Profiled: Top Upstream EPC Contractors 2012
, June 7th, 2012
2011 and early 2012 have seen some of the most exciting contracts and commissions in the Middle East.
From Pearl GTL in Qatar to new export terminals in south Iraq, projects came on stream which have dramatically affected the upstream landscape and cemented the Middle East’s prime position as the world’s most important energy supplier.
And it’s not going to stop there.
Barclays Capital estimates that global exploration and production (E&P) spending in 2012 will be up 10%, with Middle East E&P spending expected to rise 12% due to a pickup in activity particularly in Iraq, Saudi Arabia and Kuwait.
Offshore and subsea will play a huge part in the region’s growth over the next few years, as the region grabs a slice of $217 billion of planned spending on subsea and pipeline work by 2017, with even that only being enough to ensure the replacement of lost production.
Even without any demand growth, around a quarter – 23.6 million barrels a day - of total oil supply will need to be replaced by 2017. The IEA expects the MENA region to add more production capacity than any other region, investing $100 billion annually to meet the need for oil and gas.
Our 2012 EPC Contractors Special Report is the most comprehensive edition to date. In compiling our rankings, we have used a weighted combination of contract awards, backlog, revenue, EBITDA, net profit and shareholder return - all on show in our rankings on pages 26-27 - and broken down into stats for the region and the upstream sector. Where these figures remained confidential, we have used estimates based on reports, disclosures and industry comparables.
As a result, some results may surprise, and the rankings have been shaken since last year.
Our aim has been to provide a comprehensive view of who is really thriving in the region, and who is best placed to profit from the capex bonanza in the years ahead. So get reading, and join us online to tell us what you think.
Click to countdown the top 30 EPC contractors
Click to read the supplement online, including our rankings table and interviews with Fluor, Topaz Energy & Marine and key suppliers AES Arabia and Total Solutions.
30 Target Engineering
Target, which operates out of the UAE, Qatar and Saudi Arabia, breaks into our top 30 on the back of its increasing portfolio of oil and gas work across several competency areas.
The firm is active at the Shah sour gas development, where it – operating under Fluor – holds the EPC contract for civil works, which is due to complete in Q1 2014.
For GASCO, Target is working on the fourth NGL recovery train at Ruwais, where the company is undertaking marine work to a deadline of Q3 2013.
At Takreer, the company holds the construction contract for the $1.14 billion green diesel project. Target is building hydrocracker units with aim to produce of low sulphur gas oil at a rate of 37,000 bpd.
Target also enjoys a niche in marine construction having undertaken technically challenging marine construction projects in the UAE.
These include 31 artificial islands in Abu Dhabi, installation of sub-sea pipelines 2-3 kms into sea at Ras Abu Fontas, Dubai and in Ruwais and Harbour Construction in Ruwais, Das Island and Abu Dhabi and marina works at the Palm, Dubai.
With impressive work under its belt, Target may be one to watch in 2012/13.
Next: 29 Mott MacDonald
29 Mott MacDonald
While Mott MacDonald’s gross revenue was up 4% to £1.07 billion ($1.69 billion) in 2011 from £1.035bn ($1.63 billion)in 2010, group-wide profit fell back to Profit of £48.6 million ($76.6 million) down on 2010’s £49.3 million ($77.7 million).
The company’s lower rank this year better reflects the company’s market position as primarily a FEED and PMC consultancy provider. Mott Mac’s breadth and technical expertise are not in doubt, after the firm won an Oil & Gas Middle East industry gong for its work at the $1.2 billion steam injection program at Qarn Alam in Oman.
The company worked on regional projects with an estimated capital value of $8.6 billion in 2011, with the UAE and Oman the most profitable markets.
Mott Mac won FEED contracts for the $500 million EOR package, main construction, at Abu Dhabi’s Satah field development project, as well as the MPMC for water facilities at the field, with the project due for completion in 2014.
Other UAE projects include direct depressurisation works at Habshan, a $100 million Das Island separation plant, overseeing EPC works at Takreer, and a feasibility study at Umm Lulu and Nasr offshore Abu Dhabi.
In Iraq, the firm expects to complete EP for gas processing facilities at the Akkas and Manuriyah fields in Iraq by the end of the year.
Mott Mac is now poised to win more work in Iraq – where the firm has been since 2003 – and North Africa. The Middle East accounts for 14% of group revenue, and the company is targeting 5% growth this year and 15% next year.
Previous: 30 Target Engineering Next: 28 Topaz Engineering & Construction
28 Topaz Engineering and Construction
Annus horribilis. That’s how Samir J Fancy, Chairman of Topaz’s parent company Renaissance, dubbed 2011 for the company. Profits across Topaz businesses slumped 77% in the first half of the year, and the engineering group posted a loss of $22.1 million on $172.5 million of revenue in 2011.
Former CEO Fazel Falzelbhoy left abruptly in July. Renaissance subsequently disclosed fraud committed by an individual in the firm’s marine business, together with problems with project delivery in the engineering business for which the copany was forced to make $30 million in loss provisions.
Topaz has now restructured, with Renaissance CEO Stephen Thomas at the tiller for the time being, and the oil and gas business – incorporating Adyard Abu Dhabi – standing alone under former Petrofac man Tony McKay (see interview on page 42).
Topaz may come back stronger than ever. Renaissance displayed admirable transparency in dealing with Topaz’s problems. As well as cleaning house, the company dumped unprofitable business segments.
Eagerly chasing new work, McKay says the engineering business will break even by the end of this year, and says Topaz’s facilties at Mussafah, Liwa and Fujairah give the firm the means to develop its niche EPC opportunity with a renewed focus on the UAE, and brownfield projects in particular.
