Petrofac Bucks Oilfield Services Downturn with Record Order Book
UK-headquartered Petrofac showed Wednesday that it is bucking the downward trend in oilfield services by posting a record order book for the end of 2015.
In its full-year results, Petrofac said its order backlog stood at $20.7 billion at Dec. 31, 2015 – an increase of 10 percent that was partly due to $6.1 billion of new orders achieved by its Onshore Engineering & Construction segment during the year, including major new awards in Kuwait and Saudi Arabia.
The company reported that it increased its total revenue for the year by 10 percent to $6.8 billion while its operating profit at the EBITDA level came in at $792 million (2014: $935 million) before taking into account a loss associated with the late start-up of Total's Laggan-Tormore project on the Shetland Islands, where Petrofac said if faced "exceptional challenges". After taking into account the loss attributable to Laggan-Tormore, EBITDA for 2015 was $312 million.
On the bottom line, Petrofac posted a net profit of $9 million against $581 million in 2014.
As far as the firm's outlook is concerned, Petrofac said that while the operating environment remains challenging it is continuing to focus on its core areas of strength along with maintaining its bidding discipline and delivery sector-leading margins. The company aims to achieve further annualized efficiency savings of up to $90 million by the end of 2016, adding to the $80 million savings it achieved in 2015.
Petrofac said it is seeing continuing investment from its clients in its core onshore markets of the Middle East and North Africa in both upstream and downstream projects.
Commenting on the results, Petrofac Group Chief Executive Ayman Asfari said in a company statement:
"Petrofac's core proposition is based on strong project execution, clear geographic focus, a disciplined approach to bidding and a sustainable, cost-effective structure. These strengths have positioned Petrofac well in a very challenging period for the oil and gas industry.
"Our results for 2015 were adversely affected by the Laggan-Tormore project on Shetland. However, we faced up to the exceptional challenges we encountered and honoured our commitment to our client. With the plant now successfully operational, these issues are finally behind us.
"We enter 2016 with a renewed focus on our core strengths. The group's backlog stands at record year-end levels, giving us excellent revenue visibility for 2016 and beyond."
Analysts at investment bank Barclays noted that the Laggan-Tormore loss was "more than forewarned" but that Petrofac "can now put the misadventure behind it and move forward".
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ITEM Club: More Jobs Losses Expected in NE Scotland due to Oil Slump
- Shell Q&A: What Makes an Ideal Employer in Oil, Gas?
- Shell Takes First Place in Rigzone's Inaugural Ideal Employer Survey
- UK Government 'Must Recommit' to Oil, Gas Sector in Autumn Statement
- UK Government Gives Go-Ahead for Fracking in NW England
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- These Factors Helped Brent Oil Price Break Above $85
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Gaz System to Acquire Gas Storage Poland
- Subsea7 Secures Contract to Service Woodside's Trion
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- EIA Boosts USA Crude Oil Production Forecasts
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension