Baker Hughes (NASDAQ: BKR) has signed an agreement to sell its oilfield services business in Russia to its local management team, in the wake of ongoing sanctions.
The agreement follows the oilfield services giant’s suspension of new investments for Russia operations in March, as it sought to comply with laws and sanctions enacted as a result of the country’s invasion of neighbouring Ukraine.
In a 1 August statement the company said the new business will operate independently of the wider Baker Hughes group, including adopting an independent brand.
The new entity will assume all of the firm’s current oilfield services Russia assets, liabilities and commercial obligations.
The value of the management buyout was not disclosed, however in its second quarter results the firm recorded losses amounting to some $365 million in relation to the Russian oilfield services business, which was listed as for sale as of the end of the quarter.
The company reportedly generates as much as 5% of its total sales from the region. Total group-wide revenue in 2021 stood at around $20.5 billion.
The transaction is expected to close in the second half of 2022, subject to regulatory approvals.
Baker Hughes said it was committed to supporting its employees throughout the process and ensuring “an orderly transfer” for customers and relevant parties.
Meanwhile, rival oilfield services firms such as Schlumberger and Weatherford have taken a similar approach, halting new investments while leaving existing work intact.
Halliburton, however, said it would cease all current and future work.