David has full responsibility for SSPS (subsea and surface pressure systems), Romain has full responsibility for the subsea piece (product, service, flexibles). David and Romain are the “E” (equipment) of the OFSE business
Baker have capacity for 60 to 80 trees annually. The services piece of the business is worth $700M annually, subsea controls is a good chunk of the service business. Baker strategy is a focus on Mature Market Solutions (MMS) and they see growth through MMS and services generally
Davis summarised Proserv journey of last few years
Some general probing from both sides…views on market, supply chain constraints, capacity of Proserv for SCMs etc. etc. But some interesting questions from BH regards how many SCMs can Proserv manufacture, where do we build, our specific supply chain issues?
Iain posed question…where do BH see collaboration going/getting to… on a sliding scale from….. Status quo as today thru to Proserv do all BH controls?
Romain a little evasive, David far more transparent. Mentions of BH R&D investment needed, weak spot they have is controls, BH cost optimisation profile etc. Albeit indirectly, he shared that BH are currently discussing strategies around their controls business, on the sliding scale, all the way to shutting Nailsea. He also shared that Proserv name is much mentioned during internal discussions as they work their strategy. David highlighted risks to BH business if Proserv did their controls and thus BH need to work through mitigations (Proserv equity stake and/or up to full acquisition…Davis offered some thoughts for consideration to help the BH internal discussion)
Some next dates…David is going back to discuss internally with Lorenzo. BH have a board meeting end January where next steps might be presented, they will then be engulfed with their annual Florence meeting in February
David will contact us for a follow up meeting, he thinks/hopes this will be 2nd week in January (interestingly, before the BH Board meeting!)
David might have his BD folks reach out for some additional sales type engagement and discussion that would go in tandem with the four of us continuing discussions
View Notes
Baker Meeting 20th May 2025Face to Face Meeting – Baker Hughes Office - London
Proserv to return the MOU with comments asap but before next planned meeting 28th May in Aberdeen.
Proserv to complete gap analysis on our current technical position v's customer specs, Total, Equinor, Petrobras, BH will share specs, Proserv can start based on what we have.
Proserv/BH to conduct price comparison review (apples for apples) in person in Aberdeen on 28th May
To capture in annex of MOU but initial projects/customers for collaboration PTTEP Malay, Gulf of America, Gorgon and N.Sea. These are BH desire, Proserv can't commit exclusive for Gulf of America, Proserv will come up with a non-exclusive annex of projects/areas.
Once MOU in place and collaboration projects/regions agreed (exclusive and non-exclusive) will look at joint press release, target before end June.
Further meeting in London 9th or 11th June, Dom & Davis to attend. Progress to date and explore more deeply the assurances/scenarios that could be put in place to give BH comfort that they have a Proserv long term controls supplier in the event they shut Nailsea.
BH / Proserv to debate our potential differing approach to restricted countries and how to resolve.
View Notes
Meeting 28th April 2025 in Newcastle28th April meeting in Newcastle
Face to face held at BH flexibles facility in Newcastle
Attendees (Iain, Davis and from Baker Domenico, Renjun and Gareth)
Open and relaxed session discussing an outline of potential collaboration
Opportunity for Domenico to meet Davis and Iain and gauge personalities for potential progression of any collaboration
Touched on desired outcomes of the collaboration. BH clear that it recognised Nailsea was difficult to manage, was challenging to be profitable, that BH subsea controls business was frustrating their customers and after two or three projects to “fix” Nailsea, little (no!) progress had been made. There was serious consideration to close Nailsea if a Proserv collaboration could be shown to work
BH recognised that prior to any closure, it needed to test a potential Proserv collaboration across three or four different projects/geographic partnerships…a few customers and geographies were discussed
BH highlighted it would need certain assurance if they progressed to towards a closure of Nailsea…Proserv equity, ROFR etc.
