the difference is… 
petrofac services limited
117 jermyn street
london sw1y 6hh
united kingdom
t 44 20 7811 4900 
f 44 20 7811 4901
wwwpetrofaccom
petrofac annual report and accounts 2009
annual report 
and accounts 2009 …in the detail
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1
petrofac annual report 
and accounts 2009
today the power of petrofac’s service offering 
has never been greater although the scale  
of our business has increased significantly in 
recent years our approach remains constant
we continue to follow the principles that have 
driven our business from the earliest days 
diligence in execution customer focus and 
passionate attention to the smallest detail
our intent is to further improve our business 
performance and we remain resolutely 
focused on delivering optimum returns for  
all of our stakeholders five year summary
1
     2009 2008 2007 2006 2005
information not subject to audit      restated restated
revenues
2
    3655426 3329536 2440251 1863906 1485472
ebitda
2
    558966 418952 301259 198349 115634
profit for the year
23
    353603 264989 188716 120332 75397
diluted earnings per share cents
2
    10319 7711 5461 3487 2241
total assets    3600571 2269821 1748007 1401847 986650
total equity    906755 559031 522970 324904 195127
average number of employees
2
    11628 10383 9027 7482 6598
backlog us millions    8071 3997 4441 4173 3244
1 in us’000 unless otherwise stated 2 on continuing operations 3 attributable to petrofac limited shareholders
this has been another excellent year for 
petrofac in a challenging year for our 
industry we have delivered another strong 
financial performance with growth in net 
profit for the group of over 33 on revenue 
up by 10 at us365 billion
following substantial new contract 
awards in the year our record order intake 
of us73 billion doubled our backlog 
to us81 billion giving us outstanding 
revenue visibility for the current year  
and beyond
we remain committed to our aim of 
becoming the leading provider of facilities 
solutions to the oil  gas industry and aim 
to achieve this by
worldclass results
2
petrofac annual report 
and accounts 2009
3
petrofac annual report 
and accounts 2009 contents
 2 financial highlights
 4 at a glance
 6 structure
 8 insight makes the difference
10  making a difference in performance
12  think different act different  
be different
14  a fresh perspective a different 
approach
16  integrity support responsibility  
the difference is demonstrable
18 chairman’s statement
22  interview with the  
group chief executive
26 operating review
50 financial review
53 corporate social responsibility
64 directors’ information
66 senior management team
69 corporate governance report
76 directors’ remuneration report
87  statement of directors’ 
responsibilities
88  independent auditors’ report
89 consolidated income statement
90  consolidated statement of 
comprehensive income
91  consolidated statement of 
financial position
92  consolidated cash flow statement
93  consolidated statement of 
changes in equity
94  notes to the consolidated 
financial statements
 130 independent auditors’ report
 petrofac limited
 131  company financial statements 
petrofac limited
 143  oil  gas reserves unaudited
 144  shareholder information
financial highlights
revenue
us3655m
us millions
1 0
ebitda
us5590m
33
net profit
3
us3536m
33
eps
earnings per share diluted  
10319 cents per share
34
backlog
us8071m
1 02
05 06 07 08 09
1485
1864
2440
3330
3655
05 06 07 08 09
5590
4190
3013
1983
1156
05 06 07 08 09
2241
3487
5461
7711
10319
05 06 07 08 09
3244
4173
4441
3997
8071
■
  maintaining and improving on 
high safety standards 
■
   leveraging customer relationships 
by providing a range of services 
across the life cycle of an asset 
■
  generating predictable longterm 
returns from a diversified portfolio  
of investments leveraging the 
group’s service capabilities in 
order to understand and manage 
better the risks involved
■
  focusing on regions with major 
hydrocarbon reserves where 
significant capital and operational 
expenditures are expected
■
  expanding our established 
service offering into new 
countries and regions
■
  assisting customers in achieving 
their local content goals by 
accessing incountry resources 
and improving the competence 
and technical skills of local 
workforces 
■
  improving revenue and earnings 
stability through a diversified and 
complementary business model
■
  attracting and retaining 
specialists and key personnel
■
  identifying acquiring integrating 
and developing complementary 
businesses where appropriate
05 06 07 08 09
754
1203
1887
2650
3536
us millions us millions cents per share us millions
overview governance corporate social  
responsibility
business review financial statements 4
petrofac annual report 
and accounts 2009
5
petrofac annual report 
and accounts 2009
overview
at a glance
5
petrofac annual report 
and accounts 2009
at a glance
petrofac is a provider of integrated 
facilities solutions to the international 
oil  gas industries with a record  
of delivering the best results  
for our shareholders at the same 
time we focus on results for 
customers striving for the highest 
levels of performance often in 
challenging environments but in 
geographic regions we know well 
results for our people who see their 
skill and endeavour matched by our 
commitment to safety and support 
and results for the communities 
where we work through an 
appreciation of cultural diversity  
and concern for the environment
we have some 11700 employees 
operating out of five strategically 
located operational centres in 
aberdeen sharjah woking chennai 
and mumbai and a further 19 offices 
worldwide
employee  
numbers
4100
revenue
us6267m
2008 us7766m
1 9
percentage of 
group revenue
17
net profit
us128m
2008 us164m
22 
percentage of 
group profit
4
employee  
numbers
4200
net profit
us2651m
2008 us2063m
28
percentage of 
group profit
74
employee  
numbers
2900
employee  
numbers
500
energy 
developments
engineering   
construction
offshore 
engineering  
operations
engineering 
training services 
and production 
solutions
this segment includes engineering  
 construction and engineering  
construction ventures 
2009 highlights
a record order intake during the year  
of us63 billion including 
■
  us23 billion lumpsum epc project  
with abu dhabi company for onshore  
oil operations adco 
■
  us22 billion epc project for the el merk 
central processing facility in algeria
■
  petrofac emirates awarded first contract 
with gasco in abu dhabi
■
  the award of petrofac’s first project in 
saudi arabia
■
  a us100 million feed study for 
turkmengaz which contemplates moving 
into a second phase in 2010 which would 
involve a lumpsum epc contract with  
a not to exceed value of us4 billion
initial progress on these awards has been  
in line with expectations and in addition  
we have made good progress across our 
broader portfolio of projects in syria egypt 
tunisia oman kuwait and algeria
this segment is solely comprised of 
offshore engineering  operations 
2009 highlights
awarded two new contracts in the  
uk north sea
■
  a threeyear engineering and 
construction contract with apache 
worth circa £75 million
■
   a fiveyear maintenance contract  
with bp worth circa £100 million
extended its duty holder contract with 
venture production to may 2011 
through a focus on asset integrity 
eliminated a number of legacy health  
safety executive enforcement notices 
from mature assets in the uk in 
conjunction with the asset owners
enhanced mechanical services capability 
through a jv with zamil group in saudi 
arabia and through the acquisition of 
scotvalve services
this segment comprises engineering 
services training services and 
production solutions 
2009 highlights
engineering services
■
  awarded a threeyear consultancy 
contract with qatar petroleum qp 
■
  added around 300 people to our  
mumbai and chennai offices 
training services
■
  awarded a us5 million threeyear tms 
contract with bp in the uk north sea 
■
  manages 14 training facilities in six 
countries training around 50000 
delegates worldwide each year
production solutions
■
  the service operator contract with dubai 
petroleum exceeded production targets 
agreed with the customer
■
  consultancy business caltec awarded 
the offshore contractors association’s 
challenge award for technology and 
innovation for its wellcom system
this segment is solely comprised  
of energy developments 
2009 highlights
■
 commencement of production from 
both the don southwest and west don 
fields in the uk north sea achieved in 
less than a year from field development 
programme approval 
■
 excellent production from the cendor 
field offshore malaysia with 14400 
barrels per day bpd of oil achieved 
over the year and production uptime  
of over 99
■
 in tunisia the chergui gas plant 
produced an average of 265 million 
standard cubic feet per day mmscfd 
of gas during the year 
■
 the acquisition of the floating 
production facility the ahoo1 from 
hess and endeavour energy uk  
now renamed the fpf1 options for 
redeployment are under consideration
revenue
us3497m
2008 us5104m
31 
percentage of 
group revenue
9
revenue
us2487m
2008 us1534m
62
percentage of 
group revenue
7
net profit
us324m
2008 us331m
2 
percentage of 
group profit
9
net profit
us462m
2008 us219m
 111 
percentage of 
group profit
13
revenue
us2509m
2008 us1994m
26
percentage of 
group revenue
67 6
petrofac annual report 
and accounts 2009
7
petrofac annual report 
and accounts 2009
overview
structure
engineering training services  
and production solutions
engineering  construction
engineering  
construction
based in sharjah uae engineering 
 construction provides tailored 
and integrated engineering 
procurement and construction 
epc project delivery solutions  
on a lumpsum turnkey basis 
lstk through a variety of 
contracting models
key capabilities
■   
detailed design and engineering
■  
procurement including inspection 
and logistics of all project 
materials and equipment
■  
prefabrication and onsite 
construction
■  
health safety security and 
environmental management in 
line with international and national 
regulations
■  
comprehensive quality assurance 
and control
■  
project management
■  
commissioning and initial 
operations
engineering  
construction 
ventures
as part of our value offering to 
customers engineering  
construction ventures has 
established strategic companies 
and joint ventures with 
complementary organisations in 
order to drive growth in new 
markets while providing the same 
capability and expertise as 
engineering  construction
key capabilities
■  
petrofac emirates a joint venture 
company with mubadala 
petroleum services llc is 
focused on becoming an integral 
part of abu dhabi’s growing and 
diversifying energy sector while 
supplying services throughout the 
uae and internationally
■  
building a significant presence in 
saudi arabia through petrofac 
saudi arabia the kingdom is the 
largest market for epc projects 
worldwide and forms an integral 
part of our growth plans
■  
leveraging our gas processing 
experience and expertise through 
petrofac ikpt a joint venture with 
indonesia’s inti karya persada 
tehnik a company with a proven 
track record in lng liquefaction 
plants
offshore 
engineering  
operations
offshore
engineering  
operations
energy 
developments
our engineering  construction 
teams deliver excellence at all 
stages of greenfield and brownfield 
offshore projects through the 
provision of operations management 
we deliver production maintenance 
services and expertise to extend 
field life
key capabilities
■  
facilities management both on 
and offshore – including the duty 
holder service offering
■  
project management 
■  
engineering  construction for 
offshore projects
■  
maintenance management and 
support services
■  
mechanical services and 
metering
■  
supply of highly competent and 
experienced personnel
where we can leverage our service 
capabilities to mitigate risks and 
reduce costs energy developments 
coinvests alongside the group’s 
partners in oil  gas upstream 
developments and energy 
infrastructure to create additional 
value for the group
key capabilities
■  
technical operational 
commercial and asset 
management skills as well as 
access to the strong financial 
resources of the petrofac group
■  
identification and development  
of  brownfield and greenfield 
opportunities in mid and 
downstream infrastructure
■  
experience includes oil  gas 
processing facilities pipelines 
storage refineries and refinery 
units terminals and lng 
regasification
■  
pursues opportunities in 
discovered but undeveloped  
mature oil  gas fields
■  
services help to manage and 
mitigate the many risks that are 
involved in any major project
training 
services
training services makes  
a positive difference to the safety 
and efficiency of international 
workforces through the provision  
of competenceled training 
services consultancy and 
managed solutions which are 
designed to increase competence 
and minimise risk  
key capabilities
■  
competenceled training services 
in both safety and technical 
disciplines from training centres 
worldwide or from customer 
facilities
■  
consultancy services to identify 
or assess competency gaps or 
risks within an organisation
■  
outsourced tailored management 
solutions including training 
management solutions 
competence management 
solutions and emergency 
response development capability
■  
creation of nationalised 
workforces 
production 
solutions
production solutions offers 
customers singlepoint access to a 
wide range of services to help them 
improve production profitability 
operational efficiency asset 
integrity and the recovery of 
marginal reserves in addition to the 
service operator contract with 
dubai petroleum the business unit 
comprises four specialist service 
providers eclipse caltec spd  
and plant asset management
key capabilities
■  
production performance 
improvement from the reservoir 
to the delivery point
■  
leadingedge drilling and well 
engineering
■  
optimised reservoir management 
and field redevelopment 
planning
■ 
asset integrity management
■  
management consultancy to 
develop and deliver the plan
■  
development and delivery of 
pumping and separation 
technologies for new and retrofit 
optimisation of production
energy 
developments
engineering 
services
drawing on extensive engineering 
construction procurement and 
operations experience our 
engineering services business unit 
combines practical experience with 
the latest advances in technical 
innovation to provide a range of 
services including consultancy 
conceptual engineering front end 
engineering and design feed and 
project management on a 
reimbursable basis
key capabilities
■ 
comprehensive and independent 
field development planning
■ 
specialist engineering 
consultancy
■ 
conceptual engineering
■ 
front end engineering and design 
■ 
detailed engineering and 
procurement services
■ 
hse services and full project 
management and delivery 
capabilities
our services
although our performance is reported through four  
business segments beneath these segments seven  
business units ensure we endeavour to meet our  
customers’ needs across the full life cycle of oil  gas  
assets from design to decommissioning 8
petrofac annual report 
and accounts 2009
overview
we’re as local as  
our customers
we believe there is no substitute  
for local knowledge we have 11700 
professionals based at five strategically 
based operational centres in aberdeen 
sharjah woking chennai and mumbai 
these are supported by a further  
19 offices worldwide giving us a 
presence where our customers value  
it most on the ground close to their  
key locations
developing local 
workforces for  
ourselves and our 
customers
we employ more than 60 nationalities  
across the globe and invest in our own  
talent management and development 
programmes in addition we also direct 
significant resources into raising the 
capability and working practices of the 
indigenous workforces where we operate  
our training programmes which focus  
on all aspects of health  safety and 
technical competence development  
bring valuable workbased skills to  
local communities
understanding  
our customers 
the business relationships between  
our people and our customers are firm 
longterm and based on mutual respect 
and understanding many of our people 
from onsite operatives to board directors 
have grown up as nearneighbours to 
our customers working alongside each 
other for many years we share common 
heritages and cultures pasts and futures 
values and aspirations
insight makes  
the difference
we continue to maintain our focus on the 
geographic areas where we have been 
strongest it is these regions that we know 
best and where we have real insight based on 
longterm relationships cultural empathy and 
mutual respect our understanding of the 
business environment and familiarity with our 
customers’ needs have helped us develop a 
proven and extensive track record
8
petrofac annual report 
and accounts 2009
9
petrofac annual report 
and accounts 2009 10
petrofac annual report 
and accounts 2009
overview
11
petrofac annual report 
and accounts 2009
relationships matter
our strength is visible in the way  
we can bring intelligent solutions to a 
variety of engineering challenges but 
also in our investment in and longterm 
support of customer relationships 
this is essentially a peopleoriented 
industry where personal dedication to 
the customer can make the difference
dedication to delivery
only meticulous planning will lay the 
foundations for successful project 
execution we make a significant 
investment at the bid stage to ensure 
we identify and plan opportunities to 
mitigate risk and employ intelligent 
procurement strategies in order to 
maximise our performance
ours is a results business performance  
is everything whether in terms of timescales 
or budgets safety records or barrels of oil  
underpinned by our core values we are 
steadfast in our approach and focused on 
delivering the best service for our customers 
making a 
difference in 
performance
11
petrofac annual report 
and accounts 2009 12
petrofac annual report 
and accounts 2009
13
petrofac annual report 
and accounts 2009
overview
entrepreneurial culture 
keeps us nimble 
there is a fierce desire to succeed within 
petrofac nothing is taken for granted no 
solutions are predestined we welcome 
challenge pushing ourselves to break 
moulds and to constantly think of better 
ways to deliver performance – always 
without compromising our focus on 
risk management which begins in the 
boardroom and extends into every area  
of our operations
think different  
act different  
be different
small ideas 
big impact
taking ownership of a challenge or task  
has always formed the cornerstone of our 
approach – and it remains totally relevant 
today whether the challenge in question 
concerns us10000 or us1 billion  
in our experience a succession of relatively 
minor improvements can deliver a significant 
improvement to both customer relationships 
and project performance
accountability 
customer focus and 
attention to detail 
our people are keen to take responsibility 
and quick to show it by doing exactly 
what we say we will do senior personnel 
are engaged with each project and take 
personal pride in keeping customers and 
partners informed on performance at  
all times
what makes an individual a petrofac person 
a personal set of attributes exist in every one 
of our employees at every level of the business 
marking us apart a restlessness and a desire 
to always raise the bar a willingness to be 
accountable for our actions a relentless focus 
on the customer and an entrepreneurial spirit overview
our competitive advantage is built on a differentiated 
business model commercially innovative and flexible  
it enables us to create tailored solutions that meet  
our customers’ needs we offer a wideranging  
and fully integrated service extending from design  
to decommissioning in addition to coinvestment 
through our energy developments team
a fresh perspective   
a different approach
innovative 
partnerships
our energy developments business is 
one of  petrofac’s key differentiators its 
core strength lies in its ability to coinvest 
with a customer in upstream oil  gas 
assets and energy infrastructure through 
this innovative partnership approach we 
are able to align our interests with those  
of the customer and leverage the broader 
service capabilities of our group in order 
to enhance project returns
creative solutions  
that deliver
lumpsum contracts joint ventures 
performancelinked reimbursable 
contracts coinvestment… our 
relationships with our customers may 
come in many different forms but they  
are united by a common theme innovation 
and flexibility in short we will endeavour 
to create whatever solution is necessary  
in order to deliver value for stakeholders 
by applying fresh thinking
training to worldclass 
standards
from creating and managing 
programmes for major multinationals  
to ensuring that our customers’ local 
workforces have the skills required to 
operate complex plant in hazardous 
environments petrofac training services 
delivers worldclass standards we train 
more than 50000 individuals annually 
enabling our customers to benefit from 
more competent safer and more 
efficient workforces
14
petrofac annual report 
and accounts 2009
15
petrofac annual report 
and accounts 2009 16
petrofac annual report 
and accounts 2009
17
petrofac annual report 
and accounts 2009
overview
integrity support 
responsibility 
the difference is 
demonstrable
we are an integral part of the lives of our 
people and of the communities in which  
we operate – and we take our responsibility 
to them very seriously our aim is to be  
a positive influence at all times from 
maintaining our health and safety record  
to providing opportunities for our people 
protecting the environment and supporting 
local organisations
creating opportunities
the extensive support we provide to 
local communities is centred around 
education in north africa the middle 
east and asia as well as in the uk 
practical help and financial donations 
have been key to helping thousands  
of young people seize opportunities 
they would otherwise have been 
denied projects range from building 
classrooms and providing whiteboards 
to donating books and supporting  
road safety initiatives
in 2009 we became one of the founding 
members of the 100club foundation of 
the higher colleges of technology hct  
in abu dhabi the hct sets out to promote 
industryeducation partnerships and 
through our sponsorship we are supporting 
the continued development of young uae 
nationals and enhancing the hct’s offering 
for both students and industry throughout 
the centre’s 16campus network the 
programme is extremely progressive  
and we believe it is initiatives such as  
the 100club programme that will help  
us to achieve our objectives with regard  
to social investment in education training 
and development these objectives are 
core to ensuring the future sustainability  
of our workforce in abu dhabi and in other 
places where we operate 18
petrofac annual report 
and accounts 2009
19
petrofac annual report 
and accounts 2009
business review
18
petrofac annual report 
and accounts 2009
chairman’s statement
this has been another outstanding year for petrofac  
our strength in execution our strategic focus on markets  
and regions where there has continued to be strong  
demand and the increasing scale of our operations  
have again combined to deliver record revenue and  
profits revenue grew by 10 to us3655 million  
and net profits increased by 33 to us3536 million
market overview
at a macro level the global economic downturn 
continued to be a major factor throughout 2009 
consumer confidence remained low while the banking 
crisis prevented many companies from obtaining the 
funding they needed to undertake largescale projects 
energy consumption was hit hard and i believe that  
it will be some time before we see any significant 
increase in demand for hydrocarbons against  
this background it is to be hoped that we do not 
experience a rise in protectionism world trade is 
challenging at any time but it is a prerequisite for  
a thriving energy sector as it is for many others
our progress
despite the turbulence facing many western 
economies and businesses we again experienced 
strong demand for our services and have secured 
significant new orders during the year which underpin 
future earnings the company has minimal debt  
and a cash balance of around us14 billion and  
the board’s policy of maintaining a conservatively 
structured balance sheet has ensured that we have 
maintained a robust financial position 
how have we continued to grow during a period of 
recession the achievements of 2009 are as a result  
of a clear and consistent strategy we have high quality 
people throughout our organisation and a proven ability 
to serve our customers on large projects our recent 
growth has been reflected in the scale and complexity 
of the projects that we are now winning underpinned 
by our proven execution capability and excellent track 
record in the lumpsum turnkey market 
our strategic focus remains on the regions that  
we know well when it comes to investing in major 
infrastructure projects national oil companies nocs 
are in a more advantageous position than many other 
organisations many of our customers have continued 
to invest in largescale developments through the 
economic downcycle and our strength in delivery  
has placed us in an ideal position to work with them 
at the same time we also expanded our geographic 
footprint during the year winning major contracts in 
abu dhabi saudi arabia and turkmenistan 
in an important realisation of our strategy for energy 
developments we announced on 4 march 2010 the 
proposed demerger of our uk continental shelf oil  
gas assets to a new company enquest plc which will 
also acquire the uk continental shelf oil  gas assets 
of lundin petroleum the swedish oil  gas exploration 
and production group following the demerger 
enquest plc will be admitted to the official list and  
to trading on the main market for listed securities of the 
london stock exchange and admitted to the trading 
list and to trading on the stockholm stock exchange 
via a secondary listing petrofac shareholders will own 
45 of enquest plc
dividends
the board is recommending a final dividend of 2510 
cents per ordinary share equivalent to 1669 pence  
per ordinary share which if approved will be paid on 
21 may 2010 to eligible shareholders on the register  
at 23 april 2010 together with the interim dividend of 
1070 cents equivalent to 646 pence this gives a total 
dividend for the year of 3580 cents per ordinary share 
an increase of 41 over 2008
corporate governance and corporate social 
responsibility
in the wake of the crisis in financial services regulators 
are rightly concerned about risk management and our 
progression in undertaking larger and more complex 
projects has been accompanied by continued 
development of our risk management systems  
and processes we remain committed to identifying 
managing and mitigating risk in all areas of our 
operations and to this end the board’s risk committee 
deepened its oversight processes during the year
from a community perspective we continue to  
support and promote education and training in the 
regions where we operate seeking to improve the 
future prospects of both the local children and of our 
workforces in addition to the many programmes which 
we run with local schools close to our operations we 
are also establishing a new training centre in syria
chairman’s statement 20
petrofac annual report 
and accounts 2009
21
petrofac annual report 
and accounts 2009
business review
outlook
we secured a number of high value orders during 
2009 added to our existing backlog these new orders 
give us excellent visibility of earnings and cash flow for 
the coming two to three years
2009 has been a notable year for our group our strong 
operational performance was reflected in the share 
price improvement during the period and it was 
pleasing to be named as one of the ftse 100’s five 
bestperforming stocks of the year notwithstanding 
these achievements we are ever alert to the risks of 
complacency and recognise the increasing capability  
in our sector from firms based in the east so we will 
continue with our prudent balance sheet strategy  
our rigorous approach to risk management and our 
complete focus on execution excellence
i thank our shareholders customers partners and 
suppliers for their support in 2009 together we can 
look forward to 2010 and beyond with confidence
rodney chase 
chairman
our people
our growth is inextricably linked to our success  
in attracting retaining and developing our people 
petrofac has long been a business where the brightest 
talents are encouraged to do their best work and we 
are committed to ensuring that it remains so with a 
number of talent management initiatives planned for  
the year
during the past year our numbers increased from 
some 11100 to 11700 as we brought in new skills  
and experience to complement our extremely capable 
employee base in particular our leadership capability 
was significantly expanded in 2009 underpinning  
our ability to work on the largest and most  
challenging projects
on behalf of the board i extend our thanks 
unreservedly to all of our employees across the  
world it has been a privilege to witness their expertise 
commitment to excellence and constant focus on 
safety throughout the year
the board
this has been another year of stability for your board 
which benefits from great international diversity and  
a tremendous breadth of experience following our 
announcement on 4 march regarding the proposed 
demerger of our ukcs oil  gas assets it is anticipated 
that amjad bseisu will step down from the board in 
april 2010 subject to being appointed chief executive 
of enquest plc and the successful listing of shares of 
that company aside from this no changes have been 
made to the board’s composition since the annual 
general meeting held on friday 15 may 2009 at the 
2010 annual general meeting two of our longserving 
nonexecutive directors will be retiring from our board 
i would like to thank michael press and bernard de 
combret for their significant contributions to the  
board since joining in 2002 and 2003 respectively  
as a result and subject to shareholder agreement  
we look forward to welcoming two additional members 
to the board in may thomas thune andersen and 
stefano cao
chairman’s statement
chairman’s statement 
continued 22
petrofac annual report 
and accounts 2009
23
petrofac annual report 
and accounts 2009
business review
why was 2009 such an exceptional year for 
petrofac can this success be sustained
there are a number of reasons but the group’s 
continuing focus in our core geographic areas   
especially the middle east and north africa for 
engineering and construction activities has been 
fundamental the national oil companies in these 
regions have continued to invest through the down 
cycle capitalising on the economics of a softening 
market and as a result we have secured several 
significant contracts on a lumpsum turnkey  
lstk basis 
the demand for hydrocarbon production and 
processing facilities in these regions is significant  
and i am confident we will continue to see many other 
projects brought on line throughout 2011 and beyond 
as one of a few western companies willing and able  
to contract on a lstk basis this presents us with 
opportunities for further organic growth in existing 
markets but i would hope this would also extend  
to some new areas such as west africa
what were the key highlights of 2009
the year started positively with the award of our  
largest contract to date awarded in january by the 
abu dhabi company for onshore oil operations 
adco the 44month asab field development project 
in abu dhabi is valued at us23 billion
it was also pleasing when a number of contracts were 
awarded to the joint ventures jvs and companies 
which comprise our engineering  construction 
ventures business unit petrofac saudi arabia secured 
a contract from saudi aramco for the karan utilities 
and cogeneration package our 50owned jv with 
mubadala petroleum services llc petrofac emirates 
secured the contract for the construction of the  
ngl 4th train for the integrated gas development in  
abu dhabi in conjunction with korea’s gs engineering 
 construction 
first oil was achieved from the don area development 
during the first half of the year with west don brought 
on stream within 12 months of receiving field 
development programme approval fdp this was  
a major achievement 
2009 has been undoubtedly petrofac’s best year yet 
and there have been many highlights at the beginning 
of the year we launched a new organisational structure 
which although essential for our continued growth 
could have been a distraction and our teams are to  
be commended for retaining their focus on growing  
the business
although our share price performance was badly 
affected along with everyone else by the economic 
crisis at the end of 2008 we charted a steady rise  
in share price performance throughout 2009 as the  
year closed it was pleasing to note that petrofac was 
the fifth best performing stock in the ftse 100 and  
the only nonmining stock to make the top five 
what initiatives are in place to further improve 
the group’s track record on delivery
we are and will continue to be obsessed about  
the way in which we deliver and execute our projects  
we have very robust processes and procedures in 
place but we are always challenging ourselves to refine 
these one of the features of our business in recent 
years has been management of rapid growth while 
ensuring our quality benchmark is not compromised 
quality management is therefore a focus area for our 
business and is underpinned by other initiatives such as 
succession planning along with the continuous training 
and development of our management and their teams
petrofac is now organised into seven business 
units how would you describe the performance 
of those units during 2009
the engineering  construction ec and engineering 
 construction ventures ecv businesses secured  
a number of new and important contracts and have 
made a significant contribution to the group’s backlog 
and overall financial performance these businesses 
also continued to deliver upon existing contracts 
through the year and progress on their growth journey 
with a complete focus on people quality and safety 
engineering services has had a more challenging year 
like all of our businesses contracting on a reimbursable 
basis because they are more reliant on discretionary 
spending in addition to providing consultancy and 
conceptual front end engineering design studies from 
our woking office this business continues to provide 
vital support and resources for our ec businesses 
and has seen its operations in india continue to expand
interview with the  
group chief executive
as ayman asfari reflects on 2009 he explains some  
of the key differences that have underpinned petrofac’s 
achievements and outlines why he is feeling confident 
about the future
interview with the 
group chief executive  24
petrofac annual report 
and accounts 2009
25
petrofac annual report 
and accounts 2009
business review
interview with the group chief executive  
continued
offshore engineering  operations oeo also  
had a challenging year operating in a lower oil price 
environment notwithstanding this backdrop the 
reorganisation enabled the business to redefine its 
focus areas in operations management and offshore 
projects as a result oeo secured two important new 
contracts with apache and bp in the north sea while 
successfully extending a number of contracts with 
existing customers 
production solutions was created as part of our 
reorganisation at the beginning of 2009 it is  
comprised of our specialist consultancy and 
technology businesses and is focused on providing 
specialist subsurface technology and knowhow  
to enhance production on mature assets production 
solutions contracts on a gainshare or quasiequity 
basis in order for it to align its interests with those of  
the customer or partner where taking an equity stake  
is not an option the consultancy and technology 
businesses continue to operate on their own projects 
but are working together on a number of proposals for 
projects where we could deliver our integrated offering
training services is a key differentiator for our  
group and enables petrofac to assist our customers  
to develop safe and skilled national workforces  
during the year the business experienced a change  
in management and in july we welcomed paul groves 
as the unit’s managing director the business unit’s 
core focus in the uk is around its safety training 
provision and in 2009 this was impacted by the 
reduction in discretionary spending training services 
often works alongside other businesses in the group 
and in conjunction with petrofac ec is designing and 
building a technical training centre in syria this type  
of activity will assist the unit to achieve its growth 
aspirations as will its focus on the provision of technical 
training and managed services in relation to the 
development of safe and skilled workforces globally
energy developments selectively coinvests in 
alignment with partners and customers in oil  gas 
production processing and transportation assets and 
the unit’s portfolio of operated assets have performed 
well despite a lower oil price during the year the 
business made its first energy infrastructure purchase 
and the business is pursuing a number of options in 
relation to the deployment of the now renamed ahoo1 
fpf1 one the most important aspects of energy 
developments’ strategy is looking at ways in which to 
crystallise value from any investment we have a track 
record of investing in upstream oil  gas assets and 
infrastructure developments where we can leverage  
the wider engineering and operations capability of  
the group under our ‘build and harvest’ strategy we 
continue to develop these assets and when we have 
added value through the application of our expertise 
we seek to sell or swap assets in order to pursue new 
opportunities to make investments through our energy 
developments business
as a result of achieving both the export from don by 
pipeline via the thistle platform and the startup of 
production from the don southwest sidetrack well  
the first phase of the don development is now 
complete we believe therefore we have optimised the 
added value to be derived from the application of our 
service capability on the don assets on 4 march 2010 
we announced our intention to demerge our north sea 
offshore assets from the petrofac group if we 
successfully conclude the transaction our operated 
interests in both west don and don southwest and 
the elke field will be combined with the north sea 
assets of lundin britain limited thistle deveron 
broom heather and peik to form a new development 
and production company called enquest plc
upon its successful conclusion this transaction will 
represent an important realisation of our strategy
are there going to be major changes to the 
strategy as it continues to unfold
although our strategy is essentially unchanged there 
are some important aspects to highlight with regards 
to our investments we have always said that our 
strategy is to add value and then when there is no  
or limited value for petrofac to add to exit and to 
redeploy the capital in new projects or to return it  
to shareholders the harvesting of our don assets  
is an important realisation of this strategy
even without the don assets energy developments 
remains a key part of our business portfolio and we  
will continue to look for further opportunities in which 
the group can invest and bring to bear its services  
to add value for itself partners and shareholders  
we also see a major market for opportunities which 
can be developed on a gainshare or quasiequity 
basis using commercial models such as production 
enhancement and we hope to realise this aspect of 
our strategy in 2010 through production solutions
we continue to work towards being able to provide 
more integrated and therefore more efficient  
services for our customers across our group  
and the reorganisation into seven individual units  
was an important first step in achieving this the 
reorganisation has also enabled us to broaden the 
management bench this will play an increasingly 
important role as we strengthen our talent management 
and development programmes and seek to create 
more value from our limited resources our people  
as we continue to grow
interview with the 
group chief executive 
what do you think has driven petrofac’s success 
in 2009
petrofac has stayed committed to and focused on  
our core strengths our ability to manage risk enables 
us to contract via lstk and to develop other risk
reward models for contract execution as demonstrated 
through energy developments and production 
solutions we have an internal culture that is focused 
on the detail driven by the high levels of ownership in 
our organisation while we are now much bigger every 
project is managed like a small company and this is 
something we seek to maintain as we grow it is our 
culture to believe focusing on the us10k task in hand 
will help to deliver and ensure performance on the 
us1 billion project
what is the outlook for the next five years
i expect our business to continue to grow but it’s not 
realistic to expect this to increase in line with the last 
five years for all the reasons outlined in these pages  
i believe there will be many opportunities for our group 
so we will continue to stay focused on our core 
capabilities and markets increasing and expanding 
gradually achieving excellence in project delivery 
having the best and brightest people as part of our 
organisation and paying particular attention to ensuring 
we have robust systems and processes in place will 
drive our business forward and underpin our ability to 
maintain the quality of our earnings and to ensure our 
growth is sustainable  
 
ayman asfari 
group chief executive 27
petrofac annual report 
and accounts 2009 operating review
business review
our strategic initiatives
01 maintaining and improving on high  
 safety standards
02  leveraging customer relationships 
by providing a range of services 
across the life cycle of an asset
03  generating predictable longterm 
returns from a diversified portfolio 
of investments leveraging the 
group’s service capabilities in 
order to understand and manage 
better the risks involved
04  focusing on regions with major 
hydrocarbon reserves where 
significant capital and operational 
expenditures are expected
05 expanding petrofac’s established  
 service offering into new countries  
 and regions
06  assisting customers in achieving 
their local content goals by 
increasing the use of local 
resources and improving the 
competence and technical skills of 
national workforces
07  improving revenue and earnings 
stability through a diversified and 
complementary business model
08  attracting and retaining 
recognised specialists and key 
personnelmanaging succession 
issues
09  identifying acquiring integrating 
and developing complementary 
businesses where appropriate
we operate in some difficult and hazardous environments and the 
safety of our people is paramount at all times
progress during 2009
■
 during the year our employees and subcontractors completed 
67 million manhours 2008 67 million of activity our lost  
time injury and recordable injury frequency rates are key 
performance indicators and are reported on page 33 and  
are summarised below
■
 our recordable incident frequency rate for 2009 was  
038 per 200000 manhours 2008 032 which compares 
well with industry published data for the fourth year in a row 
our lost time injury frequency rate has reduced and is now  
002 per 200000 manhours 2008 003 
future milestones 
■
 our health and safety performance is reviewed in full on pages 
54 and 55 in the corporate social responsibility report 
through campaigns such as ‘horizon zero’ we aim to further 
improve our safety performance in 2010 and beyond
01
maintaining and improving 
on high safety standards
26
petrofac annual report 
and accounts 2009
petrofac’s range of services provides a  
total solution to meeting customers’ needs 
across the full life cycle of oil  gas facilities 
our successful track record spans more than 
25 years and several hundred projects and  
is firmly based on a partnership approach  
a total commitment to health and safety  
and respect and responsibility for the 
communities in which we operate
operating review
strategy
we have delivered against a consistent strategy  
our aim is to generate sustainable growth in value 
for our shareholders by leveraging our core 
competencies being the ability to engineer build 
and operate oil  gas infrastructure and the ability 
to create and deliver valueadding investments
this means
■
 working to worldclass standards 
■
 focusing always on customer satisfaction 
■
  respecting the environment and being sensitive 
to the communities in which we work
■
 promoting and rewarding on merit 
we aim to achieve this goal through nine key 
strategic initiatives our progress during the year 
and some of our future plans are outlined opposite 
and on the following pages 28
petrofac annual report 
and accounts 2009
29
petrofac annual report 
and accounts 2009 operating review
business review
we remain focused on our key markets of the ukcs the middle 
east and africa the commonwealth of independent states 
particularly the caspian region and the asia pacific regions  
while there are many attractive opportunities in other regions  
our key focus areas account for approximately 70 of the world’s 
proven oil reserves and 85 of its gas reserves
1
 and we expect 
significant capital and operational expenditures in these regions
progress during 2009
■
 in most of our key markets particularly in relation to 
engineering  construction projects development costs are 
comparatively low consequently many of our customers 
particularly those national oil companies that are well funded 
even at lower oil prices have continued to invest in oil  gas 
projects throughout the downturn
■
 our focus on these markets has helped us deliver a very 
successful year in relation to new contract awards with our 
engineering  construction new order intake for 2009 reaching 
in excess of us6 billion
future milestones
■
 we will remain focused on our key markets which should 
position us well to benefit from increasing operational and 
capital expenditure
■
 we were very active bidding in our key markets during  
2009 and expect to remain so throughout 2010 and beyond 
through our strong competitive position we expect to secure 
further project awards in the coming months
while remaining focused on our key markets we will look for 
opportunities in new countries and regions particularly where  
they are in close proximity to existing operations
progress during 2009
■
 we recently identified both abu dhabi and saudi arabia as 
potentially significant markets for engineering  construction 
over the medium to long term we have been actively bidding 
for projects in these regions since 2008 and we were 
successful in securing our first major contracts in these  
regions in early 2009
■
 building upon our recent success in the caspian region 
throughout 2009 we have been in discussions with the 
stateowned gas company turkmengaz in relation to 
providing engineering services to develop their south yoloten 
gas field in turkmenistan we were delighted to announce  
a contract at the end of the year to undertake a feed study 
and initial planning and setup studies after satisfactory 
conclusion of the first phase worth us100 million the 
contract contemplates moving into a second phase which will 
include engineering procurement and commissioning work 
the second phase will be on a lumpsum basis with a value 
not to exceed us4 billion
future milestones
■
 we plan to strengthen further our position in existing markets 
such as in abu dhabi where through petrofac emirates our 
joint venture with mubadala petroleum services company llc 
a wholly owned subsidiary of mubadala development 
company we have established an engineering centre which 
we plan to grow to several hundred fulltime staff over the next 
few years
■
 we would hope to develop a strong competitive position in 
turkmenistan which has the fourth largest gas reserves in the 
world and where there is limited existing capability and the 
development of their substantial oil  gas reserves is in its  
early stages
■
 we will continue to look at expanding into new countries and 
regions such as west and central africa and over the next 
few years we would expect iraq to develop into a significant 
market for oil  gas services 
 
