Baker Hughes Inc., Winner, Best Liquidity Management Solution

Published: Aug 2015


Photo of Richard Parkinson and Steve Hall from J.P. Morgan collecting the award on behalf of Debbie Donovan, Baker Hughes.


The re-engineering of Baker Hughes’ global USD pool is an exceptional project due to the size, scope and implementation timeframe. This ambitious initiative significantly reduced bank accounts (more than 200 in just seven months) while increasing transparency and improving operating efficiency.

Debbie Donovan

Director of Treasury Operations

Baker Hughes is a leading supplier worldwide of oilfield services, products, technology and systems to the oil and natural gas industry. The company’s 52,000 plus employees work in more than 80 countries helping customers find, evaluate, drill, produce, transport and process hydrocarbons.

in partnership with

The challenge:

After a period of substantial global growth, along-with major acquisitions, managing a dated notional US$ pooling structure spanning more than 80 countries became problematic. Baker Hughes recognised the need to reassess and redesign its offshore pooling structure to consolidate accounts, improve visibility and streamline processes. As Deborah Donovan, Director of Treasury Operations explains, “this structure, originally implemented in 1998, was no longer the optimal solution for us”. It was decided that a single US$ physical pool would best serve the company.

The challenge was to update account information country-by-country as a result of new regulatory and compliance requirements, with the input of numerous stakeholders, including operations, legal, tax and accounting. An additional constraint was that changes could only be carried out during periods when administrative resources were available, which required phased implementation over a number of months, and for the project to be completed within the same year.

“At the same time this project was underway, we were in the process of migrating from one electronic banking platform to another, as well as implementing the new liquidity solutions platform,” says Donovan.

While change for the sake of change is not always efficient, the opportunity to change and improve should be seized as opportunities arise.

Debbie Donovan, Director of Treasury Operations

The solution:

To meet its needs, Baker Hughes implemented a US$ physical pooling structure. J.P. Morgan, through its London Branch, was chosen to provide this structure. All business units now participate in the pool, except those that are precluded for jurisdictional and regulatory reasons. The structure eliminated or consolidated more than 200 bank accounts, streamlined inter-company transactions, and provided transparency into balance positions. J.P. Morgan’s dedicated project lead and various internal stakeholders worked with the Baker Hughes team in the exacting task of updating documentation across both organisations.

Best practice and innovation:

This is an exceptional project due to the size, scope and tight implementation schedule, with the participation of many disciplines (treasury, tax, legal, operations, and accounting) in both organisations. The main benefits have been to significantly reduce the number of bank accounts while increasing transparency and improving operating efficiency. Of particular benefit is the ability to manage more flexibly pool interest rate variables. The new structure streamlined posting and reconciliation reporting, freeing up administrative resources.

“One of the significant lessons learned by the treasury team was taking advantage of the opportunity to make critically important organisation changes,” Donovan adds. “While change for the sake of change is not always efficient, the opportunity to change and improve should be seized as opportunities arise.”

Key benefits:

  • Reduced reliance on bank credit lines.
  • Reduction in bank charges.
  • Cost savings.
  • Productivity gains.
  • Process efficiencies.

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