Petrofac Regulatory News (PFC)

Press Release

13 AUGUST 2012

PETROFAC LIMITED

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

FINANCIAL HIGHLIGHTS

·; Revenue up 20% to US$3.2 billion (2011: US$2.7 billion)

·; Net profit(1) up 32% to US$325.3 million (2011: US$246.3 million)

·; Earnings per share (diluted) up 32% to 94.82 cents (2011: 71.84 cents)

·; Interim dividend up 21% to 21.00 cents (13.45 pence(2)) per share (2011: 17.40 cents)

·; Backlog(3) at 30 June 2012 of US$8.9 billion (31 December 2011: US$10.8 billion; 30 June 2011: US$11.4 billion); in addition we secured US$1.5 billion of awards that were pending contract signature at 30 June 2012 and were not included in backlog(4)

·; Net cash balances at 30 June 2012 of US$0.8 billion (31 December 2011: US$1.5 billion)

Ayman Asfari, Petrofac's Group Chief Executivecommented on the interim results:

"We have delivered good operational and financial performance in the first half of the year and remain on course to deliver net profit growth in 2012 of at least 15%.

"Our strategy for future growth is based on three key drivers: geographical expansion; broadening our offshore engineering, procurement and construction capability; and implementing our Integrated Energy Services strategy. As previously indicated, over the past few months we have seen delays in certain contract tender processes with a number of anticipated awards moving from 2012 into 2013. Whilst these delays impact the expected level of 2012 new orders for Onshore Engineering & Construction, we continue to expect our strategy to deliver earnings growth in 2013 and beyond.

"As a result, we remain confident of achieving our target of more than doubling our recurring Group 2010 earnings by 2015."

OPERATIONAL HIGHLIGHTS

ENGINEERING, CONSTRUCTION, OPERATIONS & MAINTENANCE (ECOM)

Onshore Engineering & Construction

·; Good progress on our portfolio of projects during the first half of the year

·; First oil from the El Merk project in Algeria expected during the second half of the year and the South Yoloten gas plant in Turkmenistan and the Asab oil field development in Abu Dhabi are both on schedule for completion during 2013

·; Introduced hydrocarbons at the Kauther gas compression project in Oman and substantially completed the Karan utilities and cogeneration project in Saudi Arabia

·; Awarded the US$330 million Badra project in Iraq and two packages for the Petro Rabigh Phase II project in Saudi Arabia(4)

Offshore Projects & Operations

·; Awarded a US$220 million contract to undertake refurbishment of the Bekok-C platform, offshore Malaysia

·; Secured a US$465 million award to provide onshore engineering and both onshore and offshore construction services to all of Apache's North Sea assets(4)

·; Secured further awards worth approximately US$0.2 billion which were pending contract signature at 30 June 2012(4)

Engineering & Consulting Services

·; Awarded a number of conceptual studies and front end engineering and design (FEED) studies in Africa and the CIS, which may lead to interesting follow-on opportunities

·; Acquired KW Limited, a high-end subsea pipeline consulting and engineering services business which will enable us to strengthen our leading engineering proposition offshore

INTEGRATED ENERGY SERVICES (IES)

·; Signed a co-operation agreement with Schlumberger in early 2012, which will allow us to pursue larger Production Enhancement Contracts (PECs) and develop at a faster pace

·; Secured our first joint PEC with Schlumberger on the Pánuco Contract Area in Mexico, which will add US$0.4 billion to backlog after formal signing expected later this month(4)

·; Made a good start on the Magallanes and Santuario PECs in Mexico with three drilling rigs and one work over rig active on the blocks

·; FPSO Berantai now on location on the Berantai field in Malaysia, with commissioning in progress

·; On Block PM304 in Malaysia, progressing the development of the West Desaru fault block, with first oil expected before the end of 2012

·; Field Development Programme approved for the Greater Stella Area development and a profit of US$36 million recognised on the sale of 75% of the FPF1 floating production facility

OUTLOOK

Based on our good performance in the year to date, we continue to expect to deliver full year net profit growth in 2012 of at least 15%. Year-on-year growth in net profit in the second half of 2012 will be lower than in the first half of the year given the phasing of the profit from the FPF1 transaction and the initial profit recognition in respect of the South Yoloten project included in the second half results for 2011.