progress during 2009
■
 we are increasingly focused on the provision of an integrated 
service which was a major driver behind the reorganisation  
of the group into seven business units see pages 6 and 7
■
 our seven business unit managing directors now meet formally 
on a monthly basis with the group chief executive and his 
direct reports and we are already seeing the benefits of this 
more integrated approach
■
 a good demonstration of our integrated approach is the 
development of the don project where our business units 
worked together providing engineering construction 
commissioning and operations services to successfully deliver 
first oil in april 2009 less than a year from field development 
programme approval
■
 at eni’s bacton plant engineering services completed the 
feasibility study for the installation of caltec’s production 
solutions’ technology business wellcom multiphase 
boosting unit which boosts lowpressure wells and separates 
gas and liquids which was installed and commissioned by 
offshore engineering  operations 
future milestones 
■
 we are confident that our group reorganisation will enable us  
to continue our success in generating opportunities to combine 
our services and provide an integrated approach
through energy developments our customers can access  
our services under innovative commercial structures that ensure 
complete alignment of interests we deliver investment support  
on upstream and infrastructure projects where we provide 
engineering and construction or operations services through  
a handson approach we are able to better understand and 
manage a project’s risks and therefore earn a differentiated return
progress during 2009
■
 we commenced oil production from the west don field in april 
2009 less than a year from field development programme 
approval and from don southwest in june 2009 which 
represented a great achievement for petrofac and our partners
■
 in july 2009 we acquired a floating production facility from 
hess limited and endeavour energy uk limited once we 
have agreed a deployment opportunity which may involve  
an opportunity for energy developments to take an equity 
position in an upstream development we will undertake 
upgrade and modification of the facility 
future milestones 
■
 a key part of energy developments’ strategy is to  
consider divestment or ‘harvest’ of assets once they  
have been developed
■
 we have created value for our shareholders through 
development of west don and don southwest and following 
the commencement of oil production and significant progress 
on commissioning of the production infrastructure we plan  
to demerge our investments in the fields in march 2010 
thereby realising value for our shareholders see page 18  
for more detail
■
 energy developments will continue to review opportunities to 
further develop our remaining assets and to appraise new 
upstream and energy infrastructure opportunities though we 
will only do so if the project meets our strict investment criteria
02
leveraging customer 
relationships
04
focusing on regions with 
major hydrocarbon reserves
05
expanding petrofac’s 
established service  
offering into new countries 
and regions
03
generating predictable  
longterm returns from  
a diversified portfolio  
of investments
1  as per the energy information administration of the us department  
of energy as at 9 february 2009 oil reserves include 173 billion barrels  
of canadian oil sand reserves  30
petrofac annual report 
and accounts 2009
31
petrofac annual report 
and accounts 2009 operating review
business review
progress during 2009
■
 although skilled personnel remain in unprecedented demand 
we have been successful in accessing international labour 
markets including through graduate recruitment in particular 
in the middle east the indian subcontinent and asia pacific
■
 we have grown our headcount from approximately 11100 at 
december 2008 to approximately 11700 at december 2009
■
 we have seen significant growth in our largest reporting 
segment engineering  construction where employee 
numbers have grown from 3400 to 4200
■
 furthermore our engineering  construction reporting 
segment is supported by our engineering services’ offices  
in mumbai and chennai where we have recently moved  
into larger premises and now have around 1300 employees 
2008 1000
■
 we have further widened our employee share ownership  
and now have around 3000 employee shareholders 
representing around 28 of the eligible workforce
■
 as the group has grown during the year we have broadened 
and strengthened our senior management team with the 
addition of further high calibre personnel such as a new  
group treasurer group head of tax and construction director
future milestones
■
 in order to support our growth plans we expect to further 
broaden and strengthen our senior management team
■
 we plan to continue to increase headcount particularly in 
engineering  construction through growing our existing 
operational centres developing our joint venture offices  
such as in jakarta and abu dhabi and establishing  
incountry engineering offices for example in saudi arabia
progress during 2009
■
 caltec limited and eclipse petroleum technology limited  
were acquired in 2008 since january 2009 these businesses 
have been grouped with our other consultancy businesses 
within production solutions while like the majority of our 
consultancy businesses caltec and eclipse have faced  
a challenging year as customers have typically deferred 
discretionary expenditure we have been pleased with the 
progress with which we have integrated these businesses  
into the group of particular note has been the development  
of the rental model for caltec’s production technology products 
aimed at the enhancement of production from mature fields
■
 in early january 2010 we were pleased to announce the 
acquisition of scotvalve services limited a mechanical 
services business headquartered in aberdeen but with 
interests in the middle east and north africa the acquisition  
of scotvalve will enable offshore engineering  operations  
to provide repair and maintenance services within a wider 
geographic footprint
future milestones
■
 we will continue to regularly review acquisition opportunities 
and we have a strong balance sheet to support such 
opportunities
a key factor in the delivery of our strong execution performance  
is our engagement with local resources through recruiting in  
the local market and establishing longterm relationships with local 
subcontractors particularly construction subcontractors these 
relationships increase the local content on projects and ensure that 
the group operates responsibly through improving the competence 
and skills of local workforces
progress during 2009
■
 we have established subcontracts with many local and 
regional construction contractors for the new engineering  
construction projects secured during the year we have 
worked with the vast majority of these contractors before  
and are confident that with their involvement we can execute 
our contracts in hand to a high standard with local resources 
petrofac training plays an important role in developing national 
workforces and where necessary will take an active role in 
developing competence and technical skills on our projects 
which often include local content targets
■
 during the year we extended our relationship with bp to 
include a threeyear training management services contract 
with bp north sea we will provide a full administrative training 
package including identifying procuring and scheduling all 
training requirements for 2000 ukbased bp employees
future milestones
■
 in saudi arabia we are looking to develop our own incountry 
engineering capability to assist us to deliver projects with local 
resources and meet local content goals
■
 through training services we continue to review  
opportunities to invest in and manage international training 
facilities we currently operate 15 training facilities in seven 
countries and we are looking to extend our strategic 
relationships with our key national oil company and 
international oil company customers
we have always sought to be flexible and innovative with  
our commercial models providing services under a range  
of commercial structures from reimbursable services such as 
operations or engineering services reimbursable services with 
significant key performance indicator kpi related income such  
as duty holder or service operator contracts to the provision  
of lumpsum epc services and when our investment criteria  
are met we may put our capital at risk and take an equity stake  
in a development
progress during 2009
■
 following our recent reorganisation we are now looking  
to package together some of our consultancy businesses 
through production solutions and to undertake production 
enhancement projects to improve the performance of marginal 
or mature fields possibly on a tariff or quasiequity basis
future milestones
■
 throughout 2009 we have been holding discussions with 
customers with regard to potential production enhancement 
projects we hope to be able to secure such a project within 
the coming months which will allow us to begin to develop  
a track record in this market
09
developing complementary 
businesses
08
attracting and retaining 
recognised specialists and 
key personnel
07
improving revenue and 
earnings stability
06
assisting customers  
in achieving their local  
content goals 32
petrofac annual report 
and accounts 2009
33
petrofac annual report 
and accounts 2009 operating review
business review
07 08 09
5461
7711
10319
07 08 09
1233
1400
2283
07 08 09
035
032
038
07 08 09
4441
3997
8071
07 08 09
9800
11100
11700
cash generated from 
operations and cash 
conversion
these kpis measure both the absolute amount of 
cash generated from operations and the conversion 
of ebitda to cash
cash generated from operations as per the consolidated 
cash flow statement cash conversion is cash from 
operations divided by ebitda
earnings per share 
diluted eps
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
as reported in the consolidated income statement and 
calculated in accordance with note 7 to the financial 
statements
lost time injury and 
recordable injury 
frequency rates
provides a measure of the safety performance  
of the group including partners
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
backlog
the group uses this kpi as a measure of the 
visibility of future earnings
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 the engineering services and 
facilities management contracts the estimated revenue 
attributable to the lesser of the remaining terms of the 
contract and in the case of lifeoffield facilities 
management contracts five years backlog is not an 
audited measure other companies in the oil  gas industry 
may calculate this measure differently
employee numbers
provides an indication of the group’s  
service capacity
for the purposes of the annual report employee numbers 
include agency contract staff and the group’s share of joint 
venture employees
07 08 09
007
003
002
07 08 09
3716
5866
12763
to help the group assess its performance the board and 
executive management set annual kpi targets and monitor 
and assess performance against these benchmarks on a 
monthly basis throughout the year throughout this business 
review performance is assessed with reference to these 
kpis the annual measures of which are presented here
key performance indicators
07 08 09
2440
3330
3655
07 08 09
3013
4190
5590
07 08 09
1887
2650
3536
07 08 09
457
527
477
revenue
measures the level of operating activity and growth 
of the business
revenue for the year as reported in the consolidated 
income statement
ebitda
ebitda means earnings before interest tax 
depreciation amortisation and impairment and 
provides a measure of the operating profitability  
of the business
ebitda is calculated as profit before tax and net finance 
income as per the consolidated income statement 
adjusted to add back charges for depreciation 
amortisation and impairment charges as per note 3  
to the financial statements
net profit
provides a measure of the net profitability of the 
business that is profit for the year attributable  
to petrofac limited shareholders
profit for the year attributable to petrofac limited 
shareholders as reported in the consolidated  
income statement
return on capital 
employed roce
roce is a measure of efficiency with which the group 
is generating operating profits from its capital
roce is calculated as ebita earnings before interest tax 
amortisation and impairment charges 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
us millions us millions us millions 
cash conversion 

recordable injury  
rates per 200000 manhours us millions number of employees
cash generated from operations 
us millions
lost time injury  
rates per 200000 manhours
cents per share 34
petrofac annual report 
and accounts 2009
35
petrofac annual report 
and accounts 2009
business review
operating review
our key systems and procedures have been externally 
certified by a number of organisations for example 
through customersponsored audits and 98 of our 
facilities have been accredited by lloyd’s register 
quality assurance to iso 14001 requirements the 
accreditation process includes a review of the 
management of material risks and business and 
operational controls in place to mitigate such risks
key risks
those key risks that could lead to a significant loss  
of reputation or that could prevent us from executing 
our strategy and creating shareholder value are 
summarised below along with our approach to 
mitigating these key risks
corporate and project risk review processes
we have wellestablished procedures embedded in the 
organisation for the assessment and review of risks in 
relation to prospective projects and to manage the 
risks in relation to existing projects
preaward all new projects and investments are 
reviewed by the risk review committee of the relevant 
business unit the remit of the business unit risk 
review committee covers items such as
■
 moving to new territories
■
 establishing contractual commitments
■
 providing new services
■
 investing capital
■
 entering lease commitments
■
 establishing banking facilities andor granting 
security
■
 making acquisitions or the establishment of joint 
venture relationships
in addition significant new projects and investments 
are also reviewed by a corporate risk review 
committee and potentially also by the board directly 
depending on the risk profile of the opportunity our 
delegated authority framework defines the levels of 
review that are required based on the level of risk this 
ensures that a rigorous assessment of risks occurs for 
all of our projects and investments before any 
commitment is made and that both project specific 
and country risk factors are assessed in 2009 the 
corporate risk review committee reviewed 38 new 
business proposals
postaward execution is managed by our project teams 
and continuously reviewed by our business level 
executives following our group reorganisation on 
1 january 2009 the business unit managing directors 
now meet on a monthly basis with the group chief 
executive and his direct reports to review both the 
performance of each business unit and any discrete 
risks a summary of these discrete risks is reported  
to the board at each scheduled board meeting during  
the year
board level risk review during 2009
the board has increased its review and monitoring of 
all discrete risks to the company and now receives 
specific risk reports from all of our businesses at every 
scheduled board meeting these reports cover all 
areas of risk to the businesses and focus on providing 
the board with an update on specific discrete risks to 
our interests and the management strategies that are 
deployed to mitigate them
the board reviews detailed proposals for any 
significant new country of operations and for any 
project with a contract value in excess of us1 billion 
during 2009 the board has reviewed a number of 
specific new country and new contract proposals on 
this basis and requested further assurance or set 
preconditions to ensure that an acceptable risk profile 
was achieved
the risk committee has performed an important 
additional enterprise risk management function during 
2009 by providing review and oversight primarily of 
nonproject specific country risks and ensuring that 
appropriate risk monitoring and management systems 
are in place our internal audit function receives all risk 
reports that are presented to the board or the risk 
committee and independently audits any areas of risk 
that it feels are significant from an audit perspective 
and reports its findings to the audit committee
as we continue to grow and expand our range of 
services both technically and geographically our 
project and customer concentration diminishes but  
we face new risks and challenges to which our risk 
management systems and processes both centrally 
and at the project level need to respond in recognition 
of our changing risk profile we have further developed 
our risk management systems and processes to 
ensure that our risk management remains robust and 
appropriate for the range of risks that we face
enterprise risk management system
our enterprise risk management system is designed  
to ensure that all significant risks to our reputation and 
shareholder value are appropriately monitored and 
mitigated in line with the board’s policy these 
enterprise risks to our reputation and shareholder  
value fall into three areas
■
 industry risks – the systemic exposure to 
fluctuations in core commodity prices and demand 
for our services these risks are reviewed and 
managed directly by the board and senior 
management team
■
 country risks – the exposure to external country 
factors that are inherent in the environments in 
which we operate including security political risk 
legal risk and transparency bribery and corruption 
exchange rates and local infrastructure project 
teams ensure that these risks are reviewed and 
appropriate responses are built into the structure  
of the project execution and contracting model 
wherever possible our corporate functions monitor 
this risk environment and the risk committee of 
the board provides additional review and oversight 
the board retains approval authority for any 
significant new country entry
■
 project specific risks – the risks pertaining to the 
execution of projects to customer specification 
including technical risk budget and schedule risk 
performance guarantee levels safety risk and 
environmental risk these risks are directly 
managed by our project teams these risks are 
also core to our risk review process which reviews 
all new business proposals before any formal 
obligations are entered into our business unit 
managing directors and their management teams 
report monthly on discrete execution risks to senior 
management and the board through this review 
process we ensure that there is constant focus 
and attention on maintaining and improving our 
execution capability
enterprise risk management and key risks 36
petrofac annual report 
and accounts 2009
37
petrofac annual report 
and accounts 2009
business review
operating review
industry risk description mitigation
level of 
demand for  
the group’s 
services 
the demand for our services is linked to 
the level of capital and operational 
expenditure by the oil  gas industry
as noted in the ‘operating environment’ section we expect the demand for our 
services to remain robust over the long term our recent success in securing new 
and substantial contract awards gives us good visibility of revenues through to 
2011 and beyond
our continuing geographic and service expansion has helped to reduce our 
exposure to some extent by increasing the size of the addressable market for  
our services
oil  gas 
commodity 
prices
longterm expectations of the price of  
oil  gas may have an impact on the level 
of new investment in the industry and  
may therefore affect demand for our 
services
the financial performance of energy 
developments is more leveraged to  
the price of oil  gas through its co
investment in upstream oil  gas assets 
and its financial result may be impacted
as detailed in the ‘operating environment’ our business should not be 
significantly impacted by shortterm fluctuations in oil  gas prices and has 
proven robust to significant volatility in oil  gas prices over recent months
management introduced a formal policy to hedge a proportion of our direct 
exposure to oil  gas prices from 2009 thereby providing a degree of protection 
to fluctuations in the sale price variations for oil  gas
under our hedging policy we aim to hedge 75 of our forecast production levels 
we will not undertake hedging until a development has achieved steadystate 
production
availability of 
essential 
executive or 
project staff
the availability of skilled personnel 
remains one of the most significant 
challenges facing the oil  gas industry 
we remain confident that our policies to promote and reward on merit targeted 
but extensive employee share ownership management and technician training 
programmes and access to international labour markets in particular the middle 
east indian subcontinent and asia involvement in worldclass projects and 
exciting prospects for continued growth will enable us to attract and retain the 
necessary skilled personnel to undertake our projects in hand 
country risk description mitigation
security we operate in a number of countries 
where the security risk is significant
we have recruited a new group head of security who is responsible for focusing 
on highrisk territories and we have expanded our use of specialist consultancies 
and security services to advise us and to provide protection 
we have appropriate insurances in place to cover all of our staff and as part of 
this cover employ specialist security services on the ground in certain locations
business 
continuity
we are potentially exposed to inter alia 
natural hazards acts of terrorism war  
and civil unrest that could impact our 
infrastructure either through the 
unavailability of physical assets or  
access to systems and data
we have made significant progress with our business continuity planning during 
2009 our woking office is now fully certified and is the first company in the uk  
in the oil  gas sector to receive the bs 25999 certification
our aberdeen operational centre now has a fully implemented and operational 
business continuity system and we have made substantial progress and 
established a workable fallback solution for our key centres in sharjah mumbai 
and jakarta which will be extensively tested in 2010 we aim to achieve 
accreditation to external standards for our operations in aberdeen sharjah 
mumbai chennai and jakarta
exchange rates significant movements in exchange rates 
could impact our financial performance
while we operate in a number of diverse geographical locations the majority of 
our revenues are denominated in us dollars or currencies pegged to the us 
dollar in contracts priced in us dollars or currencies pegged to the us dollar 
where the group is procuring equipment or incurring costs in other currencies  
we aim to have full hedging on transactional exposures using forward currency 
contracts offshore engineering  operations’ revenues and costs are principally 
denominated in sterling however as a policy the group does not hedge the 
sterling profits generated by these activities as they are substantially matched  
by sterling group overhead costs while we report our results in us dollars our 
share price is quoted in sterling our share price may therefore be impacted by 
changes to the us dollarsterling exchange rate during the year we established 
the new position of group head of treasury and filled this position with a senior 
external hire  
sovereign 
change of law 
and contract 
enforcement
we operate in a number of countries 
where our ability to rely upon our 
contracts for protection is potentially 
reduced by the opaqueness of the  
legal system
management carefully monitor this particular risk and wherever it is perceived  
to be significant will take all measures available to reduce and limit the exposure 
through the use of for example out of country arbitration and advanced 
payments specific consideration of this risk is a feature of all new business  
risk reviews
breach of legal 
or regulatory 
code
we recognise the potential financial and 
reputational risk that could result from  
a breach of local or international laws 
particularly in respect of behaviour  
relating to bribery and corruption
as noted in the corporate governance report on pages 69 to 75 we have 
wellestablished policies and procedures to address these risks including  
a recently revised code of business conduct which all employees are required  
to confirm that they have read
management is increasingly adopting a riskbased approach to due diligence  
and risk assessment and is increasing the level of due diligence undertaken  
in respect of new contracts in potentially high risk countries including 
commissioning independent investigation where this is deemed appropriate  
we have also refreshed and reinforced our policy on the use of agents
country risk description mitigation
political risk we are exposed to potential regime 
change and civil unrest that could affect 
our operations
we monitor carefully the changing landscape of political risk particularly for 
countries that are regarded as high political risk environments this is also 
reviewed regularly by the board and the board risk committee
for high risk countries our management will also seek to limit political risk 
exposure in individual contracts as much as possible when agreeing contract 
terms and conditions with our customers
project risk description mitigation
contract 
performance 
our financial performance could be 
materially affected by the performance  
of a relatively small number of large 
contracts particularly those which  
are lumpsum furthermore our 
operational performance is important  
in maintaining our reputation for 
successful project delivery 
we have a strong track record of successful project execution which reflects our 
rigorous approach to risk identification and mitigation from tender through to 
project completion during the year we established new assurance frameworks 
for technical risk reviews the progress made on key projects is formally reported 
to the board and senior management on a regular basis with regard to financial 
performance we do not recognise profits in the early stages of lumpsum 
contracts and we maintain contingencies to cover unforeseen cost increases
counterparty particularly given the downturn  
in economic conditions there  
is a risk of commercial counterparties 
defaulting on payment terms or financial 
counterparties defaulting on deposits that 
we hold with them
in engineering  construction we typically receive advance payments on 
contracts which generally have positive cash flow profiles over the duration of  
the contract this gives us added protection in the unlikely event that a customer 
seeks to cancel or dispute the terms of a contract in offshore engineering  
operations duty holder contracts are generally neutrallyfunded our services 
are often critical to ensure that customers continue to produce oil  gas and 
consequently customers are likely to honour contractual terms in energy 
developments remuneration is from oil  gas sales to a range of customers 
including national oil companies who are generally well funded nonetheless 
the group continues to regularly monitor its receivable balances and take 
appropriate action where necessary
with respect to counterparty risk arising from other financial assets we  
regularly monitor our exposure and ensure that our financial assets are spread 
across a large number of creditworthy financial institutions our new ‘sovereign 
and financial market risk’ policy has established limits on counterparty  
cash exposure
further analysis of credit risk and other financial risks associated with or managed 
through the use of financial instruments such as interest rate and liquidity risk 
are disclosed in note 31 to the financial statements
cost inflation unexpected inflation in costs  
could adversely impact the financial 
performance of our contracts
while the majority of the costs of our offshore engineering  operations and 
engineering training services and production solutions contracts are reimbursed 
by customers either on an actual cost basis or through a periodically revised 
schedule of rates our largest exposure to cost inflation is in the provision of 
lumpsum engineering  construction services our exposure to increases in 
capital expenditure costs associated with energy developments’ projects is 
managed in a similar manner to lumpsum engineering  construction projects
our costs are managed before and after bid submission as follows
■
  conditional on the award of a major contract we will typically negotiate 
agreements to procure equipment andor arrangements with key 
subcontractors on backtoback terms where possible
■
  expectations of wage inflation are factored into project costings for bid 
submissions and budgets
■
   the group maintains contingencies to cover unforeseen cost increases
health safety 
and 
environmental 
performance
a serious health safety or environmental 
incident on any of our projects has the 
potential to cause significant commercial 
and reputational damage
our strong culture of health safety and environmental hse awareness is central 
to our operational and business activities and is vital to our system of business 
management and integral to delivery of quality and business excellence 
recorded incident data demonstrates our ongoing success in managing this risk 
see pages 54 to 57 for details particularly as we enter new geographical 
markets sometimes with new customers and partners and assume responsibility 
for new infrastructure it is imperative that our focus on hse is maintained our 
financial exposure to a significant hse incident is generally mitigated through our 
commercial arrangements and insurance programme although an incident may 
have a financial impact on our performancebased income we plan to appoint  
a dedicated environmental manager during 2010
the list above does not purport to be exhaustive there may be other risks and uncertainties not presently known to us or that we 
currently deem to be immaterial that could affect the performance of the business
enterprise risk management and key risks 
continued 38
petrofac annual report 
and accounts 2009
39
petrofac annual report 
and accounts 2009
business review
operating review
operational expenditures remain robust  
though increased tendering activity
approximately 25 of our revenue in 2009 was 
generated by our businesses which rely upon our 
customers’ operational expenditures namely  
offshore engineering  operations training services 
and production solutions where activities are largely 
focused in the ukcs and the uae as expected 
operating expenditures largely remained robust during 
2009 as our customers continued to operate and 
maintain their facilities we did however see many  
of our customers defer discretionary expenditure 
particularly in our consultancy businesses and in  
some areas of training services though we are seeing 
an increase in opportunities for these businesses and 
expect them to return to growth during 2010
over the long term we expect to see many 
opportunities for training services as the industry  
will require to recruit and train many new engineers  
to replace those set to retire in the next few years we 
are looking at building upon our strategic relationships 
with key noc and ioc customers to assist them with  
this challenge 
during 2009 we have seen an increased focus on cost 
control from our customers and as expected many 
customers have or are considering tendering contracts 
rather than renewing or extending them while this 
represents both a threat to existing service contracts 
and an opportunity to secure new business we have 
been a net beneficiary of this activity securing two 
significant contracts in our offshore engineering  
operations business where we were not the incumbent 
see page 44 for details
we expect to see more tendering activity throughout 
2010 and see this as an opportunity to grow further 
our operations businesses that are dependent upon 
operational expenditures
1 per the iea’s oil market report 15 january 2010
2 this is the iea’s reference scenario per the world energy 
outlook 2009 the reference scenario describes ‘what would 
happen if among other things governments were to take no 
new initiatives bearing on the energy sector beyond those 
already adopted by mid2009’
 3 the iea world energy outlook 2009 estimates that less than 
onethird of global gas production in 2030 will be met by 
existing production goldman sachs ‘280 projects to change 
the world’ 15 january 2010 forecasts that decline rates are 
such that opec will be at full utilisation from 201112 and 
nonopec supply has been in decline since 2004 
4 iea world energy outlook 2009
5 ‘global ep spending analysis’ jp morgan cazenove 
24 february 2010
6 ‘280 projects to change the world’ goldman sachs 
15 january 2010
longterm demand expected to remain strong
despite the global economic downturn there has been 
little change in expectations for longterm growth in 
global demand for oil  gas
while global demand for oil may have fallen by around 
15 in 2009 compared to 2008
1
 the international 
energy agency’s iea reference case sees global 
demand for oil increase by approximately 24 from 
current levels of around 85 million barrels per day bpd 
to around 105 million bpd by 2030
2
 driven primarily by 
an increase in demand from china india and the 
middle east global demand for gas is expected to 
increase by approximately 43
1
 from around 48 million 
bpd of oil equivalent to 69 million bpd of oil equivalent 
over the same period with an increase in demand 
expected in most regions particularly in the middle east
significant investment in newbuild production and 
transportation infrastructure is required to meet the 
expected growth in demand in addition to newbuild 
capacity a large proportion of investment is required  
to replace existing production facilities
3
 overall the iea 
estimates that us11 trillion is required to be invested  
in oil  gas infrastructure by 2030 approximately us5 
trillion in excess of us200 billion per annum of this 
expenditure is expected to be in our key engineering  
 construction markets of the cis middle east and 
africa our record order intake of us63 billion in 
engineering  construction in 2009 represents a 
relatively small market share of a very large and 
growing market consequently we expect demand  
for the group’s engineering  construction services  
to remain strong over the long term
in 2009 even with an estimated 19 reduction in 
capital expenditure compared to the prior year
4
 the 
market for our services remained robust the majority 
of project postponements and cancellations were in 
highcost production areas such as canadian oil 
sands or deepwater developments which are not focus 
areas for the group our core markets for engineering 
 construction are in areas where development and 
production costs are generally lower than average 
such as onshore developments in the middle east and 
africa and many of our customers are wellfinanced 
nocs which are continuing to invest through  
the downturn
capital expenditure is expected to increase by around 
7 in 2010
5
 and more projects are expected to be 
sanctioned this year than in any year since 2006
6
 this 
is likely to result in an increase in conceptual studies 
and feed studies many of which were deferred in 
2009 we have already started to see an improved 
pipeline of bidding opportunities for our engineering 
services business which is focused on such early
cycle opportunities 
operating environment 40
petrofac annual report 
and accounts 2009
41
petrofac annual report 
and accounts 2009
business review
operating review
conclusion
despite an uncertain economic environment in the 
early part of the year we had a very successful year  
in 2009 securing new contract awards both in 
engineering  construction and offshore engineering 
 operations our new awards resulted in the group 
increasing its backlog to us81 billion 2008 us40 
billion which provides good visibility of revenues 
through to 2011 and beyond
notwithstanding that we still face significant 
competition the improvement in general economic 
conditions including the oil price returning to around 
2007 levels
1
 and indications that customers are 
increasing their capital expenditure programmes  
gives us confidence in the mediumterm outlook 
longerterm the key drivers determining capital  
and operational expenditures and our geographic 
focus should ensure that our longterm prospects  
remain strong
1 the average price for brent in 2007 was us72 per barrel
opportunities for energy developments
we saw more upstream opportunities in the early part 
of 2009 for energy developments as a number of our 
customers particularly smaller independent oil 
companies faced more challenging access to debt 
and equity markets and a lower oilprice environment 
however we remained focused on our strategy of only 
investing in development opportunities with limited 
subsurface risk and maintained our strict investment 
criteria in relation to assessing projects on the basis of 
returns based on conservative oil price assumptions 
consequently we did not complete any new upstream 
investments during the year
we did however complete our first investment in 
energy infrastructure with the acquisition of the fpf1 
floating production facility see page 49 and we see 
further good opportunities in this market with our 
strong balance sheet we remain well positioned to 
invest in upstream and energy infrastructure 
opportunities and we continue to review a number  
of opportunities
on 1 january 2009 the group reorganised its operations into seven business units reporting under four segments
business unit     reporting segment
engineering  construction   
  engineering  construction
engineering  construction ventures  
offshore engineering  operations    offshore engineering  operations
engineering services  
training services     engineering training services and production solutions  
production solutions  
energy developments     energy developments
we present below an update on each of the group’s reporting segments
   revenue operating profit
1
   net profit
2
   ebitda
us millions  2009 2008 2009 2008 2009 2008 2009 2008
engineering  construction  25090 19935 3216 2412 2651 2063 3465 2524
offshore engineering  
 operations  6267 7766 178 232 128 164 197 247
engineering training services  
and production solutions  3497 5104 345 483 324 331 426 619
energy developments  2487 1534 774 517 462 219 1609 891
corporate consolidation  
and elimination  787 1044 101 88 29 127 107 91
group  36554 33295 4412 3556 3536 2650 5590 4190
  revenue growth operating margin   net margin  ebitda margin
growthmargin analysis   2009 2008 2009 2008 2009 2008 2009 2008
engineering  construction  259 704 128 121 106 104 138 127
offshore engineering  
 operations  193 03 28 30 20 21 31 32
engineering training services  
and production solutions  315 134 99 95 93 73 122 121
energy developments  621 155 311 337 186 143 647 581
group  98 364 121 107 97 80 153 126
1 profit from operations before tax and finance costs
2 profit for the year attributable to petrofac limited shareholders
operating environment
continued
review of operations 42
petrofac annual report 
and accounts 2009
43
petrofac annual report 
and accounts 2009
business review
operating review
our principal contract awards during the year were
asab field development abu dhabi
■
 awarded in january 2009 the asab field 
development is a 44month us23 billion lump
sum epc project with abu dhabi company for 
onshore oil operations adco to upgrade 
facilities at the onshore asab oil field in abu dhabi
karan utilities and cogeneration package  
saudi arabia
■
 awarded in february 2009 the karan utilities and 
cogeneration package is a 34month project with 
saudi aramco to build utilities and cogeneration 
facilities at the khursaniyah gas plant in saudi 
arabia the capacity of the plant is being extended 
to accommodate approximately 18 billion cubic 
feet of high pressure sour gas from the offshore 
karan field
el merk central processing facility algeria
■
 awarded in march 2009 el merk is a 44month 
us22 billion epc project for a consortium led by 
sonatrach and anadarko we will design and build 
the el merk central processing facility in the berkine 
basin which will have a design capacity of 
approximately 100000 barrels of oil per day 
29000 barrels of condensate per day 31000 
barrels of liquid petroleum gas lpg per day 
together with a natural gas liquids ngl train with a 
nominal capacity of 600 million standard cubic feet 
of gas per day
kauther gas compression oman
■
 awarded in late june 2009 the kauther gas 
compression contract is a us04 billion epc 
project for a gas compression system and 
associated facilities at the kauther gas plant the 
contract scope also includes commissioning and 
six months of initial operations the project follows 
on from the successful completion of the kauther 
gas plant in 2007 which petrofac built on an epc 
basis for pdo oman in early 2008 petrofac was 
asked to carry out the front end engineering and 
design for a gas depletioncompression project 
and then invited to submit a commercial proposal 
for the epc on a negotiated basis
fourth ngl train at integrated gas development  
abu dhabi
■
 in july 2009 we were awarded a contract through 
our 50 owned joint venture petrofac emirates 
and in partnership with gs engineering  
construction with gasco worth approximately 
us21 billion with a value to petrofac emirates  
of around us1 billion the 48month lumpsum 
contract with gasco is for the construction of the 
fourth natural gas liquids ngl train at the ruwais 
complex in abu dhabi this is the first project to be 
awarded to petrofac emirates our joint venture with 
mubadala petroleum services llc which was 
established in late 2008
engineering  construction
the engineering  construction reporting 
segment includes the group’s sharjahbased 
engineering  construction business unit and 
engineering  construction ventures which has 
been established to replicate the success of the 
sharjah business but in new markets such as 
abu dhabi and saudi arabia our core markets for 
this business remain the middle east north africa 
and the commonwealth of independent states 
cis particularly the caspian region
our strong partnerships proven execution track record 
and longestablished presence in the middle east and 
north african markets has helped us achieve a record 
order intake during the year of us63 billion which 
also includes a us100 million feed study for 
turkmengaz where the contract contemplates moving 
into a second phase multibillion dollar epc project 
during 2010 initial progress on our new awards has 
been in line with our expectations and we have 
delivered good operational performance across our 
broader portfolio of projects
■
 in syria we have made good progress on the ebla 
gas plant for petrocanada with first gas exports 
expected in the next few weeks and remain on 
schedule to complete the jihar gas plant for the 
hayan petroleum company a joint venture 
between the stateowned syrian petroleum 
company and ina industrija nafte ddnaftaplin  
of croatia early next year
■
 in egypt and tunisia we completed and 
commissioned the salam and hasdrubal gas plants 
for khalda petroleum a joint venture between 
apache and the stateowned egyptian general 
petroleum corporation and bg tunisia 
respectively
■
 we made significant progress on the harweel 
cluster development project for petroleum 
development oman pdo which is scheduled for 
completion around the middle of this year
■
 we made substantial progress on the in salah gas 
compression project in algeria for sonatrach bp 
and statoil where the three compression stations 
are due for completion later this year
■
 in kuwait we completed the performance test for 
the last of the gathering centres in the facilities 
upgrade contract and all stations are now 
operational and have been handed over to kuwait 
oil company and we have commenced 
construction on the mina alhmadi refinery 40” 
pipeline project which is due for completion later 
this year
review of operations 
continued
revenue 
us millions 
07 08 09
1170
1994
2509
net profit 
us millions 
07 08 09
1225
2063
2651
south yoloten gas field development turkmenistan
■
 we were awarded a contract in late december 
2009 by turkmengaz turkmenistan’s staterun  
gas producer to undertake a feed study and initial 
planning and setup studies for a 10 billion cubic 
metres per annum bcma gas processing facility 
along with the infrastructure and pipelines for the 
entire 20 bcma development a second 10 bcma 
gas processing facility will be built by another 
contractor after satisfactory conclusion of the first 
phase worth us100 million the contract 
contemplates moving into a second phase which 
will include the engineering procurement and 
commissioning work the second phase will be  
on a lumpsum basis with a value not to exceed 
us4 billion
results
engineering  construction achieved strong revenue 
growth in the year due to high levels of activity 
principally on our projects in hand at the beginning of 
the year revenue increased by 259 to us25090 
million 2008 us19935 million the main 
contributors to revenue were the ebla and jihar gas 
plants in syria the harweel project in oman the  
in salah gas compression project in algeria and  
the asab project in abu dhabi
net profit increased by 285 to us2651 million 
2008 us2063 million representing a net margin  
of 106 2008 104 the growth in net margin is 
due to continued strong operational performance 
augmented by the recovery of prior year bid costs from 
a bidding partner the firsttime profit recognition on a 
project awarded in 2008 and a prior year adjustment in 
relation to the applicability of a lower tax rate in relation 
to our projects in oman see note 6 to the financial 
statements partially offset by the dilutive effect of the 
recognition of revenue on some new contracts where 
we are not yet recognising profit as the projects are in 
their early stages 
over the year engineering  construction grew its 
headcount from 3400 to 4200 in addition our 
engineering offices in mumbai and chennai are 
reported within our engineering training services  
and production solutions segment but principally 
support our engineering  construction activities  
at 31 december 2009 we had approximately  
1300 employees in our indian offices 2008 1000
at 31 december the engineering  construction 
backlog stood at us62 billion 2008 us24 billion 
reflecting the high level of order intake during the year 
net profit margin 
 
07 08 09
105
104
106 44
petrofac annual report 
and accounts 2009
45
petrofac annual report 
and accounts 2009
business review
operating review
acquisitions
in early january 2010 we completed the acquisition of 
scotvalve services limited scotvalve a mechanical 
services business for an initial consideration of £3 
million a further consideration of up to £2 million will 
be payable in cash andor shares over three years 
subject to achieving certain agreed performance 
targets scotvalve which was founded in 1985 has 
around 40 employees located at a mechanical 
workshop in aberdeen from which the company 
provides the servicing and repair of oilfield pressure 
control equipment in addition scotvalve has the 
capability to provide its services to the oil  gas sectors 
in the middle east and north africa building upon our 
existing mechanical workshop facilities in the united 
arab emirates and saudi arabia 
results
largely as a consequence of the strength of the us 
dollar against sterling reported revenue for the year 
decreased by 193 to us6267 million 2008 
us7766 million and revenue excluding ‘pass
through’ revenue
1
 decreased by 214 to us4364 
million 2008 us5554 million approximately 90  
of offshore engineering  operations’ revenue is 
generated in the ukcs and those revenues are 
generally denominated in sterling the us dollar was 
stronger against sterling in 2009 compared to 2008 
see the financial review on page 50 for a summary of 
the exchange rates thereby having a significant impact 
on the us dollar value of reported revenues for the 
offshore engineering  operations reporting segment 
on a constant currency basis revenue excluding 
passthrough revenue decreased by approximately 7
net profit was lower at us128 million 2008 us164 
million again reflecting the strengthening of the us 
dollar against sterling as well as the more challenging 
trading environment on a constant currency basis net 
profit was approximately 5 lower net margin on 
revenue excluding passthrough revenue was only 
marginally lower than the prior year at 29 2008 30
headcount was broadly unchanged at the end of 2009 
at 4100 2008 4200
backlog for offshore engineering  operations 
increased to us16 billion at 31 december 2009 
2008 us11 billion in part due to exchange rate 
movements on a constant currency basis at 31 
december 2008 backlog was approximately us13 
billion but principally due to new contract awards  
and extensions
offshore engineering  operations
through offshore engineering  operations we 
provide operations maintenance and brownfield 
engineering services predominantly in the uk 
continental shelf ukcs and principally on a 
reimbursable basis but often with incentive 
income linked to the successful delivery of 
performance targets many of our operations 
contracts are longterm typically three to five 
years and in the case of the provision of duty 
holder services are generally openended
we have seen an increase in tendering activity during 
the year both in the ukcs and international markets 
whereas in prior years contracts were often ‘rolled
over’ with the existing supplier under similar terms and 
conditions customers will now often retender contracts 
on their expiry as they seek improved terms we have 
been a beneficiary of the increase in tendering activity 
winning two key awards
apache engineering and construction uk
■
 in july 2009 we were pleased to announce the 
award of an engineering and construction contract 
with apache for the forties field in the north sea 
this represents the first time that we have secured 
a major brownfield engineering  construction 
contract where we have not been the duty holder 
on the facilities the contract is expected to 
generate revenue of approximately £25 million per 
annum and run for at least three years
bp maintenance uk
■
 in november 2009 we secured a fiveyear contract 
to deliver integrated maintenance management 
support services including the planning co
ordination and execution of maintenance activities 
for all of bp’s uk offshore assets and the onshore 
dimlington plant this is the first time that bp has 
separated out maintenance services in this way 
the contract is expected to generate revenue of 
approximately £20 million per annum
in addition to securing these new awards we have 
been successful in extending a number of our 
operations and maintenance contracts with oil majors 
and independents including an extension to our duty 
holder contract with venture production to may 2011
review of operations
continued
revenue 
us millions
07 08 09
7746
7766
6267
net profit 
us millions 
07 08 09
192
164
128
1 passthrough revenue refers to the revenue recognised from low 
or zero margin thirdparty procurement services provided to 
customers
 on revenue excluding 
passthrough revenue
net profit margin 
 
07 08 09
32
30
29 46
petrofac annual report 
and accounts 2009
47
petrofac annual report 
and accounts 2009
business review
operating review
results
reported revenue for the year decreased by 315 to 
us3497 million 2008 us5104 million and revenue 
excluding ‘passthrough’ revenue decreased by 320 
to us3097 million 2008 us4556 million while a 
proportion of the reporting segment’s revenues are 
nonus dollar denominated and were therefore 
impacted by the strengthening of the us dollar the 
decrease is primarily due to the decline in activity levels 
for engineering services and training services
despite the reduction in activity in engineering services 
and training services and the strengthening of the us 
dollar net profit was broadly in line with the prior year 
at us324 million 2008 us331 million net margin 
on revenue excluding passthrough revenue increased 
to 104 2008 73 reflecting an increase in net 
margins in engineering services due to an increased 
contribution from the lowercost mumbai and chennai 
engineering offices and in production solutions due  
to good operational performance on the dubai 
petroleum contract
at 31 december 2009 headcount which includes 
longterm contractors was broadly unchanged at 
2900 2008 3000 although this includes an increase 
in our engineering offices in mumbai and chennai of 
around 300 employees
1
 offset by a reduction in 
selfemployed contractors at our woking engineering 
office predominantly due to lower activity levels
backlog for the engineering training services and 
production solutions reporting segment was us03 
billion at year end 2008 us05 billion due principally 
to expected lower activity in production solutions’ well 
operations management business
engineering training services and production 
solutions
three of our business units – engineering 
services training services and production 
solutions – are reported together as ‘engineering 
training services and production solutions’
engineering services predominantly provides early 
stage engineering studies such as conceptual studies 
or feed studies with the rapid fall in oil prices in the 
second half of 2008 and a more uncertain economic 
outlook a significant number of customers postponed 
such studies or rephased work resulting in a significant 
reduction in activity during 2009 while staff numbers 
in our woking engineering office have seen a modest 
reduction we have seen a substantial reduction in the 
number of selfemployed contractors which has 
reduced from more than 250 to around 50 as existing 
projects have reached completion moving into 2010 
we have been participating in more tendering activity 
which should signal a modest improvement in activity 
levels we have substantially grown our mumbai and 
chennai engineering offices which predominantly 
support our engineering  construction activities 
in training services we have seen a variation in activity 
levels in different regions though in general there has 
been a reduction in technical and other training 
activities as customers have sought to defer 
discretionary expenditure we have refocused our 
business development activities to concentrate on 
highvalue opportunities and we are seeing an 
improvement in the pipeline of opportunities
activity levels for production solutions of which the 
group’s service operator role for dubai petroleum is  
a significant part have remained robust some of our 
consultancy and technology businesses have 
experienced a reduction in activity during the year as 
customers have deferred discretionary expenditure 
though there have been indications of improvement  
as the year has progressed on our service operator 
contract with dubai petroleum we delivered a 
particularly good operational performance exceeding 
the year’s production targets agreed with our customer
review of operations
continued
1 engineering offices in mumbai and chennai are managed by 
engineering services and headcount statistics are reported 
within the engineering training services and production 
solutions reporting segment however these offices principally 
provide engineering services to support engineering  
construction at 31 december 2009 the mumbai and chennai 
offices had a total of approximately 1300 employees
revenue 
us millions 
07 08 09
4502
5104
3497
net profit 
us millions
07 08 09
243
331
324
 on revenue excluding 
passthrough revenue
2
net profit margin 
 
