James Prall, president and CEO of Colorado Industrial Construction Services Co. in Wheat Ridge, points to an area in Kurdistan in northern Iraq where his company is competing with two other firms to build a new oil refinery. The refinery, slated for completion in mid-2009, would increase Iraqi oil output by 20 percent. (Post / Lyn Alweis)
A small Wheat Ridge engineering firm is waiting to hear whether it will win a $750 million contract from the Iraq Oil Ministry to design and construct one of the first new refineries in that country in more than 30 years.
If Colorado Industrial Construction Services Co. is successful, it would create 250 new engineering jobs in Colorado and hire 1,500 construction workers in Iraq, president and chief executive James Prall said Wednesday.
CICSCO is competing for the job against two companies based outside the United States. Prall said he expects the Iraq Oil Ministry to make a decision soon.
Iraq has struggled to capitalize on its sizable oil reserves. The oil ministry has shed hundreds of employees suspected of selling fuel on the black market and has fought continuous attacks on fuel tankers and pipelines.
The Colorado firm, which employs 70 people, got this far through relationships in Iraq forged by a U.S. Army commander and a former U.S. ambassador to Bahrain.
The project, known as the Koya Refinery, would be built in Kuysanjaq, Iraq, roughly 60 miles northeast of Kirkuk, the center of oil fields in the country’s northern Kurdistan region. The refinery would be scheduled for completion in mid-2009.
Iraq needs the new refinery to reduce the $200 million it spends each month to import refined oil products to meet its own domestic and industrial needs, Prall said. The country operates at only half of its refining capacity of 700,000 barrels per day. The new refinery would handle 70,000 barrels daily, boosting Iraq’s refining by about 20 percent.
The bidding process for the three-year contract started 15 months ago and initially involved 17 companies. Three firms remain, including CICSCO. The other two finalists are OGI Group in Calgary, Canada, and DPS Bristol Ltd. in Bristol, England.
All three companies are working on other projects in Iraq and have partnered with Iraqi firms to complete construction.
“We’re not trying to take money and run away,” said Neil Young, managing director of DPS Bristol. “We form partnerships with local companies to create jobs in Iraq. When you do that well, you will have a very long-term relationship.”
“We are proud to be a part of the reconstruction of Iraq and are dedicated to the transfer of North American technology and innovation to the region’s gas sector,” OGI Group said in a statement. “Our group is bidding for major projects … including the Koya Refinery, as part of a consortium of both major international companies and local Iraqi businesses.”
Prall declined to name the Iraqi firm with which CICSCO has partnered but said it is headed by a man who earned a master’s degree in electrical engineering from North Carolina State University.
“Many of the Iraqis leading projects this big were educated in the United States and respect what we know how to do here,” Prall said.
Prall, 59, co-founded the privately held CICSCO in 1993 after helping to lead the engineering and construction division of Coors.
CICSCO, which counts Belgium Brewery and Gatorade among its customers, has handled projects for the biotechnology, food and beverage, petroleum and pharmaceutical industries. CICSCO developed business connections in Iraq thanks in large part to its vice president of marketing, Eryth Zecher, a U.S. Army commander who has served in Iraq on and off since the United States’ invasion in 2003. Zecher was unavailable for comment.
“She made a lot of friends over there, learned the culture and the business issues,” said Prall, who met Zecher while he served in the U.S. Army Reserves. He retired as a command sergeant major in 2000 after 34 years of service.
Republican Sam Zakhem, a former Colorado state senator who later was U.S. ambassador to Bahrain, was of significant help, Prall said.
“By awarding contracts like this, Iraq gets the best of both worlds,” Zakhem said in a statement. “American advanced technology, guidance and management designed to be built with local resources …”
Why would Iraq officials want to entrust such an important project to a relatively small and unknown firm such as CICSCO?
“The reason initially given to us when we started looking at this is that they didn’t want to put themselves in the position of doing business with companies that were bigger than the government and would tell the government how to do business,” Prall said. “They were looking for smaller, more flexible and more agile companies. That’s us.”
The Iraq refinery is relatively small in size and price, and scheduled for completion on a speedy timeline compared with refinery construction in North America, said Steve Douglas, spokesman for Suncor, which recently spent $400 million to upgrade its 90,000-barrel-per-day refinery in Commerce City.
If a refinery the size of the proposed Koya facility were built in North America, Douglas said it likely would cost more than $1 billion and take almost a decade to complete, in large part because of government regulations and permitting.
“We are held to certain standards in North America that might not prevail in other parts of the world,” Douglas said.
Staff writer Christine Tatum can be reached at 303-954-1503 or ctatum@denverpost.com
The Industrial Group, Inc.The Industrial Group is a full-service engineering, procurement, construction and construction management (EPC/CM) company servicing a wide range of industrial clients and industries worldwide. Our primary objective is to identify, develop, execute, deliver and maintain projects that are on time, within budget, meet the highest safety standards and meet or surpass all regulatory requirements. To deliver these premier services, The Industrial Group establishes creative, well-trained project teams supported by company state-of-the-art information technology systems, communications and management infrastructure. |
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