Baker Hughes, Aker Solutions form subsea alliance

|About: Baker Hughes Inc. (BHI)|By:, SA News Editor

Oil services firms Baker Hughes (BHI +0.4%) and Aker Solutions (AKKVF) agree to form an alliance to develop subsea production solutions to boost recovery rates at a lower cost in offshore fields.

The two companies say the new venture aims to combine Aker's strengths in subsea production and processing systems with BHI's well completion and artificial lift specializations, as well as advance industry capabilities in subsea well intervention.

The deal is being driven by deepwater subsea fields which have "so far been characterized by low recovery rates, and new discoveries in deeper and more hostile environments are making these fields even more costly to develop," says BHI CEO Martin Craighead.

Separately, BHI is upgraded to Buy from Neutral with a $80 price target, up from $60, at Global Hunter following the strong Q1 earnings report citing expected efficiency enhancements and a potential upcycle in U.S. onshore development.