GE to locate oil & gas R&D center in Oklahoma

General Electric announced Wednesday (April 3) that it will build a $110 million “Oil & Gas Global Research Center” in Oklahoma that will create 125 high-wage jobs in the state.

Research from the center could assist with further development in the Arkoma Basin and the Fayetteville Shale Play in Arkansas.

No location has yet been selected for the planned center, which will be the first sector-specific research & development. The sector will initially provide new engineering jobs in disciplines ranging from mechanical and electrical to systems and software engineering.

The company said it is reviewing locations in the central Oklahoma area. Oklahoma City is home to GE Oil & Gas’s Artificial Lift business, which is a recognized leader in electric submersible pump (ESP) manufacturing and services with more than 550 GE employees located here.

“These researchers will join GE’s global network of 50,000 world-class scientists and engineers who are working to solve some of the world’s toughest challenges,” noted a statement from the office of Oklahoma Gov. Mary Fallin.
 
‘TREMENDOUS OPPORTUNITY’
GE Chairman and CEO Jeff Immelt and Fallin made the announcement in Oklahoma City at the State Capitol.

“The launch of the new Center comes as the availability of unconventional resources, such as shale gas, is changing the global energy landscape and has the potential to create jobs, fuel innovation and lead to greater energy independence,” according to the statement. “The Center will initially focus on technologies that enable safe, efficient and reliable production, delivery and use of unconventional oil and gas.
 
GE Oil & Gas is the company's fastest-growing business, with revenues of more than $15 billion and earnings and new orders having each grown 16% in 2012. GE has grown its oil and gas portfolio to win in today's dynamic landscape, bringing to bear industry-leading technologies and services in turbomachinery, subsea drilling, pressure control, remote monitoring and diagnostics.  
 
“Unconventional resources, and shale gas in particular, may be one of the biggest productivity drivers of our lifetime,” Immelt said in the statement.  “At GE, we see a tremendous opportunity in the oil and gas space. … Collaboration is key to leading the unconventional resource revolution, and in Governor Fallin and the people of Oklahoma, we’ve found excellent partners.”

FAYETTEVILLE SHALE PLAY
The Fayetteville Shale Play, a region of natural gas development in north and central Arkansas, began to boom with activity in 2008.

An updated Fayetteville Shale Play economic impact study found that production in the Play between 2008 and 2011 created total economic activity of more than $18.5 billion. The updated study, produced by the Center for Business and Economic Research at the University of Arkansas, was released in May 2012.

Total annual state employment impacts increased from more than 14,500 people to more than 22,000 people during the 2008-2011 period.

But low natural gas prices and production in other areas of the U.S. have slowed activity in Arkansas. Severance tax collections in Arkansas during 2012 totaled $40.96 million, down more than 30% compared to the $58.905 million in 2011, and also below the $54.485 million in 2011.

However, 2013 is off to a more robust start. Arkansas’ January and February severance tax collections total $10.718 million, up 13.8% compared to the same period in 2012, and up 22.17% compared to the 2011 period.

GE RESEARCH JOB GROWTH
Fallin said she the state is a good fit for such research, and she thanked GE for the decision.
 
“I am thrilled that GE, with its rich history of innovation, has chosen Oklahoma as the home for these new technologies. Their announcement today is one more indication that our state is nationally and even internationally recognized as a leader in energy and the home of a dynamic and robust economy. Whether it’s international powerhouses like GE or small businesses, Oklahoma is a fantastic place to locate and to invest in,” Fallin said in the statement.
 
The new research center will become part of GE’s growing global Research network. In the past three years, GE has established an Advanced Manufacturing and Software Center near Detroit, started a new global software center in Silicon Valley; and added 100 new researchers to its global research headquarters in upstate New York. Taken together with the new Center, the total number of R&D jobs created will exceed 2,300 and represent an investment totaling hundreds of millions of dollars.