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"On the instruction of our US head office we have taken on a very expensive head hunter to find us four Project Managers and they have not produced a single suitable candidate." (Client Testimonial - after recruiting from us two of four candidates found and presented on a contingency basis)

ROD DEAN'S 2006 REVIEW

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E & C Hydrocarbon Review - The Global view from Europe. Looking back on 2006 & ahead to 2007.

In spite of this setback both European Offices remain full of work and progressing on all fronts. work sharing has been successfully integrated across all offices and Fluor staff are putting together integrated teams on a global basis for many projects. From the Camberley office there are projects in execution for Kazakhstan, Kuwait, Sakhalin most of which are in the construction phase. Recent project awards in Saudi Arabia (the huge Kayam Project are a sign of the bullish conditions in the Middle Eastern market places is the Habshan project.

Engineering on the Kayam UDO facilities began in July 2006 and will continue through 2008. Construction is slated to begin in February 2007 with a targeted completion of December 2009. Peak engineering employment is anticipated at 1,000 employees with peak construction employment of 12,000. Fluor offices in Camberley, U.K.; Houston, Texas; Manila, Philippines; and Saudi Arabia will be involved in the project, Coupled with the Habshan project in Abu Dhabi these projects give the Camberley office a solid backlog.

I have to say I am surprised that both Fluor and FW take on these large O & U projects in the Middle East - base load work I suppose (+ 1 million hours) and are linked to the FEED / PMC projects. So however there can be no doubt that Fluor has recovered their old 'pre eminence' in the Middle East and will remain as one of the major global E & C companies - there are some major refinery expansions in the USA (virtual new grass roots refineries) and with Whiting already awarded and a possibly another slated for Fluor the only doubt is will the projects ultimately proceed into the EPCM phase.

Jacobs reported record net earnings of $196.9mn, or $3.27 per diluted share, on revenues of $7.4bn for its fiscal year ended September 30, 2006. This compares to net earnings of $131.6m, or $2.24 per diluted share, on revenues of $5.6bn for fiscal 2005. Net earnings for the fourth quarter and fiscal year 2006 include a net, after-tax benefit of $3.1m, or $0.05 per share, representing the favourable settlement of a matter with the U.S. Internal Revenue Service ("IRS"), off-set in part by provisions recorded for certain other income tax exposures. The effects of the settlement and other income tax exposures on the elements of the income statement include an increase in pre-tax interest income of $3.3m, and a $1.5m net reduction in the Company's income tax provision.

Jacobs also announced backlog totalling $9.8bn at September 30, 2005, including a technical professional services component of $5.2bn. This compares to total backlog and technical professional services backlog of $8.6bn and $4.3bn, respectively, at September 30, 2006. Commenting on the results for year, Jacobs President and CEO Craig L. Martin stated, "Clearly we had a strong quarter, capping a good year. Earnings, sales, and backlog are at record levels. Our customers are continuing to invest, so we expect to see growth continuing throughout FY 2007." Also commenting on the results for the year and on the Company's earnings outlook for fiscal 2007, Jacobs Chief Financial Officer John W. Prosser, Jr. stated, "The outlook for 2007 should continue to track above our target 15% average growth with earnings per share between $3.75 and $4.05."

Jacobs continue to go from strength to strength in Europe - their strategy of focusing on major clients from regional offices with a few hub offices and the, but the focus is now clearly Hydrocarbons to fill the gap and given the forecast growth rate this probably the way forward. We are already seeing the fruit of their planning with some recent wins in the UK & European Refining sectors including substantial refining and chemical contracts in mainland Europe.

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