Petrofac’s net production expected to decline as of 2019
BAKU, Azerbaijan, Dec.17
By Leman Zeynalova – Trend:
Net production of UK-based Petrofac, a leading international service provider to the oil and gas production and processing industry, is expected to be approximately 4.2 million barrels of oil equivalent (mmboe) in 2019 (2018: 6.2 mmboe), Trend reports citing the company.
The average realized oil price (net of royalties) for the year is expected to be approximately $66 per barrel of oil equivalent (2018: $59/boe) reflecting higher commodity prices and production mix.
Engineering & Production Services is performing in line with expectations, with growth in Projects more than offsetting lower activity from Operations, according to the company.
“The recovery in market conditions is reflected in the acceleration of orders in the second half. In total, $1 billion of awards and contract extensions have been secured in the UK North Sea, Oman, UAE, Malaysia and Azerbaijan (2018: $0.7 billion). We have also secured contract extensions in Iraq in the second half of the year.”
The Group also recently completed the small bolt-on acquisition of W&W Energy Services (“W&W”). This provides the Group with an entry-level position in the US onshore operations and maintenance market and an additional platform for growth in the attractive Permian basin.
“We are making steady progress delivering our portfolio of E&C projects, with revenue and net margin for 2019 in line with previous guidance. The BorWin 3 offshore grid connection project in the North Sea, the RAPID project in Malaysia, the Upper Zakum Field Development in the UAE, the Jazan North tank farm and Fadhili projects in Saudi Arabia, and the KNPC Clean Fuels project in Kuwait are all substantially complete. A major milestone was also recently achieved on the Lower Fars Heavy Oil plant in Kuwait with the commencement of steam injection. The Khazzan Phase 2 (Ghazeer) gas development in Oman remains ahead of schedule.”
As for financial results, group backlog stood at $7.4 billion at 30 November 2019. “Net debt is expected to be around $0.1 billion at 31 December 2019 (2018: $0.1 billion net cash) reflecting lower order intake and delays in some commercial settlements, which we expect to be resolved in 2020.”
Petrofac designs, builds, operates and maintains oil and gas facilities, which the company delivers through a range of flexible and innovative commercial models that can be aligned to an individual client, project or asset.
Follow the author on Twitter: @Lyaman_Zeyn