Fluor Wins $1-Billion Contract for Plant in Kuwait : Construction: The engineering firm will build a petrochemical facility, its first major venture there since the 1960s.
In its first major venture in Kuwait since the 1960s, Irvine-based Fluor Corp. said Monday that it has won a $1-billion contract to build a petrochemical plant there.
The contract was awarded by a joint venture of Union Carbide Corp. and Petrochemical Industries Co. of Kuwait. When completed in 1997, the plant is expected to be one of the world’s largest petrochemical complexes, producing products such as anti-freeze and plastics.
Analysts said competition for the job was fierce. Bechtel Corp. of San Francisco and Parsons Corp. of Pasadena both made strong bids, said George Fischer, a Newport Beach-based publisher of a newsletter that tracks international construction deals.
“Fluor got the contract because they had a better mousetrap and they charged less money,” Fischer said.
Construction on the project, set to start next year, will be overseen by the company’s Fluor Daniel subsidiary office in Houston and will involve as many as 5,000 workers, most of them from the Middle East.
The deal will help boost Fluor’s already-impressive backlog. At the end of its latest fiscal quarter, the company had orders for projects totaling $14.9 billion.
The Kuwait contract “was one they were pursuing for a while,” said John N. Simon of the brokerage Seidler Cos. in Los Angeles. “There hasn’t been a lot of money spent anyplace in the chemical or petrochemical industries for a while--not only in the U.S. but elsewhere.”
An oil refinery Fluor built in Kuwait in 1968 was destroyed during the 1991 Gulf War.
Because of low petroleum prices and the damage done by the war, oil-rich Kuwait has not spent money in recent years for major new oil facilities. The bulk of the work there has involved capping burning oil wells and repairing damage at sites that were not destroyed, analysts said.
“I don’t think spending in the Middle East is as strong as it might have been given stronger oil prices, but it is by no means a small market,” said Douglas R. Augenthaler, analyst for the brokerage Oppenheimer & Co. in New York.
The latest contract more than doubles the order backlog Fluor has in the Middle East.
In Monday trading, Fluor’s stock closed at $54.25 a share, up 25 cents, on the New York Stock Exchange.
Fluor’s Middle East Millions
Despite the Gulf War, revenue from Middle East contracts increased impressively at Fluor Corp.’s Fluor Daniel unit from 1989-93. A majority of the revenue is generated by contracts in Saudi Arabia and the United Arab Emirates. Dollar amounts in millions:
1993: $434
Source: Fluor Daniel; Researched by JANICE L. JONES / Los Angeles Times
