Strategy

Our strategy (illustrated below) is intended to maximise the opportunities available to us by using the breadth and depth of our services and capabilities to deliver excellent outcomes for our clients and create value for our colleagues and investors.

Fundamental to our success is Petrofac’s distinctive, delivery-focused culture and the six values that sustain it: safe, ethical, innovative, responsive, quality and cost conscious, and driven to deliver.

Our strategic intent is to build progressively on our core business which, in turn, enables us to achieve a more balanced geographic and business model mix, and to work across the entire life cycle of our clients’ assets, from early development right through to decommissioning. In our core business our focus remains on delivering our backlog through a relentless focus on first class project execution, cost control and effective risk management, building on our track record in core markets and further cementing our foothold in geographies where we are newer players.

 

Refocused Integrated Energy Services (IES) strategy

The original strategic rationale was for IES to bring value to the wider Petrofac Group, and offer another route to market for our full range of services. In re-focusing the business, we are re‑committing to this original purpose and we will focus on projects that play to our existing strengths. To be successful in this, we will work together across the Group from the business development stage, agreeing on the target and developing a robust pursuit and execution strategy along with clear accountabilities for delivery from the outset.

At the same time, we are:

  • slowing down the pace of capital deployment
  • reducing capital intensity where it makes sense to do so
  • looking at ways we can leverage third-party capital

We will not commit to significant new capital until we have extracted the right value from the existing portfolio.

We will pursue the clear synergies between IES and ECOM (Engineering, Construction, Operations & Maintenance), and demonstrate to clients the benefits of our unique, combined offer.

 

Deepwater strategy

The scale of the deepwater market will be determined by movements in the oil price. But we still feel that there are opportunities out there for us, based on the feedback we’ve had from clients, competitors and potential partners. We know that the market is impressed by the unique configuration and capabilities of the Petrofac JSD6000 – our new installation vessel.

During 2015, we will monitor the market opportunities for use of the vessel and manage its construction programme accordingly.

We have also established a marketing alliance with McDermott to jointly pursue opportunities in the deepwater subsea, umbilicals, risers and flowlines (SURF) sector. Together, we aim to develop a first-class SURF market position targeting EPCI projects in the US Gulf of Mexico, Mexico, West Africa, Brazil, Mediterranean and the North Sea.

The Alliance will give both parties a wider geographic reach and enhanced access to world-class opportunities as well as the potential to work with clients from the conceptual and front end engineering and design stages.

The combination of our experience, assets and cultures will enable us to offer clients a very competitive integrated solution for their deepwater developments. It will also offer a broader range of assets to widen the potential market and optimise asset use.

 

Focus on delivery excellence

Our business model depends on our ability to continually provide a range of services and capabilities that are recognised as consistently high quality.

From the moment we decide to bid on a project, the discipline begins. A team is assembled, a tailor-made execution plan is developed, risks are identified, suppliers are engaged, and a member of the management team takes full responsibility for its delivery. With a clear understanding of cost and complexity, we can then bring our best-in-class, on-time delivery culture. At every step of the way, formal reviews ensure incremental improvements in our overall approach.

 

Our overall portfolio is in good shape, with built-in margins consistent with guidance.