Murray & Roberts (M&R) has indicated that it will fast-track internationalising its Australia-based oil and gas unit Clough because of the drop in liquefied natural gas (LNG) megaprojects in Australia and the expectation that future LNG projects will be in North American and Africa.
Already the slowdown in LNG capital projects has resulted in Clough’s construction order book dropping from ±R4.2-billion in 2013 to R39-million by the end of December.
The overall backlog has thus fallen to R12.2-billion from over R20-billion in the previous year.
M&R CEO Henry Laas says, while the falling oil price has reduced capital expenditure by energy companies, the drop in orders results from the move in Australia from construction of LNG terminals to their commissioning, operation and maintenance.
Clough CEO Kevin Gallagher estimates that the yearly brownfield market in Australia would be between A$2-billion and A$3-billion, of which Clough aims to capture 25%.
Believing the next wave of developments will be in Canada, the US and East Africa, Clough has acquired Scotland’s Booth Welsh and US-based CH-IV to position itself for the future.
Developments in Australia have also changed M&R’s order book, with 48% of the R37.8-billion backlog at the end of December comprising projects in the SADC. At the end of December 2013, international orders made up 60% of what was a R44-billion order book.