07 08 09
60
73
104 48
petrofac annual report 
and accounts 2009
49
petrofac annual report 
and accounts 2009
business review
operating review
 
fpf1 floating production facility undeployed
during july 2009 energy developments acquired  
a floating production facility ahoo1 subsequently 
renamed the fpf1 from hess and endeavour energy 
uk the fpf1 had been deployed on the hess 
operated ivanhoe and rob roy fields in the uk north 
sea since 1989 with the renee and rubie fields 
produced over it since 1999 the vessel weighing 
approximately 17000 tonnes has a processing 
capacity of 70000 bpd of oil and 425 mmscfd of  
gas with water injection capability of 72000 bpd and 
treatment of 75000 bpd the vessel will remain in  
dry dock at the mcnulty offshore facility in newcastle
upontyne while options for its upgrade modification 
and redeployment on fields including those where 
energy developments has or can take an interest  
are considered
permit ntp68 australia
during the second half of the year energy developments 
signed an agreement with meo australia limited  
to exit its interest in permit ntp68 in australia no 
consideration was paid in relation to the transaction 
and the carrying value of the asset us48 million  
was writtenoff during the second half of 2009
results
despite considerably lower oil prices in 2009 
compared to the prior year energy developments’ 
revenue increased to us2487 million 2008 
us1534 million due to commencement of exports 
from the west don and don southwest fields during 
the year and a full year’s contribution from the chergui 
gas plant which commenced exports in august 2008
net profit for the year was higher at us462 million 
2008 us219 million adjusting for current and prior 
year nonrecurring items net profit increased to 
us499 million 2008 us385 million reflecting 
commencement of exports from the west don and 
don southwest fields during the year and a full year’s 
contribution from the chergui gas plant partially offset 
by lower oil  gas prices current and prior year 
nonrecurring adjustments were as follows
current and prior year
■
 an impairment provision of us37 million us48 
million less a tax credit of us11 million against 
energy developments’ investment in permit nt
p68 2008 us35 million us50 million less a 
tax credit of us15 million
prior year only
■
 a us82 million charge in relation to a currency 
hedge for capital expenditure on the don area 
development which while being an economic 
hedge was deemed an ineffective cash flow  
hedge under international accounting standard 39 
‘financial instruments recognition and 
measurement’
■
 costs of us49 million us98 million less a tax 
credit of us49 million in relation to the 
unsuccessful prospero well in the greater don area
an analysis of energy developments’ oil  gas reserve 
entitlements is presented on page 143
as operator with a 30 interest energy developments 
along with its partners petronas petrovietnam and 
kuwait foreign petroleum exploration company 
kufpec drilled a number of successful nearfield 
appraisal wells and is assessing a second phase of 
development of block pm304 a feed study for the 
second phase has been commissioned and a field 
development programme to develop the nearfield 
opportunities is expected to be submitted for approval 
during the second half of 2010
ohanet algeria
energy developments in a joint venture with bhp 
billiton as joint venture operator japan ohanet oil  
gas co and woodside energy algeria has invested 
in excess of us100 million for a 10 share in a risk 
service contract rsc with sonatrach algeria’s 
national oil company through engineering  
construction we undertook the epc contract for the 
gas processing facilities in joint venture with abb 
lummus and were responsible for part of the onsite 
commissioning works first gas for export began 
flowing in late 2003 
the plant continued to perform well in 2009 overall 
production was somewhat lower than in 2008 at an 
average of approximately 123100 bpd of oil equivalent 
2008 147500 bpd of oil equivalent due in part to a 
planned shutdown in late 2009 on average we earned 
our share of the monthly liquids production by the 15th 
day of the month 2008 7th reflecting lower average 
oil  gas prices
1
 and to a lesser extent lower average 
production rates it is expected that we will earn our 
defined return by november 2011 at which point the 
rsc contract will expire
chergui field tunisia
in tunisia the chergui gas plant in which energy 
developments has a 45 operating interest produced 
an average of 265 million standard cubic feet per day 
mmscfd of gas during the year 2008 from august to 
december 243 mmscfd which is in excess of the 
original nameplate design capacity of 20 mmscfd 
following commissioning of a refrigeration unit and 
debottlenecking of the plant engineering and 
procurement activities have commenced in relation to 
the tiein of a third well which should see an increase 
in the capacity of the plant
kpc refinery kyrgyzstan
energy developments owns a 50 share in the kyrgyz 
petroleum company kpc which is engaged in the 
refining of crude oil and the marketing of oil products 
from the kpc refinery offshore engineering  
operations operates the refinery on behalf of the joint 
venture partners on a reimbursable basis during 2009 
the 10000 bpd capacity refinery performed in line with 
expectations producing an average of approximately 
2000 bpd 2008 2800 bpd of principally gasoline 
diesel and fuel oil the decrease in throughput was due 
to lower demand
energy developments
where we can leverage our service capabilities  
to mitigate risks and reduce costs energy 
developments selectively coinvests alongside  
the group’s partners in oil  gas upstream 
developments and energy infrastructure to  
create additional value for the group
during the year good progress was made on energy 
developments’ existing portfolio of operational assets 
don southwest west don chergui cendor ohanet 
and the kyrgyz petroleum company refinery
don southwest and west don ukcs
the highlight of the first half was the commencement  
of production from both the don southwest and west 
don fields in the uk north sea this represents a very 
significant milestone in the development and was 
achieved in less than a year from field development 
programme approval the first of two planned 
production wells on west don came onstream in late 
april 2009 followed by two production wells on don 
southwest in late june 2009 although one of the wells 
was sidetracked in early 2010 after the original well 
failed to flow significant amounts of oil the sidetracked 
well commenced production in early march 2010 
which facilitated tiein and commencement of the two 
don southwest water injection wells the second 
production well on west don was brought onstream in 
august 2009 and the water injection well was brought 
onstream in september 2009 
total production for 2009 for the don fields was 31 
million barrels with our share totalling 12 million 
barrels as originally planned export switched to a 
permanent pipeline export route over lundin’s thistle 
platform in early march 2010 the new system is 
expected to reduce interruption and improve 
production stability and export operations 
during the drilling of the don southwest water injection 
wells two costeffective pilot holes were drilled into 
adjacent reservoir structures both of which 
encountered oil one of the pilot holes was drilled into 
an area known as the ‘horst’ which has excellent 
reservoir quality with high oil saturations the other 
pilot hole was drilled into area h which revealed a  
60feet oil column in the brent formation
at 31 december 2009 energy developments’ estimate 
of proven and probable reserves net entitlement basis 
for the don southwest and west don fields is 195 
million barrels 2008 222 million barrels including the 
area 5 horst the net downward revision is due to 
production experience to date on both fields 
cendor pm304 malaysia
the cendor field in block pm304 offshore peninsular 
malaysia produced an average of 14400 bpd of  
oil over the year 2008 14700 bpd and achieved 
production uptime of over 99 towards the end of 
2009 offshore engineering  operations installed  
a caltec wellcom multiphase boosting unit on  
one of the wells which has subsequently seen a 
marked increase in output further units are now  
under consideration
review of operations
continued
1 for example brent a benchmark crude oil averaged us62 
per barrel for 2009 2008 us97 per barrel
ebitda 
us millions 
07 08 09
828
891
1609
net profit 
us millions 
07 08 09
334
219
462
revenue 
us millions
07 08 09
1328
1534
2487 50
petrofac annual report 
and accounts 2009
51
petrofac annual report 
and accounts 2009
business review
earnings per share
fully diluted earnings per share increased to 10319 
cents per share 2008 7711 cents an increase of 
338 in line with the group’s increase in profit for  
the year attributable to petrofac limited shareholders
operating cash flow and liquidity
the net cash generated from operations was 
us12763 million 2008 as restated us5866 
million representing 2283 of ebitda 2008 as 
restated 1400 the increase in net cash inflows  
was due principally to advances received from 
customers and billings in excess of cost and estimated 
earnings in relation to engineering  construction 
contracts secured during 2009
at 31 december 2009 the group’s net cash had 
increased to us13001 million 2008 us5518 
million as a result of
■
 operating profits generated of us576 million
■
 net working capital inflows of us700 million 
including us439 million of advance payments 
received in relation to engineering  construction 
awards less us81 million of cash outflows in 
relation to the growth of work in progress on other 
engineering  construction projects
■
 taxes paid of over us87 million
■
 investing activities of us343 million including 
us221 million in relation to capital expenditure  
on energy developments’ portfolio of assets 
predominantly on the don fields us29 million on 
cendor pm304 nearfield development and us26 
million on the acquisition of the fpf1 floating 
production facility 
■
 financing activities in particular payment of the 
2008 final dividend and 2009 interim dividend 
totalling approximately us99 million
the group decreased its levels of interestbearing loans and borrowings to us1173 million 2008 us1426 
million following repayment of an overdraft facility previously utilised by the offshore engineering  operations 
and training services business units as a result of lower interestbearing loans and borrowings and higher cash 
and shortterm deposits the group’s gross gearing ratio fell to 132 2008 255
interest 
net finance income for the year was lower at us64 
million 2008 us109 million excluding finance 
charges in relation to hedges deemed ineffective under 
ias 39 as the effect of higher average net cash 
balances during 2009 was more than offset by lower 
interest rates 
taxation
an analysis of the income tax charge is set out in note 
6 to the financial statements the income tax charge  
as a percentage of profit before tax in 2009 was 
substantially lower at 189 2008 261 the 
decrease in the effective tax rate compared to the  
prior year is due principally to 
■
 a lower than average tax charge in energy 
developments which fully utilised the tax 
allowances available to it during 2009  
including claiming a ringfenced expenditure 
supplement available to operators within the  
uk continental shelf
■
 a shift in profitability within engineering training 
services and production solutions from the uk  
to overseas including increased profitability in 
production solutions where a zero tax rate applies 
to the business unit’s largest contract with dubai 
petroleum and
■
 confirmation during the year of the applicability of  
a lower tax rate in relation to the group’s projects 
principally in engineering  construction in oman
net profit
net profit for the year increased to us3630 million 
2008 us2650 million
profit for the year attributable to petrofac limited 
shareholders increased to us3536 million an 
increase of 334 driven primarily by strong growth  
in engineering  construction and strong growth and 
improvement in net margin in energy developments 
following commencement of production from the don 
fields and a full year’s contribution from the chergui 
gas plant the net margin for the group increased to 
97 2008 80 broadly in line with the increase  
in the group’s operating margin
ebitda
ebitda increased by 334 to us5590 million 2008 
us4190 million representing an ebitda margin of 
153 2008 126 the increase in margin was due 
to growth in the higher margin energy developments 
reporting segment energy developments’ share of 
group ebitda excluding the effect of corporate 
consolidation and elimination adjustments increased to 
282 2008 208 while engineering  construction 
was broadly consistent with the prior year at 608 
2008 590 and offshore engineering  operations 
and engineering training services and production 
solutions were lower at 35 2008 58 and 75 
2008 144 respectively following a decrease in 
reported ebitda
backlog
the group’s combined backlog at the end of 2009  
was approximately us81 billion 2008 us40 billion 
reflecting our high level of order intake during year 
particularly in the engineering  construction  
reporting segment
exchange rates
our reporting currency is us dollars the us dollar  
was considerably stronger against sterling in 2009 and 
there was therefore a significant impact on the reported 
results of our uk trading activities principally within 
offshore engineering  operations the impact on the 
offshore engineering  operations reporting segment 
is discussed further on page 44 the table below  
sets out the average and yearend exchange rates  
for the us dollar and sterling for the years ended  
31 december 2009 and 2008 as used by the group  
for financial reporting purposes 
revenue
group revenue increased by 98 to us36554 
million 2008 us33295 million due to strong  
growth in engineering  construction and energy 
developments offset by a decrease in offshore 
engineering  operations and engineering training 
services and production solutions strong growth  
in engineering  construction which accounted for 
approximately twothirds of the group’s revenue was 
as a result of high levels of activity on ongoing lump
sum epc contracts including new projects awarded 
during the year the increase in revenues in energy 
developments was as a result of commencement  
of exports from the don fields and a full year’s 
contribution from the chergui gas plant which 
commenced exports in august 2008 the decrease  
in reported revenues in offshore engineering  
operations was primarily as a result of the 
strengthening of the us dollar as the majority of 
revenues are denominated in sterling while the 
decrease in engineering training services and 
production solutions was principally as a result of  
a decrease in activity levels for engineering services 
and training services
operating profit
group operating profit increased by 241 to us4412 
million 2008 us3556 million and operating margins 
increased to 121 2008 107 reflecting the 
increased operating profit contribution from the higher 
margin energy developments reporting segment 
engineering  construction operating profit increased 
by 333 to us3216 million 2008 us2412 million 
due to strong growth in activity levels and continued 
good operational performance energy developments 
operating profit increased by 497 to us774 million 
2008 us517 million following commencement of 
production form the don fields and a full year’s 
contribution from the chergui gas plant operating 
profit in offshore engineering  operations decreased 
by 231 to us178 million 2008 us232 million 
due principally to the strengthening of the us dollar 
while engineering training services and production 
solutions decreased by 285 to us345 million 
2008 us483 million due to the decrease in activity 
levels for engineering services and training services 
partly offset by an improvement in the operating  
margin from the lowercost mumbai and chennai 
engineering offices and in production solutions  
due to good operational performance on the dubai 
petroleum contract 
financial review
financial review
financial reporting exchange rates
ussterling 2009 2008
average rate for the year 156 185
yearend rate 162 146
net cash us millions 2009 2008
cash and shortterm deposits 14174 6944
interestbearing loans and borrowings 1173 1426
net cash 13001 5518
gearing ratio us millions unless otherwise stated 2009 2008
interestbearing loans and borrowings a 1173 1426
cash and shortterm deposits b 14174 6944
net cashdebt c  b – a 13001 5518
total net assets d 8905 5588
gross gearing ratio ad 132 255
net gearing ratio cd net cash net cash  
 position position
ebitda  
us millions 
revenue 
us millions
07 08 09
2440
3330
3655
net profit 
us millions 
07 08 09
1887
2650
3536
07 08 09
3013
4190
5590
 attributable to  
petrofac limited 
shareholders 52
petrofac annual report 
and accounts 2009
 corporate social  
responsibility
corporate social responsibility
53
petrofac annual report 
and accounts 2009
shareholders’ funds
total equity at 31 december 2009 was us9068 
million 2008 us5590 million the main elements  
of the net movement were the increase in retained 
earnings for the year of us2566 million a gain on 
foreign currency translation of us151 million and  
the net change in the fair value of derivatives of 
us292 million
return on capital employed
the group’s return on capital employed for the year 
ended 31 december 2009 was 477 2008 527
dividends
the company proposes a final dividend of 2510 cents 
per share for the year ended 31 december 2009 2008 
1790 cents which if approved will be paid to 
shareholders on 21 may 2010 provided they were on 
the register on 23 april 2010 shareholders who have 
not elected before 5 march 2010 to receive dividends 
in us dollars will receive a sterling equivalent of 1669 
pence per share
forwardlooking statements
the business review pages 18 to 52 contains 
forwardlooking statements with respect to the financial 
condition results and operations of the group by their 
nature forwardlooking statements involve a number of 
risks uncertainties or assumptions that could cause 
actual results or events to differ materially from those 
expressed or implied by the forwardlooking 
statements these risks uncertainties or assumptions 
could adversely affect the outcome and financial 
effects of the plans and events described herein 
forwardlooking statements contained in the business 
review regarding past trends or activities should not 
be taken as representation that such trends or activities 
will continue in the future petrofac limited undertakes 
no obligation to update the forwardlooking statements 
contained in this review or any other forwardlooking 
statements made
the group’s total gross borrowings before associated 
debt acquisition costs at the end of 2009 were 
us1231 million 2008 us1480 million of which 
510 was denominated in us dollars 2008 459 
and 490 was denominated in sterling 2008 518 
in 2008 the balance of 23 was denominated in 
kuwaiti dinars
as detailed in note 31 to the financial statements the 
group maintained a balanced borrowing profile with 
472 of borrowings maturing within one year and 
528 maturing between one and five years 2008 
368 and 632 the borrowings repayable within 
one year include us466 million of bank overdrafts 
and revolving credit facilities representing 379 of 
total gross borrowings which are expected to be 
renewed during 2010 in the normal course of business 
2008 us453 million and 306 of total gross 
borrowings
prior to 31 december 2009 the group’s policy was to 
hedge between 60 and 80 of interest payable on 
floating rate interestbearing loans and borrowings on 
31 december 2009 a number of the group’s hedging 
instruments matured and a decision was taken to 
revise the group’s hedging policy to give the group 
flexibility to repay borrowing should it so choose as 
such none of the group’s borrowings were hedged at 
31 december 2009 2008 651 an analysis of the 
derivative instruments used by the group to hedge its 
interest rate and other exposures is contained in note 
31 to the financial statements
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 during the year was us3754 million  
2008 us2555 million the principal elements  
of capital expenditure were
■
 additions to oil  gas assets in relation to 
development expenditure on energy 
developments’ interest in the don assets  
of us2741 million
■
 energy developments’ acquisition of the fpf1 
floating production facility of us264 million
capital expenditure on intangible oil  gas assets 
during the year was us292 million 2008 us370 
million in respect of capitalised expenditure on near 
field appraisal wells in relation to energy developments’ 
interest in block pm304 offshore malaysia 
financial review
continued
corporate social  
responsibility
the success of our business is 
inextricably linked to the welfare  
of our people and the communities 
where we live and work our long
term performance is dependent  
upon their understanding goodwill 
and active support
the year saw us take an important step in growing  
our reputation as an ethical partner committed to 
upholding the highest standards of behaviour in 
january we signed up to the united nations global 
compact ungc this agreement is a voluntary 
framework for groups such as petrofac that are 
committed to aligning their businesses to ten principles 
in the areas of human rights labour the environment 
and anticorruption
the spirit of the ungc is reflected in our policies  
and code of business conduct available online at 
wwwpetrofaccomresponsibilityhtml 
we are committed to setting the highest standards  
in all matters relating to health safety security 
environment and integrity assurance hsseia and to 
be acknowledged as experts in delivering high level 
operational safety performance across our diverse 
workforces in all our operational environments
while our core values and vision are unchanged  
our policies for health  safety security environment 
quality and integrity assurance were revised in 2009  
to align with the new organisation structure and now 
provide greater detail these policies are approved at 
board level and are publicly available on our website at 
httpwwwpetrofaccomresponsibilityhtml as well as 
being widely published within the business
each petrofac business unit has a detailed 
management system through which the group policies 
are implemented these are subject to internal audit 
and also to external independent verification in 
accordance with international standards such as  
iso 9001 iso 14001 and ohsas 18001 54
petrofac annual report 
and accounts 2009
55
petrofac annual report 
and accounts 2009 corporate social responsibility
 corporate social  
responsibility
in terms of occupational safety performance our  
2009 statistics show a continued good performance  
in 2009 our employees and subcontractors completed 
67 million manhours 2008 67 million of activity
we report our performance according to the 
occupational safety and health administration rules 
and in 2009 our recordable incident frequency rate 
was 038 per 200000 manhours 2008 032 our 
lost time injury frequency rate in 2009 was 002 
2008 003 although these figures compare well  
with industry published data our target remains to 
achieve zero ltis
all incidents and accidents are investigated and actions 
are followed up using a groupwide incident reporting 
tool this tool also ensures that any serious incidents 
together with the relevant outcomes are reported 
directly to senior management during the year  
23 2008 17 major potential incidents were recorded 
‘potential’ is the key word here – the criteria for 
reporting is the potential for harm so although very  
few of these incidents actually resulted in personal 
injury or damage all were reviewed in great detail
petrofac historic safety performance
055
041
035 007
032
038
007
006
003
002
05 06 07 08 09
incident rate200000 manhours
recordable incident frequency rate
lost time injury frequency rate
a group incident review board comprising senior 
managers under the chairmanship of the chief 
operating officer meets quarterly to review any serious 
incidents in detail any lessons that can be learnt are 
then shared across the group and with the wider 
industry as appropriate
vehicle safety
accidents involving vehicles still remain one of the most 
frequent causes of fatalities in our industry 
in addition to a code of conduct for drivers and 
passengers travelling in company vehicles driving 
safely is one of our eight golden rules of safety which 
apply to all employees wherever they work in order to 
maintain focus on this important area we report driving 
statistics separately from other incidents in 2009 
vehicles travelled more than 30 million km between 
locations or on project sites that is equivalent to 
driving 700 times around the world the driving 
incident frequency rate major or serious vehicle 
incidents in 2009 was 029 incidents per million km 
driven 2008 022
while none of the recorded incidents resulted in 
significant injuries in 2009 driving continues to be a 
significant risk area for the business and will therefore 
continue to receive management attention in the 
coming year
staff health and welfare
maintaining high standards of health and welfare 
among our people is essential to the smooth operation 
of the business we have measures in place to assess 
the health and fitness of senior management in all 
business units and to provide comprehensive medical 
assessments for those at risk this particularly applies 
to employees involved in overseas and offshore 
assignments
health suites manned by medical professionals  
are available at the majority of our offices and 
operational sites where necessary occupational  
health surveillance measures are also put in place
security
our people frequently work in remote and potentially 
dangerous environments where security can often be  
a real challenge 
at petrofac we are fully committed to creating a safe 
working environment for everyone this commitment 
was demonstrated further during the year by the 
appointment of a group head of security to oversee 
travel and security plans and to advise and support all 
employees in this respect 
security matters are also included as part of the risk 
review process performed when we consider working 
on a new project or in a new country all potential 
security issues for projects and locations are assessed 
in the early stages of the planning process
healthy
safer
secure
we drove  
30 million km  
or 700 times 
around the 
world 
health suites 
are available at 
the majority of 
our offices and 
operational sites
health safety and security
we will never knowingly compromise the health and 
safety of individuals or their communities in practice 
this commitment is expressed through two separate 
strands of activity firstly we work hard to prevent 
occupational safety risks to individuals which might 
result in personal injury and secondly through a strong 
emphasis on the technical integrity of the plants we 
design build and operate we strive to minimise the risk 
of major accidents such as fire and explosion which 
can cause large numbers of fatalities and widespread 
plant damage both require constant management 
attention vigilance and leadership
67 million  
manhours 
worked in 2009 56
petrofac annual report 
and accounts 2009
57
petrofac annual report 
and accounts 2009
 corporate social  
responsibility
corporate social responsibility
environment
a high level of environmental performance is an 
important priority for the group we use a systematic 
approach to environmental management to ensure that 
we conduct operations in a way that minimises their 
environmental impact this approach is applied across 
our operations regardless of the level of regulatory or 
other requirements in the countries where we operate 
the iso 14001 international standard which is 
independently audited covers 98 of the work  
we do calculated by manhours expended
planet petrofac
launched in late 2008 planet petrofac is an internal 
campaign targeted at raising awareness of environment 
issues among our people the campaign seeks to 
address key environmental activities in the context  
of our business but it also embraces employees’ 
responsibilities and opportunities as individual citizens
we held our second groupwide monthlong 
environment initiative in november 2009 encouraging 
staff and their families to ‘be part of the solution’ a 
wide range of events and activities took place at offices 
and project locations around the world during the 
campaign a total of 1100 trees were planted in various 
locations including aberdeen kyrgyzstan and sharjah 
adding to the 1000 trees planted during the 2008 
campaign in addition our inaugural children’s art 
competition open to our employees’ families received 
around 300 entries and was a great way of taking the 
environment message to the younger generation 
emissions trading and reporting
as stated in last year’s annual report we have 
established independently verified baselines for  
co2 emissions in order that we can monitor our  
carbon footprint 
in 2009 we emitted 208100 tonnes 2008 184844 
tonnes of co2 this increase reflects increased activity 
in engineering  construction site work the first full 
year of chergui operations and the commencement of 
production from the don fields our co2 emissions are 
largely due to emissions from vehicles and construction 
activities together with fuel and energy usage at project 
and office locations and necessary gas flaring at 
production facilities the figures include our equity 
ownership activities on a net basis but do not include 
locations where we manage facilities on behalf of our 
customers petrofac carries out all the necessary 
monitoring and data collection to allow verified 
information relating to these facilities to be reported  
by our customers 
petrofac also performs monitoring for all operated assets 
as required under the osloparis ospar convention 
for the protection of the north sea this involves 
monitoring all discharges to the sea for hydrocarbons 
heavy metal and radiation contamination in addition  
to carbon dioxide emissions to atmosphere are 
monitored for sulphur dioxide oxides of nitrogen and 
volatile organic carbons all wastes leaving operated 
facilities are segregated and reported by category  
all chemicals in use in the north sea are certified for 
use under the offshore chemicals regulations the 
use and discharge of these chemicals is monitored  
and reported annually the chemicals in use are 
reviewed annually and where a more environmentally 
friendly alternative is identified a plan to substitute the 
chemical is put in place
in the uk petrofac energy development limited 
pedl partakes in the emissions trading and reporting 
scheme for operations on the don fields this is  
subject to thirdparty verification to allow carbon 
dioxide trading within the emissions trading scheme 
pedl is partaking as an operator for the first time in 
2009 as a new entrant 
details of emissions from the pedl assets and those 
owned by uk customers are publically available 
through the environmental report which is published 
on the department of energy and climate change 
website httpswwwogdeccgovuk
where petrofac operates facilities outside the uk 
statutory reporting is carried out in accordance with 
local regulations with additional internal reporting of 
relevant data which is not statutory
work is currently under way to establish the position  
of the group’s uk activities under the government’s 
carbon reduction commitment energy efficiency 
scheme which will commence implementation  
during 2010
integrity assurance
it is our responsibility to safeguard everyone associated 
with operations which are designed constructed 
operated managed or supported by petrofac
managing and operating mature assets in harsh 
conditions can present particular challenges we  
have developed a comprehensive approach to asset 
integrity which ensures appropriate focus and 
management attention every month through the asset 
integrity review board airb established in 2008 we 
review asset integrity using a range of indicators with 
operations managers from all of our operated sites 
across the world this provides a forum for peer review 
and support as well as a clear lineofsight for senior 
management and forms the basis for onward reporting 
to the board
during the year we performed detailed inspections and 
audits of the heather and thistle platforms in the north 
sea our southern north sea operations including the 
bacton terminal and the cendor mopu in malaysia 
with the findings reported to the airb these detailed 
reviews are also provided to the relevant customers as 
structured and thorough evidence of the way integrity 
is managed on their assets
industry involvement
we contribute experience and expertise to our industry 
in many ways
we are active supporters of step change the uk oil  
 gas industry safety initiative where we participate in  
the leadership team asset integrity steering group 
and the human factors working group 
our group director of hsseia is a member of the 
industry’s helicopter task force which was 
established during 2009 following the loss of 16  
lives in a north sea helicopter accident
in addition we share data on safety and integrity 
management with our peers helping to raise  
standards across our industry
emergency response
our emergency response and crisis management 
procedures are subjected to rigorous testing through 
regular exercises 
beyond our own operations we also play a wider role 
in maintaining the oil  gas industry’s capability to deal 
with onshore and offshore emergencies through our 
training services business petrofac is the leading 
provider of emergency response training and through 
the emergency response service centre ersc in 
aberdeen we provide a 24hour integrated response 
capability to a range of customers every day of  
the year
recycle
reduce
educate
replace
reduce
initiatives
–  issued reusable 
bags
–  400 reusable 
water bottles 
donated to uk 
school
–  cycle to work 
campaign
–   monitoring our 
carbon footprint
educate
initiatives
–  presentations to 
local schools
–  environmental 
beach walk
–  lunchtime 
lectures
–  environmental art 
competition
replace
initiatives
–  1100 trees 
planted
–  wildlife 
conservation 
– beach cleanup
recycle
initiatives
–  distributed 
unwanted clothing 
to charities
–  recycled products 
displayed in offices
–  collection of 
mobile phones 
glasses and 
batteries for 
recycling 58
petrofac annual report 
and accounts 2009
59
petrofac annual report 
and accounts 2009
 corporate social  
responsibility
corporate social responsibility
it is essential our employees regardless of where or 
when they join the organisation ‘experience’ petrofac 
in similar and consistent ways to ensure that our values 
and behaviours are clearly recognised and displayed 
as this global approach becomes more visible we will 
continue to value the differences that do and should 
exist to ensure our business operates effectively in the 
local markets in which they operate
our focus in 2010 will be to further develop the work 
we commenced in 2009 in the key areas of resourcing 
and graduate recruitment talent management and 
succession planning performance management and 
employee communications 
2009 review
during the period our employee headcount increased 
from 11100 at the end of 2008 to 11700 at the end  
of 2009 which has been achieved mainly through 
organic growth
supporting talent
while the overall headcount has increased we 
continue to focus on identifying and developing 
individuals within the business with the potential to  
fulfil both leadership and more technical roles this 
groupwide review of talent supports our dual strategy 
of both continuing to attract and develop individuals 
with significant potential whilst also identifying 
developing and retaining our existing talent in the 
business to meet the challenges in the years to come 
in 2010 we will continue to add to our petrofac 
leadership development programmes to ensure  
that we continue to deepen our bench strength  
and enhance our succession planning
for a number of years we have been attracting the 
brightest graduate talent to petrofac and 2009 was  
no exception with over 130 new graduates joining the 
organisation across our geographies and operations
strategy
petrofac has continued through 2009 to push forward 
in its aim of being a bestinclass employer within both 
the geographical boundaries and business sectors in 
which it operates
the reorganisation put in place at the start of 2009  
has helped enable us to continue to work across our 
business to strengthen our organisation structure 
processes systems and behaviours framework 
developing the distinctive petrofac culture is a major 
objective for our leadership and hr function and efforts 
will continue in 2010 to align these key elements to 
support the business
people are 
our most 
valuable  
asset
furthermore and also in support of young talent we 
launched the petrofac royal academy of engineering 
fellowship programme in september 2009 as part  
of our £250000 pledge up to 18 of the uk’s top  
engineering students will have the opportunity to secure 
a yearlong fellowship through a masters programme 
before embarking on their chosen career path during 
the course of the next three years the successful 
fellows will be supported by technical mentors from  
our business petrofac is also providing case study 
materials and placements within our uk operations 
one petrofac
the year also saw us further enhance the way in which 
we maintain our corporate culture a key differentiator 
for the group we have continued to implement 
initiatives to help our employees both identify with  
this culture and play a key role in it during 2009 for 
example we introduced a common induction process 
that incorporates information that every new employee 
must receive regardless of where they start with the 
company as part of the induction initiative a dvd was 
produced explaining our approach to people and 
safety as well as outlining our future business strategy 
developing our people
consistent highquality training and development is 
central to the group’s progress our training capability 
was enhanced in 2009 by the introduction of a 
comprehensive elearning system initially piloted in  
our ec business this has now been successfully 
launched in an additional seven locations worldwide 
the system will continue to be rolled out through 2010 
the new elearning system has already demonstrated 
its worth in several ways notably by building employee 
understanding of the group’s code of business 
conduct the code was distributed to all employees 
during 2009 and by the end of december 2009 more 
than 4000 employees had completed the elearning 
modules which assess knowledge and understanding 
of this important document
11 700
employees in 
petrofac
91 of 
employees fully 
support our 
values
employees who 
completed 
cobc 
elearning in 
2009
4000
91 of total respondents to petrovoices survey 2009 60
petrofac annual report 
and accounts 2009
61
petrofac annual report 
and accounts 2009
 corporate social  
responsibility
corporate social responsibility
our reputation depends upon the provision of 
competent people to work on our projects the 
majority of our workforce is now assessed against 
technical and behavioural competences and we plan to 
continue to focus on this critical activity as an example 
of this we performed a major review of engineering 
competence in our indian locations to ensure that we 
continue to provide the highquality service expected 
by our customers
employee survey
in 2009 we carried out our second independent 
groupwide employee survey known as petrovoices 
the aim is to gain insight into employee perceptions on 
a wide range of matters more than 50 of those invited 
to participate took part in the survey and overall the 
results were positive showing significant improvement 
since 2007 across all categories including work 
conditions and safety leadership and engagement 
the group’s growth and success over the last two 
years was highlighted by the findings with 91 of 
respondents saying they fully support our values the 
feedback on employee development and fundamental 
perceptions of the company was also encouraging 
measured by questions on our corporate image 
culture and values the figures have improved by  
over 8 since 2007 and we are committed to building 
on these results the agreed areas of focus for 2010  
are communications employee development and 
performance management each local business unit  
is also developing its own specific action plan within 
the context of the overall group aims
following the launch of the revised code of business 
conduct cobc during the second half of 2009 we 
were pleased to note that 92 of respondents were 
aware of the code up from 81 in 2007 we will 
continue to work to raise this figure towards 100
share ownership
we have continued to introduce reward and incentive 
measures to our employees which ensure they are 
aligned with the group’s goals and share in our success 
at the end of 2009 approximately 28 of employees 
were participating in at least one of our share incentive 
schemes further details can be found in the 
remuneration report on pages 80 to 82 of this report
communications 
we continue to focus on improving our communications 
activities and during the year launched a global 
intranet petronet this has created a single platform 
for communicating across the group enabling our 
people to interact with each other and with the group 
on a variety of topics 
a structured communications programme was launched 
around project tempo the group’s enterprise 
resource planning initiative in order to ensure that 
both the user groups and the wider business 
understand the different stages of the implementation 
process and the impact this will have on the processes 
and systems currently in use
another important initiative was the communications 
programme put in place around the organisational 
changes implemented at the start of the year this 
programme included a brand project which resulted  
in the creation of separate but linked brand identities 
for each of the seven business units in the group
a corporate dvd communicating the group’s core 
capabilities was produced during 2009 and is available 
to view on wwwpetrofaccom in addition the quarterly 
magazine petrofacts continues to provide information 
on the latest news and developments from within the 
group to all employees and external stakeholders
our second picture petrofac competition was held 
during 2009 and received an enthusiastic response 
from employees attracting almost 2000 photographs 
the photographs of the 13 finalists feature on our 2010 
calendar with each finalist also receiving a digital slr 
camera the winning entry was submitted by hennie 
bester who said “competitive events whatever their 
format certainly increase the levels of engagement and 
collaboration in all our teams – even those not actively 
participating i look forward to taking part in next  
year’s competition”
we continue 
to focus on 
improving our 
communications 
activities 62
petrofac annual report 
and accounts 2009
63
petrofac annual report 
and accounts 2009
 corporate social  
responsibility
corporate social responsibility
community 
for 2009 our community support continued to be 
focused on education in the communities close to  
our operations this is an area where experience tells 
us we are able to make a significant and longterm 
impact which can make a demonstrable difference  
to local people 
the educational initiatives we support are many and 
diverse ranging from scholarships for individuals to 
extensive financial support for entire schools the 
examples you see here represent a small selection  
of projects we have undertaken during 2009
north africa
in sudan we have completed the construction of 60 
nonformal schools in partnership with international 
ngo brac uk this project was established in 2008 
and the schools have now opened their doors to 
around 1800 children aged 8–14
making 
a real 
difference
in collaboration with our customer we have also 
opened two further schools in the western sahara 
desert in egypt each school features a large 
classroom for around 45 children aged 4–13 together 
with living accommodation for two resident teachers 
this latest project which is providing valuable 
education to local bedouin children brings the total 
number of such schools we have supported in the 
desert to four
in 2008 a needs analysis with the local authorities 
showed that children and teachers at schools in the  
in salah region of algeria were suffering from constant 
chalk dust created by the use of oldfashioned 
blackboards with our help each classroom in all 38 
local schools has now been equipped with a 
whiteboard – amounting to 341 whiteboards in total
our community activities in tunisia have included 
organising a series of regular visits to our facilities at 
chergui for primary school children this programme 
gives the children an early introduction to our industry 
and provides us with the opportunity to emphasise the 
importance of safety and protection of the environment
middle east
operationally we are very active in syria with major 
projects at both jihar and ebla as the financial year 
closed we were in the advanced stages of a process 
which we hope will lead to petrofac providing funding 
for a specialist training centre this will underline our 
commitment to the health safety and operational 
efficiency of the local workforce
in the united arab emirates we continued to offer 
financial assistance to lessadvantaged students 
wishing to attend the american university of sharjah 
aus and were also proud to establish ‘the petrofac 
research chair in renewable energy’ we provided a 
dhs15 million endowed donation to fund the position 
from which aus will establish a progressive research 
programme in renewable energy bringing together its 
most talented resources we also made a dhs1 million 
grant to the higher colleges of technology hct in abu 
dhabi to support the continued development of young 
uae nationals and enhance hct’s programme offerings 
to meet the needs of both students and industry 
our community support in the uae also extended 
beyond education last year with many employees 
making significant contributions to relief funds for the 
natural disasters in indonesia the philippines and india
asia
in india both our key offices have long histories  
of supporting educational initiatives during the year 
the mumbai team continued to offer scholarship 
programmes at local schools and also funded a 
muchneeded extension to a tribal school near khopoli 
we also worked with the arvind ghanbhir secondary 
school on a book donation programme which was run 
from our london office 
the office in chennai is a great benefactor to local 
schools and orphanages with support from the 
company employees have helped the community in 
many ways including providing electrical equipment  
to a school and rice to a children’s home renovating  
a kitchen for a welfare trust and providing support  
to victims of the floods
in malaysia our team operated a successful book 
donation programme with sekolah kebangsaan taman 
setiawangsa school in kuala lumpur with many of the 
books donated from london local employees also 
raised money to purchase air conditioning units for the 
school library
we also continued to operate a scholarship 
programme alongside the kyrgyz petroleum company 
in kyrgyzstan with our help eight students are now 
able to undertake fulltime academic courses
uk
our teams in woking have continued to support the 
educational charity surrey satro science and 
technology regional organisation and 11 of our 
engineers are now satro science ambassadors each 
ambassador contributes two and a half days during the 
year usually at a local school
in scotland where we have longestablished 
relationships with local communities we again supported 
many initiatives these included a road safety scheme 
for school children as well as the establishment of a 
new partnership with charleston primary school many 
children from charleston will move on to join kincorth 
academy a secondary school which we have supported 
for many years in common with their colleagues in 
woking the scotland team has been keen to encourage 
an interest in engineering during the year they offered 
their time and practical advice to develop a local 
branch of the young engineers club and also organised 
a number of school visits to our facilities so that 
youngsters could gain insight into the oil  gas industry
community support
our support for local communities extends beyond 
education during 2009 we continued to provide 
assistance to a variety of charitable and sporting 
initiatives further strengthening the bonds which exist 
between our operations and their local communities 
full details of these initiatives can be found on our 
website at wwwpetrofaccomresponsibilityhtml
petrofac 
employees  
have provided 
electrical 
equipment and 
whiteboards to 
schools rice to 
a children’s 
home air 
conditioning 
units for a 
school library 
and support to 
victims of floods
schools built  
in sudan and 
educating  
1800 children
donated  to 
local schools 
and funding for 
the petrofac 
research chair 
in renewable 
energy
60
us millions 64
petrofac annual report 
and accounts 2009
65
petrofac annual report 
and accounts 2009
governance
9 rijnhard van tets
nonexecutive director 
a b d
rijnhard van tets was appointed a non–executive 
director of petrofac in 2007 rijnhard is currently 
general partner of laaken asset management nv he 
was an adviser to the managing board of abn amro 
between 2002 and 2007 having previously served as a 
member of abn amro’s managing board for 12 years 
rijnhard occupied a number of very senior executive 
positions at abn amro most latterly as chairman of 
abn amro’s wholesale clients and investment 
banking group between 1996 and 2002 rijnhard 
currently serves as a nonexecutive chairman of the 
boards of arcadis nv euronext amsterdam nv 
euronext nv and equity trust holdings sarl and is a 
nonexecutive director of iff europe nyse euronext 
inc stichting administratiekantoor bührmann nv and 
a number of charitable organisations age 62
the board recommends that the following two 
individuals be appointed at the agm subject to 
shareholder approval 
thomas thune andersen
proposed to be appointed as a nonexecutive 
director
having spent over 30 years with the ap møllermærsk 
group thomas thune andersen retired from the 
company in 2009 thomas held a number of very 
senior positions at møllermærsk most latterly as chief 
executive of mærsk’s oil and gas division between 
2004 and 2009 he served both on the main board of 
mærsk and its executive committee from 2005 to 
2009 thomas serves as a nonexecutive director of 
scottish  southern energy plc age 55 
stefano cao
proposed to be appointed as a nonexecutive 
director
stefano cao has more than 32 years’ experience in the 
oil and gas industry he spent 24 years at saipem spa 
the international oil and gas services group most 
latterly as chief operating officer and then chairman 
and chief executive stefano left saipem in 2000 and 
joined eni where he served as chief operating officer 
of the exploration  production division from 2000 to 
2008 today he is chief executive officer of sintonia 
sa a holding company owning infrastructure assets 
including toll roads airports and telecoms he has 
previously served as an independent director of 
telecom italia spa age 58 
6 keith roberts
chief financial officer
keith roberts joined petrofac in march 2002 as chief 
financial officer having spent most of his working life 
as an investment banker based in the city of london 
after positions in commercial banking with standard 
chartered bank and then with county bank the 
merchant banking subsidiary of national westminster 
bank keith moved into corporate finance with 
hawkpoint partners where he was a managing director 
and a member of the operating committee he has 
previously served as a nonexecutive director of the 
peacock group plc age 53
7 kjell almskog
nonexecutive director 
a c d
kjell almskog was appointed to the petrofac board  
in march 2005 kjell has held a number of senior 
executive positions including 13 years at the 
international abb group – most latterly as deputy 
group ceo and head of its oil gas  petrochemicals 
division he was then chief executive of kvaerner from 
1998 until its merger with aker in 2001 kjell was 
appointed nonexecutive chairman of intex resources 
asa a norwegian listed mining and exploration 
company in november 2007 he continues to serve as 
nonexecutive deputy chairman of kverneland group 
asa and as a senior adviser of the taylor group age 69
8 amjad bseisu
chief executive energy developments
amjad bseisu joined petrofac in 1998 and founded  
the energy developments business in 2007 amjad 
rejoined the petrofac board having previously served 
for several years prior to the company’s admission to 
listing on the london stock exchange in 2005 from 
1984 to 1998 amjad worked for the atlantic richfield 
company arco ultimately as head of international 
marketing negotiations and business development 
and president of arco petroleum ventures and arco 
crude trading inc amjad was a founding non
executive director of serica energy plc and stratic 
energy corporation age 46
it is anticipated that amjad will step down from the 
board on 6 april 2010 subject to becoming chief 
executive of enquest plc and the successful listing  
of that company 
1 rodney chase
nonexecutive chairman 
c
rodney chase was appointed nonexecutive chairman 
of petrofac in june 2005 rodney spent 38 years at bp 
plc of which 11 were served on its board he was 
deputy group ceo on his retirement from the bp group 
in may 2003 he also spent time as ceo of the 
exploration and production and marketing and refining 
divisions he continues to serve as nonexecutive 
deputy chairman of tesco plc nonexecutive director 
of computer sciences corporation nonexecutive 
director of nalco company and nonexecutive director 
of tesoro corporation he has previously held positions 
as a board member of boc plc and diageo plc age 66
2 ayman asfari
group chief executive 
c
ayman asfari joined petrofac in 1991 to establish 
petrofac international ayman has 30 years’ experience 
in the oil  gas industry and served as chief executive 
officer of petrofac international until his appointment as 
group chief executive of petrofac limited in january 
2002 ayman previously worked as the managing 
director of a major civil and mechanical construction 
business based in oman ayman currently serves as  
a member of the board of trustees of the american 
university of beirut age 51
3 michael press
senior independent director nonexecutive 
director 
a b c d
michael press was appointed to the petrofac board in 
april 2002 having previously held senior executive 
positions for the standard oil company inc and bp 
and as a main board director of amerada hess 
between 1997 and 2001 michael held various posts at 
kbc advanced technologies including nonexecutive 
director executive chairman and chief executive 
michael is chairman of twma an aberdeen based 
global drilling waste management firm and continues  
to serve as senior independent director of chart 
industries inc age 62
michael will retire from the board at the forthcoming 
agm and will not seek reappointment 
4 maroun semaan
group chief operating officer 
maroun semaan joined petrofac in 1991 to establish 
petrofac international from 1977 to 1991 maroun held 
various project positions with consolidated contractors 
international co ccc based in the middle east 
where he was involved in the management of oil  gas 
pipeline process facilities and civil works construction 
contracts in oman and bahrain he was appointed 
chief executive of petrofac engineering  construction 
in april 2004 in january 2009 maroun was appointed 
group chief operating officer with overall responsibility 
for petrofac’s engineering  construction engineering 
 construction ventures engineering services 
offshore engineering  operations and training 
services businesses maroun currently serves as  
a member of the board of trustees of the american 
university of sharjah maroun is also a founding 
member of the board of trustees of arab forum  
for environment and development afed age 54
5 bernard de combret
nonexecutive director 
b c d
bernard de combret was appointed to the petrofac 
board in november 2003 bernard was deputy 
chairman of total’s executive committee until his 
retirement in 2002 following senior positions in both 
the french ministry of foreign affairs and ministry of 
finance he spent 24 years with elf and subsequently 
total where he was ceo of refining marketing ceo for 
gas power new energies and ceo for trading and 
shipping he is currently nonexecutive chairman of 
coastal energy in addition to serving as a non 
executive director of winstar resources ltd and a 
member of the international advisory board of grupo 
santander he was appointed an independent director 
of toreador resources corporation a us listed 
company in september 2009 he has previously held 
positions as a board member of renault vi 
intercontinental exchange cepsa and banco central 
hispano age 67 
bernard will retire from the board at the forthcoming 
agm and will not seek reappointment 
directors’ information
a member of the audit committee
b member of the remuneration committee
c member of the nominations committee
d member of the risk committee 
directors’ information
6 9 2 3 1 4 5 7 8 66
petrofac annual report 
and accounts 2009
67
petrofac annual report 
and accounts 2009
governance
senior management team
8 subramanian sarma
managing director engineering  construction
9 rajesh verma
managing director engineering services
6 paul groves
managing director training services
7 rob jewkes 
managing director energy developments
4 bill dunnett 
managing director offshore engineering  
operations
5 gordon east 
managing director production solutions
1 robin pinchbeck 
group director of strategy and corporate 
development
2 richard milne 
group director of legal and commercial affairs
3 marwan chedid 
managing director engineering  construction 
ventures
senior management team
2 3 1 4 5 7 8 9 6 68
petrofac annual report 
and accounts 2009
69
petrofac annual report 
and accounts 2009
governance
corporate governance report
the company is incorporated in jersey where there is no formal 
code relating to corporate governance however the board 
recognises that it has a responsibility to ensure good governance 
of the company in order to help it fulfil its obligations to all its 
stakeholders not just shareholders it is therefore strongly 
committed to the highest standards of corporate governance and 
has decided to adhere wherever possible to the provisions of the 
combined code on corporate governance published in 2008 the 
combined code in the same way as if the company had been 
incorporated in the united kingdom looking ahead the board 
intends to adhere wherever possible to the uk corporate 
governance code which will replace the current combined code 
in 2010 the company has prepared an additional report on its 
corporate social responsibility pages 53 to 63 which sets out its 
engagement with society in general this report however 
together with the nominations committee report audit 
committee report risk committee report and remuneration 
committee report is the company’s formal report on its corporate 
governance framework and has been prepared by reference to the 
combined code the directors consider that throughout 2009 and 
up to the date hereof the company has fully complied with all 
provisions of the combined code
the combined code has identified four subject areas which 
underpin good corporate governance and these are
■
 directors
■
 directors’ remuneration
■
 accountability and audit
■
 relations with shareholders
directors
the board
the board is responsible to its shareholders for the control and 
leadership of the group and for safeguarding the company’s 
reputation nine directors have served during the year and to date 
but it is anticipated that amjad bseisu will step down from the 
board in april 2010 subject to being appointed chief executive of 
enquest plc and the successful listing of the shares of that 
company in addition bernard de combret and michael press will 
be retiring from the board at the 2010 agm the board intends to 
propose thomas thune andersen and stefano cao for election to 
the board by shareholders at the 2010 agm details of current and 
proposed directors’ skills and experience are contained in the 
directors’ biographies on pages 64 and 65
the board has a formal schedule of matters reserved to itself for 
decision including but not limited to matters of a strategic nature 
approval of the annual budget approval of major acquisitions 
investments and disposals major changes to the group’s capital 
structure the preparation of financial statements the 
recommendation or declaration of dividends the entry into 
contracts which are deemed to be material strategically or by 
reason of size succession planning and appointments to the 
board senior executive remuneration ensuring the maintenance  
of a sound system of internal controls reviewing its own and its 
committees’ performance and reviewing the group’s overall 
corporate governance arrangements 
the board met regularly during the year the board met in person 
at six meetings which had been scheduled well in advance in 
2009 the board held three such meetings in continental europe 
one meeting in sharjah the united arab emirates where the group 
has its largest office one meeting in jersey where the company is 
incorporated and one meeting in syria where the group has 
significant business operations in addition the board held a 
number of telephone conference board meetings at relatively  
short notice which arose as a result of specific business  
usually in relation to a particular commercial project between 
scheduled board meetings the agenda for each scheduled  
board meeting allows the chairman and nonexecutive directors 
to meet without the executive directors present in addition  
the board attended a strategy and business planning day with 
members of senior management 
attendance by the directors at the scheduled meetings of the 
board was as follows
number of meetings 6
rodney chase 
nonexecutive chairman 6
kjell almskog 
nonexecutive director 6
bernard de combret 
nonexecutive director 6
michael press¹ 
senior independent director 6
rijnhard van tets 
nonexecutive director 6
ayman asfari 
group chief executive 6
maroun semaan 
group chief operating officer  6
amjad bseisu 
chief executive energy developments 6
keith roberts 
chief financial officer 6
1  kjell almskog will become senior independent director following the 
retirement of michael press at the 2010 agm 
chairman and group chief executive
the roles of chairman and group chief executive are clearly 
separated and set out in writing the chairman is responsible for 
the leadership of the board ensuring its effectiveness and setting 
its agenda and for ensuring that there is effective communication 
with all shareholders the chairman also facilitates the effective 
contribution of all directors and ensures that there is a constructive 
relationship between the executive and nonexecutive directors 
the role of the group chief executive is to implement strategy by 
developing manageable goals and priorities to provide leadership 
and motivation to the management teams running the group’s 
businesses and to develop proposals for the board to consider  
in all areas reserved for its judgement 
board balance and independence
the board currently has nine members composed of the 
chairman four independent nonexecutive directors and four 
executive directors the board believes that it contains an 
appropriate balance of skills and experience at the same time as 
being able to respond quickly to the needs of the business the 
board considers all four nonexecutive directors who served 
during the year and thomas thune andersen and stefano cao 
who will be proposed as nonexecutive directors at the 2010 agm 
to be independent in character and judgement and is not aware of 
any relationships or circumstances which are likely to affect or 
could appear to affect the judgement of any of them the extensive 
knowledge and experience of the nonexecutive directors 
combined with the focus and experience of the chairman and 
executive directors enable the board to lead and give direction to 
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the group without any imbalance that may allow any individual or 
group of individuals to dominate its decision making any director 
having a concern in this or any other regard may raise it with the 
chairman or the senior independent director directors have 
access to the advice and services of the secretary to the board 
who is responsible for ensuring that board procedures and 
applicable rules and regulations are observed and for advising  
the board through the chairman on governance matters the 
directors are entitled to take independent professional advice  
at the company’s expense if required
the board is assisted by various committees principally the 
nominations audit risk and remuneration committees reports 
for 2009 from each of these committees are provided from pages 
73 to 86  
appointments to the board
the nominations committee ensures a formal rigorous and 
transparent procedure for the appointment of new directors in the 
case of candidates for nonexecutive directorships care is taken 
to ascertain whether they will have sufficient time to fulfil their 
board and committee responsibilities as part of this process 
candidates disclose all other time commitments and on 
appointment undertake to inform the chairman of any proposed 
changes the terms and conditions of appointment of non
executive directors are available from the secretary to the board 
on request 
information and professional development
to enable the board to discharge its duties all directors are given 
appropriate documentation in advance of board meetings the 
agenda and appropriate supporting board papers are generally 
distributed by the secretary to the board a week in advance of 
each scheduled board meeting and 24 hours in advance of a 
telephonic meeting called at short notice in addition all directors 
are encouraged to make further enquiries as they feel appropriate 
of the executive directors or management team
the company as a matter of course provides regular training for its 
directors on the group’s business operations the group chief 
executive provides the board with a formal report on the group’s 
activities at each board meeting in addition the board is provided 
with ad hoc presentations by operational management on a regular 
basis and undertakes an annual site visit in 2009 the managing 
director of the offshore engineering  operations business gave  
a presentation and the managing director of engineering  
construction provided the board with an overview of the group’s 
engineering  construction activities in syria the board spent 
several days in syria during which time it visited two engineering  
construction projects directors first visited the jihar gas treatment 
plant before travelling to the ebla site where they stayed overnight 
and toured the ebla gas treatment plant the following day the 
company believes that such presentations and site visits are 
essential in order to increase directors’ knowledge and 
understanding of the group not only in terms of its operations  
but also its culture and people the chairman and group chief 
executive have agreed a further programme of presentations  
by operational senior management to the board in 2010 and are 
currently planning a visit to the group’s operations in the far east 
later in the year 
in addition to operational management presentations the board 
receives a report from the group director of legal and commercial 
affairs at each board meeting and reports from the group head of 
health safety security the environment and integrity assurance 
hsseia twice a year the company is equally committed to 
providing its directors with training on technical and regulatory 
matters and such matters are generally addressed in committee 
meetings during the year formal presentations and tutorials were 
provided in committee meetings on a number of subjects 
accounting requirements in relation to hedge accounting 
methodology for assessment of hydrocarbon reserves 
decommissioning taxation insurance treasury and the external 
environment regarding remuneration as well as the formal 
programme of training which takes place as part of board and 
committee meetings the secretary to the board is available at all 
times to provide directors with updates in relation to governance 
matters and as a point of first contact should directors have any 
other queries in 2009 the secretary provided the board with 
briefings on listing rule changes the walker report the financial 
reporting council’s frc review of the combined code and most 
latterly the frc’s consultation on the provision of nonaudit service 
work by audit firms notwithstanding that the chairman formally 
requests each director to consider whether or not he requires any 
specific training on any aspect of the company’s activities on an 
annual basis any director may request the secretary to the board 
to arrange any individual training or professional development at 
any time if he feels that this would be helpful to him in discharging 
his responsibilities most importantly the company believes that it 
promotes an atmosphere such that directors are actively 
encouraged to engage and ask questions 
in the event that the board appoints a new director the chairman 
works with the individual and the secretary to the board to develop 
a tailored induction programme to take account of the individual’s 
specific needs arrangements are in place for thomas thune 
andersen and stefano cao to visit the group’s uk offices and 
sharjah office where they will have the opportunity to be briefed 
personally by each business managing director about his particular 
business and meet other members of senior management from 
both operational and functional disciplines given that thomas and 
stefano are probably less familiar with the regulatory and 
governance requirements associated with a uk listed company 
than a uk based nonexecutive director might be particular care 
will be taken to ensure that they understand the governance 
framework that the company operates within a programme 
covering their responsibilities and liabilities as directors the 
companies jersey law 1991 features of the company’s articles 
of association the company’s code of business conduct and 
share dealing code listing and disclosure and transparency rule 
requirements and combined code will be covered  
performance evaluation
the chairman in consultation with the other directors considered 
how the board might best evaluate its performance in 2009 in 
view of the fact that the board had relied upon internal reviews  
in 2007 and 2008 the board decided that it would seek some 
external facilitation in 2009 it considered that another internal 
review conducted in the same manner as the previous two years 
would be unlikely to provide the board with any new insight into its 
role and any changes the board might make in seeking to 
discharge its responsibilities more effectively having considered 
several third parties who might conduct an external review the 
chairman appointed icsa board evaluation representatives of 
icsa board evaluation are in the process of conducting faceto
face interviews with directors after which they will observe a board 
meeting in progress the icsa will then present a written report to 
the board and lead a discussion in relation to its findings and 
recommendations at the board meeting in may 2010 
systems encompass policies and procedures relating to all major 
areas of risk including matters relating to contract execution health 
and safety security and the environment the company has a 
group head of hsseia who heads a team with responsibility for 
overseeing the development of appropriate hsseia management 
systems and ensuring compliance with them across the group 
towards the end of 2009 the group head of hsseia appointed  
a head of group security who has extensive security experience 
in the middle east and other parts of the world in addition after 
conducting a lengthy selection process the group has recently 
appointed an environmental specialist who will provide renewed 
impetus to the group’s environmental programme for details 
about environmental progress refer to page 56 of the corporate 
social responsibility report 
the company has a code of business conduct code which 
amongst other matters includes policies for the company and its 
employees on health and safety security the environment 
conflicts of interest and areas of legal compliance during the year 
management rolled out an elearning programme on the code 
across the group on a prioritised basis by the end of january 
2010 more than 4000 employees had completed the elearning 
programme including some 75 of employees in the sharjah office 
as well as a significant proportion of employees based in the 
company’s offices in aberdeen woking algeria tunisia and india 
the company intends that all employees will have completed the 
elearning programme by the end of 2010 notwithstanding the 
difficulties in making the programme available to employees based 
on site 
the group has strengthened the process whereby employees can 
raise ethical concerns in confidence during the year employees 
are able to contact anonymously a thirdparty organisation called 
expolink 24 hours a day 365 days per year either by telephone or 
email and report any matter in relation to an alleged breach of the 
code expolink contact both the director of legal and commercial 
affairs and the secretary to the board with details of any alleged 
breach and one of them will ensure that an appropriate 
investigation is conducted the results of which are fed back to 
expolink which reports back to the individual concerned the 
secretary to the board ensures that the audit committee is 
periodically provided with a whistle blowing report which sets out  
a description of each matter raised and details of the outcome the 
company conducted an employee survey in the autumn of 2009 
petrovoices to which some 55 of employees responded 92 of 
respondents said that they knew about the company’s code and 
55 said they would know how to make use of the whistle blowing 
facility the previous petrovoices survey conducted in 2007 
showed that 81 of employees knew about the code and that 
46 of employees knew how to use the whistle blowing facility 
whilst the company appears to have made progress in raising 
awareness of the code and expolink facility the elearning 
programme together with a recently implemented groupwide 
induction programme should significantly increase employee 
familiarity over the forthcoming year
the company has a policy in relation to conflicts of interest 
employees should not engage in activities which conflict or might 
be perceived to conflict with their duties and guidance is provided 
on potential areas of conflict if an employee considers that he or 
she may have a potential conflict he or she must refer the matter 
to the group chief executive for his consideration the secretary 
to the board maintains a register of all such issues raised including 
whether or not the proposed activity was permitted in the event 
michael press the senior independent director led a separate 
evaluation of the chairman through a series of questionnaireled 
interviews with other members of the board and senior 
management before providing feedback to the chairman in  
a onetoone appraisal board evaluation will continue on an 
annual basis
reelection of directors
all directors are required by the company’s articles of association 
to submit themselves to shareholders for reelection by rotation at 
least once every three years or if they have been appointed part 
way through the year by the board at the subsequent agm 
sufficient biographical information and other information including 
in the case of a nonexecutive director seeking reelection a 
statement as to his continued effectiveness and commitment is 
provided to enable shareholders to make an informed decision 
directors’ remuneration 
while the board is ultimately responsible for directors’ 
remuneration the remuneration committee consisting solely  
of independent nonexecutive directors is responsible for 
determining the remuneration and conditions of employment of 
executive directors and certain members of senior management  
a report on the directors’ remuneration including a more detailed 
description of the role and activities of the remuneration 
committee is set out on pages 76 to 86
accountability and audit
internal control
the board is responsible for reviewing the effectiveness of the 
group’s system of internal control including financial operational 
and compliance controls and systems for the identification and 
management of risk the audit committee routinely meets with 
both the internal and external auditors and discusses matters of 
internal control particularly in relation to financial control the risk 
committee a committee of the board complements the audit 
committee by focusing in more detail on the group’s operational 
controls and risk management framework the audit committee 
on behalf of the board conducted a specific review of the internal 
control environment following the year end the group’s system of 
internal control can only provide reasonable and not absolute 
assurance against material misstatement or loss as it is designed 
to manage rather than eliminate the risk of failure to achieve 
business objectives however the focus on risks and controls by 
these two committees of the board ensures a strong oversight 
process for the full board
the group has an ongoing process for identifying evaluating and 
managing significant risks faced by the group which has been in 
place for the year under review and up to the date of this annual 
report and is in accordance with the revised turnbull guidance 
the key elements which make up a robust system of internal 
control in a business may be characterised by the business’s 
control environment and its risk management and assurance 
process a description of each of these elements for the group  
is given below 
control environment
the board ensures that the group has a clear organisational 
structure for the control and monitoring of its businesses including 
defined lines of responsibility and delegation of authority each of 
the group’s businesses operates and maintains its own business 
management system designed to ensure the application of sound 
processes of control to all projects and business activities such 
corporate governance report
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that a director considers that he may have a potential conflict he 
refers the matter to the audit committee for its consideration and  
a record is similarly added to the register in addition a director is 
required under jersey legislation to declare any interest or potential 
interest that might materially conflict with the interests of the 
company prior to any board meeting and the director would be 
excluded from any board discussion or decision that related to  
the matter 
risk management
the board has ultimate responsibility for managing risk it therefore 
needs to ensure that the group defines its risk appetite maintains  
a sound system of risk management and internal controls and 
satisfies itself that appropriate systems are in place to identify 
assess and manage key risks in 2007 the board established a 
risk committee whose membership is comprised of nonexecutive 
directors albeit the group chief executive group chief operating 
officer and chief financial officer attend meetings as a matter  
of course together with the head of enterprise risk management 
the risk committee ensures that the group’s risk appetite is 
considered agreed and communicated via policies in 2009 the 
committee recommended that the board approve three policies 
sovereign and financial market risk policy legal and contract 
compliance risk policy and operations risk policy it is believed 
that the three policies cover the full range of the group’s operational 
and compliance risks at least in so far as they have been identified 
the sovereign and financial market risk policy covers policy  
in relation to country risk inflation risk commodity risk currency 
risk and credit and counterparty risk the legal and contract 
compliance risk policy covers ethical risk contractual liability  
risk and the risk of noncompliance with a country’s local laws  
and regulations the operations risk policy covers project 
performance risk business continuity risk leadership risk  
change risk and health safety security and environment risks 
at least once a year the risk committee intends to review each 
policy at the same time as receiving a report on how the various 
risks covered by each policy are addressed within the business 
specifically in relation to standards resources training and 
communication review and reporting and audit the risk 
committee therefore provides the board’s primary forum for 
articulating the group’s risk appetite and assuring itself that an 
appropriate and effective risk management framework is in place 
the board is also made aware of material individual risks facing  
the group the head of enterprise risk management provides a 
written report in advance of each scheduled board meeting giving 
details of the most current material risks facing the group together 
with an explanation of any mitigating action in 2009 management 
established an enterprise risk management committee which  
is chaired by the group chief operating officer the committee 
meets twice a year for the purpose of ensuring that the group’s  
risk policies are implemented each of the group’s individual 
businesses operates and maintains a business management 
system incorporating policies and procedures which assist with the 
business’s risk management in addition each business is required 
to produce a risk matrix which identifies the key business risks the 
probability of those risks occurring their impact if they do occur 
and the actions being taken in order to manage and mitigate those 
risks the head of enterprise risk management has access to the 
risk matrices for the businesses and furthermore receives regular 
reports from the management team for each business in addition 
a rigorous process exists for the consideration of risks associated 
with undertaking new business via individual business and group 
risk review committees 
details of the principal risks and uncertainties facing the business 
are disclosed on pages 34 to 37 
assurances
the board receives assurances from the following internal and 
external controls
■
 historical financial performance and revised forecasts for the 
full year with significant variances are regularly reported by 
management to the board
■
 reports from the audit committee which includes feedback 
from the external and internal auditors and the risk committee
■
 the close involvement of the executive directors in all aspects 
of the group’s daytoday operations including regular 
meetings each month with each business unit’s head of 
business
■
 customer audits
■
 reports and presentations to the board by senior management 
■
 copies of minutes from group risk review committee meetings 
relations with shareholders
the group chief executive chief financial officer and head of 
investor relations have regular meetings with major shareholders 
and research analysts the chairman advises major shareholders 
annually in writing of his availability along with the senior 
independent director should there be issues which the 
shareholders wish to discuss 
the board receives regular feedback from analysts and major 
shareholders compiled by the company’s brokers and financial 
pr consultants in particular following presentations and meetings 
after the publication of financial results 
the principal method of communicating with the majority of 
shareholders is via the annual report and financial statements  
and the company’s website which contains details of financial 
presentations to analysts and other information about the group 
all shareholders have the opportunity to attend the agm all 
directors were present at the 2009 agm and all current and 
proposed directors intend to be present at the 2010 agm to 
answer shareholders’ questions details of the meeting are set out 
in the notice of meeting which is sent to shareholders and which 
contains the text of resolutions to be proposed and explanatory 
notes where necessary shareholders attending will be advised  
of the number of proxy votes lodged for each resolution in the 
categories ‘for’ and ‘against’ together with the number of ‘votes 
withheld’ all resolutions will be voted on by taking a poll the 
results of which will be announced to the london stock exchange 
and published on the company’s website  
the company is incorporated in jersey shareholders are required 
under the uk listing authority to notify the company in the event 
that they can exercise 5 or more of the company’s voting rights 
if the company were incorporated in the uk shareholders would 
be required to notify the company in the event that they could 
exercise 3 or more of the company’s voting rights as a matter  
of principle the company aims wherever possible to govern itself 
as if it were incorporated in the uk rather than jersey and for this 
reason adopted articles of association which currently require its 
shareholders to notify the company in the event that a shareholder 
acquires voting rights in 3 or more in the company’s share 
capital the company currently has 345629656 shares in issue 
chairman conducted a review of possible search consultants 
before appointing spencer stuart to lead the search for 
candidates a number of candidates were put forward for the 
nominations committee consideration in due course the 
committee recommended that the board propose thomas thune 
andersen and stefano cao for appointment by shareholders at the 
2010 agm the committee considers thomas and stefano to be 
excellent prospective members of the board not only for their 
extensive experience of the oil  gas industry but also for their 
personal qualities and global outlook further the committee is 
satisfied that both thomas and stefano have sufficient time to 
devote to the board bernard and michael will retire from the board 
at the conclusion of the agm 
during the year the committee received an update from the  
group head of human resources on management’s developing 
programme in relation to succession planning and talent 
management throughout the group and will continue to be provided 
with further updates on progress the committee also considered 
its terms of reference and the proposed reelection of rijnhard van 
tets at the 2010 agm the committee recommended to the board 
that rijnhard should be proposed for reelection by the company’s 
shareholders having judged him to be highly effective as a board 
member and chairman of the audit committee 
the board intends that subject to shareholders electing thomas 
thune andersen and stefano cao at the 2010 agm the 
committee’s membership will be as follows with effect from 
13 may 2010
■
 rodney chase chairman
■
 ayman asfari 
■
 kjell almskog 
■
 thomas thune andersen 
■
 stefano cao 
■
 rijnhard van tets 
this report was approved by the board on 5 march 2010
rodney chase 
committee chairman
and each share has one vote one shareholder has notified the 
company as at 23 february 2010 that it has an interest in 3 or 
more of the company and is as follows
 number of percentage 
 ordinary of allotted 
 shares share capital
legal  general group plc 13782232 399
in addition to the above ayman asfari and maroun semaan 
together with their respective close families held major 
shareholdings details of which are disclosed in the remuneration 
report on page 86
this report was approved by the board on 5 march 2010 
rodney chase 
chairman of the board
nominations committee report
membership of the nominations committee during the year and  
to the date of this report is as follows
■
 rodney chase chairman
■
 ayman asfari 
■
 kjell almskog 
■
 michael press 
■
 bernard de combret 
the committee’s powers are conferred on it under the company’s 
articles of association it has formal terms of reference which have 
been drafted in accordance with the combined code are 
reviewed annually by the committee and are available on the 
company’s website the secretary to the board acts as secretary 
to the committee minutes for all meetings are circulated to all 
directors unless there is deemed to be a conflict of interest and 
supplemented by an oral report from the committee’s chairman  
at the next board meeting the committee’s principal roles and 
responsibilities include the following
■
 consider and make recommendations to the board on all new 
appointments of directors taking into account the overall size 
balance and composition of the board
■
 consider and make recommendations to the board in relation 
to the composition of the board’s committees
■
 consider succession planning
■
 make recommendations to the board concerning the 
reappointment of any director following conclusion of his 
specified term in office
meetings are held as deemed necessary by the chairman and 
during the course of 2009 five meetings were held and all 
members attended on each occasion the board believes that as 
a general rule nonexecutive directors should serve two threeyear 
terms and that the nominations committee should seek to ensure 
that the board is refreshed on a systematic and regular basis 
given that bernard de combret and michael press would each 
have completed service on the board for at least six years during 
2009 the committee initiated a process at the start of the year to 
identify candidates to join the board within the next 18 months 
the chairman of the committee with assistance from the group 
head of human resources led the search process in the first 
instance having agreed a role and person specification the 
corporate governance report
continued 74
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and accounts 2009
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and accounts 2009
governance
corporate governance report
audit committee report 
membership of the audit committee during the year and to the 
date of this report is as follows
■
 rijnhard van tets chairman
■
 kjell almskog 
■
 michael press 
both rijnhard van tets and kjell almskog have recent and  
relevant financial experience and are deemed to have competence 
in accounting 
the committee’s powers are conferred to it under the company’s 
articles of association it has formal terms of reference which have 
been drafted in accordance with the combined code are 
reviewed annually by the committee and are available on the 
company’s website the committee’s principal roles and 
responsibilities include the following
■
 to monitor the integrity of the company’s financial statements 
and announcements relating to its financial performance and 
review significant financial reporting judgements
■
 to keep under review the effectiveness of the company’s 
internal control and risk management systems
■
 to monitor the effectiveness of the internal audit function and 
review its material findings 
■
 to oversee the relationship with the external auditors including 
agreeing their remuneration and terms of engagement 
monitoring their independence objectivity and effectiveness 
and ensuring that policy surrounding their engagement to 
provide nonaudit services is appropriately applied 
the committee is authorised to investigate any matters within its 
terms of reference and may therefore seek any information it 
requires from any employee and obtain at the company’s 
expense such professional advice as it sees fit in order to fulfil its 
duties however the committee has no executive function and its 
primary role is to review and challenge rather than assume 
responsibility for any matters within its remit 
attendance at the committee meetings is at the invitation of the 
chairman of the committee however the chief financial officer 
group financial controller group head of internal audit and the 
external auditors generally attend some or all of the committee 
meetings the group head of internal audit and the external 
auditors have the right to speak directly to the chairman of the 
committee at any time and have the opportunity to meet the 
committee without management present at least once a year  
the secretary to the board acts as secretary to the committee 
minutes for all meetings of the committee are circulated to all 
directors and supplemented by an oral report from the 
committee’s chairman at the next board meeting identifying any 
matters in respect of which action or improvement is required and 
making recommendations where appropriate 
the committee met six times during the year and all members 
attended on each occasion it considered the following matters
financial reporting
the committee reviewed the 2008 annual report and financial 
statements and the 2009 interim report issued in september 2009 
before recommending their publication to the board as part of this 
overall review the committee considered the draft preliminary 
announcements in respect of the company’s 2008 final and 2009 
interim results the committee discussed with the chief financial 
officer and external auditors the significant accounting policies 
estimates and judgements in preparing the company’s 2008 
report and financial statements and 2009 interim report  
in addition the committee reviewed drafts of trading statements 
and interim management statements before recommending their 
publication to the board  
internal controls and risk management systems
the committee has responsibility for reviewing the company’s 
internal controls and it primarily discharges this responsibility 
through its engagement with the risk committee and the group’s 
internal and external auditors an annual internal audit plan drawn 
up on a riskbased approach is presented to the committee for its 
review and approval at the start of the financial year the group 
head of internal audit provides the committee with an interim 
progress report part way through the year as a result of which the 
audit plan may be revised before returning to the committee with 
his final report for the year at the start of the subsequent year at 
the same time as the final report for the previous year is presented 
an audit plan for the current year is proposed and so the ongoing 
process of internal control review is continued in 2009 the internal 
audit department completed a total of 59 assignments across a 
broad crosssection of the group’s activities
in addition the committee also received presentations or reports 
during the year in relation to the group’s whistle blowing policy 
known as the ‘speaking up’ policy by employees and its 
effectiveness and the group’s use of an aircraft owned by  
an offshore trust in which the group chief executive has  
a beneficial interest   
internal audit
the committee evaluated the performance of internal audit from 
the quality of reports from the group head of internal audit 
feedback from management and an assessment of work planned 
and undertaken the internal audit department is currently staffed 
by six individuals in addition to the group head of internal audit 
the members of the department include accountants it 
specialists and an oil  gas engineer the committee will continue 
to keep the resourcing of the department under review but 
currently believes it is adequate both in terms of headcount and 
skills’ set 
external audit
the committee recommended to the board that the external 
auditors be reappointed following an assessment of the quality  
of service provided including the qualifications of the external 
auditors the expertise and resources made available to the group 
auditors’ independence and the effectiveness of the audit process 
the decision was based on consideration of reports issued by 
external auditors and feedback from the chief financial officer and 
group financial controller
the committee satisfied itself that the external auditors remain 
independent having regard to the auditors’ procedures for 
maintaining and monitoring independence the auditors’ policy for 
rotation of the lead partner and key audit personnel and a policy 
which specifies areas of nonaudit services that cannot be carried 
out by the external auditors and the financial thresholds above 
risk committee report 
membership of the risk committee during the year and to the date 
of this report is as follows
■
 kjell almskog chairman
■
 bernard de combret 
■
 michael press 
■
 rijnhard van tets 
the committee has formal terms of reference which are reviewed 
every two years by the committee and are available on the 
company’s website the committee is supported by the head  
of enterprise risk management and the secretary to the board 
acts as secretary to the committee minutes for all meetings are 
circulated to all directors and supplemented by an oral report  
from the committee’s chairman at the next board meeting  
the committee takes primary responsibility for
■
 reviewing proposed group risk policy and procedures and 
recommending that they be adopted by the board 
■
 overseeing group operational risk management systems 
including insurance management 
■
 identifying risks in relation to the enterprise as a whole and 
monitoring how they are managed 
■
 reviewing any external disclosures made by the group in 
relation to its risk management
the committee met three times during the year and all members 
attended each meeting in 2009 the committee reviewed a 
sovereign and financial market risk policy legal and contract 
compliance risk policy and operations risk policy for the group 
and having done so recommended that the board adopt such 
policies which the board duly did the head of enterprise risk 
management provided a high level assessment of the group’s 
compliance with the three policies at the end of 2009 in 2010  
he will provide an update on each of the policies over the course  
of the three meetings scheduled during the year the committee 
received regular updates on the group’s business continuity 
planning in the event of an unforeseen disruption to part or all  
of the group’s enterprise and noted that good progress has been 
made in 2009 notwithstanding the group’s continuing growth  
it is expected that full implementation of a business continuity  
plan across the group will be achieved in the first half of 2010  
the company’s engineering services office in woking achieved 
accreditation to bs 25999 in 2009 which is a first in the oil  gas 
industry the group head of insurance and the group head of 
treasury both provided briefings to the risk committee 
the board intends that subject to shareholders appointing stefano 
cao at the 2010 agm the committee’s membership will be as 
follows with effect from 13 may 2010
■
 stefano cao chairman
■
 kjell almskog 
■
 rijnhard van tets 
this report was approved by the board on 5 march 2010
kjell almskog 
committee chairman
which nonaudit services require the approval of the chairman of 
the committee the committee reviewed the group’s nonaudit 
services policy at the end of the year in light of the select treasury 
committee’s request to the frc in october 2009 to review 
whether or not there should be further restrictions on the provision 
of nonaudit services by audit firms the committee decided that it 
would delay its formal review of the group’s nonaudit services 
policy until such time as the frc has published its report on the 
matter for the time being the group’s nonaudit services policy 
remains in line with current best corporate governance practice 
the policy automatically excludes the company’s auditors from 
undertaking certain types of work which might impair the auditors’ 
independence the chief financial officer is required to seek prior 
clearance from the chairman of the audit committee where any 
individual fee in relation to nonaudit services is in excess of 
us200000 the aggregate nonaudit service fees for the year  
are approaching 50 of the annual audit fee or the auditor would 
generally be excluded from providing the service but the chief 
financial officer believes that due to exceptional circumstances 
the service would be better performed by the company’s auditor 
rather than another audit firm within these parameters where  
it is considered reasonable that the external auditors undertake 
nonaudit services for sound commercial and practical reasons 
without inhibiting objectivity then engagement is permitted such 
services might include independent certification reporting for fsa 
or ukla purposes and tax advice the cost of services provided 
by the external auditors during the year is detailed in note 4g to the 
financial statements most of the cost of nonaudit services was 
associated with tax and assurance services where involvement by 
the external auditors was considered appropriate and in the best 
commercial interests of the group
the board intends that subject to shareholders electing thomas 
thune andersen at the 2010 agm the committee’s membership 
will be as follows with effect from 13 may 2010
■
 rijnhard van tets chairman
■
 kjell almskog 
■
 thomas thune andersen 
this report was approved by the board on 5 march 2010
rijnhard van tets 
committee chairman  
 
