Petrofac’s next big test: What January 30 vote means for its future in the UAE

Dubai: Petrofac’s long restructuring process is moving into another critical phase, with a creditor vote later this month that will determine whether the company can complete the sale of one of its remaining businesses.

On Wednesday, Petrofac said creditors of Petrofac Facilities Management Limited will meet on January 30 to vote on a proposed Company Voluntary Arrangement (CVA) linked to the agreed sale of its Asset Solutions business to US-based engineering group CB&I.

The company said approval of the CVA is required for the sale to go ahead. The arrangement is designed to settle certain creditor claims so the transaction can be completed.

Petrofac said trade creditors, employees, and certain other parties are not affected by the CVA. It added that operations will continue as normal during the process, and Asset Solutions will keep serving customers and working with suppliers.

The company said creditors entitled to vote will receive documents and instructions from Teneo Financial Advisory, which is overseeing the process.

John Pearson, chief operating officer of Petrofac’s Asset Solutions business, said the sale would secure the future of the unit and allow about 3,000 employees to move to CB&I if completed.

The vote comes after months of upheaval across Petrofac’s global business, including developments that directly affected staff and operations in the UAE.

In November, Petrofac said operations across its UAE portfolio were continuing as normal, with teams supporting ADNOC and other clients. The company made the statement after announcing plans to place Petrofac International Limited (PIL) into administration.

PIL historically oversaw much of Petrofac’s engineering and construction activity across the Middle East and North Africa. Petrofac said the entity no longer holds active contracts and that the group intended to redeploy its 120 employees to other group companies where possible.

When Petrofac’s UK holding company entered administration in late October, the group said the process applied only to the parent entity and that operating subsidiaries would continue trading. Bringing PIL into administration marked the first time a major overseas unit was included in the court-supervised restructuring.

Petrofac said the move was designed to stabilise operations, protect value across the group, and support planned restructuring and merger-and-acquisition solutions.

Across the wider GCC, Petrofac still holds active contracts worth more than $5 billion, including projects in Algeria, Iraq, Oman, and Bahrain.

Despite assurances that operations were continuing, Petrofac’s UAE workforce was hit by significant job cuts in November.

Around 180 employees in the UAE linked to an offshore wind programme were dismissed with a day’s notice on November 18, according to sources familiar with the matter. The affected staff were mainly tied to the TenneT offshore transmission project, which had accounted for most of the company’s engineering and construction revenue.

Some departing employees raised concerns about unpaid end-of-service benefits and notice entitlements.

The layoffs followed Dutch grid operator TenneT’s decision in October to terminate Petrofac’s contract on a 2-gigawatt offshore wind transmission project, citing unmet contractual obligations.

The project represented more than 80% of revenue in Petrofac’s engineering and construction division.

The termination sharply weakened Petrofac’s position and directly preceded the UK holding company’s move into administration and its delisting from the London Stock Exchange.

Petrofac was once one of the most valuable energy services companies operating from the Middle East, with a market value that exceeded £6 billion and a place in the FTSE 100.

The company built a strong presence across the region, securing major contracts in Iraq, Saudi Arabia, and the UAE.

Its fortunes changed after corruption investigations found executives had used agents to bribe officials to win business. The UK Serious Fraud Office opened a formal probe in 2017.

Former executive David Lufkin later pleaded guilty to 14 bribery charges. In 2021, Petrofac admitted seven counts of failing to prevent bribery and was ordered to pay more than £77 million in penalties.

The conviction damaged Petrofac’s ability to win state-backed contracts, cutting off key revenue streams. The group was also carrying an estimated $4 billion in debt.

A restructuring plan that included converting more than $800 million of debt into equity was later overturned by the Court of Appeal in July 2025, leaving the company exposed.

The loss of the TenneT contract in October proved decisive.

The January 30 creditor vote will decide whether Petrofac can complete the sale of Asset Solutions to CB&I.

Petrofac says the deal would secure the future of that business and transfer about 3,000 employees.

For UAE stakeholders, the outcome will signal how effectively the group can preserve operating businesses, manage liabilities, and maintain regional operations after years of legal, financial, and commercial strain.

The vote marks another key moment in Petrofac’s effort to stabilise what remains of the company.