annual report and accounts 2012
delivery overview
02 our performance highlights
04 petrofac at a glance
06 chairman’s statement
08 interview with the group chief executive
12 delivering geographical expansion
14 delivering offshore
16 delivering integrated energy services
our business
19 how we deliver
20 our business model
22 our fit for 2015 programme
24 senior management team
26 operating environment
28 safety and integrity
segmental performance
31 segmental analysis
32 engineering construction operations  maintenance
32 onshore engineering  construction
34 offshore projects  operations
36 engineering  consulting services
38 integrated energy services
financial performance and risk
42 key performance indicators
44 financial review
47 key risks
corporate responsibility
51 driving growth responsibly
52 people and resourcing
55 social and economic development
57 ethics
58 safety and security
59 environmental protection
governance
62 directors’ information
64 corporate governance report
76 nominations committee report
78 audit committee report
82 board risk committee report
88 directors’ remuneration report
104 directors’ statements
financials
group ﬁnancials
106 independent auditor’s report
107 consolidated income statement
108 consolidated statement of comprehensive income
109 consolidated statement of ﬁnancial position
110 consolidated statement of cash ﬂows
111 consolidated statement of changes in equity
112 notes to the consolidated ﬁnancial statements
company ﬁnancial statements
151 independent auditor’s report petrofac limited
152 company income statement
152 company statement of comprehensive income
153 company statement of ﬁnancial position
154 company statement of cash ﬂows
155 company statement of changes in equity
156 notes to the company ﬁnancial statements
166 shareholder information
167 glossary
this report and accounts contains forwardlooking statements relating to the business ﬁnancial performance and results of petrofac and the industry in which 
petrofac operates these statements may be identiﬁed by words such as ‘expect’ ‘believe’ ‘estimate’ ‘plan’ ‘target’ or ‘forecast’ and similar expressions 
or by their context these statements are made on the basis of current knowledge and assumptions and involve risks and uncertainties various factors could 
cause actual future results performance or events to differ materially from those described in these statements and neither petrofac nor any other person 
accepts any responsibility for the accuracy of the opinions expressed in this report or the underlying assumptions no obligation is assumed to update 
any forwardlooking statements our vision is to be the 
world’s most admired oilﬁeld 
service company
in 2012 we took signiﬁcant steps 
towards achieving this goal 
we delivered on our strategy in 
the key areas of geographic 
expansion broadening offshore 
capability and building our ies 
business we advanced our fit 
for 2015 programme to ensure 
petrofac has the right people 
systems and processes to 
continue to grow safely effectively 
and in line with our values and we 
strengthened our relationships 
with and understanding of the 
communities where we operate
introduction
01 petrofac annual report and accounts 2012
overview our performance highlights
onshore engineering  construction
what we do
onshore engineering  construction delivers onshore 
engineering procurement and construction epc oil and gas 
projects we are focused predominantly on markets in the middle 
east africa and the commonwealth of independent states
highlights in 2012
 completed the kauther project in oman introduced hydrocarbons 
on the asab oil ﬁeld development in abu dhabi and substantially 
completed the karan project in saudi arabia
 the gas processing facility at el merk in algeria is ready for 
commencement of initial production
 made good progress across the rest of our portfolio including on 
the gasco 4th ngl train in abu dhabi and the south yoloten 
gas ﬁeld development in turkmenistan which remain on schedule 
for completion in 2013
 achieved order intake in 2012 of us30 billion securing major 
new awards in iraq kuwait and saudi arabia
offshore projects  operations
what we do
offshore projects  operations which includes our offshore capital 
projects service line specialises in both offshore engineering and 
construction services for greenﬁeld and brownﬁeld oil and gas 
projects and the provision of operations and maintenance support 
onshore and offshore
highlights in 2012
 delivered record activity levels during 2012 from both longterm 
operations support contracts and offshore capital projects
 achieved order intake of us22 billion including operations and 
maintenance projects in iraq for bp and south oil company 
engineering and construction services to all of apache’s uk 
north sea assets and a platform refurbishment contract for 
petronas in malaysia
 mapped out a clear plan to build a differentiated offshore epic 
business that will give access to top tier projects including 
deepwater and subsea umbilicals risers and flowlines surf 
supported by building our own installation capability with a capital 
outlay of around us1 billion over the next ﬁve years
engineering construction operations  maintenance ecom
73
contribution to group net proﬁt contribution to group net proﬁt
9
64
contribution to group revenue contribution to group revenue
us4358m
us4 1 46m in 2011
us1403m
us1252m in 2011
us479m
us463m in 2011
us61m
us44m in 2011
employees employees
7800 
6600 in 2011
4300 
4 1 00 in 2011
21
for more information see pages 34 and 35 for more information see pages 32 and 33
petrofac annual report and accounts 2012 02
overview engineering  consulting services
what we do
engineering  consulting services is petrofac’s centre of technical 
engineering excellence from ofﬁces in the uk india and malaysia 
we provide engineering services across the life cycle of oil and gas 
assets our teams execute all aspects of engineering including 
conceptual studies frontend engineering and design feed and 
detailed design work for onshore and offshore oil and gas ﬁelds 
and facilities
highlights in 2012
 awarded a number of conceptual and front end engineering 
and design feed studies in africa and the cis
 acquired kw limited a highend subsea pipeline consulting 
and engineering services business which will enable us to 
strengthen our leading engineering proposition offshore
integrated energy services
what we do
integrated energy services provides a fully integrated service for 
hydrocarbon resource holders under ﬂexible commercial models 
that are aligned with their requirements projects cover upstream 
developments both greenﬁeld and brownﬁeld and related energy 
infrastructure projects and can include the provision of ﬁnancial capital
highlights in 2012
 achieved gas export on the berantai risk service contract in 
malaysia following full ﬁeld development including fpso 
topsides upgrade and modiﬁcation in less than 21 months 
 made a good start on the magallanes and santuario production 
enhancement contracts pecs in mexico and were awarded a 
further two pecs for the pánuco in conjunction with 
schlumberger and arenque contracts areas
 completed the upgrade of the mopu for the west desaru ﬁeld in 
malaysia and made signiﬁcant progress on the second phase of 
cendor both are expected to commence production in 2013
 entered into a strategic alliance agreement with bowleven to 
develop the etinde permit in cameroon subject to an agreed 
field development plan and other conditions
integrated energy services ies
contribution to group net proﬁt contribution to group net proﬁt
4
contribution to group revenue contribution to group revenue
4
us248m
us208m in 2011
us719m
us519m in 2011
us29m
us31m in 2011
us89m
us22m in 2011
employees employees
2800 
2300 in 2011
3000 
2300 in 2011
revenue ebitda net proﬁt
earnings per share  
diluted
return on  
capital employed backlog
9
us118bn
us108bn in 2011
46
62 in 2011
17
18388 cents per share
15713 cents per share in 2011
17
us632m
us540m in 2011
17
us888m
us760m in 2011
9
us6324m
us5801m in 2011
 backlog by reporting 
segment 
 43
30
2
25
onshore engineering 
 construction 
offshore projects  
operations 
engineering  consulting 
services
integrated energy services
14
11
for more information see pages 38 to 40 for more information see pages 36 and 37
petrofac annual report and accounts 2012 03
group performance petrofac at a glance
our vision
to be the world’s most admired 
oilfield service company 
who we are
for more than three decades petrofac has been serving the 
international oil and gas industry during this time we have 
amassed a broad range of skills and capabilities which we 
deploy in order to help our customers develop and unlock 
the value of their energy assets
through two divisions engineering construction operations  
maintenance ecom and integrated energy services ies we 
design and build oil and gas facilities operate maintain and manage 
facilities train personnel and enhance production in addition 
we develop and coinvest in upstream and infrastructure projects 
where we can leverage the service capabilities of our group
people
it’s our people that make petrofac we have more than 18000 
talented men and women in petrofac drawn from over 
80 nationalities operating at our ofﬁces and projects across 
the world wherever possible we aim to recruit locally and 
focus on developing and retaining our staff 
safe
our people 
are
responsive
ethical
innovative
quality 
and cost 
conscious
driven to 
deliver
our culture and values
at the heart of the work we do our values differentiate us 
and guide our decisions and actions
for more information on our people see page 52
learn more about how our values are embedded into  
our business on page 54
overview
petrofac annual report and accounts 2012 04 our goal
to more than double our recurring  
2010 group earnings by 2015
how we deliver
we help our customers develop and produce their 
hydrocarbon resources bringing together worldclass 
capabilities and delivering them locally we are ﬂexible and 
entrepreneurial so we promote commercial arrangements 
that are aligned with our customers’ goals by sharing their 
objectives we can deliver even greater value
our plan 
longterm growth
our strategy for future growth is based on three key drivers 
 geographical expansion 
 broadening our offshore engineering procurement 
and construction epc capability
 implementing our integrated energy services strategy
how we are evolving for the future
we have clear ﬁnancial goals for 2015 and we are working 
hard to ensure that the company is ﬁt to deliver on them 
we have identiﬁed a number of initiatives as part of our 
fit for 2015 programme that should help secure a strong 
sustainable future for the group
our business model
we deliver our services on either a standalone or integrated 
basis and under a range of commercial models which are 
tailored to meet our customers’ needs
engineering construction  
operations  maintenance
 reimbursable services
 cost plus key performance indicators kpis
 lumpsum turnkey
integrated energy services
 risk service contracts rscs
 production enhancement contracts pecs
 equity upstream investments
learn more on page 20
learn more on pages 22 and 23
learn more on pages 13 to 17
learn more on page 19
petrofac annual report and accounts 2012 05 chairman’s  
statement
2012 was another good year for petrofac despite the marketplace 
remaining competitive we continued to grow increasing revenue by 
9 to us6324 million and earnings by 17 to us632 million
marketplace
despite the continuing global economic 
uncertainty demand for energy has remained 
strong more importantly we expect to 
see growth in demand for energy including 
oil and gas over the very long term 
coupled with the natural decline in existing oil 
and gas production this creates a need for 
largescale investment in oil and gas 
infrastructure this should ensure demand 
for our services remains strong we also see 
strong industry demand for commercially 
innovative integrated oilﬁeld services 
which are helping to build longterm 
sustainable earnings for the group
dividends
the company proposes a ﬁnal dividend of 
4300 cents per share for the year ended 
31 december 2012 2011 3720 cents 
which if approved will be paid to 
shareholders on 24 may 2013 provided 
they were on the register on 19 april 2013 
shareholders who have not elected 
by 26 february 2013 to receive dividends 
in us dollars will receive a sterling equivalent 
of 2840 pence per share
together with the interim dividend of 
2100 cents per share 2011 1740 cents 
equivalent to 1345 pence this gives a total 
dividend for the year of 6400 cents per share 
2011 5460 cents an increase of 17 
in line with the increase in net proﬁt
from strategy to delivery
petrofac is in business for the long term 
as well as having the exacting mediumterm 
aim of more than doubling recurring 2010 
group earnings by 2015
1
 we aspire to 
be the world’s most admired oilﬁeld 
service company
while we will continue to build on our existing 
strengths we aim to deliver on our strategy 
across three key areas geographical 
expansion broadening our offshore capability 
and implementing our ies strategy we are 
expanding to new markets such as mexico 
where we now have four longterm contracts 
we have made good progress with our 
offshore strategy where we are looking to 
build a differentiated offshore business that 
will give access to top tier projects
1
  our group earnings target is net proﬁt after tax 
of more than us862 million by 2015 at least 
a doubling of 2010 recurring earnings
overview
petrofac annual report and accounts 2012 06 we have achieved signiﬁcant milestones on 
our portfolio of integrated energy services 
projects which are building longterm 
sustainable earnings for the group
to be able to deliver our strategy we face 
various challenges we particularly want 
to protect and improve our execution 
capabilities and we need to keep building 
our overall resource the fit for 2015 
programme which was launched in 2012 
is designed to improve all our existing 
processes with a view to helping us work 
smarter and better this year we continued to 
improve our capability but we still need to 
recruit a substantial number of people over 
the next ﬁve years if we are to keep growing 
the business in line with our plans 
notwithstanding the scale of the task 
i am conﬁdent that we will be able to do this 
as the group has been building its human 
resources capability over a number of years 
given the large number of people who will 
be joining our group it is essential that we 
continue to promote petrofac’s longstanding 
values in order to preserve what makes the 
group unique
our board
the governance report on pages 64 to 87 
explains what the board did during 2012 but 
i would like to highlight two areas of board 
focus our risk management framework and 
capability building
our board risk committee has continued to 
strengthen our risk management framework 
it identiﬁed 13 areas of risk which would 
threaten the overall health of the group 
including delivery of our strategic goals 
we have developed a number of metrics 
for each of these areas which we will 
monitor we intend to build on this work in 
2013 and will continue to develop our key 
enterprise risk proﬁle 
following a recent period of board change 
our nominations committee has been able 
to spend more time reviewing executive 
succession planning this year we intend to 
continue concentrating on this vital area next 
year in addition the board has devoted 
considerable time to reviewing our 
human resources strategy and has been 
much encouraged over the last few years 
there have been a number of initiatives 
introduced relating to retention recruitment 
performance management and capability 
mapping these will be essential for delivery 
of the necessary capability
at the start of 2012 we welcomed marwan 
chedid and rené médori to the board 
marwan is our chief executive of engineering 
construction operations  maintenance 
and rené joined as a nonexecutive director 
becoming a member of our audit board 
risk and nominations committees 
these appointments complete a period 
of change over the last two years our broad 
mix of skills experience and nationalities 
mean that there is little danger of ‘group 
think’ our discussions are informed honest 
and vigorous once we have agreed on a 
course of action we all align ﬁrmly behind it 
setting the tone
it is essential that we promote our values if 
petrofac is to maintain its distinctive culture 
the board should lead by example and 
be seen to be safe ethical innovative 
responsive quality and cost conscious 
and driven to deliver
in considering how the board espouses 
company values two particular occasions 
this year come to mind our annual 
safety conference and petrofac’s eve 
awards ceremony
 safety is one of our most important 
values as beﬁts our potentially hazardous 
industry the attendance of our executive 
directors at the safety conference in april 
was a clear demonstration of the emphasis 
we place on safety lord cullen of 
whitekirk who led the 1990 public inquiry 
into the piper alpha oil rig disaster was our 
keynote speaker 
 our internal recognition programme 
the eve awards stand for excellence 
values and energy and honour the 
employees who best embody our values 
the 2012 awards presentation was held 
at our leadership conference in november 
attended by our 100 top leaders i was 
delighted to present this year’s ethical 
behaviour award it was clear how much 
the awards and the high proﬁle given to 
them meant to the winners
our people
the board makes a point of getting out 
into the business meeting customers and 
employees is always a highlight of such 
visits i continue to be struck by the 
capabilities and positive problemsolving 
attitude of our people they are quite 
exceptional at identifying customer needs 
and delivering the right solutions on time 
and to budget i would like to thank each of 
them for the sterling work they do much 
of which is complex arduous and carried 
out in challenging environments
outlook
whilst the situation in the middle east and 
north africa continues to be uncertain 
and the global economic outlook remains 
challenging petrofac is well positioned 
global demand for hydrocarbons is 
expected to continue to rise and our principal 
customers the national oil companies 
continue to invest and furthermore welcome 
the innovative commercial solutions that we 
are able to offer plus our commitment to 
developing local capability whilst 2012 was 
characterised by onshore engineering  
construction customers delaying awards 
we think the situation will improve during 
2013 in the meantime our integrated energy 
services division has many opportunities
our backlog gives us very good visibility of 
revenues for the coming year and we have 
a healthy bidding pipeline combined with 
an exceptional management team and a 
robust and ambitious strategy if we retain 
our values cando culture and capable 
workforce i have every conﬁdence that 
2013 will prove another successful year
norman murray
nonexecutive chairman
petrofac annual report and accounts 2012 07 interview with the  
group chief executive
group chief executive ayman asfari reﬂects on the operational and 
contract highlights of 2012 and outlines the group’s strategic drivers 
which underpin its 2015 goals
overview
petrofac annual report and accounts 2012 08 2012 has been another successful year 
for petrofac how does the company 
continue to deliver strong results and a 
good operational performance despite 
the challenging economy
our achievements are driven by our people and their passion for 
delivery despite the challenging macroenvironment the fundamentals 
for our sector remain positive and strong oil prices are encouraging 
hydrocarbon resource holders to invest in their assets and 
infrastructure across the world our talented men and women 
are responding to these opportunities
what are the three key things you want 
to report to shareholders this year
i the success of our two divisional structure
the organisational structure that we implemented at the start of last 
year is working very well and both divisions had a good ﬁrst full year of 
operations marwan chedid and andy inglis chief executives of 
ecom and ies respectively have done an excellent job of 
establishing and leading their businesses as we intended the new 
structure is proving simpler for customers to understand enables us 
to focus more clearly on our strategic goals and helps the business 
work more closely together to integrate our services
ii the rapid development of ies
building ies is one of our three strategic growth priorities in 2012 
the division increased earnings signiﬁcantly and secured major 
contracts in both new and existing geographies in mexico for 
example by the second half of this year we will be operating four 
ﬁelds and will then be the second biggest producer in the country 
next to national oil company pemex the ies leadership team has 
made excellent progress in developing the technical and management 
strength of the division providing a sound platform for further strong 
growth
iii continued excellence in execution capability
operationally we had another very good year across the group 
our portfolio is in excellent shape and most importantly customers 
are pleased with our service
in the light of petrofac’s strategic 
ambition to grow its offshore 
engineering procurement installation 
and construction epic business what 
is the signiﬁcance of the creation of 
offshore capital projects ocp
our offshore business has historically been focused on operations 
maintenance and integrity management particularly in the ukcs 
such as our contract with apache in the north sea for the forties and 
beryl assets in the past few years we have been responding to our 
customer needs and delivering large scale offshore developments in 
the uk continental shelf dons and greater stella area and in 
malaysia cendor west desaru berantai and sepat 
so we’ve been building our track record and we see continuing 
demand in this sector and a growing requirement from our customers 
for more effective delivery solutions the establishment of our ocp 
service line which is led by yves inbona and is part of our ecom 
division gives us a greater focus on this important market ocp has 
a good pipeline of bidding opportunities we are aiming to build upon 
our existing track record by deepening our offshore technical 
capability and investing in selected assets to provide access to these 
markets
what were the operational highlights of 
the year 
there have been many operational landmarks this year including
 the introduction in october 2012 of ﬁrst gas at berantai 
offshore malaysia under our risk services contract with 
petronas malaysia’s national oil company we met a very 
challenging development schedule to achieve this from concept 
