HOUSTON — It’s “too soon to quantify the financial impact” of the protest that shut down Baker Hughes’ operations in Iraq this weekend, but the Houston oil field service company has a dozen rigs in the country, analysts at Tudor, Pickering, Holt & Co. said in a note to clients Tuesday.
The company said Monday it has shut down operations in Iraq while it investigates a protest by local residents at its main Iraqi facility in Basrah, a city about 340 miles southeast of Baghdad. The protest caused a “significant disruption of business,” the company said.
Eric Holcomb, a spokesman for Baker Hughes, said there was damage to the facility, which houses all of the company’s employees and equipment in Iraq. But the company reported there were no injuries during the Saturday protest.
Analysts with Houston-based Tudor, Pickering, Holt & Co. said Iraq likely constitutes 1 percent to 2 percent of Baker Hughes’ total revenue, which hit a quarterly record of $5.8 billion in the third quarter on higher drilling activity in the Middle East and Asia Pacific.
The firm said it expects lower margins in the region, but the incident doesn’t change the firm’s positive view of the company’s stock. It just highlights the “ever-present risks associated with southern Iraq,” Tudor, Pickering, Holt & Co. wrote.
Baker Hughes shares dipped about 1 percent to $57.65 in early trading Tuesday.
In regulatory filings, the company attributed increased Middle East revenue last year in part to new operations contracts and increased upstream chemicals activities in Iraq. The company’s famous rig count included Iraq last year for the first time since 1990.