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The UK-headquartered engineering company Petrofac has been temporarily banned from participation in tenders in Kuwait’s oil and gas sector, according to industry sources.

The decision was made earlier this month by Kuwait Petroleum Corporation (KPC), the country’s national oil company.

In Kuwait, when a company is temporarily banned from participating in tenders, it is described as being “Q-listed”.

The decision to suspend Petrofac from tender participation came after the company announced that it had applied to appoint administrators, a move that potentially put thousands of jobs at risk and increased uncertainty for projects worth billions of dollars in the Middle East and North Africa (Mena) region.

One source said: “KPC wants to wait and see what happens with Petrofac’s ongoing restructuring.

“Senior officials at KPC believe there is just too much uncertainty about the company’s future and, because of this, it would be unwise to award it more contracts or allow it to submit bids for new tenders.

“If Petrofac becomes more stable and demonstrates clearly that it can still reliably execute projects in the Middle East, it is highly likely that KPC will end the suspension and allow it to participate in new tenders.”

Another source said: “Kuwait has paused new tender participation for Petrofac while the restructuring is under way.

“This isn’t unusual in the market and relates to the process itself, not to performance or capability.”

Petrofac declined to comment on the suspension when it was contacted by MEED.

Ongoing restructuring

On 25 November, Petrofac released a statement saying that it was seeking to appoint administrators to its subsidiary Petrofac International Limited (PIL).

This subsidiary was previously focused on the group’s engineering and construction activities in the Mena region.

In its statement, Petrofac said that its subsidiary would “shortly make an application to the Royal Court of Jersey seeking a letter of request under section 426 of the Insolvency Act 1986”.

It added: “The purpose of this application is to ask the Royal Court of Jersey to issue a letter of request to the High Court of England and Wales and seek its assistance in appointing administrators to PIL.”

Petrofac said that PIL had no ongoing contracts in the Mena region and it intends to redeploy PIL’s 120 staff to other subsidiaries “wherever possible”.

It added: “The administration of PIL is expected to facilitate the purpose of Petrofac Limited’s administration, to help preserve the value of the wider Group and to facilitate the planned M&A solutions.”

Petrofac has said that it is continuing to push ahead with options for alternative restructuring and M&A solutions with key creditors.