PETER BENNETT
Business platform CEO

PETER BENNETT
Business platform CEO

OIL &
GAS

“MEANINGFUL GROWTH OFF THIS LOW
BASE IS ONLY EXPECTED IN THE MEDIUM
TERM, AS CONFIDENCE RETURNS AND
GLOBAL ENERGY PRODUCERS START
INVESTING IN NEW PROJECTS.”

    ENGINEERING      CONSTRUCTION &
FABRICATION    
GLOBAL MARINE      COMMISSIONING &
BROWNFIELDS     
CORPORATE
OVERHEADS
AND OTHER     
TOTAL      
R MILLIONS   2017        2016      2017        2016      2017        2016      2017        2016      2017        2016      2017        2016    
Revenue  1 297        2 707     30        87     425        936     4 862        7 016     100        466     6 714        11 212    
Operating profit/(loss)  28        329     (52)       (16)    71        (4)    576        738     (406)       (522)    217        525    
Margin (%)  2%        12%     (173%)       (18%)     17%             12%        11%                  3%        5%    
Order book  492        1 574     1 070        –             341     3 589        4 514                  5 151        6 429    
Segment assets                                                                             2 528        2 919    
Segment liabilities                                                                             1 978        2 072    
People                                                                             1 895        1 464    
LTIFR (fatalities)                                                                            0.25(0)       0.18(0)   

ONLINE
Full business platform reviews

 

HISTORY
(R billion)

   

GEOGRAPHIC
SPLIT (%)

HISTORY (R billion)     GEOGRAPHIC SPLIT (%)
   

NEAR ORDERS AND PIPELINE
(R billion)

NEAR ORDERS AND PIPELINE (R billion)

ORDER BOOK
TIME DISTRIBUTION (R billion)

ORDER BOOK TIME DISTRIBUTION (R billion)
   

Near orders: Tenders where the Group is the preferred bidder and final award is subject to financial/commercial close – there is more than a 95% chance that these orders will be secured.

Category 1: Tenders the Group is currently working on (excluding near orders) – projects developed by clients to the stage where firm bids are being obtained – chance of being secured as firm orders a function of final client approval as well as bid strike rate.

Category 2: Budgets, feasibilities and prequalification the Group is currently working on – project planning underway, not at a stage yet where projects are ready for tender.

Category 3: Opportunities which are being tracked and are expected to come to the market in the next 36 months – identified opportunities that are likely to be implemented, but still in pre-feasibility stage.


PROJECT LIFE CYCLE REVENUE DISTRIBUTION

 

GEOGRAPHIC DISTRIBUTION

REVENUE PER REGION
PROJECT LIFE CYCLE REVENUE DISTRIBUTION   GEOGRAPHIC DISTRIBUTION

PROJECT OPPORTUNITY PER SECTOR

  • Oil and gas business accounts for majority of new work during FY2018.
  • Metals & mining and infrastructure will be important contributors to revenue while oil and gas markets remain in transition.
  • Diversification of Australian business into complementary markets is expected to provide new opportunities.
  • Growth in international markets is also expected to yield new business opportunities.

PROJECT OPPORTUNITY PER SECTOR

 
OIL & GAS PLATFORM PIPELINE ANALYSIS
OIL & GAS PLATFORM PIPELINE ANALYSIS

 

OIL & GAS MARKET OUTLOOK

  • Global LNG markets are forecast to remain in oversupply until at least 2021/2022. Leading up to these years, supply/demand imbalances should favour new developments. New supply is likely to come from USA, South East Asia, Middle East and Africa.
  • Australian operators are considering brownfields expansions of existing projects; however, investment decisions are only likely during 2019 and 2020. Operations & maintenance projects are still available, although small.
 
PROJECTED GROWTH IN NATURAL GAS TRADE

PROJECTED GROWTH IN NATURAL GAS TRADE
 
GLOBAL LNG CAPACITY AND DEMAND
(MILLION TONNES PER YEAR)
GLOBAL LNG CAPACITY AND DEMAND
(MILLION TONNES PER YEAR)

2017/18 CONSTRUCTION OUTLOOK (AU$)
2017/18 CONSTRUCTION OUTLOOK (AU$)
 

AUSTRALIAN INFRASTRUCTURE MARKET OUTLOOK

  • Major construction work growth forecast at 5%.
  • Australian roads and freeway growth forecast at 25%.
  • Water and sewerage construction growth forecast at 11%.
  • Pipeline construction growth forecast at 1%.
  • Power generation forecast to contract by 3%.
  • Oil and gas and mineral processing facilities forecast to contract, driven by major project completions.

PROSPECTS

PNG offers an attractive environment for new developments and there are several new opportunities in the project pipeline that the platform is pursuing. Smaller-scale greenfields and brownfields EPC opportunities are emerging in Australia and operators require innovative development solutions, which the platform is well positioned to deliver. Its strong focus on project execution and high-quality project delivery enables it to access scope growth on current projects.

Clough’s successful track record in downstream and petrochemical work will enable it to compete for related opportunities across South East Asia and, in Indonesia, growth opportunities exist in gas/liquids-to-power projects, particularly regasification terminals.

In the USA, the focus on energy security will continue to strengthen the oil and gas shale markets and new exploration successes could present midstream opportunities to compress, process and transport gas from production sites to existing processing and export facilities. In Canada, new project opportunities continue to emerge in LNG facilities and associated infrastructure developments, albeit at much slower rates than initially projected.

Population growth in Nigeria and East Africa is driving expenditure on energy projects, and gas-to-power opportunities in South Africa and Mozambique continue to emerge as demand for energy increases. Europe’s clean energy target is resulting in new markets for large-scale clean energy developments.

Opportunities exist in complementary markets such as Australia’s mining and infrastructure markets and east coast state governments, particularly New South Wales, are developing many large infrastructure projects. Clough is positioned to pursue selected opportunities and has developed partnering strategies to support its delivery.

Internationally, the platform continues to work in collaboration with the Underground Mining platform to pursue brownfields EPC opportunities on the Oyu Tolgoi Expansion Project in Mongolia. These complementary markets will become important contributors to revenue in FY2018, while oil and gas markets remain uncertain.