Oil and gas service provider Petrofac (LON:PFC) has secured a $350 million contract with the national oil company of Equatorial Guinea.
Petrofac said the five year technical services contract with Compañía Nacional de Petróleos de Guinea Ecuatorial (GEPetrol) will support the operation of the region’s Block B asset.
Petrofac will deliver technical services across onshore support bases, an FPSO and a platform on behalf of operator GEPetrol.
The deal with GEPetrol follows Petrofac’s initial scope supporting the transition of the asset from ExxonMobil’s local arm, Mobil Equatorial Guinea Inc (MEGI).
Exxon announced it February this year it planned to leave the small West African nation after nearly three decades operating there.
Africa a ‘key focus’ for Petrofac
Petrofac said local staff and contractors will remain in place under the new deal, with the contract managed from its base in the Equatorial Guinean capital of Malabo alongside support from the company’s technical hub in Aberdeen.
Petrofac asset solutions chief operating officer Nick Shorten Africa is a key focus for Petrofac.
“We look forward to developing our relationship with GEPetrol further, collaborating to extend the life of the field to build a legacy of energy independence and sustainable growth for Equatorial Guinea,” Mr Shorten said.
“Africa is a key focus for our Asset Solutions business and we are pleased to build on our operations in Ivory Coast, Ghana and Senegal and Mauritania with this opportunity in Equatorial Guinea.”
Equatorial Guinea aims for operatorship
Equatorial Guinea minister of mines and hydrocarbons Antonio Oburu Ondo said: “Our vision is to create a fully capable nationally-operated oil and gas company to manage our assets. Today, I am proud that our vision is becoming a reality.
“We will grow our economy through diverse partnerships and investment in our people. Combining our strong indigenous capabilities, with Petrofac’s global expertise and experience, we will deliver significant value for our country.”
GEPetrol director general Teresa Isabel Nnang Avomo said the contract with Petrofac marks a key milestone in its journey towards becoming the operator of Block B on 1 June.
“We are excited to grow our partnership with Petrofac,” she said.
“By unlocking the huge potential of our indigenous national workforce, we will build with Petrofac’s assistance, an organisation for the long-term management and development of our country’s oil and gas assets.”
Petrofac debt
Petrofac’s latest contract award comes amid a challenging period for the company.
Analysts warn recent efforts to restructure its debt could lead to a significant dilution for shareholders.
Last week, the company said it “remains in discussions” with its lenders, with options to exchange equity in the business.
Petrofac has been under considerable pressure in recent months to stem a collapse in its share price, which closed down 20.5% on the day of the announcement.
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