Petrofac restructuring suffers major setback
27 October 2025
The UK engineering company Petrofac, which is working on projects worth billions of dollars across the Middle East and North Africa (Mena) region, has said that its planned restructuring is “no longer deliverable in its current form”.
The statement has raised concerns among stakeholders in the region about potential disruption to projects.
Petrofac is actively working on projects in the UAE, Algeria, Kuwait and Bahrain. Projects in the UAE include an engineering, procurement and construction management (EPCM) contract awarded by Adnoc Gas in June.
The company’s restructuring plans have been derailed by the cancellation of a contract by the electricity transmission system operator TenneT.
The engineering, procurement, construction and installation (EPCI) contract that was terminated was for work on a project to connect wind farms to the European electricity grid.
In its latest statement, the company said: “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.
“The group is in close and constant dialogue with its key creditors and other stakeholders as it actively pursues alternative options for the group.
“In the meantime, Petrofac remains focused on serving its clients and maintaining operational capability and delivery of services across its businesses.”
Possible collapse
In the wake of Petrofac’s latest statement, there have been widespread reports that administrators are now “on standby” in case the company collapses.
The directors of Petrofac have lined up the advisory firm Teneo for an administration process, which could be confirmed early this week, according to a Sky News report.
The company’s board, chaired by former Anglo American finance director Rene Medori, has been holding emergency talks, the report said.
Rollercoaster restructuring
The latest statement from Petrofac comes less than two months after the company announced it had resolved a dispute with Korea’s Samsung E&A and Italy’s Saipem, which had been disrupting the planned restructuring.
Although Petrofac has been struggling with financial difficulties, over the past 12 months it has continued to win new project contracts in the Mena region.
Aside from the $1.2bn contract that Adnoc Gas awarded the company in June, in May Petrofac submitted the lowest bid for the Kuwaiti oil project focused on the installation of a separation gathering centre (SGC) known as SGC-2.
It submitted a price of KD422.45m ($1.37bn).
Additionally, in November last year, Petrofac announced winning a contract from Bapco Upstream to provide services to increase productivity at the Bahrain Field.
The duration of the contract is two years, and the scope covers delivery of well hook-ups, associated pipelines and tie-ins for several new wells at the Bahrain Field, also known as the Awali field.
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