BRIEF-Iraq's Basra oil Co. takes over Oxy's stake in Zubair oilfield - Basra Oil
* Basra Oil director general Hayyan Abdul Ghani tells Reuters
* E.ON, EnBW hammered by German decision to exit nuclear
* But cashing in on new expertise in closing down plants
* Both have won dismantling consulting contracts abroad
* Over third of global nuclear capacity set to be retired
By Christoph Steitz
FRANKFURT, May 9 Energy groups E.ON and EnBW are tearing down their nuclear plants at massive cost following Germany's decision to abandon nuclear power by 2022, but they are seeking to turn a burden into business by exporting their newfound dismantling skills.
Germany is the only country in the world to dump the technology as a direct consequence of Japan's Fukushima disaster in 2011, a decision that came as a major blow to the two energy firms which owned most of Germany's 17 operational nuclear stations.
E.ON and EnBW have already shut down five plants between them and must close another five by 2022. Not only are they losing a major profit driver - a station could earn 1 million euros ($1.1 million) a day - but are also facing combined decommissioning costs of around 17 billion euros.
This tough new reality has nonetheless forced them to rapidly acquire expertise in the lengthy and complex process of dismantling nuclear plants - presenting an unlikely but potentially lucrative business opportunity in a world where dozens of reactors are set to be closed over the next 25 years.
They say their skills are attracting the interest of international customers.
"We are increasingly getting requests from countries where the decommissioning of nuclear plants is an issue or will become one," said a spokeswoman for E.ON's PreussenElektra division, which was formed last year to wind down the company's nuclear business and operate the plants in the interim period.
The unit, which employs about 650 decommissioning staff, said it was seeing particularly strong demand for its know-how in Japan, where 12 reactors are set to be closed down, adding that Mitsubishi Heavy Industries (MHI) was among its clients.
EnBW formed its plant decommissioning division following the Fukushima disaster and it has about 500 staff. More recently, the division launched a consultancy service aimed at pitching for external work, including internationally.
It said it had won contracts with operators, research institutes and nuclear regulators in Germany and Europe, but declined to give names.
A source familiar with the matter said that the group had advised all three Swiss nuclear plants operators - BKW Energie, Axpo and Alpiq - in dismantling projects last year and was still actively working for one of them.
MHI, Axpo and Alpiq all declined to comment. BKW said it was in contact with several firms active in dismantling, including EnBW.
E.ON and EnBW, which both regard decommissioning as a growth business, did not give figures for their decommissioning division's financial performance or targets, saying they did not break them out from the wider group.
E.ON and EnBW are, however, entering a crowded global market where they will have to compete with bigger rivals including market leader Areva, which has a 5,000-strong decommissioning team, privately-held Bechtel, Aecom and Fluor.
With U.S. nuclear services provider Westinghouse's Chapter 11 filing in March hitting one of the biggest names in the sector, all players are hoping to increase their slice of the action.
There is plenty of work.
The International Energy Agency reckons that about 150 gigawatts of nuclear capacity, more than a third of the world's total, will be retired by 2040, with Europe accounting for the bulk at more than 40 percent.
"Within the next few decades, the majority of nuclear plants currently in operation will approach the end of their useful lives, requiring either refurbishment or decommissioning," said Randy Wotring, president of Technical and Operational Services at U.S.-based Aecom.
The market for nuclear decommissioning services is expected to nearly double to $8.6 billion euros by 2021, from $4.8 billion last year, according to research firm MarketsandMarkets.
But only about a quarter is being outsourced by utilities, which prefer to keep much of the dismantling work in-house, industry sources told Reuters.
"The decommissioning market it is a tough one but also a promising one," said Arnaud Gay, executive vice president of International Operations at France's Areva, the world's top nuclear plant dismantler.
It was promising because it was a rapidly expanding market, he added, but difficult because there was a fierce pressure on costs, given the work involved simply erasing an asset rather than building one that would produce value in the future.
LONG AND COSTLY
Plant dismantling work spans everything from project management to the removal of walls with low levels of radiation as well as more complex tasks such as using plasma cutters to take apart highly polluted parts, for example reactor pressure vessels.
Based on current estimates from plant operators and consultancy Callan Associates, the average cost of dismantling a nuclear plant with a capacity of about 1 gigawatt is 600-800 million euros.
Decommissioning can take anywhere between 10 to 40 years, depending on whether operators chose direct dismantling or nuclear entombment, where reactors are first sealed off to let radiation levels fall.
The German utilities are seeking to focus on the project management experience they have gathered from closing their own reactors, and contract out some work to specialist companies.
Pointing to the value of good management, E.ON said it expected that more efficient processes and economies of scale would help it cut its own dismantling bill by about 1 billion euros, or 9 percent.
The two companies will find themselves in competition with the likes of U.S. firm Bechtel, which also functions as a project manager during dismantling processes and in March announced a foray into the European market in a joint venture with GE Hitachi Nuclear Energy.
James Taylor, general manager of Bechtel's Environmental business - speaking about the ambitions of the German utilities - said it was early days and that such businesses were developed over decades.
"It's a 40-year market so we are patient," he said.
($1 = 0.9124 euros)
(Additional reporting by Karolin Schaps in London; Editing by Pravin Char)
* Basra Oil director general Hayyan Abdul Ghani tells Reuters
CANNES, France, May 28 The winner of the Cannes Film Festival will be announced on Sunday, with a French movie about AIDS campaigners and two dark Russian dramas among the hottest tips.
* But Heathrow says expects BA flight delays and cancellations