Petrofac administration: 2,000 jobs at risk as oil and gas firm set to go into administration
Thousands of people are set to lose their jobs after a shock announcement that North Sea firm Petrofac is going into administration
The company employs more than 7,000 workers globally, with around 2,000 of these based at its North Sea hub in Scotland, according to reports.
On Monday, the company told investors that it has applied to the High Court to appoint administrators.
The move comes after the collapse of restructuring talks, which failed after the withdrawal of a key contract last week.
It said it will now enter insolvency after Dutch electricity grid TenneT terminated a major contract to build windfarms.
The company stressed that the administration will affect the group’s main holding company.
It will continue to trade and assess options for an alternative restructuring, with different merger and acquisition options also being explored with its key creditors.
Advisers at corporate finance firm Teneo are expected to advise over the administration.
“When appointed, administrators will work alongside executive management to preserve value, operational capability and ongoing delivery across the group’s operating and trading entities,” the company said.
Petrofac’s UK business is based in Aberdeen and is involved in the operation of North Sea oil platforms for firms including BP and Shell.
The company was worth around £6 billion at its peak in 2012 but has slumped in recent years.
It was worth around £20 million when its shares were suspended in May after being severely impacted by an investigation by the Serious Fraud Office and volatile energy prices.