Fluor Confirms That It Is Opening Offices in Vietnam : Trade: Company becomes the first major U.S. engineering firm to seize the opportunity created by Clinton’s ending of embargo.
In a widely expected move, Fluor Corp. on Tuesday confirmed that it will become the first major U.S. engineering company to open trade offices in Vietnam.
The engineering giant has already opened a small office in Hanoi. It will be followed by a similar one in Ho Chi Minh City, the former Saigon, in a few weeks, said company spokeswoman Deborah Land. The offices come after Irvine-based Fluor received licenses from the Vietnamese government March 3.
“We’re really focusing initially at looking at the opportunities in the oil and gas industry,” Land said. “That is one of our strengths. Vietnam has a great deal of those resources. That doesn’t mean we’re not open to other opportunities.”
While Fluor’s preparing to conduct business in Vietnam may rankle those concerned about the Communist government’s human rights violations or with lingering memories of the war, Land said the company feels that it “can be a better force for change inside a country than outside.”
Fluor closed at $50.75 Tuesday on the New York Stock Exchange, up $1.375. In its most recent earnings report, Fluor said its first-quarter earnings increased 23% to $44 million on revenue of $2.1 billion.
Fluor’s entry into Vietnam was considered inevitable because of its engineering expertise in natural resources development, which Vietnam sorely needs. Company officials said in February that it considered Vietnam a new target for sales when President Clinton ordered the longstanding embargo of the Asian nation lifted.
Mobil Oil Corp. discovered oil off Vietnam in 1975 just as the war was ending, and the country is considered to have some of the last large, unexplored oil tracts on earth. The East-West Institute, a think tank based in Hawaii, estimates that Vietnam has 1.7 billion barrels of oil reserves and that production could double to 350,000 barrels a day by the year 2000.
Fluor is active throughout the Far East, with projects ranging from a chemical plant in Singapore to an oil refinery in Thailand.
“I have expected American companies to pursue business in Vietnam for quite a while now,” said John N. Simon, an analyst for the Seidler Cos. brokerage in Los Angeles. “For a company of the international status of Fluor, I would be surprised if they didn’t.”
Simon said Fluor might not search for oil itself but would benefit by “providing the infrastructure for companies looking for it.”
George Fischer, publisher of the Fischer Report newsletter in Costa Mesa, which chronicles the awarding of foreign contracts, said the Fluor move “was as predictable as anything.”
He said the company will find a major new pool of business in Vietnam, though it may have to fight for its share of the work from rival Bechtel Corp. of San Francisco and foreign-based engineering companies.
“They are a first-class company, probably the best-managed engineering company in the United States,” Fischer said.
A Bechtel spokeswoman, Christina Bruno, said her company won’t immediately follow suit. “We see Vietnam as a potential for growth but as for now, I can’t say we have any plans for an office.”