Previous: 29 Mott MacDonald Next: 27 Chiyoda Corp
27 Chiyoda Corp
Having constructed all Qatargas’s LNG plants, Qatar is a natural market for Japanese gas specialists Chiyoda, a fact reflected in the company’s involvement in the FEED stage at the $10.4 billion Barzan gas development project, and the firm’s role in building the QP/Shell Pearl GTL plant.
In August the firm also won an ‘on-demand’ EPCm contract from Qatargas for its seven LNG lines and other common facilities.
In November, Chiyoda won furnace replacement work for Iraq’s North Refineries Company at the aging Baiji plant, in a national sector which is set to take off over the next few years.
In Saudi Arabia, the company is working in Jubail on two contracts for thermal cracking and sweetening units for SATORP, with completion slated for 2013.
The company also announced a co-operation agreement with Saipem for collaboration on upstream and LNG projects. With plenty of offshore work up for grabs, the deal has the potential to add significantly to the company’s order book in the Middle East, so watch this space.
Previous: 28 Topaz Engineering & Marine Next: 26 SNC Lavalin
26 SNC Lavalin
SNC-Lavalin had a mixed year. No major upstream contract wins were announced in the region, leading to a slide down our rankings. The firm also took a reputational blow after the arrest of Executive VP, Riadh Ben Aissa after allegations of corruption, fraud and money laundering tied to business deals in Libya.
SNC promptly fired Ben Aissa and says he should be held accountable if he did anything wrong.
However, SNC-L is primed for contract wins elsewhere in the region after a year of its GES+ contract with Aramco for engineering and project management services in Saudi Arabia.
The company’s work at the Rhourde Nouss gas complex in Algeria progresses, under which SNC-L is building infrastructure to collect raw gas at four gas fields, a natural gas processing plant and a CO2 reinjection facility in the Sahara. SNC-L is also doing conceptual work for Abu Dhabi’s Mubadala for a CCS plant.
Iraq’s Ministry of Oil has hired SNC-L to prepare studies for a planned overhaul of the country’s 1,500km oil and gas pipeline network and associated economic modelling.
For the first quarter ended March 31, 2012, net income was $67.1 million and the firm boasts a $10.5 billion backlog as of March 2012.
Hydrocarbons & chemical makes up 15% of the company by revenue and 5% of the company’s work is in the Middle East.
Previous: 27 Chiyoda Corp Next: 25 Punj Lloyd
25 Punj Lloyd
India’s Punj Lloyd is going from strength to strength in the UAE, as it hoovers up mid-value projects of increasing complexity.
A prime example is the $197 million SAS flowlines and wellheads project for Abu Dhabi’s ADCO, slated for completion in 2014. Punj has been charged with the EPC work on 750km of flowlines at SAS and 160 wellheads at the three onshore fields.
Together with Tecnicas Reunidas, Punj Lloyd also won a contract worth $463 million for gas gathering at the massive Shah sour gas development in Abu Dhabi.
The company also has a sub-contract from Hyundai E&C for mechanical works, equipment and piping installations as part of the $1.7 billion offsites & utilities package at Habshan 5.
Another banner project won this year is the Bulk Oil Terminal at Jebel Ali in Dubai, which includes a 60km jet fuel pipeline to Dubai International Airport. Previously referred to as ‘Project Falcon,’ the facility will have state of the art oil terminal facilities with storage tank capacity of 141,000 cubic metres, including a tanker truck Loading system connected to the oil tanker berths and associated facilities.
The company reported analyst-beating group-wide net sales figures for Q1 2012 up 11.75% on the quarter and 35% year-on-year.
The major challenge for the company - and for many others in the same tier of the EPC market, is defending margins which for Punj are already squeezed by debt repayment obligations. Punj also has projects on hold in Libya, which will hopefully restart as the country settles.
Previous: 26 SNC Lavalin Next: 24 CH2MHill
24 CH2M Hill
American firm CH2MHill has been working in oil and gas for the last 40 years, and its recent acquisition of British civil engineering giant Halcrow and its ownership of VECO puts the company squarely in the top tier of engineering consultancies to the region’s oil and gas industry.
VECO has won a raft of complex projects in Abu Dhabi, from several packages for GASCO at Bu Hasa & Ruwais to field developments at ADCO’s onshore fields.
At Bab, VECO had the FEED for developing the Habshan 1 reservoir. At Bida Al Qemzan, VECO is working on $300 million of engineering and procurement for completion in 2014, with Larsen & Toubro handling construction.
At SAS, VECO scooped the PMC contracts for the $3.2 billion package A, supervising Petrofac which won the Asab EPC, and the $1.2 billion package B, where it is supervising Tecnicas Reunidas and CCC at the Sahil and Shah fields.
The firm has also overseen the conceptual study for offshore produced water facilities at the Upper Zakum full field development for ZADCO.
Previous: 25 Punj Lloyd Next: 23 Larsen & Toubro
23 Larsen & Toubro
L&T has built up an excellent reputation for second-tier EPC work across its network in the Middle East, and last year proved that the firm has a niche in the EPC market.
The company brushed aside NPCC and others to win the $450 million early works package at the Umm Lulu and Nasr fields in Abu Dhabi. L&T is working to a Technip FEED and AMEC supervision on offshore production facilities slated for completion in 2013 for ADMA-OPCO. Work includes installing four wellhead jackets and a manifold tower platform, connecting bridges and subsea pipelines.
At Habshan, L&T is working under a Saipem FEED for the $190 million EPC of Habshan-Ruwais and Ruwais-Shuweihat pipelines, a total of 123km.
For PDO, L&T is building a 106 million cu ft a day sour gas gathering facility and pipelines at the Lekhwair field, under a $250 million EPC deal due for completion in Q4 2014.
The company started construction in January on the $300 million phase one development program at ADCO’s Bida al Qemzan field, which is aiming to increase production to 20,000bpd.
