The Press and Journal (Aberdeen and Aberdeenshire)
Petrofac talks up outlook as shares plunge amid probe
Oil & gas: Scandal-rocked company says start of year has been ‘positive’
Petrofac insisted yesterday it was business as usual, despite the energy services firm having been dragged into a major oil and gas industry corruption scandal.
The company said it had made “a positive start to the year”, although the value of its work backlog at May 31 fell by £1billion to £13billion between the end of last year and May 31.
Petrofac pointed to new orders worth more than £1.3billion for the year to date and said its core business was “continuing to trade in line with expectations”.
And chief executive Ayman Asfari highlighted new contract wins for the group’s engineering and construction and its engineering and construction services divisions, as well as a “high level” of tendering activity.
He added: “We continue to have a very good pipeline of bidding opportunities.
“Our clear strategy – focused on best-in-class execution, maintaining our cost-competitiveness to secure new awards and reducing capital intensity – positions us well for the remainder of the year."
Underlying net profits for the first half of 2017 are expected to be in the range £105.8-£113.7million, with the full-year figure weighted towards the second half.
London-based Petrofac designs, builds, operates and maintains oil and gas facilities. The company employs about 13,500 people globally, managed out of seven operational centres in Aberdeen, Woking, Abu Dhabi, Chennai, Kuala Lumpur, Mumbai and Sharjah, plus a further 24 offices and a network of training facilities worldwide.
Its shares have tanked since May, when the Serious Fraud Office (SFO) launched an investigation into the company, its subsidiaries and employees as part of a wider corruption probe into Monaco-based oil contractor Unaoil.
The firm suspended its chief operating officer, Marwan Chedid, in response to the investigation. Mr Chedid – who has since resigned from the board – and Mr Asfari were arrested, questioned, and released without charge.
Other companies have been dragged into Unaoil investigations into suspected bribery, corruption and money laundering on both sides of the Atlantic.
Amec Foster Wheeler handed information about dealings involving the firm to the SFO and is co-operating with investigations in the US, while Aberdeen-based Wood Group launched an internal probe after it found one of its joint ventures made payments to Unaoil.
In Petrofac’s trading update yesterday, chairman Rijnhard van Tets said: “Everyone within Petrofac is completely focused on delivering operational excellence for our clients and winning new contracts.
“In addition, we are committed to maintaining our strong balance sheet and reducing net debt.
“The board has great confidence in Petrofac's ability to continue to deliver, and is fully supportive of the work being done to serve our clients and deliver our strategy. An independent committee of the board will continue to engage with the SFO and its investigation."