And look, we’ve been indicating that we wanted to rationalize some of our capacity. And as you look at SSPS, we’ve taken several steps also last — at the end of last year and beginning of this year to really take out some of our excess capacity on the subsea trees. We’ve also been rationalizing capacity in Asia, Latin America, outsourcing some of the basic machining that we’ve typically done in the U.K.And now we’re looking also at some of the facilities for SPC consolidating those in the Middle East, which is our primary market for the business. So we think that on the cost-side, we’re taking the appropriate actions, and this will be part of the broader $150 million and on top of that relative to some of these actions we’re taking OFSE (ph) as we go forward.So on the actual offshore market, again, we’ve seen some strong momentum.
You saw our orders. And again, the highest order rate from a five-year period for the business, and we’re seeing good traction in flexibles. So our market momentum is positive at this stage, and we see that continuing also in 2024.Operator Thank you. One moment for next question. And our next question coming from the line of Chase Mulvehill from — with Bank of America. Your line is open.Chase Mulvehill Hey. Good morning, everyone.Lorenzo Simonelli Hi, Chase.Chase Mulvehill Hi, Lorenzo. I guess a first question to you. Back at your annual meeting, you announced a few new digital offerings which included Leucipa in the OFSE segment encoded in the IET segment. So could you speak to how these differentiated digital offerings actually can help you accelerate your digital strategy and how they complement your current digital solutions offering?Lorenzo Simonelli Definitely, Chase.
And look, I was with a customer yesterday and actually reviewing the opportunity of Leucipa on the OFSE side. And as you know, Leucipa is a cloud-based automated fuel production software solution, really designed to help oil and gas operators proactively manage increased production and reduce carbon emissions. So we’re pleased to have Pan American Energy Corp, a leading company in Argentina, as a launch customer and actively talking to other customers also here in North America.We also announced a collaboration with Corva and have a minority investment to improve efficiency in rig operations through analytics, real-time data and visualization. So I’d say we’re at the early stages of really being able to provide that suite of capabilities and good customer engagement.On the IET side, you mentioned it correctly, Cordant.
Cordant is an integrated suite of solutions really supporting our industrial asset performance management and process optimization. It builds on the broad and established rotating equipment, sensors, valves, pump gears and inspection service domain we have within the space.And Cordant is available today through a modular approach and pleased that we announced the collaboration with BP to further define and develop Cordant and BP is going to be deploying 1 PM in select locations across the Gulf of Mexico production assets, where we have a large installed base of rotating equipment and also associated digital services.In addition, in the first quarter, we won an important contract with a fertilizer customer. And again, the scope of work includes artificial intelligence, machine learning, predictive analytics, and it’s really going to be able to help on the OEM physics-based analytics to improve their capability and reaching their production targets.
So it’s multimillion dollar order, which we’re very pleased about and seeing good traction across the digital landscape with the solutions and suites that we have.Chase Mulvehill Okay. Awesome. Appreciate the color there. A follow-up maybe for Nancy. You mentioned line of sight of exceeding the $150 million of cost-outs. And I know you plan to kind of have all the work completed by the end of 2Q. So maybe it’s a little bit early to ask, but can we — can you maybe spend a minute or 2 and kind of give us some color around where you see the most opportunity for incremental cost savings across Baker?Nancy Buese Yes. Happy too. So we really started this whole project back in September ’22, and we’ve just identified so many ways to think about cost-outs of the organization and really a more efficient operating structure overall.
And I would note, in the first quarter, we recognized about $15 million of those cost-outs. So we’re starting to see that just simply from the movement of four product companies into the two business segments.So when we think about the cost-outs at the moment, there’s — I think about it in two buckets. The first is, and it’s probably two-thirds of the first 150, that’s really just simplification and the organization, streamlining the operations. And that allows us to kind of take out some layers, smaller functionality, removal of duplication and just leaner overall at corporate and then also pushing us to what we call a strategically managed business structure and putting the activities closer to the business. I think there’s more we can do there as we think about that first bucket of cost-outs.The second is really cost controls and thinking about optimizing all of our support functions and thinking about how we spend our money with technology, external expenses, third-party services and the like.