L&T has a joint sub-contractor bid in for works Kuwait’s $18 billion Min Al Ahmadi Clean Fuel project with CCC. If it scoops this deal, L&T is sure to climb next year’s rankings.
Previous: 24 CH2MHill Next: 22 Leighton Offshore
22 Leighton Offshore
Leighton Offshore breaks into our rankings for its successful EPC work on the Iraq Crude Oil Export Expansion Project, perhaps the most important strategic project in the Iraqi Ministry of Oil’s Master Plan, which aims to increase export capacity by 4.5 million bpd within 5 years.
The $733 million Project Phase 1 was completed earlier this year, causing Iraq’s crude exports to rise by hundreds of thousands of barrels of oil a day as a major bottleneck in the upstream chain was removed.
Works included two 48” parallel pipelines, 20km onshore and 120km offshore, three single point mooring systems capable of receiving and loading VLCC tankers, fabrication and installation of a 600m/ton subsea valve manifold and ancillary works.
The firm won a further $518 million contract to develop two offshore platforms, a 75 km pipeline and a further single point mooring system for the South Oil Company.
A cloud remains over the project while Australian Federal Police investigate bribery concerns report from the firm’s parent company regarding the project award. Robert Cooke is acting CEO.
Previous: 23 Larsen & Toubro Next: 21 Wood Group
21 Wood Group
Wood Group, which includes the PSN, GTS and Engineering subsidiaries in its stable of businesses, slides down our rankings as strong regional figures belie a lull in new regional capex-oriented work.
The company teamed up with Abu Dhabi’s Mubadala under a JV agreement to provide a comprehensive suite of services to the oil and gas industry.
Mustang Al-Hejailan Engineering, a Wood Group company, continues to work for Saudi Aramco under GES+ contract signed in March last year. The contract establishes a long-term framework for the supply of engineering, procurement and construction management services to support the execution of onshore and offshore oil & gas projects within the Kingdom of Saudi Arabia. The duration of the contract is five years, plus three one-year extension options.
The group also continues to do brisk business under the remaining five-year contract it has for oil and gas engineering and maintenances services with PDO in Oman.
Previous: 22 Leighton Offshore Next: 20 McDermott International
20 McDermott International
Like many other EPC firms, offshore and Marine specialist McDermott International has proved adept at tapping the gas contracts landscape in the region, from Rasgas LNG projects in Qatar to major packages at the $10.4 billion Shah sour gas field under ADNOC and Occidental.
MI is also about to complete its Lower Zakum field development EPC contract ($350m), comprising a new offshore platform and water injection facilties with the aim of boosting production to 400,000bpd.
MI has facilities in Dubai and Al Khobar, Saudi Arabia, has strong ties with ExxonMobil, Aramco and Chevron, which were responsible for 36%, 24% and 10% of 2011 group-wide custom respectively.
Saudi ($955m), the UAE ($139.4m) and Qatar ($83m) provided the vast majority of regional revenue in 2011. MI reported lower marine activity levels and lower project close-outs and settlements in the region for Q1 2012.
MI has been active at the Al-Khafji Joint Operations Hout field since 1960s, and has been awarded a contract to carry out modifications to a number of existing platforms through its dedicated brown-field division in Jebel Ali.
The firm is also working on the Khafji Ratawi Water Injection Facilities.
Previous: 21 Wood Group Next: 19 SK E&C
19 SK E&C
SK E&C has worked on a list of large projects in the gulf over the last year. In Kuwait, the company continues progress on several gas projects, inclusing the $724 million EOC deal to build Booster station 132, which will handle 250 million cu ft a day of gas as part of Kuwait’s strategic investments in developing the country’s gas infrastructure. Commissioning is due to start in Q3 2012 with completion in Q1 2013.
At the Wasit gas development in Al Sharqiyah, Saudi Arabia, SK E&C has been handed the EPC for an NGL fractionation plant, with Saudi firm Mohammed Al Mojil group as subcontractor.
The plant, being built by SK E&C under a LSTK contract due to complete in April 2014, will process non-associated gas from the offshore Arabiyah and Hasbah fields. The company also won the EPC for sulphur recovery units and a 1.7 billion cu ft a day gas processing unit.
The company has also scooped downstream Saudi contracts for SATORP, and at Yanbu, and was also awarded the construction contract for the Zaha Hadid-designed $300 million King Abdullah Petroleum centre in Riyadh.
SK E&C, with several fellow Korean contractors, has started a recent push in Latin America with some success. The company recently agreed to build a $500m heavy oil storage facility in Venezuela, as the country exploits high oil prices to tap its heavier crude.
Previous: 20 McDermott International Next: 18 Bechtel
Bechtel is a global EPC behemoth, and last year again saw the privately-held American contractor deploy its expertise across a broad range of oil and gas projects in the Middle East. The GCC, and Abu Dhabi in particular, have proved to be the cornerstone of the firm’s presence in the region.
Bechtel has been instrumental in the massive Borouge 3 project in Abu Dhabi, project managing seven works packages, as Abu Dhabi looks to boost the plant’s annual production capacity of polyolefins to 4.5 million tonnes before 2014.
At Takreer, Bechtel provided the FEED which will see the refinery’s capacity boosted to 400,000bpd by next year.
In the West Nile Delta, Bechtel is following KBR’s FEED with an import and export terminal project for RWE Dea and BP Egypt which is slated to process 1 billion cu ft a day of gas. Bechtel broke ground in December 2011 and is slated to complete the project in Q4 2014.
At Abu Dhabi’s Habshan gas field, the company has completed three OGD-3/AGD-3 contracts for GASCO, which have increased under the Intergrated Gas Development program, with a combined capital value of $7.1 billion.
The company has an enduring reputation in the Gulf after spearheading the reconstruction of Kuwait’s oil infratructure ravaged on the orders of Saddam Hussein during the Gulf War, and leading a massive clean-up operation of Gulf waters polluted by oil dumped by Iraqi troops.
