CERAWeek '12: Fluor says engineering deal talks rapidly on rise

By Ben DuBose
Online Editor

HOUSTON -- Discussions for engineering deals in downstream and other energy sectors have increased rapidly in the first quarter of 2012 compared with the fourth quarter of 2011, according to Peter Oosterveer, president of the energy and chemicals (E&C) segment at Fluor.

Oosterveer spoke to Hydrocarbon Processing on the sidelines of the IHS CERAWeek conference in Houston, where he participated in a panel discussion on the energy outlook for North Africa and the Middle East.

In particular, he noted that his overall industry outlook had brightened considerably since a prior interview in November.

“There’s increased activity on the proposal and pursuit fronts,” Oosterveer said. “We’re seeing many more opportunities now that we are working on as we speak than three or four months ago.

“It’s a lot of stuff, starting with FEED (front-end engineering and design) and progressing into other things,” he added. “When we get involved in FEED work, it typically evolves into downstream things as well.”

One bright spot appears to be opportunities connected to shale gas in the US, he said.

“A year ago I wasn’t as bullish on development of new facilities in the US for shale gas as I am right now,” Oosterveer said.

“Now I see clients, and we’ve heard a couple here, actually saying that they’re working on a number of projects directly associated with shale gas,” he continued.

“The social acceptance of shale gas and fracking for the benefit of domestic consumption is the first step, and we’re getting there.”

The US industry’s next step will be the opportunity to export, said Oosterveer.

“There are quite a few people in the US nervous about if we were to export, what it would do to the price,” he said. “There have been studies done, showing there will be an impact, but relatively small.”

Another step in the US would be giving natural gas a larger role in the transportation fuels pool, he said.

“I’ve never understood this, to be honest,” said Oosterveer. “In Europe, gas is a much bigger share. I had a car 20 years ago that drove on gas. I don’t understand."

“Of course, you need investments in infrastructure,” he cautioned. “When that happens, the landscape may look very different 10 years from now.”

Outside the US, business continues to be dependable in the Middle East, said Oosterveer, who noted that he had just returned from a trip to that region.

Despite rising political turmoil in Iran and sanctions on the nation’s crude, project activity in the region has not been significantly impacted, according to the Fluor president.

“There’s the belief that cooler heads will ultimately prevail,” said Oosterveer. “No one is extremely worried, but there is concern.

“It’s hard to replace that supply if push came to shove, but it’s not impossible,” he continued. “It can be done, though. I think Iran needs the rest of the world, and particularly the revenue from energy, more so than the rest of the world needs Iran.”

“It’s not having major impact on our projects.”

The CERAWeek 2012 conference takes place from March 5-9 at the Hilton Americas in Houston, Texas. For more details on the event, click here. Stay tuned to Hydrocarbon Processing for further coverage.

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