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Oil company chief says Iraq suspended new Petrofac contract bids

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By Reuters

By Shadia Nasralla

LONDON (Reuters) – Iraq has temporarily suspended Petrofac <PFC.L> from bidding on new contracts, although existing deals are not affected, the head of an Iraqi state oil firm said on Thursday.

The Director General of Iraq’s Basra Oil Company Ihsan Abdul Jabbar told reporters at the CWC Iraq Petroleum Conference in London that Iraq had taken “preventive action to freeze the relation for new bids with Petrofac”.

“It is a freezing, suspended,” the Iraqi official said.

Petrofac is the subject of an ongoing investigation by the UK’s Serious Fraud Office (SFO) after the conviction in February of its former global head of sales, David Lufkin, on 11 counts of bribery relating to Iraqi and Saudi deals.

Petrofac, which has not been charged with any wrongdoing, said this week it had not been banned from any country. The SFO said it did not comment on ongoing investigations.

When asked about the Iraqi oil official’s comments, a Petrofac spokesman provided a transcript of an analyst call in which Petrofac’s Chief Financial Officer Alastair Cochran said bid processes in Saudi Arabia and Iraq had been respected.

“I want to make quite clear that we have not been banned from any territory in our portfolio … We have not been banned from bidding from either those jurisdictions or any other jurisdiction,” Cochran was quoted as saying on Tuesday.

Existing contracts were not affected and ongoing talks might yield a resolution of the issue within days, the Iraqi oil company chief said. Asked how long the suspension had been in place, he said about two months.

Petrofac is focussed on work in southern Iraq, providing engineering services at Iraq’s Majnoon and Rumaila oil fields, Nasiriya gas treatment plant and the Halfaya field. It also has work in Iraq’s northern Kurdistan region.

Revenues from Iraq made up around 4 percent of overall revenues for Petrofac last year, according to the company, which won a $400 million contract in the Arab state in 2018.

Cochran also said Petrofac lost out on $10 billion worth of contracts globally due to the probe by the SFO into its dealings in Saudi Arabia and Iraq.

(Reporting by Shadia Nasralla; Additional reporting by Kirstin Ridley; Editing by Alexander Smith)