By working to reduce customers' operating costs and providing a variety of services, Jacobs adds value to clients' operations.

Oil sands and their owner companies currently dominate the headlines in Alberta, Canada – and for good reason. Estimated planned capital investment in the province of Alberta is $178 billion, of which more than $103 billion is related to oil sands. There is always news about enormous projects being executed at an ever-growing rate. The often less-publicized players are the engineering, procurement and construction (EPC) firms that work for the oil companies.

Changes come rapidly with this kind of growth; convergence, competition and globalization continuously alter the playing field. Significant increases in market demands, heightened competition from mergers and consolidations and the implementation of clean fuels requirements have created challenges within the industry. Regardless of these challenges, Jacobs is confident it can meet clients' needs.
"Owners need EPC companies to provide predictable results, no matter what the market looks like," says Chip Mitchell, group vice president, western region, based in Calgary, Alberta. "Our clients' careers depend on our performance and our ability to deliver real, differentiated value to provide them with a competitive edge." As an illustration of this, Jacobs has documented more than $1.6 billion in bottom-line savings in the past nine months.

Mitchell explains he has worked in the EPC industry for more than 30 years and understands Canadian oil sands owners' needs today. "Hot market needs are similar to cold market needs – clients want predictable outcomes that make their investment strategies come to life. We achieve this by being a full lifecycle business partner who brings global best practices and the broadest depth and breadth of services available from a single contractor," he says. "Hot markets, however, require additional global resources and global sourcing of materials. For one client we are doing work in six different offices all coordinated from Calgary. This allows our clients access to the best personnel available in the global marketplace and makes performing mega-projects a reality."

Jacobs has operated in the Calgary market since 1966, providing both EPC and industrial services. Its Calgary office is a hydrocarbon processing center of excellence for the company, and is involved in all aspects of design, construction, operations and maintenance for heavy oil facilities, upgraders, refineries, chemical plants, fertilizer plants and gas plants.

The company's EPC services include feasibility studies, conceptual design and front-end engineering, detailed design, commissioning, start-up, plant maintenance and long-term support. It is focused on cradle-to-grave lifecycle services for heavy oil production facilities in Canada, with a leadership role in some of the largest heavy oil projects in the world. Jacobs provides lifecycle maintenance services for most of these world-class facilities with more than 20 industrial sites across Canada, from British Columbia to Nova Scotia. This breadth and depth of geographies allows Jacobs to access craft resources Canada-wide to safely staff turnarounds and construction projects that routinely exceed 2,000 workers at a single site.

Jacobs has been providing industrial services in Canada for more than 50 years and has completed lifecycle projects by providing a suite of services for a single client. Over a five-year period, the company has completed an average of more than 9 million craft hours annually on these activities for refineries, heavy oil upgraders, oil sands extraction plants and petrochemical, chemical, natural gas and thermal power plants. In the Fort McMurray, Alberta, area, Jacobs has completed more than 10 million craft work hours without a lost-time incident.

"We are focused today on achieving operational excellence for our clients," says Doug Gerrits, general manager of maintenance. "We are finding improved efficiencies through better owner/contractor planning coordination, which improves craft productivity resulting in reduced time to complete tasks. We also look for opportunities to combine our maintenance knowledge of our clients' facilities with Jacobs' engineering capability to provide solutions that reduce or even eliminate chronic maintenance expenditures."

"Hard to say it better than this: safety, quality and timeliness," says Mark Hamlyn, Suncor area maintenance manager, of his experience working with Jacobs. "A great success, excellent work and superb coordination, cooperation and assistance from operations. Greatly appreciated."

In addition to its EPC strengths in heavy oil, Jacobs is a leader in providing sulfur removal and natural gas production facility solutions. It recently designed a 4-billion-cubic-foot straddle plant, the largest in the world. The firm documented more than $200 million in savings for this client by eliminating an entire gas train without loss of throughput. Jacobs also has designed 47 percent of Alberta's sulfur recovery capacity and is a world leader in the provision of licensed sulfur technology, totaling in excess of 300 installations.

Through its internal construction management and construction organizations, Jacobs has access to global construction resources to support constructability, modularization, estimate input/data validation, construction planning and execution.

