OPINION: KBR's decision to exit the lump sum engineering, procurement and construction business is hard to believe, given it has dominated the sector for so long.

Its name had become synonymous with mega projects and giant surface production facilities, building anything from large platforms to floaters.

The booming liquefied natural gas sector in the past decade or so was good to KBR. A multitude of LNG trains were fabricated all around the world in stick-build or modular fashion, whatever was required.

In confirming its exit from the lump sum EPC business, KBR emphasised that this included LNG — an interesting point to highlight.

The Ichthys project in Australia — in which KBR built the massive onshore LNG facilities in a consortium with JGC and Chiyoda — ran several billion dollars over budget because of difficulties with sub-contractors and the client.

LNG exemplifies the type of high-volume, low-margin risk that KBR now wants to move away from completely.

Such was KBR's commitment to its exit decision, it de-booked $1.2 billion of backlog associated with projects in its Energy Solutions business that will no longer be pursued or performed as a result of market conditions and portfolio shaping actions.

KBR will now run a two-segment business model based on its government solutions and technology solutions divisions.

It calls itself a "government solutions company" with $13.5 billion in backlog and options. Its customers include NASA, the US Army, the US Navy, the US Air Force, federal agencies and international governments.

Perhaps this will prove another platform from which KBR can continue its dominance.

(This is an Upstream opinion article.)