UK's Petrofac hires Bain & Company to explore North Sea business

31 January 2018 2 min. read
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Bain & Company has been hired by British oilfield services company Petrofac to explore options for the group’s North Sea operations. This could include the sale of Petrofac’s North Sea operations, as the firm looks to stabilise itself following corruption allegations and the accruing of high levels of debt.

Petrofac has lost about half its value since May, when the Serious Fraud Office (SFO) commenced an investigation into the company and its units. The organisation has a current market capitalisation of £1.45 billion, amid the UK SFO’s investigations for its dealings with Monaco-based Unaoil, and has been struggling to reduce a $1 billion debt pile. The group also saw its CEO, Ayman Asfari, face down allegations of insider trading in Italy, recently, however UK courts backed the embattled Petrofac boss, ruling that he was not served notice of the charges levelled against him by the Italian authorities.UK's Petrofac hires Bain & Company to explore North Sea business

Oilfield service companies had also been hurt by weak demand in recent months, as subdued oil prices forced exploration and production companies to cut capital expenditure and defer or cancel contracts. In spite of this, Petrofac, which designs, builds, operates and maintains oil and gas facilities, said it secured $5.2 billion in new orders over 2017,  and it continued to see a high level of tendering activity in its core markets. The company also claimed its backlog stood at $10.3 billion on November 30 2017, reflecting a recovery in new order intake.

Petrofac is a provider of oilfield services to the international oil and gas industry. It is registered in Jersey, with its main corporate office on Jermyn Street, London. The group has reportedly been mulling the sale of its North Sea operations, amid several charges of corruption across its practices. At the end of 2017, the British press reported that US oilfield services companies Schlumberger and Halliburton, as well as a Middle Eastern company were among those circling Petrofac, with an acquisition bid being values at around 600 pence per share.

In order to weigh up its options, Petrofac has hired Bain & Company. The firm is said to be helping the group explore its options for its North Sea operations – options which include a potential sale. Neither Petrofac or Bain have issued a comment on the hire, although in the case of Bain, it is standard practice for consulting firms not to comment on pending client work.