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GE to Buy Subsea Drilling Tech amid Oil Price Plunge

GE to Buy Subsea Drilling Tech amid Oil Price Plunge

View all news from: Baker Hughes Energy Technology Limited
View directory entry for: Baker Hughes Energy Technology Limited

17 December 2014

General Electric announced Tuesday it will buy subsea drilling technology from Oceaneering International as oil prices keep plunging.

The industrial conglomerate is buying the Subsea Electric Actuator product line, which focuses on electric valve actuators, and said the deal is expected to close in Q1 2015. Electric actuators are fitted to the subsea systems that control the flow, usually oil or gas, out of the well or the injection of fluids into the well to enhance recovery according to the release.

GE shares rose 0.5% to 24.74 in the stock market today. Oceaneering shares rose 0.3% to 57.69.

GE is focused on expanding its industrial core and is shedding underperforming assets related to its finance unit, which nearly brought down the company during the financial crisis.

But the once hot sector of oil drilling has cooled as crude prices plunge on oversupply and an economic slowdown in China.

Brent fell 3% to $59.16 per barrel. West Texas Intermediate is down 2.4% to $54.58.

Deepwater drilling, which tends to be expensive, is especially vulnerable to price fluctuations.

GE shares have continued to fall since breaking through its 50-day line on Dec. 8.