Years of underinvestment in the oil patch, among other factors, likely will require years of spending growth to meet forecasts of future demand, Baker Hughes (NASDAQ:BKR) Chairman and CEO Lorenzo Simonelli said Monday.

Baker Hughes (BKR) thus continues to believe the early stages of a multiyear upturn in global activity has begun, and probably will result in a second straight year of double-digit increases in spending on worldwide exploration and production, the CEO said on the company’s earnings conference call, according to S&P Global Platts.

In the shorter term, Simonelli said he sees the reopening of China, combined with Europe’s need to refill gas storage supplies, playing a critical role in keeping global gas and LNG markets tight, while in the longer term, “we remain optimistic on the structural growth outlook for natural gas and LNG as the world looks to lower emissions and displaces the consumption of coal.”

Geographically, the Middle East holds the most promise, with activity scheduled to increase in multiple countries this year and likely next year, while visibility remains limited in North American given capital discipline and supply chain shortages that have tightened rig and frac crew availability, Simonelli also said.

“After a record year in 2022 in flexibles orders, we expect another strong year in 2023, as well as a significant increase in subsea trees awards,” the CEO said on the call.

Baker Hughes (BKR) reported Q4 adjusted earnings and revenues that slightly missed estimates.