“A portfolio management transaction like this supports ... the ambition to grow our revenue from sustainability-related business across the portfolio,” said Worley CEO Chris Ashton.

Worley ranks at No. 7 on ENR’s most recent list of the Top 225 Global Design firms, reporting $4.75 billion in 2021 global engineering revenue, of which $4.1 billion is international. It also ranks at No. 54 on ENR’s latest Global Contractors list with $1.68 billion in 2021 revenue, all outside of Australia.

By the Numbers 

Worley reported an interim loss of $64 million for its 2022 half year ending in December compared with a profit of $51 million for the same period one year earlier after writing down the maintenance business, which it acquired in completing purchase of Jacobs’ energy, resources and chemicals unit for about $3.3 billion in 2019, the company told investors and analysts earlier this month. 

Backlog was reported at nearly $11 billion on March 31, up from about $10 billion last June 30, said the Australian Financial Review.

According to Ashton, Worley is in a “prolonged upcycle,” with earnings and profit margins expected to rise this year as the firm continues to shift its focus to more “sustainability projects” for global oil and gas clients. “Our business is growing, the levels of activity are beyond anything I’ve seen in my 25 years with Worley,” he said. “Sustainability-related work is quickly becoming our core business.”

Worley has said it seeks to gain 75% of revenue from sustainability-related business within five years. Ashton notes that the firm is about two-thirds through a three-year estimated $100 million corporate investment in hiring, training, technology and other strategies to boost the transition. “We’re already seeing that investment pay dividends in positioning us with the markets that we’re in and allowing us to capture work that we may not have been able to without that transformation investment,” he said. 

Worley aims for expected work in minerals, low-carbon fuels, energy storage and energy networks, battery materials, and carbon capture and storage. It reported that about 39% of its first half 2023 revenue is related to sustainable energy work, with traditional energy at 28% and traditional chemicals at 27%, with 35% of its sustainable related revenue in resources work and 31% in low carbon energy. Sustainability-related work made up 40% of backlog at the end of March, and about 73% of estimated project wins this year.

The details come as global renewable power capacity is set to jump by one-third this year amid higher fossil fuel prices and energy security worries, the International Energy Agency said in a June 1 report. Global renewable additions are set to rise by 107 GW to more than 440 GW in 2023 with total green power capacity of 4.5 terawatts by next year, the agency’s Renewable Energy Market Update estimated, although also noting impacts from changing markets and insufficient power grid connections.

Worley at Work

Worley said it is now starting work for Enowa, the utility subsidiary of Neom, developer of Saudi Arabia’s planned $500-billion futuristic city, under a framework agreement of undisclosed value signed last year. Work involves development of water treatment facilities as well as energy storage and distribution, including low-carbon powered seawater desalination to supply up to 2 million cu meters per day as well as brine processing into commercial products such as gypsum, polyvinyl chloride, salt, potassium-based fertilizers and magnesium.

“NEOM intends to deliver a sustainable circular water economy … that minimize impacts on the natural environment,” said Jim Lenton, Worley group senior vice president. “This agreement provides the initial steps to revolutionize the water industry toward a truly sustainable and circular solution,” added Gavin van Tonder, Enowa Water executive director.

Meanwhile, Worley also announced May 30 an “enterprise framework agreement” with Shell Global Solutions for worldwide project services including engineering, procurement and integrated project management for work in all of the energy giant’s businesses. Contract value was not disclosed, but Worley said it includes “incentive mechanisms” and will be for three years, with two one-year extension options. The award follows one it won in 2017 that extended for five years. 

Teams based in Australia, the US, Europe, Middle East, Southeast Asia and Canada will be involved in work. “We are pleased to be a strategic global partner with Shell in the execution of their upcoming projects and their journey to net zero,” said Ashton. 

Worley also announced an EPC award in mid May for an undisclosed amount to build phase one of Venture Global LNG’s proposed CP2 LNG export terminal in Louisiana. Worley said the firms expect to finalize and sign the cost-reimbursable contract in “the near future,” with full notice to proceed set after Venture Global’s final investment decision. 

Construction could start later this year following Federal Energy Regulatory Commission project approval, Worley said. The plant, to be located next to Venture Global’s existing Calcasieu Pass LNG facility, will have 18 liquefaction blocks, each with a capacity of about 1.1 million tons per year of LNG. 

LNG Leveling Off?

But European LNG markets have softened recently as natural gas storage levels remain high in the region, S&P Global Commodity Insights said June 1. Gas storage levels in EU countries were nearly 69% full as of May 30—22% above the level at this time one year ago, High gas inventories also have reduced demand by major northeast Asian consumers such as China, Japan and South Korea, said the energy market analyst, which attributed it to nuclear plant restarts and fuel-switching. 

European LNG imports are set to fall somewhat in 2023 compared with summer 2022, although still high compared to historical norms because of the loss of Russian pipeline gas and newly built LNG import infrastructure

Worley has forecast that its margins will rise to around 7.5% in fiscal 2024 from about 6% in the first half of this year, excluding equipment and procurement costs. Total Worley global employment is about 55,100, up 4% since the end of December, with its share price climbing 15% over the past 12 months, the firm said.

Announcements by European and other energy firms earlier this year to invest more in core oil and gas production amid rising prices should not be seen as a shift in the energy sector's long-term low-carbon commitment but presents a more complex communication task, Ashton told industry publication Recharge in March. 

While “we can’t transition without the oil and gas companies making a profit,” the CEO said, their boost in traditional energy investments represent “a very, very challenging message ... to manage.”