In Q3 2023, Baker Hughes reported orders totaling $8.5 billion, marking a 14% rise sequentially and a 40% increase year-over-year. The company’s adjusted net income reached $716 million, up 13% sequentially and 42% year-on-year. Baker Hughes’ Chairman and CEO, Lorenzo Simonelli, expressed satisfaction with the quarterly performance, citing optimism for the future despite global economic challenges. Strong order performance was observed in both the Industrial & Energy Technology (IET) and Oilfield Services & Equipment (OFSE) segments, with notable awards from Venture Global in the Liquefied Natural Gas (LNG) sector and Vår Energi in subsea operations. The resilience in oil demand and production cuts have bolstered oil prices, leading to expectations of inventory reductions throughout 2023. Key factors to monitor heading into 2024 include the discipline among major producers, the rate of oil demand growth amidst economic uncertainty, and geopolitical risks.
Moreover, the global LNG market remains tight, as evidenced by recent price surges due to conflicts in the Middle East and strikes by LNG workers in Australia temporarily halting operations at several facilities. The demand for LNG in 2023 is projected to near 410 million tons per annum (MTPA), a 2% increase from the previous year. With a global nameplate capacity of 490 MTPA anticipated this year, effective utilization is likely to exceed 90%, historically indicating a tight market. Consequently, the pipeline for LNG projects remains robust both domestically and internationally, concluded Simonelli.