Petrofac hit by further costs on Shetlands gas project

Oilfield services outfit Petrofac has said it mostly performed in line with expectations in the first half, though development of a flagship project in the Shetland Islands will incur further costs.

Construction on the Laggan-Tormore project is substantially complete and the company is now in the final completion and pre-commissioning-related activities with the aim of delivering first gas in the third quarter.

However, the company said additional work has led to incremental pre-tax costs of £30m. Nevertheless, it also said it would book £20m of deferred tax assets from the losses it had made.

Petrofac has already lost $220m for the first six months of 2015 on the Laggan-Tormore project. Including this, group profits for the first half are expected to come in at $240m.

"The rest of our portfolio continues to perform in line with our operational and financial expectations," it said.

Group backlog stood at record levels by 31 May at $20.5bn, up from $18.9bn at the start of the year.