Administrators are on standby this weekend to deal with the collapse of Petrofac, the oil and energy services group – an insolvency that could threaten the future of more than 2,000 jobs in Scotland.
Sky News has learned that Petrofac executives have lined up Teneo for an administration process which could be confirmed as early as Monday morning.
The company’s board, chaired by former Anglo American CFO René Medori, would hold emergency talks this weekend.
An industry executive said a decision to file for administration would likely be made before the stock market opened on Monday.
Ed Miliband, the energy secretary, and other ministers have been briefed on the situation, with more than 2,000 Scottish jobs potentially at risk.
Kroll, the consultancy, has been engaged by the Department for Energy Security and Net Zero to work with ministers and officials on the ongoing crisis.
Government sources claimed this weekend that Petrofac’s operations in the UK were “growing”.
“This Government is supporting jobs and investment in Scotland, including creating a world-leading carbon capture industry in the North Sea, alongside our biggest ever investment in offshore wind,” an official said.
A source close to Petrofac said on Saturday that the group’s British arm had not been plagued by any loss-making contracts and would be in a strong position to secure its future.
The administrative process would affect the parent company, Petrofac Limited, which does not directly employ the company’s staff, they added.
The potential collapse of Petrofac comes at a sensitive time for Mr Miliband, who is under enormous pressure to allow more oil and gas drilling in the North Sea, despite Labor’s manifesto pledge not to license new fields.
Petrofac employs about 7,300 people worldwide, according to a recent stock filing.
It designs, builds and operates offshore equipment for energy companies.
The company’s shares have been suspended since April.
Petrofac, which now has a market capitalization of just £20 million, has been mired in financial difficulties for years.
Once valued at more than £6 billion, it drowned in a sea of debt and was the subject of a Serious Fraud Office investigation that resulted in a conviction in 2021 for failing to prevent corruption and the payment of more than $100 million in penalties.
In a stock market statement on Thursday, Petrofac said the cancellation of a contract with TenneT, a power grid operator in Europe that is its biggest customer, meant a solvent restructuring was no longer viable.
“After carefully evaluating the impact of TenneT’s decision, the board of directors has determined that the restructuring, which last week reached an advanced stage, is no longer feasible in its current form,” the company said.
“The group maintains close and constant dialogue with its major creditors and other stakeholders as it actively pursues alternative options for the group.
“In the meantime, Petrofac remains focused on serving its customers and maintaining operational capacity and service delivery across its business. »
Founded in 1981 in Texas, Petrofac has been discussing a major financial restructuring for more than a year.
A formal restructuring plan was sanctioned by the High Court in May 2025 with the aim of writing off much of its debt and injecting new equity into the company.
This decision was later reversed, leading to negotiations with creditors on a revised agreement.
If Petrofac falls into administration, it is expected to be broken up and some of its assets – including key contracts – will likely be taken over by other players in the sector.
Petrofac has been contacted for comment.
A DESNZ spokesperson declined to comment.