corporate governance report
continued 76
petrofac annual report 
and accounts 2009
77
petrofac annual report 
and accounts 2009
governance
directors’ remuneration report
incentivised to deliver the group’s strategic goals and thus deliver 
longterm shareholder value 
the committee intended to review in 2008 whether the current 
arrangements would allow the company to deliver its stated 
remuneration policy however due to the wider economic 
environment which prevailed at the end of 2008 the committee 
delayed its review of the remuneration policy until 2009 
in 2009 the committee conducted a review of the remuneration 
arrangements currently in place drawing on independent advice 
from deloitte llp 
the review highlighted that remuneration in petrofac has been 
uncompetitive at executive director level for a significant period of 
time this has been as a result of both the conservative practice to 
date in terms of both basic salary levels and incentive opportunity 
and the significant growth in the company since ipo 
to some extent this has been possible given that most executive 
directors and members of senior management are significant 
shareholders in the company following the ipo however as the 
business matures it is becoming more important to be able to 
recruit new senior executive talent but also increasingly 
inappropriate to pay our senior leaders at levels which are wholly 
out of line with the rate for the job
the committee has reiterated its preference to provide significant 
emphasis on the performancerelated elements of pay therefore 
the committee has decided that
■
 subject to shareholder approval at the 2010 agm the 
maximum annual award under the psp should be increased  
to 200 of basic salary or 300 of basic salary in exceptional 
circumstances with immediate effect
■
 the maximum annual cash bonus will be increased to 200  
of basic salary with effect from the 2010 bonus year
this means that if an executive director were to receive a maximum 
cash bonus and maximum psp award equal to 200 of basic 
salary his fixed remuneration excluding cash allowancesbenefits 
would be equal to onefifth of his overall remuneration whilst the 
remaining fourfifths of his overall remuneration would be variable 
remuneration 
previously the weighting between basic salaries annual bonus and 
psp had been broadly equal ie onethird each 
the committee awarded modest basic salary increases of 5 to 
its executive directors with effect from 1 january 2010 in making 
its decision the committee took account of current shareholder 
views on salary increases in the external environment 
nevertheless the committee recognises that the revised basic 
salary levels continue to be below lower quartile compared to uk 
companies of similar size and complexity and below industry 
benchmarks this has a significant impact on total remuneration 
which remains very conservative even after the changes to 
performancerelated pay outlined above 
the committee therefore intends to review basic salaries again 
during the course of 2010 no significant changes to basic  
salaries will be implemented without dialogue with the company’s 
major shareholders
in addition the committee met telephonically on one occasion to 
approve awards under the company’s performance share plan 
and deferred bonus share plan as part of its annual cycle of share 
awards due to a prior commitment details of these schemes are 
provided on pages 80 to 82
in addition to its routine business the committee also undertook  
a major review of executive director and senior management 
incentive arrangements during 2009 and the conclusions from this 
review are outlined below
good governance
the board and the committee consider that throughout 2009 and 
up to the date of this report the company has complied with the 
provisions of the combined code relating to directors’ remuneration 
remuneration policy and practice
nonexecutive directors
the board with the assistance of independent professional  
advice determines the fees of the independent nonexecutive 
directors the board reviews nonexecutive director fees annually 
when deciding an appropriate fee level for each independent 
nonexecutive director the board takes into account the level of 
fees generally paid to nonexecutive directors serving on boards 
of similarly sized companies listed in the united kingdom and 
further considers the responsibility and time commitment required 
of each individual
executive directors and members of senior management
the committee aims to establish a level of remuneration which is 
sufficient to attract retain and motivate executive directors and key 
executives of the calibre required to achieve the group’s objectives 
and which furthermore reflects the size and complexity of the 
group’s business together with an executive’s individual 
contribution and geographical location
the committee believes that the most appropriate pay 
comparators for the executive directors and members of senior 
management are
■
 a select group of international and uk oil  gas services 
companies for the group chief executive and certain 
operational executives to the extent that data in relation  
to such comparator companies is publicly available 
■
 the ftse 350 for certain functional executives
however it also uses remuneration in uk companies of a similar 
size and complexity as a reference point when considering 
executive director and senior management remuneration
proposed changes to executive director remuneration
in 2007 the committee agreed that its remuneration policy for 
executive directors and members of senior management going 
forward would be as follows
■
 basic salaries would be median or below against a relevant 
benchmarking group see above and
■
 the variable elements of remuneration would be structured so that 
individuals can achieve total remuneration that is upper quartile 
subject to achievement of challenging performance standards 
the committee believes that such a remuneration policy which 
sets the fixed elements at median or below and provides incentives 
capable of delivering upper quartile pay for delivery of superior 
performance is the most effective way in which to ensure that 
executive directors and members of senior management are 
role of the remuneration committee
the remuneration committee is a formal committee of the board 
and has powers delegated to it under the articles of association 
its remit is set out in terms of reference formally adopted by the 
board which were last reviewed in december 2009 a copy of  
the terms of reference is available on the company’s website  
the primary purposes of the remuneration committee are set  
out in its terms of reference and are to 
■
 recommend to the board the broad policy in respect of senior 
management remuneration
■
 ensure that the levels of remuneration are appropriate in order 
to encourage enhanced performance
■
 approve the design and set the targets for any performance 
related pay scheme 
■
 review the design of all share incentive plans before approval 
by the board and shareholders to monitor the application of 
the rules of such schemes and the overall aggregate amount  
of such awards
■
 set the remuneration of all executive directors members of 
senior management and the chairman including annual cash 
bonus and share incentive payments 
during 2009 the group chief executive ayman asfari attended 
meetings at the invitation of the chairman in order to provide 
advice on setting remuneration for other executive directors and 
members of senior management he attended no part of a meeting 
at which his own remuneration was being discussed 
richard milne the group director of legal and commercial affairs 
and carol arrowsmith of deloitte llp each attended one meeting 
during the year the director of legal and commercial affairs 
attended a meeting at the start of the year in order to provide 
advice in relation to the matters being discussed in particular the 
group’s share incentive schemes geoffrey tranfield the group 
head of human resources attended all meetings to provide 
context to the remuneration committee in relation to matters 
being discussed carol arrowsmith attended a meeting at the end 
of the year in order to provide advice in relation to the revised psp 
scheme see page 80 the secretary to the board acts as 
secretary to the committee and therefore attended all meetings 
the committee appointed deloitte llp to provide independent 
advice on remuneration matters during the year in 2009 deloitte 
llp separately provided the company with access to an industry 
research database but did not provide any other non
remuneration related advice to the company 
minutes of the meetings of the committee are circulated to all 
directors unless any director is the subject of debate by the 
committee in which case the minutes will not be sent to him the 
chairman supplements the formal circulation of the minutes by a 
verbal update from the committee chairman at the board meeting 
following a committee meeting 
activities of the remuneration committee
the committee met four times in the year and reports herewith its 
material findings attendance at the meetings during the year was 
as follows
number of meetings  4
bernard de combret  
chairman  4
michael press  4
rijnhard van tets  4
introduction
the directors are not required under jersey law to prepare a 
remuneration committee report but in accordance with the 
principles of good corporate governance as outlined in the 
combined code have chosen to do so this report has been 
prepared by the remuneration committee as if the company was 
required to comply with both schedule 8 to the large and medium
sized companies and groups accounts and reports regulations 
2008 of the united kingdom and relevant listing rules of the 
financial services authority and has been approved by the board 
this report sets out the remuneration policy and principles under 
which the directors and senior managers are remunerated and 
details the remuneration and share interests of each director for 
the year ended 31 december 2009 
as required by the remuneration report regulations shareholders 
will be invited to approve this report at the annual general 
meeting the vote on the resolution will have advisory status only 
will be in respect of remuneration policy and overall remuneration 
packages and will not be specific to individual levels of 
remuneration the members of the remuneration committee will 
be available at the annual general meeting to answer 
shareholders’ questions about the directors’ remuneration 
the sections of this report dealing with directors’ emoluments 
and share interests have been audited pages 84 to 86 by the 
group’s external auditors
information not subject to audit
composition of the committee
membership of the remuneration committee during the year and 
to the date of this report is as follows
■
 bernard de combret chairman
■
 michael press   
■
 rijnhard van tets  
given their diverse backgrounds and experience the board 
believes that the current committee members provide a suitably 
balanced perspective on executive remuneration matters none of 
the directors who served during the year had or has any personal 
interest in the matters to be decided other than as shareholders of 
the company any potential conflict of interest arising out of 
crossdirectorships or any daytoday involvement in the 
management of the group’s business activities 
as previously reported in the corporate governance report 
bernard de combret and michael press will be stepping down 
from the board at the 2010 agm the board intends that subject 
to shareholders appointing thomas thune andersen and stefano 
cao at the 2010 agm the committee’s membership will be as 
follows with effect from 13 may 2010
■
 thomas thune andersen chairman
■
 kjell almskog
■
 stefano cao
directors’ remuneration report 78
petrofac annual report 
and accounts 2009
79
petrofac annual report 
and accounts 2009
governance
individual elements of remuneration
the balance between the fixed and variable elements of 
remuneration varies depending on performance the chart  
below shows the new anticipated balance between fixed and 
variable pay following the changes to variable pay outlined above 
fixedvariable pay mix
composition of total remuneration package from 
2010 at maximum performance
basic salary cash allowances and noncash benefits
basic salary
ordinarily the committee determines an executive director’s basic 
salary at the beginning of each year and any change is applied with 
effect from 1 january 
at the time of the original listing of the company the committee 
set salary levels appreciably below the prevailing rate 
since the company has grown significantly since ipo it is currently 
recognised that basic salaries and pension arrangements are 
significantly behind market practice due to the prevailing 
economic conditions at the beginning of 2009 the committee  
did not award significant salary increases to executive directors 
keeping increases of between 3–6 in line with nearly all other 
petrofac employees the one exception to this was maroun 
semaan who received a 125 increase to reflect his promotion  
to group chief operating officer with effect from 1 january 2009
as outlined on page 77 the committee awarded modest basic 
salary increases of 5 to its executive directors with effect from  
1 january 2010 changes to basic salaries are as follows
   basic salary  
  2009 with effect from  
  basic salary 1 january 2010
ayman asfari  £462000 £485000
maroun semaan  us450000 us472500
amjad bseisu  £275000 £289000
keith roberts  £278000 £292000
cash allowances 
in addition to basic salary and noncash benefits uk resident 
executive directors receive a cash allowance in place of benefits 
including but not limited to car allowances and pension 
contributions none of the directors is eligible to receive pension 
contributions from the company
in 2009 ayman asfari received a cash allowance of £40000 whilst 
the other ukbased executive directors received £30000 these 
amounts were unchanged from 2008 
in 2010 all executive directors will receive cash allowances of 
£50000 the committee has made these small adjustments to 
cash allowances to greater align the quantum with practice in  
the wider market a more detailed review of pension and benefits 
will be undertaken in 2010 and a more meaningful pension 
supplement may be implemented
the company pays a cash allowance in respect of housing and 
transport to maroun semaan in line with local market practice in 
2009 maroun semaan received a cash allowance of us180000 
for the year in line with the increases for the ukbased executive 
directors maroun semaan will receive cash allowances of 
us220000 in 2010
in addition to basic salary maroun semaan as a uae resident 
executive director is required by local statute to receive a cash 
sum called an end of service indemnity from his employer on the 
termination of his employment within the uae accordingly the 
company accrues an amount each year 
the following table summarises the proposed changes to petrofac’s remuneration policy and more particularly to petrofac’s individual 
remuneration elements
directors’ remuneration report
directors’ remuneration report
continued
current policy proposed changes
basic salary role and contribution – market median or below  
however 2009 basic salaries are below lower quartile 
compared to uk companies of similar size and complexity 
and below industry benchmarks
no change to overall policy – remains market median  
or below
increases for executive directors of 5 with effect from  
1 january 2010 basic salary levels will be reviewed further  
in 2010
cash 
allowances 
noncash 
benefits and 
pension
market standard for role and geographic location 
current levels are below median
none of the executive directors is eligible to receive pension 
contributions from the company
no change to overall policy
increase of either £10000 or £20000 to cash allowance  
for uk directors with effect from 1 january 2010 maroun 
semaan also received an increase to his allowance of 
us40000
cash allowances to be reviewed later in 2010
annual cash 
bonus
maximum of 100 of basic salary or 150 for outstanding 
performance
award subject to achievement of financial safety and 
personal performance targets over the relevant financial year
maximum of 200 of basic salary for outstanding 
performance with effect from the 2010 bonus year ie 
payments to be made in march 2011
bonuses will continue to be determined based on 
achievement of financial safety and personal performance 
targets over the relevant financial year
performance 
share plan 
psp
maximum grant level of 100 of basic salary or 150 in 
exceptional circumstances
50 of awards are subject to total shareholder return tsr 
relative to an international peer group on an index tsr basis
■
 0 vesting below median 
■
 30 vesting at median 
■
  100 vesting for outperformance of the median by 25
50 of awards are subject to an achievement of compound 
annual growth in earnings per share eps
■
 0 vesting for 15 growth pa
■
 30 vesting for 20 growth pa
■
  100 vesting for 25 growth pa
maximum grant level proposed to increase to 200 of basic 
salary 300 in exceptional circumstances for awards made 
in 2010 onwards amendments to current plan to be submitted 
for shareholder approval at the 2010 agm see pages 80 and 
81 for further details
no significant change to tsr performance condition for  
2010 awards
changes to eps performance targets
■
 0 vesting for 10 growth pa
■
 30 vesting for 15 growth pa
■
  100 vesting for 20 growth pa
20
fixed
80
variable 80
petrofac annual report 
and accounts 2009
81
petrofac annual report 
and accounts 2009
governance
eps element 50 of award
eps is the earnings which excludes dividends in pence 
attributable to one ordinary share the company’s eps 
performance over a threeyear period is calculated and vesting  
is in line with the vesting schedule attached to a particular award
the vesting schedule attached to awards in 2009 and prior years  
is as shown in the following table
2006 to 2009 awards
eps compound annual growth percentage of eps 
over three year period  element of award vesting
15 or less 0
more than 15 but less than 20  straightline vesting 
between 0 and 30 
20 30
more than 20 but less than 25  straightline vesting 
between 30 and 100 
25 or more 100
the committee reviewed the eps targets for the 2010 psp 
awards in doing so it gave consideration to internal growth 
projections market consensus figures and general external 
conditions the eps targets for the 2010 psp awards have  
been reduced accordingly 
however the committee considers the revised eps targets to be 
extremely stretching achieving 20 per annum eps growth would 
represent exceptional performance in current market conditions 
and given exceptional growth to date 
2010 awards
eps compound annual growth percentage of eps 
over threeyear period  element of award vesting
10 or less 0
more than 10 but less than 15 straightline vesting   
  between 0 and 30 
15 30
more than 15 but less than 20 straightline vesting   
  between 30 and 100 
20 or more 100
other senior management management and  
allemployee schemes
as part of its oversight role the committee has considered the 
following three schemes
deferred bonus share plan dbsp
under the dbsp selected members of management are invited or 
in some cases required to defer a proportion of their annual cash 
bonus into company shares under the plan the shares which are 
acquired with a participant’s cash bonus are called ‘invested 
shares’ following such an investment the company will generally 
grant the participant an additional award over a number of shares 
being a specified ratio to the number of his or her invested shares 
and these awards are called ‘matching shares’ to date matching 
shares have been awarded to participants on the basis of a 11 
ratio the sole exceptions to this being two awards made in 2006 to 
an executive director and senior executive respectively in these 
particular cases it was felt to be inappropriate to grant any 
matching shares
the committee believes that tsr remains the best measure of the 
company’s ultimate delivery of shareholder returns and that eps is 
the internal financial measure that is most closely linked to value 
creation in an oil  gas services business
tsr element 50 of award
for the 2010 psp grant the tsr performance measure and 
accompanying vesting schedule will remain the same as  
previous grants 
tsr is the percentage return to a purchaser of an ordinary share  
in the company arising from share price appreciation and 
reinvestment of dividends over a given period the tsr of the 
company is measured and then compared against the median 
tsr of an index of a number of international peer companies 
details of the index constituents are provided below
vesting is in line with the following scale
tsr relative to unweighted percentage of tsr 
index of comparator group   element of award vesting
less than index median 0
equal to index median 30
more than index median by up to 25  straightline vesting 
between 30 and 100
more than index median by 25 or more 100
1  for awards granted from 2006 to 2009 it was necessary to achieve eps 
growth over the period of at least retail price index plus 3 over the three 
year vesting period from 2010 onwards vesting of the tsr element is 
subject to the achievement of strong underlying financial performance  
of petrofac 
2  in 2006 the companies from which the comparator index is composed 
were as follows abbot group plc aker kvaerner asa amec plc  
helix energy solutions group inc formerly cal dive international inc 
chicago bridge  iron co nv entrepose contracting expro international 
group plc halliburton co jgc corp saipem spa schlumberger 
limited snclavalin group inc technip sa wood group john plc 
fluor corporation foster wheeler limited and worleyparsons limited 
for grants made in 2007 and 2008 the comparator index included the 
above listed companies and in addition tecnicas reunidas sa for the 
2009 grant the 2008 comparator group was used excluding abbot  
group plc and expro international group plc for the 2010 grant  
helix energy solutions will be replaced by maire tecnimont spa  
in the comparator group
3  the committee is authorised under the rules of the psp to make 
retrospective adjustments to the comparator index for any year of award 
in the event that one or more of the constituent companies are subject  
to any of the following delisting merger acquisition or other such event 
in 2008 abbot group plc and expro international group plc ceased to 
exist as independent companies the committee therefore decided that 
these two entities would be removed from the comparator index for 2006 
2007 and 2008 awards with effect from the respective months in which 
they ceased to be independent companies 
4  it is assumed that £100 is notionally invested at the start of the 
performance period equally amongst all the companies making up the 
tsr index at the end of the vesting period the index will represent the 
value of what the initial notional investment of £100 would have returned 
over the period this will be representative of the average return made by 
the company’s competitors this is then compared to the return by an 
equivalent notional investment of £100 in petrofac over the same period 
share incentive schemes
performance share plan psp
executive directors and a restricted number of other members  
of senior management may receive performancerelated share 
awards on an annual basis participants are granted contingent 
awards to receive ordinary shares in the company which will  
in normal circumstances vest after three years subject to the 
continued employment of the participant and to the extent that 
performance conditions have been satisfied 
the performance period under the psp is three years as this is 
considered to be an appropriate longterm time horizon for both 
performance measurement and retention 
under the existing psp the maximum award level in any financial 
year is 100 of basic annual salary or in circumstances which the 
committee deems to be exceptional 150 of basic annual salary 
as part of the remuneration review carried out during 2009 the 
levels of award under the psp were considered in the context of 
the total remuneration package the committee was of the opinion 
that in order to recognise and reward the delivery of outstanding 
business performance it would be appropriate to increase 
performancerelated incentives particularly those measured over 
the longerterm
therefore in light of this the committee has decided to amend  
the rules of the psp and submit this for shareholder approval at  
the 2010 agm this is to enable maximum psp award levels to be 
200 of salary or 300 of salary in exceptional circumstances 
such as recruitment 
it is proposed that these new limits will also apply to the 2010 
awards and these awards will be made immediately following  
the 2010 agm 
it is proposed that award levels of 200 of salary will be made  
to all executive directors in 2010 except maroun semaan who  
will receive an exceptional psp award of 225 of salary due to  
his outstanding contribution to the group’s extremely strong 
performance in 2009 
the committee believes that psp performance conditions should 
strike a balance between achieving alignment with ultimate 
shareholder returns and reward for delivery of strong underlying 
performance the latter being more directly under the control of 
senior management
vesting of psp grants to date are made subject to two 
performance measures calculated over the three years following 
the grant of the award
i total shareholder return tsr relative to an index of a 
comparator group of uk and international companies for 50 
of the award and
ii earnings per share eps growth relative to predefined targets 
for 50 of the award
noncash benefits
all executive directors receive certain benefitsinkind uk resident 
executive directors currently receive private health insurance life 
assurance and longterm disability insurance maroun semaan 
who is resident in the uae receives similar benefits as well as 
other benefits typical for expatriate senior executives such as 
education and return flights to his permanent home
annual cash bonus payments
in january of each year the committee considers whether or not 
to award each executive director an annual cash bonus for the 
previous year in its deliberations the committee considers two 
principal elements in determining a director’s cash bonus
■
 first the extent to which the group’s financial performance 
and as appropriate the business division for which the 
individual director is primarily responsible have achieved 
annually established budgets and targets
■
 second the extent to which the individual has met personal 
objectives which are agreed at the start of each year in 
question and which are established with the aim of achieving 
the group’s business strategy each executive director’s 
personal objectives include health and safety targets in 
addition some executive directors have additional targets  
in relation to succession planning risk management and  
the development and implementation of the group’s social 
environmental and ethical programme in this way the 
remuneration committee considers that it has in place  
an incentive structure for members of senior management 
which promotes responsible behaviour
for 2009 in line with previous practice the committee set the 
maximum bonus potential at 100 of basic annual salary for 
achievement of corporate and personal targets but retained the 
ability to increase this to 150 of basic annual salary if outstanding 
performance were to be achieved 
in respect of 2009 the committee awarded cash bonus awards 
equal to 150 of salary to ayman asfari and maroun semaan in 
recognition not only of the group’s outstanding financial results  
for 2009 but also their respective personal performances keith 
roberts and amjad bseisu were each awarded cash bonus 
awards equal to 100 of their respective basic salaries 
the following table sets out the annual bonus awards made to 
executive directors’ for 2009 performance
  annual bonus approximate 
  in respect of 2009  of salary
ayman asfari  £700000 150
maroun semaan  us675000 150
amjad bseisu  £275000 100
keith roberts  £278000 100
the committee proposes to increase the maximum cash bonus 
that may be awarded to executive directors to 200 of basic 
salary with effect from the 2010 performance year in order to 
further incentivise exceptional performance bonuses will continue 
to be determined based on achievement of financial safety and 
personal performance targets over the relevant financial year
directors’ remuneration report
directors’ remuneration report
continued 82
petrofac annual report 
and accounts 2009
83
petrofac annual report 
and accounts 2009
governance
directors’ remuneration report
executive directors’ service contracts
each of the executive directors has a 12month rolling service contract with the company and is contractually restricted to a termination 
payment equal to 12 months’ salary and benefits further each executive director is subject to reelection by shareholders  
at least every three years none of the executive directors is currently subject to a contractual retirement date details of the directors’ 
service contracts are disclosed in the table below
  
