Petrofac takes $1.8bn of new orders in first half

However the order backlog of the FTSE 250 company, which is remain the focus of an ongoing Serious Fraud Office investigation, has shrunk to $9.7bn from the £10.2bn at the end of December and the $13bn a year ago.

Chief executive Ayman Asfari said the new orders have been awarded in both core and growth markets.

"We are well-positioned on several bids and tendering activity remains high with around $20bn of bid opportunities due for award in the second half of the year," he said.

The engineering & construction division secured $1.2bn of the new order intake, including a major upstream project in the GCC and three awards in India. Engineering & production services represented $0.6bn of orders, inlcuding several awards in the UK and the first of a framework with Petroleum Development Oman.

In Integrated Energy Services, production was said to be "broadly in line" with expectations for the year to date, with 2018 full year net production guidance for 6-7m barrels of oil equivalent. The average realised oil price for the first half of the year is expected to be roughly $58 per barrel.

After selling its JSD6000 oil-rig lifting barge in April for $190m Asfari said the company was "well positioned for the second half with good revenue visibility, a strong competitive position and healthy liquidity".

Net debt is expected to have grown to roughly $0.9bn by 30 June from $0.6bn at the end of last year, but expected to decrease in the second half. Liquidity is expected to be around $1.3bn, down from $1.6bn over the six months.

The shares rose in early trading but soon fell into the red, down 1.75% by mid-afternoon to 527p.

Analyst Nicholas Hyett at Hargreaves Lansdown said: “With the oil price back in healthy territory, the next hurdle facing the sector is the prospect of ‘peak oil demand’.

"As technologies become increasingly energy efficient, and renewables increasingly viable, the worry is that overall oil demand will begin to shrink, with potentially negative consequences for the oil price. As a result the industry has been reining back its spending to avoid investing billions in an oil field, only to find there’s no appetite when it finally gets pumping.

"That’s bad news for oil service groups – like Petrofac – which help build new oil wells. It’s particularly bad for those operating in expensive deep-sea oil fields. That makes Petrofac’s comment, that it’s seeing a recovery in the UK North Sea, notable since North Sea oil is among the most expensive in the world to produce. Activity is said to remain low, but if the early signs of a recovery are there, that bodes well for Petrofac, the sector, and the hundreds of oil services jobs in Aberdeen.”