Petrofac Limited SWOT and PESTLE Analysis
COMPANY PROFILE -Petrofac Limited
Business Sector :Oil and Gas Production Services
Operating Geography :United Kingdom, Europe, Global
About Petrofac Limited :
Petrofac Limited is a British oilfield services company that works with the international oil and gas industry. The company's primary headquarters are located on Jermyn Street in London. The company's stock is listed on the London Stock Exchange. In 1981, the company began as a modular plant manufacturer in Tyler, Texas. The firm specializes in energy infrastructure design, construction, management, and maintenance. It constructs oil and gas facilities, runs, maintains, manages those facilities, and trains workers, as well as works towards improving production and developing and co-investing in infrastructure projects. Engineering & Construction and Engineering & Production Services are the two business segments for the company. The Engineering & Construction segment serves the onshore and offshore oil and gas industry by providing lump-sum engineering, procurement, and project execution services. All reimbursable engineering and production services activities to the oil and gas industry are included in the Engineering & Production Services category. In July 2021, the firm signed the first Memorandum of Understanding (MOU) as a customer for Storegga's upcoming large-scale Direct Air Capture ("DAC") facility in the United Kingdom.
Petrofac Ltd's USP or unique selling proposition lies in being the world's top multinational energy services company, having operations in more than 29 countries. The mission statement of Petrofac reads, "We work to optimize value for our clients, without compromising quality and integrity. We have a relentless focus on delivery and exceeding our clients' expectations".
Petrofac Limited Revenue :
$ 4,081 million - FY ending 31st December 2020 (y-o-y decline 26.2%)
$ 5,530 million - FY ending 31st December 2019 (y-o-y decline 5.13%)
$ 5,829 million - FY ending 31st December 2018
Competitive Analysis of Petrofac Limited
Strengths | Weaknesses |
1. Strong presence in Middle East 2. Active in emerging markets 3. Focus on efficient human resource management 4. Presence in both upstream and downstream businesses | 1. Poor financial performance and constant decline in revenue since 2016 2. Banned from getting new contracts in few countries in Middle East |
Opportunities | Threats |
1. Opportunity to grow in American market through Permian Basin 2. Fast track project in Turkey opens newer markets 3. Increasing global demand for energy 4. Presence in the energy market of future | 1. Threat due to risk associated with international business 2. Competitive business environment |
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Detailed SWOT Analysis of Petrofac Limited
Strength
1. Strong Presence in Middle East: Petrofac has multiple clustered projects in the Middle East. It has several collaborations with national oil companies of the region. Apart from that, it also serves in projects of metal industry in the hinterland. It has ongoing and upcoming projects in Iraq, Kuwait, Oman, Saudi Arabia and UAE. It has several operations and maintenance contracts in Iraq, of which collaborations with Al Fao and Basra Oil Company being noteworthy. The company has completed Kuwait National Petroleum Company Clean Fuels Project in 2019. It has bagged multiple ongoing projects in Oman worth $130 million. Noteworthy ongoing projects are Phase 2 of Khazzan Central Processing and Duqm Refinery with 10-year framework agreement with Petroleum Development Oman. In UAE, Petrofac has a major share worth $3.5 million at the offshore mega project at Upper Zakum oil field. Besides, in UAE alumina refinery factory of Al Taweelah started production in 2018-19, which was constructed by Petrofac as a mega project not related to the petroleum industry. More than 50% of the net revenue of Petrofac was generated from Middle East in 2020, especially from Oman (18%), Kuwait (8%), Algeria (14%), Iraq (6%) and UAE (7%).
2. Active in emerging markets: Petrofac is constantly active in various emerging markets across the globe, working with multiple vendors and suppliers to deliver value to its clients. It engages with various stakeholders from these markets through its offices in Iraq, Qatar, Oman, Saudi, UAE, Kuwait, Turkey, Algeria, Brunei, China, India, Malaysia, Thailand and Kazakhstan. The biggest sources for manufacturing materials for the company are from India, South Korea and China. The company has many high worthy ongoing projects in key emerging markets like Raageshwari Deep Gas Field Development ($ 0.2 bn), BPCL Kochi ($ 0.1 bn), HPCL Visakh ($ 0.2 bn) in India, GC-32 ($ 1.3 bn) in Kuwait, Duqm Refinery ($ 1.1 bn) in Oman, Majnoon CPF ($ 0.4 bn) in Iraq, Tinrhert ($ 1.3 bn), Ain Tsila ($ 1.3 bn) in Algeria, Clean Fuels Project ($ 1.3 bn) in Thailand. Petrofac’s engagement in emerging markets proves to be crucial for the company’s growth.
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Weakness
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Opportunity
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Threat
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Major Competitors :
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References used in Petrofac Limited SWOT & PESTLE Analysis Report
1. A leading international service provider to the energy industry - https://www.petrofac.com/en-gb/media/news/results-for-the-six-months-ended-30-june-2019/
2. Posting of 2020 Annual Report and Notice of the 2021 AGM - https://www.petrofac.com/media/news/posting-of-2020-annual-report-and-notice-of-the-2021-agm/
3. Petrofac revenues to shrink next year as it struggles to win work - https://www.ft.com/content/fb8c8e42-c95b-11e9-af46-b09e8bfe60c0
4. Petrofac Breaks Into Permian Shale Market with Latest Acquisition - https://www.rigzone.com/news/petrofac_breaks_into_permian_shale_market_with_latest_acquisition-20-nov-2019-160387-article/
5. Results and presentations - https://www.petrofac.com/investors/results-and-presentations/
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Petrofac Limited SWOT and PESTLE analysis has been conducted by Tej Narayan Shaw from IISWBM, Kolkata and reviewed by senior analysts from Barakaat Consulting.
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