Oil & Gas 360 Publishers Note: Take note that Petrofrac is lowering the board and senior management compensation during this financial crisis when their employees are affected as well. This is a behavior that investors should note when the tide changes, and it is time to invest in the future. Invest in those companies cutting executive pay and sharing in the stakeholders pain.
Oilfield services firm Petrofac will reduce its headcount by a fifth and furlough staff in anticipation of a decline in activity levels.
London-listed Petrofac will also reduce salaries for its board, senior management and most employees by 10-15% in response to the drop in oil prices, partially caused by the Covid-19 outbreak.
Petrofac employs around 900 people in Aberdeen and a further 2,000 offshore in the North Sea. The wider group has a headcount of about 11,500.
Capital expenditure will be cut by 40%, while overhead and project support costs will be lowered by at least £81.5 million in 2020 and by up to £163m in 2021.
The board has withdrawn its recommendation of a final dividend of 20.63p (25.3 cents) announced on February 25, 2020
Petrofac chief executive Ayman Asfari said: “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.
“I would like to thank all of our people for their outstanding response to the crisis, allowing Petrofac to continue to operate effectively and provide invaluable support to our clients during this challenging time.
“We have a resilient business model, strong competitive position and a differentiated in-country value proposition that is highly valued by our clients.
“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.”
