Jacobs and Fortum Execute Letter of Intent

Jacobs Engineering Group and Fortum Oil and Gas have executed a letter of intent that enables Jacobs to purchase an ownership position in Fortum's Neste Engineering operations.

Terms of the deal were not disclosed; due diligence activities are ongoing.

Fortum is a leading energy company in the Nordic countries and the other parts of the Baltic Rim. It is listed at the Helsinki Stock Exchange in Finland. Fortum Oil and Gas Oy focuses on developing and producing cleaner petroleum products and runs two refineries with a combined annual capacity of 14 million tons (280,000 bpd). It is one of the largest producers of refined petroleum products in Scandinavia. Neste Engineering Oy, based in the Kilpilahti Industrial Area near Porvoo, Finland, is the largest engineering contractor in Finland serving the oil refining, petrochemicals, and chemicals markets. It has a permanent employee base of approximately 400 people and annual revenues of $60 million.

Jacobs, based in Pasadena, California, USA, is a leading engineering contractor with major operations across the United States and Europe. For 2003, Jacobs announced revenues of $4.6 billion and record profits of $128 million. Approximately 5,500 of its 35,000 employees are located in Europe, including operations in the Netherlands, Belgium, Germany, France, Italy, the United Kingdom, Ireland, Poland, Spain, and Sweden.

In making this joint announcement, Mr. Risto Rinne, President of Fortum Oil and Gas, commented, "We have entered into this arrangement to guarantee the availability of high quality engineering services for Fortum Oil and Gas in the long run. Neste Engineering is providing the services today and also in the future. Jacobs has been selected as a partner due to their established market position, which offers joint growth opportunities for Jacobs and Neste Engineering."

Jacobs Chief Executive Officer Noel Watson said, "We see the Neste Engineering team as a very capable engineering organization and an interesting complement to our existing capabilities in Europe and North America. We have solid refinery engineering skills across our existing operations, but Neste's high-end refinery engineering skills appear to be unique in the business. Even though we have opted to take a minority position in Neste Engineering, we expect to make their skills available to our clients globally."

Both executives noted that they intend to brand the existing Neste Engineering operation as a joint Neste/Jacobs company.