It stressed that the administration related only to its ultimate holding company and that its North Sea business “continues to operate as normal”.
Administrators from Teneo are expected to be appointed imminently and the company is said to be optimistic of finding a buyer for parts of the business, including its profitable UK operations.
Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce, said: “We are deeply concerned by today’s developments at Petrofac, which come at an already worrying time for the North Sea supply chain.
“Thousands of skilled jobs across the region depend on companies like Petrofac, which sit at the heart of both our oil and gas and renewables sectors.”
The collapse of a major player in the North Sea comes at an awkward time for the government, which has been blamed for job losses at some UK producers after extending and increasing a windfall tax on the sector and vowing to end new drilling.
Although Petrofac has given no indication that government policies are to blame for its demise, the Conservatives nevertheless claimed: “Ed Miliband and Labour, this is on you.”
Petrofac’s biggest shareholder and former boss is the Tory donor Ayman Asfari.
A government spokesman said: “Petrofac’s administration is a product of longstanding issues in their global business.”
Petrofac’s troubles began well before Labour was elected as it was hit by successive oil price crashes and a Serious Fraud Office inquiry. The fraud investigation, which began in 2017, deterred customers and resulted in a conviction for failing to prevent bribery and the payment of $104 million in penalties in 2021.
Petrofac also lost money on its construction contracts, especially in Thailand, amid delays caused by the pandemic, and by last year was struggling for cash to pay interest on its debt.
Its valuation had dropped to just over £20 million by May this year when its shares were suspended as it was unable to publish accounts pending the restructuring.
An initial restructuring deal was approved by the High Court in May but was rejected by the Court of Appeal in July, following complaints from two of its partners in the troubled Thai project. It had been close to agreeing a revised restructuring deal when TenneT pulled the plug on its biggest contract.
Petrofac said that “the group’s operations will continue to trade, and options for alternative restructuring and M&A solutions are being actively explored with its key creditors”.
It added that lenders were supporting the process by continuing to allow the non-payment of interest on its debt and extending debt maturities. “When appointed, administrators will work alongside executive management to preserve value, operational capability and ongoing delivery across the group’s operating and trading entities,” it said.
The government said: “The UK arm of Petrofac has not entered administration and is continuing to operate as normal, as an in-demand business with a highly skilled workforce and many successful contracts.” The government would “continue to work with the UK company as it focuses on its long-term future”.
