HLG awarded
AED250 million oilfield
infrastructure
project in Abu Dhabi
Firing on all Cylinders.
Akhbar AlDar takes a
look into HLG’s strategy
in oil and gas
The outlook for oil and
gas projects in the
GCC 2013
THE
OIL AND GAS
EDITION
2 AKHBAR ALDAR
CONTENTS
NEWS FROM THE HABTOOR LEIGHTON GROUP | JULY, 2013
Chairman’s Message
CEO and MD’s Message
Over the years, I have watched HLG grow from its origins
in Al Habtoor Engineering to now be a part of one of the
world’s leading international contracting companies.
In different regions around the world, the oil and gas sector
continues to see many developments.
Like any company that experiences growth and expansion,
there are challenges, but HLG’s strategy to diversify by
location and market type is providing opportunities in new
sectors where we see growth for many years to come.
The oil and gas sector, while internationally a mature,
explored market, remains unexplored in many parts of this
region and with the right partnerships, HLG is in a good
position to be part of a maturing market.
Across the Middle East, this is definitely the case with the
region’s production of oil continuing to speed up to meet
demand, both locally and internationally.
For HLG, this is an opportune time to broaden our
capabilities in this sector and leverage the expertise and
experience that sits in HLG and internationally among our
many related companies.
Our work on the oilfield in Iraq, as well as the supporting
infrastructure we are providing to two oilfields in
Abu Dhabi, will be the first of many successful projects
in this sector.
Riad T Sadik
José Antonio López-Monis
HLG is one of the leading diversified
international contractors in the
Middle East and North Africa. The
Group employs more than 20,000
people, making it one of the largest
construction groups in the region.
HLG is part of the Leighton Group –
one of the world’s leading international
contractors and the world’s largest
contract miner, with annual revenues
exceeding US$20 billion. The Leighton
Group’s major shareholder is HOCHTIEF
from Germany – one of the world’s
leading providers of construction
HABTOOR LEIGHTON GROUP
services. HOCHTIEF is majority owned
by Spain’s ACS Group – a world
leader in infrastructure and building
development for civil and engineering
projects.
The Group also operates a diverse
range of complementary Associated
Businesses, offering clients a onestop solution for all their construction,
development and asset management
needs.
HLG has an extensive track record in
large-scale projects across the region.
For more than 40 years it has built a
strong and loyal client base across
both the public and private sectors.
HLG focuses on five core market
sectors: Infrastructure, Building, Rail,
Oil and Gas and Mining.
Please consider the
environment before
printing this
document
July 2013 3
CONTENTS
IN BRIEF
HLG ranked among one of the UAE’s first ten Estidama projects.
Ground-breaking ceremony held at Al Ba’itha in KSA 7
Snapshot 8
THEME OVERVIEW
Firing on all cylinders 10
INdustry QUOTES 15
FOCUS ON THEME
The outlook for oil and gas projects in the GCC 2013 16
To work by boat 20
Interview with Peter Ranzenbacher 22
Project Director of HLG’s first Iraq oil and gas.
A Striking development in DIFC.
COMPANY NEWS
HLG establishes a new Pre-Contracts Department 31
In line with our Ethics 32
Burj Daman Project 27
10
In depth
6
HLG achieves first Pearl 2 Estidama 6 certification in the UAE
4
HLG awarded SARB project in Abu Dhabi 4
GROUP News
Leighton reports Q1 2013 net profit of AUD $123 million, 34 reaffirms guidance
22
27
Leighton Holdings Limited announced Net Profit after Tax of AUD $123 million for the first quarter of financial year 2013.
Developing Australia’s oil and gas 36
EDITOR’S NOTE
36
Welcome to the new look Akhbar AlDar.
In Arabic, Ahkbar AlDar means “news of the house”. It is our
corporate magazine, which features the activities of HLG and its
related companies.
This oil and gas edition takes a closer look into the region’s
booming oil and gas sector, and features some of HLG’s projects
in this market. We hope you enjoy the read.
Corporate Affairs
We welcome your feedback
hlgroup.com
4 AKHBAR ALDAR
IN BRIEF
HLG awarded AED250 million
contract by ADMA-OPCO
HABTOOR LEIGHTON GROUP
IN BRIEF
July 2013 5
HLG awarded
AED250 million
oilfield infrastructure
project in Abu Dhabi
HLG has secured an AED250 million contract for the design
and construction of an accommodation camp and associated
utilities on two artificial islands, S1 & S2, as part of the Satah
Al Razboot (SARB) oilfield development, located 120 km northwest of Abu Dhabi, for Abu Dhabi Marine Operating Company
(ADMA-OPCO).
The new project reinforces the Group’s
capabilities in the oil and gas sector and
builds on the Group’s reputation as one
of the leading diversified international
contractors in the Middle East and North
Africa.
“Oil and gas-related projects such as the
SARB project align perfectly with HLG’s
building and infrastructure expertise, and
the Group’s ability to deliver specialist
projects in remote locations,” said
Mr José Antonio López-Monís, CEO and
Managing Director of HLG.
“Oil and gas-related
projects such as
the SARB project
align perfectly with
HLG’s building and
infrastructure expertise,
and the Group’s ability
to deliver specialist
projects in remote
locations.”
HLG will also be responsible for the
management and supervision of offshore installation works on the two SARB
artificial islands.
“This is the third oil and gas-related
project to be awarded to HLG in the past
six months and we remain focused on
securing more work in the sector.
“Working with ADMA-OPCO on the
SARB artificial islands provides HLG with
an opportunity to further demonstrate
our oil and gas expertise, and secure
additional oil and gas-related contracts
on both the SARB oil field development
and other oil and gas projects across
the region,” Mr Lopez-Monis said.
The project will commence immediately
and is anticipated to be completed mid2014.