selection to ﬁrst gas in just 21 months 
 the swift establishment of our operations in mexico from a 
standing start we created a fully functioning business by the end 
of the year and secured four production enhancement contracts 
in 12 months 
 our success in delivering largescale onshore projects at sites like 
asab in abu dhabi and at el merk in algeria 
 offshore projects  operations maintained its focus on asset 
integrity and safety signiﬁcantly reducing lost time incidents 
compared with previous years against an overall increase in 
manhours worked 
 we made two small yet strategic capability enhancing acquisitions 
during the year and welcomed kw limited a subsea specialist 
consultancy and oilennium limited an elearning business into our 
engineering  consulting services and training services service 
lines respectively
 also in the year and in line with our ies strategy to help resource 
holders develop their assets and the capability of their workforces 
training services formed a strategic partnership with petronas 
and was appointed to design and build two training facilities 
in malaysia
petrofac annual report and accounts 2012 09 how is the growth of the ies division 
changing petrofac’s risk proﬁle
since our inception our risk proﬁle has evolved as our strategy has 
developed but we have always demonstrated an ability to manage 
our changing risks effectively
the development of ies is the latest stage in the evolution of our 
model the principal driver of our ies strategy is to leverage our 
service capabilities under commercial frameworks such as production 
enhancement and risk service contracts it is true that we invest 
some capital in these projects and therefore have to be conﬁdent in 
our ability to deliver to achieve a return in these contracts we focus 
on helping our customers develop proven reserves or to redevelop 
mature assets ies is helping to build longterm sustainable earnings 
for the group thereby creating a better balanced business 
what characterises the company’s 
approach to managing risk
we have an extensive internal risk review process which we 
undertake prior to committing the business to new projects
our focus on oil and gas combined with our deep knowledge and 
longterm presence in key geographies help us to execute effectively 
and avoid the risk of being unable to operate in challenging or 
remote locations 
while we can see exciting opportunities ahead we would never 
pursue growth strategies if the risks were neither manageable nor 
commensurate with shareholder reward a key element in derisking 
growth is making sure we have the right capabilities systems and 
processes to support expansion our fit for 2015 programme 
sponsored by maroun semaan petrofac’s president is focusing on 
delivering this type of sustainable organisation for more details 
about petrofac and risk see our board risk committee report 
on pages 82 to 87
can you tell us more about fit for 2015
fit for 2015 is an internal programme aimed at improving the 
efﬁciency and sustainability of our business the aim of the project 
is to enable us to achieve our ﬁnancial goals of more than doubling 
our recurring 2010 group net earnings by 2015 and to go on 
growing beyond that date having reviewed our business to identify 
‘road blocks’ to sustainable growth we are now focusing on a suite 
of initiatives these initiatives concentrate on how we win business 
how we deliver for customers and how we motivate and develop 
our people for more information on our fit for 2015 initiatives 
see pages 22 and 23
how does petrofac approach 
succession planning and do you 
have a strong enough talent pipeline 
to manage future growth
succession planning is an aspect of business that we have been 
managing proactively since we listed petrofac in 2005 in the last 
seven years we have seen changes within the leadership team 
that have been well managed and have enhanced the business 
we continue to develop our succession planning regularly identifying 
and reviewing potential successors for each senior post as well as 
the accompanying performance development plans that help ensure 
potential leaders have the skills to step up to these higher roles 
we continue to build a track record in developing our own leaders 
and core capabilities inhouse and are extending this in areas of the 
business where traditionally we have had limited capability such as 
the subsurface expertise we have been developing as part of the 
technical directorate within ies we have been increasing our 
graduate intake yearonyear and in 2012 more than 240 graduates 
joined the petrofac group 
in order to help maintain a full and visible talent pipeline in 2013 we 
will be launching the petrofac academy the academy is designed to 
support the development of the technical skills of our graduate intake 
and to develop further ongoing skills and career development across 
our workforce the ﬁrst stage of this programme a technical 
academy for graduates supporting our onshore engineering  
construction business will be launched later this year in sharjah 
and we hope that it will enable us to double the level of graduates 
we bring into the organisation in the next few years
overview
10 petrofac annual report and accounts 2012 geographic expansion 
go to page 13
offshore capability 
go to page 15
implementing ies strategy 
go to page 17
we delivered on our strategy in three key areas
last year petrofac relaunched and 
reiterated its values of being safe 
ethical innovative responsive quality 
and cost conscious and driven to deliver 
how successful was the relaunch 
the 2012 campaign went very well and the adoption of our values 
was once again prevalent at our annual employee awards ceremony 
in november where we recognised 19 individuals and teams for 
their achievements in living our values given the ongoing growth in 
our staff numbers embedding our values is a continuous process 
our people and their distinctive values is petrofac’s biggest 
differentiator in 2012 we focused on communicating what our values 
mean and how they can be adopted into daily working life in 2013 
our revised code of conduct which has the values at its core will be 
sent to all employees also and as part of our new and consistent 
approach to performance management across the group 25 of 
employee assessment will be based on how well individual behaviours 
reﬂect our values
the theme of this year’s report is from 
strategy to delivery how would you 
characterise progress in developing the 
strategic growth drivers and how are 
they going to help petrofac to achieve 
its vision to be the world’s most admired 
oilﬁeld service company
in last year’s report we communicated the three strategic priorities 
for our business delivering growth in our geographic footprint 
extending our market share in the offshore epic sector and building 
our ies business 
we have made good progress across all of these areas and i have 
already touched upon some of the developments around ies and 
our offshore business in this update across the next six pages of the 
report we have taken each strategic priority in turn and highlighted 
our aspirations and progress for each 
i believe we will achieve our vision to be the world’s most admired 
oilﬁeld service company by continuing to focus on our strategy and 
delivering for our customers and shareholders this has been another 
good year for us in all of these areas but that’s not the end of the 
story we have to challenge ourselves to keep doing better every year 
to achieve our vision
from our inception in the us in the 1980s and our ﬁrst international push into 
the middle east in the 1990s petrofac now has operations in many countries 
continuing this trajectory of careful geographic expansion is one of our 
strategic priorities 
our rationale
as a young company we still have a relatively 
concentrated geographic footprint and a 
natural part of our growth strategy will be to 
look at new regions where we believe we 
can win and deliver business successfully 
a change in government or policy can create 
fresh opportunities and the discovery of new 
oil and gas ﬁelds can generate further options 
for us expansion in different markets also 
makes petrofac more resilient to particular 
challenges in individual regions ensuring 
the overall group portfolio remains robust 
our approach
we are selective and careful when expanding 
in new markets 
we select geographies that have signiﬁcant 
hydrocarbon reserves and then assess 
whether we can do business safely and 
responsibly in that country after this we 
focus on areas where we believe petrofac 
can build a differentiated business where our 
mix of innovative contract options preference 
for delivering with local partners and ability 
to train and develop local workforces 
could make us particularly effective 
our progress
we are particularly proud of the progress 
we have made over the last 12 months in 
mexico malaysia and west africa although 
we have also strengthened our position in 
the world’s largest oil and gas province 
saudi arabia
mexico
in august 2011 petrofac became the ﬁrst 
foreign company in more than 70 years to 
run a mexican oil ﬁeld when the state oil 
company pemex awarded us 25year 
integrated production service contracts for 
the magallanes and santuario blocks in 
tabasco state since then petrofac has 
won two other integrated production service 
contracts each 30years’ long one 
in partnership with schlumberger for the 
pánuco contract area in veracruz state 
the second to develop the arenque 
contract area offshore mexico 
malaysia
in malaysia in october 2012 we introduced 
ﬁrst gas at the offshore berantai ﬁeld under 
our risk service contract with petronas 
in addition we completed the upgrade of the
mopu for the west desaru ﬁeld and made 
signiﬁcant progress on the second phase 
of cendor our training services business 
also formed a strategic partnership with 
petronas to design and build two training 
facilities in the country
west africa
petrofac built on its presence in nigeria in 
2012 with a new relationship in west africa 
in november we signed a strategic alliance 
with bowleven an africafocused oil and 
gas company to support the proposed 
development of the etinde permit offshore 
cameroon these steps complement our 
241 1 interest in seven energy a nigerian 
production and development company
saudi arabia
in 2012 petrofac expanded its operations in 
saudi arabia with four new projects in july 
we won two engineering procurement 
and construction epc awards for phase ii 
of the petrochemical expansion project for 
petro rabigh a domestic company in which 
national oil company saudi aramco and 
sumitomo chemical company of japan 
hold ﬁnancial interests then in december 
saudi aramco awarded us two further epc 
contracts totalling us14 billion for its 
jazan reﬁnery and terminal development 
the contracts are among the ﬁrst major 
awards made under saudi aramco’s 
inkingdom epc programme which 
requires bidders to meet local content 
and training requirements 
meeting new challenges
some of our new geographies have 
challenging social and political environments 
to ensure operations run safely and 
smoothly we assess and monitor aspects 
such as security social impacts and legal 
and compliance laws in each location and 
deploy appropriate protocols and procedures 
to protect our people and assets
looking ahead
going forward we intend to grow 
our activities in recentlyentered 
countries and move into new markets 
potential geographies include other 
countries in the commonwealth of 
independent states indonesia and 
east africa
deli deli deli d veri veri ver ng ng g
geog geo geog geo raph raphical al 
exp exp expa expansio nsion n n
delivering
transporting goods by road in iraq 
can be challenging complex and 
timeconsuming 
to solve this problem the petrofac 
team working on the majnoon ﬁeld 
development for shell iraq petroleum 
development bv constructed a bespoke 
jetty to enable essential equipment 
to be transported by river instead 
there were many challenges the local 
shatt al arab river which had not 
been used commercially for 30 years 
had to be dredged the team needed 
to familiarise itself with water levels 
ﬂow rates and loading data and 
permits had to be obtained from 
several government departments
the completion of the jetty saved time 
it also meant equipment arrived without 
difﬁculty and demonstrated petrofac’s 
innovative and responsive service 
additionally it will be of longterm 
beneﬁt to the local community
the majnoon ﬁeld engineering 
procurement fabrication and 
construction management services 
contract in southern iraq is one of four 
iraqi contracts we have won including 
two in 2012 since we began operations 
there in 2010
1  on a fully diluted basis assuming the full conversion of all convertible securities and exercise of all outstanding warrants and options
overview our business segmental performance financial performance  and risk corporate responsibility governance financials
13 petrofac annual report and accounts 2012 12 petrofac annual report and accounts 2012
expanding our offshore epc business 
while petrofac is perhaps best known for our onshore engineering procurement 
and construction epc capabilities we have been operating in offshore oil and gas 
for more than thirty years combining this offshore history with our epc heritage 
we aim to build a worldclass offshore engineering procurement installation and 
construction epic business
our rationale
since 2002 we have developed offshore oil 
and gas ﬁelds often under lumpsum turnkey 
contracts from the cendor berantai and 
sepat projects in malaysia to the dons in 
the uk we have brought a differentiated 
approach to this work looking forward 
we believe expenditure on offshore 
developments will grow strongly and it is 
a market we feel well positioned to enter
our approach
in 2012 we created a new service line 
offshore capital projects ocp to deliver 
our offshore epic ambitions ocp is led by 
managing director yves inbona and it forms 
part of our engineering construction 
operations  maintenance ecom division 
since joining in june yves has developed 
teams in kuala lumpur sharjah and woking 
to execute existing projects and prepare for 
new activity
initially our focus has been on shallower 
waters in south east asia the united arab 
emirates uae and the caspian sea 
but we plan to widen our focus and target 
deepwater and subsea umbilicals risers 
and flowlines surf opportunities in other 
geographies including the gulf of mexico 
and west africa 
our ocp operation complements our 
established offshore projects  operations 
opo service line opo focuses on 
reimbursable brownﬁeld modiﬁcations 
projects and on operations and maintenance 
services worldwide
our progress
2012 has been a transition year for our 
offshore businesses before the creation of 
ocp  important progress had been made by 
opo on two key offshore epic projects 
berantai and sepat since its inception 
ocp has continued to build the team and 
managed the work on the west desaru 
development in malaysia at the same time 
the team has developed a strong pipeline 
of business development opportunities 
meeting new challenges and 
looking ahead
our aspiration to grow a top tier offshore epic 
business requires us to grow our capability 
to do this we plan to build upon our existing 
track record by deepening our offshore 
technical capability and investing in selected 
assets to provide access to these markets
deli deli deliv ve vering
offs offs offs ffs ff hore re re
delivering
africa
asia
australasia
eastern europe  cis
latin america
middle east
north america
western europe
offshore ep capex by region us bn
us89bn
total capex in 2012
11
13
18
18
9
3
3
14
source douglas westwood 2013
overview our business segmental performance financial performance  and risk corporate responsibility governance financials
15 petrofac annual report and accounts 2012 14 petrofac annual report and accounts 2012
building our integrated energy services business
we launched our integrated energy services ies division in 
june 2011 with a focus on supporting customers in developing their 
hydrocarbon resources by leveraging all the capabilities of the 
petrofac group the growth of ies is one of our strategic priorities
deli deli i li deliv veri veri veri v ri ve i i ve i i v i i v v v veri in ng ng ng ng ng ng ng
inte inte nte te teg grat grat grat ra ra ra a e ed e ed e ed e ed ed d d e d e d e d e e e e de e e e d d e e e ed d ed e d e d e d d d d nerg ner ne er rg rg rg rg rg g rg rg rg ner rg g g gy y y y y y y y y y y
s serv serv v v v v v v vice ce ice ice e es s i ice e es ces e ce i i
delivering
our rationale
as a service company petrofac has no need 
to take equity in oil and gas ﬁelds or to book 
reserves or production what we have is the 
capability to develop and manage oil and gas 
ﬁelds by deploying a wide range of deep 
technical knowledge and skills that have been 
built up in the group over many years we 
believe there are many customers particularly 
national oil companies nocs and small 
explorers that need support in developing 
and managing their assets under ﬂexible 
commercial models that enable them to 
maintain ownership of their reserves
in some cases petrofac will invest capital in 
order to align ourselves more closely with our 
customers another part of our offering 
particularly relevant to nocs is our skills 
training capability that we can deploy to 
develop local workforces and increase 
competence
our approach
our ies division is made up of three discrete 
but connected service lines
 developments has deep engineering and 
project management capabilities that enable 
us to develop customers’ assets effectively
 production solutions delivers services to 
improve production operational efﬁciency 
asset integrity and recovery from our 
customers’ mature ﬁelds
 training services develops and manages 
capability plans for customers builds and 
operates training facilities currently 14 
facilities in seven countries and delivers 
around 200000 training days annually
within ies we offer our services within three 
broad commercial models
risk service contracts rscs petrofac 
manages the development of an asset 
operates and maintains that asset and 
invests capital in the project the capital is 
reimbursed generally from production cash 
ﬂows with a return based on our 
performance across factors such as 
schedule cost and operational performance 
production enhancement contracts 
pecs petrofac takes over the operation of 
a mature asset deﬁnes and executes and 
invests in its redevelopment plan we earn 
a return from a tariff per barrel paid on an 
agreed baseline and on incremental 
production in some cases the return is 
recovered completely through the tariff 
in other cases a portion of our capital is 
‘reimbursed’ immediately and consequently 
the incremental tariff is lower 
equity upstream investments  
petrofac takes a direct interest in a ﬁeld or 
block alongside our customer upstream 
investments through production sharing 
contracts psc concession agreements 
and equity of which block pm304 the 
chergui ﬁeld and the greater stella area 
development are examples
our progress
ies has grown signiﬁcantly since launch 
expanding existing relationships and 
developing new ones it now has a portfolio 
of projects across the globe including
 malaysia petrofac is leading the 
development of the offshore berantai oil 
and gas ﬁeld under a rsc along with 
our partner sapurakencana petroleum 
berhad we were appointed to develop 
the ﬁeld and operate it for seven years 
after ﬁrst gas a landmark reached in 
october 2012
 romania petrofac operates the ticleni 
oilﬁeld and its eight satellite ﬁelds for 
petrom under a pec we signed the 
15year contract which has a 10year 
extension option in 2010
 uk upon ﬁrst production petrofac will 
acquire a 20 interest in the greater stella 
area development in the north sea 
the ﬁeld is being developed by a ﬂoating 
production facility fpf1 which formerly 
belonged entirely to petrofac but which is 
now 75 owned by our coventurers in 
greater stella ithaca and dyas
meeting new challenges
ies’s growth is fostering opportunities 
and challenges that are changing the way 
we work
for example increased upstream activity 
requires us to expand our capabilities in 
areas such as subsurface specialist drilling 
and asset management to meet this need 
we have built a technical centre in woking 
uk and are constructing another in delhi 
india
nocs often require us to use and develop 
local staff consequently we are developing 
our already strong focus on incountry 
training and recruitment this investment 
in local workforces complements our 
strategic commitment to deliver social 
investment programmes in host communities 
the increasingly longterm nature of noc 
contracts makes such close community 
relationships essential
the rapid growth of our mexican 
business demonstrates the huge 
potential of our ies strategy
we won our ﬁrst contracts in mexico in 
august 2011 when in a live auction state 
operator pemex chose us to redevelop 
and increase production at magallanes 
and santuario two mature onshore 
blocks that have been in operation since 
the early 1960s 
petrofac completed the safe transition of 
the two blocks from pemex in a record 
60 days 30 days ahead of schedule 
at the same time among other 
challenges we opened an ofﬁce 
established an operating infrastructure 
recruited 140 staff established more 
than 100 procurement contracts 
and obtained licences and permits 
to operate
in 2012 petrofac won two further pemex 
contracts one in partnership with 
schlumberger for the pánuco contract 
area in veracruz state the second 
for the arenque contract area 
offshore mexico 
looking ahead
ies’s good start puts it in a strong position to 
grow around the world already its existing 
projects go a long way towards our target of 
generating at least us300 million of net proﬁt 
from ies in 2015
overview our business segmental performance financial performance  and risk corporate responsibility governance financials
17 petrofac annual report and accounts 2012 16 petrofac annual report and accounts 2012
11 petrofac annual report and accounts 2012 delivering
12 petrofac annual report and accounts 2012 from our inception in the us in the 1980s and our ﬁrst international push into 
the middle east in the 1990s petrofac now has operations in many countries 
continuing this trajectory of careful geographic expansion is one of our 
strategic priorities 
our rationale
as a young company we still have a relatively 
concentrated geographic footprint and a 
natural part of our growth strategy will be to 
look at new regions where we believe we 
can win and deliver business successfully 
a change in government or policy can create 
fresh opportunities and the discovery of new 