   
number of months’ notice
name of executive director date of service contract and date first appointed last reelected next due
 
for reelection company director
ayman asfari 13 september 2005 11 january 2002 2008 agm 2011 agm 12 12
maroun semaan 13 september 2005 11 january 2002 2009 agm 2012 agm 12 12
amjad bseisu¹ 13 september 2005 11 may 2007 2009 agm na 12 12
keith roberts 13 september 2005 6 april 2002 2008 agm 2011 agm 12 12
1 amjad bseisu will be stepping down from the board subject to the successful admission to listing of enquest plc
executive directors are entitled to accept up to one nonexecutive directorship outside and unconnected to the group provided prior 
permission is sought from the board any fees earned from such an appointment are retained by the director no executive director 
currently holds any such external directorships
nonexecutive directors
details of current individual nonexecutive directors’ contracts for services are given in the table below these directors are not part of 
any pension bonus or share incentive scheme of the company or group directors are subject to reelection at least every three years 
and are typically expected to serve two threeyear terms  
none of the nonexecutive directors has a service contract and none is entitled to compensation on leaving the board save that if 
requested to resign the chairman and each nonexecutive director is entitled to receive prior notice or fees in lieu of notice as in the  
table below
  date of latest letter of appointment general meeting at  required notice from 
name of director and date first appointed which last reelected next due for reelection company in months
rodney chase 13 september 2005 21 june 2005 2008 agm 2011 agm 3
kjell almskog 13 september 2005 23 march 2005 2009 agm 2012 agm 3
bernard de combret¹ 13 september 2005 19 november 2003 2007 agm na 3
michael press¹ 13 september 2005 30 april 2002 2007 agm na 3
rijnhard van tets 2 february 2007 11 may 2007 2007 agm 2010 agm 3
1 bernard de combret and michael press will be stepping down from the board after the 2010 agm and as such will not be offering themselves for reelection
with effect from 1 january 2010 with the exception of the chairman nonexecutive directors will be paid a basic annual fee of £55000 
for their role on the board 2009 £47000 and further annual fees of £12000 per chairmanship of a committee 2009 £8000 and 
£12000 for acting as the senior independent director 2009 £8000 the board as a whole is responsible for deciding nonexecutive 
directors’ fees unless such fees exceed £500000 in aggregate in which case shareholder approval in general meeting would be sought
the remuneration of the chairman of the board is set by the remuneration committee the chairman’s fee is all inclusive and is  
currently £100000 per year having last been considered by the remuneration committee in 2006 however it is proposed to increase 
the chairman’s fee to £120000 with effect from 21 june 2010
 
funding policy in relation to share incentive plans
in 2007 the board approved a funding policy in relation to the 
company’s employee benefit trust which holds shares to be used 
to satisfy awards under the company’s dbsp psp and rsp the 
company reviews its contingent obligations under the above listed 
share incentive schemes on a quarterly basis with a view to 
ensuring that the employee benefit trust should purchase under  
a loan arrangement with the group and hold shares sufficient to 
cover between 80 to 100 of its maximum liability at any time 
under the three schemes
performance graph
the company’s total shareholder return is defined as the 
company’s share price growth plus any dividends used to acquire 
further shares in petrofac for shareholders’ information the 
company’s tsr performance since the company was admitted  
to listing on the london stock exchange in october 2005 is shown 
on the graph below compared with the performance achieved by 
the ftse 100 index and the ftse 250 index excluding investment 
trusts the committee believes that due to petrofac rejoining the 
ftse 100 index in march 2009 both of these indices are useful to 
allow a meaningful assessment of the company’s performance 
during this period
600
500
400
300
200
100
0
oct
07
jun
07
feb
07
oct
06
jun
06
feb
06
oct
09
dec
09
jun
09
feb
09
oct
08
jun
08
feb
08
oct
05
tsr rebased to 100 on listing date
ftse 250 excluding investment trusts
source datastream
ftse 100 
petrofac
 
subject to a participant’s continued employment at the time of 
vesting invested and matching share awards may either vest 100 
on the third anniversary of grant or alternatively vest onethird on 
the first anniversary of grant onethird on the second anniversary 
of grant and the final third on the third anniversary of grant the 
remuneration committee uses its discretion to determine whether 
or not a participant should be subject to either threeyear cliff or 
annual vesting or a mixture thereof but in doing so takes 
management’s recommendations into consideration
in 2007 the remuneration committee decided that neither 
executive directors nor the most senior members of management 
should participate in the scheme as there are no performance 
conditions attached to such awards if executive directors or 
members of the group’s most senior management are considered 
for dbsp participation in future years the company undertakes 
not to make matching awards unless such awards are subject to 
suitably stretching performance conditions and a deferral period of 
at least three years 
restricted share plan rsp
under the rsp selected employees are made grants of shares on 
an ad hoc basis throughout the year the committee intends that 
the scheme 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 committee 
periodically monitors the level of awards executive directors are 
not eligible to participate in the scheme   
the petrofac approved share incentive plan sip
under the sip all uk employees including uk resident directors 
may invest up to £1500 per tax year of gross salary or if less 
10 of salary to purchase ordinary shares there is no holding 
period for these shares
dividends and voting rights in respect of shares awarded 
under the group’s share incentive schemes
participants in the psp dbsp and rsp have no dividend or voting 
rights in respect of their respective awards until such time as their 
awards vest however when the company pays a dividend the 
number of shares comprised in an award will be increased by the 
number of shares which could have been acquired with the 
amount of dividend received had the participant been the owner of 
the award shares the vesting of the extra shares will be subject to 
the same performance conditions as the original award shares
participants in the sip receive dividends in respect of their shares 
like any other shareholder the trustee invites participants prior to  
a general meeting to indicate how he or she wishes the trustee to 
vote in respect of his or her shares on any resolutions to be put  
to shareholders in general meeting
directors’ remuneration report
continued 84
petrofac annual report 
and accounts 2009
85
petrofac annual report 
and accounts 2009
governance
directors’ remuneration report
awards of shares under the psp 
awards of shares during the year to executive directors under the psp are disclosed in the table below
   of number of shares granted    number of 
  basic salary shares at in year dividend   shares at date 
director and in year 31 december under annual shares granted lapsed vested 31 december upon which market price
date of grant of grant 2008
1
 award cycle
1
 in the year 
2
 in year in year 2009
1
 shares vest on date of grant
ayman asfari         
24 april 2006 714 72894 – – – 72894 nil
3
 24 april 2009 353p
19 march 2007 1000 93235 – 2436 – – 95671
3
 19 march 2010 415p
19 march 2008 1227 101383 – 2649 – – 104032 
4
 19 march 2011 522p
19 march 2009 1309 – 113572 2967 – – 116539 
4
 19 march 2012 545p
maroun semaan         
24 april 2006 700 38877 – – – 38877 nil
3
 24 april 2009 353p
19 march 2007 1000 44053 – 1151 – – 45204
3
 19 march 2010 415p
19 march 2008 1237 46534 – 1216 – – 47750 
4
 19 march 2011 522p
19 march 2009 1222 – 71402 1865 – – 73267 
4
 19 march 2012 545p
amjad bseisu         
24 april 2006 728 46167 – – – 46167 nil
3
 24 april 2009 353p
19 march 2007 1000 54386 – 1421 – – 55807
3
 19 march 2010 415p
19 march 2008 923 45059 – 1177 – – 46236 
4
 19 march 2011 522p
19 march 2009 909 – 46930 1226 – – 48156 
4
 19 march 2012 545p
keith roberts         
24 april 2006 714 48596 – – – 48596 nil
3
 24 april 2009 353p
19 march 2007 1000 56977 – 1488 – – 58465
3
 19 march 2010 415p
19 march 2008 889 45059 – 1177 – – 46236 
4
 19 march 2011 522p
19 march 2009 950 – 49558 1294 – – 50852 
4
 19 march 2012 545p
1  the awards which are disclosed are the maximum number which can vest under the performance conditions attached to awards made under the psp  
the performance conditions under which these awards would vest in full are explained on pages 80 and 81
2 dividends awarded on the shares granted under the psp are reinvested to buy further shares 
3  the performance conditions for the april 2006 psp award were satisfied and the award vested in full during the year the share price of the shares on the date of 
vesting 24 april 2009 was 588p shares awarded on 19 march 2007 have satisfied their performance conditions in full and will therefore vest 100 on 19 march 
2010 based on a share price of 1027p which is the share price at 26 february 2010 being the latest practicable date prior to the adoption of this report by the 
remuneration committee the values of the awards made to the executive directors would be as follows ayman asfari £982541 amjad bseisu £573138 keith 
roberts £600436 and maroun semaan £464245
4  shares awarded on 19 march 2008 and 19 march 2009 are not due to vest until 19 march 2011 and 2012 respectively it is too early in the committee’s opinion 
to provide shareholders with a meaningful assessment to the extent that these shares will vest if at all
audited information
amount of each director’s emoluments in the relevant financial year
the remuneration of each director in respect of 2009 with 2008 comparison comprised
     salaries cash   2009 2008 
       fees allowances benefits cash bonus total total 
     us’000 us’000
1
 us’000
2
 us’000 us’000 us’000
executive directors      
ayman asfari
3
   722 63 44 1136 1965 1794
maroun semaan   450 217 52 675 1394 1189
keith roberts³   435 47 1 451 934 1052
nonexecutive directors      
rodney chase   158 – – – 158 188
kjell almskog   87 – – – 87 95
bernard de combret   87 – – – 87 95
michael press   87 – – – 87 82
rijnhard van tets   87 – – – 87 95
    2543 374 98 2708 5723 5589
1  payment in lieu of pension allowance and other benefits for uk resident directors and end of service indemnity and various allowances for the uae resident 
director none of the directors are eligible to receive pension contributions from the company
2  ayman asfari’s benefits primarily relate to the employment of a personal assistant who spends part of her time in the administration of his philanthropic work  
and maroun semaan receives inter alia benefits in relation to his children’s education and return flights to his permanent home 
3  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 closing rate for the year
directors’ remuneration report
continued 86
petrofac annual report 
and accounts 2009
87
petrofac annual report 
and accounts 2009
governance
statement of directors’  
responsibilities
award of shares under the dbsp
keith roberts was granted 31153 shares under the dbsp on 24 april 2006 the award was made solely in respect of invested shares 
no matching shares were granted following the award of dividend shares in 2006 2007 and 2008 the number of invested shares was 
32399 shares on 31 december 2008 the award vested in full on 24 april 2009 the market price at the date of grant was 353p and the 
market price on 24 april 2009 was 588p
sums paid to third parties in respect of executive directors’ services
no sums were paid to third parties in respect of any executive director’s services 2008 nil
directors’ beneficial shareholdings at 31 december 2009
directors’ personal shareholdings which include family interests and which are not related to their remuneration have been disclosed 
under the requirements of the ukla listing rules and are as follows
       number of number of  
       shares as at shares as at  
       31 december 2009 31 december 2008
executive directors
ayman asfari      53782114  53782114
maroun semaan      30607676  30568799
keith roberts      2120000  2120000
nonexecutive directors
rodney chase      800000  800000
kjell almskog      400000  400000
bernard de combret      700000  700000
michael press      240000  240000
rijnhard van tets      100000  100000
the company’s share price at the end of the financial year was 1043p and the market price during the year was in the range 349p  
to 1063p 
changes since the year end
there have been no changes since the year end to the information disclosed in this report 
annual general meeting approval
the remuneration report will be submitted for approval to the annual general meeting to be held on thursday 13 may 2010
on behalf of the board
bernard de combret
chairman of the remuneration committee 
5 march 2010
directors’ responsibilities
the directors are responsible for preparing the annual report the group financial statements and the parent company financial 
statements in accordance with applicable law and regulations the directors have chosen to prepare the group financial statements  
and the parent company financial statements in accordance with international financial reporting standards the directors are also 
responsible for the preparation of the remuneration report and corporate governance report which they have chosen to prepare 
being under no obligation to do so under jersey law
jersey company law requires the directors to prepare financial statements for each financial period in accordance with any 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 and group at the period end and the profit or loss of the company and group for the period then ended in preparing these 
financial statements the directors should
■
 select suitable accounting policies and then apply them consistently
■
 make judgements and estimates that are reasonable and prudent
■
 specify which generally accepted accounting principles have been adopted in their preparation
■
 prepare the financial statements on a going concern basis unless it is 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 its transactions and as 
such as to disclose with reasonable accuracy at any time the financial position of the company and group 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 company and group 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 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 business review on pages 18 to 52 the financial position of the company its cash flows liquidity position and borrowing facilities 
are described in the financial review on pages 50 to 52 in addition note 31 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 despite the current uncertain economic outlook
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
statement of directors’ responsibilities
directors’ remuneration report
continued 88
petrofac annual report 
and accounts 2009
89
petrofac annual report 
and accounts 2009
financial statements
consolidated  
income statement
independent auditors’ report
to the members of petrofac limited
consolidated income statement 
for the year ended 31 december 2009
       2009 2008 
      notes us’000 us’000
revenue      4a 3655426 3329536
cost of sales      4b 3035120 2776661
gross profit        620306 552875
selling general and administration expenses     4e 180197 202167
other income      4c 4075 7421
other expenses      4d 2998 2543
profit from operations before tax and finance incomecosts     441186 355586
finance costs      5 5582 13906
finance income      5 11942 16688
profit before tax       447546 358368
income tax expense      6 84515 93379 
profit for the year       363031 264989 
 
attributable to 
 petrofac limited shareholders       353603 264989
 minority interests       9428 –
        363031 264989
        
earnings per share us cents      7 
basic       10478 7803
diluted       10319 7711
the attached notes 1 to 33 form part of these consolidated financial statements
we have audited the group financial statements of petrofac limited 
‘the company’ and its subsidiaries together ‘the group’ for the 
year ended 31 december 2009 which comprise the consolidated 
income statement the consolidated statement of comprehensive 
income the consolidated statement of financial position the 
consolidated cash flow statement the consolidated statement  
of changes in equity and the related notes 1 to 33 the financial 
reporting framework that has been applied in their preparation  
is applicable jersey law and international financial reporting 
standards ifrss 
we have reported separately on the parent company financial 
statements of petrofac limited for the year ended 31 december 
2009 and on the information in the directors’ remuneration report 
that is described as having been audited
this report is made solely to the company’s members as a body 
in accordance with the provisions of our engagement letter and 
article 110 of the companies jersey law 1991 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 auditors
as explained more fully in the statement of directors’ 
responsibilities set out on page 87 the company’s directors are 
responsible for the preparation of the group financial statements 
and for being satisfied that they give a true and fair view the 
directors are also responsible for the preparation of the corporate 
governance report which they have chosen to prepare on  
a voluntary basis
our responsibility is to audit 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 apb’s ethical standards  
for auditors 
in addition the company has also instructed us to review whether 
the corporate governance report reflects the company’s 
compliance with the nine provisions of the 2008 combined  
code and the directors’ statement on going concern which  
for a listed ukincorporated company are specified for review  
by the company’s auditor by the listing rules of the financial 
services authority 
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
opinion on financial statements
in our opinion the group financial statements
 give a true and fair view in accordance with international financial 
■
reporting standards of the state of the group’s affairs as at  
31 december 2009 and of its profit for the year then ended and
 have been properly prepared in accordance with the requirements 
■
of the companies jersey law 1991
matters on which we are required to report by exception
we have nothing to report in respect of the following
under the companies jersey law 1991 we are required to report 
to you if in our opinion
 proper accounting records have not been kept by the company
■
 the company’s accounts are not in agreement with the 
■
accounting records or
  we have not received all the information and explanations we 
■
require for our audit
the company requested that we review
  the directors’ statement set out on page 87 in relation to going 
■
concern and
  the part of the corporate governance statement on page 69 
■
relating to the company’s compliance with the nine provisions of 
the june 2008 combined code which for a listed ukincorporated 
company are specified for review by the company’s auditor by 
the listing rules of the financial services authority
other matter
we have reported separately on the parent company financial 
statements of petrofac limited for the year ended 31 december 
2009 and on the information in the directors’ remuneration report 
that is described as having been audited 
ernst  young llp
london 
5 march 2010 90
petrofac annual report 
and accounts 2009
91
petrofac annual report 
and accounts 2009
financial statements
consolidated statement of financial position 
at 31 december 2009
consolidated statement 
of financial position
consolidated statement of comprehensive income 
for the year ended 31 december 2009
       2009 2008 
      notes us’000 us’000
assets
noncurrent assets
property plant and equipment      9 677996 413064
goodwill      11 97922 97534
intangible assets      12 73107 38353
availableforsale financial assets      14 539 566
other financial assets      15 12535 9126
deferred income tax assets      6c 49726 46444
        911825 605087
current assets   
inventories      16 9798 4077
work in progress      17 333698 252695
trade and other receivables       18 878670 700931
due from related parties      30 18260 2907
other financial assets      15 30957 9709
cash and shortterm deposits      19 1417363 694415
        2688746 1664734
total assets       3600571 2269821
 
equity and liabilities   
equity attributable to petrofac limited shareholders    
share capital      20 8638 8636
share premium       69712 68203
capital redemption reserve       10881 10881
shares to be issued      10 1988 1988
treasury shares      21 56285 69333
other reserves      23 21194 39292
retained earnings       834382 577739
        890510 558822
minority interests       16245 209
total equity       906755 559031
    
noncurrent liabilities   
interestbearing loans and borrowings       24 59195 88188
provisions      25 92103 29663
other financial liabilities      26 27485 32265
deferred income tax liabilities      6c 42192 38196
        220975 188312
current liabilities    
trade and other payables      27 967791 513329
due to related parties      30 57326 559
interestbearing loans and borrowings      24 58071 54412
other financial liabilities      26 3634 6362
income tax payable       88219 110428
billings in excess of cost and estimated earnings     17 461144 285527
accrued contract expenses      28 836656 551861
        2472841 1522478
total liabilities       2693816 1710790
total equity and liabilities       3600571 2269821
 
the financial statements on pages 89 to 129 were approved by the board of directors on 5 march 2010 and signed on its behalf by 
keith roberts – chief financial officer
the attached notes 1 to 33 form part of these consolidated financial statements
       2009 2008 
      notes us’000 us’000
profit for the year       363031 264989
foreign currency translation       15087 84232
net gains on maturity of cash flow hedges 
 recycled in the year      23 4303 32103
net changes in fair value of derivatives and 
 financial assets designated as cash flow hedges      29229 25907
net changes in the fair value of availableforsale 
 financial assets       – 879
impairment of availableforsale financial assets     14 – 355
other comprehensive incomeloss       40013 142766
total comprehensive income for the year      403044 122223
 
attributable to 
 petrofac limited shareholders       389416 122223
 minority interests       13628 –
        403044 122223
 
the attached notes 1 to 33 form part of these consolidated financial statements 92
petrofac annual report 
and accounts 2009
93
petrofac annual report 
and accounts 2009
financial statements
consolidated statement of changes in equity 
for the year ended 31 december 2009
consolidated statement  
of changes in equity
consolidated cash flow statement 
for the year ended 31 december 2009
       2009 2008 
      notes us’000 us’000
operating activities
profit before tax        447546 358368
adjustments for      
 depreciation amortisation impairment and writeoff     4b 4e 117780 63366
 sharebased payments      4f 13263 9448
 difference between other longterm employment benefits 
   paid and amounts recognised in the income statement     7905 9007
 net finance income      5 6360 2782
 gainloss on disposal of property plant and equipment     4b4d 784 41
 other noncash items net       3233 11303
operating profit before working capital changes      576117 448751
trade and other receivables       176773 194817
work in progress       81003 17486
due from related parties       15353 240
inventories       5721 1821
other current financial assets       4775 1680
trade and other payables       466469 104708
billings in excess of cost and estimated earnings      175617 77422
accrued contract expenses       284795 138395
due to related parties       56767 185
other current financial liabilities       177 –
        1276317 588499
other noncurrent items net       58 1927
cash generated from operations       1276259 586572
interest paid       3351 11526
income taxes paid net       87714 67418
net cash flows from operating activities      1185194 507628
investing activities     
purchase of property plant and equipment      317174 255542
acquisition of subsidiaries net of cash acquired     10 – 40774
purchase of other intangible assets      12 10375 –
purchase of intangible oil  gas assets      12 29230 37036
purchase of availableforsale financial assets      106 –
proceeds from disposal of property plant and equipment     1333 1031
proceeds from disposal of availableforsale financial assets     95 –
interest received       12158 16704
net cash flows used in investing activities      343299 315617
financing activities
proceeds from interestbearing loans and borrowings      – 25000
repayment of interestbearing loans and borrowings      9958 6213
proceeds from capital injection by minority interest      2408 –
treasury shares purchased      21 – 42500
equity dividends paid       98995 64135
net cash flows used in financing activities      106545 87848
 
