from strategy  
to delivery
annual report and accounts 2013 laggantormore gas plant  
shetland islands uk
strategic report
01–65
02 group at a glance
04 our global presence
06 our leadership team
08 our business model
14 chairman’s statement
16 group chief executive’s strategic review
20 key performance indicators
24 market outlook
28 our principal risks
34 segmental performance
47 financial review
52 corporate responsibility
governance
66–114
67 chairman’s introduction
68 directors’ information
70 corporate governance report
80 nominations committee report
82 audit committee report
86 board risk committee report
92 directors’ remuneration report
114 directors’ statements
financial statements
115–187
115 group ﬁnancial statements
116 independent auditor’s report
119 consolidated income statement
120 consolidated statement of other comprehensive income
121 consolidated statement of ﬁnancial position
122 consolidated statement of cash ﬂows
123 consolidated statement of changes in equity
124 notes to the consolidated ﬁnancial statements
169 company ﬁnancial statements
170 independent auditor’s report petrofac limited
171 company income statement
171 company statement of comprehensive income
172 company statement of ﬁnancial position
173 company statement of cash ﬂows
174 company statement of changes in equity
175 notes to the company ﬁnancial statements
185 shareholder information
186 glossary
to read about our business model 
in action see
pages 13 23 32 and 51  from strategy to delivery
2013 saw us make further progress towards our strategic 
goals we grew our capability remained focused on the 
operational excellence that has become our hallmark 
and preserved our distinctive culture and values during 
a year of continued growth and diversiﬁcation
sustained focus on our strategic evolution in 2013 allowed 
us to cement a stronger and more differentiated position 
in the oilﬁeld services sector through the sustained 
performance of our traditional business further demand 
for the innovative commercial models that are inherent 
within our integrated energy services offering and 
signiﬁcant progress on our strategic commitment to 
grow and enhance our offshore engineering procurement 
and construction capability to access the attractive 
deepwater markets
group performance
revenue
1
us6329m
2013 2012
1
2011
us6240m 
us5801m
earnings per share
diluted
3
18910 cents
per share
2013 2012 2011
18388¢s
15713¢s
ebitda
17
us1031m
2013 2012
1
2011
us883m
us760m
net proﬁt
3
us650m
2013 2012 2011
us632m
us540m
return on capital
employed
2013 2012 2011
46
62
28
backlog
27
us150bn
2013 2012 2011
us118bn
us108bn
1 restated see page 124 for explanation of the restatement of 2012 results
petrofac annual report and accounts 2013
01
introduction engineering construction operations  maintenance ecom
onshore engineering 
 construction
what we do
onshore engineering  construction delivers onshore engineering 
procurement and construction epc oil and gas projects we are 
focused predominantly on markets in the middle east africa and the 
caspian region of the commonwealth of independent states cis
offshore projects  
 operations
what we do
offshore projects  operations which includes our offshore capital 
projects service line specialises in both offshore engineering and 
construction services for greenﬁeld and brownﬁeld oil and gas 
projects and the provision of operations and maintenance support 
onshore and offshore
employees
6100
2012 7800
employees
5100
2012 4300
contribution to group revenue
us3534m
2012 us4288m
contribution to group revenue
us1671m
2012 us1403m
contribution to group net proﬁt
us447m
2012 restated
1
 us479m
contribution to group net proﬁt
us69m
2012 us61m
for more information see
pages 36 to 38
for more information see
pages 39 to 41
1 see page 124 for explanation of the restatement of 2012 results
highlights in 2013
 delivered four major projects in abu dhabi gasco 4th ngl train 
and asab oil ﬁeld development algeria el merk gas processing 
facility and turkmenistan galkynysh gas ﬁeld development
 we continue to progress the upper zakum project in abu dhabi 
and have agreed capacity enhancements with the client up from 
750000 barrels per day bpd to 1 million bpd
 commenced full remobilisation on the in salah southern ﬁelds 
development in algeria
 achieved order intake in 2013 of us62 billion securing major new 
awards in abu dhabi algeria and oman
 awarded us29 billion of onshore engineering  construction 
projects in 2014 to date in kuwait clean fuels project for knpc 
and oman khazzan gas development for bp
highlights in 2013
 awarded us500 million sarb3 project offshore abu dhabi our 
largest epci project to date and demonstrates the demand for us 
to broaden our marketleading epc capability offshore
 building on our strong position in iraq with a us100 million 
extension to our contract with south oil company and a new 
award worth us95 million with gazprom on the badra oil ﬁeld
 awarded a us50 million threeyear operations and maintenance 
contract in oman for oman oil company exploration and 
production llc
 placed all critical path lumpsum orders to build our new 
proprietary design ‘petrofac jsd 6000’ offshore installation vessel
petrofac annual report and accounts 2013
02
group at a glance
strategic report
54
67
26
10 integrated energy services ies
employees
3900
2012 2800
employees
3200
2012 3000
contribution to group revenue
us362m
2012 restated
1
 us245m
contribution to group revenue
us934m
2012 us708m
contribution to group net proﬁt
us32m
2012 us29m
contribution to group net proﬁt
us121m
2012 us89m
for more information see
pages 42 and 43
for more information see
pages 44 to 46
engineering   
consulting services
what we do
engineering  consulting services is petrofac’s centre of technical 
engineering excellence from ofﬁces across the middle east and 
north africa cis asiapaciﬁc europe and the americas we provide 
engineering services across the life cycle of oil and gas assets 
our teams execute all aspects of engineering including conceptual 
studies frontend engineering and design feed and detailed design 
work for onshore and offshore oil and gas ﬁelds and facilities
integrated  
energy services
what we do
integrated energy services provides an integrated service for 
hydrocarbon resource holders under innovative commercial models 
that are aligned with their requirements projects cover upstream 
developments both greenﬁeld and brownﬁeld and related energy 
infrastructure projects and can include investment
1 see page 124 for explanation of the restatement of 2012 results
highlights in 2013
 awarded a project management contract by pemex to develop the 
lakach project their ﬁrst deepwater development
 awarded a wide range of engineering services and feed contracts 
including in relation to projects in algeria and abu dhabi
 completed integration of rnz which is licensed to undertake 
major offshore engineering projects for petronas and has 
approximately 700 employees taking our total headcount in 
asiapaciﬁc to 1500
 increased operational capacity and sector capability within our 
three value engineering ofﬁces in india in line with the group’s 
growth strategy key growth focus in delhi and chennai addressing 
the reﬁnery and offshore sectors respectively
highlights in 2013
 good progress on magallanes and santuario pecs and improved 
production by 45 since we took over the blocks in february 2012 
early success with nearﬁeld appraisal
 commenced production from west desaru on block pm304 
in august 2013 only 18 months from approval of the field 
development programme by petronas
 announced together with taleveras energy resources limited 
a 20year agreement with the nigerian petroleum development 
company to develop further npdc’s offshore block oml119
 fpf3 lease on jasmine ﬁeld in the gulf of thailand extended for up 
to four years with mubadala petroleum thailand opo will continue 
to provide operations and maintenance services
petrofac annual report and accounts 2013
03
6
5
14
18
us150bn
onshore engineering
 construction 52
integrated energy 
services 26
offshore projects 
 operations 20 
engineering  
consulting services 2  
backlog by reporting segment today our projects span 29 countries and we continue 
to extend our footprint careful geographic expansion 
is one of our strategic priorities – helping us to engage 
with more customers develop new capabilities 
establish additional teams and diversify our business
our marketplace
despite continuing economic uncertainty 
global demand for oil and gas remains strong 
and as longterm energy consumption 
continues to escalate hydrocarbons are set 
to continue to play a signiﬁcant role 
this level of longterm demand coupled with 
the natural decline in existing production 
creates a need for largescale investment 
in oil and gas infrastructure as a result 
commercially innovative integrated oilﬁeld 
services will become more sought after – 
which promises to build longterm sustainable 
earnings for our group
the 11 highlighted projects showcase some 
of our successes as well as our distinctive 
deliveryfocused culture
for more information on 
our market outlook see
pages 24 to 27
petrofac annual report and accounts 2013
04
strategic report
our global presence
nigeria
oml119
in december 2013 together with taleveras 
we established a riskbased support 
agreement to provide ﬁnancial technical and 
capacity and capability building support for 
npdc’s offshore block oml119
for more information see
page 46
mexico
magallanes and santuario oil ﬁelds
since we took over the blocks in february 
2012 production levels have increased by 
45 building on this success we took over 
operations on two more contract areas 
in 2013
for more information see
page 32
usa
training at nasa’s johnson space center
in partnership with raytheon company we 
deliver survival training to the oil and gas 
industry at nasa’s johnson space center 
underwater facility in houston
algeria
alrar project
in 2013 we were awarded a 32month epc 
contract with italian contractor bonatti 
together we will extend the life of the alrar 
gas ﬁeld in southeast algeria for sonatrach
for more information see
page 38 petrofac annual report and accounts 2013
05
iraq
maintenance services
in august 2013 gazprom neft badra bv 
awarded us the contract to provide 
maintenance engineering and execution plus 
support services on the badra oil ﬁeld
for more information see
page 41
oman
sohar reﬁnery improvement project
in november 2013 in a joint venture 
with daelim industrial we were awarded 
a us21 billion contract for engineering 
procurement construction startup and 
commissioning services at the sohar reﬁnery
for more information see
page 38
uk north sea
kittiwake production platform
for more than a decade we have been the 
duty holder at kittiwake since taking over we 
have increased production improved safety 
and enhanced asset integrity
for more information see
page 39
german north sea
offshore wind commissioning support
in july 2013 we secured a contract from 
siemens energy to provide support during the 
commissioning phase of two offshore wind 
converter station platforms
for more information see
page 40
malaysia
block pm304
block pm304 was originally classed as a 
marginal resource that was too challenging 
to develop we took control in 2004 and it 
is now among malaysia’s largest oil ﬁelds
for more information see
page 44
turkmenistan
galkynysh gas ﬁeld development
the galkynysh gas ﬁeld development is 
petrofac’s largest engineering procurement 
and construction project to date
for more information see
page 23
abu dhabi
sarb3 project
in april 2013 we won the tender for a new 
us500 million engineering procurement 
construction and installation epci contract 
on behalf of the abu dhabi marine operating 
company admaopco we will develop a 
new ﬁeld off the northwest coast of abu dhabi
for more information see
page 40 1 ayman asfari
group chief executive
tenure ayman joined petrofac in 1991
responsibility after ayman joined 
petrofac in 1991 he spent the next 
two decades growing the business 
expanding its range of services and 
ﬁrmly establishing petrofac in its core 
markets under ayman’s leadership the 
business has developed into a leading 
oilﬁeld services company providing 
services across the oil and gas asset 
life cycle on both a standalone and 
integrated basis he led a corporate  
reorganisation in 2002 becoming 
group chief executive and in 2005 
he led a successful initial public 
offering ipo valuing the business 
at us13 billion today petrofac 
has operations in 29 countries with 
over 18000 employees worldwide 
it is listed on the lse ftse100 index 
with a current market cap of around 
us75 billion 
previous experience ayman graduated 
with an msc in civil and urban 
engineering in 1980 from the university 
of pennsylvania having formerly 
worked for a major civil and mechanical 
construction business in oman ayman 
has more than 30 years’ experience 
in the oil and gas industry in 2010 
ayman was heralded ernst  young’s 
uk entrepreneur of the year in 2011 
and 2012 he was named oil services 
executive of the year at the world 
national oil company congress
2 marwan chedid
chief executive engineering 
construction operations  
maintenance
tenure marwan joined petrofac 
in 1992
responsibility marwan joined petrofac’s 
engineering  construction business as 
a project manager when the business 
was ﬁrst established in sharjah in 
1992 in 2007  he was appointed chief 
operating ofﬁcer of the engineering 
 construction international business 
with daytoday responsibility for the 
successful delivery of overall operations 
in january 2009 he became managing 
director of engineering  construction 
ventures before being appointed as 
chief executive ecom with effect from 
1 january 2012
previous experience marwan 
previously worked for a major civil and 
mechanical construction business 
based in the gulf and the middle 
east for 12 years and has more than 
31 years’ experience in the oil and 
gas sector marwan holds a degree 
in mechanical engineering from the 
american university of beirut
3 subramanian sarma
managing director onshore 
engineering  construction 
tenure subramanian joined petrofac 
in 1997
responsibility subramanian joined 
petrofac as a project manager and 
has held various positions since then 
including executive vice president 
projects and deputy chief operating 
ofﬁcer of petrofac international 
as managing director of onshore 
engineering  construction within 
ecom sarma is responsible for all our 
onshore epc projects worldwide which 
are delivered predominantly under lump
sum turnkey commercial models and a 
workforce of around 6000 
previous experience prior to joining 
petrofac subramanian worked for 
kvaerner and jacobs in india and oman 
and has more than 30 years’ experience 
in the oil and gas industry he holds an 
msc in chemical engineering from the 
indian institute of technology 
4 bill dunnett
managing director offshore 
projects  operations
tenure bill joined petrofac in 2007
responsibility bill has over 26 years’ 
experience in the oil and gas industry 
and now leads the offshore projects  
operations service line within ecom 
which focuses on brownﬁeld projects 
and operations and maintenance 
services worldwide bill joined petrofac 
initially in the developments business 
where he had responsibility for asset 
development and production including 
the don ﬁelds in the ukcs and the 
chergui ﬁeld in tunisia
previous experience prior to joining 
petrofac bill spent eight years at 
halliburton and its subsidiary kbr as 
a senior vice president and corporate 
ofﬁcer his responsibilities included 
membership of the kbr executive 
leadership team global operations 
and maintenance bill spent his earlier 
career with mobil north sea and 
shell he is a chartered engineer and 
graduated in engineering from heriot 
watt university edinburgh
5 yves inbona
managing director offshore 
capital projects
tenure yves joined petrofac in 
june 2012
responsibility yves joined petrofac as 
the managing director of our offshore 
capital projects business within ecom 
which focuses on turnkey delivery of 
offshore platforms ﬂoaters and pipelines 
in shallow and deepwater worldwide 
yves has extensive expertise in the 
offshore sector having more than 30 
years of industry experience 
previous experience during his time as 
chief operating ofﬁcer of saipem spa 
yves managed the offshore business 
which was the most proﬁtable of all 
saipem’s business units he speaks 
seven languages and is a graduate 
engineer from ecole centrale de paris 
6 craig muir
managing director engineering 
 consulting services
tenure craig joined petrofac in 
february 2012
responsibility craig joined petrofac 
as managing director of engineering 
 consulting services within ecom 
his responsibilities include the effective 
management and execution of 
petrofac’s engineering service centres 
across the middle east and north 
africa cis asiapaciﬁc europe and 
the americas as well as our subsidiary 
businesses kw subsea tnei and 
plant asset management
previous experience craig previously 
held the position of executive vice 
president within growth regions covering 
the middle east africa and cis for amec 
based in abu dhabi his key focus was 
in the growth of engineering services and 
project management contracts prior to 
joining amec he also held numerous 
roles working in the oilﬁeld service sector 
including positions with kbr brown 
 root and aoc international he has 
previously worked in the north sea 
extensively in the middle east and in 
asiapaciﬁc 
petrofac annual report and accounts 2013
06
strategic report
our leadership team
1
6
2
3
4
5 7 rob jewkes
chief operating officer 
integrated energy services
tenure rob joined petrofac in 2004
responsibility rob joined petrofac 
to build a europebased engineering 
services business in woking uk 
which now forms part of petrofac’s 
engineering  consulting services 
business in 2009 rob was 
appointed managing director of 
developments within the ies division 
with responsibility for leveraging our 
engineering and project management 
capability through risk service 
contracts and equity upstream 
investments to lead the development 
of our customers’ upstream and energy 
infrastructure assets with ongoing 
projects in malaysia tunisia and the 
ukcs in january 2014 rob assumed 
the role of chief operating ofﬁcer 
ies with full responsibility for the ies 
business portfolio 
previous experience rob has more 
than 35 years of experience in the 
oil and gas industry prior to joining 
petrofac he served as chief executive 
ofﬁcer of clough engineering the 
main operating company of the 
australian engineering group clough 
limited rob holds a degree in civil 
engineering from the university of 
western australia
8 gordon east
managing director 
production solutions
tenure gordon joined petrofac 
in 2006
responsibility gordon leads the 
production solutions service line 
within ies although he initially joined 
petrofac as managing director of 
petrofac facilities management now 
offshore projects  operations 
within production solutions gordon 
is responsible for developing and 
managing the group’s portfolio of 
production enhancement contracts 
including four projects in mexico 
and the ticleni ﬁeld in romania 
previous experience prior to joining 
petrofac gordon spent more than 
20 years with conocophillips in 
various leadership and management 
roles throughout the upstream 
business worldwide he has also held 
nonexecutive roles in the dti and 
cabinet ofﬁce gordon has an ma in 
engineering from cambridge university 
and an msc in petroleum engineering 
from imperial college london
9 paul groves
managing director 
training services
tenure paul joined petrofac in 2009 
responsibility as managing director 
of petrofac’s training services service 
line paul has overall responsibility 
for developing and running the 
group’s global training competence 
consultancy and assurance activities 
as part of the ies division 
previous experience paul previously 
worked with shell from 2001 where 
he held a number of business 
development roles within the 
organisation a chartered engineer and 
scientist paul started his career as a 
lecturer of physics at oxford university 
before moving into a number of 
management and development roles in 
organisations such as alcan aluminium 
limited and british gasbg plc
10 tim weller 
chief financial officer
tenure tim joined petrofac in 2011
responsibility as chief financial 
ofﬁcer tim has overall responsibility for 
external and internal ﬁnancial reporting 
tax treasury investor relations and 
information technology throughout 
the group
previous experience tim joined 
petrofac from cable  wireless 
worldwide where he had been chief 
ﬁnancial ofﬁcer between may 2010 
and july 2011 a fellow of the institute 
of chartered accountants in england 
and wales with a degree in engineering 
science he started his career with 
kpmg in london becoming a partner 
in kpmg’s infrastructure business unit 
until may 2010 he was chief ﬁnancial 
ofﬁcer at united utilities group plc 
and had previously held chief ﬁnancial 
ofﬁcer roles with rwe thames water 
limited and innogy holdings plc now 
rwe npower holdings plc
11 richard milne
group director of legal and 
commercial affairs
tenure richard joined petrofac 
in 2004 
responsibility richard has overall 
responsibility for advising on the legal 
and commercial aspects of the group’s 
activities he played a signiﬁcant role 
in petrofac’s successful admission to 
listing on the london stock exchange 
in 2005 and in developing the group’s 
governance compliance and risk 
frameworks as a member of the 
senior management team richard 
participates in the group’s risk review 
process and advises on corporate 
matters in addition to signiﬁcant 
commercial issues 
previous experience prior to joining 
petrofac richard spent some 15 
years in corporate ﬁnance which 
followed a career in the insurance 
brokerage industry a graduate of 
oxford university richard is qualiﬁed 
as a solicitor
12 cathy mcnulty
group director of 
human resources
tenure cathy joined petrofac in 
february 2014
responsibility as group hr director 
cathy has overall responsibility for 
advising on all people aspects of 
the business this includes creating 
the people strategy to support the 
company in achieving its strategic 
ambitions focusing on succession 
planning talent management 
leadership development key hires 
creating a performance culture 
compensation and beneﬁts and 
employee engagement cathy partners 
with the business leaders to build the 
strengths and capabilities we need to 
meet the ever changing demands of 
our markets and environments
previous experience cathy has more 
than 25 years’ experience in hr and 
has held a number of senior roles most 
recently with arup the international 
consulting and engineering group 
and hewlett packard
petrofac annual report and accounts 2013
07
8
9 12 11
7 10  our main commercial models
 engineering construction operations  maintenance
 reimbursable services
  where the cost of our services is reimbursed 
by the customer plus a margin the majority 
of services provided by engineering  
consulting services and offshore projects 
 operations are remunerated on this basis
cost plus kpis
often our reimbursable contracts will include 
incentive income linked to the successful 
delivery of key performance indicators kpis 
for example duty holder projects like the 
kittiwake platform in the uk north sea 
for enquest
lumpsum turnkey
onshore engineering  construction 
and offshore capital projects undertake 
engineering procurement and construction 
epc projects predominantly on a lump
sum or ﬁxedprice basis for example the 
galkynysh project in turkmenistan 
petrofac is an oilﬁeld 
services company
working across the international oil and gas 
industry we help our customers unlock the full 
value of their energy assets
we design and build new oil and gas facilities 
we manage and maintain existing facilities 
we also enhance the performance of more 
mature or marginal assets and we develop 
and train our customers’ people to work 
more effectively 
operating onshore or offshore our service 
lines can be delivered on a standalone basis 
or integrated under a range of commercial 
models – so that our own interests are aligned 
with our customers
it is our people that make petrofac 
we aim to attract develop and retain the very 
best talent in the industry and guided by 
a clear set of petrofac values we nurture a 
distinctive deliveryfocused culture
our vision is to be the world’s most admired 
oilﬁeld services company
petrofac annual report and accounts 2013
08
strategic report
our business model
engineering  consulting services 
petrofac’s centre of technical engineering and 
excellence from ofﬁces across the middle east 
and north africa cis asiapaciﬁc europe and 
the americas we provide engineering services 
across the life cycle of oil and gas assets 
our teams execute all aspects of engineering 
including conceptual studies frontend engineering 
and design feed and detailed design work for 
onshore and offshore oil and gas ﬁelds and facilities
commercial model 
reimbursable services
onshore engineering  construction 
onshore engineering  construction delivers 
onshore engineering procurement and construction 
epc oil and gas projects we are focused 
predominately in the middle east africa and the 
caspian region of the cis
commercial model 
lumpsum turnkey
project examples badra oilﬁeld development  
iraq asab onshore oilﬁeld development abu  
dhabi galkynysh gas plant turkmenistan
offshore projects  operations 
offshore projects  operations specialises in both 
offshore engineering and construction services 
for greenﬁeld and brownﬁeld oil and gas projects 
and the provision of operations and maintenance 
support onshore and offshore
commercial models 
reimbursable services and cost plus kpis
project examples bekokc platform 
refurbishment malaysia inspection  
maintenance and repair contract iraq apache 
engineering and construction services uk
training services
our global training business manages and operates 
on behalf of our customers 14 training facilities in 
six countries and delivers around 250000 training 
days annually we work with customers to assess 
capability needs and build programmes to develop 
competent safe and efﬁcient workforces
commercial models 
reimbursable services
project examples hicon survival training  
at nasa’s johnson space center houston 
petrofac’s survival and marine training centres  
in aberdeen scotland
design build operate train integrated energy services
risk service contracts rsc
we develop operate and maintain a ﬁeld 
while the resource holder retains ownership 
and control of their reserves often we will 
coinvest in the development and will be 
reimbursed based upon our performance 
an example is the berantai project in 
malaysia rscs typically have low exposure to 
commodity prices and reservoir performance
production enhancement contracts pec
we are paid a tariff per barrel for the 
enhancement of oil and gas production above 
an agreed baseline and therefore have no 
direct commodity price exposure pecs are 
appropriate for mature ﬁelds which have a 
long production history our contracts are 
longterm for example 15 years on the ticleni 
contract in romania and 25 years for the 
magallanes and santuario blocks in mexico
equity upstream investments
upstream investments through production 
sharing contracts psc concession 
agreements and equity of which block 
pm304 the chergui ﬁeld and the greater 
stella area development are examples 
we will typically have some production and 
commodity price exposure 
petrofac annual report and accounts 2013
09
offshore capital projects
offshore capital project focuses on executing 
engineering procurement construction and 
installation epci projects offshore
commercial model 
lumpsum turnkey
project example sarb3 project abu dhabi
developments 
integrates our engineering project management 
and operating capability to lead the development 
of customers’ assets working under commercial 
models which align us with resource holders’ needs
commercial models 
risk service contracts rsc and equity 
upstream investments
project examples berantai development 
malaysia rsc greater stella area uk equity 
upstream investments
production solutions
provides customers with a wide range of services 
to help improve production operational efﬁciency 
asset integrity and the ultimate recovery of reserves 
from their assets
commercial model 
production enhancement contracts pec
project examples magallanes and santuario 
mexico ticleni romania
project examples in salah gas and in amenas 
consultancy design and procurement services 
algeria lakach project management contract 
mexico why our customers 
work with us
guided by a clear set of values petrofac has 
a distinctive deliveryfocused culture 
we are a ﬂexible entrepreneurial customer
centric business and we always look for 
innovative ways to meet customers’ needs 
– by sharing and managing their risk aligning 
our performance with their goals enhancing 
asset performance and developing their own 
people and capabilities
it’s all about understanding our customers 
drawing on our breadth of capabilities and 
adapting our approach
at the heart of everything we do the 
six petrofac values guide our decisions 
and behaviour
 safe
 ethical
 innovative
 responsive
 quality and cost conscious
 driven to deliver 
deep and widening 
capabilities
the petrofac story is 
characterised by the steady 
disciplined expansion of our 
capabilities – enabling us to 
access new markets and 
meet the evolving needs of 
our customers
operating onshore or 
offshore across a range 
of geographies we have 
amassed a full range of skills 
and capabilities – including 
design engineering 
construction consulting 
procurement project 
management operation 
maintenance and training 
as well as drilling and 
subsurface expertise
any of our service lines can 
be offered on its own or we 
can integrate them – enabling 
us to design and build oil and 
gas facilities or operate and 
manage assets fully on our 
customers’ behalf
petrofac annual report and accounts 2013
10
strategic report
our business model continued
see our case study on 
berantai malaysia – one 
example of an integrated 
delivery involving aspects 
from the initial design 
through to training the 
local workforce 
page 13
innovative
deep and
delivery
commercial approach
widening capabilities
excellence
operational
risk management
effective
a distinctive  
deliveryfocused culture
local operational excellence
at petrofac we have 
a relentless focus on 
operational excellence 
from the moment we decide 
to bid on a project the 
discipline begins a team is 
assembled a tailormade 
execution plan is developed 
risks are identiﬁed suppliers 
are sourced and a member of 
the management team takes 
full responsibility
with a clear understanding of 
cost and complexity we can 
then bring bestinclass on
time delivery at every step of 
the way formal reviews bring 
incremental improvements 
to our overall approach 
every time we identify a better 
way of doing things we aim to 
implement it across the group
this level of rigour is reﬂected 
in everything we do we have 
never lost money on a lump
sum engineering procurement 
and construction project 
which we believe speaks for 
our track record
effective risk 
management
risk management is 
fundamental to the petrofac 
proposition – by working to 
reduce risk in our customers’ 
projects and effectively 
managing risk within our 
own operations
for customers we ‘derisk’ 
projects from the moment 
we choose to bid on a 
project we look for ways to 
provide greater certainty 
share ﬁnancial risks 
and align our respective 
commercial interests
within our own business we 
seek to ensure that risks are 
anticipated and addressed 
– thanks to preinvestment 
in the quality of our bids a 
commitment to efﬁcient and 
effective project delivery and a 
handson management team
petrofac’s management and 
employees hold a signiﬁcant 
shareholding in the business 
– which means we think like 
shareholders with a focus 
on the longterm success of 
the business 
innovative commercial 
approach
we offer a range of 
commercial models – each of 
which is designed to recognise 
our customers’ commercial 
goals and reward petrofac for 
the value we bring
depending on customer 
needs we can operate 
on a ﬁxed price lumpsum 
basis we can also link our 
remuneration to certain goals 
in the case of a production 
enhancement contract we 
can collect a tariff on the 
production improvements we 
make or where we can draw 
on our full range of capabilities 
we can coinvest in upstream 
or infrastructure projects
we are also innovative in 
keeping our own costs down 
– with disciplined procurement 
practices for example 
or smart ways of phasing 
our projects 
local delivery
wherever possible we deliver 
locally – by employing local 
people working with local 
partners and suppliers and 
developing local capabilities
this commitment to local 
delivery and development is 
a key consideration for many 
customers it also enables us 
to work more costeffectively 
as we establish footholds 
in new markets it supports 
our growth 
our training business is 
core to our strategy and 
our capability – facilitating 
our entry into new markets 
cementing longterm customer 
relationships and earning trust 
from the communities in which 
we operate
petrofac annual report and accounts 2013
11
see our case studies on 
berantai malaysia el 
merk algeria galkynysh 
turkmenistan and 
magallanes and santuario 
mexico – each of which 
relied on us nurturing 
local capabilities and 
training thousands of 
local employees
pages 13 23 32 and 51
see our case study on 
berantai malaysia – to 
get a feel for how we 
minimised execution risk 
and ﬁnanced the project 
via an innovative risk 
service contract
page 13
see our case study on 
magallanes and santuario 
mexico – to appreciate 
how our commercial 
models have contributed 
to around 45 increase in 
production since we took 
over operations of the 
blocks in february 2012
page 32
see our case study on 
el merk algeria – to get 
a sense of our disciplined 
procurement practices
page 51
see our case study on 
galkynysh turkmenistan 
– at us34 billion our 
largest ever epc project 
delivered against the 
most aggressive of 
schedules
page 23 petrofac annual report and accounts 2013
12
strategic report
our business model in action 13
petrofac annual report and accounts 2013
13
fully integrated –  
capabilities from across petrofac
21 months 
to produce the ﬁrst gas 
risk service contract –  
aligning our respective interests 
us1bn
a signiﬁcant development 
programme
integrated service delivery showcasing 
our range of capabilities 
berantai gas ﬁeld development 
malaysia
the berantai project is an offshore gas ﬁeld 
development involving investment of around 
us1 billion
for the ﬁrst time our integrated energy 
services ies division and our engineering 
construction operations  maintenance 
ecom division deployed their respective 
capabilities on a single integrated project 
this enabled us to do everything from the 
initial conceptual engineering right through to 
the commissioning and ongoing management 
of the facility
one of the things that set the project apart 
was the customer’s tight timescales with a 
full range of inhouse capabilities we could 
really fasttrack delivery and ﬁrst gas was 
produced just 21 months after the ﬁnal 
investment decision
we also devised an innovative commercial 
approach which takes the form of a risk 
service contract our customer petronas 
retains full ownership of its resources and 
petrofac’s returns are directly linked to project 
delivery so our respective interests are 
perfectly aligned
the success has reinforced our credentials in 
the asiapaciﬁc region – and we are working 
with petronas on plans to continue to 
invest in the berantai ﬁeld succeeding in a 
challenging market
the longterm prospects for our industry 
are excellent 
the global appetite for energy will continue 
to grow largescale investments in oil and 
gas infrastructure will be needed to meet 
this demand and offset a natural decline in 
existing production as a result commercially 
innovative integrated oilﬁeld services will be 
more sought after – particularly by national 
oil companies
we are successfully positioning petrofac to 
prosper in this new environment but right 
now the marketplace is challenging and 
our 2013 results reﬂect the realities of the 
situation as we have emphasised in all our 
guidance competition has been intense 
geopolitical uncertainties abound and some 
customers have rethought and rephased 
their investments
even so the group delivered us650 million 
in earnings we continue to deliver 
differentiated margins and returns our 
portfolio is becoming progressively better 
balanced and we closed the year with our 
highest ever order backlog
petrofac therefore proposes a ﬁnal dividend 
of 4380 cents per share for the year ended 
31 december 2013 2012 4300 cents which 
if approved will be paid to shareholders on 
23 may 2014 further details are provided on 
page 49 
given our circumstances and in accordance 
with our guidance growth is set to be ﬂat 
to modest for 2014 but our longerterm 
prospects remain good by expanding 
geographically increasing our offshore 
capability and extending our credentials in 
integrated energy services ies we are on 
course to become the world’s most admired 
oilﬁeld service company and to secure long
term sustainable earnings for the group
scrutinising the strategic direction
against this background it is incumbent on the 
board to scrutinise systematically the strategic 
direction challenge management’s thinking 
and reassure ourselves that petrofac has the 
capability to deliver its strategic goals
throughout 2013 we paid particular attention 
to the group’s deepwater ambitions as part 
of our challenge processes the board 
thought it necessary to consult with external 
independent experts through detailed 
deliberations we concluded that petrofac has 
the right values and credentials to establish 
a differentiated toptier position in the fastest 
growing sector of the global oil and gas 
infrastructure industry
we also scrutinised the progress of the 
ies business although not all projects 
have performed in line with our original 
plans the achievements of the past 
two years are nonetheless signiﬁcant 
with innovative commercial models and 
a focus on operational excellence we are 
clearly gaining traction among national oil 
companies and explorers
petrofac annual report and accounts 2013
14
strategic report
chairman’s statement
norman murray
nonexecutive chairman
in a tough and 
competitive 
market the 
board invested 
in petrofac’s 
future made 
solid progress 
on our strategic 
goals and 
delivered 
us650 million 
in earnings
 setting the tone from the top
the foundation of petrofac’s continued 
success is our distinctive culture and the 
board sets out to lead by example we see it 
as our collective responsibility to live up to the 
values safe ethical innovative responsive 
quality and cost conscious and driven 
to deliver 
given the nature of our business and 
the geopolitical environment both risk 
management and safety performance are 
key considerations we paid particular 
attention to the three fatalities looked 
closely into the individual circumstances 
and examined the root cause behind each 
of these tragic accidents in addition we 
sought consistent assurances that the safety 
of our teams including our subcontractors is 
never compromised 
in addition we scrutinised the evacuation of 
our in salah operations in algeria
we are disciplined in evaluating the 
performance of the board itself in 2013 we 
appointed an external assessor as part of the 
evaluation process the assessor observed 
our collective performance the workings 
of each committee and my own conduct 
we have just received the assessor’s initial 
report and will provide a full account next year
the composition of the board is another key 
consideration in this regard we were delighted 
that kathy hogenson joined us as a non
executive director kathy brings considerable 
subsurface knowledge which will help to 
inform the ies agenda meanwhile we were 
sorry to bid farewell to maroun semaan co
founder of petrofac who had been with the 
business for 23 years and has made such a 
substantial contribution to the success and 
the culture of the group as well as the quality 
of the board debate we were also sad that 
andy inglis is leaving us but appreciate the 
way he established the ies business and 
understand his reasons for moving on 
reaching a series of 
signiﬁcant decisions
i regard 2013 as a pivotal year in petrofac’s 
development and the decisions made by the 
board are a reﬂection of this fact
given that we are now investing to grow 
ﬁnancing is a key consideration and carrying 
some debt becomes a strategic necessity 
the inaugural bond issue that the board 
sanctioned and oversaw is to me a sign 
of the growing maturity of the business 
the fact that we received such a respectable 
assessment by the ratings agencies suggests 
that the market has every conﬁdence in our 
ability to deliver and allows us to beneﬁt from 
excellent ﬁnancial terms
one of the most signiﬁcant board decisions 
of 2013 was to approve the commissioning 
of a new deepwater installation vessel 
this will provide a unique combination of 
highend capabilities and will enable petrofac 
to build a differentiated toptier engineering 
procurement construction and installation 
epci business focused on highend 
turnkey opportunities
as the group moves into new geographies 
and competes for larger more integrated 
projects the board has also been required 
to sanction a number of highly complex 
bids in doing so we assess the level 
of project management discipline and 
executive capabilities behind them to 
satisfy ourselves that the right mix of risk 
and reward is established
staying close to the inner 
workings of the group
with so much happening across the group 
it is important that our knowledge of petrofac 
extends well beyond the boardroom and 
that we have insights into the realities of the 
everyday business
each year two of our board meetings take 
place in our operational locations and we 
make a point of experiencing our business 
ﬁrst hand in 2013 one of these trips was 
colocated in malaysia and singapore which 
allowed us to meet with our customers 
partners and our contractors we also entered 
a ‘hard hat’ environment to inspect the 
cendor phase 2 ﬂoating production storage 
and ofﬂoading vessel fpso conversion in the 
pasir gudang shipyard
we encourage all of our nonexecutive 
directors to visit other facilities on an 
individual basis in previous years i took 
part in our safety conference in dubai our 
leadership conference and eve excellence 
value energy awards also in dubai as 
well as attending our leadership excellence 
programme at the london business school 
by spending time directly with our employees 
we can better understand what it is about 
petrofac that motivates and engages them 
this feeds directly into board discussions 
about our hr challenges and gives me the 
conﬁdence in our ability to recruit and retain 
sufﬁcient numbers of petrofac employees
looking towards signiﬁcant 
longterm growth potential
when considering petrofac’s strategic 
ambitions it is important to consider 
the group’s record of project execution 
operational excellence its success in 
establishing the ies business and the 
disciplined way in which it is extending its 
offshore capabilities a key consideration for 
the board going forward will be to ensure 
that this distinctive deliveryfocused culture is 
not compromised 
succession planning across all levels and 
areas of the business will therefore remain 
a key consideration meanwhile health 
safety security environmental and integrity 
assurance will always be high on our agenda 
and given the nature and daytoday realities 
of our business risk and crisis management 
will remain important to the board 
looking forward our record backlog gives 
us good visibility of revenues through to 2015 
and beyond we can also be encouraged 
by a healthy bidding pipeline and the return 
to a more measured bidding environment 
this should deliver a performance in line 
with our guidance in the coming year and 
position the group for signiﬁcant growth in 
the longer term
petrofac annual report and accounts 2013
15 petrofac annual report and accounts 2013
16
strategic report
group chief executive’s 
strategic review
ayman asfari 
group chief executive 2013 was a challenging but ultimately 
successful year for petrofac
we took signiﬁcant steps towards our 
strategic goals we grew our capability 
we also lived up to our emphasis on 
operational excellence and having 
signed some large and prestigious 
contracts we closed the year with our 
highest ever order backlog
overall we delivered modest growth in earnings 
in the year reﬂecting the rephasing of a small 
number of large projects these external 
factors meant that our ﬁnancial results fell short 
of our initial expectations but the progress we 
have made on the strategic operational and 
business development fronts allows us to face 
2014 with a sense of optimism 
we are establishing an ever stronger and 
more diversiﬁed position in the oilﬁeld services 
sector by aligning our own interests with our 
customers we are set to beneﬁt from the 
need for increased capability to meet the ever 
increasing global demand for energy and i am 
conﬁdent we remain well positioned to deliver 
the type of differentiated margins and returns 
our shareholders have come to expect 
from strategy to delivery
the theme of our annual report continues to 
be from strategy to delivery and the clear 
progress towards our strategic goals should 
be emphasised
across all of our activities our business 
model and our differentiation is based on 
living our values a combination of deep and 
widening capabilities local delivery effective 
risk management innovative commercial 
approaches and a relentless focus on 
operational excellence
our strategic evolution is marked out by 
our three main phases of growth each of 
which is supported by our core technical and 
operational skills
1 building and sustaining a worldclass 
onshore engineering procurement and 
construction epc business – our traditional 
capability that continued to perform strongly 
in 2013
2 delivering an integrated energy services 
ies business making use of innovative 
commercial models which respond to 
customer needs – a capability that is now well
established and gained further traction in 2013
3 growing and enhancing our offshore epc 
capability drawing on our existing project 
management and offshore strengths – an 
emerging capability that builds on our existing 
strengths to which we gave a strategic 
commitment in 2013
as we progress through these phases of 
growth we are achieving a more balanced 
geographic and business model mix we are 
also working across the entire life cycle of our 
customers’ assets – from early development 
right through to decommissioning
fundamental to our success is petrofac’s 
distinctive deliveryfocused culture and 
the six values that sustain it safe ethical 
innovative responsive quality and cost 
conscious and driven to deliver 
managing risk through 
operational excellence
as petrofac pursues its strategic objectives 
then by deﬁnition the company assumes 
more risk 
indeed the main way we create value is to 
assume project risk on behalf of customers 
this could be in the form of a reimbursable 
contract with performancelinked kpis 
traditional lumpsum epc contract duty 
holder operational contract or a fully 
integrated solution in each case we derisk 
the project and align our respective interests 
in this way we can secure improved margins 
and our customers can beneﬁt from certainty 
of delivery
the most effective way of managing these 
risks is a relentless focus on operational 
excellence as well as reducing uncertainties 
this enables us to deliver a sector
leading performance
key to our operational excellence is bidding 
discipline by preinvesting in our bids we get 
better understanding of project complexity 
and we establish more reliability on cost 
we can then be commercially astute in 
negotiating terms and we can reject any 
prospects in which the risks are neither 
manageable nor commensurate with an 
acceptable level of shareholder return 
there is no doubt that our 2013 performance 
was impacted by the highly competitive 
bidding environment we experienced in 2011 
and 2012 whilst some of our competitors 
chose to sacriﬁce their margins we maintained 
our discipline throughout the return to today’s 
more sustainable bidding behaviour suggests 
that we were entirely right to do so
it is a source of great pride that 2013 saw us 
successfully deliver four ‘mega’ projects with 
a gross value of approximately us10 billion 
petrofac annual report and accounts 2013
17
it is a source 
of great pride 
that 2013 saw 
us successfully 
deliver four 
‘mega’ projects 
with a gross 
value of 
approximately 
us10 billion
1 fpso berantai offshore malaysia
2  international graduates in a session 
at the petrofac academy
 1
2 overall the portfolio is in very strong shape 
however it is clear that on an isolated number 
of projects our execution could have been 
stronger this highlights the importance of 
our continued drive for excellence across the 
entire portfolio 
building and retaining scarce skills 
and local capabilities
delivering on our strategy requires us 
to attract and retain many more people 
with a more diversiﬁed range of expertise 
– without diluting our distinctive delivery
focused culture
during the year we implemented a range of 
related initiatives 
for example this year’s graduate intake 
will have their professional development 
supported and accelerated by the newly 
established petrofac academy a new 
performance management process was also 
launched along with improvements to our 
leadership excellence programme and our 
groupwide recruitment systems
another important source of differentiation is 
our focus on local delivery wherever possible 
we employ local people work with local 
partners and establish a local supply chain 
as demonstrated in this report all of our 
projects feature high levels of local content – 
which facilitates our entry into new markets 
cements longterm customer relationships 
and reduces our costs
meanwhile the launch of our new code of 
conduct and a renewed focus on internal 
communications helped to reinforce our 
six values 
having said this i regret to report that 
we did experience a deterioration in our 
safety record in 2013 tragically including 
two fatalities in turkmenistan and one in 
algeria our immediate countermeasures 
and the related plans for 2014 are evidence 
of our ongoing commitment to safety – 
which of course is our ﬁrst and our most 
important value and a key component of 
operational excellence
delivering in ecom and increasing 
traction in ies
our traditional onshore epc business 
performed well the delivery of four multi
billion dollar projects in 2013 proves our 
ability to execute large complex contracts 
having visited the completed facilities and 
spoken to our customers i know how satisﬁed 
they are
based on projects awarded during 2013 
and subsequently the quality of the bidding 
pipeline and our historical win rate we 
are conﬁdent of growing our backlog and 
continuing to deliver sectorleading margins 
in 2014
meanwhile ies is now a business of real 
scale which has achieved a threefold 
increase in net proﬁt in just three years 
now we have achieved scale in ies we will 
also focus on consolidating our position 
on our existing assets the performance of 
our existing mexican operations and the 
establishment of new operations in pánuco 
and arenque were deﬁnite highlights – as was 
delivery of ﬁrst gas at the berantai project in 
malaysia we will continue to look to improve 
our execution and return on the ies portfolio 
for example a priority during 2014 will be 
to create greater value on the ticleni project 
where we are evaluating further seismic tests
having led ies for the past three years andy 
inglis has decided to leave us in order to return 
to the usa and we wish him well for the 
future i have enjoyed working closely with him 
and would like to thank him for his contribution 
to building the ies business i now look 
forward to working with rob jewkes who has 
been appointed chief operating ofﬁcer of ies 
and the rest of the team 
fulﬁlling our offshore ambitions
as all of the industry analysis conﬁrms 
offshore production is set to play an increasing 
role in the oil and gas market and the trend is 
to deeper water
petrofac is well positioned to pursue the 
related opportunities with more than 20 
years’ offshore experience we have already 
delivered several billion dollars of offshore 
projects and with recent acquisitions 
such as the offshore engineering and 
consulting business rnz integrated and the 
subsea pipeline consulting and engineering 
services business kw limited and the 
recruitment of several key senior leaders 
we have progressively expanded our 
offshore capabilities 
1  laggantormore gas plant 
shetland islands uk
2  training at nasa’s johnson space 
center in houston usa
petrofac annual report and accounts 2013
18
strategic report
group chief executive’s  
strategic review continued
1
2
with our 
largest ever 
order backlog 
investment 
programme 
and signiﬁcant 
growth 
potential we 
enter 2014 in 
a strong 
position
 building on our core skills and capabilities 
we are now growing a differentiated toptier 
offshore epci business focused on high
end turnkey opportunities as in our onshore 
epc business we intend to manage a select 
portfolio of large contracts with a rigorous 
focus on risk management gratifyingly 
we already have the conﬁdence of our 
customers – as demonstrated by the lakach 
development our ﬁrst deepwater contract win 
in mexico and successful prequaliﬁcation for 
several major epci contracts including the 
bonga southwestaparo project in nigeria 
of course to build a business of scale in 
the deepwater epci market we need an 
enabler we are investing therefore in our own 
highend multipurpose installation vessel 
the petrofac jsd 6000 and in the last few 
months have awarded contracts for all of its 
key components 
this uniquely conﬁgured vessel with its 
bestinclass capabilities will give us access 
to highend projects allow us to derisk their 
delivery and also help us to attract the very 
best talent it is scheduled to be available for 
construction and installation activities from 
early 2017  helped along by this capability we 
are looking to build an offshore epci business 
delivering revenues in the order of us2 billion 
by 2020 at strong margins
our people
none of this would be possible without 
our people without doubt our employees 
are our best asset and underpinned by 
our unique culture they ensure we deliver 
on our commitments to our customers 
often they are working on complex projects in 
demanding environments i would like to thank 
each and every one of them for their efforts in 
2013 and i look forward to working with them 
during what i am conﬁdent will be an exciting 
2014 and beyond 
the end of 2013 saw maroun semaan 
cofounder of petrofac retire from the 
company and step down from the board 
i would like to thank maroun for all he has 
done for petrofac he leaves a strong and 
experienced management team clearly 
focused on longterm sustainable growth 
and a considerable legacy on which we 
continue to build 
maintaining our capital discipline
as the group assumes more risk and invests 
in its capability our capital intensity also 
increases – as evidenced by 2013’s inaugural 
bond issue
capital discipline will therefore be a key theme 
for 2014 and beyond 
given the ongoing investments in ies and our 
offshore business we do expect our return 
on capital employed to decrease somewhat 
even so we anticipate that over our ﬁve 
year planning cycle we will deliver returns 
of signiﬁcantly more than 20
as we complete our offshore investment 
programme and ies becomes cash 
generative we also expect the group as a 
whole to return to free cash ﬂow generation
outlook for 2014 and beyond 
with our largest ever order backlog 
investment programme and signiﬁcant growth 
potential we enter 2014 in a strong position
overall we expect to deliver ﬂat to modest 
growth in earnings in 2014 and to return to 
strong earnings growth in 2015
despite the cost pressures that some 
customers are facing i am conﬁdent petrofac 
will continue to capture value through a 
business model that derisks project execution 
and aligns our interests with those of our 
clients over the longer term there will be 
increased demand for energy fuelled by a 
growing global appetite for hydrocarbons 
increased capital spending by resource 
holders and a widening capability gap within 
our sector petrofac and our shareholders 
will be well positioned to beneﬁt from 
these conditions
1  the galkynysh gas treatment plant 
turkmenistan
2 santuario oil ﬁelds mexico
petrofac annual report and accounts 2013
19
2
1 measurement
ebitda is calculated as proﬁt before tax and 
net ﬁnance costs but after our share of results 
of associates as per the consolidated income 
statement adjusted to add back charges for 
depreciation and amortisation as per note 3 to 
the ﬁnancial statements
measurement
revenue for the year as reported in the consolidated 
income statement
measurement
proﬁt for the year attributable to petrofac limited 
shareholders as reported in the consolidated 
income statement
measurement
roce is calculated as ebita earnings before 
interest tax and amortisation calculated as 
ebitda less depreciation per note 3 to the ﬁnancial 
statements divided by average capital employed 
being total equity and noncurrent liabilities per the 
consolidated balance sheet
description
ebitda means earnings before interest tax 
depreciation and amortisation and provides 
a measure of the operating proﬁtability of 
the business
description
measures the level of operating activity and growth 
of the business
description
provides a measure of the net proﬁtability of the 
business ie proﬁt for the year attributable to 
petrofac limited shareholders
description
roce is a measure of the efﬁciency with which 
the group is generating operating proﬁts from 
its capital
revenue
1
us6329m
2013 2012
2
2011 2010 2009
us6240m
us5801m
us4354m
us3655m
ebitda
17
us1031m
2013 2012
2
2011 2010 2009
us883m
us760m
us634m
us550m
net proﬁt
3
us650m
2013 2012 2011 2010 2009
us632m
us540m
us433m
us354m
return on capital 
employed roce
2013 2012 2011 2010 2009
46
62
53
47
28
1 all kpis above exclude the gain from the enquest demerger in april 2010 where applicable 2 restated see page 124 for explanation of the restatement of 2012 results
petrofac annual report and accounts 2013
20
strategic report
key performance indicators
1
to help the group assess its performance 
executive management sets kpi targets and 
monitors and assesses performance against 
these benchmarks on a regular basis  description
eps provides a measure of net proﬁtability of the 
group taking into account changes in the capital 
structure for example the issuance of additional 
share capital
measurement
as reported in the consolidated income statement 
and calculated in accordance with note 7 to the 
ﬁnancial statements
description
the group uses this kpi as a measure of the 
visibility of future revenues
measurement
backlog consists of the estimated revenue attributable 
to the uncompleted portion of lumpsum engineering 
procurement and construction contracts and variation 
orders plus with regard to engineering operations 
maintenance and integrated energy services 
contracts the estimated revenue attributable to the 
lesser of the remaining term of the contract and ﬁve 
years backlog will not be booked on integrated 
energy services contracts where the group has 
entitlement to reserves the group uses this key 
performance indicator as a measure of the visibility of 
future revenue backlog is not an audited measure
description 
these kpis measure both the absolute amount of 
cash generated from operations and the conversion 
of ebitda to cash
measurement
cash generated from operations is as per the 
consolidated cash ﬂow statement cash conversion 
is cash from operations divided by ebitda
description 
provides a measure of the safety performance of 
the group including partners and subcontractors
measurement
lost time injury lti and recordable injury ri 
frequency rates are measured on the basis of 
reported lti and ri statistics for all petrofac 
companies subcontractors and partners 
expressed as a frequency rate per 200000  
manhours we aim continually to improve our 
safety record but our target for these measures 
is zero
part of 2013 executive 
directors’ remuneration
earnings per share 
diluted eps
3
18910¢share
2013 2012 2011 2010 2009
18388¢s
15713¢s
12609¢s
10319¢s
backlog
27
us150bn
2013 2012 2011 2010 2009
us118bn
us108bn
us117bn
us81bn
description
provides an indication of the group’s 
service capacity
measurement
for the purposes of the annual report employee 
numbers include contract staff and the group’s 
share of joint venture employees
employee numbers
2
18300
2013 2012 2011 2010 2009
18000
15400
13900
11700
0
2013 2012
2
2011 2010 2009
27
187
33
232
cash generated fromused in operations 
and cash conversion
us5m
2013 2012
2
2011 2010 2009
us239m
us1423m
us207m
us1276m
lost time injury and recordable injury 
frequency rates 
rates per 200000 manhours
0046
2013 2012 2011 2010 2009
0018 0018
0026
0020
014
2013 2012 2011 2010 2009
013
014
018
036
2 restated see page 124 for explanation of the restatement of 2012 results
petrofac annual report and accounts 2013
21 petrofac annual report and accounts 2013
22
strategic report
our business model in action 23
petrofac annual report and accounts 2013
23
us34bn
our largest ever epc contract
33 months
the most ambitious of timescales 
14500 
people – three quarters of 
them turkmen
no2
the second largest gas ﬁeld 
in the world
a huge project in a  
tough environment
galkynysh gas ﬁeld t urkmenistan
galkynysh which appears on the front cover 
of this annual report is the world’s second 
largest gas ﬁeld and at us34 billion its 
new processing facility was our largest ever 
epc contract
it was always going to be a challenging project
the remote landlocked location is difﬁcult 
to reach the desert climate veers from 
suffocating heat to debilitating cold 
and we had just 33 months to complete 
the entire facility 
sophisticated logistics and detailed planning 
were a necessity a mix of road air  rail sea 
and river freight was used to secure the right 
materials at the right time dedicated 
translation teams were on hand to ensure 
smooth passage through borders and across 
tough terrains
with several other major energy projects 
underway in the caspian region we also had 
to work hard to secure enough skilled people 
but we established a dedicated training centre 
in a nearby town and successfully partnered 
with 60 contractors involving more than 
14500 employees – three quarters of whom 
were t urkmen
the project designed to process 10 billion 
cubic metres of gas a year was successfully 
completed within budget inaugurated and 
handed over to our customer turkmengas 
the national gas company of turkmenistan 
in september 201 3 our longterm market 
fundamentals are robust
we believe the longerterm oil and gas market 
fundamentals are robust – and petrofac is well 
positioned to beneﬁt
among industry analysts there is clear 
consensus that global energy demand is set 
to grow strongly and that hydrocarbons will 
continue to play a signiﬁcant role large scale 
investments in oil and gas infrastructure 
will therefore be needed to meet this 
demand and to offset a natural decline in 
existing production 
in terms of the global appetite for energy 
the international energy agency iea 
estimates that demand is set to increase 
by onethird between 2011 and 2035 
although renewables will account for an 
increasing share of the mix the iea forecasts 
that hydrocarbons will still account for 76 of 
the total in 2035
1

over recent years exploration and production 
companies have been investing close to 
us700 billion annually in upstream capital 
expenditure and us500 billion in operating 
expenditure whilst the international oil 
companies iocs may be facing ongoing 
cost pressures there are clear indications 
that the national oil companies nocs 
will continue to invest – particularly if their 
partners like petrofac are able to offer 
innovative commercial models and assume 
a greater share of the related risks
see chart 1
we see an inbuilt need for reinvestment in 
existing ﬁelds in order to arrest their declining 
production indeed once production has 
peaked a conventional oil ﬁeld can expect to 
see annual declines of around 6 per year
2
 
– meaning that the industry is forced to work 
hard just to stand still
petrofac is well positioned to 
succeed in the most promising 
subsegments
over the longterm we expect upstream 
capital spending to grow by at least 5 
annually as this is the minimum that will be 
required to offset the underlying production 
decline compared with previous years this 
does represent something of a slowdown 
however certain subsegments are poised 
for higher levels of investment from which 
petrofac is well positioned to beneﬁt
 good prospects in the middle east 
– where petrofac is well established 
following the disruption of the arab spring 
spend is stepping up in the middle east 
given that the region beneﬁts from relatively 
low supply costs we expect it to continue 
to perform well 
given our wellestablished presence in the 
region petrofac should beneﬁt from the 
anticipated upturn for example our 2014 
bidding pipeline for onshore engineering 
 construction oec is attractive by the 
close of 2013 our high priority prospects 
expected to come to market during 2014 
totalled approximately us50 billion 
including downstream opportunities a 
large proportion of which are in the middle 
east and north africa mena region
see chart 2
 continued investment from nocs  
the nocs collectively control around 
80 of combined conventional and 
unconventional reserves given that 
nocs are typically less sensitive to the 
cost pressures facing the iocs and are 
required to make longterm investments 
they are showing the strongest increases 
in spending 
by building on strong wellestablished 
relationships with many of the world’s 
leading nocs petrofac is well positioned 
in this area
 a case for investment in mature ﬁelds – 
where petrofac has strong credentials 
again mature ﬁelds are playing an 
important role the number of producing 
ﬁelds is growing and the portfolio is ageing 
which is increasing the related spend 
in particular we see deﬁnite potential for 
enhanced recovery in mature ﬁelds 
these trends are important drivers for 
both our integrated energy services ies 
and offshore projects  operations opo 
service lines our experience in mexico 
where we have increased production of 
the magallanes and santuario blocks 
by around 45 since we took over 
operations is a good demonstration of 
the ongoing potential
1 international energy agency world energy outlook 2013
2 international energy agency world energy outlook 2013
petrofac annual report and accounts 2013
24
strategic report
market outlook
industry upstream spend
usbillion per annum
 
2014 2017 2013 2016 2012 2015
us764bn
us519bn
us809bn
us546bn
us908bn
us610bn
us958bn
us647bn
us720bn
us503bn
us858bn
us573bn
capex
opex
5 growth
 1
onshore engineering  
construction 2014 prospects
other 
malaysia uk 
subsaharan 
africa 9
cis 27
mena 64
1
2  the deepwater trends are positive 
– where petrofac is building a 
differentiated capability 
the longerterm trend towards the deep 
water offshore is also positive both 2012 
and 2013 were strong years for deepwater 
exploration licence awards this should 
translate into healthy growth in deepwater 
development capital expenditure over the 
next few years the subsea umbilicals risers 
and ﬂowlines surf market alone is expected 
to double between 2013 and 2020
3
 
by building a differentiated toptier capability 
in the deepwater market petrofac is again 
well positioned to beneﬁt 
see charts 3 and 4
in addition to sustained spending on 
upstream oil and gas projects we are also 
well placed to participate in a visible market of 
downstream opportunities such as reﬁning 
and petrochemicals 
despite a highly competitive bidding 
environment in many of our established 
markets the key drivers of capital and 
operational expenditure should ensure that 
demand for our services remains strong over 
the long term
3 douglas westwood february 2013
petrofac annual report and accounts 2013
25
the key 
drivers of 
capital and 
operational 
expenditure 
should ensure 
that demand 
for our 
services 
remains 
strong over 
the long term
 offshore capex by segment
usbillion
 
2005
source douglas westwood february 2013
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0
20
40
60
80
100
120
140
160
drilling
surf
trunklines
floating platform
fixed platform
global oil and gas production
million barrels of oil equivalent
 
