Petrofac has applied to the High Court of England and Wales to enter administration after losing a major offshore wind contract in the Netherlands.
The UK-listed oilfield services company said the decision was made after assessing the impact of TenneT’s cancellation of its scope of work on a 2-GW wind grid connection program.
Petrofac and its partner Hitachi Energy were awarded a contract in 2023 by TenneT to deliver six offshore connection systems, each valued at about €2 billion (approximately $2.2 billion). TenneT said in a statement that it terminated Petrofac’s portion of the work, citing the company’s failure to meet contractual obligations, and is seeking a new partner for Hitachi Energy.
Without the contract, Petrofac said its restructuring plan “is no longer deliverable in its current form.”
Petrofac’s UK operations, centered in Aberdeen, account for about 2,000 of its 7,600 employees worldwide.
The application to appoint administrators covers only the group’s ultimate holding company. Petrofac said its operating and trading entities will continue delivering on existing contracts while management and administrators work to preserve value and operational capability.
Talks are ongoing with creditors, including an ad hoc group of noteholders and the company’s revolving credit and term-loan lenders, who have agreed to extend maturities and maintain forbearance arrangements as restructuring and merger options are evaluated.
The value of Petrofac’s shares, listed on the London Stock Exchange, fell to almost $28 million in May when trading was suspended pending the publication of the firm’s 2024 audited results.
In August, the company reported a backlog of $6.7 billion and liquidity of $192 million. Recent contract awards included two projects for ADNOC, a $330 million contract for a gas compressor plant and management services for a $1.2 billion gas expansion project.