Baker Hughes NYSE: BHI is the world's third largest oilfield services company, after Schlumberger and Halliburton, its main competitors. Baker Hughes provides the world's oil & gas industry with products and services for drilling, formation evaluation, completion, production and reservoir consulting. Baker Hughes operates in over 90 countries worldwide mainly based in countries with a mature petroleum industry as is the case with most oil & gas service companies. Baker Hughes has its headquarters in the America Tower in the American General Center in Neartown, Houston.[3][4]
Baker Hughes Incorporated was formed when Baker International and Hughes Tool Company merged in 1987. Baker Hughes operates worldwide with major offices in Liverpool, United Kingdom, Singapore, Dubai, Research & Maintenance Facility in Celle, Germany, Lafayette, Louisiana, Houston, Texas Pescara, Italy, and Kuala Lumpur, Malaysia. The company is administered broadly in two Hemispheres; Eastern Hemisphere with five Regions (Europe, Africa, Middle East, Asia Pacific & Russia/Caspian) and Western Hemisphere with four Regions (Canada, US Land, US Gulf & Latin America); each of these Regions is subdivided into Geo Markets.

Baker Hughes Incorporated (Baker Hughes) is engaged in the oilfield services industry. Baker Hughes is a supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry. The Company also provides industrial and other products and services to the downstream refining, and process and pipeline industries. It operates in over 80 countries. Its Western Hemisphere operations consist of four regions: Canada, United States Land, Gulf of Mexico and Latin America. Eastern Hemisphere operations consist of five regions Europe, Africa, Russia Caspian, Middle East and Asia Pacific. The Company operates in five segments: North America (Combined results for the United States, including Gulf of Mexico, Canada and Trinidad), Latin America (Combined results for Central and South America, including Mexico and excluding Trinidad), Europe/Africa/Russia Caspian (EARC) (Combined results for Europe, Africa- excluding Egypt and Russia Caspian), Middle East/Asia Pacific (MEAP) (Combined results for Middle East, including Egypt and Asia Pacific) and Industrial Services and Other. On April 28, 2010, it acquired BJ Services Company (BJ Services).
Oilfield Operations
The Company offers a range of products and services to its customers worldwide. Its oilfield products and services fall into one of two categories: Drilling and Evaluation or Completion and Production. Drilling and Evaluation consists of drill bit systems, drilling systems, wireline systems and drilling fluids product lines. Drill bit systems include Tricone and PDC or diamond drill bits used for performance drilling, hole enlargement and coring. Drilling systems include conventional and rotary steerable systems used to drill wells directionally and horizontally; measurement-while-drilling and logging-while-drilling systems used to perform reservoir navigation services; drilling optimization services; tools for coil tubing drilling and wellbore re-entry systems; coring drilling systems, and surface logging. Wireline systems include tools for both open hole and cased hole well logging used to gather data to perform petrophysical and geophysical analysis; reservoir evaluation coring; casing perforation; fluid characterization; production logging; well integrity testing; pipe recovery, and seismic and microseismic services. Drilling fluids include emulsion and water-based drilling fluids systems; reservoir drill-in fluids, and fluids environmental services. Completion and Production consists of its well completion systems, wellbore intervention, intelligent production systems, artificial lift, upstream chemicals and pressure pumping services product lines.
Completion systems include products and services used to control the flow of hydrocarbons within a wellbore including sand control systems; liner hangers; wellbore isolation; expandable tubulars; multilaterals; safety systems; packers and flow control, and tubing conveyed perforating. Wellbore intervention includes products and services used in existing wellbores to improve their performance including thru-tubing fishing; thru-tubing inflatables; conventional fishing; casing exit systems; production injection packers; remedial and stimulation tools, and wellbore cleanup. Intelligent production systems include products and services used to monitor and dynamically control the production from individual wells or fields including production decisions services; chemical injection services; well monitoring services; intelligent well systems, and artificial lift monitoring. Artificial lift includes electric submersible pumps systems; progressing cavity pump systems; gas lift systems, and surface horizontal pumping systems used to lift large volumes of oil and water when a reservoir is no longer able to flow on its own. Upstream chemicals include chemicals and chemical application systems to provide flow assurance, integrity management and production management for upstream hydrocarbon production. Pressure pumping services include cementing, stimulation and coil tubing services used in the completion of new oil and natural gas wells and in remedial work on existing wells, both onshore and offshore.
Industrial Services and Other
Industrial Services and Other consists of its downstream chemicals; process and pipeline services, and stimulation chemicals. It also includes its reservoir technology and consulting group that provides consulting services and software products, including the Gaffney, Cline and Associates reservoir consulting services.
The Company competes with Schlumberger, Halliburton, Weatherford, National Oilwell Varco, Champion Technologies, Inc., Nalco Holding Company, Newpark Resources, Inc. and Frac Tech Services, LLC.

