Oil and gas service giant Petrofac said yesterday it could take further stakes in North Sea fields after gaining an interest in one discovery.
Petrofac signed a deal with Aberdeen-based Ithaca Energy UK to take on a 20% share of the Greater Stella area in the central North Sea earlier this year, and the company did not rule out similar agreements in future as a way to grow its integrated energy service business.
The firm, which employs 4,000 people in Aberdeen, said yesterday it expected to have a gross cash balance of £834million at the end of this year.
Chief financial officer Tim Weller said the company’s cash reserves meant it was in a good financial position to use “innovative commercial models” and said he did not think the Ithaca deal would be a one-off.
Mr Weller said: “We are looking to exploit the capabilities we have from our engineering, procurement and construction activity in the oil and gas market to help our customers exploit reserves better. We want to deploy our capabilities, but we are also content to deploy financial capital.”
Mr Weller said Petrofac was not targeting additional stakes however, and would take each deal on its own merits.
He added that he expected other service firms to agree similar contracts in the future.
Mr Weller said: “We do not have one standard model. If, as part of striking a commercial deal with a customer, they have a desire for us to take an interest in a field then we are content to do so, but it is not our sole focus.
“Petrofac is one of the early movers in this approach and it will be interesting to see if others follow.”
Petrofac previously had UK offshore interests, but these were spun off last year into a new company, EnQuest, together with the UK oil and gas assets of Swedish group Lundin Petroleum.
In yesterday’s update, Petrofac said it expected its backlog at the end of the year to be £6.8billion. Alan MacPhee, an investment manager at financial-planning and wealth-management specialist Brewin Dolphin in Aberdeen, said Petrofac’s update indicated the company was closing the year on a high note.
He added that it had a strong pipeline of opportunities in its engineering, construction, operations and maintenance division as well as in its integrated energy service business, which backed up its ambition to double last year’s recurring group earnings by 2015.
Petrofac shares closed up 5.1% at £14.43 yesterday.
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