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2014-09-08 17:50:00

GE OIL BUSINESS: $17 BLN, 75%

GE OIL BUSINESS: $17 BLN, 75%

General Electric Co's fast-growing oil and gas business that supplies equipment and services is improving profit margins and is well-placed to outpace industry growth over the next several years, a top unit executive said in an interview.

Spurred by $14 billion in acquisitions since 2007, the oil division's revenue has risen 75 percent to $17 billion since 2009, making it the U.S. conglomerate's fastest-growing industrial business in that period.

But its 12.8 percent profit margin last year trailed by several percentage points GE's other major industrial businesses, such as aviation and healthcare, and GE Chief Executive Jeff Immelt is seeking to improve the company's overall industrial margin from 15.7 percent last year to 17 percent by 2016.

The unit's profitability is likely to be a prime topic for analysts and investors on Wednesday, when GE holds a half-day presentation in New York on its oil and gas business.

"We're driving profitability up for this business as we look into the '14 time frame and as we look into the strategic plan we lay out for the next three years," said Rafael Santana, president of GE's turbomachinery solutions division, the largest business within oil and gas. The oil and gas unit will be a "key part" of driving toward Immelt's profit margin target for the whole company, Santana said on Friday.

To improve margins, the unit is cutting costs by becoming more productive, while trying to develop products for which it can charge a higher price.

For example, GE reduced the weight and footprint of an off-shore power generation product by 20 percent, allowing GE to charge a premium because the smaller product is more desirable to customers, Santana said.

The analyst meeting next week is the first intensive review for investors that GE has held specifically for the oil and gas sector, whose results it began reporting separately in 2012. The business offers equipment and services to oil and gas exploration companies, including oil-field pumps, sub-sea drilling equipment, compressors and wellhead bores.

Speaking to Reuters ahead of the meeting, Santana said one key message executives will convey is that GE's oil and gas business is poised to outpace broader market growth of 6 percent to 8 percent a year.

"When we look at the industry ... we see the opportunity for us to grow beyond those numbers," Santana said, citing the breadth of GE's portfolio.

For 2014, Santana said, the unit is on track to reach GE's target set in December for profit and revenue growth of at least 10 percent.

Santana said the company can "definitely drive growth organically" rather than through further acquisitions.

Asked whether GE will maintain its level of deal-making in the oil and gas sector, Santana said: "We feel very good about the portfolio we have built. But if opportunities arise, we'll be looking."

reuters.com

Tags: GE, OIL, GAS

Chronicle:

GE OIL BUSINESS: $17 BLN, 75%
2018, January, 19, 12:15:00

S.KOREA'S DIVERSIFICATION

PLATTS - For full-year 2017, South Korea's crude imports from its biggest supplier Saudi Arabia fell 1.7% to 319.02 million barrels, compared with 324.45 million barrels in the previous year, customs data showed. On the contrary, South Korea has imported 1.77 million mt, or around 13 million barrels, of crude from the US in 2017, about four times higher than in 2016. Shipments from Russia grew to 140,000 b/d last year from 112,000 b/d in 2016.

GE OIL BUSINESS: $17 BLN, 75%
2018, January, 19, 12:10:00

ADNOC'S 2030 STRATEGY

AOG - ADNOC’s 2030 strategy, he said, aims to capitalise on predicted global economic growth and demand for oil and petrochemical products, particularly in non-OECD countries. As its business responds to changing market dynamics, the company will continue to broaden its partnership base, strengthen its profitability, adapt to new realities and expand market access.

GE OIL BUSINESS: $17 BLN, 75%
2018, January, 19, 12:05:00

TOSHIBA SELLS WESTINGHOUSE

WNN - Under the terms of the assignment and purchase agreement it has signed with Nucleus and Brookfield, Toshiba will sell its rights to assert claims against Westinghouse related to the parent guarantees in the amount of $5.788 billion, and on account of other claims Toshiba holds against Westinghouse in the amount of $2.284 billion to Nucleus, for the sale price of $2.160 billion.

GE OIL BUSINESS: $17 BLN, 75%
2018, January, 17, 23:50:00

OIL PRICES: NOT ABOVE $70 YET

REUTERS - Brent crude futures LCOc1 were at $69.23 a barrel at 0808 GMT, up 8 cents from their last close, but down from a high of $69.37 earlier in the day. Brent on Monday rose to $70.37 a barrel, its highest since December 2014, the start of a three-year oil price slump. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $63.84 a barrel, down from a high of $63.89 earlier, but up 11 cents from their last settlement. WTI hit $64.89 on Tuesday, also the highest since December 2014.

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