Although many large engineering, procurement and construction, or EPC, firms in the petroleum sector are still building backlog and revenues on international jobs, traditional upstream and downstream opportunities in the U.S. remain largely in a slump. Still, many U.S.-based firms are bullish on work in Canada and South America.
Irving, Texas-based Fluor Corp. is near the end of a strong streak of U.S. refinery work won in recent years, including a $3.8-billion job for BP America at its Whiting, Ind., refinery, $1.6 billion in work in Detroit for Marathon Oil and $1.2 billion for two projects in Texas and Louisiana for Valero.
“Most of the refineries have done their business in terms of big capital programs, and the refining market in the U.S. is in a bit of a tight position,” says Matthew McSorley, vice president of energy and chemicals at Fluor. “We see a lot of the opportunities in the near term being outside the U.S.”
Some of those opportunities are in the north, where Fluor is focused on work in the Alberta oil sands. Although oil-sands projects saw some volatility in the past due to rising and falling oil prices, McSorley sees stability in the market today. “We're optimistic on Canada,” he says. “It has been going strong for the past five years, and I think there will be a steady trend of work continuing up there.”
In fact, research firm Visiongain forecasts that capital expenditures on oil-sands projects will hit a record $24.9 billion this year. By 2015, oil-sands bitumen production could double, according to Alberta's Energy Resources Conservation Board.
CB&I, The Woodlands, Texas, has executed oil-sands projects for more than four decades, and Chip Ray, executive vice president of corporate planning, sees it as steady work in an otherwise depressed North American market. “We tend to focus on clients who look at projects that will be financially viable based on a long-term view on crude pricing,” he says. “Those clients aren't overly dependant on short-term spikes in pricing.”
In March, CB&I announced that it won a contract for more than $900 million in EPC work for Imperial Oil Resources in Alberta. Its work scope includes a bitumen-extraction plant, tank farms and storage vessels. Completion is expected in the third quarter of 2012.
Meanwhile, CB&I is keeping a close eye on work south of the U.S. border. In the past five years, the firm has won several projects in Central and South America, including a $1.4-billion refinery in Cartagena, Columbia, which is scheduled for completion next year.
With a strong focus on offshore oil and gas projects, McDermott International, Houston, has to look beyond the U.S. for the bulk of its work these days. In 2010, the firm recorded $2.4 billion in revenues, its second-highest tally ever, with a record backlog of more than $5 billion and $4.2 billion in new awards. But following BP's massive oil spill in the Gulf of Mexico last year, the Obama administration put the brakes on expansion of offshore drilling in U.S. waters.
“While we struggle with permitting in the Gulf of Mexico, we are still finding good opportunities in the region,” says Steve Johnson, president and CEO. The firm is pursing work with state-owned PEMEX in Mexico, winning a $50-million gulf pipeline job in May. But Johnson says the firm has its offshore resources and fabrication yards at the ready for more gulf work in the coming years. In August, the Dept. of the Interior announced that, in December, it would offer its first offshore-lease sales since the BP disaster. “There will be a re-acceleration of work in the Gulf of Mexico,” he says. “The large deepwater operations will be permitted. It's just a matter of time, and when it happens, we'll be extremely well positioned to take advantage of it.”