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Petrofac collapse could impact $5.83bn of Mena projects

28 October 2025

 

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On 27 October, Petrofac announced that it had applied to appoint administrators, a move that has potentially put thousands of jobs at risk and increased uncertainty for projects worth billions of dollars in the Middle East and North Africa (Mena) region.

The total value of projects awarded to Petrofac and under construction in the region is $5.83bn, according to information recorded by the regional project-tracking service MEED Projects.

Petrofac also has bids under evaluation for 15 projects in the region worth a total of $19.28bn, according to MEED Projects data.

Over recent years, Petrofac has aggressively sought to win new contracts in the Mena region, bidding on a range of projects in an effort to improve its financial situation.

Some of the tender processes in which Petrofac is currently participating could ultimately be disrupted due to the company’s financial problems, especially when there is only one other bidder for the contract.

Regional impact

The UAE is potentially the most exposed to disruption from Petrofac filing for administration. It is executing major projects worth $2.87bn in the UAE.

Algeria is second in the region in terms of exposure to contracts under execution, with $1.8bn in projects.

Petrofac also has projects in Oman, Bahrain and Iraq, worth $483m, $353m and $320m, respectively.

UAE projects under execution

In the UAE, Petrofac has five active projects, all awarded by Abu Dhabi’s state-owned Adnoc Gas.

The biggest of these is a $1.2bn project for the planned Das Island gas liquefaction facility, which was awarded in June this year and expected to be completed by the fourth quarter of 2027.

The second-biggest contract that Petrofac has in the UAE is a $700m contract as part of Adnoc Gas’ project to upgrade its sales gas pipeline network across the UAE.

The scope of the package is focused on developing a new compressor plant at the Habshan gas compressor facility.

This contract was awarded in June 2023 and was previously expected to be completed before the end of next year.

The other significant contracts that Petrofac has in the UAE include a $615m contract for a carbon capture, utilisation and storage (CCUS) facility at the Habshan site, as well as a $335m contract to upgrade the Habshan gas processing complex.

Adnoc Gas awarded the CCUS contract in October 2023, and the upgrade contract was awarded in January this year.

In addition to the projects Petrofac has won in the UAE, it has bids currently under evaluation worth $6.6bn in the country.

Petrofac in Algeria

Petrofac’s largest ongoing project in the Mena region is the $1.5bn project that it is executing to develop a major petrochemicals project in Algeria.

The Scotland-based company is executing the project in partnership with China Huanqiu Contracting & Engineering Corporation (HQCEC) in Algeria’s Arzew region.

Petrofac and HQCEC signed the engineering, procurement and construction (EPC) contract for the Algerian petrochemicals project in June 2023.

HQCEC is a subsidiary of China National Petroleum Corporation.

In July 2024, MEED reported that concerns about the project’s future were increasing due to Petrofac’s financial difficulties.

The project is being developed in the Arzew Industrial Zone, west of Algiers, and the contract was signed with STEP Polymers, a wholly owned subsidiary of Algeria’s national oil company, Sonatrach.

When the contract was signed, Petrofac said that its portion of the project was valued at about $1bn.

The project’s scope includes the design and construction of two major integrated processing units.

It includes the delivery of a new propane dehydrogenation unit and polypropylene production unit, as well as associated utilities and infrastructure for the site.

It is expected to produce 550,000 tonnes of polypropylene a year.

Petrofac has been active in Algeria since 1997, when it opened its first office in Algiers. The company has since developed some of the country’s most significant oil and gas assets.

On top of the projects under execution in Algeria, Petrofac has bids under evaluation for projects worth $7.19bn in the country.

Petrofac in Oman, Bahrain and Iraq

Petrofac is working on a range of strategic upstream projects across Oman, Bahrain and Iraq.

These contracts include a $370m project to expand the central processing facility (CPF) at Iraq’s Majnoon field.

In August this year, MEED reported that Petrofac was pushing to complete the project contract.

The EPC contract for the project was awarded to Petrofac by Basra Oil Company (BOC) in 2018.

Originally, the contract had a 34-month time period, but, like many other projects awarded at a similar time, the project was delayed due to complications related to the Covid-19 pandemic.

In August, MEED reported that the final part of the project that needed to be addressed was an issue relating to a single unit of the expansion project.

The oil processing trains were mechanically complete in October 2022 and were ready for startup in late 2023.

The facility then started operating in 2024. However, due to issues related to product specifications, it was taken offline.

Majnoon is Iraq’s fourth-biggest oil field and is estimated to contain 12.6 billion barrels of oil.

Petrofac does not currently have any bids under evaluation in Iraq or Oman, but it has submitted bids for projects worth $900m in Bahrain.

Over recent years, Petrofac has been attempting to expand in Kuwait, Saudi Arabia and Libya.

In these countries, it currently has bids under evaluation for projects worth a total of $4.63bn.

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Wil Crisp

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