Previous: 19 SK E&C Next: 17 Hyundai Heavy Industries
17 Hyundai Heavy Industries
Hyundai Heavy Industries, the world’s largest shipbuilding company, is still working on two major GCC projects, but its failure to secure further upstream EPC work in the region keeps it near the lower half of our rankings.
HHI completed its $2 billion package – won in conjunction with Chiyoda – at the Pearl GTL plant at Ras Laffan, Qatar in November, where Shell will separate, desulfurise and refine 1.6billion cubic barrel feet of natural gas per day.
Overseen by WorleyPasons, HHI is executing a $1 billion contract for a 750 million cu ft a day offsites and utilities package on Das Island for ADGAS.
The package comprises three tri-ethylene glycol dehydration trains, three compression trains and gas receiving and burning units, and is part of Abu Dhabi’s Intergrated Gas Development program, which aims to boost gas output by 1 billion cu ft a day.
In 2010, RasGas awarded HHI $890 a million LSTK contract to work on a significant portion of the Barzan Gas Project offshore Qatar.
HHI’s EPC deal comprises three offshore wellhead platforms, contributing 300 kms of subsea pipeline and 100 kms of subsea cables and gas-processing facilities, which are expected to produce 1.9 billion cuft a day of natural gas by 2014.
Previous: 18 Bechtel Next: 16 JGC Corp
16 JGC Corp
With the $1.7 billion Barzan Onshore EPC contract numbering amongst their accomplishments in 2011, JGC improves its position in our rankings from last year.
Qatar continues to dominate the LNG market, and JGC’s positioning as a specialist in diversification facilities such as GTL leaves the company well-positioned within the region. With a presence in Saudi Arabia, UAE and Australia amongst others, JGC has annual sales of $5 billion.
The firm’s most productive project over the last year was the $4.7 billion Integrated Gas Development project for GASCO, where JGC is working under a joint venture with Italy’s Maire Technimont.
The IGD project aims to increase UAE offshore gas production in the United Arab Emirates.
The offshore gas, after initial treatment in the new Das Island facilities, will be sent through a dedicated 30-inch pipeline to the Habshan site in the southwestern part of the Emirate, where it will be further processed before being sent to the gas sales network. The project is slated for completion in October 2013.
Across its overseas Oil & Gas business stream, JGC saw $434 million net income over the last financial year on sales of $2,726 million, with a current backlog of $5.17 billion. The Middle East accounted for 36.9% of group-wide sales and 24% of the company’s outstanding contracts.
Previous: 17 Hyundai Heavy Industries Next: 15 Technicas Reunidas
15 Technicas Reunidas
Technicas suffered at the hands of Korean competitors in 2011 on key bids, resulting in a 6% drop in group backlog to €5,387 million ($6,896 million), 86% of which is from oil and gas. However, oil & gas revenues climbed 6.1% to €2,285 million ($2,957 million) and net profit climbed 38.1%.
Despite building up a good reputation through successful projects from GC-28 in Kuwait to gas treatment and fractionation plants in Saudi Arabia, Technicas has had difficulty out-bidding Korean rivals since 2009, with the lowest bid-to-win ration of European contractors in the region, according to Morgan Stanley.
The company’s focus on downstream projects in Saudi Arabia and the UAE in particular puts the firm in competition with EPC behemoths such as Samsung Engineering.
But it’s not all bad news. The company, as part of a consortium with Punj Lloyd, beat Dodsal and Saipem to a $470 million gas gathering complex contract, due for delivery in 2014, at the Shah field.
Tecnicas has still won impressive turnkey projects in Saudi’s booming downstream sector, and continues to work on the large Yanbu and Al Jubail refinery expansions.
Tecnicas is also involved in the SAS project for ADCO in Abu Dhabi, including additional wells, flow lines, replacement and modification of existing facilities and building new surface facilities. The Spanish company also completed the PDO’s Saih Rawl Depletion Compression Project, and TR Oman and several gas projects in Algeria.
Previous: 16 JGC Corp Next: 14 WorleyParsons
While WorleyParsons does not often conduct EPC contracts per se, the Australian company’s burgeoning regional profile warrants a listing.
The firm has had a solid year, and has carved out a name for itself as a sour gas specialist, following successful projects for Gasco (Habshan and Ruwais), KNPC, Equate, Saudi Aramco, Qatar Petroleum, and Petroleum Development Oman.
The foremost of these is the 4,750 Billion cu ft a day Habhan facility, where WorleyParsons devised the management of 4,500 tonnes per day of liquid sulphur as a by-product of acid gas processing, whereby liquid sulphur is trucked to GASCO Ruwais facilities where it is granulated and exported.
Work for the Joint Operations project between Kuwait Gulf Oil Company and Saudi Arabian Chevron at onshore oil fields located in the partitioned zone between the countries of Kuwait and Saudi Arabia has been a particular boon.
WorleyParsons has signed up to a four-year engineering, project management and construction management services contract. A steam flooding pilot has been hugelely successful, and provided the parties agree to fund the project, any roll out will see the company at the head of one of the most exciting EOR projects in the world.
Previous: 15 Technicas Reunidas Next: 13 Foster Wheeler
13 Foster Wheeler
Engineering and construction is 70% of Foster Wheeler’s group-wide business, 15% of which is in the Middle East. Divisionally, the firm works in Refining & Petrochemicals (68%), Oil & Gas (9%) and Chemicals (15%).
The start of the year saw a slight decline in E&C group revenue in Q1 2012, with EBITDA across the company down by 28.9% in 2011. However, a range of new projects came thick and fast.
ChemaWEyaat has let a contract to Foster Wheeler’s Global Engineering & Construction Group covering production management consultancy services for an aromatics complex at Ruwais, Abu Dhabi at the company’s Madeenat Al Gharbia site.