0
180
160
140
120
100
80
60
40
20
deepwater
shallow water
onshore
1975 1990 2000 1995 2005 2010 2015 2020 2025 1970 1985 1965 1980
source douglas westwood february 2013
3
4 turning an industry challenge 
to our advantage
we believe that the changing economics 
within the industry play to petrofac’s 
strengths in operational excellence – as 
well as our expertise in devising innovative 
commercial approaches
research shows that despite oil prices 
remaining at sustained high levels the returns 
for many asset owners are being squeezed 
by factors including cost inﬂation regulatory 
pressures more challenging projects and of 
course budget miscalculations in the past 
rising oil prices and reserve upsides may have 
saved many projects – but this is unlikely to 
remain the case in the future
see chart 5
several recent surveys reveal signiﬁcant and 
continuing inefﬁciencies 
for example schlumberger cited in its 
business consulting survey that 66 of large 
projects were over budget and 72 were 
behind schedule
4
 in terms of operations 
oil and gas uk reports that production 
efﬁciency in the uk continental shelf ukcs 
had slipped from 80 in 2004 to 60 in 2012 
– representing a signiﬁcant deterioration at 
considerable cost
5

clearly the industry cannot afford this level 
of poor performance to continue from our 
own experience we know that oil companies 
are increasingly reluctant to absorb all of the 
risk while their contractors charge for time 
and materials increasingly customers will 
demand certainty of delivery and budget and 
we believe they will look for three key things in 
their suppliers
 a clear capability to deliver the work on 
the ground
 a competitive cost base with a culture of 
cost control and incremental improvement
 a willingness to share in the risk of delivery 
– whether that be through a lumpsum epc 
contract a performancerelated operational 
contract or coinvestment and tariffsharing 
in a fully integrated contract
given our business model and our distinctive 
deliveryfocused culture this emerging 
industry challenge represents a deﬁnite 
opportunity for petrofac to grow market share
ongoing improvements in the 
competitive environment
although 2013 presented its challenges 
we were able to close the year with our 
highest ever order backlog and an attractive 
bidding pipeline
the opportunities before us are relatively well
balanced across our geographies as well as 
our reporting segments
 onshore engineering  construction 
oec 
we are one of the largest onshore oil and 
gas epc contractors across the middle 
east and north africa mena we have 
a strong track record in several other 
regions and we continue to extend our 
geographic footprint 
in 2013 with an order intake of 
us62 billion we returned to the levels 
that we last saw in 2009 and 2010 
order intake was much lower in 2011 and 
2012 which were years of very intense 
competition whilst many of our competitors 
won signiﬁcant work at very low margins 
during this period we retained our bidding 
discipline as a consequence we did not 
build sufﬁcient order backlog to sustain our 
revenue growth through 2013 – but we have 
continued to deliver sectorleading margins 
while many of our peers have seen a trend 
of falling net margins
see charts 6 and 7
petrofac annual report and accounts 2013
26
strategic report
market outlook continued
onshore engineering  construction
annual order intake
usbillion
2013 2012 2011 2010 2009
30
16
60
63
62
returns for iocs squeezed 
25
20
15
10
5
0
120
100
80
60
40
20
0 2004 2007 2009 2008 2010 2011 2012 2013e 2003 2006 2005
average roce average brent
roce 
average brent price 9bbl
source jp morgan cazenove may 2013
net margin since ipo
2013 2005
pfc epc contractors
0
2
4
6
8
10
12
14
source company ﬁlings and factset
4 schlumberger business consulting survey october 2013
5 oil  gas uk economic report 2013
epc contractors deﬁnition
 2013 consensus estimates as at december 2013
 saipem technip tecnicas reunidas samsung 
engineering gs engineering  construction daewoo 
engineering  construction daelim industrial jgc 
chiyoda sk ec chicago bridge  iron
5
6 7 the competitive landscape has improved 
in recent months we have seen more 
sustainable bidding behaviour from our 
peers and as a result we are now enjoying 
a high win rate in summary 2013 can 
be regarded as one of our best years in 
terms of new orders and we expect to 
return to revenue growth in oec over the 
medium term
 offshore projects  operations opo 
opo has a particularly strong and well
established position in the uk market as an 
innovator we developed the duty holder 
model more than 15 years ago and see 
opportunities to evolve our model further
through our experience in such a mature 
and highly skilled market as the uk we 
have established a deep set of offshore 
skills and capabilities drawing on these 
credentials we have been able to enter new 
markets and take over the management of 
mature assets in integrated energy services 
– prime examples being our operations in 
mexico and romania
opo has delivered strong growth over the 
past few years and prospects continue 
to be promising while the uk oil services 
market is always competitive it remains 
robust with increasing spend on the ageing 
asset base we also see good opportunities 
to expand internationally – in iraq for 
example we are growing an operations 
and maintenance business with revenues 
approaching us200 million in 2013
increasingly opo is undertaking offshore 
epci projects drawing on this experience 
we are now building a toptier offshore 
epci business to access highend turnkey 
opportunities where there is signiﬁcant 
epc content over and above the value 
of the installation services this epci 
business will expand our access to 
offshore facilities work it will also access 
the deepwater and surf markets and will 
selectively address ﬂoating production and 
pipeline opportunities
the way we approach offshore epci will 
be similar to our onshore work we will 
manage a small portfolio of large contracts 
with a rigorous focus on risk management 
our customers will be nocs and iocs and 
we will initially focus on those geographic 
regions where we have existing capability 
and a track record of execution
while much of the offshore market may be 
commoditised with excess capacity the 
highend of the offshore epci market is very 
different with demand outstripping supply 
we have also seen recent consolidation 
with some high proﬁle mergers and alliance 
agreements we are therefore conﬁdent that 
there is a clear opportunity for a new entrant 
in this highend market
 engineering  consulting services 
ecs 
across every facet of petrofac’s activity 
ecs provides a marketleading engineering 
capability – and a fully integrated 
engineering service has become a real 
differentiator for the group
for example it gives us the technical 
capability to undertake largescale projects 
like the us1 billion berantai development 
in malaysia see case study on page 13 
and the us34 billion processing facility 
at the galkynysh gas ﬁeld development in 
turkmenistan see case study on page 23 
with the move into offshore epci projects 
we are building the ecs capability so that 
we can also excel in subsea engineering 
for example through the acquisition of kw 
limited a subsea engineering specialist 
through our work in the asiapaciﬁc 
region for example we are progressively 
enhancing our credentials in the deepwater 
offshore engineering services sector 
and this capability will help the wider 
petrofac group to succeed with evermore 
sophisticated offshore assignments such 
as deepwater surf and pipeline contracts
 integrated energy services ies 
in the three years since our ies business 
was established it has achieved signiﬁcant 
momentum with ﬁve operating centres 
3200 employees and 11 assets under 
operation the strength of this portfolio 
combined with a backlog of us39 billion 
and the positive market conditions look set 
to sustain ies earnings over the long term
the fundamental premise underpinning our 
ies strategy is that the upstream industry is 
short of capability our analysis and direct 
experience suggest that those industry 
players with growing capability gaps are 
looking for innovative ways to source 
scarce expertise
our response to this market demand is 
our integrated service offer which allows 
us to earn a differentiated margin for the 
capability we provide the focus is on 
nocs who are sitting on a vast potential 
in their mature ﬁelds often operating below 
their peak in addition we are responding 
to the niche explorers who are seeking to 
move from exploration to development and 
require the capability and capital to do so
we have achieved a number of signiﬁcant 
operational successes to date such as 
the signiﬁcant progress on block pm304 
in malaysia see case study on page 44 
and increasing the production from the 
magallanes and santuario blocks in mexico 
by 45 since we took over operations in 
february 2012 see case study on page 32 
we were also able to grow the potential of 
our existing assets during 2013 in mexico 
the ﬁrst nearﬁeld opportunity that we 
drilled added potentially 50 million barrels 
of contract production – with the potential 
of more to come across the santuario 
magallanes pánuco and arenque 
production enhancement contracts
in addition we are pursuing opportunities 
in regions that offer signiﬁcant resource 
potential and recurring opportunities 
and where we have the relationships 
and capability to deliver locally – more 
speciﬁcally southeast asia west africa 
mena mexico and the cis
petrofac annual report and accounts 2013
27 the principal risks and uncertainties we face are 
outlined below 
these are the most signiﬁcant risks that could have adverse impact on our ﬁnancial position or business 
performance their occurrence could therefore reduce the likelihood of us achieving our strategic goals
our business risk systems combined with the board’s ownership of strategic risk ensure that a risk 
management culture is embedded in business details and 2013 developments are included in the board 
risk committee report on pages 86 to 91
details of how our risk 
framework has evolved
pages 88 to 91
risk mitigation and management commentslinks
sovereign country and ﬁnancial market risks
overexposure to a single 
market risk
the risk of overconcentration 
in a particular market 
or geography 
as we pursue our business strategy we are achieving a more balanced 
geographic and business model mix we are also working across the 
entire life cycle of our customers’ assets – from early development right 
through to decommissioning
when considering the entry into new territories or extending our 
activities in existing territories our plans are reviewed by the group risk 
committee the board risk committee regularly reviews the overall 
concentration risk
we also take all reasonable measures to reduce and limit our 
commercial exposure in each territory this includes regular security risk 
assessments careful selection of contracting parties outofcountry 
arbitration advance payments and disciplined cash management
counterparty risks
the risk of ﬁnancial or 
commercial exposure if 
counterparties such as key 
ﬁnancial institutions customers 
partners subcontractors 
or vendors default on 
their commitments 
we aim to minimise our cash ﬂow exposure on contracts especially 
where we deploy capital alongside our services such as in certain ies 
contracts we will only do so where we are comfortable with the level of 
counterparty risk and with the contractual terms and conditions
we regularly monitor our exposure and ensure that our ﬁnancial assets 
are spread across a number of creditworthy ﬁnancial institutions and that 
limits are not breached 
our sovereign and financial market risk policy requires that material 
ﬁnancial counterparty risk is only held with counterparties that are rated 
by standard and poor’s as ‘a’ or better or the equivalent moody’s rating 
financial counterparty risk is managed by group treasury 
the board risk committee has established speciﬁc limits for 
ﬁnancial counterparties
liquidity risk
the risk arising if we were 
not able to meet our 
ﬁnancial commitments
we manage liquidity risk by ensuring that we always maintain an 
adequate level of liquidity in the form of readily available cash shortterm 
investments or committed credit facilities
as the group has grown we are investing more of our surplus cash 
into strategic investments and other opportunities particularly in ies 
in 2013 we launched our inaugural bond issue as a means to invest in the 
business and secure additional liquidity
the board risk committee has deﬁned a minimum level of liquidity 
that must be maintained additionally the board has set a target for the 
maximum level of leverage cash ﬂow forecasting is carried out across 
all service lines on a regular basis to identify any funding requirements 
well in advance
petrofac annual report and accounts 2013
28
strategic report
our principal risks
see the group chief 
executive’s foreword page 17 
for details on how we are 
diversifying our business 
model
see note 29 to the 
ﬁnancial statements
see our sovereign and 
financial market risk policy – 
available from our website
wwwpetrofaccom
governancedownloads risk mitigation and management commentslinks
sovereign country and ﬁnancial market risks continued
investment risks
the risk that poor investment 
decisions could negatively 
impact our business
this includes investments in the 
business itself and coinvestment 
in our customers’ assets as is 
often the case with ies contracts
as the group moves into new geographies and competes for larger 
more integrated projects the board is required to sanction more complex 
bids and investments in doing so it assesses the level of project 
management discipline and executive capability behind them to satisfy 
itself that the right mix of risk and reward is established 
business disruption risks
the risk of exposure to civil or 
political unrest civil war regime 
change or sanctions that could 
adversely affect our operations
there is also a risk that it 
security failings could result 
in the loss of commercially 
sensitive data
we face a range of political risks in a variety of territories including the 
possibility of unforeseen regime change as well as legal or regulatory 
changes the board regularly monitors the changing political landscape 
particularly in those countries regarded as unpredictable
security risk assessments are carried out in all high risk territories before 
entering into new contracts careful consideration is also given to project 
investment and income exposures and to the associated contract terms 
and conditions as well as facing external cybersecurity threats almost 
every business is increasingly dependent on the ongoing capability and 
reliability of its it platforms across petrofac we are alert to the related 
risks and conscious of the need to be able to respond effectively to any 
farreaching systems failure
commodity or currency risks
signiﬁcant movements in 
exchange rates could impact our 
ﬁnancial performance
also volatility in oil and gas 
prices could inﬂuence the level 
of investment in the industry 
– and hence the demand for 
our services
the ﬁnancial performance of 
ies is more susceptible to oil 
and gas price volatility due to 
production sharing contracts 
and equity positions
the majority of group revenues are denominated in us dollars or 
currencies pegged to the us dollar in instances where we are procuring 
equipment or incurring costs in other currencies we use forward 
currency contracts to hedge any related exposures
opo’s revenues and costs are principally denominated in sterling 
however we choose not to hedge these revenues as they are 
substantially matched by the sterling costs of our corporate ofﬁce 
and other ukbased activities
as detailed in the operating environment section we expect demand 
for our services to remain robust and to be largely insulated from any 
shortterm ﬂuctuations in oil and gas prices however we do recognise 
the impact that a fall in oil prices could have on our future backlog 
and margins
under our sovereign and financial market risk policy we aim to hedge 
on a rolling annual basis the net proﬁt exposure from at least 75 of our 
lowestimate of production however we do not begin hedging until a 
development has achieved steadystate production
operational and contractual risks
customer concentration risks
the risk of overexposure to any 
one customer – and the impact 
this could have if the relationship 
were to be jeopardised
the board regularly monitors the total value of contracts by customer to 
ensure that we are not overly dependent on any one relationship 
in ecom our customerbase is already widely disaggregated we are 
also working towards a larger client portfolio for ies through our 
business strategy we are progressively diversifying our business in 
terms of service lines locations and business models
in addition we have a formal programme of regular senior level dialogue 
with our major customers to understand and preempt any concerns 
they may have
petrofac annual report and accounts 2013
29
despite some continuing 
unrest in the middle east and 
north africa during 2013 our 
activities suffered minimal 
disruption see page 56 for 
details
the effective evacuation 
of our in salah gas plant 
in algeria helped us 
to test and reﬁne our 
related procedures
see note 29 to the ﬁnancial 
statements for details of our 
oil and gas derivative 
instruments and foreign 
currency exposures and how 
they are managed
over the medium term 
growth in ies is expected 
to be primarily driven by 
risk service contracts and 
production enhancement 
contracts where we have 
less exposure to changing 
oil and gas prices
under our operating 
framework for managing 
such risks we have a 
number of relevant policies 
including our operational 
and contractual risk policy risk mitigation and management commentslinks
operational and contractual risks continued
competition risks
the risk of a signiﬁcant change 
to the marketplace dynamics – 
and the ways in which this could 
threaten our market position or 
our geographic footprint
as noted in the operating environment section we expect the demand 
for our services to remain robust over the long term
our business strategy assumes that a high level of competition will 
continue – but our progressive diversiﬁcation continues to grow the size 
of our addressable market 
bidtowin ratios and segmental competition is regularly analysed to 
monitor this risk
environmental asset integrity 
and safety risks
the risk of experiencing a 
serious environmental asset 
integrity or safety incident – and 
the commercial and reputational 
damage that could be caused
our strong culture of health safety and environmental awareness 
is central to our operational and business activities this culture is 
continually reemphasised and is supported by our operating framework 
and its associated management processes and systems – including our 
asset integrity framework
we also have a wide variety of controls embedded within the business 
including hsseia processes safety case management processes 
major accident hazard risk assessments and audits and regular 
monitoring of integrity management and maintenance schedules 
for all of our contracts the respective management teams also review 
the commercial arrangements with clients maintain emergency 
preparedness plans and review insurance coverage
contractual performance 
risks
the fact that we work on a 
relatively small number of 
very large contracts – and the 
implications for our ﬁnancial 
performance if any of these 
contracts were to be disrupted
we have a strong track record of successful project execution from bid 
submission through to project completion which demonstrates our 
rigorous approach to risk identiﬁcation and mitigation meanwhile the 
status on all key projects is regularly reviewed by senior management 
and reported to the board
our design integrity assurance processes involve the robust challenge 
of all speciﬁcations including peerreview assessment as well as on
going integrity risk reviews also our subcontractor risk management 
strategy involves the retention of competent subcontractors with a track 
record of delivery
we always seek to avoid liabilities that are unquantiﬁable or for which we 
could not reasonably be held responsible we also monitor the level of 
insurance provision and the extent to which we could bear the ﬁnancial 
consequences of a major disruption
risk transfer arrangements
if we are unable to transfer 
certain risks to the insurance 
market due to the availability or 
cost of cover for example we 
could be exposed to material 
uninsured losses
we maintain an insurance programme to provide mitigation against 
signiﬁcant losses this programme is consistent with general industry 
practice and it also incorporates a captive insurance vehicle 
all insurance policies that we purchase are subject to certain limits 
deductibles and speciﬁc terms and conditions in addition insurance 
premium costs are subject to changes based on various facts including 
a particular company’s loss experience the overall loss experience of 
the insurance markets accessed and capacity constraints
petrofac annual report and accounts 2013
30
strategic report
our principal risks continued
see the group chief 
executive foreword page 
17 for details on how we are 
diversifying our business
see page 55 for details 
of our recorded incident 
performance – as well as 
our related policies and 
processes
see our operational and 
contractual risk policy – 
available on our website
wwwpetrofaccom
governancedownloads risk mitigation and management commentslinks
operational and contractual risks continued
organisation and  
succession risks
the availability of sufﬁciently 
skilled experienced and capable 
personnel particularly at 
senior levels is one of the most 
signiﬁcant challenges facing the 
oil and gas industry
given our ambitious growth targets it is necessary for petrofac 
to attract and retain signiﬁcant numbers of appropriately qualiﬁed 
employees we have therefore developed a more systematic  
groupwide approach to talent management 
we regularly review our resourcing needs and aim to identify and 
nurture the best people through talent and performance management 
linked to effective succession planning and recruitment
we remain conﬁdent that our policies to attract train promote and 
reward our people will be sufﬁcient for the group – and will enable us to 
meet our strategic goals
ethical social and regulatory risks
major breaches of our  
code of conduct
the risk that employees or suppliers 
may fail to live up to our high ethical 
standards – and the consequent 
impact on our reputation 
our code of conduct sets out the behaviours we expect of our 
employees and the third parties we work with including suppliers 
contractors agents and partners we have a full programme of  
ongoing activity to embed this code of conduct across the group
we are also disciplined in monitoring and managing the social impacts 
of our operations as set out in our social performance standard 
this includes supporting and investing in local communities affected by 
our operations
we seek assurances that the third parties we employ comply with our 
code of conduct and the principles set out in our ethical social and 
regulatory risk policy and our social performance standard 
in addition our external affairs risk reviews help to identify possible 
areas of exposure and to ensure that we put appropriate controls 
in place 
major regulatory breaches 
including bribery and 
corruption
the potential ﬁnancial and 
reputational risk that would arise 
if any of our employees or third 
parties were to breach local or 
international laws
our business is conducted in a growing range of territories and is 
therefore subject to a broad range of legislation and regulations
the group has an anticorruption compliance programme that 
seeks to manage related risks across all of our business activities 
this programme recognises the requirements of the uk bribery act 
2010 and focuses on training monitoring risk management and 
due diligence
our management takes a riskbased approach to due diligence and 
risk assessment in recent years we have increased the level of due 
diligence for new contracts in higherrisk countries where appropriate 
this includes the commissioning of independent investigations 
we continue to reemphasise our independently managed 
whistleblowing line available to all employees as well as third parties – 
and are fully committed to investigating any suspected breaches of our 
code of conduct
petrofac annual report and accounts 2013
31
see pages 58 to 61 for details 
of people and resourcing 
programmes and the related 
developments in 2013
see our ethical social and 
regulatory risk policy – 
available on our website
wwwpetrofaccom
governancedownloads
see page 57 for details of 
our code of conduct and the 
ways in which it is embedded 
across the group
see our bribery and 
corruption standard – 
available on our website
wwwpetrofaccom
governancedownloads petrofac annual report and accounts 2013
32
strategic report
45
boost in production
10
increase in resource base 
90
of employees are mexican
25 years 
a longterm relationship with 
pemex
boosting the production 
of ageing assets 
magallanes and santuario mexico
since taking responsibility for the magallanes 
and santuario production enhancement 
contracts we have boosted output by 45 
since we took over operations and the 
known resource base is up by more than 
10 – which means that pemex has seen a 
signiﬁcant increase in both the scale and the 
efﬁciency of its assets
originally commissioned in the early 1960s 
these oilﬁelds had been largely ignored in 
favour of other better producing ﬁelds and 
only one in ten of the drilled wells remained 
productive but drawing on our broadbased 
capabilities we knew that a combination 
of innovation focus and hard work could 
maximise the inherent resources we knew 
the ﬁelds still retained 
an innovative commercial approach is part 
of the story 
under the terms of the 25year contract we 
receive a 75 reimbursement for our capital 
investment and operating expenditure 
plus a tariff for every barrel of incremental 
production this means we are remunerated 
for the value we bring yet pemex retains 
ownership and control of its assets
building on our success we have now been 
awarded two more pemex contracts 
we are of course recruiting and training 
locally ninety per cent of our employees are 
mexican and four in ten work within their own 
home state
our business model in action 33
petrofac annual report and accounts 2013
33 petrofac annual report and accounts 2013
segmental performance
34
strategic report
35 segmental analysis
  our operations are organised into two divisions which 
report under four segments
36  engineering construction  
operations  maintenance ecom
  engineering construction operations  maintenance 
designs and builds oil and gas facilities and 
operates manages and maintains them on behalf 
of our customers
  the division has four service lines which report  
as three separate segments
 36 onshore engineering  construction  
 39 offshore projects  operations  
 42 engineering  consulting services
44 integrated energy services ies
  integrated energy services harnesses petrofac’s broad 
range of capabilities to provide integrated services 
to oil and gas resource holders the division has 
three integrated service lines which report as one 
reporting segment the group reports the ﬁnancial results of its seven service lines under four segments
divisions
engineering construction operations  
 maintenance ecom  
chief executive – marwan chedid
reporting 
segments
service 
lines
onshore 
engineering  
construction 
oec
engineering   
consulting 
services  
ecs
offshore projects  operations 
opo
integrated energy services ies  
chief operating ofﬁcer – rob jewkes
integrated energy services
onshore  
engineering  
construction
offshore  
projects   
operations
offshore  
capital  
projects
engineering 
 consulting 
services
training 
services
production  
solutions
developments
below we present an update on each of the group’s reporting segments
revenue operating proﬁt
12
net proﬁt
3
ebitda
2
us millions 2013
2012
restated
4
2013 2012 2013 2012 2013
2012
restated
4
onshore engineering  construction 3534 4288 483 540 447 479 539 575
offshore projects  operations 1671 1403 99 79 69 61 118 95
engineering  consulting services 362 245 33 30 32 29 38 36
integrated energy services 934 708 166 133 121 89 315 196
corporate consolidation  elimination 172 404 12 24 19 26 21 19
group 6329 6240 793 758 650 632 1031 883
revenue growth  operating margin  net margin  ebitda margin 
growthmargin analysis  2013
2012
restated
4
2013
2012
restated
4
2013
2012
restated
4
2013
2012
restated
4
onshore engineering  construction 176 34 137 126 126 11 2 153 134
offshore projects  operations 191 12 1 59 56 41 43 71 68
engineering  consulting services 478 17 7 91 122 88 11 8 105 147
integrated energy services 319 365 17 8 188 130 126 337 27 7
group 14 76 125 12 1 103 10 1 163 142
1
 
proﬁt from operations before tax and ﬁnance costs
2
 
operating proﬁt and ebitda includes the group’s share of results of associates
3
 
proﬁt for the year attributable to petrofac limited shareholders
4 see page 124 for explanation of the restatement of 2012 results
petrofac annual report and accounts 2013
35
segmental analysis
rob jewkes was appointed to chief operating ofﬁcer ies in january 2014 following andy inglis’ resignation 
in the oilﬁeld services 
business there is no typical 
project but the upper 
zakum ﬁeld development is 
particularly unusual
located across four artiﬁcial islands 
80km off the abu dhabi coastline 
it’s a strange hybrid – a huge onshore 
project requiring an unusual blend 
of offshore skills and disciplines
awarded by the zakum 
development company zadco 
this us37 billion engineering 
procurement construction 
transportation and commissioning 
epic2 contract sees petrofac 
emirates working in partnership 
with daewoo shipbuilding  
marine engineering co ltd 
and coordinating more than 30 
specialist subcontractors
on a project of this scale you 
would expect to see at least 10000 
people and hundreds of acres of 
storage but at upper zakum’s 
isolated island sites space is at 
a real premium – and it all needs 
to be done differently
everything is corralled into distinct 
phases and almost 50 of the 
fabrication work takes place more 
than 6000km away in south 
korea singapore and china 
the construction sequence on 
the islands is the driver to the 
engineering procurement and 
module fabrication sequence and 
delivery from the yards with some 
modules weighing in at more than 
3000 tonnes precision planning is 
vital expertise in logistics is just as 
important as engineering prowess 
1 restated see page 124 for explanation of the restatement of 2012 results
petrofac annual report and accounts 2013
36
strategic report
segmental performance continued
engineering construction  
operations  maintenance ecom
engineering construction operations  maintenance  
designs and builds oil and gas facilities and operates  
manages and maintains them on behalf of our customers
onshore engineering  construction
what we do
onshore engineering  construction delivers onshore engineering procurement and 
construction projects we are predominantly focused on markets in the middle east 
africa and the caspian region of the cis
highlights in 2013
 delivered four major projects in abu 
dhabi gasco 4th ngl train and asab 
oil ﬁeld development algeria el merk 
gas processing facility and turkmenistan 
galkynysh gas ﬁeld development
 we continue to progress the upper zakum 
project in abu dhabi and have agreed 
capacity enhancements with the client 
up from 750000 barrels per day bpd to 
1 million bpd
 commenced full remobilisation on the 
in salah southern ﬁelds development 
in algeria
 achieved order intake in 2013 of 
us62 billion securing major new awards 
in abu dhabi algeria and oman
 awarded us29 billion of onshore 
engineering  construction projects in 
2014 to date in kuwait clean fuels project 
for knpc and oman khazzan gas 
development for bp
revenue
18
us3534m
2013 2012
1
2011 2010 2009
us4288m
us4146m
us3254m
us2509m
net proﬁt
7
us447m
2013 2012 2011 2010 2009
us479m
us463m
us373m
us265m
net proﬁt margin
126
2013 2012
1
2011 2010 2009
112 112
115
106
backlog
53
us78bn
2013 2012 2011 2010 2009
us51bn
us64bn
us90bn
us62bn
contribution to  
group revenue
contribution to  
group net proﬁt
employees
6100
2012 7800
67 54 timeline for onshore engineering  construction key projects
gas sweetening facilities project qatar
laggantormore gas processing plant ukcs
galkynysh turkmenistan
in salah southern ﬁelds development algeria
badra ﬁeld iraq
petro rabigh saudi arabia
jazan oil reﬁnery saudi arabia
sarb 3 abu dhabi
upper zakum abu dhabi
bab compression and bab habshan abu dhabi
alrar algeria
sohar reﬁnery oman
clean fuels project kuwait
khazzan cpf project oman
us600m
us800m
us3400m
us1200m
us330m
undisclosed
us1400m
us500m
us2900m
us700m
us450m
us1050m
us1700m
us1200m
original contract  
value to petrofac 2013 2012 2014 2015
 nocnoc led companyconsortium      joint nocioc led companyconsortium      iocioc led companyconsortium
onshore engineering  
construction
onshore engineering  construction delivers 
onshore engineering procurement and 
construction projects we are predominantly 
focused on markets in the middle east africa 
and the caspian region of the cis
we continue to make good progress on our 
portfolio of projects which remains in excellent 
shape we delivered four major projects 
in abu dhabi algeria and turkmenistan 
we have commenced early work on our 
recently awarded projects including on the 
upper zakum ﬁeld development in abu dhabi 
where we have been undertaking capacity 
enhancement studies these studies have the 
potential to increase the scale and duration 
of the upper zakum project and as we have 
previously indicated the revised phasing 
has resulted in the deferral of signiﬁcant 
revenue and margin compared with our 
original expectations from 2014 into 2015 
and beyond
following the terrorist attack which took place 
in january 2013 at the in amenas natural gas 
site in algeria at the request of our client 
we evacuated our staff on a temporary basis 
from the in salah southern ﬁelds development 
in that country full remobilisation to site 
commenced in early 2014
petrofac emirates
with effect from january 2013 we agreed to 
increase our economic interest in petrofac 
emirates our abu dhabi based venture to 
75 mubadala petroleum sold its shares in 
petrofac emirates to nama project services 
llc an afﬁliate of nama development 
enterprises a leading local service provider 
to the energy industry across the united arab 
emirates nama will hold a 25 economic 
interest in the venture we will report 100 
of the revenue and backlog on all current 
and future petrofac emirates’ projects with 
nama’s 25 economic interest reported 
as ‘proﬁt for the year attributable to non
controlling interests’
new awards
order intake for the year totalled us62 billion 
2012 us30 billion including the following 
major awards
upper zakum ﬁeld development 
abu dhabi
in april 2013 we announced that petrofac 
emirates had been awarded a contract by 
zakum development company zadco 
for the upper zakum ﬁeld development in 
abu dhabi the original project is worth 
approximately us37 billion and has been 
secured by petrofac emirates in a consortium 
with daewoo shipbuilding  marine 
engineering co ltd dsme 
petrofac emirates’ current share of the 
contract is valued at us29 billion 
the project comprises engineering 
procurement construction transportation and 
commissioning of island surface facilities on 
four artiﬁcial islands speciﬁcally this will 
include wellhead control manifolds crude oil 
process facilities water injection and gas lift 
oil export pumps power generation and 
associated utilities 
bab gas compression project abu dhabi
in june 2013 petrofac emirates was awarded 
a us500 million contract by abu dhabi 
company for onshore oil operations adco 
for expansion of compression facilities at the 
bab field 150 kilometres southwest of abu 
dhabi city we will undertake modiﬁcations 
to three of the existing compressor stations 
and install a new fourth facility the scope 
of work also includes 27 well head facilities 
associated gas pipelines direct gathering 
manifold and modiﬁcations to remote manifold 
stations the project will be completed in a 
phased manner in approximately 30 months 
whereupon commissioning will commence
bab habshan1 project abu dhabi
in june 2013 petrofac emirates was awarded 
a us187 million onshore engineering 
procurement and construction contract by 
adco for the development of the bab 
habshan1 project the project has an 
anticipated duration of 20 months and 
includes the provision of water injection 
petrofac annual report and accounts 2013
37 clusters oil production wells water injection 
wells associated electrical and instrumentation 
facilities pipelines headers and ﬂowlines 
overhead power transmission lines and 
modiﬁcations at remote degassing stations 
alrar project algeria
in october 2013 we were awarded a contract 
to lead a partnership with italian lumpsum 
contractor bonatti to execute a 32month 
engineering procurement and construction 
epc contract for sonatrach to extend 
the life of the alrar gas ﬁeld in southeast 
algeria the contract value is more than 
us650 million of which approximately 70 
will be booked by petrofac the scope of work 
encompasses engineering procurement 
construction and commissioning services 
for the development of new separation 
and booster compression facilities at the 
wellestablished alrar ﬁeld which has been 
operational since 1987 
sohar reﬁnery improvement project 
oman
in november 2013 petrofac in a 5050 joint 
venture with korean based daelim industrial 
co ltd daelim was awarded a 36month 
epc contract by oman oil reﬁneries and 
petroleum industries company orpic 
totalling us21 billion located in the sohar 
industrial area 230 kilometres northwest of 
muscat the scope of work encompasses 
engineering procurement construction 
startup and commissioning services at the 
reﬁnery the contract includes improvements 
at the existing facility as well as the addition of 
new reﬁning units the reﬁnery was originally 
constructed and commissioned in 2006 and 
orpic is now investing in improvements at 
the site to enhance the current production 
capacity when complete it is anticipated 
that the revamped facility will increase current 
output by more than 70
we were also successful in securing the 
following projects in early 2014
clean fuels project kuwait 
in february 2014 we announced that we 
are leading a joint venture with samsung 
engineering co ltd samsung and cbi 
nederland bv cbi to deliver kuwait 
national petroleum company’s knpc clean 
fuels project mina abdulla mab1 reﬁnery 
in kuwait the us37 billion contract of 
which petrofac’s share is us17 billion will 
be completed over a period of approximately 
four years the lumpsum engineering 
procurement and construction scope of work 
includes the provision of 19 new reﬁning units 
at mina abdulla revamping of ﬁve existing 
units at the shouaiba reﬁnery site and the 
accompanying interreﬁnery transfer lines 
khazzan central processing facility 
oman
in february 2014 we were awarded a 
contract by bp for the central processing 
facility cpf for the khazzan gas project 
in the sultanate of oman this has been 
awarded on a convertible lumpsum basis 
and will convert to a full lumpsum contract 
worth approximately us12 billion at a pre
determined point during execution the scope 
of work will include engineering procurement 
and construction of the cpf at the khazzan 
ﬁeld the cpf will include two process trains 
each having a capacity of 525 million standard 
cubic feet of gas per day an associated 
condensate processing system power 
generation plant water treatment system 
and all associated utilities and infrastructure 
the project is expected be completed in 2017 
financial performance 
revenue for the year was lower at 
us3534 million 2012 restated 
us4288 million reﬂecting overall activity 
levels including the rephasing of the in salah 
southern ﬁelds development in algeria and 
the upper zakum project in abu dhabi 
five projects contributed over half of the 
revenue for the reporting segment in the 
year the galkynysh gas ﬁeld development 
in turkmenistan the el merk gas processing 
facility and the in salah southern ﬁelds 
development in algeria the upper zakum 
project in abu dhabi and the jazan reﬁnery 
and terminal project in saudi arabia
net proﬁt for the year was us447 million 
2012 us479 million representing a net 
margin of 126 2012 restated 112 
the increase in net margin reﬂects a 
contribution from projects in their late 
stages including the galkynysh gas ﬁeld 
development in turkmenistan and the el 
merk gas processing facility and contractual 
settlements on completed projects
onshore engineering  construction 
headcount stood at 6100 at 31 december 
2013 2012 7 800 reﬂecting lower activity 
levels in 2013 and optimisation of our 
resources between the united arab emirates 
and our engineering centres in india 
which are reported within engineering  
consulting services
onshore engineering  construction backlog 
increased by more than 50 over the year to 
stand at us7 8 billion at 31 december 2013 
2012 us51 billion reﬂecting recent awards 
in abu dhabi where we now book 100 of 
petrofac emirates share and awards in algeria 
and oman
petrofac annual report and accounts 2013
38
strategic report
segmental performance continued
1  the galkynysh gas treatment plant 
turkmenistan
2  el merk gas processing facility 
algeria
1 2 39

during 2013 we secured further 
north sea contract renewals 
which are a good indication of 
the way that customer needs are 
evolving – and how petrofac is 
responding
ever since we began working in the north sea 
we have been looking for innovative new ways 
to meet customer needs it was petrofac who 
pioneered the duty holder model and across 
several contracts we brought progressive 
improvements to production safety and 
asset integrity
during this time customer needs have 
continued to evolve some operators require 
largescale operational support for their 
managed assets and we have recently been 
awarded a twoyear extension to a ﬁveyear 
contract for total to deliver technical services 
on the alwyn and dunbar platforms we have 
demonstrated over many years that we are 
able to increase production improve safety 
and asset integrity and reduce maintenance 
backlog using the duty holder model and we 
have extended our contract on the kittiwake 
platform until the end of 2014 
most recently we have seen that some 
operators are keen to assume more 
responsibility for their assets and we are 
helping them though this transition by 
changing the type of support we provide 
and gradually enabling them to achieve 
greater autonomy
in our latest agreements with enquest for 
example we have replaced duty holder with 
a combination of operations and maintenance 
support and what we’ve called ‘duty holder 
support services’ across a wider range of 
its assets 
it’s all about understanding our customers 
drawing on our breadth of capabilities and 
adapting our approach accordingly 
petrofac annual report and accounts 2013
39
offshore projects  operations
what we do
offshore projects  operations which includes our offshore capital projects service line 
specialises in both offshore engineering and construction services for greenﬁeld and brownﬁeld 
oil and gas projects and the provision of operations and maintenance support onshore 
and offshore
highlights in 2013
 awarded us500 million sarb3 project 
offshore abu dhabi our largest epci 
project to date and demonstrates the 
demand for us to broaden our market
leading epc capability offshore
 building on our strong position in iraq with 
a us100 million extension to our contract 
with south oil company and a new award 
worth us95 million with gazprom on the 
badra oil ﬁeld
 awarded a us50 million threeyear 
operations and maintenance contract in 
oman for oman oil company exploration 
and production llc
 placed all critical path lumpsum orders to 
build our new proprietary design ‘petrofac 
jsd 6000’ offshore installation vessel
employees
contribution to  
group revenue
contribution to  
group net proﬁt
5100
2012 4300
10
26
revenue
19
us1671m
2013 2012 2011 2010 2009
us1403m
us1252m
us722m
us627m
net proﬁt
13
us69m
2013 2012 2011 2010 2009
us61m
us44m
us17m
us13m
net proﬁt margin
41
2013 2012 2011 2010 2009
43
35
24
20
backlog
11
us31bn
2013 2012 2011 2010 2009
us35bn
us27bn
us24bn
us16bn offshore projects  operations
offshore projects  operations which 
includes our offshore capital projects service 
line specialises in both offshore engineering 
and construction services for greenﬁeld 
and brownﬁeld oil and gas projects and the 
provision of operations and maintenance 
support onshore and offshore
in 2013 we made substantial progress on 
the sarb3 project see below the upgrade 
and modiﬁcation of the fpf1 for the greater 
stella area development see integrated 
energy services and we completed the 
refurbishment of the bekokc platform in 
malaysia this activity more than offset 
the impact of projects that substantially 
completed in the prior year including the 
upgrade and modiﬁcation of the fpf5 
formerly the ocean legend and the fpso 
berantai these projects are now complete 
with the ﬂoating production facilities on 
location on west desaru on block pm304 
and the berantai development both offshore 
malaysia we also increased activity levels on 
the laggantormore gas plant on shetland 
uk and our operations support contracts 
particularly in iraq where we had the beneﬁt 
of a full year’s activity on the iraq crude oil 
expansion project for south oil company soc
new awards
we secured the following major new projects 
and extensions in 2013
sarb3 project abu dhabi
in april 2013 we were awarded our 
largest offshore epci project to date a 
us500 million engineering procurement 
installation and commissioning contract by 
abu dhabi marine operating company for 
the satah al razboot package 3 project 
sarb3 drilling will be conducted from 
two artiﬁcial islands sarb1 and sarb2 
with the well ﬂuid sent by subsea pipeline 
to a facility on zirku island for processing 
storage and export our scope includes 
200 kilometres of subsea pipelines for well 
ﬂuid water injection gas injection ﬂare and 
export along with three kilometres of onshore 
pipeline and 55 kilometres of subsea power 
and communication cables the offshore 
scope of the contract includes the provision 
of two riser platforms and four ﬂare platforms 
with four interconnecting bridges and one 
single point mooring buoy located at the north 
of zirku island the onshore scope of the 
contract includes drilling utilities foundations 
on sarb1 and sarb2 transport installation 
hook up and assistance in the commissioning 
of the accommodation modules
operations and maintenance 
services oman
in june 2013 we announced a new 
agreement worth us50 million with oman 
oil company exploration and production llc 
oocep the contract for an initial period 
of three years will see us deliver operations 
and maintenance at two new production 
facilities on behalf of oocep  the upstream 
subsidiary of oman oil company the national 
oil company of oman we will design and 
implement an operations management system 
to meet oocep requirements and manage 
the initial transition from the commissioning to 
full operating phase 
wind convertor station platform 
commissioning support 
german north sea
in july 2013 we secured a €40 million 
contract from siemens energy to provide 
support during the commissioning phase of 
two offshore wind converter station platforms 
in the german north sea we will provide 
logistics management platform support 
services and maintenance services during 
the commissioning and testing phase of two 
high voltage direct current offshore platforms 
the platforms are currently under construction 
and will each connect several surrounding 
wind farms to the german mainland in total 
providing enough transmission capacity to 
supply about two million german households 
with wind power
1
petrofac annual report and accounts 2013
40
strategic report
segmental performance continued maintenance services iraq
in august 2013 we were awarded a second 
contract by gazprom neft badra bv 
gazprom on the badra oil ﬁeld situated 
160 kilometres southeast of baghdad 
worth us95 million over three years 
we will provide maintenance engineering 
maintenance execution and support 
services the award builds on a previous 
contract to carry out the epc work on the 
ﬁrst phase of the ﬁeld’s processing facilities 
iraq is an important geography for us and 
this award reﬂects our ability to provide quality 
maintenance and engineering services on 
technically and logistically challenging projects 
in the region
operations and maintenance 
services iraq
in october 2013 we announced a contract 
extension with soc for its iraq crude 
oil expansion project the 12month 
extension worth around us100 million 
includes additional scope for operations 
and maintenance services the extension 
follows the original award made in 2012 
which covered operations and maintenance 
services on offshore facilities including an 
offshore platform metering station two single 
point moorings subsea pipelines and tanker 
operations all based 60 kilometres offshore 
the al fao peninsula in southern iraq
the extension covers two additional single 
point moorings and a central metering and 
maintenance platform during the ﬁrst year of 
the contract we achieved some signiﬁcant 
milestones on behalf of our customer soc 
including the export of 240 million barrels of oil 
and one million manhours worked without a 
lost time incident
financial performance
revenue for the year increased 
191 to us1671 million 2012 
us1403 million reﬂecting higher levels of 
activity approximately twothirds of offshore 
projects  operations’ revenue was generated 
in the uk and those revenues are generally 
denominated in sterling the average us 
dollar to sterling exchange rate for the year 
was slightly lower than the prior period 
excluding the impact of the exchange rate 
movement revenue growth would have been 
marginally higher than reported
financial reporting exchange rates
ussterling
year  
ended 31 
december 
2013
year  
ended 31 
december 
2012
average rate for period 157 159
yearend rate 166 163
net proﬁt for the year increased 131 to 
us69 million 2012 us61 million reﬂecting 
increased levels of activity net margins were 
marginally lower at 41 2012 43
the group’s results for the year ended 
31 december 2013 included a oneoff gain of 
us22 million reported within ‘consolidation 
adjustments  eliminations’ reﬂecting the 
recognition on granting a ﬁnance lease 
over the fpf5 to the partners on the pm304 
production sharing contract in malaysia of 
margin from the modiﬁcation and upgrade of 
the fpf5 by offshore projects  operations 
which was eliminated on consolidation in 
prior years
headcount increased to 5100 at 
31 december 2013 2012 4300 as the 
laggantormore project on shetland is now 
in its construction phase
offshore projects  operations backlog 
stood at us31 billion at 31 december 2013 
2012 us35 billion as progress on the 
existing portfolio of projects more than offset 
new awards and extensions
petrofac annual report and accounts 2013
41
1  kittiwake platform uk north sea
2  bekokc central processing 
platform malaysia
3  laggantormore gas plant 
shetland islands uk
2 3 contribution to  
group revenue

as petrofac continues to move into 
new geographies and disciplines 
the work of our engineering  
consulting services ecs 
business becomes evermore 
diverse
the core ecs capability has always been 
conceptual and frontend engineering and 
detailed design today this has evolved 
into an everexpanding business across 
the middle east and north africa cis 
asiapaciﬁc europe the americas and 
australia historically driven by growth of its 
onshore business
but as petrofac has extended its offshore 
credentials so too has the ecs team 
in mexico’s lakach project for example we 
are assisting with almost every aspect of the 
extensive subsea production infrastructure 
and with petrofac’s move into longer
term more strategic relationships with oil 
companies and explorers ecs has built a 
toptier engineering services proposition – as 
indicated by the broad scope of our threeyear 
contract at the in salah and amenas facilities 
in algeria and a ﬁveyear contract with 
petronas carigali in malaysia
with the progressive move into deeper 
water operations ecs is also excelling in 
subsea engineering through our work in 
the asiapaciﬁc region we are progressively 
enhancing our credentials in the deepwater 
offshore engineering services sector and this 
capability helps the wider petrofac group 
to succeed with evermore sophisticated 
offshore assignments – such as deepwater 
surf and pipeline contracts
our specialist consultancies have also 
performed well in particular plant asset 
management which has developed a rapidly 
expanding portfolio with ioc and noc 
customers globally
across every facet of petrofac’s activity ecs 
provides a leading engineering capability 
this ability to offer a fully integrated 
engineering service has become a real 
differentiator for the group 
1 restated see page 124 for explanation of the restatement of 2012 results 42
petrofac annual report and accounts 2013
strategic report
segmental performance continued
engineering  consulting services
what we do
engineering  consulting services is petrofac’s centre of technical engineering excellence 
from ofﬁces across the middle east and north africa cis asiapaciﬁc europe and the 
americas we provide engineering services across the life cycle of oil and gas assets our teams 
execute all aspects of engineering including conceptual studies frontend engineering and design 
feed and detailed design work for onshore and offshore oil and gas ﬁelds and facilities
highlights in 2013
 awarded a project management contract 
by pemex to develop the lakach project 
their ﬁrst deepwater development
 awarded a wide range of engineering 
services and feed contracts including 
in relation to projects in algeria and 
abu dhabi
 completed integration of rnz which 
is licensed to undertake major offshore 
engineering projects for petronas and 
has approximately 700 employees taking 
our total headcount in asiapaciﬁc to 1500
 increased operational capacity and sector 
capability within our three value engineering 
ofﬁces in india in line with the group’s 
growth strategy key growth focus in delhi 
and chennai addressing the reﬁnery and 
offshore sectors respectively
employees
contribution to  
group net proﬁt
3900
2012 2800
6
5
revenue
48
us362m
2013 2012
1
2011 2010 2009
us245m
us208m
us173m
us114m
net proﬁt
1 0
us32m
2013 2012 2011 2010 2009
us29m
us31m
us22m
us17m
net proﬁt margin
88
2013 2012 2011 2010 2009
118
148
122
152 engineering  consulting services
engineering  consulting services operates 
as our centre of technical engineering 
excellence from ofﬁces across the middle 
east and north africa cis asiapaciﬁc 
europe and the americas we provide 
engineering services across the life cycle of 
oil and gas assets our teams execute all 
aspects of engineering including conceptual 
studies frontend engineering and design 
feed and detailed design work for onshore 
and offshore oil and gas ﬁelds and facilities
as well as supporting the rest of ecom and 
ies we have secured and undertaken a 
wide range of conceptual studies and feed 
studies during the year for external customers 
engineering  consulting services’ larger 
awards during 2013 included
in salah gas and in amenas 
consultancy design and procurement 
services algeria
in january 2013 we were awarded a 
substantial services contract in algeria by the 
in salah gas and in amenas joint ventures 
comprising sonatrach bp and statoil 
under the terms of the threeyear contract 
we are providing a range of multidiscipline 
consultancy design and procurement 
services to augment hydrocarbon production
lakach project management 
contract mexico
in march 2013 we were awarded in 
partnership with doris engineering a 
project management contract by petróleos 
mexicanos pemex for the lakach project 
their ﬁrst major deepwater development 
our services include specialised technical 
assistance supervision for the construction 
installation commissioning testing and 
startup of deepwater wells and infrastructure 
drilling activities and tieins to existing 
onshore facilities
acquisitions
in late 2011 we entered into a collaboration 
agreement with rnz integrated sdn bhd 
rnz a malaysian engineering company 
with particular focus on offshore projects 
following the completion of a number of 
preconditions including the establishment 
of a management committee we now have 
overall control of rnz and the company is 
consolidated as part of the petrofac group 
see note 10 to the ﬁnancial statements 
rnz has approximately 700 employees 
and is one of a small number of companies 
to be licensed to undertake major offshore 
engineering projects for petronas
financial performance
revenue for the year increased by 
47 8 to us362 million 2012 restated 
us245 million reﬂecting a substantial 
increase in activity levels including signiﬁcant 
activity on a project in malaysia and the 
consolidation of rnz from april 2013 
net proﬁt for the year increased 103 
to us32 million 2012 us29 million 
while activity levels were signiﬁcantly higher 
than the prior year the project in malaysia was 
undertaken at lower than average margin
headcount increased to 3900 at 
31 december 2013 2012 2800 due 
principally to the inclusion of approximately 
700 employees of rnz and an increase in 
headcount in our engineering centres in india
petrofac annual report and accounts 2013
43
1 and 2
petrofac has ofﬁces across the 
middle east and north africa 
cis asiapaciﬁc europe and 
the americas
1 2 integrated energy services
integrated energy services 
ies
contribution to  
group revenue
contribution to  
group net proﬁt
employees
3200
2012 3000
integrated energy services harnesses petrofac’s broad range of capabilities to 
provide integrated services to hydrocarbon resource holders the division has three 
integrated service lines which report as one ﬁnancial segment
highlights in 2013
 good progress on magallanes and 
santuario pecs and improved production 
by 45 since we took over the blocks 
in february 2012 early success with 
nearﬁeld appraisal
 commenced production from west 
desaru on block pm304 in august 2013 
only 18 months from approval of the field 
development programme by petronas
 announced together with taleveras energy 
resources limited a 20year agreement 
with the nigerian petroleum development 
company to develop further npdc’s 
offshore block oml119
 fpf3 lease on jasmine ﬁeld in the gulf 
of thailand extended for up to four years 
with mubadala petroleum thailand opo 
will continue to provide operations and 
maintenance services

located offshore peninsular 
malaysia block pm304 was 
originally classed as a marginal 
resource deemed too challenging 
to develop today it is among 
malaysia’s largest oil ﬁelds
petrofac’s involvement dates back to 2004 
when we ﬁrst began working petronas 
from a standing start we submitted our ﬁrst 
ﬁeld development plan in just ﬁve months a 
record for malaysia we then used a mobile 
offshore production unit to develop the 
resource another ﬁrst for malaysia and ﬁrst 
oil was produced in 2006 just 16 months 
from sanction 
this same level of performance and innovation 
has come to characterise our operations 
from original estimates of recoverable 
volumes of just 12 million barrels block 
pm304 is now expected to yield some 
200 million barrels the good performance 
continued throughout 2013 – when we 
produced ﬁrst oil on west desaru had 
appraisal success on central graben east 
desaru and east cendor and achieved 
10 million hours without a single lost time 
incident lti at the cendor phase 2 project
we expect production from block pm304 to 
increase in 2014 as we continue to bring west 
desaru and cendor phase 2 onstream
what we do
integrated energy services provides an integrated service for hydrocarbon resource holders 
under innovative commercial models that are aligned with their requirements projects cover 
upstream developments both greenﬁeld and brownﬁeld and related energy infrastructure 
projects and can include investment
1 restated see page 124 for explanation of the restatement of 2012 results
petrofac annual report and accounts 2013
strategic report
44
segmental performance continued
revenue
32
us934m
2013 2012
1
2011 2010 2009
us708m
us519m
us384m
us484m
net proﬁt
36
us121m
2013 2012 2011 2010 2009
us89m
us22m
us38m
us61m
net proﬁt margin
130
2013 2012
1
2011 2010 2009
126
44
99
126
backlog
29
us39bn
2013 2012 2011 2010 2009
us30bn
us16bn
us03bn us03bn
18 14 integrated energy services 
integrated energy services provides an 
integrated service for hydrocarbon resource 
holders under innovative commercial models 
that are aligned with their requirements 
projects cover upstream developments 
both greenﬁeld and brownﬁeld and related 
energy infrastructure projects and can 
include investment 
integrated energy services deploys group 
capabilities to meet the individual needs 
of customers using a range of commercial 
frameworks including
 production enhancement contracts pecs
 risk service contracts rscs
 traditional equity upstream investment 
models including both production 
sharing contracts pscs and 
concession agreements
our service offering is underpinned by our 
ability to develop resource holders’ local 
capability through the provision of skills 
training with competency development and 
assurance frameworks
production enhancement 
contracts
in mexico we took over ﬁeld operations on 
the pánuco contract area in late march 2013 
and on the arenque contract area in early 
july 2013 we have made good progress 
on magallanes and santuario during the 
year having improved production levels 
by 45 since we took over the blocks in 
february 2012
on the ticleni pec in romania while 
production remains below our original 
expectations we have achieved an increase 
in production in 2013 compared with 2012 
we spent the latter part of 2013 shooting 
additional seismic studies in order to enhance 
our understanding of the ticleni ﬁeld and 
the results of this will inform a revised ﬁeld 
development plan we expect to recommence 
drilling activities in 2014
we earn a tariff per barrel on pecs for an 
agreed level of baseline production and an 
enhanced tariff per barrel on incremental 
production during the year we earned 
tariff income on a total of 7 8 million barrels 
of oil equivalent mboe 2012 52 mboe 
reﬂecting a full 12 months of production from 
magallanes and santuario 11 months in 2012 
following commencement in february 2012 
a contribution from pánuco and arenque 
which commenced in the year and higher 
production from ticleni
risk service contracts
on the berantai rsc offshore peninsular 
malaysia we commenced the processing 
and exporting of gas in october 2012 
we achieved another key milestone on 
this project during the ﬁrst half of 2013 in 
bringing all 13 wells from the ﬁrst phase of 
the development online we are currently 
undertaking studies for the second stage of 
the development
see our integrated energy services data 
pack for more details
wwwpetrofaccomiesdatapack
summary of integrated energy services key projects
production enhancement 
contracts pecs
ticleni romania
magallanes and santuario 
mexico
pánuco mexico
arenque mexico
risk service contracts 
rscs
berantai development 
malaysia
bowleven etinde permit 
development cameroon
oml119 nigeria
equity upstream 
investments
block pm304 malaysia
chergui gas plant tunisia
greater stella area uk
end date
 
2025
†
  
 
2037 
 
2043 
 
2043 
 
 
2020 
 
 
life of ﬁeld 
 
2033 
2026
2031
life of ﬁeld
2011 2013 2012 2014
transition period
transition period
transition period
transition period
 in joint venture with schlumberger
 subject to final investment decision fid
†
10 year
extension option
petrofac annual report and accounts 2013
45 we continue to support bowleven on the 
etinde permit in cameroon with conceptpre
feed engineering as we progress towards the 
ﬁnal investment decision
in december 2013 we announced together 
with taleveras energy resources limited an 
independent african oil and gas company 
a 20year agreement with the nigerian 
petroleum development company npdc 
to provide investment and technical capacity 
and capability building support for the further 
development of npdc’s offshore block 
oml119 in a riskbased support agreement 
whereby reserves and license ownership are 
retained by npdc
equity upstream investments
in malaysia despite a number of operational 
and technical challenges we commenced 
production from the third phase of 
development of block pm304 west desaru 
in early august 2013 only 18 months 
from approval of the field development 
programme fdp by petronas initial oil 
processing is through the recently upgraded 
fpf5 mobile offshore production unit 
with stabilised crude oil exported through 
the existing cendor phase 1 facilities and 
ultimately through the phase two fpso which 
is expected to arrive in the ﬁrst half of 2014 
with ﬁrst production from phase two expected 
early in the second half during the year we 
drilled three new wells on block pm304 as 
part of a near ﬁeld appraisal programme with 
encouraging results
the chergui gas plant in tunisia continues 
to perform in line with our expectations with 
production at similar levels to the prior year 
two new wells were drilled during the year 
with one tiedin to date which we expect to 
improve production and extend the plateau
during the year our net entitlement from 
production from block pm304 and the 
chergui gas plant totalled 16 million barrels of 
oil equivalent mboe 2012 14 mboe
through offshore projects  operations 
we have recently completed the dry dock 
related marine system refurbishment and 
hull life extension works on the fpf1 ﬂoating 
production facility for the greater stella area 
partners the main topsides processing plant 
construction and installation activities are now 
well under way the fpf1 will be deployed on 
the greater stella area in the uk north sea 
with production now expected to commence 
at the end of 2014 reﬂecting the revised 
execution schedule
financial performance
integrated energy services’ revenue increased 
by 319 to us934 million 2012 restated 
us708 million reﬂecting an increase in 
activity and production on the pecs in mexico 
and an increase in production from block 
pm304 in malaysia following commencement 
of production from west desaru in august 
2013 these increases more than offset a 
reduction in revenues from the berantai risk 
service contract following completion of the 
ﬁrst phase of the development in the ﬁrst half 
of 2013
net proﬁt increased 360 to us121 million 
2012 us89 million excluding the 
us36 million contribution from the fpf1 
transaction in 2012 net proﬁt more than 
doubled reﬂecting the commencement of 
operations on west desaru on block pm304 
in malaysia a full year of income from the 
fpso berantai a greater contribution from 
production enhancement contracts due 
to increased production on the magallanes 
and santuario blocks and a contribution 
of us17 million from our interest in seven 
energy 2012 us8 million loss
headcount increased to 3200 at 
31 december 2013 2012 3000 reﬂecting 
an increase in activity levels including 
commencement of the pánuco and 
arenque pecs 
integrated energy services’ backlog 
increased by 291 to stand at us39 billion 
at 31 december 2013 2012 us30 billion 
following the agreement for the further 
development of oml119 in nigeria and an 
increase in backlog for the pecs in mexico as 
we progress the plans for their development
an important differentiator for petrofac is our focus on local delivery 
by recruiting and training local staff we are better able to enter new markets and 
cement longterm customer relationships by developing local skills we can also 
work more costeffectively and progressively grow our global capability 
our new us120 million training agreement 
with petronas the malaysian national 
oil company is indicative of the petrofac 
approach in a new regional centre of 
excellence comprising two ‘live’ upstream 
facilities we are able to train 500 delegates 
a year as a result the malaysian oil industry 
can safely anticipate a steady stream of 
highlyskilled locally developed expertise 
delivered by petrofac training services  
this is our biggest such contract to date  
and with capability building so high on the 
agenda for many of today’s oil companies  
we expect the demand to keep on growing
petrofac annual report and accounts 2013
46
strategic report
segmental performance continued revenue
group revenue increased 14 to 
us6329 million 2012 restated 
us6240 million with good growth in 
offshore projects  operations engineering 
 consulting services and integrated 
energy services due to high levels of activity 
largely offset by lower revenues in onshore 
engineering  construction reﬂecting lower 
activity levels including the rephasing of 
the in salah southern ﬁelds development 
in algeria and the upper zakum ﬁeld 
development in abu dhabi
operating proﬁt
1
 
