Baker Hughes Sees Rebuilding Opportunities in Middle East Energy Sector

US energy technology company Baker Hughes sees opportunities for increased investment in energy and critical infrastructure across the Middle East as regional tensions ease, despite expecting a slowdown in oilfield activity in the fourth quarter of 2026.

"Our long-term outlook for the region remains very constructive, and a more stable environment could support not only recovery of existing activity, but a broader investment cycle around infrastructure, energy resilience and economic diversification," Chairman & Chief Executive Officer Lorenzo Simonelli said during third quarter 2026 results earnings call on Wednesday.

Middle East oilfield services revenue rose 17 percent quarter-on-quarter in the three months through September, supported by a recovery in offshore activity and stronger demand for pressure pumping and artificial lift services onshore.

However, Baker Hughes expects activity to decline in the fourth quarter, returning broadly to second-quarter levels.

"We are taking a measured approach to the near-term outlook and expect to see some moderation in regional activity levels, reflecting heightened tension in certain parts of the region," Simonelli said.

Chief Financial Officer Ahmed Moghal said during the call that higher logistics costs and supply chain challenges could put additional pressure on the execution of projects in the region.

Looking into 2027, Simonelli said the pace of normalisation remained uncertain, particularly for the OFSE segment (Oilfield Services & Equipment), although customer discussions continued to reinforce the Middle East's strategic importance for investment in oil and gas production, natural gas and power infrastructure.

"We could see additional investment in rebuilding and upgrading critical supply routes, supporting broader development across power generation, industrial, digital and water infrastructure," Simonelli said.

Baker Hughes is positioning its portfolio of gas compression, power generation, subsurface technologies and lifecycle services to capture a greater share of potential spending.

The company has already secured several regional contracts, including multi-year awards from Kuwait Oil Company (KOC) covering production technologies, artificial intelligence-enabled solutions and hybrid Kymera drill bits. It also announced plans for a research and technology development centre in Kuwait to support upstream production optimisation and develop local technical capabilities.

Separately, Baker Hughes secured compressor upgrade orders in the Middle East and Asia during the third quarter, reflecting continued investment in improving the efficiency and reliability of existing assets.

Under its Mature Assets Solutions business, which focuses on improving production recovery, extending the life of existing oil and gas fields, and repurposing ageing infrastructure, it is progressing an integrated programme across approximately 50 wells in Libya to help restore production and maximise recovery from mature fields. The initial scope focuses on electric submersible pump changeouts, with potential to broaden the role based on value delivered.

The company is also scaling this model through coiled tubing drilling contracts across the Middle East and Asia Pacific that combine its subsurface expertise, differentiated technology and integrated execution capabilities to help customers improve recovery and extend the productive life of mature fields.

Baker Hughes is targeting more than US$3 billion in annual revenue from the Mature Assets Solutions business by 2030, with high-single-digit annual growth.

The company expects global upstream spending to increase at a low- to mid-single-digit rate in 2027 but cautioned that the overall pace of recovery in the Middle East remains an important variable for its outlook.