The firm has an EPC contract from Aramco for a propylene oxide unit at Jubail Industrial City in the Eastern Province of the Kingdom of Saudi Arabia.
Qatargas brought FW into a framework agreement covering projects associated with existing LNG plants at Ras Laffan.
BANAGAS has contracted with FW to expand its LPG facilities in Bahrain to 285 million cu ft a day of associated gas by 2014.
FW is at the head of one of Saudi Aramco’s GES+ consortia, under which FW will perform PMS, pre-FEED, FEED and detailed design and procurement services. Work includes the Clean Transportation Fuels Project at the Riyadh Refinery.
In November 2011 Foster Wheeler received a contract from ZADCO to perform an availability and reliability study in connection with expansion of the Zirku oil processing facilities.
FW’s future in Azerbaijan looks bright after the company signed an MOU with SOCAR to participate in oil and gas projects.
Previous: 14 WorleyParsons Next: 12 Jacobs Engineering
12 Jacobs Engineering
A huge market for us,” is how Jacobs CEO described the region to Jacobs investors last year. “The prospects there are just enormous. We are very well positioned.” And so it has proved to be for Jacobs, with a range of projects across the Middle East and the GCC in particular.
The company boasts a group-wide backlog of $15.1 billion as of March 2012, which contains a slew of technically-demanding projects.
The firm is overseeing SK Engineering & Construction’s work at the $10 billion Takreer crude expansion, and holds the basic engineering consultancy package at the Wasit Gas Development project in Al Sharqiyah, Saudi Arabia, for Saudi Aramco.
Again overseeing SK E&C, Jacobs is consulting the EPC of sulphur recovery units which will produce 4,800 tonnes a day of sulphur.
Jacobs also provided the FEED for Bahrain’s $430 million, 400 tonnes a year lube base oil plant in the Sitrah industrial area, and saw Samsung Engineering complete the EPC works in October 2011.
The plant is strategic part of Bahrain’s attempts to maximise its value chain capture, producing sulphur-free very high viscosity index to be used for blending top-tier lubricants.
The company saw net earnings grow to $83.9 million on revenues of $ 2.7 billion for the second quarter of fiscal 2012, which ended March 30, up from $ 80.3 million on revenues of $ 2.56 billion the year before.
Previous: 13 Foster Wheeler Next: 11 Maire Technimont
11 Maire Technimont
In a difficult year for the the group, Maire Technimont’s Middle East business proved its savior.
Maire’s power business in Latin America took a hammering on delivery and issues. Fortunately, oil, gas and petrochemicals – which make up 76% of the business by revenue – remained buoyant, especially in the Middle East, which has become the company’s greatest earner by region, and which currently accounts for almost half of total revenue.
Through 2011 Maire booked €1,234 million ($1,595 million) of revenue in the Middle East, 46.6% of the group total, and 68.2% up on 2010, emphasising the substantial top line contribution of Oil, Gas & Petrochemicals, whose operations are mainly concentrated in the Middle East.
In 2009 Maire with Japan’s JGC was awarded the largest gas treatment plant ever built in Abu Dhabi for $4.7 billion, under GASCO’s Integrated Gas Development project. Due for completion in October 2013, the project is now entering a peak productive phase for the company, shoring up revenues.
Previous: 12 Jacobs Engineering Next: 10 Lamprell
Lamprell smashed through the billion dollar barrier in its preliminary results for 2011. Revenues surged by over 127% to $1.15 billion from $503.8 million a year ago.
The Company had a record bid pipeline of $5.2 billion at February. Gross profit increased by 66.8% to $ 132.9 million (2010: $ 79.7 million), resulting in a gross margin of 11.6% (2010: 15.8%), with the declining margin attributable to the wind farm vessel work. As a result the company proposed a final dividend of $0.08 per share, down from $0.095 per share a year ago.
The firm acquired engineering services firm and yard neighbours MIS in 2011, diversifying revenue and giving Lamprell improved rig-building capacity and access to a range of Middle East markets.
As the company uses its wider offering to move up the EPC food chain, Lamprell also sees its new engineering and construction offering as a key strategic focus for 2012.
2011 was also a strong year for orders. Lamprell recorded a record order book totaling $1.25 billion at the end of the year.
The company Lamprell also fromally opened a new state-of the art yard and quay in Hamriyah, Sharjah, serving key clients such as Abu Dhabi’s NPCC.
However, it has not all been plain sailing for the company. Lamprell booked a profit knock of $14.3 million in October from further completion costs for wind farm installation vessel projects, and the trend of lower than expected margins leaks into 2012, with management confirming a “small” expected loss for the first half of the year.
Previous: 11 Maire Technimont Next: 8 Hyundai E & C
9 Hyundai E&C
Hyundai E&C has had a brisk year, completing the $1.3 billion gas facilities package at Karan in July.
Like other Korean contractors, the company has its core strengths in downstream and gas processing projects, a fact reflected in its award of a $600 million gas processing contract from Oman’s OOCEP in December 2011 for the Musandam Gas Plant.
The plant will get its feed stock from the Bukha and West Bukha oil fields operated by RAK Petroleum, with a total capacity of 20,000 barrels of oil per day and 45 million cubic feet of treated gas flowing through the plant on completion.
The project will also entail construction of 23km of subsea pipeline to bring products from West Bukha field to the plant, storage facilities and an export jetty with associated pipelines.
Hyundai continues work on a $1.4 billion KOC pipeline project won in 2010, involving the construction of a fuel gas and oil pipeline to two power plants in Sabiya and Doha, to complete in April 2013.
Work also continues at Habshan 5 in Abu Dhabi, where the firm is completing utilities and offshores for GASCO under a $1.7 billion deal.
