Bechtel to manage restoration of Kuwait oil facilities WAR IN THE GULF

February 28, 1991|By Graeme Browning

San Francisco-based Bechtel Group Inc. appears to be the biggest winner so far among U.S. companies scrambling for a chunk of the multibillion-dollar reconstruction effort in Kuwait.

Bechtel, a privately owned engineering and construction company that is one of the largest companies of its kind in the world, has a letter of intent to manage efforts by Kuwait Petroleum Co. to restore its oil facilities, company spokesman Larry Miller said yesterday.

Bechtel declines to put a public price tag on its services, but oil industry experts, in a report in the San Francisco Chronicle, estimated the value of restoring Kuwait's oil, natural gas and petrochemical complexes at $10 billion.

A high-ranking Bechtel executive, however, said the cost could be much more.

A bulk liquefied-petroleum-gas facility that Bechtel constructed for the Kuwait Petroleum Co. from 1960 to 1962 cost $1 billion and is now worth $3 billion, said the executive, who asked not to be identified because he was not authorized to speak for the company.

"For everything they're talking about repairing now, it could cost $20 or $30 billion by the time the project's finished," he said.

Bechtel will help the Kuwaitis assess how much damage was done to their oil fields when Iraqi occupiers set hundreds of oil wells afire and will design engineering plans, purchase materials and oversee the work force necessary to repair the damage, Mr. Miller said.

The company also has begun installing emergency water pipelines that will run from the Persian Gulf to the Kuwaiti oil fields to provide water for Red Adair, a renowned fighter of oil-field fires, to use in putting out the oil fires set by the retreating Iraqis, Mr. Miller said.

Bechtel already has assembled 130 employees in its London office to begin developing repair plans, he said.

In addition, the company expects to be managing about 5,600 employees, subcontractors and Kuwaiti oil workers in the fields when the project gets under way.

But the senior executive said the project probably will mean more prestige than profit for Bechtel.

"In this business, you make your profit in places where you provide the manpower. Here, we'll probably have only 100 or so of our own people supervising 5,000 of somebody else's," he said.

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