G.E. to Buy John Wood Unit for $2.8 Billion

General Electric said on Sunday that it had agreed to buy the John Wood Group’s well-support business for about $2.8 billion, as it sought to bolster its unconventional oil and natural gas production services.þþThe deal is the latest by G.E. in the energy sector, as the conglomerate builds out its deepwater oil and natural gas production capabilities. In its press release, G.E. cited International Energy Agency forecasts that unconventional natural gas production would make up about 35 percent of global supply by 2035, while unconventional oil production would account for 10 percent.þþG.E. has already struck several deals, including the $1.3 billion takeover of Wellstream Holdings of Britain two months ago, þþIn an interview, John Krenicki Jr., president and chief executive of G.E.’s energy business, said the purchase of the well-support division of John Wood would give G.E. a large market presence in fast-growing segments of the oil and natural gas industry. John Wood, for example, is a leader in making specialized pumps used for enhanced recovery in large oil wells.þþTwo thirds of the world’s oil, Mr. Krenicki said, comes from about 300 giant wells, where a third of the oil has been extracted so far. Combining G.E.’s energy research with proven technology from John Wood, he said, should lead to improvements in oil recovery. þþ“And with oil prices up, this is the first place to hunt,” he said.þþLast year, John Wood’s well-support business posted a 55 percent jump in earnings, to $166 million, atop $947 million in revenue.þþThe unit has more than 3,800 employees and more than 20 manufacturing and service centers around the world.þþThe deal is expected to close later this year, subject to approval by regulators and John Wood shareholders.þþG.E. was advised by Citigroup.þþSteve Lohr contributed reporting.þ