group operating proﬁt for the year increased 
46 to us793 million 2012 us758 million 
representing an operating margin of 125 
2012 restated 121 the increase in 
operating margin was due to strong growth 
in the higher margin integrated energy 
services reporting segment an increase in 
operating margins in onshore engineering 
 construction and offshore projects  
operations and a gain of us22 million 
reported within ‘consolidation adjustments  
eliminations’ the gain reﬂects the recognition 
on granting a ﬁnance lease over the fpf5 
to the partners on the pm304 production 
sharing contract in malaysia of margin from 
the modiﬁcation and upgrade of the fpf5 by 
offshore projects  operations which was 
eliminated on consolidation in prior years
net proﬁt
reported proﬁt for the year attributable to 
petrofac limited shareholders increased 28 
to us650 million 2012 us632 million 
with the increase in net proﬁt from integrated 
energy services and to a lesser extent 
offshore projects  operations and 
engineering  consulting services more 
than offsetting a decrease in net proﬁt from 
onshore engineering  construction due 
to lower activity levels the increase in net 
proﬁt in integrated energy services was 
due to the commencement of operations 
on west desaru on block pm304 in 
malaysia a full year of income from the 
fpso berantai a greater contribution from 
production enhancement contracts due 
to increased production on the magallanes 
and santuario blocks and a contribution 
of us17 million from our interest in 
seven energy the additional contribution 
from these projects more than offset the 
us36 million oneoff proﬁt from the fpf1 
while we delivered 
modest growth in 
net proﬁt during 
the year up 28 
to us650 million 
ebitda grew 
strongly up 17 
to over us1 billion 
and backlog 
increased 27 
to end the year at 
the record level 
of us150 billion
 1 proﬁt from operations before tax and ﬁnance costsincome 
and our share of results of associates
petrofac annual report and accounts 2013
47
financial review
tim weller
chief financial ofﬁcer transaction in 2012 in addition the gain of 
us22 million reported within ‘consolidation 
adjustments  eliminations’ more than 
offset higher net ﬁnance costs in ‘corporate 
 other’‘consolidation adjustments  
eliminations’ the net margin for the group 
increased to 103 2012 restated 101 
reﬂecting a greater contribution from the 
higher margin integrated energy services 
reporting segment a higher net margin in 
onshore engineering  construction due to 
signiﬁcant margin delivery on projects in their 
late stages and the gain of us22 million 
reported within ‘consolidation adjustments  
eliminations’
earnings before interest tax 
depreciation and amortisation 
ebitda
1
ebitda increased 168 to us1031 million 
2012 restated us883 million representing 
an ebitda margin of 163 2012 restated 
142 reﬂecting strong growth in ebitda 
margins from integrated energy services 
onshore engineering  construction 
and offshore projects  operations 
integrated energy services has higher 
ebitda margins than the rest of the group 
at 337 2012 restated 27 7 reﬂecting 
its higher capital intensity integrated energy 
services’ share of the group’s ebitda 
increased during the year from 22 in 2012 
to 31 in 2013 due to a greater contribution 
from block pm304 in malaysia following 
the commencement of operations on west 
desaru a full year of income from the 
fpso berantai a greater contribution from 
production enhancement contracts due 
to increased production on the magallanes 
and santuario blocks and a contribution 
of us17 million from our interest in seven 
energy the ebitda contribution from 
onshore engineering  construction was 
lower due to lower activity levels but the 
ebitda margin increased to 153 2012 
restated 134 due to signiﬁcant margin 
delivery on projects in their late stages
backlog
the group’s backlog increased 27 to end 
the year at the record level of us150 billion 
at 31 december 2013 2012 us118 billion 
reﬂecting a strong intake of new orders in 
onshore engineering  construction and 
growth in integrated energy services’ backlog 
due to the signing of an agreement to develop 
oml119 in nigeria and scope growth on 
existing projects
exchange rates
the group’s reporting currency is us dollars 
a signiﬁcant proportion of offshore projects 
 operations’ revenue is generated in the 
ukcs approximately two thirds and those 
revenues and associated costs are generally 
denominated in sterling however there was 
little change in the average exchange rate for 
the us dollar against sterling for the years 
ended 31 december 2013 and 2012 and 
therefore little exchange rate impact on our us 
dollar reported results the table below sets 
out the average and yearend exchange rates 
for the us dollar and sterling as used by the 
group for ﬁnancial reporting purposes 
financial reporting exchange rates
ussterling 2013 2012
average rate for year 157 159
yearend rate 166 163
interest
net ﬁnance costs for the year were 
us4 million 2012 us7 million net ﬁnance 
income finance costs increased from 
us5 million in 2012 to us28 million in 2013 
reﬂecting the move into a net debt position 
during the year however this was mitigated 
by a us12 million increase in ﬁnance income 
primarily from growth in the credit from 
unwinding of the discount on the longterm 
receivable in respect of the berantai project 
reﬂecting the larger receivable balance which 
subsisted during the year
taxation
our policy in respect of tax is to 
 operate in accordance with the terms of the 
petrofac code of business conduct 
 act with integrity in all tax matters
 work together with the tax authorities in 
jurisdictions that we operate in to build 
positive longterm relationships
 where disputes occur to address 
them promptly
 manage tax in a proactive manner 
to maximise value for our customers 
and shareholders
responsibility for the tax policy and 
management of tax risk rests with the chief 
financial ofﬁcer and group head of tax who 
report the group’s tax position regularly to the 
group audit committee 
the group’s tax affairs and the management 
of tax risk are delegated to a global team of 
tax professionals
an analysis of the income tax charge is set 
out in note 6 to the ﬁnancial statements 
the income tax charge for the year as a 
percentage of proﬁt before tax was broadly 
unchanged at 180 2012 17 7 a number 
of factors have impacted the effective tax 
rate this year net release of tax provisions 
held in respect of income taxes and from 
the recognition of tax losses previously 
unrecognised and the mix of proﬁts in the 
jurisdictions in which proﬁts are earned 
adjustments in respect of prior periods 
represent the creation or release of tax 
provisions following the normal review audit 
and ﬁnal settlement process that occurs in the 
territories in which the group operates
earnings per share
fully diluted earnings per share increased 
28 to 18910 cents per share 2012 18388 
cents in line with the group’s increase in 
proﬁt for the year attributable to petrofac 
limited shareholders
operating cash ﬂow and liquidity
the group’s net debt stood at us727 million 
at 31 december 2013 2012 restated net cash 
us233 million as the net result of
 operating proﬁts before working capital 
and other noncurrent changes of 
us1026 million
 net working capital outﬂows of 
us893 million including
 – an increase in work in progress 
of us817 million which relates 
predominantly to projects which were 
either rephased or were in their late 
stages during 2013
 – an increase in trade and other 
receivables of us252 million including 
an increase in other receivables 
predominantly relating to vat 
receivables advances to some of 
our subcontractors and vendors and 
an increase in retentions on onshore 
engineering  construction projects as 
we reach the late stages on a number of 
projects this was partially offset by an 
increase in trade and other payables of 
us116 million
 an increase in longterm receivables 
from customers of us134 million due to 
expenditure on the berantai risk service 
contract in malaysia
1 including our share of results of associates
petrofac annual report and accounts 2013
48
strategic report
financial review continued  investing activities of us593 million 
including capital expenditure of 
us487 million on property plant and 
equipment us43 million on intangible oil 
and gas assets us85 million in respect of 
the development of the greater stella area 
less us23 million of cash recognised on 
consolidation of petrofac emirates see note 
10 to the ﬁnancial statements
 ﬁnancing activities in particular payment 
of the 2012 ﬁnal dividend and 2013 interim 
dividend totalling us224 million and 
ﬁnancing the purchase of treasury shares 
for us47 million for the purpose of making 
awards under the group’s share schemes
 net taxes paid of us77 million 
gearing ratio
us millions unless 
otherwise stated 2013 2012
interestbearing loans 
and borrowings a 1344 349
cash and shortterm 
deposits b 617 582
net cashdebt  
c  b – a 727 233
equity attributable 
to petrofac limited 
shareholders d 1989 1549
gross gearing ratio 
ad 68 23
net gearing ratio  
cd 37
net cash 
position
net debtebitda 71
net cash 
position
the group’s total gross borrowings less 
associated debt acquisition costs and the 
discount on senior notes issuance at the 
end of 2013 were us1344 million 2012 
us349 million the group entered into a 
us12 billion ﬁveyear committed revolving 
credit facility in september 2012 which is 
available for general corporate purposes 
in october 2013 the group successfully 
raised us750 million from our debut bond 
issue see note 24 to the ﬁnancial statements 
during the year standard and poors and 
moodys initiated ratings coverage for the 
group assigning investment grade credit 
ratings of bbb and baa1 respectively
none of the company’s subsidiaries are 
subject to any material restrictions on their 
ability to transfer funds in the form of cash 
dividends loans or advances to the company
capital expenditure
capital expenditure on property plant and 
equipment totalled us597 million in the year 
ended 31 december 2013 2012 restated 
us428 million comprising
 capital expenditure on integrated energy 
services projects of us491 million see 
table below predominantly in relation to 
development costs for pecs and block 
pm304 in malaysia
 expenditure on assets under construction of 
us23 million which includes expenditure 
incurred in relation to our new ofﬁce building 
in the united arab emirates and the group’s 
enterprise resource planning erp project
 other capital expenditure of us83 million 
including land buildings and leasehold 
improvements and ofﬁce furniture 
and equipment
capital expenditure on intangible oil and gas 
assets during the year was us43 million 
2012 us165 million predominantly in 
respect of predevelopment activities on 
block pm304 offshore malaysia
capital expenditure on integrated energy 
services production enhancement 
contracts and equity upstream investments 
in the year was us619 million including 
us85 million accounted for through 
receivables from customers
total equity
total equity at 31 december 2013 was 
us1992 million 2012 us1550 million 
the main elements of the net movement were 
net proﬁt for the year of us647 million less 
dividends paid in the year of us222 million and 
the purchase of treasury shares of us47 million 
which are held in the petrofac employees beneﬁt 
trust for the purpose of making awards under 
the group’s share schemes see note 21 to the 
ﬁnancial statements
return on capital employed
the group’s return on capital employed for the 
year ended 31 december 2013 was lower at 28 
2012 46 predominantly reﬂecting ongoing 
investment in integrated energy services
dividends
the company proposes a ﬁnal dividend of 
4380 cents per share for the year ended 
31 december 2013 2012 4300 cents which 
if approved will be paid to shareholders 
on 23 may 2014 provided they were on the 
register on 22 april 2014 shareholders who 
have not elected before 25 february 2014 to 
receive dividends in us dollars will receive a 
sterling equivalent of 2625 pence per share
together with the interim dividend of 2200 
cents per share 2012 2100 cents equivalent 
to 1410 pence this gives a total dividend for 
the year of 6580 cents per share 2012 6400 
cents an increase of 28 in line with the 
increase in net proﬁt
capital expenditure on integrated  
energy services projects
cost
net 
carrying 
amount
us millions unless otherwise stated
31 
december 
2012 additions
transfers 
inout
disposals 
receipts
31 
december 
2013
31 
december 
2013
oil  gas assets note 9 block pm304 
cendor west desaru chergui pecs 288 491
2
49 – 828 628
oil  gas facilities note 9 ohanet 
various ﬂoating production facilities 558 – – 110
1
448 273
intangible oil  gas assets note 12 
block pm304 cendor phase 2 and 
other predevelopment costs 268 43 21 – 290 290
receivables from customers in relation 
to the greater stella area including 
within note 14 115 85 – – 200 200
total 1229 619 28 110 1766 1391
1 the fpf5 was sold under a ﬁnance lease during 2013 an amount of us127 million is included in receivable from a joint venture 
partner in relation to the receivables due under the ﬁnance lease
2 includes us100 million of capitalised decommissioning costs provided on block pm304 in malaysia and santuario magallanes 
arenque and pánuco production enhancement contracts in mexico
in addition to the above amounts receivable under the berantai risk service contract 
which includes receivables in relation to both capital and operating expenditure stood at 
us476 million at 31 december 2013 2012 us389 million
petrofac annual report and accounts 2013
49 petrofac annual report and accounts 2013
50
strategic report
our business model in action 51
petrofac annual report and accounts 2013
51
us22bn
a signiﬁcant and complex 
epc contract
90
of onsite workers were algerian
52 months 
completed within a tight deadline
innovation complexity  
and operational excellence 
el merk algeria
the us22 billion el merk central processing 
facility in algeria showcases many of our 
capabilities – and the way we approach 
our projects
lasting 52 months it was a large and 
intricate epc contract it was built during 
a time of global upheaval and uncertainty 
and its remote desert location added to 
the complexity 
as ever local delivery was paramount so we 
worked with local partners nine in ten of the 
onsite workers were algerian and we built 
a local training centre to equip high school 
graduates with soughtafter skills 
given the daunting scale of the project our 
procurement teams were determined to bring 
real value and several of their innovations 
are now standard practice across the 
group for example instead of waiting for 
our engineers to determine the necessary 
speciﬁcations for copper cables they 
went ahead and booked copper at source 
early to reduce the impact of commodity 
price inﬂation
for the ﬁrst time we also decided to 
spread the engineering work across several 
petrofac ofﬁces chennai mumbai jakarta 
and sharjah as well as accelerating the 
timescales this helped us to think and act 
as a single global business trainees at jurong island  
training centre singapore
52
petrofac annual report and accounts 2013
strategic report
corporate responsibility
53 living up to our core values
  as a safe ethical and responsive business that is driven 
to deliver
54 safety asset integrity and security
  nothing is more important to petrofac than 
safety – from our people customers and the 
communities we work in to the integrity of the assets 
and facilities we build maintain and run
57 ethics
  ‘ethical’ is one of the six petrofac values our code 
of conduct sets out the standards we insist upon 
everyone who works for and with petrofac is expected 
to uphold the code – and to speak up if they become 
aware of any breaches
58 people and resourcing
  our ambitious growth plans require us to have the right 
people in the right places at the right time
62 social performance
  we seek to manage the impacts both positive and 
negative our business may have on the communities 
where we operate – thereby reducing risk and creating 
value for the company
64 environmental protection
  we are committed to understanding and minimising the 
environmental impact of our global operations at petrofac our approach to corporate 
responsibility cr is embodied in our 
core values 
these values lie at the heart of the work we 
do they differentiate us from our competitors 
and they guide our decisions and actions
for example our value of being ethical is 
evident in our code of conduct our focus 
on quality is clear in the way we develop 
our people and manage our operations 
our insistence of safety is visible in the 
way we safeguard our people and assets 
and our responsiveness is evident in the 
way we engage with local communities 
and customers
we regard our values and their contribution to 
cr as an important differentiator for petrofac 
and therefore a commercial asset 
 to deliver on our strategic goals we need 
to attract signiﬁcant numbers of people 
primarily from within the communities in 
which we operate – and our values along 
with our business conduct help us to do so
 to operate efﬁciently and effectively 
within a tightly regulated environmentally 
aware sector we need to formalise and 
institutionalise our commitments to 
safety and security ethical conduct and 
environmental protection
our values have always been implicit in 
the way we run the business we are 
progressively formalising our approach to 
cr and demonstrating to all stakeholders 
how this helps us to achieve our wider 
commercial objectives
progressively raising our reporting 
standards
we are working towards reporting against the 
global reporting initiative gri g4 guidelines 
as a commonly used framework for reporting 
on social environmental and governance 
matters the gri guidelines enable us to 
benchmark our performance against our 
peers and to track progress over time 
they also help us to identify and address 
the material issues that matter most to our 
stakeholders including investors customers 
staff and civil society groups
within future editions of our annual report 
and accounts we can therefore expect to 
be conﬁdent that we are focusing on those 
cr areas that are most important to our 
stakeholders and most relevant to our  
longterm commercial success
understanding what matters 
most to our stakeholders 
we ﬁrst enlisted the support of our external 
corporate sustainability advisers who 
facilitated an initial materiality assessment for 
petrofac in 2012 working with representatives 
from across the business we identiﬁed a 
series of cr topics we believed were most 
relevant to our reporting
in 2013 we took this work a step further 
by validating our assumptions through 
indepth interviews with a range of external 
stakeholders – including clients investors 
ngos suppliers government representatives 
and relevant industry associations 
on this basis we agreed an authoritative 
‘materiality matrix’ which is now used to 
inform our reporting and our management 
approach to cr in 2014 we will continue 
with the validation involving a wider 
selection of stakeholders and reﬁning our 
analysis accordingly 
providing a more complete picture
our external advisers also conducted a full 
gap analysis of petrofac’s 2012 annual report 
and accounts this identiﬁed those areas 
where our reporting is already in accordance 
with the gri g4 guidelines and highlighted the 
areas for improvement 
drawing on this analysis we are developing 
plans to allow us to improve our reporting 
around environmental incidents water 
management biodiversity supplier 
management and human rights
petrofac annual report and accounts 2013
53
living up to our core values
– as a safe ethical and responsive business that is driven to deliver
petrofac materiality matrix and issues for 2013
safety and emergency 
preparedness
people resourcing
security risks
environmental incidents
social performance
diversity and equality
governance
environmental management
human rights
energy and climate change
revenue and tax transparency
joint venture management
supplier and contractor 
management
legacy soil contamination
industrial relations disputes
water management
biodiversity and habitat 
protectionoperating in 
sensitive locations
materials
health
waste management
low
high
medium
medium
importance to external stakeholders
high
low
importance to petrofac internal stakeholders nothing is more important to petrofac 
than safety – from our people customers 
and the communities we work in to the 
integrity of the assets and facilities we 
build maintain and run
safety asset integrity and security are 
fundamental disciplines for petrofac 
they matter to our people our customers 
our suppliers and our wider stakeholders 
they are evidence of our relentless focus on 
operational excellence they also help us to 
sustain our unique deliveryfocused culture
despite an impressive performance across 
much of the group we were concerned by 
an increase in reported incidents in 2013 – 
including three fatalities
the range of wellestablished health safety 
security environment and integrity assurance 
hsseia disciplines combined with the 
new initiatives launched in 2013 and the 
improvements planned for 2014 and beyond 
demonstrate that we remain fully committed 
to the safety agenda – and are determined 
to learn from the lessons of the past year
meanwhile we continue to reﬁne our 
asset integrity programme which includes 
systematic scrutiny and monthly reporting 
across all of our operations 
‘safe’ – a core 
petrofac value
reﬂecting on our safety 
performance
across petrofac our aspiration is for zero 
safety incidents – as reﬂected in the name 
of our horizon zero global safety campaign
we are proud to say that much of the time 
we live up to this goal 
at the kittiwake platform in the north sea for 
example we have operated for eight years 
without a single lost time incident lti 
during 2013 we also celebrated 10 million 
ltifree manhours at both the cendor field 
development project in malaysia and the 
kuwait oil company’s efﬂuent water injection 
project – a project that received a gold 
award in the engineering and construction 
category of the american society of safety 
engineersgulf cooperation council hse 
excellence awards
sadly these achievements were overshadowed 
by three deaths in turkmenistan one person 
died in a vehicle accident and another in a 
lifting accident the third fatality took place 
in algeria as the result of a fall each incident 
was investigated and reviewed by senior 
management and separately by the board
we also experienced an increase in the 
number of what we term ‘high potential 
incidents’ hipos that is to say incidents that 
could have resulted in a fatality or serious 
injury had the situation been slightly different 
compared with 2012 the number of hipos 
was up by 8 however it should be noted 
that we have increased our emphasis on 
reporting incidents based on their potential 
as opposed to their actual outcome 
a large proportion of hipos took place 
at our mexican and romanian locations 
where we have taken over the operation of 
existing facilities by focusing on operational 
excellence and embedding the petrofac 
values we aim to improve their respective 
safety records other incidents were 
experienced in turkmenistan and algeria 
during the ﬁnal stages of projects again each 
of these hipo cases was fully investigated 
and the lessons learned have been shared 
across the group 
our overall safety performance for 2013 
measured according to us occupational 
safety and health administration osha 
rules was as follows
 our recordable incident frequency rate was 
014 per 200000 manhours whilst this 
represents a slight increase on 2012 when 
the corresponding rate was 013 it does 
however remain well below the industry 
norms of 035 as extrapolated from the 
ﬁgures published by the international 
association of oil and gas producers
 our lost time incident lti frequency 
rate was 0046 per 200000 manhours 
although this represents an increase 
on 2012 when the corresponding rate 
was 0018 it also remains well below 
the industry benchmark of 010 again 
extrapolated from ﬁgures published by 
the international association of oil and 
gas producers
 our driving incident frequency rate was 002 
per million kilometres driven this was an 
area of focus for 2013 and the performance 
was a signiﬁcant improvement on 2012 – 
when the corresponding rate was 011
launching immediate 
countermeasures
any deterioration in our safety performance 
runs counter to the petrofac values and our 
unique deliveryfocused culture 
an immediate analysis of the reported 
incidents in 2013 revealed that most root 
causes lay in the areas of control of work 
lifting operations work at height and energy 
isolation our immediate response in each 
case was to raise awareness of the event and 
the related risks and to develop local control 
measures also the trends seen in 2013 are 
being addressed in our groupwide 2014 
safety improvement plan and the continuing 
development of our golden rules of safety 
we also focused on these incidents and 
trends at our annual safety conference in 
dubai around 130 senior leaders from across 
the group attended including our chairman 
the group chief executive and the managing 
directors of all service lines the event 
focused on three key topics – root cause 
analysis lessons learned see below and 
lifting safety
strengthening our safety culture
we have found that one of the most effective 
ways of improving our safety culture is to 
share knowledge and lessons learned across 
the group 
with this in mind 2013 saw the launch 
of our lessons learned tool – an online 
portal that is used to capture and share 
reallife experiences
easily accessible to petrofac employees 
lessons learned includes a wealth of safety 
information alerts around speciﬁc incidents or 
areas of concern plus training videos and our  
golden rules of safety video we also use 
the tool to capture and communicate lessons 
and experiences from other companies and 
projects in our industry in the ﬁve months 
following its launch around 100 lessons 
were shared 
petrofac annual report and accounts 2013
54
strategic report
safety asset integrity and security
corporate responsibility continued recognising individual and 
team initiatives
to recognise our successes in safety 
we acknowledge individual and team 
achievements and actively encourage all of 
our business units and operations to raise 
awareness of safety issues examples include
 eve awards 
a highlight of our annual leadership 
conference is the eve awards which 
celebrate each of the petrofac values – 
including ‘safety’
in 2013 the winners included a cross
disciplinary team from our offshore projects 
 operations business who had produced 
a new control of work standard process 
and a range of accompanying tools 
this included an awardwinning elearning 
training package designed to ensure that 
all the steps of the process would be 
understood by everyone involved
as well as receiving external recognition 
from oil  gas uk for their ‘ideas in safety’ 
award the team’s framework has also been 
adopted by a number of our customers
 safety seminar 
during 2013 employees at our chennai 
operational centre came together to share 
knowledge at a safety seminar drawing on 
the content of our annual safety conference 
this covered root cause analysis lessons 
learned and lifting
 board training 
underlining the board’s commitment 
to the safety agenda our directors 
participated in a process safety awareness 
training programme
sharing best practice across 
the industry
we aim to share expertise and reduce risk 
across the industry by collaborating with our 
peers for example we remain an active 
member of the uk oil response forum and 
we currently cochair the step change in 
safety initiative including its asset integrity 
workgroup in addition our group director of 
hsseia sits on the helicopter safety steering 
group and chairs a task group responding to 
the 2013 sumburgh helicopter crash in which 
four people from the uk oil industry tragically 
lost their lives
petrofac training services is a respected 
emergency response trainer amongst many 
activities in 2013 it provided training on 
the new opito helicopter standards to a 
group of delegates from mellitah oil and 
driving incident frequency rate
incidents per million kilometres driven
2013 2012 2011 2010 2009
011 011
003
029
002
recordable incident frequency rate
per 200000 manhours
2013 2012 2011 2010 2009
013
014
018
036
014
lost time injury frequency rate
per 200000 manhours
2013 2012 2011 2010 2009
0018 0018
0026
0020
0046
total manhours worked million
million manhours completed by 
employees and subcontractors
2013 2012 2011 2010 2009
272
143
76
70
160
gas in libya it also provided training to and 
was commended by the uk government’s 
energy minister michael fallon who said 
“the experience and level of training was very 
impressive and it emphasised the importance 
of highquality training in offshore safety”
continuing to improve 
our capability
to address the deterioration in our safety 
performance in 2013 and to support 
petrofac’s progressive move into new 
geographies and more challenging operating 
environments a wideranging plan sponsored 
by our group ceo has been agreed for 
implementation in 2014
key components include
 rollingout a groupwide initiative to improve 
the management of contractor safety 
focusing initially on those geographies and 
projects with recent experience of incidents 
 delivering an elearning package on 
our golden rules of safety to increase 
awareness and improve understanding of 
their importance 
 providing a framework and supporting tools 
to improve the visibility positive impact 
and effectiveness of site visits by our 
leadership team
this groupwide plan is supplemented by 
and aligned with local plans that have been 
established by each service line
asset integrity – 
fundamental 
to our business
at petrofac we design build and operate 
assets which are safe reliable and meet or 
exceed their speciﬁed design purpose
key to this is our asset integrity framework 
which enables us to take a structured and 
consistent approach to integrity across 
all petrofac operations this framework 
comprises our 
 asset integrity management policy
 asset integrity standard comprising the 
12 elements of asset integrity 
 guidance documents and a toolkit of 
supporting processes
the emphasis for 2013 was to increase 
engagement with this framework and 
emphasise its importance across the group 
in total more than 2500 employees had an 
indepth introduction with presentations 
completed in aberdeen abu dhabi chennai 
dubai kuala lumpur london mexico 
mumbai poland saudi arabia and sharjah
meanwhile for each month of 2013 one of the 
12 elements of our asset integrity standard 
was featured on our intranet petronet 
this helped employees to understand the 
principles and how they contribute to our 
safety performance
petrofac annual report and accounts 2013
55 a rigorous consistent process
every month each of our operating assets 
is obliged to report against a range of key 
performance indicators comprising
 lagging indicators – relating to the 
actual condition of our assets and the 
performance of our related activities 
such as the numbers of temporary 
repairs under management and the 
level of maintenance backlog
 leading indicators – relating to our 
performance in maintaining robust risk 
controls such as the completion of 
actions arising from integrity assurance 
reviews and status of competency 
assessment programmes 
drawing on this data an asset integrity 
dashboard is published each month and is 
distributed among more than 100 people 
across the group 
additionally our asset integrity review board 
comprising senior representatives from each 
of our operating assets meets monthly 
beyond peer reviewing and experience 
sharing their role is to
 understand the sources of integrity risk and 
take actions to manage them effectively
 maintain appropriate standards which 
prevent and mitigate risks 
 openly report on integrity 
management performance
 promote a culture in which all employees 
are committed to asset integrity
a full programme of asset 
integrity reviews
during 2013 a total of 16 comprehensive 
asset integrity reviews were conducted on 
our operating assets in these subject matter 
experts who are independent of operations 
assess the level of compliance with our asset 
integrity standards they also conduct a 
thorough review of the physical condition of 
each asset
opportunities for further 
improvements
for 2014 the focus will be to identify 
opportunities for reﬁnements or improvements 
to our asset integrity framework 
this will include
 updating the asset integrity standard to 
provide more speciﬁc operational guidance 
 building on our work in the uk by 
developing a groupwide hydrocarbon leak 
reduction training package
 implementing a revised technical authority 
framework and associated process to 
support those people who operate our 
assets and manage high hazard risks
security – protecting our people 
and assets
petrofac’s security team works closely with 
the business to protect our people and assets 
and to ensure that our operations proceed 
smoothly this becomes more important as 
we enter new territories and work in more 
challenging social and political environments
putting our security and 
evacuation procedures to the test
in january 2013 we were asked to evacuate 
our people from the in salah gas plant in 
algeria this was a precautionary measure 
following the terrorist attack on the nearby in 
amenas gas plant
at very short notice three teams were 
mobilised – onsite in algeria in sharjah and 
in london in a period of just 72 hours they 
overcame the numerous challenges involved 
and safely evacuated 400 people
learnings from this experience have also 
been incorporated into our security and 
evacuation procedures
improved intelligence gathering 
and analysis
during 2013 we enhanced our intelligence 
capability by strengthening the team with 
a wider range of more specialised skills 
this has improved the way that we gather 
and analyse intelligence on security issues 
particularly in higher risk countries in the 
middle east and north africa similarly we 
have stepped up intelligence and information 
sharing with other companies in the oil and 
gas sector
tightening our everyday processes 
we continuously review evaluate and evolve 
our security processes to reﬂect the changing 
nature of the environments in which we 
operate for example as part of the pre
investment in our bids thorough security risk 
assessments are carried out on all high risk 
territories or projects 
we have also consolidated and strengthened 
our positions in new and challenging territories 
like iraq mexico and nigeria
meanwhile our ongoing security 
activity includes 
 regular brieﬁngs to the board 
risk committee 
 weekly travel security and country updates
 24hour emergency support
petrofac annual report and accounts 2013
56
strategic report
corporate responsibility continued
1  many people work in remote 
locations across the world
1 ‘ethical’ is one of the six petrofac values 
our code of conduct sets out the 
standards we insist upon everyone who 
works for and with petrofac is expected 
to uphold the code – and to speak up if 
they become aware of any breaches
our new code of conduct 
the petrofac code of conduct the code 
founded on the six petrofac values provides 
clear guidance to our employees and 
business partners
in 2012 the code was given a major overhaul 
– to incorporate best practice reﬂect new 
legislation and cover the increasing risks 
we face as we enter new geographies and 
encounter challenging operating conditions
in 2013 the code was reviewed and ratiﬁed 
by the petrofac board 
reﬂecting our emphasis on clarity the 
code uses easytofollow language and the 
principles are brought to life through everyday 
examples the content includes a new equal 
opportunities chapter an explicit prohibition 
on making facilitation payments and paying 
bribes and clariﬁes our approach to third 
parties – including risk mitigation through 
due diligence conﬂicts of interest and 
fair competition
the code applies to contractors and suppliers 
as well as petrofac employees and is available 
in english french spanish romanian 
and russian
distributing and embedding 
the code
in early 2013 the new code was distributed 
to all employees and suppliers and supported 
by an extensive communications campaign 
in early 2014 we will launch a tailored 
elearning module for all of our employees in 
order to ensure that the messages contained 
in the code are understood by all utilising 
life scenarios 
in 2013 an induction programme on the code 
was also introduced for all new graduates 
in 2014 we launched our annual code of 
conduct certiﬁcation process in previous 
years this required all senior and midlevel 
managers to certify that they had read 
and understood the code’s principles and 
requirements and had observed them in their 
business dealings the exercise has been 
expanded to reach out to those in our ﬁrst 
level of leadership and this year was targeted 
to close to 3000 employees three times the 
number in 2012 the exercise is automatically 
logged through a speciﬁc online site enabling 
us to track levels of participation and assess 
possible code breaches that may be raised 
speaking up about any breaches 
of the code
at the end of 2012 we ran a threemonth 
groupwide communications programme to 
raise awareness of speak up – our phone and 
email service enabling employees and third 
parties to report breaches of the code
the success of this campaign was 
demonstrated through our 2013 petrovoices 
employee survey see page 61 in which 80 
of our people said that they knew how to use 
the speak up facility up from 69 in 2011 
in addition 38 suspected breaches of the 
code were reported during 2013 compared 
with just 21 reports between 2009 and 2012 
every reported breach is fully investigated 
helping us to identify and address any gaps 
in our processes all violations are reported 
to the board risk committee and those 
individuals found to be in serious breach of the 
code may have their employment terminated 
– which was the outcome on 15 occasions 
in 2013 
screening all third party suppliers
in 2013 we continued to reﬁne the ways we 
assess our third party suppliers – to identify 
and mitigate any reputational risks they pose 
and ensure that their ethical standards are 
consistent with our own
most signiﬁcantly we developed an online 
due diligence tool which helps us conduct 
detailed assessments of third party suppliers 
following an initial screening phase involving 
the names of over 18000 third party 
suppliers we identiﬁed some that warranted 
further investigation these are subject to 
more comprehensive due diligence using the 
new tool
assessing compliance across 
all our locations
we seek to conduct regular compliance 
reviews across all petrofac locations 
aiming for transparency in 
our reporting 
we aim to be transparent and open in 
our reporting to comply with international 
standards and to meet the expectations of 
all stakeholders
to this end we became signatories of the 
un global compact ungc in 2009 and 
have sought to integrate its ten principles in 
the way we do business covering the areas 
of human rights labour environment and 
anticorruption these principles are designed 
to ensure that businesses can beneﬁt local 
economies and societies
80 
of our staff say they know how to 
use our whistleblowing line to 
raise a concern 
1  all employees and suppliers 
received a new code of conduct
petrofac annual report and accounts 2013
57
1
ethics our ambitious growth plans require 
us to have the right people in the  
right places at the right time
our strategy of continued geographic 
expansion increased offshore activity and 
the growth of our integrated energy services 
ies business requires us to attract and retain 
more people 
indeed over the coming ﬁve years we 
expect our workforce to grow to around 
25000 allowing for anticipated attrition 
this will require us to recruit around 15000 
new employees
in a steadily growing global industry facing 
a deﬁnite skills shortage this will be a 
signiﬁcant undertaking the petrofac hr 
team are therefore working closely with 
the business to ensure that we meet this 
organisational challenge
it is more than just recruiting extra people
we also need to deliver in more challenging 
geographies we need to build local delivery 
capability to achieve real sustainability we 
need to build the leadership talent pipeline 
beyond our current senior executives
in order to retain sought after skills we 
also need to ensure that the interests and 
aspirations of our people are closely aligned 
with those of the business and to sustain our 
unique deliveryfocused culture we need all of 
our people to commit to our values
a business focused hr strategy
the petrofac hr strategy is a reﬂection of our 
wider business strategy and we intend to
 organise ourselves to achieve the 
company’s growth ambitions and 
recognise the need for local delivery
 integrate our hr services and draw on 
best practice to improve our performance 
and manage our costs 
 secure the right quantity and quality of 
skills to deliver on the company’s growth 
plans in our traditional markets as well as in 
new disciplines and geographies
 ﬁll the gap between highly experienced 
people approaching retirement age and 
younger less experienced employees
 implement a robust talent management 
process in order to maintain and grow our 
leadership teams
number of
graduates recruited
230
2013 2012 2011 2010 2009
243
146
107
120
a new performance 
management system 
in 2013 a new performance management 
process was introduced across all of our 
service lines and locations 
this provides a standardised way of setting 
objectives and conducting midyear reviews 
and yearend appraisals it ensures that all of 
our people understand what is expected of 
them in terms of their contribution to service 
line and companywide success – whilst 
also recognising the petrofac values and 
the role they play in our unique delivery
focused culture 
by the end of the year 10000 people had 
been trained in the new process and over 
85 of all employee objectives had been 
set using the new scorecard the results 
of the 2013 petrovoices employee survey 
see below suggest that this renewed 
emphasis on performance management is 
widely acknowledged
in mid 2014 following the ﬁrst full year of its 
operation we will conduct a thorough review 
of the process and reﬁne it accordingly 
as we upgrade our internal it systems 
we will provide online access to complete 
the process
a disciplined talent 
management methodology
the global oil and gas industry faces a 
signiﬁcant skills shortage our groupwide 
talent management programme aims to 
address this challenge by developing and 
retaining our own employees thereby reducing 
our reliance on external recruitment
as part of our disciplined approach to 
business and capacity planning we therefore 
place real emphasis on talent management 
and succession planning
as well as onboarding new employees our 
hr team and line managers work together 
to identify those people whose retention is 
most important to the business our focus 
extends well beyond leaders and potential 
leaders we also consider those people with 
hardtoreplace organisational knowledge 
relationships and technical expertise and we 
look at how best to capture and disseminate 
the skills and knowledge of our more 
experienced employees 
petrofac annual report and accounts 2013
58
strategic report
corporate responsibility continued
people and resourcing
90 
of graduates hired since 2010 are 
still working for petrofac 
6 
percentage of petrofac  
employees left by choice in 2013
2700
new staff joined  
petrofac in 2013  for example we have started to pilot 
a petrofac veterans programme that 
will enable older employees to work 
alongside younger recruits and share their 
considerable experience 
with regards to talent management two 
particular initiatives stood out in 2013
the petrofac academy
in 2013 we formally launched the new 
petrofac academy which reinforces our 
crosscompany approach to development 
ultimately this will have three main aims
 graduate development – to help us 
attract new graduates from diverse 
backgrounds and geographies
 management development – to improve 
the skills of our supervisory and middle 
managers to help them succeed personally 
and manage their teams more effectively
 leadership development – to strengthen 
our senior leadership talent pipeline 
initially located in our uae ofﬁces and focusing 
on graduate training we have developed a 
technical facility and curriculum which will 
accelerate the acquisition of skills and help 
younger professionals achieve professional 
autonomy more quickly
to lead the initiative we appointed a senior 
vice president for the academy from within 
petrofac who will work with our operational 
and hr teams to reﬁne and progressively 
extend the approach
the leadership excellence programme
our leadership excellence programme was 
introduced in 2011 with a clear mandate to
 strengthen our existing 
leadership capability and improve 
leadership performance
 develop and prepare our people to 
understand and overcome future challenges
 reinforce the unique petrofac culture 
by increasing understanding of 
the organisation 
by the end of 2013 nearly 150 of our senior 
leaders had participated in the programme 
the year’s initiatives included
 two leadership excellence events 
in the uae and london
 two advanced people skills modules 
in the uae and london
 two financial skills modules 
in the uae and london
we also developed a team support module 
which has been trialled in malaysia and will 
be made available to all leaders we have 
also introduced an accelerated senior 
development programme involving 23 
individuals with leadership potential plans for 
2014 include a management development 
pathway programme
petrofac annual report and accounts 2013
59
celebrating a distinctive delivery
focused culture
at the heart of everything we do 
the six petrofac values guide our 
decisions and behaviour safe ethical 
innovative responsive quality and 
cost conscious and driven to deliver
each year we celebrate employees and 
teams who embody these values through 
the eve excellence values energy 
awards which are presented at our annual 
leadership conference 
this year’s winners included 
senior engineer himanshu chanchal 
pictured above with group director of 
legal and commercial affairs richard 
milne – who developed an automated tool 
for designing the foundations for vibrating 
equipment this can reduce 20 days of 
design work into a few hours it also brings 
increased accuracy and when deployed at 
our karan project in saudi arabia it enabled 
a 54 reduction in concrete
technical specialist mantosh bhattacharya 
– who on two separate occasions came 
up with solutions to technical issues that the 
equipment vendor ge had been unable to 
resolve as a result ge changed its processes 
as well as bringing time and cost savings to 
petrofac this had an industrywide impact
1  our mumbai ofﬁce has grown 
signiﬁcantly in the ten years since 
it opened
1 attrition levels measured in terms of those 
leaving the company by choice remained 
at acceptable levels with turnover of less 
than 6 
to support our ongoing recruitment needs 
we introduced a range of new initiatives 
these include
establishing a compelling ‘employee 
value proposition’
to achieve our growth ambitions we need 
petrofac to present itself as an attractive 
employer that meets the immediate needs 
and future aspirations of potential recruits 
through formal research we set out to 
discover what it is about our business that 
motivates people to join us and remain 
with the company initially we spoke to 
engineers in our key geographies of africa 
malaysia mexico the middle east and the 
uk drawing on these ﬁndings we developed 
an ‘employee value proposition’ around the 
principles of growing opportunities diverse 
experience and responsible ambition 
this will enable us to develop a common 
approach across all of our recruitment 
collateral and advertising
redesigning our recruitment systems
in 2013 we implemented a consistent 
automated recruitment and application 
tracking system to support and enhance the 
experience of potential and future employees
this includes a ‘new hires portal’ which allows 
recruits to access and exchange information 
regarding their new position and accelerates 
the onboarding process by the yearend the 
system had been rolled out across most of the 
group it will be implemented in our remaining 
operations during 2014
an emphasis on local delivery
an important source of differentiation for 
petrofac is our focus on local delivery 
recruiting and training local staff and working 
with local partners helps us enter new markets 
and cements longterm relationships with 
governments and national oil companies 
it also enables us to work more cost
effectively and grow our global capability 
in mexico for example 90 of employees 
at our new operations are mexican and 
many work within their own home state 
at the height of our work on turkmenistan’s 
galkynysh gas ﬁeld processing facility we 
partnered with 60 contractors involving more 
recruiting a new generation 
of homegrown petrofac talent 
to meet our growth plans petrofac recruits 
continuously and systematically
in the past we were heavily reliant on 
identifying and securing skills and expertise 
from outside the organisation in the future 
we aim to be recognised as a business that 
excels at growing its own talent and this 
emphasis on personal and professional 
development is one of the ways in which 
we aim to attract a signiﬁcant number of 
new employees
in 2013 the total number of employees and 
longterm contractors increased by around 
2 to reach 18300 meanwhile voluntary staff 
petrofac annual report and accounts 2013
60
strategic report
corporate responsibility continued
1  control room in the engine room of 
fpso berantai offshore malaysia
2  at the galkynysh gas plant 
in turkmenistan
1
2 than 14500 employees three quarters of 
whom were turkmen at the el merk central 
processing facility in algeria more than 90 
of onsite workers were algerian
global mobility where 
it makes sense
although our objective is generally to recruit 
locally petrofac will continue to send people 
on international assignments – to supplement 
local technical and professional skills and to 
develop our pool of leaders with experience 
of working overseas
in 2013 we developed guidelines to ensure 
these international moves proceed smoothly 
for employees and their families they also 
ensure that we behave consistently and 
openly that our costs are controlled 
and we always try to comply with the 
related legislation in both the home and 
host countries
a clear commitment to diversity 
and equality
petrofac is a highly diverse multicultural 
business our board is made up of seven 
nationalities and our workforce comprises 
around 80 this diversity allows us to reﬂect 
our global customer base and draw on a rich 
mix of culture and experience
to emphasise our commitment a new 
diversity policy was rolled out in 2013 
alongside the relaunch of our code of 
conduct a series of dedicated training 
modules will help to embed this across 
the group in 2014
in august 2013 kathleen hogenson was 
appointed as a nonexecutive director 
increasing female representation on the 
petrofac board to two for more information 
see the nominations committee report on 
page 80 meanwhile around 26 of our 2013 
global graduate intake is female
in line with uk governance code and uk 
companies act 2006 requirements which the 
company has complied with on a voluntary 
basis we disclose the proportion of women to 
men across the company at senior levels and 
on the board on page 80 of the nominations 
committee report
our culture and values a 
source of differentiation
petrofac’s differentiation stems from our 
unique deliveryfocused culture and our 
relentless pursuit of operational excellence 
as we recruit signiﬁcant numbers of new 
employees we are consistently reinforcing 
this culture and emphasising its importance 
to the way we operate our business
our values are an intrinsic component of our 
new performance management framework 
– which means that every employee is partly 
appraised on the extent to which they live up 
to the values
each year we celebrate employees and 
teams who embody our values through the 
eve excellence values energy awards 
this year we received 160 nominations from 
across the group 
in our petrovoices survey see below 82 
of employees believed that our values are 
demonstrated through clear and visible 
actions by other employees
an engaged workforce with 
a sense of ownership
an engaged employee is one who is fully 
involved in and enthusiastic about their work 
and acts in a way that furthers the company’s 
wider interests in pursuit of our business 
strategy we formally monitor engagement 
levels across the business systematically 
build on strengths and address concerns
in 2013 we conducted our fourth biennial 
employee survey petrovoices to ensure 
that this was accessible to a wide range 
of employees the survey was translated 
into four languages and made available in 
paper and online formats the 2013 results 
were compared with the 2011 results 
and an external benchmark of other high 
performing businesses
this showed that engagement levels 
have remained broadly consistent with 
2011 dipping slightly from 85 to 82 
attitudes relating to communication pay 
and beneﬁts and talent and performance 
management had improved however views 
on leadership change and company image 
have dipped our external advisors suggest 
that these patterns are typical of organisations 
that go through signiﬁcant change
we actively encourage employee share 
ownership believing that it builds commitment 
to the company’s goals and rewards our 
people for their contribution in 2013 30 of 
our employees participated in at least one of 
the petrofac share schemes 
clear consistent communications
with a large rapidly expanding global 
workforce we believe it is essential that we 
have the tools to keep our people informed 
about and interested in our strategy our 
successes and our challenges
a focus in 2013 was to strengthen internal 
communications in response to feedback 
from our 2011 petrovoices survey and 
discussions at the 2012 leadership 
conference for our top leaders to support 
their facetoface communication with their 
teams as a result we now produce our 
business brief at least three times a year 
post our interim and fullyear results and 
our leadership conference for our top 
120 leaders to support their facetoface 
communication with their teams in october 
2013 we also relaunched petrofacts our 
internal magazine making it more engaging 
thoughtful and representative of our people 
around the world
in 2014 we plan to make further improvements 
to our website improving functionality and 
providing more regular relevant information
petrofac annual report and accounts 2013
61
3
3  petrofacts was relaunched in 2013 accountability or is contractually required 
to manage them it is supported by a set of 
best practice guidance notes covering social 
assessment stakeholder engagement land 
acquisition and involuntary resettlement and 
managing grievances 
in 2013 we developed additional guidance 
on social investment and began to develop a 
guidance note on cultural heritage 
during the year we incorporated socio
economic factors such as potential for 
conﬂict with local communities and risks 
to community health and safety into our 
enterprise risk management system 
these issues are now evaluated alongside 
other risk categories as a core part of our risk 
review process 
implementing our social 
performance framework
our social performance standard is being 
implemented in tunisia and mexico and 
introduced in romania where petrofac is 
directly accountable for managing social 
impacts in 2013 we continued to rollout 
related activities in each of these countries 
including the provision of training to locally
based staff and awareness sessions amongst 
senior management specialist teams also 
worked with our operating centres in india 
the middle east and the uk to implement 
relevant aspects of the social performance 
framework including our strategic corporate 
giving activities 
the social performance framework requires 
us to assess the potential short and long
term impact of our activities by identifying 
key risks that we might encounter throughout 
the asset’s life cycle relating to social health 
environmental economic and cultural 
matters we develop strategies to manage 
or mitigate these risks appropriately a key 
aspect of conducting an assessment involves 
engagement with affected communities 
relevant government agencies international 
organisations and locallybased ngos 
as appropriate 
in mexico for example we completed detailed 
socioeconomic baseline assessments for 
the pánuco and arenque contracts which we 
began to operate in 2013 building on similar 
exercises conducted in 2012 for our contracts 
in tabasco state all our mexico operations 
now have community development plans in 
place based on similar assessments we 
have also developed social performance plans 
in tunisia and romania
in 2014 we will continue to develop our local 
capability in this area through recruitment 
and training and will introduce an internal 
assurance process to monitor compliance 
with the social performance standard and to 
identify areas requiring additional capability 
development and support we believe that this 
provides a consistent approach to managing 
socioeconomic issues effectively and 
maintaining our social licence to operate
our social investment programmes 
petrofac’s social investment expenditure in 
local communities totalled us4702942 
in 2013 up from us1006617 in 2012 
this included community development 
and strategic corporate giving initiatives 
the yearonyear increase was mainly due 
to substantial community development 
programmes being implemented in mexico 
and tunisia it also includes a total of 
us263 million for the 2013 operating costs 
for our training facilities which have been 
established in abu dhabi and algeria 
 algeria – our training centre located in 
hassimessaoud in algeria was established 
in 2010 it was created to train and qualify 
young algerians in ﬁve disciplines and 
has since provided training to around 
700 trainees 
 abu dhabi – petrofac is designing and 
building the training pilot plants for the 
abu dhabi national oil company adnoc 
training institute ati the training facility 
will provide specialist skills in oil and gas 
facility operations as part of the design and 
build of the training pilot plants petrofac 
will develop the operating and maintenance 
procedures training scenarios curriculum 
materials and provide familiarisation training 
to adnoc  adma nominated trainers 
the training centre is due to be completed 
in 2014 
 mexico – we completed our initial 
community development programmes 
for our concessions in tabasco state 
providing support for schools community 
centres environmental awareness and 
community safety initiatives 
in consultation with our partner pemex 
and the local communities we have 
now deﬁned a longterm development 
programme for tabasco focusing on health 
education livelihoods and conservation 
and have established partnerships with 
local organisations to implement projects in 
each of these areas see case study 
we seek to manage the impacts both 
positive and negative our business 
may have on the communities where 
we operate – thereby reducing risk and 
creating value for the company
as our business strategy takes us into new 
geographies and we embark on longer
term contracts we are becoming ever more 
disciplined in understanding planning and 
managing our social performance
our social performance framework – which 
incorporates our ethical social and regulatory 
policy and our social performance standard 
– was established in 2012 this standard sets 
out the minimum requirements for managing 
social impacts where petrofac has direct 
petrofac annual report and accounts 2013
62
strategic report
corporate responsibility continued
social performance
our social investment programmes
other 4
strategic 
corporate
giving 6
community
development 90
community development
initiatives that target neighbouring andor 
impacted communities in our areas of operation 
that are designed to create beneﬁts for these 
groups over and above the beneﬁts available 
through standard project and operational 
expenditure and that assist these groups 
in meeting their development priorities
strategic corporate giving
philanthropic initiatives which have altruistic aims 
but which nevertheless contribute to petrofac’s 
overall reputation and brand such initiatives are 
typically implemented at a national or regional 
level and are managed by corporate centres of 
country head ofﬁces matched giving is also part 
of petrofac’s strategic corporate giving
other
sponsorship refers to support provided by 
petrofac businesses to an event activity or 
organisation typically relating to our business 
the arts sport or entertainment in return for 
brand recognition and enhancement   tunisia – our social investment is focused 
on supporting job creation and livelihoods 
which addresses the key concerns of the 
community on kerkennah island
in 2013 we helped six people set up small 
or micro businesses through training 
and access to ﬁnance and more than 
120 people enrolled on our training for 
employment programme
we also continued a basic needs support 
programme for local schools and worked 
with the island’s nine ngos to build their 
capacity and support their work 
our corporate giving strategy
in 2013 the petrofac board endorsed a 
corporate giving strategy building on 
established activities in the sphere of 
education this focuses on initiatives that
 promote science technology engineering 
and mathematics stem education 
 improve access to education and 
employability for people from 
marginalised groups 
we are committed to supporting stem 
and in 2013 we continued to strengthen 
our relationship with the royal academy of 
engineering – putting our partnership on a 
new longterm footing 
we renewed our royal academy of 
engineering fellowship programme which 
has been in place since 2009 over the next 
four years this will provide a further 
18 places for graduate engineers to pursue 
a masters degree also included is the 
provision of additional learning and 
development opportunities including where 
possible a companysourced major project 
a mentor and a work placement
during the year we launched a new 
programme supporting the development 
of a national stem teacher network the 
‘connecting teachers programme’ aims to 
improve professional opportunities and real
life applications for the classroom through 
regional networking initially we sponsored 
the appointment of two teaching coordinators 
based in london and woking
our london and woking ofﬁces have also 
established inhouse mentoring programmes 
working with young people in schools mainly 
from underrepresented backgrounds 
petrofac’s mentors are all volunteers who 
want to make a difference to young peoples’ 
lives by helping them to develop personal 
and professional skills as well as being 
a rewarding experience for the mentors 
this helps students fulﬁl their aspirations 
by boosting their conﬁdence selfbelief 
and motivation
supporting employee fundraising
our employees also have the opportunity to 
make regular donations through their payroll 
and in 2013 petrofac donated us23088 in 
matched funding
similarly petrofac employees can choose 
to fundraise collectively in 2013 petrofac 
staff raised us99000 for the uae branch 
of the red crescent in aid of the philippines 
typhoon campaign
petrofac annual report and accounts 2013
63
1  one of our community meetings 
in mexico
2  we work with young people in 
our mentoring schemes in london 
and woking
in our concession areas in mexico 
petrofac is committed to spending 
1 of our total annual expenditure on 
sustainable development initiatives 
this constitutes a signiﬁcant opportunity 
for local communities to enhance their 
standard of living and for petrofac to build 
productive relationships 
to ensure successful development 
outcomes we are entering into strategic 
partnerships with local organisations to 
implement longterm projects an example 
is in our santuario concession in tabasco 
state in 2013 we signed an agreement with 
the national research institution for forestry 
agriculture and livestock inifap to 
conduct a longterm programme in support 
of farmers 
one area of support is for cocoa producers 
in recent years crops have been 
signiﬁcantly impacted by disease in some 
cases reducing yields to one tenth of their 
previous value in partnership with inifap  
we are providing technical assistance 
and agricultural supplies to hundreds of 
smallholder farmers covering 600 hectares 
within our concession area with a view to 
increasing yields and household income 
the project has a strong conservation 
element preventing additional deforestation 
of cocoa plantations as farmers have less 
incentive to plant other crops in response to 
declining yields we are also working with 
inifap on similar projects to support maize 
and livestock farmers 
1
2 we are committed to understanding 
and minimising the environmental  
impact of our global operations
petrofac has always been aware of the 
environmental implications of its business 
and over the past several years we have 
introduced progressively stricter controls 
as we enter new geographies and more 
remote locations environmental protection 
becomes an even more important 
management consideration
a disciplined approach to data 
collection and assurance
in 2013 we worked harder to ensure that the 
entire petrofac group has a complete and 
consistent understanding of its environmental 
impact we have therefore been reﬁning our 
data management systems to ensure that 
each service line has a clear understanding of 
the standards under which they are expected 
to operate
with regards to our greenhouse gas emissions 
we are fully compliant with the requirements of 
the uk companies act 2006 strategic report 
and directors’ reports regulations 2013 
which the company has complied with on a 
voluntary basis in 2013 we commissioned 
ricardoaea a qualiﬁed independent party 
to assure and validate our greenhouse gas 
emissions data collection processes
to provide an accurate estimate we have 
adopted the following principles
 our emissions data is calculated in line 
with the principles of the greenhouse 
gas protocol corporate accounting and 
reporting standard produced by the world 
resources institute and the world business 
council for sustainable development – a 
globally recognised standard
 greenhouse gas emissions and our 
corporate carbon footprint report are 
based on
 – for fuels and electricity use – emission 
factors from the uk department for the 
environment food and rural affairs 
defra 
 – for gas ﬂaring – the american petroleum 
institute’s sangea methodology
 for those operations that are jointly owned 
we use an equity share approach to 
account for emissions
 those operations that are wholly controlled 
by third parties are excluded from 
our reporting
 all petrofac operational sites are included in 
this report with the exception of our three 
new nigerian sites which were excluded as 
they had not commenced operations
in addition to greenhouse gas emissions 
data we collect data on the waste that leaves 
our facilities which is typically segregated 
measured and reported by category
as well as calculating our own emissions 
we also monitor and report on air emission 
data to our clients for the facilities we 
manage on their behalf in the case of our 
north sea operations our monitoring meets 
the stringent standards of the osloparis 
convention in accordance with the european 
environmental emissions monitoring system 
we measure
 all discharges of hydrocarbons heavy metal 
and radiation contamination
 all air emissions of sulphur dioxide nitrogen 
oxides and volatile organic carbons
our environmental data collection and analysis 
enables us to monitor and improve on our 
energy use and waste management which 
helps to minimise our related environmental 
impact it is also made available to various 
stakeholders to demonstrate that we 
comply with all related requirements and 
show that petrofac is fully committed to 
environmental protection
following its review ricardoaea concluded 
that we have made good progress in 
calculating our carbon footprint and have set 
up credible processes for collating data and 
calculating emissions
our emissions performance
we have seen an increase in our carbon 
footprint from past years we attribute a 
signiﬁcant portion of the increase in emissions 
to the addition of the berantai and west 
desaru fpsos our operations including 
our share of joint ventures but excluding 
customerowned facilities emitted 284636 
tonnes of co 2e in 2013 up from 201675 
tonnes of co 2e in 2012 these are direct 
emissions scope 1 253101 tco 2e and 
scope 2 31534 tco 2e
the carbon disclosure project cdp provides a 
global disclosure system for companies to report 
their environmental impacts and strategies in 
respect of greenhouse gas emissions 
petrofac continues to support the cdp and we 
received an improved score for 2013 achieving 
a rate of 77 for disclosure and band b for 
performance given that more than half of 
reporting companies are rated in band c or 
lower it is clear that petrofac is outperforming 
many of our peers
in 2013 we again participated in the uk 
government’s crc energy efﬁciency 
scheme we are registered for phase 2 of this 
scheme and our ukbased assets complied 
with all of the related criteria 
in 2013 we reported on a small number of 
environmental incidents
 fifteen incidents of hydrocarbons spilled to 
land four of these were classiﬁed as minor 
involving less than 10 litres the remaining 
11 were classiﬁed as medium and involved 
spillages of between 10 and 600 litres
 two incidents of hydrocarbons released to 
water one of these was classiﬁed as minor 
involving less than 10 litres the other 
incident which involved one of our 
subcontractor’s vehicles and took place at 
the sfax ferry terminal in tunisia resulted 
in a spillage of around 38800 litres of 
condensate which dispersed naturally this 
was classiﬁed as major
284636 tco
2
e
tonnes of carbon emissions generated
2013 2012 2011 2010 2009
202
227
214
208
285
27 
petrofac locations participated 
in environment month
as a condition of the mandatory reporting requirement of the 
companies act 2006 petrofac must report its emissions in its 
annual report against an intensity metric that is representative 
of its business activities the intensity ration for 2013 is 4497 
tco2e per million us revenue we have chosen to use “tonnes
million us revenue” as this metric is the most representative 
across the entire business
petrofac annual report and accounts 2013
64
strategic report
corporate responsibility continued
environmental protection in each case the appropriate spillresponse 
measures were implemented and a full 
investigation was conducted
during the year no ﬁnes or penalties were 
imposed on petrofac as a result of any 
environmental incidents or noncompliance 
with any environmental regulations
focusing on energy efﬁciency
to raise awareness of environmental issues 
among our employees we hold an annual 
petrofac environmental month
in recent years the focus has been energy 
efﬁciency we invited all of our employees 
to suggest creative ways of improving our 
energy efﬁciency and in 2013 a record 
number of 27 petrofac locations participated 
in the programme
this initiative helps to secure progressive 
improvements in our energy efﬁciency 
this year for example it directly led to a 10 
decrease in electricity consumption in our 
romanian operations and a 12 reduction 
in our diesel fuel consumption in mexico
meanwhile at our al khan ofﬁces in sharjah 
we implemented daily reviews of our energy 
consumption this secured a further 3 
increase in savings in addition to an 18 
saving in 2012 and a reduction of almost 
25 in 2011
tracking waste management 
and recycling
we monitor and report on waste and 
recycling levels across all of our projects 
and encourage locally based employees to 
pursue initiatives that are appropriate to their 
particular circumstances
for example
 our sharjah ofﬁces have been implementing 
responsible waste management initiatives 
for the past seven years since 2006 some 
358 tonnes of waste paper and six tonnes of 
plastic have been recycled petrofac sharjah 
is also an active member of the arab forum 
for environment and development and 
supports the emirates environmental group 
– and has won the group’s annual waste 
management award on several occasions 
 during 2013 our bridge view ofﬁces 
in aberdeen increased their recycling 
rate to 61 compared to 55 in 2012 
meanwhile the amount of waste sent to 
landﬁll fell by more than 20 from 187 
to 149 tonnes
biodiversity and 
water management
through our stakeholder engagement 
programmes it has become clear that 
biodiversity and water management are 
areas of interest and concern for several 
of our stakeholder groups
we can demonstrate that across the group 
as a whole petrofac’s operations have a 
minimal negative impact but wherever these 
issues are relevant we do take appropriate 
precautions and countermeasures 
for example
 for the construction and development of 
the shetland gas plant we have worked 
closely with our customer total and the 
scottish environment protection agency to 
protect indigenous wildlife and maintain the 
quality of watercourses and coastal waters 
see the case study opposite
 in arid and desert climates we take 
particular care to minimise our use of water 
for example the design of our sharjah 
ofﬁces incorporates a greywater harvesting 
system enabling this water to be reused
greater consistency planned 
for 2014 and beyond
in 2014 we plan to develop a new group 
environmental framework this will bring more 
rigour to our existing standards and ensure 
that all petrofac operations and facilities take a 
consistent approach
building on our recent data collection and 
quality initiatives we will also implement a new 
group environmental data reporting guide 
again this will bring greater consistency to the 
group enable us to compare the respective 
performance of our operations and help us 
to manage and minimise our environmental 
impact to ensure that we operate to the 
most stringent standards we will also seek 
independent veriﬁcation of our reported data
learning from recent instances of 
hydrocarbon spills we will further tighten 
our spill response procedures and use 
a compliance strategy to assess the 
preparedness and capability of petrofac 
and our subcontractors
petrofac annual report and accounts 2013
65
home to three national nature 
reserves and more than 80 sites 
of special scientiﬁc interest the 
shetland environment is one of the 
rarest and richest in the world so 
when we were awarded a £500 million 
contract to plan and develop the new 
laggantormore shetland gas plant 
environmental management was a 
prime consideration
based on thorough surveys of the site 
we gained a clear understanding of the 
indigenous wildlife and planned accordingly 
– scheduling work to avoid breeding 
seasons changing the paths or roads and 
fence lines and establishing exclusion zones 
to keep people and equipment away from 
sensitive areas
meanwhile a dedicated water management 
team ensures that runoff water from the 
construction site remains clear clean and 
siltfree a sophisticated ‘siltbuster’ system 
has processed around 500 million litres of 
water outﬂow water is tested three times 
daily to verify its quality
the rapid return of eurasian otters to the 
completed pipeline sites is evidence of 
the success petrofac annual report and accounts 2013
66
governance
corporate governance report
norman murray
chairman of the board dear shareholder
i am pleased once again to present the 
company’s corporate governance report 
allowing me the opportunity to outline our 
objectives to achieving and maintaining the 
highest standards of governance i believe that 
our governance framework is evident across 
the group and throughout this report you will 
see examples of how we are endeavouring 
to attain our corporate goals and sustain our 
core values with our continuing commitment 
to ongoing shareholder engagement and 
the improvement and development of 
good governance behaviours i have every 
conﬁdence that we can build on our work 
to date to ensure that the interests of the 
directors as stewards of the company 
are aligned with those of investors and 
other stakeholders 
what is our approach 
to governance
as a jersey incorporated company with 
a premium listing on the london stock 
exchange petrofac is required to report 
against the uk corporate governance 
code uk code the uk code sets out the 
standards of good practice in relation to board 
leadership and effectiveness accountability 
remuneration and relations with shareholders 
this report including the reports from 
the nominations audit board risk and 
remuneration committees describes how 
the company has applied all of the principles 
set out in sections a to e of the uk code 
during the period under review 
the uk code also introduced the obligation 
for the board to acknowledge its responsibility 
for ensuring the annual report when taken as 
a whole is fair balanced and understandable 
so that shareholders are provided with the 
necessary information to assess company 
performance and strategy the company’s 
auditors ernst  young llp ernst  young 
are required to review whether or not the 
corporate governance report reﬂects the 
company’s compliance with the provisions 
of the uk code speciﬁed for their review by 
the listing rules of the uk listing authority 
and to report if it does not reﬂect such 
compliance no such report has been made 
copies of the uk code are publicly available 
at wwwfrcorguk
how have we responded to recent 
governance developments
over the last few years numerous reviews 
consultations and regulations have been 
delivered and introduced both in the uk and 
across europe with the aim of developing 
governance at both a corporate and national 
level while on occasion the number 
and extent of the changes has felt a little 
overwhelming we believe that the general 
trend is correct and that the majority of 
changes should help to promote greater 
accountability and enhanced disclosure 
within the company we have been actively 
involved with and responded to a number 
of these consultations which we hope will 
help shape future regulation and legislation 
during 2013 we concentrated on developing 
our response to the new directors’ 
remuneration regulations and to that end 
continued to participate in the financial 
reporting council frc reporting lab 
in addition we followed recent developments 
in relation to the role and reporting 
requirements of audit committees as set out 
by the frc and lord sharman’s report on 
risk and going concern after such an intense 
period of governance developments we hope 
that companies will now be given a sustained 
period to embed the recent changes 
as chairman i take responsibility for providing 
our board with the opportunity to consider all 
governance developments and for ensuring 
that the directors receive appropriate training 
on relevant issues 
in october 2013 two new pieces of legislation 
for uk incorporated companies to report 
on company strategy and on directors’ 
remuneration came into force as a jersey 
incorporated company this new legislation 
does not apply to petrofac however as 
you will see on pages 1 to 65 and pages 
92 to 113 where practicable we have 
endeavoured to comply with these changes 
and have voluntarily taken the opportunity 
to structure our remuneration report in 
alignment with companies incorporated in the 
uk further information on the disclosures 
required by and our compliance with the new 
directors’ remuneration regulations are set out 
within the remuneration report on page 93 
i have every 
conﬁdence 
that we can 
build on our 
work to date 
to ensure that 
the interests 
of the 
directors as 
stewards of 
the company 
are aligned 
with those 
of investors
 petrofac annual report and accounts 2013
67 1 norman murray
nonexecutive chairman
appointed march 2011 and as chairman 
in may 2011
committees chairman of the 
nominations committee
key strengths widereaching board 
ﬁnancial and commercial experience 
having served on various company 
boards as both director and chairman 
deep understanding of governance and 
regulatory matters gained in entrepreneurial 
environments and in energy markets
experience prior to his portfolio career 
norman spent 25 years in the private 
equity industry he cofounded morgan 
grenfell private equity limited and was 
also a director of morgan grenfell asset 
management limited until june 2011 
he was chairman of cairn energy plc 
having served on that board for 12 years 
in february 2012 norman stepped down 
as a nonexecutive director of robert 
wiseman dairies plc he then stepped 
down from the board of greene king plc in 
december 2012 in 2013 norman became 
nonexecutive chairman of the edrington 
group limited and was appointed 
chairman of scottish ballet norman is 
a former chairman of the british venture 
capital association and a past president 
of the institute of chartered accountants 
of scotland
external appointments nonexecutive 
chairman of the edrington group limited 
and chairman of scottish ballet
2 ayman asfari
group chief executive
appointed january 2002
committees member of the 
nominations committee
key strengths distinguished record 
with strong operational leadership skills 
clear strategic vision entrepreneurial 
track record international focus 
extensive business development skills 
wealth of oil industry knowledge
experience ayman joined the group in 
1991 to establish petrofac international 
of which he was ceo he has more 
than 30 years’ experience in the oil and 
gas industry having formerly worked as 
managing director of a major civil and 
mechanical construction business in oman
external appointments member of the 
board of trustees of the american university 
of beirut founder and chairman of the 
asfari foundation and serves on the 
chatham house panel of senior advisors
3 marwan chedid
chief executive engineering 
construction operations  
maintenance
appointed january 2012
committees none
key strengths thorough knowledge of 
the oil and gas sector and contracting 
environments solid commercial 
operational and engineering experience 
excellent understanding of growing 
a business
experience marwan joined petrofac 
in 1992 when the business was ﬁrst 
established in sharjah having previously 
worked for ccc a major contracting 
company based in the gulf and the middle 
east for eight years in 2007 he was 
appointed chief operating ofﬁcer of the 
engineering  construction international 
business with daytoday responsibility for 
the successful delivery of overall operations 
in january 2009 he became managing 
director of engineering  construction 
ventures before being appointed as 
chief executive ecom with effect from 
1 january 2012
external appointments member of 
the board of trustees of the university 
of balamand
4 tim weller
chief financial officer
appointed october 2011
committees none
key strengths wideranging 
ﬁnancial management experience 
strategic and ﬁnancial planning 
cost control and capital efﬁciencies 
external stakeholder communications 
and management experience of major 
systems implementation
experience tim joined petrofac in 
september 2011 from cable  wireless 
worldwide where he had been chief 
ﬁnancial ofﬁcer between may 2010 and july 
2011 a fellow of the institute of chartered 
accountants in england and wales with a 
degree in engineering science he started 
his career with kpmg in london becoming 
a partner in kpmg’s infrastructure business 
unit until may 2010 he was chief ﬁnancial 
ofﬁcer at united utilities group plc and 
had previously held chief ﬁnancial ofﬁcer 
roles with rwe thames water limited and 
innogy holdings plc now rwe npower 
holdings plc in march 2013 tim stepped 
down as a nonexecutive director of bbc 
worldwide and in april 2013 was appointed 
a nonexecutive director of g4s plc 
external appointments nonexecutive 
director of the carbon trust and g4s plc 
5 andy inglis
chief executive  
integrated energy services
appointed march 2011
committees none
key strengths strategic understanding 
and technical knowledge of the oil and gas 
industry proven operational leadership 
and signiﬁcant board and executive 
management experience
experience andy joined petrofac in 
january 2011 having spent 30 years with 
bp latterly as ceo of its exploration and 
production business he was an executive 
director on the bp plc board between 
2007 and 2010 he started his bp career 
as a project engineer on various north 
sea projects followed by commercial and 
operating roles in bp’s upstream business 
he became executive vice president and 
deputy chief executive of bp exploration 
 production in 2004 he is a former non
executive director of bae systems plc 
andy will leave the company and step 
down from the board on 28 february 2014
external appointments none
6 thomas thune andersen
nonexecutive director
appointed may 2010 
committees chairman of the 
remuneration committee member 
of the audit board risk and 
nominations committees
key strengths wideranging international 
experience broad knowledge of energy 
industry and markets proven track 
record executing growth strategies and 
mobilising and developing organisations 
hse experience extensive knowledge 
at board and senior management level 
from both an executive and non
executive standpoint
experience thomas spent 32 years at 
the ap møllermærsk group with an 
international career ending as ceo and 
president of mærsk’s oil and gas company 
he also served on mærsk’s main board and 
its executive committee from 2005 to 2009 
since 2009 thomas has a board portfolio 
in companies in the energy and critical 
infrastructure sectors
external appointments chairman of the 
lloyd’s register group and chairman 
of the board of trustees for the lloyds 
foundation chairman of deepocean 
group vice chairman of vkr holding 
and a nonexecutive director of sse plc
petrofac annual report and accounts 2013
68
governance
directors’ information
1 2
5 3
4
6 7 stefano cao
nonexecutive director
appointed may 2010
committees chairman of the board risk 
committee member of the remuneration 
and nominations committees
key strengths strong international business 
experience broad knowledge of energy 
industry signiﬁcant knowledge of technical 
and commercial activities both as operator 
and contractor
experience stefano has 32 years’ 
experience in the oil and gas industry 
from february 2009 to july 2012 he 
served as ceo of sintonia sa a holding 
company owning infrastructure assets 
including toll roads airports and telecoms 
from 2000 to 2008 stefano was chief 
operating ofﬁcer of eni’s exploration  
production division before which he spent 
24 years at saipem spa the international 
oil and gas services group holding such 
senior roles as ceo chairman and chief 
operating ofﬁcer in 2013 stefano joined the 
advisory board of ambienta sgr an sme 
investment company which targets the 
environmental sector and was appointed 
chairman of spig spa a company 
selling worldwide cooling towers and air 
cooled condensers
external appointments director of the 
management board of a2a spa and a 
director of the boards of autostrade per 
l’italia spa and aeroporti di roma spa 
member of the advisory board of ambienta 
sgr and chairman of spig spa
8 roxanne decyk
nonexecutive director
appointed march 2011
committees member of the remuneration 
nominations and board risk committees
key strengths strong track record in global 
and international government relations 
extensive experience in the energy 
industry and experience leading strategy 
in several industries communications 
sales and marketing knowledge including 
reputation and brand management 
expertise sustainable development 
knowledge broad international human 
resources knowledge
experience roxanne retired from the 
royal dutch shell group in december 2010 
having held a number of roles including 
head of global government affairs and 
corporate affairs director over a period of 
11 years she was a member of shell’s 
executive committee from 2005 to 2009 
prior to joining shell roxanne had various 
roles at amoco corporation and navistar 
international corporation in 2013 roxanne 
was appointed a director of ensco plc
external appointments independent 
director of snapon incorporated alliant 
techsystems inc and ensco inc
9 kathleen hogenson
nonexecutive director
appointed august 2013
committees member of the audit board 
risk and nominations committees
key strengths 30 years’ experience in 
the oil and gas industry with particular 
expertise in reservoir management 
and subsurface engineering 
extensive commercial and strategic 
knowledge and proven operational 
leadership entrepreneurial track record 
and excellent understanding of growing 
a business 
experience kathleen is the president and 
ceo of zone energy llc a company 
she founded in 2009 which focuses 
on the acquisition and development 
of oil and gas properties she was 
the ceo of santos usa corporation 
from 2001 and 2007 responsible for 
santos americas and europe prior to 
this kathleen held a number of senior 
roles at unocal corporation and maxus 
energy corporation 
external appointments president and 
ceo of zone energy llc member of the 
advisory board of samsung oil  gas 
usa corporation a director on the board 
of parallel petroleum llc trustee of the 
society of exploration geophysicists 
10 rené médori
nonexecutive director
appointed january 2012
committees chairman of the audit 
committee member of the board risk and 
nominations committees
key strengths extensive and current 
international ﬁnancial experience well
established knowledge of governance and 
regulatory matters good understanding 
of operational and strategic management 
experience of balance sheet strengthening 
opportunities and the whole range of 
ﬁnancing arrangements
experience rené is ﬁnance director of 
anglo american plc a position he has 
held since september 2005 he was 
group ﬁnance director of the boc group 
plc between june 2000 and may 2005 
having held several ﬁnance appointments 
including as ﬁnance director of boc’s 
gases business in the americas from 1997 
rené stepped down as a nonexecutive 
director of sse plc in june 2012
external appointments executive 
director of anglo american plc non
executive director of de beers and anglo 
platinum limited
11 rijnhard van tets
nonexecutive director
appointed may 2007 and as senior 
independent director from may 2011
committees member of the audit 
nominations and board risk committees
key strengths extensive ﬁnancial 
background with solid international board 
and senior management experience 
achieved from serving on various 
company boards and advisory trusts 
excellent experience of governance and 
audit committees
experience rijnhard is general partner of 
laaken asset management nv he advised 
the managing board of abn amro 
between 2002 and 2007 having previously 
served as a managing board member for 
12 years at abn amro his roles included 
that of chairman of the wholesale clients 
and investment banking group
external appointments nonexecutive 
chairman of arcadis nv euronext 
amsterdam nv and euronext nv and non
executive director of nyse euronext inc 
and bnp paribas obam nv
12 mary hitchon
secretary to the board
appointed october 2005
experience mary joined petrofac shortly 
after ipo and has responsibility for the 
group’s governance and listing rule 
compliance framework she is secretary 
to the board and its committees 
mary is a fellow of the institute of chartered 
secretaries with 20 years’ experience in a 
uk listed environment having previously 
worked at tbi plc the axa group and 
savills plc
petrofac annual report and accounts 2013
69
7 9
10
11
12 8 leadership
what should our board be doing
while the board has a schedule of matters 
reserved to it for formal decision a copy 
of which is available on our website we 
recognise that there are a number of key 
topics for which all boards should take 
responsibility this year we set out opposite 
how we believe either directly or through our 
committees we have concentrated on these 
topics with due regard to our key values
focus of 2013 
 increased focus on health safety and 
security matters
 approval of deepwater epci strategy 
including approval of vessel investment
 approval and successful launch of 
inaugural bond issue
 refreshed committee structures
objectivespriorities for 2014
 renewed focus on succession planning
 delivery of deepwater epci strategy
 increased review and monitoring of 
key risks across the group and risk 
assurance oversight
 crisis management
 it oversight
board achievements during 2013
petrofac annual report and accounts 2013
70
governance
corporate governance report continued
the board is guided by 
the company’s values and 
while not exhaustive we 
describe some of our key 
highlights for 2013 and how 
they demonstrate the board 
living our values
responsive
driven
to deliver
quality and
cost conscious
safe
innovative
ethical petrofac annual report and accounts 2013
71
safe
whilst the board has responsibility for 
reviewing our health safety security 
environment integrity and assurance 
hsseia policy this did not change in 2013 
having been reviewed in detail in 2012
the board was however actively engaged 
in living the ﬁrst of our values
 it received regular updates from our 
group director of hsseia on safety 
covering general trends as well as speciﬁc 
incidents including fatalities and high 
potential incidents
 it approved the hsseia plan for 2013
 it monitored the evacuation of employees 
from the in salah southern ﬁelds development 
in algeria 
 the board risk committee received detailed 
reports and presentations on integrity 
assurance and process safety
quality and cost conscious
we take pride in what we do we want to 
do it well and cost effectively so that we are 
differentiated from our competitors the 
board monitors the group’s performance 
in the following ways
 ayman asfari provides the board with 
a detailed report which focuses on our 
operational delivery allowing the board 
to monitor and measure progress at 
every meeting
 the board regularly monitors the group’s 
ﬁnancial performance and approves all 
scheduled releases to the market
 our risk governance framework seeks to 
safeguard execution excellence with due 
regard for cost
 our fit for 2015 programme has been 
driven by a desire to deliver ‘better for less’ 
in everything we do
responsive
we seek to understand our customers so that 
we can develop our strategy in response to 
their evolving needs 
the board spent 36 of its meeting time 
considering strategic matters during the year 
delivering the petrofac jsd6000 vessel on 
budget and on schedule will be a prime focus 
going forward and evidence of the board 
delivering its strategy in response to an 
identiﬁed customer demand
the group’s shape continues to change and 
ensuring we have the right funding in place is a 
further example of the board responding to the 
business’s changing needs our successful 
inaugural bond issue was a direct response 
to this challenge
innovative
it is in our nature to think differently to 
proactively challenge convention and seek 
out new ways to add value 
our innovative philosophy has driven our plans 
to develop our deepwater epci strategy which 
is allowing us to build a differentiated top tier 
offshore business the board gave its approval 
to develop our epci strategy at the start of the 
year and provided further approval for the 
investment in the specialist vessel towards the 
end of the year
ethical
as a company we aspire to the highest 
standards of ethical behaviour our updated 
code of conduct which is founded on our 
core values and governs how we work was 
rolled out across the group during the year 
the aim of this document which is available 
on our website is to set out our expectations 
of everyone who works for and with petrofac 
and to help us ensure we continue to do the 
right thing for our employees customers 
suppliers communities and the environment 
in which we operate
as a board we have continued to focus on 
ethical matters through the introduction and 
roll out of our diversity and inclusion policy 
across the group and the implementation of a 
social impacts standard
driven to deliver
petrofac has a relentless focus on delivery 
with the aim of meeting and exceeding our 
customers’ expectations some of the 
transactions which have been previously 
approved and announced during the year are
 the award of a us37 billion contract in april 
by zakum development company zadco
 the entry in june of petrofac emirates into 
two epc contracts for the development of 
projects in abu dhabi at us187 million and 
us500 million respectively
 the increase of the company’s economic 
interest in petrofac emirates to 75
 the award of a us95 million contract on 
the badra oil ﬁeld in iraq
 the entry into a partnership with bonatti 
in october to execute an epc contract 
for sonatrach to extend the life of the 
alrar gas ﬁeld in algeria valued at around 
us650 million
 the award of a us21 billion epc contract 
jointly with daelim industrial co ltd located 
in the sohar industrial area oman who is on our board
kathleen hogenson was appointed in august 
2013 and maroun semaan retired at the end 
of december 2013 andy inglis will leave the 
company and step down from the board on 
28 february 2014 accordingly at the date 
of this report we have 11 directors on the 
board comprising myself as chairman six 
nonexecutive directors and four executive 
directors as set out in the table below 
name position nationality
norman  
murray
chairman
rijnhard  
van tets
senior independent 
director
thomas thune 
andersen
nonexecutive 
director
stefano cao
nonexecutive 
director
roxanne decyk
nonexecutive 
director
kathleen 
hogenson
1
nonexecutive 
director
rené médori
nonexecutive 
director
ayman asfari
2
group chief 
executive
marwan chedid
chief executive 
ecom
andy inglis
3
chief executive  
ies
tim weller
chief financial 
ofﬁcer
1 ms hogenson was appointed on 1 august 2013
2 mr asfari is a british citizen however he is syrian born and 
has dual nationality
3 mr inglis will leave the company and step down from the 
board on 28 february 2014
full biographies of each of our directors in 
ofﬁce at year end are shown on pages 68 and 
69 those biographies for directors standing 
for election or reelection are also included in 
the notice of meeting all our nonexecutive 
directors are independent in judgement and 
character each was appointed through an 
impartial recruitment process and none has 
any other connection with the company 
all our directors are required to disclose to our 
board any potential conﬂict for consideration 
and i am not aware of any relationship or 
circumstance which is likely to prejudice or 
could appear to prejudice the judgement of 
any director
we have made considerable efforts to build a 
board with the right balance of skills diversity 
and industry expertise you will see that our 
directors are drawn from across the world 
and have varied career histories with no 
single type of person dominating the board 
we are fortunate in that many of our directors 
bring a great deal of experience in the oil and 
gas industry both in lumpsum contracting 
and subsurface exploration and production 
we believe this is essential to safeguard 
the longterm interests of our shareholders 
the additional strengths brought to the board 
by each director are detailed further on pages 
68 and 69 
how is the board structured
as a jersey incorporated company our board 
is unitary in nature this means that all our 
directors share equal responsibility for 
decisions taken executive and nonexecutive 
directors need to be able to work together in 
an atmosphere of openness trust and mutual 
respect it is therefore important that all 
directors see the chairman as a fair and 
impartial individual my relationships with the 
group chief executive and the senior 
independent director are of particular 
importance as these two individuals 
represent the views of management and 
nonexecutive directors respectively i believe 
that an effective working relationship between 
each of our directors provides a robust 
framework which is essential for the 
progression of the company’s strategic aims 
i hold regular private meetings with ayman 
and we will often discuss matters before and 
after they are considered at board meetings 
in order that we can reach a mutual 
understanding of each other’s views 
especially in matters where we may not initially 
be in agreement i also hold private meetings 
and maintain regular contact with rijnhard 
between our scheduled board meetings 
and believe that i am equally informed 
about the views of both management and 
nonexecutive directors 
in addition i set aside time during some board 
meetings to see the nonexecutive directors 
separately each of these meetings provides 
insight which assists me in two ways i am 
better able to set the agenda for our board 
meetings and i can ensure that all directors 
contribute at our meetings through their 
individual and collective experience challenge 
and support 
the board is assisted by four committees 
as set out in the diagram opposite 
each committee is responsible for 
reviewing and overseeing activities within 
its particular terms of reference copies 
of which are available on the company’s 
website wwwpetrofaccom at each 
scheduled board meeting the chairman 
of each committee provides a summary 
of any committee meeting held since the 
previous board meeting and the minutes of 
all committee meetings are circulated to the 
board individual reports from each committee 
chairman for 2013 are provided on pages 80 
to 113 
in addition to the four board committees 
there are a number of executive management 
committees involved in the daytoday 
operational management of petrofac which 
have been established to consider various 
issues and matters for recommendation to the 
board and its committees as set out in the 
diagram opposite 
petrofac annual report and accounts 2013
72
governance
corporate governance report continued management of the group daytoday operational
board level committees
responsible for decisions of a strategic or substantive nature
remuneration 
committee 
agrees remuneration policy and 
sets individual compensation 
levels for members of 
senior management
board risk  
committee 
oversees the group’s risk 
management and internal 
control processes for non
ﬁnancial matters
nominations  
committee 
takes primary responsibility 
for succession planning 
boarddirector selection 
and board composition
audit  
committee 
monitors the integrity of the 
company’s ﬁnancial statements 
and reviews ﬁnancial and 
regulatory compliance 
and controls 
board
executive 
committee
chief executive 
committee
guarantee 
committee
disclosure 
committee
treasury 
committee
group risk 
committee
management level committees
responsible for the communication and implementation of decisions administrative matters 
and matters for recommendation to the board and its committees
corporate structureframework
petrofac annual report and accounts 2013
73
shareholders 
elect the  
external auditors
elect the 
directors
ongoing dialogue
engagement
committee report
pages 80 to 81
committee report
pages 92 to 113
committee report
pages 86 to 91
committee report
pages 82 to 85 how is our board organised
as recommended by the uk code 
ayman and i have clearly deﬁned areas 
of responsibility and these are set out in 
writing as chairman i see my role as 
one which ensures that the board both 
challenges and supports management i am 
also responsible for leading the board and 
ensuring its effectiveness ayman asfari as our 
group chief executive is responsible for the 
implementation and execution of strategy and 
the daytoday management of the group 
he is supported by his senior management 
team whose details are outlined on pages 
6 and 7  rijnhard van tets is our senior 
independent director a position he assumed 
in may 2011 he is available to shareholders 
to answer any questions which cannot be 
addressed by me or ayman 
our secretary to the board mary hitchon 
is responsible to the board one of her key 
roles is to advise me on governance matters 
so that i can enhance the governance and 
effectiveness of the board the committees 
and our individual directors which she does 
with an understanding of the business 
professionalism and integrity
the responsibilities for the roles of the group 
chief executive chairman and that of the 
senior independent director and secretary 
to the board are shown in the table below
chairman 
 lead the board
 ensure effective communication 
with shareholders
 ensure effective communication ﬂows 
between directors
 facilitate the effective contribution of 
all directors
 ensure effective board governance 
senior independent director 
 acts as a sounding board and conﬁdante to 
the chairman
 acts as intermediary for other 
independent directors
 available to shareholders to answer 
questions which cannot be addressed by 
chairman or group chief executive
 will chair the board if chairman is 
unavailable and will chair the nominations 
committee when considering succession to 
the role of chairman of the board
 will meet with other directors to appraise the 
chairman’s performance and on such other 
occasions as deemed appropriate
group chief executive 
 implement strategy and objectives
 develop manageable goals and priorities
 lead and motivate the management teams
 develop proposals to present to the board 
on all areas reserved for its judgement
 develop group policies for approval by the 
board and ensure implementation
secretary to the board
 acts as secretary to all board committees
 assists in and coordinates the board 
evaluation process
 ensures the board is kept informed and 
is consulted on all matters reserved to it 
and that papers and other information are 
delivered in a timely fashion
 ensures the board is kept informed on 
governance matters providing advice 
through the chairman
 available to individual directors in respect 
of board procedures and provides general 
support and advice
effective division of responsibilities
petrofac annual report and accounts 2013
74
governance
corporate governance report continued
as at the date of this report
less than one year 1
12 years 2
34 years 2
23 years 4
board tenure
five years or more 2
nonexecutive
chairman 1
nonexecutive
directors 6
executive and nonexecutive 
director balance
executive directors 4
middle east 1
us 2
continental 
europe 4
nationality of board members
uk 4
female 2
gender split of board members
male 9 who attends board meetings
as well as directors and the secretary to the 
board on occasion guests from operational 
and functional management are invited to 
attend board meetings during 2013 updates 
were provided from operational management 
one and two tiers below director level as 
well as from the functional heads of hsseia 
hr it risk security compliance group 
tax external affairs and strategy we believe 
this interaction helps directors gain a deeper 
understanding of the company and allows 
them to get to know its senior management 
thus enhancing their understanding of the 
business and the implementation of strategy 
and making for more effective and lively board 
meetings we also consider that giving senior 
management the opportunity to present to 
the board and meet the directors informally is 
invaluable for their personal development
how often does our board meet
the board meets facetoface at least 
six times a year at scheduled meetings 
in addition the board meets on an ad hoc 
telephonic basis when items of business 
arise which cannot be held over until the next 
planned meeting scheduled meetings are 
generally held over a twoday period though 
at least two of these meetings are longer as 
during our annual programme of events we 
also hold dedicated strategy days as well as a 
site visit committee meetings are held prior to 
board meetings 
where does our board meet
petrofac limited was incorporated in jersey 
under the companies jersey law 1991 
and although we hold our board meetings 
at a variety of locations most are held in 
jersey every year one of our six scheduled 
meetings is held in sharjah uae being the 
location of our largest ofﬁce and the centre 
of our onshore engineering  construction 
business while in sharjah in 2013 the board 
took the opportunity to meet with and speak 
to a group of graduates as well as around 
50 members of our local management 
team every year we also hold one meeting 
in a location where petrofac has signiﬁcant 
business in october 2013 we visited 
singapore and malaysia further details of 
this visit can be found below meetings held 
outside of jersey allow the board to gain a 
better understanding of petrofac its people 
its customers its suppliers and partners 
in october the board held its board and 
committee meetings in singapore at the 
training centre on jurong island during the 
visit directors toured the facility received a 
presentation from local management on our 
ies and ecom businesses in singapore and 
southeast asia and had the opportunity 
to meet with a crosssection of employees 
thereby giving the board the opportunity 
to see each part of the business and help 
them to understand some of the challenges 
being faced 
the meetings were followed by a trip to 
the pasir gudang shipyard in malaysia 
hosted by our contractor malaysia marine 
and heavy engineering mmhe the board 
was able to see the ﬂoating production 
storage and ofﬂoading fpso vessel 
which is currently being refurbished prior 
to deployment on our cendor phase 2 
project over the course of this three
day trip as well as providing exposure to 
employees and suppliers the visit also 
gave directors the opportunity to meet 
with the senior management of our client 
petronas thus gaining an insight into any 
customer concerns 
petrofac annual report and accounts 2013
75
total number of meetings held during the year to 31 december 2013
physical board  
meetings attended
adhoc telephonic board 
meetings attended 
meetings usually held at 
short notice and 
attendance takes place 
outside of uk 
strategy days 
attended
norman murray¹
rijnhard van tets
thomas thune andersen
stefano cao
roxanne decyk
kathleen hogenson²
rené médori
ayman asfari
maroun semaan
marwan chedid
andy inglis
tim weller
1 chairman
2 kathleen hogenson was appointed on 1 august 2013
attended       not eligible to attend
details of director attendance during the year and eligibility to attend are set out in 
the below effectiveness
how do we get the best out of 
our board
we invest time and effort in appointing our 
directors and arranging board meetings to 
ensure we get the best out of our directors 
individually and the board as a whole i believe 
that the board must operate in an atmosphere 
of mutual trust and respect in order to be 
effective and i therefore encourage directors 
to be open and forthright in order to stimulate 
active debate within each meeting this allows 
for scrutiny and constructive challenge 
before any board decisions are taken as well 
as encouraging the right culture within the 
boardroom directors must be practically 
supported to enable them to engage fully with 
the company and allow them to make their 
best possible contribution i outline below 
some of the practical measures we take
information provided 
we adopt a tailored approach to developing 
our board agendas some items are brought 
to the board on the basis of a 6 or 12month 
rolling programme such as strategy the 
forthcoming year’s budget or hsseia plan 
while others such as the reports from the 
group chief executive and chief financial 
ofﬁcer are standing items generally though 
the majority of the agenda is comprised 
of nonrecurring items such as strategic 
matters or project speciﬁc and investment 
related opportunities we believe this allows 
our directors to engage more effectively 
and encourages constructive debate during 
each meeting
as recommended by the uk code and as 
part of our commitment to best practice 
we ensure papers are dispatched in a timely 
manner usually one week prior to each 
meeting papers are provided electronically 
through a dedicated secure application 
giving directors instant access to papers 
as well as to a useful resource bank of 
additional information when telephonic 
board meetings are held the secretary to 
the board ensures that papers are circulated 
electronically generally at least 24 hours prior 
to the meeting
our selection process 
the nominations committee is responsible 
for the recommendation of directors to our 
board and there is a formal rigorous and 
transparent selection procedure for the 
appointment of new directors board size and 
composition are considered very carefully 
to ensure the right balance of individuals 
taking into account experience and diversity 
in addition our directors are made aware 
of the need to allocate sufﬁcient time to the 
company to discharge their responsibilities 
effectively care is taken to establish the 
existing commitments of all nonexecutive 
directors particularly the chairman should a 
director’s external commitments change after 
appointment they are required to make me 
and the board aware as soon as practicable 
so that we can consider any potential conﬂict 
of interest time commitment challenge 
or residency status issue a report on the 
activities of the nominations committee is set 
out on page 80
director development and training 
while we do not run an extensive programme 
of ‘onesizeﬁts all’ training i encourage all 
directors to pursue an individually tailored 
development programme throughout the 
year comprising a mixture of formal seminars 
led by external advisors ofﬁce and site 
visits as well as governance and health and 
safety training a training workshop was 
provided to the board on process safety and 
asset integrity while members of the audit 
committee also attended individual sessions 
with our auditors in relation to the new 
governance requirements impacting overall 
reporting we maintain a training record for 
each director and this is reviewed during the 
evaluation process over the course of this 
year approximately 170 hours of training were 
recorded by the board 
what is our approach 
to shareholders 
reappointing directors
in line with the uk code all directors will 
seek appointment and reappointment by 
shareholders at the 2014 annual general 
meeting agm as also required the terms 
and conditions of appointment of all directors 
are available for inspection by any person 
at our registered ofﬁce in jersey and at our 
corporate services ofﬁce in london they are 
also made available for inspection during 
the 30 minutes prior to the start of our agm 
each year 
petrofac annual report and accounts 2013
76
governance
corporate governance report continued
our induction programme
kathleen hogenson joined the board in 
august 2013 and an individually tailored 
induction programme was provided as chief 
executive of her own company with 30 years’ 
experience in the oil and gas industry the 
focus for kathleen’s induction has been to 
increase her knowledge of petrofac and the 
uklisted company environment as well 
as prepare her for her role as a member 
of the audit board risk and nominations 
committees full details are set out below 
identiﬁed strengths
 entrepreneurial experience
 background in petroleum and 
reservoir engineering
 good subsurface experience and 
probabilistic assessment
focus areas
 to increase kathleen’s knowledge 
of petrofac especially relating to our 
ecom business and in particular 
epc contracting 
 to increase her understanding of the 
uklisted company environment and 
to provide any speciﬁc assistance in 
preparing for her role as a member of the 
board committees
induction programme
 as for all new appointments kathleen 
attended our compulsory presentation 
led by freshﬁelds on the role and 
responsibilities of a uklisted director
 in addition coordinating around 
scheduled board meetings arrangements 
were made for kathleen to visit our ofﬁces 
in london singapore and kuala lumpur 
as well as attending the site visit in 
malaysia with the full board these visits 
gave her the opportunity to meet senior 
operational management key functional 
heads of the group and new graduates
 a tailored visit to kuwait is scheduled for 
april 2014 evaluation of board effectiveness
the uk code requires me to conduct 
an annual evaluation of the board our 
committees and individual directors to 
establish whether or not the board is working 
effectively at the start of the year i conducted 
onetoone interviews with each director 
using a set of predeﬁned questions aiming 
to address the activities of the board and the 
committees each interview resulted in open 
conversations and discussions
rijnhard van tets conducted his own appraisal 
of me following a series of interviews with our 
executive and nonexecutive directors
following this evaluation process i can conﬁrm 
that the performance of each director was 
effective during the year and can conclude 
that the control and leadership required for a 
listed company is provided by the board as 
a whole 
at the end of the year we engaged the 
services of sheena crane limited to conduct 
an externally facilitated evaluation ms crane 
observed committee and board meetings in 
november and has subsequently undertaken 
onetoone interviews with each director 
in february 2014 ms crane provided 
feedback to me and to the board as a whole 
including my individual performance i am 
currently in the process of prioritising the 
proposed recommendations and will provide 
a full account next year 
issues identiﬁed in 2013 and how they are being addressed is shown below
outputs from evaluation
agreed action and areas of suggested 
improvement
succession planning over the last two years considerable time has been 
spent on the practicable application of succession 
planning both at board and at senior management 
level this work continues primarily within the 
nominations committee remit to establish effective 
succession plans and to ascertain those individuals 
who are ready for a new role now and those who 
require further development and training 
greater ﬁnancial detail requested to permit 
better consideration of the group’s capital 
demands future ﬁnancing plans and ﬁnancial 
structures
expanding the ﬁnancial information presented in the 
ﬁveyear plans to include downside scenarios and 
including sensitivities on future cash ﬂows within 
regular reports to provide greater insight and allow 
the board to focus on ﬁnancial planning in a more 
focused and concentrated way
crisis management the development of crisis management planning 
and the board’s role in such plans is seen as 
extremely important as a result of the crisis in 
algeria in january 2013 which resulted in the 
evacuation of our in salah site we feel better 
prepared for operational crises however speciﬁc 
and targeted training initiatives are planned
increase health and safety oversight consideration to be given to increasing the hse 
disclosures reported at each board meeting and 
further to provide more indepth presentations and 
deep dive sessions on speciﬁc hse matters on 
the signiﬁcant risks to the business in addition the 
group director of hsseia now attends all board 
meetings as a result of the three fatalities which 
occurred during 2013 board focus on hse matters 
remains high
overall risk oversight we have continued to develop metrics required to 
monitor our risk framework and the key areas of 
risk which affect the business membership of the 
board risk committee has also been expanded 
to include all nonexecutive directors to 
ensure greater board engagement a new 
risk management software package has also 
been introduced which allows the tracking and 
development of the company’s key risks and the 
development of effective reporting metrics
petrofac annual report and accounts 2013
77
how do we deal with potential 
conﬂicts of interest
as far as is possible the other directors 
and i endeavour to avoid conﬂicts of interest 
with the company however potential 
conﬂicts can occasionally arise during a 
term of appointment and accordingly we 
have processes and procedures in place 
that require directors to identify and declare 
any actual or potential conﬂicts of interest 
whether matterspeciﬁc or situational 
such notiﬁcations are required to be made 
by the director concerned prior to or at a 
board meeting and all directors have a duty 
to update the whole board of any changes 
in circumstances in accordance with the 
company’s articles of association the board 
may authorise potential conﬂicts which can be 
limited in scope during the year all conﬂict 
management procedures were adhered to 
and operated effectively 
do the directors have deeds 
of indemnity
all directors and ofﬁcers of petrofac limited 
are provided with deeds of indemnity in 
respect of liabilities which may be incurred as 
a result of their ofﬁce in accordance with our 
articles of association and to the maximum 
extent permitted by jersey law in addition 
petrofac has appropriate insurance coverage 
in respect of legal action which may be 
brought against the directors and its ofﬁcers 
neither the company’s indemnities nor 
insurance would provide any cover where a 
director or ofﬁcer was found to have acted 
fraudulently or dishonestly accountability 
how does our board formally 
satisfy itself that it has sound 
risk management and internal 
control systems
the board is responsible for reviewing the 
effectiveness of petrofac’s risk management 
and internal control systems including 
ﬁnancial operational and compliance 
controls the board currently considers this 
by reference to the work undertaken during 
the year by both the audit and board risk 
committees in addition to which the board 
also receives regular reports from members 
of management with responsibility for the 
group’s material enterprise risks 
to facilitate the yearend process the audit 
and board risk committees held a joint 
meeting in order to provide the board with 
a formal report on the effectiveness of the 
group’s ﬁnancial and regulatory controls 
and the effectiveness of the group’s risk 
management systems in relation to the 
group’s enterprise risks and project and 
investment risks this report allows the 
board to take a view on whether or not the 
group has sound risk management and 
internal control systems in place the board 
is satisﬁed that sound risk management and 
internal control systems have been in place 
across the group throughout 2013 and as at 
today’s date when the ﬁnancial statements 
were approved petrofac also seeks to have 
a sound system of internal control based 
on the group’s policies and guidelines in all 
material associates and joint ventures as with 
all companies our systems of internal control 
and risk management are designed to mitigate 
and manage rather than eliminate business 
risk and can only ever provide reasonable 
and not absolute assurance against material 
misstatement or loss
how does our board identify 
petrofac’s signiﬁcant risks
the board risk committee receives a 
key risk report krr which identiﬁes the 
principal risks facing the company and 
evaluates the likelihood of their incidence 
and their impact to the group if they were 
to materialise the committee assesses 
the availability and likely effectiveness of the 
actions that are planned to manage and 
mitigate these risks in order to avoid or reduce 
the impact of the underlying risk
in terms of process risks which appear in the 
krr are identiﬁed managed and reported 
at ﬁve primary levels within the group as 
set out in the diagram below at the lowest 
level level 5 we identify operational risks 
relevant geographical regional or portfolio 
exposures are introduced at level 4 risks to 
speciﬁc business service lines appear at 
level 3 tactical risks are introduced at 
divisional level and ﬁnally risks to the delivery 
of our strategy are identiﬁed and reviewed at 
level 1 – group level the krr consolidates 
these exposures which include all of the key 
risks identiﬁed on pages 28 to 31
 
