Fluor is seeing a positive response from potential clients as it revamps its operations to emphasise the energy transition, chief executive David Constable said on 7 May.
The US engineering and construction contractor has already stated its objectives to achieving net zero for Scopes 1 and 2 carbon dioxide by the end of 2023 while decreasing its debt to capitalisation ratio to between 20% and 40% by 2024. During the first quarter earnings call, Constable said the company was now splitting its operations into three business segments as it looks to streamline its business model.
One of the segments, Energy Solutions, is involved with projects in both oil and gas and the energy transition. During the first quarter, Fluor was awarded three projects worth US$2.8 billion from Pemex for work on a refinery in Mexico. It also had an unnamed chemicals project worth $1 billion cancelled, but still increased its total project backlog to approximately $11.1 billion.
Constable placed most of his focus in the call on potential energy transition projects.
“When we unveiled our strategy in January, there was a lot of interest in Fluor's energy transition opportunities, supporting a reduced carbon future. Over the past few months, we've been in extensive conversations with clients about our energy transition capabilities,” he said.
“We are executing several carbon capture FEED [front-end engineering design] and feasibility studies using our proprietary economy FG plus technology. Additionally, we are doing early work in the areas of refinery efficiency, gasification to produce carbon-negative energy, green hydrogen, renewable diesel, renewable jet fuel and energy storage. In each of these areas, we have identified projects and are continuing to pursue new opportunities as well.”
One particular area where Fluor could benefit, Constable said, is in the chemical sector. Downstream clients, he noted, are looking at funding both traditional work and energy transition projects to stay competitive.
“They're starting to throw billions of dollars at energy transition. Obviously, (it’s) very early days, but we've got a lot of energy transition work in-house with them as well to look at how they might attack that challenge that we've all got to move to low-carbon future,” the executive said.
For the first quarter, Fluor reported reported a net loss of $61 million, or 43 cents per diluted share. The company reported revenue of $2.9 billion, with $3.7 billion in awards across its three business segments during the quarter. Company executives believe demand for the company’s services will increase as the global economy recovers from the Covid-19 pandemic.
"Results for the quarter were consistent with our expectations as we start to work past the effects of COVID-19 on our projects and operations,” Constable said. ”We continue to have productive conversations with our clients and believe that prospects and opportunities will begin to pick up as we enter the back half of 2021."