Fluor 2003 Annual Report Download - page 9

฀ ฀ ฀ ฀
฀
฀
฀ ฀ ฀ ฀
FL UOR C O RPO R AT ION 2003 A NNUAL REPORT
OIL & GAS
the early stages of a major capital investment cycle. Fluor
has performed front-end engineering on a number of
major oil and gas projects, which tend to be very large,
complex multi-year programs in challenging geographic
locations. Because of the significant scope and complexity
of these projects, particularly development of new oil and
gas resources, Fluor is exceptionally well positioned to
capitalize on this major cycle of investment.
While Fluor performs projects of all sizes, it is one of
the few companies with megaproject experience and execu-
tion capability. Our global scope, experience and critical
program management skills provide the capabilities and
resources to handle large, multi-faceted programs. While
it is difficult to predict the precise timing of these proj-
ects, the company’s confidence that they will move forward
was reinforced during 2003 with the award of the first two
expected major upstream programs.
The first of these significant awards was the $1.3 bil-
lion Tengizchevroil project, a major oil and gas develop-
ment program, in Kazakhstan. The second award was for
oil-processing and gas re-injection facilities in Eastern
Russia, part of the Sakhalin I program. The key drivers
for these and a number of anticipated future projects are
diminishing global supply and increasing demand for new
production capacity. Global demand for oil and gas con-
tinues to grow, while current reserves are being depleted.
It has been estimated by industry sources that 60 to 80
million barrels per day of new capacity will be required
over the next decade, translating to new investment of
$1 trillion, to fund the required growth in production.
Fluor is tracking a significant number of major oil
and gas programs in widely diverse geographic locations,
including the Caspian Sea region, the former Soviet
Union, the Middle East, China, offshore West Africa and
Canada. The projects range from upstream development
of new oil and gas fields, to extensive production increases
from Canadian oil sands, to major new petrochemical
facilities. While Fluor has a long resumé of experience
in the Middle East, the company has continued to build
its market position in China and has established a strong
presence over the past several years in the developing
markets in the Caspian Sea region and the former Soviet
PAGE 7
As฀consortium฀leader,฀
Fluor฀is฀managing฀the฀
development฀of฀the฀Hamaca฀
Heavy฀Crude฀Upgrader฀
Project฀for฀Petrolera฀
Ameriven.฀Located฀in฀the฀
The฀world-class฀Bayu-
Undan฀Offshore฀Gas฀
Production฀and฀Separation฀
Complex฀was฀completed฀
for฀ConocoPhillips฀in฀late฀
2003฀and฀positioned฀in฀the฀
Timor฀Sea.฀With฀more฀than฀
1.5฀million฀work-hours,฀
Fluor฀provided฀EPCM฀ser-
vices฀to฀develop฀the฀proj-
ect’s฀gas฀liquids฀resources฀
and฀export฀gas฀via฀sub-sea฀
pipeline.฀(below)
hydrocarbon-rich฀Orinco฀
Belt฀of฀Venezuela,฀the฀larg-
est฀known฀hydrocarbon฀
deposit฀in฀the฀world,฀the฀
Hamaca฀project฀area฀is฀
estimated฀to฀contain฀more฀
than฀30฀billion฀barrels฀of฀
extra-heavy฀oil.฀The฀up-
grader฀is฀a฀grassroots฀facil-
ity฀that฀will฀upgrade฀heavy฀
crude฀oil฀to฀commercial฀
grade฀by฀removing฀heavy฀
carbon฀as฀coke฀and฀remov-
ing฀sulfur฀and฀nitrogen฀
contaminants.฀(bottom)