Petrofac Limited, one of the UK’s most prominent energy engineering and construction contractors, entered administration in October 2025 after the collapse of a near-final balance sheet restructuring triggered by the termination of a major offshore wind contract. The administration of the holding company — filed on 27 October 2025 — did not immediately halt operations across the group, but it set in motion a managed breakup of Petrofac’s business divisions that has fundamentally reshaped the company’s footprint entering 2026.
What Happened: The Collapse of Petrofac’s Restructuring
Petrofac’s financial difficulties stemmed from a 2017 Serious Fraud Office investigation into improper payments made to win contracts in the Middle East. The company pleaded guilty in 2021 and paid a £77 million fine — a penalty that damaged its ability to win new MENA contracts for several years and left it carrying significant debt through a period of reduced revenue.
Through 2023 and 2025, Petrofac pursued a court-supervised restructuring plan backed by hedge fund creditors including Mason Capital Management and Nut Tree Capital Management. The plan — which would have converted approximately $845 million of debt into equity while injecting fresh capital — received initial High Court approval in May 2025. However, the Court of Appeal overturned that approval in July 2025, finding the plan unfairly allocated restructuring benefits between creditor classes. Petrofac applied to the Supreme Court for leave to appeal while renegotiating with creditors — leaving its capital structure highly exposed to any operational shock.
That shock arrived in October 2025 when TenneT, the Dutch electricity grid operator, terminated Petrofac’s scope on a flagship 2GW offshore wind cable installation programme in the Netherlands. The TenneT work represented more than 80% of Petrofac’s engineering and construction division revenue. Its loss made the revised restructuring plan undeliverable, and Petrofac’s directors applied to the High Court of England and Wales to appoint administrators to the holding company on 27 October 2025.
Administration: What It Covered and What Continued Trading
The administration was described by Petrofac and its advisers at corporate finance firm Teneo as targeted — applying to Petrofac Limited (the ultimate holding company) and selected subsidiaries, not to all operating entities. The company’s statement at the time emphasised that group operations would continue to trade while alternative restructuring and M&A solutions were explored with creditors.
In practice, this meant different outcomes across different parts of the group. The UK North Sea operations continued running normally. The Middle East engineering and construction division — Petrofac Emirates — continued operating and was identified for potential M&A. In November 2025, approximately 200 UAE-based employees were laid off, with some uncertainty around end-of-service payments given the interaction between UAE labour law and UK insolvency rules. Kuwait Petroleum Corporation placed Petrofac on its restricted tender list — a precautionary measure reflecting concerns about the restructuring rather than project performance, and expected to be lifted once stability is demonstrated.
Asset Solutions: Acquired by CB&I
The most significant transaction to emerge from the administration process was the sale of Petrofac’s Asset Solutions division to CB&I. Asset Solutions was Petrofac’s operations, maintenance, and decommissioning services business — providing lifecycle support for onshore and offshore energy assets across the UK, Middle East, and Asia-Pacific.
CB&I agreed the acquisition in December 2025, subject to a Company Voluntary Arrangement (CVA) to compromise certain creditor claims. At a creditor meeting on 30 January 2026, the CVA was approved by 99% of creditors voting and 86% by value — removing the final structural obstacle to closing. The transfer of approximately 3,000 Petrofac Asset Solutions employees to CB&I ownership was expected to complete in Q1 2026. The acquisition significantly expands CB&I’s integrated services offering and introduces a reimbursable contracting model to its portfolio. CB&I’s existing capabilities in tank and terminal engineering are covered in our profile of CB&I: Global Leader in Tank Design, Fabrication, and Energy Infrastructure.
What Remains of Petrofac
As of March 2026, the Petrofac group exists in fragmentary form. The Asset Solutions business has transferred to CB&I. The holding company remains in administration under court-appointed administrators. Petrofac Emirates — the UAE-based engineering and construction division serving MENA oil and gas clients — is being evaluated for sale or alternative restructuring, with the company’s Middle East project pipeline and client relationships representing its most commercially valuable remaining assets.
