EOG Talks with Richard Ward, SVP Subsea Production Systems at Baker Hughes | Egyps 2022

Absolutely, it's a privilege to be here first of all, and to have a chat with yourself. It's been 10 or 11 years since I've been in Egypt, and it's incredible to see the journey the country's been on, the development through infrastructure as well as through the energy sector. It's very powerful.

Well, thanks. Baker Hughes has actually been here multiple decades through the journey of the energy development of Egypt. Over the last decade, we saw the emergence of gas in the economy, and especially now the criticality of gas being seen as a transition fuel to a cleaner future for the world. The Zohr project was a milestone for Egypt and for the industry. Baker Hughes was fortunate enough to be chosen to be the partner in that development from a subsea infrastructure standpoint. We had the privilege of providing all the hardware and equipment to allow for the safe and efficient production of that field, which is installed and now on production. As you know, it provides 56% of the national production, so it's key. It's been a great journey with our partners in Petrol, with EGAS, as well as the supply chain behind us, like Petrojet, right there with us working hard.

It will. Baker Hughes has a strong capability in gas developments around the world, on the well construction side, the infrastructure side, and as you move to midstream and downstream through our tremendous presence in LNG and on the compression side. Zohr is one of those developments that's clinical in the industry. The key we're learning is developing a strong local capability. While we're a global company, building the national capability to deliver this world-class project is a key element to success.

It's a great question. I think Egypt is uniquely positioned to become a real infrastructure hub for the European and East Mediterranean region. It has the upstream industry and downstream sectors, the infrastructure is in place, and there's spare capacity inside that infrastructure. As we look at the potential from a subsurface standpoint for gas development and then leveraging that existing infrastructure to tie into other markets, I think it positions Egypt uniquely. Actually, to that point, Baker Hughes itself is now looking to develop a technical hub here in Egypt, specifically around gas. That talent, confidence, and capability will then be exported around the world to other projects. So Egypt is on the cusp of being able to develop this unique capability of being a gas technical center of excellence, but the key is the infrastructure hub.

First and foremost, we're very excited with the journey evolving and emerging here in Egypt, so it's key to have differential leading capability in country. But even today, the capability and confidence we're building from a technical and engineering standpoint and through our supply chain will then apply around the world. We have world-class projects in India, the Far East region, Australia, and West Africa. We actually have local talents being developed on these projects now going to these other countries, sharing that experience and building on that capability. So it's going to be twofold: one is to make sure Egypt continues this journey of emergence as a real gas powerhouse, and secondly, as we look at the global ecosystem, how that hub for us can feed into a global network of projects.

If I step back a bit, the fascinating thing about the energy transition is that demand for energy is going to be increasing. Countries are emerging, growing, developing, and that demand is growing over the next several decades. Within the energy mix, hydrocarbons today are predominant, renewables are growing at pace, and you have nuclear in other areas. Realistically, technology that's not yet commercial is unlikely in the near term, so hydrocarbons will be in that ecosystem for several decades. Key for us as an industry and for Egypt to be a pioneer is to make sure we develop those hydrocarbons so we can provide energy effectively at the right cost point for the population with the least amount of emissions possible, ideally zero emissions, but we have to be realistic on that journey. Gas is a natural transition fuel as you think about going from the relative carbon intensity. But beyond that, we need to look at the emissive profile of our operations and reduce it. Can we electrify more subsea production facilities and LNG facilities? How do we electrify to reduce that carbon intensity and bring the environment into focus? Having COP27 here in Egypt will reinforce the necessity of hydrocarbons being in the energy mix but also allow us to talk openly, candidly, transparently, and honestly about the journey the industry must go on to clean the hydrocarbons as far as possible in partnership with renewable growth, dealing with the intermittency that comes from that as well as other forms of energy. So it really puts Egypt on the world stage, and from a transition standpoint, holding COP27 with the gas play coming through here being fundamental to that European region is a tremendous opportunity.

Definitely exciting. Thank you for the time today. It's been great to talk about Egypt and the emergence of Egypt's gas, which is super exciting. As we see that whole economy develop, it's very exciting times.

Thank you.