GE Pursues $3 Billion of Brazil Deals as Petrobras Demand Rises
General Electric Co. (GE), which spent more than $4.1 billion on acquisitions since October to build its oil and gas unit, is bidding for about $3 billion of Brazil energy contracts over three years as the industry expands.
GE is competing for work that includes supplying Petroleo Brasileiro SA (PETR4) with equipment for its floating production vessels, Fernando Martins, a vice president for GE’s oil and gas division in Latin America, said yesterday in a telephone interview from Rio de Janeiro. The company is also talking with Petrobras on supplying subsea wellhead systems, he said.
“We have equipment and services from the subsea well up to the refinery,” he said. “This is a terrific opportunity.”
GE, based in Fairfield, Connecticut, earlier this week won three contracts worth $350 million in Brazil, including deals to provide subsea logistics services to Petrobras and drilling systems for Royal Dutch Shell Plc. Brazil, home to the biggest oil discovery in the Americas in the past three decades, is seeking to more than double its oil output by 2020.
GE plans to hire 500 workers for its Brazilian oil and gas business before year-end, an increase of about 42 percent, Martins said. The company is also setting up plans to retain its employees as the “very fast” expansion increases competition for human resources in the country, he said.
“Sometimes more importantly than hiring new people is making sure that you retain your own employees,” Martins said, adding that the unit had a turnover rate of less than 3 percent of its workforce in the past year.
GE Oil & Gas has more than 20,000 employees in 100 countries. In 2010, the division provided $7.6 billion of the parent company’s $150.2 billion in total sales.
GE’s acquisitions since October have included John Wood Group Plc’s well-support division, parts of Dresser Inc. and Wellstream Holdings Plc, an oil services provider focused on Brazil.
GE rose 6 cents, or 0.3 percent, to $18.30 at 2:22 p.m. in New York Stock Exchange composite trading. The stock has gained about 16 percent in the past year.
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