In the meantime, Baker Hughes and Schlumberger reached an agreement in June 2000 to combine their seismic units, Western Geophysical and Geco-Prakla, respectively, into a new joint venture firm called Western GECO. Schlumberger paid Baker Hughes about $500 million to take a 70 percent stake in the venture, while Baker Hughes took the remaining 30 percent. Upon completion of the deal in November 2000, Baker Hughes used the proceeds to further reduce its debt.
In August 2000 Michael E. Wiley was hired to be the new chairman, president, and CEO of Baker Hughes. Wiley had been the president and COO of Atlantic Richfield Company from 1997 until May 2000, when that firm was acquired by BP Amoco. Baker Hughes continued to trim its operations under the new leader, announcing in October 2000 its intention to exit from the oil and gas exploration and production business. By early 2003 this exit had been completed through the sale of a 40 percent stake in a Nigerian oil field.
Although the company's financial performance improved in 2001 and 2002, concerns about the corporate culture at Baker Hughes once more came into the foreground. The Securities and Exchange Commission (SEC) charged that two high-ranking company officers, the CFO and the controller, authorized the payment of a $75,000 bribe to an Indonesian government official in March 1999. (The two officers both resigned later in 1999.) The bribe was made to induce the official to reduce the company's tax liability from $3.2 million to $270,000. This was a violation of the Foreign Corrupt Practices Act. The SEC further alleged that similar payoffs had been made in India and Brazil. In September 2001 Baker Hughes reached a settlement with the SEC regarding these charges, without the firm admitting or denying the charges and without a fine being levied. Then in March 2002 a former Baker Hughes employee filed a civil lawsuit claiming that he had been fired in October 2001 for refusing to pay a bribe to a Nigerian oil official in order to secure a large drilling contract. Both the SEC and the Justice Department soon launched investigations into the matter.
Principal Subsidiaries: Western Atlas Inc.; Baker Hughes GmbH (Austria); Baker Hughes (Deutschland) GmbH (Germany); Baker Hughes INTEQ GmbH (Germany); Baker Hughes Limited (U.K.); Baker Hughes Canada Company; Baker Hughes Espana, S.L. (Spain); Baker Hughes SRL (Venezuela).
Principal Divisions: Baker Atlas; Baker Oil Tools; Baker Petrolite Corporation; Centrilift; Hughes Christensen Company; INTEQ; BIRD Machine.
Principal Competitors: Schlumberger Limited; Halliburton Company; Smith International, Inc.; Weatherford International Ltd.; BJ Services Company; Precision Drilling Corporation; Petroleum Geo-Services ASA; John Wood Group PLC; GE Betz; Ondeo Nalco Energy Services, L.P.; Grant Prideco, Inc.; Sandvik Smith AB; Compagnie Générale de Géophysique, S.A.; Veritas DGC Inc.


