More than 2,000 jobs at risk as oil and gas company enters administration

More than 2,000 Scotland-based jobs are at risk as oil and energy services group Petrofac has applied for administration.

The group's operations will continue to trade, and options for restructuring of the company and a possible merger or acquisition are being actively explored with its key creditors, the company said on Monday.

People close to the company say they are hopeful a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.

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Administrators will work alongside company management to "preserve value, operational capability and ongoing delivery", its announcement read.

News of a possible insolvency announcement was first reported by Sky News.

Energy Secretary Ed Miliband and other ministers have been briefed on the situation.

An advisory firm, Kroll, had been engaged by the Department for Energy Security and Net Zero to work with ministers and officials on the unfolding crisis for the company.

What is Petrofac?

Petrofac employs about 7,300 people globally, according to a recent stock exchange filing.

It designs, constructs and operates offshore equipment for energy companies.

The company has been valued at more than £6bn but has been struggling with debt.

It also faced a Serious Fraud Office investigation, which resulted in a 2021 conviction for failing to prevent bribery, and the payment of millions of pounds in penalties.

Founded in 1981 in Texas, the business has been in talks about a far-reaching financial restructuring for more than a year.

A formal restructuring plan was sanctioned by the High Court in May this year with the aim of writing off much of its debt and injecting new cash into the business.

This was subsequently overturned, prompting talks with creditors about a revised agreement.

A Department for Energy Security and Net Zero spokesperson said, "The UK arm of Petrofac has not entered administration and is continuing to operate as normal, as an in-demand business with a highly skilled workforce and many successful contracts."

"Petrofac's administration is a product of longstanding issues in their global business.

"The government will continue to work with the UK company as it focuses on its long-term future."

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