HLG’s scope of work comprises the design, procurement,
construction, testing and commissioning of accommodation,
offices and associated utilities on two artificial islands,
including:
1. Two office buildings
2. Four accommodation buildings
3. Diesel generation units
4.Sewage and water treatment plants
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6 AKHBAR ALDAR
IN BRIEF
HLG achieves First
Pearl 2 Estidama
Certification in the UAE
Set to become one of the world’s top industrial and logistics
hubs, Khalifa Port and Kizad, developed by Abu Dhabi Ports
Company (ADPC), and designed and constructed in part by
Habtoor Leighton Group (HLG), has been ranked among one
of the UAE’s first ten Estidama projects.
Among the recently completed Estidama
compliant facilities delivered by HLG
is a mosque (Masjid) and emergency
response centre (fire station), which
are the first certified buildings in their
respective categories to achieve the
Pearl 2 rating within UAE.
Other facilities designed and constructed
by HLG to meet the a Estidama Pearl 2
rating also include an onshore
maintenance facility; control centre;
and passport and immigration, customs
monitoring and environmental agency
buildings.
HLG CEO and Managing Director,
Mr José Antonio López-Monís, said
the Pearl 2 Estidama certification is
a good example of HLG’s ability to
work collaboratively with all project
participants to deliver the customer’s
requirements and integrate Estidama’s
sustainability criteria into HLG’s design
and construction response.
“We are very pleased to receive news
of the Pearl 2 Estidama certification for
a number of port buildings, and proud
to have delivered the very first mosque
and fire station in the UAE designed
and constructed to Pearl 2 Estidama
standards,” said Mr López-Monís.
Estidama is an environmental initiative
of the Abu Dhabi Government and
a local definition of sustainability,
which combines social, economic and
cultural aspects into environmental
considerations as part of the UAE’s 2030
vision.
HLG was appointed by ADPC to deliver
a major highway connection and
associated infrastructure from Sheikh
Zayed Road to Khalifa Port and Kizad.
HABTOOR LEIGHTON GROUP
HLG’s design and construction of the
Onshore Port Facilities were developed
to meet the specific requirements of
ADPC and delivered as per schedule.
HLG’s scope of works
includes:
1. 75 Governmental
buildings and
supporting facilities
2. 15 million cubic
metres of earthworks
3. 28 kilometres of two,
three and four-lane
dual carriageways
4. 5 bridges
5. 48 major services
culverts and bridges
6. 7 kilometres MSE
walls
7. 177 kilometres of
electrical reticulation
8. 279 kilometres of
telecommunications/
communication
distribution
9. 104 kilometres of
pipelines
July 2013 7
Ground-Breaking
Ceremony held
at Al Ba’itha in
the Kingdom of
Saudi Arabia
A ground-breaking ceremony was held earlier this year at
HLG’s Al-Ba’itha Bauxite Mine Infrastructure & Utilities
project – located around 500 kilometres north-east of
Riyadh in the Kingdom of Saudi Arabia.
The event was hosted by Mr Abdulaziz Al Harbi – the President of Ma’aden
Aluminium Company – and attended by senior executives from Ma’aden, HLG,
Alcoa and Worley Parson Flour (WPF) and the leader of the local village.
A mosque at the Khalifa Port
and Industrial Zone (Industrial
Zone Area A Infrastructure) Abu
Dhabi, U.A.E.
A significant aspect of this project is the relocation of the local community,
who in time will move to a newly constructed town where there will also be
opportunities for employment.
hlgroup.com
8 AKHBAR ALDAR
SNAPSHOT
Leighton Contractors developing
Australia’s oil & gas
HABTOOR LEIGHTON GROUP
SNAPSHOT
July 2013 9
An aerial view of the foundation
structures for the Chevron-operated
Gorgon Project, being delivered by
Leighton Contractors in Australia.
hlgroup.com
THEME OVERVIEW
10 AKHBAR ALDAR
THEME OVERVIEW
Akhbar AlDar takes a look into
HLG’s strategy in oil and gas
Firing on all
Cylinders
The Middle East is home of the Organisation of the Petroleum
Exporting Countries (OPEC) and is one of the oldest and largest
oil and gas producing areas of the world. Collectively, the region
has the world’s largest proven reserves of conventional crude oil.
Richard Whitehead
General Manager of
HLG’s Northern Gulf division
In fact, much of the region’s
development and growth can be
attributed to oil revenue and therefore
the sector has been particularly
influential in contract awards – either
indirectly for infrastructure development,
or more directly through use of the
resource.
marine works is uniquely suited to be
part of developing this region.
“Notwithstanding its maturity and the
entry hurdles, the oil and gas sector
is an attractive market for HLG and
represents one of our major growth
areas,” said Richard Whitehead, General
Manager of HLG’s Northern Gulf
division.
“There is great potential for the
Group in the sectors we are working
with, and as many of our clients are
truly international, there is also the
opportunity to extend that skill beyond
the immediate region.”
Richard joined HLG in 2008 and
continues to enjoy the challenges and
opportunities his work presents both
in the pioneering markets around the
region, as well as expanding HLG’s
exposure and skills in the oil and gas
sector.
“The Northern Gulf is made up of
many countries, with many and
diverse cultures – each with its own
idiosyncrasies and priorities. We’ve
spent the last two years understanding
the market dynamics, identifying the real
opportunities and building a network
from the ground up.”
The Group’s expertise in civil
infrastructure, earthworks, building and
HABTOOR LEIGHTON GROUP
The unprecedented growth within
the oil and gas sector in the Northern
Gulf also gives HLG an opportunity to
further develop a sector-specific skillbase within the organisation.
While every country is different, the
projected growth in the oil and gas
sector across the GCC is a common
denominator of each region. The
two great performers are widely
acknowledged as the Kingdom of
Saudi Arabia and Iraq – with Iraq
predicting an average of 11.5% growth
per annum, raising its production from
a current three to eight million barrels
per day by 2021.
Gas production is another significant
growth area, with an expected rise
of 40% over the next decade. The
majority of this will come from the
Eastern Mediterranean fields, the
Dora field in the Kuwait Saudi Joint
Operations Zone and of course Iraq –
all within the Northern Gulf.