oil and gas ﬁelds can generate further options 
for us expansion in different markets also 
makes petrofac more resilient to particular 
challenges in individual regions ensuring 
the overall group portfolio remains robust 
our approach
we are selective and careful when expanding 
in new markets 
we select geographies that have signiﬁcant 
hydrocarbon reserves and then assess 
whether we can do business safely and 
responsibly in that country after this we 
focus on areas where we believe petrofac 
can build a differentiated business where our 
mix of innovative contract options preference 
for delivering with local partners and ability 
to train and develop local workforces 
could make us particularly effective 
our progress
we are particularly proud of the progress 
we have made over the last 12 months in 
mexico malaysia and west africa although 
we have also strengthened our position in 
the world’s largest oil and gas province 
saudi arabia
mexico
in august 2011 petrofac became the ﬁrst 
foreign company in more than 70 years to 
run a mexican oil ﬁeld when the state oil 
company pemex awarded us 25year 
integrated production service contracts for 
the magallanes and santuario blocks in 
tabasco state since then petrofac has 
won two other integrated production service 
contracts each 30years’ long one 
in partnership with schlumberger for the 
pánuco contract area in veracruz state 
the second to develop the arenque 
contract area offshore mexico 
malaysia
in malaysia in october 2012 we introduced 
ﬁrst gas at the offshore berantai ﬁeld under 
our risk service contract with petronas 
in addition we completed the upgrade of the
mopu for the west desaru ﬁeld and made 
signiﬁcant progress on the second phase 
of cendor our training services business 
also formed a strategic partnership with 
petronas to design and build two training 
facilities in the country
west africa
petrofac built on its presence in nigeria in 
2012 with a new relationship in west africa 
in november we signed a strategic alliance 
with bowleven an africafocused oil and 
gas company to support the proposed 
development of the etinde permit offshore 
cameroon these steps complement our 
241
1
 interest in seven energy a nigerian 
production and development company
saudi arabia
in 2012 petrofac expanded its operations in 
saudi arabia with four new projects in july 
we won two engineering procurement 
and construction epc awards for phase ii 
of the petrochemical expansion project for 
petro rabigh a domestic company in which 
national oil company saudi aramco and 
sumitomo chemical company of japan 
hold ﬁnancial interests then in december 
saudi aramco awarded us two further epc 
contracts totalling us14 billion for its 
jazan reﬁnery and terminal development 
the contracts are among the ﬁrst major 
awards made under saudi aramco’s 
inkingdom epc programme which 
requires bidders to meet local content 
and training requirements 
meeting new challenges
some of our new geographies have 
challenging social and political environments 
to ensure operations run safely and 
smoothly we assess and monitor aspects 
such as security social impacts and legal 
and compliance laws in each location and 
deploy appropriate protocols and procedures 
to protect our people and assets
looking ahead
going forward we intend to grow 
our activities in recentlyentered 
countries and move into new markets 
potential geographies include other 
countries in the commonwealth of 
independent states indonesia and 
east africa
transporting goods by road in iraq 
can be challenging complex and 
timeconsuming 
to solve this problem the petrofac 
team working on the majnoon ﬁeld 
development for shell iraq petroleum 
development bv constructed a bespoke 
jetty to enable essential equipment 
to be transported by river instead 
there were many challenges the local 
shatt al arab river which had not 
been used commercially for 30 years 
had to be dredged the team needed 
to familiarise itself with water levels 
ﬂow rates and loading data and 
permits had to be obtained from 
several government departments
the completion of the jetty saved time 
it also meant equipment arrived without 
difﬁculty and demonstrated petrofac’s 
innovative and responsive service 
additionally it will be of longterm 
beneﬁt to the local community
the majnoon ﬁeld engineering 
procurement fabrication and 
construction management services 
contract in southern iraq is one of four 
iraqi contracts we have won including 
two in 2012 since we began operations 
there in 2010
1
  on a fully diluted basis assuming the full conversion of all convertible securities 
and exercise of all outstanding warrants and options
13 petrofac annual report and accounts 2012 delivering
14 petrofac annual report and accounts 2012 expanding our offshore epc business 
while petrofac is perhaps best known for our onshore engineering procurement 
and construction epc capabilities we have been operating in offshore oil and gas 
for more than thirty years combining this offshore history with our epc heritage 
we aim to build a worldclass offshore engineering procurement installation and 
construction epic business
our rationale
since 2002 we have developed offshore oil 
and gas ﬁelds often under lumpsum turnkey 
contracts from the cendor berantai and 
sepat projects in malaysia to the dons in 
the uk we have brought a differentiated 
approach to this work looking forward 
we believe expenditure on offshore 
developments will grow strongly and it is 
a market we feel well positioned to enter
our approach
in 2012 we created a new service line 
offshore capital projects ocp to deliver 
our offshore epic ambitions ocp is led by 
managing director yves inbona and it forms 
part of our engineering construction 
operations  maintenance ecom division 
since joining in june yves has developed 
teams in kuala lumpur sharjah and woking 
to execute existing projects and prepare for 
new activity
initially our focus has been on shallower 
waters in south east asia the united arab 
emirates uae and the caspian sea 
but we plan to widen our focus and target 
deepwater and subsea umbilicals risers 
and flowlines surf opportunities in other 
geographies including the gulf of mexico 
and west africa 
our ocp operation complements our 
established offshore projects  operations 
opo service line opo focuses on 
reimbursable brownﬁeld modiﬁcations 
projects and on operations and maintenance 
services worldwide
our progress
2012 has been a transition year for our 
offshore businesses before the creation of 
ocp  important progress had been made by 
opo on two key offshore epic projects 
berantai and sepat since its inception 
ocp has continued to build the team and 
managed the work on the west desaru 
development in malaysia at the same time 
the team has developed a strong pipeline 
of business development opportunities 
meeting new challenges and 
looking ahead
our aspiration to grow a top tier offshore epic 
business requires us to grow our capability 
to do this we plan to build upon our existing 
track record by deepening our offshore 
technical capability and investing in selected 
assets to provide access to these markets
africa
asia
australasia
eastern europe  cis
latin america
middle east
north america
western europe
offshore ep capex by region us bn
us89bn
total capex in 2012
11
13
18
18
9
3
3
14
source douglas westwood 2013
15 petrofac annual report and accounts 2012 delivering
16 petrofac annual report and accounts 2012 building our integrated energy services business
we launched our integrated energy services ies division in 
june 2011 with a focus on supporting customers in developing their 
hydrocarbon resources by leveraging all the capabilities of the 
petrofac group the growth of ies is one of our strategic priorities
our rationale
as a service company petrofac has no need 
to take equity in oil and gas ﬁelds or to book 
reserves or production what we have is the 
capability to develop and manage oil and gas 
ﬁelds by deploying a wide range of deep 
technical knowledge and skills that have been 
built up in the group over many years we 
believe there are many customers particularly 
national oil companies nocs and small 
explorers that need support in developing 
and managing their assets under ﬂexible 
commercial models that enable them to 
maintain ownership of their reserves
in some cases petrofac will invest capital in 
order to align ourselves more closely with our 
customers another part of our offering 
particularly relevant to nocs is our skills 
training capability that we can deploy to 
develop local workforces and increase 
competence
our approach
our ies division is made up of three discrete 
but connected service lines
 developments has deep engineering and 
project management capabilities that enable 
us to develop customers’ assets effectively
 production solutions delivers services to 
improve production operational efﬁciency 
asset integrity and recovery from our 
customers’ mature ﬁelds
 training services develops and manages 
capability plans for customers builds and 
operates training facilities currently 14 
facilities in seven countries and delivers 
around 200000 training days annually
within ies we offer our services within three 
broad commercial models
risk service contracts rscs petrofac 
manages the development of an asset 
operates and maintains that asset and 
invests capital in the project the capital is 
reimbursed generally from production cash 
ﬂows with a return based on our 
performance across factors such as 
schedule cost and operational performance 
production enhancement contracts 
pecs petrofac takes over the operation of 
a mature asset deﬁnes and executes and 
invests in its redevelopment plan we earn 
a return from a tariff per barrel paid on an 
agreed baseline and on incremental 
production in some cases the return is 
recovered completely through the tariff 
in other cases a portion of our capital is 
‘reimbursed’ immediately and consequently 
the incremental tariff is lower 
equity upstream investments  
petrofac takes a direct interest in a ﬁeld or 
block alongside our customer upstream 
investments through production sharing 
contracts psc concession agreements 
and equity of which block pm304 the 
chergui ﬁeld and the greater stella area 
development are examples
our progress
ies has grown signiﬁcantly since launch 
expanding existing relationships and 
developing new ones it now has a portfolio 
of projects across the globe including
 malaysia petrofac is leading the 
development of the offshore berantai oil 
and gas ﬁeld under a rsc along with 
our partner sapurakencana petroleum 
berhad we were appointed to develop 
the ﬁeld and operate it for seven years 
after ﬁrst gas a landmark reached in 
october 2012
 romania petrofac operates the ticleni 
oilﬁeld and its eight satellite ﬁelds for 
petrom under a pec we signed the 
15year contract which has a 10year 
extension option in 2010
 uk upon ﬁrst production petrofac will 
acquire a 20 interest in the greater stella 
area development in the north sea 
the ﬁeld is being developed by a ﬂoating 
production facility fpf1 which formerly 
belonged entirely to petrofac but which is 
now 75 owned by our coventurers in 
greater stella ithaca and dyas
meeting new challenges
ies’s growth is fostering opportunities 
and challenges that are changing the way 
we work
for example increased upstream activity 
requires us to expand our capabilities in 
areas such as subsurface specialist drilling 
and asset management to meet this need 
we have built a technical centre in woking 
uk and are constructing another in delhi 
india
nocs often require us to use and develop 
local staff consequently we are developing 
our already strong focus on incountry 
training and recruitment this investment 
in local workforces complements our 
strategic commitment to deliver social 
investment programmes in host communities 
the increasingly longterm nature of noc 
contracts makes such close community 
relationships essential
the rapid growth of our mexican 
business demonstrates the huge 
potential of our ies strategy
we won our ﬁrst contracts in mexico in 
august 2011 when in a live auction state 
operator pemex chose us to redevelop 
and increase production at magallanes 
and santuario two mature onshore 
blocks that have been in operation since 
the early 1960s 
petrofac completed the safe transition of 
the two blocks from pemex in a record 
60 days 30 days ahead of schedule 
at the same time among other 
challenges we opened an ofﬁce 
established an operating infrastructure 
recruited 140 staff established more 
than 100 procurement contracts 
and obtained licences and permits 
to operate
in 2012 petrofac won two further pemex 
contracts one in partnership with 
schlumberger for the pánuco contract 
area in veracruz state the second 
for the arenque contract area 
offshore mexico 
looking ahead
ies’s good start puts it in a strong position to 
grow around the world already its existing 
projects go a long way towards our target of 
generating at least us300 million of net proﬁt 
from ies in 2015
17 petrofac annual report and accounts 2012 19 how we deliver
for more than three decades petrofac has been serving the international oil and 
gas industry
20 our business model
 the scale and depth of petrofac’s capabilities enable us to provide services to our 
customers across the life cycle of oil and gas assets
22 our fit for 2015 programme
 our internal improvement programme was launched in early 2012 ﬁnd out how it will 
help us meet our future goals 
24 senior management team
 meet our senior management team
26 operating environment
 the key drivers of capital and operational expenditures should ensure that demand 
for our services remains strong 
28 safety and integrity
 nothing is more important to petrofac than safety the safety of our people and the 
plants we build and operate are critical to the continued success of our group 
our business
18 petrofac annual report and accounts 2012 how we deliver
petrofac has been serving the international oil and gas industry since 1981 
from our origins as a texasbased producer of modular 
plant we have grown to become a leading ftse 100 
company with operations in 29 countries in the past 
three decades we have developed a wide range of skills 
and capabilities which we use to help our customers 
the hydrocarbon resource holders to develop and unlock 
the value of new and existing oil and gas assets both on 
and offshore
through our two divisions engineering construction 
operations  maintenance ecom and integrated 
energy services ies we design and build oil and gas 
facilities operate maintain and manage assets train 
personnel and enhance production in addition we 
develop and coinvest in upstream and infrastructure 
projects where we can leverage the wider service 
capabilities of our group
our approach
across the world our services are characterised by our 
approach to local delivery our customer focus and 
our ﬂexible commercial frameworks
local delivery
at petrofac we believe in working in partnership with 
customers partners and suppliers within the communities 
where we operate 
our global workforce of more than 18000 staff 
drawn from around 80 nationalities highlights our 
commitment to employing and developing local 
resources national workforce development is often a 
key consideration for our customers our training and 
competence development programmes facilitated 
by our training services business can be tailored to 
meet organisational or project capability objectives and 
we offer language skills and competence programmes 
alongside engineering procurement and construction 
epc or development projects
customer focus
our teams put customer focus at the heart of service 
delivery driven by our core values petrofac people aim to 
anticipate problems before they arise and always try to 
respond to customer needs quickly and effectively 
however demanding the challenge
our two divisions ecom and ies provide services on 
either a standalone or integrated basis with the ultimate 
aim of helping our customers solve their energy 
challenges as effectively as possible 
commercial ﬂexibility
our commercial frameworks are designed to provide 
a ﬂexible approach to meeting our customers’ needs 
we offer our customers a range of commercial 
propositions from reimbursable and cost plus kpis 
to models where we share the investment and risks 
involved and are designed to deliver differentiated 
returns for more information on our commercial models 
see page 20
19 petrofac annual report and accounts 2012 our business model
the scale and depth of petrofac’s capabilities enable us to provide services  
to our customers across the entire life cycle of oil and gas assets 
our services are available on either a standalone or integrated basis and we  
provide a range of commercial models which are tailored to meet our customers’ 
needs services are delivered through our two divisions – ecom and ies
design
from the concept to the detail our design services draw  
on deep technical experience combined with a long track  
record of delivering in the ﬁeld our design teams span the 
technical spectrum and are available worldwide to address 
customers’ needs
build
whether it is on or offshore brown or greenﬁeld our engineering 
procurement and construction businesses deliver customers’ 
projects with an acute focus on schedule and cost we work 
under both reimbursable and lumpsum contractual models  
from the million to the multibillion dollar scale
manage
we provide a complete asset management service under a 
variety of different commercial models covering production 
enhancement production operations and maintenance work 
both onshore and offshore
train
our global training business manages 14 training facilities in 
seven countries we have an integrated approach working with 
customers to assess capability needs and to build programmes 
to develop competent safe and efﬁcient workforces
maintain
our people have deep experience in operating oil and 
gas infrastructure we provide project management operations 
and maintenance support and engineering and construction 
solutions for planned facility modiﬁcations and upgrades
develop
we bring our spectrum of technical skills together under 
integrated contracts to support customers in developing their 
energy resources we undertake this development work under 
a variety of commercial structures sharing risk with our 
customers in order to align ourselves closely with them
engineering construction operations  
 maintenance
reimbursable services
where the cost of our services is reimbursed by the customer plus an 
agreed margin the majority of services provided by engineering  
consulting services and offshore projects  operations are 
remunerated on this basis
cost plus kpis
often our reimbursable contracts will include incentive income linked 
to the successful delivery of key performance indicators kpis for 
example duty holder projects like the kittiwake platform in the uk 
north sea for centrica
lumpsum turnkey
onshore engineering  construction and offshore capital projects 
undertake engineering procurement and construction epc projects 
predominantly on a lumpsum or ﬁxedprice basis for example the 
south yoloten project in turkmenistan  
integrated energy services
risk service contracts rscs
where we develop operate and maintain a ﬁeld while the resource 
holder retains ownership and control of their reserves often we will 
coinvest in the development and will be reimbursed based upon 
our performance a recent example is the berantai project in 
malaysia rscs typically have low exposure to commodity prices 
and reservoir performance
production enhancement contracts pecs
where we are paid a tariff per barrel for enhancement of oil and gas 
production above an agreed baseline and therefore have no direct 
commodity price exposure pecs are appropriate for mature ﬁelds 
which have a long production history our contracts are long term 
for example 15 years on the ticleni contract in romania and 25 
years for the magallanes and santuario ﬁelds in mexico
equity upstream investments
upstream investments through production sharing contracts psc 
concession agreements and equity of which block pm304 the 
chergui ﬁeld and the greater stella area development are examples 
we will typically have some production and commodity price 
exposure going forward we expect to focus more on risk service 
contracts and production enhancement contracts
our commercial models our services
20 petrofac annual report and accounts 2012
our business 01
02
03
04
12
07
10
06
08
09
05
11
key
01 co2 storage
02 offshore wind
03 co2 sequestrationcapture
04 reﬁning and petrochemicals
05 storage
06 liqueﬁed natural gas
07  oil and gas processing facilities and pipelines
08  onshore development and production
09  offshore development and production
10 floating production
11 underground reservoir
12 training facility
21 petrofac annual report and accounts 2012 our fit for 2015 programme
petrofac has delivered strong growth historically and has set exacting 
mediumterm goals to more than double our recurring 2010 group 
earnings by 2015 to help us consolidate this growth and build a 
stronger platform for the future we have launched an internal 
programme ‘fit for 2015’ to improve our groupwide structures 
systems and processes
programme status
the project was launched in january 2012 and during the year we 
identiﬁed key areas for improvement and then drew up detailed plans 
to address those areas this initial ‘wave’ of initiatives will begin to 
deliver in 2013 but we will also launch design work on a shorter 
second wave of initiatives during the course of the year
programme focus
the fit for 2015 initiatives address three broad areas 
 our strategic focus to improve both our business development 
activity on priority prospects customers and countries and the 
quality of projects entering our portfolio
 how we work to identify more efﬁcient and effective ways of 
working to improve performance across all of our businesses 
activity has focused on identifying and codifying internal best 
practice to ensure a more systematic approach to project delivery
 who delivers the work to ensure the right people with the right 
skills are in place to deliver our plans the project has focused 
initially on improving our performance management processes 
as the key enabler of change
who delivers work
how we work
strategic focus
systematic and nimble approach to project 
delivery balanced use of lowcost centres and 
value engineering
collaborative delivery of projects across 
service lines
business development tied to strategy with 
full clarity on what differentiates our service lines
integrated approach to sales across 
service lines where appropriate
focus on priority prospects to increase win rate
drive to win instilled across the organisation
