Delivering Capital Efficiency to the Global Petrochemical Market

Transcription

1 Delivering Capital Efficiency to the Global Petrochemical Market Gary Donovan Senior Vice President, Business Development and Strategy, Global Energy & Chemicals March 21, 2017

2 Major Offices and Fabrication Yards CLIENT MARKETS Energy & Chemicals Power Infrastructure Mining & Metals Life Sciences & Advanced Manufacturing Government 2

3 2016 Financial Performance Revenue: $19 billion New awards: $21 billion Backlog: $45 billion Fluor Corporation is rated at one of the higher investment grade levels: Standard & Poor s Moody s Fitch Long-term Ratings: Short-term Ratings: A- A3 BBB+ A-2 P-2 F-2 Fluor Corporation 60 Years on NYSE Outlook: Stable Negative Stable 3

4 Chemicals and Petrochemicals Project Experience Sasol Ethane Cracker and Derivatives Louisiana, United States Sadara Chemicals Complex Al Jubail, Saudi Arabia BASF Ultramid Polymerization Plant Shanghai, China Dow Gulfstream Program Texas, United States Saudi Kayan Petrochemical Complex Al Jubail, Saudi Arabia 4

5 Client/Market Perspective All projects are challenged: Market pressure Reduced budgets Investor expectations Needs: Do more with less Improved project results capital efficiency Delivery and investment predictability Driving: Longer and more complex project development Openness and need for new ideas BASF "Strict cost and expenditure discipline will therefore also be top priority in This applies in particular to cutting back on capital expenditures..." Dr. Kurt Bock, Chairman of the Board of Executive Directors, BASF Factbook 2016 LyondellBasell We continued to execute a strategy that remains grounded in deliberate cost management, capital discipline, strong cash generation and focused investments... Bhavesh V. (Bob) Patel, Chief Executive Officer and Chairman of the Management Board, 2015 Annual Report Phillips 66 "Returns on our investments are important, and the reduction in capital spending from prior years reflects that fewer projects meet our return thresholds in the current business environment." Greg Garland, Chairman and CEO, 2017 Capital Program Announcement Industry Need = Innovative, Capital-Efficient Solutions 5

6 Productivity in the Construction Industry Manufacturing productivity has increased by 48% since 2000, while construction productivity has declined by 40% Overview of U.S. Labor Productivity Over Time Manufacturing Construction Source: IHS Markit 6

7 A Step-Change Improvement in Capital Efficiency Integrated EPFC Solutions 7

8 Rethink the Traditional Model Zero Base Execution What is Possible? Zero Base Execution SM ZBE SM Distinctive Fluor process and intellectual property enables innovation Supports a step-change improvement in project delivery ZBE drivers and enablers Culture and behavior shift Challenge traditional on cost and benefit basis Clarify: must haves versus wants 8

9 ZBE Foundation for a Step-Change Improvement 9

10 Example Chemicals Project Proven technology based on operating facilities Key growth project Economically challenged ZBE application in progress Clarified requirements (must haves versus wants) Based on class of facilities Collaboration to challenge and improve Implementation phase Performance Category Initial Class of Facility Basis Project Business Objective Capacity Class 2.5 Class 2 Flexibility Class 3 Class 2 Expandability Class 2 Class 1 Reliability Class 3+ Class 2 Controls Class 3 Class 2 Operability & Maintainability Class 3+ Class 2 10

11 A Step-Change Improvement What s Possible? 20% to 30% Reduction in TIC 11