Energy Voice | GSA deal contributes to pre-tax loss for Petrofac

An impairment charge from Petrofac’s deal to sell its stake in the Greater Stella Asset helped it to a pre-tax loss in the first half of the year.

The energy services giant reported a pre-tax loss of £40.4million, compared to a profit of £84.4m in the same period last year.

Petrofac said it received a pre-tax impairment charge of £61.4m for the six months to June 30 as a result of the deal with Ithaca to sell its stake in GSA.

Last week the firm agreed to sell its 20% interest in the central North Sea production hub, along with its 24.4% in the FPF-1 floating production facility.

It is expected to be completed in the first quarter of next year and could fetch Petrofac a total of £228m.

Petrofac said the deal would help it back to being a “capital-light business”, and follows other divestments including sales of stakes in assets in Mexico and Tunisia, as well as a sale of its JSD 6000 offshore vessel project in April.

The firm, which traditionally focuses on building and maintaining oil and gas facilities, reported the UK as being its strongest region for engineering and production services, taking in £199m in the period, along with a further £20m for integrated energy services.

Petrofac said it had secured contract extensions and new awards “with a range of clients” in the UK, including Chevron and Eni.

Ayman Asfari, Petrofac’s Group Chief Executive, said : “The Group is making significant progress reducing capital intensity, signing agreements to sell the JSD6000 installation vessel, our interests in the Chergui gas concession and Greater Stella Area development, as well as a 49% interest in our Mexican operations.

“These transactions will increase our focus on our core and strengthen our balance sheet.

“We remain focused on our core and delivering organic growth as the market recovers. The Group has secured US$3.3 billion of new orders in both established and adjacent markets year to date, and is well placed on several bids due for award before the end of the year. Our focus on operational excellence is reflected in improved margins and continued good progress across our project portfolio in the first half.

“Furthermore, we are well positioned for the second half with good revenue visibility, a strong competitive position and healthy liquidity.”

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