Collapse of Petrofac

Introduction to the Crisis

It’s not the start to the week that Energy Secretary was hoping for: more than 2,000 private sector jobs in Scotland are at risk from the collapse of Petrofac, the London-listed oilfield services group.

The Trigger for Bankruptcy

The trigger was the cancellation of a major contract by its biggest customer last week, but the failure of a company once worth more than £6bn has been a long time coming. The company’s slip into bankruptcy has been anticipated due to its long-standing financial struggles.

Efforts to Save the Company

Administrators at Teneo are now trying to save what they can from Petrofac’s rubble. The company stated that its operations will continue to operate and options exist for alternative restructuring and sale solutions. Solutions are being actively explored with its main creditors.

Preserving Value and Operations

Upon appointment, the administrators will work with senior management to preserve the value, operability, and continued delivery of all of the group’s operating and trading units. This effort aims to maintain the company’s core functions while exploring options for its future.

Uncertainty for Employees

The future is now uncertain for thousands of employees, although there is hope that a buyer can be found quickly for the North Sea operations. This could potentially happen in the coming days, offering relief to those affected.

Government Response

A spokesperson for the Department for Energy Security and Net Zero stated that the UK arm of Petrofac has not entered into administration and continues to operate as usual. The government will continue to work with the UK business as it focuses on its long-term future, acknowledging that Petrofac’s administration is the result of long-standing problems in its global business.