net increase in cash and cash equivalents      735350 104163
net foreign exchange difference on cash and cash equivalents     6235 20890
cash and cash equivalents at 1 january       649159 565886
cash and cash equivalents at 31 december     19 1390744 649159
the attached notes 1 to 33 form part of these consolidated financial statements
 attributable to shareholders of petrofac limited
  issued  capital 
  share share redemption shares to treasury other  retained  minority total
  capital premium reserve  be issued shares reserves earnings total interests equity 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 
      note 21 note 23
balance at 1 january 2009 8636 68203 10881 1988 69333 39292 577739 558822 209 559031
net profit for the year – – – – – – 353603 353603 9428 363031
other comprehensive income – – – – – 35813 – 35813 4200 40013
total comprehensive income  
 for the year – – – – – 35813 353603 389416 13628 403044
shares issued on acquisition 
 note 10 2 1509 – – – – – 1511 – 1511
sharebased payments charge  
 note 22 – – – – – 13263 – 13263 – 13263
shares vested during the  
 year note 21 – – – – 13048 12617 431 – – –
transfer to reserve for share 
 based payments note 22 – – – – – 10942 – 10942 – 10942
deferred tax on sharebased  
 payment reserve – – – – – 13085 – 13085 – 13085
capital injection by  
minority interests – – – – – – – – 2408 2408
dividends note 8 – – – – – – 96529 96529 – 96529
balance at 31 december 2009 8638 69712 10881 1988 56285 21194 834382 890510 16245 906755
 attributable to shareholders of petrofac limited
  issued  capital 
  share share redemption shares to treasury other  retained  minority total
  capital premium reserve  be issued shares reserves earnings total interests equity 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 
      note 21 note 23
balance at 1 january 2008  
 as previously reported 8636 68203 10881 – 29842 50467 377450 485795 209 486004
restatement – – – – – 36966 – 36966 – 36966
balance at 1 january 2008 
 as restated 8636 68203 10881 – 29842 87433 377450 522761 209 522970
net profit for the year – – – – – – 264989 264989 – 264989
other comprehensive loss – – – – – 142766 – 142766 – 142766
total comprehensive  
 incomeloss for the year – – – – – 142766 264989 122223 – 122223
shares to be issued on acquisition 
 note 10 – – – 1988 – – – 1988 – 1988
sharebased payments charge  
 note 22 – – – – – 9448 – 9448 – 9448
shares vested during the year  
 note 21 – – – – 3009 3009 – – – –
treasury shares purchased  
 note 21 – – – – 42500 – – 42500 – 42500
transfer to reserve for share 
 based payments note 22 – – – – – 9602 – 9602 – 9602
dividends note 8 – – – – – – 64700 64700 – 64700
balance at 31 december 2008 8636 68203 10881 1988 69333 39292 577739 558822 209 559031
 shares held by petrofac employee benefit trust
the attached notes 1 to 33 form part of these consolidated financial statements 94
petrofac annual report 
and accounts 2009
95
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements 
for the year ended 31 december 2009
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 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
estimation uncertainty
the key assumptions concerning the future and other key sources 
of estimation uncertainty at the balance sheet 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
 project cost to complete estimates at each balance sheet date  
■
the group is required to estimate costs to complete on fixed price 
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 balance 
sheet date
 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
 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 2009 
was us97922000 2008 us97534000
 deferred tax assets the group recognises deferred tax assets on 
■
unused tax losses 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 as well as the likelihood of future 
taxable profits the carrying amount of recognised tax losses at 
31 december 2009 was us18413000 2008 us33165000
 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 intangible oil  gas and other intangible 
■
assets the group determines at each balance sheet date whether 
there is any evidence of impairment in the carrying value of its 
intangible oil  gas and other intangible assets this requires 
management to estimate the recoverable value of its intangible 
assets for example by reference to quoted market values  
similar arm’s length transactions involving these assets or value  
in use calculations
 units of production depreciation estimated proven plus probable 
■
reserves are used in determining the depreciation of oil  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 and assumptions 
including the amount of economically recoverable reserves and 
estimates of future oil  gas capital expenditure
interests in joint ventures 
the group has a number of contractual arrangements with other 
parties which represent joint ventures these take the form of 
agreements to share control over other entities ‘jointly controlled 
entities’ and commercial collaborations ‘jointly controlled 
operations’ the group’s interests in jointly controlled entities are 
accounted for by proportionate consolidation which involves 
recognising the group’s proportionate share of the joint venture’s 
assets liabilities income and expenses with similar items in the 
consolidated financial statements on a linebyline basis where  
the group collaborates with other entities in jointly controlled 
operations the expenses the group incurs and its share of the 
revenue earned is recognised in the income statement assets 
controlled by the group and liabilities incurred by it are recognised 
in the balance sheet where necessary adjustments are made  
to the financial statements of the group’s jointly controlled entities 
and operations to bring their accounting policies into line with 
those of the group
foreign currency translation
the company’s functional and presentational currency is united 
states dollars in the accounts of individual subsidiaries 
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 balance sheet 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 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 equity until 
the disposal of the net investment at which time they are 
recognised in the income statement 
the balance sheets of overseas subsidiaries and joint ventures are 
translated into us dollars using the closing rate method whereby 
assets and liabilities are translated at the rates of exchange 
prevailing at the balance sheet date the income statements of 
overseas subsidiaries and joint ventures are translated at average 
exchange rates for the year exchange differences arising on the 
retranslation of net assets are taken directly to a separate 
component of equity
on the disposal of a foreign entity accumulated exchange 
differences are recognised in the income statement as a 
component of the gain or loss on disposal 
1 corporate information 
the consolidated financial statements of petrofac limited the 
‘company’ for the year ended 31 december 2009 were authorised 
for issue in accordance with a resolution of the directors on 
5 march 2010 
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 2009 financial statements 
are shown on pages 131 to 142 the group’s principal activity is the 
provision of facilities solutions to the oil  gas production and 
processing industry
a full listing of all group companies and joint venture companies  
is contained in note 33 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 
availableforsale financial assets 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 thousand us’000 except 
where otherwise stated certain comparative information has been 
reclassified to conform to current period presentation
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 
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
subsidiaries are consolidated from the date on which control is 
transferred to the group and cease to be consolidated from the 
date on which control is transferred out of the group control is 
achieved where the company has the power to govern the financial 
and operating policies of an investee entity so as to obtain benefits 
from its activities all intragroup balances and transactions 
including unrealised profits have been eliminated on consolidation 
minority interests in subsidiaries consolidated by the group are 
disclosed separately from the group’s equity and income 
statement losses attributable to minority interests in excess of its 
interest in the net assets of the subsidiary are adjusted against the 
interest of the group unless there is a binding obligation on the part 
of the minority to contribute additional investment in the subsidiary
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 2009  
the principal effects of the adoption of these new and amended 
standards and interpretations are discussed below
ias 1 ‘presentation of financial statements revised’
the revised standard requires that items of income and expenses 
which are nonowner changes in equity be presented separately in 
a statement of comprehensive income either separately as a single 
statement or as two statements along with the income statement 
the group has decided to opt for the former and present a single 
separate statement of comprehensive income
ifrs 7 ‘financial instruments disclosures amendments’
the amendments require additional disclosures about the fair  
value measurement and liquidity risk the disclosures require that 
for each item recorded at fair value a fair value measurement 
hierarchy be disclosed based on the source of inputs for 
ascertaining the fair values of such items the amendment also 
requires the disclosure of liquidity risk with respect to derivative 
financial instruments used for liquidity management the adoption 
in the current year of the amendment has resulted in additional 
disclosure but does not have an impact on the accounting policies 
and measurement basis adopted by the group
ifrs 8 ‘operating segments’ 
this standard introduces the management approach to segment 
reporting which requires the disclosure of segment information 
based on the internal reports regularly reviewed by the group’s 
chief operating decision maker in order to assess each segment’s 
performance and allocate resources to them the adoption of  
this standard during 2009 has not had any impact on the financial 
position of the group however the segment information disclosed 
has changed as a result of the recent internal restructuring of  
the group
certain new standards amendments to and interpretations of 
existing standards have been issued and are effective for the 
group’s accounting periods beginning on or after 1 january 2010 
or later periods which the group has not early adopted those  
that are applicable to the group are as follows
i  ifrs 3 ‘business combinations revised’ effective for 
annual periods beginning on or after 1 july 2009 have been 
enhanced to amongst other matters specify the accounting 
treatments for acquisition costs contingent consideration 
preexisting relationships and reacquired rights the revised 
standards include detailed guidance in respect of step 
acquisitions and partial disposals of subsidiaries and associates 
as well as in respect of allocation of income to noncontrolling 
interests further an option has been added to ifrs 3 to permit 
an entity to recognise 100 of the goodwill of an acquired 
entity not just the acquiring entity’s portion of the goodwill the 
impact of this standard on the group will be assessed when a 
business combination transaction occurs
ii  ias 27 ‘consolidated and separate financial statements 
amendments’ effective for annual periods beginning on or 
after 1 july 2009 prescribes accounting treatment in respect of 
change in ownership interest in a subsidiary allocation of losses 
incurred by a subsidiary between controlling and noncontroller 
interests and accounting for loss of interest in a subsidiary this 
may affect the group where a subsidiary with noncontrolling 
interest becomes loss making or there is a change in ownership 
interest in any of its subsidiaries
iii  ifric 17 ‘distributions of noncash assets to owners’ this 
interpretation provides guidance in respect of accounting for 
noncash asset distributions to shareholders this interpretation 
is effective for periods beginning on or after 1 july 2009 
management will consider its impact on the financial position  
of the group at the time of any such transaction 96
petrofac annual report 
and accounts 2009
97
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
notes to the consolidated 
financial statements
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  gas assets all intangible oil  gas 
assets are assessed for any impairment prior to transfer and any 
impairment loss is recognised in the 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 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  gas asset 
the unwinding of the discount applied to future decommissioning 
provisions is included under finance costs in the income statement
availableforsale financial assets
investments classified as availableforsale are initially stated  
at fair value including acquisition charges associated with  
the investment
after initial recognition availableforsale financial assets are 
measured at their fair value using quoted market rates gains and 
losses are recognised as a separate component of equity until  
the investment is sold or impaired at which time the cumulative 
gain or loss previously reported in equity is included in the  
income statement
impairment of assets excluding goodwill
at each balance sheet 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 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 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
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 balance sheet 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 balance sheet 
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
2 summary of significant accounting policies continued
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  gas assets at the following rates
oil  gas facilities 10 – 125
plant and equipment 4 – 33
buildings and leasehold improvements 5 – 33
or shorter of the lease term
office furniture and equipment  25 – 100
vehicles 20 – 33
tangible oil  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 
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 shall be 
included in profit or loss 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 income statement in the 
period in which they are incurred
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
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 ifrs8 ‘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
deferred consideration payable on acquisition
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 calculated based on the 
best estimate of the timing of additional payments discounted back 
to present value with the discount factor element recognised as a 
finance cost in the income statement
intangible assets – non oil  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 as 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 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  gas assets
capitalised costs
the group’s activities in relation to oil  gas assets are limited to 
assets in the evaluation development and production phases
oil  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  98
petrofac annual report 
and accounts 2009
99
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
2 summary of significant accounting policies continued
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 income statement as a finance cost
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 third party 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 income statement
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 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 balance sheet
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 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
petrofac employee benefit trust
the petrofac employee benefit trust was established on 7 march 
2007 to warehouse ordinary shares purchased to satisfy various 
new share scheme awards made to the employees of the 
company 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 trust has been 
presented as part of both the company and group financial 
statements in accordance with sic 12 ‘special purpose entities’ 
the cost of shares temporarily held by petrofac employee benefit 
trust are reflected as treasury shares and deducted from equity
leases
the determination of whether an arrangement is or contains a 
lease is based on the substance of the arrangement at inception 
date of 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
the group has entered into various operating leases the payments 
for which are recognised as an expense in the income statement 
on a straightline basis over the lease terms
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
engineering procurement and construction services 
engineering  construction
revenues from fixedprice lumpsum contracts are recognised on 
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 balance sheet 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 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
facilities management engineering and training services 
offshore engineering  operations engineering training 
services and production solutions
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
oil  gas activities energy developments
oil  gas revenues comprise the group’s share of sales from the 
processing or sale of hydrocarbons on an entitlement basis when 
the significant risks and rewards of ownership have been passed  
to the buyer
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 out 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 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 
balance sheet date
deferred income tax is recognised on all temporary differences at 
the balance sheet 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
 deferred income 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 income tax assets is reviewed  
at each balance sheet 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 income tax assets to be utilised 
unrecognised deferred income tax assets are reassessed at each 
balance sheet 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 income 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  
balance sheet date
current and deferred income 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 
income statement
derivative financial instruments and hedging 
the group uses derivative financial instruments such as forward 
currency contracts interest rate collars and swaps and oil price 
collars and forward contracts to hedge its risks associated with 
foreign currency interest rate 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 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 interest rate cap swap 
and oil price collar contracts is determined by reference to  
market values for similar instruments 100
petrofac annual report 
and accounts 2009
101
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
3 segment information 
as described on page 41 with effect from 1 january 2009 the group reorganised to deliver its services through seven business units 
engineering  construction engineering  construction ventures offshore engineering  operations engineering services training 
services production solutions and energy developments as a result the segment information has been realigned to fit the new group 
organisational structure which now comprises four reporting segments being engineering  construction offshore engineering  operations 
engineering training services and production solutions and energy developments rather than as was historically the case split between 
three reporting divisions engineering  construction operations services and energy developments
the following tables represent revenue and profit information relating to the group’s reporting segments for the year ended 31 december 2009 
and the comparative segmental information has been restated to reflect the revised group structure
included within the engineering training services and production solutions segment are three diverse businesses none of which have ever 
met the quantitative thresholds set by ifrs 8 ‘operating segments’ for determining reportable segments
the consolidation adjustments and corporate columns include certain balances which due to their nature are not allocated to segments
year ended 31 december 2009
    engineering
   offshore training services   consolidation
  engineering  engineering   production  energy corporate adjustments  
  construction operations solutions developments  others eliminations total
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
revenue
external sales  2508951 616542 281225 248708 – – 3655426
intersegment sales  – 10178 68431 – – 78609 –
total revenue  2508951 626720 349656 248708 – 78609 3655426
 
segment results  321600 17830 34483 77395 1615 326 449367
unallocated corporate costs  – – – – 8181 – 8181
profitloss before tax and 
 finance incomecosts  321600 17830 34483 77395 9796 326 441186
finance costs  – 258 1582 10702 5705 12665 5582
finance income  14087 94 313 64 10049 12665 11942
profitloss before income tax  335687 17666 33214 66757 5452 326 447546
income tax expenseincome  61328 4853 672 20566 3095 191 84515
minority interests  9240 – 188 – – – 9428
profitloss for the year attributable  
to petrofac limited shareholders  265119 12813 32354 46191 2357 517 353603
year ended 31 december 2008
    engineering
   offshore training services   consolidation
  engineering  engineering   production  energy corporate adjustments  
  construction operations solutions developments  others eliminations total
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
revenue
external sales  1968522 767795 439862 153357 – – 3329536
intersegment sales  25017 8769 70542 – – 104328 –
total revenue  1993539 776564 510404 153357 – 104328 3329536
 
segment results  241160 23172 48258 51713 1176 215 362912
unallocated corporate costs  – – – – 7326 – 7326
profitloss before tax and 
 finance incomecosts  241160 23172 48258 51713 8502 215 355586
finance costs  – 914 3656 8247 7547 6458 13906
finance income  19395 32 998 224 8075 12036 16688
profitloss before income tax  260555 22290 45600 43690 7974 5793 358368
income tax expenseincome  54206 5847 12507 21810 571 1562 93379
profitloss for the year attributable  
to petrofac limited shareholders  206349 16443 33093 21880 8545 4231 264989
2 summary of significant accounting policies continued
derivative financial instruments and hedging continued
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
fair value hedges
for fair value hedges the carrying amount of the hedged item is 
adjusted for gains and losses attributable to the risk being hedged 
the derivative is remeasured at fair value and gains and losses from 
both are taken to the income statement for hedged items carried 
at amortised cost the adjustment is amortised through the income 
statement such that it is fully amortised by maturity
the group discontinues fair value hedge accounting if the hedging 
instrument expires or is sold terminated or exercised the hedge 
no longer meets the criteria for hedge accounting or the group 
revokes the designation
cash flow hedges
for cash flow hedges the effective portion of the gain or loss on 
the hedging instrument is recognised directly in equity while the 
ineffective portion is recognised in the income statement amounts 
taken to equity are transferred to the income statement when the 
hedged transaction affects the 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 existing in equity at that time 
remains in equity and is recognised when the forecast transaction 
is ultimately recognised in the income statement when a forecast 
transaction is no longer expected to occur the cumulative gain or 
loss that was reported in equity is immediately transferred to the 
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 stand
alone derivatives 102
petrofac annual report 
and accounts 2009
103
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
geographical segments
the following tables present revenue from external customers based on project location and noncurrent assets by physical location for  
the years ended 31 december 2009 and 2008
year ended 31 december 2009
  united united arab      other  
  kingdom  emirates syria algeria oman kuwait kazakhstan countries consolidated 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000
revenues from  
external customers 705281 695118 530269 492378 380601 203577 184305 463897 3655426
 
    united  united arab   other  
    kingdom  tunisia emirates algeria malaysia countries consolidated 
    us’000 us’000 us’000 us’000 us’000 us’000 us’000
noncurrent assets 
property plant and equipment   447591 57078 74093 55229 25279 18726 677996
intangible oil  gas assets   – – – – 53888 – 53888
other intangible assets   11654 – – – – 7565 19219
goodwill   85155 – 12099 – – 668 97922
year ended 31 december 2008
  united united arab      other  
  kingdom  emirates oman tunisia algeria syria kazakhstan countries consolidated 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000
revenues from  
external customers 790083 553393 494818 277676 224122 215077 201762 572605 3329536
 
    united  united arab   other  
    kingdom  tunisia emirates algeria malaysia countries consolidated 
    us’000 us’000 us’000 us’000 us’000 us’000 us’000
noncurrent assets 
property plant and equipment   180457 68904 68365 59009 25212 11117 413064
intangible oil  gas assets   29451 – – – – – 29451
other intangible assets   8902 – – – – – 8902
goodwill   80418 – 16448 – – 668 97534
revenue from two customers amounted to us801723000 2008 us822114000 in the engineering  construction segment 
4 revenues and expenses
a revenue
       2009 2008 
       us’000 us’000
rendering of services       3446037 3214782
sale of crude oil  gas       202770 102036
sale of processed hydrocarbons       6619 12718
        3655426 3329536
included in revenues from rendering of services are offshore engineering  operations engineering training services and production 
solutions revenues of a ‘passthrough’ nature with zero or low margins amounting to us230262000 2008 us275947000
b cost of sales
included in cost of sales for the year ended 31 december 2009 is us908000 2008 us88000 loss gain on disposal of property  
plant and equipment used to undertake various engineering and construction contracts in addition depreciation charged on property  
plant and equipment of us104997000 during 2009 2008 us39143000 is included in cost of sales note 9
also included in cost of sales are forward points and ineffective portions on derivatives designated as cash flow hedges and gains  
on maturity of undesignated derivatives of us19508000 2008 us11826000 losses these amounts are an economic hedge but  
do not meet the criteria within ias 39 and are most appropriately recorded in cost of sales
3 segment information continued 
year ended 31 december 2009
    engineering     
   offshore training services    consolidation  
  engineering  engineering   production  energy corporate adjustments    
  construction operations solutions developments  others eliminations total 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
assets
segment assets  2719786 249026 266642 751959 626119 1071692 3541840
intersegment assets  451816 13664 42974 4948 558290 1071692 –
investments  – – – 539 – – 539
   2267970 235362 223668 747550 67829 – 3542379
unallocated assets  – – – – 8466 – 8466
deferred tax assets  4160 2953 5181 21579 15853 – 49726
total assets  2272130 238315 228849 769129 92148 – 3600571
 
other segment information 
capital expenditures 
property plant and equipment  51821 3400 6682 309824 4686 1014 375399
intangible oil  gas assets  – – – 29230 – – 29230
 
charges        
depreciation  24525 1887 7482 78677 251 918 111904
amortisation  415 – 668 – – – 1083
impairment  – – – 4793 – – 4793
other longterm employment benefits  7779 833 1736 52 38 – 10438
sharebased payments  6213 1263 2258 1337 2192 – 13263
year ended 31 december 2008
    engineering     
   offshore training services    consolidation  
  engineering  engineering   production  energy corporate adjustments    
  construction operations solutions developments  others eliminations total 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
assets
segment assets  1590789 221303 279958 450813 – 352592 2190271
intersegment assets  292321 14436 45441 394 – 352592 –
investments  – – – 566 – – 566
   1298468 206867 234517 450985 – – 2190837
unallocated assets  – – – – 32540 – 32540
deferred tax assets  3136 1565 4100 37162 919 438 46444
total assets  1301604 208432 238617 488147 33459 438 2269821
 
other segment information 
capital expenditures 
property plant and equipment  49906 4221 10005 197718 325 6633 255542
intangible oil  gas assets  – – – 37036 – – 37036
other intangible assets  – – 12009 – – – 12009
goodwill  – – 52353 – – – 52353
 
charges 
depreciation  11210 1504 10803 22254 425 840 45356
amortisation  – – 2829 – – – 2829
impairment  – – – 5355 – – 5355
writeoff of intangible oil  gas assets  – – – 9826 – – 9826
other longterm employment benefits  7867 816 1427 60 53 – 10223
sharebased payments  3855 1485 1679 1059 1370 – 9448 104
petrofac annual report 
and accounts 2009
105
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
5 finance costsincome
       2009 2008 
       us’000 us’000
interest payable
longterm borrowings       3171 2888
other interest including shortterm loans and overdrafts     310 1239
unwinding of discount on deferred consideration and decommissioning provisions    2101 1910
ineffective foreign currency cash flow hedge       – 8157
time value portion of derivatives designated as hedges note 31     – 288
total finance cost       5582 13906
 
interest receivable 
bank interest receivable       11487 15989
other interest receivable       455 699
total finance income       11942 16688
6 income tax
a tax on ordinary activities
the major components of income tax expense are as follows
       2009 2008 
       us’000 us’000
current income tax 
current income tax charge       100985 128243
adjustments in respect of current income tax of previous years     31448 4373
deferred income tax 
relating to origination and reversal of temporary differences     5570 33393
adjustments in respect of deferred income tax of previous years     9408 5844
income tax expense reported in the income statement       84515 93379
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
       2009 2008 
       us’000 us’000
accounting profit before tax       447546 358368
at jersey’s domestic income tax rate of 0 2008 20     – 71674
profits exempt from jersey income tax       – 71674
expected tax charge using the weighted average statutory tax rate for the group    107320 92922
overhead allowances        – 4484
expenditure not allowable for income tax purposes       14706 6192
income not taxable        396 415
adjustments in respect of previous years       22040 1470
tax effect of utilisation of tax losses not previously recognised     252 312
unrecognised tax losses       618 946
other permanent differences       15441 –
at the effective income tax rate of 189 2008 261     84515 93379
the group’s effective tax rate for the year ended 31 december 2009 is 189 2008 261 there are a number of factors contributing  
to the decrease in the group effective tax rate these include confirmation during the year of the applicability of a lower tax rate in relation  
to the group’s projects in oman the lower rate applies to the profits earned in earlier years the effect has been recognised as an 
adjustment in respect of prior years in the tax reconciliation also a higher proportion of engineering  construction segmental profits  
have been earned in lower tax rate jurisdictions the energy developments business unit has claimed the tax allowances available to  
it during 2009 and in particular ring fence expenditure supplement which is available for a limited number of accounting periods for 
company’s carrying on a ring fence trade within the uk continental shelf
for the year ended 31 december 2008 the company obtained jersey exempt company status and was therefore exempt from jersey 
income tax on nonjersey source income and bank interest by concession from 1 january 2009 the jersey exempt company status 
regime has been abolished and under the new regime the company will be charged to tax in jersey at the rate of 0 no material impact  
to the income tax expense is expected to arise as a result of this change
4 revenues and expenses continued 
c other income
       2009 2008 
       us’000 us’000
foreign exchange gains       2342 6134
gain on sale of property plant and equipment      – 47
other income       1733 1240
        4075 7421
d other expenses
       2009  2008
       us’000 us’000
foreign exchange losses       2675 1932
loss on sale of property plant and equipment      124 47
other expenses       199 564
        2998 2543
e selling general and administration expenses 
       2009  2008
       us’000 us’000
staff costs       94583 99441
depreciation       6907 6213
amortisation note 12       1083 2829
impairment note 12 and 14       4793 5355
writeoff of intangible oil  gas assets note 12      – 9826
other operating expenses       72831 78503
        180197 202167
other operating expenses consist mainly of office travel legal and professional and contracting staff costs
f staff costs 
       2009 2008 
       us’000 us’000
total staff costs 
wages and salaries       708684 682869
social security costs       27877 28892
defined contribution pension costs       11155 11948
other longterm employee benefit costs note 25      10438 10223
expense of sharebased payments note 22      13263 9448
        771417 743380
of the us771417000 of staff costs shown above us676834000 2008 us643939000 are included in cost of sales with the 
remainder in selling general and administration expenses
us25598000 of prior year engineering  construction contractrelated staff costs have been reclassified from selling general and 
administrative expenses to cost of sales to be consistent with the current year ended 31 december 2009 accounting treatment of  
these costs
the average number of persons employed by the group during the year was 11628 2008 10383
g 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
       2009 2008 
       us’000 us’000
audit of the group financial statements       1369 1177
other fees to auditors 
auditing the accounts of subsidiaries       546 236
other services relating to taxation       178 107
all other services       15 46
        2108 1566 106
petrofac annual report 
and accounts 2009
107
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
8 dividends paid and proposed
       2009 2008 
       us’000 us’000
declared and paid during the year 
equity dividends on ordinary shares 
final dividend for 2007 1150 cents per share      – 39164
interim dividend 2008 750 cents per share      – 25536
final dividend for 2008 1790 cents per share      60332 –
interim dividend 2009 1070 cents per share      36197 –
        96529 64700
       2009 2008 
       us’000 us’000
proposed for approval at agm 
not recognised as a liability as at 31 december 
equity dividends on ordinary shares 
final dividend for 2009 2510 cents per share 2008 1790 cents per share     86729 61831
9 property plant and equipment
   land   office   
   buildings and   furniture assets  
 oil  gas oil  gas  leasehold plant and  and under   
 assets facilities improvements equipment vehicles equipment construction total 
 us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000
cost 
at 1 january 2008 135515 125371 21247 22556 4443 53420 31064 393616
additions 189214 – 35018 2935 2516 25859 – 255542
acquisition of subsidiaries – – 190 – – 534 – 724
transfer from capital work 
 in progress – – 31064 – – – 31064 –
disposals – – 723 683 318 875 – 2599
exchange difference 45626 – 3708 2573 67 9891 – 61865
at 1 january 2009 279103 125371 83088 22235 6574 69047 – 585418
additions 276798 32612 32632 4273 4907 17663 6514 375399
disposals – – 1474 4631 789 3366 – 10260
exchange difference – – 1296 1103 204 3745 165 6513
at 31 december 2009 555901 157983 115542 22980 10896 87089 6679 957070
 
depreciation   
at 1 january 2008 8874 73660 4060 15049 3467 32269 – 137379
charge for the year 7748 13366 5346 2598 1052 15246 – 45356
disposals – – 544 20 237 726 – 1527
exchange difference 435 – 879 1115 47 6378 – 8854
at 1 january 2009 16187 87026 7983 16512 4235 40411 – 172354
charge for the year 60984 15254 14998 3571 2254 14843 – 111904
disposals – – 1330 4516 740 3150 – 9736
exchange difference – – 379 1051 37 3085 – 4552
at 31 december 2009 77171 102280 22030 16618 5786 55189 – 279074
net carrying amount 
at 31 december 2009 478730 55703 93512 6362 5110 31900 6679 677996
at 31 december 2008 262916 38345 75105 5723 2339 28636 – 413064
no interest has been capitalised within oil  gas facilities during the year 2008 us nil and the accumulated capitalised interest net of 
depreciation at 31 december 2009 was us931000 2008 us1430000 
additions to oil  gas assets in the year mainly comprise development expenses capitalised on the group’s interest in the don area assets 
of us274114000 2008 us167265000
6 income tax continued 
c deferred income tax
deferred income tax relates to the following
   consolidated balance sheet consolidated income statement
    
      2009 2008 2009 2008
      us’000 us’000 us’000 us’000
deferred income tax liabilities 
fair value adjustment on acquisitions     2599 3610 139 800
accelerated depreciation     27515 23065 15472 19778
other temporary differences     12078 11521 1441 18094
gross deferred income tax liabilities     42192 38196  
 
deferred income tax assets 
losses available for offset     18413 33165 11130 28747
decelerated depreciation for tax purposes    7596 5893 9409 3932
share scheme     18636 2799 1142 3024
other temporary differences     5081 4587 3949 4418
gross deferred income tax assets     49726 46444  
deferred income tax chargecredit       14978 39237
d unrecognised tax losses
deferred income tax assets are recognised for tax loss carryforwards and tax credits to the extent that the realisation of the related  
tax benefit through the future taxable profits is probable the group did not recognise deferred income tax assets of us15452000  
2008 us20732000
       2009 2008 
       us’000 us’000
expiration dates for tax losses 
no earlier than 2022       11451 11906
no expiration date       3360 6534
        14811 18440
tax credits no expiration date       641 2292
        15452 20732
7 earnings per share 
basic earnings per share amounts are calculated by dividing the net 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 net 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
       2009 2008 
       us’000 us’000
net profit attributable to ordinary shareholders for basic and diluted earnings per share   353603 264989
       2009 2008
       number number
       ’000 ’000
weighted average number of ordinary shares for basic earnings per share    337473 339585
effect of diluted potential ordinary shares granted under sharebased payment schemes   5187 4072
adjusted weighted average number of ordinary shares for diluted earnings per share   342660 343657 108
petrofac annual report 
and accounts 2009
109
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
11 goodwill
a summary of the movements in goodwill is presented below
       2009 2008 
       us’000 us’000
at 1 january       97534 71743
acquisitions during the year note 10       – 52353
reassessment of deferred consideration payable note 10 and 26     8992 –
exchange difference       9380 26562
at 31 december       97922 97534
the decrease in goodwill is as a result of the reassessment of deferred consideration payable on spd group limited of us4351000 
eclipse petroleum technology limited of us1712000 and caltec limited of us2929000
goodwill acquired through business combinations has been allocated to four groups of cashgenerating units which are operating 
segments for impairment testing as follows
 offshore engineering  operations
■
 production solutions
■
 training services
■
 energy developments 
■
these represent the lowest level within the group at which the goodwill is monitored for internal management purposes
offshore engineering  operations production solutions and training services cashgenerating units
the recoverable amounts for the offshore engineering  operations production solutions and training units have been determined  
based on value in use calculations using discounted pretax cash flow projections management has adopted a tenyear projection period  
to assess each unit’s value in use as it is confident based on past experience of the accuracy of longterm cash flow forecasts that these 
projections are reliable the cash flow projections are based on financial budgets approved by senior management covering a fiveyear 
period extrapolated for a further five years at a growth rate of 5 for offshore engineering  operations and training cashgenerating  
units and 25 per annum for production solutions cashgenerating unit since it includes newly acquired businesses note 10 where  
there is less historic track record of achieving financial projections management considers these longterm growth rates to be conservative 
relative to both the economic outlook for the units in their respective markets within the oil  gas industry and the growth rates experienced  
in the recent past by each unit 
energy developments cashgenerating unit
the recoverable amount of the energy developments unit is also determined on a value in use calculation using discounted pretax cash 
flow projections based on financial budgets and economic assumptions for the unit approved by senior management and covering a five 
year period as referred to in ias 36
carrying amount of goodwill allocated to each group of cashgenerating units
       2009 2008 
       us’000 us’000
offshore engineering  operations unit       22975 20433
production solutions unit       52496 56653
training unit       20234 18231
energy developments unit       2217 2217
        97922 97534
key assumptions used in value in use calculations
the calculation of value in use for the offshore engineering  operations production solutions and training services units is most  
sensitive to the following assumptions
market share the assumption relating to market share for the offshore engineering  operations unit is based on the unit resecuring  
those existing customer contracts in the uk which are due to expire during the projection period for the training services unit 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
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 by each unit a growth rate of 5 per annum has been applied for offshore engineering  operations  
and training cashgenerating units for the remaining five years of the tenyear projection period and 25 per annum for production 
solutions cashgenerating unit since it includes newly acquired businesses note 10 where there is less historic track record of achieving 
financial projections
net profit margins estimates are based on management’s assumption of achieving a level of performance at least in line with the recent 
past performance of each of the units
9 property plant and equipment continued 
included in oil  gas assets are us50726000 2008 us2879000 of capitalised decommissioning costs net of depreciation provided 
on the pm304 asset in malaysia the chergui asset in tunisia and the don area assets in the united kingdom
of the total charge for depreciation in the income statement us104997000 2008 us39143000 is included in cost of sales and 
us6907000 2008 us6213000 in selling general and administration expenses
capital work in progress comprises of expenditures incurred in relation to the group erp project
10 business combinations
acquisitions in 2008
eclipse petroleum technology limited
on 25 july 2008 the group acquired a 100 interest in the share capital of eclipse petroleum technology limited eclipse a specialist 
production engineering company the consideration for the acquisition inclusive of transaction costs of sterling 195000 equivalent 
us388000 was sterling 8150000 equivalent us16200000 the consideration of sterling 7955000 equivalent us15812000 
excluding transaction costs comprised sterling 6000000 equivalent us11927000 in cash sterling 1000000 equivalent 
us1988000 to be satisfied with 158177 ordinary shares vesting in two years’ time and the balance being the discounted value of 
deferred consideration amounting to sterling 955000 equivalent us1897000 payable based on the estimated future profitability  
of eclipse the deferred consideration in no event will exceed an additional amount of sterling 9000000 equivalent us17892000 
the fair value of net assets acquired was us3960000 which included fair value of intangible assets recognised on acquisition of 
us2179000 these intangible assets recognised on acquisition comprise a proprietary software system which is being amortised  
over its remaining economic useful life of six years on a straightline basis
during the year income of us152000 2008 us275000 charge for the unwinding of interest has been reflected in the income  
statement reflecting the catchup impact of the change in the estimated deferred consideration payable during 2009
the deferred consideration was reassessed at year end in the light of latest financial projections for the business and the current carried 
amount was reduced by sterling 1025000 equivalent us1712000 with a corresponding decrease in the carried goodwill 
the residual goodwill of sterling 5133000 equivalent us8327000 2008 sterling 6158000 equivalent us8995000 comprises  
the fair value of expected future synergies and business opportunities arising from the integration of the business in to the group
caltec limited
on 29 august 2008 the group acquired a 100 interest in the share capital of caltec limited caltec a specialist production technology 
company for a consideration of sterling 26776000 equivalent us48956000 including transaction costs of sterling 596000  
equivalent us1093000 the consideration of sterling 26180000 equivalent us47863000 excluding transaction costs comprised  
of sterling 15699000 equivalent us28641000 in cash as initial consideration and working capital adjustments and the balance  
being the discounted value of deferred consideration of sterling 10481000 equivalent us19222000 payable based on the expected 
achievement of future performance targets set for the company the deferred consideration in no event will exceed an additional amount  
of sterling 15000000 equivalent us27510000
the fair value of net assets acquired was us8843000 which included fair value of intangible assets recognised on acquisition of 
us9830000 these intangible assets recognised on acquisition represent patented technology which is being amortised over its 
remaining economic useful life of ten years on a straightline basis
during the year a charge of us752000 2008 us248000 for the unwinding of interest has been reflected in the income statement
during the year 97530 sterling 1000000 equivalent us1614000 petrofac shares were issued in settlement of additional deferred 
consideration payable on the original acquisition
the deferred consideration was reassessed at year end in the light of latest financial projections for the business and the current carried 
amount was reduced by sterling 1754000 equivalent us2929000 with a corresponding decrease in the carried goodwill
the residual goodwill of sterling 20072000 equivalent us32563000 2008 sterling 21826000 equivalent us31881000 comprises  
the fair value of expected future synergies and business opportunities arising from the integration of the business in to the group 110
petrofac annual report 
and accounts 2009
111
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
intangible oil  gas assets
oil  gas asset part of the energy development segment additions above comprise of us29230000 2008 us24658000 of 
capitalised expenditure on nearfield appraisal wells in the group’s 30 interest in block pm304 offshore malaysia
during the year a further impairment provision of us4793000 2008 us5000000 was made against the group’s interest in  
permit ntp68 in australia the group’s interests in the project were transferred to a third party for us nil consideration
there were investing cash outflows relating to capitalised intangible oil  gas assets of us29230000 2008 us37036000 in the 
current period arising from predevelopment activities as at 31 december 2009 there were cash and deposits of us nil 2008 
us495000 and trade and other payables of us nil 2008 us508000 arising from predevelopment activities in the current period
other intangible assets
additions to other intangible assets of us10375000 comprise of us7980000 paid on account of intellectual property rights to lng 
technology and capitalisation of further development costs of a proprietary well engineering software system of us2395000 other 
intangible assets comprising customer contracts proprietory software lng intellectual property and patent technology are being 
amortised over their remaining estimated economic useful life of three six eight and ten years respectively on a straightline basis and  
the related amortisation charges included in selling general and administrative expenses note 4e 
13 interest in joint ventures 
in the normal course of business the group establishes jointly controlled entities and operations for the execution of certain of its  
operations and contracts a list of these joint ventures is disclosed in note 33 the group’s share of assets liabilities revenues and 
expenses relating to jointly controlled entities and operations is as follows
       2009 2008 
       us’000 us’000
revenue       31573 28878
cost of sales       28293 21481
gross profit        3280 7397
selling general and administration expenses      16374 1200
other income net       47 –
finance income net       5 87
lossprofit before income tax       13042 6284
income tax       268 523
net lossprofit        13310 5761
 
current assets       61677 38295
noncurrent assets       4830 3644
total assets       66507 41939
 
current liabilities       64619 2446
noncurrent liabilities       3686 –
total liabilities       68305 2446
net liabilitiesassets       1798 39493
14 availableforsale financial assets
       2009 2008 
       us’000 us’000
shares – listed       – 133
units in a mutual fund       539 433
        539 566
availableforsale financial assets consist of units in a mutual fund and therefore have no fixed maturity date or coupon rate
during the year the listed shares were sold for us95000 realising a us38000 loss on disposal in 2008 an impairment provision  
of us355000 was made against the above listed shares held as an availableforsale financial asset on the basis of a fall in the market 
value of these shares was considered to be significant
11 goodwill continued
key assumptions used in value in use calculations continued
discount rate management has used a pretax discount rate of 145 per annum for offshore engineering  operations 2008 161 
production solutions 2008 161 and training services 2008 151 cashgenerating units which are derived from the estimated 
weighted average cost of capital of the group this discount rate has been calculated using an estimated riskfree rate of return adjusted  
for the group’s estimated equity market risk premium and the group’s cost of debt 
the calculation of value in use for the energy developments unit is most sensitive to the following assumptions
discount rate management has used an estimate of the pretax weighted average cost of capital of the group plus a risk premium to reflect 
the particular risk characteristics of each individual investment the discount rate used for 2009 was 105 for each asset 2008 114
oil  gas prices management has used an oil price assumption of us70 2008 us55 per barrel and a gas price of us830 2008 
us640 per mcf for the impairment testing of its individual oil  gas investments
reserve volumes and production profiles management has used its internally developed economic models of reserves and production  
as a basis of calculating value in use
sensitivity to changes in assumptions
with regard to the assessment of value in use of the cashgenerating units management believes that no reasonably possible change in 
any of the above key assumptions would cause the carrying value of the relevant unit to exceed its recoverable amount after giving due 
consideration to the macroeconomic outlook for the oil  gas industry and the commercial arrangements with customers underpinning  
the cash flow forecasts for each of the units
12 intangible assets
       2009 2008 
       us’000 us’000
intangible oil  gas assets
cost
at 1 january       43137 15927
additions       29230 37036
asset writtenoff       – 9826
disposal       18479 –
at 31 december       53888 43137
accumulated impairment  
at 1 january       13686 8686
impairment       4793 5000
disposal       18479 –
at 31 december       – 13686
net book value of intangible oil  gas assets at 31 december     53888 29451
 
