Bechtel has decided to make a significant change in its structure. Basically, beginning on the first of the year it has altered its business matrix from a regional to an industry focus. Previously, Bechtel looked to working and building its markets within regions. The new direction is to organize around industries and to develop them globally rather than regionally.

Accordingly, Bechtel's Global Business Units will be: Pipeline and Mining & Metals; Bechtel Systems and Infrastructure, including Bechtel National; Telecommunications & Industrial and Bechtel Infrastructure; Petroleum & Chemical; Fossil Power and Nuclear Power; and Infrastructure, which includes rail, water and aviation. The heads of these GBUs will be responsible for their GBU profits and losses. Scott Ogilvie is the president of Bechtel's Fossil Power and Nuclear Power GBU with full responsibility for its success deriving from all of its projects around the world. His headquarters will be in Frederick, Maryland.

Ogilvie grew up in New Jersey and was trained as an engineer at Rutgers University. He joined Bechtel in 1976 and has worked with them ever since. He has always been on the power side of the company. He has worked as a planner, lead field cost engineer, cost and schedule supervisor, construction coordinator, manager of management information, business development manager and project manager in the U.S., as well as the head of Asia/Pacific fossil power in the 1990s.

By last year Bechtel felt it had done about as much as it could with the regional focus, having penetrated markets and made strong contacts. It also felt that it needed to change with the times and that its customers would respond better to the new structure. This was because, as Riley Bechtel wrote in a recent internal memo, "Technology, our markets, and the political and economic landscape of the world have changed significantly in the last five years. [These and other reasons] require us to put increased emphasis on portfolio management, be more selective in the projects we pursue, and manage our financial and human resources more effectively on a global basis."

Says Ogilvie, "We found the regional structure very successful. Now what we are doing is strengthening the business units and making them more global and more flexible as well as more accountable for the bottom line. It aligns us with our customers who are more and more rapidly crossing regional boundaries. They are making the transition to a more global approach, and we want to make that move with them."

Bechtel will still have regional general managers within a GBU who are reportable to the GBU president. It will also have a regional president in each of a half dozen regions, senior executives who will operate outside the GBUs but work to facilitate and coordinate Bechtel projects within the region.

Ogilvie reports that about a quarter of his GBU's revenue is nuclear, which includes steam generator replacements, maintenance, modification, decontamination and decommissioning, and new nuclear generation. Thus, three quarters of current revenues is coming from fossil fuel projects. About one-third of CY2000 fossil awards originated in the U.S. For nuclear, the ratio was reversed - about two thirds of new nuclear work originated in the U.S. "I expect that we'll pick up more fossil work in the U. S. over the next two years," Ogilvie says, "so that the ratio over 2001-02 will be more like 50-50. For nuclear, we expect no change in the mix of U.S./overseas."

Ogilvie told World Cogeneration that he thought the Asia fiscal crisis was resolving itself more slowly than many experts had expected but that improvement was at least steady and would increase demand. He thought an interesting market was Brazil, where a growing population and industrialization, along with declining power from hydro plants owing to drought, would create new markets and demands. He believes that Mexico will need more power and that it has created a good IPP program using outside financing and contractors. He said that Bechtel had participated in several projects in this program, which it considers exceptionally successful.

"In addition, Europe will continue to deregulate," Ogilvie said. "The UK has good opportunities, as does Germany, and Bechtel has just started work on 4,000 megawatts of powerplants in Turkey that is very important to us. In fact, we are on the winning Intergen-Enka team for the first IPP program in that country."

Ogilvie reported that Bechtel's PowerLine, the effort to create model plants that can be assembled anywhere in the world, last year developed two new models, one for super-critical coal firing and one for natural gas. Ogilvie believes coal has a good future, if for no other reason than to increase the fuel mix in regions and temper the price swings resulting from gyrating natural gas costs. "Coal plants are much cleaner than even a few years ago, and continue to get cleaner. I think coal has a real place in our future markets and any owner should include it as part of its portfolio."

Asked to peer into his crystal ball, Ogilvie says he believes speed to market is going to be particularly important, that is, satisfying the owner's need by building in a timely manner but also delivering a plant that is reliable. "In addition, environmental requirements will tighten, and so new units will have to be increasingly cleaner," he says. "There will be a greater diversity of fuels as measured by new orders over the next two to three years. We'll see more coal and waste fuels. There may also be one new nuclear plant in the U.S.

"As to deregulation, it will continue, with some fits and starts. Merchant supply plants will come on-line in order to meet demand. I believe you'll see efficient markets develop in the next few years. There will be a true merchant plant arena with free markets in supply and demand."