Bloomberg News

Water Projects to Grow Faster Than Oil Business, Amec CEO Says

December 09, 2011

Dec. 8 (Bloomberg) -- Amec Plc, the U.K.-based oil and gas engineer, expects water projects to become its fastest-growing business as pressure on existing supplies forces investment in desalination and waste treatment.

“We anticipate that the water sector is going to grow much beyond the average rate of growth of any of the businesses,” Chief Executive Officer Samir Brikho said, estimating the water will expand as fast as 25 percent a year. “There are about 1.4 billion people without fresh water. Amec has been investing a lot of money.”

Amec’s mainstay oil and gas business will benefit from crude oil prices above $100 a barrel and growing commodity demand in emerging markets, Brikho said in an interview at the World Petroleum Congress in Doha, Qatar. The London-based company expects earnings per share to reach 100 pence by 2015 from 71.2 pence this year as margins on profits hold at about 9 percent, he said.

“Demand today is driven by Asia,” Brikho said. “We are now looking at how we are able to grow our business in Asia,” Latin America and the Middle East.

Amec is considering acquisitions, Brikho said. The company had about 430 million pounds ($675 million) in cash at the end of October, according to its presentation from Nov. 24. Amec will keep returning some cash to shareholders. The directors “don’t see why we should back hold back on dividends as long as we are making money,” he said, declining to comment on the size of future payments.

“We have a pipeline of acquisitions” and are examining plans to add “skills and talents in sub-sea engineering in the oil and gas business, underground mining,” water and nuclear support businesses, he said. “The primary use of our cash is going to be to do acquisitions.”

--Editors: Will Kennedy, Alastair Reed

To contact the reporters on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net;

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net;


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