OVERALL
Beta: 1.49
Market Cap (Mil.): $33,616.08
Shares Outstanding (Mil.): 434.26
Annual Dividend: 0.60
Yield (%): 0.78
FINANCIALS
BHI Industry Sector
P/E (TTM): 31.39 31.79 12.04
EPS (TTM): 116.34 -- --
ROI: 7.11 7.31 3.95
ROE: 9.60 8.27 5.09


Statistics:
Public Company
Incorporated: 1987
Employees: 26,500
Sales: $5.02 billion (2002)
Stock Exchanges: New York Pacific Swiss
Ticker Symbol: BHI
NAIC: 213111 Drilling Oil and Gas Wells; 213112 Support Activities for Oil and Gas Operations; 333132 Oil and Gas Field Machinery and Equipment Manufacturing; 325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing

Key Dates:
1907: Reuben C. "Carl" Baker develops the Baker Casing Shoe, a device to ensure the uninterrupted flow of oil through a well.
1909: Invention of the first rotary drill bit leads to the creation of Sharp-Hughes Tool Company, led by Howard Hughes, Sr., and Walter Sharp.
1912: Sharp dies, and Hughes buys Sharp's share of the business.
1913: Baker organizes Baker Casing Shoe Company to hold and license his patents.
1915: Hughes renames his company Hughes Tool Company.
1924: Upon Hughes's death, ownership of Hughes Tool passes to Howard Hughes, Jr., who over the next several decades uses the firm's steady inflow of cash to fund his various avocations.
1928: Having expanded into the manufacturing of his own tools, Baker changes the name of his company to Baker Oil Tools, Inc.
1961: Baker Oil Tools goes public.
1972: Hughes Tool is taken public.
1975: Hughes acquires drill-bit maker Reed Tool Company.
1976: Baker Oil Tools changes its name to Baker International Corporation.
1987: Hughes Tool and Baker International merge to form Baker Hughes Incorporated.
1990: Eastman Christensen Company, maker of directional and horizontal drilling equipment, is acquired.
1991: Company spins off its pumping service unit, BJ Services, to the public.
1992: Eastman Christensen is merged with Hughes Tool Company to form a new division, Hughes Christensen Company; Teleco Oilfield Services Inc. is acquired; Teleco and four other Baker Hughes drilling systems companies are combined into a new division, Baker Hughes INTEQ.
1997: Petrolite is acquired, augmenting the firm's specialty chemical division, which is renamed Baker Petrolite; Drilex International Inc., provider of directional drilling services, is purchased and merged into Baker Hughes INTEQ.
1998: Baker Hughes acquires Western Atlas Inc., resulting in the creation of two new divisions: Western Geophysical (seismic data services) and Baker Atlas (down-hole services).
1999: Discovery of accounting irregularities at INTEQ division lead to a restatement of prior years' earnings.
2000: Baker Hughes contributes Western Geophysical to a joint venture with Schlumberger called Western GECO, 30 percent owned by Baker Hughes.

Name Age Since Current Position
Deaton, Chadwick 58 2010 Chairman of the Board, Chief Executive Officer
Craighead, Martin 51 2010 President, Chief Operating Officer
Ragauss, Peter 53 2006 Chief Financial Officer, Senior Vice President
Crain, Alan 59 2007 Senior Vice President, General Counsel
Keifer, Alan 56 1999 Vice President, Principal Accounting Officer, Controller
Triplett, Clifton 52 2008 Vice President, Chief Information Officer
Martin, Jay 59 2004 Vice President, Chief Compliance Officer, Senior Deputy General Counsel
Charreton, Didier 47 2007 Vice President - Human Resources
O'Donnell, John 62 2009 Vice President, President - Western Hemisphere Operations
Mathieson, Derek 40 2009 Vice President, President - Products and Technology
Cancilla, Russell 59 2009 Vice President, Chief Security Officer - Health, Safety, Environment and Security
Soucy, Arthur 48 2009 Vice President - Supply Chain
Chariag, Belgacem 48 2009 Vice President, President - Eastern Hemisphere Operations
Riley, H. John 70 Lead Independent Director
Stewart, J. 67 2010 Director
Gargalli, Claire 68 1998 Independent Director
Watson, Charles 61 1998 Independent Director
Nichols, J. Larry 68 2001 Independent Director
Fernandes, Anthony 65 2001 Independent Director
Lash, James 66 2002 Independent Director
Cazalot, Clarence 60 2002 Independent Director
Brady, Larry 68 2004 Independent Director
Jungels, Pierre 67 2006 Independent Director

Address:
3900 Essex Lane, Suite 1200
Post Office Box 4740
Houston, Texas 77210-4740
U.S.A.
 
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