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MEED used the words “Selected” and “Awarded” to describe the Algeria and Bahrain contracts respectively! These words are definitive and not “speculative” as replied by Petrofac IR team to Slift’s query! Agreed a contract is not a contract until it is signed by both parties. However if the client wants to place an order but the contractor does not want to accept it for whatever reason the shareholder could be informed accordingly. On the Bahrain project PFC are L1 bidder but it appears that they have left quite a lot of money on the table! PFC is around 28% lower than the second lowest bidder! That is a very big difference considering the estimated contract value. If PFC doesn’t accept the contract then apart from financing could the “low offer” which became apparent only after tender opening be another reason? Guess we will never know for sure.
On the Algeria project interestingly Italian Tecnimont was initially considered the front runner (as also reported by MEED in February)! Then it was reported that Petrofac had been selected for the project by Sonatrach. So what actually happened there? Hopefully there will be 2 RNS confirming both contracts very soon!
RNS will come only after formal award or at least an LOI! And this is a new project on the upstream side. Nothing to do with the Petrochemical award of last year which was a joint venture with a Chinese firm!
Https://www.meed.com/petrofac-selected-for-algeria-upstream-project
Https://www.upstreamonline.com/exclusive/front-runner-emerges-for-prized-adnoc-expansion-on-uaes-largest-offshore-oilfield/2-1-1573322
Should be a massive one when awarded!
Earlier phases executed by Petrofac!
At 2023 first half year end, bidding pipeline was $44 billion for E&C. If that included the ADNOC Hail & Ghasha then the bidding pipeline would have shrunk by $17billion unless PFC has managed to find the equivalent value of bids elsewhere. We will soon know about that from the December update. Not sure whether the E&C bidding pipeline of $44 billion also included the remaining TenneT orders not confirmed as yet.
Petrofac are one of the favorites for the Upper Zakum expansion project expected to be awarded end of this year or early next year. It’s a mega project with contract value in excess of US$4billion! With all the concerns raised regarding cash flow got to wonder how the financial aspects will be handled should PFC win the contract!
Upstream Online has confirmed that multi-billion dollar Aramco contracts awarded to McDermott have been cancelled. Perfect opportunity for the Petrofac CEO who is ex-McDermott to divert that business to PFC. Not sure though whether PFC is back on the Aramco approved list yet! Or whether only ADNOC has put PFC back on the bidding list.