Global engineering group AMEC Foster Wheeler will consider acquisitions in Australia so it can provide maintenance services for oil and gas projects after they are completed, chief executive Samir Brikho says.
“We do intend to be a big-time player in the oil and gas service industry, as well as in mining and environmental services,” Mr Brikho told The Australian Financial Review during a visit to Perth.
After completing its £2 billion ($3.9 billion) acquisition of engineering group Foster Wheeler in November, AMEC Foster Wheeler is working on expanding its Asia-Pacific business, which it expects to eventually account for one-third of group revenue.
The acquisition allows London-based AMEC Foster Wheeler to combine its expertise in advising on oil and gas project exploration and production with Foster Wheeler’s expertise in refining and distribution advice.
The company, which competes with WorleyParsons for projects, still had “gaps in its portfolio” in Australia that it aimed to fill by acquisitions and by organic growth, Mr Brikho said.
“There is quite big excitement in what is happening in brownfield services in Australia that would require a different type of expertise … We are going to build up that expertise locally but then may accelerate that by buying in businesses.”
The recent weakening of the Australian dollar against the pound and the US dollar had been helpful, Mr Brikho said.
“For a certain period of time it was impossible to do anything in Australia.”
AMEC Foster’s Wheeler’s Australian projects include a $20 million contract for a bulk-handling facility at Gina Rinehart’s Roy Hill iron ore mine and an engineering design project as part of a joint venture with engineering group Clough for Arrow Energy’s proposed Bowen gas project in central Queensland.
While the company was satisfied with the number of Australian projects it was working on, it wanted to find ways of maintaining its high level of activity, Mr Brikho said.
Like other international engineering companies, AMEC Foster Wheeler has had large projects postponed, including a $US6 billion project in Qatar, because of falling oil prices.
“We have been bidding on a couple of jobs in different places where the projects have been postponed and some other projects have been changed,” Mr Brikho said.
The company expected oil prices to remain low for the remainder of 2015 at about $US60 a barrel and was hopeful they would rise to about $US70 a barrel in 2016, he said.
To deliver engineering contracts on time and on budget, engineering companies needed to create simpler, standardised designs, he said.
AMEC Foster Wheeler was planning to work more collaboratively with customers globally and “harmonise” its management information systems so that it could deliver high-quality services around the world, he said.
This would include using engineers in countries with cheaper wage rates, such as India, to work on projects in other parts of the world, such as the North Sea, where wages could be four times as much.
By Jenny Wiggins