Petrofac wins repeat work worth £250m across UKCS

Petrofac have won repeat business worth around �250m. Picture: PA
Petrofac have won repeat business worth around �250m. Picture: PA
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OIL services group Petrofac yesterday said it had won repeat business across the UK Continental Shelf (UKCS) worth around $400 million (£250m).

The work has been secured by the firm’s offshore projects and operations business unit on a number of contracts with existing clients.

The largest of the agreements is for the provision of operations and maintenance teams for CNR International across the three platforms in the Ninian complex over the next five years.

Other contracts include one in the east Irish Sea where Petrofac has secured a two-year contract renewal from Eni, covering operations and maintenance services for the Douglas fixed platforms, offshore storage installation and the Point of Ayr terminal.

It has also been awarded responsibility for the Irish Sea Pioneer operations support vessel which Petrofac said builds on its existing portfolio of services for Eni.

Walter Thain, managing director for Petrofac’s offshore projects and operations, said: “This package is great news for the business and for everyone involved. In the current climate, more than ever, it is vital that operators can have confidence in the supply chain to continue to generate value. This large-scale renewal – of contracts that we have held in some cases for more than a decade – is testament to our record of sustained operations delivery on behalf of our customers across the UKCS.”

The news came as a welcome boost to Petrofac’s North Sea interests which have suffered a setback in recent months. In April it warned that it faces further losses on a major gas project in the Shetland Islands of around $195m (£130m).

The company, which employs more than 4,500 people in Scotland, blamed bad weather and industrial action for delays as it entered the final construction and commissioning phases of the Laggan-Tormore site.

It said that as work had ramped up on the project – which is being carried out for energy giant Total at a site just to the east of the existing Sullom Voe Terminal – it had become apparent that “significantly more man-hours” were needed to complete it than had been anticipated.

It also cited the failure of an unnamed sub-contractor to “deliver in line with their agreed scope” as another factor which would lead to cost over-runs.

Petrofac, which has also suffered delays at the Greater Stella Area project in the central North Sea, said it still expected to complete Laggan-Tormore in the third quarter of the year.

Despite the positive news, shares in Petrofac closed down 17.5p at 856.5p.

Meanwhile. administrators from EY were yesterday appointed to Red7Marine Group, which provides offshore oil and gas services and marine renewables and has an office in Aberdeen. The administrators have sold the company’s inland and coastal division to a new business backed by a private investor but the group’s offshore business did not form part of the sale and that division has closed with the loss of 47 jobs. The failure was based on factors included the fall in the oil price.