July 2013 11
hlgroup.com
THEME OVERVIEW
12 AKHBAR ALDAR
“Iraq is one of our team’s focal points
and presents HLG with some of the best
long-term opportunities. It is a country
emerging from two decades of war
and stagnation, and with projected oil
revenue it is able to undertake the longoverdue rebuilding and development of
the country’s infrastructure, as well as
the necessary investments to increase
oil production.”
HLG’s capabilities put the Group in good
stead to be part of this redevelopment
– with water, airports, roads, healthcare
and education projects, along with the
provision of oil and gas services, all on
the horizon.
HLG’s scope is the
full EPC of civil and
foundation works,
camp facilities, 27
oil and process
water storage tanks,
the installation
of security and
utility services,
buildings, pipe-racks,
process equipment,
electrical and
instrumentation and
pre-commissioning.
Independently, specialist companies that
operate under HLG’s parent companies,
including Leighton Offshore, Cobra and
Intecsa, have a strong track record of
various projects within the oil and gas
sector. Combined, each of the Group
companies and associated businesses
have unparalleled capabilities that will
fill niche opportunities and support the
provision of leading oil and gas services
across the spectrum.
“HLG is in a perfect position to bring
together the expertise of each company
to support the needs of individual
clients in the specific markets we are
operating in.”
As evidence of the potential of this
sector, HLG has secured three oil and
gas-related projects in the past six
months – two in Abu Dhabi and one in
Iraq.
“Given the perceived security risks in
Iraq, many vendors have adopted a wait
and see approach and as a result, the oil
and gas industry is not well serviced in
that country.
“HLG has taken up this challenge
and is leveraging off our experiences
in Afghanistan, where we have
successfully built credibility and become
prequalified to EPC status with many
of the international oil companies that
operate within the country.”
The Group was awarded an oilfield
development project in Iraq in 2012 –
a first time project win for HLG in Iraq,
which is being delivered in partnership
with one of the largest oilfield services
companies in the world.
HABTOOR LEIGHTON GROUP
The project is for multiple 50,000 barrels
per day oil processing trains, across
three geographically displaced sites.
Bringing together the engineering
and process expertise of the delivery
partner, and the technical and
construction expertise of HLG, it took
the team around 15 months to convert
the project from tender and will take
around 16 months to construct.
HLG’s scope is the full EPC of civil and
foundation works, camp facilities, more
than two dozen oil and process water
storage tanks, the installation of security
and utility services, buildings, piperacks, process equipment, electrical and
instrumentation and pre-commissioning.
July 2013 13
“This project provides HLG with
an opportunity to demonstrate our
outstanding oil and gas capabilities
and our ability to deliver the project to
the highest international construction
standards.
“Not only is the strength and credibility
of the Iraq delivery team unmatched,
in addition, HLG has an incomparable
opportunity to build true oil and gas
expertise organically and longer-term
look to export those services. This
will be a terrific addition to the oil and
gas infrastructure work we already do
well.”
In the Middle East market, HLG
continues to build relationships with oil
and gas specialist companies and form
local partnerships that enable the Group
to bid and execute work that sits within
their core skills.
“In these markets, the focus is very
much on partnering with companies
who have an existing track-record or
a particular engineering niche that we
can complement. It takes a long time to
establish credibility in a new market, and
strategic partnerships assist with this
process.”
HLG’s Northern Gulf division has spent
the last eighteen months pre-qualifying
for EPC projects in the Northern Gulf,
with several of the world’s largest
international oil and gas conglomerates
– companies whose turnovers are
larger than some countries’ GDP.
“We are thrilled to achieve the
preferred EPC vendor status and be
on the list of pre-qualified service
providers. Notwithstanding the
generally very onerous technical
requirements of submissions, this
puts the Group in a strong position
of bidding within a select shortlist,
rather than bidding against numerous
unknown vendors, which is more
common in other industries.”
HLG recognises the differences in the
oil and gas culture, which is typically
process-driven and complex, with
rigorous safety and quality controls.
hlgroup.com
INDUSTRY QUOTES
14 AKHBAR ALDAR
“Where necessary,
we externally recruit
experts in the field,
such as piping, tank,
erection or process
engineers. There is a
big demand for niche
skill-sets in this industry,
but unfortunately limited
supply, made more
difficult because of
where we are working.”
“Even with processes and procedures
that we are commonly familiar with in
the civil industry, the expectations of this
industry are far greater.”
A big component of Richard’s role
is identifying and recruiting the
experienced specialists in the oil and
gas sector to deliver complex projects in
remote locations.
“Where necessary, we externally recruit
experts in the field, such as piping, tank,
erection or process engineers. There
is a big demand for niche skill-sets in
this industry, but unfortunately limited
supply, made more difficult because of
where we are working.”
While working in the Northern Gulf
region can be confronting and
challenging at first, HLG’s induction
program, coupled with its staff rotation
schedule and customised transportation
HABTOOR LEIGHTON GROUP
and accommodation facilities, is
sensitive to the challenges that working
in the region presents.
“Our Iraq project gives HLG the
opportunity to deliver a ‘model’ for other
projects, where we can identify the
various elements of process technology,
package-up the components and
identify an end-to-end solution for
clients. We are a business in our
embryonic stages, but the potential
is enormous and limited only by our
vision.”
In addition to current project work being
undertaken in Iraq, the Northern Gulf
division is exceptionally active in the
market and is pricing a number of other
tenders across the region – building
credibility along the way.
July 2013 15
THEY SAID IT
“I urge everyone to invest in the UAE. People looking at gaining
experience in many areas have the opportunity to do so here. But I
advise you to stick to what you know and not go into something you
don’t have any experience in. This is what has made me successful.”
Khalaf Al Habtoor, Chairman of the Al Habtoor Group, advising a French business delegation.
“Oil and gas will be a good sector next year. Construction is definitely
picking up in Abu Dhabi and Dubai.”