common performance talent and reward frameworks 
applicable to all service lines
bestinclass recruitment with capability demand 
linked to strategy and business plans
our business
22 petrofac annual report and accounts 2012 a standardised groupwide 
approach for managing production 
enhancement contracts pecs within 
ies will be the outcome of one fit for 
2015 initiative
as ies asset managers build their portfolio 
of pecs they are identifying best practices 
as they take over and operate new ﬁelds 
the ies asset management initiative has 
developed a new toolkit that establishes 
a consistent way of working enabling 
us to respond more quickly apply best 
practice share learning and improve 
production enhancement
gordon east initiative owner says the 
toolkit will help staff understand and build 
on minimum requirements “it is not 
intended to be a suite of new technical 
processes but a way of organising 
existing processes to be most effective” 
says east managing director of ies 
production solutions
programme impact
many of the initiatives apply to speciﬁc parts of the business 
our integrated energy services ies division for example is deﬁning 
a toolkit of asset management processes to support its production 
enhancement projects while our onshore engineering  construction 
business’ activities include an initiative which aims to improve our use 
and management of subcontractors
reﬂecting the importance of fit for 2015 the programme is being 
supported internally with a global employee engagement campaign 
this includes ‘town hall’ presentations by senior managers local team 
brieﬁngs and video print and online updates
senior leadership
petrofac senior management is driving fit for 2015 group president 
maroun semaan is sponsoring the programme and each initiative also 
has a senior owner accountable for delivery
23 petrofac annual report and accounts 2012 senior management team
subramanian sarma
managing director onshore engineering 
 construction 
t enure
subramanian joined petrofac in 1997
responsibility
subramanian joined petrofac as a project manager and has 
held various positions since then including executive vice 
president projects and deputy chief operating ofﬁcer 
of petrofac international as managing director of onshore 
engineering  construction within ecom subramanian 
is responsible for all our onshore epc projects worldwide 
which are delivered predominantly under lumpsum turnkey 
commercial models and a workforce of around 7800 
previous experience
prior to joining petrofac subramanian worked for 
kvaerner and jacobs in india and oman and has more 
than 30 years’ experience in the oil and gas industry  
he holds an msc in chemical engineering from the 
indian institute of t echnology  
bill dunnett
managing director offshore projects 
 operations
t enure
bill joined petrofac in 2007
responsibility
bill has over 26 years’ experience in the oil and gas industry 
and now leads the offshore projects  operations service 
line within ecom which focuses on brownﬁeld projects and 
operations and maintenance services worldwide bill joined 
petrofac initially in the developments business where he 
had responsibility for asset development and production 
including the don ﬁelds in the ukcs and the chergui ﬁeld 
in t unisia
previous experience
prior to joining petrofac bill spent eight years at halliburton 
and its subsidiary kbr as a senior vice president and 
corporate ofﬁcer  his responsibilities included membership 
of the kbr executive leadership t eam global operations 
and maintenance bill spent his earlier career with mobil 
north sea and shell he is a chartered engineer and 
graduated with a ﬁrst in engineering from heriot watt 
university  edinburgh
craig muir
managing director engineering  
consulting services
t enure
craig joined petrofac in february 2012 
responsibility
craig joined petrofac as managing director of engineering 
 consulting services within ecom his responsibilities 
include the effective management and execution of 
petrofac’ s engineering service centres in woking india 
malaysia indonesia houston algeria and nigeria as well 
as our subsidiary business plant asset management
previous experience
craig previously held the position of executive vice 
president within growth regions covering the middle east 
africa and cis for amec based in abu dhabi key focus 
was in the growth of engineering services and project 
management contracts prior to joining amec he also 
held numerous roles working in the oilﬁeld service sector 
including those with kbr brown  root and aoc 
international he has previously worked in the north sea 
extensively in the middle east and in asia paciﬁc 
yves inbona
managing director offshore capital projects
t enure
yves joined petrofac in june 2012
responsibility
yves joined petrofac as the managing director of our 
offshore capital projects business within ecom 
which focuses on the offshore engineering procurement 
installation and commissioning epic market yves has 
extensive expertise in the offshore sector  having more 
than 30 years of industry experience 
previous experience
during his time as chief operating ofﬁcer of saipem spa 
yves managed the offshore business which was the most 
proﬁtable of all saipem’ s business units he speaks seven 
languages and is a graduate engineer from école centrale 
de paris 
our business
24 petrofac annual report and accounts 2012 paul groves
managing director training services
t enure
paul joined petrofac in 2009 
responsibility
as managing director of petrofac’ s t raining services 
business paul has overall responsibility for developing and 
running the group’ s global training competence consultancy 
and assurance activities as part of the ies division 
previous experience
paul previously worked with shell from 2001 where he 
held a number of business developmentled roles within 
the organisation a chartered engineer and scientist 
paul started his career as a lecturer of physics at oxford 
university before moving into a number of management 
and development roles in organisations such as alcan 
aluminum limited and british gasbg plc
richard milne
group director of legal and commercial affairs
t enure
richard joined petrofac in 2004 
responsibility
richard has overall responsibility for advising on the 
legal and commercial aspects of the group’ s activities 
he played a signiﬁcant role in petrofac’ s successful 
admission to listing on the london stock exchange in 
2005 and in developing the group’ s governance and 
compliance framework as a member of the senior 
management team richard participates in the group’ s 
risk review process and advises on corporate matters 
in addition to signiﬁcant commercial issues 
previous experience
prior to joining petrofac richard spent some 15 years in 
corporate ﬁnance which followed a career in the insurance 
brokerage industry  a graduate of oxford university 
richard qualiﬁed as a solicitor 
geoff tranﬁeld
group director of human resources
t enure
geoff joined petrofac in 2008 
responsibility
as the group director of human resources geoff has 
driven the progression of petrofac’ s hr strategy and 
organisation development during his time at petrofac 
the group has grown considerably and geoff has overseen 
the launch of a number of organisational development 
talent management and other hr programmes 
previous experience
geoff previously worked for hess corporation for more 
than ﬁve years latterly in the position of vice president 
hr – worldwide ep  prior to joining hess geoff held a 
number of other hr positions in sectors including oil and 
gas utilities and rail
rob jewkes
managing director developments
t enure
rob joined petrofac in 2004
responsibility
rob joined petrofac to build a europebased engineering 
services business in woking uk which now forms part of 
petrofac’ s engineering  consulting services business 
in 2009 rob was appointed managing director of 
developments within the ies division and is responsible 
for leveraging our engineering and project management 
capability through risk service contracts and equity 
investments to lead the development of our customers’ 
upstream assets and energy infrastucture assets 
with ongoing projects in malaysia t unisia and the ukcs 
previous experience
rob has more than 35 years of experience in the oil and 
gas industry  prior to joining petrofac he served as chief 
executive ofﬁcer of clough engineering the main operating 
company of the australian engineering group clough 
limited rob holds a degree in civil engineering from the 
university of western australia
gordon east
managing director production solutions
t enure
gordon joined petrofac in 2006
responsibility
gordon leads the production solutions service line within 
ies although he initially joined petrofac as managing director 
of petrofac facilities management now offshore projects 
 operations within production solutions gordon is 
responsible for developing and managing the group’ s 
portfolio of production enhancement contracts including 
four projects in mexico and the ticleni field in romania
previous experience
prior to joining petrofac gordon spent more than 20 years 
with conocophillips in various leadership and management 
roles throughout the upstream business worldwide 
he has also held nonexecutive roles in the dti and 
cabinet ofﬁce gordon has an ma in engineering 
from cambridge university and an msc in petroleum 
engineering from imperial college london
25 petrofac annual report and accounts 2012 overview – supply and demand
the international energy agency’s iea ‘new policies scenario’
1
 
anticipates that global energy demand will increase by over onethird 
from 2011 to 2035 12 per year on average driven by rising 
incomes and population growth under the ‘current policies 
scenario’
2
 energy demand increases by 15 per year to 2035 
the vast majority of the growth in demand will come from nonoecd 
countries particularly china the world’s largest energy consumer 
india and the middle east while oecd demand increases by just 3 
from 2010 to 2035 under the ‘new policies scenario’
fossil fuels will remain the predominant means of satisfying global 
energy demand over the long term
3
 under the ‘new policies 
scenario’ demand for oil is projected to increase by around 14 
to approximately 100 million barrels per day by 2035 global demand 
for gas is expected to increase considerably faster with a projected 
50 increase from 2010 to 2035 reaching the equivalent of 
approximately 88 million barrels of oil per day by 2035
the natural decline in existing oil and gas production is of even greater 
signiﬁcance than the anticipated growth in demand for oil and gas 
for example the ﬁgure opposite shows the decline from currently 
producing oil ﬁelds out to 2035 largescale investment in oil and 
gas projects is therefore required both to limit and compensate for 
the decline in supply and to satisfy growth in demand
operating 
environment
0
20
40
60
80
mbd
2000 2005 2011 2015 2020 2025 2030 2035
world liquids supply by type in the new policies scenario
p processing gains
p light tight oil
p other unconventional oil
p natural gas liquids 
crude oil
p fields yettobe found 
p fields yettobe developed
p currently producing
100
90
70
50
30
10
source world energy outlook 2012 © oecdiea 2012 ﬁgure 315 page 103
1
 ‘ our central scenario the new policies scenario takes into account existing 
policy commitments and assumes those recently announced are 
implemented albeit in a cautious manner’ iea world energy outlook 2012 
november 2012 page 33
2
 ‘ the current policies scenario assumes no implementation of policies beyond 
those adopted by mid2012’ iea world energy outlook 2012 november 
2012 page 33
3
  59 of the increase in global energy demand between 2010 and 2035 iea 
world energy outlook 2012 november 2012 page 53
our business
26 petrofac annual report and accounts 2012 world primary energy demand by fuel million tonnes of oil equivalent
1990 2010 2015 2020 2030 2035 201035
coal 2231 3474 3945 4082 4180 4218 08
oil 3230 4113 4352 4457 4578 4656 05
gas 1668 2740 2993 3266 3820 4106 16
nuclear 526 719 751 898 1073 1138 19
hydro 184 295 340 388 458 488 20
bioenergy 903 1277 1408 1532 1755 1881 16
other renewables 36 112 200 299 554 710 77
t otal 8779 12730 13989 14922 16417 17197 12
 compound average annual growth rate  includes traditional and modern biomass uses
source world energy outlook 2012 © oecdea 2012 table 22 page 53
investment in oil and gas infrastructure
driven by the supply and demand environment described above 
investment in oil and gas infrastructure is expected to be 
approximately us19 trillion over the period 2012 to 2035
1
 
including upstream reﬁning and transmission and distribution 
this represents just over 50 of all energysupply infrastructure 
in the new policies scenario and is equivalent to us614 billion 
per year from 2012 to 2035 approximately 50 of this investment 
around us300 billion per annum is expected to be in our core 
markets of the uk continental shelf ukcs the middle east and 
africa the commonwealth of independent states cis and the 
asia paciﬁc region
the iea sees the balance of investment shifting to the middle east 
and other regions however the average investment per year over 
the period to 2035 is similar to that spent in 2012 as the ﬁnding 
and development costs in these regions are lower offsetting 
the higher cost of new sources such as deepwater and 
unconventional projects
2

operational expenditures
industrywide operational expenditures are expected to increase 
the average cost per barrel of developing operating and maintaining 
new ﬁelds which are often in more remote or harsher environments 
is likely to increase over time in addition the cost per barrel 
of maintaining existing producing ﬁelds is also likely to increase 
as they will require greater ‘healthcare’ as they mature and 
production declines
strategy
our addressable market is a small proportion of the total global capital 
and operational expenditure in the industry we have three key 
strategic initiatives for growth which will expand our addressable 
market over time
 expanding into new geographies within our core markets 
see page 13
 taking our onshore epc capability offshore see page 15
 the provision of integrated energy services see page 17
in summary
notwithstanding that we still face signiﬁcant competition in many of 
our established markets the key drivers of capital and operational 
expenditure should ensure that demand for our services remains 
strong over the long term the substantial market opportunity that we 
see for the provision of integrated energy services should help to 
drive strong growth in that division and help us achieve our ambition 
of more than doubling our 2010 recurring group earnings by 2015
1
 iea ‘world energy outlook 2012’ november 2012 page 124
2
 iea ‘world energy outlook 2012’ november 2012 page 123
27 petrofac annual report and accounts 2012 safety and integrity
we work in a technicallychallenging and geographicallydiverse 
industry that requires a vigilant and proactive approach to 
safeguarding our people and operations across the world
the safety of our people and of the plants we build and operate are 
critical to the continued success of our group 
asset integrity
in 2012 we launched an asset integrity framework to deliver a 
structured and consistent approach to integrity across all petrofac 
operations the framework comprises our asset integrity policy 
our asset integrity standard a number of guidance documents and 
a toolkit of supporting processes 
the new framework was launched in april 2012 at our annual safety 
conference attended by 150 senior managers including our chairman 
and group chief executive to reinforce the importance of safety and 
integrity assurance to petrofac we invited lord cullen who led the 
1990 public inquiry into the piper alpha oil platform disaster in which 
167 people died to speak at this event
we continued to strengthen the systems we use to monitor and 
maintain our projects and operations our group integrity forum 
which brings together the individuals responsible for overseeing 
integrity assurance in our service lines meets quarterly 
this forum is responsible for the oversight of the management 
of petrofac’s integrity assurance worldwide 
petrofac conducts detailed audits of major sites to determine 
compliance with our asset integrity standard and protection against 
and preparedness for major accidents the information gathered is 
carefully assessed to check performance and trends and remedial 
action is taken as required during the year we continued to develop 
our asset integrity guidelines which aid us in recognising risks and 
setting actions to manage them
our asset integrity review board which meets monthly assesses 
operational integrity against 30 key measures the review board 
which involves managers from all operated sites identiﬁes and seeks 
to resolve potential risks and acts as a valuable forum for peer review 
and sharing experience 
during the year some petrofac board members had the opportunity 
to view our safety and asset integrity activities in person with a series 
of visits to company sites one of these visits to the kittiwake 
platform in the north sea included petrofac’s chairman group chief 
executive and chief financial ofﬁcer 
safety culture
highperforming assets and robust systems alone do not deliver 
safety employees must have safety skills and mindsets 
training plays an integral part here particularly when we recruit 
local workers who are unfamiliar with our industry and safety culture 
in 2012 our offshore projects  operations business was 
instrumental in the development of an elearning programme in safe 
working practices for offshore staff the interactive ‘control of work’ 
programme uses 3d animations case studies lessons learned from 
previous accidents and offshore videos this programme is now being 
widely adopted throughout our industry including by some 
of petrofac’s customers
we continued to promote our internal horizon zero safety campaign 
around the world the campaign named after our goal of achieving 
zero lost time accidents and major incidents galvanises employees 
around our eight ‘golden rules of safety’ driving which remains the 
primary cause of injury and death in our industry was a particular 
focus during the year in 2012 we translated our golden rules safety 
video into a further six languages and revised our managers’ guides 
to motivating staff to act safely
we work to reduce risk across the wider oil and gas industry by 
sharing best practice with our peers we remain members of the uk 
oil spill prevention and response advisory group and support the 
uk industry’s step change in safety initiative our specialist 
operations provide invaluable insights in this ﬁeld petrofac training 
services is a respected emergency response trainer and our uk 
emergency response service centre provides a 24hour integrated 
response capability
sharing knowledge and experience is a critical aspect of improving 
safety culture to help formalise this we developed a lessonslearned 
database to enable easy access to a wealth of safety information 
and to generate alerts around speciﬁc incidents or areas of concern 
to support the sharing of lessons learnt and best practice internally 
we brought together around 30 safety managers from across the 
group at our annual safety managers’ forum in dubai 
in safety as in other areas of our business we are continuously 
trying to improve by introducing greater commonality across petrofac 
in 2012 we reviewed our safety systems and processes and 
introduced a number of consistent groupwide initiatives including 
a new incident investigation and root cause analysis system
nothing is more important to petrofac than safety 
our business
28 petrofac annual report and accounts 2012 our performance
one of the most notable aspects of our safety performance in 2012 
was the signiﬁcant increase in the total manhours worked reﬂecting 
the number of large contracts in either construction or operations 
phases at 272 million manhours this was almost double the 
143 million recorded manhours in 2011 
in many ways our overall safety performance was good in 2012 
our recordable incident frequency rate as measured according to 
occupational safety and health administration rules was 013 per 
200000 manhours 2011 014 and our lost time injury lti 
frequency rate was 0018 the same as last year our driving incident 
frequency rate per million kilometres driven also stayed at last year’s 
level of 011
in line with our horizon zero objectives several sites experienced 
no lti incidents at all particularly noteworthy was the 25 million 
manhours without lti achieved by our team at the el merk gas 
processing facility in algeria the achievement helped the project win 
jv partner anadarko’s 2013 international safety and environmental 
excellence program award also our ‘hsse in construction’ team 
working on the majnoon oil ﬁeld project in iraq for shell recently won 
the shell chief executive ofﬁcer’s award for ‘improving performance 
in global health safety security and environment hsse risk areas’
other safety landmarks were achieved at karan our gas plant 
development project in eastern saudi arabia which has had more 
than 11 million incidentfree manhours our mina al ahmadi pipeline 
project in southern kuwait which has had over 10 million and our 
oilﬁeld production enhancement operations in ticleni southwestern 
romania which topped ﬁve million 
sadly these achievements are overshadowed by the deaths of 
two petrofac contract workers in 2012 in march a foreman at our 
site in kauther oman was struck by a reversing truck and in april 
a chargehand died after he was crushed by falling equipment at 
our site near ruwais in western abu dhabi each incident was 
investigated and reviewed by senior management and then 
separately by the petrofac board the lessons learned from these 
tragic events have been shared groupwide 
during the year we continued to focus on developing our emergency 
response preparedness across the group this included training 
and preparedness exercises at both the group and divisional level 
we also revised our crisis management standard to reﬂect the 
changing nature of our contracts and our presence in a number of 
challenging geographies which we will continue to develop and 
reﬁne during 2013
total manhours worked  
million manhours completed by employees and subcontractors recordable incident frequency rate
lost time injury frequency rate driving incident frequency rate
272 million 013
0018 011
per 200000  
manhours
per 200000  
manhours
incidents per million 
kilometres driven
67
76
70
143
272
2008
2010
2009
2011
2012
0033
0026
0020
0018
0018
2008
2010
2009
2011
2012
022
003
029
011
011
2008
2010
2009
2011
2012
032
018
036
014
013
2008
2010
2009
2011
2012
29 petrofac annual report and accounts 2012 31 segmental analysis
