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Petrofac order backlog rises to record high, no Iraq setback

Published 24/06/2014, 08:27
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By Ron Bousso

LONDON (Reuters) - British oil and gas services group Petrofac on Tuesday reported a record order backlog of $20.1 billion while keeping a stable profits outlook after last month's forecast warning.

The bulk of new orders came in the company's core segment of onshore engineering and construction (OEC), with $4.5 billion of order intake in the year to May 31, including in Oman, Kuwait and Algeria.

Violence in Iraq has so far not had any impact on the FTSE 100 company's operations in the oil-rich country which are concentrated south and east of Baghdad and which represent less than five percent of the group's revenues for 2014, it said.

"The Group's backlog stands at record levels, giving us good revenue visibility for the rest of this year and beyond," Chief Executive Officer Ayman Asfari said.

Service companies, which provide the engineering and construction on oil and gas projects, are increasingly under pressure as big oil companies face huge project delays and tighten their budgets.

Petrofac last month lowered its profits forecast by 11 percent after weak results in integrated energy services (IES) in which it invests alongside oil companies and has earnings linked to the volume of barrels taken out of the ground.

By the end of May, the backlog for the IES segment had risen slightly to $4 billion.

The group's engineering and consulting services (ECS) in March was awarded its largest-ever contract worth $1 billion with Petroleum Development Oman (PDO).

The company maintained its profits outlook at a range of $580 to $600 million.

Net debt nearly doubled in the six months to May 31 to $1.3 billion, reflecting ongoing investment in IES and the offshore installation vessel Petrofac JSD 6000.

(Reporting by Ron Bousso; editing by Jason Neely)

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