John Branch, Director of Reward Services for global management consultant
Hay Group, on job opportunities within the UAE.
“The outlook for energy tells us that the world’s energy supplies will
continue to grow more diverse, and our investments reflect those
forecasts. In addition to our continued investments in conventional oil
and gas production, we are making significant investments in oil sands,
deepwater and Arctic operations, and the development of oil and natural
gas supplies found in shale and other tight rock formations.”
ExxonMobil Qatar vice president Alistair Routledge,
citing International Energy Agency estimates.
“Saudi Arabia and the UAE will increasingly focus their oil exports
on industrializing economies in Asia, in line with a transformation of
international trade flows toward emerging markets.”
HSBC and Oxford Economics report.
hlgroup.com
16 AKHBAR ALDAR
The outlook for oil
and gas projects in
the GCC 2013
MEED Insight: GCC Oil and Gas Projects Market 2013 report highlights the growing
opportunities in the oil and gas sector.
Since 2006, the GCC has implemented
some of the most ambitious oil and gas
projects ever undertaken.
Saudi Arabia has not
only been the largest oil
and gas projects market
in the GCC, awarding
an estimated USD$90
billion worth of contracts
in the period 2006-11, but
also the most consistent
delivering USD$14-20
billion every year except
2008. In contrast, the
UAE has been the most
volatile with annual
volumes ranging from
a low of USD$1.1 billion
in 2008 up to peak of
USD$30 billion in 2009.
HABTOOR LEIGHTON GROUP
The likes of the 1.2 million-barrel-a-day
Khurais field development in Saudi
Arabia and the USD$18 billion Pearl
GTL project in Qatar have not only been
triumphs of engineering and logistics
but also provided further confirmation of
the region’s importance for international
engineers and contractors. It has also
seen the dramatic rise of the South
Korean contractor, which after having
been effectively barred from tendering
for a decade, has made up for lost time
by winning well over 50 per cent of
projects tendered since 2009.
An estimated USD$200 billion worth
of major project contracts have been
awarded in the GCC oil and gas major
projects sector since 2006, delivering
on average about USD$35 billion a
year of major project contract awards.
But it has not been plain sailing. There
have been sharp annual fluctuations
over the period with a historical low of
USD$11.7 billion being recorded in 2008
and a record high of USD$52 billion the
following year. Since then however, new
project awards have declined, falling to
USD$25 billion in 2012.
Despite this, the outlook for the market
in 2013 and beyond is generally positive,
although hopes for a significant hike in
contract awards will largely depend on
developments in two of the historically
more marginal project markets, Kuwait
and Oman. However, even if both fail to
deliver on expectations, there will still
be a reasonable volume of work coming
out of Saudi Arabia, Abu Dhabi and
Qatar over the medium term.
The high levels of capital investment in
the region’s oil and gas infrastructure
over the past seven years has been
driven by rising oil, gas and refined
product demand in domestic markets
and abroad, as well as the push to
create much needed employment
through the development of a
downstream petrochemical industry in
Saudi Arabia.
Boosting gas supplies has been a
particular priority as governments seek
to meet high local demand growth
fuelled by the power, oil and industrial
sectors. With the exception of Qatar, all
GCC states have faced an increasingly
tight gas market, which has resulted
in sour and tight gas reserves being
developed and the first LNG receiving
terminals being built.
Saudi Arabia has not only been the
largest oil and gas projects market in the
GCC, awarding an estimated $90 billion
worth of contracts in the period 2006-11,
but also the most consistent delivering
USD$14-20 billion every year except
2008. In contrast, the UAE has been
the most volatile with annual volumes
ranging from a low of USD$1.1 billion in
2008 up to peak of USD$30 billion in
2009.
In Qatar, new contract awards have
declined significantly from 2006
following completion of its LNG and GTL
programmes, while Kuwait’s oil and gas
has punched well below its weight due
to politics and bureaucracy
Unsurprisingly, Saudi Aramco has been
by far the largest oil and gas client in
the GCC, awarding directly an estimated
USD$29 billion of major contracts in
the period 2006-11 as well as a further
FOCUS ON THEME
July 2013 17
hlgroup.com
18 AKHBAR ALDAR
TOP GCC OIL AND GAS CLIENTS
BY MAJOR CONTRACT AWARDS, 2006 - 11
Today, the GCC has a
healthy backlog of oil and
gas project work with
an estimated USD$170
billion worth under
study, in design or out
to bid. Kuwait and Saudi
Arabia each have about
USD$45 billion worth of
unawarded work, while
both Oman and the UAE
have some USD$27
billion.
USD$35 billion through its downstream
ventures.
It is followed by Abu Dhabi Refining
Company (Takreer) and Abu Dhabi
Gas Industries (Gasco), both of which
awarded over USD$11 billion of contract
work during the same period. Saudi
Arabian and Abu Dhabi companies have
dominated the list of top 15 clients over
the period with only Kuwait Oil Company
(KOC) and Qatar’s Pearl GTL breaking
their stranglehold.
Today, the GCC has a healthy backlog
of oil and gas project work with an
estimated USD$170 billion worth under
HABTOOR LEIGHTON GROUP
study, in design or out to bid. Kuwait and
Saudi Arabia each have about USD$45
billion worth of unawarded work, while
both Oman and the UAE have some
USD$27 billion.
However, while Saudi Arabia and the
UAE have track records of implementing
large-scale investment programmes,
the same cannot be said of Kuwait and
Oman raising doubts over how much
and over what timeframe their backlogs
of work will be awarded. Kuwait will also
have to overcome major political and
bureaucratic obstacles, something that
it has been unable to do since 2008, if it
is to achieve its investment target.
FOCUS ON THEME
July 2013 19
BREAKDOWN OF GCC OIL AND GAS
AWARDS BY STATE, 2006 - 11
MEED Insight anticipates a major
pick up in award activity in both
2013 and 2014, with an estimated
USD$54 billion worth of work
forecast to be placed in 2013 and
a further USD$52 billion in 2014.