our operations are organised into two divisions which report under four segments
32 engineering construction operations 
 maintenance ecom
engineering construction operations  maintenance designs and builds oil and gas 
facilities and operates manages and maintains them on behalf of our customers 
the division has four service lines which report as three separate segments
32 – onshore engineering  construction
34 – offshore projects  operations
36 – engineering  consulting services
38 integrated energy services ies
integrated energy services harnesses petrofac’s broad range of capabilities to 
provide integrated services to oil and gas resource holders the division has three 
integrated service lines which report as one reporting segment
segmental 
performance
30 petrofac annual report and accounts 2012 the group reports the ﬁnancial results of its seven service lines under four segments
we present below an update on each of the group’s reporting segments
revenue operating proﬁt
12
net proﬁt
3
ebitda
2
us millions 2012 2011 2012 2011 2012 2011 2012 2011
onshore engineering  construction 4358 4146 540 554 479 463 580 585
offshore projects  operations 1403 1252 79 57 61 44 95 62
engineering  consulting services 248 208 30 33 29 31 36 40
integrated energy services 719 519 133 53 89 22 196 89
corporate consolidation  elimination 404 324 24 17 26 20 19 16
group 6324 5801 758 680 632 540 888 760
revenue growth operating margin net margin ebitda margin
growthmargin analysis  2012 2011 2012 2011 2012 2011 2012 2011
onshore engineering  construction 51 274 124 134 110 112 133 141
offshore projects  operations 121 733 56 45 43 35 68 49
engineering  consulting services 191 200 121 158 117 148 145 191
integrated energy services 386 350 185 103 124 44 273 173
group 90 332 120 117 100 93 140 131
1
 proﬁt from operations before tax and ﬁnance costs
2
 operating proﬁt and ebitda includes the group’s share of losses of associates
3
 proﬁt for the year attributable to petrofac limited shareholders
segmental  
analysis
engineering construction operations  maintenance ecom
chief executive – marwan chedid
integrated energy services ies
chief executive – andy inglis
onshore 
engineering  
construction 
oec
offshore projects  operations  
opo
engineering 
 consulting 
services  
ecs
integrated energy services
onshore 
engineering  
construction
offshore  
projects  
operations
engineering 
 consulting 
services
training
services
production 
solutions
developments
reporting  
segments
offshore  
capital  
projects
divisions
service  
lines
31 petrofac annual report and accounts 2012 engineering construction 
operations  maintenance ecom
engineering construction operations  maintenance designs and builds oil and gas 
facilities and operates manages and maintains them on behalf of our customers
what we do
onshore engineering  construction delivers 
onshore engineering procurement and 
construction projects we are predominantly 
focused on markets in the middle east 
africa and the commonwealth of 
independent states
highlights in 2012
 completed the kauther project in oman 
introduced hydrocarbons on the asab 
oil ﬁeld development in abu dhabi and 
substantially completed the karan project 
in saudi arabia
 the gas processing facility at el merk 
in algeria is ready for commencement 
of initial production
 made good progress across the rest of 
our portfolio including on the gasco 
4th ngl train in abu dhabi and the 
south yoloten gas ﬁeld development in 
turkmenistan which remain on schedule 
for completion in 2013
 achieved order intake in 2012 of 
us30 billion securing major new 
awards in iraq kuwait and saudi arabia
onshore engineering  construction
employees
contribution to group revenue
contribution to group net proﬁt
7800
revenue us millions 
1994
3254
2509
4146
4358
2008
2010
2009
2011
2012
net proﬁt us millions 
206
373
265
463
479
2008
2010
2009
2011
2012
net proﬁt margin  
104
115
106
112
110
2008
2010
2009
2011
2012
backlog us billions 
24
90
62
64
51
2008
2010
2009
2011
2012
sophisticated logistics planning has 
helped keep petrofac’s us34 billion 
gas ﬁeld development project in 
south yoloten turkmenistan ﬁrmly 
on track
a demanding schedule meant early 
and effective procurement of materials 
was essential to prevent delays 
in construction 
our timely purchasing strategy and a 
comprehensive logistics assessment is 
helping to ensure goods are transported 
efﬁciently to landlocked turkmenistan 
all modes of transportation are being 
used from road haulage air freight 
and rail transportation to sea and 
river shipping meanwhile to ensure 
smooth customs clearance our 
dedicated translation team presents 
all documentation in both turkmen 
and russian
73
64
32 petrofac annual report and accounts 2012
segmental performance during 2012 we completed the kauther 
gas compression project in oman 
introduced hydrocarbons on the asab 
oil ﬁeld development in abu dhabi and 
substantially completed the karan utilities 
and cogeneration project in saudi arabia 
the el merk gas processing facility in algeria 
is ready for the introduction of hydrocarbons 
we made good progress across our portfolio 
of projects during 2012 including on the 
gasco 4th ngl train in abu dhabi and 
the south yoloten gas ﬁeld development in 
turkmenistan which remain on schedule 
for completion in 2013 following the recent 
terrorist attack at the in amenas natural gas 
site in algeria at the request of our customer 
we have evacuated our staff on a temporary 
basis from the in salah southern ﬁelds 
development in that country we will 
recommence activities on the site when 
agreed with our customer
new awards
order intake during the year totalled 
us30 billion and included the following 
major awards
badra oilﬁeld development project iraq
in february 2012 we were awarded a 
us330 million lumpsum epc contract 
by gazprom for the ﬁrst phase of the badra 
oilﬁeld development project we are providing 
detailed design engineering procurement 
construction precommissioning 
commissioning and startup work on the 
badra development’s central processing 
facility which comprises three crude oil 
processing trains the ﬁrst phase of the 
project is expected to come on stream in the 
second half of 2013 with ﬁnal completion 
scheduled during the second half of 2015
petro rabigh phase ii petrochemical 
expansion project saudi arabia
in july 2012 we announced the award 
of two epc contracts for petro rabigh’s 
a joint venture between saudi aramco 
and sumitomo chemical co ltd phase ii 
petrochemical project in saudi arabia 
the epc contracts are for tank farms in the 
north and south areas and common utilities 
the projects which are scheduled to be 
undertaken within 36 months will be 
delivered from our saudi arabia ofﬁce 
in alkhobar
power distribution network kuwait
in september 2012 we were awarded a 
us200 million epc contract by kuwait oil 
company koc for a new power distribution 
network in north kuwait which is expected 
to be completed in 24 months under the 
terms of the contract we will construct three 
new substation buildings as well as laying 
approximately 900 kilometres of buried 
cable to connect the site’s substations to 
the distribution network when complete 
the new facilities will provide a more robust 
power supply to support the development 
of the onshore oil ﬁelds in north kuwait
jazan reﬁnery and terminal project 
saudi arabia
in december 2012 we were awarded two 
epc packages for saudi aramco’s jazan 
reﬁnery and terminal project with a 
combined value of around us14 billion 
when complete the reﬁnery will produce 
around 400000 barrels of oil per day and 
have associated terminal facilities on the red 
sea near jazan in the southwest of the 
kingdom of saudi arabia petrofac’s saudi 
arabia ofﬁce will lead the delivery of the work 
scope which covers tank farms in the north 
and south areas of the development 
these are some of the ﬁrst major awards 
made by saudi aramco under its inkingdom 
epc programme and both packages 
are scheduled to be undertaken within 
three years
results
revenue for the year increased by 51 to 
us4358 million 2011 us4146 million 
reﬂecting an increase in activity levels 
compared with the prior year five projects 
contributed over threequarters of the 
revenue for the reporting segment the south 
yoloten gas plant in turkmenistan the asab 
onshore oil ﬁeld development in abu dhabi 
the el merk gas processing facility and the 
in salah southern ﬁelds development in 
algeria and the gas sweetening facilities 
project in qatar
ebitda decreased by 08 to 
us580 million with the ebitda margin 
slightly lower than the prior year at 133 
2011 141 while we had high levels of 
activity and signiﬁcant margin delivery on 
contracts which are nearing completion 
we also saw increased bid costs due to 
the high level of bidding activity in 2012
net proﬁt for the year increased by 35 
to us479 million 2011 us463 million 
representing a net margin of 110 broadly 
in line with the prior year 2011 112 
the increase in net proﬁt reﬂects the 
movement in ebitda and a decrease in the 
effective tax rate for the reporting segment
onshore engineering  construction 
headcount increased from 6600 to 7800 
reﬂecting the increase in activity levels
onshore engineering  construction backlog 
stood at us51 billion at 31 december 2012 
2011 us64 billion
timeline for onshore engineering  construction key projects
asab onshore oil ﬁeld development abu dhabi
el merk gas processing facility algeria
gasco 4th ngl train abu dhabi
gas sweetening facilities project qatar
mina alahmadi reﬁnery pipelines 2 kuwait
water injection project kuwait
laggantormore gas processing plant ukcs
south yoloten gas plant turkmenistan
in salah southern ﬁelds development algeria
majnoon ﬁeld iraq
badra ﬁeld iraq
petro rabigh saudi arabia 
koc power distribution network kuwait 
jazan oil reﬁnery saudi arabia 
us2300m
us2200m
us500m
us600m
us400m
us430m
us800m
us3400m
us1200m 
us240m
us330m
undisclosed
us200m
us1400m
2015
nocnoc led companyconsortium joint nocioc led companyconsortium iocioc led companyconsortium
2014 2012 2013
original  
contract value  
to petrofac
33 petrofac annual report and accounts 2012 what we do
offshore projects  operations which includes 
our offshore capital projects service line 
specialises in both offshore engineering and 
construction services for greenﬁeld and 
brownﬁeld projects and the provision of 
operations and maintenance support 
onshore and offshore
highlights in 2012
 delivered record activity levels during 
2012 from both longterm operations 
support contracts and offshore 
capital projects
 achieved order intake of us22 billion 
including operations and maintenance 
projects in iraq for bp and south oil 
company engineering and construction 
services to all of apache’s uk north sea 
assets and a platform refurbishment 
contract for petronas in malaysia
 mapped out a clear plan to build a 
differentiated offshore epic business that 
will give access to top tier projects 
including deepwater and subsea 
umbilicals risers and flowlines surf 
supported by building our own installation 
capability with a capital outlay of around 
us1 billion over the next ﬁve years
offshore projects  operations
employees
contribution to group revenue
contribution to group net proﬁt
4300
backlog us billions 
11
24
16
27
35
2008
2010
2009
2011
2012
net proﬁt us millions 
16
17
13
44
61
2008
2010
2009
2011
2012
net proﬁt margin  
21
24
20
35
43
2008
2010
2009
2011
2012
revenue us millions 
777
722
627
1252
1403
2008
2010
2009
2011
2012
the kittiwake production platform 
located in the central north sea 
reached a key safety milestone 
in october 2012 when it celebrated 
seven years without a lost 
time incident
this strong performance against one of 
the key safety metrics reﬂects a range 
of factors including a proactive safety 
culture promoting and fostering safe 
behaviours a focus on understanding 
the risks from major accident hazards 
a strong learning culture from previous 
asset or industry incidents and investment 
and support from the platform owners
petrofac has been duty holder of the 
north sea platform since 2003 when we 
oversaw the ownership transition from 
the previous operator other kittiwake 
landmarks since 2003 include operating 
several new satellite ﬁeld tiebacks and a 
new oil export pipeline system along with 
reducing the maintenance backlog
in 2012 centrica renewed our kittiwake 
duty holder contract for a further two years
9
21
34 petrofac annual report and accounts 2012
segmental performance 1
  contracts where the group takes full responsibility for managing a customer’s 
asset and is responsible for the safety of the asset
offshore projects  operations which 
includes our offshore capital projects service 
line provides engineering and construction 
services at all stages of greenﬁeld and 
brownﬁeld offshore projects in addition 
through the provision of operations support 
services we deliver production and 
maintenance support and extend ﬁeld life 
the majority of offshore projects  
operations’ activities are currently in the uk 
continental shelf ukcs but a growing 
proportion of activities are outside the uk 
including in the united arab emirates 
iraq malaysia and thailand services are 
predominantly provided on a reimbursable 
basis but often with incentive income linked 
to the successful delivery of performance 
targets many of our production and 
maintenance contracts are longterm 
typically three to ﬁve years and in the 
case of the provision of duty holder
1
 
services are generally openended 
increasingly we are delivering our engineering 
and construction services on a lumpsum 
basis on offshore capital projects as we 
progress our strategy of taking our onshore 
epc capability offshore
we have delivered record activity levels in 
offshore projects  operations during 2012 
from both longterm operations support 
contracts and offshore capital projects 
including work on a number of projects 
secured or extended during 2011 and 2012 
including 
 engineering and construction services for 
apache 
 duty holder services for centrica’s 
kittiwake platform 
 the fpf3 jasmine venture duty holder 
contract in thailand 
 a maintenance contract for bp on the 
rumaila ﬁeld in iraq 
 upgrade of the fpf1 ﬂoating production 
facility for the greater stella area project 
see integrated energy services 
 the fpf5 ocean legend modiﬁcation 
and upgrade prior to deployment on the 
west desaru fault block in malaysia 
see integrated energy services
 completion of the upgrade and modiﬁcation 
of the fpso berantai which is now 
deployed in the berantai ﬁeld in malaysia 
see integrated energy services 
 in addition we have now achieved 
sufﬁcient progress to commence proﬁt 
recognition on the laggantormore gas 
plant on shetland in the uk
new awards
offshore projects  operations secured 
a number of contract wins and extensions 
during 2012 with an order intake totalling 
us22 billion new wins during the 
year included
bekokc platform refurbishment 
malaysia
in may 2012 we were awarded a 
us220 million contract by petronas 
carigali sdn bhd a subsidiary of 
petronas the malaysian national oil 
company for the refurbishment of the 
bekokc platform located in the south
eastern part of the malay basin the project 
will be executed on an engineering 
procurement construction installation 
and commissioning epcic alliance basis 
bekokc is a manned platform serving as 
a gas processing and compression hub 
exporting gas from the guntong tiong and 
bekok ﬁelds of block pm9 in addition to 
production of crude oil and gas from its own 
wells under the terms of the refurbishment 
project we will provide epcic services to the 
platform with the overall project expected to 
be completed in around 15 months 
apache engineering and construction 
services uk
in july 2012 we announced a threeyear 
contract with two optional oneyear extensions 
worth approximately us160 million per 
annum to provide onshore engineering and 
both onshore and offshore construction 
services to all of the apache north sea 
assets including the beryl alpha and bravo 
platforms in the northern north sea and the 
scottish area gas evacuation sage gas 
processing plant at st fergus aberdeenshire 
the contract represents an extension to the 
previous service contract which petrofac held 
for apache’s forties platforms under the 
terms of the new contract our scope will also 
include topside brownﬁeld and greenﬁeld 
activity in addition to interfacing with 
subsea contractors
inspection maintenance and repair 
contract iraq
in november 2012 we won a further 
inspection maintenance and repair contract 
for the rumaila oil ﬁeld in southern iraq with 
our joint venture partner china petroleum 
engineering  construction corporation 
cpecc the us229 million contract was 
awarded by bp iraq nv bp via the rumaila 
operating organisation roo following a 
competitive tender the threeyear contract 
which is worth more than us160 million to 
petrofac covers the inspection maintenance 
and repair of degassing stations rotating 
machinery and cluster pumping stations 
and came into effect on 1 november 2012
offshore operations contract iraq
in august 2012 we secured a contract worth 
approximately us100 million to provide 
offshore operations and maintenance 
services for the iraq crude oil expansion 
project awarded by iraq’ s south oil company 
soc the 12month contract commenced 
following a threemonth mobilisation period 
there is also additional scope for the contract 
to be extended via two oneyear contract 
extension options offshore projects  
operations will provide operations and 
maintenance services for the new oil export 
facilities situated approximately 60 kilometres 
offshore the al fao peninsula in southern iraq 
the facilities include an offshore platform 
metering station single point moorings 
subsea pipelines and tanker operations
results
reported revenue for the year increased 
by 121 to us1403 million 2011 
us1252 million reﬂecting high activity 
levels on both longterm operations support 
contracts and offshore capital projects
around 70 of offshore projects  
operations’ revenue was generated in 
the uk and those revenues are generally 
denominated in sterling the average us 
dollar to sterling exchange rate was broadly 
in line with the prior year
financial reporting exchange rates
ussterling
year 
ended 31 
december 
2012
year 
ended 31 
december 
2011
average rate for year 159 160
yearend rate 163 155
notwithstanding that the prior year beneﬁted 
from a provision release following completion 
of a longterm maintenance services 
contract net proﬁt increased by 401 
to us61 million 2011 us44 million 
reﬂecting the high levels of activity and ﬁrst 
time proﬁt recognition on the laggan
tormore gas plant project
net margin increased to 43 2011 35 
due to an increasing proportion of higher 
margin nonuk business and an increasing 
proportion of lumpsum offshore capital 
projects
headcount increased to 4300 at 
31 december 2012 reﬂecting the higher 
levels of activity 2011 4100
offshore projects  operations backlog 
increased to us35 billion at 31 december 
2012 2011 us27 billion following the new 
contract wins and extensions during 2012
35 petrofac annual report and accounts 2012 what we do
engineering  consulting services is 
petrofac’s centre of technical engineering 
excellence from ofﬁces in the uk india 
and malaysia we provide engineering 
services across the life cycle of oil and gas 
assets our teams execute all aspects of 
engineering including conceptual studies 
frontend engineering and design feed 
and detailed design work for onshore and 
offshore oil and gas ﬁelds and facilities
highlights in 2012
 awarded a number of conceptual and 
feed studies in africa and the cis
 acquired kw limited a highend subsea 
pipeline consulting and engineering 
services business which will enable us 
to strengthen our leading engineering 
proposition offshore
engineering  consulting services
employees
contribution to group revenue
contribution to group net proﬁt
2800
net proﬁt us millions 
18
22
17
31
29
2008
2010
2009
2011
2012
net proﬁt margin  
75
122
152
148
117
2008
2010
2009
2011
2012
revenue us millions 
235
173
114
208
248
2008
2010
2009
2011
2012
petrofac has built on its presence 
in turkmenistan with the second 
project win in a year for its strategic 
joint venture with the china 
petroleum engineering  
construction corporation cpecc
china petroleum petrofac engineering 
services cppes was established in 
october 2011 during its ﬁrst two years 
of operation it is concentrating both on 
projects in china and international 
opportunities for chinese oil and gas 
companies other international prospects 
will be reviewed opportunistically 
in september 2012 cppes won a 
sevenmonth contract for the detailed 
design of gas gathering facilities in 
bagtyyarlyk northeast turkmenistan 
the project for cpecc’s turkmenistan 
branch will be delivered by an integrated 
team of petrofac and cpecc engineers 
the award came a month after the joint 
venture completed an earlier project 
to expand existing tank farm facilities for 
the same customer on budget and on 
schedule in amu darya turkmenistan
elsewhere in turkmenistan petrofac is 
working on the us34 billion south 
yoloten gas ﬁeld development project 
our largest ever project
4
4
36 petrofac annual report and accounts 2012
segmental performance engineering  consulting services operates 
as our centre of technical engineering 
excellence from ofﬁces in the uk india and 
malaysia we support the life cycle of oil and 
gas assets this is through engineering 
studies including conceptual frontend 
engineering and design feed and detailed 
design work across onshore and offshore oil 
and gas ﬁelds to external customers and in 
support of ecom and ies projects primarily 
on a reimbursable basis 
we secured a number of conceptual and 
feed studies during the year which has led 
to increased activity levels for example 
we were awarded a feed study on behalf 
of rialto energy and société nationale 
d’opérations pétrolières de la côte d’ivoire 
for the gazelle ﬁeld in côte d’ivoire
during the year we established an 
engineering ofﬁce in lagos to support our 
nigerian operations and we are evaluating 
options to establish further engineering 
ofﬁces in other countries to enhance our 
local delivery capabilities
acquisitions
as announced in february 2012 we 
acquired kw limited a highend subsea 
engineering and consulting business 
which complements our existing skills in 
engineering  consulting services and 
will enable us to strengthen our leading 
engineering proposition offshore kw limited 
has an extensive track record ranging from 
conventional subsea tieback projects to 
deepwater projects highpressure high
temperature hpht wells and extreme 
natural environments
results
reported revenue for the year increased 
191 to us248 million 2011 us208 