So I think there’s opportunities in both ways, and we’re going to continue to methodically work through all of it and thinking about how do we centralize activities that need to be at the core, how do we put the right things at the business and then really standardizing some of our key operating processes.So we do think that’s going to generate additional savings. So we need to get through this first bit of the cost-out effort, and then we will come back to you with a better signal. So we think there’s more there, but it’s probably too soon to call. And then you heard it right is we’re working hard to get all this done by Q2, so we can start realizing the savings run rates by the end of 2023.Chase Mulvehill Okay. Perfect. Thanks for the color.
I’ll turn it back over.Operator Thank you. One moment for next question. And our next question coming from the line of Scott Gruber with Citi. Your line is open.Scott Gruber Yes. Good morning. Questions on the outlook for your North American business within OFSE. Lorenzo, you lowered your year-on-year D&C spend forecast which looks appropriate in light of the onshore drilling activity trending down here and it’s likely down, exit to exit. But oil production is still growing in the U.S. It’s still growing in Canada, which should drive chemicals growth. And I believe Gulf of Mexico revenues should still be up for Baker this year. I think you can still hold the $1 billion, or so revenue run rate through year-end, even if the land rig count onshore is down?Lorenzo Simonelli Yeah, Scott.
Look, I think there’s certainly a lot of moving parts in the North America market at the moment. And coming into the year, we expected some privates to drop oil rigs early in the year, but that would be gradually offset over the course of the year by the public E&Ps and some majors adding some rigs. The natural gas pricing has been weaker. And so we would expect 30 to 40 rigs also additional to be dropped over the course of 2023.On the oil side, though, we don’t see much risk to the oil activity. If we stay at around $80, we should be able to stay level on the rigs and I don’t think we’ll see much impact unless we start to go below the $70. And then also for the public E&Ps, we don’t see much risk to their activity levels until we get to around $60 or below.
So a lot that we’re continuing to monitor. But to your point, I think it’s fair to say that we should be able to maintain that run rate.Scott Gruber Good. And then a question on the Middle East, following the OPEC production quota (ph), are you seeing or do you expect to see any impact on your chemical or less sales in the Middle East this year?Lorenzo Simonelli Yeah, Scott. Right now, we see no major change really limited in our international outlook and expect international spending to increase in the mid-double-digit range. Again, as you think about the Middle East, the GCC countries, drilling plans for this year are pretty well set along with the procurement of materials and labor. I wouldn’t — I’d be surprised if there was a material deviation from current plans.
However, looking into 2024, we’ll have to monitor the health of the global economy and also the oil demand.And if OPEC+ cuts wind up being deeper or lasting longer, it could impact the growth trajectory to some degree in 2024, but it’s too early to say. And I think you’ve got to remember that a lot of these customers are looking at production capacity over the long term increasing and have been dedicated to that on the natural gas development. So we’ll monitor the situation, but at this time, limited impact.Scott Gruber Okay. Appreciate the color. Thank you.Operator Thank you. One moment please for next question. And our next question coming from the line of Luke Lemoine with Piper Sandler. Your line is open.Luke Lemoine Hey. Good morning.
Lorenzo, could you talk a little more about your agreement with HIF for Direct Air Capture with your Mosaic business? And maybe what the time line could be and what the opportunity set you see for Mosaic over the next few years?Lorenzo Simonelli Yeah, definitely, Luke. And look, as we’ve mentioned previously, partnerships are critical to delivering the energy transition. So there’s no one company or technology that’s going to solve the problem. And partnerships like this that we have with HIF, we think are crucial to be able to demonstrate and showcase the technology. So HIF is a great case where they’re developing projects to produce e-fuels by blending green hydrogen and CO2. We, again, are being with them alongside others such as Porsche and also other investments.We’re going to be providing them a number of compressors, turbines, pumps, valves and other technology and per facility that’s good content for us.