Proserv highlighted potential options to address the BH assurances
Gareth is clearly heading up the customer/product/technical aspect of any potential deal. Renjun is heading up the commercial aspect/assurances/strategy. Dom is not involved at the working level of any deal but clearly driving Renjun and Gareth to progress the conversation
Actions from meeting
Gareth sending out an MOU to Proserv
A further teams call for Renjun to discuss with Proserv the assurances aspect
Setting of another face to face in London between Renjun/Gareth and Iain/Davis and Ewen
View Notes
Meeting Notes 28th May 2025
Meeting held in Aberdeen Ewen / Iain with Gareth and Andy Barr attending on teams
Purpose was for an apples for apples comparison on pricing
Meeting held and open sharing of commercials
Actions from meeting
Ewen to lay out side by side our prices v BH prices. The sharing was not hard copies, verbal on screen sharing only. Ewen will put all the data in a spreadsheet for internal use only
BH / Proserv will reflect on the info shared and discuss next steps at our face to face in London on 9th June
Agenda for 9th June sent to BH from Iain
View Notes
Meeting Notes 9th June 2025BH London Office / Attendees Iain, Ewen, Davis…BH – Dom, Gareth and Renjun
In many ways, the meeting was just a repeat of previous sessions. Main topicsGap analysis, Proserv v The Majors SpecificationsHighlighted that BH had still not sent Proserv any specs from the Majors. Proserv highlighted we did have Feguiur and Total and were ongoing a review. Also highlighted that Proserv have completed a gap analysis v API 17F (5th Edition) and we would share the gap analysis with BH by week commencing 16th June.Action – Iain to share with GarethWorkshop on the technology map and operators needsBH suggested a meeting with Proserv technical/bidding team to review what controls equipment is generally needed for BH project scopes and what aspects/equipments could be completed by Proserv. Teams Meeting was held on 12th June between Baker and Proserv (Gareth and Nathan…Geert, Tom, Iain and Ewen)Priority projects/customers BH see that the collaboration could startENI, Shell, Total, Petrobras, Exxon, Chevron. BH gave the follow priority with Exxon Mozambique No1 priority, then TotalEnergies Namibia, Chevron?, ENI Indonesia No4 and Petrobras No5. Petrobras moved well down priority list compared to previous meeting???Frame AgreementBH discussed the need for a framework regards Price and Delivery. Proserv highlighted we needed to understand exactly the equipment that was needed but conceptually OK. No further action was covered here though.AftermarketBH highlighted they would still like to have all services (once the warranty period finishes) to come through them. Went back and forth a few times on this topic, clearly BH see large revenues here and want to keep control. This aspect will involve significant discussion going forward.IP RightsBH highlighted their “need” to have access to IP rights in the event our relationship breaks down, Proserv go out of business or Proserv get acquired. This is another aspect that BH need a strong position so they feel they are protected and have business continuity from the controls perspective. The Proserv stance was they could secure protection with their right to buy Proserv should a future event trigger the actual reality. Again, further discussion will be needed here.Shutting NailseaBH highlighted they may ask for our support in managing a controlled closure of Nailsea. What they can shut off in their business, when they could do it and a phased transfer of scopes into the Proserv business.Ladder DiagEssentially, all of the above issues and steps but put them in a ladder diag with dates. They were going to take this away and prepare.
View Notes
Email contact 27 June 2025
Internal EmailFrom: Iain SmithTo: Davis Larssen, David Nemetz, Geert Kooi, Ewen MacLean, Tore Erntsen, Ben Swan, Daniel FearnleySubject: Baker HughesDate: 27 June 2025GentsAs most of you know, Baker have now come back to us (26th June) regards bidding a large subsea project. I just want to send a summary of some of the next steps as I see them, some thoughts around timing, strategy and actions/owners on our side. Please feedback any thoughts you believe add additional value to the below.My summary comment here before you read all the blah blah below. This is exciting, very exciting. But lets ensure we keep ourselves coordinated and feet on the ground. There will inevitably be side conversations and little huddles but lets try and stay tight as a team, feed back into myself and this team and not let side strategies develop unless its through all of us. And while I might be pointing at you lot, I fully accept the three fingers pointing back to me (I have as much responsibility (more!) in keeping all you folks informed and run more risk of running off on my own so will work hard on my own words!!)
The Project is with Exxon in Mozambique, Rovuma project (ENI and CNPC are the Exxon partners)
It is for 28 SCM’s and a significant amount of associated controls equipment…its significantly larger than any subsea controls project we have bid to date
FID is currently slated for 2026…so its still some way out!
It’s a large LNG project, thus, being large bore gas, BH (and maybe Exxon??) might believe they have a strong technical offering and whilst maybe not an advantage, BH may consider they have a right to win
Baker have historically been very successful and have close ties to ENI (they have historically only enjoyed limited success with Exxon)
Seems Exxon are somewhat frustrated with TFMC and OSS currently, that said, a large tender often times get both OSS and TFMC to sit up straight and garner back some love!
Proserv are currently bidding two scopes direct to Exxon Guyana (sorry Davis, I told you earlier the manifolds controls was thru Trendsetter but it is direct to Exxon too). CRM21025 and CRM21215, totalling $10M, with both jobs in forecast for July. So hopefully before we meet BH face to face again, we should know the outcome of these two opportunities.
