Key Highlights
- Petrofac, a leading oil and energy services group, is on the brink of administration.
- The company’s board has engaged Teneo for an administrative process which could be confirmed as early as Monday morning.
- About 2,000 jobs in Scotland may be at risk due to potential job cuts.
- Administration would affect Petrofac Limited, the parent company, not directly employed workers.
Petrofac Faces Collapse: Scottish Jobs at Risk
The oil and energy services group Petrofac is in severe financial trouble, with its board set to engage Teneo for an administration process as early as Monday morning. This move could result in the loss of approximately 2,000 jobs across Scotland.
Emergency Board Meetings
The company’s board, chaired by Rene Medori, a former Anglo American finance director, is holding emergency talks this weekend to decide on the fate of the group. Mark Kleinman, City editor at Sky News, reports that a decision to file for administration could be made before the stock market opens on Monday.
Government Involvement
Ministers have been briefed on the situation as the collapse of Petrofac could impact Scotland’s energy sector. Kroll, an advisory firm, has been engaged by the Department for Energy Security and Net Zero to assist with the crisis management. Government sources claim that UK operations were growing but are now mired in financial trouble.
Financial Struggles
Petrofac’s shares have been suspended since April 2025, reflecting years of financial issues. The company was once valued at over £6 billion but is now worth barely £20 million due to debt and a Serious Fraud Office investigation that resulted in a 2021 conviction for failing to prevent bribery.
Recent Developments
A recent stock exchange announcement revealed that the cancellation of a contract by TenneT, Petrofac’s largest customer, made a solvent restructuring unviable. The company stated, “Having carefully assessed the impact of TenneT’s decision, the Board has determined that the restructuring, which had last week reached an advanced stage, is no longer deliverable in its current form.”
Industry Impact
Petrofac employs about 7,300 people globally and has been involved in designing, constructing, and operating offshore equipment for various energy companies. The potential collapse comes at a sensitive time for Energy Secretary Ed Miliband, who is facing pressure to permit more North Sea oil and gas drilling despite Labour’s manifesto commitment not to grant new field licences.
In conclusion, the administration process of Petrofac could have significant implications for the Scottish job market and the broader energy sector. The company’s board and stakeholders are actively pursuing alternative options to secure its future in a rapidly evolving industry landscape.
