Petrofac seals $2bn Oman oil deal

Jersey-based design and engineering firm Petrofac has secured a new $2bn oil refinery contract in the south of Oman.

The British firm will work alongside Samsung Engineering as part of a 50/50 joint venture on the Duqm Refinery scheme. The 47-month project is expected to begin soon, with Petrofac and Samsung handling engineering, procurement, construction, commissioning, training and start-up operations for all the utilities and offsites at Duqm.

News of the deal was warmly received by the London Stock Exchange, with Petrofac's shares (PFC.L) rising more than 8 per cent to 483p before the close of trading on Friday.

According to a statement by Petrofac, notification of intent to award the contract has been received. The company is now waiting on financial closure and full notice to proceed from Duqm Refinery and Petrochemical Industries LLC (DRPIC).

The Duqm Refinery project will form the cornerstone of the Special Economic Zone in Duqm (SEZAD) – an area of more than 2,000 sq. km located about 500km south of Muscat. The zone was established by royal decree in 2011 and represents the Sultanate's efforts to diversify the national economy. The refinery development will cover an area of more than 8 sq. km and once completed will have a refining capacity of approximately 230,000 barrels of oil per day.

E Sathyanarayanan, group managing director of engineering and construction at Petrofac, said: "This significant project represents our twelfth in the country and serves to reinforce Petrofac's commitment to one of our core markets; one in which we have been present since 1988.

"Furthermore, it provides a valuable opportunity for us to continue to increase in-country value through engaging with the local supply chain and recruitment of local resources. We are very much looking forward to working with Samsung on this project and growing our relationship with DRPIC."