million reﬂecting the increase in activity 
levels net proﬁt was marginally lower at 
us29 million 2011 us31 million 
as engineering  consulting services 
recognised a us3 million loss being 50 
on fair value changes in seven energy 
warrants 2011 us3 million gain 
the other 50 of the fair value changes 
were recognised in integrated energy 
services see note 12 to the ﬁnancial 
statements for more detail
headcount was higher at 31 december 2012 
at 2800 31 december 2011 2300 
reﬂecting the increase in activity levels 
particularly in our engineering ofﬁces in 
india and woking uk
engineering  consulting services’ backlog 
increased to us02 billion at 31 december 
2012 2011 usnil 
37 petrofac annual report and accounts 2012 what we do
integrated energy services provides a fully 
integrated service for hydrocarbon resource 
holders under ﬂexible commercial models 
that are aligned to their requirements 
projects cover upstream developments 
both greenﬁeld and brownﬁeld and related 
energy infrastructure projects and can 
include the provision of ﬁnancial capital
highlights in 2012
 achieved gas export on the berantai risk 
service contract rsc in malaysia 
following full ﬁeld development including 
fpso topsides upgrade and modiﬁcation 
in less than 21 months 
 made a good start on the magallanes and 
santuario production enhancement 
contracts pecs in mexico and were 
awarded a further two pecs for the 
pánuco in conjunction with schlumberger 
and arenque contracts areas
 completed the upgrade of the mopu for 
the west desaru ﬁeld in malaysia and 
made signiﬁcant progress on the second 
phase of cendor both are expected to 
commence production in 2013
 entered into a strategic alliance agreement 
with bowleven to develop the etinde permit 
in cameroon subject to an agreed field 
development plan and other conditions
employees
contribution to group revenue
contribution to group net proﬁt
3000
backlog us billions 
05
03
03
16
30
2008
2010
2009
2011
2012
net proﬁt us millions 
37
38
61
22
89
2008
2010
1
2009
2011
2012
net proﬁt margin  
86
99
126
44
124
2008
2010
1
2009
2011
2012
revenue us millions 
435
384
484
519
719
2008
2010
2009
2011
2012
integrated energy  
services ies
integrated energy services harnesses petrofac’s broad range of capabilities 
to provide integrated services to hydrocarbon resource holders the division 
has three integrated service lines which report as one ﬁnancial segment
14
11
first gas from the berantai ﬁeld 
offshore malaysia in october 2012 
was a key milestone towards our 
customer petronas achieving 
its goals of increasing domestic 
production and building local 
capability
petrofac operates the ﬁeld and has led 
the fasttrack development under the 
ﬁrst risk services contract awarded 
in malaysia alongside local partner 
sapurakencana petroleum on behalf 
of petronas the national oil company
berantai is around 150km offshore 
peninsular malaysia 10km south of the 
tapis ﬁeld and 30km north east of the 
angsi ﬁeld the development comprises 
a wellhead platform connected to a 
ﬂoating production storage and ofﬂoading 
fpso vessel the fpso berantai 
gas is exported by a 30km subsea 
pipeline to the petronas carigali
operated angsi field and onwards into 
the peninsular malaysian gas grid 
1
 excluding the gain on the enquest demerger
38 petrofac annual report and accounts 2012
segmental performance integrated energy services comprises 
three discrete but connected service lines 
developments production solutions and 
training services where we can leverage our 
service capabilities to enhance value mitigate 
risks and reduce costs integrated energy 
services provides a fully integrated service 
for hydrocarbon resource holders under 
ﬂexible commercial models that are aligned 
to their requirements projects cover 
upstream developments both greenﬁeld and 
brownﬁeld and related energy infrastructure 
projects and can include the provision of 
ﬁnancial capital
our service offering is underpinned by our 
ability to develop resource holders’ local 
capability through the provision of technical 
skills training with competency development 
and assurance frameworks for example 
in january 2012 we were awarded a 
ﬁveyear contract to run saudi petroleum 
services polytechnic centre for construction 
skills and drilling training we received our 
ﬁrst intake of students in april which included 
local workers for aramco along with staff 
from its contractor base 
integrated energy services deploys its 
services to meet the individual needs of 
customers using a range of commercial 
frameworks including production 
enhancement contracts pecs risk service 
contracts rscs and traditional upstream 
equity investment models including both 
production sharing contracts psc and 
concession agreements 
production enhancement contracts
during the year we were awarded the 
pánuco and arenque pecs in mexico by 
pemex following a competitive bidding 
process we expect to commence ﬁeld 
operations on the pánuco contract area 
jointly with schlumberger and on the 
arenque offshore contract during the ﬁrst 
half of 2013 
we commenced ﬁeld operations on the 
magallanes and santuario pecs in mexico 
on 1 february 2012 and we now have three 
drilling rigs and two workover rigs active on 
the blocks the drilling programme on the 
ticleni pec for petrom in romania is 
progressing with one rig operational on 
the ﬁeld with additional activity focusing 
on sidetracks and well workovers
we earn a tariff per barrel on the pecs for an 
agreed level of baseline production and an 
enhanced tariff per barrel on incremental 
production we earned tariff income on a 
total of 52 million barrels of oil equivalent 
mboe 2011 13 mboe during the year 
which included 11 months of ﬁeld operations 
on the magallanes and santuario pecs and 
our second full year of operations on the 
ticleni pec
risk service contracts
in january 2011 we secured our ﬁrst rsc 
in malaysia to lead the development of the 
berantai ﬁeld offshore peninsular malaysia 
for petronas we have a 50 interest in 
the rsc alongside local partner 
sapurakencana 
under the terms of the rsc we receive 
a rate of return linked to our performance 
against an agreed incentive structure 
including project costs timing of ﬁrst gas and 
sustained gas delivery measured six months 
after project completion with an ongoing 
incentive structure based upon operational 
uptime we achieved a key milestone on 
the berantai rsc in october 2012 with 
the commencement of processing and 
export of gas
in november 2012 we announced a 
strategic alliance agreement with bowleven 
to develop the etinde permit in cameroon 
subject to an agreed field development plan 
and satisfaction of certain other conditions 
including coventurer and government 
approvals the strategic alliance’s risk service 
arrangements envisage that petrofac will 
subsequently execute the planned 
development through the provision of 
project management engineering 
procurement and construction services
summary of integrated energy services key projects 
see our integrated energy services data pack at wwwpetrofaccomiesdatapack for more details
production enhancement  
contracts pecs
ticleni romania
magallanes and santuario mexico
pánuco mexico
arenque mexico
risk service contracts rscs
berantai development malaysia
bowleven etinde permit  
development cameroon
equity upstream investments
block pm304 malaysia
chergui gas plant tunisia
greater stella area uk
2025
†
 
2037
2043
2043
2020
life of ﬁeld
2026
2031
life of ﬁeld
†
10 year 
extension option
transition  
period
transition period
2015 2014 2013 2012 2011
transition period
transition period
 in joint venture with schlumberger
 subject to agreed field development plan
end date
39 petrofac annual report and accounts 2012 equity upstream investments
on block pm304 in malaysia the upgraded 
west desaru mobile offshore production unit 
mopu formerly the ocean legend recently 
sailed from the conversion yard and the 
conductor support structure is presently 
being constructed also on block pm304 
we have made signiﬁcant progress on the 
second phase of cendor with installation 
of all inﬁeld facilities and good progress 
made on the ﬂoating production storage 
and ofﬂoading fpso vessel we expect 
production from west desaru and the 
second phase of cendor to commence 
in 2013
in tunisia we have drilled two additional 
production wells during the year which are 
expected to extend the production plateau 
for the chergui gas plant
in october 2011 we signed an agreement 
that will see the deployment of the ﬂoating 
production facility fpf1 the fpf1 on the 
greater stella area development in the north 
sea following the fdp submission in early 
2012 we ﬁnalised the sale of 75 of the 
share capital in the company holding the 
fpf1 to ithaca energy inc ithaca and 
dyas bv  upon ﬁrst production we will 
acquire a combined 20 interest in the 
greater stella area from the other co
venturers in the development consisting of 
three ukcs licences the greater stella 
area development is expected to commence 
production in 2014
our net entitlement from production for 
the year from our psc and concession 
agreements which currently includes the 
ﬁrst phase of block pm304 cendor and 
the chergui gas plant was 14 mboe 
2011 17 mboe
seven energy
we have a 241
1
 interest in seven energy 
international limited a leading nigerian gas 
development and production company 
seven energy commenced production from 
the uquo ﬁeld in late 2012 and stubb creek 
will come onstream during 2013
results
integrated energy services’ revenue 
increased by 386 to us719 million 
2011 us519 million reﬂecting substantial 
progress on the berantai rsc and 
commencement of the magallanes and 
santuario pecs
net proﬁt for the year increased 2934 
to us89 million 2011 us22 million 
reﬂecting ﬁrst time proﬁt recognition on the 
berantai rsc the proﬁt from the sale of 75 
of the share capital in the company holding 
the fpf1 and the commencement of the 
magallanes and santuario pecs as a result 
of loss of control over the company holding 
the fpf1 which arises on sale of 75 of 
the share capital accounting standards 
require us to fair value our remaining 
investment in associate and recognise the 
uplift in the fair value in the proﬁt and loss 
account the total contribution from the fpf1 
transaction was approximately us36 million
headcount increased to 3000 at 
31 december 2012 2011 2300 
primarily due to the commencement of 
the magallanes and santuario pecs and 
development of our projects in malaysia 
integrated energy services’ backlog stood 
at us30 billion at 31 december 2012 
2011 us16 billion 
1
  on a fully diluted basis assuming the full conversion of all convertible securities and exercise of all outstanding warrants and options
oil and gas personnel in the gulf of 
mexico are beneﬁting from space age 
training facilities thanks to a strategic 
partnership between petrofac 
training services and raytheon 
technical services company
petrofac and its us partner are using 
nasa’s johnson space center to deliver 
‘high consequence’ water survival 
and emergency response and crisis 
management training during the training 
customers practice aquatic manoeuvres 
in the houston facility’s unique 40 feet 
deep 62 million gallon pool which is 
normally used for preparing astronauts 
for space walks
in april 2012 ﬁve months after launch 
the partnership was accredited to deliver 
offshore petroleum industry training 
organisationapproved survival courses 
it is now looking to extend its offering to 
other industries such as aviation
40 petrofac annual report and accounts 2012
segmental performance financial 
performance  
and risk
42 key performance indicators
to help the group assess its performance executive management sets annual 
kpi targets and monitors and assesses performance against these benchmarks 
on a regular basis
44 financial review
we delivered another year of strong ﬁnancial performance in 2012 with revenue 
growth of 9 and net proﬁt growth of 17
47 key risks
a summary of the key risks that could lead to a signiﬁcant loss of reputation or 
prevent us from delivering our ﬁveyear strategic plans
41 petrofac annual report and accounts 2012 key performance 
indicators
1
to help the group assess its performance executive management 
sets kpi targets and monitors and assesses performance against 
these benchmarks on a regular basis
1
 all kpis above exclude the gain from the enquest demerger in april 2010 where applicable
percentage change
9
description
measures the level of operating 
activity and size of the business
revenue us millions
3330
4354
3655
5801
6324
2008
2010
2009
2011
2012
measurement
revenue for the year as reported in the consolidated income statement
percentage change
17
description
ebitda means earnings before 
interest tax depreciation 
amortisation and impairment 
and provides a measure of 
the operating proﬁtability of 
the business
ebitda us millions
419
634
550
760
888
2008
2010
2009
2011
2012
measurement
ebitda is calculated as proﬁt before tax and net ﬁnance income 
but after our share of results of associates as per the consolidated 
income statement adjusted to add back charges for depreciation 
amortisation and impairment as per note 3 to the ﬁnancial statements
percentage change
17
description
provides a measure of the net 
proﬁtability of the business that 
is proﬁt for the year attributable 
to petrofac limited shareholders
net proﬁt us millions
265
433
354
540
632
2008
2010
2009
2011
2012
measurement
proﬁt for the year attributable to petrofac limited shareholders 
as reported in the consolidated income statement
description
roce is a measure of the 
efﬁciency with which the group is 
generating operating proﬁts from 
its capital
return on capital employed roce 
53
53
47
62
46
2008
2010
2009
2011
2012
measurement
roce is calculated as ebita earnings before interest tax 
amortisation and impairment charges per note 12 to the ﬁnancial 
statements 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
financial performance and risk
42 petrofac annual report and accounts 2012 percentage change
17
description
provides an indication of the 
group’s service capacity
employee numbers number of employees
11100
13900
11700
15400
18000
2008
2010
2009
2011
2012
measurement
for the purposes of the annual report employee numbers 
include agency contract staff and the group’s share of joint 
venture employees
percentage change
9
description
the group uses this kpi as a 
measure of the visibility of future 
revenues
backlog us billions
40
117
81
108
118
2008
2010
2009
2011
2012
measurement
backlog consists of the estimated revenue attributable to the uncompleted 
portion of lumpsum engineering procurement and construction 
contracts and variation orders plus with regard to engineering 
operations maintenance and integrated energy services contracts 
the estimated revenue attributable to the lesser of the remaining term 
of the contract and ﬁve years backlog will not be booked on integrated 
energy services contracts where the group has entitlement to 
reserves the group uses this key performance indicator as a measure 
of the visibility of future revenue backlog is not an audited measure
description
provides a measure of the 
safety performance of the 
group including partners 
and subcontractors
lost time injury and recordable injury frequency rates rates per 200000 manhours
0033
0026
0020
0018
0018
2008
2010
2009
2011
2012
032
018
036
014
013
2008
2010
2009
2011
2012
measurement
lost time injury lti and recordable injury ri frequency rates are 
measured on the basis of reported lti and ri statistics for all petrofac 
companies subcontractors and partners expressed as a frequency 
rate per 200000 manhours we aim continually to improve our safety 
record and our goal for these measures is zero
percentage change
17
description
eps provides a measure of net 
proﬁtability of the group taking into 
account changes in the capital 
structure for example the 
issuance of additional share capital
earnings per share diluted eps cents per share
7711
12609
10319
15713
18388
2008
2010
2009
2011
2012
measurement
as reported in the consolidated income statement and calculated in 
accordance with note 7 to the ﬁnancial statements
description
these kpis measure both 
the absolute amount of cash 
generated from operations 
and the conversion of ebitda 
to cash
cash usedgenerated from operations and cash conversion us millions
measurement
cash usedgenerated from operations is as per the consolidated 
cash ﬂow statement cash conversion is cash from operations divided 
by ebitda
587
207
1276
1423
315
2008
2010
2009
2011
2012
us
140
33
232
187
35
2008
2010
2009
2011
2012

43 petrofac annual report and accounts 2012 financial review
i am pleased to be able to report another excellent set of results 
we delivered another year of strong ﬁnancial performance in 2012 
with revenue growth of 9 and net proﬁt growth of 17
1
 including our share of losses from associates
revenue
group revenue increased by 90 to us6324 million 
2011 us5801 million driven by growth in revenues in all four 
reporting segments 64 of the group’s revenues were from 
onshore engineering  construction which grew 51 in the year 
the strongest growth was in integrated energy services reﬂecting 
signiﬁcant progress on the berantai risk service contract rsc 
and the commencement of the magallanes and santuario 
production enhancement contracts pecs in mexico revenues 
from engineering  consulting services and offshore projects 
 operations also grew strongly due to high levels of activity
operating proﬁt
1
group operating proﬁt for the year increased 116 to us758 million 
2011 us680 million representing an operating margin of 120 
2011 117 the increase in operating margin was principally a 
function of the strong growth in the higher margin integrated energy 
services reporting segment
net proﬁt
reported proﬁt for the year attributable to petrofac limited 
shareholders increased 172 to us632 million 
2011 us540 million the increase was driven predominantly by 
integrated energy services due to ﬁrsttime proﬁt recognition on 
the berantai rsc the proﬁt from the sale of 75 of the share 
capital in the company holding the fpf1 and the commencement 
of the magallanes and santuario pecs onshore engineering  
construction reﬂecting high activity levels and signiﬁcant margin 
delivery on certain contracts which are reaching completion 
and offshore projects  operations due to high levels of activity 
an increasing proportion of higher margin nonuk business and an 
increasing proportion of lumpsum offshore capital projects including 
ﬁrsttime proﬁt recognition on the laggantormore gas plant on 
shetland the net margin for the group increased to 100 
2011 93 reﬂecting particularly strong growth in the higher 
margin integrated energy services reporting segment
earnings before interest tax 
depreciation amortisation and 
impairment ebitda
1
ebitda increased 169 to us888 million 2011 us760 million 
representing an ebitda margin of 140 an increase from the 
prior year 2011 131 ebitda margins were lower in onshore 
engineering  construction at 133 2011 141 reﬂecting 
signiﬁcant margin delivery on contracts nearing completion offset 
by increased bid costs in light of a stepup in tendering activity in 
the year the ebitda margin for offshore projects  operations 
increased from 49 to 68 due to an increasing proportion of 
tim weller
chief financial ofﬁcer
financial performance and risk
44 petrofac annual report and accounts 2012 higher margin nonuk business and an increasing proportion of 
lumpsum offshore capital projects ebitda margin was signiﬁcantly 
higher in integrated energy services at 273 2011 173 
primarily due to ﬁrsttime proﬁt recognition on the berantai rsc 
the proﬁt resulting from the sale of 75 of the share capital in 
the company holding the fpf1 and the commencement of the 
magallanes and santuario pecs while ebitda margins were lower in 
onshore engineering  construction which contributes the majority 
of the group’s ebitda 64 in 2012 74 in 2011 this was more 
than offset by strong growth in integrated energy services which 
accounted for 22 of the group’s ebitda in 2012 2011 12
backlog
the group’s backlog increased to us118 billion at 31 december 
2012 2011 us108 billion due to new projects in integrated 
energy services and offshore projects  operations more than 
offsetting a reduction in onshore engineering  construction backlog
exchange rates
the group’s reporting currency is us dollars a signiﬁcant proportion 
of offshore projects  operations’ revenue is generated in the ukcs 
approximately twothirds and those revenues and associated 
costs are generally denominated in sterling however there was 
little change in the average exchange rate for the us dollar against 
sterling for the years ended 31 december 2012 and 2011 and 
therefore little exchange rate impact on our us dollar reported results 
the table below sets out the average and yearend exchange rates 
for the us dollar and sterling as used by the group for ﬁnancial 
reporting purposes 
financial reporting exchange rates
ussterling 2012 2011
average rate for the year 159 160
yearend rate 163 155
interest 
net ﬁnance income for the year increased to us7 million 
2011 us1 million due to the unwinding of discounting of longterm 
receivables on the berantai rsc
taxation
our policy in respect of tax is to
 operate in accordance with the terms of the petrofac code 
of conduct 
 act with integrity in all tax matters
 work together with the tax authorities in jurisdictions where we 
operate to build positive longterm relationships
 where disputes occur to address them promptly
 manage tax in a proactive manner to maximise value for our 
customers and shareholders
responsibility for the tax policy and management of tax risk rests 
with the chief financial ofﬁcer and group head of tax who report 
the group’s tax position regularly to the group audit committee 
the group’s tax affairs and the management of tax risk are delegated 
to a global team of tax professionals
an analysis of the income tax charge is set out in note 6 to the 
ﬁnancial statements the income tax charge for the year as a 
percentage of proﬁt before tax was lower at 177 2011 207 
a number of factors have impacted the effective tax rate including 
a net release of tax provisions held in respect of income taxes the 
recognition of tax losses previously unrecognised and the mix of 
proﬁts in the jurisdictions in which proﬁts are earned
earnings per share
fully diluted earnings per share increased to 18388 cents per 
share 2011 15713 cents an increase of 170 in line with the 
group’s increase in proﬁt for the year attributable to petrofac 
limited shareholders
operating cash ﬂow and liquidity
cash used in operations was us315 million  
2011 us1423 million generated
the decrease in cash generated from operations was due principally 
to the cash generated from operating proﬁts before working capital 
