A Quick Glimpse At The Petrofac Share Price

Petrofac is an oilfield service company based in the United Kingdom that provides engineering, construction, and operations and maintenance services to the oil and gas industry worldwide. 

In this article, we’ll look closely at the Petrofac share price history and performance to help readers understand what drives the company’s valuation and stock movements. We will also cover topics like the company’s origins and founding, major shareholders, and factors that impact Petrofac’s share price. 

What is the Origin of the Petrofac Company?

Petrofac was founded in 1981 as a manufacturer of modular refineries and plants in Tyler, Texas. In 2005, Petrofac went public with an initial listing on the London Stock Exchange. Looking to expand its operations, in 2010, Petrofac acquired a 20 per cent stake in the Gateway gas storage project, an underground facility housed in a former natural gas field beneath the North Sea. 

Further bolstering its presence in the natural gas sector and North Africa, in November 2013, Petrofac joined with Italian firm Bonatti and Algeria’s state-owned Sonatrach energy company to form a $650 million joint venture. The project focused on boosting output from the Alrar gas field in southeastern Algeria through upgraded separation and compression infrastructure. 

Today, Petrofac has operational bases across 24 countries and employs around 11,500 people from more than 80 nationalities. The company has constructed many major infrastructure projects in oil-rich nations over its 40+ year history while cementing its position as a leading global provider of oilfield services.

Who are the Shareholders of Petrofac in 2023?

Petrofac has four major shareholders as of 2023, with Ayman Asfari and family being the largest single stakeholder with a 16.11% share of the company, equivalent to 83,972,155 shares.

Ayman Asfari, Petrofac’s Group Chief Executive, has been with the company since 2002 and has led its growth into an international oil services firm operating across more than 25 countries. His substantial personal stake in Petrofac reflects his long-term commitment to and leadership of the company over more than two decades.

The second largest shareholder in Petrofac is the Spanish investment manager Azvalor Asset Management SGIIC SA, which owns 14.996% of the company or 78,151,077 shares as of 2023. Azvalor invests globally on behalf of institutional and retail clients across European markets. Its stake in Petrofac allows it to benefit from the company’s role in providing services to the thriving oil and gas industry.

With a 9.46% ownership position and 49,305,093 shares, Schroders PLC, the British multinational asset manager and investment bank, is another major player in Petrofac equity. Schroders invests in Petrofac to gain exposure to the vital oil industry for the portfolios of its wealth management clients.

J O Hambro Capital Management Limited, a UK-based fund manager with over $7 billion in assets under management, is rounding out the top shareholders. Their stake of 27,714,916 shares translates to 5.31% ownership of Petrofac. J O Hambro likely sees potential upside for Petrofac as the global economy continues recovering and oil and gas activities accelerate into the future.

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Petrofac Share Price History In 2023

The Petrofac share price has been on a rollercoaster ride in 2023 as the company continues working to resolve outstanding legal issues and shore up its financial position. After starting the year strong in January at 83.20p per share, the Petrofac share price has declined precipitously.

The Petrofac share prices held relatively steady in February and March, closing at 79.10p and 78.75p, respectively. However, April marked the start of a steep downward slide for Petrofac’s valuation. By May, the Petrofac share price had sunk to 70.70p and declined further to a 2023 low of 47.00p in October – a staggering 43% below January’s opening price.

The Petrofac share price weakness reflects investor concerns about the company’s uncertain future as it remains under investigation by the UK’s Serious Fraud Office for suspected bribery and money laundering. The company pleaded guilty to failing to prevent former staff from offering bribes worth over $44 million to secure oil contracts in Iraq and Saudi Arabia based on the report of the Serious Fraud Office, a specialist prosecuting authority tackling top-level severe or complex fraud, bribery, and corruption.

While the Petrofac share price recovered somewhat in November and December to around 20p, this still represents a 76% decline in less than a year. Going forward into 2024, the company’s ability to negotiate an acceptable deferred prosecution agreement with authorities and avoid harsh penalties or restrictions on future business will be pivotal for restoring confidence.

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Factors Impacting the Petrofac Share Price

As an oilfield services company operating across the upstream value chain, Petrofac’s valuation and share price performance are tied to many complex and interlinked factors. Understanding these key drivers of the company’s stock movement is critical for investors seeking to make informed decisions.

At the most fundamental level, oil and gas prices influence capital investment budgets amongst Petrofac’s exploration and production clients. Higher hydrocarbon prices allow oil companies to boost spending on new projects and infrastructure. This feeds through stronger demand and more lucrative contracts for oilfield service providers like Petrofac. 

Petrofac’s profit margins and earnings also remain sensitive to broader macroeconomic variables like foreign exchange rates and country-specific inflation or tax policies. As the company conducts business across 24 countries, fluctuating currencies against the British Pound and changes in regional regulations make forecasting more difficult.

Lastly, Petrofac’s capacity to maintain adequate cash flow and liquidity while reducing its elevated debt obligations affects shareholder confidence. The company requires significant financing to fund major energy construction projects’ working capital and infrastructure needs across remote areas.

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Final Thoughts

For traders considering positions in Petrofac stock, comprehensive research is essential. While the company’s services remain in high demand across the thriving global oil industry, its legal troubles and operational restrictions introduce ambiguity around its prospects. Before risking capital on Petrofac shares, traders should study the company’s governance improvements.

Gaining clarity on Petrofac’s liquidity outlook and ability to manage its debt burden should also feature prominently in the analysis. Additionally, keeping abreast of oil price trends, regional inflation/tax policies, currency movements, and other macroeconomic factors influencing profitability deserves attention. 

With sufficient research and an understanding of the complex variables affecting Petrofac’s valuation, traders can make informed decisions aligned with their risk-return objectives. 

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