Fluor Corp. (FLR) said on Tuesday that it has bagged a contract from Canada’s Imperial Oil Ltd. (IMO) for the Kearl oil sands project.
The Texas-based company expects to book about $1.5 billion from the contract this year, and a major portion will be recognized in the second quarter.
“This significant project award expands our presence in the upstream side of the Canadian oil sands business, a key growth market for our company,” said senior group president for energy & chemicals, power and government David Seaton.
The engineering, procurement and construction (EPC) contract awarded to Fluor relates to the first phase of the project, which is likely to commence production in late 2012. The C$8 billion (about $6.9 billion) Kearl project is a surface mining and bitumen extraction operation located 70 kilometers northeast of Fort McMurray, Alberta.
The company, which posted revenues of $5.8 billion in the first-quarter, reduced its earnings outlook in May to range between $3.80 and $4.10 per share, compared to the earlier forecast of $3.90 to $4.20 per share. Fluor cited cancellation of the $2.1 billion refinery in Kuwait as the primary reason for the lowered guidance.
Imperial Oil, which is 69.9% owned by Exxon Mobil Corp. (XOM), plans to develop the Kearl project in 3 phases and is expected to ultimately produce more than 300,000 barrels per day of bitumen.
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