and other noncurrent items of us907 million 2011 cash generated 
us796 million less net working capital outﬂows of us918 million 
2011 us757 million inﬂow and an increase in customer receivables 
within ‘other ﬁnancial asset’ of us300 million 2011 us130 million 
in relation to the berantai rsc and in respect of development of the 
greater stella area
the main net working capital outﬂows included an increase in 
trade and other receivables of us549 million 2011 us301 million 
a reduction in accrued contract expenses of us525 million 
2011 us7 million partly offset by an increase in trade and 
other payables of us253 million 2011 us735 million
45 petrofac annual report and accounts 2012 the other key movements in cash included
 net cash outﬂows from investing activities of us544 million 
2011 us523 million including
 – capital expenditure on integrated energy services projects of 
us433 million predominantly in relation to the acquisition and 
upgrade of supporting infrastructure and ﬁeld development costs 
in relation to pecs and development expenditure on block 
pm304 offshore malaysia 
 – other capital expenditure of us136 million including assets 
under construction leasehold improvements and ofﬁce furniture 
and equipment
 – investment of a further us25 million in seven energy 
see note 12 to the ﬁnancial statements for details
 – proceeds from the sale of 75 of the share capital in the 
company holding the fpfi
 net cash outﬂows from ﬁnancing activities of us36 million 
2011 us227 million including
 – payment of the 2011 ﬁnal dividend and 2012 interim dividend 
totalling us201 million
 – ﬁnancing the purchase of treasury shares for the purpose of 
making awards under the group’s share schemes of 
us76 million
 – us303 million of proceeds drawn under the group’s revolving 
credit facility see note 24 to the ﬁnancial statements less 
repayment of group’s term loan of us43 million
 net income taxes paid of us83 million 2011 us157 million
the net result of the above was the group’s net cash stood at 
us265 million at 31 december 2012 2011 us1495 million 
following the drawdown under the group’s revolving credit facility 
interestbearing loans and borrowings increased to us349 million 
2011 us77 million resulting in the group’s gross gearing ratio 
increasing to 23 2011 7
gearing ratio
us millions unless otherwise stated 2012 2011
interestbearing loans and borrowings a 349 77
cash and shortterm deposits b 614 1572
net cashdebt c  b – a 265 1495
shareholders’ funds d 1550 1115
gross gearing ratio ad 23 7
net gearing ratio cd
net cash 
position
net cash 
position
the group’s total gross borrowings before associated debt acquisition 
costs at the end of 2012 were us360 million 2011 us80 million 
the group entered into a us12 billion ﬁveyear committed revolving 
credit facility in september 2012 which is available for general 
corporate purposes the majority of interestbearing loans and 
borrowings at 31 december 2012 is in relation to the revolving credit 
facility see note 24 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
expenditure capitalised on property plant and equipment totalled 
us430 million in the year ended 31 december 2012 2011 
us435 million the principal elements of capital expenditure 
during the year were
 capital expenditure on integrated energy services projects of 
us309 million predominantly in relation to the acquisition and 
upgrade of supporting infrastructure and ﬁeld development costs 
in relation to pecs
 expenditure on assets under construction of us53 million 
which includes expenditures incurred in relation to our new ofﬁce 
building in the united arab emirates and the group’s enterprise 
resource planning project
 other capital expenditure of us68 million including leasehold 
improvements and ofﬁce furniture and equipment 
capital expenditure on intangible oil and gas assets during the year 
was us165 million 2011 us40 million including development 
costs in relation to integrated energy services’ interest in block 
pm304 offshore malaysia 
shareholders’ funds
total equity at 31 december 2012 was us1550 million 2011 
us1115 million the main elements of the net movement were 
net proﬁt for the year of us630 million less dividends paid in the 
year of us198 million and the purchase of treasury shares of 
us76 million which are held in the petrofac employees beneﬁt trust 
for the purpose of making awards under the group’s share schemes 
see note 22 to the ﬁnancial statements
return on capital employed
the group’s return on capital employed for the year ended 
31 december 2012 was lower at 46 2011 62 in part reﬂecting 
the group’s deployment of capital in the integrated energy services 
reporting segment
dividends
the company proposes a ﬁnal dividend of 4300 cents per share 
for the year ended 31 december 2012 2011 3720 cents which 
if approved will be paid to shareholders on 24 may 2013 provided 
they were on the register on 19 april 2013 shareholders who have 
not elected before 26 february 2013 to receive dividends in us 
dollars will receive a sterling equivalent of 2840 pence per share
together with the interim dividend of 2100 cents per share 
2011 1740 cents equivalent to 1345 pence this gives a total 
dividend for the year of 6400 cents per share 2011 5460 cents 
an increase of 172 in line with the increase in net proﬁt
financial performance and risk
46 petrofac annual report and accounts 2012 key risks
the key risks that could lead to a signiﬁcant loss of reputation or 
prevent us from delivering our ﬁveyear strategic plan are summarised 
here along with our approach to mitigating these risks details of how 
our risk framework has evolved during the year are included in the 
board risk committee report on page 82 to 87
risk mitigation and management commentslinks
sovereign country and ﬁnancial market
overexposure to a single 
market risk
overconcentration in a 
particular market or geography 
could impact on our ability 
to deliver the ﬁveyear 
strategic plan
petrofac endeavours to ensure that its portfolio is appropriately diversiﬁed as a mitigant against 
potential instability within speciﬁc countries or regions where the group has an interest
our country exposure in higher risk jurisdictions is reviewed by the group risk committee 
when considering discrete risks or entry into new countries or territories and by the board risk 
committee who on a quarterly basis review the overall concentration risk
we also take all reasonable measures to reduce and limit our commercial exposure in each 
territory through the use of for example regular security risk assessments careful selection of 
contracting parties out of country arbitration advanced payments and careful cash management
see pages 13 to 17 
we are diversifying our 
business model
counterparty risk
the risk of ﬁnancial or 
commercial exposure if 
counterparties key ﬁnancial 
institutions customers partners 
subcontractors or vendors fail 
to perform their obligations
we aim to minimise our cash ﬂow exposure on contracts and where we deploy capital alongside 
our services such as in integrated energy services ies we will only do so where we are 
comfortable with the counterparty risk and the contractual terms and conditions
with respect to ﬁnancial counterparty risk we regularly monitor our exposure and ensure that 
our ﬁnancial assets are spread across a large number of creditworthy ﬁnancial institutions and 
that limits are not breached our sovereign and financial market risk policy requires that material 
ﬁnancial counterparty risk is only held with counterparties that are rated by standard and poor’s 
as ‘a’ or better or equivalent rating from moody’s financial counterparty risk is managed by 
group treasury
the board risk committee has established speciﬁc limits for the main ﬁnancial counterparties 
used by the group
see our sovereign and 
financial market risk 
policy – available on 
our website
wwwpetrofaccom
governancedownloads
liquidity risk
the risk arising from 
insufﬁcient ﬁnancial resources 
being available to meet 
liabilities as they fall due
we manage liquidity risk by ensuring that we maintain an adequate level of liquidity in the form 
of readily available cash shortterm investments or committed credit facilities at all times
as the company has grown it is investing more of its surplus cash into strategic investments 
and other opportunities particularly in ies in 2012 we arranged a us12bn ﬁveyear revolving 
credit facility to secure additional liquidity
the board risk committee has deﬁned a minimum level of liquidity which must be maintained 
by the group and additionally the board has deﬁned a maximum level of permitted leverage 
careful cash ﬂow forecasting is carried out across all service lines on a regular basis to identify 
any funding requirements well in advance
see note 31 to the 
ﬁnancial statements
investment risk 
poor investment decisions 
could negatively impact 
our business
our organic growth is dependent on creating a portfolio of quality investments and investing in the 
best available options ineffective investment selection and development particularly in ies could 
lead to loss of value and higher capital expenditure
business disruption risk
exposure to potential civil
political unrest civil war regime 
change or sanctions that could 
adversely affect our operations
information security breaches 
may also result in the loss of 
petrofac’s commercially 
sensitive data
petrofac faces a range of political risks in a variety of territories with the possibility of unforeseen 
regime change or legalregulatory changes the board therefore regularly monitors the changing 
landscape of political risk particularly in those countries regarded as high risk
security risk assessments are carried out in all high risk territories before entering into speciﬁc 
contracts careful consideration is also given to project investment and income exposures and 
to the review of the associated terms and conditions of contracts with customers
in respect of the protection of electronic information petrofac is continually improving the security 
of its information technology infrastructure reviewing key business processes in the context of 
information security and ensuring there is heightened consideration of information security in the 
business a new ‘petrofac group information security policy’ was produced in 2012 to increase 
awareness and understanding of the threat
despite the unrest in 
the middle east and 
north africa during 
2011 to 2012 our 
activities suffered 
minimal disruption 
see page 33 for details
our security and 
evacuation procedures 
are kept under review
47 petrofac annual report and accounts 2012 risk mitigation and management commentslinks
commodity or currency risk
signiﬁcant movements in 
exchange rates could impact 
our ﬁnancial performance
oil and gas prices may have 
an impact on the level of new 
investment in the industry 
and may affect demand for 
our services
the ﬁnancial performance of 
ies is more leveraged to the 
price of oil and gas through its 
production sharing contracts
equity positions
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 hedge fully transactional 
exposures using forward currency contracts
offshore projects  operations’ revenues and costs are principally denominated in sterling 
our policy is not to hedge the sterling revenues generated by these activities as they are 
substantially matched by the sterling costs of our corporate ofﬁce and other ukbased activities
as detailed in the ‘operating environment’ section we expect demand for our services to remain 
robust and not be materially impacted by shortterm ﬂuctuation in oil and gas prices we do 
recognise however that as a result of threats to global economic growth there is a risk of falling oil 
prices which could result in reduced or delayed activity by national oil companies nocs and 
international oil companies iocs impacting upon future backlog and margins
under our sovereign and financial market risk policy we aim to hedge on a rolling annual basis 
the net proﬁt exposure resulting from at least 75 of our lowestimate of hydrocarbon production 
we will not undertake hedging until a development has achieved steadystate production
see note 31 to the 
ﬁnancial statements for 
details of our oil and gas 
derivative instruments 
and foreign currency 
exposures and how 
they are managed
over the medium term 
growth in the ies 
division is expected 
to be primarily driven by 
risk service contracts 
and production 
enhancement 
contracts where we 
have no direct oil and 
gas price exposure
operational and contractual
customer concentration risk
overexposure to any one 
customer could have a 
signiﬁcant impact if that 
customer relationship 
were jeopardised
the board regularly monitors the total value of contracts by customer to ensure that we are not 
overly dependent upon any one customer we have a widely disaggregated customer base in the 
ecom division and are working towards a larger portfolio of clients for the growing ies business
the company’s strategy is to disaggregate the business further in terms of its service lines 
locations and business models
furthermore we have a formal programme to ensure that we maintain a regular dialogue with our 
major customers at a senior level to appreciate their future plans and to understand any concerns 
they may have with regard to our performance
there are a number 
of relevant policies 
under our operating 
framework for managing 
these risks such as the 
operational and 
contractual risk policy
competition risk
risk that we lose our strategic 
market position or geographic 
spread
as noted in the ‘operating environment’ section we expect the demand for our services to remain 
robust over the long term albeit we face signiﬁcant competition in many of our markets
our ﬁveyear strategic plans assume that a high level of competition continues however our 
geographic and service line expansion including the provision of ies has helped to grow the size 
of the addressable market for our services bid win ratios and segmental competition is regularly 
analysed to monitor this risk
see page 17 for details 
of how we plan to 
deliver integrated 
energy services
environmental asset 
integrity or safety risks
a serious environmental asset 
integrity or health and safety 
incident on any of our projects 
has the potential to cause 
signiﬁcant commercial and 
reputational damage
major accidents or incidents although low probability or a failure to manage these risks 
effectively could result in injury loss of life damage to the environment andor loss of certain 
facilities with the associated loss of production or costs associated with mitigation recovery 
compensation and ﬁnes
petrofac is also subject to health and safety laws in numerous jurisdictions around the world and 
failure to comply with such laws could signiﬁcantly impact the group’s reputation affecting the 
willingness of stakeholders to work with the group
as we enter new geographical markets sometimes with new customers and partners and 
assume responsibility for new infrastructure it is particularly important that our focus on these 
issues is maintained
our strong culture of health safety and environmental awareness is central to our operational and 
business activities this culture is supported by our company operating framework and its 
associated management processes and systems for example our asset integrity framework
we have a wide variety of controls embedded within our hsseia processes safety case 
management major accident hazard risk assessments and audits together with regular 
monitoring of integrity management and maintenance schedules management teams also review 
the commercial arrangements with clients maintain emergency preparedness plans and review 
insurance coverage
recorded incident 
data measures our 
effectiveness in 
managing health safety 
and environmental risks 
see pages 28 and 29 
for details
contractual performance 
risk
our ﬁnancial performance could 
be signiﬁcantly affected by the 
performance of a relatively small 
number of large contracts
successful project delivery is fundamental to petrofac’s operating performance a substantial 
variation in cost or schedule could constitute a signiﬁcant risk to the group’s reputation and 
ﬁnancial position
we do however have a strong track record of successful project execution which reﬂects our 
rigorous approach to risk identiﬁcation and mitigation from bid submission through to project 
completion progress on key projects is formally reported to the board and senior management 
who receive detailed risk analyses on a regular basis 
our design integrity assurance process involves the robust challenge of design speciﬁcations 
whether or not they are deﬁned by the customer including peerreview assessment and ongoing 
reviews of integrity risk are undertaken throughout the life of a project
our subcontractor risk management strategy involves the retention of competent subcontractors 
with a track record of delivery we have a number of strong subcontractor relationships with 
proven high quality companies that we seek to work with wherever possible
we seek to avoid the acceptance of any liabilities that are unquantiﬁable or for which we could not 
reasonably be regarded as responsible including losses of a consequential nature we monitor 
the adequacy of insurance provision and the extent to which we can bear the ﬁnancial 
consequences of a catastrophe
see our operational and 
contractual risk policy 
– available on 
our website
wwwpetrofaccom
governancedownloads
financial performance and risk
48 petrofac annual report and accounts 2012 risk mitigation and management commentslinks
risk transfer arrangements 
insurance programme coverage
the transfer of risks to the insurance market may be affected and inﬂuenced by constraints on 
the availability of cover market appetite and capacity price and the propensity of an insurer to 
respond to notiﬁcations and claims which means that the group could be exposed to material 
uninsured losses some risks associated with petrofac’s activities cannot or may not be 
reasonably or economically insured petrofac may therefore incur signiﬁcant losses from risks 
that are not covered by insurance
petrofac maintains an insurance programme to provide mitigation against signiﬁcant losses 
which is consistent with general industry practice the insurance programme incorporates a 
captive insurance vehicle policies purchased are subject to certain limits deductibles and 
speciﬁc terms and conditions in addition insurance premium costs are subject to changes 
based on a company’s loss experience the overall loss experience of the insurance markets 
accessed and capacity constraints
organisation and 
succession risk
the availability of sufﬁciently 
skilled experienced and capable 
personnel particularly at senior 
level remains one of the most 
signiﬁcant challenges facing 
the oil and gas industry
petrofac’s performance operating results and future growth depend to a large extent on its 
continued ability to attract retain motivate and organise appropriately qualiﬁed personnel 
with the level of expertise and knowledge necessary to conduct its operations effectively 
competition for talented suitably experienced and qualiﬁed management and employees is 
intense across the sector for specialists in oil and gas
petrofac has aggressive targets for growth and anticipates a further increase in the number of 
employees in the next ﬁve years we are therefore evolving a more systematic approach to 
resourcing to ensure we can meet our short and longterm human resource needs we regularly 
review our resourcing demand models which underpin the group’s business plans and aim to 
identify the best people through talent and performance management linked to effective 
succession planning and recruitment
we remain conﬁdent that our policies to attract promote and reward on merit targeted 
but extensive employee share ownership management and technical training programmes 
and access to international labour markets will enable us to attract and retain the necessary 
skilled personnel to undertake our projects in hand
see ‘people and 
resourcing’ on pages 
52 to 54 for progress 
during 2012
ethical social and regulatory
major breach of our  
code of conduct
working with third parties 
communities workforce 
relations etc
our code of conduct sets out the behaviours we expect of our employees and third parties 
working with andor for us such as suppliers contractors agents and partners we are 
committed to complying with all applicable legal requirements and working to the highest 
ethical standards in 2012 we also strengthened our management of the social impacts of our 
operations on directly affected communities by introducing a social performance standard
we seek assurances that all third parties over whom we have responsibility or who are acting 
under our direction conduct their business with us in a manner that is consistent with our code 
of conduct and the principles set out in our ethical social and regulatory risk policy our social 
performance standard external affairs risk reviews also help to target speciﬁc areas of threat 
and ensure that we put appropriate controls in place
we take appropriate measures to understand the social risks and impacts of our business 
activities and take steps to mitigate these risks by engaging with supporting and investing in 
the local communities affected by our operations
see our ethical social 
and regulatory risk 
policy – available on 
our website
wwwpetrofaccom
governancedownloads
major regulatory breach 
including bribery and 
corruption
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
petrofac’s business activities are conducted in many countries and are therefore subject to a 
broad range of legislation and regulations
the company has an anticorruption compliance programme which seeks to manage 
corruption risk across the group’s business activities the compliance programme includes 
components which recognise the requirements of the uk bribery act 2010 and which focus 
on training monitoring risk management and due diligence
management takes a riskbased approach to due diligence and risk assessment and has 
increased the level of due diligence undertaken in respect of new contracts in predeﬁned 
highrisk countries including commissioning independent investigation where appropriate 
we also regularly review external corruption ratings before entering a particular country  
or territory
we continue to emphasise our independently managed whistleblowing line ‘speak up’ 
available to all employees as well as third parties and are committed to the investigation of 
all suspected breaches to our code of conduct
see page 57 for details 
of our compliance and 
training programme in 
relation to antibribery 
and corruption
see our bribery and 
corruption standard 
available on our 
website
