Petrofac collapse shakes North Sea energy sector as 2,000 UK jobs hang in the balance

Petrofac, one of the North Sea’s largest oil and gas contractors, has filed for administration, putting more than 2,000 jobs in Scotland at risk and sending shockwaves through the UK’s energy sector. The company, which employs about 7,300 people globally, said its holding company had entered administration following the loss of a key offshore wind project with European grid operator TenneT, after failing to meet contractual obligations.

While the UK arm continues to trade, the collapse underscores deep financial strain within Petrofac’s global operations. The group, burdened by debts approaching $4 billion (£3 billion), has faced years of instability following a 2017 corruption probe that severely hampered its ability to secure new work. Its recovery was further derailed by the pandemic, and the termination of the TenneT contract has rendered its restructuring “no longer deliverable.”

The government has pledged support for the company’s UK operations, with Energy Secretary Ed Miliband coordinating efforts to protect jobs in Aberdeen, where Petrofac’s North Sea base employs most of its workforce. However, the crisis adds political tension amid Labour’s commitment to halt new North Sea oil and gas licences—a policy drawing criticism from business leaders warning of economic fallout and reduced energy security.

Petrofac’s troubles highlight the fragile balance between decarbonisation goals and industrial stability. Once a FTSE 100 powerhouse, the company’s share trading was suspended in May after failing to publish its 2024 results, with its market value falling to around £20 million. Despite its struggles, Petrofac’s UK arm remains operational and could attract potential buyers given its skilled workforce and ongoing contracts.

Dive deeper into the full article to see how Petrofac’s collapse could reshape the UK’s energy transition and employment landscape.