PRETORIA – Clough, listed Murray & Roberts’s (M&R) Australia-based oil and gas engineering and construction wholly-owned subsidiary, has been short-listed for two oil and gas contracts with a combined value of about A$6.8 billion (R74.9bn).
Daniel Grobler, the group financial director of M&R, said that if Clough secured one of these projects it would provide a significant “facelift” to the company as well as the business model for M&R’s oil and gas platform.
Grobler believed Clough would still be in a tough operating environment for the next year but thereafter would start securing big projects that were out to tender, and had a very good base from which to start growing its earnings into the future.
Henry Laas, group chief executive of M&R, said each of these projects was now worth A$3.5bn and, if the group was successful with its bids, they would be pursued in a joint venture in which Clough had a third share.
Laas said that for oil and gas it was very important that Clough established itself in complementary markets.
Clough was moving in this direction and M&R wanted to get a strong engineering, procurement and construct (EPC) business to address the opportunity in the Australian infrastructure and mining market, he said.
“This is not a business that we would like to roll out on a global basis. It is purely targeted at the opportunity we see within Australia now,” Laas said.
Clough increased its order book to R6.4bn at end-June from R5.1bn and was actively tendering on many other projects, with M&R’s total order book at R30.1bn at year-end.
This excluded new underground mining contract awards to M&R announced last week totalling R3.6bn, including the Pumpkin Hollow underground project in Nevada for the Nevada Copper Corporation and a shaft-sinking project on an unidentified copper mine in South Africa.
M&R has transformed from being a predominantly South African civil and building contractor to a multinational engineering and construction group focused on the natural resources market sectors, including oil and gas, metals and minerals and power and water, and complementary markets.
Speaking at M&R’s financial results presentation last week, Laas stressed the importance to the group of maintaining the businesses it had.
He said international growth for the group was important, adding that it had businesses in the US, the UK and other parts of the world.
Laas confirmed that the group was still pursuing an acquisition in the US.