Administrators are on standby this weekend to handle the collapse of Petrofac, the oil and energy services group – an insolvency which could threaten the future of more than 2,000 jobs in Scotland.
Sky News has learnt that directors of Petrofac has lined up Teneo for an administration process which could be confirmed as early as Monday morning.
The company’s board, chaired by former Anglo American finance director Rene Medori, is said to be holding emergency talks this weekend.
One industry executive said a decision to file for administration was likely to be taken before the stock market opens on Monday.
Ed Miliband, the energy secretary, and other ministers have been briefed on the situation, with more than 2,000 Scottish-based jobs potentially at risk.
Kroll, the advisory firm, has been engaged by the Department for Energy Security and Net Zero to work with ministers and officials on the unfolding crisis.
Government sources claimed this weekend that Petrofac’s UK operations were “growing”.
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“This government is supporting jobs and investment in Scotland including building a world leading carbon capture industry in the North Sea, alongside our biggest ever investment in offshore wind,” one official said.
A source close to Petrofac said on Saturday that the UK arm of the group had not been beset by any lossmaking contracts and would be in a strong position to secure its future.
The administration process would affect the parent company, Petrofac Limited, which does not directly employ the company’s workforce, they added.
Petrofac’s potential collapse comes at a sensitive time for Mr Miliband, who is coming under enormous pressure to permit more North Sea oil and gas drilling despite Labour’s manifesto commitment not to grant licences on new fields.
Petrofac employs about 7,300 people globally, according to a recent stock exchange filing.
It designs, constructs and operates offshore equipment for energy companies.
The company’s shares have been suspended since April.
Petrofac, which now has a market capitalisation of barely £20m, has been mired in financial trouble for years.
Once-valued at more than £6bn, it has been drowning in a sea of debt, and faced a Serious Fraud Office investigation which resulted in a 2021 conviction for failing to prevent bribery, and the payment of more than $100m in penalties.
In a stock exchange announcement on Thursday, Petrofac said the cancellation of a contract by TenneT, an operator of electricity grids in Europe which is its biggest customer, meant that a solvent restructuring was now not viable.
“Having carefully assessed the impact of TenneT’s decision, the Board has determined that the restructuring, which had last week reached an advanced stage, is no longer deliverable in its current form,” the company said.
“The group is in close and constant dialogue with its key creditors and other stakeholders as it actively pursues alternative options for the group.
“In the meantime, Petrofac remains focused on serving its clients and maintaining operational capability and delivery of services across its businesses.”
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Founded in 1981 in Texas, Petrofac has been in talks about a far-reaching financial restructuring for more than a year.
A formal restructuring plan was sanctioned by the High Court in May 2025 with the aim of writing off much of its debt and injecting new equity into the business.
This was subsequently overturned, prompting talks with creditors about a revised agreement.
If Petrofac does fall into administration, it is expected to be broken up, with some of its assets – including key contracts – likely to be taken over by other industry players.
Petrofac has been contacted for comment.
A DESNZ spokesman declined to comment.
