United States

United States

GE to sell off oil and gas stake

UNITED STATES: GE is set to separate from its oil and gas division, with renewable energy set to form part of a slimmed down conglomerate.

GE Renewable Energy's 6MW Haliade turbine at the Mekur offshore wind site in Germany
GE Renewable Energy's 6MW Haliade turbine at the Mekur offshore wind site in Germany

Following a strategic review, the company — which has reported struggling financial results recently — said it will focus on its aviation, power and renewable energy divisions.

GE plans to spin its healthcare division off into a standalone business, and completely separate from its Baker Hughes (BHGE) oil and gas subsidiary, in which it owns a 62.5% interest.

The "orderly separation" from Baker Hughes will take place over the next two or three years, the firm said.

It added the move would make GE’s "corporate structure leaner and substantially reduce debt".

John Flannery, chairman and CEO of GE, said: "We are aggressively driving forward as an aviation, power and renewable energy company — three highly complementary businesses poised for future growth. We will continue to improve our operations and balance sheet as we make GE simpler and stronger.

"We are confident that positioning GE Healthcare and BHGE outside of GE’s current structure is best, not only for GE and its owners, but also for these businesses, which will strengthen their market-leading positions and enhance their ability to invest for the future," Flannery added.

In its annual results presentation, GE reported a 14% revenue increase for its renewables business, while the group as a whole made a loss for 2017.

Across the full financial year, GE Renewable Energy also saw orders increase 1% to $10.37 billion and profits grow 26% to $727 million.


GE is not the only energy firm active in the renewables space to announce divestments.

Offshore wind developer Ørsted has placed its Danish power distribution and residential customer business up for sale.

This move follows the sale of its upstream oil and gas division in May 2017.

The firm said the unit does not fit in with its long-term growth in renewables.

"With continued significant investments in green energy in the coming years, the strategic and financial importance of the Danish power distribution and residential customer businesses will be further reduced in the coming years, compared to Ørsted's rapidly growing international business in green energy," the company said.


Elsewhere, E.on has completed the sale of its conventional power business, Uniper, to Finnish energy firm Fortum.

Uniper was created in 2016, after E.on decided to spin off the business to focus on renewable generation and energy networks.

E.on CEO Johannes Teyssen said: "The sale of our remaining shares in Uniper to Fortum marks the end of a chapter in E.on's history."

The German firm is currently in the process of buying the grid and retail businesses of RWE subsidiary Innogy, in a complicated asset and shares swap deal. 

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