(Reuters) -British oilfield services provider Petrofac said on Monday it plans to appoint administrators, potentially putting jobs at risk, after the company lost a major Dutch contract.
Petrofac said the administration would be limited to the group’s ultimate holding company only, with operations continuing to trade while it explores restructuring and M&A options with creditors.
“Our long-established North Sea business continues to operate as normal, and management are working to minimise disruption for clients and employees,” a Petrofac spokesperson told Reuters in an emailed statement.
The company has been restructuring its finances under pressure from rising costs and delayed payments, a move that reflects wider challenges facing the oilfield services sector in a volatile energy market.
Petrofac’s core markets are the Middle East, North Africa and the UK North Sea. It employs 8,500 workers across the globe, including 2,000 in the UK, and it was not yet clear which jobs may be at risk.
In 2023, Petrofac and Hitachi Energy were awarded a 13-billion-euro ($15.16 billion) contract by Dutch-German electricity grid operator TenneT to deliver six 2-gigawatt offshore wind grid connection projects in the Netherlands and Germany.
Last week, TenneT said it had decided to terminate the portion of the contract related to Petrofac’s involvement because Petrofac had failed to meet its contractual obligations.
A spokesperson for the UK’s Department for Energy Security and Net Zero said Petrofac’s administration was “a product of long-standing issues in their global business,” while stressing that the UK arm has not entered administration and continues to operate as normal.
“The government will continue to work with the UK company as it focuses on its long-term future,” the spokesperson said.
Sky News reported on Saturday that Petrofac had appointed Teneo as administrator and its board was engaged in emergency talks over the weekend.
($1 = 0.8575 euros)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Sherry Jacob-Phillips and Susan Fenton)
