Petrofac 2017 orders see boost, plans deep-water exit

UK-based oilfield services company Petrofac reported higher order intake for 2017 as oil prices rose but ended the year with a net loss, while said it would exit its deep water operations.

Petrofac, which designs, builds and maintains oil and gas facilities, said its revenue fell to $6.40 billion from $7.9 billion in the year-earlier period. It made a net loss of US$29 million for 2017 hit by a charge of $372 million related to exceptional items.

Ayman Asfari, Petrofac’s Group CEO said the company will continue to reduce its capital intensity and boost returns by selling its non-core assets and by exiting deep-water business and expects to take an impairment charge of $176 million related to its offshore construction vessel JDS6000.

Petrofac booked new orders during the year worth $5.2 billion and reported a backlog of US$10.2 billion, compared with $11.7 billion, a year ago.

“Our competitive position has helped secure a strong recovery in new orders in 2017, particularly in the second half of the year. Tendering activity remains high, we are well positioned on several bids and we are maintaining our bidding discipline in a competitive market,” Asfari said.

It reported a net debt of $600 million, after a 44 per cent reduction in capital expenditure.

The company said it had concluded that restrictions imposed on Asfari in May 2017 were no longer appropriate.

Britain's Serious Fraud Office (SFO) began an investigation in May into the activities of Petrofac and its units in connection with a probe into Monaco-based Unaoil on suspected bribery, corruption and money laundering.

Last month, the company said its top management, including chairman and executive directors, would be interviewed by the SFO.

Petrofac also said chief operating officer Marwan Chedid had stepped down and would act in an advisory capacity for a transitional period to assist on his succession.

Chedid was suspended in May and he consequently resigned from the board.