hughes incorporated type public traded as nyse bhi s & p 500 component industry oil and gas founded 1907 1987 merger headquarters american general center houston texas u.s. area served worldwide key people martin s. craighead chairman & ceo revenue us 22.364 billion 2013 1 us 21.361 billion 2012 1 operating income us 1.949 billion 2013 1 us 2.192 billion 2012 1 net income us 1.096 billion 2013 1 us 1.311 billion 2012 1 total assets us 27.934 billion 2013 2 us 26.689 billion 2012 1 total equity us 17.912 billion 2013 2 us 17.268 billion 2012 2 number of employees 35000 2016 website bakerhughes the america tower of the american general center the headquarters of baker hughes baker hughes is an american industrial service company it is one of the world s largest oil field services companies . it operates in over 90 countries providing the oil and gas industry with products and services for oil drilling formation evaluation completion production and reservoir consulting . baker hughes has its headquarters in the america tower in the american general center in neartown houston . 3 4 contents 1 history 1.1 joint venture with schlumberger 1.2 petroskills alliance 1.3 criminal charges 1.4 labor action 1.5 acquisition by halliburton 2 divisions 2.1 drilling and evaluation group 2.2 completion and production group 2.3 business units 3 legacy companies 3.1 completions 3.2 drilling fluids 3.3 mud logging and well monitoring 3.4 directional drilling and diamond drill bits 3.5 measurement while drilling 3.6 fishing tools and services 3.7 specialty chemicals 3.8 wireline logging and perforating and geophysical exploration 4 see also 5 references 6 external links history edit baker hughes is the combination of many companies that have developed and introduced technology to serve the petroleum service industry . their combined history dates back to the early 1900s . during its history baker hughes has acquired and assimilated numerous oilfield pioneers including brown oil tools ctc edeco and elder oil tools completions ; milchem and newpark drilling fluids ; exlog mud logging ; eastman christensen and drilex directional drilling and diamond drill bits ; teleco measurement while drilling ; tri state and wilson fishing tools and services ; aquaness chemlink and petrolite specialty chemicals western atlas seismic exploration well logging bj services company pressure pumping . hughes tool company s oil drill manufacturing plant in downtown houston 1915 . the hughes tool company was founded in 1908 by business partners walter benona sharp and howard r. hughes sr. father of howard r. hughes jr. . that year hughes sr. and sharp developed the first two cone drill bit designed to enable rotary drilling in harder deeper formations than was possible with earlier fishtail bits . they conducted two secret tests on a drilling rig in goose creek texas . each time hughes asked the drilling crew to leave the rig floor pulled the bit from a locked wooden box and then his associates ran the bit into the hole . the drill pipe twisted off on the first test but the second was extremely successful . in 1909 the sharp & hughes bit was granted a u.s. patent . in the same year the partners formed the sharp hughes tool company in houston texas to manufacture the bit in a rented space measuring 20 by 40 ft 12 m . citation needed after walter sharp died in 1912 hughes purchased sharp s half of the business . the company was renamed hughes tool company in 1915 and hughes jr. inherited it after his father s death in 1924 . through the 1950s and 1960s hughes tool company remained a private enterprise owned by hughes . while hughes was engaged in his hollywood and aviation enterprises managers in houston such as fred ayers and maynard montrose kept the tool company growing through technical innovation and international expansion . in 1958 the engineering and research laboratory was enlarged to accommodate six laboratory sections that housed specialized instruments such as a direct reading spectrometer and x ray diffractometer . in 1959 hughes introduced self lubricating sealed bearing rock bits . after collecting data from thousands of bit runs hughes introduced the first comprehensive guides to efficient drilling practices in 1960 ; 1964 saw the introduction of the x line rock bits combining new cutting structure designs and hydraulic jets . baker international was formed by reuben c. baker who developed a casing shoe that revolutionized cable tool drilling . in july 1907 r.c. baker a 34 year old inventor and entrepreneur in coalinga california was granted a u.s. patent for a casing shoe that enabled drillers to efficiently run casing and cement it in oil wells . this innovation launched the business that would become baker oil tools and baker hughes incorporated . mr. baker had arrived in the california oilfield in 1895 with 95 cents in his pocket and dreams of making his fortune in the los angeles oil boom . subsequently he hauled oil for drillers with a team of horses and became a drilling contractor and an oil wildcatter before achieving success as an innovator in oilfield equipment . in 1928 baker casing shoe company changed its name to baker oil tools inc. to reflect its product line of completion cementing and fishing equipment . in early 1956 during one of the most successful periods in the company s history reuben c. baker retired as president of baker oil tools . a few weeks later he died after a brief illness at the age of 85 and was succeeded by his long time associate ted sutter . although he only had three years of formal education mr. baker had been granted 150 patents . in 1965 mr. sutter was succeeded by e.h. hubie clark who would become the first baker hughes chairman of the board in 1987 ; during its 80 year history before the baker hughes merger baker had only three chief executives . inteq also originally incorporated the drilling fluids division of baker hughes which consisted of milpark and others . this