x Abu Dhabi, UAEMonday 24 July 2017

Petrofac lines up expansion with $4bn in funding kitty

Petrofac plans to spend up to $4 billion over the next four years as it looks to pick up more contracts from state oil companies.

Petrofac, the oil service provider with investments in Abu Dhabi, plans to spend up to US$4 billion (Dh14.69bn) over the next four years to fund expansions in Africa and South East Asia.

The UK company's planned spending spree comes as oil service companies benefit from boosted revenues as the high oil price drives energy investment.

"The demand for the services continues to be quite robust," Ayman Asfari, the company's chief executive, told Bloomberg News.

Petrofac's earnings for the first half of the year rose 6.6 per cent to $246 million compared with the same period last year, the company reported yesterday. Shares were up 3.9 per cent to hit 1,214 pence in London after the announcement.

Mr Asfari said Petrofac was in the running for fresh contracts in Malaysia and Indonesia and was weighing projects with Nigerian National Petroleum.

Petrofac is a partner with Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, in Petrofac Emirates, an engineering and energy services joint venture.

In June, it bought a storage vessel worth tens of millions of dollars from Pearl Energy, a subsidiary of Mubadala that pumps oil and gas in South East Asia. The ship, Jasmine Venture, will continue to serve a field in the Gulf of Thailand operated by Pearl.

"The transaction reflects our strong ongoing relationship with Mubadala," Petrofac said at the time.

Its co-investments with Abu Dhabi could serve as a prototype as Petrofac looks to pick up national oil companies as clients.

In January it recruited Andy Inglis, the former head of exploration and production at BP, to lead a new division.

The unit, aimed at state oil companies sitting on undeveloped fields, is to offer training, engineering and even capital to potential customers.

However, oilfield service companies are vulnerable to risks including fluctuations in commodity prices and potential unrest in resource-rich countries, warned the consultancy Deloitte.

"Security risk remains heightened, given the strategic importance of activities conducted by oilfield services companies," the consultancy wrote in a recent report.

* with Bloomberg News

ayee@thenational.ae