Petrofac, the international oil & gas facilities service provider, is publishing its Interim Management Statement for the period from 1 January 2011 to 13 May 2011, as required by the UK Listing Authority’s Disclosure and Transparency Rules, ahead of its Annual General Meeting today.
- Continuing operations performing in-line with expectations with a good start on the second phase of the South Yoloten project in Turkmenistan
- Order intake of US$2.0 billion in the year to date, with major awards in Algeria, Iraq and Malaysia
- Group backlog of US$12.3 billion at the end of April 2011 (31 Dec 2010: US$11.7 billion) continues to give outstanding revenue visibility
Ayman Asfari, Group Chief Executive, commented: “Operationally, we have made a good start to the year and we are increasingly confident that we will deliver like-for-like(1) net profit growth in 2011 of at least 15%, in line with our previous guidance.
“Notwithstanding that we anticipate group backlog to remain relatively stable over 2011, we have continued to win business in the year to date with major new awards in Algeria, Iraq and Malaysia.”
Engineering & Construction
We have made good progress on our portfolio of projects, including commissioning and completion of the performance test for the Jihar gas plant in Syria and completion of the third and final compression station and power generation facility at Krechba on the first phase of the In Salah Gas development in Algeria. In January 2011, we were awarded a US$1.2 billion contract for further development of the In Salah Gas southern fields, including upgrade of the Teg and Krechba compression stations. In Turkmenistan, we have made a good start on the second phase of the South Yoloten project, following completion of the first phase in late 2010. We have placed orders and agreed subcontracts for the majority of our procurement and construction activities and have commenced early onsite construction works. In Iraq, we recently announced a US$240 million contract to deliver early production facilities on the Majnoon field for Shell and we expect to bid on a number of other projects in the country over the coming months.
Offshore Engineering & Operations
We have made a positive start on our recent major contracts awards, including the Laggan Tormore gas plant on Shetland and the Duty Holder contract for the Government of Sharjah. As well as opportunities in Offshore Engineering & Operations’ largest market of the UK/Europe, we continue to bid on opportunities in the Middle East and North Africa, the Caspian and the Asia Pacific region.
Engineering, Training Services & Production Solutions
Engineering Services continues to support front end engineering and design (FEED) work and early engineering on projects across the group, predominantly in Engineering & Construction and Energy Developments. We have secured premises for a third Indian engineering office, in Dehli, which will open around the middle of the year. Training Services has seen a significant improvement in training delegate numbers across the majority of its geographic markets and has recently opened a training facility at Hassi Messaoud in Algeria. Supporting the development of local workforces remains a core part of our strategy and we are actively considering establishing training centres in other important markets for the group, including Iraq and Turkmenistan. In Production Solutions, the general environment for our consultancy and technology businesses has improved, and we have had some early success in improving production on our Production Enhancement Contract for the Ticleni field in Romania.
In late January 2011, we secured our first Risk Service Contract in Malaysia, for the development of the Berantai field. We completed the acquisition of a floating production, storage and offloading vessel (‘FPSO’) to support the development in March 2011, with upgrade and life extension works now being undertaken in Singapore. The second phase of the Cendor development, also in shallow waters offshore Peninsular Malaysia, is progressing well, with agreement reached by the partners to the Production Sharing Contract to lease a new-build FPSO.
The group’s backlog at the end of April 2011 stood at approximately US$12.3 billion (31 December 2010: US$11.7 billion), comprising approximately US$9.4 billion from the Engineering & Construction reporting segment (31 December 2010: US$9.0 billion) and approximately US$2.9 billion across the other reporting segments (31 December 2010: US$2.7 billion). Gross cash balances were higher at the end of April 2011 at US$1.7 billion, following receipt of a large advance payment on the South Yoloten project in January 2011 (31 December 2010: US$1.1 billion).
(1) Like-for-like net profit growth excludes the gain of US$124.9 million on the EnQuest demerger and the trading net profit from Energy Developments’ demerged assets of US$2.1 million for the year ending 31 December 2010.
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Notes to Editors
Petrofac is a leading international provider of facilities solutions to the oil & gas production and processing industry, with a diverse customer portfolio including many of the world’s leading integrated, independent and national oil & gas companies. Petrofac is quoted on the London Stock Exchange (symbol: PFC) and is a constituent of the FTSE 100 Index.
The group delivers services through seven business units: Engineering & Construction, Engineering & Construction Ventures, Engineering Services, Offshore Engineering & Operations, Training Services, Production Solutions and Energy Developments.
Through these businesses Petrofac designs and builds oil & gas facilities; operates, maintains and manages facilities and trains personnel; enhances production; and, where it can leverage its service capability, develops and co-invests in upstream and infrastructure projects. Petrofac’s range of services meets its customers’ needs across the full life cycle of oil & gas assets.
With around 14,000 employees, Petrofac operates out of six strategically located operational centres, in Aberdeen, Sharjah, Woking, Chennai, Mumbai and Abu Dhabi and a further 20 offices worldwide. The predominant focus of Petrofac’s business is on the UK Continental Shelf (UKCS), the Middle East and Africa, the Commonwealth of Independent States (CIS) and the Asia Pacific region.