Petrofac adds to its Abu Dhabi oil work with a second contract

City A.M. Reporter
PETROFAC, the British oil and gas services firm, yesterday said that a joint venture it is part of has won a $2.9bn (£1.88bn) share of an oil facilities contract with Zakum Development Company in Abu Dhabi.

The contract, Petrofac’s second multi-million dollar win in the Middle Eastern emirate this month, will see the firm’s joint venture with Mubadala Petroleum build facilities for four artificial islands at Zakum’s oil exploration site.

The facilities will come into operation in 2016.

Petrofac’s investors have been impatient to see it win new contracts after the company caused concerns in February by deviating from a usual practice of providing specific annual profit targets.

Numis analyst Sanjeev Bahl said the joint venture contract win was worth about $1.45bn to Petrofac itself, and was positive news for the company.

“It helps de-risk consensus forecasts. We still think they need another $5bn or so [of contract wins] this year," he said.

Petrofac, which designs and builds oil and gas infrastructure and also invests alongside oil firms in oil fields, earlier in April won another contract in Abu Dhabi worth $500m.

The company said in February it was seeing a strong pipeline of bidding opportunities meaning it would deliver “good growth” in net profit this year, while adding to its confidence in meeting a 2015 earnings target.