GE Oil & Gas has completed its acquisition of artificial lift technologies and industrial gears firm Lufkin Industries in a deal valued at US$3.3billion.
Lufkin, with approximately 4,500 employees in more than 40 countries, manufactures and services a portfolio of artificial lift equipment through a global network of more than 110 service centers and nine manufacturing facilities.
Its business includes Aberdeen-based artificial technology firm Zenith, bought by Lufkin last year.
Artificial lift, used in 94% of the roughly 1 million oil-producing wells around the world, helps lift resources to the surface in reservoirs with low pressure and improves the efficiency of naturally flowing wells.
GE executive Ian Milne, most recently president of GE Oil & Gas’ Pressure Control business, will lead the Lufkin business post-close.
“Artificial lift technologies are essential in increasing well output, whether it’s maximizing the potential of a new well or breathing fresh life into a mature one,” said Daniel C. Heintzelman, president and CEO, GE Oil & Gas.
The global artificial lift sector is expected to reach about US$13billion in 2013, according to Spears & Associates.
Growth is being fueled by the development of unconventional shale plays and liquids-rich resource plays. For example, in North America, an increased pursuit of oil has driven demand for the rod lift systems manufactured by Lufkin.
GE says automation is an integral part of Lufkin’s approach to artificial lift optimization and its product line contains the building blocks that will help to develop an artificial lift “industrial internet” through a connected network of technology, data and experts.
Lufkin also manufactures industrial gears and engineered bearings designed to increase turbine efficiency and produce higher power and speed levels.