In our ECOM division, we see a significant number of bidding opportunities in our core markets in the Middle East, Africa, the Commonwealth of Independent States, Europe and Asia Pacific. However, we have seen delays in the award of onshore engineering and construction projects from 2012 into 2013. We therefore expect Onshore Engineering & Construction backlog to remain broadly flat across the remainder of 2012. Looking ahead, based on underlying growth in industry spend and project awards delayed from 2012, we anticipate a larger addressable market for Onshore Engineering & Construction in 2013. Given our competitive positioning and proven track record in project execution we expect to capitalise on the greater level of market opportunities and anticipate growth in our Onshore Engineering & Construction backlog during 2013.

In Offshore Projects & Operations, we have good revenue visibility following a strong run of recent awards and we are continuing our high levels of bidding activity on both long-term operations support contracts and offshore capital projects.

In Integrated Energy Services, we are focused on building upon our execution track record, with important delivery milestones throughout 2012 and 2013 on our existing projects. We expect to deliver strong earnings growth in IES in 2012 driven by: initial profit recognition on the Berantai Risk Service Contract; the sale of 75% of the FPF1 floating production facility as part of the Greater Stella Area transaction; commencement of the Magallanes and Santuario Production Enhancement Contracts; and growing production on the Ticleni Production Enhancement Contract in Romania. Our existing projects substantially underpin our medium-term growth plans of generating net profit from IES of at least US$300 million in 2015(5)and we are engaged in ongoing discussions with a number of resource holders in respect of potential additional projects.

Overall, we remain confident of achieving our target of more than doubling our recurring 2010 Group earnings by 2015.

Notes

Ends

Analyst presentation:

A presentation for analysts will be held at 9.00am today, which will be webcast live via http://cache.cantos.com/webcast/static/ec2/4000/5275/9523/10388/Lobby/default.htm.

For further information contact:

Notes to Editors

Petrofac is a leading international service provider to the oil & gas production and processing industry, with a diverse customer portfolio including many of the world's leading integrated, independent and national oil & gas companies. Petrofac is quoted on the London Stock Exchange (symbol: PFC) and is a constituent of the FTSE 100 Index.

The Group delivers services through two divisions: Engineering, Construction, Operations & Maintenance (ECOM - comprising Onshore Engineering & Construction, Offshore Projects & Operations, Offshore Capital Projects and Engineering & Consulting Services) and Integrated Energy Services (IES). Through these divisions Petrofac designs and builds oil & gas facilities; operates, maintains and manages facilities and trains personnel; enhances production; and, where it can leverage its service capability, develops and co-invests in upstream and infrastructure projects. Petrofac's range of services meets its customers' needs across the full life cycle of oil & gas assets.

With around 17,200 employees, Petrofac operates out of seven strategically located operational centres, in Aberdeen, Sharjah, Woking, Chennai, Mumbai, Abu Dhabi and Kuala Lumpur and a further 24 offices worldwide. The predominant focus of Petrofac's business is on the UK Continental Shelf (UKCS), the Middle East and Africa, the Commonwealth of Independent States (CIS) and the Asia Pacific region.

For additional information, please refer to the Petrofac website at www.petrofac.com.

The attached is an extract from the Group's Interim report 2012. Page number references refer to the full Interim report when available.

Results

We have delivered good operational performance across our portfolio of projects in the year to date and we remain on course to deliver net profit growth in 2012 of at least 15%.

In the six months ended 30 June 2012, revenue increased by 19.6% to US$3,241.8 million (2011: US$2,711.1 million) due to revenue growth in all four reporting segments, particularly in the Onshore Engineering & Construction reporting segment, where activity levels remain high.

Net profit attributable to Petrofac Limited shareholders increased 32.1% to US$325.3 million (2011: US$246.3 million). The increase in net profit was driven predominantly by Integrated Energy Services, due to first time profit recognition on the Berantai Risk Service Contract in Malaysia and profit from the sale of 75% of the share capital in the company holding the FPF1 floating production facility, and Onshore Engineering & Construction, due to higher levels of activity than in the corresponding period in 2011.

