More than 2,000 Scotland-based jobs are at risk as oil and energy services group Petrofac has applied for administration.
The group’s operations will continue to trade, and options for restructuring of the company and a possible merger or acquisition are being actively explored with its key creditors, the company said on Monday.
People close to the company say they are hopeful a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.
Money blog: ‘We protect the UK, our salaries can be limitless’
Administrators will work alongside company management to “preserve value, operational capability and ongoing delivery”, its announcement read.
News of a possible insolvency announcement was first reported by Sky News.
Energy Secretary Ed Miliband and other ministers have been briefed on the situation.
Petrofac administration not a great start to the week for Ed Miliband though relief could come
Renewable energy produces more electricity than coal for the first time, experts say
125 jobs to go at Lindsey oil refinery as ministers accused of being ‘tin eared’
City editor
It’s not the start to the week that Ed Miliband, the energy secretary, would have been hoping for: more than 2,000 private sector jobs in Scotland at risk from the collapse of Petrofac, the London-listed oilfield services group.
Its slide into insolvency was triggered by last week’s cancellation of a major contract by its biggest customer, but the failure of a company once valued at more than £6bn has been a long time coming.
Administrators at Teneo will now attempt to salvage what they can from Petrofac’s wreckage.
For thousands of employees, the future is now uncertain, although people close to the company say they are hopeful that a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.
That would be a relief to Mr Miliband, whose energy policy has come under growing scrutiny in recent months amid dire warnings about the future of Britain’s offshore oil industry.
An advisory firm, Kroll, had been engaged by the Department for Energy Security and Net Zero to work with ministers and officials on the unfolding crisis for the company.
What is Petrofac?
Petrofac employs about 7,300 people globally, according to a recent stock exchange filing.
It designs, constructs and operates offshore equipment for energy companies.
It had been valued at more than £6bn but has been struggling with its debt.
It also 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.
Founded in 1981 in Texas, the business 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 this year with the aim of writing off much of its debt and injecting new cash into the business.
Be the first to get Breaking News
Install the Sky News app for free
This was subsequently overturned, prompting talks with creditors about a revised agreement.
