Petrofac wins $1.47B Kuwait oil project as parent company files for administration

Oct 28, 2025

On October 27, 2025, Petrofac International Limited emerged as the lowest bidder for Kuwait Oil Company’s $1.47 billion Water Injection Plant-IV project — a critical infrastructure push to boost oil recovery in southern Kuwait — while its parent company, Petrofac Limited, simultaneously filed for administration in the High Court of England and Wales. The twist? The very team winning one of the Middle East’s biggest energy contracts is part of a group whose holding company has just entered formal insolvency. It’s a corporate paradox: operations thriving while the top layer collapses.

How a $1.47 Billion Bid Survived a Corporate Meltdown

The Water Injection Plant-IV (WIP IV) project in South Kuwait is no small undertaking. It includes building a new water injection facility, over 100 kilometers of pipelines, safety systems, oil gathering infrastructure, and seven new well pads across the S&EK region. The goal? Inject more water into aging oil reservoirs to squeeze out every last drop — a vital tactic as Kuwait seeks to maintain its 3 million barrels-per-day production target. Only two bidders made it to the final round: Petrofac and India’s Larsen & Toubro. Petrofac’s bid of KWD 453.7 million ($1.47 billion) undercut L&T’s KWD 488.3 million ($1.5 billion) by over $30 million — a decisive margin in an industry where margins are razor-thin.

What’s remarkable is that this bid came just days after TenneT, the Dutch grid operator, terminated Petrofac’s contract on the 2GW offshore wind project in the North Sea, citing “failure to meet contractual obligations.” That single blow unraveled Petrofac Limited’s already fragile financial restructuring plan. By October 23, internal warnings had escalated. Four days later, the parent company filed for administration.

Targeted Collapse, Continuous Operations

Petrofac’s October 27 statement was carefully worded: “This is a targeted administration of the Group’s ultimate holding company only.” Translation: the shell is in trouble, but the engines are still running. The company’s operational arms — including its Kuwait office at Eastern Plaza Building in Ahmadi — are continuing business as usual. Creditors, including the Ad Hoc Group of Noteholders and lenders backing its revolving credit facility, have agreed to extend maturities while restructuring options are explored. Administrators will work alongside current management to “preserve value and operational capability.”

That’s why the Kuwait contract still matters. For Petrofac International, this isn’t just another project — it’s a lifeline. Kuwait has been a core market since the 1980s. The company has built local partnerships, hired Kuwaiti engineers, and invested in in-country value creation. Its safety record in the region is among the best in the industry. Winning this contract ensures cash flow, keeps teams employed, and maintains its reputation — all while the UK parent company is being wound down.

The BBC confirmed that Petrofac’s 2,000 employees in Scotland — primarily in its North Sea operations — will not be affected. Same goes for its teams in the Middle East, West Africa, and the Gulf. The administration doesn’t touch these entities. They’re legally separate, with their own balance sheets and contracts. The Kuwait project, for example, is contracted with Petrofac International Limited, not Petrofac Limited. That legal distinction is what’s keeping the lights on.

Why Seven Bidders Shrunk to Two

When KOC opened bidding in August 2024, seven global giants were pre-qualified: Spain’s Tecnicas Reunidas and Saipem, South Korea’s Samsung Engineering, Hyundai Engineering & Construction Company, and Daewoo Engineering & Construction, plus China’s Sinopec Luoyand Engineering and Sinopec Engineering Incorporation. By the deadline, only Petrofac and L&T submitted bids. Why?

Industry insiders suggest the project’s complexity — combined with rising global inflation and supply chain instability — scared off many. Petrofac, despite its parent’s troubles, has deep regional knowledge and established logistics in Kuwait. L&T, while financially stable, may have priced more conservatively to account for currency and labor risks. Petrofac, desperate for cash, gambled on a low-margin win. And it paid off — for now.

What This Means for Kuwait’s Oil Future

For Kuwait Oil Company, the decision was straightforward: lowest compliant bid wins. The WIP IV project is essential to sustaining production from the South Kuwait fields, which account for nearly 40% of the country’s output. KOC’s engineers are confident in Petrofac’s track record — even as its UK parent crumbles. “Petrofac has been part of Kuwait’s infrastructure rebuild for over four decades,” said a senior KOC official, speaking off the record. “They know our fields. They know our standards. We’re not betting on a corporate structure. We’re betting on a team.”

The administration of Petrofac Limited doesn’t change that. The project will proceed. Construction is expected to begin in Q1 2026, with completion targeted for late 2028. The real question isn’t whether the plant will be built — it’s whether Petrofac International can survive long enough to see it through.

What’s Next for Petrofac?

Administrators will now explore three paths: a sale of the operating businesses, a debt-for-equity swap with creditors, or a full carve-out of the viable units into a new entity. The Ad Hoc Group of Noteholders — representing bondholders with $1.2 billion in exposure — is reportedly open to supporting a restructuring that keeps the Middle East and African divisions intact. If successful, Petrofac International could emerge as a standalone company, free of the UK parent’s debt.

For now, the company’s Kuwait office remains open. Employees are still reporting to Eastern Plaza. Work on the WIP IV project continues. The administrators have not yet named who will take over the UK side. But in Ahmadi, the focus is on pipelines, not paperwork.