Murray & Roberts’ subsidiary bags a $620m contract in US
The engineering and mining contractor says the contract heralds the ‘internationalisation’ of its oil and gas business
Murray & Roberts’ subsidiary Clough USA has won a $620m (R9.4bn) petrochemical engineering, procurement and construction (EPC) contract in the US, in a development that vindicates the company’s strategy to diversify through acquisition.
The multi-year project is Clough USA’s first major contract and would entrench the company in the North American market, Murray & Roberts said in a statement.
The wholly-owned subsidiary was established earlier this year following Murray & Roberts’ acquisition of Saulsbury Industries’ Gulf Coast downstream EPC business.
Murray & Roberts’ spokesperson Ed Jardim said in the past year the company had diversified its market positioning, mainly through acquisitions in each of its three business platforms — oil and gas, underground mining and power and water.
The diversification strengthened the group’s resilience against market volatility, Jardim said.
“This strategy entailed diversifying our exposure across the natural resources market sectors, across selected geographic regions with different market dynamics, and across the different phases of the engineering and construction project lifecycle,” he said.
One of the acquisitions, which the listed engineering and mining contractor concluded earlier in 2019, was Saulsbury Industries’ Gulf Coast downstream and chemical engineering, procurement and construction division.
“We rebranded that division as Clough USA. A few months later and as announced this morning, we have secured a R9.5bn, multi-year, petrochemical engineering, procurement and construction project in the USA,” Jardim said.
He said Murray & Roberts’ oil and gas business historically only had exposure to the Australasian oil and gas markets.
“This acquisition has essentially allowed for the internationalisation of the oil and gas platform. This small acquisition has now given the platform a relatively low-risk entry to the fast-growing gas and petrochemical market in the USA,” Jardim said.
He said the Houston, Texas-based Clough USA provided Murray & Roberts with a base from which to extend the oil and gas platform’s EPC service offering to the growing oil and gas and petrochemical sectors in North America “which holds significant opportunity”.
Murray & Roberts’ share price shed 0.90% to R12.15 on Monday.