For years, Petrofac was among the most trusted names in the Gulf's energy sector. The British engineering and construction group helped build refineries, pipelines and gas facilities that powered the region's growth. Its white helmets were a familiar sight on major project sites.

That reputation is now under strain.

On October 27, Petrofac said its board had applied to the High Court of England and Wales to appoint administrators to its holding company after Dutch grid operator TenneT cancelled a major offshore wind contract in the Netherlands. The €2 billion (Dh7.8 billion) project had been central to a debt-restructuring plan already in difficulty.

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In a statement, the company called it a“targeted administration” limited to the parent entity, stressing that its subsidiaries would continue trading while“restructuring and merger options” were explored with lenders.

A day later came the second blow. Petrofac's shares were delisted from the London Stock Exchange. The company confirmed on its website that trading in its ordinary shares“has been cancelled” following the appointment of administrators. It said operations would carry on“as normal", backed by creditor support and extended loan maturities.

In simple terms, Petrofac's parent company is now under court-appointed supervision while it tries to reach a deal with lenders. Its shares are effectively worthless, and its future depends on whether it can restructure its debt and preserve key contracts.

The company maintains that operations remain intact and that its core businesses are strong.“Petrofac has a number of fundamentally strong businesses,” a spokesperson said, adding that teams are working to“minimise disruption for clients and employees".

Founded in 1981 and listed in London in 2005, Petrofac grew from a small oilfield contractor into one of the most recognisable names in engineering, procurement and construction (EPC) for oil, gas and petrochemical projects. It employs about 7,300 people worldwide.

Industry analysts say its downfall has been years in the making. In 2017, the UK's Serious Fraud Office opened an investigation into bribery allegations linked to Middle East contracts. Four years later, Petrofac was fined £77 million (Dh374 million) for failing to prevent bribery involving more than £5 billion (Dh24 billion) in projects across the region.

That conviction led to a one-year suspension from bidding for new ADNOC contracts. The ban was lifted in 2022 but the reputational damage lingered.

“When the global energy transition gathered pace and borrowing costs climbed, Petrofac was left juggling debt and shrinking margins,” said an analyst.“The cancellation of the Dutch wind-farm contract proved to be the final straw, cutting off a vital source of cash and forcing the company into administration.”

While the immediate fallout is being felt in Scotland, where around 2,000 jobs in Aberdeen are at risk, the aftershocks are spreading to the Middle East, Petrofac's most profitable market for decades.

Through Petrofac Emirates LLC, its UAE arm, the company has managed multi-billion-dollar contracts for ADNOC Gas, Kuwait Oil Company, and others. Industry trackers estimate that Petrofac holds more than US $5 billion (Dh18 billion) in active projects across the GCC and North Africa.

In the UAE, the firm is engaged in several multi-million-dollar energy-infrastructure projects viewed as critical to production growth and the country's long-term energy-transition targets.

For now, engineers remain on site and work continues, though the situation is being watched closely.“No client likes to hear the word administration,” said an EPC consultant.“Even if operations are ring-fenced, perception matters. It can slow down decisions, extensions, or new awards.”

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