Baker Hughes' VP of engineering and technology on the company's rebranding
John Kerr, Baker Hughes' vice president of engineering and technology for its oilfield equipment division, answered questions about the company's rebrand at ADIPEC.
Baker Hughes has just undergone its second rebrand in as many years. Tell me about the rebrand and how this has changed the firm.
It has not been a shock to the organization. Some months after we first became Baker Hughes, GE, in August 2017, when the GE organisation elected to decouple to a degree, we put it in our sights that soon after we would become a standalone organisation. So it is not as if we have gone through something that has shaken the system. It has been a very well controlled migration. We went through this around six to eight weeks ago.
We have now transformed to an energy technology organisation... I mean, [oil and gas] continues to be the core DNA of our being. But what it does strongly indicate is our drive and our commitment towards driving new energy sources. Possibly looking at areas as evolving... like carbon capture and other areas that has us delivering energy-orientated outcomes to a wider variety of industries.
Culturally, internally, it is an area we are working towards. And we have had the last 18 months to two years of preparation for this rebrand. What it has actually meant internally for us is already we have started flexing that muscle to align ourselves horizontally across our four major businesses, so that we are actually starting to harmonise our own end reservoir production orientated capabilities from the oilfield services sites and balancing that with hardware offering so that we can actually then deliver true, production reservoir energy orientated solutions to the industry.
With regards to how we are thinking about the environment, in January this year, at our annual meeting, our CEO Lorenzo Simonelli announced to the industry that we were going to be net carbon neutral by 2050. However, we are making a commitment to be 20% reduced in that area by 2030. So the whole branding element is also an indication, strong indication of the committment to the environment and the industry as a whole.
And how will this shift towards a more sustainable model impact your segment under Baker Hughes?
When you think about carbon reduction and becoming carbon net zero, initially you could think we are challenged with being a company segment which largely focuses on delivering large pressure control, well control types of equipment. And in that environment, with other areas such as possibly turbo and process solutions, and gas turbine divisions, you can always think that anything consuming fuel can consume fuel at more efficient rates.
But the way we think about it, for example with our new production tree technology, is it brings within itself some significant shifts as to how we think about carbon reduction. And one obvious one there is that a new technology is 45% or 50% lighter. So we are going from a system that traditionally with an average 63, 65 tons, the new version of it weighs about 50% of that. So you think about something that's half the weight. It doesn't consume as much material, consume as much energy, it is lighter to transport. So it has a carbon reduction component. And that approach we are franchising across all the new technology portfolio elements working to see how we can reduce the effect on the environment.
In Saudi Arabia you have your own manufacturing hubs. Are you working to reduce the carbon impact locally there as well? What are the challenges associated with reducing your carbon footpring, specifically when the supply chain has localisation restrictions?
As far as carbon reduction is concerned, we continuously strive to work out solutions as to how we reduce the energy consumption of our facilities. It may very well mean that we actually bring in cleaner power, sustainable power, into our factories. The more we can do in-country, and the less we import, reduces our footprint. We announced [at ADIPEC] that we are opening a new facility focusing on wellhead service supply in Musaffah, Abu Dhabi. That is specifically to increase the efficiency of our overall operation here as opposed to that being something to do elsewhere.
'Creative partnerships' are a hot topic in our industry; has Baker Hughes' approach to partnerships shifted at all?
Unlike the traditional way a company like ours might engage the industry from an OEM sales perspective, where we typically respond to technical and commercial inquiries, we offer technical solutions, we manufacture and sell. We are now balancing that, or complementing that, with a variety of other capabilities, including Project Connect, which has us engaging the whole life cycle of subsea field development in a different way, where we engage with opportunities multiple years before, around the early FEED stages, where we work directly with our clients to define technical configuration to help drive certainty in technical selection and through the execution, fulfillment phase and ultimately installation, working on a much more long term partnership.
What informed this different approach?
When you think about subsea field development, the major area of focus has been to unlock the commercial viability of what maybe in the past, have been stranded assets that have been proven to be uneconomic in the past. The only true way of shifting the conomic hurdle is to introduce significant cost savings to the end user, or at least those who are investigating the economic viability of that. We will look at new technology that is itself significantly reducing the cost of the hardware that needs to be deployed. We complement that internally with, I think, a unique balance of product and service opportunities. Also, depending on where we are engaging in the world, we also have evolved skill of working with a series of different partnerships from the umbilical risers and flow lines groups. We deliberately have not chosen to connect one sort of partner in that space. We have taken a much more dynamic and flexible arrangement.