Baker Hughes bullish on the global natural gas market; Investments in energy transition continue
Baker Hughes Co. (BKR) has made investing in ‘new energy frontiers’ a key part of its strategy going forward, but the management of the oil services provider still sees good prospects for the global gas market. natural.
Noting the company’s recently released 2Q2021 financial results, CEO Lorenzo Simonelli adopted an optimistic tone while discussing the current state of demand for natural gas and liquefied natural gas (LNG) around the world.
“The fundamentals are as strong if not better than oil, as a combination of blackouts and strong demand in Asia, Latin America and Europe pushed third quarter LNG prices to levels not seen since 2015,” Simonelli said.
It comes as management sees “continued signs of a global economic recovery that are expected to drive growth in demand for oil and natural gas” in the second half of this year and into 2022, the executive said. While the Covid-19 variants present potential downside risks, “we believe the oil price environment looks constructive, with demand picking up and operators largely maintaining spending discipline.”
As for natural gas, the hot weather in Europe and the United States contributed to a “strong improvement in demand” and to a low level of storage. It comes as “structural growth continues unabated in Asia,” including a 30% per year increase in Chinese LNG imports during the first half of this year, according to Simonelli.
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“With the current sustained pace of growth and increasing demand for cleaner energy sources, we maintain our positive long-term outlook for natural gas and LNG,” said Simonelli.
Meanwhile, BKR continues to focus on the energy transition.
“The momentum for cleaner energy projects continues to build up around the world,” said Simonelli. “In the United States, Europe and Asia, various projects around wind, solar and green and blue hydrogen are advancing, as well as a number of carbon capture projects. “
BKR spent the second quarter building on “a key pillar of our strategy to position ourselves on some of these new energy frontiers. Our team moved quickly and decisively into selected areas to build relationships and build a solid foundation for future business success. “
The Oilfield Services segment reported quarterly revenue of $ 2.358 billion, a sequential increase of 7%. This included a sequential increase in revenue of $ 693 million, or 11%, for North America, with international revenue rising to $ 1.665 billion, a 6% increase quarter / trimester.
Oilfield Equipment revenue totaled $ 637 million for the quarter, compared to $ 628 million in the first quarter, but down 8% year-on-year. Management highlighted the decline in the volume of the Company’s Subsea Drilling Systems business and the divestiture of its surface pressure monitoring business in 4Q2020 to explain the drop in revenue, the increase in volume of the Flexible Pipe business Systems partially compensating.
Turbomachinery & Process Solutions revenue totaled $ 1.628 billion in 2Q2021, up 10% sequentially and 40% more year-over-year, due to higher equipment volume. high, said management. Equipment revenues accounted for 48% of segment revenues, with service revenues accounting for the remaining 52%.
Digital Solutions segment revenue increased 11% sequentially on a year-over-year basis to reach $ 520 million. The gains were mainly due to higher volume in Process & Pipeline Services, Waygate Technologies and Bently Nevada businesses, with Nexus Controls business partially offsetting, according to management.
The company’s total revenue for the quarter was $ 5.142 billion, up from $ 4.782 billion in the previous quarter and $ 4.736 billion in 2Q2020.
BKR reported a net loss for the quarter of $ 68 million (8 cents / share), compared to a loss of $ 195 million (30 cents / share) in the previous year quarter. Operating profit was $ 194 million, compared to an operating loss of $ 52 million a year ago.