Continuous disruption is 'new normal' for oil and gas industry, Baker Hughes GE CEO says
- The oil industry has been forced to cut costs and search for ways to boost efficiency since the price of oil collapsed from nearly $120 a barrel in June 2014
- Lorenzo Simonelli said: "We have to look at disruption as being our friend"
Continuous disruption in the oil and gas industry should be viewed positively, Lorenzo Simonelli, CEO of Baker Hughes, a GE company, said Tuesday.
Speaking at the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), Simonelli said, "We have to look at disruption as being our friend."
"The new normal is continuous disruption, we need to take out all the inefficiency and instead our industry needs transparency and visibility," he said.
The oil industry has been forced to cut costs and search for ways to boost efficiency since the price of oil collapsed from nearly $120 a barrel in June 2014. The sharp drop in prices was caused by weak demand, a strong dollar and booming U.S. shale production.
In comparison to the aviation industry, Baker Hughes' Simonelli said the oil gas sector was around two to three times more inefficient. He said companies would need to "work together" in future, before warning: "We can't go back to the old way of doing things like drunken sailors."
On Monday, General Electric (GE) CEO John Flannery signaled he would consider selling off its majority share in Baker Hughes, a separately traded company formed by the merger of GE's oil and gas unit and oilfield services firm Baker Hughes.
GE Oil & Gas was primarily known as an equipment manufacturer, while Baker Hughes specializes in services like horizontal drilling and hydraulic fracturing.
Brent crude traded at around $62.95 a barrel Tuesday morning, down 0.33 percent, while U.S. crude was around $56.58 a barrel, up 0.32 percent.
— CNBC's Tom DiChristopher contributed to this report.