group
division
business service line
geographical region
operations 
individual projects and assets
the process of identiﬁcation is both topdown 
and bottomup so that management are 
able to review and challenge at each level in 
addition to which management at all levels 
of the hierarchy review and treat the risks for 
which they are organisationally responsible
does our board receive 
information which allows it to 
identify when delivery of its goals 
are under threat
as detailed on pages 8 to 51 petrofac has 
a clear strategy and business plan with 
three growth priorities designed to increase 
shareholder value over the medium to 
long term i geographic expansion ii ies 
growth and iii building the offshore epci 
business in addition to which the ﬁveyear 
business plans submitted to the board which 
incorporate risk analysis as a matter of course 
set ﬁnancial targets for the group
the group formally measures performance 
against these strategic goals quarterly and 
each business unit reports operational 
progress monthly at each board meeting 
ayman provides a full update on business 
operations during which any possible 
impediments to the delivery of our group 
goals are highlighted and discussed 
the board also receives comprehensive 
reports from our chief financial ofﬁcer 
this ensures the board is kept fully informed 
about the group’s ﬁnancial performance for 
the year to date as compared with the year’s 
budget or the latest revised forecast with 
explanations for any variances in addition to 
being kept abreast of all signiﬁcant health 
safety and security matters we continue to 
develop a broader set of ﬁnancial and non
ﬁnancial key performance indicators which 
should assist us in monitoring delivery of 
these goals
petrofac annual report and accounts 2013
78
governance
corporate governance report continued remuneration 
how do we decide what directors 
are paid
the remuneration committee is responsible 
for determining the remuneration and terms 
of employment of executive directors as well 
as some members of senior management 
this committee is also responsible for 
agreeing the chairman’s fees a detailed 
report on the activities of the remuneration 
committee is provided on pages 92 to 
113 responsibility for determining the 
remuneration payable to the nonexecutive 
directors lies with the board and therefore the 
executive directors and i effectively determine 
the fees payable to the nonexecutive 
directors albeit we take independent external 
advice these fees are reviewed each year 
and further details are provided on page 112
relations with 
shareholders
who are our major shareholders
ordinarily shareholders of jersey incorporated 
companies with a uk listing need only 
disclose their holdings if they hold voting 
rights of 5 or more in a company however 
our articles of association have been drafted 
so that any shareholder with 3 or more of 
our voting rights must disclose their holding 
bringing us in line with ukincorporated 
companies those shareholders with holdings 
of 3 or more at the yearend and as at the 
date of this report are as follows
number of  
ordinary  
shares
percentage  
of issued 
share capital
ayman asfari  
and family 62950678 1820
maroun semaan  
and family 28288813 818
standard life 
investments ltd 17 327 409 501
how does our board engage with 
our shareholders and make sure 
that it is aware of shareholders’ 
views 
as a board we acknowledge our 
responsibilities to promote the success of 
petrofac for many of our stakeholders but our 
principal focus is of course our shareholders 
shareholder sentiment has been a discussion 
topic at each board meeting this year 
especially as our share price declined during 
the year
ayman tim and the investor relations team 
headed by jonathan low have a regular 
programme of meetings scheduled each year 
and conduct a series of individual meetings 
with existing and potential shareholders 
following our full and half year results and 
interim management statements they also 
provide presentations to research analysts 
and institutional investors including 
question and answer sessions following the 
announcement of our full and half year results 
these presentations are broadcast live on 
our website and accordingly may be followed 
by all shareholders directors also receive 
brokers’ research notes from jonathan and 
an update from our joint brokers at each 
board meeting 
during 2013 over 300 investor meetings were 
held by the investor relations team of which 
ayman andor tim attended approximately 
60 at the end of 2013 we held a capital 
markets day in london which provided an 
update on the group’s strategy and ﬁnancial 
proﬁle all of our current executive directors 
accompanied by the managing directors of 
each of our business units were in attendance 
to answer questions on our ecom and ies 
divisions and to outline the enhancement 
of our offshore epc capability as a result 
i believe that ayman and tim are each well 
placed to provide the rest of the board with 
their insights into shareholder sentiment 
recognising the importance of shareholder 
engagement especially as progress continues 
in adopting the frc stewardship code 
towards the end of the year i once again 
contacted investors representative bodies 
and governance organisations offering them 
the opportunity to meet with the aim of 
understanding any governance concerns 
accompanied by our secretary to the 
board and the head of investor relations 
we met with three of our largest institutional 
shareholders and a key voting and advisory 
services provider whilst areas of focus varied 
between meetings succession planning 
directors’ remuneration risk awareness 
and hse issues were raised as areas of 
particular interest 
we place considerable importance on 
communication with our shareholders 
whether they are large institutional 
shareholders or private shareholders 
many of whom are also employees of the 
group as with many organisations we give 
shareholders the option of receiving their 
communications in soft copyelectronic 
form however we are keen to ensure all 
shareholders are kept informed of our 
activities and therefore although over 13 
of shareholders have opted to receive their 
documents electronically we continue to issue 
hard copies of our annual report and accounts 
to those who request them all shareholder 
documents market announcements together 
with copies of presentations to analysts and 
interviews with ayman are available on our 
website wwwpetrofaccom which we hope 
encourages shareholders to become more 
informed investors
our annual general meeting agm
full details of this year’s agm which will be 
held in london are set out in the notice of 
meeting which accompanies this report and 
which is also available on our website as a 
matter of good practice we will conduct 
all resolutions on a poll and announce the 
results to the market as soon as possible 
after the meeting all shareholders are invited 
to attend the company’s agm at which they 
have the opportunity to put questions to the 
board and meet with those board directors 
able to attend those shareholders who 
are unable to attend the agm are invited 
to email questions to me in advance at 
agmquestionspetrofaccom i look forward 
to seeing as many of you as possible this year 
when my colleagues and i will be available to 
answer your questions
norman murray
chairman of the board
25 february 2014
petrofac annual report and accounts 2013
79 petrofac annual report and accounts 2013
80
governance
nominations committee report
norman murray
chairman of the nominations committee
membership and attendance at meetings 
held during 2013
role of the committee
 regularly reviews the composition and 
structure of the board and its committees
 identiﬁes and recommends for board 
approval suitable candidates to be 
appointed to the board
 considers succession planning for 
directors and other senior executives and in 
doing this considers diversity experience 
knowledge and skills
terms of reference
the committee reviewed its terms of 
reference during the year minor revisions were 
made to ensure they continue to conform 
to best practice copies are available on 
our website 
members meetings attended
norman murray chairman
ayman asfari
thomas thune andersen
stefano cao
roxanne decyk
kathleen hogenson
1
rené médori
rijnhard van tets
1 kathleen hogenson was appointed on 1 august 2013
diversity matters 8
governance
other
21
search for directors
nonexecutive
director 35
succession
planning 36
how the committee spent its time 
during the year
north and 
central america 2
asia 44
middle east and
north africa 14
europe 40
cultural diversity of the group
gender diversity on the board 
18 82
gender diversity on the board
9 91
gender diversity at graduate level 
26 74
gender diversity at graduate level
21 79
gender diversity in senior management 
10 90
gender diversity in senior management 
10 90
gender diversity across the group 
13 87
gender diversity across the group
13 87
board skill set as at the date 
of this report 
oil and gas experience 73
engineering 55
finance 36
international experience 100
regulatory and governance 55
hse 64
operationalstrategic 
management
100
2013 2012 dear shareholder
as part of its remit the committee has 
responsibility for the identiﬁcation and 
recommendation of prospective directors 
for board approval a formal procedure for 
selecting and recruiting directors is in place 
and extensive consideration is given to 
identifying the capabilities required of potential 
candidates taking into account the balance 
of existing skills knowledge experience and 
diversity on the board 
board changes 
continuing the process started in 2012 we 
engaged in a comprehensive search to ﬁnd 
a new nonexecutive director we worked 
with egon zehnder a recruitment consultancy 
ﬁrm that has signed up to the voluntary code 
of conduct on gender diversity best practice 
and with whom we have no other relationship 
after a lengthy search process we were 
delighted to welcome kathleen hogenson 
to the board as a nonexecutive director in 
august 2013 
kathleen has some 30 years’ experience in 
the oil and gas industry and currently runs her 
own company in the us she brings extensive 
subsurface knowledge entrepreneurial 
spirit commercial acumen and an indepth 
understanding of the industry attributes 
which enrich the board with kathleen’s 
appointment we have also fulﬁlled our 
aspiration to have 15 female representation 
on the board by 2013 
after more than 22 years with the company 
the committee acknowledged with regret 
maroun semaan’s decision to retire and 
step down from the board at the end of the 
year the committee would like to take this 
opportunity to recognise maroun’s signiﬁcant 
contribution to the group and to our board 
deliberations during a long and distinguished 
career and we of course wish him well in 
his retirement 
in january 2014 we announced the departure 
of andy inglis with effect from february 2014 
andy established the ies division in 2011 and 
has overseen the growth of that business 
which has seen a threefold increase in net 
proﬁt in three years we wish andy well for 
the future
we have previously expressed the view 
that nonexecutive directors should serve 
no longer than six years nevertheless the 
committee made the decision last year that 
the board would beneﬁt if rijnhard remained 
as a director for a further year i am delighted 
to report that he has now agreed to serve a 
full third term subject to shareholder approval 
as we said last year the company has 
undergone a period of substantial change 
yet the tenure of the board’s nonexecutive 
membership is relatively short with the 
exception of rijnhard all of our nonexecutive 
directors have less than four years’ service 
with the group the committee therefore 
continues to believe that rijnhard’s board 
membership is of particular beneﬁt given 
his ‘corporate memory’ which enables him 
to challenge colleagues with great insight 
furthermore he has wideranging ﬁnancial 
experience and working with me has 
developed the role of senior independent 
director so that it has genuine signiﬁcance
following these board changes the 
committee acknowledges the recent 
proportion shift on the board between 
executive and nonexecutive directors 
at the time of kathleen’s appointment the 
committee also took the opportunity to review 
the composition of each board committee 
recommending various changes details of the 
current membership are disclosed within the 
individual reports of each committee
succession planning and talent 
management 
advising the board on succession is a key 
aspect of the committee’s role and we are 
very conscious of our responsibilities in 
relation to board and senior management 
succession plans we need to ensure that 
board and senior management changes 
are managed effectively and in the event of 
unforeseen changes the group’s strategy is 
not disrupted 
we recognise that the success of our 
company comes from ensuring a talent 
pipeline exists throughout the organisation 
and that effective hr processes are in 
place to attract retain and develop skilled 
employees our talent management strategy 
is now embedded across the group both at 
business unit and divisional level it is used 
to identify clearly critical roles and gaps and 
provide a framework for staff training and 
performance management thereby informing 
the succession planning process in addition 
leadership development workshops are being 
initiated across the group with focus being 
given to coaching
building on our commitment last year to focus 
on succession planning the committee spent 
time during the year reviewing the senior 
management pipeline and appraising potential 
managing director succession candidates 
on an individual basis where particular 
weaknesses have been identiﬁed action 
plans are being implemented to ensure that 
highcalibre employees with the required 
skills experience and knowledge are being 
suitably developed this work will continue 
throughout 2014
diversity
at the end of 2012 the board adopted a 
diversity and inclusion policy which applies 
not only to the board but to the entire 
group this policy aims to ensure equality 
of opportunity and fairness in all areas 
of employment to value the diversity of 
our employees and promote an inclusive 
culture across our business irrespective of 
background or gender we aim to recruit on 
merit and employ the best people for each 
role diversity and inclusion training for all 
managers and supervisors is scheduled to 
take place during 2014
we believe that diversity is wider than simply 
gender and as a consequence consider 
that our business beneﬁts greatly from a 
varied employee base of over 80 nationalities 
nevertheless we recognise that we continue 
to have a gender imbalance across the group 
especially given that engineering continues 
to be a predominately maledominated 
profession we acknowledge that we have few 
women in senior engineering roles but we are 
committed to building a pipeline of talent from 
the bottom up and to that end i am pleased 
to report that 26 of our graduate recruits 
during 2013 were female which is favourable 
when compared with the uk industry average 
of 14 for 201112 as reported in engineering 
uk 2014 whilst we do not believe we have all 
the answers we are seeking to address some 
of the issues and develop suitable plans 
including the provision of environments that 
will encourage employees to remain with us as 
they progress through their careers details of 
our current gender diversity statistics are set 
out opposite 
norman murray 
chairman of the nominations committee
25 february 2014
petrofac annual report and accounts 2013
81 dear shareholder
i assumed the role of chairman of the audit 
committee in august having been a member 
of the committee since the start of 2012 
i succeeded rijnhard van tets who has very 
effectively led the committee for six years 
and whom i am very pleased will remain as a 
member of the committee for the remainder 
of his board tenure
while a change to the membership of the 
committee took place during the year we 
continue to have four independent non
executive directors whom i consider are able 
to bring an appropriate balance of ﬁnancial or 
accounting experience together with a deep 
understanding of the oil and gas industry 
following her departure from the committee 
i wish to express my thanks to roxanne 
for her input and commitment over the last 
two years 
the primary responsibility of the committee 
is to oversee our ﬁnancial reporting 
arrangements and to support the board by 
monitoring the integrity of the company’s 
ﬁnancial statements this allows us to provide 
shareholders with the necessary information 
to assess the company’s performance 
business model and strategy in doing this 
the committee gives due consideration to 
the group’s system of internal controls and to 
matters which coincide with key events in our 
ﬁnancial reporting calendar in addition to the 
general ﬁnancial reporting matters considered 
during the year focus was also given to
 solvency and going concern statements
 dividend payments including compliance 
with jersey legislation
 related party transactions
 fraud detection arrangements
 appropriateness of the company’s  
nonaudit service policy and fees
 tax position of the group
consideration and training was also given 
on the governance and regulatory changes 
impacting audit committees this year 
including narrative reporting changes identiﬁed 
in the uk code auditor reporting revisions 
and proposed auditor rotation provisions 
rené médori
chairman of the audit committee
25 february 2014
petrofac annual report and accounts 2013
82
governance
audit committee report
rené médori
chairman of the audit committee
internal control 
systems 24
how the committee spent its time 
during the year
financial 
reporting 30
policy review 4
tax updates 7
external auditincluding 
nonaudit services review 21
governance
other 12
code of 
conduct
whistleblowing 
 2
membership and attendance at meetings 
held during 2013
members meetings attended
thomas thune andersen
roxanne decyk
1
kathleen hogenson
2
rené médori
rijnhard van tets
1 roxanne decyk was a member until 1 august 2013 
2 kathleen hogenson was appointed as a member on 
1 august 2013 
role of the committee
 monitors the integrity of the company’s 
ﬁnancial statements and reviews signiﬁcant 
ﬁnancial reporting judgements
 reviews the effectiveness of ﬁnancial 
and regulatory compliance controls 
and systems
 monitors the effectiveness of the group’s 
internal audit function and reviews its 
material ﬁndings
 oversees the relationship with the 
external auditors including agreeing their 
fee and assessing their independence 
and effectiveness
 advises the board on whether the annual 
report and accounts taken as a whole is 
fair balanced and understandable
terms of reference
during the year we reviewed our terms of 
reference adopting the governance reporting 
changes recommended by the uk corporate 
governance code and the frc guidance on 
audit committees copies are available on 
our website activities during the year
the committee supports the board in the 
effective discharge of its responsibilities 
for ﬁnancial reporting and internal control 
as set out in our directors’ statements on 
page 114 directors are responsible for the 
preparation of group ﬁnancial statements 
in accordance with international financial 
reporting standards ifrs the group has 
an internal control and risk management 
framework in place which permits the 
company to prepare consolidated accounts 
this includes policies and procedures to 
ensure that adequate accounting records 
are maintained and transactions accurately 
recorded to ensure the company’s ﬁnancial 
reports and communications to the market 
give a clear and balanced assessment of the 
company’s position 
in addition to the matters considered during 
the year as set out below we also reviewed 
the 2013 full year results and the annual 
report and accounts at the beginning 
of 2014 
internal audit 
the board has overall responsibility for 
ensuring that the group has an adequate 
system of internal control on behalf of the 
board the committee has oversight over 
and reviews the effectiveness of the group’s 
internal ﬁnancial controls in doing so the 
committee draws on input from the group 
head of internal audit who is responsible for 
providing the committee with assurances on 
the adequacy of the internal control functions 
and attends each committee meeting 
at the start of the year the committee 
agreed the audit plan to be undertaken by 
the internal audit team a summary progress 
report setting out key ﬁndings of the work 
undertaken is provided at each meeting 
and any signiﬁcant areas of concerns are 
discussed and if required actions agreed 
any changes to the internal audit plan during 
the year are agreed by the committee and are 
usually required where
 circumstances within the group have 
changed or
 the level of risk has increased or decreased 
signiﬁcantly or 
 speciﬁcally requested by management 
during the year kpmgforensics were 
appointed to carry out an independent 
fraud risk assessment of our procurement 
processes within the oec business in uae 
it is intended that further assessments will be 
conducted across other parts of the business 
during 2014 the purpose of the review was 
to understand the major fraud risks and 
to identify any weaknesses in our existing 
processes based on the feedback received 
our existing preventative controls will be 
updated in addition a new fraud risk control 
matrix will be progressively introduced as 
and when the fraud risk assessment for each 
process is completed 
internal controls
the group’s internal control systems 
are largely divided into three categories 
operational effectiveness and efﬁciency 
reliability of ﬁnancial reporting and compliance 
with applicable laws and regulations we have 
a number of processes in place for identifying 
evaluating and managing the risks within 
each of these categories as the group has 
grown the risks being faced have evolved 
as a result our internal control framework 
has had to change to ensure that we have 
the most appropriate controls in place a joint 
meeting of the committee and the board 
risk committee was held at yearend so that 
assurance could be provided to the board 
that effective governance risk management 
and control processes were in place
matters considered and reviewed by the committee during the year are summarised in the table below
financial reporting internal controls external auditors
the company’s fullyear and halfyear ﬁnancial 
statements including consideration of the going 
concern statement and compliance with all ﬁnancial 
reporting requirements
the internal audit function including the approval and 
monitoring of the 2013 internal audit plan
the audit plan for work to be undertaken during 
the year 
the company’s fullyear and halfyear 
results announcements made to the london 
stock exchange 
the appropriateness of the company’s nonaudit 
services policy
reports from the external auditors regarding their 
assessments and ﬁndings in respect of the fullyear 
and halfyear results
the results of management’s assessments of 
the group’s going concern and group solvency 
position including recommending to the board that 
the going concern assessment was reasonable
details of the group’s related party transactions 
and whether these were executed on an arm’s 
length basis
the letters of representation issued by the 
company to the external auditors for approval by 
the board 
the appropriateness of the company’s 
accounting policies
the company’s policy for detecting fraud the proposed audit fee for the year
the company’s dividend policy including 
consideration of the solvency statement required 
under companies jersey law 1991
the company’s compliance with its tax ﬁling and 
reporting obligations
petrofac annual report and accounts 2013
83 external auditors
ernst  young llp ernst  young have been 
the company’s auditors since initial listing and 
provide the committee with relevant reports 
reviews information and advice throughout 
the year the committee remain satisﬁed of 
the auditors’ effectiveness and in making this 
assessment had due regard to their expertise 
and understanding of the group their 
resourcing capabilities independence and 
the contents of their reports each year the 
committee holds a meeting with the auditors 
without management present to discuss 
a variety of issues not least the conduct 
of the audit and in addition the chairman 
of the committee has regular contact with 
the audit partner outside of scheduled 
committee meetings 
each year ernst  young set out their 
proposed audit approach and scope to 
ensure that the audit is aligned with the 
committee’s expectations this is done with 
due regard to continuing developments within 
the company such as for 2013 the ongoing 
execution and completion of ies projects and 
the continued delivery of oec projects and 
the progress of contracts nearing completion 
where changes to the audit scope have 
occurred during the year the committee has 
been encouraged by the auditors’ interaction 
with management to ensure no impact occurs 
to the overall audit process thereby ensuring 
strong governance processes at yearend 
a report was provided to the committee 
detailing areas of audit risk the ﬁndings of 
which were reviewed and considered by 
the committee 
audit tender
the uk code now provides that a listed 
company should put its external audit 
contract out to tender at least every 10 years 
following the introduction of these new 
provisions the committee gave consideration 
to a formal audit tender during 2014 and 
decided that it would not undertake any 
such process this year an external audit ﬁrm 
is required to appoint a new audit partner 
every ﬁve years and a partner rotation for 
petrofac took place following the end of the 
2012 yearend audit in line with published 
recommendations the company will therefore 
consider tendering the audit following the end 
of our current audit partner tenure in 2018 
however this will be kept under consideration 
especially in view of the introduction of any 
new european legislation
signiﬁcant judgements 
signiﬁcant judgements considered by the committee are set out in the table below 
signiﬁcant judgements 
considered by the committee
how the issue was addressed 
by the committee 
revenue and margin recognition 
on ﬁxed price engineering 
procurement and construction 
contracts
the committee reviewed the reasonableness of judgements 
made regarding the cost to complete estimates the timing of 
recognition of variation orders the adequacy of contingency 
provisions to mitigate contract speciﬁc risks and the 
assessments around the potential for liquidated damages for 
projects behind schedule the committee held discussions with 
executive directors and received regular internal audit reports 
into the operating effectiveness of internal controls relevant to 
these judgements further the external auditors performed audit 
procedures on revenue recognition and reported their ﬁndings 
to the committee the committee concluded that the timing 
of recognition continues to be in line with ifrs requirements 
and were comfortable with the judgements made in respect 
of these items 
accounting for ies contracts the appropriateness of the accounting treatments adopted 
in respect of the ies contracts entered into or subsisting 
during the course of the year was reviewed by the committee 
accounting for ies contracts was also an area of focus for the 
external auditor who reported their ﬁndings to the committee 
the committee concluded that the accounting treatment 
adopted in respect of ies contracts continues to be in line 
with ifrs requirements
goodwill and tangible 
asset impairment 
the judgements in relation to impairment testing relate to the 
assumptions applied in calculating the value in use of the cash
generating units to which the goodwill is allocated and the fair 
value less costs of disposal for other assets subject to testing 
the key assumptions applied for impairment testing relate to the 
future performance expectations of the cashgenerating units 
using board approved business plans and the discount rate 
used to calculate the present value of the future cash ﬂows from 
the units a six monthly report is reviewed by the board which 
analyses the forecast results of each ies project compared 
with the initial investment case sanctioned by the board 
the committee reviewed the results of impairment testing by 
management and held discussions with external audit in relation 
to their ﬁndings the committee concluded that the results of 
management’s goodwill and tangible asset impairment testing 
were appropriate
taxation the tax positions within the group were monitored and reviewed 
by the committee to ensure that the group’s effective tax 
rate tax provisions and the recognition of deferred tax assets 
continue to be appropriate taxation issues were discussed with 
senior management and a report outlining key tax issues was 
reviewed the external auditor also reported to the committee 
on the ﬁndings of their audit of the group’s tax charge 
and provisions
petrofac annual report and accounts 2013
84
governance
audit committee report continued nonaudit services
to safeguard the independence and 
objectivity of our external auditors we have 
a nonaudit services policy that sets out the 
circumstances where we may appoint our 
external auditors to undertake additional 
nonaudit work to ensure compliance with 
this policy the committee regularly reviews 
the group’s cumulative nonaudit spend and 
furthermore gives prior consideration to the 
appointment of ernst  young should the 
nature or size of the proposed work require 
it the committee is satisﬁed that ernst  
young’s objectivity and independence has 
not been affected by any nonaudit work 
undertaken by them during the year
there were no breaches during the year of the 
us300000 threshold requiring prior approval 
by the committee the nonaudit spend for 
the year as a percentage of the overall audit 
fee was 32 2012 24 whilst this is higher 
than previous years some of these costs 
relate to the work completed in association 
with our inaugural bond issue although the 
majority is largely due to the increased use of 
ernst  young in certain jurisdictions mainly 
in north africa the middle east and central 
asia to provide advice and incountry tax 
compliance services we feel that given 
ernst  young’s experience their presence in 
these regions assures us they are the most 
appropriate provider of this work details of 
the fees in respect of audit and nonaudit 
related services can be found on page 136 
and in note 4e to the ﬁnancial statements 
during the year the committee reviewed the 
nonaudit services policy whilst proposed 
eu legislation may introduce increased 
restrictions on audit ﬁrms providing certain 
nonaudit services the committee considers 
that the existing policy remains appropriate 
for the time being it will however revisit the 
policy once any new regime has been formally 
adopted by the eu the current policy a copy 
of which can be found on the company’s 
website is summarised below
nonaudit services policy
 the external auditors are automatically 
prohibited from carrying out work which 
might impair their objectivity
 the cfo will seek approval from the 
committee before appointing the external 
auditors to carry out a piece of nonaudit 
work where
 – the fee is above us300000
 – total nonaudit fees for the year are 
approaching 50 of the annual audit fee
 – the external auditors would ordinarily 
be prohibited from carrying out the 
work under the company’s nonaudit 
services policy but not prohibited 
under ethical standard 5 and the 
cfo wants to appoint them due to 
exceptional circumstances
 the cfo may appoint the external auditor 
to do other types of nonaudit work as listed 
in the policy
whistleblowing 
responsibility and oversight of the company’s 
whistleblowing policy and our speak 
up programme lies with the board risk 
committee however in accordance with 
our agreed processes any alleged code 
of conduct breaches relating to ﬁnancial 
matters are reported to the committee 
including details of the investigation any 
proposed action to be taken along with any 
recommended preventative actions to avoid 
recurrence further details are provided on 
page 91 
training
in august all committee members received 
a onetoone training session with ernst  
young on the frc’s revised guidance on audit 
committees as well as an overview of the 
changes introduced in uk governance code 
2012 which affect the committee in addition 
members were encouraged to attend external 
seminars run by professional advisers which 
were felt to be relevant to their role
petrofac annual report and accounts 2013
85 membership and attendance at meetings 
held in 2013
members meetings attended
stefano cao chairman 
thomas thune andersen
1
roxanne decyk
kathleen hogenson
1
rené médori
rijnhard van tets
1 mr thune andersen and ms hogenson both joined the 
committee in august 2013 
petrofac annual report and accounts 2013
86
governance
board risk committee report
stefano cao
chairman of the board risk committee
 
