Lorenzo Simonelli noted that OPEC+ production cuts have stabilized global oil markets, but that uncertainty over the future restoration of these cuts, added to geopolitical risks from Gaza and Ukraine, could influence the trajectory of oil prices.
Forecast for North America
In North America, Baker Hughes is forecasting an annual decline in activity in the low to mid-single digits, with a continued decrease in activity in US gas basins. This decline would be partially offset by a slight increase in oil activity in the second half of the year.
International growth and investment
On the international front, Simonelli forecasts high-single-digit growth, anticipating that extensions to OPEC+ cuts and adjustments to Saudi Arabia’s oil-to-gas drilling equipment will positively influence markets. He also stressed that growth in upstream spending would be led by offshore markets in Latin America, West Africa and the Middle East.
Development of the new energy sector
Simonelli also highlighted the growing importance of production optimization to extend the life of existing reservoirs. Baker Hughes has launched solutions for mature fields, helping operators maximize the value of these fields through products such as chemicals and new technologies in automation and digital optimization.
With regard to natural gas and LNG, the CEO remains very optimistic about long-term demand, forecasting an increase in natural gas demand of almost 20% by 2040, and an increase in LNG demand in the 2020s by single digits each year. These trends should support an installed capacity of 800 mtpa by 2030, requiring further capacity additions beyond that.
