Fluor Could Reap Benefits of Peace : Kuwait: The Irvine firm’s ties to the region and technical expertise may help it be among those to rebuilt the war-ravaged nation.
Fluor Corp., the nation’s biggest heavy construction contractor, isn’t saying much, but informed speculation is rampant that the company is almost certain to capture a big chunk of the business of reconstructing war-ravaged Kuwait.
Analysts say the Irvine firm is well-positioned to vie for a wide variety of jobs--rebuilding of burned-out petroleum facilities, power plants, hospitals, electrical and water systems. It also can provide engineering and technical services for telecommunications, technology and defense projects.
Wall Street has been licking its chops. On Thursday, Fluor hit an 52-week high of $53, up 37.5 cents in heavy trading. When the Persian Gulf War began Jan. 16, its stock was at $36.125.
The company, which has been riding high on a recent turnaround, also has a long history of doing business in the Middle East. Just last summer it landed a multibillion-dollar contract to manage an oil facility expansion program in Saudi Arabia.
“You can make some assumptions that Fluor as well as other large engineering and construction companies will participate,” said Kathy Maag, energy service analyst with Duff & Phelps in Chicago.
Thus far its competitors appear to have the inside track in Kuwait. San Francisco-based Bechtel Corp., the nation’s second-largest heavy construction company, said this week that it signed a letter of intent with Kuwait Petroleum Co. to manage the rebuilding of the petroleum industry.
But analysts said there is plenty of work to go around. Estimates on the cost of restoring Kuwait have been as high as $500 billion. Bechtel will have to parcel much of that work out to subcontractors, and Fluor is likely choice. Still the company is circumspect.
“Until we have a contract, we are not going to speculate on what our role could be,” said Fluor spokesman Rick Maslin. But, he added: “We have had a longtime presence in the Middle East, and it is no secret we have the capabilities to do a lot of the work that is necessary.”
Last June, Fluor announced that it had landed a huge contract to help Saudi Aramco upgrade its aging petroleum facilities. Some analysts estimated the contract to be worth up to $6 billion. Fluor cautioned that much of the work will be shared with other companies.
About 100 Fluor employees were deployed to Saudi Arabia to begin work on that project before the Iraqi invasion of Kuwait.
In an interview earlier this month, Les McCraw, Fluor’s chief executive, confirmed that the company was involved in ongoing discussions with the Kuwaiti government. But he declined to provide more information until the war had ended and full damage could be assessed. McCraw could not be reached for comment Thursday.
