Competition & Markets Authority
Well intervention services deal could result in increased costs for UK oil and gas production
Baker Hughes’ acquisition of Altus could result in oil and gas operators in the UK facing a worse deal for certain well intervention services.
Well intervention services are essential services used by oil and gas operators to manage well production, provide well diagnostics and modify a well’s state or configuration. Both Baker Hughes and Altus supply various well intervention services in the UK, including to operators active on the UK continental shelf.
The Competition and Market Authority’s (CMA) Phase 1 investigation has found that Baker Hughes and Altus are the two largest providers of both coiled tubing and pumping services in the UK and compete very closely in the supply of these services currently. After the deal, Baker Hughes would face competition from only one other major supplier – Halliburton – and a small number of other suppliers that are much weaker competitors in the UK.
The CMA is therefore concerned that the loss of rivalry between the merging companies could lead to higher prices, reduced choice and lower quality services for businesses in the UK that purchase coiled tubing and pumping services.
Colin Raftery, Senior Director of Mergers at the CMA, said:
Well intervention services are an integral part of managing oil and gas wells. Competition is vital to avoid higher prices or poorer quality of services for oil and gas operators active in the UK.
Our investigation showed that Baker Hughes’ purchase of Altus would take out an important supplier and few remaining competitors would be left in the market. We will move to an in-depth investigation unless the companies can address our concerns.
Baker Hughes and Altus have 5 working days to submit proposals to address the CMA’s competition concerns. The CMA would then have a further 5 working days to consider whether to accept these in principle instead of referring the case to a Phase 2 investigation.
For more information, visit the Baker Hughes/ Oz MidCo (Altus) investigation page.
Notes to Editors
‘Baker Hughes’ refers to Baker Hughes Nederland Holdings B.V. and ‘Altus’, or ‘Oz MidCo’, refer to Oz MidCo AS (Altus Intervention).
UK refers to the UK part of the North Sea and UK onshore.
Coiled tubing (CT) refers to a conveyance method which uses a continuous length of small diameter flexible pipe to transport fluids, tools, chemicals or gases down a well.
Pumping refers to the delivery of gases or liquids from the surface into the well. It can be provided as ancillary services to CT or as a standalone service.
All media enquiries should be directed to the CMA press office by email on firstname.lastname@example.org, or by phone on 020 3738 6460.
Latest News from
Competition & Markets Authority
CMA investigates online selling practices based on ‘urgency’ claims30/11/2022 11:25:00
The CMA is investigating Emma Sleep over concerns that some of its online sales practices may breach consumer law.
Music streaming report published30/11/2022 10:20:00
The CMA has concluded its independent study into the music streaming market.
Vehicle salvage merger reduces choice and may limit access to salvage vehicles for green parts29/11/2022 12:20:00
Copart’s completed purchase of Hills Motors will reduce the number of salvage services providers available to customers and could limit the vehicles available to suppliers of recycled vehicle parts, often known as ‘green parts’.
Investigation into cloud gaming and browsers to support UK tech and consumers22/11/2022 14:20:00
The CMA has launched a market investigation into cloud gaming and mobile browsers after receiving widespread support for its proposals first published in June.
Consultation on allowing schools early exit from software contracts17/11/2022 13:20:00
The CMA is consulting on proposals from ESS to allow certain schools to exit longer-term software contracts where the CMA has concerns that the lack of notice given to them limited their choice and competition.
CMA accepts remedy to address concerns in foam merger17/11/2022 09:20:00
The CMA has accepted a remedy from Carpenter and Recticel following concerns that Carpenter’s merger with Recticel could harm manufacturers and lead to a worse deal for shoppers on items like mattresses and kitchen sponges.
Airline merger could see passengers pay more to fly from London to South Korea15/11/2022 12:20:00
The buyout of Asiana Airlines by Korean Air could lead to higher prices for passengers flying between London and Seoul, as well as impacting air cargo services.
Barclays customers to receive up to £1m for PPI breaches09/11/2022 12:15:00
The CMA has written publicly to Barclays after the bank failed to send a reminder to customers of payment protection insurance (PPI) policies.