Jacobs says clients unfazed by Keystone XL delay

Tue Nov 22, 2011 11:54am EST
 
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By Braden Reddall

(Reuters) - Jacobs Engineering Group Inc, a leading contractor in Canada's oil sands, sees the Keystone XL delay as a political decision, not technical, and expects the $7 billion pipeline will eventually be approved.

Chief Executive Craig Martin said he believes Jacobs clients in Canada will keep investing despite the setback for their ambitions to send more crude to Texas refineries.

"They're really starting to get what I would characterize as an Exxon-like attitude," Martin told analysts at a meeting in New York that was webcast. "They're in it for the long term," he said.

The U.S. State Department ordered that a new route be found for Keystone XL, delaying the project by more than a year.

Nebraska and TransCanada Corp agreed last week to find a new route for the pipeline, which would transport 700,000 barrels of crude daily, to steer clear of environmentally sensitive lands.

Martin said the delay might even create opportunities to build upgrades to partly refine more oil sands crude in Canada, where the major producers include Suncor Energy Inc, Canadian Natural Resources Ltd and Cenovus Energy.

As head of the second-largest publicly traded U.S. engineering group, after Fluor Corp, Martin said his strategy for competing with big rivals is to bid for any type of work, from a $50,000 project to one worth $5 million.

"We're willing to get in on the junky, dirty part of the food chain of projects," he said, adding that this ultimately could lead to winning the big deals.   Continued...