Petrofac flags challenges in Saudi Arabia and Iraq

The company has not revealed what are the challenges it is facing in Saudi Arabia and Iraq. (File/AFP)
Updated 25 June 2019
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Petrofac flags challenges in Saudi Arabia and Iraq

  • Britain is probing allegations of bribery against Petrofac Ltd.
  • A previous executive pleaded guilty to 11 counts of bribery

British oilfield services provider Petrofac Ltd. said on Tuesday that it has booked $1.7 billion in new orders so far this year even as it faced challenges in Saudi Arabia and Iraq, which has crimped its business.
Petrofac for the last two years has been navigating legal challenges as Britain probes allegations of bribery at the company. But the company has managed to sign multiple contracts and sell some assets to beef-up its core business.
In February, a former senior executive pleaded guilty to 11 counts of bribery in relation to oil deals in Iraq and Saudi Arabia as part of an investigation brought on by Britain’s Serious Fraud Office (SFO).
While the company has not been charged on any accounts, the convicting of former executives and top bosses being called for inquiries have hammered Petrofac shares. They lost nearly half of their value since the SFO first began its investigations into the company in May 2017 as part of a wider probe into Monaco-based oil and gas consultancy Unaoil on suspected bribery, corruption and money laundering.
Petrofac did not provide an update on the investigation on Tuesday and the company’s shares were down 2% in early dealings.
“We continue to maintain excellent client relationships in all of our markets, although new order intake in the year to date reflects our recent challenges in Saudi Arabia and Iraq,” it said.
Petrofac did not provide additional information on the challenges that it is facing in those regions.
The company also said trading was in line with expectations and it was well-positioned for the second half with good revenue visibility and high levels of tendering activity.


China opens up finance sector to more foreign investment

Updated 20 July 2019
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China opens up finance sector to more foreign investment

  • China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020
  • Beijing has long promised to further open up its economy to foreign business participation and investment

BEIJING: China lifted some restrictions on foreign investment in the financial sector Saturday, as the world’s second largest economy fights slowing growth at home and a damaging trade war with the US.
China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020, a year earlier than originally planned, the Financial Stability and Development Committee said in a statement posted by the central bank Saturday.
Foreign investors will also be encouraged to set up wealth management firms, currency brokerages and pension management companies, the statement said.
Beijing has long promised to further open up its economy to foreign business participation and investment but has generally dragged its feet in implementing the moves — a major point of contention with Washington and Brussels.
Saturday’s announcement followed a Friday meeting chaired by economic czar Liu He where policymakers focused on tackling financial risk and financial contagion and pledged new steps to support growth, according to a state council statement.
Additional measures include scrapping entry barriers for foreign insurance companies like a requirement of 30 years of business operations and canceling a 25 percent equity cap on foreign ownership of insurance asset management firms.
Foreign owned credit rating agencies will also be allowed to evaluate a greater number of bond and debt types, the statement said.
US President Donald Trump has launched a damaging tariff war in an attempt to force Beijing to further open up its economy and limit what he calls its unfair trade practices.
The US and China have hit each other with punitive tariffs covering more than $360 billion in two-way trade.
Trump and Xi Jinping agreed to revive fractious trade negotiations when they met on the sidelines of the G20 summit in Japan on June 29 and top US and Chinese negotiators have held phone talks this month.