1 00:00:02,520 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,760 --> 00:00:10,600 Speaker 2: Baker hue shares in focus after the company top to 3 00:00:10,600 --> 00:00:15,160 Speaker 2: earnings expectations. Despite a sluggish environment, the energy services giant 4 00:00:15,160 --> 00:00:18,560 Speaker 2: remains a key player as a sector navigates shifting market 5 00:00:18,640 --> 00:00:23,800 Speaker 2: and geopolitical dynamics. CEO Lorenzo Seminelli joins us. Now, Lorenzo, 6 00:00:23,840 --> 00:00:25,959 Speaker 2: thank you so much for joining us this morning and 7 00:00:26,040 --> 00:00:29,040 Speaker 2: the strength I mean we call you an energy services company. 8 00:00:29,080 --> 00:00:32,080 Speaker 2: Maybe we should be talking more about data centers, announcing 9 00:00:32,120 --> 00:00:35,519 Speaker 2: your three year data center order target is three billion dollars. 10 00:00:35,840 --> 00:00:39,120 Speaker 2: Should we be thinking of Baker Hughes more focused on 11 00:00:39,159 --> 00:00:43,400 Speaker 2: the industrial and energy technology segment than the more traditional 12 00:00:43,440 --> 00:00:47,080 Speaker 2: meat and potatoes of energy services around oil and gas. 13 00:00:48,560 --> 00:00:51,120 Speaker 3: Well, Danny, great to be with you, and yes, very 14 00:00:51,120 --> 00:00:54,880 Speaker 3: pleased with the results of twenty twenty five and also. 15 00:00:54,640 --> 00:00:55,400 Speaker 1: The fourth quarter. 16 00:00:55,840 --> 00:00:58,640 Speaker 3: And you should be thinking of Baker Hughes as really 17 00:00:58,640 --> 00:01:03,560 Speaker 3: an energy technology company that intersects the industrial world of 18 00:01:04,040 --> 00:01:08,399 Speaker 3: data centers electrification with also that of energy sources and 19 00:01:08,520 --> 00:01:13,959 Speaker 3: understanding the molecule itself. And we are benefiting from a 20 00:01:14,040 --> 00:01:17,240 Speaker 3: portfolio that allows us to play in both. And you've 21 00:01:17,280 --> 00:01:21,480 Speaker 3: seen the increase in power generation behind the meta off 22 00:01:21,520 --> 00:01:23,800 Speaker 3: grid applications, data centers. 23 00:01:23,800 --> 00:01:27,000 Speaker 1: You've mentioned it. We've taken up our target. 24 00:01:26,680 --> 00:01:30,080 Speaker 3: With regards to three billion during the course of twenty 25 00:01:30,120 --> 00:01:33,960 Speaker 3: five to twenty seven, doubling our previous estimate, and feel 26 00:01:34,080 --> 00:01:38,240 Speaker 3: very good about the overall outlook for power generation, electricity 27 00:01:38,280 --> 00:01:41,600 Speaker 3: consumption and it doubling over the course of now to 28 00:01:41,640 --> 00:01:42,440 Speaker 3: twenty forty. 29 00:01:43,080 --> 00:01:46,280 Speaker 4: What's your outlook on the oil price here, Lorenzo, because 30 00:01:46,880 --> 00:01:50,400 Speaker 4: it seems to me we're all jockeying. 31 00:01:49,960 --> 00:01:51,440 Speaker 1: For more power. 32 00:01:51,520 --> 00:01:55,400 Speaker 4: Everybody's paying up for electricity, but oil, as much as 33 00:01:55,440 --> 00:01:59,040 Speaker 4: I drive, continues to hang out in the duldrums. Right 34 00:01:59,120 --> 00:02:01,760 Speaker 4: New York crud here sixty dollars and fifty seven cents. 35 00:02:01,800 --> 00:02:06,919 Speaker 4: With all the geopolitical tensions, how long does crude stay 36 00:02:06,960 --> 00:02:07,440 Speaker 4: this low? 37 00:02:09,880 --> 00:02:12,520 Speaker 3: You know, you look at us in energy and we've 38 00:02:12,520 --> 00:02:15,680 Speaker 3: always said don't try and predict the oil price because 39 00:02:15,720 --> 00:02:19,160 Speaker 3: it is emotional and it's going to be range bound. 