Offshore Construction - Marine Technology Society

KIEWIT OFFSHORE SERVICES
MTS Outlook Conference | March 24, 2016
Kiewit Corporation
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Outline
• Kiewit Brief
• Market - Local
• Technological Developments
• Personnel / Training Needs
• Threats to Offshore
Kiewit Corporation
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Peter Kiewit Sons’, Inc.
• One of North America’s largest and
most successful contractors
• Founded in 1884 in Omaha, Nebraska
• Owned entirely by active employees
• Financially strong and stable
• PKS backlog exceeding $19 billion
• Highly diversified and
de-centralized
Omaha, Nebraska
Kiewit Corporation
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Kiewit Presence
District Offices
Area Offices
Mining Operations
Kiewit Corporation
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Kiewit Operating Groups
KIEWIT CORPORATION
Bruce Grewcock, President & CEO
KIEWIT INFRASTRUCTURE GROUP
KIEWIT ENERGY GROUP
KIEWIT BUILDING GROUP
WESTERN
REGION
CENTRAL
REGION
EASTERN
REGION
OIL, GAS & CHEMICAL
BUILDING
KIEWIT BRIDGE
& MARINE
CENTRAL
EASTERN
EASTERN CANADA
MEC INDUSTRIAL
NORTHERN
CALIFORNIA
SOUTHERN
CALIFORNIA
KIEWIT
OFFSHORE
SERVICES
TIC DISTRICT
T.E. IBBERSON
NEWFOUNDLAND
OPERATIONS
MEC
TRANSPORTATION
GANOTEC EAST
SOUTH CENTRAL
SOUTHEAST
WESTERN CANADA
KIEWIT
ENERGY US
UNDERGROUND
NORTHWEST
SOUTHWEST
Kiewit Corporation
POWER
KIEWIT POWER
CONSTRUCTORS
TIC SOUTHERN
KIEWIT MINING GROUP
MINING
BUILDING
MINING DISTRICT
SPRINKLERS
KIEWIT
ENGINEERING &
DESIGN
GANOTEC WEST
CHERNE
CONTRACTING
AUSTRALIA
OPERATIONS
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Kiewit Offshore Services, Ltd.
• Fabricating in Corpus Christi, TX since 1984
• Kiewit has been part of local companies known as:
1984 - 1991
Kiewit Corporation
1991 - 2000
2000-Current
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Market
• 2015 - Deepwater production up and oil prices continued to plummet
Source: IHS, Feb 2016
Kiewit Corporation
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Market
Kiewit Corporation
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Market - Local
Specific to Fabrication…
• Lack of available capital could push projects even further to the right
• Many operators in suspension mode or a “slow walk”
• Diminished fabrication capacity in Gulf Coast Region
• Two remaining yards in US GOM capable of fabricating large offshore
platforms
• Limited number of opportunities in deepwater
• Fewer operators due to high cost of development and ever-increasing
regulatory oversight
• Projects are large-scale and therefore higher risk of actual development
• Asian market hungry for GOM projects
• Operators driven to lower costs
Kiewit Corporation
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Financial / Cost Trends
• Deflationary costs from all markets has helped lower the overall
development cost
• Steel, a main driver in deepwater projects, isn’t expected to increase
until 2025
• Supports large scale future projects in Brazil & the US GoM
Source: IHS, February 2016
Kiewit Corporation
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Personnel Trends - General
• Small candidate pool for fabrication market
• Overcorrection before the next up cycle
• Millennials will be the largest demographic in US (1 in 3 of all working
age people)
• Knowledge gap and lack of mid career personnel
Dejavu All Over Again
Source: Rostand, 2013
Kiewit Corporation
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Personnel Trends - Local
• KOS provides training programs for all major crafts:
• Structural Fitting, Pipe Fitting, Welding, Painting
• Focus on Safety, Quality, Productivity
• Program formalized in 2013 for all crafts, fully funded by KOS
• Since 2013, trained 600 welders, 290 pipe fitters, 425 structural fitters,
and 70 scaffold builders
• Ensures training focused on offshore fabrication specifics
• Benefits to local community
Kiewit Corporation
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Technology Trends
• Operators looking for low cost solutions (Design 1, build many)
• Use of more subsea process equipment (smaller topsides)
• Wider use of robotics and automation
• Implementation of advanced software for fabrication
• Different approach to project execution - Differentiator
Kiewit Corporation
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Major Threats to Offshore
• Regulatory issues in the US
• Lack of available capital for mega projects
• Availability of qualified engineers in the marketplace to support
future business – lack of gray hair
• Opportunities waning due to:
• Gulf of Mexico shown to be a mature province
• Fewer operators participating in deepwater offshore
• Projects continue to get larger (offset by attempts to develop fields
using smaller platforms)
• Foreign competition expected to take market share (China, Singapore,
Korea)
Kiewit Corporation
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Kiewit Corporation
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