Petrofac, the British-based oilfield services provider with operations in the UAE, has won a US$668 million contract to build a gas compression project in Algeria.
The contract, which the company announced on Wednesday, is a shot in the arm after a disappointing year because of delays in the start-up of another gas project in Algeria. That project, In Salah, was pushed back after a January terrorist attack on a separate plant spurred a security review at Algerian energy facilities, delaying Petrofac’s earnings.
The new contract, which Petrofac is to share with Italy’s Bonatti, is intended to maintain production at the Alrar East and Ouest gasfields, part of the Illizi basin.
“This development builds on Petrofac’s long history of successful execution in Algeria where we have been operating successfully for more than 15 years,” said Subramanian Sarma, the company’s managing director for onshore engineering and construction. “Petrofac has a rigorous approach to project execution and we are focused on delivering an effective, safe solution for Sonatrach [the Algerian state energy company] that meets our high standards.”
The In Salah project delay has eaten into the company’s earnings, with net profit dropping by a quarter to US$243m in the first half of the year.
Shares of Petrofac have lost 11 per cent of their value since the start of the year. Petrofac shares were trading at 1,443 pence in London yesterday morning.
The company has said it aims to make up the lost income in the second half of the year, and eventually double profits to $862m by 2015.
In July, Petrofac upped its stake in Petrofac Emirates, which was a joint venture with Mubadala Petroleum based in Abu Dhabi. Mubadala sold its stake to a private company in the UAE, which, in turn, sold half of its share to Petrofac. Petrofac now holds a 75 per cent of the venture.