Berkshire Hathaway said it is scuttling the Oilfield Solutions Business of subsidiary Lubrizol and that it had declared a pre-tax loss of $365 million on the underperforming business.
That business originated from Weatherford Internationals Houston-based Engineered Chemistry oilfield chemicals business and its Kingsville, Texas-based Integrity Industries drilling fluids business, both of which Lubrizol acquired in 2015 for an undisclosed amount. Berkshire Hathaway noted the pre-tax loss in its 2016 annual report.
Citing a deep and persistent downturn in the oilfield industry, Lubrizol said in a statement provided to Lube Report that in late 2016 the company made the decision to exit its Oilfield Solutions Business to better focus its efforts on driving organic growth across the companys remaining business segments.
As a result of the decision, Lubrizol took actions with several units that made up Oilfield Solutions, including some actions expected to be completed by mid-2017:
- carved out Lubrizol Specialty Product Inc. as a stand-alone company within Berkshire Hathaway;
- sold Integrity Industries, a well construction business that supplied drilling muds and other drilling fluids;
- shut down some parts of the Oilfield Chemistry business;
- began exploring options to separately sell parts of the international business, specifically operations in Canada, Argentina, Ivory Coast and Nigeria; and
- integrating other parts of the business into the Lubrizol Additives business segment.
The company said it had or would shut down many of the Oilfield Solutions locations and layoff some employees but that it would offer severance assistance.