After months of waiting, former UAE staff of Petrofac accepted partial settlement following the company’s collapse.
Dubai: Petrofac was once a leading name in energy services, valued at over £6 billion (around Dh27.5 billion) and listed on the FTSE 100.
Its decline was gradual, driven by a corruption probe, heavy debt, failed restructuring efforts, and the loss of a major offshore wind contract, which ultimately pushed the UK holding company into administration. Meanwhile, former UAE employees waited months for clarity on salaries, notice-period pay, and end-of-service benefits.
By June 2026, several former Petrofac employees in the UAE confirmed they had received around 70% of their outstanding dues.
2011–2017: Rapid growth that eventually became increasingly risky.
Expansion and later findings
- Petrofac established a strong foothold across the Middle East, securing major contracts in Iraq, Saudi Arabia, and the UAE.
2017: SFO probe begins
- In May 2017, the UK Serious Fraud Office launched a formal investigation into allegations of bribery, corruption, and money laundering.
The probe marked a turning point for Petrofac, bringing its past contracts under scrutiny and undermining confidence in a company heavily dependent on large state-backed energy projects.
2019–2021: Conviction and penalties — Former Petrofac executive David Lufkin pleaded guilty to 14 counts of bribery across multiple jurisdictions.
Conviction and penalties
- In October 2021, Petrofac admitted to seven counts of failing to prevent bribery and was fined more than £77 million. The judgment described the corruption as “systemic, serious and grave.”
2022 to mid-2025: Debt pressure builds
- From 2022 to mid-2025, Petrofac faced mounting debt pressures, carrying around $4 billion in liabilities and attempting a restructuring plan that included converting over $800 million of debt into equity.
The High Court granted conditional approval in May 2025, but the Court of Appeal overturned the restructuring plan in July following challenges from partners, leaving the group facing another major setback.
October 2025: TenneT contract loss derails the plan — Dutch grid operator TenneT removed Petrofac from a 2GW offshore wind transmission programme after the company failed to meet contractual obligations.
Contract impact and administration
- Court filings showed that the contract accounted for more than 80% of revenue in Petrofac’s engineering and construction division. Its loss rendered recovery efforts unviable.
“We were told that around 190 to 200 of us were being terminated on the same day, with the next day set as our final working day,” said a long-serving Petrofac employee. “We were informed that salaries would be paid only up to November 19.”
Late November 2025: Salary paid, dues unresolved — Former employees confirmed they received pay for the 19 days worked in November, while end-of-service benefits and notice-period entitlements remained unsettled.
Late November 2025: Orlen Lithuania cuts ties
Petrofac suffered another setback when Orlen Lithuania terminated a contract valued at nearly €1 billion, citing delays in a refinery upgrade project in Mažeikiai.
“Due to increasing delays in the supply of materials and assembly works, and consequently failure to meet contractual deadlines in the implementation of the Bottom of the Barrel investment, Orlen Lietuva has decided to terminate the contracts with Petrofac International,” the Orlen Group said.
The cancellation added to Petrofac’s growing list of contract losses and further raised concerns over its ability to stabilise and sustain operations.
January 2026: Asset Solutions sale progresses
By January, Petrofac was advancing a company voluntary arrangement linked to the planned sale of its Asset Solutions division to CB&I.
“The agreed sale of Asset Solutions to CB&I is a strong outcome for the business and for around 3,000 colleagues who are expected to move across on completion,” said John Pearson, Chief Operating Officer of Petrofac’s Asset Solutions business. “After more than two years of restructuring, this CVA represents the final step in delivering that outcome, and we are asking creditors to support it so the transaction can be completed.”
March 2026: Petrofac Emirates sale agreed
In March, Petrofac agreed to sell Petrofac Emirates to a consortium of investors led by Mason Capital Management and Pearlstone Alternative.
The transaction included the group’s core engineering and construction operations in the UAE, along with execution teams based in the UAE, Chennai, and Mumbai.
Chief Executive Tareq Kawash said the deal “preserves Petrofac’s execution and engineering capability and delivers continuity for the contracts currently under execution.”
May 2026: Petrofac Emirates sale completed
Petrofac completed the sale of Petrofac Emirates in May after receiving all necessary regulatory and corporate approvals.
The company said Petrofac Emirates would continue operating as a self-sustaining business with no funded debt, with growth opportunities across the UAE and the broader MENA region.
Leadership change and new phase
Tareq Kawash was appointed Chief Executive Officer of Petrofac Emirates.
“The completion of this transaction marks an important milestone for Petrofac Emirates and the beginning of a new chapter for the business,” he said.
June 2026: UAE staff receive 70% dues
Former Petrofac employees in the UAE confirmed that payments were made on June 4 and June 5, nearly six and a half months after the November layoffs.
One former senior employee said most staff received about 70% of their outstanding dues and accepted it as a full and final settlement.
“We got 70% of what they owed us, but then most of us, the critical mass, we decided that 70% was, you know, good enough,” he said. “It’s better to take the bird in hand than to strive for two in the bush.”
The same employee said his end-of-service benefit was paid in full, though others reportedly received reduced amounts after agreeing to the settlement.
“My end-of-service benefit I got in full, but that’s just me speaking for myself,” he said. “Most other people, I think, they lost about 5% to 10% of the EOSB by accepting the 70% as full and final settlement.”
Former employees also said government intervention helped move the process toward closure after complaints were raised with the Ministry of Human Resources and Emiratisation.
Petrofac declined to comment on the payments, saying: “Thank you for your enquiry. We are unable to comment at the present time.”
The payouts brought partial relief to many former UAE staff, while Petrofac Emirates entered a new phase under its new ownership after a turbulent period for the company.
