Fluor Sees Delay, Bigger Bid in Iraq
By CHRIS CZIBORR
There’s more waiting for Aliso Viejo-based Fluor Corp. on its bid for work in Iraq.
Last week the Army Corps of Engineers said it would delay naming winners for work to upgrade Iraq’s oil operations by one to two months.
Fluor is a bidder on the contracts, which are to replace controversial oil sector work given without bidding to Houston-based Halliburton Co.’s Kellogg Brown & Root International Inc.
Fluor lost out on an earlier $680 million bid for general repair work in Iraq to San Francisco-based Bechtel Group Inc. It’s shown interest in bidding on several other Iraq contracts, but the bidding process has seen uncertainty and delays.
But there’s some good news for Fluor on the Army Corps’ oil contracts: The potential value of the work has doubled from $1 billion to $2 billion.
“The Army Corps said it’s giving bidders more time to revise proposals,” Fluor spokesman Jerry Holloway said. “We’re still awaiting further information as to what that means.”
Army Corps spokesman Scott Saunders said the amount of work increased for a couple of reasons.
“We knew the oil infrastructure had been neglected for quite a while, but by late October when we completed our assessment we realized it’s even worse than we thought,” Saunders said. “That and the ongoing attacks by terrorists and saboteurs made us realize more work is needed than we anticipated when we put out the original solicitation back in June.”
Apart from war, Iraq’s oil sector has suffered from more than a decade of United Nations sanctions and general neglect under Saddam Hussein.
Saunders said the Corps delayed awarding the contracts because it needs to find more funding.
“We’re not sure yet where all the money’s going to come from,” Saunders said.
Potential sources include U.S. coffers and proceeds from the sale of Iraqi oil.
The Corps said now it plans to award two oil contracts,one worth up to $800 million to handle work in northern Iraq and a contract for southern Iraq that could be worth as much as $1.2 billion. The southern contract, which includes Baghdad, is bigger because there are more oil wells in the region.
Fluor bid through a venture with the Britain’s AMEC PLC. Fluor controls a 51% stake in the partnership.
In other Fluor news, Holloway said the Fluor-AMEC venture last month submitted a separate bid to the U.S. Agency for International Development for up to $1.5 billion in Iraq general rebuilding of roads and other basics. That deal is an addition to Bechtel Group’s earlier $680 million contract.
Meanwhile, the Corps also said last month that it plans to award up to $5 billion in general rebuilding work in Iraq and other countries in which the U.S. has interests, such as Afghanistan.
The Corps is looking to fill up to 10 new contracts, with each deal worth a minimum $500,000 and a maximum $500 million.
Fluor hasn’t said whether it will bid on those contracts. Fluor already has won a $102 million contract for similar work on Iraq’s electricity operations from the Army Corps.
Army Corps contracts are open to U.S. and global companies, while U.S. Agency for International Development bidding is open only to U.S. companies or joint ventures where the U.S. partner holds a controlling stake.
