Petrofac Shares Plummet after Being Banned from UAE Contracts

Petrofac shares plunged 8% on Tuesday morning after the company said it had been barred from competing for new contracts in the UAE. It comes months after a former executive of the oilfield services provider pleaded guilty in Britain over bribery charges. The stock dropped by about 8% as the market opened on Tuesday.

Earlier, London-listed Petrofac shares fell as much as 12% to hit session lows on Monday after the company said ADNOC had notified it of the decision. The GCC country accounted for roughly 10% of its contract revenue in 2019. In January, the former executive pleaded guilty to three bribery charges brought by Britain’s Serious Fraud Office over payments made to agents to influence awarding of contracts worth US$3.3 billion in the UAE.

The former executive pleaded guilty to 11 other counts in 2019 related to bribery charges in Iraq and Saudi Arabia. Petrofac does not currently include the two countries in its bidding pipeline. Petrofac said on Monday it would continue to work on two small UAE projects, but did not provide any other details related to the suspension.

"Petrofac will continue to execute two EPC projects for ADNOC currently under construction," it said. "ADNOC has stated that it recognizes the long-standing nature of its relationship with Petrofac and has confirmed that its decision will be reviewed on a periodic basis." It had previously said that the country accounts for just under a third of its bidding pipeline.