Scotland (Parliament Politics Magazine) – Petrofac, the oilfield services group, faces imminent insolvency, with administrators from Teneo ready to intervene as soon as Monday, threatening over 2,000 jobs in Scotland. The company’s board, chaired by Rene Medori, is in emergency talks as government officials including Energy Secretary Ed Miliband are closely monitoring the situation amid ongoing restructuring efforts.
Petrofac’s Impending Insolvency and Administration Process
Administrators are on standby this weekend to manage the collapse of Petrofac, a key player in the North Sea oil and energy service sector, potentially putting more than 2,000 Scottish jobs at risk. Sky News sources reveal that Teneo has been lined up by Petrofac’s board to act as administrators, with a formal administration move possibly triggered early Monday before the stock market opens.
The company’s board is chaired by Rene Medori, former finance director of Anglo American. Medori and the directors are engaged in urgent discussions this weekend over the administration decision. An industry executive told Sky News that the administration filing is likely imminent. Energy Secretary Ed Miliband and other government ministers have been briefed on the crisis, highlighting the significant jobs threat involved.
Government and Advisory Involvement
The Department for Energy Security and Net Zero has brought in advisory firm Kroll to assist ministers and officials as the situation unfolds. Despite the looming collapse, government sources have conveyed that Petrofac’s UK operations are “expanding” and reassured that the government continues to back jobs and investment in Scotland, including initiatives in carbon capture and offshore wind power development.
One government official told reporters,
“This government is supporting jobs and investment in Scotland including building a world-leading carbon capture industry in the North Sea, alongside our biggest ever investment in offshore wind”.
Company Position and Financial Troubles
Petrofac Limited, the parent company which would undergo administration, does not directly employ the workforce, but this process still threatens the Scottish jobs connected to its operations. The company founded in Texas in 1981 has been attempting a complex financial restructuring for over a year to reduce its debt via new equity injection, but previous plans sanctioned by the High Court in May 2025 were overturned, necessitating new creditor talks.
Earlier this month, Petrofac announced that the restructuring would leave existing shareholders with no residual value and aimed for completion by the end of November 2025. The restructuring follows mounting costs and delayed payments compounded by business challenges including a corruption scandal in the Middle East and disruptions at a Thai refinery.
Industry and Market Impact
Petrofac’s collapse would represent a severe blow to North Sea operations, which have faced pressure from government policies aimed at restricting fossil fuel extraction while promoting renewable alternatives. Labour ministers face criticism for blocking new North Sea oil licences amidst rising energy costs and job security anxieties in the sector. The company has contracts with major offshore operators such as Shell, BP, and TotalEnergies and oversees several safety obligations across North Sea sites.
Business leaders are calling for policy shifts, including the removal of windfall taxes on oil companies, ahead of the upcoming Budget, to support North Sea energy production. Some experts urge a rethink of the UK’s 2030 clean power target to prioritise affordable energy bills while advancing net zero goals by 2050.
Scottish Members of Parliament have expressed concerns that renewable energy jobs growth has not compensated for losses in the traditional energy sector, underscoring the socio-economic impact of Petrofac’s troubles.
Next Steps and Administration Outlook
If Petrofac enters administration, it is expected the company will be broken up, with other industry players potentially acquiring key contracts and assets. The board’s urgent weekend meetings indicate preparations for this outcome, with the final decision anticipated before markets open Monday.
At the same time, Petrofac continues to communicate with creditors and explore alternatives, but the gravity of its financial distress makes administration probable. The company has not publicly commented outside of business hours on recent developments.