Hyundai E&C is also working on the South Yoloten gas project in Turkmenistan where as part of a Korean, the firm is designing and building a 10 billion cubic metre capacity gas desulfurization plant.
Previous: 10 Lamprell Next: 8 CB & I
8 CB & I
CB&I boasted US $255 million net income in 2011, on the back of $4.6 billion group revenue. Across the board, CB&I won $6.8 billion of new contracts last year, $2.2 billion of which from oil & gas.
The firm’s regional hub is in Ajman, UAE. Engineering & construction accounted for half of revenue in 2011, 26% of net income and 32% of new business.
The firm previously scooped awarded a $5.03 billion contract for constructing the storage tanks at Ruwais in Abu Dhabi, a project that took 12 million man hours and 1,750 staff to complete. Scope of work included engineering, procurement and fabrication of the six LPG tanks and two paraffin naphtha tanks.
CB&I’s other banner project in the region was for the design and construction of two storage farms, with 6 tanks at the harbor site and another 32 at the main complex at Pearl GTL. CB&I provided EPC services from the 900,000 cubic meters storage facility and 120 km of piping completed.
Previous awards include a 420 million standard cubic feet per day (SCFD) gas processing and treating complex ifor Yemen LNG and a lump-sum turnkey contract for LPG storage tanks for a natural gas processing expansion project in Ruwais, Abu Dhabi.
Outside the Middle East, the company is in the top tier of US oil & gas EPC firms, and has a strong presence in oil sands projects.
Previous: 9 Hyundai E&C Next: 7 NPCC
Abu Dhabi’s National Petroleum Construction Company (NPCC) is looking ahead to a banner year in the GCC and beyond, after a 2011 marked by intense competition with Korean firms.
In an interview with Arab News in December, chief executive Aqeel Madhi admitted a lull in contract wins last year, though says the firm’s backlog protected revenues. “We face aggressive competition from Koreans, Chinese and Indian companies who offer unrealistic prices,” Mahdi said.
The company is upgrading its capabilities with an investment of more than $500 million (Dh1.83 billion) as it eyes the ZADCO 750 EPC contract at Upper Zakum.
“This covers upgrading our onshore marine fleet, increasing yards capacity, augmenting equipment facilities, and in addition, expanding our engineering capabilities,” Madhi said at a recent company event in the capital pertaining to health, safety and environment.
NPCC, which expanded dramatically in Abu Dhabi’s last major round of offshore spending, will also be vying for ADMA-OPCO’s Umm Lulu and Nasr field development contracts, and it would take a brave industry-watcher to bet against them, given their work to date at lower Zakum (est. $350m) and Qusahwira (est. $560m).
The latest ADMA-OPCO and ZADCO contracts could again see NPCC again join forces with Technip.
The firm has also secured $380 million of contracts in India over the last two years. NPCC is 70% owned by the state’s General Holding Corp and 30% by Athens-based Consolidated Contractors.
The firm is targeting AED 5 billion ($1.36 billion) of revenues this year, up from AED 4.2 billion ($1.14 billion) in 2011.
Previous: 8 CB & I Next: 6 KBR
KBR’s regional President, Khaled Abu-Nasrah, continues to develop the robust business KBR enjoys in the Middle East.
The company gets a boost in our rankings this year as its GES+ consortium in Saudi Arabia gears up in earnest. KBR President and CEO William P Utt remains bullish on the Middle East, particularly in LNG and GTL.
The company’s close ties with Chevron continued this year, totaling $2bn of work in 2011, or 22% of revenue, up from $1.8 billion in 2010.
At Shah Deniz II, a BP project in the Caspian Sea that includes both onshore and offshore components, KBR continued to execute pre-FEED and FEED work, and expects to extend its involvement into later project stages.
KBR also completed the PMC for FEED contract at the fourth NGL recovery train and the overseeing FEED for LPG storage tanks at Ruwais, with the project in its EPC execution phase and due for commissioning in Q3 2013.
The firm also completed the overseeing FEED for the $1 billion Das Island facilities and utilities package.
Continuing its presence in the GCC downstream market and close relations with Aramco, KBR was awarded FEED and PMC contracts for the Jazan refinery and terminal hydrocracker unit, a 400,000 bpd project slated to complete in 2016. Jazan will provide the foundation industry for Jazan Economic City.
Previous: 7 NPCC Next: 5 Fluor
Fluor is celebrating 100 years of business in 2012, and can also celebrate that it’s centenary year has been a great one in the Middle East.
The company’s oil and gas group was able to grow its backlog this year, with the award of a massive $19 billion petrochemical project for Sadara, a JV between Dow and Saudi Aramco. Elsewhere in Saudi Arabia, Fluor has won an EPC contract from SAPCO for its Super Absorbent Polymer Project (SAP) in Jubail.
In October the firm won the FEED from ADM-OPCO for new offshore facilities located at the Nasr Field. The project includes seven wellhead towers, ‘super-complex’ facilities including gas processing and oil separation production facilities, a utilities platform, living quarters, and infield subsea pipelines. The firm predicts a significant uptick in offshore platform work in 2012, and will see steady workflows from a maintenance deal struck with RasGas for its LNG trains.
In Iraq, work has begun on an early works package for ExxonMobil at West Qurna 1. In August, Fluor won a contract from Chevron Neftegaz to provide project services for the marine terminal and supervisory control and data system portions of the Caspian Pipeline Expansion project, and has secured a major contract in Kazakhstan.
Fluor’s oil and gas business reported profit of $73 million in Q1 2012, up 9% year-on-year. Revenue grew 23% to $2.0 billion, compared with $1.7 billion last year. The company boasts a $16.8 billion global backlog in oil and gas projects alone.
Previous: 6 KBR Next: 4 Technip
Technip is involved, arguably more than any other EPC firm, at every stage of the subsea EPC value chain, from subsea field layout, pipeline and umbilical design and fabrication, right through to installation and condition monitoring during production.