40 00:02:19,600 --> 00:02:23,080 Speaker 3: As you look at the supply and demand aspects in 41 00:02:23,160 --> 00:02:26,360 Speaker 3: twenty twenty six, again we see an improvement in the 42 00:02:26,400 --> 00:02:29,480 Speaker 3: back half of the year. There's enough supply out there 43 00:02:29,520 --> 00:02:32,800 Speaker 3: at the moment, but as you look at beyond twenty six, 44 00:02:33,200 --> 00:02:37,079 Speaker 3: demand continues to increase. Oil is always going to be important, 45 00:02:37,400 --> 00:02:40,120 Speaker 3: it's going to be core for certain end markets, and 46 00:02:40,160 --> 00:02:43,079 Speaker 3: so we think it will be range bound and twenty 47 00:02:43,120 --> 00:02:45,720 Speaker 3: twenty six again being relatively soft. 48 00:02:46,639 --> 00:02:49,359 Speaker 2: Lorenzo, there's been a lot of optimism over the past 49 00:02:49,400 --> 00:02:51,640 Speaker 2: couple of weeks in you and your peers about the 50 00:02:51,680 --> 00:02:55,520 Speaker 2: opportunity in Venezuela. By some measures, you're one of the largest, 51 00:02:55,520 --> 00:02:58,680 Speaker 2: if not the largest, having the largest base of some 52 00:02:58,720 --> 00:03:01,120 Speaker 2: of the machinery in the rear in itself. You've talked 53 00:03:01,120 --> 00:03:05,440 Speaker 2: to our Bloomberg News colleagues before about optimism in Venezuela. 54 00:03:05,560 --> 00:03:08,519 Speaker 2: Have you started yet to ramp up production or are 55 00:03:08,560 --> 00:03:12,480 Speaker 2: those plans in place to help with the infrastructure build out. 56 00:03:14,040 --> 00:03:17,920 Speaker 3: Venezuela is a clear opportunity for Bakers Hughes, and again, 57 00:03:17,960 --> 00:03:21,160 Speaker 3: we have a long history just as a reference point, 58 00:03:21,639 --> 00:03:26,120 Speaker 3: back in twenty twelve across our oil field services and 59 00:03:26,200 --> 00:03:31,120 Speaker 3: also our industrial energy technology segments, we were revenues of 60 00:03:31,240 --> 00:03:35,120 Speaker 3: five hundred million. We've got a very large installed base 61 00:03:35,360 --> 00:03:41,240 Speaker 3: of existing compressors, engines or production, and we see that 62 00:03:41,360 --> 00:03:44,240 Speaker 3: opportunity being there going forward as well as you look 63 00:03:44,280 --> 00:03:48,520 Speaker 3: to ramp up production. We have been operating within Venezuela 64 00:03:48,600 --> 00:03:52,480 Speaker 3: under the license that's available and helping the operators with 65 00:03:52,600 --> 00:03:53,280 Speaker 3: the license. 66 00:03:53,760 --> 00:03:55,680 Speaker 1: And we're obviously working. 67 00:03:55,360 --> 00:03:59,240 Speaker 3: Closely with the administration and understanding how we go in 68 00:03:59,280 --> 00:04:03,160 Speaker 3: with the broader portfolio as the legal framework becomes understood, 69 00:04:03,440 --> 00:04:06,800 Speaker 3: and also as we surely understand the safety of our 70 00:04:06,840 --> 00:04:08,200 Speaker 3: operations and our employees. 71 00:04:08,400 --> 00:04:11,080 Speaker 4: At the same time, five hundred million dollars seems like 72 00:04:11,160 --> 00:04:13,480 Speaker 4: small potatoes for a big company like Baker Hughes, and 73 00:04:13,520 --> 00:04:16,719 Speaker 4: certainly for the opportunity. 