Petrofac the Destruction of an Aberdeen Empire

Petrofac - The Intrigue of collapse?

Petrofac was founded in 1981 by Ayman Asfari, the son of a diplomat and a Syrian businessman. After graduating from the University of Pennsylvania, Asfari began his career as a consulting engineer, testing soil for large-scale industrial buildings. Coming from a wealthy family, he later attended the prestigious Wharton School in New York—the same institution attended by former U.S. President Donald Trump.

Originally established as a manufacturer of modular plants, Petrofac soon expanded into the servicing and maintenance of oil and gas platforms. The oil boom of the 2000s fueled rapid growth, leading to the opening of offices in Aberdeen, Abu Dhabi, Kuwait, Mumbai, Singapore, Australia, and Texas. By 2005, the company employed more than 2,500 people and generated revenues of approximately $1.5 billion.

As oil prices surged at the end of 2005, Petrofac’s revenues rose sharply to nearly $2 billion within a year, and by early 2007, its order book had reached about $4.2 billion. Over the following decade, Petrofac acquired numerous competitors and partners, amassing substantial debt in the process. This aggressive expansion strategy proved sustainable while oil prices remained high, but when prices began to decline around 2013, the company struggled to manage its large interest payments and maintain profitability.

The downfall of Petrofac began in early 2017 when the company admitted to paying approximately $57 million in bribes to secure several high-value contracts in the Middle East. A subsequent investigation by the UK’s Serious Fraud Office (SFO) uncovered fake invoices and evidence of large sums being funneled through regional agents, who then passed on illicit payments to executives at Middle Eastern oil companies.

Between 2012 and 2017, Petrofac pleaded guilty to seven counts of bribery, during which it had secured an estimated $5.5 billion in contracts directly linked to these corrupt payments. The SFO fined the company $100 million as a result.

However, the repercussions extended far beyond the fine. Major oil and gas firms began terminating or withdrawing from their agreements with Petrofac, unwilling to be associated with the corruption scandal. As contracts were canceled and new opportunities dried up, Petrofac’s revenues steadily declined. The shrinking profit margins ultimately made it increasingly difficult for the company to service its mounting corporate debt.

CEO Ayman Asfari maintained strong connections with influential figures, many of whom continued to support him even after the corruption scandal surfaced. In 2019, when Asfari was revealed as a major donor to the British Conservative Party, prominent politicians—including former Prime Ministers David Cameron and Theresa May, as well as MP Liam Fox—reportedly lobbied on Petrofac’s behalf to help secure contracts with the Bahraini government. Notably, David Cameron was said to have returned to the UK aboard Asfari’s private jet.

In Aberdeen, however, the scandal seemed to have less impact on Petrofac’s reputation. The following year, in 2019, the company secured several significant contracts, including the decommissioning project for the Rubie and Renee fields and a multi-million-dollar maintenance and modifications agreement with Chevron, among others.

Despite these wins, Petrofac was facing severe financial strain. It became widely known that more than 80% of the company’s suppliers had been waiting six months or longer for payment. Petrofac reportedly warned some suppliers that refusing to continue deliveries could result in losing future business—an unsustainable stance given its mounting unpaid bills.

By early 2025, Petrofac’s net debt had soared to nearly $772 million. As lenders began to view the company as a major credit risk, interest rates on its structured financing surged. With annual interest payments reaching approximately $68 million—and a reported net loss of over $162 million in 2023—the company’s ability to service its debt was slipping further out of reach with each passing month.

The stream of bad news showed no sign of stopping. One lesson the oil and gas industry repeatedly fails to learn is this: never engage in fixed-price contracts. Historically, such agreements have rarely yielded profit and have often placed companies in serious financial jeopardy. Nevertheless, executives continue to pursue them—signing deals their project teams cannot realistically deliver on—in a desperate attempt to secure new business.

Petrofac became the latest example of this costly mistake with its fixed-price Thai Clean Fuels project, which suffered major cost overruns for which the company was fully liable. As Petrofac’s financial instability became increasingly publicized, client confidence began to erode, and many companies grew hesitant to extend or renew their contracts with the troubled firm.

In March 2023, energy giant TenneT signed a framework agreement with Petrofac and Hitachi to design, build, and commission a massive 2GW grid connection system and wind farm complex. The deal, valued at approximately $3.5 billion, marked a significant milestone for Petrofac—signaling a promising shift toward the renewable energy sector and offering hope for a more stable future beyond oil and gas.

