With Lufkin Deal, G.E. Continues to Plumb the Oil Patch

With its $3.3 billion takeover of Lufkin Industries, General Electric continues to ride the boom in the oil patch.

Since 2007, the conglomerate’s oil and gas unit has struck $11 billion worth of acquisitions â€" not including Monday’s announcement â€" to bolster its drilling services offerings. Among those deals was the $3 billion purchase of Dresser in 2010 and the $1.9 billion takeover of Vetco in 2007.

But it was the 2011 deal for John Wood’s well-support business that helped pave the way for the Lufkin transaction. That $2.8 billion purchase gave G.E. a line of specialized pumps used for enhanced recovery from big oil wells.

Buying Lufkin would add a complementary business of artificial lifts for use in drill platforms, as well as a line of industrial gear boxes used by several customers, including G.E. itself. Daniel C. Heintzelman, the chief executive of G.E.’s oil and gas unit, estimated in an interview that more than 90 percent of wells around the world either use or will need artificial lift.

“Lufkin has a very good complementary set of technologies that we’d love to invest in,” he said. “This is a company we can bring more comprehensively to the global marketplace.”

Mr. Heintzelman added that the industrial giant is continuing to bet big on drilling. Exploration in shale, the hardened rock formations behind the surge in energy production, is expected to grow by 10 percent or more a year for up to a decade.

G.E. announced last week that it would build a global research center for oil and gas in Oklahoma City, focusing at first on unconventional resources like shale natural gas.

At the moment, G.E.’s oil and gas offerings are well rounded, thanks to those investments, Mr. Heintzelman said. The conglomerate’s portfolio includes technologies for both on- and off-shore exploration, as well as for transporting and refining petroleum.

Mr. Heintzelman said that the plan now is to invest in G.E.’s current businesses to stir up organic growth â€" though he added that as the energy boom continues apace, more acquisition opportunities may arise.