Worley remains upbeat about clean coal

Chemical and resources group Worley is eyeing opportunities in SA’s thermal coal sector, following the completion of the merger with a subsidiary of Jacobs Engineering in April.

Australian-listed WorleyParsons bought US-based Jacobs’s energy, chemicals and resources business for $3.2bn. The merged entity, Worley, provides professional project and asset services in energy, chemicals and resources and employs 57,600 people across 51 countries.

Worley, which is one of the world’s largest project delivery firms, remains upbeat about the prospects of coal despite the negative sentiment towards the resource from a number of entities. Most recently Nedbank and Standard Bank decided not to fund coal mines.

“We are trying to work with clients [in the coal industry] to mine in the cleanest possible way because coal is under immense environmental pressure at the moment. Funders are making it far more difficult if you are not developing your project in a way that ensures the least amount of emissions,” said senior vice- president Denver Dreyer.

Dreyer, a former CEO of WorleyParsons RSA, is now responsible for mining, minerals and metals for Europe, Middle East and Africa in the merged company.

Following the completion of the transaction, Worley has prioritised increasing its global footprint in minerals, metals and mining, Dreyer said.

Opportunities outside SA are linked to the uptake in electric vehicles. “These opportunities relate to the nickels, copper, lithium and all the raw materials needed for the batteries and storage in the electric vehicle revolution. We are starting to see a lot of interest and studies,” he said, singling out the Democratic Republic of Congo and Zambia as key markets in the switch to electric vehicles.

Dreyer said that prior to the Jacobs acquisition the company had identified gaps in the chemicals sector and downstream hydrocarbon sector, which entails the refining and processing of crude oil. “We intended to fill those gaps over time either through acquisitions or organically growing into those markets.” 

The deal with Jacobs ticks all the right boxes, said Dreyer. Through the acquisition, the company has access to Jacobs’s skills and markets. “The great thing is that there were almost no areas where we overlapped. Their centre of mass was in the downstream sector. They are the world leader in chemicals and have a stronger geographic footprint in the Americas. It was a clear decision to make,” he said.

The professional services provider has described the transaction as a combination of two highly complementary organisations.

Asked whether the merged entity is a bigger version of WorleyParsons, Dreyer is adamant it is not. “It is not more of the same. When we looked at this particular acquisition, we looked at it from many angles. There were three lenses we looked at.”

These were changes in the market, “unstoppable” trends in the industry, and emerging disruptive technologies. “You need to understand the impact of where the world is going,” Dreyer said.

Worley CEO Andrew Wood said the combination of the two companies is not just about capacity and capability. “It is about opportunity: the opportunity to become a partner of choice for our customers, the employer of choice for our people and to deliver enhanced returns for our shareholders.”

Dreyer said Johannesburg will remain the global centre of excellence for mining and minerals processing. The company regards SA as one of the world’s best mining environments. “There is no other city in the world where within a radius of 100km can you find the breadth and depth of mining skills like you have here. It is incredible,” he said.

njobenis@businesslive.co.za