ABU DHABI/LONDON: Baker Hughes, the world’s second-largest oil services company, will take a 5 percent stake in Abu Dhabi National Oil Company’s (ADNOC) drilling unit for $550 million under a tie-up announced on Monday.
Baker Hughes (BHGE) becomes the first foreign company to take a stake in one of state-owned ADNOC’s services companies under the agreement which values ADNOC Drilling at about $11 billion.
It will allow Baker Hughes to cement its presence in the Middle East, the fastest growing region for oil and gas operations, and enable ADNOC Drilling to gain access to the know-how and technical expertise of a global player.
Since its acquisition by General Electric Co. last year, Baker Hughes has sought new business models following a sharp decline in global drilling activity since 2014. That includes offering a suite of services to oil and gas producers from exploration to drilling.
“To us this is not just another partnership... this will allow ADNOC Drilling to be not only a local player but a global specialist in the drilling and oil service business,” ADNOC’s Chief Executive Sultan Al-Jaber told Reuters in an interview in Abu Dhabi.
It would help make ADNOC Drilling “the most efficient and the most competitive,” Al-Jaber said.
Baker Hughes’ CEO Lorenzo Simonelli said BHGE will have a representative on the board of ADNOC Drilling and will create a dedicated training team.
The partnership will offer drilling services in the UAE and possibly abroad as well, Al-Jaber said.
The transaction is expected to close before the end of this year, with operations starting in 2019, ADNOC and BHGE said in a joint statement.
Al-Jaber said “there are no plans at this point of time” to float a stake in ADNOC Drilling.
While analysts said the deal would bode well for Baker Hughes’ long-term prospects in the United Arab Emirates, some lamented that the firm was paying too high a price in its acquisition.
“We’re just not fans of OFS (oilfield service) companies having to ante up” to tap into revenue growth, analysts for investment firm Tudor Pickering Holt & Co. wrote in a note on Monday.
Shares of Baker Hughes were down roughly 1 percent at midday on Monday, trading around $31.65.
Moelis is acting as the financial adviser to ADNOC on the transaction, while Citi is the adviser to BHGE, the two companies said in the statement.
Baker Hughes acquires 5% of UAE’s ADNOC Drilling for $550 million
Baker Hughes acquires 5% of UAE’s ADNOC Drilling for $550 million
Bahrain to roll out fiscal reforms to bolster public finances
RIYADH: Bahrain’s government has unveiled a comprehensive package of fiscal reforms aimed at curbing public expenditure, generating new revenue streams, and safeguarding essential subsidies for citizens.
According to a report by the Bahrain News Agency, the measures include increases in fuel prices, higher electricity and water tariffs for certain categories, and greater dividend contributions from state-owned enterprises.
The Cabinet emphasized that electricity and water prices will remain unchanged for the first and second tariff bands for citizens’ primary residences, including homes accommodating extended families.
These reforms are aligned with Bahrain’s Economic Vision 2030, which seeks to reinforce fiscal discipline, diversify revenue sources beyond crude oil, and ensure long-term fiscal sustainability.
“The Cabinet confirmed that electricity and water tariffs for the first and second tariff bands for citizens’ primary residences will remain unchanged, taking into account extended families residing in a single household,” BNA reported.
The Cabinet also agreed to defer any changes to the subsidy mechanisms for electricity and water used in citizens’ primary residences until further studies are completed. At the same time, it approved amendments to electricity and water consumption tariffs for other categories, with implementation scheduled to begin in January 2026.
Under the proposed reforms, a 10 percent corporate income tax will be levied on companies with revenues exceeding 1 million Bahraini dinars ($2.6 million) or annual net profits above 200,000 dinars.
The new corporate tax framework is expected to come into force in 2027, subject to the completion of necessary legislative and regulatory approvals.
In addition, Bahrain plans to increase natural gas prices for businesses and reduce administrative government spending by 20 percent as part of broader cost-cutting efforts.
The government also aims to improve the utilization of undeveloped investment land that already has infrastructure in place by introducing a monthly fee of 100 fils per square meter, with implementation anticipated in January 2027.
The Cabinet further tasked the ministers of labor, legal affairs, and health with reviewing fees related to worker permits and health care services.
According to the report, revised fees will be phased in gradually over a four-year period starting in January 2026, with domestic workers exempt from the changes.
Authorities stressed that the reforms are designed to streamline government procedures that support investment, attract foreign capital, and strengthen the role of the private sector in driving economic growth.
