British company Petrofac files for administration

The struggling British oil and energy services group Petrofac announced on Monday, October 27, that it had applied for administration following the cancellation of a major wind power contract, jeopardizing thousands of jobs.

The procedure "only targets the main holding company of the group", Petrofac said in a statement, adding that business continues and that "alternative restructuring and merger and acquisition solutions are being actively studied".

According to several British media outlets, more than 2.000 jobs in Scotland are threatened by this situation, out of more than 7.000 employees in the group.

The reason for this is the decision by the Dutch company TenneT to terminate a €13 billion framework agreement in wind power for which Petrofac had been selected in 2023, alongside the Japanese company Hitachi.

"Since Petrofac has not been able to meet its contractual obligations, TenneT has exercised its right to partially terminate the contract relating to the Petrofac perimeter," and the project will therefore continue without it, TenneT said in a statement on Thursday.

Petrofac, sanctioned in 2021 in the United Kingdom for corruption on contracts in the Middle East, weighed down in recent years by financial difficulties which led it to implement a restructuring, has seen its value plummet on the London Stock Exchange, where its share has been suspended since the beginning of May.

The British trade union RMT expressed its "deep concern" in a statement following the announcement which "jeopardizes the jobs (...) of offshore and onshore workers".

Petrofac's receivership "is the result of persistent problems in its international operations" but its British branch "is continuing its operations normally", the Ministry of Energy said in a statement to AFP.

The government "will continue to collaborate with the British entity to ensure its long-term future," he said.