health and safety 12
security and travel 11
how the committee spent its time during the year
governanceother 10 risk management framework 37
insurance 5
group policies 9
compliance 16
role of the committee
 recommends risk appetite and delegations 
of authority
 reviews the risk management and reporting 
systems for projects and investments
 monitors those risks that may impede 
delivery of the group’s strategy 
or performance
 assures itself of the effectiveness of the 
enterprise risk management framework
 monitors the group’s enterprise risk proﬁle 
through oversight of the key risk register
 reviews risk transfer strategy including 
insurance provision
terms of reference
the committee reviewed its terms of 
reference and have adopted many of the 
governance changes recommended by the 
uk corporate governance code and the 
icsa model terms copies are available on 
our website dear shareholder
2013 may be characterised as a year when 
many of the beneﬁts of the risk initiatives 
introduced over the past two years have 
started to become apparent the committee 
believes that there has been real progress 
in identifying and monitoring risk throughout 
the organisation during the year and 
that furthermore we will see additional 
improvement in 2014 as systems continue 
to mature 
the director of legal and commercial 
affairs and group head of enterprise risk 
continued to provide greater deﬁnition to the 
group’s risk management framework which 
supplied valuable context for the selection 
of an enterprise risk management system 
a thorough pilot study was conducted in 
each division before a system was selected 
the system which is in the process of 
being implemented across the group will 
introduce commonly understood standards 
and processes that should help not only 
to increase our oversight of risk but also 
promote an increased cultural awareness 
of risk we have always been good at 
considering project risks but this development 
should increase our ability to monitor and 
understand systemic risks and the effects 
of aggregation 
our group head of enterprise risk has 
continued to build on the work we started 
some two years ago to develop a more 
credible enterprise risk register a living 
document known as our key risk register 
this identiﬁes the signiﬁcant risks facing the 
group together with mitigating factors and 
is regularly reviewed by management and 
the committee each area of signiﬁcant risk 
has been considered and metrics or key 
performance indicators kpis developed 
so that they can be monitored whilst some 
kpis are proving difﬁcult to collect we have 
made substantial progress looking ahead we 
believe we will be able to monitor risk trends 
more effectively
whilst the committee has made great 
strides in developing a more systematic and 
empirical approach to risk management and 
its oversight it has also continued to rely on 
reports from various functional heads as part 
of the general assurance process our group 
head of compliance group treasurer and 
group head of security each provided 
general updates during 2013 the group 
director of hsseia supplemented his general 
updates to the board with more technical 
presentations to the committee including 
detailed brieﬁngs on integrity assurance and 
our process safety framework
the membership of the committee has been 
expanded this year primarily in response 
to the code’s guidance that the board as 
a whole should take responsibility for risk 
management thomas thune andersen 
and kathleen hogenson both joined the 
committee in august 2013 and each brings 
considerable experience in addition the 
committee is supported by the executive 
directors all of whom make themselves 
available at each meeting this allows the 
committee to ensure that the board spend 
signiﬁcant time considering the principal risks 
and exposures facing the company 
looking ahead we will continue to monitor 
governance developments including the 
implementation of lord sharman’s proposals 
and we intend to participate in the consultation 
on the potential modiﬁcation of the ‘internal 
control guidance to directors’ often referred 
to as the ‘turnbull guidance’
the committee is pleased by the signiﬁcant 
progress made this year but is by no means 
complacent we will continue to monitor 
progress next year with a view to reﬁning 
how we spend our time we will concentrate 
our focus so that we discharge our primary 
responsibilities to identify and manage risks to 
the enterprise and its strategic execution and 
to be assured that effective risk management 
systems are in place throughout the group 
stefano cao
chairman of the board risk committee
25 february 2014
petrofac annual report and accounts 2013
87 review of the group’s risk 
management framework
the diagram below sets out petrofac’s 
enterprise risk management framework 
which encompasses the policies culture 
processes systems and other aspects of 
the company that taken together facilitate its 
effective and efﬁcient operation 
principal aspects of this framework are 
explained in the following sections
enterprise risk management 
system erm
an erm system was procured during 2013 
and will be embedded across the group 
during 2014 with the aim of providing an 
integrated approach to risk management 
the system brings risks together by 
type and by exposure under the same 
framework standardising the approach for 
assessing reviewing and reporting on risk 
and enhancing visibility and accountability 
the risk assessment process is based upon 
the principles and guidelines of bs iso 
310002009 and its purpose is to
 regulate the entry of appropriate 
opportunities and risks into the group
 develop our understanding of the most 
signiﬁcant threats and opportunities
 promote active management of these 
exposures down to acceptable levels
 assure the achievement of business plan 
objectives and operational performance
key risk register
the key risk register krr identiﬁes those 
risks with the potential to seriously affect the 
performance future prospects or reputation 
of the company or prevent us from delivering 
our strategic objectives the krr is the 
means by which the company’s principal risks 
are reported to the committee and the board 
for review it includes business ﬁnancial 
hazard and operational risks together with 
external factors over which the board may 
have little or no direct control the krr is 
updated quarterly and identiﬁes
 nature and extent of the risks facing 
the company
 likelihood of the risks materialising and their 
potential impact on business plan objectives
 the company’s ability to reduce or control 
the incidence and impact of risks
 the risk proﬁle by exposure and by type
 the extent and categories of risk which are 
regarded as acceptable for the company 
to bear
petrofac annual report and accounts 2013
88
governance
board risk committee report continued
group’s risk management framework
company values and culture
enterprise risk management system and other tools
leadership communications and engagement
infrastructure 
 company vision 
and strategy
 company values
 group policies 
and standards
 appetite and 
delegated authorities
 asset integrity framework
 code of conduct
 risk management process
 risk review committees
 global 
insurance programme
 emergency preparedness
risk management process 
risk integration 
 strategic planning
 medium term planning
 prospect phase
 gonogo process
 proposal phase
 design
 procurement
 execution
 operation
 hand over
 management 
support processes
communicate and consult
assurance
risk 
identiﬁcation
risk 
assessment
risk 
treatment
risk 
monitoring
risk 
reporting risk appetite
the group’s risk appetite has developed 
organically over a number of years based 
on historical risk taking characteristics 
and has continued to develop during 2013 
as we pursue our growth strategy further 
our appetite for risk is largely governed 
through the delegated authorities da and 
risk review committees rrcs which are 
embedded across the group
as part of the review of our risk framework the 
committee continues to believe that it should 
not apply a single aggregate risk appetite for 
the group as a whole preferring to see risk 
appetite managed though individual limits and 
parameters which are continuously monitored 
in each business service line and aggregated 
for review at group level
risk appetite is therefore articulated in a 
variety of ways appropriate to the type of 
exposure under consideration for example 
our policy statements describe the 
committee’s approach to each risk category 
and our policy standards describe acceptable 
controls and limits 
examples of some of the parameters which 
exercise control over risk appetite include
 health  safety – monthly reviews of kpis 
for ltis and hipo incidents
 asset integrity – monthly reviews of control 
kpis associated with all key assets across 
the group
 concentration risk – maximum tolerable 
exposure by territory client and 
contract type
 investment limits – for capital expenditures 
minimum rates of irr or annual free cash
ﬂow targets
 liquidity headroom – agreed by the board 
and speciﬁed in the sovereign and financial 
market risk policy
 ﬁnancial strength – maintain an ebitda 
debt ratio agreed with the board
 loss experience – to manage our 
operational activities and exposures to an 
agreed value or irr
 people risks – nonconformances with 
code of conduct incident reporting and 
attrition rates
during 2014 the committee will continue to 
review the group’s enterprise risk proﬁle and 
framework which together with the evolving 
krr will increasingly become the means by 
which risk appetite and tolerance are deﬁned 
and managed
assurance and reporting
as well as regular reports from the group 
head of enterprise risk further reports to 
the board and committee are provided by 
management and include deepdives into the 
effectiveness of health  safety processes 
asset integrity processes compliance 
nonconformances and security which 
together with other sources of information 
have between them provided a balanced 
assessment of the principal risks and the 
effectiveness of the systems of internal control 
any control failings or weaknesses are 
identiﬁed and discussed in these reports for 
example compliance issues or whistleblowing 
statistics including the underlying reasons 
the impact that they have had on the 
company and the actions being taken to 
rectify them when reviewing these reports 
the committee has considered how effectively 
risks have been identiﬁed how they have been 
mitigated and managed whether actions are 
being taken promptly to remedy any failings 
or weaknesses and whether the causes 
of the failing or weakness have indicated 
poor decisiontaking or a need for more 
extensive monitoring or a reassessment of the 
effectiveness of the processes
interface between the board risk 
committee and audit committee
petrofac has established separate audit 
and board risk committees as such 
there are some areas that span both 
committees’ responsibilities thereby 
requiring effective interfaces between the two 
committees to support and discharge their 
respective responsibilities 
whilst the board has delegated the detailed 
work to these two committees it retains 
overall responsibility for ensuring that the 
group has effective internal control and risk 
management and therefore receives regular 
reports on the work of each committee from 
their respective chairmen in addition the 
board retains ultimate responsibility for the 
group krr
the key areas where both committees 
have common responsibilities are risk 
management compliance internal control 
and in assisting the board in reviewing the 
effectiveness of the company’s internal 
control environment covering
 mechanisms to support the achievement  
of strategic objectives
 reliability of ﬁnancial reporting
 appropriateness of the control environment
 effectiveness and efﬁciency of operations
 compliance with applicable laws 
and regulations
during 2014 the committee intends to align 
and coordinate further the activities of these 
committees around a coso based internal 
control framework
petrofac annual report and accounts 2013
89 governance arrangements
petrofac’s overall system of risk governance relies on a number of committees and management 
processes which bring together reports on the management of risk at various levels
the risk governance process relies upon regular risk assessments and reviews of existing and 
new opportunities by considering the risk exposure and appetite of each business service 
line and function the diagram below sets out the risk governance structure in operation 
showing the interaction between the various risk review and management committees 
terms of reference are in place for individual committees 
the board retains ultimate responsibility 
for setting the group’s risk appetite and 
reviewing the risks which the board considers 
sufﬁciently signiﬁcant that they might prevent 
the delivery of strategy or threaten petrofac’s 
continued existence 
the board risk committee is constituted 
by the board to assist it in discharging 
this responsibility the committee has 
responsibility for providing oversight and 
advice to the board on the current risk 
exposures and future risk strategy and 
in doing so is responsible for making 
recommendations to the board in relation 
to the erm framework the group’s risk 
appetite and tolerance in pursuit of business 
objectives and for approval of the da 
the committee also assists the board with 
the deﬁnition and execution of an effective risk 
management strategy and has responsibility 
for oversight of the company’s framework 
of corporate standards processes and 
procedures in addition the committee 
provides the board with assurance on an 
annual basis that the design and operating 
effectiveness of this control framework remain 
ﬁt for purpose 
the group risk committee grc is a 
management committee constituted as the 
principal executive forum for the review of 
enterprise project and investment risks in 
accordance with the da approved by the 
board the grc reviews all material new 
business opportunities and projects including 
bid submissions country entry joint ventures 
investments acquisitions and disposals and 
is responsible for making recommendations 
as to the management and mitigation of risk 
exposure and recommending the proposal 
for approval by the board or the relevant 
executive the grc is responsible for the 
assurance of the erm framework agreed by 
the board including the approval of group 
standards and the application of the board’s 
da in addition the grc regularly reviews the 
krr prior to its submission to the committee
risk framework
sets risk appetite 
approves key risk 
register and signiﬁcant 
projects
board oversight of  
framework of internal  
controls and risk  
management
senior management  
consider risks on  
signiﬁcant projects and  
investments for formal  
consideration by the  
board oversight of  
key risk register 
divisional management  
oversight and review  
of projects
risk management is  
embedded within  
each business service line
assurance to  
management and  
the board
board
board risk 
committee
audit 
committee
divisional 
risk review
business 
service line
group 
functions
internal 
audit
provides assurance 
on framework
provides assurance 
on framework
petrofac annual report and accounts 2013
90
governance
board risk committee report continued
key risk register  
given to board risk 
committee
group risk 
committee divisional risk review committee 
drrc each division has a risk review 
committee which provides peer review 
of proposed projects and investments in 
accordance with the da where required by 
the da it then prepares appropriate materials 
for the grc and ensures that no proposal 
is presented without being reviewed and 
supported by the drrc
business service line review each of our 
individual businesses has its own business 
management system that incorporates risk 
management policies and procedures and 
produces its own risk register each business 
service line’s management team meets 
regularly and monitors these risks as a 
matter of course notes any risk assessment 
change and seeks to take appropriate 
mitigating action 
code of conduct and 
whistleblowing
our code of conduct was relaunched in 
2013 all reported breaches of the code 
are reviewed and assessed by our group 
head of compliance to determine what 
further investigation is warranted and to 
ensure that appropriate action is taken 
the committee receives details of the 
issues reported together with the action 
being taken any alleged breaches relating 
to ﬁnancial compliance are dealt with by 
the audit committee further details of our 
code including our whistleblowing facility 
are provided on page 57  
security
petrofac’s security department enhanced its 
intelligence capability during 2013 in light of 
the ﬂuid nature of the security environment 
across the middle east and north africa 
mena region as detailed further on page 
56 this helps to provide assurance to the 
committee that the group is kept informed 
of any changes in our core market place 
and that appropriate protective measures 
are taken to reinforce the message of a 
safe and secure environment for all our staff 
and assets a global roadshow is planned 
for 2014 to promote ‘security awareness’ 
across the group in addition in light of the 
incident report ﬁndings from the in amenas 
attack in algeria which took place in 
january 2013 our contingency planning for 
securityled evacuations and other security 
emergencies have been and continue to be 
further enhanced 
information technology security
following a global assessment of potential 
information technology threats and external 
cybersecurity threats the company decided 
to embark on a programme to reinforce our 
it resilience arrangements sustainability 
survivability and security our aim is to 
respond effectively to any farreaching 
systems failure controls are being deployed 
through a new it strategy including security 
of regional data centres use of enterprise 
applications a common desktop environment 
network optimisation and security of critical 
applications this topic currently being 
monitored directly by the board may form 
part of the committee’s agenda in 2014
business continuity management 
petrofac has hub ofﬁces in sharjah aberdeen 
mumbai chennai london woking and kuala 
lumpur which all have business continuity 
management and disaster recovery plans 
in place testing of the plans has been 
completed for a number of these ofﬁces 
as a result of recent growth in the region 
business impact analysis is being updated 
in singapore jakarta and kuala lumpur 
more recently petrofac training services 
became the ﬁrst emergency response 
provider in aberdeen to receive the iso 
22301 accreditation for its business continuity 
structure of the emergency response 
service centre
insurance
given the recent changes in the scale and 
nature of the group’s activities petrofac made 
a signiﬁcant step towards its aim of global 
policy coverage in 2013 by placing its global 
insurance programme with zurich this move 
comes after aon was appointed as the 
group’s insurance broker and adviser in 2012 
following a commitment to the committee 
a number of claims scenario workshops 
were carried out with each division in 2013 
the principal objective being to provide 
assurance that the group’s insurance 
arrangements remain ‘ﬁt for purpose’ given 
the growth in the scope and scale of its 
activities and that the insurance programme 
will respond as expected in the event of a loss 
policy limits and policy wordings are reviewed 
each year at programme renewal
petrofac annual report and accounts 2013
91 membership and attendance at meetings 
held in 2013
members meetings attended
thomas thune 
andersen
stefano cao
1
roxanne decyk
1 stefano cao was unable to attend one ad hoc telephonic 
meeting due to a prior business commitment
role of the committee
 determine and agree with the board 
the broad policy and framework for the 
remuneration of executive directors the 
chairman and certain senior managers
 review the continued appropriateness and 
relevance of the remuneration policy
 ensure that incentives are appropriate 
to encourage enhanced performance 
and provide alignment with longterm 
shareholder value
 approve the design of and determine 
the targets for performance related 
pay schemes
 review the design of all share incentive 
plans before approval by the board and 
shareholders and monitor the application of 
the rules of such schemes and the overall 
aggregate amount of the awards
 determine the remuneration of all executive 
directors the chairman and certain senior 
managers within the agreed policy taking 
into account remuneration trends across 
the company and remuneration practices 
in other peer companies
terms of reference
the committee reviewed its terms of 
reference and has adopted many of the 
governance changes recommended by the 
uk corporate governance code and the 
icsa model terms copies are available on 
our website
petrofac annual report and accounts 2013
92
governance
directors’ remuneration report
 how the committee spent its time during the year
governanceother 19
review of external environment 7
new remuneration
reporting regulations 28
2013 remuneration review including 
annual bonus and psp arrangements 46
thomas thune andersen
chairman of the remuneration committee dear shareholder
as chairman of petrofac’s remuneration 
committee i am pleased to present our 2013 
directors’ remuneration report
2013 performance and 
remuneration outcomes
in determining remuneration outcomes 
for 2013 the committee has sought to 
ensure that the decisions taken are fair 
and fully representative of our performance 
during 2013 our policy is to set stretching 
performance targets which require the 
delivery of outstanding performance for 
signiﬁcant payouts to be achieved since our 
ipo in 2005 our ﬁnancial performance has 
been strong with returns to shareholders 
substantially exceeding those in the majority 
of our peers and this has been reﬂected 
in the strong payouts under our variable 
incentive plans this year maintaining these 
high growth levels has been tougher to 
achieve and therefore remuneration has 
been adjusted accordingly 
2013 saw a number of important successes 
we delivered four major projects two in 
abu dhabi and one each in turkmenistan 
and algeria we also continued to build 
and strengthen our capabilities in new 
geographies particularly the north sea and 
iraq as a result at the end of 2013 backlog 
is at a record level of us150 billion and our 
ability to deliver our strategy over the next few 
years is in good shape
nevertheless 2013 has not been without its 
challenges for both our company and the 
sector overall we achieved modest growth in 
net proﬁt in 2013 we generally delivered good 
operational performance although we did not 
meet our own expectations in all respects 
in particular there were three fatalities during 
the year two in turkmenistan and one in 
algeria additionally some operational targets 
were missed due to delivery of some projects 
falling behind our high expectations 
all of the above factors were taken into 
account when the committee determined 
annual bonuses as a result 2013 cash 
bonuses for the continuing executive directors 
were around 60 of maximum which is down 
on previous years’ outcomes
our tsr and eps performance from 2011 to 
2013 was such that the 2011 performance 
share plan psp awards are due to vest at 
12 of maximum reﬂecting the stretching 
targets which the committee attaches to our 
variable pay arrangements
2014 proposals
we believe that our existing remuneration 
framework continues to be appropriate for 
petrofac and remains ﬁt for purpose and 
therefore no major changes to the structure 
are proposed for 2014
there have been moderate increases to 
executive directors’ salaries for 2014 in 
line with those of the wider workforce in 
the relevant geographies there has been 
no increase in the level of cash allowances 
paid in lieu of car allowances and pension 
contributions for ukbased executive 
directors for 2014 a modest adjustment 
has been made to our uaebased executive 
director’s cash allowance for 2014 to reﬂect 
general increases in the cost of living in 
the uae 
we have also taken the opportunity to review 
the performance targets under the psp 
to ensure that they remain appropriately 
stretching in light of our strategic priorities and 
earnings expectations we consider that the 
tsr performance target remains appropriate 
and are proposing no change to this measure 
however taking into account internal and 
external forecasts for performance over the 
next threeyear period we are repositioning 
the eps performance targets given the 
maturity and increased size of the company 
we have sought to strike a balance between 
setting eps targets which are appropriately 
stretching whilst ensuring that they do 
not drive unacceptable levels of risk and 
encourage inappropriate behaviours
three of our share incentive plans the psp  
the deferred bonus share plan dbsp and 
the share incentive plan sip were each 
introduced at ipo in 2005 and we are taking 
the opportunity to submit these plans for 
renewal at the 2014 agm the psp remains 
our sole longterm vehicle for incentivising 
executive directors and senior management 
the dbsp is our key share plan for 
below board participants with over 3200 
participants and under our policy executive 
directors cannot participate in the dbsp  
the sip is an all employee share incentive 
plan for uk employees approved and 
operated in accordance with uk hm revenue 
and customs 
in recognition of best practice we are 
proposing this year to incorporate malus 
and clawback provisions into the psp and 
dbsp rules so that the committee may 
reduce or cancel awards under certain 
deﬁned circumstances in addition in order 
to bring the plan approval timescale in line 
with our remuneration policy these plans 
will be submitted for shareholder approval 
at the agm in 2014 the sip rules are being 
updated to reﬂect recent regulatory changes 
other than this the terms of the plans 
are unchanged
new remuneration reporting 
regulations
we fully support the focus on transparency 
which is the cornerstone of the new 
uk remuneration reporting regulations 
these came into force on 1 october 2013 
and are applicable to ukincorporated 
companies listed on the london stock 
exchange as a jerseyincorporated 
company petrofac is not subject to these 
regulations nevertheless the committee 
recognises the importance of effective 
corporate governance and is ﬁrmly committed 
to best practice we have therefore structured 
this year’s report to reﬂect the new regulations 
and are submitting our policy report and 
annual report on remuneration for two 
separate advisory shareholder votes 
we have also provided a summary of our 
remuneration framework changes for 
2014 our performance during 2013 and 
how this aligned with our remuneration 
outcomes overleaf
we hope that you ﬁnd the approach we have 
taken clear and transparent the committee 
values all feedback from shareholders 
and hopes to receive your support at the 
forthcoming agm
thomas thune andersen
chairman of the remuneration committee
25 february 2014
petrofac annual report and accounts 2013
93 in summary
the annual report on remuneration beginning on page 105 provides more detail on our policy implementation
our remuneration framework – changes for 2014
element opportunity structure
salary salary increases in line with the wider employee 
population in the relevant geographical area
na 
beneﬁts no change na 
cash allowance in lieu of 
pension and other beneﬁts
no increase in 2014 for ukbased executive directors
modest increase for uaebased executive director to 
reﬂect a general increase in the cost of living
na 
annual bonus no change no change
performance share plan no change rebalancing of the eps performance targets 
to reﬂect our growth proﬁle  
introduction of malusclawback provisions
our performance in 2013
2013 was a challenging year and in some areas our performance did not meet the stretching expectations which we set ourselves nevertheless 
operationally we handed over four major projects and continued to extend our business into new geographies in addition we enter 2014 with a 
record backlog of us150 billion 
operational performance
 four ‘mega’ projects were handed over in turkmenistan south yoloten abu dhabi ngl4 and asab and algeria el merk
 we continued to extend the business in the north sea iraq and mexico and signed major deals in algeria abu dhabi kazakhstan 
nigeria and oman
 the petrofac academy was founded and in malaysia we began our largest training project to date
 regrettably there were three fatalities during the year two in turkmenistan and one in algeria
revenue
1
us6329m
2013 2012
1
2011
us6240m 
us5801m
net proﬁt
3
us650m
2013 2012 2011
us632m
us540m
backlog
27
us150bn
2013 2012 2011
us118bn
us108bn
petrofac annual report and accounts 2013
94
governance
directors’ remuneration report continued policy report – looking forward
this section contains details of the company’s 
remuneration policy that will govern future 
remuneration payments that the company 
will make 
annual report on remuneration – 
looking backwards – implementation  
of the policy in 2013
this section provides details of how the 
company’s remuneration policy was 
implemented in 2013
annual report on remuneration – 
looking forward – implementation 
of the policy in 2014
this section provides details on how the 
company will implement our remuneration 
policy in 2014
within the report we have used different 
colours to differentiate between
 fixed elements of remuneration
 variable elements of remuneration
our pay
on the whole pay outcomes for 2013 are down from those in 2012 reﬂecting performance against the challenging targets set by the committee
all ﬁgures shown in us’000
salary beneﬁts
1
cash allowance bonus psp total
ayman asfari 988 56 109 1173 277 2603
maroun semaan 595 110
1
220 150 119 1194
marwan chedid 575 69
1
220 700 53 1617
andy inglis 852 2 109 0 0 963
tim weller 688 2 109 782 – 1581
1 for the purposes of this table the annual increase in the end of service beneﬁt for uaebased executive directors required under local statute has been shown in the beneﬁts column 
our remuneration principles
the committee aims to establish a level of remuneration which
 is sufﬁcient to retain attract and motivate executive directors and key executives of the calibre required to achieve the group’s objectives whilst 
paying no more than necessary and
 reﬂects the size complexity and international scope of the group’s business together with an executive’s individual contribution and 
geographical location
under our remuneration policy
 base salaries are generally median or below against a relevant benchmarking group
 variable elements of remuneration are structured so that individuals can achieve upper quartile total remuneration subject to achievement of 
challenging performance standards
this remuneration policy has remained unchanged since 2007 and the committee considers that it remains ﬁt for purpose and ensures that 
executive directors and senior managers are incentivised to deliver the group’s strategic goals and longterm shareholder value
how to use this report
this report has been divided into three sections
petrofac annual report and accounts 2013
95
see
pages 96 to 104
see
pages 105 to 111
see
page 112 looking forward
policy report
the following section sets out our directors’ remuneration policy the ‘policy’ this policy will be put forward for shareholder approval at the 2014 
agm and will apply to payments made on or after 15 may 2014
as a jerseyincorporated company petrofac does not have the beneﬁt of the statutory protections afforded by the uk companies act 2006 
in relation to the new reporting regime accordingly if there is any inconsistency between the company’s policy report as approved by 
shareholders and any contractual entitlement or other right of a director the company may be obliged to honour that existing entitlement or right 
formal legal advice taken during the year afﬁrms that it would not be practical for us to submit our policy report for a binding shareholder vote 
in the manner of a ukincorporated company we are therefore submitting our policy report and our annual report on remuneration as two 
separate advisory votes at the 2014 agm
further details regarding the operation of the policy can be found on pages 105 to 111 of this report
fixed remuneration
elementpurpose and 
link to strategy
operation maximum  
opportunity
performance 
measures
salary
core element of 
remuneration paid for 
doing the expected  
daytoday job
 the committee takes into consideration a number 
of factors when setting salaries including but not 
limited to
 – size and scope of the 
individual’s responsibilities
 – the individual’s skills experience 
and performance
 – typical salary levels for comparable roles within 
appropriate pay comparators and
 – pay and conditions elsewhere in the group
 basic salaries are normally reviewed at the 
beginning of each year with any change usually 
being effective from 1 january
 whilst there is no maximum salary level any 
increases will normally be broadly in line with the 
wider employee population within the relevant 
geographic area
 higher increases may be made under certain 
circumstances at the committee’s discretion 
for example this may include
 – increase in the scope andor responsibility of the 
individual’s role and
 – development of the individual within the role
 in addition where an executive director has 
been appointed to the board at a lower than 
typical salary larger increases may be awarded 
to move them closer to market practice as their 
experience develops
 none
beneﬁts
provide employees 
with market 
competitive beneﬁts
 ukbased executive directors receive beneﬁts 
which typically may include but are not limited to 
private health insurance for the executive director 
and his family life assurance and longterm 
disability insurance
 uaebased executive directors receive similar 
beneﬁts to ukresident executive directors and in 
addition receive other typical expatriate beneﬁts 
which may include but are not limited to children’s 
education return ﬂights to their permanent home 
and appropriate insurance arrangements
 where executive directors are required to relocate 
the committee may offer additional expatriate 
beneﬁts if considered appropriate
 ukbased executive directors are also eligible to 
participate in any taxapproved all employee share 
plans operated by the company on the same basis 
as other eligible employees petrofac currently 
operates a share incentive plan in the uk
 whilst no maximum level of beneﬁts is prescribed 
they are generally set at an appropriate market 
competitive level taking into account a number of 
factors which may include
 – the jurisdiction in which the individual is based
 – the level of beneﬁts provided for other employees 
within the group and
 – market practice for comparable roles within 
appropriate pay comparators
 the committee keeps the beneﬁt policy and beneﬁt 
levels under regular review
 none
petrofac annual report and accounts 2013
96
governance
directors’ remuneration report continued fixed remuneration continued
elementpurpose and 
link to strategy
operation maximum  
opportunity
performance 
measures
cash allowance in lieu 
of pension and other 
beneﬁts
provide employees 
with an allowance 
for beneﬁts and 
retirement planning
 ukresident executive directors receive a 
cash allowance in place of certain beneﬁts 
including but not limited to car allowances and 
pension contributions
 uaeresident executive directors receive a cash 
allowance in respect of housing utilities and 
transport in line with local market practice
 whilst there is no maximum level of cash allowance 
prescribed in general the levels provided are 
intended to be broadly market typical for role and 
geographic location
 the levels of cash allowance provided are kept under 
regular review by the committee
 normally in determining any increase to cash 
allowances the committee will have regard to the 
rate of increase in the cost of living in the local market 
and other appropriate indicators
 none
end of service 
indemnity
paid to uaebased 
executive directors only 
in order to comply with 
local uae statute
 a statutory end of service payment is due to all  
nonuae national employees working in the uae 
at the end of their contracted employment
 the company accrues an amount each year in 
order to satisfy this indemnity when it falls due
 the statutory payment is based on the individual’s 
number of years of service and salary level at the time 
of their departure 
 none
pension
no executive 
director currently 
participates in a formal 
pension arrangement
 executive directors receive a cash allowance 
in lieu of pension provision see above
 the company operates deﬁned contribution 
pension arrangements across the group 
in line with legal requirements the company 
offers participation in the uk pension plan to its 
ukbased executive directors however both 
current ukbased executive directors chose 
to opt out of these arrangements and as such 
continue to receive a cash allowance in lieu of 
pension provision
 although both current ukbased executive directors 
have opted to receive a cash allowance in lieu of 
pension provision this position is kept under review
 as the committee would want to conduct a thorough 
review prior to executive directors joining a group 
pension arrangement it would not be appropriate to 
provide a maximum level of pension provision at this 
time however if this did occur the level of provision 
would typically be dependent on seniority the cost 
of the arrangements market practice and pension 
practice elsewhere in the group
 none
petrofac annual report and accounts 2013
97 variable remuneration
element operation maximum opportunity performance measures
annual bonus
incentivise delivery of 
the business plan on an 
annual basis
rewards performance 
against key 
performance indicators 
which are critical to 
the delivery of our 
business strategy
 awards based on performance in the relevant 
ﬁnancial year 
 performance measures are set annually and 
payout levels are determined by the committee 
after the yearend based on performance against 
those targets
 delivery in cash
 maximum bonus 
opportunity of 200 
of basic salary
 the precise bonus targets are set by the 
committee each year taking into account a 
number of internal and external reference points 
including the company’s key strategic objectives 
for the year
 when setting these targets the committee 
ensures that they are appropriately stretching in 
the context of the business plan and that there 
is an appropriate balance between incentivising 
executive directors to meet ﬁnancial targets for 
the year and to deliver speciﬁc nonﬁnancial 
strategic operational and personal goals 
this balance allows the committee to effectively 
reward performance against the key elements of 
our strategy
 measures used typically include but are not 
limited to
 – hse and integrity measures
 – ﬁnancial measures
 – group andor business service line strategic 
and operational performance measures and
 – peoplerelated measures
 normally each of these measures will have a 
broadly equal weighting but the committee will 
keep this under review on an annual basis
 typically 30 of the maximum opportunity 
is paid for ‘threshold’ performance ie 
the minimum level of performance which results 
in a payment
petrofac annual report and accounts 2013
98
governance
directors’ remuneration report continued variable remuneration continued
element operation maximum opportunity performance measures
performance share 
plan
1
incentivise executive 
performance over the 
longer term
rewards the delivery 
of targets linked to the 
longterm strategy of 
the business and the 
creation of shareholder 
value over the 
longer term
 award levels are determined by reference to 
individual performance prior to grant
 vesting of awards is dependent on achievement of 
stretching threeyear performance targets
 at vesting the committee considers if the 
company’s tsr is a genuine reﬂection of the 
underlying company performance and may 
reduce or cancel the portion of award subject to 
tsr if it considers it appropriate
 awards are normally made in the form of 
conditional share awards but may be awarded in 
other forms if appropriate such as nil cost options 
awards may also be satisﬁed in cash
 additional shares are accrued in lieu of dividends 
and paid on any shares which vest
 the committee may adjust or amend the terms of 
the awards in accordance with the plan rules
 the psp rules are due to expire in 2015 
new rules however will be submitted for 
shareholder approval at the 2014 agm subject to 
these rules being approved all psp awards from 
the date of the agm onwards will incorporate 
malus and clawback provisions such that the 
committee may reduce or cancel unvested awards 
or require repayment of amounts already paid out 
at any time up to the second anniversary of the 
vesting date of the relevant award in a number of 
speciﬁc circumstances including
 – material misstatement of ﬁnancial results
 – material failure of risk management
 – material breach of any relevant health and 
safety or environment regulations and
 – serious reputational damage to the company 
or any group member
 the maximum 
award that can be 
granted in respect 
of a ﬁnancial year of 
the company under 
the psp is 200 of 
basic salary or in 
circumstances which 
the committee 
deems to be 
exceptional awards 
up to 300 of 
base salary can 
be granted
 awards vest based on threeyear performance 
against a combination of ﬁnancial and share price 
performance measures
 the ultimate goal of the company’s strategy 
is to provide longterm sustainable returns to 
shareholders the committee strives to do this 
by aligning the performance measures under the 
psp with the longterm strategy of the company 
and considers that strong performance under 
the chosen measures should result in sustainable 
value creation
 – ﬁnancial measure – to reﬂect the ﬁnancial 
performance of our business and a 
direct and focused measure of company 
success the committee sets targets to 
be appropriately stretching with regard 
to a number of internal and external 
reference points
 – share price performance measure –  
a measure of the ultimate delivery of 
shareholder returns this promotes alignment 
between executive director reward and the 
shareholder experience targets are set 
with reference to wider market practice and 
positioned at a level which the committee 
considers represent stretching performance
 normally the weighting would be split equally 
across these two measures
 for ‘threshold’ levels of performance under 
the ﬁnancial performance measure 0 of the 
award vests increasing to 100 of the award for 
maximum performance
 for ‘threshold’ levels of performance under the 
share price performance measure 30 of the 
award vests increasing to 100 of the award for 
maximum performance
 the committee sets targets each year 
achievement of which it considers would 
represent stretching performance in the context 
of the business plan
 the committee may amend the performance 
conditions applicable to an award if events 
happen which cause the committee to consider 
that it fails to fulﬁl its original purpose and would 
not be materially less difﬁcult to secure
share incentive plan
1
 
sip
encourage longterm 
shareholding and to 
align the interests 
of uk employees 
with shareholders
 participants may invest gross salary to purchase 
ordinary shares
 the company does not make awards of matching 
free or dividend shares under the sip
 participants may 
invest up to the 
prescribed hmrc 
limits in operation 
at the time 
this is currently 
£1500 gross 
salary per tax year 
increasing to £1800 
from april 2014
 none
1 the committee may in the event of any variation of the company’s share capital demerger delisting or other event which may affect the value of awards adjust or amend the terms of awards in 
accordance with the rules of the relevant share plan in the case of the sip any changes may be subject to hmrc approval if required
petrofac annual report and accounts 2013
99 notes to the policy table
legacy matters
the committee can make remuneration payments and payments for 
loss of ofﬁce outside of the policy set out above where the terms of 
the payment were agreed before the policy came into effect or at a 
time when the relevant individual was not a director of the company 
provided that in the opinion of the committee the payment was not in 
consideration for the individual becoming a director of the company 
this includes the exercise of any discretion available to the committee 
in connection with such payments
for these purposes payments include the committee satisfying 
awards of variable remuneration and in relation to an award over 
shares the terms of the payment are agreed at the time the award 
is granted
outstanding share awards under the value creation plan vcp were 
granted prior to 27 june 2012 under the rules of that plan approved 
by shareholders on 11 may 2012 no further awards can be made after 
11 may 2014 outstanding awards are set out in the annual report on 
remuneration if the stretching performance conditions are satisﬁed 
awards under the vcp would vest in 2016 2017 and 2018
remuneration arrangements throughout the company
the remuneration policy for our executive directors is designed in 
line with the remuneration philosophy and principles that underpin 
remuneration for the wider group all our reward arrangements are 
built around the common objectives and principles outlined below
 performance driven – the company intentionally places 
signiﬁcant focus on variable remuneration ensuring that a 
meaningful proportion of remuneration is based on performance 
performance targets are typically aligned with those of the executive 
directors as a result individuals are incentivised towards consistent 
ﬁnancial and nonﬁnancial business goals and objectives in addition 
to appropriate individual goals
 employees as shareholders – a substantial number of employees 
participate in our various share incentive plans as a result of 
this participation as well as those shares owned and purchased 
by employees prior to and since ipo petrofac is proud of the 
signiﬁcant levels of employee share ownership within the company 
we consider that this is one of the key drivers of performance 
throughout the business 
nonexecutive directors
elementpurpose and 
link to strategy
operation opportunity performance metrics
nonexecutive 
director ned fees
core element 
of remuneration  
paid for fulﬁlling the 
relevant role
 neds receive a basic annual fee paid quarterly in 
respect of their board duties 
 further fees are paid to neds in respect of 
chairmanship of board committees no fees are 
paid for membership of a board committee
 the nonexecutive chairman receives an all
inclusive fee for the role
 the remuneration of the nonexecutive chairman 
is set by the remuneration committee
 the board as a whole is responsible for 
determining ned fees these fees are the sole 
element of ned remuneration neds are not 
eligible for annual bonus share incentives 
pensions or other beneﬁts
 fees are typically reviewed annually
 expenses incurred in the performance of duties 
for the company may be reimbursed or paid for 
directly by the company as appropriate including 
any tax due on the payments
 current fee levels can be found in the annual 
report on remuneration on page 112 
 fees are set at a level which is considered 
appropriate to attract and retain the calibre of 
individual required by the company
 fee levels are normally set by reference to the 
level of fees paid to neds serving on boards of 
similarlysized uklisted companies and the size 
responsibility and time commitment required of 
the role
 the company’s articles of association provide 
that the total aggregate remuneration paid to the 
chairman and neds will be within the limits set by 
shareholders the current aggregate limit of £1m 
was approved by shareholders at the 2011 agm
 none
petrofac annual report and accounts 2013
100
governance
directors’ remuneration report continued recruitment policy
in determining remuneration arrangements for new appointments to 
the board including internal promotions or interim appointments the 
committee applies the following principles
 the committee takes into consideration all relevant factors 
including the calibre of the individual local market practice existing 
arrangements for other executive directors pay relativities and 
market positioning
 typically the new appointment will have or be transitioned onto 
the same policy framework as the other executive directors as 
outlined above
 upon appointment the committee may only offer additional 
remuneration arrangements if it is considered essential to do so in 
order to secure the appointment
 the committee commits to explaining the rationale for the relevant 
arrangements to shareholders in the remuneration report following 
any appointment
 the committee may also consider providing additional beneﬁts to 
expatriate appointments where appropriate and 
 the committee will have regard to the best interests of both 
petrofac and its shareholders and is conscious of the need to pay 
no more than is necessary particularly when determining buy
out arrangements
to facilitate recruitment the committee may make a oneoff award to 
’buy out’ incentives and any other remuneration opportunities in doing 
so the committee will take account of relevant factors including any 
performance conditions attached to any forfeited incentive awards 
the likelihood of those conditions being met the proportion of the 
vestingperformance period remaining and the form of the award 
eg cash or shares
the committee may grant awards to a new executive director under 
the provision in the fca listing rules which allows for the granting 
of awards speciﬁcally to facilitate in unusual circumstances the 
recruitment of an executive director without seeking prior shareholder 
approval in doing so it will comply with the provisions in force at the 
date of this report
where an executive is appointed from within the organisation the 
company will honour legacy arrangements in line with the original 
terms and conditions
in the event of the appointment of a new nonexecutive director 
remuneration arrangements will normally be in line with those detailed 
in the relevant table opposite 
executive director service contracts
the key employment terms and other conditions of the current executive directors as stipulated in their service contracts are set out below
provision policy
notice period 12 months’ notice by either the company or the executive director no ﬁxed expiry date
termination payment the company may terminate employment by making a payment in lieu of notice equivalent to the value of base 
salary and beneﬁts in respect of the notice period 
 the company would normally expect executive directors to mitigate any loss upon their departure
remuneration and beneﬁts participation in the incentive plans including the annual bonus and the psp  is noncontractual
policy on payment for loss of ofﬁce
the committee takes a number of factors into account when 
determining leaving arrangements for an executive director
 the committee must satisfy any contractual obligations agreed 
with the executive director as a nonuk incorporated company 
without the beneﬁt of the statutory protections afforded by the uk 
companies act we would be obliged to honour any contractual 
entitlement or other right of an executive director even if it were 
inconsistent with our policy report
 individuals will not normally be eligible to receive an annual bonus 
if on the date the bonus is paid they are no longer employed by 
the group or have submitted their notice or are under notice of 
termination of employment or on garden leave where an individual 
is considered by the committee to be a ‘good leaver’ in exceptional 
circumstances it may consider the individual eligible for a time pro
rated annual bonus subject to business and individual performance
 other payments such as legal fees and outplacement fees may be 
paid if it is considered appropriate
petrofac annual report and accounts 2013
101 policy on payment for loss of ofﬁce continued
the treatment of outstanding share awards is governed by the relevant share plan rules this includes plans operated at below board level and 
under which executive directors are not entitled to be granted awards the following table provides a summary of the leaver provisions of each of 
our share plans in the event of any disagreement the share plan rules will take precedence 
plan performance  
share plan
value creation plan deferred bonus  
share plan
restricted share plan share incentive plan
summary of plan current longterm 
incentive plan for 
executive directors and 
senior management
oneoff plan 
awards made in  
2012 only
below board only
1
 
vehicle for deferral of 
annual bonus amounts 
with awards matched by 
the company
below board only
1
 
typically used to make 
awards to individuals 
upon appointment
hmrcapproved tax
efﬁcient plan available 
for participation to all 
ukbased employees
automatic good leaver categories
death
injury illhealth 
or disability

transfer of employing 
company or business 
outside group

retirement by 
agreement with 
employer

redundancy
any other scenario in 
which the committee 
determines good leaver 
treatment is justiﬁed

2

treatment for good leavers under normal circumstances as governed by the share plan rules and in accordance with the 
company’s share dealing code
3
vesting of awards subject to the 
achievement of 
performance conditions 
tested at the relevant 
vesting date unless the 
committee determines 
it fair and reasonable 
that a greater proportion 
should vest on a time
apportioned basis
unvested awards shall vest 
to the extent determined by 
the committee taking into 
account the performance 
conditions where the 
performance period has 
not been completed and 
unless the committee 
determines otherwise the 
period of time elapsed 
since grant
invested awards vest 
in full 
matching awards vest on 
a timeapportioned basis
5
 
on a time
apportioned basis
5

leaver provisions 
under the sip are 
in accordance with 
the standard hmrc 
leaver provisions 
vesting date the original vesting date
4
the original vesting date
4
the date of cessation
6
the date of cessation
6
death all unvested awards shall 
vest in full on the date 
of death
all unvested awards shall 
vest following death to 
the extent determined by 
the committee
7
 
all unvested awards shall 
vest in full on the date 
of death
all unvested awards shall 
vest in full on the date 
of death
all shares will be 
released on the date 
of death
treatment for bad leavers ie any other leaving reasons than those provided above
8
unvested awards lapse 
in full
5
 
unvested awards lapse 
in full
5
 
unvested awards lapse 
in full
5
 
unvested awards lapse 
in full
5
 
all shares are released 
subject to any relevant 
tax requirements
1  executive directors may hold awards which were granted prior to their appointment to the board 
2  other than gross misconduct
3 for all plans other than the sip individuals leaving as ‘good leavers’ will be deemed to cease employment when the relevant notice period ends unless the committee determines to deem cessation to 
be on an earlier date on or following the date notice was given 
4  the committee has the ﬂexibility to determine that awards can vest upon cessation of employment
5  unless determined otherwise by the remuneration committee
6  awards are generally not subject to performance conditions and will vest on cessation of employment subject to the terms of the relevant share plan rules
7 taking into account the performance conditions where the performance period has not been completed and unless the committee determines otherwise the period of time elapsed since grant
8 for all plans other than the sip individuals leaving as ‘bad leavers’ will be deemed to cease employment when notice is given unless the committee determines to deem cessation to be on a later date 
no later than the end of the relevant notice period
petrofac annual report and accounts 2013
102
governance
directors’ remuneration report continued other events
on a change of control or winding up of the company
 invested awards under the dbsp vest in full
 rsp awards psp awards and matching awards under the dbsp will vest on a time prorated basis and where applicable subject to the 
achievement of the relevant performance conditions unless the committee determines that the circumstances are sufﬁciently exceptional to 
justify a higher level of vesting
 vcp awards vest taking into account the achievement of the performance conditions where the performance period has not completed 
and unless the committee determines otherwise the time elapsed since grant in the event of a demerger delisting special dividend or other 
event which in the opinion of the committee may affect the current or future value of shares the committee may allow awards to vest on the 
same basis
nonexecutive director letters of appointment
the nonexecutive directors including the chairman of the company have letters of appointment which set out their duties and responsibilities 
they do not have service contracts
the key terms of the appointments are set out in the table below
provision policy
period in line with the uk code all directors will seek annual reappointment by shareholders at the agm
termination three months’ notice by either the company or the nonexecutive director
 nonexecutive directors and the chairman are not entitled to compensation on leaving the board
 if a nonexecutive director or the chairman is requested to resign they are entitled to prior notice or fees in lieu of three 
months’ notice
fees as set out on page 112
illustration of the remuneration policy
petrofac’s remuneration arrangements have been designed to ensure that a signiﬁcant proportion of pay is dependent on the delivery of stretching 
shortterm and longterm performance targets aligned with the creation of sustainable shareholder value the committee considers the level of 
remuneration that may be received under different performance outcomes to ensure that this is appropriate in the context of the performance 
delivered and the value added for shareholders
the charts on page 104 provide illustrative values of the remuneration package in 2014 for executive directors under three assumed 
performance scenarios
assumed performance assumptions used
fixed pay
all performance scenarios consists of total ﬁxed pay including base salary beneﬁts and cash allowance
 base salary – salary effective as at 1 january 2014
 beneﬁts – amount received by each executive director in 2013
 cash allowance – allowance effective as at 1 january 2014
variable pay
minimum performance no payout under the annual bonus
 no vesting under the performance share plan
performance in line with 
expectations
 50 of the maximum payout under the annual bonus ie 100 of salary
 30 vesting under the performance share plan ie 60 of salary
maximum performance
1
 100 of the maximum payout under the annual bonus ie 200 of salary
 100 vesting under the performance share plan ie 200 of salary
1 we have used a maximum psp award opportunity of 200 of base salary in line with the usual maximum award under the plan rules please note that in circumstances which the committee deems to 
be exceptional awards up to 300 of base salary may be made
performance share plan awards have been shown at face value with no share price growth or discount rate assumptions allemployee share 
plans have been excluded as have any legacy awards held by executive directors for ukbased executive directors who are paid in pound 
sterling amounts have been translated to us dollars based on the average exchange rate for 2013 of £1us15641
petrofac annual report and accounts 2013
103 consideration of conditions elsewhere 
in the company
when determining remuneration arrangements for executive directors 
the committee considers as a matter of course the pay and conditions 
of employees throughout the group in particular the committee pays 
speciﬁc attention to the general level of salary increases and the size 
of the annual bonus pool within the wider population with particular 
reference to the yearonyear change in these ﬁgures
whilst the committee does not directly consult with our employees as 
part of the process of determining executive pay the committee does 
receive feedback from employee surveys and takes this into account 
when reviewing executive pay in addition a signiﬁcant number of our 
employees are shareholders and so are able to express their views in 
the same way as other shareholders
consideration of shareholder views
the company places great emphasis on our strong relationship 
with shareholders and recognises the importance of clear and 
full consultation on all aspects of remuneration and governance 
at petrofac 
in reviewing our approach to directors’ remuneration reporting this year 
and our forwardlooking remuneration policy we maintained a dialogue 
with our major shareholders and took their views into account
the committee continues to monitor shareholder views when 
evaluating and setting ongoing remuneration strategy and we commit 
to consulting with major shareholders prior to any signiﬁcant changes 
to our remuneration policy
minor amendments
the committee may make minor amendments to the policy set out 
above for regulatory exchange control tax or administrative purposes 
or to take account of a change in legislation without obtaining 
shareholder approval for that amendment
availability of documentation
service contracts and letters of appointment for all directors are 
available for inspection by any person at our registered ofﬁce in jersey 
and at our corporate services ofﬁce in london they will also be 
available for inspection during the 30 minutes prior to the start of our 
agm to be held in london in may 2014
group chief executive – ayman asfari
all ﬁgures expressed as a  of total
maximum
target
below
threshold
1213k
2840k
5280k 23
43
100
36 21
38 39
fixed remuneration annual bonus psp
base salary 1017k
beneﬁts
 
87k
cash allowance
 
109k
total ﬁxed pay
 
1213k
chief executive engineering construction 
operations  maintenance – marwan chedid
all ﬁgures expressed as a  of total
maximum
target
below
threshold
856k
1824k
3276k 26
47
100
33 20
37 37
fixed remuneration annual bonus psp
base salary 605k
beneﬁts
 
21k
cash allowance
 
230k
total ﬁxed pay
 
856k
chief financial ofﬁcer – tim weller
all ﬁgures expressed as a  of total
maximum
target
below
threshold
831k
1982k
3709k 22
42
100
36 22
39 39
fixed remuneration annual bonus psp
base salary 720k
beneﬁts
 
2k
cash allowance
 
109k
total ﬁxed pay
 
831k
as noted on page 103 these charts are for illustrative purposes 
only and actual outcomes may differ from that shown
petrofac annual report and accounts 2013
104
governance
directors’ remuneration report continued annual report on remuneration 
looking backwards
the information presented from this section up until the relevant note on page 111 represents the audited section of this report
single total ﬁgure of remuneration
the following table sets out the total remuneration for executive directors and nonexecutive directors for the year ended 31 december 2013 
with prior year ﬁgures also shown all ﬁgures are presented in usd 
all ﬁgures shown  
in us’000
salary and fees  
a
beneﬁts  
b
cash allowance  
c
postemployment 
beneﬁt  
d
annual bonus  
e
longterm 
incentives  
f
total 
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
executive 
directors
ayman asfari
1
988 969 56 40 109 103 – – 1173 1571 277 1980 2603 4663
maroun semaan
2
595 595 60 54 220 220 50 94 150 500 119 1492 1194 2955
marwan chedid
3
575 541 21 37 220 200 48 136 700 850 53 421 1617 2185
andy inglis
14
852 833 2 2 109 103 – – 0 1428 0 – 963 2366
tim weller
1
688 674 2 2 109 103 – – 782 1031 – – 1581 1810
nonexecutive 
directors
5
norman murray
1
434 400 – – – – – – – – – – 434 400
thomas thune 
andersen 125 121 – – – – – – – – – – 125 121
stefano cao 125 121 – – – – – – – – – – 125 121
roxanne decyk 101 98 – – – – – – – – – – 101 98
rené médori
13 6
111 93 – – – – – – – – – – 111 93
rijnhard van tets
6
114 121 – – – – – – – – – – 114 121
kathleen 
hogenson
7
44 – – – – – – – – – – – 44 –
notes to the table – methodology 
a salary and fees –the cash paid in respect of 2013
b beneﬁts –the taxable value of all beneﬁts paid in respect of 2013 ukresident executive directors receive private health insurance life assurance and longterm disability insurance ayman asfari’s 
beneﬁts primarily relate to the employment of a personal assistant who is partly engaged in support of the administration of his personal affairs uaeresident executive directors receive similar beneﬁts 
to ukresident executive directors and in addition receive other typical expatriate beneﬁts such as children’s education and return ﬂights to their permanent home 
c cash in lieu of pension and car allowance – ukresident executive directors receive a cash allowance in place of beneﬁts including but not limited to car allowances and pension contributions 
directors do not receive pension contributions from the company uaeresident executive directors receive a cash allowance in respect of housing utilities and transport in line with local 
market practice
d postemployment beneﬁt – uaeresident executive directors are required by local statute to receive an end of service indemnity payment such payments are due to all nonuae national employees 
working in the uae and are based on years of service and salary these sums will be payable by the company only on termination of the individual’s employment from the uae the amounts disclosed 
are the increase in entitlement beneﬁt for 2013 the total amount retained as at 31 december 2013 in respect of marwan chedid is us957224 as a result of his departure from the company on 
31 december 2013 maroun semaan received payment of his uae end of service indemnity in full which amounted to us1034000 the indemnity has been accrued over his 22 years of employment 
at the company in line with requirements under uae local statute
e annual bonus – cash bonus paid in respect of 2013
f longterm incentives – 12 of the 2011 awards under the performance share plan are due to vest on 19 march 2014 the value shown represents an estimate of the market value of the shares that 
are due to vest based on a threemonth average share price of 1311 pence 1 october to 31 december 2013 the 2012 values in this column relating to awards which vested in may 2013 have been 
revised from last year’s report based on the actual share price of 1325 pence at the date of vesting on 16 may 2013
further notes to the table
1  ukbased directors are paid in sterling amounts have been translated to us dollars based on the prevailing rate at the date of payment or award with the exception of the bonus amounts which have 
been translated using the average exchange rate for 2013 of £1us15641
2  maroun semaan ceased to be a director from 31 december 2013 
3  marwan chedid and rené médori were appointed as directors on 19 january 2012 the 2012 ﬁgures reﬂect the period from this date to 31 december 2012
4  andy inglis will cease to be a director from 28 february 2014 
5  nonexecutive directors receive a basic fee of £65000 per annum and an additional fee of £15000 per annum for acting as a chairman of a board committee norman murray receives a fee of 
£280000 per annum these fees were last changed in july 2013
6 rené médori succeeded rijnhard van tets as chairman of the audit committee on 1 august 2013
7  kathleen hogenson was appointed as a nonexecutive director on 1 august 2013
petrofac annual report and accounts 2013
105 additional disclosures in respect of the single 
ﬁgure table
beneﬁts
the single total ﬁgure table on page 105 sets out the total amount 
of beneﬁts received by each executive director the table below 
provides an overview of the most signiﬁcant components of the 
relevant beneﬁts
provision of 
personal assistant 
housing and 
transport 
education  
allowance
ayman asfari us53802 – –
maroun semaan – us219996 us29700
marwan chedid – us219996 us12375
annual bonus
the table below sets out the annual bonus awards made to executive 
directors in respect of 2013
2013
annual bonus
as a  of 
maximum 
opportunity
as a  of base 
salary 
ayman asfari £750000 59 119
maroun semaan us150000 13 25
marwan chedid us700000 61 122
andy inglis £0 0 –
tim weller £500000 57 114
at the start of the year the committee determined whether to award 
each executive director a cash bonus in respect of 2013 in doing 
so the committee considered the extent of achievement by each 
executive director against their balanced scorecard measures set 
by reference to the group’s corporate plan and took into account 
the company’s ﬁnancial performance and personal objectives 
the balanced scorecard is used as a framework for the committee to 
use its judgement to determine bonuses for each executive director on 
a discretionary basis and does not provide a formulaic outturn
these targets are designed to be stretching and drive performance 
and delivery of the group’s strategic aims 
the measures include
 hse and integrity measures
 ﬁnancial performance including net income total revenue order 
intake cash ﬂow targets backlog and costs
 group and where relevant business service line strategic and 
operational performance measures and
 peoplerelated measures 
in addition some executive directors have targets related to 
succession planning risk management and speciﬁc capability 
measures in this way the committee considers that it has an incentive 
structure for senior management that promotes responsible behaviour 
the bonuses awarded to executive directors in respect of 2013 
recognise that on the whole our performance against our strategic 
and growth targets was good with achievement of a number of 
key strategic and operational milestones our programme to drive 
capability within the group was also delivered well placing us on a ﬁrm 
footing for future growth
in terms of ﬁnancial results we achieved modest growth in net proﬁt 
in 2013 and there was also continued growth in our backlog which 
ended the year at a record high of us150 billion
set against this however the committee recognises that there were 
three fatalities during 2013 in addition performance against some 
ﬁnancial metrics whilst still good did not fully meet our stretching 
expectations and some of our operational targets were not met in 
all respects 
taking all these factors into account the committee used its 
judgement to set bonuses in the context of our overall performance 
the signiﬁcant reduction in outturn from 2012 reﬂects both the 
stretching targets which we set at the beginning of the year and missed 
expectations in some areas
at this stage the committee considers that the goals within the 
balanced scorecard remain commercially sensitive we always seek 
to be as transparent as possible with shareholders as such we 
will continue to keep the disclosure of our performance framework 
under review so that we can respond to developing best practice 
and provide shareholders with as much context as possible within 
commercial constraints
performance share plan
the psp value shown in the single ﬁgure table relates to the 2011 
award which is due to vest in march 2014 the performance conditions 
for this award are set out below
a  50 of the award – threeyear relative tsr performance against a 
sectoral peer group the ‘index’
threeyear petrofac tsr performance
percentage of tsr 
element vesting
less than the index 0
equal to the index 30
25 outperformance of the index 100
straightline vesting operates between these points
the peer group for the 2011 award is set out below
aker solutions saipem
amec schlumberger
chicago bridge  iron co snclavalin group
fluor corporation technip
foster wheeler tecnicas reunidas
halliburton wood group john
jgc worleyparsons
maire tecnimont
petrofac annual report and accounts 2013
106
governance
directors’ remuneration report continued b 50 of the award – threeyear eps growth
eps growth per annum
percentage of eps  
element vesting
10 or less 0
15 30
20 or more 100
straightline vesting operates between these points
the table below provides an overview of petrofac’s performance against the 2011 psp award targets and resulting vesting
actual performance vesting as  of element
relative tsr performance below index 0
eps growth 14 per annum 24
total vesting 12 of shares awarded
scheme interests awarded during the ﬁnancial year
performance share plan awards
as outlined in the policy table psp awards are granted over petrofac shares with the number of shares under award determined by reference to 
a percentage of base salary award levels are based on individual performance prior to grant details of the actual number of shares granted are 
set out on page 109 the following table provides details of the awards made under the psp on 24 may 2013 performance for these awards is 
measured over the three ﬁnancial years from 1 january 2013 to 31 december 2015 they are subject to the same performance conditions as for 
the 2011 award outlined in the previous section on page 106
type of award face value £
face value 
 of salary
threshold vesting  
 of face value
maximum vesting 
 of face value
end of performance 
period
ayman asfari
performance 
shares
£1219987 193 for tsr element 
50 of award
30 of face value
for eps element
50 of award
0 of face value
100 31 dec 2015
maroun semaan – –
marwan chedid £727 597 191
andy inglis £1049994 193
tim weller £849995 193
awards were made based on a share price of 152940 pence and the face values shown have been calculated on this basis this share price represents the ﬁveday average share price up to 22 march 
2013 due to share dealing restrictions placed on senior management at that time although awards were made in may the march dates were used for the award pricing calculations as this was when the 
majority of employees received awards 
share incentive plan awards
ukbased executive directors are eligible to participate in hmrcapproved allemployee share plans on the same basis as other eligible 
employees during 2013 tim weller participated in the share incentive plan sip and purchased 109 shares during 2013
payments for loss of ofﬁce
after more than 22 years’ invaluable service maroun semaan who is one of the founders and major shareholders of the company retired from 
the group on 31 december 2013 he stepped down from the board at the same time mr semaan received his base salary beneﬁts and cash 
allowance up until that date as mr semaan is a ‘good leaver’ the committee determined he should receive an annual bonus payment for the 
achievement of his speciﬁc objectives in addition under the rules of the performance share plan all outstanding longterm incentive awards 
that he holds under the performance share plan will vest on a timeapportioned basis subject to their existing timescales and satisfaction of 
the applicable performance conditions as required under the provisions of uae labour law mr semaan received an end of service indemnity 
payment of us1034000 other than this statutory requirement he did not receive any payment for loss of ofﬁce
andy inglis will cease to be an executive director of the company on 28 february 2014 mr inglis will receive his base salary beneﬁts and cash 
allowance for 2013 and for the period of 2014 up until that date mr inglis did not receive an annual bonus in respect of 2013 and will not be 
considered for an annual bonus in respect of 2014 all outstanding longterm incentive awards he holds under the performance share plan have 
lapsed as mr inglis had given notice of his termination of employment to the company prior to the ﬁnal tranche of his 2011 rsp award vesting 
this award has also lapsed 
full details of mr inglis’ leaving arrangements including a single ﬁgure of remuneration for 2014 will be published in our 2014 directors’ 
remuneration report
petrofac annual report and accounts 2013
107 statement of directors’ shareholding and share interests
directors’ shareholdings at 31 december 2013 and share ownership guidelines
following discussions with shareholders in relation to the vcp in 2012 the committee introduced a shareholding requirement of 300 of base 
salary for those executive directors participating in the plan neither ayman asfari nor maroun semaan were participants in the vcp and were 
therefore not subject to a formal shareholding requirement in any event as founders these two individuals already had substantial shareholding 
interests in the company signiﬁcantly in excess of the required levels
until the relevant shareholding guidelines have been met executive directors are encouraged to retain vested shares earned under the 
company’s incentive plans unvested share awards are not taken into account when considering an executive director’s progress towards 
the shareholding requirements 
current shareholding requirements and the number of shares held by directors at 31 december 2013 are set out in the table below
director
shareholding requirement 
as a  of salary target 
–  achieved
shares owned outright  
at 31 december 
2013 
no of shares
interests in share  
incentive schemes 
awarded without 
performance conditions  
at 31 december 
2013
1 
no of shares
interests in share  
incentive schemes 
awarded subject to 
performance conditions  
at 31 december  
2013
no of shares
shares owned outright  
at 31 december  
2012
no of shares
ayman asfari
2
no formal 
shareholding 
requirement
62950678 – 269332 62900835
maroun semaan
2
no formal 
shareholding 
requirement
28288813 – 91771 28217 864
marwan chedid
3
300 1519 1368733 21558 119479 1321913
andy inglis
4
300 30 39494 22144 248944 18035
tim weller
3
300 43 46208
5
10548 99192 28211
norman murray – 17 130 – – 9630
thomas thune andersen – 4000 – – 4000
stefano cao –––––
roxanne decyk – 5804 – – 5804
rijnhard van tets – 100000 – – 100000
rené médori –––––
kathleen hogenson –––––
1  these relate to shares awarded under the dbsp to marwan chedid prior to his appointment as an executive director and exceptional oneoff awards made to andy inglis and tim weller under the rsp 
at the time of their employment by the company
2  although neither ayman asfari nor maroun semaan have formal shareholding requirements both substantially exceed the shareholding requirement set for the other executive directors 
3  marwan chedid and tim weller are expected to build up a shareholding of three times salary over a period of ﬁve years from appointment tim weller was appointed as an executive director on 
13 october 2011 whilst at this time tim has yet to fully meet the shareholding requirement he has taken steps to acquire shares since his appointment marwan chedid’s shareholding requirement 
has been met in full for the purposes of determining executive director shareholdings the individual’s salary and the share price as at 31 december 2013 has been used 1224 pence 
4  andy inglis will cease to be an executive director of the company on 28 february 2014 
5  includes shares purchased through the sip totalling 187 shares as at 31 december 2013 
 
petrofac annual report and accounts 2013
108
governance
directors’ remuneration report continued share interests – share awards at 31 december 2013
share awards held at the year end including awards of shares made during 2013 to executive directors are given in the table below
director and date of grant plan
number  
of shares  
under award 
at 311212
1
shares granted
in year
1
dividend shares
granted in year
2
lapsed in year vested in year
total number  
of shares  
under award  
at 311213
date from  
which shares 
ordinarily vest
ayman asfari
14 may 2010 psp 94169 – – – 94169
3
– 1903 13
19 march 2011 psp 109195 – 3426 – – 112621
6
1903 14
19 march 2012 psp 72176 – 2264 – – 74440 1903 15
24 may 2013 psp – 79769 2502 – – 82271 1903 16
269332
maroun semaan
14 may 2010 psp 70949 – – – 70949
3
– 1903 13
19 march 2011 psp 51081
4
–1603 4391 – 48293
6
1903 14
19 march 2012 psp 37 899
4
–1188 16287 – 22800 1903 15
71093
marwan chedid
19 march 2010 dbsp 19838
5
––– 19838 – 1903 13
14 may 2010 psp 20020 – – – 20020
3
– 1903 13
19 march 2011 psp 20897 – 655 – – 21552
6
1903 14
19 march 2011 dbsp 27 862
5
–658 – 6962 21558 1903 14
19 march 2012 psp 47 374– 1487– – 48861 1903 15
24 may 2013 psp– 47 574 1492– – 49066 1903 16
141037
andy inglis
05 january 2011 rsp 42929
7
–674 – 21459
8
22144 050114
19 march 2011 psp 112573 – 3531 – – 116104  1903 14
19 march 2012 psp 60146 – 1887 – – 62033 1903 15
24 may 2013 psp – 68654 2153 – – 70807 1903 16
271088
9
tim weller
06 september 2011 rsp 20444
7
– 538 – 10434 10548 060914
19 march 2012 psp 40598– 1274– – 41872 1903 15
24 may 2013 psp – 55577 1743 – – 57320 1903 16
109740
1  the award amounts disclosed under the psp are the maximum number that may vest if all performance conditions attached to the awards are satisﬁed in full
2  dividends awarded on shares granted under the share plans are reinvested to purchase further shares
3  the performance conditions for the may 2010 psp award were satisﬁed and the award vested in full on 16 may 2013 when the closing share price was 1325p
4 following maroun semaan’s retirement on 31 december 2013 the psp awards detailed have been scaled back proportionally to reﬂect the number of shares that he was entitled to as at 31 december 
2013 these awards will be released on the original vesting dates to the extent that the original performance conditions attached to each award are met
5  following his appointment to the board on 19 january 2012 no further awards have been made to marwan chedid under the dbsp on 16 may 2013 his 2010 dbsp award vested in full and a third of 
his 2011 dbsp award vested the closing share price on 16 may 2013 was 1325p mr chedid’s ﬁnal tranche of dbsp awards will vest in march 2014
6  shares awarded on 19 march 2011 have partially satisﬁed performance conditions and therefore 12 of the maximum award levels will vest on 19 march 2014 based on a share price of 1368 pence 
which is the closing share price on 24 february 2014 being the latest practicable date prior to the adoption of this report by the committee the value of the awards made to executive directors on 
19 march 2014 would be as follows ayman asfari £184872 maroun semaan £79276 and marwan chedid £35376
7  shares awarded under the rsp on 5 january 2011 and 6 september 2011 are not subject to performance conditions and will vest subject inter alia to continued employment in equal annual tranches 
over three years from the date of grant in accordance with the share scheme rules and the company’s share dealing code requirements
8  these shares were originally due to vest under the rsp on 5 january 2013 but were delayed as a result of the company being unable to deal at that time these shares vested on 16 may 2013 when 
the closing share price was 1325p
9  these shares will lapse on 28 february 2014 when andy inglis ceases to be an executive director of the company 
petrofac annual report and accounts 2013
109 share interests – share options
share options held at the yearend to executive directors are given in the table below
director date of grant plan
number of options at 
311212 and 311213 exercise price
date from which 
exercisable
marwan chedid
18 may 2012 vcp 112910
1
171028p 18 may 2016
vcp 112910
1
171028p 18 may 2017
vcp 112910
1
171028p 18 may 2018
338730
andy inglis
18 may 2012 vcp 173161
1
171028p 18 may 2016
vcp 173161
1
171028p 18 may 2017
vcp 173161
1
171028p 18 may 2018
519483
2
tim weller
18 may 2012 vcp 46726
1
171028p 18 may 2016
vcp 46726
1
171028p 18 may 2017
vcp 46726
1
171028p 18 may 2018
140178
1  as outlined in our 2012 remuneration report share options under the vcp will only vest subject to the achievement of stretching performance targets the number of share options shown represents the 
maximum number of shares that will vest at each vesting date in addition at each vesting date the committee will assess performance against certain performance safeguards retaining discretion to 
reduce the number of share options that may vest in certain circumstances following vesting all options will be exercisable until 18 may 2020
2  all outstanding options will lapse on 28 february 2014
this represents the end of the audited section of the report
historical tsr performance and group chief executive remuneration outcomes
the chart below compares the tsr performance of the company over the past ﬁve years with the tsr of the ftse 100 index this index has been 
chosen because it is a recognised equity market index of which petrofac is a member the table below the chart summarises the ceo single ﬁgure 
for total remuneration annual bonus payouts and ltip vesting levels as a percentage of maximum opportunity over this period
2009
600
300
400
500
200
100
0
2013 2012 2011 2010
petrofac ftse 100 source datastream
tsr rebased to 100 on 1 january 2009
group chief executive 2009 2010 2011 2012 2013
group chief executive single ﬁgure of remuneration us’000 us3501 us4889 us6088 us4663 us2603
annual bonus payout as a  of maximum opportunity 100 100 75 81 59
psp vesting outturn as a  of maximum opportunity 100 100 100 100 12
petrofac annual report and accounts 2013
110
governance
directors’ remuneration report continued to provide an additional reference point we have also provided a chart below which presents our tsr performance against the same index since 
ipo in october 2005
2005 2006
1000
400
600
800
200
0
2013 2011 2012 2009 2010 2007 2008
petrofac ftse 100 source datastream
tsr rebased to 100 on 3 october 2005
percentage change in remuneration of the group chief executive
the table below illustrates the increase in salary beneﬁts including cash allowance in lieu of pension and annual bonus for the group chief 
executive and that of a representative group of the company’s employees for these purposes we have used all ukbased employees as the 
comparative group as this represents the most appropriate comparator group for reward purposes for our ukbased group chief executive
 change in 
base salary 
20132012
 change in 
beneﬁts 
excluding cash 
allowance in lieu 
of pension  
20132012
 change in 
annual bonus 
20132012
group chief executive  34 38 – 242
all ukbased employees  50 0 – 36
relative importance of the spend on pay
the chart below illustrates the change in total remuneration dividends paid and net proﬁt from 2012 to 2013
the ﬁgures presented have been calculated on the following bases
 dividends – dividends paid in respect of the ﬁnancial year 
 net proﬁt – our reported net proﬁt in respect of the ﬁnancial year this is a key performance indicator for the company the committee 
therefore believes it is the most direct reﬂection of our underlying ﬁnancial performance
 total remuneration – represents total salaries paid to all company employees in respect of the ﬁnancial year see page 136 of the report 
for an explanation as to how this value is calculated note that this excludes social security costs beneﬁt and pension costs and sharebased 
payment expenses
spend in respect of the ﬁnancial year
usm
 
total remuneration dividends net proﬁt
2276
6320
12640 12650
2213
28
28
01
6500
fy2012
fy2013
petrofac annual report and accounts 2013
111 looking forward to 2014
implementation of remuneration policy in 2014
this section provides an overview of how the committee is proposing 
to implement our remuneration policy in 2014
base salary
in determining salary increases for 2014 the committee took into 
account a number of factors including the level of salary increases in 
the wider workforce internal and external positioning and the general 
economic climate
the committee has agreed salary increases of between 3 and 5 
for ukbased executive directors with effect from 1 january 2014 
for marwan chedid a uaebased executive director the salary 
increase is 5 all increases are in line with the wider employee 
population in the relevant local market
the table below shows base salaries for 2014
2014 basic 
salary
2013  
basic salary
ayman asfari £650000 £632000
marwan chedid us605000 us575000
tim weller £460000 £440000
beneﬁts
the committee sets beneﬁts in line with the policy set out on page 96 
there are no changes proposed to the beneﬁt framework in 2014
cash allowance in lieu of pension and car allowance
the levels of cash allowance provided are intended to be broadly 
market typical for role and geographic location although current levels 
are below median
no increase in cash allowance is proposed for ukbased executive 
directors in 2014 the cash allowance for marwan chedid a uae
based executive director has been increased by us10000 with 
effect from 2014 to reﬂect an increase in the general cost of living in 
the uae
the table below shows cash allowances for 2014
2014 cash 
allowance in lieu 
of pension
2013 cash 
allowance in lieu 
of pension
ayman asfari £70000 £70000
marwan chedid us230000 us220000
tim weller £70000 £70000
annual bonus
the maximum annual bonus opportunity for executive directors will 
remain at 200 of base salary in 2014
no change is proposed to the annual bonus framework that applied in 
2013 as outlined on pages 98 and 106 at this stage the committee 
considers that the exact annual bonus targets remain commercially 
sensitive in next year’s annual report we commit to providing 
shareholders with as much context as possible on performance 
against those targets and the resulting bonus outturn rationale 
within commercial constraints
performance share plan
the operating maximum psp award for executive directors will remain 
at 200 of base salary in 2014 
proposed 2014 awards to be granted to executive directors have been 
set by reference to individual performance during 2013 the following 
table sets out the proposed 2014 psp awards for executive directors
2014 psp  
award as   
of base salary
2014 psp 
award as  
of maximum
ayman asfari 1 77 91
marwan chedid 1 82 91
tim weller 174 87
50 of the 2014 psp award will be subject to a tsr performance 
condition over a threeyear period requiring petrofac to outperform 
an index of sectoral peers the peer group to be used for this award is 
the same as outlined on page 106 with maire tecnimont replaced by 
baker hughes the tsr outperformance requirements and associated 
vesting schedule remain the same
the remaining 50 of the 2014 psp award will be subject to an eps 
performance condition over the same threeyear period 
the committee reviewed targets in early 2014 by reference to a 
number of internal and external reference points to ensure that they are 
positioned at a level which it considers appropriate and stretching in 
the context of the business strategy and earnings expectations for the 
next three years whilst ensuring that they do not drive unacceptable 
levels of risk and encourage inappropriate behaviours 
as a result the eps targets have been repositioned for the 2014 
awards as follows
eps growth per annum
percentage of 
eps element 
vesting
7 5 or less 0
10 30
15 or more 100
nonexecutive director remuneration
the table below shows the nonexecutive director current 
fee structure
2014 fees
chairman of the board fee £280000
basic nonexecutive director fee £65000
board committee chairman fee £15000
there are no fees paid for membership of board committees 
petrofac annual report and accounts 2013
112
governance
directors’ remuneration report continued consideration by the directors of matters relating to 
directors’ remuneration 
support for the committee 
during the year the committee received independent advice 
on executive remuneration matters from deloitte llp deloitte 
deloitte were formally appointed as advisers by the committee in 
october 2005 following a recommendation from the nonexecutive 
chairman at the time
deloitte is a member of the remuneration consultants group and 
as such voluntarily operates under the code of conduct in relation to 
executive remuneration consulting in the uk
the committee has reviewed the advice provided by deloitte during 
the year and is satisﬁed that it has been objective and independent
total fees received by deloitte in relation to the remuneration advice 
provided to the committee during 2013 amounted to £110325 based 
on the required time commitment
in addition during 2013 deloitte also provided tax services certain 
strategic and advisory consulting services and secondees who 
assisted in routine internal tax and ﬁnance functions
during 2013 the committee also received support from legal advisers 
freshﬁelds bruckhaus deringer llp freshﬁelds who provided advice 
on delayed awards and vestings for psp and dbsp awards for some 
employees as well as general interpretation of the scheme rules 
the individuals listed in the table below none of whom were 
committee members materially assisted the committee in considering 
executive remuneration and attended at least part of one meeting by 
invitation during the year
attendee position comments
norman murray chairman of board
to provide context  
for matters under 
discussion 
ayman asfari group chief executive
geoff tranﬁeld group head of hr
richard milne group director of legal  
commercial affairs
mary hitchon secretary to the board secretary to committee
carol arrowsmith partner at deloitte llp adviser
simon evans partner at freshﬁelds legal adviser
none of the individuals attended part of any meeting in which their own 
compensation was discussed
governance
the board and the committee consider that throughout 2013 and 
up to the date of this report the company has complied with the 
provisions of the uk corporate governance code relating to directors’ 
remuneration in addition the guidelines issued by the association of 
british insurers abi and the national association of pension funds 
napf have been noted the company also took the opportunity 
to respond to the gc100 working group consultation on the new 
remuneration reporting regulations
the committee considers executive remuneration matters in 
the context of alignment with risk management all members of 
the committee are also members of the board risk committee 
this allows them to provide oversight on any group risk factors 
relating to remuneration matters the committee believes that the 
remuneration arrangements in place do not raise health and safety 
environmental social or ethical issues nor inadvertently motivate 
irresponsible behaviour
shareholder voting
the table below outlines the result of the advisory vote on the 2012 
directors’ remuneration report received at the 2013 agm
number of votes cast for against abstentions
247 605438 235369476 12235962 797 680
9506 494 032
the committee is pleased to note that over 95 of our shareholders 
approved the 2012 directors’ remuneration report since our listing in 
october 2005 we have received at least 95 support for the directors’ 
remuneration report at all agms excluding abstentions and the 
committee would like to take this opportunity to thank shareholders 
for their support over this period
external board appointments
executive directors are normally entitled to accept one nonexecutive 
appointment outside the company with the consent of the board 
any fees received may be retained by the director 
as at the date of this report tim weller is a nonexecutive director 
with the carbon trust and g4s plc for which he received £17 000 
and £42600 respectively in fees during the year until march 2013 
tim weller also served as a nonexecutive director on the bbc 
worldwide board for which he received £10200
annual general meeting
as set out in my statement on page 93 with consideration to the new 
remuneration reporting regulations our policy report and annual report 
on remuneration will each be subject to two advisory shareholder votes 
at the agm to be held on 15 may 2014
on behalf of the board
thomas thune andersen 
chairman of the remuneration committee
25 february 2014
petrofac annual report and accounts 2013
113 directors’ responsibilities
the directors are responsible for preparing the annual report and the 
ﬁnancial statements in accordance with applicable law and regulations 
the directors have chosen to prepare the ﬁnancial statements in 
accordance with international financial reporting standards ifrs 
the directors are also responsible for the preparation of the directors’ 
remuneration report which they have chosen to prepare being 
under no obligation to do so under jersey law the directors are also 
responsible for the preparation of the corporate governance report 
under the listing rules
jersey company law the ‘law’ requires the directors to prepare 
ﬁnancial statements for each ﬁnancial period in accordance with 
generally accepted accounting principles the ﬁnancial statements 
are required by law to give a true and fair view of the state of affairs of 
the company at the period end and the proﬁt or loss of the company 
for the period then ended in preparing these ﬁnancial statements the 
directors should



adopted in their preparation

inappropriate to presume that the company will continue in business
the directors are responsible for keeping proper accounting records 
which are sufﬁcient to show and explain the company’s transactions 
and as such as to disclose with reasonable accuracy at any time the 
ﬁnancial position of the company and enable them to ensure that the 
ﬁnancial statements prepared by the company comply with the law 
they are also responsible for safeguarding the assets of the group and 
company and hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of 
the corporate and ﬁnancial information included on the company’s 
website legislation in jersey governing the preparation and 
dissemination of ﬁnancial statements may differ from legislation in 
other jurisdictions
directors’ approach
the board’s objective is to present a fair balanced and understandable 
assessment of the company’s position and prospects particularly 
in the annual report half year report formerly the interim report and 
other published documents and reports to regulators the board has 
established an audit committee to assist with this obligation 
going concern
the company’s business activities together with the factors likely to 
affect its future development performance and position are set out 
in the strategic report on pages 1 to 65 the ﬁnancial position of the 
company its cash ﬂows liquidity position and borrowing facilities are 
described in the ﬁnancial review on pages 47 to 49 in addition note 29 
to the ﬁnancial statements include the company’s objectives policies 
and processes for managing its capital its ﬁnancial risk management 
objectives details of its ﬁnancial instruments and hedging activities and 
its exposures to credit risk and liquidity risk
the company has considerable ﬁnancial resources together with 
longterm contracts with a number of customers and suppliers 
across different geographic areas and industries as a consequence 
the directors believe that the company is well placed to manage 
its business risks successfully the directors have a reasonable 
expectation that the company has adequate resources to continue in 
operational existence for the foreseeable future thus they continue to 
adopt the going concern basis of accounting in preparing the annual 
ﬁnancial statements
responsibility statement under the disclosure and 
transparency rules
each of the directors listed on pages 68 and 69 conﬁrms that to the 
best of their knowledge

and understandable and provides the information necessary for 
shareholders to assess the company’s performance business 
model and strategy 

true and fair view of the assets liabilities ﬁnancial position and proﬁt 
of the company and the undertakings included in the consolidation 
taken as a whole and
 view of the development and performance of the business and 
the position of the company and the undertakings included in the 
consolidation taken as a whole together with a description of the 
principal risks and uncertainties that they face
by order of the board
tim weller
chief financial ofﬁcer
petrofac annual report and accounts 2013
114
governance
directors’ statements petrofac annual report and accounts 2013
115
group ﬁnancial statements
116  independent auditor’s report to the members of 
petrofac limited
119 consolidated income statement
120 consolidated statement of other comprehensive income
121 consolidated statement of ﬁnancial position
122 consolidated statement of cash ﬂows
123 consolidated statement of changes in equity
124 notes to the consolidated ﬁnancial statements independent auditor’s report to the members of petrofac limited 
 
