Baker Hughes posts better-than-expected profit and expects strong growth in North America as oil and gas producers turn to its new technologies to reduce drilling time and cut costs.
July 17 (Reuters) - Baker Hughes Inc, the world's third-largest oilfield services company, said it expects strong growth in North America as oil and gas producers turn to its new technologies to reduce drilling time and cut costs.
The company, whose services include seismic surveys that determine where oil lies under the earth's surface and hydraulic fracturing of wells, launched 47 new products and services in the second quarter.
"In North America, the trend of customers spending incremental op-ex towards production-related technologies is unfolding as we expected," Chief Executive Martin Craighead said on a post-earnings call. "We predict strong growth in this area for the foreseeable future."
Technologies developed in the last year or two contribute between 35-50 percent to the company's revenue, Craighead said.
Oil and gas companies, under increasing pressure from shareholders, are looking to increase production at lower cost, prompting oilfield service providers to develop more efficient drilling technologies.
Baker Hughes said it expects profit from operations to rise by 15 percent in the third quarter as increased drilling activity and an improving pressure pumping market lift revenue and margins in North America.
Pressure pumping business in North America had been depressed for the past two years as new equipment entered the market at a time when drillers pulled out of natural gas basins due to weak prices.
Pressure pumping is used in hydraulic fracturing to extract oil and gas from shale rock.
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