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Petrofac to contend for £12bn worth of contracts later this year

UK oilfield services giant Petrofac has secured £1.3 billion worth of orders so far this year, and expects to compete for contracts worth £11.7bn in the second half of 2019.

The company had a backlog of £7bn at the end of May, down from £7.5bn at the end of last year.

In a trading update, Petrofac predicted it would have net debts of £80 million at the end of June.

In February, Petrofac, which is the subject of an ongoing investigation by the Serious Fraud Office, revealed it had eliminated net debts in 2018, and had net cash of £70m at the end of December.

For its engineering and construction business, the firm forecasts full-year 2019 revenues of around £3.5bn.

The unit has been busy working on a number of major projects in the Middle East. In the North Sea, it is preparing for the introduction of power at the BorWin 3 offshore grid connection project.

The group’s engineering and production services wing clinched new awards and contract extensions in the UK North Sea, Oman, UAE and Iraq.

Petrofac, which has stakes in a number of producing oil fields, said its net production was expected to reach 2.1 million barrels of oil equivalent (boe) for the first half of the year, down from 3.1m boe in the first six months of 2018.

Petrofac chief executive Ayman Asfari said: “We are trading in line with our prior guidance reflecting solid operational performance across the business.

“We continue to maintain excellent client relationships in all of our markets, although new order intake in the year to date reflects our recent challenges in Saudi Arabia and Iraq. 

“Looking forward, the group has a busy tendering pipeline in other markets with around US$15 billion (£11.7bn) of bid opportunities due for award in the second half of the year.

“We are making good progress delivering our strategic objectives. We continue to target best-in-class delivery for our clients and are improving our competitiveness by reducing costs, driving digitalisation, increasing local content and investing in talent.  

“Furthermore, we are well positioned in the second half with good revenue visibility, a strong balance sheet and high levels of tendering activity.”

With around 11,500 employees, Petrofac operates out of seven strategically located operational centres, in Aberdeen, Sharjah, Abu Dhabi, Woking, Chennai, Mumbai and Kuala Lumpur and has a further 24 offices worldwide.

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