Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

In this list
Electric Power | Natural Gas | Oil

Baker Hughes looking to support energy transition during oil market downturn

Commodities | Energy | Electric Power | Renewables | Natural Gas

Hydrogen: Beyond the Hype

Electric Power

Platts M2MS-Power

Electric Power | Renewables | LNG | Infrastructure Utilities

Caribbean Energy Conference, 21st

Electricity | Electric Power | Energy Transition | Metals

Lucid Motors completes construction of US EV factory, output to start in 2021

Oil | Petrochemicals

Insight from Dubai: Middle East seeks refuge in petchems amid bleak oil demand forecasts

Baker Hughes looking to support energy transition during oil market downturn


Sees international oil markets stabilizing in 2021

Looks to expand digital technology use

'Well positioned' in LNG space

New York — Baker Hughes remains committed to the oil and gas industry despite its ongoing challenges, but is also looking to grow its business portfolio to support energy transition, the company said Oct. 21.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

In North America, uncertainty in the oil market coupled with the rapidly evolving business models of some of the largest U.S. producers muddies the near- and longer-term outlooks, CFO Brian Worrell said on the company's third-quarter earnings call.

"As more E&Ps commit to maintenance mode CapEx levels, minimal production growth and returning more cash to their shareholders, we believe that overall, North American drilling and completion activity will struggle to be flat on a year-over-year basis in 2021 and that U.S. oil production should decline on a year-over-year basis," the CFO said.

Activity in the international oil markets is expected to stabilize in 2021 after continued weakness in the fourth quarter 2020, Worrell said.

Although still challenging, "the outlook for natural gas is slightly more optimistic as forward prices have improved with strong demand in Asia and lower expected future gas production in the U.S.," Chairman, President and CEO Lorenzo Simonelli said.

Anticipating a year-over-year decline in revenue in 2021 in its oilfield services segment, cost-out actions initiated in the first quarter are expected to shield it from larger losses and drive modest improvement in margins. The company is on track to achieve $700 million in annualized cost savings by the end of the year, with a little more than two-thirds of the costs taken from the oilfield services segment, Worrell said.

As Baker Hughes adjusts its oil and gas operations to align with changes in the market, it is also looking to accelerate the acceptance and adoption of technology as a way to support and keep pace with the energy transition, the executives said.

"The COVID-19 pandemic has revealed the speed at which the environment can respond to lower carbon levels. This has accelerated the debate on how to fuel economic growth while transitioning to a lower-carbon future," Simonelli said.

In its efforts to expand its role in the energy transition, Baker Hughes plans to expand the use of digital technology and remote operations in both its oilfield services and turbomachinery and process solutions segment, which houses its LNG operations.

Simonelli said LNG is a key aspect of the energy transition as both a destination fuel and as a bridge fuel to reduce coal usage.

"[W]e're very much in line with the continued expansion of LNG and natural gas usage," he said.

Baker Hughes is "very well positioned" to take advantage of the 50 million to 100 million tons of new LNG capacity set to receive final investment decisions over the next three to four years amid rising demand and capacity requirements that could total about 650 million to 700 million tons by 2030, the CEO said.

The company's plans also include expanding its existing product and services footprint into chemicals and non-metallic materials. "Due to the lower carbon footprint associated with non-metallics, we believe this segment provides significant opportunity for expansion as well as synergies with our upstream and chemicals businesses," Simonelli said.

The CEO sees the greatest near-term potential in Baker Hughes' technology coming in the carbon capture, hydrogen and energy storage areas.

"Although it is still very early in the evolution of these three markets, we believe that Baker Hughes can play a key role in the future development of these areas with the technology we have in-house," Simonelli said.