EBITDA increased 37.0% to US$454.8 million (2011: US$332.0 million). The increase in EBITDA was greater than the increase in net profit due to strong growth in Integrated Energy Services (see above), which has a higher EBITDA margin than the rest of the Group.

The Group's net cash was lower at US$775.3 million at 30 June 2012 (31 December 2011: US$1,495.2 million) as the net result of:

·; operating profits before working capital and other non-current changes of US$452 million

·; net working capital outflows of US$759 million, including an unwinding of advances of US$337 million and an increase in work in progress of US$385 million as we make substantial progress on our portfolio of Onshore Engineering & Construction projects

·; investing activities of US$156 million, including capital expenditure of US$204 million, predominantly on Integrated Energy Services projects, the acquisition of subsidiaries for US$15 million, including KW Limited, less US$60 million of proceeds from the sale of 75% of the share capital in the company holding the FPF1

·; financing activities, in particular, payment of the 2011 final dividend of US$128 million and financing the purchase of treasury shares for US$75 million for the purpose of making awards under the Group's share schemes

·; taxes paid of US$42 million

Net finance income for the period was US$1.1 million (2011: US$1.8 million). Finance income was lower at US$3.2 million (2011: US$5.2 million) due to lower average cash balances. Finance costs were also lower at US$2.1 million (2011: US$3.4 million) due to a lower level of interest-bearing loans and borrowings.

The tax charge for the six months ended 30 June 2012 of US$88.9 million (2011: US$53.1 million) represents an effective tax rate of 21.5% (six months ended 30 June 2011: 17.7%; year ended 31 December 2011: 20.7%). The slight increase in the Group's effective tax rate compared with the full year 2011 is predominantly due to a higher proportion of profit before tax being earned by Integrated Energy Services and Offshore Projects & Operations, which have effective tax rates that are higher than the average for the Group. The effective tax rate for Integrated Energy Services was lower for the first half of 2012 at 26.7% (year ended 31 December 2011: 55.3%), due to the specific projects contributing profit, while the increase in the effective tax rate for Offshore Projects & Operations to 26.2% (year ended 31 December 2011: 22.1%) was due to a higher proportion of profits earned in higher tax rate jurisdictions. The effective tax rate for the Group for the year to 31 December 2012 is expected to be around 22%.

Diluted earnings per share for the six months ended 30 June 2012 increased by 32.0% to 94.82 cents per share (2011: 71.84 cents per share) in line with the growth in net profit.

The Group's combined backlog was US$8.9 billion at 30 June 2012 (31 December 2011: US$10.8 billion). In addition, we secured US$1.5 billion of awards that were pending contract signature at 30 June 2012 (31 December 2011: nil) and were not included in backlog (US$0.5 billion in Onshore Engineering & Construction; US$0.6 billion in Offshore Projects & Operations; US$0.4 billion in Integrated Energy Services).

At 30 June 2012, the Group had around 17,200 employees (including long-term contractors), compared with around 15,400 at 31 December 2011, following strong growth in headcount in Onshore Engineering & Construction to support high levels of activity.

Dividend

The Board has declared an interim dividend of 21.00 cents per share (2011: 17.40 cents), an increase of 20.7%, which will be paid on 19 October 2012 to eligible shareholders on the register at 21 September 2012. Shareholders who have not elected to receive dividends in US dollars will receive a sterling equivalent of 13.45 pence per share. The Board will set the total dividends payable for the year to 31 December 2012 according to the Group's earnings and expects to distribute approximately 35% of full year post tax profits by way of dividend, in accordance with the Group's dividend policy.

Segmental analysis

The Group reports the financial results of its seven service lines under four reporting segments:

We present below an update on each of the Group's reporting segments:

1 Profit from operations before tax and finance costs, including the Group's share of losses of associates.

2 Profit for the year attributable to Petrofac Limited shareholders.

Engineering, Construction, Operations & Maintenance

Engineering, Construction, Operations & Maintenance designs and builds oil & gas facilities and operates, manages and maintains them on behalf of our customers.

Onshore Engineering & Construction

Onshore Engineering & Construction undertakes engineering, procurement and construction (EPC) projects predominantly on a lump-sum basis, with a typical duration of two to four years. Onshore Engineering & Construction is predominantly focused on markets in the Middle East and Africa and the Commonwealth of Independent States.

