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Big Contracts Behind Fluor’s Local Growth

Fluor Corp.’s top executives may be long gone from Orange County, but the company’s remaining local engineers are thriving.

The Irving, Texas-based engineering and construction company, which moved its headquarters from Aliso Viejo in 2006, recently landed a $2 billion contract to build a refinery for France’s Total SA.

About 200 engineers from Fluor’s Aliso Viejo and Irvine offices are set to work on the project, which will be completed in Port Arthur, Texas, on the Gulf of Mexico by 2011.

“The project is part of an overall growth program in Southern California for Fluor,” said Russell Poquette, executive project director.

That growth is being driven by a rising demand for oil, which has companies such as Total looking to add and upgrade their refineries, he said.

Fluor also does work for the chemical, mining and transportation industries.

Two years ago, it moved its headquarters to Texas to be closer to customers. It took with it 60 executives and corporate workers and left behind almost 1,200 workers.

It’s been growing since. This year should be no different, Poquette said.


More Hires

About 200 jobs are set to be added to Fluor’s OC offices by the end of the year, he said.

Last year it added 660 jobs and expanded its local offices with a lease for 169,254 square feet of space in three Irvine Spectrum buildings owned by The Irvine Company at the Discovery Business Center.

Just six years ago it had less than 600 workers in the county after laying off people to cope with a downturn in its power plant work.

Fluor did about $16.7 billion in sales for 2007. Wall Street is looking for $20.5 billion in 2008.

“The world demand is stronger than the capability to serve it,” Poquette said. “Our backlog is at its highest in history.”

The company’s stock has been on a tear the past year and is up 5% so far this year with a recent market value of $13 billion.

Some 2,000 of Fluor’s 41,000 workers are set to work on the refinery in Texas.

About 30 new hires from Fluor’s local offices are working on the project, Poquette said.

Three hundred workers from its Houston office also will be tapped for the work as well as another 300 from its New Delhi office.

The engineers will expand the existing refinery to process sour crude oil, which has a higher amount of impurities compared to the sweet crude it already refines.

The heavier sour crude is found at the bottom of barrels, and is more expensive to convert to gas and diesel fuels than sweet crude, Poquette said.

But the costlier process has become more attractive as the price of oil rises, he said.

“Most refineries still only work with sweet crude,” he said. “But that’s changing.”

The new refinery will import oil from Canada, Mexico and South America and churn out 12 million tons of fuel per year.

Fluor didn’t compete with other contractors for the work because it already had a head start as a contractor for the refinery’s previous owner, Poquette said.

“We already went through the early study phases of the project,” he said.

Total bought the refinery seven years ago from Fina Inc., part of Belgium’s Petrofina SA.

Total is one of the world’s largest oil and gas companies with refineries in 25 countries.

Fluor has its roots in Fluor Construction Co., which was founded in Santa Ana in 1912 by Swiss immigrant John Simon Fluor.

Fluor’s first major contract was with Southern California Gas Co. when it asked him to build an office and meter shops.

Fluor also does government projects such as nuclear cleanup and highway building.

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