A clean energy solution is a must for the world to survive and thrive in the coming days. Without it, the world is heading for an environmental challenge. Globally, there are lots of promises made by transnational governments and multinational organizations to cut pollution and meet the eco-friendly goals set by the world’s climate leaders.
The industrial world now needs advanced expertise and equipment to further its clean energy targets. One leader who is committed to providing innovative technology solutions to industries to meet their clean energy and overall sustainability goals is Mr. Lorenzo Simonelli.
As the Chairman and CEO of Baker Hughes, Mr. Lorenzo is passionately working towards solving the climate challenges and taking energy forward.
Baker Hughes is an energy technology company that provides solutions for energy and industrial customers worldwide. The company has a century of experience and conducts business in over 120 countries. Its innovative technologies and services are designed to take energy forward – making it safer, cleaner, and more efficient for people and the planet.
We had an exclusive opportunity to interview Mr. Lorenzo Simonelli, where he discussed with us the details of his successful journey in the industry as well as his commitment to creating innovative technology solutions to help industries achieve their climate goals.
The following are the highlights from the interview:
Kindly brief our readers about yourself and your professional journey so far.
I was born in Italy and educated in the UK. I have a financial background—I started my career at Mitsubishi bank.
While working there, I started to realize it would be great to see how banking and operations come together. Even better would be to see what’s being produced and how you are making an impact on people’s lives through the knowledge of equipment.
This led me to join General Electric (GE), and I knew from early on that I wanted to run a company—it’s always been my desire. I went through the management ranks during my 25 years at GE. My last role was managing GE Oil and Gas, which then merged with Baker Hughes in 2017. That’s when I took my current role as Chairman and CEO.
I am very pleased and humbled to have the opportunity to lead Baker Hughes while also impacting and learning from others. I think there’s an aspect of continuously managing ambiguity and learning as you become a CEO.
What was your inspiration to step into the oil & gas business space?
I have been fortunate to work in many industries throughout my career, including transportation, consumer appliances, finance and more. The energy industry has always been interesting to me because energy is a fundamental human need and has an impact on growing economies and improving our way of life.
The oil & gas industry is so important to ensure we have a sustainable future, and I believe it remains a great place to have a career.
Tell us about your company, its mission, and its vision. What role did you play in furthering its development and outreach?
Baker Hughes is an energy technology company that provides solutions for energy and industrial customers worldwide. Building on a century of experience and conducting business in more than 120 countries, our innovative technologies and services are taking energy forward, making it safer, cleaner, and more efficient for people and the planet.
Our strategy is focused on improving our core competitiveness and delivering higher productivity solutions today while positioning for the future. To drive our strategy forward, we developed a three-pronged approach to guide our execution: transform the core, invest for growth, and position for new frontiers.
Transforming the core represents our focus on improving margins and cash flow across our businesses through cost improvements, portfolio rationalization, and new business models.
Investing for growth centers around expansion into high-potential segments such as industrial power, industrial asset management, non-metallic materials, and chemicals.
Positioning for new frontiers underscores our commitment to helping meet global energy demand by offering lower-carbon solutions across industries.
Please expand to us about the offerings that make your company stand out from the competition.
We were one of the first companies in our sector to make a net-zero carbon commitment. In January 2019, we committed to reducing CO2 equivalent emissions by 50 percent by 2030 and achieving net-zero emissions by 2050. We are helping our customers do the same by putting our technology to work, enabling them to reduce their carbon footprint.
Baker Hughes has integrated offerings and a unique set of products and services across our two business segments: Oilfield Services & Equipment, and Industrial & Energy Technology. Together, these businesses make up one of the only technology portfolios that spans across oil and gas, alternative and renewable energy, as well as other industrial sectors. This positions us to take advantage of various market opportunities to improve outcomes for ourselves and our customers.
We believe our portfolio makes us unique in the industry – standing out from our traditional oilfield service peers but also competitively positioned against broader industrial leaders.
Please share with us your views on the future of the Middle East’s oil and gas industry.
In the Middle East, there is a strong focus on driving the decarbonization of the sector. Most NOCs/governments in the region (UAE, Saudi, Qatar, Egypt, Oman) have made commitments to reach net-zero by 2050. With this, we expect a continued strong appetite for exploring opportunities around carbon capture, hydrogen, and emissions management.
There is also progress towards digital transformation through a growing appetite for exploring how we can digitize operations through things like asset management, remote operations, and reliability.
LNG is also a huge opportunity in the region, with a special focus on Qatargas. Qatar is expanding its North Field capacity to 110 MPTA by 2025. We are also seeing other LNG players in the Middle East like Oman and Egypt expand their LNG production capacities.
Gas remains a key transition fuel in the Middle East, with major discoveries in Egypt (Zohr and Nour fields) and Turkey (Black Sea)—we expect this to continue. Overall, the industry is at an extremely exciting and critical point in its history in the Middle East, and I am proud that Baker Hughes can play a role in supporting the region’s continued prosperity.
Enlighten us about the latest technologies and inventions that are being used in improving the operations of your company.
At Baker Hughes, we believe pursuing in-house research and development will play a crucial role in realizing our energy transition ambitions. In 2021, we invested $492 million in research and development and were granted more than 2,500 patents. Some of the innovations we developed in 2021 included:
Carbon Optimizer, an innovative web-based tool developed to reduce the amount of carbon dioxide produced by a gas turbine, while meeting process and customer constraints.
ProductionLink Edge, a suite of advanced analytics and “smart” edge technology to automate and boost production while curtailing associated methane emissions from gas wells.
LUMEN Analytics, a key differentiating technology of LUMEN Sky and LUMEN Terrain to measure and monitor methane emissions. LUMEN Sky and Terrain enable Baker Hughes to aid our customers’ goals to reduce greenhouse gases and support their own net-zero ambitions.
As an experienced leader, what advice would you like to give to aspiring entrepreneurs and enthusiasts who wish to venture into the competitive industry that you are serving to?
We are always in need of problem solvers in the energy industry. We strive to solve complex challenges, and when we can solve them in a profitable and scalable way, we can make huge advancements in how energy is produced, consumed, and managed.
I would encourage aspiring entrepreneurs to prove the commercial value as much as the technological innovation since our industry does require proof that ideas can work and they can make money.
Where do you see yourself in the future? Also, how do you envision scaling your business operations and outreach in the coming years?
I have always wanted to run a business, so I am grateful for the last 5+ years of being able to lead Baker Hughes. I am comfortable where I am because the industry always presents new challenges, and we have had to adapt to meet them.
During my time at Baker Hughes so far, we have relaunched our brand as an energy technology company, weathered a pandemic and geopolitical turmoil, and made tremendous progress in helping the industry reduce its emissions and improve its efficiency. There is tremendous growth to be had in the coming years as we all work towards solving climate change and energy affordability, and security.
Awards and Recognition
- AA ESG rating from MSCI
- B rating from CDP
- 2022 EcoVadis Bronze Sustainability Rating
- Wall Street Journal Management Top 250
- 100 Best Corporate Citizens by 3BL Media
- America’s Most Responsible Companies by Newsweek
- Hart Energy ESG Awards – Best Public Service Company
- Included on S&P 500 ESG Index in May 2022