We have made good progress across our portfolio of projects during the first half of the year, including on our major projects in Abu Dhabi, Algeria and Turkmenistan. In Algeria, we expect first oil from the El Merk project in Algeria during the second half of the year and the South Yoloten gas plant in Turkmenistan and the Asab oil field development in Abu Dhabi are both on schedule for completion in 2013. We have introduced hydrocarbons on the Kauther gas compression project in Oman and have substantially completed the Karan utilities and cogeneration project in Saudi Arabia.

New awards

We have secured the following projects in 2012 to date:

Badra oilfield development project, Iraq

In February 2012, we were awarded a US$330 million lump-sum EPC contract by Gazprom for the first phase of the Badra oilfield development project. We will provide detailed design, engineering, procurement, construction, pre-commissioning, commissioning and start-up work on the Badra development's central processing facility, which comprises three crude oil processing trains. The first phase of the project is expected to come on stream in the second half of 2013, with final completion scheduled during the second half of 2015.

Petro Rabigh Phase II petrochemical expansion project, Saudi Arabia

In July 2012, we announced the award of two EPC contracts for Petro Rabigh's (a joint venture between Saudi Aramco and Sumitomo Chemical Co Ltd) Phase II petrochemical project in Saudi Arabia. The EPC contracts are for tank farms in the north and south areas and common utilities. The projects, which are scheduled to be undertaken within 36 months, are some of the first major awards made by Saudi Aramco under their In-Kingdom EPC programme and will be delivered from our Saudi Arabia office in Al-Khobar.

 Results

Revenue for the first half of the year increased by 25.1% to US$2,381.3 million (2011: US$1,903.7 million), reflecting a substantial increase in activity levels compared with the corresponding period in the prior year, particularly on the South Yoloten project in Turkmenistan, the In Salah Gas southern fields development and the El Merk central processing facility in Algeria and the Asab field development in Abu Dhabi.

Net profit increased 21.7% to US$250.6 million (2011: US$205.9 million), representing a net margin of 10.5% (2011: 10.8%). Net margin is expected to be around 11% for the full year.

Onshore Engineering & Construction headcount increased from 6,600 to 7,800 over the first half of the year, reflecting the increase in activity levels.

At 30 June 2012, the Onshore Engineering & Construction backlog stood at US$4.6 billion (31 December 2011: US$6.4 billion). In addition, we secured US$0.5 billion of awards that were pending contract signature and are not included in backlog at 30 June 2012.

Offshore Projects & Operations

Offshore Projects & Operations provides engineering and construction services at all stages of greenfield and brownfield offshore projects. In addition, through the provision of operations support services, we deliver production and maintenance support and extend field life. The majority of Offshore Projects & Operations' activities are currently in the UK Continental Shelf (UKCS), but a growing proportion of activities are outside of the UK, including in the United Arab Emirates, Iraq, Malaysia and Thailand. Services are predominantly provided on a reimbursable basis, but often with incentive income linked to the successful delivery of performance targets. Many of our production and maintenance contracts are long-term (typically three to five years) and in the case of the provision of Duty Holder[1] services are generally open-ended. Increasingly, we are delivering our engineering and construction services on a lump-sum basis on offshore capital projects, as we progress our strategy of taking our onshore EPC capability offshore.

We have delivered record activity levels in Offshore Projects & Operations in the first half of the year, from both long-term operations support contracts and offshore capital projects, including work on a number of projects secured during 2011 and 2012, including: the FPF3 Duty Holder (Jasmine Venture) contract in Thailand; a maintenance contract for BP on the Rumaila field in Iraq; upgrade of the FPF1 floating production facility for the Greater Stella Area project (see Integrated Energy Services); the FPF5 (Ocean Legend) modification and upgrade prior to deployment on the West Desaru fault block in Malaysia; and completion of the upgrade and modification of the FPSO Berantai, which is now deployed in the Berantai field in Malaysia (see Integrated Energy Services). In addition, we have now achieved sufficient progress to commence profit recognition on the Laggan-Tormore gas plant on Shetland in the UK.

