General Electric Co. (NYSE: GE) is set to spend $110 million to build a new research facility in Oklahoma City. There is no final location yet, and there is no date set for when it will open; those answers are expected to follow soon.
The facility will be solely dedicated to studying, researching, and developing ways to improve the extraction processes used to reach oil and gas deposits that for now are still beyond our grasp. This will include innovative and technological advancements in fracking and horizontal drilling, which brought life back into the industry but are beginning to reach their limitations.
It was not long ago that the combination of fracking and horizontal drilling revolutionized the way we drill for oil and gas. Areas rich in shale deposits were soon after erupting with activity.
GE’s lab and its research team will be spearheaded by GE Oil and Gas – GE’s fastest-growing segment, which has invested $11 billion in acquisitions in recent years and is considering more for the near future.
According to Bloomberg, GE Oil and Gas has increased revenue by 57 percent since 2009 and rounded out 2012 with $15.2 billion in revenue.
GE is taking the bull by the horns in an evolving global energy landscape that has the potential to transform fuel production and boost a fragile economy.
GE has decided to take part in every single aspect of natural gas as it becomes more and more vital to domestic and foreign markets around the world. The company is supplying and servicing equipment and operations, developing locomotives that will run on liquefied natural gas (LNG) instead of diesel fuel, and providing technology in turbomachinery, subsea drilling, pressure control, remote monitoring, and diagnostics. And the list goes on and on.
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From a GE press release:
“Unconventional resources, and shale gas in particular, may be one of the biggest productivity drivers of our lifetime,” said GE Chairman and CEO Jeff Immelt. “At GE, we see a tremendous opportunity in the oil and gas space. Since 2007, we have invested $11 billion to build broad technical capabilities that can deliver productivity gains and foster innovation for our customers. Collaboration is key to leading the unconventional resource revolution, and in Governor Fallin and the people of Oklahoma, we’ve found excellent partners.”
Efforts will soon be move ahead in securing top notch experts; up to 125 engineers and scientists will be hired to oversee daily operations and join GE’s global network of 50,000, who are leading GE forces around the globe.
The facility will work directly with labs stationed from Shanghai to Rio de Janeiro, all collaborating on a unified front for GE business.
GE has settled on Oklahoma for more than just its southern hospitality; while these Oklahoma residents sure can whip up a fine southern meal, they also have an affinity for gas and oil. Oklahoma is the nation’s third-leading natural gas producer in the nation and has the second-most active drilling rigs.
Three of the largest oil companies in the nation—Devon Energy Corp. (NYSE: DVN), Chesapeake Energy Corp. (NYSE: CHK), and SandRidge Energy Inc. (NYSE: SD)—all are heavily invested in Oklahoma oil and gas projects. And Tulsa-based ONEOK Inc. (NYSE: OKE) and Williams Companies Inc. (NYSE: WMB) are the second and third largest energy companies in the nation, respectively.
These five companies, as they stand alone, are already leaders of the industry, but should they form a partnership with GE and its innovative research facility right near home base, these companies will have the advantage of being at the forefront of the already evolving energy landscape.
Because they are all in such close proximity, it will save precious time. Working with local companies cuts down on transportation costs tremendously and keeps everybody in earshot of what’s going on.
Things will be allowed to move fast, and this will save precious time. And if there’s one thing I think we all know, it’s that time is money.
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