Offshore activities include engineering, procurement, fabrication and installation of fixed and floating platforms for the energy industry.
Brownfield offshore work is a valuable specialism. Together with Abu Dhabi EPC firm NDCC, the company’s offshore division was awarded an engineering, procurement and construction lump-sum contract by ZADCO worth $485 million (35% of which for Technip) for the Satah Full Field Development project 200 kilometers northwest of Abu Dhabi.
Technip will conduct the engineering and procurement, while NPCC will provide the construction and installation. The two companies will jointly work on the onshore tasks.
The Satah Full Field Development project’s objective is to maximize crude oil production and oil recovery by reducing the well heads’ back pressure and introducing of gas injection and gas lift facilities. The project scope involves offshore brownfield works to the existing well head platforms and production manifold platform, installation of infield pipelines, as well as modifications and installation of new facilities at the Onshore Satah plant at Zirku Island.
The Asab 3 Project in Abu Dhabi continues. Technip, for GASCO, is working to process an additional 150 Million Standard Cubic Feet per Day (MMSCFD) of associated gas from the existing Asab, Shah and Sahil oil fields, under a $415 million contract.
Technip is also leading Chiyoda in a Qatargas 1 Plateau Maintenance Project (PMP) in Ras Laffan, Qatar. The PMP involves EPC for a new acid gas removal unit, a new sulphur recovery unit, and modifications to utility systems for handling increased feedgas rates to the existing liquefied natural gas (LNG) trains, and is slated for completion in 2013.
Having completed the FEED contract for the second phase of field development at the offshore Upper Zakum field, Technip is anticipated to also take the EPC contract, according to industry watchers.
ZADCO intends that the two EPC contracts will increase oil production capacity at Upper Zakum from 520,000 barrels per day (bpd) to 750,000 bpd by 2015, as part of the UAE’s wider push to reach 3.5 million bpd production capacity by 2018.
The group boasts a massive €10.4 billion backlog, 17% of which is for projects in the Middle East. Technip completed its acquisition of acquisition of Global Industries on December 1, 2011.
Previous: 5 Fluor Next: 3 Samsung Engineering
3 Samsung Engineering
Samsung Engineering is the leading example of what Korean firms have been able to achieve in the Middle East in a reletively short time, scooping major contracts from Saudi Aramco, working on the mammoth Shah gas deal for ADNOC, and entering Iraq for the first time with a mammoth EPC project at West Qurna 2.
About 80% of Samsung’s activity in the region is in oil, gas, refining and petrochemicals with around 20% in power generation and metallurgy. Samsung is now well used to working on the multi-billion dollar projects that have increased in the GCC in recent years, and has followed through on its close relations and competitive tenders to Gulf clients with a consistent quality and delivery track record.
An example of the firm’s multi-package dominance of downstream approach is Saudi Aramco’s Shaybah natural gas liquids program, for which Samsung scooped all four EPC packages on offer, a total capital value of $2.76 billion.
While Saudi Arabia remains a key focus, the UAE is gaining in importance, especially with upcoming offshore projects. Samsung also has eyes on Oman and Qatar, where facility expansions are on the way.
People often wonder how Samsung does it. Executives have told us about the importance of their procurement processes, something other EPC companies are now realising as they expand satellite offices in Asia to capture the most competitive supplies.
The firm’s established base in Saudi Arabia continues to do well, and its commitment to the country’s future is impressive, reflected in the CSR award presented to Samsung at the Oil & Gas Middle East Awards for its Naffora Techno Valley facility, where young Saudis will be trained as the next generation of upstream engineers.
But its outside the Kingdom that things really got interesting last year. On 2 February Samsung Engineering signed a contract with GASCO for a Nitrogen Gas Injection plant worth $160 million USD.
The plant will be built in Mirfa, UAE and will be capable of injecting 600 million cubic feet a day of nitrogen gas into wells to increase gas production as part of an EOR program at ADCO’s Habshan oil field, ready for completion in 2014.
The company also scooped a huge contract from a Qatargas consortium for a Diesel Hydrotreater (DHT) unit that will further enhance production, by 54,000 barrels per stream day (BPSD) of ultra low sulphur diesel fuel, at the Laffan Refinery.
Perhaps the signature moment for the company came in March this year, when Samsung announced that it had been awarded a $998 million contract from Russia’s Lukoil for the project management, engineering, procurement, supply, transportation, construction, pre-commissioning of facilities comprising the oil gathering system, central processing facilities and water supply system for the development of the West Qurna 2 Contract Area and thereafter to provide assistance to LUKOIL with commissioning and start up.
The huge award combined Samsung’s historical strength in persuading clients to hand over work that would previously have been split into several packages, with the company’s boldness to enter a new and challenging market for a new client.
The last year has showed that Samsung Engineering is setting itself apart from its fellow Korean contractors with an ambition and ability to win and execute work beyond its historical comfort zone of downstream projects in the GCC. If the trend continues next year, Samsung Engineering could claim the top spot in our 2013 rankings.
Previous: 4 Technip Next: 2 Saipem
Saipem had a strong year in 2011, as Onshore Engineering & Construction revenues were up 13.5% and EBITDA by 26.6% due to increased volumes in the Middle East, Canada and Australia.
We place Saipem above Samsung Engineering this year for the company’s stronger showing in winning upstream work, and its superior positioning in terms of capturing EPC projects in upstream oil and gas over the next project cycle.
A modest contraction in the firm’s onshore division has been more than set off by an explosion in offshore work, a trend that aligns the firm well with the next cycle of upstream projects in the Middle East. A quarter of the firm’s fixed platform offshore EPC work came from the region – second only to Asia-Pacific – with an overall activity boost of 17% over 2010.
