Statoil and Baker Hughes Successfully Test First Rotary Steerable Liner-While-Drilling System

Innovative technology has applications in new and mature fields

HOUSTON, TEXAS – January 15, 2010 – Statoil has successfully tested the world's first rotary steerable liner-while-drilling system from its Brage platform in the Norwegian sector of the North Sea. The new technology was jointly developed by Statoil (NYSE: STO) and Baker Hughes Incorporated (NYSE: BHI).

The concept of a rotary steerable system that gives operators the ability to accurately drill and log three-dimensional well profiles with a liner attached directly to the drillstring is entirely new. The system is designed to withstand high circulation rates and high torque loads while providing liner connect and disconnect capabilities. Following a second deployment in January at Statoil's Statfjord Field, the new technology will be commercialized.

"This joint development project with Statoil illustrates Baker Hughes' commitment to working with our clients to develop leading-edge technology based on the needs of the industry," notes Gary Rich, president, Europe region, for Baker Hughes. "This project also highlights the advantages of bringing together experts from several different disciplines to work collaboratively on a project that encompasses both the drilling and completion well construction processes."

In conventional drilling operations, it is necessary to pull the drillstring before the casing or liner can be run into the borehole. Liner drilling systems eliminate the need to pull the drillstring to run casing, saving time and drilling costs by minimizing the risk of borehole collapse and reducing non-productive time. The addition of rotary steerable capabilities helps overcome the challenges of drilling in zones with lower pressure and unstable shale / coal layers and in formations with varying flow and pressure regimes.

Statoil and Baker Hughes qualified and verified this breakthrough technology through a rigorous development process and conducted extensive onshore testing before it was run on Statoil's Brage platform. A research group in Statoil's technology and new energy division (TNE) has worked in cooperation with Baker Hughes to develop the new drilling technology.

www.bakerhughes.com/steerable_liner

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About Statoil

Statoil is an international energy company with operations in 40 countries. Statoil builds on more than 35 years of experience from oil and gas production on the Norwegian continental shelf. Statoil is committed to accommodating the world's energy needs in a responsible manner, applying technology and creating innovative business solutions.

About Baker Hughes

Baker Hughes provides reservoir consulting, drilling, formation evaluation, completion and production products and services to the worldwide oil and gas industry.

Forward-Looking Statements

This news release (and oral statements made regarding the subjects of this release) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (each a "Forward-Looking Statement"). The word "will," the phrase "is designed to" and similar expressions are intended to identify forward-looking statements and our expectations. There are many risks and uncertainties that could cause actual results to differ materially from our forward-looking statements and expectations, including well conditions and industry economics. These forward-looking-statements are also affected by the risk factors described in the company's Annual Report on Form 10-K for the year ended December 31, 2008, the company's subsequent quarterly reports on Form 10-Q, and those set forth from time to time in other filings with the Securities and Exchange Commission (SEC). The documents are available through the company's website at http://www.bakerhughes.com/investor or through the SEC Electronic Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement.

The forward-looking statements contained in this news release are also subject to the following risk factors: Our expectations regarding performance, commercialization, cost savings, reduction of risk of borehole collapse and reduction of non-productive time are subject to various risks, such as well conditions, the timing of deployment and economic factors impacting the economy generally.