The Engineering and Construction division that held the TenneT work has effectively ceased as a going concern in its previous form. The offshore wind contracting capability that Petrofac was building — intended to diversify beyond oil and gas EPC — proved to be the proximate cause of the company’s collapse rather than its salvation. The broader EPC contractor landscape in Europe that Petrofac once occupied is examined in our roundup of the top engineering and construction companies powering Europe’s energy transition.
Petrofac’s Legacy and Industry Impact
At its peak, Petrofac was one of the most active EPC contractors in the MENA region — delivering major projects including the Duqm Refinery in Oman, multiple ADNOC gas processing facilities in the UAE, and the Greater Tortue Ahmeyim LNG project off Mauritania and Senegal. The company employed approximately 8,000 people globally at the time of its administration filing, with significant concentrations in the UK, UAE, and Malaysia.
The administration is a significant event for the UK energy services sector, removing a major domestic contractor from the EPC market and raising questions about the viability of offshore wind contracting models that rely on fixed-price lump-sum contracts. The TenneT termination — triggered by Petrofac’s failure to meet contractual obligations on a technically demanding subsea cable programme — reflects the execution risk inherent in renewable EPC work that several traditional oil and gas contractors have found difficult to manage. For context on the North American EPC market that continues to operate without these structural disruptions, see our guide to the top tank and terminal EPC companies in North America.
Petrofac — Key Facts
| Founded | 1981 |
|---|---|
| Headquarters | London, United Kingdom |
| Administration Filed | 27 October 2025 |
| Trigger | TenneT termination of 2GW offshore wind contract; failed restructuring plan |
| Asset Solutions | Sold to CB&I; CVA approved 30 January 2026; ~3,000 employees transferring |
| Petrofac Emirates | Continuing operations; under M&A evaluation as of March 2026 |
| Prior Revenue (2024) | ~$2.6 billion |
| SFO Fine (2021) | £77 million for improper payments to win MENA contracts |
| Administrators | Court-appointed; advised by Teneo |
What happened to Petrofac?
Petrofac Limited entered administration on 27 October 2025 after Dutch grid operator TenneT terminated its scope on a 2GW offshore wind programme in the Netherlands. The loss of that contract — which represented more than 80% of Petrofac’s engineering and construction division revenue — made the company’s near-finalised balance sheet restructuring plan undeliverable, forcing its directors to apply to the High Court to appoint administrators.
Has Petrofac been sold?
Petrofac’s Asset Solutions division — its operations, maintenance, and decommissioning services business — was sold to CB&I. The CVA required to facilitate the sale was approved by 99% of creditors voting on 30 January 2026, with approximately 3,000 employees expected to transfer to CB&I in Q1 2026. Petrofac Emirates, the UAE-based engineering and construction division, remains under evaluation for sale or restructuring as of March 2026.
Is Petrofac still operating?
Parts of Petrofac continue to operate. The administration applied to the holding company and selected subsidiaries rather than all operating entities. UK North Sea operations and Petrofac Emirates continued trading through the administration process. However, the Engineering and Construction division that held the TenneT offshore wind work has effectively ceased in its previous form.
Why did Petrofac fail?
Petrofac’s collapse resulted from a combination of long-running factors. A 2017 Serious Fraud Office investigation — which ended in a £77 million fine in 2021 — damaged its ability to win new Middle East contracts for several years, leaving it carrying significant debt through a period of reduced revenue. Multiple restructuring attempts failed, culminating in a Court of Appeal ruling in July 2025 that overturned an approved restructuring plan. The TenneT contract termination in October 2025 provided the final trigger.
What is Petrofac’s connection to CB&I?
CB&I acquired Petrofac’s Asset Solutions business through a transaction agreed in December 2025, following administration of Petrofac’s holding company. A Company Voluntary Arrangement linked to the sale was approved by 99% of creditors on 30 January 2026. The deal expands CB&I’s lifecycle services offering significantly and secures the jobs of approximately 3,000 former Petrofac employees.