[1] Contracts where the Group takes full responsibility for managing a customer's asset and is responsible for the safety case of the asset.

New awards

We have secured the following major new projects in 2012 to date:

Bekok-C platform refurbishment, Malaysia

In May 2012, we were awarded a US$220 million contract by PETRONAS Carigali Sdn Bhd, a subsidiary of PETRONAS, the Malaysian national oil company, for the refurbishment of the Bekok-C platform, located in the south-eastern part of the Malay basin. The project will be executed on an engineering, procurement, construction, installation and commissioning (EPCIC) alliance basis. Bekok-C is a manned platform serving as a gas processing and compression hub exporting gas from the Guntong, Tiong and Bekok fields of Block PM9 in addition to production of crude oil and gas from its own wells. Under the terms of the refurbishment project Petrofac will provide EPCIC services to the platform with the overall project expected to be completed in around 15 months.

Apache engineering and construction services, UK

In July 2012, we announced a three-year contract (with two optional one-year extensions), worth approximately £100 million per annum, to provide onshore engineering and both onshore and offshore construction services to all of the Apache North Sea assets including the Beryl Alpha and Bravo platforms in the northern North Sea and the Scottish Area Gas Evacuation (SAGE) gas processing plant at St Fergus, Aberdeenshire. The contract represents an extension to, and continuation of, the current service contract which Petrofac holds for Apache's Forties platforms. Under the terms of the new contract Petrofac's scope will also include topside brownfield and greenfield activity in addition to interfacing with subsea contractors.

Results

Revenue increased by 13.9% to US$661.7 million (2011: US$581.0 million), reflecting high activity levels on both long-term operations support contracts and offshore capital projects, particularly those referred to above.

Around 70% of Offshore Projects & Operations' revenue was generated in the UK and those revenues are generally denominated in sterling. The average US dollar to sterling exchange rate for the first half of

2012 was broadly in line with the prior period.

Net profit was marginally lower at US$30.7 million (2011: US$31.8 million), as the prior period benefitted from a provision release following completion of a long-term maintenance services contract. Excluding the provision release, Offshore Projects & Operations net profit increased by 26%, reflecting contributions from a number of new projects, including the FPF5 (Ocean Legend) modification and upgrade and first time profit recognition on the Laggan-Tormore gas plant project.

Headcount was marginally lower at 30 June 2012 at 4,000 (31 December 2011: 4,100).

Offshore Projects & Operations backlog increased to US$2.8 billion (31 December 2011: US$2.7 billion), reflecting new awards and extensions secured in the first half of the year. In addition, we secured US$0.6 billion of awards that were pending contract signature at 30 June 2012 which were not included in backlog.

Engineering & Consulting Services

Engineering & Consulting Services operates as our centre of technical engineering excellence providing high-calibre engineering resources and technical assurance services across onshore and offshore oil & gas projects. Engineering & Consulting Services provides early stage engineering studies, including conceptual studies and front end engineering and design (FEED) studies, to external customers and in support of ECOM and IES projects, primarily on a reimbursable basis.

We have secured a number of conceptual studies and FEED studies in Africa and the CIS during the year to date, for example, a FEED study on behalf of Rialto Energy and Société Nationale d'Opérations Pétrolières de la Côte d'Ivoire for the Gazelle field in Côte d'Ivoire, which may lead to interesting follow-on opportunities.

Acquisitions

As announced in February, we acquired KW Limited, a high-end subsea pipeline consulting and engineering services business which complements the existing skills in Engineering & Consulting Services and will enable us to strengthen our leading engineering proposition offshore.

Results

Revenue for the period increased 7.9% to US$103.8 million (2011: US$96.2 million), reflecting an increase in activity levels.

Net profit was lower at US$5.0 million (2011: US$14.8 million), as despite an increase in overall activity levels, there was a decline in utilisation rates. The first half of 2011 also benefitted from the recognition of profit in relation to the vesting of Seven Energy warrants.

Headcount was marginally higher at 30 June 2012 at 2,500 (31 December 2011: 2,300).

