Petrofac Says No Significant Impact From Iraq Crisis

LONDON--U.K.-listed oil services company Petrofac PLC said Tuesday that the fighting in Iraq has had no significant impact on its current operations there.

Petrofac's operations are south and east of Baghdad and represent less than 5% of the group's expected revenues for 2014.

The company said in a trading update that it expected its net profit for the full year to come in between $580 million and $600 million. The company had previously forecast the year's figure to be the same or slightly higher than the $650 million achieved in 2013.

Petrofac said profit was expected to be "significantly" weighted toward the second half when offshore projects start to be delivered.

"Our pipeline of bidding opportunities remains attractive, which, together with our strong competitive position, should see us secure a number of further awards over the second half of the year," said Chief Executive Ayman Asfari.

In May, Petrofac said it expected full-year net profit to be lower mostly because of project delays in the Greater Stella Area in the U.K. North Sea, lower-than-expected production in Romania and the dilution of equity interest in Nigerian oil company Seven Energy.

The drop in the profit forecast highlights the challenging operating environment for service companies. They provide the engineering and construction on oil and gas projects, but are coming under increasing pressure as the big oil companies that are their main customers clamp down on spending.

Petrofac said its backlog stood at $20.1 billion at May 31, with more than half in the offshore engineering and construction division of the company.

Write to Selina Williams at [e-mail]

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