Gas plant difficulties hit Petrofac shares price

Difficulties in finishing the Sullom Voe gas plant project have contributed to a dramatic fall in Petrofac shares of almost a quarter.

The 24.8 per cent tumble on the FTSE 100 came after the company said it expected to make a loss on the £800 million Laggan-Tormore project this year and make no money on the plant in 2015.

Overall, the firm anticipates profits this year to reach $580 million – or £362 million – and even lower next year at $500 million.
The gloomy predictions have come amid concerns surrounding a drop in oil prices and a potentially detrimental impact on the industry.

Chief executive Ayman Asfari said the company was still well-positioned for the future.

“This has been a difficult period for Petrofac and the industry.

“In the main, our project delivery is in good shape, but it is clear that on a small number of projects our execution has fallen short of the high standards we set for ourselves.

“We have faced these actions and have taken robust action to address them and believe this leaves us on a surer footing for the future.

“The foundations of the business remain strong. I am confident that Petrofac will meet the challenges presented by certain projects in our portfolio and the medium-term growth prospects for our business remain strong.”