Integrated Energy Services

Integrated Energy Services comprises three discrete but integrated service lines, Developments, Production Solutions and Training Services. Where we can leverage our service capabilities to enhance value, mitigate risks and reduce costs, Integrated Energy Services provides a fully integrated service offering for resource holders under flexible commercial models that are aligned to their requirements. Projects cover upstream developments, both greenfield and brownfield, and related energy infrastructure projects, and can include the provision of financial capital in addition to our intellectual capital.

Our service offering is underpinned by the ability to develop resource holders' local capability through the provision of technical skills training programmes and competency development and assurance frameworks. For example, in January 2012, we were awarded a five-year contract to run Saudi Petroleum Services Polytechnic's Centre for Construction Skills and Drilling training. We received our first intake of students in April, which include local workers for Aramco along with staff from its contractor base.

Integrated Energy Services deploys its services to meet the individual needs of customers using a range of commercial frameworks, including: Production Enhancement Contracts (PEC), Risk Service Contracts (RSC) and traditional upstream equity investment models including both Production Sharing Contracts (PSC) and royalty concessions.

Production Enhancement Contracts

In January 2012, we announced a Co-operation Agreement with Schlumberger Production Management, under which we will work together to deliver integrated and high-value Production Enhancement Contracts. Werecently secured our first joint Production Enhancement Contract on the Pánuco Contract Area in Mexico. The Pánuco Contract Area represents the largest resource of the recent awards by PEMEX, and includes four mature onshore fields, which were discovered in the early 1900s, with original oil in place of approximately 6.8 billion barrels. The Pánuco Contract Area has a recovery factor of around 10% to date. We believe that the complementary skill sets of Petrofac and Schlumberger and our proven execution capability will maximise the potential of these fields for PEMEX. The contract, which runs for 30 years, is expected to be signed later this month and field operations are expected to start around the beginning of 2013. Elsewhere in Mexico, we have made a good start on the Magallanes and Santuario Production Enhancement Contracts with three drilling rigs and one work over rig active on the blocks.

On the Ticleni production enhancement contract for Petrom in Romania we have recently commenced a two rig drilling programme as well as progressing other key work items, such as the working over and/or maintenance of currently producing wells and the reactivation of shut-in wells, in addition to the water flood programme.

In the first half of the year we produced a total of 2.4 million barrels of oil equivalent (mboe) (2011: 0.6 mboe), including five months of production from the Magallanes and Santuario Production Enhancement Contractswhich commenced on 1 February 2012.

Risk Service Contracts

In January 2011, we secured our first RSC in Malaysia, to lead the development of the Berantai field, offshore Peninsular Malaysia, for PETRONAS. We have a 50% interest in the RSC, alongside local partner SapuraKencana.

Under the terms of the RSC, we will receive a rate of return linked to our performance against an agreed incentive structure, including project costs, timing to first gas and sustained gas delivery measured six months after project completion, with an ongoing incentive structure based on operational uptime.

The wellhead platform, subsea infrastructure and gas export pipeline are in place and the drilling programme is progressing well. The FPSO Berantai is now on location and final commissioning works are in progress.

Production Sharing Contracts (PSC) and royalty concessions

We are progressing the third phase of development (West Desaru) of Block PM304, Offshore Malaysia, following approval of the Field Development Programme (FDP) by PETRONAS in February 2012. We are accelerating the development by introducing an Early Production System which will deploy the upgraded FPF5 Mobile Offshore Production Unit (formerly the Ocean Legend), initially exporting stabilised crude oil through existing facilities, and ultimately through the phase two FPSO after its arrival in the Cendor field in 2013. First oil is expected in the fourth quarter of 2012.

The Chergui gas plant in Tunisia continues to perform strongly and we have recently commenced drilling the first of two to three wells in our 2012 development programme to appraise further the concession area.

In October 2011, we signed an agreement that will see the deployment of the floating production facility FPF1 ('the FPF1') on the Greater Stella Area development in the North Sea. Following the FDP submission in early 2012, we have finalised the sale of 75% of the share capital in the company holding the FPF1 to Ithaca Energy Inc ('Ithaca') and Dyas BV. We will acquire a combined 20% interest in the Greater Stella Area from the other co-venturers in the development, consisting of three UKCS licences.