opinion on financial statements 
in our opinion the group financial statements 
 give a true and fair view of the state of the group’s affairs as at 
31 december 2013 and of its profit for the year then ended 
 have been properly prepared in accordance with international 
financial reporting standards and  
 have been prepared in accordance with the requirements of the 
companies jersey law 1991 
what we have audited 
we have audited the group financial statements of petrofac limited 
for the year ended 31 december 2013 which comprise the 
consolidated income statement the consolidated statement of 
comprehensive income the consolidated statement of financial 
position the consolidated statement of cash flows the 
consolidated statement of changes in equity and the related notes 
1 to 30 the financial reporting framework that has been applied in 
their preparation is applicable law and international financial 
reporting standards 
this report is made solely to the company’s members as a body in 
accordance with article 113a of the companies jersey law 1991 
and our renewed engagement letter dated 19 february 2014 our 
audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to 
anyone other than the company and the company’s members as a 
body for our audit work for this report or for the opinions we have 
formed  
respective responsibilities of directors and auditor 
as explained more fully in the directors’ responsibilities statement 
set out on page 114 the directors are responsible for the 
preparation of the group financial statements and for being satisfied 
that they give a true and fair view  
our responsibility is to audit and express an opinion on the group 
financial statements in accordance with applicable law and 
international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices board’s 
ethical standards for auditors 
in addition the company has also instructed us to 
 report as to whether the information given in the corporate 
governance statement with respect to internal control and risk 
management systems in relation to financial reporting processes 
and about share capital structures is consistent with the financial 
statements  
 review the directors’ statement in relation to going concern as set 
out on page 114 which for a premium listed uk incorporated 
company is specified for review by the listing rules of the 
financial conduct authority and 
 whether the information given in the strategic report is consistent 
with the group financial statements 
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant accounting 
estimates made by the directors and the overall presentation of the 
financial statements in addition we read all the financial and non
financial information in the annual report to identify material 
inconsistencies with the audited financial statements and to identify 
any information that is materially incorrect based on or materially 
inconsistent with the knowledge acquired by us in the course of 
performing the audit if we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for 
our report 
our assessment of risks of material misstatement 
we identified the following risks of material misstatement that have 
had the greatest impact on our overall audit strategy the allocation 
of resources in the audit and directing the efforts of the 
engagement team  
 revenue recognition in respect of long term contracting 
 taxation as a result of the complexity of the group’s operations 
and the large number of jurisdictions in which the group operates 
 initial recognition and determination of subsequent accounting for 
contracts in the integrated energy services segment of the 
business and 
 consideration of potential impairment of goodwill and other 
assets 
our application of materiality  
materiality is a key part of planning and executing our audit strategy 
for the purposes of determining whether the financial statements 
are free from material misstatement we define materiality as the 
magnitude of an omission or misstatement that individually or in the 
aggregate in light of the surrounding circumstances could 
reasonably be expected to influence the economic decisions of the 
users of the financial statements 
as we developed our audit strategy we determine materiality at the 
overall level and at the individual account level performance 
materiality is the application of materiality at the individual account or 
balance level 
planning the audit solely to detect individually material 
misstatements overlooks the fact that the aggregate of individually 
immaterial misstatements may cause the financial statements to be 
materially misstated and leaves no margin for possible undetected 
misstatements performance materiality is set to reduce to an 
appropriately low level the probability that the aggregate of 
uncorrected and undetected misstatements exceeds materiality for 
the financial statements as a whole 
we determined planning materiality for the group to be 38 million 
2012 38 million which is approximately 5 2012 5 of pretax 
profit for the year adjusted for exceptional items if applicable this 
provided a basis for determining the nature timing and extent of risk 
assessment procedures identifying and assessing the risk of 
material misstatement and determining the nature timing and extent 
of further audit procedures 
on the basis of our risk assessments together with our assessment 
of the overall control environment our judgement is that 
performance materiality was 50 2012 50 of our planning 
materiality namely 19 million 2012 19 million our objective in 
adopting this approach was to ensure that uncorrected and 
undetected audit differences in all accounts did not exceed our 
planning materiality level 
  
petrofac annual report and accounts 2013
116
financial statements  
we agreed with the audit committee that would report to them 
all uncorrected audit differences in excess of 19 million 2012 
19 million which is set at 5 of planning materiality we report 
all corrected audit differences that in our view warrant reporting on 
qualitative grounds or where the corrected difference exceeds 
performance materiality reclassification differences are reported 
to the audit committee where the difference exceeds 2 of the 
applicable primary financial statement line items 
an overview of the scope of our audit 
our group audit scope focussed on four operating locations
1
 all 
of which were subject to a full scope audit for the year ended 
31 december 2013 and were selected based on our assessment 
of the risk of material misstatement due to both size and risk an 
additional five components were selected for a specific scope audit 
where the extent of audit work was based on our assessment of 
the risks of material misstatement and of the materiality of those 
locations to the group’s business operations  
together with the group functions which were also subject to a full 
audit for the year ended 31 december 2013 these locations 
represent the principal business units of the group and account for 
82 of the group’s revenue 83 of the group’s operating profit 
and 85 of the group’s total assets audits of these locations are 
performed at a performance materiality level calculated with 
reference to a proportion of the group materiality appropriate to the 
relative scale and risk associated with each location they are also 
selected to provide a basis for undertaking audit work to address 
the risks of material misstatement identified above an additional 
two components were selected for a limited scope review which 
primarily involves inquiries of management and analytical procedures 
based on our assessment of the risk of these locations 
the group audit team follows a programme of planned site visits 
that is designed to ensure that a senior member of the team visits 
each of the four full audit scope locations at least once a year in 
2013 the group audit team including the senior engagement partner 
visited the main operating location in the united arab emirates 
during planning interim review and year end audit procedures 
a group team audit partner also visited the remaining full scope 
locations in malaysia and mexico reviewed key working papers and 
participated in the component team’s planning including the 
discussion of fraud and error the group audit team attended the 
audit closing meetings for each full audit scope component 
the way in which we responded to the risks identified above 
was as follows 
long term contractsrevenue and margin recognition 
we audited the systems in place to ensure the appropriate 
determination of the percentage completion of each significant 
contract ensuring appropriate approval from customers was 
evidenced we challenged management in respect of the 
reasonableness of judgements made regarding the cost to complete 
estimate the timing of recognition of variation orders the adequacy 
of contingency provisions to mitigate contract specific risks and their 
assessments around the potential for liquidated damages for 
projects behind schedule we consider these to be the key 
judgemental areas driving the recognition of revenue and margins in 
respect of long term contracts we also ensured that management’s 
policies and processes for making these estimates continue to be 
applied consistently  
 
accounting for taxation assets liabilities income and expenses 
we utilised tax specialists in our london team in the planning stages 
to determine which jurisdictions should be in scope as well as in the 
audit of tax balances we also involved local tax specialists in the 
relevant jurisdictions where we deemed it necessary we considered 
and challenged the tax exposures estimated by management and 
the risk analysis associated with these exposures along with claims 
or assessments made by tax authorities to date we also audited 
the calculation and disclosure of current and deferred tax to ensure 
compliance with local tax rules and the group’s accounting policies 
including the impact of complex items such as share based 
payments and the review of management’s assessment of the 
likelihood of the realisation of deferred tax balances  
initial recognition and subsequent accounting for ies contracts 
we challenged the judgements and accounting treatments made by 
management arising from the most complex contractual 
arrangements at inception for these contracts we also considered 
the underlying economic models supporting calculations and 
assumptions using valuations specialists where necessary to ensure 
that these are materially accurate and in line with the group’s 
accounting policies as well as the requirements of ifrs we 
involved internal financial reporting specialists to ensure that all 
relevant considerations have been identified and appropriately 
reflected in accounting treatments  
impairment of goodwill and other assets  
we focused on this area as it involves complex and subjective 
judgements by the directors about the future results of the 
business in evaluating whether any impairment was necessary to 
the remaining carrying value of goodwill and other assets our audit 
work involved obtaining evidence regarding its recoverable amount 
and how it compared to the amount at which the goodwill or other 
assets are currently recorded we challenged management’s 
assessment of impairment including the key inputs of the forecast 
cash flows the discount rate used the growth rate assumed and 
the historical accuracy of budgets and we used a valuation 
specialist to assist us with our consideration of the discount rate 
we also evaluated management’s sensitivity analysis and we 
confirmed that the financial statement disclosures met the 
requirements of accounting standards 
opinion on other matters 
in our opinion 
 the information given in the corporate governance statement set 
out on pages 66 to 91 in the annual report and accounts with 
respect to internal control and risk management systems in 
relation to financial reporting processes and about share capital 
structures is consistent with the financial statements 
 the information given in the strategic report is consistent with the 
group financial statements 
matters on which we are required to report by exception 
under the isas uk and ireland we are required to report to you if 
in our opinion information in the annual report is  
 materially inconsistent with the information in the audited financial 
statements or 
 apparently materially incorrect based on or materially inconsistent 
with or knowledge of the group acquired in the course of 
performing our audit or 
 otherwise misleading 
in particular we are required to consider whether we have identified 
any inconsistencies between our knowledge acquired during the 
audit and the directors’ statement that they consider the annual 
report is fair balanced and understandable and whether the annual 
report appropriately discloses those matters that we communicated 
to the audit committee which we consider should have been 
disclosed  
petrofac annual report and accounts 2013
117 independent auditor’s report to the members of petrofac limited cont’d 
under companies jersey law 1991 we are required to report to 
you if in our opinion  
 proper accounting records have not been kept or proper returns 
adequate for our audit have not been received from branches not 
visited by us or 
 the financial statements are not in agreement with the accounting 
records and returns or 
 we have not received all the information and explanations we 
require for our audit 
under the listing rules we are required to review the part of the 
corporate governance statement relating to the company’s 
compliance with the nine provisions of the uk corporate 
governance code specified for our review 
the company has voluntarily complied with and has instructed us 
to review the directors’ statement set out on page 114 in relation 
to going concern this statement is specified for review by the 
listing rules of the financial services authority for premium listed 
uk incorporated companies  
we have nothing to report in respect of these matters 
other matter 
we have reported separately on the parent company financial 
statements of petrofac limited for the year ended 31 december 
2013 and on the information in the directors’ remuneration report 
that is described as having been audited  
john flaherty 
for and on behalf of ernst  young llp 
london 
25 february 2014 
notes 
1
 full scope includes head office and group consolidation procedures 
2
 the maintenance and integrity of the petrofac limited web site is the 
responsibility of the directors the work carried out by the auditors does not 
involve consideration of these matters and accordingly the auditors accept 
no responsibility for any changes that may have occurred to the financial 
statements since they were initially presented on the web site 
3
 legislation in jersey governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions 
 
petrofac annual report and accounts 2013
118
financial statements consolidated income statement 
for the year ended 31 december 2013 
notes
2013 
 usm 
  
2012
 usm
restated
revenue 4a 6329  6240
cost of sales 4b 5165  5164
gross profit 1164  1076
selling general and administration expenses 4c 387  357
other income 4f 11  65
other expenses 4g 17  20
profit from operations before tax and finance costsincome 771  764
finance costs 5 28  5
finance income 5 24  12
share of profitslosses of associatesjoint ventures 13 22  6
profit before tax 789  765
income tax expense 6 142  135
profit for the year 647  630
 
attributable to   
 petrofac limited shareholders 650  632
 noncontrolling interests 3  2
 647  630
earnings per share us cents on profit attributable to petrofac limited shareholders 7  
– basic 19085  18555
– diluted 18910  18388
the attached notes 1 to 30 form part of these consolidated financial statements 
petrofac annual report and accounts 2013
119 consolidated statement of other comprehensive income 
for the year ended 31 december 2013 
notes
2013 
 usm  
2012
 usm
profit for the year 647  630
   
other comprehensive income   
foreign currency translation lossesgains 23 4  10
net gainloss on maturity of cash flow hedges recycled in the year 23 1  20
net changes in fair value of derivatives and financial assets designated as cash flow hedges 23 29  –
other comprehensive income to be reclassified to consolidated income statement in  
subsequent periods 24  30
total comprehensive income for the year  671  660
 
attributable to   
 petrofac limited shareholders 674  662
 noncontrolling interests  3  2
 671  660
the attached notes 1 to 30 form part of these consolidated financial statements 
  
petrofac annual report and accounts 2013
120
financial statements consolidated statement of financial position 
at 31 december 2013 
notes
2013 
 usm 
  
2012
 usm
restated
assets    
noncurrent assets   
property plant and equipment 9 1191  897
goodwill 11 155  125
intangible assets 12 330  307
investments in associatesjoint ventures 13 215  210
other financial assets 14 527  444
income tax receivable 9  –
deferred tax assets 6c 37  43
 2464  2026
current assets   
inventories 16 16  27
work in progress 17 1473  656
trade and other receivables 18 2360  1846
due from related parties 28 5  10
other financial assets 14 320  85
income tax receivable 2  12
cash and shortterm deposits 19 617  582
 4793  3218
total assets 7257  5244
equity and liabilities    
equity attributable to petrofac limited shareholders   
share capital 20 7  7
share premium 4  4
capital redemption reserve 11  11
treasury shares 21 110  100
other reserves 23 63  38
retained earnings 2014  1589
 1989  1549
noncontrolling interests 3  1
total equity 1992  1550
noncurrent liabilities    
interestbearing loans and borrowings 24 1291  292
provisions 25 213  100
other financial liabilities 14 2  8
deferred tax liabilities 6c 140  143
 1646  543
current liabilities   
trade and other payables 26 2296  1918
due to related parties 28 3  34
interestbearing loans and borrowings 24 53  57
other financial liabilities 14 37  17
income tax payable 140  75
billings in excess of cost and estimated earnings  17 254  307
accrued contract expenses 836  743
 3619  3151
total liabilities  5265  3694
total equity and liabilities 7257  5244
the financial statements on pages 119 to 168 were approved by the board of directors on 25 february 2014 and signed on its behalf by  
tim weller – chief financial officer 
the attached notes 1 to 30 form part of these consolidated financial statements
petrofac annual report and accounts 2013
121 consolidated statement of cash flows 
for the year ended 31 december 2013 
notes
2013 
 usm 
  
2012
 usm
restated
operating activities    
profit before tax 789  765
adjustments to reconcile profit before tax to net cash flows   
 depreciation amortisation impairment and write off 4b 4c 238  125
 sharebased payments 4d 15  26
 difference between other longterm employment benefits paid and amounts recognised in the  
 income statement 7  11
 net finance expenseincome 5 4
 
 7
 gain arising from sale of a vessel under a finance lease 22  –
 loss on fair value changes in seven energy warrants 4g 1  6
 gain on disposal of an investment in a joint venture 4f –  6
 share of profitslosses of associatesjoint ventures 13 22  6
 gain on disposal of noncurrent asset held for sale 4f –  27
 fair value gain on initial recognition of investment in associate 13 –  9
 debt acquisition costs written off –  3
 other noncash items net 16  7
 1026  900
working capital adjustments   
 trade and other receivables 252  487
 work in progress 817  44
 due from related parties 5  77
 inventories 11  16
 other current financial assets 75  68
 trade and other payables 116  184
 billings in excess of cost and estimated earnings 92  82
 accrued contract expenses 92  525
 due to related parties 31  11
 133  50
longterm receivables from customers 14 134  185
other noncurrent items net 6  4
cash generated fromused in operations 5  239
interest paid 14  3
income taxes paid net 77  83
net cash flows used in operating activities 86  325
investing activities   
purchase of property plant and equipment 487  392
acquisition of subsidiaries net of cash acquired 23  20
payment of contingent consideration on acquisition –  1
purchase of intangible oil and gas assets 12 43  165
purchase of other intangible assets 12 10  7
loan extended to an associateinvestments in an associate  13 4  25
dividend received from joint ventures 10  2
loan in respect of the development of the greater stella area 85  115
proceeds from disposal of property plant and equipment 2  1
proceeds from disposal of noncurrent asset held for sale –  60
proceeds from disposal of an investment in a joint venture –  5
interest received 1  5
net cash flows used in investing activities 593  652
financing activities   
interestbearing loans and borrowings obtained net of debt acquisition cost 1919  291
repayment of interestbearing loans and borrowings 910  50
treasury shares purchased 21 47  76
equity dividends paid 224  201
net cash flows fromused in financing activities 738  36
net increasedecrease in cash and cash equivalents 59  1013
net foreign exchange difference 1  3
cash and cash equivalents at 1 january 525  1535
cash and cash equivalents at 31 december 19 585  525
the attached notes 1 to 30 form part of these consolidated financial statements
petrofac annual report and accounts 2013
122
financial statements consolidated statement of changes in equity 
for the year ended 31 december 2013 
  attributable to shareholders of petrofac limited  
non 
controlling 
interests 
usm 
 
 
total 
equity 
usm
  
issued  
share  
capital 
usm 
 
  
share  
premium 
usm 
 capital 
redemption 
reserve 
usm
treasury 
shares 
usm 
note 21
other 
reserves 
usm 
note 23
retained 
earnings 
usm
 
 
total  
usm 
   
balance at 1 january 2013  7  4  11 100 38 1589 1549   1  1550
profit for the year  –  –  – – – 650 650   3  647
other comprehensive income  –  –  – – 24 – 24   –  24
total comprehensive income for the year  –  –  – – 24 650 674   3  671
sharebased payments charge note 22  –  –  – – 15 – 15   –  15
shares vested during the year note 21  –  –  – 37 34 3 –   –  –
transfer to reserve for share  
based payments note 22  –  –  – – 22 – 22   –  22
treasury shares purchased note 21  –  –  – 47 – – 47   –  47
income tax on sharebased  
payments reserve  –  –  – – 2 – 2   –  2
noncontrolling interest arising on a 
business combination note 10  –  –  – – – – –   5  5
dividends note 8  –  –  – – – 222 222   –  222
balance at 31 december 2013  7  4  11 110 63 2014 1989   3  1992
 
  attributable to shareholders of petrofac limited  
non 
controlling 
interests 
usm 
 
 
total 
equity 
usm
  
issued  
share  
capital 
usm 
  
share  
premium 
usm 
  
capital 
redemption 
reserve 
usm
treasury 
shares 
usm 
note 21
other 
reserves 
usm 
note 23
retained 
earnings 
usm
total  
usm 
    
balance at 1 january 2012  7  2  11 75 6 1161 1112   3  1115
profit for the year  –  –  – – – 632 632   2  630
other comprehensive income  –  –  – – 30 – 30   –  30
total comprehensive income for the year  –  –  – – 30 632 662   2  660
shares issued as payment of 
consideration on acquisition  –  2  –––– 2   –  2
sharebased payments charge note 22  –  –  – – 26 – 26   –  26
shares vested during the year note 21  –  –  – 51 45 6 –   –  –
transfer to reserve for share 
based payments note 22  –  –  – – 20 – 20   –  20
treasury shares purchased note 21  –  –  – 76 – – 76   –  76
income tax on sharebased  
payments reserve  –  –  – – 1 – 1   –  1
dividends note 8  –  –  – – – 198 198   –  198
balance at 31 december 2012  7  4  11 100 38 1589 1549   1  1550
 shares held by petrofac employee benefit trust and petrofac joint venture companies employee benefit trust 
the attached notes 1 to 30 form part of these consolidated financial statements 
petrofac annual report and accounts 2013
123 notes to the consolidated financial statements 
for the year ended 31 december 2013 
1 corporate information 
the consolidated financial statements of petrofac limited 
the ’company’ for the year ended 31 december 2013 were 
authorised for issue in accordance with a resolution of the 
directors on 25 february 2014 
petrofac limited is a limited liability company registered and 
domiciled in jersey under the companies jersey law 1991 
and is the holding company for the international group of petrofac 
subsidiaries together the ‘group’the company’s 31 december 
2013 financial statements are shown on pages 171 to 184 
the group’s principal activity is the provision of services to the 
oil and gas production and processing industry 
the principal group companies and joint venture entities 
are contained in note 30 to these consolidated financial statements 
2 summary of significant accounting policies 
basis of preparation 
the consolidated financial statements have been prepared on a 
historical cost basis except for derivative financial instruments and 
contingent consideration which have been measured at fair value 
the presentation currency of the consolidated financial statements 
is united states dollars and all values in the financial statements are 
rounded to the nearest million usm except where otherwise 
stated 
statement of compliance 
the consolidated financial statements of petrofac limited and its 
subsidiaries have been prepared in accordance with international 
financial reporting standards ifrs and applicable requirements 
of jersey law 
restatements 
the financial performance of the group for the year ended 31 
december 2012 the financial position of the group as at 31 
december 2012 and the statement of cash flows of the group for 
the year ended 31 december 2012 have been restated by replacing 
proportionate consolidation of joint ventures with the equity method 
of accounting as a result of the application of new ifrs 11 – joint 
arrangements and amended ias 28 – investment in associates and 
joint ventures refer note 13 for details the loan extended in 
respect of development of the greater stella area of us115m was 
incorrectly classified in the cash flow statements for the year ended 
31 december 2012 the financial statements have been restated to 
reclassify the amount of the loan given by the company from 
operating activities to investing activities to correctly disclose the 
nature of the loan this restatement had no impact on the profit 
number of both the prior and the current period 
basis of consolidation 
the consolidated financial statements comprise the financial 
statements of petrofac limited and its subsidiaries the financial 
statements of its subsidiaries are prepared for the same reporting 
year as the company and where necessary adjustments are made 
to the financial statements of the group’s subsidiaries to bring their 
accounting policies into line with those of the group 
control is achieved when the group is exposed or has rights to 
variable returns from its involvement with the investee and has the 
ability to affect those returns through its power over the investee all 
intragroup balances and transactions including unrealised profits 
have been eliminated on consolidation 
when the group has less than a majority of the voting or similar 
rights of an investee the group considers all relevant facts and 
circumstances in assessing whether it has power over an investee 
including  
 the contractual arrangement with the other vote holders  
of the investee 
 rights arising from other contractual arrangements 
 the group’s voting rights and potential voting rights 
the group reassesses whether or not it controls an investee if facts 
and circumstances indicate that there are changes to one or more 
of the three elements of control consolidation of a subsidiary 
begins when the group obtains control over the subsidiary and 
ceases when the group loses control of the subsidiary assets 
liabilities income and expenses of a subsidiary acquired or disposed 
of during the year are included in the statement of comprehensive 
income from the date the group gains control until the date the 
group ceases to control the subsidiary 
noncontrolling interests in subsidiaries consolidated by the group 
are disclosed separately from the group’s equity and income 
statement and noncontrolling interests are allocated their share 
of total comprehensive income for the year even if this results 
in a deficit balance 
new standards and interpretations 
the group has adopted new and revised standards and 
interpretations issued by the international accounting standards 
board iasb and the international financial reporting 
interpretations committee ifric of the iasb that are relevant to its 
operations and effective for accounting periods beginning on or after 
1 january 2013 the principal effects of the adoption of the relevant 
new and amended standards and interpretations are discussed 
below 
ias 1 – presentation of items of other comprehensive 
income amendment 
the amendments to ias 1 introduce a grouping of items presented 
in other comprehensive income oci items that could be recycled 
to the consolidated income statement at a future point in time now 
have to be presented separately from items that will never be 
recycled the amendment only affected the presentation and had 
no impact on the group’s financial position or performance 
ifrs 10 – consolidated financial statements and ias 27 – 
separate financial statements 
ifrs 10 establishes a single control model that applies to all entities 
including special purpose entities ifrs 10 replaces the parts of the 
previously existing ias 27 consolidated and separate financial 
statements that dealt with consolidated financial statements and 
sic 12 consolidation – special purpose entities ifrs 10 changes 
the definition of control such that an investor controls an investee 
when it is exposed or has rights to variable returns from its 
involvement with the investee and has the ability to affect those 
returns through its power over the investee to meet the definition of 
control in ifrs 10 all three criteria must be met including a an 
investor has power over an investee b the investor has exposure 
or rights to variable returns from its involvement with the investee 
and c the investor has the ability to use its power over the investee 
to affect the amount of the investor’s returns ifrs 10 has had no 
impact on the consolidation of investments held by the group 
ifrs 11 – joint arrangements and ias 28 – investment in 
associates and joint ventures 
ifrs 11 replaces ias 31 interests in joint ventures and sic 13 
jointlycontrolled entities – nonmonetary contributions by 
venturers ifrs 11 removes the option to account for jointly 
controlled entities jces using proportionate consolidation instead 
jces that meet the definition of a joint venture under ifrs 11 must 
be accounted for using the equity method 
petrofac annual report and accounts 2013
124
financial statements  
 
the application of this new standard impacted the financial position 
of the group by replacing proportionate consolidation of the joint 
venture in petrofac emirates llc tte petrofac limited 
professional mechanical repair services company spie capag – 
petrofac international limited and china petroleum petrofac 
engineering services cooperatif ua with the equity method of 
accounting ifrs 11 is effective for annual periods beginning on or 
after 1 january 2013 the effect of ifrs 11 is described in more 
detail in note 13 which includes quantification of the effect on the 
financial statements 
ifrs 12 – disclosure of interests in other entities 
ifrs 12 sets out the requirements for disclosures relating to an 
entity’s interests in subsidiaries joint arrangements associates and 
structured entities the requirements in ifrs 12 are more 
comprehensive than the previously existing disclosure requirements 
for subsidiaries the group does not have subsidiaries with material 
noncontrolling interests and there are no unconsolidated structured 
entities ifrs 12 disclosures are provided in notes 13 and 30 
ifrs 13 – fair value measurement 
ifrs 13 establishes a single source of guidance under ifrs for all 
fair value measurements ifrs 13 does not change when an entity 
is required to use fair value but rather provides guidance on how to 
measure fair value under ifrs when fair value is required or 
permitted the application of ifrs 13 has not materially impacted 
the fair value measurements carried out by the group additional 
disclosures where required are provided in the individual notes 
relating to the assets and liabilities whose fair values were 
determined the fair value hierarchy is provided in note 15 
standards issued but not yet effective 
standards issued but not yet effective up to the date of issuance 
of the group’s financial statements are listed below and include only 
those standards and interpretations that are likely to have an impact 
on the disclosures financial position or performance of the group 
at a future date the group intends to adopt these standards when 
they become effective 
ifrs 9 financial instruments classification 
and measurement 
ifrs 9 as issued reflects the first phase of the iasb’s work on the 
replacement of ias 39 and applies to classification and 
measurement of financial assets and financial liabilities as defined in 
ias 39 in subsequent phases the iasb is addressing hedge 
accounting and impairment of financial assets the adoption of the 
first phase of ifrs 9 will have an effect on the classification and 
measurement of the group’s financial assets but will not have an 
impact on classification and measurements of the group’s financial 
liabilities the iasb decided that a mandatory date of 1 january 
2015 would not allow sufficient time for entities to prepare to apply 
the new standard because the impairment phase of the ifrs 9 
project has not yet been completed accordingly the iasb decided 
that a new date should be decided upon when the entire ifrs 9 
project is closer to completion the group will quantify the effect in 
conjunction with the other phases when the final standard including 
all phases is issued  
ias 39 novation of derivatives and continuation of hedge 
accounting – amendments to ias 39 
these amendments provide relief from discontinuing hedge 
accounting when novation of a derivative designated as a hedging 
instrument meets certain criteria these amendments are effective 
for annual periods beginning on or after 1 january 2014 the group 
has not novated its derivatives during the current period however 
these amendments would be considered for future novations 
significant accounting judgements and estimates 
judgements 
in the process of applying the group’s accounting policies 
management has made the following judgements apart from those 
involving estimations which have the most significant effect on the 
amounts recognised in the consolidated financial statements  
 revenue recognition on fixedprice engineering procurement 
and construction contracts the group recognises revenue on 
fixedprice engineering procurement and construction contracts 
using the percentageofcompletion method based on surveys 
of work performed the group has determined this basis of 
revenue recognition is the best available measure of progress 
on such contracts 
 revenue recognition on integrated energy services contracts the 
group assesses on a case by case basis the most appropriate 
treatment for its various of commercial structures which include 
risk service contracts production enhancement contracts and 
equity upstream investments including production sharing 
contracts see accounting policies note on page 131 for further 
details 
estimation uncertainty 
the key assumptions concerning the future and other key sources 
of estimation uncertainty at the statement of financial position date 
that have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial 
year are discussed below 
 provisions for liquidated damages claims ld’s the group 
provides for ld claims where there have been significant contract 
delays and it is considered probable that the customer will 
successfully pursue such a claim this requires an estimate of the 
amount of ld’s payable under a claim which involves a number of 
management judgements and assumptions regarding the amounts 
to recognise 
 project cost to complete estimates at each statement of financial 
position date the group is required to estimate costs to complete 
on fixedprice contracts estimating costs to complete on such 
contracts requires the group to make estimates of future costs 
to be incurred based on work to be performed beyond the 
statement of financial position date this estimate will impact 
revenues cost of sales workinprogress billings in excess of 
costs and estimated earnings and accrued contract expenses 
 recognition of contract variation orders vo’s the group 
recognises revenues and margins from vo’s where it is 
considered probable that they will be awarded by the customer 
and this requires management to assess the likelihood of such an 
award being made by reference to customer communications and 
other forms of documentary evidence 
 onerous contract provisions the group provides for future losses 
on longterm contracts where it is considered probable that the 
contract costs are likely to exceed revenues in future years 
estimating these future losses involves a number of assumptions 
about the achievement of contract performance targets and 
the likely levels of future cost escalation over time us nil at 
31 december 2013 2012 us nil 
 impairment of goodwill the group determines whether goodwill 
is impaired at least on an annual basis this requires an estimation 
of the value in use of the cashgenerating units to which the 
goodwill is allocated estimating the value in use requires the 
group to make an estimate of the expected future cash flows 
from each cashgenerating unit and also to determine a suitable 
discount rate in order to calculate the present value of those cash 
flows the carrying amount of goodwill at 31 december 2013 was 
us155m 2012 us125m note 11 
 
petrofac annual report and accounts 2013
125 notes to the consolidated financial statements continued 
for the year ended 31 december 2013 
2 summary of significant accounting policies 
continued 
 deferred tax assets the group recognises deferred tax assets 
on all applicable temporary differences where it is probable that 
future taxable profits will be available for utilisation this requires 
management to make judgements and assumptions regarding 
the amount of deferred tax that can be recognised based on the 
magnitude and likelihood of future taxable profits the carrying 
amount of deferred tax assets at 31 december 2013 was 
us37m 2012 us43m 
 income tax the company and its subsidiaries are subject to 
routine tax audits and also a process whereby tax computations 
are discussed and agreed with the appropriate authorities whilst 
the ultimate outcome of such tax audits and discussions cannot 
be determined with certainty management estimates the level of 
provisions required for both current and deferred tax on the basis 
of professional advice and the nature of current discussions with 
the tax authority concerned 
 recoverable value of property plant and equipment intangible oil 
and gas and other intangible assets the group determines at 
each statement of financial position date whether there is any 
evidence of indicators of impairment in the carrying value of its 
property plant and equipment intangible oil and gas and other 
intangible assets where indicators exist an impairment test is 
undertaken which requires management to estimate the 
recoverable value of its assets for example by reference to quoted 
market values similar arm’s length transactions involving these 
assets fair value less costs of disposal discounted cash flow 
models or value in use calculations for certain oil and gas assets 
where impairment triggers were identified the recoverable 
amounts for these assets were estimated using both value in use 
and fair value less costs of disposal discounted cash flow models 
for all assets tested the recoverable amount was higher than the 
carrying amount and therefore no impairment was recorded the 
key sources of estimation uncertainty for these tests are consistent 
with those disclosed in note 11 
 units of production depreciation estimated proven plus probable 
reserves are used in determining the depreciation of oil and gas 
assets such that the depreciation charge is proportional to the 
depletion of the remaining reserves over their life of production 
these calculations require the use of estimates including the 
amount of economically recoverable reserves and future oil and 
gas capital expenditure 
investment in associates and joint ventures 
an associate is an entity over which the group has significant 
influence significant influence is the power to participate in the 
financial and operating policy decisions of the investee but is not 
control or joint control over those policies 
a joint venture is a type of joint arrangement whereby the parties 
that have joint control of the arrangement have rights to the net 
assets of the joint venture a joint operation is a type of joint 
arrangement whereby the parties that have joint control of the 
arrangement have rights to the assets and obligations for the 
liabilities relating to the arrangement joint control is the 
contractually agreed sharing of control of an arrangement which 
exists only when decisions about the relevant activities require 
unanimous consent of the parties sharing control 
the considerations made in determining significant influence or 
joint control are similar to those necessary to determine control  
over subsidiaries 
the group’s investments in its associate and joint venture are 
accounted for using the equity method 
under the equity method the investment in an associate or a joint 
venture is initially recognised at cost the carrying amount of the 
investment is adjusted to recognise changes in the group’s share of 
net assets of the associate or joint venture since the acquisition 
date goodwill relating to the associate or joint venture is included in 
the carrying amount of the investment and is neither amortised nor 
individually tested for impairment 
the consolidated income statement reflects the group’s share of 
the results of operations of the associate or joint venture any 
change in oci of those investees is presented as part of the 
group’s oci in addition when there has been a change recognised 
directly in the equity of the associate or joint venture the group 
recognises its share of any changes when applicable in the 
statement of changes in equity unrealised gains and losses 
resulting from transactions between the group and the associate or 
joint venture are eliminated to the extent of the interest in the 
associate or joint venture  
the group’s interests in joint operation are recognised in relation to 
its interest in a joint operation’s  
 assets including its share of any assets held jointly 
 liabilities including its share of any liabilities incurred jointly 
 revenue from the sale of its share of the output arising from  
the joint operation 
 share of the revenue from the sale of the output by the  
joint operation 
 expenses including its share of any expenses incurred jointly 
under joint operations the expenses that the group incurs and its 
share of the revenue earned is recognised in the consolidated 
income statement assets controlled by the group and liabilities 
incurred by it are recognised in the statement of financial position 
the group recognises its share of the profits after tax and  
noncontrolling interest of the associates and joint ventures in its 
consolidated income statement any unrealised gains and losses 
resulting from transactions between the group and the associate 
and joint venture are eliminated to the extent of the interest in its 
associates and joint ventures 
where necessary adjustments are made to the financial statements 
of the group’s joint ventures and operations to bring their 
accounting policies into line with those of the group 
after application of the equity method the group determines 
whether it is necessary to recognise an impairment loss on its 
investment in its associate or joint venture at each reporting date 
the group determines whether there is objective evidence that the 
investment in the associate or joint venture is impaired if there is 
such evidence the group calculates the amount of impairment as 
the difference between the recoverable amount of the associate or 
joint venture and its carrying value then recognises the loss as 
‘selling general and administration expenses’ in the consolidated 
income statement 
upon loss of significant influence over the associate or joint control 
over the joint venture the group measures and recognises any 
retained investment at its fair value any difference between the 
carrying amount of the associate or joint venture upon loss of 
significant influence or joint control and the fair value of the retained 
investment and proceeds from disposal is recognised in 
consolidated income statement 
  
petrofac annual report and accounts 2013
126
financial statements  
 
 
foreign currency translation 
the company’s functional and presentational currency is us dollars 
in the financial statements of individual subsidiaries joint ventures 
joint operations and associates transactions in currencies other 
than a company’s functional currency are recorded at the prevailing 
rate of exchange at the date of the transaction at the year end 
monetary assets and liabilities denominated in foreign currencies are 
retranslated at the rates of exchange prevailing at the reporting date 
nonmonetary assets and liabilities that are measured at historical 
cost in a foreign currency are translated using the rate of exchange 
as at the dates of the initial transactions nonmonetary assets and 
liabilities measured at fair value in a foreign currency are translated 
using the rate of exchange at the date the fair value was 
determined all foreign exchange gains and losses are taken to the 
consolidated income statement with the exception of exchange 
differences arising on monetary assets and liabilities that form part 
of the group’s net investment in subsidiaries these are taken 
directly to the statement of changes in equity until the disposal 
of the net investment at which time they are recognised in the 
consolidated income statement 
the statements of financial position of overseas subsidiaries joint 
ventures joint operations and associates are translated into us 
dollars using the closing rate method whereby assets and liabilities 
are translated at the rates of exchange prevailing at the reporting 
date the income statements of overseas subsidiaries and joint 
operations are translated at average exchange rates for the year 
exchange differences arising on the retranslation of net assets are 
taken directly to other reserves within the statement of changes 
in equity 
on the disposal of a foreign entity accumulated exchange 
differences are recognised in the consolidated income statement 
as a component of the gain or loss on disposal 
property plant and equipment 
property plant and equipment is stated at cost less accumulated 
depreciation and any impairment in value cost comprises the 
purchase price or construction cost and any costs directly 
attributable to making that asset capable of operating as intended 
the purchase price or construction cost is the aggregate amount 
paid and the fair value of any other consideration given to acquire 
the asset depreciation is provided on a straightline basis other 
than on oil and gas assets at the following rates 
oil and gas facilities 10 – 125 
plant and equipment 4 – 33 
buildings and leasehold improvements 5 – 33  
 or lease term if shorter 
office furniture and equipment 25 – 50 
vehicles 20 – 33 
tangible oil and gas assets are depreciated on a fieldbyfield basis 
using the unitofproduction method based on entitlement to proven 
and probable reserves taking account of estimated future 
development expenditure relating to those reserves refer to page 
45 for life of these fields 
each asset’s estimated useful life residual value and method 
of depreciation are reviewed and adjusted if appropriate at each 
financial year end 
no depreciation is charged on land or assets under construction 
the carrying amount of an item of property plant and equipment 
is derecognised on disposal or when no future economic benefits 
are expected from its use or disposal the gain or loss arising from 
the derecognition of an item of property plant and equipment is 
included in the consolidated income statement when the item is 
derecognised gains are not classified as revenue 
noncurrent assets held for sale 
noncurrent assets or disposal groups are classified as held for 
sale when it is expected that the carrying amount of an asset will 
be recovered principally through sale rather than continuing use 
assets are not depreciated when classified as held for sale 
borrowing costs 
borrowing costs directly attributable to the construction of qualifying 
assets which are assets that necessarily take a substantial period 
of time to prepare for their intended use are added to the cost of 
those assets until such time as the assets are substantially ready 
for their intended use all other borrowing costs are recognised as 
interest payable in the consolidated income statement in the period 
in which they are incurred 
business combinations and goodwill 
business combinations are accounted for using the acquisition 
method the cost of an acquisition is measured as the aggregate of 
the consideration transferred measured at acquisition date fair value 
and the amount of any noncontrolling interests in the acquiree for 
each business combination the group elects whether to measure 
the noncontrolling interests in the acquiree at fair value or at the 
proportionate share of the acquiree’s identifiable net assets 
acquisitionrelated costs are expensed as incurred and included in 
administrative expenses 
when the group acquires a business it assesses the financial 
assets and liabilities assumed for appropriate classification and 
designation in accordance with the contractual terms economic 
circumstances and pertinent conditions as at the acquisition date 
this includes the separation of embedded derivatives in host 
contracts by the acquiree  
if the business combination is achieved in stages any previously 
held equity interest is remeasured at its acquisition date fair value 
and any resulting gain or loss is recognised in profit or loss it is then 
considered in the determination of goodwill 
goodwill acquired in a business combination is initially measured at 
cost being the excess of the cost of the business combination over 
the net fair value of the identifiable assets liabilities and contingent 
liabilities of the entity at the date of acquisition following initial 
recognition goodwill is measured at cost less any accumulated 
impairment losses goodwill is reviewed for impairment annually 
or more frequently if events or changes in circumstances indicate 
that such carrying value may be impaired all transaction costs 
associated with business combinations are charged to the 
consolidated income statement in the year of such combination 
for the purpose of impairment testing goodwill acquired is allocated 
to the cashgenerating units that are expected to benefit from the 
synergies of the combination each unit or units to which goodwill 
is allocated represents the lowest level within the group at which 
the goodwill is monitored for internal management purposes and 
is not larger than an operating segment determined in accordance 
with ifrs 8 ‘operating segments’ 
impairment is determined by assessing the recoverable amount of 
the cashgenerating units to which the goodwill relates where the 
recoverable amount of the cashgenerating units is less than the 
carrying amount of the cashgenerating units and related goodwill 
an impairment loss is recognised 
where goodwill has been allocated to cashgenerating units and 
part of the operation within those units is disposed of the goodwill 
associated with the operation disposed of is included in the carrying 
amount of the operation when determining the gain or loss on 
disposal of the operation goodwill disposed of in this circumstance 
is measured based on the relative values of the operation disposed 
of and the portion of the cashgenerating units retained 
petrofac annual report and accounts 2013
127 notes to the consolidated financial statements continued 
for the year ended 31 december 2013 
2 summary of significant accounting policies 
continued 
contingent consideration payable on a business combination  
when as part of a business combination the group defers a 
proportion of the total purchase consideration payable for an 
acquisition the amount provided for is the acquisition date fair value 
of the consideration the unwinding of the discount element is 
recognised as a finance cost in the consolidated income statement 
for business combinations prior to 1 january 2010 all changes in 
estimated contingent consideration payable on acquisition are 
adjusted against the carried goodwill for business combinations 
after 1 january 2010 changes in estimated contingent 
consideration payable on acquisition are recognised in the 
consolidated income statement unless they are measurement 
period adjustments which arise as a result of additional information 
obtained after the acquisition date about the facts and 
circumstances existing at the acquisition date which are adjusted 
against carried goodwill contingent consideration that is classified 
as equity is not remeasured and subsequent settlement is 
accounted for within equity 
intangible assets – non oil and gas assets 
intangible assets acquired in a business combination are initially 
measured at cost being their fair values at the date of acquisition 
and are recognised separately from goodwill where the asset is 
separable or arises from a contractual or other legal right and its fair 
value can be measured reliably after initial recognition intangible 
assets are carried at cost less accumulated amortisation and any 
accumulated impairment losses intangible assets with a finite life 
are amortised over their useful economic life using a straightline 
method unless a better method reflecting the pattern in which the 
asset’s future economic benefits are expected to be consumed 
can be determined the amortisation charge in respect of intangible 
assets is included in the selling general and administration 
expenses line of the consolidated income statement the expected 
useful lives of assets are reviewed on an annual basis any change 
in the useful life or pattern of consumption of the intangible asset is 
treated as a change in accounting estimate and is accounted for 
prospectively by changing the amortisation period or method 
intangible assets are tested for impairment whenever there is an 
indication that the asset may be impaired 
oil and gas assets 
capitalised costs 
the group’s activities in relation to oil and gas assets are limited 
to assets in the evaluation development and production phases 
oil and gas evaluation and development expenditure is accounted 
for using the successful efforts method of accounting 
evaluation expenditures 
expenditure directly associated with evaluation or appraisal 
activities is capitalised as an intangible asset such costs include the 
costs of acquiring an interest appraisal well drilling costs payments 
to contractors and an appropriate share of directly attributable 
overheads incurred during the evaluation phase for such appraisal 
activity which may require drilling of further wells costs continue to 
be carried as an asset whilst related hydrocarbons are considered 
capable of commercial development such costs are subject to 
technical commercial and management review to confirm the 
continued intent to develop or otherwise extract value when this 
is no longer the case the costs are writtenoff in the income 
statement when such assets are declared part of a commercial 
development related costs are transferred to tangible oil and gas 
assets all intangible oil and gas assets are assessed for any 
impairment prior to transfer and any impairment loss is recognised 
in the consolidated income statement 
development expenditures 
expenditure relating to development of assets which include the 
construction installation and completion of infrastructure facilities 
such as platforms pipelines and development wells is capitalised 
within property plant and equipment 
changes in unitofproduction factors 
changes in factors which affect unitofproduction calculations 
are dealt with prospectively in accordance with the treatment of 
changes in accounting estimates not by immediate adjustment of 
prior years’ amounts 
decommissioning 
provision for future decommissioning costs is made in full when 
the group has an obligation to dismantle and remove a facility 
or an item of plant and to restore the site on which it is located 
and when a reasonable estimate of that liability can be made 
the amount recognised is the present value of the estimated future 
expenditure an amount equivalent to the discounted initial provision 
for decommissioning costs is capitalised and amortised over the life 
of the underlying asset on a unitofproduction basis over proven 
and probable reserves any change in the present value of the 
estimated expenditure is reflected as an adjustment to the provision 
and the oil and gas asset 
the unwinding of the discount applied to future decommissioning 
provisions is included under finance costs in the consolidated 
income statement 
impairment of assets excluding goodwill 
at each statement of financial position date the group reviews 
the carrying amounts of its tangible and intangible assets to assess 
whether there is an indication that those assets may be impaired 
if any such indication exists the group makes an estimate of the 
asset’s recoverable amount an asset’s recoverable amount is 
the higher of an asset’s fair value less costs to sell and its value 
in use in assessing value in use the estimated future cash flows 
attributable to the asset are discounted to their present value using 
a pretax discount rate that reflects current market assessments 
of the time value of money and the risks specific to the asset 
if the recoverable amount of an asset is estimated to be less than its 
carrying amount the carrying amount of the asset is reduced to its 
recoverable amount an impairment loss is recognised immediately 
in the consolidated income statement unless the relevant asset is 
carried at a revalued amount in which case the impairment loss is 
treated as a revaluation decrease 
where an impairment loss subsequently reverses the carrying 
amount of the asset is increased to the revised estimate of its 
recoverable amount but so that the increased carrying amount 
does not exceed the carrying amount that would have been 
determined had no impairment loss been recognised for the 
asset in prior years a reversal of an impairment loss is recognised 
immediately in the consolidated income statement unless the 
relevant asset is carried at a revalued amount in which case the 
reversal of the impairment is treated as a revaluation increase 
inventories 
inventories are valued at the lower of cost and net realisable value 
net realisable value is the estimated selling price in the ordinary 
course of business less estimated costs of completion and the 
estimated costs necessary to make the sale cost comprises 
purchase price cost of production transportation and other directly 
allocable expenses costs of inventories other than raw materials 
are determined using the firstinfirstout method costs of raw 
materials are determined using the weighted average method 
  
petrofac annual report and accounts 2013
128
financial statements  
 
work in progress and billings in excess of cost and 
estimated earnings 
fixed price lump sum engineering procurement and construction 
contracts are presented in the statement of financial position as 
follows  
 for each contract the accumulated cost incurred as well as 
the estimated earnings recognised at the contract’s percentage 
of completion less provision for any anticipated losses after 
deducting the progress payments received or receivable from 
the customers are shown in current assets in the statement 
of financial position under ‘work in progress’ 
 where the payments received or receivable for any contract 
exceed the cost and estimated earnings less provision for any 
anticipated losses the excess is shown as ‘billings in excess 
of cost and estimated earnings’ within current liabilities 
trade and other receivables 
trade receivables are recognised and carried at original invoice 
amount less an allowance for any amounts estimated to be 
uncollectable an estimate for doubtful debts is made when there is 
objective evidence that the collection of the full amount is no longer 
probable under the terms of the original invoice impaired debts are 
derecognised when they are assessed as uncollectable 
cash and cash equivalents 
cash and cash equivalents consist of cash at bank and in hand 
and shortterm deposits with an original maturity of three months 
or less for the purpose of the cash flow statement cash and cash 
equivalents consists of cash and cash equivalents as defined above 
net of outstanding bank overdrafts 
interestbearing loans and borrowings 
all interestbearing loans and borrowings are initially recognised at 
the fair value of the consideration received net of issue costs directly 
attributable to the borrowing 
after initial recognition interestbearing loans and borrowings are 
subsequently measured at amortised cost using the effective 
interest rate method amortised cost is calculated by taking  
into account any issue costs and any discount or premium  
on settlement 
provisions 
provisions are recognised when the group has a present legal or 
constructive obligation as a result of past events it is probable that 
an outflow of resources will be required to settle the obligation and a 
reliable estimate can be made of the amount of the obligation if the 
time value of money is material provisions are discounted using a 
current pretax rate that reflects where appropriate the risks 
specific to the liability where discounting is used the increase 
in the provision due to the passage of time is recognised in the 
consolidated income statement as a finance cost 
fair value measurement 
the group measures financial instruments such as derivatives at 
fair value at each reporting date also fair values of financial 
instruments measured at amortised cost are disclosed in note 29 
fair value is the price that would be received to sell an asset or paid 
to transfer a liability in an orderly transaction between market 
participants at the measurement date the fair value measurement 
is based on the presumption that the transaction to sell the asset or 
transfer the liability takes place either  
 in the principal market for the asset or liability or 
 in the absence of a principal market in the most advantageous 
market for the asset or liability 
the principal or the most advantageous market must be accessible 
to by the group 
the fair value of an asset or a liability is measured using the 
assumptions that market participants would use when pricing the 
asset or liability assuming that market participants act in their 
economic best interest 
a fair value measurement of a nonfinancial asset takes into account 
a market participant’s ability to generate economic benefits by using 
the asset in its highest and best use or by selling it to another 
market participant that would use the asset in its highest and  
best use 
the group uses valuation techniques that are appropriate in the 
circumstances and for which sufficient data are available to measure 
fair value maximising the use of relevant observable inputs and 
minimising the use of unobservable inputs 
all assets and liabilities for which fair value is measured or disclosed 
in the financial statements are categorised within the fair value 
hierarchy described as follows based on the lowest level input that 
is significant to the fair value measurement as a whole  
 level 1 – quoted unadjusted market prices in active markets for 
identical assets or liabilities 
 level 2 – valuation techniques for which the lowest level input that 
is significant to the fair value measurement is directly or indirectly 
observable 
 level 3 – valuation techniques for which the lowest level input that 
is significant to the fair value measurement is unobservable 
for assets and liabilities that are recognised in the financial 
statements on a recurring basis the group determines whether 
transfers have occurred between levels in the hierarchy by re
assessing categorisation based on the lowest level input that is 
significant to the fair value measurement as a whole at the end of 
each reporting period 
for the purpose of fair value disclosures the group has determined 
classes of assets and liabilities on the basis of the nature 
characteristics and risks of the asset or liability and the level of the 
fair value hierarchy as explained above 
petrofac annual report and accounts 2013
129 notes to the consolidated financial statements continued 
for the year ended 31 december 2013 
2 summary of significant accounting policies 
continued 
derecognition of financial assets and liabilities 
financial assets 
a financial asset or where applicable a part of a financial asset 
is derecognised where 
 the rights to receive cash flows from the asset have expired 
 the group retains the right to receive cash flows from the asset 
but has assumed an obligation to pay them in full without material 
delay to a thirdparty under a ‘passthrough’ arrangement or 
 the group has transferred its rights to receive cash flows from the 
asset and either a has transferred substantially all the risks and 
rewards of the asset or b has neither transferred nor retained 
substantially all the risks and rewards of the asset but has 
transferred control of the asset  
financial liabilities 
a financial liability is derecognised when the obligation under the 
liability is discharged or cancelled or expires 
if an existing financial liability is replaced by another from the same 
lender on substantially different terms or the terms of an existing 
liability are substantially modified such an exchange or modification 
is treated as a derecognition of the original liability and the 
recognition of a new liability such that the difference in the 
respective carrying amounts together with any costs or fees 
incurred are recognised in the consolidated income statement 
offsetting of financial instruments 
financial assets and financial liabilities are offset and the net amount 
is reported in the consolidated statement of financial position if there 
is a currently enforceable legal right to offset the recognised 
amounts and there is an intention to settle on a net basis to realise 
the assets and settle the liabilities simultaneously 
pensions and other longterm employment benefits 
the group has various defined contribution pension schemes in 
accordance with the local conditions and practices in the countries 
in which it operates the amount charged to the consolidated 
income statement in respect of pension costs reflects the 
contributions payable in the year differences between contributions 
payable during the year and contributions actually paid are shown 
as either accrued liabilities or prepaid assets in the statement of 
financial position 
the group’s other longterm employment benefits are provided in 
accordance with the labour laws of the countries in which the group 
operates further details of which are given in note 25 
sharebased payment transactions 
employees including directors of the group receive remuneration 
in the form of sharebased payment transactions whereby 
employees render services in exchange for shares or rights over 
shares ‘equitysettled transactions’ 
equitysettled transactions 
the cost of equitysettled transactions with employees is measured 
by reference to the fair value at the date on which they are granted 
in valuing equitysettled transactions no account is taken of any 
service or performance conditions other than conditions linked 
to the price of the shares of petrofac limited ‘market conditions’ 
if applicable 
the cost of equitysettled transactions is recognised together with 
a corresponding increase in equity over the period in which the 
relevant employees become fully entitled to the award the ‘vesting 
period’ the cumulative expense recognised for equitysettled 
transactions at each reporting date until the vesting date reflects the 
extent to which the vesting period has expired and the group’s best 
estimate of the number of equity instruments that will ultimately vest 
the income statement charge or credit for a period represents the 
movement in cumulative expense recognised as at the beginning 
and end of that period 
no expense is recognised for awards that do not ultimately vest 
except for awards where vesting is conditional upon a market or 
nonvesting condition which are treated as vesting irrespective 
of whether or not the market or nonvesting condition is satisfied 
provided that all other performance conditions and service 
conditions are satisfied equity awards cancelled are treated as 
vesting immediately on the date of cancellation and any expense 
not recognised for the award at that date is recognised in the 
consolidated income statement 
petrofac employee benefit trusts 
the petrofac employee benefit trust and the petrofac joint venture 
companies employee benefit trust warehouse ordinary shares 
purchased to satisfy various new share scheme awards made to the 
employees of the company and its joint venture partner employees 
which will be transferred to the members of the scheme on their 
respective vesting dates subject to satisfying the performance 
conditions of each scheme the trusts continue to be consolidated 
in the group financial statements under ifrs 10 which has been 
adopted in the current year 
treasury shares 
for the purpose of making awards under its employee share 
schemes the company acquires its own shares which are held by 
the petrofac employee benefit trust and the petrofac joint venture 
companies employee benefit trust all these shares have been 
classified in the statement of financial position as treasury shares 
within equity shares vested during the year are satisfied with 
treasury shares 
leases 
the determination of whether an arrangement is or contains a lease 
is based on the substance of the arrangement at inception date and 
whether the fulfilment of the arrangement is dependent on the use 
of a specific asset or assets or the arrangement conveys the right 
to use the asset 
leases are classified as finance leases whenever the terms of the 
lease transfer substantially all the risks and rewards of ownership 
to the lessee all other leases are classified as operating leases 
assets held under finance leases are recognised as noncurrent 
assets of the group at the lower of their fair value at the date of 
commencement of the lease and the present value of the minimum 
lease payments these assets are depreciated on a straightline 
basis over the shorter of the useful life of the asset and the lease 
term the corresponding liability to the lessor is included in the 
consolidated statement of financial position as a finance lease 
obligation lease payments are apportioned between finance costs 
in the income statement and reduction of the lease obligation so as 
to achieve a constant rate of interest on the remaining balance of 
the liability 
the group has entered into various operating leases the payments 
for which are recognised as an expense in the consolidated income 
statement on a straightline basis over the lease terms 
petrofac annual report and accounts 2013
130
financial statements  
 
revenue recognition 
revenue is recognised to the extent that it is probable economic 
benefits will flow to the group and the revenue can be reliably 
measured the following specific recognition criteria also apply 
onshore engineering  construction 
revenues from fixedprice lumpsum contracts are recognised 
using the percentageofcompletion method based on surveys of 
work performed once the outcome of a contract can be estimated 
reliably in the early stages of contract completion when the 
outcome of a contract cannot be estimated reliably contract 
revenues are recognised only to the extent of costs incurred that 
are expected to be recoverable 
revenues from costplusfee contracts are recognised on the basis 
of costs incurred during the year plus the fee earned measured by 
the costtocost method 
revenues from reimbursable contracts are recognised in the period 
in which the services are provided based on the agreed contract 
schedule of rates 
provision is made for all losses expected to arise on completion 
of contracts entered into at the statement of financial position date 
whether or not work has commenced on these contracts 
incentive payments are included in revenue when the contract 
is sufficiently advanced that it is probable that the specified 
performance standards will be met or exceeded and the amount 
of the incentive payments can be measured reliably variation orders 
are only included in revenue when it is probable they will be 
accepted and can be measured reliably and claims are only 
included in revenue when negotiations have reached an  
advanced stage 
offshore projects  operations engineering  consulting services 
and integrated energy services 
revenues from reimbursable contracts are recognised in the period 
in which the services are provided based on the agreed contract 
schedule of rates 
revenues from fixedprice contracts are recognised on the 
percentageofcompletion method measured by milestones 
completed or earned value once the outcome of a contract can be 
estimated reliably in the early stages of contract completion when 
the outcome of a contract cannot be estimated reliably contract 
revenues are recognised only to the extent of costs incurred that 
are expected to be recoverable 
incentive payments are included in revenue when the contract 
is sufficiently advanced that it is probable that the specified 
performance standards will be met or exceeded and the amount 
of the incentive payments can be measured reliably claims are only 
included in revenue when negotiations have reached an advanced 
stage such that it is probable the claim will be accepted and can be 
measured reliably 
integrated energy services 
oil and gas revenues comprise the group’s share of sales from the 
processing or sale of hydrocarbons from the group’s equity 
upstream investments on an entitlement basis when the significant 
risks and rewards of ownership have been passed to the buyer 
revenue from production enhancement contracts is recognised 
based on the volume of hydrocarbons produced in the period and 
the agreed tariff and the reimbursement arrangement for costs 
incurred 
precontractbid costs 
precontractbid costs incurred are recognised as an expense until 
there is a high probability that the contract will be awarded after 
which all further costs are recognised as assets and expensed over 
the life of the contract 
income taxes 
income tax expense represents the sum of current income tax and 
deferred tax 
current income tax assets and liabilities for the current and prior 
periods are measured at the amount expected to be recovered 
from or paid to the taxation authorities taxable profit differs from 
profit as reported in the consolidated income statement because it 
excludes items of income or expense that are taxable or deductible 
in other years and it further excludes items that are never taxable or 
deductible the group’s liability for current tax is calculated using 
tax rates that have been enacted or substantively enacted by the 
statement of financial position date 
deferred tax is recognised on all temporary differences at the 
statement of financial position date between the carrying amounts of 
assets and liabilities in the financial statements and the 
corresponding tax bases used in the computation of taxable profit 
with the following exceptions  
 where the temporary difference arises from the initial recognition 
of goodwill or of an asset or liability in a transaction that is not a 
business combination that at the time of the transaction affects 
neither accounting nor taxable profit or loss 
 in respect of taxable temporary differences associated with 
investments in subsidiaries associates and joint ventures 
where the timing of reversal of the temporary differences can be 
controlled and it is probable that the temporary differences will 
not reverse in the foreseeable future and 
 deferred tax assets are recognised only to the extent that it is 
probable that a taxable profit will be available against which the 
deductible temporary differences carried forward tax credits or tax 
losses can be utilised 
the carrying amount of deferred tax assets is reviewed at each 
statement of financial position date and reduced to the extent that it 
is no longer probable that sufficient taxable profit will be available to 
allow all or part of the deferred tax assets to be utilised 
unrecognised deferred tax assets are reassessed at each statement 
of financial position date and are recognised to the extent that it has 
become probable that future taxable profit will allow the deferred tax 
asset to be recovered 
deferred tax assets and liabilities are measured on an undiscounted 
basis at the tax rates that are expected to apply when the asset is 
realised or the liability is settled based on tax rates and tax laws 
enacted or substantively enacted at the statement of financial 
position date 
current and deferred tax is charged or credited directly to other 
comprehensive income or equity if it relates to items that are 
credited or charged to respectively other comprehensive income 
or equity otherwise income tax is recognised in the consolidated 
income statement 
  
petrofac annual report and accounts 2013
131 notes to the consolidated financial statements continued 
for the year ended 31 december 2013 
2 summary of significant accounting policies 
continued 
derivative financial instruments and hedging 
the group uses derivative financial instruments such as forward 
currency contracts and oil price collars and forward contracts to 
hedge its risks associated with foreign currency and oil price 
fluctuations such derivative financial instruments are initially 
recognised at fair value on the date on which a derivative contract is 
entered into and are subsequently remeasured at fair value 
derivatives are carried as assets when the fair value is positive and 
as liabilities when the fair value is negative 
any gains or losses arising from changes in the fair value of 
derivatives that do not qualify for hedge accounting are taken 
to the consolidated income statement 
the fair value of forward currency contracts is calculated by 
reference to current forward exchange rates for contracts with 
similar maturity profiles the fair value of oil price collar contracts is 
determined by reference to market values for similar instruments 
for the purposes of hedge accounting hedges are classified as 
 fair value hedges when hedging the exposure to changes in the 
fair value of a recognised asset or liability or 
 cash flow hedges when hedging exposure to variability in cash 
flows that is either attributable to a particular risk associated 
with a recognised asset or liability or a highly probable  
forecast transaction 
the group formally designates and documents the relationship 
between the hedging instrument and the hedged item at the 
inception of the transaction as well as its risk management 
objectives and strategy for undertaking various hedge transactions 
the documentation also includes identification of the hedging 
instrument the hedged item or transaction the nature of risk being 
hedged and how the group will assess the hedging instrument’s 
effectiveness in offsetting the exposure to changes in the hedged 
item’s fair value or cash flows attributable to the hedged risk 
the group also documents its assessment both at hedge inception 
and on an ongoing basis of whether the derivatives that are used 
in the hedging transactions are highly effective in offsetting changes 
in fair values or cash flows of the hedged items 
the treatment of gains and losses arising from revaluing derivatives 
designated as hedging instruments depends on the nature of the 
hedging relationship as follows 
cash flow hedges 
for cash flow hedges the effective portion of the gain or loss on 
the hedging instrument is recognised directly in the other 
comprehensive income in the net unrealised gainslosses on 
derivatives while the ineffective portion is recognised in the 
consolidated income statement amounts taken to other 
comprehensive income are transferred to the consolidated income 
statement when the hedged transaction affects the consolidated 
income statement 
if the hedging instrument expires or is sold terminated or exercised 
without replacement or rollover or if its designation as a hedge is 
revoked any cumulative gain or loss previously recognised in other 
comprehensive income remains separately in equity until the 
forecast transaction occurs and affects the consolidated income 
statement when a forecast transaction is no longer expected to 
occur the cumulative gain or loss that was reported in the other 
comprehensive income is immediately transferred to the 
consolidated income statement 
embedded derivatives 
contracts are assessed for the existence of embedded derivatives 
at the date that the group first becomes party to the contract 
with reassessment only if there is a change to the contract that 
significantly modifies the cash flows embedded derivatives which 
are not clearly and closely related to the underlying asset liability 
or transaction are separated and accounted for as 
standalone derivatives 
 
petrofac annual report and accounts 2013
132
financial statements  
3 segment information 
the group delivers its services through the four reporting segments set out below 
 onshore engineering  construction which provides engineering procurement and construction project execution services to the 
onshore oil and gas industry  
 offshore projects  operations which provides offshore engineering operations and maintenance onshore and offshore and engineering 
procurement and construction project execution services to the offshore oil and gas industry 
 engineering  consulting services which provides technical engineering consultancy conceptual design front end engineering 
and design feed and project management consultancy pmc across all sectors including renewables and carbon capture  
 integrated energy services which coinvests with partners in oil and gas production processing and transportation assets provides 
production improvement services under value aligned commercial structures and oil and gas related technical competency training 
and consultancy services  
management separately monitors the trading results of its four reporting segments for the purpose of making an assessment of their 
performance and making decisions about how resources are allocated to them each segment’s performance is measured based on 
its profitability which is reflected in a manner consistent with the results shown below however certain shareholder services related 
overheads group financing and consolidation adjustments are managed at a corporate level and are not allocated to reporting segments 
the following tables represent revenue and profit information relating to the group’s reporting segments for the year ended 
31 december 2013 
year ended 31 december 2013 
onshore 
engineering  
construction 
usm  
offshore 
projects  
operations 
usm
engineering 
 consulting
services
usm
integrated 
energy 
services 
usm
corporate
 others
usm
consolidation 
adjustments 
 eliminations 
usm  
total
usm
revenue     
external sales 3524  1639 196 922 –
1
48  6329
intersegment sales 10  32 166 12 – 220  –
total revenue 3534  1671 362 934 – 172  6329
 
segment results 483  99 31 146 2
2
19  780
unallocated corporate costs –  – – – 9 –  9
profitloss before tax and finance 
incomecosts 483  99 31 146 7 19  771
share of profits of associatesjoint ventures –  – 2 20 – –  22
finance costs 2  3 – 12 23 12  28
finance income 16  1 – 23 27 43  24
profitloss before income tax 497  97 33 177 3 12  789
income tax expense 50  28 4 56 3 1  142
noncontrolling interests –  – 3 – – –  3
profitloss for the year attributable to 
petrofac limited shareholders 447  69 32 121 6 13  650
 
other segment information     
capital expenditures     
property plant and equipment 60  40 6 497 5 11  597
intangible oil and gas assets –  – – 43 – –  43
 
charges     
depreciation 52  19 5 144 11 2  229
amortisation impairment and write off 4  – – 5 – –  9
other longterm employment benefits 19  1 – – – –  20
sharebased payments 9  2 1 2 1 –  15
1 
positive elimination of external sales shown above of us48m represents a group adjustment to the overall project percentage of completion on the laggan
tormore project as oec and opo are reflecting in their segments progress on their own respective shares of the total project scope 
2  
includes us22m gain arising from the granting of a finance lease for the fpf5 floating production facility to the pm304 joint venture in which the group has a 
30 interest 
petrofac annual report and accounts 2013
133 notes to the consolidated financial statements continued  
3 segment information continued 
year ended 31 december 2012 restated 
onshore 
engineering  
construction 
usm  
offshore 
projects  
operations 
usm
engineering 
 consulting
services
usm
integrated 
energy 
services 
usm
corporate
 others
usm
consolidation 
adjustments 
 eliminations 
usm  
total
usm
revenue     
external sales 4262  1237 97 693 –
1
49  6240
intersegment sales 26  166 148 15 – 355  –
total revenue 4288  1403 245 708 – 404  6240
 
segment results 540  80 30 138 6
2
26  768
unallocated corporate costs –  – – – 4 –  4
profitloss before tax and finance 
incomecosts 540  8030138226  764
share of losses of associatesjoint ventures –  1 – 5 – –  6
finance costs –  – – 4 6 5  5
finance income 8  – 1 7 9 13  12
profitloss before income tax 548  79 31 136 5 34  765
income tax expenseincome 69  18 4 47 8 5  135
noncontrolling interests –  – 2 – – –  2
profitloss for the year attributable to 
petrofac limited shareholders 479  61 29 89 13 39  632
 
other segment information     
capital expenditures     
property plant and equipment 74  13 7 355 4 25  428
intangible oil and gas assets –  – – 165 – –  165
 
charges     
depreciation 35  1555562  114
amortisation impairment and write off –  1 1 8 1 –  11
other longterm employment benefits 16  1 – 1 – 1  19
sharebased payments 13  3 1 5 4 –  26
1  
elimination of external sales shown above of us49m represents a group adjustment to the overall project percentage of completion on the laggantormore 
project as oec and opo are reflecting in their segments progress on their own respective shares of the total project scope 
2 
includes us31m elimination on consolidation of profit made by opo on the upgrade of the fpf5 floating production facility the costs of which have been 
capitalised in the property plant and equipment of ies 
geographical segments 
the following tables present revenue from external customers based on their location and noncurrent assets by geographical segments for 
the years ended 31 december 2013 and 2012 
year ended 31 december 2013 
  
united 
kingdom 
usm  
 
turkmenistan 
usm  
algeria 
usm 
united 
arab 
emirates 
usm
malaysia 
usm
saudi 
arabia
usm
iraq
 usm
other 
countries 
usm  
consolidated 
usm
revenues from 
external customers  1640  697  714 678 556 395 388 1261  6329
 
  
united 
kingdom 
usm  
united arab 
emirates 
usm 
mexico 
usm
romania 
usm
malaysia
usm
tunisia 
usm
other 
countries 
usm  
consolidated 
usm
noncurrent assets       
property plant and equipment  48  139 327 139 377 50 111  1191
intangible oil and gas assets  11  – – – 270 8 1  290
other intangible assets  10  – 24 5 – – 1  40
goodwill  107  44 – – – – 4  155
 
petrofac annual report and accounts 2013
134
financial statements  
 
year ended 31 december 2012 restated 
  
turkmenistan 
usm  
united 
kingdom 
usm  
algeria 
usm 
united 
arab 
emirates 
usm
malaysia 
usm
kuwait
usm
qatar 
usm
other 
countries 
usm  
consolidated 
usm
revenues from 
external customers  1697  1186  862 720 448 319 259 749  6240
 
  
united 
kingdom 
usm  
united arab 
emirates 
usm 
mexico 
usm
romania 
usm
malaysia
usm
singapore 
usm
other 
countries 
usm  
consolidated 
usm
noncurrent assets       
property plant and equipment  68  120 86 75 382 76 90  897
intangible oil and gas assets  10  – – – 251 – 7  268
other intangible assets  13  – 16 5 – – 5  39
goodwill  107  17 – – – – 1  125
revenues disclosed in the above tables are based on where the project is located revenues representing greater than 10 of  
group revenues arose from one customer amounting to us696m 2012 one customer us1697m in the onshore engineering  
 construction segment 
4 revenues and expenses 
a revenue 
2013 
 usm 
  