division was called inteq drilling fluids which provided the premier brands in oil and gas well drilling muds and wellbore cleaning fluids . in 2003 these product lines were spun off to form the separate entity of baker hughes drilling fluids bhdf with inteq continuing as the drilling and evaluation d & e company . inteq provides directional drilling mwd lwd surface logging mudlogging and coring services . the company s flagship brand has been the autotrak rotary steerable drilling system which was a pioneering directional drilling tool and has been responsible for the company s relatively strong market share in the past few years . when introduced in 1997 with agip s.p.a. the tool is fundamentally different compared to contemporary rivals such as the powerdrive and the geopilot employing the hybrid technique 5 of pushing and pointing vectoring the bit rather than only pointing the bit or only pushing the bit . 6 in 1987 baker international acquired and merged with hughes tool company to form baker hughes incorporated . shortly after in 1992 baker hughes acquired christensen diamond products and merged it with hughes tool company to form the drilling and evaluation division hughes christensen . after the merger hughes christensen introduced the ar series the newest antiwhirl technology capable of penetrating a much wider variety of tough formations without the catastrophic cutter fracture experienced by conventional pdc bits . ar series bits were designed to resist bit whirl by directing load forces through low friction gauge pads . by 1995 hughes christensen s gold series pdc line increased drilling efficiency by reducing the frictional forces that can accumulate in front of the cutting edge reducing the energy required to remove the rock . a year later patented chipmaster pdcs known for their efficiency and durability were built on the success of the eggbeater product line . hughes christensen next introduced the genesis hcm bits for steerable motors with patented ezsteer depth of cut control technology . this same technology was adapted to genesis hcr bits for rotary steerable systems such as the baker hughes autotrak rotary closed loop system . genesis zx pdcs followed with new zenith cutters . joint venture with schlumberger edit in 2000 baker hughes and schlumberger formed a joint venture called westerngeco . the joint venture was signed for a period of five years and merged baker s western geophysical and schlumberger s geco prakla the two leading seismic interpretation companies of the time . due to diminishing exploration markets new marginal oil fields and low barrel prices the worldwide business of seismic exploration was surviving on just the corporate strength of the two big service companies . the only new technology that was being introduced at the time was the 4 dimensional seismic survey monitoring . 7 in 2006 baker hughes announced it was selling its 30 % share of the westerngeco joint venture to schlumberger for 2.4 billion in cash . 8 baker hughes used the services of goldman sachs & co. who advised them on the sale . petroskills alliance edit in 2008 baker hughes joined the petroskills alliance . member companies came together to create detailed skill and competency maps which act as a guide for the 200 short courses taught to industry professionals in over 40 locations worldwide . competency maps are an analysis tool and software application that allows users to assess their skills base to identify gaps in their training areas needing improvement or mastered skill areas within upstream downstream and hse petroleum subject disciplines . 9 criminal charges edit in 2007 baker hughes pleaded guilty in u.s. federal court to violations of the foreign corrupt practices act fcpa including bribing oil related industry officials in russia uzbekistan angola indonesia and nigeria . 10 under the settlement a unit of the houston based company pleaded guilty to violations of the foreign corrupt practices act fcpa for payments made between 2001 and 2003 to a commercial agent retained in 2000 in connection with a project in kazakhstan . after bribes were paid baker hughes was awarded an oil services contract in a karachaganak kazakhstan field that generated 219 million in revenues from 2001 to 2006 . labor action edit during the annual period of negotiations between trade unions and their employer counterparts in norway 114 baker hughes employees were called to strike action in june 2012 . due to their key positions in the oil industry this strike by safe organized baker hughes employees would affect more than a dozen offshore oil installations . 11 12 acquisition by halliburton edit in november 2014 it was announced that baker hughes had entered talks with halliburton over a merger deal valued at 34.6 billion . 13 if carried out it would be the largest merger in the history of the industry . halliburton proposed the acquisition of baker hughes which would unite two of the largest u.s. providers of oil field services . under the terms of the transaction baker hughes shareholders will receive 1.12 shares of halliburton common stock and 19.00 in cash for each share of baker hughes stock they own . the merger has been approved by both companies stockholders and currently is waiting on approval from several jurisdictions such as the us department of justice on concerns on how it will affect the level of competition prices and consumer welfare for the global oilfield service providing industry . undoubtedly the merger will lead to increased consolidation in the oil services market . also officials believe that the asset sale will not help the combined company retain competitiveness as smaller buyers will not utilize their larger rivals assets efficiently . the merger had a deadline of the end of april 2016 after which if a decision had not been made both companies could walk away from the deal if they chose . at the beginning of may 2016 the day after the deadline expired baker hughes and