More than 2,000 jobs in Scotland are under threat after oil and energy services firm Petrofac filed for administration.
The company confirmed on Monday that while its operations will continue trading, it is actively pursuing restructuring options — including the potential for a sale, merger, or acquisition — in collaboration with key creditors.
Sources close to Petrofac expressed optimism that a buyer for its North Sea assets could be secured soon, possibly within days.
Administrators from Teneo have been appointed to work alongside Petrofac’s management team in an effort to “preserve value, operational capability and ongoing delivery,” according to an official statement.
The news comes after Sky News first reported that the firm was preparing for insolvency.
Energy Secretary Ed Miliband and other senior ministers have been briefed on the unfolding situation.
A major blow to the North Sea sector
Petrofac’s collapse follows the cancellation of a significant contract by its largest customer last week — a development that tipped the already struggling company into administration.
Once valued at over £6 billion, Petrofac has been battling financial challenges for years, including heavy debt burdens and the lingering impact of a Serious Fraud Office investigation, which in 2021 led to a conviction for failing to prevent bribery and millions in fines.
The Department for Energy Security and Net Zero had previously engaged advisory firm Kroll to assist ministers in managing the crisis.
Political and industry repercussions
The timing of Petrofac’s administration is politically awkward for Ed Miliband, whose energy strategy has faced growing scrutiny amid fears about the future of the UK’s offshore oil and gas sector.
Analysts say a swift sale of Petrofac’s North Sea business would provide relief to both employees and the government, which is eager to prevent further disruption in the already strained energy industry.
About Petrofac
Founded in 1981 in Texas, Petrofac designs, builds, and operates offshore infrastructure for global energy companies.
According to recent filings, it employs around 7,300 people worldwide.
The company had been engaged in lengthy negotiations over a large-scale financial restructuring aimed at reducing debt and bringing in new investment. Although the High Court approved*that plan in May, it was later overturned, forcing the company back to the negotiating table with creditors.