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Petrofac lauds Aberdeen as 'big recruitment growth' centre

Petrofac bosses have said Aberdeen is one of the “biggest areas of recruitment growth” for the global energy service group.

Nick Shorten, managing director of Petrofac’s western hemisphere engineering and production services (EPS) division, said yesterday about 70 new well-engineering roles had been created in the firm’s north-east operations this year.

Petrofac currently employs about 700 people in Aberdeen, and about 2,000 offshore in the UK North Sea.

The London-headquartered firm’s global headcount decreased by 250 to 11,250 during the first half of 2019, a period marked by a return to the black for the company.

Mr Shorten declared himself “happy” with what he was seeing in the “global well engineering space”, while the North Sea was witnessing “more intense activity” than anywhere else.

During the reporting period, the company was appointed well operator by Tullow Oil for the next phase of its Thames decommissioning project.

Petrofac’s EPS wing also secured an extension to an operations and maintenance (O&M) support agreement for Total’s Alwyn and Dunbar platforms.

UK contract wins for wells and O&M work have continued into the second half of 2019.

Earlier this month, Petrofac was handed a well plugging and abandonment contract by Hess for the Rubie and Renee fields, about 125 miles north-east of Aberdeen.

It also clinched a three-year deal to provide O&M services to Ineos for the Forties pipeline system.

Mr Shorten, who joined Petrofac from Wood last year, said the EPS business was enjoying contract extensions across its portfolio as customers show their “trust” in the firm’s services.

Petrofac supports operations on around 35 installations in the North Sea. It is duty holder for seven assets in the area, including the FPF-1 platform, serving Ithaca’s Greater Stella Area.

Mr Shorten said project activity was “coming back to the North Sea market” and Petrofac was working on the “front end phase” for a number of projects.

BACK IN THE BLACK

Petrofac chiefs said “solid operational performance” helped the firm return to the black in the first six months of the year, but warned of more difficult times ahead.

London-listed Petrofac reported pre-tax profits of £158 million in the first half, a vast improvement on a deficit of £42m in the same period of 2018, while revenue rose by 1.3% to £2.3 billion.

Petrofac said it remained “well positioned” for the rest of 2019, but revenue is expected to decrease in 2020, reflecting a shortage of new orders booked in recent years.

Chief executive Ayman Asfari said new order intake this year had been “impacted by recent challenges in Saudi Arabia and Iraq”.

The company has been dogged by a Serious Fraud Office (SFO) corruption investigation launched in May 2017 and forming part of a wider probe into Unaoil, a Monaco-based consultancy.

Mr Asfari was arrested, questioned under caution by the SFO and released without charge.

In February, David Lufkin, global head of sales at Petrofac, pleaded guilty to 11 counts of bribery relating to “making corrupt offers” to influence contract awards in Saudi Arabia and Iraq.

Petrofac said yesterday it was focused on “bringing the matter to closure as quickly as possible”.

David Barclay, head of office for wealth manager Brewin Dolphin in Aberdeen, said: “It’s been a tough 2019 for Petrofac, with its shares dropping as much as 30% between February and August.

“The next couple of years could also prove to be difficult, with net profit declining so far in 2019 and revenues expected to decrease into 2020.

“The on-going SFO investigation is likely to continue to impact sentiment towards the shares.

“Management will, therefore, be keen to reach a resolution as quickly as possible.”

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