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- [00:00]
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Danny
In focus after the company topped earnings expectations. Despite a sluggish environment, the energy services giant remains a key player as the 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 $3 billion. 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?
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Lorenzo Simonelli
Well, Danny, great to be with you and yes, very pleased with the results of 2025 and also the fourth quarter. And you should be thinking of Baker Hughes as really 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 meter, off grid applications, data centers. You've mentioned that we've taken up our target with regards to 3 billion during the course of 25 to 27, doubling our previous estimate and feel very good about the overall outlook for power generation, electricity consumption and doubling over the course of now to 2040.
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Interviewer
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 doldrums, right? New York crude here at $60.57. With all the geopolitical tensions, how long does crude stay this low?
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Lorenzo Simonelli
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 rangebound. As you look at the supply and demand aspects in 2026, 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 26, 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 rangebound and 2026, again, being relatively soft.
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Danny
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 largest, having the largest base of some of the machinery in the region itself. You've talked to our Bloomberg News colleagues before about optimism in Venezuela. Have you started yet to ramp up production? Are those plans in place to help with the infrastructure buildout?
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Lorenzo Simonelli
Venezuela is a clear opportunity for Baker Hughes, and again, we have a long history. Just as a reference point back in 2012, across our oilfield services and also our industrial energy technology segments, we were revenues of 500 million. We've got a very large installed base of existing compressors, engines, oil 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.
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Interviewer
At the same time, $500 million 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?
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Lorenzo Simonelli
If you look at it from a 2012 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 overhaul. So there's a significant opportunity, not just from a OPEX perspective of annual activity, but really the infrastructure improvement going forward. And 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.
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Danny
Have you had conversations with the 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 the administration? What are they willing to back up?
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Lorenzo Simonelli
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. The secretaries involved. And so there's a large team that's actively working this.
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Interviewer
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.
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