2012
 usm
restated
rendering of services 6181  6121
sale of crude oil and gas 148  111
sale of processed hydrocarbons  –  8
 6329  6240
included in revenues from rendering of services are offshore projects  operations engineering  consulting services and integrated 
energy services revenues of a ‘passthrough’ nature with zero or low margins amounting to us389m 2012 us220mthe revenues 
are included as external revenues of the group since the risks and rewards associated with recognition are assumed by the group 
b cost of sales 
included in cost of sales for the year ended 31 december 2013 is depreciation charged on property plant and equipment of us207m 
during 2013 2012 us96m note 9 
also included in cost of sales are forward points and ineffective portions on derivatives designated as cash flow hedges and losses on 
undesignated derivatives of usnil 2012 us2m lossthese amounts are an economic hedge of foreign exchange risk but do not meet 
the criteria within ias 39 and are most appropriately recorded in cost of sales 
c selling general and administration expenses 
2013 
 usm 
  
2012
 usm
restated
staff costs 245  226
depreciation note 9 22  18
amortisation note 12  9  4
net impairment of an investment in associate note 13  –  7
other operating expenses  111  102
 387  357
other operating expenses consist mainly of office travel legal and professional and contracting staff costs 
  
petrofac annual report and accounts 2013
135 notes to the consolidated financial statements continued  
4 revenues and expenses continued 
d staff costs 
2013 
 usm 
  
2012
 usm
restated
total staff costs    
wages and salaries  1154  1147
social security costs  58  52
defined contribution pension costs  18  20
other longterm employee benefit costs note 25  20  19
expense of sharebased payments note 22  15  26
 1265  1264
of the us1265m 2012 us1264m restated of staff costs shown above us1020m 2012 restated us1038m is included in cost of 
sales with the remainder in selling general and administration expenses 
the average number of payrolled staff employed by the group during the year was 15948 2012 15259 
e auditors remuneration 
the group paid the following amounts to its auditors in respect of the audit of the financial statements and for other services provided 
to the group 
2013 
 usm  
2012
 usm
group audit fee 2  1
audit of accounts of subsidiaries  1  1
others 1  1
 4  3
others include audit related assurance services of us350000 2012 us327000 tax advisory services of us460000 2012 
us235000 tax compliance services of us200000 2012 us113000 and other nonaudit services of us340000 2012 
us118000 
f other income 
2013 
 usm  
2012
 usm
foreign exchange gains  10  9
gain on disposal of noncurrent asset held for sale –  27
fair value on initial recognition of investment in associate note 13 –  9
gain on disposal of an investment in a joint venture  –  6
recovery of legal claim  –  6
other income  1  8
 11  65
prior year gain on sale of noncurrent asset held for sale of us36m comprised us27m on disposal of 752 of petrofac’s interest in 
petrofac fpf1 limited to ithaca energy inc and us9m being the increase in fair value of the remaining 248 interest held which was 
classified as an associate 
g other expenses 
2013 
 usm  
2012
 usm
foreign exchange losses  15  11
loss on fair value changes in seven energy warrants note 13 1  6
other expenses  1  3
 17  20
 
  
petrofac annual report and accounts 2013
136
financial statements  
 
5 finance costsincome 
2013 
 usm  
2012
 usm
finance costs    
longterm borrowings  23  2
other interest including shortterm loans and overdrafts  1  1
unwinding of discount on provisions note 25 4  2
total finance costs  28  5
finance income   
bank interest receivable  1  5
unwinding of discount on longterm receivables from customers 23  7
total finance income  24  12
6 income tax 
a tax on ordinary activities  
the major components of income tax expense are as follows 
2013 
 usm  
2012
 usm
current income tax   
current income tax charge 170  97
adjustments in respect of current income tax of previous years  29  29
deferred tax   
relating to origination and reversal of temporary differences 2  73
recognition of tax losses relating to prior periods 1  6
income tax expense reported in the income statement  142  135
income tax reported in equity   
deferred tax related to items charged directly to equity 2  4
current income tax related to share schemes –  5
income tax incomeexpense reported in equity 2  1
the split of the group’s tax charge between current and deferred tax varies from year to year depending largely on 
 the variance between tax provided on the percentage of completion of projects versus that paid on accrued income for engineering 
procurement and construction contracts and  
 the tax deductions available for expenditure on risk service contracts and production enhancement contracts pecs which are partially 
offset by the creation of losses 
see 6c below for the impact on the movements in the year 
b reconciliation of total tax charge 
a reconciliation between the income tax expense and the product of accounting profit multiplied by the company’s domestic tax rate is 
as follows 
2013 
usm  
2012
 usm
accounting profit before tax  789  765
at jersey’s domestic income tax rate of 0 2012 0  –  –
expected tax charge in higher rate jurisdictions  154  160
expenditure not allowable for income tax purposes  20  13
adjustments in respect of previous years  28  36
adjustments in respect of losses not previously recognisedderecognised  8  2
unrecognised tax losses  1  –
other permanent differences  2  1
effect of change in tax rates  1  1
at the effective income tax rate of 180 2012 177  142  135
the group’s effective tax rate for the year ended 31 december 2013 is 180 2012 177 a number of factors have impacted the 
effective tax rate this year net release of tax provisions held in respect of income taxes and from the recognition of tax losses previously 
unrecognised and the mix of profits in the jurisdictions in which profits are earned adjustments in respect of prior periods represent the 
creation or release of tax provisions following the normal review audit and final settlement process that occurs in the territories in which the 
group operates 
from 1 april 2014 the main uk corporation tax rate will be 21 subsequently reducing to 20 in 2015 the change in the uk rate to 20 
was substantively enacted as at the reporting date and the impact of the change has been included above  
petrofac annual report and accounts 2013
137 notes to the consolidated financial statements continued  
6 income tax continued 
c deferred tax 
deferred tax relates to the following 
consolidated statement 
of financial position 
consolidated income 
statement 
2013
 usm
2012
 usm
2013 
 usm  
2012
 usm
deferred tax liabilities  
fair value adjustment on acquisitions 3 3
 
–  –
accelerated depreciation 204 121 83  78
profit recognition 32 100 68  86
other temporary differences 2 – 2  –
gross deferred tax liabilities 241 224  
deferred tax assets 
losses available for offset 93 96 3  94
decelerated depreciation for tax purposes 2 3 1  1
share scheme 6 9 1  1
profit recognition 6 11 5  –
other temporary differences 31 5 26  1
gross deferred tax assets 138 124  
net deferred tax liabilitydeferred tax charge 103 100 1  67
   
of which   
deferred tax assets 37 43  
deferred tax liabilities 140 143  
d unrecognised tax losses and tax credits 
deferred income tax assets are recognised for tax loss carry forwards and tax credits to the extent that the realisation of the related tax 
benefit through offset against future taxable profits is probable the group did not recognise deferred income tax assets of us29m 2012 
us27m 
2013 
 usm  
2012
 usm
expiration dates for tax losses  
no earlier than 2018 –  7
no expiration date 17  8
 17  15
tax credits no expiration date 12  12
 29  27
during 2013 the group recognised a tax benefit from the utilisation of tax losses us2m 2012 us3m recognition of losses not 
previously recognised of us7m 2012 us6m and there is no derecognition of tax losses from a prior period 2012 us7m 
 
  
petrofac annual report and accounts 2013
138
financial statements  
7 earnings per share 
basic earnings per share amounts are calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted 
average number of ordinary shares outstanding during the year 
diluted earnings per share amounts are calculated by dividing the profit attributable to ordinary shareholders after adjusting for any dilutive 
effect by the weighted average number of ordinary shares outstanding during the year adjusted for the effects of ordinary shares granted 
under the employee share award schemes which are held in trust 
the following reflects the income and share data used in calculating basic and diluted earnings per share 
2013 
 usm  
2012
 usm
profit attributable to ordinary shareholders for basic and diluted earnings per share  650  632
 
2013 
number 
‘m  
2012 
number
‘m
weighted average number of ordinary shares for basic earnings per share  341  340
effect of dilutive potential ordinary shares granted under sharebased payment schemes  3  3
adjusted weighted average number of ordinary shares for diluted earnings per share  344  343
  
8 dividends paid and proposed 
2013 
 usm  
2012
 usm
declared and paid during the year    
equity dividends on ordinary shares  
final dividend for 2011 3720 cents per share 
 
–  127
interim dividend 2012 2100 cents per share –  71
final dividend for 2012 4300 cents per share  147  –
interim dividend 2013 2200 cents per share 75  –
 222  198
 
2013 
 usm  
2012
 usm
proposed for approval at agm    
not recognised as a liability as at 31 december   
equity dividends on ordinary shares  
final dividend for 2013 4380 cents per share 2012 4300 cents per share 
 
152  149
 
  
petrofac annual report and accounts 2013
139 notes to the consolidated financial statements continued  
9 property plant and equipment 
  
oil and gas 
assets 
usm 
oil and gas 
facilities 
usm  
land 
buildings 
and 
leasehold 
improvements 
usm
plant and 
equipment 
usm
vehicles 
usm
office 
furniture 
and 
equipment 
usm
assets  
under 
construction 
usm  
total 
usm
cost        
at 1 january 2012  118 426  206 25 17 116 24  932
additions restated  170 139  28 3 6 29 53  428
disposals  – 7  4 10 – 2 –  23
exchange difference  – –  1 – – 1 –  2
at 1 january 2013 restated  288 558  231 18 23 144 77  1339
additions  491 –  38 8 1 36 23  597
acquisition of subsidiaries  – –  31 5 – 6 –  42
disposals  – 110  1 1 1 4 –  117
transfer from intangible oil and 
gas assets note 12  21 –  ––– – –  21
transfers  28 –  43 – – – 71  –
exchange difference  – –  1 – – 1 –  2
at 31 december 2013  828 448  343 30 23 183 29  1884
 
depreciation   
     
at 1 january 2012  62  137  59 17 12 62 –  349
charge for the year restated  36  11  29 2 4 32 –  114
disposals  – 7  4 10 – 1 –  22
exchange difference  – –  – – – 1 –  1
at 1 january 2013 restated  98  141  84 9 16 94 –  442
charge for the year  102  34  53 6 4 30 –  229
acquisition of subsidiaries  – –  18 3 – 4 –  25
disposals  – –  1 – 1 3 –  5
transfers  – –  7 – – 7 –  –
exchange difference  – –  1 – – 1 –  2
at 31 december 2013  200  175  162 18 19 119 –  693
net carrying amount 
at 31 december 2013  628 273  181 12 4 64 29  1191
at 31 december 2012 restated  190 417  147 9 7 50 77  897
additions to oil and gas assets mainly comprise field development costs relating to block pm304 in malaysia of us46m santuario 
magallanes and arenque pecs of us211m ticleni pecs of us54m and panuco pecs of us22m 2012 santuario and magallanes 
pecs of us106m and ticleni pecs of us48m capitalised decommissioning costs provided on the pm304 block in malaysia of us13m 
santuario magallanes and arenque pecs of us77m and panuco pecs of us10m  
additions to oil and gas facilities in 2012 mainly comprised the upgrade of the fpf5 at a cost of us104m 
disposal within oil and gas facilities in 2013 of us110m represents a sale under a finance lease of the fpf5 to the pm304 joint venture in 
which the group has a 30 interest 
of the total charge for depreciation in the income statement us207m 2012 us96m restated is included in cost of sales and us22m 
2012 us18m in selling general and administration expenses 
assets under construction comprise expenditures incurred in relation to a new office building in the united arab emirates the group 
enterprise resource planning erp project and construction of the new petrofac jsd6000 installation vessel 
included in ‘land buildings and leasehold improvements’ and ‘plant and equipment’ is property plant and equipment under finance lease 
agreements for which book values are as follows 
net book value   
2013 
usm  
2012
usm
gross book value    34  35
addition   10  5
depreciation   24  7
exchange difference   1  1
at 31 december   19  34
  
petrofac annual report and accounts 2013
140
financial statements  
10 business combination 
petrofac emirates llc pe 
the financial position and performance of pe have been consolidated into the group financial statements from 1 january 2013 the effective 
date of the acquisition of an additional 25 economic interest by the group following the disposal of the 50 economic interest in the 
entity previously held by mubadala petroleum mubadala nama development enterprises has acquired the remaining 25 economic 
interest mubadala ceded control of pe to the group with effect from 1 january 2013 including the exercise of their voting rights to enable 
the group to exercise control over pe 
the fair values of the identifiable assets and liabilities of pe on 1 january 2013 are analysed below 
recognised 
on 
acquisition 
usm  
carrying 
value
 usm
property plant and equipment 15  15
trade and other receivables  258  258
cash and shortterm deposits  58  58
 331  331
less   
trade and other payables  269  269
billings in excess of cost and estimated earnings  39  39
accrued contract expenses  1  1
 309  309
  
fair value of net assets acquired 22 
noncontrolling interest arising on acquisition  5 
acquisition date fair value of initial 50 interest note 13  11 
goodwill arising on acquisition  29 
consideration for 25 interest acquired on 1 january 2013  35 
 
cash inflow on acquisition   
cash paid on acquisition   35
cash acquired with subsidiary   58
net cash inflow on the acquisition of subsidiary   23
the residual goodwill above comprises the fair value of expected future synergies and business opportunities arising from the integration of 
the business into the group 
rnz integrated m sdn bhd rnz 
during 2011 the group entered into a collaboration agreement with the owners of rnz whereby it was agreed that when certain 
conditions had been fulfilled three out of five members of the management committee of rnz would be petrofac representatives and the 
actions of the management committee would be decided by a simple majority the conditions were fulfilled and the membership changes of 
the management committee took place on 1 april 2013 being the date from which the group has the power to control the relevant activities 
of rnz rnz has been consolidated 100 in the group results since 1 april 2013 
if the above combination had taken place at the beginning of the year profit of rnz would have been us2m and revenue would have been 
us44m 
the group has an agreement with owners of rnz that the profits of the company will not be distributed until it obtains the consent  
of the group  
  
petrofac annual report and accounts 2013
141 notes to the consolidated financial statements continued  
11 goodwill 
a summary of the movements in goodwill is presented below 
2013 
usm  
2012
 usm
at 1 january  125  107
acquisitions during the year 32  15
reassessment of contingent consideration payable  4  1
exchange difference  2  4
at 31 december  155  125
acquisitions during the year comprise the goodwill recognised on the acquisition of an additional 25 interest in petrofac emirates llc of 
us29m and rnz of us3m acquisitions during 2012 comprised the goodwill recognised on acquisition of kw limited of us14m and 
hlspd americas s de rl of us1m  
reassessment of contingent consideration payable comprises a decrease in contingent consideration payable on caltec limited of us4m 
2012 us1m 
goodwill acquired through business combinations has been allocated to four groups of cashgenerating units for impairment testing 
as follows  
 onshore engineering  construction 
 offshore projects  operations  
 engineering  consulting services  
 integrated energy services 
these represent the lowest level within the group at which the goodwill is monitored for internal management purposes the group 
considers cashgenerating units to be individually significant where they represent greater than 25 of the total goodwill balance  
onshore engineering  construction offshore projects  operations engineering  consulting services and integrated 
energy services cashgenerating units 
recoverable amounts have been determined based on value in use calculations using discounted pretax cash flow projections 
management have adopted projection periods appropriate to each unit’s value in use for onshore engineering  construction offshore 
projects  operations and engineering  consulting services cashgenerating units the cash flow projections are based on financial 
budgets approved by senior management covering a fiveyear period extrapolated at a growth rate of 25 
for the integrated energy services business the cash flows are based on economic models over the length of the contracted period for 
production enhancement contracts equity upstream investments and risk service contracts for other operations included in integrated 
energy services cash flows are based on financial budgets approved by senior management covering a fiveyear period extrapolated at a 
growth rate of 25  
the carrying amount of goodwill for the onshore engineering  construction offshore projects  operations and engineering  consulting 
services cashgenerating units are not individually significant in comparison with the total carrying amount of goodwill and therefore no 
analysis of sensitivities has been provided below 
  
petrofac annual report and accounts 2013
142
financial statements  
carrying amount of goodwill allocated to each group of cashgenerating units 
2013 
 usm  
2012
 usm
onshore engineering  construction unit  29  –
offshore projects  operations unit 30  29
engineering  consulting services unit 26  23
integrated energy services unit  70  73
 155  125
key assumptions used in value in use calculations for the integrated energy services unit 
the following key assumptions were included in the value in use calculations used to estimate the recoverable amount of the integrated 
energy services cashgenerating unit where management has identified a reasonably possible change in any of these assumptions that 
would result in impairment details have been provided below 
market share for the training business which is within integrated energy services the key assumptions relate to management’s 
assessment of maintaining the unit’s market share in the uk and developing further the business in international markets 
capital expenditure the production enhancement contracts in the integrated energy services unit require a minimum level of capital spend 
on the projects in the initial years to meet contractual commitments if the capital is not spent a cash payment of the balance is required 
which does not qualify for cost recovery the level of capital spend assumed in the value in use calculation is that expected over the period 
of the budget based on the current field development plans which assumes the minimum spend is met on each project and the contracts 
remain in force for the entire duration of the project for other equity upstream investments the level of capital spend assumed is based on 
sanctioned field development plans and represents the activities required to access commercial reserves a 10 increase in capital 
expenditure representing a total overspend of us300m undiscounted across the portfolio of integrated energy services projects would 
result in an impairment charge of us43m 
reserve volumes and production profiles management has used its internally developed economic models of reserves and production 
profiles as inputs in to the value in use for the production enhancement contracts risk service contracts and equity upstream 
investments these economic models are revised annually as part of the preparation of the group’s five year business plans which are 
approved by the board management has used an oil price of us100 per barrel 2012 us100 per barrel to determine reserve volumes 
a 10 decrease in forecast production across the portfolio of integrated energy services projects would result in an impairment charge 
equal to the carrying value of goodwill of us70m and a 10 reduction in the oil price would result in an impairment charge of us23m 
growth rate estimates are based on management’s assessment of market share having regard to macroeconomic factors and the growth 
rates experienced in the recent past in the markets in which the unit operates a growth rate of 25 per annum has been applied for 
businesses within the integrated energy services cashgenerating unit where the cash flows are not based on long term contractual 
arrangements 
discount rate management has used a pretax discount rate of 104 per annum 2012 132 per annum the discount rate is derived 
from the estimated weighted average cost of capital wacc of the group and has been calculated using an estimated risk free rate of 
return adjusted for the group’s estimated equity market risk premium there has been a significant reduction in the group’s wacc during 
2013 principally due to a major change in the macroeconomic outlook compared with the previous year which has resulted in a shift in the 
market risk premium used in the calculation of the group wacc furthermore the introduction of leverage in to the group’s consolidated 
statement of financial position has also reduced the group wacc due to the cost of debt being much lower than the cost of equity a 100 
basis point increase in the pretax discount rate to 114 would result in an impairment charge of us63m 
  
petrofac annual report and accounts 2013
143 notes to the consolidated financial statements continued  
12 intangible assets 
2013 
 usm  
2012
 usm
intangible oil and gas assets    
cost    
at 1 january  268  103
additions  43  165
transfer to oil and gas assets note 9 21  –
net book value of intangible oil and gas assets at 31 december  290  268
 
other intangible assets  
 
 
cost    
at 1 january  54  30
additions on acquisition –  6
transfer from other noncurrent financial assets –  10
additions  10  7
write off 4  –
exchange difference  –  1
at 31 december  60  54
accumulated amortisation    
at 1 january  15  11
amortisation  5  4
at 31 december  20  15
net book value of other intangible assets at 31 december  40  39
total intangible assets 330  307
intangible oil and gas assets 
oil and gas assets part of the integrated energy services segment additions above comprise largely us40m 2012 us149m 
of capitalised expenditure on the group’s assets in malaysia 
there were investing cash outflows relating to capitalised intangible oil and gas assets of us43m 2012 us165m in the current period 
arising from predevelopment activities 
transfers within intangible oil and gas assets represent transfers to oil and gas assets relating to block pm304 in malaysia note 9 
other intangible assets 
other intangible assets comprising project development expenditure customer contracts proprietary software and patent technology are 
being amortised over their estimated economic useful life on a straightline basis and the related amortisation charges included in selling 
general and administration expenses note 4c 
us4m relating to lng intellectual property was written off during the year  
petrofac annual report and accounts 2013
144
financial statements  
 
13 investments in associatesjoint ventures 
associates
usm 
joint 
ventures 
 usm  
total
 usm
as at 1 january 2012 164 21  185
additional investment in seven energy international limited  25 –  25
transfer from subsidiary to investment in associate – petrofac fpf1 limited 9 –  9
transfer of a longterm receivable from a related party – petrofac fpf1 limited 13 –  13
share of lossesprofits  8  2  6
impairment of investment in gateway storage company limited 14  –  14
dividends received  – 2  2
as at 31 december 2012 restated 189 21  210
investment in petrofac fpf1 limited 4 –  4
share of profits 17 5  22
transferred to investment in subsidiary note 10 – 11  11
dividends received  – 10  10
as at 31 december 2013 210 5  215
dividends received include us8m received from petrofac emirates llc and us2m received from tte petrofac limited 2012 us2m 
received from tte petrofac limited 
associates 
2013 
 usm  
2012
 usm
associates acquired through acquisition of subsidiary 1  1
petrofac fpf1 limited 25  21
investment in seven energy international limited  184  167
 210  189
seven energy international limited 
on 25 november 2010 the group invested us100m for 150 126 on a fully diluted basis of the share capital of seven energy 
international limited seven energy a leading nigerian gas development and production company incurring us1m of transaction costs 
this investment which was previously held under availableforsale financial assets was transferred to investments in associates pursuant 
to an investment on 10 june 2011 of us50m for an additional 46 of the share capital of seven energy which resulted in the group 
being in a position to exercise significant influence over seven energy on 30 october 2012 the group invested us25m for an additional 
24 of the share capital of seven energy the additional us25m investment was made as part of a discounted rights issue required to 
deal with a shortterm funding requirement by seven energy at a subscription price of us150 per share and in light of this the carrying 
value of the investment has been tested for impairment and no impairment provision is required no negative goodwill has been accounted 
for on the rights issue as the range of possible outcomes was immaterial the group also has the option to subscribe for 148571 of 
additional warrants in seven energy at a cost of a further us52m subject to the performance of certain service provision conditions and 
milestones in relation to project execution these warrants have been fair valued at 31 december 2013 as derivative financial instruments 
under ias 39 using a black scholes model amounting to us11m 2012 us12m us1m 2012 us6m other expense has been 
recognised as other expense in the current period income statement as a result of the revaluation of these derivatives at 31 december 2013 
note 4g during 2012 deferred revenue recognised in trade and other payables of us10m was released in full to the consolidated income 
statement as 100 of the performance conditions required to subscribe for the remaining warrants in the company were satisfied 
the share of the associate’s statement of financial position is as follows 
2013 
 usm  
2012
 usm
noncurrent assets 1140  740
current assets 220  100
noncurrent liabilities 284  254
current liabilities 682  268
equity  394  318
group’s share of net assets 87  70
transaction costs incurred  2  2
residual goodwill  95  95
carrying value of investment 184  167
share of associates revenues and net profitloss 
revenue 
 
76  23
net profitloss 17  8
  
petrofac annual report and accounts 2013
145 notes to the consolidated financial statements continued  
13 investments in associatesjoint ventures continued 
joint ventures 
2013 
 usm  
2012
 usm
petrofac emirates llc –  19
spie capag – petrofac international limited 1  1
china petroleum petrofac engineering services cooperatif ua 2  –
tte petrofac limited 2  1
 5  21
transition to ifrs 11 
under ias 31 investment in joint ventures prior to the transition to ifrs 11 the group’s interest in petrofac emirates llc tte petrofac 
limited professional mechanical repair services company spie capag – petrofac international limited and china petroleum petrofac 
engineering services cooperatif ua were classified as jointly controlled entities and the group’s share of the assets liabilities revenue 
income and expenses were proportionately consolidated in the consolidated financial statements upon adoption of ifrs 11 the group has 
determined its interest in these entities to be joint ventures and they are required to be accounted for using the equity method the effect of 
applying ifrs 11 is as follows 
impact on the consolidated income statement 
  
2012
 usm
decrease in the reported revenue   84
decrease in the cost of sales   80
decrease in gross profit   4
decrease in selling general and administration expenses   2
decrease in operating profit   2
increase in share of profits of joint ventures   2
net impact on profit after tax   –
impact on the consolidated statement of financial position 
  
2012
 usm
increase in net investment in joint venture noncurrent   21
decrease in noncurrent assets   8
decrease in current assets   101
decrease in current liabilities   88
net impact on equity   –
impact on the consolidated statement of cash flows 
  
2012
 usm
decrease in net cash flows from operating activities   34
increase in net cash flows used in investing activities   2
net decrease in cash and cash equivalents   32
  
petrofac annual report and accounts 2013
146
financial statements  
interest in joint ventures 
summarised financial information of the joint ventures
1
 based on its ifrs financial statements and reconciliation with the carrying amount 
of the investment in consolidated financial statements are set out below  
 
2013 
 usm 
  
2012
 usm
restated
revenue  38  168
cost of sales  25  160
gross profit  13  8
selling general and administration expenses  2  4
finance expenseincome net  –  –
profit before income tax  11  4
income tax  1  –
profit  10  4
group’s share of profit for the year 5  2
 
current assets  
 
12  202
noncurrent assets  2  16
total assets  14  218
 
current liabilities  
 
2  176
noncurrent liabilities  2  –
total liabilities  4  176
net assets  10  42
group’s share of net assets 5  21
carrying amount of the investment 5  21
1  
a list of these joint ventures is disclosed in note 30 
the joint ventures had no contingent liabilities or capital commitments as at 31 december 2013 and 2012 the joint ventures cannot 
distribute their profits until they obtain consent from the venturers 
  
petrofac annual report and accounts 2013
147 notes to the consolidated financial statements continued  
14 other financial assets and other financial liabilities 
other financial assets 
2013 
 usm  
2012
 usm
noncurrent   
longterm receivables from customers 394  437
receivable from a joint venture partner 127  –
fair value of derivative instruments note 29 5  –
restricted cash 1  7
 527  444
current 
  
shortterm component of receivable from customers  282  67
seven energy warrants note 13 11  12
fair value of derivative instruments note 29 23  2
restricted cash 4  4
 320  85
other financial liabilities   
noncurrent   
contingent consideration payable 1  1
interest rate swaps note 29 1  –
finance lease creditors note 27 –  6
fair value of derivative instruments note 29 –  1
 2  8
current 
  
contingent consideration payable 1  7
fair value of derivative instruments note 29 14  3
finance lease creditors note 27 15  7
interest rate swaps note 29 1  –
interest payable 6  –
 37  17
the longterm receivables from customers relate to the discounted value of amounts due under the berantai rsc which are being 
recovered over a six year period from 2013 in line with the contractual terms of the project the 2012 balance also includes amounts 
receivable in respect of the development of the greater stella area 
the shortterm component of receivable from customers relate to the amounts due under the berantai rsc and to amounts receivable in 
respect of the development of the greater stella area 
restricted cash comprises deposits with financial institutions securing various guarantees and performance bonds associated with the 
group’s trading activities note 27this cash will be released on the maturity of these guarantees and performance bonds 
  
petrofac annual report and accounts 2013
148
financial statements  
15 fair value measurement 
the following financial instruments are measured at fair value using the hierarchy below for determination and disclosure of their respective 
fair values 
level 1  unadjusted quoted prices in active markets for identical financial assets or liabilities 
level 2  other valuation techniques where the inputs are based on significant observable factors 
level 3  other valuation techniques where the inputs are based on significant unobservable market data 
year ended 31 december 2013 
date of valuation 
level 2 
usm   
level 3 
usm
financial assets    
seven energy warrants 31 december 2013 –  11
receivable under the berantai rsc 31 december 2013 –  476
amounts receivable in respect of the development of the greater stella area 31 december 2013 200  –
euro forward currency contracts – designated as cash flow hedge 31 december 2013 24  –
gbp forward currency contracts – designated as cash flow hedge 31 december 2013 4  –
 
assets for which fair values are disclosed note 29  
 
 
cash and shortterm deposits 31 december 2013 617  –
restricted cash 31 december 2013 5  –
   
financial liabilities    
euro forward currency contracts – designated as cash flow hedge 31 december 2013 2  –
sterling forward currency contracts – undesignated 31 december 2013 11  –
interest rate swaps 31 december 2013 2  –
oil derivative 31 december 2013 1  –
 
liabilities for which fair values are disclosed note 29  
 
 
interestbearing loans and borrowings    
 senior notes 31 december 2013 750  –
 revolving credit facility 31 december 2013 444  –
 project financing 31 december 2013 138  –
 bank overdrafts 31 december 2013 32  –
contingent consideration 31 december 2013 2  –
year ended 31 december 2012 
date of valuation 
level 2  
 usm   
level 3
usm
financial assets    
seven energy warrants 31 december 2012 –   12
receivable under the berantai rsc 31 december 2012 –  389
amounts receivable in respect of the development of the greater stella area 31 december 2012 115   –
euro forward currency contracts – designated as cash flow hedge 31 december 2012 1   –
euro forward currency contracts – undesignated 31 december 2012  1   –
 
financial liabilities  
 
 
euro forward currency contracts – designated as cash flow hedge 31 december 2012  1  –
euro forward currency contracts – undesignated 31 december 2012  1  –
sterling forward currency contracts – undesignated 31 december 2012  2  –
  
petrofac annual report and accounts 2013
149 notes to the consolidated financial statements continued  
16 inventories 
2013 
 usm  
2012
 usm
crude oil 4  3
stores and spares 12  23
raw materials –  1
 16  27
included in the consolidated income statement are costs of inventories expensed of us43m 2012 us18m 
17 work in progress and billings in excess of cost and estimated earnings 
2013  
usm 
  
2012 
usm
restated
cost and estimated earnings 14244  10619
less billings 12771  9963
work in progress 1473  656
 
billings 5690  5356
less cost and estimated earnings 5436  5049
billings in excess of cost and estimated earnings 254  307
 
total cost and estimated earnings 19680  15668
 
total billings 18461  15319
18 trade and other receivables 
2013 
 usm 
  
2012
 usm
restated
trade receivables 1294  1212
retentions receivable 254  170
advances 216  110
prepayments and deposits 70  32
receivables from joint venture partners 314  268
other receivables 212  54
 2360  1846
other receivables mainly consist of value added tax recoverable of us130m 2012 us46m us76m being unbilled accruals on 
santuario and magallanes pecs and the balance being miscellaneous nontrading receivables 
  
petrofac annual report and accounts 2013
150
financial statements  
trade receivables are noninterest bearing and are generally on 30 to 60 days’ terms trade receivables are reported net of provision for 
impairment the movements in the provision for impairment against trade receivables totalling us1299m 2012 us1215m are as 
follows 
  2013 2012 
 
 specific 
impairment 
usm
general 
impairment 
usm
total 
usm
specific 
impairment 
usm
general 
impairment 
usm  
total 
usm
at 1 january  213 21  3
charge for the year  2– 2 –2  2
amounts written off  ––– – 2  2
at 31 december  415 21  3
at 31 december the analysis of trade receivables is as follows 
 
 
neither past 
due nor 
impaired 
usm 
 number of days past due 
  
 30 
days  
usm  
31–60
days 
usm
61–90
 days
 usm
91–120
days
 usm
121–360
days
 usm
 360 
 days 
 usm  
total
 usm
unimpaired  532  586  91 23 8 31 6  1277
impaired  –  –  – – 7 6 9  22
  532  586  91 23 15 37 15  1299
less impairment provision  –  –  – – 1 1 3  5
net trade receivables 2013  532  586  91 23 14 36 12  1294
 
unimpaired restated  838  237  58 21 5 24 10  1193
impaired  –  –  – – 13 5 4  22
  838  237  58 21 18 29 14  1215
less impairment provision  –  –  – – 1 1 1  3
net trade receivables 2012 
restated  838  237  58 21 17 28 13  1212
the credit quality of trade receivables that are neither past due nor impaired is assessed by management with reference to externally 
prepared customer credit reports and the historic payment track records of the counterparties 
advances represent payments made to certain of the group’s subcontractors for projects in progress on which the related work had not 
been performed at the statement of financial position date  
receivables from joint venture partners are amounts recoverable from venture partners on the fpso berantai block pm304 and petrofac 
emirates on an engineering procurement and construction project 
all trade and other receivables are expected to be settled in cash 
certain trade and other receivables will be settled in cash using currencies other than the reporting currency of the group and will be largely 
paid in sterling and euros 
19 cash and shortterm deposits 
2013 
 usm 
  
2012
usm
restated
cash at bank and in hand 506  366
shortterm deposits 111  216
total cash and bank balances 617  582
shortterm deposits are made for varying periods of between one day and three months depending on the immediate cash requirements 
of the group and earn interest at respective shortterm deposit rates the fair value of cash and bank balances is us617m 
2012 us582m 
for the purposes of the consolidated statement of cash flows cash and cash equivalents comprise the following 
2013 
 usm 
  
2012
usm
restated
cash at bank and in hand 506  366
shortterm deposits 111  216
bank overdrafts note 24 32  57
 585  525
 
petrofac annual report and accounts 2013
151 notes to the consolidated financial statements continued  
20 share capital 
the share capital of the company as at 31 december was as follows 
 
2013 
usm  
2012
usm
authorised   
750000000 ordinary shares of us0020 each 2012 750000000 ordinary shares of us0020 each 15  15
 
issued and fully paid   
345912747 ordinary shares of us0020 each 2012 345891490 ordinary shares of us0020 each 7  7
the movement in the number of issued and fully paid ordinary shares is as follows 
  number
ordinary shares  
ordinary shares of us0020 each at 1 january 2012  345821729
issued during the year as further contingent consideration payable for the acquisition of a subsidiary  69761
ordinary shares of us0020 each at 1 january 2013  345891490
issued during the year as further contingent consideration payable for the acquisition of a subsidiary  21257
ordinary shares of us0020 each at 31 december 2013  345912747
the share capital comprises only one class of ordinary shares the ordinary shares carry a voting right and the right to a dividend 
share premium the balance on the share premium account represents the amount received in excess of the nominal value of the 
ordinary shares 
capital redemption reserve the balance on the capital redemption reserve represents the aggregated nominal value of the ordinary 
shares repurchased and cancelled 
21 treasury shares 
for the purpose of making awards under its employee share schemes the company acquires its own shares which are held by the petrofac 
employee benefit trust and the petrofac joint venture companies employee benefit trust all these shares have been classified in the 
statement of financial position as treasury shares within equity 
the movements in total treasury shares are shown below 
2013 2012 
number usm number  usm
at 1 january 5466213 100 5736017  75
acquired during the year 2300000 47 3000000  76
vested during the year 2093522 37 3269804  51
at 31 december 5672691 110 5466213  100
shares vested during the year include dividend shares and 8 uplift adjustment made in respect of the enquest demerger of 153408 
shares 2012 375040 shares 
22 sharebased payment plans 
performance share plan psp 
under the performance share plan of the company share awards are granted to executive directors and a restricted number of other 
senior executives of the group the shares vest at the end of three years subject to continued employment and the achievement 
of certain predefined market and nonmarketbased performance conditions the 50 market performance based part of these awards 
is dependent on the total shareholder return tsr of the group compared with an index composed of selected relevant companies the fair 
value of the shares vesting under this portion of the award is determined by an independent valuer using a monte carlo simulation model 
taking into account the terms and conditions of the plan rules and using the following assumptions at the date of grant 
  
22 mar 2013
awards
18 apr 2013
awards
24 may 2013
awards
2012
awards
2011 
awards  
2010
awards
expected share price volatility based on median 
of comparator group’s threeyear volatilities 
 346 347 339 380 510  500
share price correlation with comparator group  440 443 420 460 430  390
riskfree interest rate  04 04 05 04 17  15
expected life of share award  3 years 3 years 3 years 3 years 3 years  3 years
fair value of tsr portion  692p 492p 571p 1103p 788p  743p
  
petrofac annual report and accounts 2013
152
financial statements  
the nonmarketbased condition governing the vesting of the remaining 50 of the total award is subject to achieving between 10 and 
20 earnings per share eps growth targets over a threeyear period the fair values of the equitysettled award relating to the eps part of 
the scheme are estimated based on the quoted closing market price per company share at the date of grant with an assumed vesting rate 
per annum built into the calculation subsequently trued up at year end based on the actual leaver rate during the period from award date to 
year end over the threeyear vesting period of the plan  
deferred bonus share plan dbsp 
under the dbsp selected employees are required to defer a proportion of their annual cash bonus into company shares ‘invested award’ 
following such an award the company will generally grant the participant an additional award of a number of shares bearing a specified 
ratio to the number of his or her invested shares ‘matching shares’ typically using a 11 ratio subject to a participant’s continued 
employment invested and matching share awards may either vest 100 on the third anniversary of grant or alternatively vest onethird on 
the first anniversary of the grant onethird on the second anniversary and the final proportion on the third anniversary 
at the year end the values of the bonuses settled by shares cannot be determined until the remuneration committee has approved the 
portion of the employee bonuses to be settled in shares once the portion of the bonus to be settled in shares is determined the final bonus 
liability to be settled in shares is transferred to the reserve for sharebased payments the costs relating to the matching shares are 
recognised over the corresponding vesting period and the fair values of the equitysettled matching shares granted to employees are based 
on the quoted closing market price at the date of grant with the charge adjusted to reflect the expected vesting rate of the plan 
share incentive plan sip 
all uk employees including uk executive directors are eligible to participate in the sip employees may invest up to sterling £1500 per tax 
year of gross salary or if lower 10 of salary to purchase ordinary shares in the company there is no holding period for these shares 
restricted share plan rsp 
under the rsp selected employees are made grants of shares on an ad hoc basis the rsp is used primarily but not exclusively to make 
awards to individuals who join the group part way through the year having left accrued benefits with a previous employer the fair values of 
the awards granted under the rsp at various grant dates during the year are based on the quoted market price at the date of grant 
adjusted for an assumed vesting rate over the relevant vesting period  
value creation plan vcp 
during 2012 the company introduced a new oneoff value creation plan vcp which is a share option scheme for executive directors and 
key senior executives within the company vcp is a premium priced share option scheme with options granted with an exercise price set at 
a 10 premium to the grant date price options will vest to the extent of satisfying group and divisional profit after tax targets together with 
various other performance underpins and riskmalus provisions that can be imposed at the discretion of the remuneration committee of the 
board the share options vest in equal tranches on the fourth fifth and sixth anniversaries of the original grant date but may be exercised up 
to eight years from the date of grant 
the vcp share options were fair valued by an independent valuer using a blackscholes option pricing model taking into account the rules 
of the plan and using the following key assumptions 
tranche 1 tranche 2  tranche 3
share price at the date of grant 1555p 1555p  1555p
exercise price 1710p 1710p  1710p
expected lives of the award 6 years 65 years  7 years
share price volatility 41 41  41
share price dividend yield 23 23  23
riskfree interest rates 11 12  13
per share fair values 451p 467p  482p
sharebased payment plans information 
the details of the fair values and assumed vesting rates of the sharebased payment plans are below 
  psp eps portion dbsp  rsp 
  22 mar  18 apr 24 may    
  
fair value 
per share  
assumed 
vesting rate  
fair value 
per share  
assumed 
vesting rate
fair value 
per share
assumed 
vesting rate
fair value 
per share
assumed 
vesting rate 
fair value 
per share  
assumed 
vesting rate 
2013 awards  1446p  31  1266p  31 1340p 31 1446p 914 1366p  967
2012 awards  1705p  00  –  – – – 1705p 855 1555p  874
2011 awards  1426p  166  –  – – – 1426p 879 1463p  673
2010 awards  1103p  938  –  – – – 1185p 889 990p  831
 
  
petrofac annual report and accounts 2013
153 notes to the consolidated financial statements continued  
22 sharebased payment plans continued 
the following table shows the movements in the number of shares held under the sharebased payment plans outstanding but not 
exercisable 
  psp  dbsp rsp vcp total 
  
2013 
number  
2012 
number  
2013 
number  
2012
number
2013
number
2012
number
2013
number
2012
number
2013 
number  
2012
number
outstanding at 
1 january  1232186  1358046  3120968  3809746 522171 534780 1773713 – 6649038  5702572
granted 
during 
the year  499221  409212  1948702  1507614 204722 227726 – 1773713 2652645  3918265
vested 
during 
the year  368005   535072  1097127   1991385 123133 210836 – – 1588265   2737293
forfeited 
during 
the year  47532  –  264237   205007 64886 29499 72563 – 449218   234506
outstanding at 
31 december  1315870  1232186  3708306  3120968 538874 522171 1701150 1773713 7264200  6649038
includes invested and matching shares 
excludes shares which will be forfeited by andy inglis on leaving the company effective 28 february 2014 as explained in the remuneration report on page 
109 
the number of shares still outstanding but not exercisable at 31 december 2013 for each award is as follows 
  psp  dbsp rsp vcp total 
  
2013 
number  
2012 
number  
2013 
number  
2012
number
2013
number
2012
number
2013
number
2012
number
2013 
number  
2012
number
2013 awards  488879  –  1794234  – 201635 – –  2484748  –
2012 awards  385312  409212  1251020  1421132 198424 222056 1701150 1773713 3535906  3826113
2011 awards  441679  454969  663052  1049174 108453 138135 – – 1213184  1642278
2010 awards  –  368005  –  650662 30362 161980 – – 30362  1180647
total awards  1315870  1232186  3708306  3120968 538874 522171 1701150 1773713 7264200  6649038
 includes invested and matching shares 
the weighted average share price of the company shares during 2013 was us2176 sterling equivalent of £1390 
the number of outstanding shares excludes the 8 uplift adjustment made in respect of the enquest demerger and dividend shares 
shown below 
   psp  dbsp rsp total 
   
2013
number
2012 
number  
2013
number
2012
number
2013
number
2012
number
2013 
number  
2012
number
enquest 8 uplift  – –  318 52037 916 4542 1234  56579
dividend shares  74196 55511  155741 119699 17992 14058 247929  189268
outstanding at 31 december  74196 55511  156059 171736 18908 18600 249163  245847
 includes invested and matching shares 
the charge in respect of sharebased payment plans recognised in the consolidated income statement is as follows 
   psp  dbsp rsp vcp  total 
   
2013 
 usm 
2012 
 usm  
2013
 usm
2012
 usm
2013
 usm
2012
 usm
2013
 usm
2012 
 usm  
2013 
 usm  
2012
 usm
share based payment 
chargecredit  1 6  14 15 3 4 1 1  
 
15  
 
26
 represents charge on matching shares only 
the group has recognised a total charge of us15m 2012 us26m in the consolidated income statement during the year relating 
to the above employee sharebased schemes see note 4d which has been transferred to the reserve for sharebased payments along 
with us22m of the bonus liability accrued for the year ended 31 december 2012 which has been settled in shares granted during the year 
2011 bonus of us20m 
  
petrofac annual report and accounts 2013
154
financial statements  
the reduction in the share based payments charge compared with the previous year is due to a significant decrease in the expected future 
vesting rates of the performance share plans and the value creation plan together with an increase in employee leaver rates within the 
deferred bonus share plans 
for further details on the above employee sharebased payment schemes refer to pages 99 106 107 and 109 to 111 of the directors’  
remuneration report 
23 other reserves 
net unrealised 
gainslosses
on derivatives 
usm
foreign 
currency 
translation 
usm
reserve for 
sharebased 
payments 
usm  
total
usm
balance at 1 january 2012 20 35 61  6
foreign currency translation – 10 –  10
net losses on maturity of cash flow hedges recycled in the year 20 – –  20
sharebased payments charge note 22 – – 26  26
transfer during the year note 22 – – 20  20
shares vested during the year – – 45  45
deferred tax on sharebased payments reserve – – 1  1
balance at 1 january 2013 – 25 63  38
foreign currency translation – 4 –  4
net gains on maturity of cash flow hedges recycled in the year 1 – –  1
net changes in fair value of derivatives and financial assets  
designated as cash flow hedges 29 – –  29
sharebased payments charge note 22 – – 15  15
transfer during the year note 22 – – 22  22
shares vested during the year – – 34  34
deferred tax on sharebased payments reserve – – 2  2
balance at 31 december 2013 28 29 64  63
nature and purpose of other reserves 
net unrealised gainslosses on derivatives 
the portion of gains or losses on cash flow hedging instruments that are determined to be effective hedges is included within this reserve 
net of related deferred tax effects when the hedged transaction occurs or is no longer forecast to occur the gain or loss is transferred 
out of equity to the consolidated income statement realised net gains amounting to us1m 2012 us20m net loss relating to foreign 
currency forward contracts and financial assets designated as cash flow hedges have been recognised in cost of sales 
the forward currency points element and ineffective portion of derivative financial instruments relating to forward currency contracts and 
gains on undesignated derivatives amounting to usnil 2012 us2m loss have been recognised in the cost of sales 
foreign currency translation reserve 
the foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements 
in foreign subsidiaries it is also used to record exchange differences arising on monetary items that form part of the group’s net investment 
in subsidiaries 
reserve for sharebased payments 
the reserve for sharebased payments is used to record the value of equitysettled sharebased payments awarded to employees and 
transfers out of this reserve are made upon vesting of the original share awards 
the transfer during the year reflects the transfer from accrued expenses within trade and other payables of the bonus liability relating to the 
year ended 2012 of us22m 2011 bonus of us20m which has been voluntarily elected or mandatorily obliged to be settled in shares 
during the year note 22 
 
  
petrofac annual report and accounts 2013
155 notes to the consolidated financial statements continued  
24 interestbearing loans and borrowings 
the group had the following interestbearing loans and borrowings outstanding 
  
31 december 2013  
actual interest rate  
31 december 2012 
actual interest rate 
effective interest 
rate  maturity
2013 
usm  
2012 
usm
current     
bank overdrafts i uk libor  150 
us libor  150 
uk libor  150
us libor  150
uk libor
 150
us libor
 150
on demand 32  57
other loans     
current portion of project 
financing 
iv us libor  270 – us libor  
270 2014 21 –
   53  57
noncurrent     
senior notes ii 340 – 368 5 years 750  –
revolving credit facility rcf iii us libor  150 – us libor
 150
4 years
 
444 
 
303
project financing iv us libor  270 – us libor  
270 6 years 117 –
   1311  303
less     
debt acquisition costs net of 
accumulated amortisation and 
effective interest rate adjustments 
  
17 
 
11
discount on senior notes 
issuance 
  
3 –
   1291  292
details of the group’s interestbearing loans and borrowings are as follows 
i bank overdrafts 
bank overdrafts are drawn down in us dollars and sterling denominations to meet the group’s working capital requirements these are 
repayable on demand 
ii senior notes 
on 10 october 2013 petrofac issued an aggregate principal amount of us750m 5 year senior notes notes at an issue price of 
99627 the group will pay interest on the notes at an annual rate equal to 340 of the outstanding principal amount interest on the 
notes is payable semiannually in arrears in april and october of each year commencing in april 2014 the notes are senior unsecured 
obligations of the company and will rank equally in right of payment with the company’s other existing and future unsecured and 
unsubordinated indebtedness petrofac international ltd and petrofac international uae llc irrevocably and unconditionally guarantee 
jointly and severally the due and prompt payment of all amounts at any time becoming due and payable in respect of the notes the 
guarantees are senior unsecured obligations of each guarantor and will rank equally in right of payment with all existing and future senior 
unsecured and unsubordinated obligations of each guarantor  
iii revolving credit facility 
on 11 september 2012 petrofac entered into a us1200m 5 year committed revolving credit facility with a syndicate of 13 international 
banks which is available for general corporate purposes the facility which matures on 11 september 2017 is unsecured and is subject 
to two financial covenants relating to leverage and interest cover petrofac was in compliance with these covenants for the year ending 
31 december 2013 as at 31 december 2013 us444m was drawn under this facility 2012 us303m 
interest is payable on the drawn balance of the facility at libor  15 and in addition utilisation fees are payable depending on the level 
of utilisation 
iv project financing 
in may 2013 berantai floating production limited entered into a us300m group’s 51 share us153m senior secured term loan facility 
with a syndicate of 4 banks to refinance the cost of obtaining and developing the berantai fpso the loan which was advanced in full in 
may 2013 is being amortised on a quarterly basis and has a final maturity date of october 2019 the facility contains a debt service 
coverage ratio financial covenant of not less than 1151 interest on the loan is calculated at libor plus a margin of 270 underlying 
libor has been hedged at 1675 for the duration of the loan note 29 
fees relating to the group’s financing arrangements have been capitalised and are being amortised over the term of the respective 
borrowings 
none of the company’s subsidiaries are subject to any material restrictions on their ability to transfer funds in the form of cash dividends 
loans or advances to the company 
 
petrofac annual report and accounts 2013
156
financial statements  
25 provisions 
other 
longterm 
employment 
benefits 
provision
usm
provision for
decommissioning
usm
other 
provisions 
usm  
total
 usm
at 1 january 2013 63 33 4  100
additions during the year 20 100 2  122
paid in the year 13 – –  13
unwinding of discount 1 3 –  4
at 31 december 2013 71 136 6  213
other longterm employment benefits provision 
labour laws in the united arab emirates require employers to provide for other longterm employment benefits these benefits are payable 
to employees on being transferred to another jurisdiction or on cessation of employment based on their final salary and number of years’ 
service all amounts are unfunded the longterm employment benefits provision is based on an internally produced end of service benefits 
valuation model with the key underlying assumptions being as follows 
senior 
employees  
other 
employees
average number of years of future service 5  3
average annual  salary increases 6  4
discount factor 5  5
senior employees are those earning a base of salary of over us96000 per annum 
discount factor used is the local dubai fiveyear sukuk rate 
provision for decommissioning 
the decommissioning provision primarily relates to the group’s obligation for the removal of facilities and restoration of the sites at the 
pm304 field in malaysia chergui in tunisia and santuario magallanes arenque and panuco production enhancement contracts in mexico 
for additions during the year refer to note 9 the liability is discounted at the rate of 416 on pm304 2012 416 525 on chergui 
2012 525 and 586 on santuario magallanes arenque and panuco production enhancement contracts 2012 538 the 
unwinding of the discount is classified as finance cost note 5the group estimates that the cash outflows against these provisions will arise 
in 2026 on pm304 2018 on chergui 2033 on santuario and magallanes 2038 on arenque and 2030 on panuco production enhancement 
contracts 
other provisions 
this represents amounts set aside to cover claims against the group which will be settled via the captive insurance company jermyn 
insurance company limited 
26 trade and other payables 
2013 
 usm  
2012
 usm
restated
trade payables 927  830
advances received from customers 444  367
accrued expenses 684  576
other taxes payable 44  40
other payables 197  105
 2296  1918
advances received from customers represent payments received for contracts on which the related work had not been performed at the 
statement of financial position date 
other payables mainly consist of retentions held against subcontractors of us73m 2012 us86m and payable to joint venture partners 
of us50m 2012 usnil 
certain trade and other payables will be settled in currencies other than the reporting currency of the group mainly in sterling euros and 
kuwaiti dinars 
  
petrofac annual report and accounts 2013
157 notes to the consolidated financial statements continued  
27 commitments and contingencies 
commitments 
in the normal course of business the group will obtain surety bonds letters of credit and guarantees which are contractually required 
to secure performance advance payment or in lieu of retentions being withheld some of these facilities are secured by issue of corporate 
guarantees by the company in favour of the issuing banks 
at 31 december 2013 the group had letters of credit of us29m 2012 usnil and outstanding letters of guarantee including 
performance advance payments and bid bonds of us3602m 2012 us2296m against which the group had pledged or restricted 
cash balances of in aggregate us5m 2012 us11m 
at 31 december 2013 the group had outstanding forward exchange contracts amounting to us1273m 2012 us228m these 
commitments consist of future obligations either to acquire or to sell designated amounts of foreign currency at agreed rates and value 
dates note 29 
leases 
the group has financial commitments in respect of noncancellable operating leases for office space and equipment these noncancellable 
leases have remaining noncancellable lease terms of between one and 17 years and for certain property leases are subject to 
renegotiation at various intervals as specified in the lease agreements the future minimum rental commitments under these noncancellable 
leases are as follows 
2013 
 usm  
2012
 usm
within one year 33  25
after one year but not more than five years 73  108
more than five years 89  198
 195  331
included in the above are commitments relating to the leasing of a mobile operating production unit for the cendor phase 1 project of 
us5m 2012 us149m and the lease of office buildings in aberdeen united kingdom of us120m 2012 us127m 
minimum lease payments recognised as an operating lease expense during the year amounted to us44m 2012 us37m 
longterm finance lease commitments are as follows 
future 
minimum 
lease 
payments
usm
finance cost 
usm  
present 
value
 usm
land buildings and leasehold improvements   
the commitments are as follows   
within one year 16 1  15
after one year but not more than five years – –  –
more than five years ––  –
 16 1  15
capital commitments 
at 31 december 2013 the group had capital commitments of us942m 2012 us493m excluding the above lease commitments 
included in the us942m of commitments are 
2013 
 usm  
2012
 usm
building of the petrofac jsd6000 installation vessel  489  –
production enhancement contracts in mexico  390  146
further appraisal and development of wells as part of block pm304 in malaysia 20  287
costs in respect of ithaca greater stella field development in the north sea  41  50
commitments in respect of the construction of a new office building in united arab emirates –  5
  
petrofac annual report and accounts 2013
158
financial statements  
28 related party transactions 
the consolidated financial statements include the financial statements of petrofac limited and the subsidiaries listed in note 30 
petrofac limited is the ultimate parent entity of the group 
the following table provides the total amount of transactions which have been entered into with related parties 
sales to 
related 
parties 
usm
purchases 
from 
related 
parties 
usm
amounts 
owed  
by related  
parties  
usm  
amounts 
owed 
to related 
parties 
usm
joint ventures 2013 1 7 5  3
 2012 restated1701355  34
associates 2013 – – –  –
 2012 restated3–5  –
key management personnel interests 2013 – – –  –
 2012 – 2 –  –
all sales to and purchases from joint ventures are made at normal market prices and the pricing policies and terms of these transactions are 
approved by the group’s management 
all related party balances will be settled in cash 
purchases in respect of key management personnel interests of us264000 2012 us1521000 reflect the costs of chartering the 
services of an aeroplane used for the transport of senior management and directors of the group on company business which is owned by 
an offshore trust of which the group chief executive of the company is a beneficiary the charter rates charged for group usage of the 
aeroplane are significantly less than comparable market rates 
also include in purchases in respect of key management personnel interests is us138000 2012 us189000 relating to client 
entertainment provided by a business owned by a member of the group’s key management 
for details of the rights issue by seven energy and the warrants held see note 13 to the financial statements  
compensation of key management personnel 
the following details remuneration of key management personnel of the group comprising executive and nonexecutive directors of the 
company and other senior personnel further information relating to the individual directors is provided in the directors’ remuneration report 
on pages 92 to 113 
2013 
 usm  
2012
 usm
shortterm employee benefits 17  21
sharebased payments –  8
fees paid to nonexecutive directors 1  1
 18  30
 
  
petrofac annual report and accounts 2013
159 notes to the consolidated financial statements continued  
29 risk management and financial instruments 
risk management objectives and policies 
the group’s principal financial assets and liabilities other than derivatives comprise availableforsale financial assets trade and other 
receivables amounts due fromto related parties cash and shortterm deposits workinprogress interestbearing loans and borrowings 
trade and other payables and contingent consideration 
the group’s activities expose it to various financial risks particularly associated with interest rate risk on its variable rate cash and shortterm 
deposits loans and borrowings and foreign currency risk on both conducting business in currencies other than reporting currency as well as 
translation of the assets and liabilities of foreign operations to the reporting currency these risks are managed from time to time by using a 
combination of various derivative instruments principally forward currency contracts in line with the group’s hedging policies the group 
has a policy not to enter into speculative trading of financial derivatives 
the board of directors of the company has established an audit committee and board risk committee to help identify evaluate and 
manage the significant financial risks faced by the group and their activities are discussed in detail on pages 82 to 91 
the other main risks besides interest rate and foreign currency risk arising from the group’s financial instruments are credit risk liquidity risk 
and commodity price risk and the policies relating to these risks are discussed in detail below 
interest rate risk 
interest rate risk arises from the possibility that changes in interest rates will affect the value of the group’s interestbearing financial liabilities 
and assets 
the group’s exposure to market risk arising from changes in interest rates relates primarily to the group’s longterm variable rate debt 
obligations and its cash and bank balances the group’s policy is to manage its interest cost using a mix of fixed and variable rate debt 
the group’s cash and bank balances are at floating rates of interest 
interest rate sensitivity analysis 
the impact on the group’s pretax profit and equity due to a reasonably possible change in interest rates on loans and borrowings at the 
reporting date is demonstrated in the table below the analysis assumes that all other variables remain constant 
   pretax profit equity 
   
100 basis 
point 
increase 
usm
100 basis 
point 
decrease 
usm
100 basis 
point 
increase 
usm  
100 basis 
point 
decrease 
usm
31 december 2013    5 5 –  –
31 december 2012    2 2 –  –
the following table reflects the maturity profile of these financial liabilities and assets 
year ended 31 december 2013 
 
within 
1 year 
usm  
1–2
years
usm
2–3
years 
usm
3–4 
years 
usm
4–5 
years 
usm
more than 
5 years 
usm  
total
usm
financial liabilities      
floating rates       
bank overdrafts note 24  32  –– – – –  32
term loans note 24  21  22 23 467 24 25  582
 53  22 23 467 24 25  614
financial assets      
floating rates      
cash and shortterm deposits note 19  617  –– – – –  617
restricted cash balances note 14  4  1– – – –  5
  621  1– – – –  622
interest rate swaps 
at 31 december 2013 the group had interest rate swap agreements in place for its project financing with a notional principle equivalent to 
us153m whereby it pays a fixed rate of interest of 1675 and receives a variable rate equal to 3 month us libor on the notional 
amount the fair value of the interest rate swap at 31 december 2013 is a liability of us2m 2012 usnil and is being used to hedge the 
exposure to changes in us libor rates 
 
  
petrofac annual report and accounts 2013
160
financial statements  
year ended 31 december 2012 restated 
 
within 
1 year 
usm  
1–2
years
usm
2–3
years 
usm
3–4 
years 
usm
4–5 
years 
usm
more than 
5 years 
usm  
total
usm
financial liabilities      
floating rates       
bank overdrafts note 24  57  – – – – –  57
term loans note 24  –  – – – 303 –  303
 57  – – – 303 –  360
financial assets      
floating rates      
cash and shortterm deposits note 19  582  – – – – –  582
restricted cash balances note 14  4  7 – – – –  11
  586  7 – – – –  593
financial liabilities in the above table are disclosed gross of debt acquisition costs effective interest rate adjustments and discount on senior 
notes of us20m 2012 us11m 
interest on financial instruments classified as floating rate is repriced at intervals of less than one year the other financial instruments of the 
group that are not included in the above tables are noninterest bearing and are therefore not subject to interest rate risk 
foreign currency risk 
the group is exposed to foreign currency risk on sales purchases and translation of assets and liabilities that are in a currency other than 
the functional currency of its operating units the group is also exposed to the translation of the functional currencies of its units to the us 
dollar reporting currency of the group the following table summarises the percentage of foreign currency denominated revenues costs 
financial assets and financial liabilities expressed in us dollar terms of the group totals 
2013 
 of foreign 
 currency 
denominated 
 items  
2012
 of foreign
 currency
 denominated
 items
revenues 324  345
costs 450  547
current financial assets 331  378
noncurrent financial assets 10  00
current financial liabilities 222  339
noncurrent financial liabilities 00  27
the group uses forward currency contracts to manage the currency exposure on transactions significant to its operations it is the group’s 
policy not to enter into forward contracts until a highly probable forecast transaction is in place and to negotiate the terms of the derivative 
instruments used for hedging to match the terms of the hedged item to maximise hedge effectiveness 
foreign currency sensitivity analysis 
the income statements of foreign operations are translated into the reporting currency using a weighted average exchange rate of 
conversion foreign currency monetary items are translated using the closing rate at the reporting date revenues and costs in currencies 
other than the functional currency of an operating unit are recorded at the prevailing rate at the date of the transaction the following 
significant exchange rates applied during the year in relation to us dollars 
2013 2012 
average 
rate
closing 
rate
average  
rate  
closing
 rate
sterling 157 166 159  163
kuwaiti dinar 352 354 357  355
euro 133 137 129  132
the following table summarises the impact on the group’s pretax profit and equity due to change in the fair value of monetary assets 
liabilities and derivative instruments of a reasonably possible change in us dollar exchange rates with respect to different currencies 
pretax profit equity 
10 us
dollar rate
increase
usm
−10 us
 dollar rate
decrease
usm
10 us 
 dollar rate 
 increase 
 usm  
−10 us
dollar rate
 decrease
usm
31 december 2013 34 34 66  66
31 december 2012 10 10 19  19
  
petrofac annual report and accounts 2013
161 notes to the consolidated financial statements continued  
29 risk management and financial instruments continued 
derivative instruments designated as cash flow hedges 
at 31 december the group had foreign exchange forward contracts as follows 
  contract value  fair value undesignated fair value designated net unrealised gainloss 
  
