Oilfield services firm Petrofac has announced that it will reduce overhead and project support costs by at least US$100mn in 2020 and by up to US$200mn in 2021 as part of its response to the COVID-19 outbreak
The company aims to conserve cash and liquidity by reducing capex by 40 per cent and suspending the 2019 final dividend.
Petrofac will reduce the salaries and allowances for its board, senior management and most of its employees by between 10-15 per cent. It will also reduce personnel by 20 per cent and furloughing staff in anticipation of a reduction in activity levels with the aim to reduce non-staff overhead costs by up to 25 per cent.
Ayman Asfari, Petrofac’s Group CEO, commented, “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.”
