UK Energy minister Michael Shanks has accused First Minister John Swinney of spreading “deliberate misinformation” on the troubles at oil services company Petrofac.
Following the former FTSE 100 company’s decision to call in administrators, putting 2,000 UK jobs at risk, Mr Swinney blamed UK government taxes for its difficulties.
In a post on social media site X, he said: “This is incredibly concerning news for employees of Petrofac, their families, and the wider community. The UK Government must urgently revisit the Energy Profits Levy,” adding that “ScotGov stands ready to support all those affected by today’s news.”
Daily Business was among those that pointed out that the company’s problems were not directly related to the levy, also known as the windfall tax, but on the loss of big contract and ongoing financial difficulties within the company.
Mr Shanks said: “The administration of Petrofac’s top company is a product of longstanding issues in their global business. The UK arm has not entered administration and is continuing to operate as normal.
“Petrofac’s UK arm is an in-demand business with a highly skilled workforce and many successful contracts. The government will continue to work with the UK company as it focuses on its long-term future.
“This is deliberate misinformation and reckless, especially from the First Minister. The UK arm of Petrofac is a successful, growing company and all of us have a responsibility to support it, not to undermine it.”
Petrofac, whose UK headquarters is in Aberdeen, today called in administrators from Teneo after a key customer cancelled a multi-billion pound contract, undermining a restructuring plan it had been working on for at least a year.
TenneT, which operates the electricity grid for the Netherlands and much of Germany, terminated a contract to build offshore platforms and onshore converter stations for six offshore wind farms.
The contract was awarded jointly to Petrofac and Hitachi in 2023 with a value of about €13 billion thought to be split fairly evenly between the two companies. At the time Petrofac said the agreement was “the largest in Petrofac’s history”.
The administration only impacts the group’s ultimate holding company and it is seeking other options to refinance or find a buyer.
It added: “The group’s operations will continue to trade, and options for alternative restructuring and M&A solutions are being actively explored with its key creditors, including the ad hoc group of noteholders, who are supporting the group with continued forbearance arrangements whilst alternative options are explored.”
Petrofac had been making progress on its restructuring plans. Shareholders would have been wiped out through a debt-for-equity swap, but it would have saved the company.
Mr Swinney was not alone in attempting to pin the blame for Petrofac’s troubles on the energy policies of both Labour and the SNP.
Scottish Conservatives shadow energy secretary Douglas Lumsden said the opposition of both the UK and Scottish governments towards new North Sea projects was “decimating” the sector and wreaking havoc on livelihoods and our energy security.
“This news will come as a devastating blow for the highly skilled Scottish workers at Petrofac who have been abandoned by both their governments,” he said.
Scottish Liberal Democrats lead candidate for North East Scotland, Yi-pei Chou Turvey said: “Almost everyone in the North East will know someone who is concerned for their job at the moment.
“That’s why Scottish Liberal Democrats are calling for the replacement of the windfall tax on oil and gas profits and measures to stabilise the UK’s tax regime.”
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