74 00:04:16,240 --> 00:04:17,360 Speaker 1: That exists in. 75 00:04:17,279 --> 00:04:21,279 Speaker 4: Venezuela with the largest oil reserves of any country in 76 00:04:21,320 --> 00:04:25,719 Speaker 4: the world. How high do you think it could go 77 00:04:25,800 --> 00:04:28,160 Speaker 4: there in terms of revenue for you? And what kind 78 00:04:28,160 --> 00:04:31,600 Speaker 4: of guarantees security guarantees do you need to see before 79 00:04:31,640 --> 00:04:35,200 Speaker 4: investing more into that economy. 80 00:04:35,960 --> 00:04:39,159 Speaker 3: If you look at it from a twenty twelve perspective, 81 00:04:39,200 --> 00:04:41,760 Speaker 3: that was an annual number and you think what's happened 82 00:04:41,800 --> 00:04:46,360 Speaker 3: to the production since then? It's been declining, and the 83 00:04:46,360 --> 00:04:48,360 Speaker 3: infrastructure obviously. 84 00:04:47,880 --> 00:04:49,920 Speaker 1: Needs repair, it needs OA hole. 85 00:04:50,279 --> 00:04:54,680 Speaker 3: So there's a significant opportunity not just from a opex 86 00:04:54,720 --> 00:05:00,359 Speaker 3: perspective of annual activity, but really the infrastructure improvement going forward. 87 00:05:00,480 --> 00:05:02,159 Speaker 1: I wouldn't state a number right now. 88 00:05:02,200 --> 00:05:05,760 Speaker 3: But clearly it's an opportunity that we see given the 89 00:05:05,800 --> 00:05:09,560 Speaker 3: reserves that Venezuela has and also the backdrop of experience 90 00:05:09,600 --> 00:05:13,320 Speaker 3: that we have there with regards to safety again, employee 91 00:05:13,320 --> 00:05:16,760 Speaker 3: safety and just making sure that the right framework is 92 00:05:16,760 --> 00:05:20,600 Speaker 3: there is important. It was there before, so again working 93 00:05:20,640 --> 00:05:23,720 Speaker 3: with the authorities to make sure it's in place. And 94 00:05:23,880 --> 00:05:28,160 Speaker 3: we have good experience of navigating different environments as many 95 00:05:28,200 --> 00:05:31,600 Speaker 3: other companies do as well. So we are optimistic about 96 00:05:31,880 --> 00:05:34,400 Speaker 3: Venezuela and we are watching it closely. 97 00:05:34,720 --> 00:05:38,040 Speaker 2: Have you had conversations with administration? How easy and how 98 00:05:38,080 --> 00:05:39,919 Speaker 2: seamless are they going to make it in terms of 99 00:05:39,960 --> 00:05:43,200 Speaker 2: things like getting any additional licenses you might need, any 100 00:05:43,240 --> 00:05:46,400 Speaker 2: support from this administration, what are they willing to back up? 101 00:05:47,920 --> 00:05:50,640 Speaker 3: Again, those discussions are ongoing. I think you've seen some 102 00:05:50,720 --> 00:05:54,400 Speaker 3: of those dialogues and also what's been said by the administration. 103 00:05:55,520 --> 00:06:00,960 Speaker 3: Clearly there's a dialogue around incremental licenses, how to invest, 104 00:06:01,080 --> 00:06:05,599 Speaker 3: how to think about the aspect of also payments, etc. 105 00:06:06,200 --> 00:06:08,600 Speaker 3: And all of that is being worked on. You've got 106 00:06:09,080 --> 00:06:13,680 Speaker 3: Department of Energy, you've got the National Energy Dominance Council, 107 00:06:13,760 --> 00:06:17,679 Speaker 3: you've got the secretaries involved, and so there's a large 108 00:06:17,720 --> 00:06:19,080 Speaker 3: team that's actively working this. 109 00:06:19,880 --> 00:06:22,360 Speaker 4: All right, Lorenzo, thanks so much for joining us. Lorenzo 110 00:06:22,800 --> 00:06:27,120 Speaker 4: Simonelli there the CEO of Baker Hughes, talking about their 111 00:06:27,160 --> 00:06:31,840 Speaker 4: foray into AI data centers, as well as investment in Venezuela.