Although 2012 saw a marginal pick up in
contract awards in the GCC oil and gas
sector, with about USD$27 billion worth
of contracts awarded, MEED Insight
anticipates a major pick up in award
activity in both 2013 and 2014, with an
estimated USD$54 billion worth of work
forecast to be placed in 2013 and a
further USD$52 billion in 2014.
However, the 2013 forecast assumes
that the USD$14 billion fourth refinery
in Kuwait will finally proceed while the
green light will be given to the USD$15
billion tight gas programme in Oman.
Similarly, Kuwaiti and Omani projects
are likely to determine the final contract
volumes in 2014 given that the forecast
takes in the USD$18 billion clean fuels
project and the $6 billion Duqm refinery
in the sultanate.
Despite the forecast pick-up in activity,
competition for new contract work will
remain intense as Korean contractors
look to maintain market share and
European and Japanese contractors
seek to replenish their order books. The
Koreans will remain highly competitive
especially in downstream refining,
although Western contractors are likely
to have the edge on tight gas and
enhanced oil recovery (EOR) projects.
The ‘price is king’ mentality will remain
an abiding feature of the GCC oil
and gas projects market. However,
‘localisation’ will also play a much
greater role especially in Saudi Arabia
and Oman. With job creation the
number one priority in both states,
foreign companies will increasingly
have no choice but to expand their
local presence and hire more national
staff if they want to be allowed onto
prequalification and bid lists.
An extract from MEED Insight Report
hlgroup.com
20 AKHBAR ALDAR
TO WORK BY BOAT
In 2012, HLG secured
a major contract for the
engineering, procurement
and construction of
accommodation and utilities
on four artificial islands being
constructed offshore from
Abu Dhabi.
Located off the coast of Abu Dhabi
is a project HLG was awarded which
comprises the engineering, procurement
and construction of accommodation,
supporting buildings and permanent
utilities, including: accommodation
for more than 2000 people; kitchen,
mess hall, clinic and laundry facilities;
recreational areas; a mosque; temporary
harbour house; operations and drilling
offices; and workshops.
As the HLG project team began
readying themselves to relocate to
this complex new project, the detailed
planning and preparation began for
each of the disciplines heading out to
site. With transportation to the artificial
islands being by boat and barge, and
travel time taking around two and a
HABTOOR LEIGHTON GROUP
half hours, preparedness and logistical
planning was key.
While all construction-related materials
were being transported offshore, staff
began their vigorous training and
development to ensure they were fit and
familiar with the demands of the project
and working at a remote location.
This started with a thorough medical
examination to determine the team’s
physical and mental fitness to work
offshore.
The training was centred around
instructing individuals on how to react in
different circumstances that may occur
offshore on the island, or while travelling
to or from the Islands.
FOCUS ON THEME
July 2013 21
The training was
centred around
instructing individuals
on how to react in
different circumstances
that may occur
offshore on the island,
or while travelling to or
from the Islands.
The three-day training program is called
T-BOSIET and H2S and the certification
received on successfully completing the
training is valid for four years.
To simulate real-life scenarios,
participants – comprising swimmers and
non-swimmers were submerged in the
pool as part of the rescue drills.
HLG’s project team has started work on
two of the islands and once complete
will move to the other Islands to begin
construction. The project is on track for
construction completion by mid 2015,
followed by a 2-year operations and
maintenance period.
The learning modules, which are tailored for offshore scenarios,
were both classroom based and practical, and included:
• An induction to working offshore
• First aid training
• H2S training (identifying and responding to Hydrogen
Sulphide in the oilfield)
• Helicopter evacuation while in water
• Boat rescue
• Fire fighting
• Search and rescue
hlgroup.com
22 AKHBAR ALDAR
IN DEPTH
Located in Southern Iraq lies one of the
largest oil fields in the world, and in
2012 HLG was awarded a sub-contract
to deliver infrastructure for a central
production facility for this engineering,
procurement and construction project.
Interview
with Peter
Ranzenbacher
Project Director, Iraq Oil Field
Akhbar AlDar talks with the Project Director of HLG’s first Iraq
oil and gas contract to find out more about his role on this
unique project.
Production capacity on oil fields
across Iraq are on the verge of
extensive expansion, with oil field
development activity well underway
by some of the world’s leading
multinational oil and gas consortiums
who are predicting that production on
independent oil fields will reach well
over one million barrels per day
by 2017.
“Our Iraq project is a great opportunity
for HLG to demonstrate our leading
approach to engineering, procurement
and construction (EPC) activities in
challenging environments,” said Peter
Ranzenbacher, Project Director of
HLG’s Iraq oil field project.
Peter is one of 50 HLG employees
currently working on the Iraq project,
with staff numbers expected to reach
200 by mid-2013, and manpower
reaching around 1500 people at the
peak of the project.
HABTOOR LEIGHTON GROUP
IN DEPTH
July 2013 23
The Group’s offshore expertise
is provided through Leighton
Offshore who is recognised
as an industry leader in
single point mooring system
installations and laying large
diameter offshore pipelines.
hlgroup.com
24 AKHBAR ALDAR
“Our core project
team currently
comprises
engineering,
procurement,
quality, safety
and construction
professionals who
have worked on
similar projects
before, and we are
transferring those
skills and experience
to this project.”
While the team is small, they have the
required experience to successfully
deliver HLG’s first project in the
country.
“HLG’s Iraq project is one of ‘firsts’
for the Group. It is the first project
the Group is delivering in Iraq, and is
the first time we are working with our
international client and multinational
project owner.
“Our core project team currently
comprises engineering, procurement,
HABTOOR LEIGHTON GROUP
quality, safety and construction
professionals who have worked on
similar projects before, and we are
transferring those skills and experience
to this project.”
HLG, which is part owned by the
Leighton Group, which is in turn part
owned by HOCHTIEF and ACS – all
of which rank among the world’s top
contractors – is able to tap into the
Group-wide capabilities to deliver bestin-class oil and gas capabilities.
