Petrofac share price falls 13 per cent amid costs hike

 
Jessica Morris
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Petrofac has announced a £130m loss from its Shetland gas project in the North Sea (Source: Getty)

Shares in Petrofac dived today, after the oilfield services provider announced an additional £130m pre-tax loss for its Shetland gas project in the North Sea.

Shares in Petrofac fell as much as 13 per cent to 875.28p in mid-morning trade on the London Stock Exchange.

The firm said the final stages of the project had suffered amid adverse weather conditions and industrial action. And as activity increased, it became clear they needed more man power to finish the project which is due to be completed in the third quarter.

"Whilst we still anticipate project completion in the third quarter of 2015, as a result of the significant amount of additional man-hours and associated support costs required over the remaining months of project executive, we now expect to recognise a further pre-tax loss on the project of around £130m in 2015," it said.

The global oil price rout has dented the profitability of a number of oil companies, meaning many have had to cut investment, abandon projects and make job cuts.

In his last budget, Chancellor George Osborne unveiled tax breaks for the North Sea oil and gas industry, helping it stay afloat amid plunging global oil prices and dwindling reserves.

"I have never faced a more difficult and challenging work environment," chief executive Ayman Asfari said on a conference call.

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