other intangible assets    
cost    
at 1 january       13892 3930
additions on acquisition note 10       – 12009
acquired intangible assets note 10       – 414
additions       10375 –
exchange difference       1209 2461
at 31 december       25476 13892
accumulated amortisation    
at 1 january       4990 2161
amortisation       1083 2829
exchange difference       184 –
at 31 december       6257 4990
net book value of other intangible assets at 31 december     19219 8902
total intangible assets       73107 38353 112
petrofac annual report 
and accounts 2009
113
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
18 trade and other receivables
       2009 2008 
       us’000 us’000
trade receivables       614837 608023
retentions receivable       8772 2241
advances       139550 31977
prepayments and deposits       35143 24849
other receivables       80368 33841
        878670 700931
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 us614837000 2008 us608023000  
are as follows
  2009 2008
   
   specific general  specific general 
   impairment impairment total impairment impairment total 
   us’000 us’000 us’000 us’000 us’000 us’000
at 1 january   3698 1296 4994 4086 1216 5302
charge for the year   6309 1320 7629 1361 482 1843
amounts written off   343 198 541 – 333 333
unused amounts reversed   4798 661 5459 1530 15 1545
exchange difference   9 3 6 219 54 273
at 31 december   4875 1754 6629 3698 1296 4994
at 31 december the analysis of trade receivables is as follows
   number of days past due
 neither past due 
  nor impaired   30 days 31–60 days 61–90 days 91–120 days 121–360 days  360 days total 
 us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000
unimpaired 434159 116197 28835 13365 3431 5977 2138 604102
impaired – 3177 2148 386 2510 6220 2923 17364
  434159 119374 30983 13751 5941 12197 5061 621466
less impairment provision – 585 243 332 305 3421 1743 6629
net trade receivables 2009 434159 118789 30740 13419 5636 8776 3318 614837
        
unimpaired 325844 197790 45106 11012 10460 12714 1319 604245
impaired – 734 86 618 666 3032 3636 8772
  325844 198524 45192 11630 11126 15746 4955 613017
less impairment provision – 190 85 194 249 1640 2636 4994
net trade receivables 2008 325844 198334 45107 11436 10877 14106 2319 608023
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 balance sheet date the significant increase in advances during 2009 relates to some major new contract awards  
in the engineering  construction business
included in other receivables are us46697000 2008 nil recoverable from venture partners on the don assets being their share  
of accrued expenses 
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 kuwaiti dinars
15 other financial assets
       2009 2008 
       us’000 us’000
other financial assets – noncurrent 
fair value of derivative instruments note 31      9655 7227
restricted cash       2880 1899
        12535 9126
other financial assets – current 
fair value of derivative instruments note 31      22306 5631
interest receivable       845 1047
restricted cash        7431 2736
other       375 295
        30957 9709
restricted cash comprises deposits with financial institutions securing various guarantees and performance bonds associated with  
the group’s trading activities and cash in escrow against reimbursed longterm employee benefits charged to a customer and for the 
acquisition of a company note 32 this cash will be released on the maturity of these guarantees and performance bonds and on  
the transfercessation of employment of the relevant employee for which the longterm benefit is held in escrow
16 inventories
       2009 2008 
       us’000 us’000
crude oil       5272 1669
processed hydrocarbons       31 805
stores and spares       2943 744
raw materials       1552 859
        9798 4077
included in the income statement are costs of inventories expensed of us37306000 2008 us22404000
17 work in progress and billings in excess of cost and estimated earnings
       2009 2008 
       us’000 us’000
cost and estimated earnings       3918368 3782100
less billings       3584670 3529405
work in progress       333698 252695
 
billings       3406412 1509548
less cost and estimated earnings       2945268 1224021
billings in excess of cost and estimated earnings      461144 285527
 
total cost and estimated earnings        6863636 5006121
 
total billings       6991082 5038953 114
petrofac annual report 
and accounts 2009
115
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
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 cliff vest at the end of three years subject to continued employment and the achievement of 
certain predefined nonmarket and market based performance conditions the nonmarket based condition governing the vesting of 50  
of the total award is subject to achieving between 15 and 25 earning 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 the fair value 
and assumed vesting rates of the eps part of the scheme are shown below
       fair value assumed
       per share vesting rate
2009 awards       545p 1000
2008 awards       522p 913
2007 awards       415p 949
2006 awards       353p 917
the remaining 50 market performance based part of these awards is dependent on the total shareholder return tsr of the group 
compared to 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
     2009 2008 2007 2006 
     awards awards awards awards
expected share price volatility based on median  
of comparator group’s threeyear volatilities    490 320 290 280
share price correlation with comparator group    360 220 170 100
riskfree interest rate     210 379 520 460
expected life of share award     3 years 3 years 3 years 3 years
fair value of tsr portion     456p 287p 245p 234p
the following shows the movement in the number of shares held under the psp scheme outstanding but not exercisable
       2009 2008
       number number
outstanding at 1 january       1298809 864181
granted during the year       576780 456240
vested during the year       418153 –
forfeited during the year       24756 21612
outstanding at 31 december       1432680 1298809
the number of awards still outstanding but not exercisable at 31 december 2009 is made up of 576780 in respect of 2009 awards 2008 nil 
431843 in respect of 2008 awards 2008 451178 424057 in respect of 2007 awards 2008 436603 and nil for 2006 2008 411028
the charge recognised in the current year amounted to us2727000 2008 us2258000
deferred bonus share plan dbsp
executive directors and selected employees were originally eligible to participate in this scheme although the remuneration committee 
decided during 2007 that executive directors should no longer continue to participate participants may be invited to elect or in some 
cases be required to receive a proportion of any bonus in ordinary shares of the company ‘invested awards’ 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’ 
the 2006 share awards vest on the third anniversary of the grant date provided that the participant did not leave the group’s employment 
subject to a limited number of exceptions however a change in the rules of the dbsp scheme was approved by shareholders at the 
annual general meeting of the company on 11 may 2007 such that the 2007 share awards and for any awards made thereafter the 
invested and matching shares would unless the remuneration committee of the board of directors determined otherwise vest 3333  
on the first anniversary of the date of grant a further 3333 on the second anniversary of the date of grant and the final 3334 of the 
award on the third anniversary of the date of grant
at the year end the values of the bonuses settled by shares cannot be determined until all employees have confirmed the voluntary portion  
of their bonus they wish to be settled by shares rather than cash and until the remuneration committee has approved the mandatory 
portion of the employee bonuses to be settled in shares once the voluntary and mandatory portions of the bonus to be settled in shares 
are 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 relevant 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 adjusted for the truedup percentage vesting rate of the 
plan the details of the fair values and assumed vesting rates of the dbsp scheme are below
19 cash and shortterm deposits
       2009 2008 
       us’000 us’000
cash at bank and in hand       203105 107461
shortterm deposits       1214258 586954
total cash and bank balances       1417363 694415
cash at bank earns interest at floating rates based on daily bank deposit rates 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 us1417363000 2008 us694415000
for the purposes of the cash flow statement cash and cash equivalents comprise the following
       2009 2008 
       us’000 us’000
cash at bank and in hand       203105 107461
shortterm deposits       1214258 586954
bank overdrafts note 24       26619 45256
        1390744 649159
20 share capital
the share capital of the company as at 31 december was as follows
       2009 2008 
       us’000 us’000
authorised 
750000000 ordinary shares of us0025 each 2008 750000000 ordinary shares of us0025 each  18750 18750
 
issued and fully paid 
345532388 ordinary shares of us0025 each 2008 345434858 ordinary shares of us0025 each  8638 8636
the movement in the number of issued and fully paid ordinary shares is as follows
        number
ordinary shares  
ordinary shares of us0025 each at 1 january 2008       345434858
movement during the year        –
ordinary shares of us0025 each at 1 january 2009       345434858
issued during the year as further deferred consideration payable for the acquisition of a subsidiary note 10   97530
ordinary shares of us0025 each at 31 december 2009      345532388
the share capital comprises only one class of ordinary shares the ordinary shares carry a voting right and the right to a dividend
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 all these shares have been classified in the balance sheet as treasury shares within equity
the movements in total treasury shares are shown below
   2009 2008
    
     number us’000 number us’000
at 1 january     9540306 69333 4052024 29842
acquired during the year     – – 5854194 42500
vested during the year     2329341 13048 365912 3009
at 31 december     7210965 56285 9540306 69333
as at 31 december 2009 5504819 2008 5504819 of the above shares were held by lehman brothers in a client custody account  
which is now being managed by their appointed administrator the company anticipates that the administrators will release these assets  
in the near future under a signed claim resolution agreement approved by the creditors
included in the above treasury shares are 274938 2008 274938 shares held in relation to the acquisition of spd group limited in 2007
shares vested during the year include dividend shares of 76931 2008 3096 with a cost of us431000 2008 us25000 116
petrofac annual report 
and accounts 2009
117
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
23 other reserves
    net unrealised      
    gainslosses on net unrealised    
    availablefor losses foreign reserve for  
    sale financial gains on currency sharebased   
    assets derivatives translation payments total 
    us’000 us’000 us’000 us’000 us’000
balance at 1 january 2008 as restated     598 65857 4817 16161 87433
foreign currency translation    – – 84232 – 84232
net gains on maturity of cash flow hedges recycled in the year  – 32103 – – 32103
net changes in fair value of derivatives and financial assets 
 designated as cash flow hedges    – 25907 – – 25907
changes in fair value of availableforsale financial assets  879 – – – 879
impairment of availableforsale financial assets   355 – – – 355
sharebased payments charge note 22    – – – 9448 9448
transfer during the year note 22    – – – 9602 9602
shares vested during the year note 22    – – – 3009 3009
balance at 1 january 2009     74 7847 79415 32202 39292
foreign currency translation    – – 15087 – 15087
net gains on maturity of cash flow hedges recycled in the year  – 4303 – – 4303
net changes in fair value of derivatives and financial assets 
 designated as cash flow hedges    – 25029 – – 25029
sharebased payments charge note 22    – – – 13263 13263
transfer during the year note 22    – – – 10942 10942
shares vested during the year note 22    – – – 12617 12617
deferred tax on share based payments reserve   – – – 13085 13085
balance at 31 december 2009    74 28573 64328 56875 21194
 during 2008 the company identified that in prior periods certain gains and losses on cash flow hedges had been reclassified to accrued contract expenses from 
other reserves net unrealised lossesgains on derivatives ahead of the contract costs to which they relate impacting the income statement as a result us36966000 
was reclassified from accrued contract expenses to other reserves at 1 january 2008
nature and purpose of other reserves
net unrealised gainslosses on availableforsale financial assets
this reserve records fair value changes on availableforsale financial assets held by the group net of deferred tax effects realised gains 
and losses on the sale of availableforsale financial assets are recognised as other income or expenses in the income statement
net unrealised gainslosses on derivatives
the portion of gains or losses on cash flow hedging instruments that are determined to be effective hedges are 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 income statement realised net gains amounting to us5161000 2008 us31713000 relating to  
foreign currency forward contracts and financial assets designated as cash flow hedges have been recognised in cost of sales realised  
net losses of us1470000 2008 us63000 gains relating to interest rate derivatives have been classified as a net interest expense  
and a realised net gain of us611000 2008 us327000 was added to revenues in respect of oil derivatives 
the forward currency points element and ineffective portion of derivative financial instruments relating to forward currency contracts and 
gains on the maturity of undesignated derivatives amounting to a net gain of us19508000 2008 us11826000 loss have been 
recognised in the cost of sales the time value portion gain on interest rate derivatives of us nil 2008 us433000 and loss on oil 
derivatives of us nil 2008 us145000 were netted off and added to interest payable
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 2008 of us10942000 2007 bonus of us9602000 which has been voluntarily elected or mandatorily obliged  
to be settled in shares during the year note 22 
22 sharebased payment plans continued
deferred bonus share plan dbsp continued
       fair value assumed 
       per share vesting rate
2009 awards       545p 982
2008 awards       522p 929
2007 awards       415p 907
2006 awards       353p 855
the following shows the movement in the number of shares held under the dbsp scheme outstanding but not exercisable
       2009 2008
       number number
outstanding at 1 january       3755383 2558711
granted during the year       2773020 1777080
vested during the year       1743372 385700
forfeited during the year       90840 194708
outstanding at 31 december       4694191 3755383
 includes invested and matching shares
the number of awards still outstanding but not exercisable at 31 december 2009 is made up of 2696752 in respect of 2009 awards  
2008 nil 1237786 in respect of 2008 awards 2008 1688558 759653 in respect of 2007 awards 2008 1084602 and nil for  
2006 awards 2008 982223
the charge recognised in the 2009 income statement in relation to matching share awards amounted to us8064000 2008 us5665000
share incentive plan sip
all uk employees including uk resident directors are eligible to participate in the scheme 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 restricted share plan scheme employees are granted shares in the company over a discretionary vesting period which may or  
may not be at the direction of the remuneration committee of the board of directors subject to the satisfaction of performance conditions  
at present there are no performance conditions applying to this scheme nor is there currently any intention to introduce them in the future  
the fair values of the awards granted under the plan 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 for details of the fair values and assumed vesting rate of the 
rsp scheme see below
      weighted average  assumed
      fair value per share vesting rate
2009 awards       430p 1000
2008 awards       478p 911
2007 awards       456p 944
2006 awards       278p 963
the following shows the movement in the number of shares held under the rsp scheme outstanding but not exercisable
       2009 2008
       number number
outstanding at 1 january       1184711 394216
granted during the year       86432 811399
vested during the year       167053  5180
forfeited during the year       21629 15724
outstanding at 31 december       1082461 1184711
the number of awards still outstanding but not exercisable at 31 december 2009 is made up of 86432 in respect of 2009 awards 2008 nil 
786826 in respect of 2008 awards 2008 795675 209203 in respect of 2007 awards 2008 234387 and nil for 2006 awards 2008 154649
during the year the company recognised a charge of us2472000 2008 us1525000 in relation to the above
the group has recognised a total charge of us13263000 2008 us9448000 in the income statement during the year relating to the 
above employee sharebased schemes see note 4f which has been transferred to the reserve for sharebased payments along with 
us10942000 of the bonus liability accrued for the year ended 31 december 2008 which has been settled in shares granted during the 
year 2008 us9602000
for further details on the above employee sharebased payment schemes refer to pages 80 to 82 of the directors’ remuneration report 118
petrofac annual report 
and accounts 2009
119
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
25 provisions
      other longterm
      employment  provision for 
      benefits provision decommissioning t otal
      us’000 us’000 us’000
at 1 january 2009      26225 3438 29663
additions during the year      10438 53371 63809
unused amounts reversedpaid in the year     2533 278 2811
unwinding of discount      – 1442 1442
at 31 december 2009      34130 57973 92103
other longterm employment benefits provision
labour laws in certain countries in which the group operates require employers to provide for other longterm employment benefits these 
benefits are payable to employees at the end of their period of employment the provision for these longterm benefits is calculated based  
on the employees’ last drawn salary at the balance sheet date and length of service subject to the completion of a minimum service period  
in accordance with the local labour laws of the jurisdictions in which the group operates the amount is payable to the employees on being 
transferred to another jurisdiction or on cessation of employment
provision for decommissioning
the decommissioning provision primarily relates to the company’s obligation for the removal of facilities and restoration of the site at the 
pm304 field in malaysia at chergui in tunisia and on the don assets in the united kingdom the liability is discounted at the rate of 380  
on pm304 2008 350 525 on chergui 2008 525 and 450 2008 340 on don the unwinding of the discount is classified  
as a finance cost note 5 the company estimates that the cash outflows against these provisions will arise in 2014 on pm304 in 2018  
on chergui and in 2019 on don assuming no further development of the asset
26 other financial liabilities
       2009 2008 
       us’000 us’000
other financial liabilities – noncurrent 
deferred consideration payable        27438 32147
other        47 118
        27485 32265
 
other financial liabilities – current 
deferred consideration payable        1622 –
interest payable       22 118
fair value of derivative instruments note 31      1813 6244
other       177 –
        3634 6362
included in deferred consideration payable above is an amount payable of us4890000 2008 us nil relating to the group’s purchase  
of a floating platform
27 trade and other payables
       2009 2008 
       us’000 us’000
trade payables       266944 275058
advances received from customers       379684 76845
accrued expenses       285760 149684
other taxes payable       14699 6876
other payables       20704 4866
        967791 513329
trade payables are noninterest bearing and are normally settled on terms of between 30 and 60 days
advances from customers represent payments received for contracts on which the related work had not been performed at the balance 
sheet date
included in other payables are retentions held against subcontractors of us938000 2008 us911000
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
24 interestbearing loans and borrowings
the group had the following interestbearing loans and borrowings outstanding
   31 december 2009 31 december 2008 effective  2009 2008 
   actual interest rate  actual interest rate  interest rate  maturity us’000 us’000
current
revolving credit facility i us libor –  us libor  2010 20000 – 
    150   150
bank overdrafts ii uk libor  uk libor  uk libor on demand 26619 45256 
    200  0875   200    
   us libor us libor us libor    
    200  0875  200    
    kd discount rate kd discount rate    
     200   200   
other loans
current portion of  
 term loan iii usuk libor usuk libor 314 to 371   10489 9156 
     0875   0875  2008 418 
     to 488
current portion of  
 term loan iv usuk libor usuk libor 265 to 344   963 – 
     0875   0875  2008 374 
     to 502
       58071 54412
noncurrent
term loan iv usuk libor usuk libor 265 to 344  2013 18291 18720 
     0875   0875 2008 374 
     to 502
revolving credit facility i – us libor  2008 311 2010 – 20000  
       0875    
term loan  iii usuk libor usuk libor 314 to 371  20102013 46694 54847 
     0875   0875 2008 418  
     to 488   
       64985 93567
less
debt acquisition costs 
 net of accumulated 
 amortisation and effective 
 rate adjustments      5790 5379
       59195 88188
details of the group’s interestbearing loans and borrowings are as follows
i revolving credit facility
this facility is repayable on 31 december 2010
ii 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
iii term loan
this term loan at 31 december 2009 comprised drawings of us28877000 2008 us33998000 denominated in us dollars and 
us28306000 2008 us30005000 denominated in sterling both elements of the loan are repayable over a period of four years  
ending 30 september 2013
iv term loan
this term loan is to be repaid over a period of three years ending 30 september 2013 the drawings at 31 december 2009 comprised 
us13900000 2008 us13900000 denominated in us dollars and us5354000 2008 us4820000 denominated in sterling 
the group’s credit facilities and debt agreements contain covenants relating to interest and net borrowings cover none of the company’s 
subsidiaries is subject to any material restrictions on their ability to transfer funds in the form of cash dividends loans or advances to  
the company  120
petrofac annual report 
and accounts 2009
121
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
30 related party transactions 
the consolidated financial statements include the financial statements of petrofac limited and the subsidiaries listed in note 33  
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 purchases from amounts owed amounts owed 
     parties related parties by related parties to related parties 
     us’000 us’000 us’000 us’000
joint ventures   2009   27337 15434 17773 56925
   2008   9081 1858 2907 367
key management personnel interests  2009   – 1405 487 401
   2008   – 1277 – 192
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 us1336000 2008 us1277000 reflect the market rate based 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 chief executive of the company is a beneficiary 
also included in purchases in respect of key management personnel interests is us69000 2008 us nil relating to client entertainment 
provided by a business owned by a member of the group’s key management
amounts owed by key management personnel comprises a temporary loan of us487000 2008 us nil provided in respect of income tax 
payable on vesting of restricted share plan shares pending disposal of shares to meet this liability once the close period for trading 
petrofac shares ends
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 76 to 86
       2009 2008 
       us’000 us’000
shortterm employee benefits       11209 5542
other longterm employment benefits        129 59
sharebased payments       3368 1311
fees paid to nonexecutive directors       506 554
        15212 7466
increase in compensation of key management personnel in 2009 is mainly due to increase in the number of members of the executive 
management committee as a result of the management reorganisation of the group effective 1 january 2009 
31 risk management and financial instruments
risk management objectives and policies
the group’s principal financial assets and liabilities other than derivatives comprise trade and other receivables cash and shortterm 
deposits interestbearing loans and borrowings trade and other payables and deferred consideration
the group’s activities expose it to various financial risks particularly associated with interest rate risk on its variable rate 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 interest rate swaps caps and forward currency contracts in line with the group’s hedging policy 
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 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 74 and 75 
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
28 accrued contract expenses
       2009 2008 
       us’000 us’000
accrued contract expenses       832503 543191
reserve for contract losses       4153 8670
        836656 551861
the reserve for contract losses is to cover costs in excess of revenues on certain contracts
29 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 2009 the group had letters of credit of us91042000 2008 us24096000 and outstanding letters of guarantee 
including performance and bid bonds of us2124134000 2008 us865120000 against which the group had pledged or restricted 
cash balances of in aggregate us2675000 2008 us1506000 
at 31 december 2009 the group had outstanding forward exchange contracts amounting to us351803000 2008 us166412000 
these commitments consist of future obligations to either acquire or sell designated amounts of foreign currency at agreed rates and  
value dates note 31 
leases
the group has financial commitments in respect of noncancellable operating leases for office space and equipment these non
cancellable 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 non
cancellable leases are as follows
       2009 2008 
       us’000 us’000
within one year       35796 59292
after one year but not more than five years      57127 72729
more than five years       73030 54787
        165953 186808
included in the above are commitments relating to the lease of an office building extension in aberdeen united kingdom of us39735000 
2008 us44573000 and the lease of a drilling rig for the don southwest project of us10089000 2008 us35744000
minimum lease payments recognised as an operating lease expense during the year amounted to us33063000 2008 us26557000 
capital commitments
at 31 december 2009 the group had capital commitments of us18786000 2008 us44035000 excluding the above lease 
commitments 
included in the above are commitments relating to the further appraisal and development of wells as part of the cendor project in malaysia 
amounting to us14572000 2008 us26468000 commitments in respect of it projects of us3300000 2008 us nil and the 
development of the don assets amounting to us914000 2008 us8610000 122
petrofac annual report 
and accounts 2009
123
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
derivative instruments designated as cash flow hedges 
at 31 december 2009 the group held no derivative instruments designated as cash flow hedges in relation to floating rate interestbearing 
loans and borrowings
    fair value of assetliability
    
  nominal amount   2009 2008
instrument us equivalent date matured date commenced us’000 us’000
uk libor interest rate swap 2629000 30 september 2009 31 december 2004 – 37
uk libor interest rate collar 30131000 31 december 2009 31 december 2007 – 705
us libor interest rate collar 34138000 31 december 2009 31 december 2007 – 432
during 2009 changes in fair value of us nil 2008 us1607000 loss relating to these derivative instruments were taken to equity and  
a loss of us1470000 2008 us63000 gain were recycled from equity into interest expense in the income statement the time value 
portion of these derivatives of us nil 2008 us433000 gain was nettedoff against interest expense
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 
       2009 2008
       of foreign currency   of foreign currency 
      denominated items  denominated items 
revenues      395  438
costs      501  616
current financial assets      353  579
noncurrent financial assets      10  00
current financial liabilities      423  648
noncurrent financial liabilities      346  256
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 date of the balance sheet 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
   2009 2008
    
     average rate closing rate average rate closing rate
sterling     156 162 185 146
kuwaiti dinar     347 348 372 362
euro     140 144 148 139
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  –5 us dollar  10 us dollar  –5 us dollar 
      rate increase  rate decrease   rate increase   rate decrease 
      us’000 us’000 us’000 us’000
31 december 2009     10238 5119 7964 3990
31 december 2008     16355 8177 10597 6135
31 risk management and financial instruments continued
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  
at 31 december 2009 after taking into account the effect of interest rate swaps and collars 00 2008 651 of the group’s term 
borrowings are at a fixed or capped rate of interest 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 is demonstrated in the table 
below the analysis assumes that all other variables remain constant
   pretax profit equity
    
     100 basis  100 basis  100 basis 100 basis 
     point increase point decrease point increase point decrease 
     us’000 us’000 us’000 us’000
31 december 2009     1096 1096 – –
31 december 2008     882 882 705 1615
the following table reflects the maturity profile of these financial liabilities and assets 
year ended 31 december 2009
  within 1–2 2–3 3–4 4–5 more than  
  1 year years years years years 5 years total 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
financial liabilities 
floating rates 
revolving credit facility note 24  20000 – – – – – 20000
bank overdrafts note 24  26619 – – – – – 26619
term loans note 24  11452 18901 24221 21863 – – 76437
   58071 18901 24221 21863 – – 123056
 
financial assets 
floating rates 
cash and shortterm deposits note 19  1417363 – – – – – 1417363
restricted cash balances note 15  7431 226 – – – 2654 10311
   1424794 226 – – – 2654 1427674
year ended 31 december 2008
  within 1–2 2–3 3–4 4–5 more than  
  1 year years years years years 5 years total 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
financial liabilities 
floating rates 
revolving credit facility note 24  – 20000 – – – – 20000
bank overdrafts note 24  45256 – – – – – 45256
term loans note 24  9156 12186 19837 25302 16242 – 82723
interest rate collars note 31  1137 – – – – – 1137
interest rate swap note 31  37 – – – – – 37
   55586 32186 19837 25302 16242 – 149153
 
financial assets 
floating rates 
cash and shortterm deposits note 19  694415 – – – – – 694415
restricted cash balances note 15  2736 207 – – – 1692 4635
   697151 207 – – – 1692 699050
financial liabilities in the above table are disclosed gross of debt acquisition costs and effective rate adjustments of us5790000  
2008 us5379000
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  124
petrofac annual report 
and accounts 2009
125
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
credit risk
the group trades only with recognised creditworthy third parties divisional risk review committees drrc have been set up by the 
board of directors to evaluate the creditworthiness of each individual third party at the time of entering into new contracts limits have  
been placed on the approval authority of the drrc 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 2009  
the group’s five largest customers accounted for 575 of outstanding trade receivables and work in progress 2008 507
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
liquidity risk
the group’s objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts revolving credit 
facilities project finance and term loans to reduce its exposure to liquidity risk the maturity profiles of the group’s financial liabilities at  
31 december 2009 are as follows 
year ended 31 december 2009
       contractual  
  6 months 6–12 1–2 2–5 more than undiscounted carrying 
  or less months years years 5 years cash flows amount 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
financial liabilities 
interestbearing loans and borrowings  31863 26208 18901 46084 – 123056 117266
trade and other payables  
 excluding advances from customers  576264 11843 – – – 588107 588107
due to related parties  44496 12830 – – – 57326 57326
deferred consideration  1622 – 20519 11356 – 33497 29060
derivative instruments  907 906 – – – 1813 1813
interest payable  22 – – – – 22 22
interest payments  816 1148 2094 2291 – 6349 –
   655990 52935 41514 59731 – 810170 793594
year ended 31 december 2008
       contractual  
  6 months 6–12 1–2 2–5 more than undiscounted carrying 
  or less months years years 5 years cash flows amount 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
financial liabilities 
interestbearing loans and borrowings  49835 4577 32186 61381 – 147979 142600
trade and other payables  
 excluding advances from customers  380145 56339 – – – 436484 436484
due to related parties  469 90 – – – 559 559
deferred consideration  – – 29454 8894 – 38348 32147
derivative instruments  5436 808 – – – 6244 6244
interest payable  118 – – – – 118 118
interest payments  1817 1817 2799 4236 – 10669 –
   437820 63631 64439 74511 – 640401 618152
the group uses various funded facilities provided by banks and its own financial assets to fund the abovementioned financial liabilities
31 risk management and financial instruments continued
foreign currency sensitivity analysis continued 
at 31 december 2009 the group had foreign exchange forward contracts designated as cash flow hedges with a fair value gain of 
us32800000 2008 us10165000 in equity as follows 
  contract value fair value net unrealised gainloss 
    
   2009 2008 2009 2008 2009 2008
   us’000 us’000 us’000 us’000 us’000 us’000
euro currency purchases sales    101909 41655 29496 7761 28430 9488
sterling currency purchases   38700 26747 4703 2585 4966 2956
yen currency sales purchases   160 7465 942 1173 862 –
kuwaiti dinars sales    211034 90545 1295 5160 266 3633
        32800 10165
the above foreign exchange contracts mature and will affect income between january 2010 and july 2013 2008 between january 2009 
and april 2010 also included in the net unrealised gains of us32800000 2008 us10165000 is minority share of gains of 
us4200000 2008 us nil
at 31 december 2009 the group had cash and shortterm deposits designated as cash flow hedges with a fair value gain of us1786000 
2008 us2205000 loss as follows 
   fair value net unrealised gainloss 
    
     2009 2008 2009 2008 
     us’000 us’000 us’000 us’000
euro currency cash and shortterm deposits     91660 269409 1163 2653
sterling currency cash and shortterm deposits    5264 15667 772 4858
kuwaiti dinars cash and shortterm deposits    19146 – 149 –
        1786 2205
during 2009 changes in fair value of us28043000 2008 loss us25950000 relating to these derivative instruments and financial 
assets were taken to equity and us5161000 2008 us31713000 were recycled from equity into cost of sales in the income statement  
the forward points and ineffective portion of the above foreign exchange forward contracts and gains on maturity of undesignated 
derivatives of us19508000 2008 us11826000 losses was recognised in the income statement note 4b and 4d
commodity price risk – oil prices
the group is exposed to the impact of changes in oil  gas prices on its revenues and profits generated from sales of crude oil  gas  
the group’s policy is to manage its exposure to the impact of changes in oil  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 hedging oil production of 96000 bbl with maturities ranging from 1 july 2009  
to 31 december 2010 three crude oil collars were also contracted hedging 90000 bbl of oil production with maturities from 1 january 2010  
to 31 december 2010 in addition six fuel oil swaps were also entered into for hedging gas production of 27000mt with maturities from  
1 october 2009 to 31 december 2010 
the fair value of oil derivatives at 31 december 2009 was us1813000 liability 2008 us1349000 asset with a loss recognised  
in equity of us1813000 2008 us1494000 gain
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  –10 usbbl  10 usbbl  –10 usbbl 
      increase  decrease  increase  decrease 
      us’000 us’000 us’000 us’000
31 december 2009     82 82 861 861
31 december 2008     – – 251 250 126
petrofac annual report 
and accounts 2009
127
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
assets measured at fair value
year ended 31 december 2009
      tier 1 tier 2 2009 
      us’000 us’000 us’000
financial assets 
availableforsale financial assets      – 539 539
forward currency contracts – designated as cash flow hedge    – 26891 26891
forward currency contracts – undesignated     – 5070 5070
 
financial liabilities 
interestbearing loans and borrowings      – 117266 117266
oil derivative      – 1813 1813
 
year ended 31 december 2008
      tier 1 tier 2 2008 
      us’000 us’000 us’000
financial assets 
availableforsale financial assets      133 433 566
oil derivative      – 1349 1349
forward currency contracts      – 11509 11509
 
financial liabilities 
interestbearing loans and borrowings      – 142600 142600
interest rate collars      – 1137 1137
interest rate swap      – 37 37
forward currency contracts – designated as cash flow hedge    – 900 900
forward currency contracts – undesignated     – 4170 4170
32 events after the reporting period
on 14 january 2010 the group acquired 100 of the share capital of scotvalve services limited a united kingdom based company 
providing servicing and repair of oilfield pressure control equipment for an initial cash consideration of sterling 3000000 with a further 
sterling 2000000 of consideration payable on achievement of certain agreed performance targets
on 4 march 2010 the company announced its intention to demerge the don assets in the north sea held by petrofac energy developments 
limited pedl from the petrofac group and transfer them in to a newly established entity which will hold the combined north sea assets  
of pedl and lundin north sea bv this demerger is planned to be effected via a reorganisation of the company’s ordinary share capital 
such that existing shareholders in petrofac receive one additional new share in the newly established merged entity for each share held in 
petrofac and the new entity intends to pursue a market listing in the near future
31 risk management and financial instruments continued
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
       2009 2008 
       us’000 us’000
cash and shortterm deposits        1417363 694415
interestbearing loans and borrowings a       117266 142600
net cash b       1300097 551815
equity attributable to petrofac limited shareholders c      890510 558822
profit for the year attributable to petrofac limited shareholders d     353603 264989
gross gearing ratio ac       132 255
net gearing ratio bc       net cash net cash 
        position position
shareholders’ return on investment dc       397 474
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 balance sheet are set out below 
   carrying amount fair value 
    
     2009 2008 2009 2008
     us’000 us’000 us’000 us’000
financial assets 
cash and shortterm deposits     1417363 694415 1417363 694415
restricted cash     10311 4635 10311 4635
availableforsale financial assets     539 566 539 566
oil derivative     – 1349 – 1349
forward currency contracts – designated as cash flow hedge   26891 11509 26891 11509
forward currency contracts – undesignated    5070 – 5070 –
 
financial liabilities 
interestbearing loans and borrowings     117266 142600 117266 142600
deferred consideration     30178 32147 30178 32147
interest rate collars     – 1137 – 1137
interest rate swap     – 37 – 37
oil derivative     1813 – 1813 –
forward currency contracts – designated as cash flow hedge   – 900 – 900
forward currency contracts – undesignated    – 4170 – 4170
market values have been used to determine the fair values of availableforsale financial assets and forward currency contracts the fair 
values of interest rate swaps and collars have been calculated by discounting the expected future cash flows at prevailing interest rates  
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 company considers that the carrying amounts of trade and  
other receivables trade and other payables other current and noncurrent financial assets and 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
tier 1 unadjusted quoted prices in active markets for identical financial assets or liabilities
tier 2 other valuation techniques where the inputs are based on all observation data directly or indirectly
tier 3 other valuation techniques where the inputs are based on unobservable market data 128
petrofac annual report 
and accounts 2009
129
petrofac annual report 
and accounts 2009
financial statements
notes to the consolidated 
financial statements
notes to the consolidated financial statements continued
for the year ended 31 december 2009
    proportion of nominal
    value of issued shares
    controlled by the group
    
name of company country of incorporation 2009 2008
trading subsidiaries continued
spd group limited british virgin islands 51 51
spd uk limited scotland  51 51
spd fzco united arab emirates 51 51
spd llc united arab emirates 25 25
petrofac energy developments oceania limited cayman islands 100 100
pt petrofac ikpt international indonesia 51 51
petrofac kazakhstan limited england 100 100
petrofac international uae llc united arab emirates 100 100
petrofac ec oman llc oman 100 100
petrofac international south africa pty limited south africa 100 100
eclipse petroleum technology limited england 100 100
caltec limited england 100 100
i perform limited scotland 100 100
petrofac fpf1 limited  jersey 100 –
joint ventures
costain petrofac limited england 50 50
kyrgyz petroleum company kyrgyz republic 50 50
mjvi sendirian berhad brunei 50 50
spie capag – petrofac international limited jersey 50 50
tte petrofac limited jersey 50 50
petrofac emirates llc united arab emirates 49 49
dormant subsidiaries
asjv venezuela sa venezuela 100 100
joint venture international limited scotland 100 100
montrose park hotels limited scotland 100 100
rgit ethos health  safety limited scotland 100 100
scota limited scotland 100 100
petrofac russia limited england 100 100
monsoon shipmanagement limited  cyprus 100 100
rubicon response limited scotland 100 100
 companies consolidated as subsidiaries on the basis of control
33 subsidiaries and joint ventures
at 31 december 2009 the group had investments in the following subsidiaries and incorporated joint ventures
    proportion of nominal
    value of issued shares
    controlled by the group
    
name of company country of incorporation 2009 2008
trading subsidiaries
petrofac inc usa 100 100
petrofac international ltd jersey 100 100
petrofac energy developments limited england 100 100
petrofac energy developments international limited  jersey 100 100
petrofac uk holdings limited england 100 100
petrofac facilities management international limited jersey 100 100
petrofac services limited england 100 100
petrofac services inc usa 100 100
petrofac training international limited jersey 100 100
petroleum facilities e  c limited jersey 100 100
petrofac employee benefit trust jersey 100 100
atlantic resourcing limited scotland 100 100
petrofac algeria eurl algeria 100 100
petrofac engineering india private limited india 100 100
petrofac engineering services india private limited india 100 100
petrofac engineering limited england 100 100
petrofac offshore management limited jersey 100 100
petrofac fze united arab emirates 100 100
petrofac facilities management group limited scotland 100 100
petrofac facilities management limited scotland 100 100
petrofac international nigeria ltd nigeria 100 100
petrofac pars pjsc  iran 100 100
petrofac iran pjsc  iran 100 100
plant asset management limited scotland 100 100
petrofac nuigini limited papua new guinea 100 100
pfmap sendirian berhad malaysia 100 100
petrofac caspian limited azerbaijan 100 100
petrofac malaysiapm304 limited england 100 100
petrofac training group limited scotland 100 100
petrofac training holdings limited scotland 100 100
petrofac training limited scotland 100 100
petrofac training inc usa 100 100
petrofac training trinidad limited trinidad 100 100
monsoon shipmanagement limited jersey 100 100
petrofac ec international limited united arab emirates 100 100
petrofac saudi arabia limited saudi arabia 100 100
petrofac energy developments ohanet jersey limited jersey 100 100
petrofac energy developments ohanet llc usa 100 100
pedl limited england 100 100
petrofac cyprus limited cyprus 100 100
pkt technical services ltd russia 50 50
pkt training services ltd russia 100 100
pt pci indonesia indonesia 80 80
process control and instrumentation services pte ltd singapore 100 100
process control and instrumentation sendirian berhad malaysia 100 100
sakhalin technical training centre russia 80 80
petrofac norge as norway 100 100
 directly held by petrofac limited 
 companies consolidated as subsidiaries on the basis of control
     notes to the consolidated financial statements continued
at 31 december 2009
131
petrofac annual report 
and accounts 2009
financial statements
130
petrofac annual report 
and accounts 2009
company  
income statement
independent auditors’ report 
to the members of petrofac limited
we have audited the parent company financial statements of 
petrofac limited the ‘company’ for the year ended 31 december 
2009 which comprise the company income statement the company 
statement of comprehensive income the company statement of 
financial position the company cash flow statement the company 
statement of changes in equity and the related notes 1 to 18 the 
financial reporting framework that has been applied in their 
preparation is applicable jersey law and international financial 
reporting standards ifrss 
this report is made solely to the company’s members as a body 
in accordance with the provisions of our engagement letter and 
article 110 of the companies jersey law 1991 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 auditors
as explained more fully in the statement of directors’ responsibilities 
set out on page 87 the company’s directors are responsible for the 
preparation of the parent company financial statements and for 
being satisfied that they give a true and fair view the directors are 
also responsible for the preparation of the directors’ remuneration 
report which they have chosen to prepare as if the company was 
required to comply with relevant requirements of both the uk 
companies act 2006 and regulations there under and the listing 
rules of the financial services authority our responsibility is to 
audit 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 apbs ethical standards for auditors in addition 
the company has also instructed us to review whether the section  
of the directors’ remuneration report that has been 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 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
opinion on financial statements
in our opinion the parent company financial statements
 give a true and fair view in accordance with international 
■
financial reporting standards of the state of the company’s 
affairs as at 31 december 2009 and of its profit for the year  
then ended and
 have been properly prepared in accordance with the 
■
requirements of the companies jersey law 1991
opinion on other matters
in our opinion the part of the directors’ remuneration report  
that has been described as audited 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
under the companies jersey law 1991 we are required to report 
to you if in our opinion
 proper accounting records have not been kept by the company
■
 the company’s accounts are not in agreement with the 
■
accounting records 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 2009 
ernst  young llp
london
5 march 2010 
company income statement 
for the year ended 31 december 2009
       2009 2008 
      notes us’000 us’000
revenue      3 161994 98540
general and administration expenses      4 11440 7839
other expenses       577 438
profit before tax and finance incomecosts      149977 90263
finance costs      5 5349 6504
finance income      5 9858 8168
profit before tax       154486 91927
income tax expense       6 – 68
profit for the year       154486 91859
 
