Baker Hughes 2007 Annual Report Download - page 16
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producing hydrocarbons from new and
existing reservoirs.
While the long-term projections for E&P
spending are strong, we expect the growth
rate to moderate this year. In North America,
for example, we expect a modest increase in
activity in 2008 as strong drilling activity has
brought natural gas production growth
roughly into balance with demand growth.
In this environment, we expect our Comple-
tion and Production segment to benefit, as
customers seek to optimize production. We
expect North America activity to pick up
in 2009.
Outside of North America, we expect our
revenues to increase in the low to mid-teens
in 2008, as international operators develop
reserves in the Middle East, Russia, Africa
and Asia.
We expect deepwater drilling activity
to remain flat at least until 2009, when the
first new deepwater rigs will begin entering
the market.
Facing a somewhat slower anticipated
overall growth rate in 2008, we will continue
to work to attain pricing in keeping with the
value we create for our customers. Managing
costs will be another priority in 2008, with
the objective of maintaining acceptable mar-
gins as we continue to invest in growth.
James R. Clark Retires
Baker Hughes President and Chief Operat-
ing Officer James R. “Rod” Clark retired from
the company on January 31, 2008. I want to
personally thank Rod for his significant contri-
bution to Baker Hughes.
Opportunities for Growth
In conclusion, I believe that 2008 will
be a year of transition for the oilfield service
industry. After a year of moderate growth, we
expect activity to accelerate. Global hydrocar-
bon demand will continue to increase as
known oil and gas reserves decline, so oil and
gas companies will need to find new fields
and maximize production from existing assets.
Many new offshore rigs, under construction
today, will be delivered over the next few
years, enabling growth in deepwater markets.
All of this points to strong prospects for this
industry for many years to come. With this
opportunity in mind, Baker Hughes will con-
tinue to invest in infrastructure, technology
and people to service the growing demand
in 2009 and well past the end of the decade.
Sincerely,
Chad C. Deaton
Chairman, President and
Chief Executive Officer
The Baker Hughes executive management team includes (left to right): David H. Barr, Vice President and
Group President, Completion and Production; Peter A. Ragauss, Senior Vice President and Chief Financial Officer;
Chad C. Deaton, Chairman, President and Chief Executive Officer; Alan R. Crain, Senior Vice President and
General Counsel; Didier Charreton, Vice President, Human Resources; and Martin S. Craighead, Vice President
and Group President, Drilling and Evaluation.
12 Baker Hughes Incorporated