KBR Awarded Pre-Feasibility Contract by PetroSA for Crude Oil Refinery Project

HOUSTON--(Business Wire)--KBR (NYSE:KBR) today announced that it has been awarded a contractby PetroSA to conduct the pre-feasibility study to build a USD 6billion crude oil refinery in Coega, Port Elizabeth. The proposed crude oil refinery, called Project Mthombo, isexpected to come on stream in 2014/2015. Project Mthombo, which couldproduce more than 200,000 barrels of fuel per day, will be one of thelargest post-2010 investments in South Africa. "KBR has a well-established track record developing downstreamprojects, accessing global resources and crude oil refining. We lookforward to applying this expertise to PetroSA's world-scale refineryproject," said John Quinn, President, Downstream for KBR. The pre-feasibility study focuses on determining the economicoptimum configuration for the refinery including crude oil type andcosts, required product slate, prices and specifications, and capitaland operating costs. The study is expected to take about six months tocomplete and will be conducted out of KBR's Houston offices withsupport of KBR South Africa and Ilitha, a local engineering company.After the configuration has been approved, Project Mthombo will moveon to the feasibility phase, which will define the engineering scopeof the refinery. The project will also generate approximately 20,000 direct andindirect jobs in one of the most impoverished provinces in SouthAfrica, beginning with numerous South African personnel assigned towork on the study. "PetroSA is using this opportunity to develop jobskills capacity in South Africa and has selected several promisingcandidates from previously disadvantaged South Africans, who will beassigned to KBR for the duration of the study. The development ofthese engineers, who are essential for the successful construction andoperation of the refinery, is part of a well-defined strategy byPetroSA in anticipation of future needs," said Jorn Falbe,vice-president, new ventures--midstream for PetroSA. Project Mthombo underpins South Africa's security of energy supplyand reduces South Africa's dependency on imported automotive fuels.Project Mthombo, which is nominally sized for 200,000 barrels of fuelper day to satisfy the South African demand, could be expanded toallow for exports or other growth opportunities and could beintegrated with downstream petrochemical opportunities. KBR is a global engineering, construction and services companysupporting the energy, petrochemicals, government services and civilinfrastructure sectors. The company offers a wide range of servicesthrough its Upstream and Downstream, Technology, Services, Governmentand Infrastructure and Ventures business segments. For moreinformation, visit www.kbr.com.KBRHeather Browne, 713-753-3775Director, Communicationsheather.browne@kbr.comRob Kukla, Jr., 713-753-5082Director, Investor Relationsinvestors@kbr.comCopyright Business Wire 2007