Kuwait has awarded contracts worth a reported $7.2 billion to five South Korean firms in regard to the development of two oil refineries as well as raising production levels.
The contracts, which stem from $12 billion in bids approved in February for the state-run company’s Clean Fuels Project, highlight efforts by South Korean builders to shore up margins via joint bids with other local or foreign firms for major overseas construction projects.
Korean companies are increasingly forming consortiums with established overseas companies and that is helping them to win better value contracts, said Yun Sok-mo, an analyst at Samsung Securities.
Overseas plant orders won by South Korean builders during the first quarter rose by 42.1 percent from a year ago, according to the Ministry of Trade, Industry and Energy in a report earlier this month.
The ministry said prospects for further growth in overseas orders looked good given expectations for continued global economic recovery and growing demand for energy-related work.
Daewoo Engineering & Construction Co Ltd said in statement on Monday that it won an order for the Mina Abdullah refinery in Kuwait as part of a joint venture with Hyundai Heavy Industries Co Ltd and Fluor Corp.
The order is worth $1.13 billion each for the three companies, according to Daewoo.
Samsung Engineering Co Ltd, in a regulatory filing on Monday, said it got a separate $1.62 billion order for the Mina Abdullah refinery as part of a joint venture with Petrofac Ltd and Chicago Bridge & Iron Company NV.
GS Engineering & Construction Corp and unlisted SK Engineering & Construction Co Ltd SKEC.UL also said they got an order for refinery work in Kuwait as part of a joint venture with Japan’s JGC Corp.
The third order, for the Mina Al-Ahmadi refinery, is worth around $1.66 billion for each of the three companies, according to GS Engineering and SK Engineering.
