A court-supervised restructuring that began in 2023 was meant to stabilise the business by adding new funding and deferring debt service. The plan secured High Court approval in May 2025, only for the Court of Appeal to overturn it in July after objections from joint-venture partners. That left Petrofac with a fragile capital structure that depended on flawless execution and creditor patience. The TenneT termination removed both.

What this means for the Middle East

The Gulf region is one of Petrofac’s most important theatres of work. The company has been a major contractor to national oil and gas operators in the UAE and Oman, delivering engineering, procurement and construction services for gas compression, wellhead facilities, and brownfield upgrades. In 2025 alone, it secured awards from ADNOC Gas tied to the Rich Gas Development programme, Das Island gas expansions and new compressor capacity at Habshan.

According to MEED Projects data, Petrofac has about $5.8 billion of active projects in the Middle East and North Africa. The UAE accounts for roughly $2.9 billion, including a $1.2 billion scope for the planned Das Island gas liquefaction facility and a $700 million package for the sales gas pipeline network upgrade. Across the region, the company has bids under evaluation worth more than $19 billion.

The worry is not about project cancellation in the Gulf. State-backed energy spending remains robust and contractors can be replaced. The risk lies in timing. If administrators struggle to secure liquidity for operating subsidiaries, or if suppliers hesitate to ship long-lead equipment, schedules could tighten. Energy projects are increasingly interlinked. Compressor modules, control systems and rotating equipment often have long fabrication cycles. A break in one chain can ripple across commissioning programmes.

“Petrofac’s situation is unfortunate, but the energy market is far bigger to be hit by any single contractor,” said a regional analyst. “Abu Dhabi’s projects are structured to stay on schedule, and even when global contractors face turbulence, UAE projects continue without interruption.”

How Gulf project owners are likely to respond

Clients are already running contingency plans. These typically include checking parent company guarantees, reviewing step-in and novation rights, and preparing to shift residual scope to joint-venture partners or other EPC players already pre-qualified. In the GCC, local champions and global firms have active frameworks with ADNOC, PDO and Aramco. That makes step-ins more practical than in other regions.

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