Doing the Right Projects Right
Jacobs understands that in a market with seemingly unlimited projects, clients face a tough decision on what projects get done and which go on the shelf. By focusing on core clients, Jacobs creates trust through good work done consistently. With this foundation, Jacobs can act as a business partner with clients to jointly define and prioritize client investment options to high-grade project options – normally those that will yield the greatest return with the least risk. Then, after working with clients to define precisely the scope and objectives for a screened project using a disciplined EPC work process, Jacobs proceeds to "Do the Right Projects Right."

This philosophy, the company explains, enables Jacobs to provide clients with the greatest value and effective use of capital through involvement in the feasibility and conceptual phases of projects, ensuring the client is selecting the right projects to design and construct. In the latter phases of the project, the focus shifts from process design innovation to continuing cost savings through efficient EPC execution and performing the right projects the correct way. Employee involvement, communication and measurement are keys to the EPC work process and provide the predictable results that clients need, the company says.

Jacobs organizes and manages projects of all sizes from inception through execution to start-up – maintaining the flexibility to tailor services to the specific requirements of individual projects and clients. Jacobs customizes its EPC work process to fit each client's needs, with smaller projects using streamlined versions.

"At all levels, success has been the result of our adherence to a proven EPC work process and the client value and quality this discipline delivers," Mitchell says. "My minimum expectation is that we will delight the client by reducing costs by 10 percent using our value-engineering program."

A focus on value and quality ensures the facilities Jacobs builds run efficiently. Total quality management is the basis of Jacobs' cultural process for enhancing its attention to continuous improvement of the quality and performance of all services provided.

Global Access to Expertise
According to most industry sources, a shortage of labor is affecting most sectors of the Alberta oil industry. These shortages include professionals in all sectors as well as craft workers in most trades. To meet this challenge, Jacobs implements creative solutions that now have become proven approaches as clients expand their borders.

To access the required resources to meet clients' needs, Jacobs uses "boundaryless behavior" coupled with advanced IT systems to make its collection of hydrocarbon offices work together seamlessly. In Alberta, for example, when Jacobs combines the resources of Calgary, Houston and Mumbai, it brings a resource base of 6,000 professionals to bear for a single client. "When we workshare a typical project with our Mumbai, India-office, we significantly reduce client costs on each hour shared," says Ralph Mailer, manager of engineering.

"With the size of projects we're doing today, these savings can exceed $5 to 10 million."

Similarly, the company says, construction craft needs in Fort McMurray have been reduced in both work force needs and cost by using off-site construction or "modularization."
By building complete, truck-shippable modules, a plant can be constructed more efficiently in an Edmonton shop under controlled conditions rather than "stick-built" onsite under harsher, less-efficient conditions. Jacobs says the productivity and cost savings of doing the same project in a modular fashion in Edmonton is up to half the labor cost of constructing the same facility "stick-built" in Fort McMurray.

Strategies are changing to complete projects and Jacobs says it is no stranger to the changes. Taking construction work offsite, drawing on overseas design centers and taking advantage of multi-office execution expertise allows Jacobs to supplement local talent with other resources through an approach without boundaries.

The company explains its standardized work procedures and virtual office platforms help create a cohesive global work environment and allow utilization of talent in other offices.
Jacobs uses tools that enhance communications, data distribution and collaboration for project team members and also allow clients timely access to project information. This shortens the design review cycles and therefore reduces project execution time. By effectively using these tools, the company says, each team member can find the data required with minimum effort, and project teams and clients can share information and work easily across multiple design sites.

Through its systems capabilities, engineers across the globe can share information. The system reloads six times an hour, constantly updating work and making it ideal for transferring documents and collaborating with employees thousands of miles away.

'We Will Not Compromise Safety'
Jacobs stresses people are its "greatest asset," and says this core value of the company is the catalyst for its health, safety and environment (HSE) culture.
"We take great pride in our passion for HSE and our achievements in recent years with respect to protecting the health and well-being of our employees, our clients' employees and the public at large," Mitchell says. "This is one area where we cannot and will not compromise."

