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