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Fluor challenged by shortage of skilled labor amid US shale boom

06.25.2013  |  HP News Services

Keywords: [Fluor] [shale gas] [labor] [employment]

By BEN KESLING

Fluor has been a prime beneficiary of the US shale oil and gas boom as the engineering and construction group starts to build out energy infrastructure, but like rivals, it faces the challenge of navigating one big possible bottleneck: the availability of skilled workers.

Big chemical companies plan an array of new and expanded facilities along the US Gulf Coast to handle the surge in gas and liquids supply, and Irving, Texas-based Fluor reckons its can use some "home-field advantage" to avoid its projects being delayed by the squeeze on craft labor such as electricians, welders and riggers.

"We've seen a lack of willingness on the craft part to travel more than one state away. I think we're going to see a change in that," Fluor CEO David Thomas Seaton said on an investor call last month. He also said he thinks craft labor could be a "pinch point" for new projects.

"So we're going to have to be careful about craft labor, but I don't see that being an Achilles' heel to the schedules people are thinking about or cancel in any way the projects we are focused on," he said.

The shale gas boom is touted by many economists as a transformative event for the US economy, generating an $88 billion in infrastructure spending over the next decade, according to Macquarie Group Ltd.

Fluor, which posted $27.6 billion in revenue last year, estimates the need for 20,000 to 50,000 craft workers for construction of US oil and gas projects over the next decade, depending on how many projects move forward.

The aging workforce of US engineers is a well-known issue for companies such as Boeing, but the shortage of craft workers is less publicized. Craft workers are two of the top 10 most difficult types of jobs for companies to fill, according to temporary hiring specialist Manpower Inc.

Fluor is the prime contractor for the new ethylene cracking plant being built for Dow Chemical in Freeport, Texas. The project is already underway and is expected to require 2,000 workers at its peak, with both companies counting on first-mover advantage to avoid being caught in a labor-shortage trap as rival plants seek regulatory approval.

Fluor is beginning the Dow cracker project ahead of a potential rush in petrochemical construction, said Richard Meserole, the company's vice president of energy and chemical construction.

He said this will help it attract workers and establish a beachhead with the supply of labor. Fluor also has a network of factories in the Philippines, Mexico and Canada that can allow it to build modular components off-site and then assemble them on site.

The company also works closely with local schools and governments to recruit and train local labor rather than trying to woo workers from around the US.

"Fluor, in particular, has a lot of initiatives set up with local junior colleges for apprenticeships and training programs," said Sameer Rathod, an analyst with Macquarie Bank. "Being a large player lends itself to attracting more people. Fluor is a name that everybody knows, maybe others don't have that."

Fluor had almost 36,000 salaried staff and 8,601 craft and hourly employees world-wide at the end of 2012. In North America, it employs 5,000.

"We have a fairly well-established network of technical colleges," Mr. Meserole said in an interview. "We take a large portion of those who come out of high school and see construction as a long career." Fluor lists more than a dozen universities on its website with which it shares official partnerships, including specialty training support and scholarships.

Crackers -- plants that break natural gas into its component parts -- are popular projects for contractors to chase because of the increase in gas volume available and the continuing low cost of domestic gas feedstock. Crackers are the first step in a long processing, storage and distribution chain, as well as further production of other gas derivatives, much of which remains to be built.

By establishing themselves early in the process, Fluor has said it will position itself for major contracts as projects ramp up further down the chain.

"Everything is sort of focused around crackers, of course, because you need to build crackers first before you can build downstream units," said Peter Oosterveer, president of Fluor's energy and chemicals group, at a recent investor conference.

"A lot of people get excited about the prospect of maybe as much as 10 crackers, which have been on our radar screen... I'm quite happy to say that I will be disappointed if we can't win or at least have a share on 50% of those crackers," he said.


Dow Jones Newswires



Have your say
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Diane Long
07.25.2013

Any interest in a field Landman? I work with my husband and he has been a consulting Landman for over 20 years. I have been working in the industry for 7 years. Anyone out there that may have information on stable long term employment let me know. I'll send my resume.

simon ndungu
07.25.2013

hi,am intrested to work in your company as a craft worker from kenya.thank you

Jose B
07.22.2013

Hi, if they would need a Mechanical Engineer with pipe stress Analysis experience, i´m interested.

Sugan
07.17.2013

Site Manager - 11 years experience

Hrand Avanessian
07.10.2013

I used to work for FLUOR and one month ago I was demobilized. I called and talked to the Electrical Manager in LA area, but I was told that they don't have projects. I am a Electrical Engineer, MS EE, Senior Member of IEEE since 1999, PE in California and Nevada, with more than 30+ years of experience in oil, gas and petrochemical fields. So, call me if you need me (818) 524 9454. My email is: hitechera@gmail.com

Robert Brown
07.08.2013

Fluor would not have so much trouble staffing these mega projects if their supervision on other projects knew how to manage and treat the craft workers. They have lost loyal hands over the years due to lack of good on-site management. I believe upper management may know this and are trying to correct the problem. We shall see in the next couple of years how well they corrected the problem.

domingo s pabalan
07.04.2013

When will you gonna open this for Senior : Civil/ Structural Engineer, QC Engineer even. Through this position I'm inquiring to carry-out not only to the knowledge and experience in different oil and gas location in heavy infrastructure projects site based. Gladly to hear your kind favor in the future.

Goud Prasad
07.03.2013

If they Need MAtireal Control Admin Specialist in Any Decipline. My expertized Matireal, Waste Management,

Fluor Corporate License
07.03.2013

what schools are offering training for Fluor in Texas

Ronilo M Garcia
07.03.2013

If they need Material controller in any decipline.my expertized both oil & gas,power plant,polymer,LNG materials.

Ernie G.
07.02.2013

Do they need Piping Materials Specialist? I have both metallurgy and polymers experiences as well as Piping Materials.

Bossman
07.01.2013

Sounds like JP, is a disgruntled union hand. Don't give on your career at McDonalds....it will teach you a craft skill that even your pappa will be proud of.

Donald Phillips BSChE, MEChE, & MBA
06.29.2013

Need any Chemical Engineers?

JP
06.28.2013

Well Well, Between the huge EPC firms and the huge petro/chem companies that worked very hard on breaking the unions for one reason or another. They were very proud of them selves for the accomplishment. This all took place thru 70s to late 90s. With their great accomplishment they forgot one thing to invest in the future. With no real trade schools left to support the boom what is left? Now all the players of industry are left with is McDonald's rejects who can just about screw to pieces of hose together or manage to screw in a light bulb.
This little piece of history should be considered when looking at FEED and EPC schedules, everyone.

Dr.Mukesh Kumar
06.28.2013

Being a Materials & Metallurgist having 22 years of experience, i will am willing to join Oil & Gas MNC as materials expert.

Gulshan Malhotra
06.27.2013

Great news for the craft workers.

Christopher Odokonyero
06.27.2013

I am a mechanical engineer with a post graduate qualification in project planning appraisal and financing. I have had a wealth of experience working for two multinational oil/gas companies (Chevron and Total) in Uganda. I would wish to join the industry at up stream level so as to acquire the requisite experience and skills in the sector. Please I request that you forward my interest to relevant companies )the likes of Fluur)who could be willing to engaged me in the trade. I would be grateful to hear from you.

Doreyde
06.26.2013

Buen dia, a ver que te parece esta nota

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