company statement of comprehensive income 
for the year ended 31 december 2009
       2009 2008 
       us’000 us’000
profit for the year       154486 91859
net lossgains on maturity of cash flow hedges 
 recycled in the year       537 7
net changes in fair value of derivatives and 
 financial assets designated as cash flow hedges      962 376
other comprehensive incomeloss       425 369
total comprehensive income for the year      154911 91490
 
the attached notes 1 to 18 form part of these company financial statements 132
petrofac annual report 
and accounts 2009
133
petrofac annual report 
and accounts 2009
financial statements
company  
cash flow statement
company statement of financial position 
at 31 december 2009
       2009 2008 
      notes us’000 us’000
assets 
noncurrent assets 
property plant and equipment       27 41
investment in subsidiaries      8 265599 214088
longterm loan receivable from a subsidiary     9 – 219491
        265626 433620
 
current assets 
trade and other receivables        189 249
amounts due from subsidiaries      10 379939 19937
cash and shortterm deposits      11 64387 14516
        444515 34702
total assets       710141 468322
 
equity and liabilities 
equity attributable to petrofac limited shareholders 
share capital      17 8638 8636
share premium       69712 68203
capital redemption reserve       10881 10881
treasury shares      12 56285 69333
sharebased payments reserve      13 43790 32202
net unrealised losses on derivatives      15 – 425
retained earnings      18 119103 61577
total equity       195839 111741
 
noncurrent liabilities 
interestbearing loans and borrowings       14 39008 65464
longterm employee benefit provisions       176 144
other financial liabilities       – 118
        39184 65726
current liabilities 
trade and other payables       811 492
amounts due to subsidiaries      10 448048 284930
interestbearing loans and borrowings      14 26259 5000
other financial liabilities       – 433
        475118 290855
total liabilities       514302 356581
total equity and liabilities       710141 468322
the financial statements on pages 131 to 142 were approved by the board of directors on 5 march 2010 and signed on its behalf by  
keith roberts – chief financial officer
the attached notes 1 to 18 form part of these company financial statements
company cash flow statement 
for the year ended 31 december 2009
       2009 2008 
      notes us’000 us’000
operating activities 
profit before tax        154486 91927
adjustments for 
 depreciation      4 27 42
 sharebased payments      13 912 588
 difference between other longterm employment benefits 
  paid and amounts recognised in the income statement     32 51
 net finance income      5 4509 1644
 other noncash items net       1843 2060
operating profit before working capital changes      152791 88904
trade and other receivables       60 40
amounts due from subsidiaries       109097 5953
trade and other payables       319 94
amounts due to subsidiaries       160583 210593
current financial liabilities       433 417
        204223 305813
other noncurrent items net       307 425
cash generated from operations       204530 305388
interest paid       1443 9228
income taxes paid net       – 68
net cash flows generated from operating activities      203087 296092
 
investing activities 
purchase of property plant and equipment      13 31
investment in subsidiaries       50000 23569
longterm loans made to a subsidiary       – 183579
interest received       187 1523
net cash flows used in investing activities      49826 205656
 
financing activities 
proceeds from interestbearing loans and borrowings      – 25000
repayment of interestbearing loans and borrowings      5121 1312
treasury shares purchased      12 – 42500
equity dividends paid       98995 64135
net cash flows used in financing activities      104116 82947
 
net increase in cash and cash equivalents      49145 7489
net foreign exchange difference on cash and cash equivalents     726 1379
cash and cash equivalents at 1 january       14516 8406
cash and cash equivalents at 31 december     11 64387 14516
 
the attached notes 1 to 18 form part of these company financial statements  134
petrofac annual report 
and accounts 2009
135
petrofac annual report 
and accounts 2009
financial statements
notes to the company 
financial statements
company statement of changes in equity 
for the year ended 31 december 2009
 attributable to shareholders of petrofac limited
       net unrealised   
  issued  capital  sharebased gains  
  share share redemption treasury payment  losses on retained total 
  capital premium reserve shares reserve derivatives earnings equity 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000 us’000 
  note 17   note 12 note 13  note 18 
balance at 1 january 2008 8636 68203 10881 29842 16161 56 34418 108401
net profit for the year – – – – – – 91859 91859
other comprehensive  
 incomeexpense – – – – – 369 – 369
total comprehensive 
 incomeexpense – – – – – 369 91859 91490
sharebased payments charge 
 note13 – – – – 588 – – 588
shares vested during the year – – – 3009 3009 – – –
treasury shares purchased 
 note 12 – – – 42500 – – – 42500
transfer to reserve for  
 sharebased payments 
 note 13 – – – – 18462 – – 18462
dividends note 7 – – – – – – 64700 64700
balance at 1 january 2009 8636 68203 10881 69333 32202 425 61577 111741
net profit for the year – – – – – – 154486 154486
other comprehensive income  – – – – – 425 – 425
total comprehensive income – – – – – 425 154486 154911
shares issued as payment of 
 deferred consideration 2 1509 – – – – – 1511
sharebased payments charge 
 note 13 – – – – 912 – – 912
shares vested during the year – – – 13048 12617 – 431 –
transfer to reserve for 
 sharebased payments 
 note 13 – – – – 23293 – – 23293
dividends note 7 – – – – – – 96529 96529
balance at 31 december 2009 8638 69712 10881 56285 43790 – 119103 195839
 shares held by petrofac employee benefit trust
the attached notes 1 to 18 form part of these company financial statements 
notes to the company financial statements
for the year ended 31 december 2009
1 corporate information 
the consolidated financial statements of petrofac limited the 
company and petrofac employee benefit trust together referred 
to as the company financial statements for the year ended 
31 december 2009 were authorised for issue in accordance  
with a resolution of the directors on 5 march 2010 
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  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 united states 
dollars and all values in the separate financial statements are 
rounded to the nearest thousand us’000 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
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 
noninterest bearing shortterm funding to and from subsidiaries 
these are recognised at the fair value of consideration received
paid 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
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 employees is reimbursed  
by them to the company
longterm employee benefit provisions
labour laws in certain countries in which the company operates 
require employers to provide for other longterm employment 
benefits these benefits are payable to employees at the end  
of their period of employment the provision for these longterm 
benefits is calculated based on the employees’ last drawn salary  
at the balance sheet date and length of service subject to the 
completion of a minimum service period in accordance with the 
local labour laws of the jurisdictions in which the company 
operates 
revenues
revenues comprise dividends from subsidiaries which are 
recognised when the right to receive payment is established 136
petrofac annual report 
and accounts 2009
137
petrofac annual report 
and accounts 2009
financial statements
notes to the company 
financial statements
3 revenues
       2009 2008 
       us’000 us’000
dividend income from subsidiaries       161994 98540
4 general and administration expenses
       2009 2008 
       us’000 us’000
staff costs       7595 5170
depreciation       27 42
other operating expenses       3818 2627
        11440 7839
included in other operating expenses above are auditors’ remuneration of us67000 2008 us68000 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 finance costsincome
       2009 2008 
       us’000 us’000
interest payable 
longterm borrowings       1443 1356
on amounts due to subsidiaries       3906 5141
expense of time value portion of derivative financial instrument      – 7
total finance cost       5349 6504
  
interest receivable 
bank interest receivable       55 525
on amounts due from subsidiaries       9803 7643
total finance income       9858 8168
6 income tax
       2009 2008 
       us’000 us’000
current income tax   
withholding tax on loan interest income from subsidiaries      – 68
the income tax expense in 2008 arose due to irrecoverable withholding tax deducted on payments to the company as explained in detail  
in note 6 of the consolidated financial statements of the group the company has no income tax expense in jersey in addition as any  
deferred tax on temporary differences would be recognised at a 0 tax rate there are no deferred tax assets or liabilities for the company 
7 dividends paid
       2009 2008 
       us’000 us’000
declared and paid during the year 
equity dividends on ordinary shares 
final dividend for 2007 1150 cents per share      – 39164
interim dividend 2008 750 cents per share      – 25536
final dividend for 2008 1790 cents per share      60332 –
interim dividend 2009 1070 cents per share      36197 –
        96529 64700
       2009 2008 
       us’000 us’000
proposed for approval at agm not recognised as a liability as at 31 december 
equity dividends on ordinary shares 
final dividend for 2009 2510 cents per share 2008 1150 cents per share     86729 61831
notes to the company financial statements continued
for the year ended 31 december 2009
8 investments in subsidiaries
       2009 2008 
       us’000 us’000
at 1 january        214088 172057
investment in petrofac uk holdings limited      1511 42031
investment in petrofac energy developments limited      50000 –
as at 31 december        265599 214088
the investment in petrofac energy developments limited comprises of additional loans made for its investments in don assets 
at 31 december 2009 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 2009 2008
trading subsidiaries 
petrofac inc    usa 100 100
petrofac international ltd    jersey 100 100
petrofac energy developments limited    england 100 100
petrofac energy developments international limited    jersey 100 100
petrofac uk holdings limited    england 100 100
petrofac facilities management international limited   jersey 100 100
petrofac services limited    england 100 100
petrofac services inc    usa 100 100
petrofac training international limited    jersey 100 100
petroleum facilities e  c limited    jersey 100 100
9 longterm loan receivable from a subsidiary
longterm loan receivable from a subsidiary at 31 december 2008 represents a loan made to one of the company’s subsidiaries petrofac 
energy developments international limited for the purpose of its appraisal of and development activities on its oil  gas assets the loan 
carried an interest rate of us libor  20 margin 
10 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 8 above
11 cash and shortterm deposits
       2009 2008 
       us’000 us’000
cash at bank and in hand       4857 2284
shortterm deposits       59530 12232
total cash and bank balances cash and cash equivalents     64387 14516
cash at bank earns interest at floating rates based on daily bank deposit rates shortterm deposits are made for varying periods of 
between one day and one month 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 us64387000 2008 us14516000
12 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 all these shares have been classified in the balance sheet as treasury shares within equity
the movements in total treasury shares are shown below
   2009 2008
    
     number us’000 number us’000
at 1 january     9540306 69333 4052024 29842
acquired during the year     – – 5854194 42500
vested during the year     2329341 13048 365912 3009
at 31 december     7210965 56285 9540306 69333
as at 31 december 2009 5504819 2008 5504819 of the above shares were held by lehman brothers in a client custody account which  
is now being managed by their appointed administrator the company anticipates that the administrators will release these assets in the 
near future under a signed claim resolution agreement approved by the creditors
included in the above treasury shares are 274938 2008 274938 shares held in relation to the acquisition of spd group limited in 2007 138
petrofac annual report 
and accounts 2009
139
petrofac annual report 
and accounts 2009
financial statements
notes to the company 
financial statements
notes to the company financial statements continued
for the year ended 31 december 2009
13 sharebased payments reserve 
sharebased payment plan information is disclosed in note 22 of the consolidated financial statements of the group 
during the year a sharebased payment scheme charge of us912000 2008 us588000 was recognised by the company in respect  
of its own employees’ time spent on shareholder related services
the transfer during the year into sharebased payment reserve disclosed in the statement of changes in equity of us23293000  
2008 us18462000 represents amounts collected from subsidiaries in respect of their employees sharebased payment transactions
14 interestbearing loans and borrowings
the company had the following interestbearing loans and borrowings outstanding
   31 december 2009 31 december 2008 effective  2009 2008 
   actual interest rate  actual interest rate  interest rate  maturity us’000 us’000
current
revolving credit facility iii us libor us libor  us libor  2010 20000 – 
    150  0875  150
current portion of i us libor  us libor  371  – 5296 5000 
term loan   0875  0875  2008 418    
current portion of ii usuk libor  usuk libor 265 to 344  – 963 – 
term loan   0875  0875 2008 374     
     to 502   
       26259 5000 
noncurrent 
term loan ii usuk libor usuk libor 265 to 344  2013 18291 18720 
    0875  0875 2008 374 
     to 502
revolving credit facility iii – us libor 2008 311 2010 – 20000 
      0875
term loan  i us libor us libor 371 20102013 23581 28998 
    0875  0875  2008 418 
       41872 67718
less 
debt acquisition costs net of accumulated 
 amortisation and effective interest  
 rate adjustments       2864 2254
       39008 65464
details of the company’s interestbearing loans and borrowings are as follows
i term loan
this term loan at 31 december 2009 comprised drawings of us28877000 2008 us33998000 repayable over a period of four years 
ending 30 september 2013
ii term loan
this term loan is to be repaid over a period of three years ending 30 september 2013 
iii revolving credit facility
this facility is repayable on 31 december 2010
15 risk management and financial instruments
risk management objectives and policies
the company’s principal financial assets and liabilities other than derivatives 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 which are addressed by using derivative instruments to hedge this exposure 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 interest bearing 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  100 basis  100 basis 100 basis 
     point increase point decrease point increase point decrease 
     us’000 us’000 us’000 us’000
31 december 2009     823 823 – –
31 december 2008     521 521 210 695
the following table reflects the maturity profile of interestbearing financial liabilities and assets excluding interestbearing subsidiary related 
financial assets and liabilities 
year ended 31 december 2009
  within 1–2 2–3 3–4 4–5 more than 
  1 year years years years years 5 years total 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
financial liabilities 
floating rates 
revolving credit facility note 14  20000 – – – – – 20000
term loan note 14  6259 11688 15567 14617 – – 48131
amount due to subsidiaries interest bearing  – 448048 – – – – 448048
   26259 459736 15567 14617 – – 516179
 
financial assets 
floating rates 
cash and shortterm deposits note 11  64387 – – – – – 64387
amount due from subsidiaries interest bearing 358693 – – – – – 358693
   423080 – – – – – 423080
year ended 31 december 2008
  within 1–2 2–3 3–4 4–5 more than 
  1 year years years years years 5 years total 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
financial liabilities 
floating rates 
revolving credit facility note 14  – 20000 – – – – 20000
term loan note 14  5000 6561 12025 15927 13205 – 52718
amount due to subsidiaries interest bearing  – 284930 – – – – 284930
interest rate collar   432 – – – – – 432
   5432 311491 12025 15927 13205 – 358080
 
financial assets 
floating rates 
cash and shortterm deposits note 11  14516 – – – – – 14516
amount due from subsidiaries interest bearing 10900 – – – – – 10900
longterm loan receivable from a subsidiary – – – – – 219491 219491
   25416 – – – – 219491 244907
financial liabilities in the above table are disclosed gross of debt acquisition costs and effective interest rate adjustments of us2864000 
2008 us2254000
interest on financial instruments classified as floating rate is repriced at intervals of less than one year  140
petrofac annual report 
and accounts 2009
141
petrofac annual report 
and accounts 2009
financial statements
notes to the company 
financial statements
notes to the company financial statements continued
for the year ended 31 december 2009
15 risk management and financial instruments continued
derivative instrument designated as cash flow hedge 
there were no outstanding interest rate derivatives designated as cash flow hedges at 31 december 2009 at 31 december 2008  
the company held the following derivative instrument designated as a cash flow hedge in relation to floating rate interestbearing loans  
and borrowings
    fair value of assetliability
    
  nominal amount   2009 2008
instrument us equivalent period to maturity date commenced us’000 us’000
us libor interest rate collar 34138000 matured 31 december 2007 – 432
during 2009 an interest expense of us nil 2008 us7000 was recognised as the time value portion and us nil 2008 us425000 
was classified as equity being the intrinsic value portion of the above derivative financial instrument
foreign currency risk
almost all of the financial assets and liabilities of the company are denominated in us dollars the foreign currency exposure is limited to 
sterling 3300000 us5354000 of its interestbearing loans and borrowings
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  –5 us dollar  10 us dollar  –5 us dollar  
     rate increase  rate decrease  rate increase rate decrease  
     us’000 us’000 us’000 us’000
31 december 2009     3821 1911 – –
31 december 2008     425 212 – –
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 
the maturity profiles of the company’s financial liabilities at 31 december 2009 are as follows 
year ended 31 december 2009
       contractual  
  6 months 6–12 1–2 2–5 more than undiscounted carrying 
  or less months years years 5 years cash flows amount 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
financial liabilities 
interestbearing loans and borrowings  2649 23611 11688 30183 – 68131 65267
trade and other payables   811 – – – – 811 811
amounts due to subsidiaries  – 448048 – – – 448048 448048
interest payments  563 798 1273 1472 – 4106 –
   4023 472457 12961 31655 – 521096 514126 
year ended 31 december 2008
       contractual  
  6 months 6–12 1–2 2–5 more than undiscounted carrying 
  or less months years years 5 years cash flows amount 
  us’000 us’000 us’000 us’000 us’000 us’000 us’000
financial liabilities       
interestbearing loans and borrowings  2500 2500 26561 41157 – 72718 70464
trade and other payables   492 – – – – 492 492
amounts due to subsidiaries  – 284930 – – – 284930 284930
derivative instruments  – 432 – – – 432 432
interest payable  1 – – – – 1 1
interest payments  3576 3578 1796 2559 – 11509 –
   6569 291440 28357 43716 – 370082 356319
the company uses various funded facilities provided by banks and its own financial assets to fund the abovementioned financial liabilities
capital management
the company’s gearing ratio is as follows
       2009 2008 
       us’000 us’000
cash and shortterm deposits        64387 14516
interestbearing loans and borrowings a       65267 70464
net debt b       880 55948
total equity c       195839 111741
gross gearing ratio ac       333 631
net gearing ratio bc       04 500
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 balance sheet are set  
out below 
   carrying amount fair value 
    
     2009 2008 2009 2008
     us’000 us’000 us’000 us’000
financial assets 
cash and shortterm deposits     64387 14516 64387 14516
longterm receivable from a subsidiary     – 219491 – 219491
 
financial liabilities      
interestbearing loans and borrowings     65267 70464 65267 70464
interest rate collar     – 432 – 432
the fair values of interest rate collars have been calculated by discounting the expected future cash flows at prevailing interest rates 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 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
tier 1 unadjusted quoted prices in active markets for identical financial assets or liabilities
tier 2 other valuation techniques where the inputs are based on all observation data directly or indirectly
tier 3 other valuation techniques where the inputs are based on unobservable market data
assets measured at fair value
       tier 2 2009 
       us’000 us’000
financial liabilities 
interestbearing loans and borrowings       65267 65267
       tier 2 2008 
       us’000 us’000
financial assets 
longterm receivable from a subsidiary       219491 219491
 
financial liabilities
interestbearing loans and borrowings       70464 70464
interest rate collars       432 432 142
petrofac annual report 
and accounts 2009
notes to the company financial statements continued
for the year ended 31 december 2009
143
petrofac annual report 
and accounts 2009
16 related party transactions
the company’s related parties consist of its subsidiaries and the transactions and amounts due todue from them are either of a funding  
or investing nature note 9  10 the company is recharged a portion of the key management personnel cost by one of its subsidiaries  
the amount recharged during the year was us2182000 2008 us1576000 for further details of the full amount of key management 
personnel costs see directors’ remuneration report on pages 84 to 86
17 share capital
the movements in share capital are disclosed in note 20 to the consolidated financial statements of the group
18 retained earnings
        us’000
at 1 january 2008        34418
net profit for the year        91859
dividends paid note 7        64700
at 1 january 2009        61577
net profit for the year        154486
dividend shares vested during the year        431
dividends paid note 7        96529
as at 31 december 2009        119103
oil  gas reserves unaudited  
at 31 december 2009
   south    
 europe africa east asia total
       
    oil  ngls oil  ngls gas oil  ngls oil  ngls gas oil equivalent 
    mmbbl mmbbl bcf mmbbl mmbbl bcf mmboe
proven reserves 
at 1 january 2009 
developed   – 24 187 35 59 187 91
undeveloped   122 – 01 – 122 01 122
proven   122 24 188 35 181 188 213
 
changes during the year 
revisions   44 02 53 13 33 53 23
additions   65 – – – 65 – 65
acquisitions   – – – – – – –
production   12 08 43 12 32 43 40
 
at 31 december 2009 
developed   34 14 193 36 84 193 118
undeveloped   97 – 05 – 97 05 97
proven   131 14 198 36 181 198 215
 
probable reserves 
at 1 january 2009   100 – 50 17 117 50 126
changes during the year 
revisions   67 – 12 12 79 12 76
additions   31 – – – 31 – 31
acquisitions   – – – – – – –
production   – – – – – – –
at 31 december 2009   64 – 62 05 69 62 81
 
total proven  probable reserves 
at 1 january 2009   222 24 238 52 298 238 339
changes during the year 
revisions   111 02 65 01 112 65 99
additions   96 – – – 96 – 96
acquisitions   – – – – – – –
production   12 08 43 12 32 43 40
at 31 december 2009   195 14 260 41 250 260 296
notes
 these estimates of reserves were prepared by the group’s engineers and audited by a competent independent third party based on the 
■
guidelines of the petroleum resources management system sponsored by the society of petroleum engineers the world petroleum 
council the american association of petroleum geologists and the society of petroleum evaluation engineers
 the reserves presented are the net entitlement volumes attributable to the company under the terms of relevant production sharing 
■
contracts and assuming future oil prices equivalent to us70 per barrel brent 
 for the purpose of calculating oil equivalent total reserves volumes of natural gas have been converted to oil equivalent volumes at the 
■
rate of 5800 standard cubic feet of gas per barrel of oil
glossary
mmbbl – million barrels
bcf – billion cubic feet
mmbbl – million barrels of oil equivalent
ngls – natural gas liquids
oil  gas reserves 
unaudited
financial statements 144
petrofac annual report 
and accounts 2009
shareholder information 
at 31 december 2009
petrofac shares are traded on the london stock exchange using 
code ‘pfcl ’ 
registrar
capita registrars jersey limited
12 castle street
st helier
jersey je2 3rt
uk transfer agent
capita registrars
the registry
34 beckenham road
beckenham
kent br3 4tu
company secretary and registered office
ogier corporate services jersey limited
whiteley chambers
don street
st helier
jersey je4 9wg
legal advisers to the company
as to english law
freshfields bruckhaus deringer llp
65 fleet street
london ec4y 1hs
as to jersey law
ogier
whiteley chambers
don street
st helier
jersey je4 9wg
joint brokers
goldman sachs
peterborough court
113 fleet street
london ec4a 2bb
jp morgan cazenove
20 moorgate
london ec2r 6da
auditors
ernst  young llp
1 more london place
london se1 2af
corporate and financial pr
tulchan communications group
85 fleet street
london ec4y 1ae
financial calendar
13 may 2010      annual general meeting
21 may 2010      final dividend payment
23 august 2010      interim results announcement
october 2010      interim dividend payment
dates correct at time of print but subject to change
the group’s investor relations website can be found through wwwpetrofaccom


Summary:
 38
petrofac annual report 
and accounts 2009
39
petrofac annual report 
and accounts 2009
business review
operating review
operational expenditures remain robust  
though increased tendering activity
approximately 25 of our revenue in 2009 was 
generated by our businesses which rely upon our 
customers’ operational expenditures namely  
offshore engineering  operations training services 
and production solutions where activities are largely 
focused in the ukcs and the uae as expected 
operating expenditures largely remained robust during 
2009 as our customers continued to operate and 
maintain their facilities we did however see many  
of our customers defer discretionary expenditure 
particularly in our consultancy businesses and in  
some areas of training services though we are seeing 
an increase in opportunities for these businesses and 
expect them to return to growth during 2010
over the long term we expect to see many 
opportunities for training services as the industry  
will require to recruit and train many new engineers  
to replace those set to retire in the next few years we 
are looking at building upon our strategic relationships 
with key noc and ioc customers to assist them with  
this challenge 
during 2009 we have seen an increased focus on cost 
control from our customers and as expected many 
customers have or are considering tendering contracts 
rather than renewing or extending them while this 
represents both a threat to existing service contracts 
and an opportunity to secure new business we have 
been a net beneficiary of this activity securing two 
significant contracts in our offshore engineering  
operations business where we were not the incumbent 
see page 44 for details
we expect to see more tendering activity throughout 
2010 and see this as an opportunity to grow further 
our operations businesses that are dependent upon 
operational expenditures
1 per the iea’s oil market report 15 january 2010
2 this is the iea’s reference scenario per the world energy 
outlook 2009 the reference scenario describes ‘what would 
happen if among other things governments were to take no 
new initiatives bearing on the energy sector beyond those 
already adopted by mid2009’
 3 the iea world energy outlook 2009 estimates that less than 
onethird of global gas production in 2030 will be met by 
existing production goldman sachs ‘280 projects to change 
the world’ 15 january 2010 forecasts that decline rates are 
such that opec will be at full utilisation from 201112 and 
nonopec supply has been in decline since 2004 
4 iea world energy outlook 2009
5 ‘global ep spending analysis’ jp morgan cazenove 
24 february 2010
6 ‘280 projects to change the world’ goldman sachs 
15 january 2010
longterm demand expected to remain strong
despite the global economic downturn there has been 
little change in expectations for longterm growth in 
global demand for oil  gas
while global demand for oil may have fallen by around 
15 in 2009 compared to 2008
1
 the international 
energy agency’s iea reference case sees global 
demand for oil increase by approximately 24 from 
current levels of around 85 million barrels per day bpd 
to around 105 million bpd by 2030
2
 driven primarily by 
an increase in demand from china india and the 
middle east global demand for gas is expected to 
increase by approximately 43
1
 from around 48 million 
bpd of oil equivalent to 69 million bpd of oil equivalent 
over the same period with an increase in demand 
expected in most regions particularly in the middle east
significant investment in newbuild production and 
transportation infrastructure is required to meet the 
expected growth in demand in addition to newbuild 
capacity a large proportion of investment is required  
to replace existing production facilities
3
 overall the iea 
estimates that us11 trillion is required to be invested  
in oil  gas infrastructure by 2030 approximately us5 
trillion in excess of us200 billion per annum of this 
expenditure is expected to be in our key engineering  
 construction markets of the cis middle east and 
africa our record order intake of us63 billion in 
engineering  construction in 2009 represents a 
relatively small market share of a very large and 
growing market consequently we expect demand  
for the group’s engineering  construction services  
to remain strong over the long term
in 2009 even with an estimated 19 reduction in 
capital expenditure compared to the prior year
4
 the 
market for our services remained robust the majority 
of project postponements and cancellations were in 
highcost production areas such as canadian oil 
sands or deepwater developments which are not focus 
areas for the group our core markets for engineering 
 construction are in areas where development and 
production costs are generally lower than average 
such as onshore developments in the middle east and 
africa and many of our customers are wellfinanced 
nocs which are continuing to invest through  
the downturn
capital expenditure is expected to increase by around 
7 in 2010
5
 and more projects are expected to be 
sanctioned this year than in any year since 2006
6
 this 
is likely to result in an increase in conceptual studies 
and feed studies many of which were deferred in 
2009 we have already started to see an improved 
pipeline of bidding opportunities for our engineering 
services business which is focused on such early
cycle opportunities 
operating environment 40
petrofac annual report 
and accounts 2009
41
petrofac annual report 
and accounts 2009
business review
operating review
conclusion
despite an uncertain economic environment in the 
early part of the year we had a very successful year  
in 2009 securing new contract awards both in 
engineering  construction and offshore engineering 
 operations our new awards resulted in the group 
increasing its backlog to us81 billion 2008 us40 
billion which provides good visibility of revenues 
through to 2011 and beyond
notwithstanding that we still face significant 
competition the improvement in general economic 
conditions including the oil price returning to around 
2007 levels
1
 and indications that customers are 
increasing their capital expenditure programmes  
gives us confidence in the mediumterm outlook 
longerterm the key drivers determining capital  
and operational expenditures and our geographic 
focus should ensure that our longterm prospects  
remain strong
1 the average price for brent in 2007 was us72 per barrel
opportunities for energy developments
we saw more upstream opportunities in the early part 
of 2009 for energy developments as a number of our 
customers particularly smaller independent oil 
companies faced more challenging access to debt 
and equity markets and a lower oilprice environment 
however we remained focused on our strategy of only 
investing in development opportunities with limited 
subsurface risk and maintained our strict investment 
criteria in relation to assessing projects on the basis of 
returns based on conservative oil price assumptions 
consequently we did not complete any new upstream 
investments during the year
we did however complete our first investment in 
energy infrastructure with the acquisition of the fpf1 
floating production facility see page 49 and we see 
further good opportunities in this market with our 
strong balance sheet we remain well positioned to 
invest in upstream and energy infrastructure 
opportunities and we continue to review a number  
of opportunities
on 1 january 2009 the group reorganised its operations into seven business units reporting under four segments
business unit     reporting segment
engineering  construction   
  engineering  construction
engineering  construction ventures  
offshore engineering  operations    offshore engineering  operations
engineering services  
training services     engineering training services and production solutions  
production solutions  
energy developments     energy developments
we present below an update on each of the group’s reporting segments
   revenue operating profit
1
   net profit
2
   ebitda
us millions  2009 2008 2009 2008 2009 2008 2009 2008
engineering  construction  25090 19935 3216 2412 2651 2063 3465 2524
offshore engineering  
 operations  6267 7766 178 232 128 164 197 247
engineering training services  
and production solutions  3497 5104 345 483 324 331 426 619
energy developments  2487 1534 774 517 462 219 1609 891
corporate consolidation  
and elimination  787 1044 101 88 29 127 107 91
group  36554 33295 4412 3556 3536 2650 5590 4190
  revenue growth operating margin   net margin  ebitda margin
growthmargin analysis   2009 2008 2009 2008 2009 2008 2009 2008
engineering  construction  259 704 128 121 106 104 138 127
offshore engineering  
 operations  193 03 28 30 20 21 31 32
engineering training services  
and production solutions  315 134 99 95 93 73 122 121
energy developments  621 155 311 337 186 143 647 581
group  98 364 121 107 97 80 153 126
1 profit from operations before tax and finance costs
2 profit for the year attributable to petrofac limited shareholders
operating environment
continued
review of operations 42
petrofac annual report 
and accounts 2009
43
petrofac annual report 
and accounts 2009
business review
operating review
our principal contract awards during the year were
asab field development abu dhabi
■
 awarded in january 2009 the asab field 
development is a 44month us23 billion lump
sum epc project with abu dhabi company for 
onshore oil operations adco to upgrade 
facilities at the onshore asab oil field in abu dhabi
karan utilities and cogeneration package  
saudi arabia
■
 awarded in february 2009 the karan utilities and 
cogeneration package is a 34month project with 
saudi aramco to build utilities and cogeneration 
facilities at the khursaniyah gas plant in saudi 
arabia the capacity of the plant is being extended 
to accommodate approximately 18 billion cubic 
feet of high pressure sour gas from the offshore 
karan field
el merk central processing facility algeria
■
 awarded in march 2009 el merk is a 44month 
us22 billion epc project for a consortium led by 
sonatrach and anadarko we will design and build 
the el merk central processing facility in the berkine 
basin which will have a design capacity of 
approximately 100000 barrels of oil per day 
29000 barrels of condensate per day 31000 
barrels of liquid petroleum gas lpg per day 
together with a natural gas liquids ngl train with a 
nominal capacity of 600 million standard cubic feet 
of gas per day
kauther gas compression oman
■
 awarded in late june 2009 the kauther gas 
compression contract is a us04 billion epc 
project for a gas compression system and 
associated facilities at the kauther gas plant the 
contract scope also includes commissioning and 
six months of initial operations the project follows 
on from the successful completion of the kauther 
gas plant in 2007 which petrofac built on an epc 
basis for pdo oman in early 2008 petrofac was 
asked to carry out the front end engineering and 
design for a gas depletioncompression project 
and then invited to submit a commercial proposal 
for the epc on a negotiated basis
fourth ngl train at integrated gas development  
abu dhabi
■
 in july 2009 we were awarded a contract through 
our 50 owned joint venture petrofac emirates 
and in partnership with gs engineering  
construction with gasco worth approximately 
us21 billion with a value to petrofac emirates  
of around us1 billion the 48month lumpsum 
contract with gasco is for the construction of the 
fourth natural gas liquids ngl train at the ruwais 
complex in abu dhabi this is the first project to be 
awarded to petrofac emirates our joint venture with 
mubadala petroleum services llc which was 
established in late 2008
engineering  construction
the engineering  construction reporting 
segment includes the group’s sharjahbased 
engineering  construction business unit and 
engineering  construction ventures which has 
been established to replicate the success of the 
sharjah business but in new markets such as 
abu dhabi and saudi arabia our core markets for 
this business remain the middle east north africa 
and the commonwealth of independent states 
cis particularly the caspian region
our strong partnerships proven execution track record 
and longestablished presence in the middle east and 
north african markets has helped us achieve a record 
order intake during the year of us63 billion which 
also includes a us100 million feed study for 
turkmengaz where the contract contemplates moving 
into a second phase multibillion dollar epc project 
during 2010 initial progress on our new awards has 
been in line with our expectations and we have 
delivered good operational performance across our 
broader portfolio of projects
■
 in syria we have made good progress on the ebla 
gas plant for petrocanada with first gas exports 
expected in the next few weeks and remain on 
schedule to complete the jihar gas plant for the 
hayan petroleum company a joint venture 
between the stateowned syrian petroleum 
company and ina industrija nafte ddnaftaplin  
of croatia early next year
■
 in egypt and tunisia we completed and 
commissioned the salam and hasdrubal gas plants 
for khalda petroleum a joint venture between 
apache and the stateowned egyptian general 
petroleum corporation and bg tunisia 
respectively
■
 we made significant progress on the harweel 
cluster development project for petroleum 
development oman pdo which is scheduled for 
completion around the middle of this year
■
 we made substantial progress on the in salah gas 
compression project in algeria for sonatrach bp 
and statoil where the three compression stations 
are due for completion later this year
■
 in kuwait we completed the performance test for 
the last of the gathering centres in the facilities 
upgrade contract and all stations are now 
operational and have been handed over to kuwait 
oil company and we have commenced 
construction on the mina alhmadi refinery 40” 
pipeline project which is due for completion later 
this year
review of operations 
continued
revenue 
us millions 
07 08 09
1170
1994
2509
net profit 
us millions 
07 08 09
1225
2063
2651
south yoloten gas field development turkmenistan
■
 we were awarded a contract in late december 
2009 by turkmengaz turkmenistan’s staterun  
gas producer to undertake a feed study and initial 
planning and setup studies for a 10 billion cubic 
metres per annum bcma gas processing facility 
along with the infrastructure and pipelines for the 
entire 20 bcma development a second 10 bcma 
gas processing facility will be built by another 
contractor after satisfactory conclusion of the first 
phase worth us100 million the contract 
contemplates moving into a second phase which 
will include the engineering procurement and 
commissioning work the second phase will be  
on a lumpsum basis with a value not to exceed 
us4 billion
results
engineering  construction achieved strong revenue 
growth in the year due to high levels of activity 
principally on our projects in hand at the beginning of 
the year revenue increased by 259 to us25090 
million 2008 us19935 million the main 
contributors to revenue were the ebla and jihar gas 
plants in syria the harweel project in oman the  
in salah gas compression project in algeria and  
the asab project in abu dhabi
net profit increased by 285 to us2651 million 
2008 us2063 million representing a net margin  
of 106 2008 104 the growth in net margin is 
due to continued strong operational performance 
augmented by the recovery of prior year bid costs from 
a bidding partner the firsttime profit recognition on a 
project awarded in 2008 and a prior year adjustment in 
relation to the applicability of a lower tax rate in relation 
to our projects in oman see note 6 to the financial 
statements partially offset by the dilutive effect of the 
recognition of revenue on some new contracts where 
we are not yet recognising profit as the projects are in 
their early stages 
over the year engineering  construction grew its 
headcount from 3400 to 4200 in addition our 
engineering offices in mumbai and chennai are 
reported within our engineering training services  
and production solutions segment but principally 
support our engineering  construction activities  
at 31 december 2009 we had approximately  
1300 employees in our indian offices 2008 1000
at 31 december the engineering  construction 
backlog stood at us62 billion 2008 us24 billion 
reflecting the high level of order intake during the year 
net profit margin 
 
07 08 09
105
104
106 44
petrofac annual report 
and accounts 2009
45
petrofac annual report 
and accounts 2009
business review
operating review
acquisitions
in early january 2010 we completed the acquisition of 
scotvalve services limited scotvalve a mechanical 
services business for an initial consideration of £3 
million a further consideration of up to £2 million will 
be payable in cash andor shares over three years 
subject to achieving certain agreed performance 
targets scotvalve which was founded in 1985 has 
around 40 employees located at a mechanical 
workshop in aberdeen from which the company 
provides the servicing and repair of oilfield pressure 
control equipment in addition scotvalve has the 
capability to provide its services to the oil  gas sectors 
in the middle east and north africa building upon our 
existing mechanical workshop facilities in the united 
arab emirates and saudi arabia 
results
largely as a consequence of the strength of the us 
dollar against sterling reported revenue for the year 
decreased by 193 to us6267 million 2008 
us7766 million and revenue excluding ‘pass
through’ revenue
1
 decreased by 214 to us4364 
million 2008 us5554 million approximately 90  
of offshore engineering  operations’ revenue is 
generated in the ukcs and those revenues are 
generally denominated in sterling the us dollar was 
stronger against sterling in 2009 compared to 2008 
see the financial review on page 50 for a summary of 
the exchange rates thereby having a significant impact 
on the us dollar value of reported revenues for the 
offshore engineering  operations reporting segment 
on a constant currency basis revenue excluding 
passthrough revenue decreased by approximately 7
net profit was lower at us128 million 2008 us164 
million again reflecting the strengthening of the us 
dollar against sterling as well as the more challenging 
trading environment on a constant currency basis net 
profit was approximately 5 lower net margin on 
revenue excluding passthrough revenue was only 
marginally lower than the prior year at 29 2008 30
headcount was broadly unchanged at the end of 2009 
at 4100 2008 4200
backlog for offshore engineering  operations 
increased to us16 billion at 31 december 2009 
2008 us11 billion in part due to exchange rate 
movements on a constant currency basis at 31 
december 2008 backlog was approximately us13 
billion but principally due to new contract awards  
and extensions
offshore engineering  operations
through offshore engineering  operations we 
provide operations maintenance and brownfield 
engineering services predominantly in the uk 
continental shelf ukcs and principally on a 
reimbursable basis but often with incentive 
income linked to the successful delivery of 
performance targets many of our operations 
contracts are longterm typically three to five 
years and in the case of the provision of duty 
holder services are generally openended
we have seen an increase in tendering activity during 
the year both in the ukcs and international markets 
whereas in prior years contracts were often ‘rolled
over’ with the existing supplier under similar terms and 
conditions customers will now often retender contracts 
on their expiry as they seek improved terms we have 
been a beneficiary of the increase in tendering activity 
winning two key awards
apache engineering and construction uk
■
 in july 2009 we were pleased to announce the 
award of an engineering and construction contract 
with apache for the forties field in the north sea 
this represents the first time that we have secured 
a major brownfield engineering  construction 
contract where we have not been the duty holder 
on the facilities the contract is expected to 
generate revenue of approximately £25 million per 
annum and run for at least three years
bp maintenance uk
■
 in november 2009 we secured a fiveyear contract 
to deliver integrated maintenance management 
support services including the planning co
ordination and execution of maintenance activities 
for all of bp’s uk offshore assets and the onshore 
dimlington plant this is the first time that bp has 
separated out maintenance services in this way 
the contract is expected to generate revenue of 
approximately £20 million per annum
in addition to securing these new awards we have 
been successful in extending a number of our 
operations and maintenance contracts with oil majors 
and independents including an extension to our duty 
holder contract with venture production to may 2011
review of operations
continued
revenue 
us millions
07 08 09
7746
7766
6267
net profit 
us millions 
07 08 09
192
164
128
1 passthrough revenue refers to the revenue recognised from low 
or zero margin thirdparty procurement services provided to 
customers
 on revenue excluding 
passthrough revenue
net profit margin 
 
07 08 09
32
30
29