Petrofac chosen for Oman oil and gas project

Company said it would provide engineering, procurement and construction for Petroleum Development Oman’s Yibal Khuff development project over the next four-and-a-half years.

Petrofac has won a US$900 million contract to provide services for one of Oman’s integrated oil and gas projects.

The UK-listed company, with yards in Abu Dhabi and Sharjah, said it would provide engineering, procurement and construction for Petroleum Development Oman’s Yibal Khuff development project over the next four-and-a-half years. The project, located about 350 kilometres south-west of Muscat, is expected to come online in 2019 and produce crude and sour gas.

The managing director for Petrofac’s engineering and consulting services, Craig Muir, said the company would use the “local supply chain and recruitment of local resources” to deliver the project.

Mr Muir said the Yibal Khuff contract “reinforces our presence in Oman, where we have a number of ongoing projects and a local engineering office”.

The contract would not dent Petrofac’s backlog, said Alex Brooks, a London-based energy analyst at Canaccord Genuity.

A quarter of the contract is for professional services, with the remainder for pass-through procurement, which represents a significantly lower contract value of about $225m.

“Comparing to the group’s backlog of about $19bn, this [contract] is only about a 1 per cent addition,” Mr Brooks said. “It is not completely irrelevant, but it is a small addition.”

Petrofac shares were up 1.6 per cent to 911 pence apiece in afternoon trade in London on Thursday. Over the past year the share price has ranged from a high of 1268 pence last June to a low of 596.5 pence this January.

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