Petrofac Mulls a Sale of its North Sea Arm

According to reports, Petrofac is thinking about an exit from the North Sea as the company works to tackle its rising debt pile amid an investigation regarding fraud.

The FTSE 250 oil services company has been struggling since the oil price crash that occurred in 2014, and as of the end of June, the debt pile of the company had expanded to $1bn (£747m).

The share price of the firm took a huge blow in May after it suspended the company’s chief operating officer amid an investigation regarding corruption, money laundering, and bribery by the Serious Fraud Office.

In August, it took another blow when Ayman Asfari, its chief executive, was imposed with a fine amounting to €300,000 (£264,000) by the market watchdog of Italy over an alleged insider trading, which Asfari has rejected.

The Sunday Times reported that Petrofac had appointed consultants from Bain & Co to look at options for its North Sea unit which includes a sale.

It comes ahead of a trading update on the 14th of December. Analysts at Barclays stated that the orders of Petrofac have remained stubbornly sluggish in the second half of 2017 with some major tenders going against the company.

“Stock-wise, Petrofac remains a recovery play, in our view, with the share price more than reflecting well-known concerns,” said the analysts.

On Friday, the shares of Petrofac closed down at 417.9p, having more than half from this time in 2016 when its shares stood at about 915p.

Petrofac is one of the top services suppliers in the North Sea. The Times said that the North Sea business of the firm, which employs about 4,000 workers, could draw in players including KBR, Bluewater, and SNC-Lavalin.

Bain & Co and Petrofac declined to comment.