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- Baker Hughes sees 2025 upstream capex down by high-single digits
- Warns of tariff cost impact, working to raise domestic sourcing
- LNG technologies and equipment seen as bright spot for Baker
HOUSTON, April 23 (Reuters) – U.S. oilfield service provider Baker Hughes (BKR.O) on Wednesday forecast steeper drops in spending by global oil producers as tariffs dent demand expectations and push down prices for crude.
Baker Hughes echoed rival Halliburton’s concerns on Tuesday, that weak oil prices could push down oilfield activity in North America.
Houston-based Baker Hughes, which reported better-than-expected first-quarter profit on Tuesday, now expects global upstream spending to be down by high-single digits in 2025.
Oil and gas producer spending in North America, excluding Mexico, is set to decline in the low-double digits, Baker Hughes said, compared with a previous expectation for a drop in the mid-single digit range.
Internationally, spending is expected to ease to mid- to high-single digits compared with a previous forecast for spending to be flat to down year-on-year.
“In North America, discretionary spending delays are extending into the second quarter, driven by ongoing uncertainty. Additionally, recent oil price volatility presents potential downside to second half activity, particularly in U.S. land,” said Baker Hughes CEO Lorenzo Simonelli.
The prospect of an oversupplied oil market, rising tariffs, uncertainty in Mexico and activity weakness in Saudi Arabia are collectively constraining international upstream spending levels, Simonelli said, adding that some of the weakness would be offset by strength in markets like Brazil and several countries in the Middle East and Asia Pacific.
The company also warned of cost impacts from tariffs on U.S. imports from China, Germany, Britain and Italy, as well as a modest impact from steel and aluminum tariffs. Baker Hughes also sources some oilfield components and chemicals from Canada and Mexico, it said.
It said it was working to increase domestic sourcing, and was talking with customers to recover some costs.
Baker Hughes forecast a $100 million to $200 million impact on its annual earnings before interest, tax, depreciation and amortization.
Baker shares were down 5% at $36.46 late Wednesday morning.
Liquefied natural gas (LNG) technologies and equipment are expected to be a bright spot for Baker Hughes, after U.S. President Donald Trump ended the moratorium on new LNG export permits, and on the back of rising gas and power demand for data centers.
Several key LNG customers in the Gulf Coast are indicating plans to further expand capacity beyond 2030, offering greater clarity regarding the potential increase in installed capacity above the anticipated 800 million tonnes per annum by the end of the decade, Simonelli said.
“We’re really not seeing customers pull back from LNG, gas infrastructure or the data center projects,” Simonelli said.
The company said it expects to book at least $1.5 billion of orders in data center equipment over the next three years.
Reporting by Arathy Somasekhar in Houston Editing by Marguerita Choy
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