Petrofac files for administration, putting 7,300 global energy jobs at risk

When Petrofac filed for administration on October 27, 2025, it didn’t just trigger a corporate collapse—it sent shockwaves through the global energy sector. The UK-based engineering giant, once a powerhouse in oilfield services and offshore infrastructure, now faces the grim reality of potentially losing 7,300 jobs worldwide after Dutch grid operator TenneT abruptly terminated its $14 billion offshore wind contract. The decision, made on October 23, 2025, wasn’t random. It was the final blow to a company already on life support, crippled by years of legal fallout and failed turnarounds.

How TenneT’s Move Crushed Petrofac’s Financial Backbone

The contract termination wasn’t a surprise to insiders. Petrofac’s engineering and construction division relied on TenneT for more than 80% of its revenue—a dependency so extreme that when the Dutch firm pulled the plug, the math became impossible. The project? A 2GW offshore wind grid linking the Netherlands’ growing renewable fleet to the mainland. Petrofac’s role: engineering, procurement, construction, and installation (EPCI) of platforms and onshore converter stations. It was supposed to be the crown jewel of its renewable transition. Instead, it became its coffin.

TenneT cited repeated failures to meet contractual milestones. Court filings show Petrofac missed deadlines on critical component deliveries, lagged on safety compliance audits, and failed to respond to technical queries in time. By October 21, 2025, TenneT had issued a formal notice of default. Three days later, the termination was final. "It wasn’t just about delays," said one industry analyst familiar with the project. "It was about trust. Once you lose that in offshore engineering, you lose everything."

A Legacy of Scandal and Stalled Recovery

Petrofac’s downfall didn’t begin in October 2025. It began nearly a decade earlier, in 2017, when the UK’s Serious Fraud Office concluded a multi-year investigation into bribery allegations in the Middle East. The result? A £70 million ($93.5 million) fine and a black mark that haunted its bid teams for years. Major clients in Saudi Arabia, Kuwait, and Abu Dhabi stopped inviting Petrofac to tender. Revenue from its core Middle East operations collapsed by 65% between 2018 and 2023, according to internal reports cited in court filings.

The company tried to pivot. It bet big on renewables. But the transition was messy. Projects ran over budget. Management turnover was high. And by 2024, its share price had fallen 90% from its 2014 peak. A rescue plan emerged in early 2025: hedge funds Mason Capital Management and Nut Tree Capital Management offered to convert $845 million in debt into equity and inject fresh capital. It looked like salvation.

Then came the Court of Appeal decision in July 2025London. Judges ruled the deal unfairly favored insiders and ignored the rights of unsecured creditors. The plan was dead. And with it, Petrofac’s last realistic chance to avoid insolvency.

North Sea Operations Still Standing—For Now

Here’s the twist: Petrofac’s administration doesn’t mean all operations are shutting down. The company confirmed that its North Sea business—centered in Aberdeen and employing around 2,000 people—is operating normally. That’s because those units serve long-term oil and gas clients under separate contracts, with stable cash flow and minimal exposure to the TenneT fallout. "We’re not shutting down Scotland," said a Petrofac spokesperson. "We’re fighting to protect the parts of this company that still work." The administration is targeted—only the ultimate holding company is under court control. The subsidiaries in the UK, Norway, and Oman remain operational. That’s critical. It means clients can still rely on Petrofac for maintenance, inspections, and platform upgrades. But the uncertainty is eating away at morale. Contractors are pausing payments. Suppliers are demanding cash upfront. One offshore technician in the North Sea told us: "We’re still showing up. But we don’t know if our paychecks will clear next month."

Creditors Hold the Keys—But for How Long?

Despite the chaos, Petrofac still has lifelines. Its Revolving Credit Facility (RCF) and Term Loan lenders have agreed to extend maturities on a rolling basis. Bondholders, led by the Ad Hoc Group of Noteholders, are maintaining forbearance agreements. These aren’t acts of charity—they’re strategic bets. Many of these creditors own stakes in other energy firms and believe Petrofac’s assets, particularly its engineering teams and vessel fleets, still hold value.

The administrators, appointed by the High Court of England and Wales, have one mandate: preserve value. That means keeping projects running, honoring key client contracts, and shopping the company for a buyer. Talks are underway with private equity firms and even rival contractors like Subsea 7 and Saipem. But time is short. Every day without a buyer drains cash.

What Happens Next? The Ripple Effects

If Petrofac’s assets are sold piecemeal, hundreds of skilled engineers and project managers could flood the market—driving down wages in an industry already struggling to retain talent. If it’s bought whole, the buyer may cut redundant roles, especially in its London headquarters. Either way, the offshore wind sector will feel the impact. TenneT now has to find a replacement contractor for the 2GW project—likely delaying the timeline by 12–18 months and increasing costs for Dutch consumers.

The broader lesson? Energy transition isn’t just about building turbines. It’s about building resilient companies. Petrofac’s collapse shows how one failed contract, layered on top of years of mismanagement and legal scars, can unravel even the most established firms.