Precision engineering group Hunting is making changes in a bid to restore profitability to its Europe, Middle East and Africa (EMEA) business and adapt to challenges in the market.
On March 18, Hunting released an update on restructuring plans for the EMEA segment. This followed a separate announcement earlier in the month about the acquisition of organic oil recovery (OOR) technology from its founding shareholders for $17.5m, in a move expected to benefit Hunting’s global operations.
Hunting announced in January that it had decided to restructure its EMEA operating segment.
This move was based on expectations of low levels of future drilling activity in the North Sea, among other factors.
The latest update said a review of the segment, including an analysis of the medium-term outlook for the European region, had led to a series of proposals that were now under consideration by Hunting’s senior leadership.
These include the proposed closure of the oil country tubular goods (OCTG) operating site in the Netherlands, with any future orders in relation to geothermal activity being fulfilled by Hunting’s UK sites; the consolidation of OCTG threading and accessories manufacturing activity into the Fordoun operating site in Aberdeen, UK; the consolidation and transfer of all well intervention manufacturing activities into Hunting’s Dubai operating site; and a reduction in the total headcount of the EMEA segment.
Hunting’s regional managing director, Graham Goodall, told Energy Voice the future orders being shifted from the Netherlands to the UK represented “some positivity for the UK side of the business”.
He added that the new Dubai facility was expected to enter service within the next few weeks. And while numbers for the anticipated headcount reductions are not being disclosed at this time, Goodall said the reductions would mainly affect the Badentoy facility in Aberdeen.
Consultation processes with employees have now started.
Goodall described the “one and only goal” of the restructuring as restoring the profitability of the EMEA segment.
“It’s no secret that there’s a challenging market out there, particularly being driven by government policy as a lack of spending,” he said.
This has been the case for a number of years among Hunting’s customer base, Goodall continued, “which has resulted in us getting to this point that we had to take a look at our business and then restructure to right-size our business and get us to a profitable state in the future”.
Hunting anticipates realising annualised cost savings of around $10m per year once the restructuring is complete and is targeting profitability for the EMEA segment by the first quarter of 2026.
Meanwhile, Goodall described the OOR technology acquisition as “positive news”, including for the UK and the North Sea.
The acquisition comprises the entire portfolio of intellectual property, including over 25 discreet patents, the distribution rights for the technology, and a laboratory located in California, US.
Once the acquisition closes, Hunting will hold the global rights for the OOR technology, putting it on a path to further accelerate commercialisation across North America and elsewhere.
OOR is an enhanced oil recovery (EOR) technology aimed at improving the ultimate recovery of oil reserves from wells, thereby extending field life and boosting economic returns. Hunting has touted the technology’s cost-efficiency, saying it reduces capital expenditure requirements while being simple to deploy. Reduced water cut during end-of-life production and lower hydrogen sulphide (H2S) levels in production offtake have also been cited as benefits of OOR.
Field trials of the technology are currently underway with numerous exploration and production companies across North America, Europe, the Middle East and Asia Pacific, Hunting said. This comes after the company announced in August 2024 that it had secured up to $60m worth of OOR contracts to support operators in the North Sea.
“Demand remains strong, with the fastest growing areas being Africa, India, APAC and North America,” Hunting’s finance director, Bruce Ferguson, told Energy Voice. “We have around 70 engaged customers looking at testing the technology, with five customers using it at full-field level. With the long sales cycle it will take 12-18 months to convert the other customers to this stage.”
Ferguson cited a previous trial of the OOR technology at CNOOC International’s Scott platform in the North Sea, which saw a 140% increase in oil production and a 50-80% reduction in H2S. This led to a full-field treatment, though it is currently on hold owing to power issues at the platform, according to Ferguson.
“Following that pilot we have now analysed over 20 oilfields in the UKCS, with demand in the North Sea continuing to grow,” he said.
“Results from the ongoing field trials are constantly being received and are positive. To date, full-field applications are 99% successful in returning a return on investment within three months of breakthrough,” Ferguson continued.
“However, these results can usually only be made public flowing the publication of a peer-reviewed scientific paper. A highly successful application will be published next month which demonstrates the results from two full-field applications on two reservoirs in South Oman. These will be released as appropriate going forward.”