IN DEPTH
HLG’s related companies have delivered
numerous onshore oil and gas projects
in greenfield and brownfield locations
around the world.
The Group’s offshore expertise is
provided through Leighton Offshore
who is recognised as an industry
leader in single point mooring system
installations and laying large diameter
offshore pipelines.
“We are tapping into a large pool
of knowledge and experience from
across the Group. This gives us an
unparalleled advantage to deliver
unparalleled results.”
Peter has 25 years’ experience in the
industry – starting his career in modules
construction for offshore oil projects
before moving to shipbuilding and then
returning to oil and gas-related projects.
His experience in senior management
roles with major EPC contractors
involved major projects he managed in
the region, including Oman, Kuwait and
July 2013 25
the Kingdom of Saudi Arabia, over the
past six years.
“It’s a great sense of accomplishment
to see a project through from frontend engineering and design (FEED) to
commissioning and operation.
Peter is responsible for the construction
of infrastructure to support initial
production facilities capable of
processing 300,000 barrels of oil per
day (BOPD), including the separation of
oil, gas and water.
hlgroup.com
26 AKHBAR ALDAR
“Like any
construction
project, there will
be challenges and
obstacles along
the way – it is
unavoidable when
you are working
in demanding
conditions with a
tight schedule and
tough logistical
considerations.”
HLG’s Iraq project is located on several
separate sites and has multiple 50,000
BOPD oil processing trains.
“Like any construction project, there will
be challenges and obstacles along the
way – it is unavoidable when you are
working in demanding conditions with
a tight schedule and tough logistical
considerations.”
HLG’s sub-contract is for the partial
engineering and construction of civil,
utility and infrastructure works, and
includes oil and water storage tanks,
gas compression, oil separation, utilities
and power generation, and establishing
the security perimeter.
Before team members are deployed on
site, they undertake various training to
ensure they not only fully understand
the project, its requirements and
constraints, but also that leading safety
and quality standards are embedded in
their thinking.
“On a project like this, which has so
many facets, hands-on involvement of
HABTOOR LEIGHTON GROUP
the management team is imperative.
We have full EPC responsibility and
need to ensure we have the right
people in the right roles to manage and
deliver multiple activities in parallel,
without compromising on safety or
quality.”
The success of the Group’s work on the
Iraq project will determine the success
of HLG being awarded other oil and
gas-related work in the region, and so
the team is ensuring the foundations of
HLG’s values and work ethic are firmly
established.
“Key to HLG’s success is early planning,
detailed definition of scope, and early
risk assessment.
“This, when done in collaboration with
the client, owner, vendors and subcontractors, ensures that as a team
we continue to address engineering,
design, planning, procurement and
construction matters as they arise.”
IN DEPTH
July 2013 27
IN DEPTH
Located in the middle of the bustling
Dubai International Finance Centre
(DIFC) sits the architecturally
impressive ‘Burj Daman’ project.
A STRIKING
DEVELOPMENT
IN DUBAI’S
BUSTLING DIFC
This striking, L-shaped, mixed-use
development comprises two building
of different heights that intersect and
partially overlap from the 20th-storey
on the first tower. The second tower,
which is 60-storey high, is composed of
two structures that are connected by a
series of steel link bridges.
Project Director Robert Marinelli shares
his views on this impressive structure.
Akhbar AlDar met with Project Director
Robert Marinelli to find out more about the
exciting features of Burj Daman.
“This is a structurally complex and
striking building that boasts a number
of special features, including housing
the DIFC’s first Mosque and the allglass entrance feature which, upon
completion, will be the largest of its type
in the world – standing at 14 metres high
and 24 metres long.”
HLG is delivering the project, which has a contract value of circa
AED900 million, for Daman Real Estate Capital Partners Ltd –
one of the UAE’s major real estate developers.
DIFC is described as a city within a
city that provides a complete range
of business and lifestyle facilities for
today’s professionals, including office
hlgroup.com
28 AKHBAR ALDAR
This is a structurally
complex and striking
building that boasts
a number of special
features
HABTOOR LEIGHTON GROUP
IN DEPTH
July 2013 29
“Burj Daman brings
together the most
sought-after lifestyle
aspects of DIFC in
one location – from
branded apartments
and penthouses
to grade-A office
accommodation,
leisure facilities and
retail spaces.”
spaces, retail outlets, restaurants, and
art galleries. And now, all are combined
into one, with hotels and residential
apartments exclusively linked and
provided for, via this project.
“Burj Daman brings together the most
sought-after lifestyle aspects of DIFC in
one location – from branded apartments
and penthouses to Grade-A office
accommodation, leisure facilities and
retail spaces.”
A fully air-conditioned pedestrian bridge
is planned to link the development
with DIFC – making Burj Daman the
only composite residential, hotel,
commercial, and retail offering in the
DIFC.
Upon completion, Burj Daman will also
house eight swimming pools, cafes and
restaurants, green areas sky gardens at
levels 33, 39 and 45, as well as 2,400
parking spaces – 900 of which will be
available via fully automated car parking.
“Testing and commissioning was
recently completed on the building’s
automated vehicle system, which is
designed to minimise the area and
volume required for parking vehicles.
This leading-edge system will transport
three cars at a time to and from parking
hlgroup.com
30 AKHBAR ALDAR
Burj Daman Overview
• 250 hotel guestrooms
• 50 branded apartments
• 4 penthouses
• 210 high-rise apartments
• 94 low-rise
apartments
• 22 studios apartments
• 3 levels of community
and residential
recreational facilities
• 51,927 square metres
of Grade A office
accommodation
• 2,275 square metres
of retail area
• 2,360 parking spaces
• 225-people capacity
mosque
• Soft/hard landscaping
works
• 6 podiums and 5 basements
• 8 swimming and leisure pools
spaces – thereby eliminating much of
the space wasted in conventional multistorey car parks.”
HLG’ scope of work includes completion
of all building structures, external works,
site facilities and landscaping. It also
includes fit-out works for the residential
apartments and common areas, façade
works and primary services to all
buildings.