However, by October 2025, Petrofac’s financial troubles had resurfaced. The company was attempting to raise £335 million to reduce its debt burden, and while a deal appeared to be in place, it was abruptly delayed when the Court of Appeal overturned a High Court approval of the restructuring plan. The appeal had been filed by contractors Samsung and Saipem, both creditors still owed money from the problematic Thai Clean Fuels project.

Following the ruling, Petrofac’s shares were suspended from trading on the London Stock Exchange as the company entered urgent discussions with creditors and stakeholders in a bid to secure alternative financial solutions.

Fast forward to October 2025 — the situation took a devastating turn. Energy giant TenneT abruptly withdrew from its major electricity grid connection contract with Petrofac, effectively pulling the rug out from under the company. TenneT had grown increasingly concerned about Petrofac’s financial instability, viewing it as too great a risk to the project. Many suppliers involved in the workscope had not been paid for months and were refusing to deliver further materials or equipment until outstanding invoices were settled, causing significant project delays and cost overruns.

The termination of this contract triggered the collapse of Petrofac’s refinancing efforts. All potential lenders rescinded their provisional offers, leaving the company effectively insolvent. On Monday morning, October 27th, at 9:30 a.m., a team of administrators from Teneo arrived at Petrofac’s offices to take control of the business.

The fallout has placed Petrofac—and the wider Aberdeen oil industry supply chain—in an extremely precarious position. The company reportedly has not paid most of its Aberdeen-based suppliers for over six months. Each week, management circulated an internal list of the most critical suppliers, choosing only a few for payment while deferring the rest until legal action was threatened. The Aberdeen supply chain alone is believed to be owed more than £62 million. Many of these firms are small businesses without the financial resilience to absorb such losses, and some may face collapse as a direct consequence of Petrofac’s downfall.

Adding to the complexity of Petrofac’s collapse is its role as the legal duty holder for several major oil and gas platforms in the North Sea. These include:

• Ithaca Energy assets: the Alba, Captain, Erskine, and FPF-1 fields in the UK Central North Sea.

• Shell assets (ONEgas West): the Clipper South complex and Leman Alpha installations in the Southern North Sea.

• EnQuest asset: the Kittiwake platform in the Central North Sea.

• Anasuria cluster: the Anasuria FPSO, along with the Teal, Teal South, Guillemot A, and a partial interest in the Cook field.

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Petrofac’s insolvency therefore has far-reaching implications—not just for its workforce and suppliers, but also for the operational safety and continuity of critical North Sea infrastructure.

These oil companies have been aware of Petrofac’s fragile financial position for at least 18 months. The critical question now is: what measures did they take during that time to safeguard their operations? Did they explore switching contractors or assume duty-holder responsibilities themselves to protect the integrity and safety of their assets?

There is also concern that Petrofac’s collapse could ultimately impact the public purse. If a Petrofac-managed platform were to encounter operational or safety issues during administration, the UK government—and by extension, taxpayers—could be exposed to potential liabilities.

The downfall of Petrofac in Aberdeen carries major repercussions for the region and its extensive supply chain. Wood Group, Petrofac’s principal rival and once a dominant force in the industry, is itself burdened with financial challenges and is unlikely to be able to step in to fill the gap.

The immediate outlook is bleak. Around 2,000 Aberdeen-based employees face uncertainty over their pay, and many suppliers stand to lose substantial sums. While a potential buyer could emerge, the current high-tax, low-margin environment for energy firms in the UK makes such a rescue unlikely. The harsh reality is that profitability in this sector has become increasingly difficult—leaving few willing or able to take on the risk.

The corruption scandal and mounting financial troubles left Petrofac unable to secure the bank guarantees required to launch new projects, trapping the company in a downward spiral that has culminated in today’s disaster. Once a powerhouse of Aberdeen, Petrofac now stands as little more than rubble—a cautionary footnote in industrial history.

As for Ayman Asfari, his personal stake of around 20% in the company, once worth hundreds of millions, has been effectively wiped out. Yet over the years, he benefited from substantial dividends that have secured his financial independence, with his net worth reportedly exceeding £1 billion. Asfari enjoys a lavish lifestyle: he owns the 44-meter motor yacht Lammouche, valued at roughly £25 million and costing over £2 million annually to maintain, as well as a Challenger 606 private jet worth over £10 million.

While he continues a life of luxury—jetting to Monaco and spending weeks at sea on his yacht—Aberdeen faces a far bleaker reality as a result of the company he founded. Small suppliers and loyal staff, who built Petrofac into a global player, now face an uncertain future, with some companies at risk of collapse and many families facing a very worrying Christmas.

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