Jacobs' overall goal is to be "incident and injury free," both onsite and in its offices. The company says the approach is a behavioral one, which instills a supporting culture throughout project teams. This is manifested in small ways such as "safety moments" to kick off all daily, weekly and monthly internal and external meetings at all sites and offices. It is also reinforced through a comprehensive HSE program that applies to all areas of the organization.

In achieving its exemplary safety record, Jacobs says it continuously monitors the effectiveness of its safety process and compliance with safety procedures. The firm reviews and enhances its HSE programs regularly to increase the awareness of employees and maintain regulatory compliance, choosing not to wait for regulations to come into effect before reacting.

The company explains that its safety program is the foundation for achieving continuous improvement in safety performance, and it's working. Jacobs recently completed 10 million work hours on one client's site without a single lost-time incident. On a project near Edmonton, a client acknowledged Jacobs' success in safety with its President's Award, which recognizes outstanding safety performance. The company says this is "an enormous achievement considering the small site, congested work area, heavy lifts and presence of multiple contractors."

'Relationship-Based' Values
Jacobs says its first core value – being a relationship-based company – is a fundamental business strategy. The company focuses on "forging strong, long-term relationships with clients" because the company considers sound client relationships to be the most important contributor to success – a success built on partnering with clients to trust one another, to work together honestly, and to see and solve the business challenges of the future. By aligning with core clients, Jacobs is able to identify and then meet the growing list of owner challenges.

"We view Jacobs as one of the best-managed companies in the EPC industry and we believe the company's relationship-based, low-risk approach to the business has been a key to its success," says Richard F. Rossi of ING Barings.

Approximately 65 percent of Jacobs' work is derived from long-term partnerships and alliances, with 80 percent of Jacobs' work coming from repeat business. This differs dramatically from the conventional industry model that relies heavily on discrete and transactional projects.

Working in tandem with its clients rather than as adversaries, the company says, this intimacy model supports solid business decision-making – choices that always place the clients' best interests first. This includes Jacobs taking the lead to cut costs and to eliminate uneconomic projects.

Jacobs explains it has created a corporate culture of saving clients money. Through a proven program, the company says it can foster an environment of constant improvement and recognition for cost-cutting efforts. In the first nine months of its fiscal year, globally Jacobs has saved its clients more than $1.6 billion.

An environment of continual improvement characterizes the company. With a disciplined "lessons-learned" strategy, employees are able to continually improve the quality of work performed by ensuring that lessons are learned once, used to improve work processes, captured and then made readily available for use on future projects.

Jacobs says the lessons-learned initiative increases customer value delivery and fosters a unique learning environment. Use of lessons also improves performance, eliminates rework, increases productivity and, ultimately, saves clients money, the company says.

Murray Nelson, vice president of Firebag Projects for Suncor, says, "The relationship with our contractors of choice, which include Jacobs, and the long-term development plans for Firebag offer a unique opportunity to create a project environment and organization that promotes Firebag's visions and values in safety, positive culture, superior technology and best-in-class execution."

'Competition is Fierce'
"The boom won't last forever," Mitchell says. "We have to position ourselves to maintain the plants that are already constructed and we do that through forging those relationships now, the relationships that will last far beyond the current boom."

It takes discipline and commitment to processes and principles to create a company with growth like Jacobs, the firm says. As one of the most highly respected companies in the business – ranked as the No. 1 engineering firm by Fortune in 2006 – Jacobs says there is immense pressure to perform.

"Competition is fierce in this industry and margins are low, forcing every player to find a differentiator," Mitchell says. "Quality at low cost is hard to do, but Jacobs continues to find a way."

The firm says the success of a company's business model can be measured in many ways; sustained growth is one very telling yardstick. Jacobs' net income has grown substantially since 1988. The company's ability to grow its business at this steady pace stems from a combination of merger and acquisition activity, as well as continued improvement of market share in the diversified sectors it serves. With its strategic diversification, Jacobs believes its long-stated growth objective of 15 percent per year at the bottom line is realistic.

"Our company's future depends on happy clients today and tomorrow," Mitchell explains. "We are up to this challenge."