Petrofac Cutting Salaries and Staff

Petrofac Limited announced Monday that it is taking decisive actions to improve its cost competitiveness and protect the long-term health of its business.

These actions include reducing and structurally rebasing salaries and allowances for its board, senior management and most of its employees by between 10 and 15 percent, reducing personnel by around 20 percent and furloughing staff, and reducing non-staff overhead costs by up to 25 percent.

The measures are expected to reduce overhead and project support costs by at least $100 million this year and by up to $200 million in 2021.

In addition, Petrofac revealed that it was reducing its capital expenditure by 40 percent and suspending the 2019 final dividend.

“At this unprecedented time, our top priority remains the health and well-being of our people, clients and suppliers, and ensuring that we take decisive action to protect the long-term health of our business,” Ayman Asfari, Petrofac’s group chief executive, said in a company statement.

“We have a resilient business model, strong competitive position and a differentiated in-country value proposition that is highly valued by our clients,” he added.

“Nevertheless, we are taking swift, decisive action in response to the Covid-19 pandemic and lower oil prices to reduce costs, retain our competitiveness and preserve the strength of our balance sheet. These best position us to protect our business, stakeholders and the communities we serve,” Asfari continued.

Stringent health protocols are currently in place across all of Petrofac’s operations, according to the company, which said it has transitioned quickly and effectively to remote working to minimize business disruption.

Petrofac, which provides integrated services across the oil and gas asset lifecycle in 29 countries, describes itself as a leading FTSE 250 company.

As of April 5, there have been 1.13 million confirmed cases of the virus around the world, with 62,784 deaths, according to the latest figures from the World Health Organization.

Source: rigzone