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Petrofac cuts staff in Libya and puts oil project on hold

2 March 2026

 

The financially troubled engineering company Petrofac has cut its staff in Libya and stopped work on a key oil project in the country, according to industry sources.

Between 15 and 20 Libyan members of staff have been released by the company, and work on a project to develop the Erawin oil field has been paused, sources said.

Petrofac secured a contract with Zallaf Libya Oil & Gas Exploration & Production Company to deliver its Erawin field development project phase 1 early production facilities (EPF) in September 2021.

The project’s scope of work encompassed surface equipment, including well pads and flowlines, at the Erawin oil field.

It also included a pipeline to transport crude oil approximately 100 kilometres (km) to the El-Sharara oil field, along with a control room, substation and telecom system located there.

In a statement to MEED, Petrofac said:

“Petrofac has not exited Libya. Our Tripoli office remains operational and we continue to maintain an active presence in the country.

“Regarding the Erawin project, the pipeline infrastructure was completed and has been in operation for more than a year.

“A small number of remaining activities were paused while we continue discussions with the client on the project’s final scope and close‑out arrangements.

“Petrofac has not abandoned the project, nor have we shut down our operations in Libya.”

Commenting on the cut to employee numbers in Libya, the company said:

“Recent workforce adjustments reflect the normal lifecycle of a project.”

The company added: “Libya remains an important market for Petrofac, and we remain committed to supporting the development of the country’s energy sector.

“As discussions with the client are ongoing, we are not in a position to comment further at this time.”

Zallaf Libya Oil & Gas Exploration & Production Company was established in Libya in 2013 and is wholly owned by Libya’s National Oil Corporation.

It awarded the Erawin EPF contract to Petrofac using the engineering, procurement, construction and commissioning (EPCC) contract model.

In a statement in 2021, Petrofac said the contract was valued at over $100m, but did not give a precise figure.

The regional project-tracking service MEED Projects has estimated that the contract was worth $440m.

Petrofac problems

On 27 October last year, Petrofac announced that it had applied to appoint administrators, a move that 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.

At the time, the total value of projects awarded to Petrofac and under construction in the region was $5.83bn, according to information recorded by MEED Projects.

Petrofac also had bids under evaluation for 15 projects in the region worth a total of $19.28bn.

Since then, key parts of the business have been sold off, and many of the company’s staff have been made redundant.

The redundancies included around 180 employees who were issued termination notices in October last year.

In December, the US-based company CB&I announced it had entered into a deal to buy Petrofac’s asset solutions business in the first quarter of 2026.

In January this year, the proposed company voluntary arrangement (CVA) related to the sale of its Asset Solutions business was approved.

Erawin exports

Libya shipped its first cargo of crude from the Erawin oil field in November 2023.

The shipment departed from Libya’s Zawiyah port and consisted of 600,000 barrels of crude.

Australia-based Worley Parsons was appointed as the front-end engineering and design (feed) contractor for the EPF project in 2019.

The Erawin field development project is located about 800km south of Tripoli and 100km southwest of the El-Sharara field.

https://image.digitalinsightresearch.in/uploads/NewsArticle/15821861/main.jpg
Wil Crisp

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