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SONATRACH and BHGE to Form New Company to Meet Manufacturing Demand


SONATRACH and BHGE to Form New Company to Meet Manufacturing Demand

November 9, 2017

sonatrach and bhge form new company

Algiers – 9 November, 2017 - In a signing ceremony hosted by SONATRACH in Algiers, and in the presence of the Minister of Energy, Mr. Mustapha Guitouni, SONATRACH and Baker Hughes, a GE company (NYSE: BHGE) have announced the creation of a 20,000 sqm manufacturing facility in Arzew Industrial Zone aiming to strengthen Algeria’s position in the upstream oil and gas market to meet local demand.

SONATRACH and BHGE have formed a new company in which SONATRACH and BHGE have 51% and 49% ownership respectively, underscoring a major commitment to deliver best-in-class manufacturing capabilities in Algeria to the highest international standards. The project draws on the extensive experience of BHGE in Oilfield equipment manufacturing and leverages the company’s global and local scale to provide production solutions from the facility, which is anticipated to be operational in December 2019.

Through an initial combined investment of USD 45 million, the new company will provide manufacturing, assembly, and maintenance for various types of oilfield equipment including wellheads, xmas trees, BOPs and valves, establishing a major base to fulfill Algeria’s increased domestic upstream requirements with the potential for future exports. The facility will also add training capabilities and offer competency development programs for more than ~200 engineers during the first 7 years.

In addition to reducing dependence on imports, the facility will boost economic competitiveness and strengthen the local supply chain by helping to create 200 local jobs in Oran’s Arzew area, a substantial number of indirect jobs serving the sector, and the development of qualified industrial SMEs.

Mr. Abdelmoumen Ould Kaddour, CEO of Sonatrach, said: “The creation of this company is a breakthrough in Sonatrach's integration chain, with a view to better controlling costs and deadlines to ensure the transfer of know-how and technologies through the diversification of its portfolio of goods and services.

“It will contribute to strengthening the national industrial fabric and the creation of a network of national subcontractors, certified to international norms and standards. It will also build on the relationship between Sonatrach and BHGE, and boost it to a partnership of excellence."

Mr. Rami Qasem, President and CEO of BHGE Middle East, North Africa, Turkey and India, said: "Through the delivery of high end oilfield products and services, BHGE reaffirms its focus on driving further productivity for our customers across the entire oil and gas value chain. We are honored to work with SONATRACH and play an important role in supporting the country’s ambition to be among the key upstream manufacturers in North Africa. The combined effort underscores our commitment to help fuel the economy by improving economic competitiveness, developing skilled talent and delivering the highest manufacturing standards with plans for future exports.  The new company will not only revitalize Algeria’s local supply chain, but also position the country as a key manufacturer in industrial equipment”.

Building on over 40 years of presence, BHGE has been involved in several major development projects including its partnership with SONATRACH and SONELGAZ for the creation of ALGESCO, a major turbomachinery, maintenance and repair center in Boufarik, serving Algeria’s upstream, midstream and downstream customers. BHGE has also launched the first edition of the global “Oil & Gas University" program in the country, an initiative that has trained 25 young professionals in technical and leadership skills.


About Baker Hughes, a GE company

Baker Hughes, a GE company (NYSE: BHGE) is the world’s first and only fullstream provider of integrated oilfield products, services and digital solutions. We deploy minds and machines to enhance customer productivity, safety and environmental stewardship, while minimizing costs and risks at every step of the energy value chain. With operations in over 120 countries, we infuse over a century of experience with the spirit of a startup – inventing smarter ways to bring energy to the world.

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