in Oil & Companies News 21/07/2022
Baker Hughes Company (Nasdaq: BKR) (“Baker Hughes” or the “Company”) announced results today for the second quarter of 2022. “Our second quarter results were mixed as each product company navigated a different set of challenges ranging from component shortages and supply chain inflation to the suspension of our Russian operations. While OFS and TPS are managing the current situation fairly well, OFE and DS have both had more difficulty. I would like to thank our team for their continued efforts and commitment to deliver for our customers and execute on our strategy through these volatile times,” said Lorenzo Simonelli, Baker Hughes chairman and chief executive officer.
“As we look to the second half of 2022 and into 2023, the oil markets face an unusual set of circumstances and challenges. On one hand, the demand outlook for the next 12 to 18 months is deteriorating, as inflation erodes consumer purchasing power and central banks aggressively raise interest rates to combat inflation. On the other hand, due to years of underinvestment globally and the potential need to replace Russian barrels, broader supply constraints can realistically keep commodity prices at elevated levels even in a scenario of moderate demand destruction. As a result, we believe the outlook for oil prices remains volatile, but still supportive of strong activity levels as higher spending is required to re-order the global energy map and likely offsets demand destruction in most recessionary scenarios.”
“Baker Hughes is preparing for all of these scenarios and will continue to execute on our long-term strategy. If commodity prices remain resilient as we expect, our portfolio is well positioned to benefit from a strong LNG cycle and a multi-year upstream spending cycle. We will also continue to invest in our energy transition and industrial initiatives, while also returning 60 to 80% of free cash flow to shareholders,” concluded Simonelli.
The OFS segment saw continued customer interest in its electrical submersible pumps (ESPs) and artificial lift solutions. OFS secured an exclusive three year contract to provide ESPs for an operator in the Permian Delaware Basin for existing wells as well as ESPs for approximately 250 new wells through 2025. The contract enables the customer to advance development of its Permian assets while reducing overall operating costs through improved ESP performance, field service and equipment delivery.
OFS also secured a four-year contract to provide artificial lift solutions for the Missan Field in Iraq. The contract includes the supply of electrical submersible pumps (ESP), surface equipment and dedicated field services. The ESPs will be utilized to maximize oil recovery and extend system run-life in harsh environments.
The TPS segment continued to have another strong quarter of LNG leadership. TPS secured a major contract from Bechtel to provide seven mid-scale LNG trains to support the Stage 3 expansion project of Cheniere’s Corpus Christi Liquefaction facility (CCL). Each train is comprised of two electric motor-driven compressors producing approximately 1.5 MTPA of LNG, totaling approximately 10.5 MTPA of production capacity. This award builds on the strong relationship between Baker Hughes and Cheniere since 2012, as we currently provide all liquefaction equipment for Cheniere’s Corpus Christi and Sabine Pass projects.
Also in LNG, TPS continued to support New Fortress Energy’s (NFE) “Fast LNG” facilities project with a contract for two main refrigerant turbocompressor strings in offshore. Each turbocompressor will feature one LM6000PF+ gas turbine. NFE will deploy Baker Hughes’ technology in various offshore projects across the globe, helping to secure overall LNG supply for NFE’s customer base.
TPS was awarded a contract from Samsung Engineering (SECL) to supply 14 electric motor driven compressors (EMCC) to support gas processing for Saudi Aramco’s Jafurah unconventional gas field project, the largest non-associated gas field in the Kingdom of Saudi Arabia. For this project, Baker Hughes will leverage its local compressor packaging facility in Modon, supporting the Kingdom’s in-country total value add program.
TPS was awarded a contract by a subsidiary of Tellurian Inc., to provide electric-powered Integrated Compressor Line (ICL) technology and turbomachinery equipment for a natural gas transmission project in southwest Louisiana. The Driftwood pipeline project will be the first North American application of Baker Hughes’ ICL technology – the project is expected to supply upwards of 5.5 billion cubic feet of natural gas daily, with virtually no emissions. The project will initially include four ICL compressors and other turbomachinery equipment for the compressor trains, as well as a LM6000PF+ gas turbine for backup power for the initial phase of the pipeline project.
The OFE segment continued to gain momentum internationally with its offshore flexible pipe technology, securing several large contracts with multiple customers across the Americas and the Middle East. OFE will provide flexible pipe systems and services, including risers, flowlines and jumpers, to improve oil recovery and help to extend field life and profitability. In addition, OFE continued to find new sustainable applications for its onshore flexible pipe technology, deploying it for the first time as part of a CO2 district heating and cooling system.
The DS segment continued to gain traction in the aerospace sector for industrial asset inspection solutions. Waygate Technologies secured several multi-year contracts with aircraft manufacturers in North America and China for its industrial inspection services as well as ultrasonic inspection equipment. Waygate’s solutions will be used to inspect additive-printed parts and components to ensure structural integrity and material durability, which is also critical for the growing electric mobility segment.
Executing on Priorities and Leading with Innovation
OFS continued to maintain its strategic market leadership in Saudi Arabia, securing its third contract with Aramco in the past two quarters for Integrated Well Services & Solutions (IWS&S). IWS&S’s integrated model helps optimize project performance and value by combining project management expertise, a comprehensive technology portfolio, and service delivery for the customer.
Baker Hughes continued to support its customers as they work towards their net-zero ambitions. TPS secured an important upgrade contract with Société pour la Construction du Gazoduc Transtunisien (SCOGAT), part of the Trans Tunisian Pipeline Company (TTPC), for two compression stations in Tunisia. The project will replace three gas turbines from Single Annular Combustor (SAC) to Dry Low Emission (DLE) turbines, contributing to a significant reduction of NOx in ISO conditions compared to the previous solutions installed and supporting the customer in meeting its emission reduction targets.
TPS continued to support the growth of the hydrogen economy. TPS secured a contract with Air Products to supply advanced compression technology for production of green ammonia for the NEOM Green Hydrogen Company in the Kingdom of Saudi Arabia. When completed, NEOM will be the world’s largest single-line ammonia and the first full scale green ammonia plant. The order is part of the companies’ previously announced hydrogen collaboration agreement in 2021 and leverages Baker Hughes’ broad experience and references in supplying syngas and ammonia compressors.
DS gained traction with its emissions management portfolio of technologies. Following a memorandum of understanding signed in February with the Egyptian General Petroleum Corporation (EGPC), DS secured a contract with Petrosafe, an EGPC subsidiary, for the first deployment of flare.IQ technology to reduce emissions in refining operations in the country. The deployment will be implemented at the APC Refinery in Alexandria, supporting Egypt’s low-carbon strategy and tackling emissions in the sector as the country prepares to host COP27 in November.
DS saw continued interest for its condition monitoring systems and services in the industrial sector. Bently Nevada secured a contract to upgrade the machinery protection systems for critical machines at a steel plant in the Middle East. The contract includes Bently Nevada’s latest Orbit 60 system which will provide the customer with reliable protection and enable advanced condition monitoring of critical assets. View more: https://investors.bakerhughes.com/news-releases/news-release-details/baker-hughes-company-announces-second-quarter-2022-results Source: Baker Hughes