Energy services group Petrofac has initiated an administration process limited to its holding company, following the failure of a refinancing plan supported by its bondholders. The company stated that its commercial operations, particularly in the North Sea, would continue without interruption.
Termination of offshore contract fuels internal tensions
This move follows the cancellation of a major offshore wind contract with Dutch grid operator TenneT. The project, considered central to the group’s financial recovery strategy, was expected to stabilise its position. Its termination derailed negotiations with an ad hoc group of bondholders and intensified internal disagreements over restructuring priorities.
In a statement, Petrofac clarified that the administration applies solely to its holding entity, with its operating subsidiaries unaffected. The company said the appointed administrators will work alongside management to preserve group value, operational capacity, and continuity of service.
Shareholders and creditors at odds
Talks with creditors, especially holders of the company’s high-yield bonds, have failed to produce a definitive resolution. Petrofac noted that its banking partners continue to roll over loan maturities in the short term. A lack of consensus among stakeholders, particularly between bondholders and senior lenders, has impeded coordinated progress.
Once listed on the FTSE 100, Petrofac saw its market value fall from £6bn ($9bn) in 2012 to just £20mn ($26.7mn) before trading was suspended in May. This decline was compounded by a UK Serious Fraud Office (SFO) investigation and repeated profit warnings, eroding financial confidence in the group.
Industrial disruption in the North Sea supply chain
Founded in Texas in 1981, Petrofac has become a key provider of technical services across oil, gas, and renewable energy sectors. It has worked with BP and Shell on offshore platforms in the North Sea. The company’s UK operations, spread across Aberdeen, London, Woking, and Great Yarmouth, remain active according to official statements.
The Aberdeen and Grampian Chamber of Commerce expressed concern over the announcement, citing risks to the regional supply chain. Chief executive Russell Borthwick stated that “thousands of skilled jobs” depend on companies like Petrofac, whose dual presence in oil and renewables makes it a critical player.
The UK Department for Energy Security and Net Zero confirmed that Petrofac’s UK business continues to operate normally. The government said it would work with the group’s local entities to support operational stability amid ongoing uncertainty.
