RIYADH — Petrofac’s move into administration has triggered uncertainty across the Gulf’s energy contracting ecosystem, raising concerns over project delivery and financial exposure for some of the region’s biggest oil and gas companies.

The UK-based engineering and services group entered administration after failing to stabilise its balance sheet following the loss of a major European offshore wind contract. The decision places the parent company under court-appointed oversight while operating subsidiaries continue trading during restructuring negotiations.

The move caps years of financial strain, legal scrutiny and shrinking margins that undermined Petrofac’s standing in global energy markets. Rising borrowing costs, compliance pressures and competition across the EPC landscape accelerated the company’s decline.

Gulf exposure in focus

The Gulf, Petrofac’s most valuable region, is now assessing the potential ripple effects. The company has been an essential contractor for ADNOC, Kuwait Oil Company and other national energy players, holding multi-billion-dollar contracts in gas, petrochemicals and upstream development.

Executives in the UAE and Kuwait say clients have begun reviewing contract security and delivery timelines. While work on current sites continues, analysts caution that even reputational uncertainty can stall future tenders and contract amendments.

“Administration introduces uncertainty, and Gulf national oil companies do not tolerate execution risk,” said one regional energy consultant. “Confidence matters, even if operations appear ring-fenced.”

Petrofac’s collapse arrives at a critical phase for international EPC firms operating in the Middle East. Capital-intensive project cycles, stringent compliance rules and competition for energy-transition spending are testing contractors with heavy leverage.

The development may prompt regional operators to reassess partner exposure and insist on tighter financial vetting, particularly for long-duration infrastructure programmes.

What comes next

Administrators will explore asset sales, investment options or a court-guided restructuring. Petrofac’s Middle East operations, historically its strongest unit, will be central to any recovery or acquisition process.

For now, projects continue, personnel remain deployed and site activity is steady. Still, the collapse of a long-standing EPC leader serves as a sharp reminder that financial fragility can surface even in established energy alliances.