In the first half of the year our net entitlement from production was a total of 0.7 million barrels of oil equivalent (mboe) (2011: 0.8 mboe) from the first phase of the PM304 Cendor field and the Chergui gas plant.

Results

Integrated Energy Services' revenue increased by 25.7% to US$322.7 million (2011: US$256.7 million), reflecting substantial progress on the Berantai RSC and commencement of the Magallanes and Santuario PECs.

Net profit for the first half of the year was substantially higher at US$65.0 million (2011: US$6.0 million), reflecting first time profit recognition on the Berantai RSC and the profit from the sale of 75% of the share capital in the company holding the FPF1. As a result of loss of control over this subsidiary which arises on sale of 75% of the share capital, accounting standards require us to fair value our remaining investment in associate and recognise the uplift in the fair value in the profit and loss account. The total contribution from the FPF1 transaction was approximately US$36 million.

Headcount increased to 2,800 at 30 June 2012 (December 2011: 2,300), primarily due to the commencement of the Magallanes and Santuario PECs and development of our projects in Malaysia.

Integrated Energy Services' backlog stood at US$1.5 billion at 30 June 2012 (31 December 2011: US$1.6 billion).

Principal risks and uncertainties

The principal risks and uncertainties that could lead to a significant loss of reputation or prevent us from delivering our five-year strategic plan are summarised here, along with our approach to mitigating these risks. These key risks and uncertainties have not materially changed since the publication of our 2011 Annual Report. Details of our risk framework are included in the Group's Annual report and accounts 2011 on pages 86 to 87.

Going concern

The financial position of the Company, its cash flows, liquidity position and borrowing facilities, and its business activities, together with the factors likely to affect its future development, performance and position are set out in this Business Review and in the Group's Annual report and accounts 2011 on pages 2 to 50. In addition, note 34 to the Group's Annual report and accounts 2011 includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Company has access to considerable financial resources together with long-term contracts with a number of customers and suppliers across different geographic areas and industries. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Outlook

Based on our good performance in the year to date, we continue to expect to deliver full year net profit growth in 2012 of at least 15%. Year-on-year growth in net profit in the second half of 2012 will be lower than in the first half of the year given the phasing of the profit from the FPF1 transaction and the initial profit recognition in respect of the South Yoloten project included in the second half results for 2011.

In our ECOM division, we see a significant number of bidding opportunities in our core markets in the Middle East, Africa, the Commonwealth of Independent States, Europe and Asia Pacific. However, we have seen delays in the award of onshore engineering and construction projects from 2012 into 2013. We therefore expect Onshore Engineering & Construction backlog to remain broadly flat across the remainder of 2012. Looking ahead, based on underlying growth in industry spend and project awards delayed from 2012, we anticipate a larger addressable market for Onshore Engineering & Construction in 2013. Given our competitive positioning and proven track record in project execution we expect to capitalise on the greater level of market opportunities and anticipate growth in our Onshore Engineering & Construction backlog during 2013.

In Offshore Projects & Operations, we have good revenue visibility following a strong run of recent awards and we are continuing our high levels of bidding activity on both long-term operations support contracts and offshore capital projects.

In Integrated Energy Services, we are focused on building upon our execution track record, with important delivery milestones throughout 2012 and 2013 on our existing projects. We expect to deliver strong earnings growth in IES in 2012 driven by: initial profit recognition on the Berantai Risk Service Contract; the sale of 75% of the FPF1 floating production facility as part of the Greater Stella Area transaction; commencement of the Magallanes and Santuario Production Enhancement Contracts; and growing production on the Ticleni Production Enhancement Contract in Romania. Our existing projects substantially underpin our medium-term growth plans of generating net profit from IES of at least US$300 million in 20151 and we are engaged in ongoing discussions with a number of resource holders in respect of potential additional projects.

Overall, we remain confident of achieving our target of more than doubling our recurring 2010 Group earnings by 2015.

1 See our IES data pack for more details: http://www.petrofac.com/index.asp?pageid=466.

INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2012

The attached notes 1 to 20 form part of these interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2012

The attached notes 1 to 20 form part of these interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The attached notes 1 to 20 form part of these interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2012 

The attached notes 1 to 20 form part of these interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2012