WorleyParsons CEO Sees Energy Transition Fueling Growth

By Rhiannon Hoyle

SYDNEY--WorleyParsons Ltd. (WOR.AU) wants to tap into fast-changing energy markets for its next leg of growth, betting a transition in world energy supplies offers a booming pipeline of work for the engineering and consulting company.

The push toward a lower-carbon economy will be a material driver of earnings and revenue for Australia-listed WorleyParsons, which in April acquired the energy, chemicals and resources arm of Texas-based Jacobs Engineering Group Inc. (JEC) for $3.2 billion, Chief Executive Andrew Wood said.

"Whichever scenario you believe, energy is going to be changing dramatically," Mr. Wood said in an interview, and huge investment in new projects will consequently be required.

"It's probably at a scale the sector has never seen before," he said.

Earlier this year, BP PLC (BP.LN) projected the vast majority of global energy supply growth would come from renewables and natural gas over the next two decades but said steep investment in oil exploration and production would also be needed to meet crude demand.

That projection "brings into sharp focus just how fast the world's energy systems are changing," BP Chief Executive Bob Dudley said at the time.

"We are bullish on the opportunities" coming from that, WorleyParsons's Mr. Wood said.

On Wednesday, WorleyParsons upgraded the expected cost benefits following its acquisition of the Jacobs unit to 150 million Australian dollars (US$105 million) from a prior forecast of A$130 million. Realizing those benefits are the focus, rather than any further deals, Mr. Wood said.

While the acquisition has rapidly expanded the company's American footprint, it isn't considering a local listing. That would add a layer of complexity that is unnecessary, given that the Australian market "has served us very well" for capital and that U.S. investors can invest through American depositary receipts.

The Sydney-based company generates 55% of its revenue in the Americas. It also has roughly 13,500 U.S. employees, almost 10,000 more than before the acquisition.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

June 05, 2019 04:17 ET (08:17 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.