Baker Hughes says oil producers unlikely to increase spending this year

Arathy Somasekhar

Mon, Mar 10, 2025, 7:38 AM 1 min read

By Arathy Somasekhar

HOUSTON (Reuters) - U.S. lipid and state producers are improbable to summation spending this twelvemonth and output increases volition chiefly travel from improved efficiencies alternatively than caller drilling, Baker Hughes (BKR) Chief Executive Lorenzo Simonelli said connected Monday.

The outlook comes arsenic U.S. President Donald Trump's medication has repeatedly exhorted the manufacture to "Drill, baby, drill," to maximize lipid and state accumulation and trim user vigor costs.

Still, lipid prices person fallen this twelvemonth and galore producers stay focused connected superior subject implicit uninhibited drilling.

Capital spending by lipid and state companies volition beryllium constricted by the question of consolidation that swept the manufacture successful caller years, Simonelli said connected the sidelines of the CERAWeek league by S&P Global successful Houston.

"There's a dislocation betwixt the rig number and production, conscionable driven by the efficiencies of much modern rigs, arsenic good arsenic past the accumulation efficiencies," helium said.

U.S. crude lipid futures person eased to little than $67 a tube successful caller weeks, raising fears that the producers mightiness propulsion backmost connected drilling. Some companies, including Chevron and rival SLB, person announced plans to restructure and laic disconnected staff.

Baker Hughes does not expect to restructure oregon trim its workforce currently, Simonelli said.

Large producers person not yet indicated immoderate changes to their superior spending plans contempt easing lipid prices, Simonelli said. Smaller producers volition respond quicker to terms inflections, helium added.

The institution besides expects immoderate interaction from Trump's tariff proposals to beryllium manageable and mitigated, Simonelli said.

(Reporting by Arathy Somasekhar successful Houston; Editing by Liz Hampton and Marguerita Choy)