Project slowdowns hit Petrofac

Project slowdowns hit Petrofac

Oilfield services leader Petrofac has warned that delays to projects mean its plan to double profits over five years is unlikely to be achieved, reflecting a deteriorating operating environment as projects are being delayed worldwide and clients demand cost reductions.

 

Delays to major projects in Abu Dhabi and Malaysia are blamed for a slowdown in earnings growth, which follows earnings warnings from other key players in the sector recently including Aker Solutions, Saipem and Subsea 7.

 

Petrofac warned that delays to the Upper Zakum project in the Gulf, which is majority owned by the Abu Dhabi National Oil Company along with junior partners ExxonMobil and the Japan Oil Development Company, would mean deferring earnings for 2014 and 2105 and beyond, but the delays could also increase the scale and duration of work there which is currently valued at US$2.9Bn.

 

Work on product enhancement projects on the Berentai development off the coast of Malaysia, which has been seen as the key driver of the company’s profits growth, has also been deferred which will hit Petrofac’s Integrated Services division.

 

Chief Executive Ayman Asfari said the five year profits growth target was still attainable but would depend on the timing of contract awards for its engineering, construction, operations and maintenance businesses.

 

Petrofac has been a fast growing company recently as it follows a policy of taking on more construction and execution risk than its rivals, and taking stakes in some of the upstream assets it is working on, including mature oilfields. The company has an order backlog of some $14Bn.

Please rate

Comments 

Ctrl + Enter

Most Read

Is there a post-Brexit salary rise? It looks like it...

Is there a post-Brexit salary rise? It looks like it...

Following the Brexit vote in June last year, many experts predicted that markets would continue to fall leaving salaries stagnating and even falling in some sectors. Data shows the pace at which new jobs are being created is still slower than in 2014, with economic growth affected by the

Julian Taylor, Water Recruitment Team Leader

Julian Taylor, Water Recruitment Team Leader

Today we interviewed Julian Taylor, the Head of the Water Team at Anglo. He shares his thoughts on the water industry and gives some useful advice to professionals who are working in the Water and Wastewater industries.   A: What is your professional background? J: Well, I have been in

Some thoughts on the place of Women in Engineering

Some thoughts on the place of Women in Engineering

According to the latest women in engineering statistics from EngineeringUK 2017 report “women make up only 1 in 8 of those in engineering occupations and less than 1 in 10 of those in an engineering role within an engineering company”.  Would having more women engineers help tackle

This website uses cookies to enhance your user experience. By continuing to use this site, you consent to our use of these cookies. See our Cookie Policy.