Baker Hughes forms consortium for energy exploration in Syria
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 12 2024
0mins
Should l Buy BKR?
Source: Business Insider
Baker Hughes Co's stock reached a 52-week high, reflecting strong investor interest amid a broader market decline.
The company is part of a consortium with Saudi Arabia's ACWA Power and TAQA, along with U.S. firms, to explore energy production in Syria, targeting 4-5 exploration blocks. This initiative comes as the Syrian government seeks billions in foreign investment to rebuild its energy infrastructure, highlighting the urgent need for reconstruction in the sector. The integration of Kurdish-controlled regions into state governance further enhances opportunities for foreign investment, indicating a potential shift in the energy landscape.
This strategic move positions Baker Hughes favorably in the recovering energy sector, which has seen sustained growth despite challenges in other markets. The consortium's efforts could lead to significant long-term benefits for the company as it taps into new markets and strengthens its operational capabilities.
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Analyst Views on BKR
Wall Street analysts forecast BKR stock price to rise
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 59.860
Low
52.00
Averages
61.54
High
67.00
Current: 59.860
Low
52.00
Averages
61.54
High
67.00
About BKR
Baker Hughes Company is an energy technology company with a portfolio of technologies and services that span the energy and industrial value chain. The Company operates in two segments: Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET). OFSE segment provides products and services for onshore and offshore oilfield operations across the lifecycle of a well, ranging from exploration, appraisal, and development, to production, rejuvenation, and decommissioning. OFSE is organized into four product lines: Well Construction; Completions, Intervention, and Measurements; Production Solutions, and Subsea and Surface Pressure Systems. IET segment provides technology solutions and services for mechanical-drive, compression and power-generation applications across the energy industry, including oil and gas, liquefied natural gas (LNG) operations, downstream refining and petrochemical markets, as well as lower carbon solutions to broader energy and industrial sectors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Technology Integration: The partnership focuses on integrating Vallourec’s Delphy storage solution with Baker Hughes’ compression technologies, emphasizing the optimization of storage and compression configurations to lower ownership costs and enhance customer competitiveness.
- Storage Capacity: Vallourec’s Delphy solution is designed for underground storage of green hydrogen, capable of holding up to 100 tons, prioritizing high pressure, compact design, and safety to meet market demands for secure and efficient storage.
- Market Outlook: By optimizing operating pressures and configurations, the collaboration is expected to drive business growth in sectors such as green hydrogen, green ammonia, and sustainable fuels, further enhancing their competitive position in the green energy market.
See More
Vallourec and Baker Hughes Sign MOU on Hydrogen Storage Solutions
- MOU Signing: Vallourec and Baker Hughes have signed a Memorandum of Understanding aimed at advancing hydrogen storage solutions for the green hydrogen market, marking a long-term collaborative relationship in the industrial green hydrogen value chain.
- Technology Integration: The collaboration will integrate Vallourec's Delphy storage solution with Baker Hughes' compression technology, optimizing compression-storage configurations to help customers reduce total cost of ownership while enhancing competitiveness.
- Market Potential: The Delphy solution can store up to 100 tons of green hydrogen gas vertically, engineered for high-pressure performance and industry-leading safety, and has already been certified by Bureau Veritas and DNV, solidifying Vallourec's key position in the green hydrogen value chain.
- Strategic Development: Vallourec's CEO Philippe Guillemot emphasized that this collaboration reflects the company's strategy to build relationships along the value chain, committed to scaling green hydrogen applications for industrial decarbonization.
See More
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- Permian Basin Rig Count Decline: The latest data from Baker Hughes indicates a decrease of three rigs in the Permian Basin this week, bringing the total to 238 active rigs, down from 304 a year ago, suggesting a slowdown in drilling activity that could impact future oil supply.
- National Rig Count Unchanged: The national oil and gas rig count remains unchanged at 551 rigs, compared to 588 rigs a year ago, reflecting overall market weakness and investor caution regarding future oil and gas market conditions.
- Shifts in Rig Distribution: Among the active rigs, the number seeking oil decreased by three to 409, while those exploring for natural gas increased by three to 133, indicating a rising demand for natural gas in the current market environment.
- Slight Drop in Oil Prices: The regional benchmark price for oil ended Friday at $59.37 per barrel, down 66 cents from last week, while the national benchmark West Texas Intermediate crude closed at $62.89 per barrel, also down 66 cents, indicating pressure on oil prices in the market.
See More
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- Asset Sale Plan: Baker Hughes is set to initiate the sale of its Waygate Technologies unit in the coming months, potentially attracting interest from private equity firms and fetching around $1.5 billion, which could optimize capital allocation and enhance shareholder value.
- Significant Acquisition Context: Following its $9.6 billion acquisition of industrial equipment maker Chart Industries last year, Baker Hughes is conducting a comprehensive evaluation of its capital allocation to ensure effective integration and business growth post-acquisition.
- New Order Secured: Recently, Baker Hughes received a gas turbine order from Twenty20 Energy to supply 10 Frame 5 gas turbines and associated equipment for U.S. data center infrastructure, further solidifying its market position in critical infrastructure.
- Positive Stock Reaction: Baker Hughes shares rose 4% on Wednesday, reflecting market optimism regarding its potential asset sale and new orders, although retail sentiment remains bearish; nonetheless, the company's stock has increased nearly 30% over the past year.
See More
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- Major Order Announcement: Baker Hughes (BKR) has secured a significant order from Twenty20 Energy for 10 Frame 5 gas turbines and associated generator technology, supporting up to 250 MW of power generation capacity, indicating strong demand in the power equipment market.
- Delivery Schedule: Initial deliveries are designated for Twenty20 Energy's data center projects in Georgia and Texas, scheduled for completion in 2027, which will help meet the increasing demand for digital infrastructure.
- Strategic Partnership Outlook: This order signifies progress in the strategic agreement between Baker Hughes and Twenty20 Energy, as both companies commit to supplying multi-gigawatt power generation equipment to address the rapidly growing demand for reliable and sustainable power in the U.S.
- Positive Market Reaction: Baker Hughes (BKR) shares rose 3.8% in Wednesday's trading, reaching a nine-year high of $62.08, reflecting investor optimism regarding the company's future growth potential.
See More
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- Energy Exploration Consortium: Saudi Arabia's ACWA Power and TAQA, along with U.S. firms Baker Hughes, Hunt Energy, and Argent LNG, are forming a consortium for energy exploration and production in Syria, targeting 4-5 exploration blocks in the northeastern region to rebuild war-damaged energy infrastructure.
- Urgent Investment Needs: The Syrian government is seeking billions of dollars in foreign investment to repair its severely damaged energy facilities due to 14 years of war, highlighting the urgent need for reconstruction in the energy sector.
- Kurdish Forces Integration: The eastern region of Syria, traditionally rich in oil and previously controlled by Kurdish forces, has agreed to integrate into state governance, creating new opportunities for foreign investment and enhancing the stability of energy development.
- Accelerated International Cooperation: Last week, Chevron signed an initial offshore gas exploration agreement in Syria with a Qatari firm, indicating a rising interest from international energy companies in the Syrian market, potentially paving the way for future investments.
See More