2013 
usm 
2012 
usm  
2013
usm
2012
usm
2013 
usm
2012
usm
2013  
usm  
2012
usm
euro purchases  561 67  – – 22 – 26  –
sterling purchases sales  349 103  11 2 4 – 4  –
yen sales   3 4  – – – – –  –
     11 2 26 – 30  –
the above foreign exchange contracts mature and will affect income between january 2014 and november 2015 2012 between january 
2013 and july 2014 
at 31 december 2013 the group had cash and shortterm deposits designated as cash flow hedges with net unrealised gains of us1m 
2012 usnil as follows 
fair value net unrealised gainloss 
2013
usm
2012
 usm
2013 
 usm  
2012
 usm
euro cash and shortterm deposits 32 118 1  –
sterling cash and shortterm deposits – 7 –  –
yen cash and shortterm deposits – 1 –  –
 1  –
during 2013 changes in fair value gains of us32m 2012 gains us2m relating to these derivative instruments and financial assets 
were taken to equity and gains of us1m 2012 us18m losses were recycled from equity into cost of sales in the income statement 
the forward points and ineffective portions of the above foreign exchange forward contracts and loss on undesignated derivatives of usnil 
2012 us2m loss were recognised in the income statement note 4b 
commodity price risk – oil prices 
the group is exposed to the impact of changes in oil and gas prices on its revenues and profits generated from sales of crude oil and gas 
the group’s policy is to manage its exposure to the impact of changes in oil and gas prices using derivative instruments primarily swaps 
and collars hedging is only undertaken once sufficiently reliable and regular longterm forecast production data is available 
during the year the group entered into various crude oil swaps and zero cost collars hedging oil production of 323657 barrels bbl 
2012 1000000 bbl with maturities ranging from january 2014 to december 2014in addition fuel oil swaps were also entered into 
for hedging gas production of 35147 metric tonnes mt 2012 31743mt with maturities from january 2014 to december 2014 
the fair value of oil derivatives at 31 december 2013 was a liability of us1m 2012 usnil with net unrealised losses deferred in equity of 
us1m 2012 usnil during the year usnil 2012 us2m loss was recycled from equity into the consolidated income statement on the 
occurrence of the hedged transactions and a loss in the fair value recognised in equity of us1m 2012 us2m loss 
the following table summarises the impact on the group’s pretax profit and equity due to a change in the fair value of oil derivative 
instruments and the underlifting assetoverlifting liability of a reasonably possible change in the oil price 
pretax profit equity 
10
 usbbl
 increase
 usm
−10
 usbbl
 decrease
 usm
10  
usbbl 
 increase 
 usm  
−10
usbbl
 decrease
 usm
31 december 2013 1 1 3  3
31 december 2012 – – 12  12
credit risk 
the group trades only with recognised creditworthy third parties business unit risk review committees burrc evaluates the 
creditworthiness of each individual thirdparty at the time of entering into new contracts limits have been placed on the approval authority 
of the burrc above which the approval of the board of directors of the company is required receivable balances are monitored on an 
ongoing basis with appropriate followup action taken where necessary at 31 december 2013 the group’s five largest customers 
accounted for 493 of outstanding trade receivables and work in progress 2012 488 
with respect to credit risk arising from the other financial assets of the group which comprise cash and cash equivalents availableforsale 
financial assets and certain derivative instruments the group’s exposure to credit risk arises from default of the counterparty with a 
maximum exposure equal to the carrying amount of these instruments 
  
petrofac annual report and accounts 2013
162
financial statements  
liquidity risk 
the group’s primary objective is to ensure sufficient liquidity is available to support future growth our strategy includes the provision of 
financial capital and the potential impact on the group’s capital structure is reviewed regularly the group is not exposed to any external 
capital constraints the maturity profiles of the group’s financial liabilities at 31 december are as follows 
year ended 31 december 2013 
 
6 months 
or less 
usm  
6–12
months 
usm
1–2
years 
usm
2–5
years
 usm
more than
5 years 
usm
contractual 
undiscounted 
 cash flows 
 usm  
carrying
 amount
 usm
financial liabilities     
interestbearing loans and borrowings 42  11 22 1264 25 1364  1344
finance lease creditors 10  6 – – – 16  15
trade and other payables excluding 
advances from customers and other  
taxes payable 1760  48 – – – 1808  1808
due to related parties 3  – – – – 3  3
contingent consideration –  1 1 – – 2  2
derivative instruments 13  1 – – – 14  14
interest payments 20  19 38 101 1 179  –
 1848  86 61 1365 26 3386  3186
year ended 31 december 2012 restated 
 
6 months 
or less 
usm  
6–12
months 
usm
1–2
years 
usm
2–5
years
 usm
more than
5 years 
usm
contractual 
undiscounted 
 cash flows 
 usm  
carrying
 amount
 usm
financial liabilities     
interestbearing loans and borrowings 57  – – 303 – 360  349
finance lease creditors –  8 6 – – 14  13
trade and other payables excluding 
advances from customers and other 
taxes payable 1407  104 – – – 1511  1511
due to related parties 34  – – – – 34  34
contingent consideration 1  6 2 – – 9  8
derivative instruments 3  – 1 – – 4  4
interest payments 4  3 6 6 – 19  –
 1506  121 15 309 – 1951  1919
the group uses various funded facilities provided by banks and its own financial assets to fund the above mentioned financial liabilities 
capital management 
the group’s policy is to maintain a healthy capital base to sustain future growth and maximise shareholder value 
the group seeks to optimise shareholder returns by maintaining a balance between debt and capital and monitors the efficiency of its 
capital structure on a regular basis the gearing ratio and return on shareholders’ equity is as follows 
2013 
usm  
2012 
usm
cash and shortterm deposits 617  582
interestbearing loans and borrowings a 1344  349
net debtcash b 727  233
equity attributable to petrofac limited shareholders c 1989  1549
profit for the year attributable to petrofac limited shareholders d 650  632
gross gearing ratio ac 676  225
net gearing ratio bc 
366  
net cash 
position
shareholders’ return on investment dc 327  408
 
  
petrofac annual report and accounts 2013
163 notes to the consolidated financial statements continued  
29 risk management and financial instruments continued 
fair values of financial assets and liabilities 
the fair value of the group’s financial instruments and their carrying amounts included within the group’s statement of financial position  
are set out below 
carrying amount fair value 
2013
 usm
2012
 usm
2013 
 usm  
2012
 usm
financial assets      
cash and shortterm deposits 617 582 617  582
restricted cash 5 11 5  11
seven energy warrants 11 12 11  12
receivable under berantai rsc 476 389 476  389
amounts receivable in respect of the development of the greater stella area 200 115 200  115
euro forward currency contracts – designated as cash flow hedge 24 1 24  1
euro forward currency contracts – undesignated 4 1 4  1
 
financial liabilities 
 
 
interestbearing loans and borrowings   
  senior notes 742 – 750  –
  revolving credit facility 435 292 444  303
  project financing 135 – 138  –
  bank overdrafts 32 57 32  57
contingent consideration 2 8 2  8
interest rate swaps 2 – 2  –
oil derivative 1 – 1  –
euro forward currency contracts – designated as cash flow hedge 2 1 2  1
euro forward currency contracts – undesignated – 1 –  1
sterling forward currency contracts – undesignated 11 2 11  2
the group considers that the carrying amounts of trade and other receivables workinprogress trade and other payables other current 
and noncurrent financial assets and liabilities approximate their fair values and are therefore excluded from the above table 
the fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current 
transaction between willing parties other than in a forced or liquidation sale  
the following methods and assumptions were used to estimate the fair values 
 the group enters into derivative financial instruments with various counterparties principally financial institutions with investment grade 
credit ratings derivatives valued using valuation techniques with market observable inputs are mainly foreign exchange forward contracts 
and oil derivatives market values have been used to determine the fair values of availableforsale financial assets forward currency 
contracts interest rate swaps and oil derivatives  
 the fair values of longterm interestbearing loans and borrowings are equivalent to their amortised costs determined as the present value 
of discounted future cash flows using the effective interest rate 
 the fair value of warrants over equity instruments in seven energy has been calculated using a black scholes model note 13 the 
valuation requires management to make certain assumptions about unobservable inputs to the model of which the significant 
unobservable inputs are disclosed in the table below 
  2013
volatility of underlying interest   568
riskfree interest rate   04
value of underlying interest on valuation date per share   us300
management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their 
impact on the total fair value an increase in the value of underlying interest would lead to an increase in the fair value of the warrants the 
fair value of the warrants is not significantly sensitive to a reasonable change in the volatility of underlying interest or the riskfree interest rate 
however it is to a reasonable change in the value of underlying interest as is described in the following table 
  
2013
usm
us25 increase in the value of underlying interest   2
us25 decrease in the value of underlying interest   2
 
petrofac annual report and accounts 2013
164
financial statements  
 the fair value of the receivable under berantai rsc has been calculated using a discounted cash flow model the valuation requires 
management to make certain assumptions about unobservable inputs to the model of which the significant unobservable inputs are 
disclosed in the table below 
  2013
internal rate of return   15
discount rate   60
oil price per barrel   us100
gas price per gigajoule   us737
management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their 
impact on the total fair value the fair value of the receivable under berantai rsc is only sensitive to a reasonable change in the internal rate 
of return and the discount rate the table below explains the impact on the fair value of the receivable as a result of changes to these inputs 
  
2013
usm
100 basis points decrease in the internal rate of return   16
100 basis points increase in the discount rate   10
100 basis points decrease in the discount rate   10
reconciliation of fair value measurement of the receivable under berantai rsc 
  usm
as at 1 january 2013   389
billings during the year   118
fair value gain included in revenue   16
unwinding of discount   23
receipts during the year   70
as at 31 december 2013   476
  
petrofac annual report and accounts 2013
165 notes to the consolidated financial statements continued  
30 subsidiaries and joint arrangements 
at 31 december 2013 the group had investments in the following subsidiaries and joint arrangements 
  
proportion of nominal  
value of issued shares 
controlled by the group 
name of company country of incorporation 2013  2012
trading subsidiaries    
petrofac algeria eurl algeria 100  100
petrofac cyprus limited cyprus 100  100
co2deepstore aspen limited england –  100
eclipse petroleum technology limited england 100  100
k w limited england 100  100
oilennium limited england 100  100
petrofac malaysiapm304 limited england 100  100
petrofac contracting limited england 100  100
petrofac engineering limited england 100  100
petrofac services limited england 
1
100  
1
100
petrofac uk holdings limited england 
1
100  
1
100
the new energy industries limited england 100  100
tnei services limited england 100  100
caltec limited england 100  100
petrofac energy developments uk limited england 
1
100  
1
100
petrofac deutschland gmbh germany 100  –
jermyn insurance company limited guernsey 
1
100  
1
100
petrofac engineering india private limited india 100  100
petrofac engineering services india private limited india 100  100
petrofac information services private limited india 100  100
pt pci indonesia indonesia 80  80
pt petrofac ikpt international indonesia 51  51
petrofac integrated energy services limited formerly co2deepstore 
  holdings limited 
 
jersey 
 
1
100  
1
100
monsoon shipmanagement limited jersey 100  100
petrofac energy developments ohanet jersey limited jersey 100  100
petrofac energy developments international limited jersey 
1
100  
1
100
petrofac energy developments west africa limited jersey 
1
100  
1
100
petrofac facilities management international limited jersey 
1
100  
1
100
petrofac fpf004 limited jersey 100  100
petrofac fpso holding limited jersey 
1
100  
1
100
petrofac gsa limited jersey 100  100
petrofac international ltd jersey 
1
100  
1
100
petrofac offshore management limited jersey 100  100
petrofac platform management services limited jersey 100  100
petrofac training international limited jersey 
1
100  
1
100
petroleum facilities e  c limited jersey 
1
100  
1
100
petrofac jsd 6000 limited jersey 100  –
petrokyrgyzstan limited jersey 100  100
petrofac ec sdn bhd malaysia 100  100
petrofac energy developments sdn bhd malaysia 100  100
petrofac engineering services malaysia sdn bhd malaysia 100  100
petrofac fpf005 limited malaysia 100  100
petrofac training sdn bhd malaysia 100  100
pfmap sdn bhd malaysia 100  100
  
petrofac annual report and accounts 2013
166
financial statements   
proportion of nominal  
value of issued shares 
controlled by the group 
name of company country of incorporation 2013  2012
trading subsidiaries continued    
spd well engineering sdn bhd  malaysia 100  100
hlspd americas s de rl mexico 100  100
petrofac mexico sa de cv mexico 100  100
petrofac mexico servicios sa de cv mexico 100  100
operadora de campos del noreste sa de cv mexico 100  –
petrofac global employment bv netherlands 100  –
petrofac kazakhstan bv netherlands 100  100
petrofac mexico holdings bv netherlands 100  100
petrofac netherlands cooperatief ua netherlands 100  100
petrofac netherlands holdings bv netherlands 100  100
petrofac treasury bv netherlands 100  100
pts bv netherlands 100  100
petrofac kazakhstan ventures bv netherlands 100  –
petrofac nigeria bv netherlands 100  –
petrofac norge bv netherlands 100  –
petrofac russia bv netherlands 100  –
petrofac energy services nigeria limited nigeria 100  100
petrofac international nigeria limited nigeria 100  100
kw norge as norway 100  100
petrofac norge as norway 100  100
petrofac ec oman llc oman 100  100
petrofac solutions  facilities support srl romania 100  100
pkt technical services ltd russia 
2
50  
2
50
pkt training services ltd russia 100  100
sakhalin technical training centre russia 100  80
petrofac saudi arabia company limited saudi arabia 100  100
atlantic resourcing limited scotland 100  100
co2deepstore limited scotland –  100
petrofac facilities management group limited scotland 100  100
petrofac facilities management limited scotland 100  100
petrofac training limited scotland 100  100
scotvalve services limited scotland 100  100
spd limited scotland 100  100
stephen gillespie consultants limited scotland 100  100
petrofac training group limited scotland 100  100
petrofac training holdings limited scotland 100  100
plant asset management limited scotland 100  100
petrofac fpf003 pte limited singapore 100  100
petrofac south east asia pte ltd singapore 
1
100  
1
100
petrofac training institute pte limited singapore 100  100
petrofac international south africa pty limited south africa 100  100
petrofac emirates llc note 10 united arab emirates 
2
49  
3
49
petrofac ec international limited united arab emirates 100  100
petrofac fze united arab emirates 100  100
petrofac international uae llc united arab emirates 100  100
spd llc united arab emirates 
2
49  
2
49
petrofac energy developments ohanet llc united states 100  100
petrofac inc united states 
1
100  
1
100
petrofac training inc united states 100  100
spd group limited british virgin islands  100  100
 
petrofac annual report and accounts 2013
167 notes to the consolidated financial statements continued  
30 subsidiaries and joint arrangements continued 
  
proportion of nominal  
value of issued shares 
controlled by the group 
name of company country of incorporation 
2013  2012
dormant subsidiaries    
i perform limited scotland 100  100
joint venture international limited scotland 100  100
montrose park hotels limited scotland 100  100
rgit ethos health  safety limited scotland 100  100
rubicon response limited scotland 100  100
scota limited scotland 100  100
petrofac training trinidad limited trinidad 100  100
petrofac services inc usa 
1
100  
1
100
petrofac esop trustees limited jersey –  
1
100
 
    
proportion of nominal  
value of issued shares 
controlled by the group 
name of joint arrangement principal activities 
country of 
incorporation  2013  2012
joint arrangements      
joint ventures      
mjvi sdn bhd dormant brunei  50  50
costain petrofac limited dormant england  50  50
spie capag – petrofac international limited dormant jersey  50  50
tte petrofac limited operation and management of a training 
centre 
jersey 
 
50 
 
50
china petroleum petrofac engineering services 
cooperatif ua 
consultancy for petroleum and chemical 
engineering 
netherlands 
 
49 
 
49
professional mechanical repair services company operation of service centre providing 
mechanical services to oil and gas industry
saudi arabia  50  50
joint operations      
petroalfa servicios integrados de energia sapi de cv services to oil and gas industry mexico  
4
50  –
petrospm integrated services sa de cv production enhancement for pánuco mexico  
5
50  
5
50
berantai floating production limited bareboat charter of a floating platform malaysia  
6
51  
6
51
bechtel petrofac jv feasibility study for a project in uae unincorporated 
7
15  –
petrofacdaelim jv epc for a project in oman unincorporated 
7
50  –
petrofacbonatti jv epc for a project in algeria unincorporated 
7
70  –
ngl 4 jv epc for a project in uae unincorporated 
7
45  
7
45
1 
directly held by petrofac limited 
2 
companies consolidated as subsidiaries on the basis of control 
3 
joint venture in 2012 
4 
joint arrangement classified as joint operation on the basis of contractual arrangement whereby the activities of the arrangement are primarily designed for 
the provision of output to the venturers this indicates that the venturers have rights to substantially all the economic benefits of the assets of the arrangement 
5  
joint arrangement classified as joint operation on the basis of contractual arrangement between the joint venturers to be jointly and severally liable for 
performance under pánuco isc 
6  
joint arrangement classified as joint operation on the basis of contractual arrangement between the joint venturers that gives rights to assets and obligation for 
liabilities of the joint arrangement to the venturers 
7  
the unincorporated arrangement between the venturers is a joint arrangement as contractually all the decisions about the relevant activities require 
unanimous consent by the venturers 
the company’s interest in joint ventures is disclosed on page 147 
petrofac annual report and accounts 2013
168
financial statements petrofac annual report and accounts 2013
169
company ﬁnancial statements
170 independent auditor’s report petrofac limited
171 company income statement
171 company statement of comprehensive income
172 company statement of ﬁnancial position
173 company statement of cash ﬂows
174 company statement of changes in equity
175 notes to the company ﬁnancial statements
 
185 shareholder information
186 glossary independent auditor’s report to the members of petrofac limited 
we have audited the parent company financial statements of 
petrofac limited for the year ended 31 december 2013 which 
comprise the company income statement the company statement 
of comprehensive income the company statement of financial 
position the company statement of cash flows the company 
statement of changes in equity and the related notes 1 to 19 the 
financial reporting framework that has been applied in their 
preparation is applicable law and international financial reporting 
standards 
this report is made solely to the company’s members as a body in 
accordance with article 113a of the companies jersey law 1991 
and our renewed engagement letter dated 19 february 2014 our 
audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to 
anyone other than the company and the company’s members as a 
body for our audit work for this report or for the opinions we have 
formed  
respective responsibilities of directors and auditor 
as explained more fully in the directors’ responsibilities statement 
set out on page 114 the directors are responsible for the 
preparation of the parent company financial statements and for 
being satisfied that they give a true and fair view our responsibility 
is to audit and express an opinion on the parent company financial 
statements in accordance with applicable law and international 
standards on auditing uk and ireland those standards require us 
to comply with the auditing practices board’s ethical standards for 
auditors 
in addition the company has also instructed us to report to you our 
opinion on whether the section of the directors’ remuneration 
report that is described as audited has been properly prepared in 
accordance with the basis of preparation described therein  
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the parent company’s circumstances and have been consistently 
applied and adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the overall 
presentation of the financial statements in addition we read all the 
financial and nonfinancial information in the annual report to identify 
material inconsistencies with the audited financial statements and to 
identify any information that is materially incorrect based on or 
materially inconsistent with the knowledge acquired by us in the 
course of performing the audit if we become aware of any apparent 
material misstatements or inconsistencies we consider the 
implications for our report 
opinion on financial statements 
in our opinion the parent company financial statements 
give a true and fair view of the state of the company’s affairs as at 
31 december 2013 and of its profit for the year then ended 
 have been properly prepared in accordance with international 
financial reporting standards and 
 have been prepared in accordance with the requirements of the 
companies jersey law 1991 
opinion on other matter  
in our opinion the part of the directors’ remuneration report to be 
audited which you have instructed us to audit has been properly 
prepared in accordance with the basis of preparation as described 
therein 
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters where 
the companies jersey law 1991 requires us to report to you if in 
our opinion 
 proper accounting records have not been kept or proper returns 
adequate for our audit have not been received from branches not 
visited by us or 
 the financial statements are not in agreement with the accounting 
records and returns or 
 we have not received all the information and explanations we 
require for our audit 
other matter 
we have reported separately on the group financial statements of 
petrofac limited for the year ended 31 december 2013 as 
described in the audit report on the group financial statements the 
risk of impairment of goodwill and other assets also relates to the 
parent company 
john flaherty 
for and on behalf of ernst  young llp 
london 
25 february 2014 
notes 
1 
the maintenance and integrity of the petrofac limited web site is the 
responsibility of the directors the work carried out by the auditors does not 
involve consideration of these matters and accordingly the auditors accept 
no responsibility for any changes that may have occurred to the financial 
statements since they were initially presented on the web site 
2 
legislation in jersey governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions 
 
petrofac annual report and accounts 2013
170
financial statements company income statement  
for the year ended december 2013 
notes
2013 
 usm  
2012
 usm
revenue 3 398  354
general and administration expenses 4 15  12
other income 5 4  2
other expenses 6 9  15
profit before tax and finance costsincome 378  329
finance costs 7 23  5
finance income 7 18  10
profit before tax 373  334
income tax expense –  –
profit for the year 373  334
 
 
 
 
company statement of comprehensive income 
for the year ended 31 december 2013 
 
2013 
 usm  
2012
 usm
profit for the year 373  334
other comprehensive income –  –
total comprehensive income for the year 373  334
the attached notes 1 to 19 form part of these company financial statements 
 
petrofac annual report and accounts 2013
171 company statement of financial position 
at 31 december 2013 
notes
2013 
 usm  
2012
 usm
assets    
noncurrent assets   
investments in subsidiaries 9 307  194
investment in associate 10 176  176
other noncurrent assets 9  11
 492  381
current assets   
trade and other receivables 1  1
amounts due from subsidiaries 11 1038  902
warrants on investment in associate 10 11  12
cash and shortterm deposits 12 140  19
 1190  934
total assets 1682  1315
 
equity and liabilities    
equity attributable to petrofac limited shareholders   
share capital 19 7  7
share premium 4  4
capital redemption reserve 11  11
treasury shares 13 110  100
sharebased payments reserve 57  53
retained earnings 401  253
total equity 370  228
 
noncurrent liabilities    
interestbearing loans and borrowings 15 742  –
longterm employee benefit provisions 1  –
 743  –
current liabilities   
trade and other payables 2  2
other financial liabilities  16 17  2
amounts due to subsidiaries 11 550  1081
interestbearing loans and borrowings 15 –  2
 569  1087
total liabilities  1312  1087
total equity and liabilities 1682  1315
the financial statements on pages 171 to 184 were approved by the board of directors on 25 february 2014 and signed on its behalf by 
tim weller – chief financial officer 
the attached notes 1 to 19 form part of these company financial statements 
 
 
 
petrofac annual report and accounts 2013
172
financial statements company statement of cash flows 
for the year ended 31 december 2013 
notes
2013 
 usm  
2012
 usm
operating activities    
profit before tax 373  334
 373  334
 
adjustments for   
 sharebased payments 14 –  1
 net finance expenseincome 7 5  5
 net loss on share warrants 6 1  6
 other noncash items net 16  5
operating profit before working capital changes 395  339
 amounts due from subsidiaries 99  683
 trade and other receivables –  1
 trade and other payables –  6
 amounts due to subsidiaries 530  208
cash generated from operations 234  143
interest paid 23  5
net cash flows generated from operating activities 257  148
 
investing activities    
purchase of investment in subsidiary 9 138  18
purchase of investment in associates 10 –  25
repayment of investment by subsidiaries 9 25  80
interest received 18  10
net cash flows used in investing activities 95  47
 
financing activities   
interest bearing loans and borrowings obtained net of debt acquisition cost 742  –
repayment of interestbearing loans and borrowings –  29
debt financing fees paid –  11
treasury shares purchased 13 47  76
equity dividends paid 220  198
net cash flows used in financing activities 475  314
 
net increase in cash and cash equivalents 123  415
cash and cash equivalents at 1 january 17  432
cash and cash equivalents at 31 december 12 140  17
the attached notes 1 to 19 form part of these company financial statements 
 
petrofac annual report and accounts 2013
173 company statement of changes in equity 
for the year ended 31 december 2013 
issued  
share  
capital 
usm  
note 19  
share 
premium 
usm
capital 
redemption 
reserve 
usm
treasury 
shares 
usm 
note 13
reserve for 
sharebased 
payments 
usm 
note 14
retained 
earnings 
usm 
  
total 
equity
 usm
balance at 1 january 2012 7  2 11 75 52 123  120
net profit for the year –  – – – – 334  334
other comprehensive income –  – – – – –  –
total comprehensive income –  – – – – 334  334
sharebased payments charge note 14 –  – – – 1 –  1
shares vested during the year –  – – 51 45 6  –
treasury shares purchased note 13 –  – – 76 – –  76
transfer to reserve for sharebased 
payments –  –––45–  45
shares issued as payment of 
deferred consideration –  2 – – – –  2
dividends note 8  –  – – – – 198  198
balance at 1 january 2013 7  4 11 100 53 253  228
net profit for the year –  – – – – 373  373
other comprehensive income –  – – – – –  –
total comprehensive income –  – – – 373  373
sharebased payments charge note 14 –  – – – – –  –
shares vested during the year –  – – 37 34 3  –
treasury shares purchased note 13 –  – – 47 – –  47
transfer to reserve for sharebased 
payments –  –––38–  38
dividends note 8 –  – – – – 222  222
balance at 31 december 2013 7  4 11 110 57 401  370
shares held by petrofac employee benefit trust and petrofac joint venture companies employee benefit trust 
the attached notes 1 to 19 form part of these company financial statements 
 
petrofac annual report and accounts 2013
174
financial statements notes to the company financial statements 
for the year ended 31 december 2013 
1 corporate information 
the financial statements of petrofac limited the ‘company’ 
referred to as the company financial statements for the year ended 
31 december 2013 were authorised for issue in accordance with 
a resolution of the directors on 25 february 2014 
petrofac limited is a limited liability company registered in 
jersey under the companies jersey law 1991 and is the 
holding company for the international group of petrofac 
subsidiaries together the ‘group’ the group’s principal activity 
is the provision of facilities solutions to the oil and gas production 
and processing industry 
2 summary of significant accounting policies 
basis of preparation 
the separate financial statements have been prepared on a 
historical cost basis except for derivative financial instruments that 
have been measured at fair value the functional and presentation 
currency of the separate financial statements is us dollars and all 
values in the separate financial statements are rounded to the 
nearest million usm except where otherwise stated  
statement of compliance 
the separate financial statements have been prepared in 
accordance with international financial reporting standards ifrs 
and applicable requirements of jersey law 
investments in subsidiaries 
investments in subsidiaries are stated at cost less any provision 
for impairment 
investments in associates 
investments in associates are stated at cost less any provision 
for impairment 
longterm loan receivables from subsidiaries 
longterm loan receivables from subsidiaries are initially stated at 
fair value after initial recognition they are subsequently measured 
at amortised cost using the effective interest rate method 
due fromdue to subsidiaries 
due fromdue to subsidiaries are both interest bearing and  
noninterestbearing shortterm funding to and from subsidiaries 
these are recognised at the fair value of consideration 
receivedpaid less any provision for impairment 
cash and cash equivalents 
cash and cash equivalents consist of cash at bank and in hand 
and shortterm deposits with an original maturity of three months 
or less for the purpose of the cash flow statement cash and cash 
equivalents consists of cash and cash equivalents as defined above 
net of any outstanding bank overdrafts 
interestbearing loans and borrowings 
all interestbearing loans and borrowings are initially recognised 
at the fair value of the consideration received net of issue costs 
directly attributable to the borrowing 
after initial recognition interestbearing loans and borrowings are 
subsequently measured at amortised cost using the effective 
interest rate method amortised cost is calculated by taking 
into account any issue costs and any discount or premium 
on settlement 
employee benefit trusts 
the petrofac employee benefit trust and the petrofac joint 
venture companies employee benefit trust ebt’s are treated as 
extensions of the activities of the company and accordingly the 
company financial statements include all transactions and balances 
of the ebt’s except for transaction and balances between the 
company and the ebt’s 
sharebased payment transactions 
employees including directors of the group receive remuneration 
in the form of sharebased payment transactions whereby 
employees render services in exchange for shares or rights over 
shares ‘equitysettled transactions’ 
equitysettled transactions 
the cost of equitysettled transactions with employees is measured 
by reference to the fair value at the date on which they are granted 
in valuing equitysettled transactions no account is taken of any 
service or performance conditions other than conditions linked 
to the price of the shares of petrofac limited ‘market conditions’ 
if applicable 
the cost of equitysettled transactions is recognised together with 
a corresponding increase in equity over the period in which the 
relevant employees become fully entitled to the award the ‘vesting 
period’ the cumulative expense recognised for equitysettled 
transactions at each reporting date until the vesting date reflects 
the extent to which the vesting period has expired and the group’s 
best estimate of the number of equity instruments that will ultimately 
vest the income statement charge or credit for a period represents 
the movement in cumulative expense recognised as at the 
beginning and end of that period 
no expense is recognised for awards that do not ultimately vest 
except for awards where vesting is conditional upon a market or 
nonvesting condition which are treated as vesting irrespective 
of whether or not the market or nonvesting condition is satisfied 
provided that all other performance conditions are satisfied 
equity awards cancelled are treated as vesting immediately on 
the date of cancellation and any expense not recognised for 
the award at that date is recognised in the income statement 
the company operates a number of share award schemes on 
behalf of the employees of the group which are described in detail 
in note 22 of the consolidated financial statements of the group 
the reserve for sharebased payments is used to record the value 
of equitysettled sharebased payments awarded to employees and 
transfers out of this reserve are made upon vesting of the original 
share awards the sharebased payments charges pertaining to 
fellow group companies are recharged to them and shown as 
investment in subsidiaries subsequently they are transferred to due 
from subsidiaries and settled in cash
petrofac annual report and accounts 2013
175 notes to the company financial statements continued  
3 revenues 
dividends from subsidiaries are recognised when the right to receive payment is established  
seven energy warrant revenues in 2012 related to the achievement of 100 of the project execution milestones required to earn the option 
to subscribe for 148571 warrants in seven energy note 10 
2013 
 usm  
2012
 usm
dividend income from subsidiaries 398  352
seven energy warrant revenues note 10 –  2
 398  354
4 general and administration expenses 
2013 
 usm  
2012
 usm
staff costs 9  8
other operating expenses 6  4
 15  12
included in other operating expenses above is auditors’ remuneration of us76480 2012 us75720 related to the fee for the audit of the 
parent company financial statements it excludes fees in relation to the audit of the group financial statements which are borne by petrofac 
services limited 
5 other income 
2013 
 usm  
2012
 usm
write back of intercompany loan receivable from subsidiary –  2
share based payment credit 4  –
 4  2
6 other expenses 
2013 
 usm  
2012
 usm
decrease in seven energy warrant valuation note 10 1  6
revolving credit facility and senior notes acquisition cost amortisation 3  1
exchange loss 2  1
others 3  7
 9  15
7 finance costsincome 
2013 
 usm  
2012
 usm
finance costs   
longterm borrowings 22  3
on amounts due to subsidiaries 1  2
total finance costs 23  5
finance income   
bank interest receivable –  2
on amounts due from subsidiaries 18  8
total finance income 18  10
  
petrofac annual report and accounts 2013
176
financial statements  
8 dividends paid and proposed 
2013 
 usm  
2012
 usm
declared and paid during the year   
equity dividends on ordinary shares   
final dividend for 2011 3720 cents per share –  127
interim dividend 2012 2100 cents per share –  71
final dividend for 2012 4300 cents per share  147  –
interim dividend 2013 2200 cents per share  75  –
 222  198
 
2013 
 usm  
2012
 usm
proposed for approval at agm not recognised as a liability as at 31 december   
equity dividends on ordinary shares   
final dividend for 2013 4380 cents per share 2012 4300 cents per share 152  149
9 investments in subsidiaries 
2013 
 usm  
2012
 usm
at 1 january 194  236
investment in petrofac uk holdings limited 138  18
investment repaid by pedil 25  60
invested bonus in deferred bonus share plan dbsp charged to subsidiaries 22  20
receipt of invested bonus in dbsp from subsidiaries 22  20
share based payment amounts receivable from subsidiaries 15  26
transferred to due from subsidiaries 15  26
as at 31 december 307  194
at 31 december 2013 the company had investments in the following subsidiaries 
proportion of nominal value of issued 
shares controlled by the company 
name of company country of incorporation 2013  2012
trading subsidiaries    
petrofac energy developments uk limited england 100  100
petrofac services limited england 100  100
petrofac uk holdings limited england 100  100
jermyn insurance company limited guernsey 100  100
petrofac international ltd jersey 100  100
petrofac energy developments international limited jersey 100  100
petrofac facilities management international limited jersey 100  100
petrofac training international limited jersey 100  100
petroleum facilities e  c limited jersey 100  100
petrofac south east asia limited singapore 99  99
petrofac inc usa 100  100
petrofac services inc usa 100  100
 
  
petrofac annual report and accounts 2013
177 notes to the company financial statements continued  
10 investment in associate 
2013 
 usm  
2012
 usm
at 1 january 176  151
investment in share capital –  25
at 31 december 176  176
on 25 november 2010 the company invested us100m for 15 126 on a fully diluted basis of the share capital of seven energy 
international limited seven energy a leading nigerian gas development and production company incurring us1m of transaction costs 
this investment which was previously held under availableforsale financial assets was transferred to investments in associates pursuant to 
an investment on 10 june 2011 of us50m for an additional 5 of the share capital of seven energy which resulted in the company being 
in a position to exercise significant influence over seven energy on 30 october 2012 the company invested us25m for an additional 
24 of the share capital of seven energy the additional us25m investment was made as part of a discounted rights issue required to 
deal with a shortterm funding requirement by seven energy at a subscription price of us150 per share and in light of this the carrying 
value of the investment has been tested for impairment and no impairment provision is required no negative goodwill has been accounted 
for on the rights issue as the range of possible outcomes was immaterial 
the company also has the option to subscribe for 148571 of additional warrants in seven energy at a cost of a further us52m subject to 
the performance of certain service provision conditions and milestones in relation to project execution these warrants have been fair valued 
at 31 december 2013 as derivative financial instruments under ias 39 using a black scholes model amounting to us11m 2012 
us12m us1m 2012 us6m other expense has been recognised as other expense in the current period income statement as a result 
of the revaluation of these derivatives at 31 december 2013 note 6 during 2012 deferred revenue recognised in trade and other payables 
of us2m at 31 december 2012 was released in full to the income statement as 100 of the performance conditions required to subscribe 
for the remaining warrants in the company were satisfied 
11 amounts due fromdue to subsidiaries 
amounts due fromdue to subsidiaries comprise both interest and noninterest bearing shortterm loans provided toreceived from 
subsidiaries listed in note 9 
12 cash and shortterm deposits 
2013 
 usm  
2012
 usm
cash at bank and in hand 53  19
shortterm deposits 87  –
total cash and bank balances  140  19
shortterm deposits are made for varying periods of between one day and one month depending on the immediate cash requirements 
of the company and earn interest at respective shortterm deposit rates the fair value of cash and bank balances is us140m 2012 
us19m for the purposes of the company cash flow statement 2013 cash and cash equivalents comprise total cash and bank balances 
shown above less an overdraft of nil 2012 overdraft us 2m 
  
petrofac annual report and accounts 2013
178
financial statements  
13 treasury shares 
for the purpose of making awards under its employee share schemes the company acquires its own shares which are held by the petrofac 
employee benefit trust and the petrofac joint venture companies employee benefit trust all these shares have been classified in the 
statement of financial position as treasury shares within equity 
the movements in total treasury shares are shown below 
2013 2012 
number usm number  usm
at 1 january 5466213 100 5736017  75
acquired during the year 2300000 47 3000000  76
vested during the year 2093522 37 3269804  51
at 31 december 5672691 110 5466213  100
14 sharebased payments chargereserve 
share based payment charge 
sharebased payment plan information is disclosed in note 22 of the consolidated financial statements of the group the following table 
shows the movements in the number of shares held under the three group employee schemes for the employees of the company 
deferred 
bonus share 
plan number
performance 
share plan 
number  
restricted 
share plan 
number
outstanding at 1 january 2012 60686 215822  5585
granted during the year 13876 45144  –
vested during the year 32994 85033  –
forfeited during the year ––  –
outstanding at 1 january 2013 41568 175933  5585
granted during the year 15362 9791  –
transferred to subsidiaries 370 –  –
vested during the year 17052 75210  5585
forfeited during the year 4754 18409  –
outstanding but not exercisable at 31 december 2013 34754 92105  –
 
deferred 
bonus share 
plan number
performance 
share plan 
number  
restricted 
share plan 
number
made up of following awards   
2011 9026 52140  –
2012 11398 30174  –
2013 14330 9791  –
 34754 92105  –
during the year no sharebased payment scheme charge 2012 us1m was recognised by the company in respect of its own employees 
time spent on shareholder related services 
sharebased payment reserve 
the transfer during the year into sharebased payment reserve disclosed in the statement of changes in equity of us38m 
2012 us45m is the charge for sharebased payments awards by the company to its own employees as well as employees 
of subsidiaries including bonus amounts converted into shares 
 
  
petrofac annual report and accounts 2013
179 notes to the company financial statements continued  
15 interestbearing loans and borrowings 
the company had the following interestbearing loans and borrowings outstanding 
  
31 december 2013  
actual interest rate  
31 december 2012 
actual interest rate 
effective interest 
rate  maturity
2013 
usm  
2012
 usm
current     
bank overdrafts  i – uk libor 
 175
 uk libor 
 175
on demand –  2
   –  2
noncurrent     
senior notes  ii 340 – 368 5 years 750  –
   750  –
less 
debt acquisition costs net of  
 accumulated amortisation 
 and effective interest rate  
 adjustments   5 
 
–
discount on senior notes 
issuance   3 
 
   742  –
details of the company’s interestbearing loans and borrowings are as follows 
i bank overdraft 
bank overdrafts are drawn down in us dollars to meet the group’s working capital requirements these are repayable on demand  
ii senior notes 
on 10 october 2013 petrofac issued an aggregate principal amount of us750m 5 year senior notes notes at an issue price of 
99627 the group will pay interest on the notes at an annual rate equal to 340 of the outstanding principal amount interest on the 
notes is payable semiannually in arrears in april and october of each year commencing on april 2014 the notes are senior unsecured 
obligations of the company and will rank equally in right of payment with the company’s other existing and future unsecured and 
unsubordinated indebtedness petrofac international ltd and petrofac international uae llc irrevocably and unconditionally guarantee 
jointly and severally the due and prompt payment of all amounts at any time becoming due and payable in respect of the notes the 
guarantees are senior unsecured obligations of each guarantor and will rank equally in right of payment with all existing and future senior 
unsecured and unsubordinated obligations of each guarantor  
16 other financial liabilities 
 
2013 
 usm  
2012
 usm
forward currency contracts – undesignated 11  2
interest payable 6  –
 17  2
  
petrofac annual report and accounts 2013
180
financial statements  
17 risk management and financial instruments 
risk management objectives and policies 
the company’s principal financial assets and liabilities are amounts due from and due to subsidiaries cash and shortterm deposits and 
interestbearing loans and borrowings 
the company’s activities expose it to various financial risks particularly associated with interest rate risks on its external variable rate loans 
and borrowings the company has a policy not to enter into speculative trading of financial derivatives 
the other main risks besides interest rate are foreign currency risk credit risk and liquidity risk and the policies relating to these risks are 
discussed in detail below 
interest rate risk 
interest rate risk arises from the possibility that changes in interest rates will affect the value of the company’s interestbearing financial 
liabilities and assets the company does not hedge its exposure on its interestbearing funding tofrom subsidiaries  
interest rate sensitivity analysis 
the impact on the company’s pretax profit and equity due to a reasonably possible change in interest rates is demonstrated in the table 
below the analysis assumes that all other variables remain constant 
   pretax profit equity 
   
100 basis 
point 
increase 
usm
100 basis 
point 
decrease 
usm
100 basis 
point 
increase 
usm  
100 basis 
point 
decrease 
usm
31 december 2013    16 16 –  –
31 december 2012    – – –  –
the following table reflects the maturity profile of interest bearing financial liabilities and assets excluding interest bearing subsidiary related 
financial assets and liabilities 
year ended 31 december 2013 
 
within 1  
year  
usm  
1–2 
years 
usm
2–3 
years 
usm
3–4 
years 
usm
4–5 
years 
usm
more than  
5 years  
usm  
total 
usm
financial liabilities      
floating rates      
amount due to subsidiaries interestbearing 550  – – – – –  550
  550  – – – – –  550
financial assets      
floating rates  
cash and shortterm deposits note 12  140  – – – – –  140
amount due from subsidiaries  
interestbearing  915  – – – – –  915
  1055  – – – – –  1055
 
  
petrofac annual report and accounts 2013
181 notes to the company financial statements continued  
17 risk management and financial instruments continued 
year ended 31 december 2012 
 
within 1  
year  
usm  
1–2 
years 
usm
2–3 
years 
usm
3–4 
years 
usm
4–5 
years 
usm
more than  
5 years  
usm  
total 
usm
financial liabilities      
floating rates  
bank overdraft note 15  2  – – – – –  2
amount due to subsidiaries interestbearing 997  – – – – –  997
  999  – – – – –  999
financial assets      
floating rates  
cash and shortterm deposits note 12  19  – – – – –  19
amount due from subsidiaries  
interestbearing  559  – – – – –  559
  578  – – – – –  578
financial liabilities in the above table are disclosed gross of debt acquisition costs and effective interest rate adjustments of 8m 2012 nil 
interest on financial instruments classified as floating rate is repriced at intervals of less than one year 
foreign currency risk 
almost all of the financial assets and liabilities of the company are denominated in us dollars the foreign currency exposure at 
31 december 2013 is limited to sterling £46m with an equivalent value of us76m 2012 sterling £131m equivalent us213m 
the following table summarises the impact on the company’s pretax profit and equity due to change in the fair value of monetary assets 
liabilities and derivative instruments of a reasonably possible change in us dollar exchange rates with respect to different currencies 
pretax profit equity 
10 us dollar 
rate increase 
usm
–10 us dollar 
rate decrease 
usm
10 us dollar 
rate increase 
usm  
–10 us dollar 
rate decrease 
usm
31 december 2013 9 9 –  –
31 december 2012 22 22 –  –
at 31 december 2013 the company had foreign exchange forward contracts as follows 
contract value  fair value undesignated 
2013 
usm
2012 
usm  
2013 
usm  
2012
usm
sterling sales 403 103  11  2
euro sales 4 –  –  –
   11  2
the above foreign exchange contracts mature and will affect income between january 2014 and february 2014 2012 between january 
2013 and february 2013 
credit risk 
the company’s principal financial assets are cash and shortterm deposits and amounts due from subsidiaries 
the company manages its credit risk in relation to cash and shortterm deposits by only depositing cash with financial institutions that have 
high credit ratings provided by international credit rating agencies 
liquidity risk 
the company’s objective is to maintain a balance between continuity of funding and flexibility through the use of term loans and revolving 
credit facilities to reduce its exposure to liquidity risk 
  
petrofac annual report and accounts 2013
182
financial statements  
the maturity profiles of the company’s financial liabilities at 31 december 2013 are as follows 
year ended 31 december 2013 
6 months  
or less 
usm  
6–12 
months 
usm
1–2 
years
 usm
2–5 
years 
usm
more than 
5 years 
usm
contractual 
undiscounted 
cash flows 
usm  
carrying 
amount 
usm
financial liabilities     
interestbearing loans and borrowings   – – 750 – 750  742
trade and other payables 2  – – – – 2  2
amounts due to subsidiaries –  550 – – – 550  550
interest payments 13  13 26 76 – 128  128
derivatives 11  – – – – 11  11
 26  563 26 826 – 1441  1433
year ended 31 december 2012 
6 months  
or less 
usm  
6–12 
months 
usm
1–2 
years
 usm
2–5 
years 
usm
more than 
5 years 
usm
contractual 
undiscounted 
cash flows 
usm  
carrying 
amount 
usm
financial liabilities     
interestbearing loans and borrowings 2  – – – – 2  2
trade and other payables 2  – – – – 2  2
amounts due to subsidiaries –  1081 – – – 1081  1081
derivatives 2  – – – – 2  2
 6  1081 – – – 1087  1087
the company uses various funded facilities provided by banks and its own financial assets to fund the above mentioned financial liabilities 
capital management 
the company’s policy is to maintain a healthy capital base using a combination of external and internal financing to support its activities as 
the holding company for the group 
the company’s gearing ratio is as follows 
2013 
 usm  
2012
 usm
cash and shortterm deposits note 12 140  19
interestbearing loans and borrowings a note 15 742  2
net debtcash b 602  17
   
total equity c 370  228
   
gross gearing ratio ac 2005  09
 
net gearing ratio bc 
 
1627 
 
net cash 
position
  
petrofac annual report and accounts 2013
183 notes to the company financial statements continued  
17 risk management and financial instruments continued 
fair values of financial assets and liabilities 
the fair value of the company’s financial instruments and their carrying amounts included within the company’s statement of financial 
position are set out below 
carrying amount fair value 
2013
 usm
2012
 usm
2013 
 usm  
2012
 usm
financial assets      
warrants on investment in associate note 10 11 12 11  12
cash and shortterm deposits note 12 140 19 140  19
 
financial liabilities  
  
 
 
interestbearing loans and borrowings note 15 742 2 750  2
forward currency contracts – undesignated 11 2 11  2
the fair values of longterm interestbearing loans and borrowings and longterm receivable from a subsidiary are equivalent to amortised 
costs determined as the present value of discounted future cash flows using the effective interest rate the company considers that the 
carrying amounts of trade and other receivables amounts due fromdue to subsidiaries trade and other payables and other current financial 
liabilities approximate their fair values and are therefore excluded from the above table 
fair value hierarchy 
the following financial instruments are measured at fair value using the hierarchy below for determination and disclosure of their respective 
fair values 
level 1  unadjusted quoted prices in active markets for identical financial assets or liabilities 
level 2  other valuation techniques where the inputs are based on significant observation factors 
level 3  other valuation techniques where the inputs are based on significant unobservable market data 
year ended 31 december 2013 
tier 2 
 usm  
tier3
 usm
financial assets   
seven energy warrants –  11
 
financial liabilities  
 
forward currency contracts – undesignated 11  –
year ended 31 december 2012 
tier 2 
 usm  
tier3
 usm
financial assets   
seven energy warrants –  12
 
financial liabilities   
 
forward currency contracts – undesignated 2  –
18 related party transactions 
the company’s related parties consist of its subsidiaries and the transactions and amounts due todue from them are either of funding 
or investing nature note 9 the company is recharged a portion of the key management personnel cost by one of its subsidiaries 
the amount recharged during the year was us1m 2012 us2m for further details of the full amount of key management personnel 
costs refer to the group’s consolidated financial statements for details of the rights issue by seven energy and the warrants held see note 
10 the company is listed as a guarantor of the revolving credit facility obtained by a wholly owned subsidiary 
19 share capital 
the movements in share capital are disclosed in note 20 to the consolidated financial statements of the group 
 
petrofac annual report and accounts 2013
184
financial statements registrar
capita registrars jersey limited  
12 castle street  
st helier  
jersey je2 3rt
uk transfer agent
capita asset services  
the registry  
34 beckenham road  
beckenham  
kent br3 4tu
corporate brokers
goldman sachs  
peterborough court  
133 fleet street  
london ec4a 2bb 
jp morgan cazenove  
25 bank street  
canary wharf  
london e14 5jp
company secretary and registered ofﬁce
ogier corporate services jersey limited  
ogier house  
the esplanade  
st helier  
jersey je4 9wg
auditors
ernst  young llp  
1 more london place  
london se1 2af 
legal advisers to the company 
freshﬁelds bruckhaus deringer llp  
65 fleet street  
london ec4y 1hs
corporate and financial pr
tulchan communications group  
85 fleet street  
london ec4y 1ae
stock exchange listing
petrofac shares are listed on the london stock exchange using code 
‘pfcl ’
financial calendar
15 may 2014 annual general meeting
23 may 2014 final dividend payment
26 august 2014 half year results announcement
october 2014 interim dividend payment
dates are based on current expectations
copies of all announcements will be available on the company’s 
website at wwwpetrofaccom following their release
petrofac annual report and accounts 2013
185
shareholder information
at 31 december 2013 a
agm
annual general meeting
airb
asset integrity review board
appraisal well 
a well drilled into a discovered  
accumulation to provide data necessary  
to deﬁne a field development  
plan for the accumulation
b
backlog
backlog consists of the estimated revenue 
attributable to the uncompleted portion of 
lumpsum engineering procurement and 
construction contracts and variation orders 
plus with regard to engineering operations 
maintenance and integrated energy services 
contracts the estimated revenue attributable 
to the lesser of the remaining term of the 
contract and ﬁve years backlog will not 
be booked on integrated energy services 
contracts where the group has entitlement 
to reserves the group uses this key 
performance indicator as a measure of the 
visibility of future earnings backlog is not 
an audited measure
barrel 
a unit of volume measurement used 
for petroleum
bbl
one barrel of oil
block 
a subdivision of an underground petroleum 
reservoir by a resource owner for the 
purposes of licensing and administering 
exploration appraisal and production of 
resources by oil and gas companies 
boe
barrel of oil equivalent
bpd
barrel per day
brownﬁeld development
further investment in a mature ﬁeld to 
enhance its production capacity thereby 
increasing recovery and extending ﬁeld life
c
capex 
capital expenditure
cis
commonwealth of independent states
cost plus kpis
a reimbursable contract which includes an 
incentive income linked to the successful 
delivery of key performance indicators kpis
cpecc
china petroleum engineering  
construction corporation
cppes
china petroleum petrofac 
engineering services
cr
corporate responsibility
d
dbsp
deferred bonus share plan
decc
department of energy and climate  
change uk
decommissioning 
the reuse recycling and disposal  
of redundant oil and gas facilities
downstream
the downstream sector commonly refers to 
the reﬁning of petroleum crude oil and the 
processing and purifying of raw natural gas 
as well as the marketing and distribution 
of products derived from crude oil and 
natural gas
duty holder 
a contracting model under which petrofac 
provides a complete managed service covering 
production and maintenance work both 
offshore and onshore to reduce the costs of 
operating and to extend the life of the facilities
e
ebitda 
calculated as proﬁt before tax and net ﬁnance 
income but after our share of losses from 
associates as per the consolidated income 
statement adjusted to add back charges for 
depreciation and amortisation as per note 3 
to the ﬁnancial statements
ebt
employee beneﬁt trust
ecs
engineering  consulting services 
this service line is petrofac’s centre of 
technical engineering excellence delivering 
earlystage engineering studies including 
conceptual and frontend engineering and 
design work across onshore and offshore 
oil and gas ﬁelds
ecom 
engineering construction operations 
 maintenance one of two divisions 
which designs and builds oil and gas facilities 
and operates manages and maintains them 
on behalf of petrofac’s customers
epc 
engineering procurement and construction
epcic
engineering procurement construction 
installation and commissioning
epci
engineering procurement installation  
and construction
eps
earnings per share
excom 
executive committee
f
feed 
front end engineering and design 
field development plan fdp 
a document setting out the manner in which 
a hydrocarbon discovery is to be developed 
and operated
fpso 
floating production storage and 
ofﬂoading vessel
fpf
floating production facility
g
gas ﬁeld 
a ﬁeld containing natural gas but no oil 
greenﬁeld development
development of a new ﬁeld
h 
hydrocarbon
a compound containing only the elements 
hydrogen and carbon – can be solid 
liquid or gas
petrofac annual report and accounts 2013
186
financial statements
glossary hse
health  safety executive uk
hsseia 
health safety security environment and 
integrity assurance
i
ias
international accounting standards
ifrs
international financial reporting standards 
ioc
international oil company 
ies 
integrated energy services the ies division 
harnesses petrofac’s existing service 
capabilities and delivers them on an integrated 
basis to resource holders with the aim of 
supporting the development of their oil and 
gas resources enhancing production from 
their mature reservoirs and helping them to 
build national capability
k
kpi
key performance indicator
l
lng 
liqueﬁed natural gas 
lumpsum turnkey project
an agreement in which a contractor designs 
constructs and manages a project until it is 
ready to be handed over to the customer and 
operation can begin immediately
lti
lost time injury
m
mena
middle east and north africa region
mm boe 
million barrels of oil equivalents 
mmscfd
million standard cubic feet per day
mopu
mobile offshore production unit
mou
memorandum of understanding
n
noc
national oil company
o
ocp
offshore capital projects a service line 
which specialises in offshore engineering 
procurement installation and construction 
services for greenﬁeld projects
oec 
onshore engineering  construction 
a service line which delivers onshore 
engineering procurement and 
construction projects
oecd
organisation for economic cooperation 
and development
oil ﬁeld 
a geographic area under which an oil 
reservoir lies
opec 
organisation of petroleum exporting countries 
opo 
offshore projects  operations a service 
line which specialises in offshore engineering 
and construction services for brownﬁeld 
projects and the provision of operations and 
maintenance support on and offshore
p
pec
production enhancement contract is 
where petrofac is paid a tariff per barrel for 
oil and gas production and therefore has 
no commodity price exposure pecs are 
appropriate for mature ﬁelds which have 
a long production history
pmc 
project management contractor – managing 
an external construction contractor to manage 
construction of a facility
psc
production sharing contract
psp 
performance share plan
r
reimbursable services
where the cost of petrofac’s services 
are reimbursed by the customer plus an 
agreed margin
ri
recordable injury
roce
return on capital employed
rsc 
risk service contract is where petrofac 
develops operates and maintains a ﬁeld while 
the resource holder retains ownership and 
control of its reserves 
rsp 
restricted share plan
s
sip 
share incentive plan
surf 
subsea umbilicals risers and flowlines
t
tsr 
total shareholder return
u
ukcs 
united kingdom continental shelf
ungc
united nations global compact
upstream
the segment of the petroleum industry having 
to do with exploration development and 
production of oil and gas resources
v
vcp
value creation plan
petrofac annual report and accounts 2013
187 petrofac annual report and accounts 2013
188
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Summary:
 petrofac annual report and accounts 2013
16
strategic report
group chief executive’s 
strategic review
ayman asfari 
group chief executive 2013 was a challenging but ultimately 
successful year for petrofac
we took signiﬁcant steps towards our 
strategic goals we grew our capability 
we also lived up to our emphasis on 
operational excellence and having 
signed some large and prestigious 
contracts we closed the year with our 
highest ever order backlog
overall we delivered modest growth in earnings 
in the year reﬂecting the rephasing of a small 
number of large projects these external 
factors meant that our ﬁnancial results fell short 
of our initial expectations but the progress we 
have made on the strategic operational and 
business development fronts allows us to face 
2014 with a sense of optimism 
we are establishing an ever stronger and 
more diversiﬁed position in the oilﬁeld services 
sector by aligning our own interests with our 
customers we are set to beneﬁt from the 
need for increased capability to meet the ever 
increasing global demand for energy and i am 
conﬁdent we remain well positioned to deliver 
the type of differentiated margins and returns 
our shareholders have come to expect 
from strategy to delivery
the theme of our annual report continues to 
be from strategy to delivery and the clear 
progress towards our strategic goals should 
be emphasised
across all of our activities our business 
model and our differentiation is based on 
living our values a combination of deep and 
widening capabilities local delivery effective 
risk management innovative commercial 
approaches and a relentless focus on 
operational excellence
our strategic evolution is marked out by 
our three main phases of growth each of 
which is supported by our core technical and 
operational skills
1 building and sustaining a worldclass 
onshore engineering procurement and 
construction epc business – our traditional 
capability that continued to perform strongly 
in 2013
2 delivering an integrated energy services 
ies business making use of innovative 
commercial models which respond to 
customer needs – a capability that is now well
established and gained further traction in 2013
3 growing and enhancing our offshore epc 
capability drawing on our existing project 
management and offshore strengths – an 
emerging capability that builds on our existing 
strengths to which we gave a strategic 
commitment in 2013
as we progress through these phases of 
growth we are achieving a more balanced 
geographic and business model mix we are 
also working across the entire life cycle of our 
customers’ assets – from early development 
right through to decommissioning
fundamental to our success is petrofac’s 
distinctive deliveryfocused culture and 
the six values that sustain it safe ethical 
innovative responsive quality and cost 
conscious and driven to deliver 
managing risk through 
operational excellence
as petrofac pursues its strategic objectives 
then by deﬁnition the company assumes 
more risk 
indeed the main way we create value is to 
assume project risk on behalf of customers 
this could be in the form of a reimbursable 
contract with performancelinked kpis 
traditional lumpsum epc contract duty 
holder operational contract or a fully 
integrated solution in each case we derisk 
the project and align our respective interests 
in this way we can secure improved margins 
and our customers can beneﬁt from certainty 
of delivery
the most effective way of managing these 
risks is a relentless focus on operational 
excellence as well as reducing uncertainties 
this enables us to deliver a sector
leading performance
key to our operational excellence is bidding 
discipline by preinvesting in our bids we get 
better understanding of project complexity 
and we establish more reliability on cost 
we can then be commercially astute in 
negotiating terms and we can reject any 
prospects in which the risks are neither 
manageable nor commensurate with an 
acceptable level of shareholder return 
there is no doubt that our 2013 performance 
was impacted by the highly competitive 
bidding environment we experienced in 2011 
and 2012 whilst some of our competitors 
chose to sacriﬁce their margins we maintained 
our discipline throughout the return to today’s 
more sustainable bidding behaviour suggests 
that we were entirely right to do so
it is a source of great pride that 2013 saw us 
successfully deliver four ‘mega’ projects with 
a gross value of approximately us10 billion 
petrofac annual report and accounts 2013
17
it is a source 
of great pride 
that 2013 saw 
us successfully 
deliver four 
‘mega’ projects 
with a gross 
value of 
approximately 
us10 billion
1 fpso berantai offshore malaysia
2  international graduates in a session 
at the petrofac academy
 1
2 overall the portfolio is in very strong shape 
however it is clear that on an isolated number 
of projects our execution could have been 
stronger this highlights the importance of 
our continued drive for excellence across the 
entire portfolio 
building and retaining scarce skills 
and local capabilities
delivering on our strategy requires us 
to attract and retain many more people 
with a more diversiﬁed range of expertise 
– without diluting our distinctive delivery
focused culture
during the year we implemented a range of 
related initiatives 
for example this year’s graduate intake 
will have their professional development 
supported and accelerated by the newly 
established petrofac academy a new 
performance management process was also 
launched along with improvements to our 
leadership excellence programme and our 
groupwide recruitment systems
another important source of differentiation is 
our focus on local delivery wherever possible 
we employ local people work with local 
partners and establish a local supply chain 
as demonstrated in this report all of our 
projects feature high levels of local content – 
which facilitates our entry into new markets 
cements longterm customer relationships 
and reduces our costs
meanwhile the launch of our new code of 
conduct and a renewed focus on internal 
communications helped to reinforce our 
six values 
having said this i regret to report that 
we did experience a deterioration in our 
safety record in 2013 tragically including 
two fatalities in turkmenistan and one in 
algeria our immediate countermeasures 
and the related plans for 2014 are evidence 
of our ongoing commitment to safety – 
which of course is our ﬁrst and our most 
important value and a key component of 
operational excellence
delivering in ecom and increasing 
traction in ies
our traditional onshore epc business 
performed well the delivery of four multi
billion dollar projects in 2013 proves our 
ability to execute large complex contracts 
having visited the completed facilities and 
spoken to our customers i know how satisﬁed 
they are
based on projects awarded during 2013 
and subsequently the quality of the bidding 
pipeline and our historical win rate we 
are conﬁdent of growing our backlog and 
continuing to deliver sectorleading margins 
in 2014
meanwhile ies is now a business of real 
scale which has achieved a threefold 
increase in net proﬁt in just three years 
now we have achieved scale in ies we will 
also focus on consolidating our position 
on our existing assets the performance of 
our existing mexican operations and the 
establishment of new operations in pánuco 
and arenque were deﬁnite highlights – as was 
delivery of ﬁrst gas at the berantai project in 
malaysia we will continue to look to improve 
our execution and return on the ies portfolio 
for example a priority during 2014 will be 
to create greater value on the ticleni project 
where we are evaluating further seismic tests
having led ies for the past three years andy 
inglis has decided to leave us in order to return 
to the usa and we wish him well for the 
future i have enjoyed working closely with him 
and would like to thank him for his contribution 
to building the ies business i now look 
forward to working with rob jewkes who has 
been appointed chief operating ofﬁcer of ies 
and the rest of the team 
fulﬁlling our offshore ambitions
as all of the industry analysis conﬁrms 
offshore production is set to play an increasing 
role in the oil and gas market and the trend is 
to deeper water
petrofac is well positioned to pursue the 
related opportunities with more than 20 
years’ offshore experience we have already 
delivered several billion dollars of offshore 
projects and with recent acquisitions 
such as the offshore engineering and 
consulting business rnz integrated and the 
subsea pipeline consulting and engineering 
services business kw limited and the 
recruitment of several key senior leaders 
we have progressively expanded our 
offshore capabilities 
1  laggantormore gas plant 
shetland islands uk
2  training at nasa’s johnson space 
center in houston usa
petrofac annual report and accounts 2013
18
strategic report
group chief executive’s  
strategic review continued
1
2
with our 
largest ever 
order backlog 
investment 
programme 
and signiﬁcant 
growth 
potential we 
enter 2014 in 
a strong 
position
 building on our core skills and capabilities 
we are now growing a differentiated toptier 
offshore epci business focused on high
end turnkey opportunities as in our onshore 
epc business we intend to manage a select 
portfolio of large contracts with a rigorous 
focus on risk management gratifyingly 
we already have the conﬁdence of our 
customers – as demonstrated by the lakach 
development our ﬁrst deepwater contract win 
in mexico and successful prequaliﬁcation for 
several major epci contracts including the 
bonga southwestaparo project in nigeria 
of course to build a business of scale in 
the deepwater epci market we need an 
enabler we are investing therefore in our own 
highend multipurpose installation vessel 
the petrofac jsd 6000 and in the last few 
months have awarded contracts for all of its 
key components 
this uniquely conﬁgured vessel with its 
bestinclass capabilities will give us access 
to highend projects allow us to derisk their 
delivery and also help us to attract the very 
best talent it is scheduled to be available for 
construction and installation activities from 
early 2017  helped along by this capability we 
are looking to build an offshore epci business 
delivering revenues in the order of us2 billion 
by 2020 at strong margins
our people
none of this would be possible without 
our people without doubt our employees 
are our best asset and underpinned by 
our unique culture they ensure we deliver 
on our commitments to our customers 
often they are working on complex projects in 
demanding environments i would like to thank 
each and every one of them for their efforts in 
2013 and i look forward to working with them 
during what i am conﬁdent will be an exciting 
2014 and beyond 
the end of 2013 saw maroun semaan 
cofounder of petrofac retire from the 
company and step down from the board 
i would like to thank maroun for all he has 
done for petrofac he leaves a strong and 
experienced management team clearly 
focused on longterm sustainable growth 
and a considerable legacy on which we 
continue to build 
maintaining our capital discipline
as the group assumes more risk and invests 
in its capability our capital intensity also 
increases – as evidenced by 2013’s inaugural 
bond issue
capital discipline will therefore be a key theme 
for 2014 and beyond 
given the ongoing investments in ies and our 
offshore business we do expect our return 
on capital employed to decrease somewhat 
even so we anticipate that over our ﬁve 
year planning cycle we will deliver returns 
of signiﬁcantly more than 20
as we complete our offshore investment 
programme and ies becomes cash 
generative we also expect the group as a 
whole to return to free cash ﬂow generation
outlook for 2014 and beyond 
with our largest ever order backlog 
investment programme and signiﬁcant growth 
potential we enter 2014 in a strong position
overall we expect to deliver ﬂat to modest 
growth in earnings in 2014 and to return to 
strong earnings growth in 2015
despite the cost pressures that some 
customers are facing i am conﬁdent petrofac 
will continue to capture value through a 
business model that derisks project execution 
and aligns our interests with those of our 
clients over the longer term there will be 
increased demand for energy fuelled by a 
growing global appetite for hydrocarbons 
increased capital spending by resource 
holders and a widening capability gap within 
our sector petrofac and our shareholders 
will be well positioned to beneﬁt from 
these conditions
1  the galkynysh gas treatment plant 
turkmenistan
2 santuario oil ﬁelds mexico
petrofac annual report and accounts 2013
19
2
1