InterviewUS Fluor to target Iraq petchems in next decade

20 November 2009 20:56  [Source: ICIS news]

By Ben DuBose

HOUSTON (ICIS news)--Iraq should offer substantial opportunities for petrochemical investment within the next decade following government stabilisation, executives with US engineering and construction firm Fluor said on Friday.

“In the next wave, with stabilisation, we do think there are great opportunities, particularly in oil and gas initially, then in 5-10 years with petrochemicals,” said Michael Pears, senior vice president of the company’s energy and chemicals division.

The company said it had undertaken security logistics work for the US military in recent years, and was looking to use that “footprint” as a way to make inroads into potential energy investments.

“We now know how to handle that terrain,” Pears said.

Fluor provides engineering, procurement and construction (EPC) services for chemical and other industrial companies.

The executives said they hoped the company’s strong track record and continued emphasis on the Middle East would benefit them as countries like Iraq and Afghanistan emerge.

In particular, that would include Saudi Arabia, which already boasts the "petrochemical headquarters of the world”, said Peter Oosterveer, group president of energy and chemicals.

“We will continue to invest there,” he said. “Not all of that new capacity is necessary to cover the world’s capacity needs, but it will replace capacity elsewhere, which will be more expensive in terms of feedstocks.”

Oosterveer said the increased emphasis on the Middle East would come at the expense of more developed countries such as the US, where higher feedstock costs and potential carbon legislation could lead to the numerous facility closures.

“If you look at major chemical investment in North America, if you can find it, please let me know where it is,” Pears said.

Pears said polysilicones and other technology breakthroughs could make sense in North America, if his company jumps onboard early enough to find the value.

But for commodity chemicals such as olefins, heavy investment will come in the Middle East and China, with smaller amounts in southeast Asia, South America and Mexico.

For Iraq specifically, the initial wave within 3-5 years should be in oil and gas opportunities, Oosterveer said. But after the five-year period, petrochemical producers are likely to target the area for its cheaper feedstocks, and Fluor is hoping to capitalise.

“If you have a footprint and a local face, which we’re working on as we speak, you have a tremendous competitive advantage,” Oosterveer said. “If we continue to expand our presence in Iraq, as a company we’re going to benefit from that when stabilisation comes.”

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By: Ben DuBose
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