Petrofac Secures Production E
Press Release
12 July 2010
PETROFAC LIMITED
PETROFAC SECURES MAJOR PRODUCTION ENHANCEMENT CONTRACT IN ROMANIA
Petrofac, the international oil & gas facilities service provider, has been awarded its first Production Enhancement services contract by Petrom in Romania. Under the terms of the contract, Petrofac's Production Solutions business will provide production enhancement services to Petrom as the concession holder for the Ticleni oilfield and its eight satellite fields (Ticleni). The initial 15-year contract, which includes an option for extension by a further ten years, is effective immediately.
Ticleni, a mature onshore field which has been operating for some 60 years, is located in South-western Romania and has more than 1,000 wells, of which around 300 are currently producing a total of approximately 4,500 barrels of oil per day. Under the Production Enhancement contract Petrofac will provide a range of services to increase production through improving recovery rates, optimise operational efficiencies and invest to upgrade the facilities. Petrofac will be paid a tariff per barrel of oil produced, including an enhanced tariff for incremental production.
Petrofac will manage all aspects of the fields' activity on behalf of Petrom, including the responsibility for the employees currently working in Ticleni, who will be transferred to Petrofac under the terms of the contract.
Commenting on the award, Ayman Asfari, group chief executive of Petrofac, said: "I am delighted to announce this contract which is a significant milestone for Petrofac Production Solutions as we have been assessing opportunities like this for some time. We believe this innovative approach enables us to align with our customer while generating additional value by investing and leveraging our operations, drilling management, production engineering, facilities upgrade and training skills. This contract also provides us with the opportunity to develop a track record for excellence in the production enhancement market which has the potential to be an area of significant growth over the medium-term."
Mariana Gheorghe, chief executive officer, Petrom, commented: "In order to unlock our E&P potential, given the complexity of operating mature fields as well as the complexity of our portfolio in Romania, we will focus our efforts on the re-development of six to eight fields. In parallel, in order to maximise production on other mature fields, we decided to enter partnerships with internationally reputed companies, with a track record of remarkable results in this area. This partnership with Petrofac in Romania is an example of this approach and we are confident of obtaining the best results through this aligned and incentivised contract to enhance production and improve operational efficiency."
Notes
1In accordance with its normal accounting policy Petrofac will book the initial five years' of estimated contract revenues into backlog in relation to this contract, which equates to US$270 million. Backlog consists of the estimated revenue attributable to the uncompleted portion of lump-sum engineering, procurement and construction contracts and variation orders plus, with regard to production enhancement, engineering services and facilities management contracts, the estimated revenue attributable to the lesser of the remaining term of the contract and five years. The group uses this key performance indicator as a measure of the visibility of future earnings. Backlog is not an audited measure.
Ends
For further information contact:
Tulchan Communications Group Ltd +44 (0) 20 7353 4200
James Bradley
David Allchurch
petrofac@tulchangroup.com
Petrofac Limited +44 (0) 20 7811 4900
Jonathan Low, Head of Investor Relations
Notes to Editors
OMV Petrom SA
Petrom is the largest Romanian oil & gas group, with activities in the business segments of exploration and production, refining and marketing as well as gas and power. Petrom exploits estimated proved oil & gas reserves of 823 million barrels of equivalent (boe) in Romania (854 million boe at Group level), has an annual refining capacity of 8 million tons and holds around 550 filling stations in Romania. The company also has an international network of 268 filling stations located in Moldova, Bulgaria and Serbia. In 2009 the turnover of Petrom was EUR 3,029 million, EBITDA was EUR 696 million. OMV Aktiengesellschaft, the leading energy group in Central and South-eastern Europe holds a 51.01% share in Petrom. OMV is active in 12 Central European countries in its refining and marketing business segment and in 17 countries on four continents in Exploration and Production. Ministry of Economy holds 20.64% of Petrom shares, Property Fund SA holds 20.11%, the European Bank for Reconstruction and Development 2.03% and 6.21% is free float on Bucharest Stock Exchange.
Petrofac
Petrofac is a leading international provider of facilities solutions 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 seven business units: Engineering & Construction, Engineering & Construction Ventures, Engineering Services, Offshore Engineering & Operations, Training Services, Production Solutions and Energy Developments.
Through these businesses 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 12,000 employees, Petrofac operates out of six strategically located operational centres, in Aberdeen, Sharjah, Woking, Chennai, Mumbai and Abu Dhabi and a further 19 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.
Petrofac's Productions Solutions business unit offers customers single-point access to a wide range of services to help them improve production, profitability, operational efficiency, asset integrity and the recovery of marginal reserves. In addition to the service operator contract with
Dubai Petroleum, the business unit comprises four specialist service providers: Eclipse, Caltec, SPD and Plant Asset Management. Productions Solutions is part of Petrofac's Engineering, Training Services and Production Solutions reporting segment.
For additional information, please refer to the Petrofac website at www.petrofac.com.
This information is provided by RNS
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