“This is a great project and we’re
fortunate to have such a motivated and
versatile team who is committed to
ensuring we deliver the highest quality
outcome, while managing the project’s
constricted program and budget.”
HABTOOR LEIGHTON GROUP
The project’s first milestone, comprising
an 18-storey, 52,000 square metre shell
and core office building, with floor spans
of 110 metres long, was successfully
handed over to the Client on program
in November 2012. The next major
milestone is scheduled for completion
this month and includes the building’s
façade, with the final milestone for
building completion scheduled for
December 2013.
COMPANY NEWS
July 2013 31
HLG establishes a
new Pre-Contracts
Department
For many organisations a centralised business model means that the whole company
is geographically centralised. At HLG however, the centralised approach means that the
Group’s locally-based teams are stronger than ever – better supported by the UAE-based
central hub.
“We have a strong
team in place –
people who know
our business,
understand our
markets and are
able to identify
where the
opportunities
are for HLG.”
Headed up by Manuel Pardo, a civil
engineer and Master of geotechnics
and structures, HLG’s new PreContracts department is responsible
for coordinating all HLG’s pre-contract
activity across the regions where HLG
operates.
“The philosophy is simple. HLG’s local
teams have the relationships and
knowledge we need to achieve our new
work targets. This new structure enables
the Pre-Contracts team to provide an
improved level of support and focus our
resources on areas where we have the
greatest opportunity for success,” said
Mr Pardo.
HLG’s Pre-Contract department
will comprise three key functions:
Business Development, Estimating and
Engineering.
“We have a strong team in place
– people who know our business,
understand our markets and are able
to identify where the opportunities are
for HLG,” Mr Pardo added.
Elie Obeid will be responsible for
the Business Development function,
which will be responsible for
identifying opportunities in line with
HLG’s strategy, and for managing
relationships with the Group’s past,
current and potential future clients,
partners and consultants.
Jeremy Trubridge will manage the
Estimating function, which includes a
shared pool of resources that will be
tactically deployed depending on the
nature of the projects the Group is
pursuing.
The Engineering function will initially
be managed by Ian Kendall and will
provide engineering expertise on
HLG’s bids.
Manuel Pardo has 25 years experience in the development, proposal preparation,
design and construction of large highway, bridge, and tunnel projects in Europe,
Africa, North America and Asia – predominantly on design-build and private-publicpartnership projects. Joining HLG in 2013 as the Executive General Manager of Pre-Contracts, Manuel has
proven international management and contracting experience and the ability to direct
successful proposals and manage the construction of complex projects in challenging
environments.
Manuel’s most recent experience was the preparation of the winning proposal for
the $1.3 billion SR99 Bored Tunnel project for the Washington State Department
of Transportation; the expansion of Dragados’ presence into new markets across
America; and Dragados’ development in the Far East markets.
hlgroup.com
32 AKHBAR ALDAR
IN LINE WITH
OUR ETHICS
As HLG works towards its vision of becoming the leading diversified
international contractor in the Middle East and North Africa, it is important
we do so with the highest standards of ethical and professional behaviour.
Establishing an ethics program,
underpinned by a clear set of shared
beliefs, is a fundamental part of this.
To ensure the conduct and behaviour of
our people is better aligned, the Group
has recently revised its Core Values and
Code of Ethics, and is in the process of
rolling out a detailed Code of Conduct.
Together, we
must ensure that
any breaches of
the code are not
tolerated and
are reported for
further action.
HLG takes a zero-tolerance approach
to bribery and corruption with all
stakeholders, including our staff, clients,
partners, sub-contractors and suppliers.
HLG’s detailed Code of Conduct, which
will be released mid-2013, will apply to
everyone with whom HLG conducts its
business.
Together, we must ensure that any
breaches of the code are not tolerated
and reported for further action.
If you are aware of any potential breach
in HLG’s ethical guidelines listed above,
or have been approached by any of
our staff to participate in unethical,
inappropriate or illegal behaviour, please
contact our Ethics Hotline. All reporting
will be dealt with in full confidentiality.
By working together, in accordance with
HLG’s Code of Ethics, we can all achieve
greater success through a more ethical
and effective operation.
HABTOOR LEIGHTON GROUP
HLG’s new Code of Ethics expands on
our four Core Values of Integrity, Safety,
Success and Teamwork and ensures our
shared beliefs are incorporated within
basic guidelines designed to encourage
actions and behaviour that reflect
positively on our employees and our
organisation. These include:
1. Acting honestly and
with integrity
2.Supporting the safety
and wellbeing of
those under our care
3.Striving to provide
successful outcomes
4. Working together to
achieve a shared
vision
COMPANY NEWS
July 2013 33
Email: [email protected] | SMS: +971 (0)56 683 6060
HLG ETHICS HOTLINE
+971 (0)4 206 0606*
CALLS WILL BE TREATED IN THE STRICTEST CONFIDENCE
Calls from outside the UAE will be charged at international rates.
For more information contact your mobile provider.
hlgroup.com
34 AKHBAR ALDAR
LEIGHTON REPORTS
Q1 2013 NET PROFIT
OF aud$123 MILLION,
REAFFIRMS GUIDANCE
Leighton Holdings Limited announced Net Profit after Tax (NPAT)1 of
AUD$123 million for the first quarter of financial year 2013, compared
to a loss of AUD$80 million in the prior comparable period. Revenue was
AUD$5.4 billion, compared to AUD$5.1 billion in the prior comparable period.
Chief Executive Officer, Mr Hamish
Tyrwhitt, said that it was pleasing to
report a rise in NPAT margin in quarter
one, to 2.3 per cent compared to the full
year 2012 margin of 1.9 per cent.
“This result reflects the advantages of
the Group’s diverse business portfolio,
benefitting from both our geographic
spread and the range of sectors in
which we operate. It was delivered
against the backdrop of a challenging
macroeconomic environment especially
in contract mining and some adverse
weather conditions in Queensland and
Western Australia,” Mr Tyrwhitt said.
