News Column

Petrofac forms joint venture for $1.25bn

June 27, 2014

PETROFAC and private equity firm First Reserve have formed a $1.25 billion (pound(s)735,000) investment joint venture in a deal including the sale of some assets of the British oil services company.

The PetroFirst joint venture will involve investment firm First Reserve taking an 80 per cent stake and Petrofac the remaining 20 per cent.

First Reserve will invest $1 billion and Petrofac some $250 million.

As part of the deal, PetroFirst will buy assets from Petrofac's Integrated Energy Services (IES) arm, where the company has invested in oil production alongside oil companies.

The division, which was created in 2011, has been under internal review in recent months after a string of disappointing investments and project delays.

First Reserve will also acquire three of Petrofac's deployed and contracted floating production facilities in Malaysia and Thailand for $450 million.

Tim Weller, chief financial officer at Petrofac, said there was an opportunity to invest in "several billion dollars' worth of infrastructure".

The deal is expected to reduce the oil company's debt from around $1.3 billion to closer to $850 million.

Petrofac last month cut its 2014 profit forecast by 11 per cent and said it would cut IES expenditure after completing a review of the division.

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Source: Herald, The (Scotland)

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