Over the last year the firm saw €2,912 million of its €12,505 million in new offshore and onshore contracts come from the Middle East.
Arguably the UAE has been Saipem’s key market recently. The giant 1 billion cu ft a day Shah sour gas project has seen Saipem take on gas processing ($1.9bn), sulphur recovery ($1.45bn), pipelines ($200m) and the lead role in the Etihad sulphur rail transport system.
In Saudi Arabia, Saipem won an EPIC contract from Saudi Aramco for fifteen fixed platforms, an export pipeline, offshore lines, and subsea and control cables for the development of the Arabiyah and Hasbah offshore fields, as part of the Al Wasit Gas Program.
In addition to the platforms, the contract encompasses an export pipeline, offshore lines, and subsea and control cables. As part of a long-term agreement, Saipem also as secured the contract for the construction, transport and installation of four jackets and an observation platform for the Marjan and Manifa fields in the Arabian Gulf.
Kuwait has also kept Saipem strong as work continues on the BS 160 and BS 171 gas booster stations, compressors systems at KOC’s Gathering Centres 07, 08 and 21 in the south and the Jurassic project in the north for Kharafi National.
In Iraq, Saipem will lead the EPC work for phase 2 of the Iraq Crude Oil Export Expansion program at Basra oil terminal for South Oil Company, and the company won a contract from the Burullus Gas Co in Egypt to assist in the development of the West Delta Deep Marine Concession.
Saipem has also continued its varied portfolio of projects in Algeria, including the Urea Arzew ammonia project, Hassi Messaoud oil complex, GL3Z Arzew LNG terminal, Menzel Ledjmet East gas extraction facility and GK3 - lot 3 gas pipeline.
Algeria is set to generate further work as the government considers measures to improve access for foreign oil companies.
This slew of projects has seen Saipem boost its workforce by over 10% over the year. In onshore, Saipem boasts 14,916 staff, with 13,533 staff specialising in offshore.
Saipem’s group-wide backlog of €20,401 million (€7,983 million in Offshore Engineering and Construction, €8,390 million in the Onshore Engineering and Construction), is one of the largest in any EPC business, and €6,507 million of it comes from the Middle East. Saipem is set to capitalise heavily on the latest cycle of upstream projects in the region’s key markets.
Previous: 3 Samsung Engineering Next: 1 Petrofac
Petrofac is top of the pile for the third year running, and has a bright future. The company set a strict definition of success in June last year of doubling 2010 sales of $4.354 billion by 2015.
Onshore engineering and construction remains the beating heart of Petrofac, accounting for 68% of revenue ($4,146.2m, 2010: $3,253.9m) and 83% of net profit ($462.8m, 2010: $373.0m) in 2011, and with around 13,000 employees, 85% of Petrofac’s staff.
2011 saw Petrofac reshaped into two divisions: Engineering, Construction, Operations & Maintenance (ECOM) and Integrated Energy Services (IES), a burgeoning and innovative business unit which aims to develop oil and gas assets for national oil companies on a performance fee basis. Marwan Chedid, a long-serving Petrofac manager, was appointed chief executive for ECOM in January.
But the innovation doesn’t end with IES. Where other firms have been leery of Chinese competition, Petrofac launched a joint venture, China Petroleum Petrofac Engineering Services, with CPECC, in a move whcih has Petrofac primed to gain work from the growing roster of chinese oil and gas firms.
Petrofac is already working with CPECC at the supergiant Rumaila field in Iraq, which is jointly operated by BP and China’s CNPC.
Petrofac President Maroun Semaan is unfazed by the state of the market, and by Asian competition in particular. “I would prefer to think of the market as busy rather than crowded!” he told us in the April edition of Oil & Gas Middle East. “The NOCs and IOCs remain keen to invest, particularly with a $100+ oil price, which cascades into the supply chain. A busy EPC arena keeps all the contracting community ‘on its toes’.
“The South Koreans are faring well in this market that’s for sure,” he admits. “In 2011 we saw high levels of activity from Korean EPC contractors as their domestic market was depressed.
“At the end of the day, we all have businesses to run and targets to meet so have to be as competitive as we possibly can in order to achieve this.”
The company’s spread of projects - set out in the panel on the right - is second to none, and it’s reputation among other players in the market is formidable. Petrofac is also a key source of sub-contracted EPC work, and the industry tells us the company is an exact but excellent client.
Petrofac expects profit to leap at least 15% this year after it beat a 20% growth target for 2011. “We are targeting over $6 billion of ECOM new orders this year, which will help us to maintain average double-digit revenue growth over the medium term,” says Semaan.
CEO Ayman Asfari is expanding the business in Thailand, Nigeria, Mexico and Iraq, and the company gives the impression that it only saw its backlog drop last year because the London-listed firm was too busy to replenish it.
But its not all about size. Petrofac seems to have a knack for getting their first, as evidenced by its IES division, recent tie-ins with Schlumberger and CPECC, and its contract wins in the Caspian - where its massive works at South Yoloten are now in profit - and Iraq.
March 2011 saw the firm win a $240 million EPC deal from Shell for a new early production system at Majnoon, comprising two 50,000 bpd trains and the upgrade of brownfield facilities. That Gazprom then picked it for a $330 million of similar work at Badra in January demonstrates the value of a bold vision.
In an industry used to seeing nimble prime movers edged out by big players, Petrofac reatins the tenacity and focus of a start-up.
Petrofac’s only potential concern it’s a lull in its backlog, which group-wise at the end of 2010 stood at $11.7 billion, and which at 11 May stood at $9.6 billion, and $7.9 billion for ECOM, below Saipem by our reckoning. If Petrofac is going to remain the number one EPC firm in the Middle East, it needs to start winning contracts this year, but with a new strategic partner, excellent revenue visibility and an enviable reputation, the company remains the one to beat.
Previous: 2 Saipem