Petrofac, a global oil and gas services company with over 7,000 employees, has filed for administration, primarily impacting its main UK holding company, while its UK operations are expected to continue normally.

The company’s UK arm, based mainly in Aberdeen, employs around 2,000 workers and manages North Sea oil platforms for clients like BP and Shell.

Petrofac's insolvency was triggered after the termination of a major windfarm contract in the Netherlands by TenneT, following failed restructuring efforts and the withdrawal of a key contract.

The company had been attempting a financial restructuring approved in May, but the loss of the TenneT contract made a solvent restructuring impossible, leading to the High Court filing.

Petrofac announced to investors that it has applied to the High Court to initiate administration proceedings, marking a significant turning point for the company.

Despite the insolvency, Petrofac continues to operate its UK business, which manages North Sea assets, and is exploring options such as restructuring, mergers, or acquisitions with creditors.

A 2025 court-approved restructuring plan aimed at reducing debt was reversed after TenneT withdrew its contract, prompting the current administration process.

Advisers from Teneo are expected to assist during the administration to preserve the company's value, operational capacity, and ongoing projects.

The administration will primarily impact Petrofac's main holding company, but the UK operations are expected to continue functioning normally, with management working to minimize disruption.

UK Energy Minister Michael Shanks expressed optimism about Petrofac's long-term future and clarified that the administration affects only the holding company, not the UK operations.

Petrofac’s valuation has plummeted from around £6 billion in 2012 to approximately £20 million in 2025, due to investigations, market volatility, and debt issues, leading to its shares being suspended from the London Stock Exchange.

The UK government, through the Department for Energy Security and Net Zero, is monitoring the situation and has stated that Petrofac’s UK arm is unaffected and operating normally, with ongoing support to ensure stability.

Industry experts view Petrofac’s potential collapse as a major blow to the oil and gas sector, with assets and contracts likely to be acquired by rivals if the administration proceeds.