Proserv are currently bidding OSS (controls team out of Germany) the HPU for Mozambique. Its currently a $900K (CRM20413) budget with a 365 day validity. This is the same job BH are asking us to partner with them on in Mozambique and ties with the FID dates
Daniel and Simon Andrew are seeing Exxon in Nigeria next week…they will not mention our BH collaboration specifically, but they will see about trying to join more dots
Proserv have a wide gap regards our relationship with Exxon globally and no “ins” currently with their Mozambique team. I would guess Baker will want to keep us at arms length from Exxon Mozambique so we will need to tread carefully. That said, I do have plans to close the gaps and ensure we have robust intel and contacts to help our decision making and influence the process…but the Rovuma project is going to be a long play!
Whilst this is the “first” project BH have asked us to specifically tender to them, I actually believe they will, in the not too distant future, engage with us for other projects that will actually leapfrog the Mozambique project from a timing perspective
NEXT STEPS
Geert will work with Joe and Tom to review the project details and prepare some questions/clarifications
Iain will arrange a teams call for next week (2nd or 3rd July) where Geerts team will present the questions to Baker (Gareth and Nathen)
Ewen, Tom, Geert and Joe (with others as needed) will then spend the rest of July pricing up the project…need to get an expected first review date from BH (Iain will action)
At the appropriate time in July we will complete an RRB type discussion on our costings and thus price we plan to share with Baker (I will set the meeting)
In Tandem, Ewen will work on our responses to the proposed MOU wording with the intent of getting this back to Baker, again targeting 3rd July for returning to Baker
Iain will arrange the next face to face with Baker, we are targeting 20th August in London (Iain, Davis and Ewen with Gareth, Dom and Renjun). I would be thinking an agenda along the lines of:-
Pricing proposal for Exxon
MOU finalisation/sign off (I hope)
More details on next steps, next project, timelines (Baker are calling this the “process ladder logic”)
Potentially agree communication options on our collaboration (which could still be no comms for now)
Need to agree customer interactions…what we can or should say and to whom and when
I think we now have a couple of opportunities that we could/should be adding to the discussion
Many ThanksIainExternal EmailFrom: Renjun ChongTo: Gareth Davies, Iain SmithCc: Domenico Di Giambattista, Davis Larssen, Ewen MacLeanSubject: RE: Proserv API 17F Gap AnalysisDate: 26 June 2025Iain and team,Hope you’re well. For the process/ladder logic, I suggest we have a meeting either in person or virtually first or second week of August. Hopefully, we will be able to close the price analysis for the large scope project and initial technology gap analysis by then, which will give us an indication of the timeline we can move between phases of our strategic collaboration.Please let us know your preference and provide us with your availability for that.Regards, Renjun ChongExternal EmailFrom: Gareth DaviesTo: Iain SmithCc: Renjun Chong, Domenico Di Giambattista, Davis Larssen, Ewen MacLeanSubject: RE: Proserv API 17F Gap AnalysisDate: 26 June 2025Iain, Good afternoon,Nathan and I have reviewed the gaps to API 17 Rev 5– on initial view doesn’t seem to be any significant show stoppers. The SCM instrumentation issue could need more attention, but we can have a follow up on that.Please see attached two documents,Firstly, the Exxon project file which should be sufficient to allow a “large scope cost comparison”, I suggest we organise a regroup with Nathan and I when you have digested such that we can address any potential clarifications. We will pull the Exxon Controls Specification and send that separately for product assessment.Secondly the comments to the MoU. I’ve provided a clean copy – which I know might frustrate the reviewers, but section 3 in particular didn’t align with the thinking from the last meeting. Please have a look and reflect, but in the last London discussion, we talked about creating the SSA to create the non-project specific terms to make project PO placement really simple and removing the need for back to back project based negotiations – this should be fairly clear in what is now written, but please let us know if you would like to discuss further. I will send over the SSA first draft in the next week.Lastly, we will send the process / ladder logic diagram once refined.Best Regards GarethExternal EmailFrom: Iain SmithTo: Gareth DaviesCc: Renjun Chong, Domenico Di Giambattista, Davis Larssen, Ewen MacLeanSubject: Proserv API 17F Gap AnalysisDate: 19 June 2025Dear GarethHope you are well.As promised, albeit a little late (apologies), please find attached a Proserv Gap Analysis summary compared to API 17F 5th edition. Any questions and/or thoughts, please let me know.It has been ten days since our last meeting in London and the follow up technical session with yourself and Nathen and it would be good to get your feedback.We have now mutually shared what is some reasonably confidential commercial and technical information between BH/Proserv and I am keen to ensure we keep the momentum. At our last meeting in London we discussed Exxon Mozambique as your priority number one along with a need for a mutually beneficial frame agreement (price and delivery). You also touched on a ladder diagram (phase I, phase II you do/we do etc).Now you have had time to digest the information shared, what do you see as the next steps and importantly for us, do you have a feel for a timeline? Are the three items listed above the areas for our next focus, can we start commercials for a specific project? Or do we need further action and documenting of some of the other items discussed (e.g IP, equity stake, Nailsea cost cutting/Proserv support)?Some steer on your side would be great, happy to jump on a quick call.Many ThanksIain
No contact to date with any of the Proserv team, but is very aware of the ongoing discussions.
