18 July 2013
Petrofac Increases Interest in Abu Dhabi Joint Venture
Petrofac announces that it has entered into agreements which will increase its economic interest in Petrofac Emirates, its Abu Dhabi based joint venture with Mubadala Petroleum, to 75%. This follows the sale by Mubadala Petroleum of its shares in Petrofac Emirates to Nama Project Services LLC, an affiliate of Nama Development Enterprises (Nama), a leading local service provider to the energy industry across the United Arab Emirates (UAE). The remaining 25% will be to the benefit of Nama. Completion of the transaction is subject to conditions precedent, including the usual regulatory consents.
Formed in 2008, Petrofac Emirates was the first joint venture company in the UAE to provide a full range of engineering, design, procurement and construction services for major onshore oil and gas, refining and petrochemical projects. The joint venture has grown strongly since 2008 and in 2013 has been awarded three strategically important projects in Abu Dhabi: an engineering, procurement, construction, transportation and commissioning contract for the Upper Zakum field in consortium with Daewoo Shipbuilding & Marine Engineering Co Ltd (Petrofac Emirates’ share US$2.9 billion); a US$187 million onshore EPC contract for the development of the Bab Habshan-1 project and a US$500 million onshore EPC contract for expansion of gas compression facilities at the Bab field.
Maurizio La Noce, CEO of Mubadala Petroleum, said, “Mubadala Petroleum, in partnership with Petrofac International, established Petrofac Emirates five years ago as a major provider of, and centre of excellence for, engineering, procurement and construction services to the oil and gas sector in the UAE and the region. Mubadala Petroleum has contributed local sector knowledge and relationships, and encouraged the recruitment and development of Emirati talent into the business.
"Having nurtured and matured the business into a stable and profitable venture, Mubadala Petroleum’s interest is now being transferred to the UAE’s private sector, in line with Mubadala’s strategic objectives and mandate. Mubadala Petroleum will concentrate on its core international E&P business, and most important UAE gas supply projects. In this context, we will continue to support the Abu Dhabi based Petrofac Emirates business and will look at opportunities to leverage on our existing and strong relationship with Petrofac International to identify mutually beneficial opportunities aligned with our ambitious growth objectives in our core geographies.”
Matthew Hollis, Managing Director of Nama, said: “We are very proud to have worked closely with Petrofac over the last 20 years. Their impressive performance has enabled them to grow in to one of the most successful leading EPC contractors in the world today. Their UAE joint venture with our friends in Mubadala Petroleum has further enhanced this success in recent years and so for all of us at Nama it is now a great honour to have been given the opportunity to be partners in bringing Petrofac Emirates into the private sector here in Abu Dhabi.”
Marwan Chedid, Chief Executive of Petrofac’s Engineering, Construction, Operations & Maintenance division, said: “Since its inception in 2008, we have established a first class engineering centre in Abu Dhabi with Petrofac Emirates. The joint venture has created business opportunities and established strong relationships over the last five years, in addition to helping Petrofac to expand our local talent pool by attracting UAE nationals to join our talented team. Looking forward, we want to build on the success we have achieved to date, including the important projects we have secured in Abu Dhabi this year. Nama is a first class local partner and we are optimistic about the future prospects of Petrofac Emirates. Likewise we look forward to maintaining our strong links with Mubadala Petroleum as we explore other opportunities collaboratively outside the region.”
Under the terms of the restructure, Petrofac will report 100% of the revenue and backlog on all current and future Petrofac Emirates’ projects (with Nama’s 25% economic interest reported as ‘profit for the year attributable to non-controlling interests’).