Baker Hughes sees upstream capital expenditures reduced by smart numbers in 2025
Warn of the impact of tariff costs and strive to increase domestic procurement
LNG technology and equipment are seen as highlights for bakers
Authors: Arathy Somasekhar and Mrinalika Roy
HOUSTON, April 23 (Reuters) – U.S. oilfield service provider Baker Hughes predicted a sharp drop in spending on global oil producers as tariffs demand expectations and lower crude oil prices.
Baker Hughes echoed concerns from rival Halliburton on Tuesday that weak oil prices could lower North American oil field activity.
Houston-based Baker Hughes reported a better-than-expected first-quarter profit on Tuesday and now expects global upstream spending to be reduced by brilliant figures in 2025.
North American oil and gas producers spending in North America will drop on low double numbers, Baker Hughes said.
Internationally, expenditures are expected to be easily in the middle compared to previous forecasts of steady to decline year-on-year.
“In North America, the delay in discretionary spending driven by continued uncertainty to the second quarter extends into the second quarter. In addition, recent oil price volatility has brought potential second-half activity, especially on U.S. land.”
Simonelli said the oversupply of oil markets, rising tariffs, uncertainty in Mexico and the outlook for weak activity in Saudi Arabia have collectively limited the levels of international upstream spending, adding that some weaknesses will be offset by the strength of markets such as Brazil and the Middle East and Asia-Pacific.
The company also warned of fees for U.S. imports from China, Germany, the United Kingdom and Italy, as well as moderate impacts on steel and aluminum tariffs. Baker Hughes also provides some oilfield components and chemicals from Canada and Mexico.
It said it is working to increase domestic procurement and is talking to customers to recover some of the fees.
Baker Hughes predicts that its annual revenue before interest, taxes, depreciation and amortization will affect $100 million to $200 million.
Baker shares fell 5% to $36.46 on Wednesday morning.
Liquefied natural gas (LNG) technology and equipment are expected to be the highlight of Baker Hughes, behind U.S. President Donald Trump ends the moratorium on new LNG export licenses and the increased demand for gas and electricity for data centers.
Simonelli said several key LNG customers on the Gulf Coast said they planned to further expand capacity after 2030, which provides greater clarity for the expected annual installation capacity of 800 million tons by the end of the decade.
“We really don’t see customers pulling back from LNG, gas infrastructure or data center projects,” Simonnelli said.
The company said it expects to book at least $1.5 billion in orders on data center devices over the next three years.
(Reported by Marguerita Choy’s editorial in Houston by Arathy Somasekhar)
