Kuwait suspension is a setback for Petrofac’s restructuring
3 December 2025
Commentary
Wil Crisp
Oil & gas reporter
Petrofac’s suspension from participating in tenders in Kuwait’s oil and gas sector is likely to be a major blow to the company amid its ongoing restructuring.
In its latest restructuring update, issued on 25 November, Petrofac said it was continuing to explore restructuring options and M&A solutions to address its financial difficulties.
If the company cannot win contracts in significant markets such as Kuwait, its business units are likely to lose value and become less attractive to potential acquirers.
The suspension is also a setback for Petrofac because it has already invested significant resources in evaluating potential projects in Kuwait and submitting bids.
These resources have now effectively been wasted, as the company is unable to win the contracts for the projects it has spent time and money evaluating.
The projects it has bid for in Kuwait include the Water Injection Plant 4 (WIP-4) project in the south of the country.
In October, MEED revealed that Petrofac had submitted the lowest bid for the project, beating the only other bidder, India’s Larsen & Toubro.
Petrofac submitted a bid of KD453,736,367 ($1.48bn), which was 7% lower than Larsen & Toubro’s bid of KD488,378,247 ($1.59bn).
Petrofac would almost certainly have won this contract had it not been temporarily banned from securing work in Kuwait.
Although Petrofac has only been temporarily banned from tender participation, there is significant uncertainty about how long the ban will remain in effect.
The longer the ban remains in place, the more amplified the negative impacts will be for the Jersey-registered engineering company.
Additionally, if other key markets follow suit and introduce their own bans, the long-term impact on Petrofac’s financial situation is likely to worsen.
This is a major concern for large clients of Petrofac in the Middle East that are relying on it to execute high-value projects.
According to data recorded by the regional project-tracking service MEED Projects, the total value of projects awarded to Petrofac and under construction in the region is $5.83bn.
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.
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