Ithaca Energy has modified its Greater Stella deal with Petrofac in a bid to hit its sail-away target.
Petrofac boss Ayman Asfari has admitted mistakes were made in the handling of the delayed Laggan Tormore gas development - which has led to the company losing $263million on the Shetland project.
Petrofac has posted a net loss for the first half of the year which was affected by an increase in costs from its Laggan-Tormore project in the Shetland Islands. The company said net loss for the period was $133million, compared with a net profit of $136million a year earlier. Petrofac has incurred $236million in loss on the delayed Shetland Islands project so far this year.
Petrofac has been awarded a $780million contract from KOC (Kuwait Oil Company) for its manifold group trunkline in the country. The international oil and gas services provider said the win will play an integral part in KOC’s plans to increase and maintain its crude production over the next five years. There are three new gathering centres – forming part of the broader engineering, procurement and construction contract - already being built.
Petrofac’s share price rose nearly 10% to 939p despite mounting costs. The firm confirmed staffing issues, work delays and harsh weather conditions led to an additional £30million in incurred costs for its Laggan-Tormore project . The bloated expenditure brings the company’s total loss in the year to date to £140million.
Petrofac confirmed mounting costs from its Laggan-Tormore project will see its profits “significantly weighted” towards the second half of the year. The firm detailed an additional £30million of costs it has incurred with the flagship gas development in the Shetland Islands, bringing their total loss in the year to date to £140million.
Energy service giant Petrofac said today its projects and operations business unit had secured contract renewals for UK North Sea work worth a total of about $400million (£252million).
Petrofac has confirmed that non-executive director Roxanne Decyk is to step down. Ms Decyk will be replaced by Matthias Bichsel following approval by shareholders at the annual general meeting.
Petrofac is in consultation with onshore staff as it looks to make reductions to it headcount. The services company said it was in discussion with around 100 members of staff. However it is understood the number of staff who could face job losses is likely to be around 50. As previously reported earlier this month on Energy Voice, in addition to 79 job reductions as a result of EnQuest’s changes to its shift pattern, a further 21 jobs could also go offshore.
This week's most read story on Energy Voice was Loren Steffy's discussion on the news that Shell is to buy BG Group for £47million. In his editorial he reflects on what could have been should Shell have decided to snap up BP instead. The news of the sale initially began circulating earlier this month.
A fresh profits warning on the troubled Laggan-Tormore gas terminal development hit the share price of service giant Petrofac yesterday. Almost £350million was wiped off Petrofac’s market value as shares slid 10% to 912.5p. The firm admitted it would lose a further £130million on the Total-operated project, in addition to the £154million in losses it took on the scheme in 2014. This on a project value of £800million. Ayman Asfari, Petrofac’s Chief Executive listed a number of difficulties facing the development of the loss-making gas terminal that included industrial action and the high cost of doing business in the North Sea.
Petrofac is set to incur a further $195million charge on the Laggan-Tormore project as a result of continued delays. The company is currently building the Shetland Gas Plant for Total after signing a £800million deal in 2010 for engineering, procurement, supply, construction and commissioning of the site. Petrofac has previously said it expected to recognise no further profit or loss on the project over the remainder of the contract duration.
Petrofac has completed a project for Nexen Petroleum on its Golden Eagle Development Area. The company said the work was delivered through its Plant Asset Management consulting business. It involved the development and implementation of a maintenance programme for the installation, which is 70 kilometres north east of Aberdeen.
Energy service firm Petrofac plans to axe 16.5 full-time equivalent offshore roles supporting the UK North Sea operations of CNR International (CNRI). A spokeswoman confirmed the fewer-than-expected number last night after 37 possible redundancies was mentioned in a letter to Petrofac employees. It also said workers supplied to CNRI through its Aberdeen-based recruitment business, Atlantic Resourcing, were being “downmanned”.
Petrofac Ltd. bucked weakness in the market for oilfield services as it added orders this year to a record backlog for 2014 with the national oil companies that make up its main customers still investing into the downturn in prices. The company, based in London, also formed a five-year tie-up with McDermott International Inc. to pursue subsea projects. Petrofac advanced 7% to 872 pence, the biggest gain since Oct. 17, by 11:07 a.m. even as it lowered an earnings goal for this year and net income fell 11% in 2014. The company cut its forecast by $40 million to $460 million after a further drop in oil prices since its November estimate, it said Wednesday in an earnings statement. The order backlog rose to a record $18.9 billion in 2014 with intake this year at $3.5 billion. Profit for 2014 was also hit by delayed projects.
Contractor Petrofac could be making a number of job losses after Marathon Oil said it would be reviewing how it maintained and operated its Brae field in the North Sea. The companies are currently in discussion following an announcement by the US firm last month that it would be implementing new maintenance strategies to address its “late Life operations”. In a letter to staff, Petrofac said it had been advised by Marathon that they anticipated a “significant reduction” in discretionary and project type activities on an annual basis.
Petrofac has won a $4billion contract for the first phase of Kuwait Oil Company’s (KOC) Lower Fars heavy oil development programme. The company will carry out the work in consortium with the Consolidated Contractors Company (CCC) as its partner. The scope of work covers greenfield and brownfield and includes engineering, procurement, construction, pre-commissioning, start-up and operations, associated infrastructure as well as the production support complex.
Petrofac said it expects its IES net profit for 2015 to drop by around $45million after assessing a number of ongoing projects. The company said the current change in oil prices and “expectation on delivery” of certain IES projects had been behind the estimated reduction. Within the next year, the company said the Laggan-Tormore project in Shetland, would result in “no profit or loss”.
International oil and gas facility service provider expects to make up to $600million in profit this year. The company said the past year had been its most successful for new awards, with an ECOM (Engineering, Construction, Operation and Maintenance) order intake of $9.4billion.
Independent oil and gas explorer Ithaca Energy saw its share price plummet 11% on Friday after its development partner said delay in delivering a production vessel would hit its key North Sea field.