Visited Newcastle FPS plant on Thursday, 8th May.
Dom hosted and confirmed discussion was held regarding Proserv/BH collaboration.
Lorenzo/Amerino likely final sign-off for potential closure of Nailsea.
Collaborating sign-off for working with Proserv on specific deals will sit further down their org.
Amerino GattiExecutive VP, Oilfield Services
No contact to date with any of the Proserv team, but is very aware of the ongoing discussions.
Visited Newcastle FPS plant on Thursday, 8th May.
Dom hosted and confirmed discussion was held regarding Proserv/BH collaboration.
Lorenzo/Amerino likely final sign-off for potential closure of Nailsea.
Collaborating sign-off for working with Proserv on specific deals will sit further down their org.
David DillonSVP – Subsea & Surface Pressure SystemsConference Call – 17th Dec 2024
Very positive to collaboration.
Openly discussed shutting Nailsea and having Proserv handle all the controls.
David suffered a heart attack in February and is currently out of office.
Following Dave Dillon's heart attack it is presently unclear as to whether he will return to work any time soon.
Other Baker ContactsDomenico Di GiambattistaVP SubseaFace-to-Face – 28th April in Newcastle
Domenico keen to move a collaboration forward.
Less knowledgeable of the controls product and handing the day-to-day of making a “deal” to Gareth and Renjun.
Dom will be the presenter of any “deal” to Lorenzo and Amerino.
Daniel WrightDirector of Global Business Operations
Spencer has a good relationship with Daniel but is not known to others in Proserv.
Seems to be a right-hand man for Dom, but again, not close to controls.
Gareth DaviesExecutive Product Portfolio Director
Technical and market expert for the deal.
The one main player that has a background for emotional attachment to BH controls technology and Nailsea as a site.
Outwardly displays no emotion to Nailsea and very much sticking to the BH company line of rational business decisions to take BH forward.
Some negative comments about Gareth from certain folks from inside BH, but BH leadership appear to understand they need Gareth to support the technical and market aspects of any future deal.
James CrawfordStrategy Director
Reporting to Renjun and well known to Daniel Fernley.
He has limited knowledge of the ongoing process through his boss, Renjun.
Daniel Fernley knows James well.
Kevin JayanathanSales Director – SEA
Sales and prepares the bids in Asia.
Well known to Iain Smith.
A guy keen to collaborate.
Renjun ChongExecutive Director of Strategy
Previously worked at McKinsey.
Will lead the commercial and contractual aspects of any deal.
Has limited technical and market knowledge.
Umberto NespoloGlobal Sales and Commercial Director
Not aware of the ongoing process but understands all global sales, target customers, strengths, and weaknesses of BH.
Recognises he is on a sticky wicket at BH; recently in charge of all sales and commercial (150 people) for SPS, but restructure changes his role to early customer engagement (team of 5).
Good to talk with and will share stuff, but respectful of his BH role.
An important contact for a different type of intel/insight.
Will be interesting to see when he gets pulled into the process.
Derek PriceExec Product Portfolio Director
Luke started building a relationship with Derek in Perth.
Not known to others at Proserv.
Seems to carry influence in BH, especially for FEA.
Mike LewisSenior Sales Manager (APAC)
Known to many at Proserv.
Luke in regular contact.
Will share intel and keen to collaborate.
Neil SaundersFormer President & CEO - Oilfield Equipment
Both Iain and Davis have a (friendship) relationship with Neil, but he remains professional towards Baker
Graham GilliesVP – Baker Hughes APAC
Iain has close friendship with Graham, but remains professional towards Baker
John KerrSnr Exec Director – Systems and Technology
Davis has friendship with John, who supports Proserv via mentoring/coaching for Tore
Andy BarrCommercial Director North Sea and CaspianMet over teams on meeting 28th May to share commercials of our respective organisations , very open, keen to explore collaboration. Recognises Nailsea’s high cost base and poor performance is limiting the BH tree/manifold business
