Fluor to unveil new project awards soon

David T. Seaton, Senior Group President of Fluor Corporation addresses the Reuters Energy Summit in Houston June 4, 2009.

HOUSTON (Reuters) - Fluor Corp (FLR.N) clients are still willing to invest despite the downturn, and the engineering and construction company will make some significant project announcements soon, a top executive said on Thursday.

"We see many of the oil and gas guys and petrochemical guys continuing to spend regardless of the current circumstances," David Seaton, Fluor's senior group president for energy and chemicals, power and government, told the Reuters Global Energy Summit in Houston.

Fluor, the largest publicly traded U.S. company in its sector, had spoken in February of two "very significant" projects timed for the second quarter, and Seaton said they were on track.

"We've heard on them, and we're confident that there will be some positive news coming out -- still in Q2," he said.

The executive, who has responsibility for about two-thirds of the company's line-up of projects, also said Fluor could still meet its goal of ending 2009 with its backlog broadly steady at about $30 billion.

"Right now we've seen such a lull that our new award revenues are much more lumpy than they've been over the last three or four years, and a little less predictable," Seaton said. "There's certainly an opportunity that we'll finish the year with a '3' in front of it, and if not, it's not going to be far from it."

That's despite the March cancellation of a planned refinery in Kuwait, trimming $2.1 billion from Fluor's backlog, in a decision Seaton called politically motivated.

"Fact of the matter is that the Kuwaitis are in a position that if they don't do the fourth refinery, they don't have the motor fuels to keep them a net exporter," said the executive, who has extensive experience of the region. "I think politics has got in the way of good solid economic growth of a very important country in the Middle East."

Fluor, through the Irving, Texas company's new renewable group, could use its balance sheet strength to support early-phase projects, as it did with Britain's Greater Gabbard Offshore Windfarm, though that was as far as its funding would go.

"We're not going to get into the position where our equity puts us in a long-term ownership position in anything, really, because that's just not what we do," Seaton said.

He also wanted to see nuclear, as well as coal, on the U.S. energy "menu" along with natural gas and renewable power sources, because the latter alone would not provide enough power to sustain U.S. economic growth.

Seaton said fear that a U.S. nuclear power renaissance will trigger a repeat of delay and skyrocketing costs seen during 1970s-era construction are unfounded.

Many of those problems were created by aggressive budgets and construction timetables, he said. "In the '60s and '70s we had a learning curve about quality control," Seaton said.

"Today, we have those lessons learned and I would like to think we'll have a different outcome," Seaton said.

The United States is slightly handicapped due to Europe's lead in use of nuclear power and clean fuel, he said.

"But the U.S. has an interesting ability to catch up quickly when our minds are made up to do something," he said. On nuclear, Seaton said, "I'm not sure we have our minds made up."

(Reporting by Braden Reddall and Eileen O'Grady; Editing Bernard Orr, Richard Chang)