21 October 2010
Interim Management Statement
Petrofac Limited (Petrofac, the group or the Company), the international oil & gas facilities service provider, is publishing its Interim Management Statement for the period from 1 July 2010 to 21 October 2010, as required by the UK Listing Authority’s Disclosure and Transparency Rules.
- Continuing operations performing in-line with expectations
- Order intake(1) of approximately US$2.6 billion in the year to date
- Gross cash balances of US$1.0 billion at 30 September 2010 (30 June 2010: US$1.1 billion); cash balances expected to rise over the balance of the year
Ayman Asfari, Group Chief Executive, commented: “We are pleased with our excellent operational performance during the year to date, with a number of projects either recently delivered to customers or expected to be delivered before the end of the year.
“Our operational performance, together with our expected order intake for the full year, underpins our confidence in 2010 and the medium-term.”
Engineering & Construction
In Engineering & Construction, following on from the completion and commissioning of the Ebla gas plant during the first half of the year, we expect to achieve substantial completion of the Jihar gas plant, Harweel enhanced oil recovery plant, the Mina Al-Ahmadi refinery pipelines and the In Salah gas compression projects by the end of the year. In July and August, we were awarded two engineering, procurement and construction projects in Kuwait with a combined value in excess of US$800 million. We are seeing a good flow of bidding opportunities in our core markets, particularly in countries such as Algeria and Iraq and we are focused on the conversion to the second phase of the South Yoloten project in Turkmenistan.
Offshore Engineering & Operations
In Offshore Engineering & Operations, we continue to bid actively. We have made further progress in growing the business internationally with the recent award of a duty holder contract, worth approximately US$50 million per annum for 5 years, for the operations and facilities management of the onshore Sajaa gas plant and related assets for the Government of Sharjah in the United Arab Emirates.
Engineering, Training Services & Production Solutions
In Production Solutions, we signed our first production enhancement contract in July for operation of the Ticleni field and its eight satellite fields in Romania for an initial term of 15 years. Following completion of a four-month transition, we plan to take full operational responsibility for the fields on 1 November, including the transfer of over 900 personnel from Petrom. In Training Services, overall delegate numbers are showing modest year-on-year growth in the UK and are up strongly in international markets. In October, we inaugurated our fifteenth training facility, a state-of-the-art technical training centre in Syria, which we designed, refurbished and equipped, and which we will operate for 5 years. In Engineering Services, utilisation rates are running at high levels, with significant man-hours being expended on proposals work.
In Energy Developments, the Cendor field in Malaysia recently passed the milestone of 20 million barrels of production (since first oil in September 2006). Work continues on progressing the second phase of the development, with a formal decision expected before the end of the year. Our other operational assets are performing in line with expectations. Business development activities remain focused on our core markets, including Asia Pacific, where we have identified opportunities to build upon our successful track record in the region.
The group’s backlog at the end of September stood at approximately US$7.4 billion(2) (30 June 2010: US$6.9 billion), comprising approximately US$5.7 billion from the Engineering & Construction reporting segment (30 June 2010: US$5.4 billion) and approximately US$1.7 billion across the other reporting segments (30 June 2010: US$1.5 billion). Gross cash balances were US$1.0 billion at the end of September 2010 (30 June 2010: US$1.1 billion).
(1) Order intake comprises new contracts awarded, growth in scope of existing contracts and the rolling increment attributable to contracts which extend beyond five years. Order intake is not an audited measure.
(2) Does not include US$0.3 billion of awards since 1 October 2010.