Petrofac Limited: Offered fully subscribed -8-
The successful refinancing of all short-term maturities, through the Refinancing Plan, will strengthen Petrofac’s balance sheet and liquidity position, allowing it to be in an optimal position to benefit from the expected market recovery. The Company has introduced several cost reduction measures to reduce overheads and project support costs, while preserving core capabilities. The company is on track to achieve more than $ 250 million in cost savings from pre-pandemic levels. 7. Reinforced compliance structure
The Group’s commitment to the highest level of ethical and effective governance is supported by a culture of integrity, transparency and trust. The Group’s compliance framework uses a three-line approach, with each line forming a feedback loop that informs improvement: leadership and people, processes and controls, and assurance. There is strong alignment between management incentives and ESG performance metrics, with ESG performance metrics accounting for an average of 40% of top management incentives. In recent years, the Group has strengthened its cultural orientation on ethical conduct, supported by a well-developed and independently audited compliance and governance regime, committed to the best compliance systems and practices. MSCI’s ESG ratings upgraded the Group to “AA” in March 2021, denoting industry leadership, with “the Group’s strong business ethics policies driving the upgrade” and corporate policies. The Group’s business ethics are “strong” compared to its peers, its corporate governance practices being “” leading those of its peers “and highlighting the improvement since 2020.
The Company has set up a Compliance and Ethics Committee of the Board which oversees and maintains the implementation of the principles and rules relating to compliance and ethics and provides assurance to Petrofac shareholders that the policies and the standards are both adequate and effective.
The changes implemented led to the creation of a highly qualified Sharjah-based compliance leadership team, comprising a new group legal counsel, a compliance officer and a director of investigations and dedicated officers in key operating centers.
In addition, the Company has made significant investments in new technologies with new confidential reporting tools and externally hosted due diligence tools and has established an independent compliance investigation team.
The Company’s implementation of an independent review and subsequent regular audit process reporting directly to the Compliance and Ethics Committee adds additional layers and further strengthens its compliance structure.
A revised code of conduct was launched in January 2020, with mandatory eLearning training for employees and third parties who work with the Group to ensure that standards and expected behaviors are understood and applied.
With the implementation of the new compliance structure, Petrofac established a zero tolerance approach to Code of Conduct violations, retaliation, victimization, intimidation and harassment. 8. Reinvigorated management team with demonstrable expertise
The appointment of a new CEO, Sami Iskander, with more than 30 years of international experience in petroleum services and upstream exploration and production companies, significantly strengthens the leadership of the Company. Sami is supported by a new CFO, Afonso Reis e Sousa, with nearly a decade at Petrofac, in a number of roles, most recently as Group Treasurer and Head of Tax, Insurance and risks. The new management team has extensive industry experience and is well positioned to lead the transformation of the business and has established clear values to underpin the group’s purpose and societal license to operate, which govern the operation of the group. Petrofac. Behavioral expectations clearly defined by the Petrofac Board of Directors for those who work for and with the Group support a culture of superior performance coupled with high standards of ethical business conduct.
As announced in April 2021 in its annual results, the Group’s strategy is based on three overarching objectives: first-rate delivery, a return to growth and superior yields.
Top notch delivery
Best-in-class delivery requires an optimal execution structure supported by technology, lean and efficient processes, and customer-focused local delivery to a global standard where quality and value are independently assured and risk mitigated.
Simplify the organization
Petrofac simplifies its organization by creating a streamlined structure supported by technology and efficient processes. This includes the establishment of a 1tec collaborative technical organization, which brings together the Group’s technical experts in a series of “Functions” such as proposals, engineering, supply chain and quality assurance, in order to ensure that best practices are developed and shared effectively across the Group. and that Petrofac teams around the world deliver world-class performance in every location.
This efficient and digital organization should also further improve the Group’s cost competitiveness, leaving it in a good position to rebuild its order book when the market recovers and to systematically offer higher margins to shareholders.
Overall capacity, location execution
The improved organizational structure, with 1tec as the backbone, will aim to ensure that projects are executed to a single global standard in all countries in which Petrofac operates, through a local customer-centric delivery system. This local delivery model should bring the Group closer to its customers and deepen Petrofac’s understanding of the markets in which it operates, which will further reduce execution risks and improve profitability.
At the same time, Petrofac will continue to maximize value in the country (measured by the value of local spending on goods and services), a source of competitive advantage, by investing in new local leadership with a mandate to build strong businesses and resilient, supported by supply chains, in key markets. As a benchmark, Petrofac’s spending by value in the country in 2020 was 53% on non-joint venture projects and significantly higher in some key geographies. When bidding for new work, in-country value is a key metric rated by customers and Petrofac’s success rate in tenders confirms that it is a market leader on this front. .
Petrofac has invested and continues to invest heavily in its digital capability which, together with technical expertise, improves productivity and provides optimal solutions to customers while ensuring greater consistency and lower costs across all portfolios.
For example, in December 2020, Petrofac’s work to digitize its operations and maintenance services was recognized with a prestigious award from Oil & Gas UK, the main representative body of the offshore energy industry in the UK. United. By combining digital and mobile twin technologies with the Group’s proprietary software, BuildMETM, Petrofac has digitized its inspection processes. Proven in more than 4000 inspections in the North Sea, this approach has improved productivity by 200%.
The Group has also made significant investments in its internal systems to increase the automation and efficiency of motors. These investments have already improved the Group’s productivity and will be an important lever for maximizing the Group’s cost-competitiveness when pursuing future contract awards.
Petrofac has a number of successful strategic partners, which allow customers to benefit from combined expertise while providing added value to the country.
In NES, Petrofac forms strategic partnerships with developers and technology providers. These customer-centric relationships not only facilitate project development today, but also strengthen the Group’s ability to seize future opportunities.
For example, Petrofac has formed a Global Technical Delivery Alliance (“TDA”) with Storegga, which has the potential to be the UK’s first industrial scale carbon capture and storage project. TDA combines Petrofac’s world-class engineering, project delivery and operational expertise with Storegga’s project development capability, supporting the rapid delivery of critical infrastructure to zero net in the UK and to abroad.
Additionally, as a technology neutral service provider, Petrofac will continue to leverage its subject matter experts to deliver optimal tailor-made solutions to customers, without being constrained by the need to deploy particular in-house technologies.
This not only allows the Group to provide optimal solutions to its customers, but also to maximize the market opportunities available to Petrofac. This is particularly relevant for the new energy segment where there is a wide range of new technologies, each of which is limited to specific niches within particular sub-sectors. For example, the Group estimates that there are around 1,000 large industrial sites suitable for carbon capture in Europe alone, all of which will require tailor-made solutions adapted to the exhaust volumes of each producer, the percentage of CO2 gas and the physical configuration of its facilities. A wide range of technologies will be needed to provide solutions to this heterogeneous set of opportunities, and Petrofac’s technology neutral approach ensures that it can serve the entirety of this market.
Return to growth
Petrofac’s focus on returning to growth will be supported by better customer focus, approaching both existing and new customers to drive growth in key markets, pursue growth opportunities in new ones. selective markets and accelerate the Group’s expansion into new energies.
Client centric approach
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October 26, 2021 02:27 ET (06:27 GMT)