Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Baker hue shares in focus after the company top to
Speaker 2: earnings expectations. Despite a sluggish environment, the energy services giant
Speaker 2: remains a key player as a sector navigates shifting market
Speaker 2: and geopolitical dynamics. CEO Lorenzo Seminelli joins us. Now, Lorenzo,
Speaker 2: thank you so much for joining us this morning and
Speaker 2: the strength I mean we call you an energy services company.
Speaker 2: Maybe we should be talking more about data centers, announcing
Speaker 2: your three year data center order target is three billion dollars.
Speaker 2: Should we be thinking of Baker Hughes more focused on
Speaker 2: the industrial and energy technology segment than the more traditional
Speaker 2: meat and potatoes of energy services around oil and gas.
Speaker 3: Well, Danny, great to be with you, and yes, very
Speaker 3: pleased with the results of twenty twenty five and also.
Speaker 1: The fourth quarter.
Speaker 3: And you should be thinking of Baker Hughes as really
Speaker 3: an energy technology company that intersects the industrial world of
Speaker 3: data centers electrification with also that of energy sources and
Speaker 3: understanding the molecule itself. And we are benefiting from a
Speaker 3: portfolio that allows us to play in both. And you've
Speaker 3: seen the increase in power generation behind the meta off
Speaker 3: grid applications, data centers.
Speaker 1: You've mentioned it. We've taken up our target.
Speaker 3: With regards to three billion during the course of twenty
Speaker 3: five to twenty seven, doubling our previous estimate, and feel
Speaker 3: very good about the overall outlook for power generation, electricity
Speaker 3: consumption and it doubling over the course of now to
Speaker 3: twenty forty.
Speaker 4: What's your outlook on the oil price here, Lorenzo, because
Speaker 4: it seems to me we're all jockeying.
Speaker 1: For more power.
Speaker 4: Everybody's paying up for electricity, but oil, as much as
Speaker 4: I drive, continues to hang out in the duldrums. Right
Speaker 4: New York crud here sixty dollars and fifty seven cents.
Speaker 4: With all the geopolitical tensions, how long does crude stay
Speaker 4: this low?
Speaker 3: You know, you look at us in energy and we've
Speaker 3: always said don't try and predict the oil price because
Speaker 3: it is emotional and it's going to be range bound.
Speaker 3: As you look at the supply and demand aspects in
Speaker 3: twenty twenty six, again we see an improvement in the
Speaker 3: back half of the year. There's enough supply out there
Speaker 3: at the moment, but as you look at beyond twenty six,
Speaker 3: demand continues to increase. Oil is always going to be important,
Speaker 3: it's going to be core for certain end markets, and
Speaker 3: so we think it will be range bound and twenty
Speaker 3: twenty six again being relatively soft.
Speaker 2: Lorenzo, there's been a lot of optimism over the past
Speaker 2: couple of weeks in you and your peers about the
Speaker 2: opportunity in Venezuela. By some measures, you're one of the largest,
Speaker 2: if not the largest, having the largest base of some
Speaker 2: of the machinery in the rear in itself. You've talked
Speaker 2: to our Bloomberg News colleagues before about optimism in Venezuela.
Speaker 2: Have you started yet to ramp up production or are
Speaker 2: those plans in place to help with the infrastructure build out.
Speaker 3: Venezuela is a clear opportunity for Bakers Hughes, and again,
Speaker 3: we have a long history just as a reference point,
Speaker 3: back in twenty twelve across our oil field services and
Speaker 3: also our industrial energy technology segments, we were revenues of
Speaker 3: five hundred million. We've got a very large installed base
Speaker 3: of existing compressors, engines or production, and we see that
Speaker 3: opportunity being there going forward as well as you look
Speaker 3: to ramp up production. We have been operating within Venezuela
Speaker 3: under the license that's available and helping the operators with
Speaker 3: the license.
Speaker 1: And we're obviously working.
Speaker 3: Closely with the administration and understanding how we go in
Speaker 3: with the broader portfolio as the legal framework becomes understood,
Speaker 3: and also as we surely understand the safety of our
Speaker 3: operations and our employees.
Speaker 4: At the same time, five hundred million dollars seems like
Speaker 4: small potatoes for a big company like Baker Hughes, and
Speaker 4: certainly for the opportunity.
Speaker 1: That exists in.
Speaker 4: Venezuela with the largest oil reserves of any country in
Speaker 4: the world. How high do you think it could go
Speaker 4: there in terms of revenue for you? And what kind
Speaker 4: of guarantees security guarantees do you need to see before
Speaker 4: investing more into that economy.
Speaker 3: If you look at it from a twenty twelve perspective,
Speaker 3: that was an annual number and you think what's happened
Speaker 3: to the production since then? It's been declining, and the
Speaker 3: infrastructure obviously.
Speaker 1: Needs repair, it needs OA hole.
Speaker 3: So there's a significant opportunity not just from a opex
Speaker 3: perspective of annual activity, but really the infrastructure improvement going forward.
Speaker 1: I wouldn't state a number right now.
Speaker 3: But clearly it's an opportunity that we see given the
Speaker 3: reserves that Venezuela has and also the backdrop of experience
Speaker 3: that we have there with regards to safety again, employee
Speaker 3: safety and just making sure that the right framework is
Speaker 3: there is important. It was there before, so again working
Speaker 3: with the authorities to make sure it's in place. And
Speaker 3: we have good experience of navigating different environments as many
Speaker 3: other companies do as well. So we are optimistic about
Speaker 3: Venezuela and we are watching it closely.
Speaker 2: Have you had conversations with administration? How easy and how
Speaker 2: seamless are they going to make it in terms of
Speaker 2: things like getting any additional licenses you might need, any
Speaker 2: support from this administration, what are they willing to back up?
Speaker 3: Again, those discussions are ongoing. I think you've seen some
Speaker 3: of those dialogues and also what's been said by the administration.
Speaker 3: Clearly there's a dialogue around incremental licenses, how to invest,
Speaker 3: how to think about the aspect of also payments, etc.
Speaker 3: And all of that is being worked on. You've got
Speaker 3: Department of Energy, you've got the National Energy Dominance Council,
Speaker 3: you've got the secretaries involved, and so there's a large
Speaker 3: team that's actively working this.
Speaker 4: All right, Lorenzo, thanks so much for joining us. Lorenzo
Speaker 4: Simonelli there the CEO of Baker Hughes, talking about their
Speaker 4: foray into AI data centers, as well as investment in Venezuela.