Hamish Tyrwhitt
Chief Executive Officer,
Leighton Holdings
“Our work in hand was AUD$42.2
billion, with over AUD$4 billion of work
awarded during the period. We are not
targeting top-line growth, rather we are
onboarding projects with good margins
as demonstrated by a closing project
margin-in-hand of over 10 per cent.
The net decline of AUD$1.3 billion from
December 2012 reflects this discipline
but also indicates a softening in the
overall level of contract awards in
construction and contract mining.
“During the quarter, we continued
our capital recycling initiatives by
reaching agreement for the sale of our
telecommunication infrastructure assets.
The sale will unlock an enterprise value
of around AUD$885 million and, through
retaining a 30 per cent share in the
joint venture, we will continue to have
ongoing exposure to this sector,”
Mr Tyrwhitt said.
HABTOOR LEIGHTON GROUP
The Group’s gearing2 increased from
35.0 per cent to 47.7 per cent in the
quarter, driven by the early payment
of the equity in BrisConnections and
the scheduled final dividend payment,
each of AUD$200 million, together
with seasonal deterioration in working
capital. It also reflects an increased level
of net project underclaims from both
scope growth and contract variations.
Mr Tyrwhitt said, “Management of
underclaims was noted as a key focus at
the time of our 2012 results. Importantly,
we have detailed plans in place to
reduce these underclaims and expect
resolution on a number of the claims
during the remainder of the year.
“Notwithstanding current market
conditions, we remain on track to deliver
a full year underlying NPAT within our
previous guidance range of AUD$520
to AUD$600 million and a gearing level
within the target band of 25 to 35 per
cent by year-end.
“The importance of our ‘stabilise,
rebase and grow’ strategy in today’s
challenging environment is self-evident.
Throughout the remainder of the year,
we will continue to rebuild our operating
model and progress net margin
expansion and cash flow initiatives, in
order to realise further improvements in
2014 and beyond. Rebased, we will have
the right platform to leverage longterm
growth domestically and internationally
and to deliver sustainable returns to our
shareholders,” Mr Tyrwhitt concluded.
GROUP NEWS
July 2013 35
“Notwithstanding current
market conditions, we remain
on track to deliver a full year
underlying NPAT within our
previous guidance range
of AUD$520 to AUD$600
million and a gearing level
within the target band of 25
to 35 per cent by year-end.
hlgroup.com
36 AKHBAR ALDAR
play video
Video courtesy of chevron
In-situ and pre-cast concrete on
the Gorgon Project Plant site
HABTOOR LEIGHTON GROUP
GROUP NEWS
July 2013 37
Developing
Australia’s oil
and gas
Leighton Contractors is undertaking two scopes of work on the
Chevron-operated Gorgon Project.
The Gorgon Project is developing
the Gorgon and Jansz-Io gas fields
located within the Greater Gorgon
area, between 130 and 200 kilometres
off the northwest coast of Western
Australia. It includes the construction of
a three-train, nominal 15 million tonnes
per annum (MTPA) liquefied natural gas
(LNG) facility on Barrow Island and a
domestic gas plant with the capacity to
provide 300 terajoules per day of gas
to Western Australia.
The Gorgon Project is one of the
world’s largest natural gas projects and
the largest single resource project in
Australia’s history.
The Gorgon Project
is one of the world’s
largest natural gas
projects and the largest
single resource project
in Australia’s history.
Barrow Island is classified as an “A”
Class Reserve – one of the most
protected classes of nature reserve.
An oil field has operated on the
island since 1967 and the island is
acknowledged world-wide as an
example of how the petroleum industry
and nature can successfully exist
together.
Leighton Contactors was awarded
contracts for the Gorgon Project in
2009, covering the LNG jetty and
marine structures, and the civil and
underground services packages.
The 2.1 kilometre LNG jetty and marine
structures scope of work is being
constructed in a consortium with Italian
oil and gas contractor, Saipem. The
works includes design, procurement,
construction and commissioning.
Works include the supply, fabrication
and installation of the jetty including
jetty topsides from the abutment to the
jetty head, mooring/breasting dolphins
and navigation aids. In addition,
Leighton is responsible for installing a
heavy lift facility and tug pens, parts of
an adjacent materials offloading facility.
The civil and undergrounds services
covers in-situ and precast concrete, as
well as underground services—including
drainage, piping and electrical and
instrumentation cabling for both the
LNG process trains and the offsite and
utilities areas.
The scope of the civil contract includes
1.4 million m3 of earthworks, 127,000 m3
of in-situ and 104,000 m3 of precast
concrete. For the underground services
including drainage, there’s 62 kilometres
of piping and 3,600 kilometres of
electrical and instrumentation cabling.
Leighton Contractors’ work-in-hand for
oil and gas projects in the Australian
region has now reached AUD$3.7
billion. Their most recently awarded oil
and gas project work includes building
the AUD$200 million Esso Highlands
office facilities in Papua New Guinea
and AUD$1.4 billion worth of work
for the INPEX Ichthys Project in the
Northern Territory.
Graeme Dunn, General Manager Oil and
Gas, said Leighton Contractors provides
end-to-end solutions for the oil and
gas sector: “We are a one-stop-shop
for oil and gas, delivering earthworks,
civils, marine facilities, SMP (structural,
mechanical, piping), buildings and
telecommunications.”
The Gorgon Project is operated by
an Australian subsidiary of Chevron
(47.3 percent interest), in joint venture
with the Australian subsidiaries of
ExxonMobil (25 percent), Shell (25
percent), Osaka Gas (1.25 percent),
Tokyo Gas (1 percent) and Chubu
Electric Power (0.417 percent).
hlgroup.com
CORPORATE OFFICE
Al Habtoor Leighton LLC
P.O. Box 10869, Dubai
United Arab Emirates
T: +971 4 285 7551
F: +971 4 285 7479
[email protected]