News Release October 28, 2013


Expansion of U.S. energy infrastructure abets globalization of Asian E&C companies

HOUSTON – Globalization of the energy engineering and construction (E&C) industry is occurring more quickly than many in the industry realize–led by growing influence of Chinese E&C firms–and oil and gas produced from shale and other low-permeability reservoirs has established the U.S. as the destination of choice for E&C companies seeking energy processing and infrastructure projects, according to responses to a real-time opinion survey of the
audience observing a panel-discussion at the 16th annual fall conference of the Rice Global Engineering & Construction Forum (RGF).

The theme of the RGF conference was Getting Ahead of the Curve: Adapting to our Industry’s Accelerating Pace of Change. Responses to survey questions from senior E&C managers and executives as they watched panelists discuss the accelerating pace of energy E&C projects in the U.S. indicated that the conference theme was well-chosen.

After listing a sample of energy E&C projects in the U.S. awarded to foreign firms, the panel moderator asked a series of questions that tested audience members knowledge of the global E&C industry.

  • When asked what percentage of revenue in the ENR Global Top 10 is attributable to U.S. companies, more than four of five respondents answered either 30 percent (46% of respondents) or 55 percent (36%). Only14 percent chose the correct answer: 5 percent.
  • When asked what percentage of revenue in the ENR Global Top 10 is attributable to Chinese companies, only one-fourth of respondents chose the correct answer: 60 percent. Two-thirds thought the correct answer was either 20 percent (30%) or 40 percent (37%).
  • By the time the panel moderator posed the third question, audience members were catching on. When asked how China Railway Group’s revenue compares with the top U.S. company in the ENR Global Top 10, 49 percent of respondents chose the correct answer: CRG revenue is three times that of the highest ranked U.S. company. Forty-two percent of respondents guessed that CRG revenue was twice that of the top U.S. firm in ENR’s rankings.

In commenting on results of the survey, Bill Wingate, RGF marketing committee chair and vice-president of oil and gas marketing and business development at SNC-Lavalin Inc., said the increasing presence of Asian E&C contractors in the U.S. is one of the most significant E&C trends indicated by the survey.

“A few years ago, we saw the presence and workload of Korean E&C firms increase in the U.S.,” Wingate said. “More recently we’ve seen Chinese contractors being awarded lump-sum turnkey contracts for significant process plant projects in Wyoming and Texas.”

Responses to other survey questions provided context for the high level of E&C project activity in the U.S.

  • Slightly more than half of respondents selected low-cost feedstock and energy as the primary drivers for new entry owners to invest in energy facilities in the U.S. Similarly, 60 percent of respondents chose the high level of project activity as the primary factor influencing new-entry E&C firms seeking to build their business in the U.S.
  • A strong majority of respondents (85%) indicated that new entry E&C firms were being attracted to the U.S. by all types of projects–including heavy civil projects, processing plants, power plants, and energy infrastructure–rather than processing plants exclusively.
  • More than two-thirds of respondents said the U.S. is the easiest place among developed countries with high levels of E&C activity in which to do E&C projects (43%), the easiest place in the world in which to work (15%), or about the same as Europe (11%). But 26 percent thought doing projects in the U.S. is more difficult than average.
  • Responding to a related question, about four of five respondents indicated the non-technical risks of carrying out an E&C project in the U.S., compared to other countries with high levels of E&C activity, is the lowest in the world (6%), relatively low (54%), or about the same as in Europe (19%).
  • U.S. E&C companies see foreign competitors as formidable new entrants on the U.S. E&C market. When asked what primary competitive advantage new-entry E&C firms bring to a new market, nearly half of respondents (46%) chose all of the possible answers offered: deep pockets of the parent, deep knowledge of global procurement, high-value engineering centers, and willingness to sustain losses to gain market share.

“E&C companies always go where the business is,” said Martin Van Sickels, RGF executive director and president of MVS Consulting L.L.C. “The competitive advantages of new-entry E&C companies are especially true for Asian E&Cs, which take a different view of the relationship between risk management and approaches to gaining market share.”

About the survey of attendees at the RGF’s 16th annual fall conference: The survey was conducted using hand-held response devices provided by Audience Response Systems, during a panel discussion entitled, “The Changing Face of North American E&C.”Moderator of the panel was Richard Westney, founder and chairman of Westney Consulting Group. Panelists were senior executives of leading E&C companies competing in the energy sector: Keith Clauss, president and chief executive of SK E&C; Mark Mallett, vice-president of operations and engineering at Freeport LNG; Keith Manning, executive vice-president of Zachry Holdings Inc.; and Mike McAtee, senior vice-president of BASF. The ARS technology enabled Westney to ask each question following a brief panel discussion, allow a few seconds for respondents to consider their answers before voting, and display a summary of audience responses immediately to the group. More than 100 attendees participated in the survey, but fewer responses were recorded on some questions.

Feedback from attendees indicated the panel discussion and audience survey was a winning combination. Nearly 90 percent of meeting-evaluation forms returned by attendees reported high degrees of satisfaction with the presentation. “I liked the use of polling questions,” one attendee evaluation said. “It kept me engaged, and I found it interesting to see the distribution of answers from the attendees.”

About the Rice Global Engineering & Construction Forum: The RGF is a voluntary academic-industry organization dedicated to stimulating original thinking, discussion, and resolution of the major economic, political, strategic and technological challenges and opportunities faced by global engineering and construction companies.

For more information about the RGF or this year’s survey of fall conference attendees, please contact: Martin Van Sickels, RGF executive director, at 281-370-0374 or; Mike Harrison, chair of the fall conference committee, at 713-562-7589 or; Tom Anderson, chair of RGF Board of Directors, 832-513-1968 or; or A. D. Koen, RGF media advisor, at 713-812-1623 or

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