17th Oct 2014 07:53
LONDON (Alliance News) - Petrofac Ltd Friday said it has received record awards for its engineering, construction, operations and management activities as it remains on track to hit profit targets for the 2014.
The company reported an order intake totalling USD9.4 billion for the year to date for its engineering, construction, operations and management (ECOM) sector.
The boost in orders is mainly attributable to increased activity for ECOM's onshore engineering and construction services in the second half. During the second half of the year, it has sealed new contracts including a USD700 million contract with the Kuwait Oil Co and a USD500 million contract for a subsidiary of Petrnoas in Malaysia.
The company expects to secure further contracts for its onshore engineering and construction services before the end of 2014, it said in a statement.
Its offshore projects and operations division within ECOM also has secured new contracts in the second half in the UK Continental Shelf, the region of waters surrounding the UK, and new contracts in Iraq. In the North Sea, Petrofac has secured a three-year, USD120 million contract to provide engineering and construction support for Chevron's three assets - the Captain, Alba and Erksine platforms.
In Iraq, it secured a contract to provide general construction to BP PLC on the Rumalia field near Basra, managing modifications to increase production. The contract is for three years, with an option to extend it for a further two years and has a value of up to USD500 million, said Petrofac.
"This is already our most successful year for new awards in ECOM, with ECOM order intake of USD9.4 billion in the year to date, which has been secured at bid margins, on a country-by-country basis, in line with the last few years," said Chief Executive Ayman Asfari.
Its integrated energy services continue to develop production enhancement contracts in Mexico, expected to be realised toward the end of the year, it added. Its equity upstream investments have seen developments, with production due to commence at the Greater Stella area in the UK North Sea in the middle of 2015, and first oil being encountered at Cendor 2 in Malaysia.
"In integrated energy services, our focus remains on the delivery of key operational milestones on the existing project portfolio. During the period we achieved first oil on Cendor phase 2 on Block PM304 in Malaysia, a significant operational landmark on the project, with ramp up of production expected in the near-term," said Asfari.
Its group backlog, unfinished work or customer orders that have been received but are either incomplete or in the process of completion, increased USD21.2 billion at September 30, compared to USD20.3 billion at June 30, giving good revenue visibility for the remainder of the year, it said in a statement.
At September 30, the company reported a net debt of USD1.1 billion, a decrease from June 30, when it stood at USD1.3 billion.
"With activity levels stepping up over the second half of the year, in line with our expectations, we remain on track to deliver net profit in the range USD580 million to USD600 million for the full year 2014," said Asfari.
Petrofac shares were up 3.0% to 1,017.00 pence per share early Friday, the third leading gainer in the FTSE 100.
By Joshua Warner; [email protected]; @JoshAlliance
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