wwwpetrofaccom
governancedownloads
49 petrofac annual report and accounts 2012 corporate 
responsibility
51 driving growth responsibly
we are strengthening the way we measure monitor and report corporate 
responsibility performance in 2012 as a step towards meeting global reporting 
initiative gri guidelines we are focusing on the material issues we believe matter 
most to our stakeholders
52 people and resourcing
our growth strategy relies on having the right people in the right places at the 
right time to achieve this in 2012 we developed our performance management 
and recruitment systems strengthened our leadership cadre and began to evolve 
our global human resources organisation
55 social and economic development
we aim to make a positive difference to the regions in which we operate by 
supporting local economies and communities in 2012 as petrofac’s strategy took 
us into more new geographies on longer term contracts we developed our 
approach to managing our social performance
57 ethics
petrofac aspires to the highest standards of ethical behaviour in 2012 we revised our 
code of conduct enhanced our compliance systems and strengthened employee 
engagement on this issue
58 safety and security
petrofac’s strategic entry into new territories can expose us to volatile social and 
political environments in 2012 complementing our wider social investment 
programme our security experts worked to protect our people and assets and 
ensure operations proceeded smoothly 
59 environmental protection
we are committed to limiting the environmental impact of our global operations 
in 2012 we revised our environmental policy to reﬂect the new opportunities and 
risks of our twodivisional structure and evolving business model
for more on our approach to safety and integrity see pages 28 and 29
50 petrofac annual report and accounts 2012 our approach to  
corporate responsibility
for petrofac corporate responsibility cr is 
a practical demonstration of our core values 
our value of being ethical is evident in our 
new code of conduct page 57 our focus 
on quality is visible in the way we develop 
our people pages 52 to 54 and our 
responsiveness is evidenced through 
the way we engage local communities 
pages 55 to 56
although our values have always guided the 
way we do business our cr systems and 
processes have not always kept up with our 
rapid growth now as an established ftse 
100 company we are formalising our 
approach to cr to ensure it delivers the best 
results for our stakeholders and our business 
this is particularly important now as with our 
strategy involving longterm production 
enhancement and risk service contracts 
often in countries that are developing rapidly 
managing our social impacts to mitigate risk 
and maximise beneﬁt for stakeholders is 
essential for our future growth
raising our  
reporting standards
in 2012 we agreed a roadmap towards 
achieving integrated reporting by 2015 
the roadmap includes a number of key 
milestones and actions
as a step towards the global reporting 
initiative gri standard this cr report charts 
our progress against the material issues that 
we believe matter most to our stakeholders 
including investors customers staff and civil 
society groups 
the material issues reﬂect areas that are key 
to doing business responsibly and legally 
and other matters that are integral to our 
strategic ambitions for instance as shown 
in the diagram below ‘safety and security’ 
is part of responsible business behaviour 
whereas effective ‘people and resourcing’ 
is a strategic driver
material issues were identiﬁed at a workshop 
in october 2012 which was led by our 
external corporate sustainability advisers and 
attended by internal stakeholders from our 
social performance external affairs health 
safety security environment and integrity 
assurance human resources hr 
compliance and communications teams
in line with best practice and reﬂecting our 
aim to meet the gri guidelines we are 
developing key performance indicators kpis 
to monitor our social impacts this activity is 
still work in progress
stakeholder  
engagement
following the publication of this annual 
report we intend to conﬁrm the validity of 
our internallyprioritised material issues 
via stakeholder engagement 
although new in the context of our corporate 
reporting we have increasingly focused on 
engaging with stakeholders most directly 
impacted by our activities and such dialogue 
has informed the way we plan and manage 
programmes in 2012 for instance our 
sustainable development strategy in 
mexico was drafted in close liaison with 
our customer and community groups and 
in early 2013 reﬂecting the increasing global 
consistency of our stakeholder engagement 
we undertook a stakeholder and socio
economic survey in tunisia
such engagement is not only key to providing 
stakeholders with what they want and need 
to know it also helps us manage social risk 
improves our performance and is central to 
achieving our longterm vision to be the 
world’ s most admired oilﬁeld service company
addressing the strategic issues that 
underpin the delivery of our three 
growth priorities and our goal of more 
than doubling our earnings by 2015
adhering to local laws and voluntary 
international standards
drivers of 
growth
people and resourcing 
social and economic development
corporate responsibility  
compliance
safety and security  ethical conduct  environmental protection 
driving growth  
responsibly
working with the communities where we operate is an integral part of 
how we do business
51 petrofac annual report and accounts 2012
corporate responsibility people and  
resourcing
our strategy of continued geographic 
expansion increased offshore activity and the 
growth of our integrated energy services ies 
business will continue to have a signiﬁcant 
impact on the composition of our workforce
in support of this we need to increase further 
our employee numbers and develop and 
appoint many more outstanding leaders and 
technical experts as well as having the right 
skills these individuals will also need to 
demonstrate a commitment to our values 
to manage these challenges as part of our 
fit for 2015 organisational improvement 
programme we focused on developing a 
global performance management system 
and establishing a consistent recruitment 
process linked to capability demand 
planning that will build petrofac’s brand and 
reputation we are also working to ensure 
our hr organisation and all other support 
functions enable us to respond to our 
business objectives as part of this a 
dedicated hr lead was appointed for our 
engineering construction operations  
maintenance ecom division during the 
year following the appointment of a similar 
lead for ies during 2011
performance management
in 2013 petrofac will roll out a standard 
performance management system across 
our entire business this programme will 
mean all employees follow the same process 
in setting their objectives to encourage good 
performance and ensure there is a clear and 
consistent link between corporate and 
individual objectives we believe this will help 
us to motivate our people provide clarity 
and alignment on what individuals and the 
business must do to succeed and address 
any areas of underperformance it will also 
enable us to use behavioural indicators to 
support and strengthen our company values
in 2012 we ran a pilot of the new 
performance management process 
developing the model to reﬂect lessons 
learnt in anticipation of the coming global 
launch we also drafted multilingual backup 
materials and implementation plans covering 
logistics engagement communications 
and training
talent management
the oil and gas industry continues to face 
an acute skills shortage in key technical 
disciplines our groupwide talent 
management strategy aims to address this 
challenge by developing and sourcing more 
of our future managers and leaders internally 
rather than via external recruitment
the strategy works to identify critical roles 
and gaps alongside a clear view of the talent 
pipeline enabling us to focus development 
activity and helping to identify where external 
recruitment is required our leadership 
excellence le programme which we 
launched in 2011 in partnership with the 
london business school is one of our core 
senior management development tools and 
sits alongside a suite of other interventions
petrofac’s ambitious growth plans rely on having the right people in the 
right places at the right time in 2012 our hr team worked closely with 
the business to meet these needs
percentage of  
petrofac employees 
left by choice in 2012
number of graduates 
recruited in 2012
243
less 
than
104
107
120
146
243
2008
2010
2009
2011
2012
new staff joined 
petrofac in 2012
of graduates hired since 2010 
are still working for petrofac
4800 97
6
corporate responsibility
52 petrofac annual report and accounts 2012 local employment
petrofac is a multicultural business our 
board is made up of seven nationalities and 
our workforce of more than 80 this diversity 
enables us to reﬂect our international 
customer base and draw on a rich mix of 
culture and experience 
the diversity of our organisation is boosted 
by our strategic commitment to employing 
people local to our operations wherever 
possible eighty per cent of employees at our 
new operations in mexico for instance are 
mexican with four out of ten employees at 
our magallanes and santuario operation in 
tabasco state coming from the home state
global mobility
while endeavouring to recruit locally 
the complex and widespread nature of 
our business sometimes requires us to 
move people across borders in 2012 
we further developed group guidelines 
to ensure international moves proceed 
smoothly for employees and their families 
assignees are treated fairly and consistently 
opportunities for closer cost management 
are actively pursued and petrofac complies 
with necessary legislation in the home and 
host countries we piloted our revised global 
mobility policy in a number of locations in 
advance of a planned 2013 launch
promoting diversity and 
equality
to encourage equality across gender race 
and other differences during 2012 we 
developed a new diversity and inclusion 
policy the new policy will be supported by a 
number of interventions in 2013 in tandem 
with the revised code of conduct the code 
itself and an associated employee elearning 
module both will have dedicated sections 
on diversity as well as being widely 
communicated to staff the new diversity 
and inclusion policy will be shared with our 
recruitment suppliers who will be required 
to align with it when working on our behalf 
leadership development
in 2012 we again ran core le events in 
london and dubai and have scheduled 
further events for 2013
we built on the programme by developing 
and running further training modules for past 
attendees in ‘advanced people skills’ and 
‘finance skills’ we are now considering 
other modules to add to this suite 
we are also looking to extend the le 
programme beyond individual leaders to 
include their wider teams we are piloting a 
group development initiative with ies 
developments’ malaysia leadership team 
before potentially rolling it out across the 
wider business this is one of a number of 
programmes in operation or design
resourcing
to meet our strategic workforce expansion 
plans we recruit continuously and 
systematically hr assesses the number and 
types of employees required in alignment 
with our business plans through the 
application of a strategic forecasting tool 
it then works with management to identify 
and recruit talented candidates in 2012 
our rate of recruitment was sufﬁcient to meet 
business needs with the total number of 
employees and longterm contractors rising 
by around 17
staff retention measured in terms of those 
leaving the company by choice was at a 
similar level to last year overall with turnover 
less than 6 
during the year we began to redesign our 
core recruitment system technology this will 
enable companywide consistency while 
being easily adapted to local service line 
requirements this includes a new applicant 
tracking system which will allow us to 
manage directlysourced candidates more 
effectively the recruitment and applicant 
tracking systems will be rolled out in 2013 
and will be linked to an improved user 
interface on the company’s website
when petrofac won its ﬁrst mexican 
contract in august 2011 it had 
just one employee in the country 
its mexico general manager within 
four months it had 140
to build its magallanes and santuario 
oil ﬁelds workforce so swiftly petrofac 
did not just transfer staff from other 
operations reﬂecting its commitment to 
recruiting local people it drew more than 
95 of its new employees from mexico 
venezuela or colombia including half 
of the senior management team 
having recruited the new staff petrofac 
then worked hard to align them behind 
the way we work our core values and 
our safety culture and so ensure the 
ﬁelds’ transition from our customer 
pemex to us could be undertaken 
safely and effectively
following the successful transition 
petrofac has continued to recruit staff 
and win contracts in mexico
53 petrofac annual report and accounts 2012 our culture and values 
petrofac’s distinctive culture is key to our 
success so we strive to ensure our people 
continue to reﬂect our culture and values 
as we grow
the development of common groupwide 
hr processes from performance 
management to recruitment is doing much 
to create a uniﬁed company experience and 
culture while always reﬂecting the need to 
foster creativity and be true to the geographic 
dynamics in which we operate emphasis on 
our core values always plays a key part 
in 2012 we again held a high proﬁle awards 
programme to celebrate staff who embody 
our values the eve excellence values 
energy awards were presented at our annual 
leadership conference achievements 
showcased included the winner of the safety 
award whose championing of safety helmet 
microchips improved site monitoring and 
raised safety standards and the winners of 
the responsive category whose database 
innovation gives engineers around the 
company access to a decade of technical 
drawings and project equipment
employee engagement
the skills shortage in our industry means 
talented staff are always in great demand 
it is therefore good business practice 
as well as being true to our values to treat 
employees with respect and engage them 
in our company
petrofac encourages employee share 
ownership believing it builds commitment 
and rewards our people for their part in our 
success in 2012 32 of our staff held 
company shares
following our 2011 petrovoices employee 
survey action plans addressed a broad 
range of issues identiﬁed by staff from 
compensation and worklife balance to 
career development and safety our next 
survey will be launched in 2013
communications
effective communication of our values 
strategy and activity is crucial in aligning 
petrofac people with our vision
in 2012 group and divisional 
communications teams strove to engage all 
stakeholders with transparent and relevant 
communication via digital print and 
facetoface channels
online the group team rolled out a more 
accessible intranet to our key geographies 
and relaunched petrofac’s corporate website 
further improvements to the website during 
the year included rebuilding the careers 
section the most visited part of the site 
to make it more engaging unique visitor 
numbers to the site rose by more than one 
quarter in 2012 with total visits reaching 
more than 15 million print communication 
focused on our quarterly global employee 
magazine petrofacts 
to reﬂect and develop its growing 
international proﬁle petrofac created an 
external affairs department headed by 
an appointee with a strong background 
in oil and gas industry communications and 
managing social impacts the department 
which incorporates our communications and 
corporate responsibility teams will be joined 
by a media manager in 2013
corporate responsibility
54 petrofac annual report and accounts 2012 worldclass training
working as we often do in developing 
countries means we can add signiﬁcant 
economic and social impact to our host 
countries our commitment to training and 
employing local people in particular can help 
stimulate sustainable prosperity for entire 
communities our training centre in mary 
turkmenistan for example trained 2859 
staff from our south yoloten project in 
essential construction skills and health 
and safety in 2012
as well as developing our own staff 
we provide worldclass training to 
employees of other oil and gas companies 
petrofac’s 14 training centres in seven 
countries deliver around 200000 training 
days annually our expertise is helping many 
stateowned companies develop their 
own national oil and gas workforces to 
internationally recognised standards
wherever we operate petrofac strives to 
be a positive presence and to minimise 
any negative impacts of our operations 
this has become particularly important as 
the evolution of our business is increasingly 
leading to longterm management contracts 
with national oil companies our recent 
mexican production enhancement contract 
awards for the pánuco and arenque 
ﬁelds for example will run for 30 years 
as guests in host countries over many 
decades it is crucial that we manage our 
social risk by developing strong trustbased 
stakeholder relationships
managing social impacts
in 2012 petrofac agreed a new social 
performance standard which is mandatory in 
all projects where we are directly accountable 
for managing social impacts
the standard reﬂects how our evolving 
business model particularly the longterm 
nature of contracts is changing our 
relationship with the communities in which 
we operate 
by the end of 2013 we aim for this social 
performance standard to be adopted by all 
projects and operations where petrofac 
has direct accountability for managing 
social impacts or is contractually required 
to manage them we will report on our 
progress against this commitment as one 
of our kpis in our 2013 annual report
our new social performance standard is 
supported by detailed implementation 
guidance documents in 2012 we ﬁnalised 
such documents on assessing social risks 
and managing grievances in 2013 we will 
add new guidance on stakeholder 
engagement and land and resettlement
our new social performance framework 
incorporating the standard and supporting 
guidance notes aims to deliver a 
consistent approach to managing social 
performance through credible authoritative 
assessment coherent planning and robust 
implementation reﬂecting the central 
importance of international expansion in 
our growth strategy the framework provides 
essential guidance for rolling out and 
managing social risk in each new territory
in 2012 we updated our ethical social and 
regulatory policy which underpins the social 
performance framework again to reﬂect our 
changing business model
social and economic 
development
petrofac’s relationship with the communities in which we operate is 
based on mutual beneﬁt in short we believe we should support the 
regions that support us 
social investment
petrofac’s social performance standard 
requires that its social investment 
programme is built on credible and 
authoritative social assessments
these assessments which involve 
consultation with local stakeholders identify 
social risks and impacts in each country 
following a social assessment we aim to 
establish a bespoke social investment plan 
for the communities we operate in reﬂecting 
their speciﬁc priorities and needs in 2012 
as mentioned above we completed an 
extensive social assessment on mexico’s 
magallanes and santuario ﬁelds and 
developed a social investment programme 
which reﬂects its ﬁndings in 2013 we will 
build on this assessment to develop a 
longterm programme to deliver tangible 
improvements and growth to local 
communities in doing so we will leverage 
petrofac’s strengths including local capability 
building and business development to help 
stimulate economic activity
during the year we invested us1006617 
in social projects our support included
 in tunisia providing business startup 
training supporting environmental 
cleanups and funding urgent road safety 
improvements for more about tunisia 
see our case study on page 56
 in mexico refurbishing community centres 
schools and recreational facilities 
promoting cultural festivals aiding 
educational environmental initiatives and 
supporting a project to manage waste
55 petrofac annual report and accounts 2012 to help evaluate petrofac’s overall 
contribution and to record the outputs and 
longterm impacts of our projects we use 
the london benchmark group investment 
tool during the year we developed the 
investment tool further and provided training 
on its use to our international network of 
external affairs representatives
we are currently evolving our overall approach 
to strategic corporate giving and sponsorship 
our philanthropic and sponsorship activities 
will focus on global education initiatives that 
promote science technology engineering 
and mathematics stem and improve 
access to education and employment of 
people from marginalised society
in 2012 we completed our fouryear 
royal academy of engineering fellowship 
programme since 2009 we have provided 
17 petrofac royal academy of engineering 
fellowships to enable graduate engineers to 
pursue applied technical roles mainly in oil 
and gas we are renewing the programme 
in 2013
in respect of marginalised groups during the 
year we provided 50 petrofac scholarships 
to the arvind gandbhir secondary school 
in northern mumbai india in the uk 
our ofﬁces in london and woking set up 
group mentoring programmes with the 
charity mosaic which supports children 
from challenging backgrounds and deprived 
areas our mentors strive to help young 
participants fulﬁl their aspirations and 
potential by working with them to boost 
their conﬁdence selfbelief and motivation
petrofac is partnering with community groups to meet local needs effectively on 
tunisia’s kerkennah island we operate and have a 45 interest in the island’s 
chergui ﬁeld with entreprise tunisienne d’activitiés pétrolières the state oil 
company holding the remaining 55
in 2012 social projects included cleaning up areas that had been used to dump municipal 
waste providing capital to the municipal authority for urgent road safety improvements 
and facilitating a plant nursery startup in partnership with an agricultural collective 
to provide indigenous crops so households can grow cereals and vegetables 
to support the kerkennah island projects we established a permanent cr ofﬁce in 2012 
this is currently staffed by 16 people almost all from the island
in 2013 we will survey island householders community groups and other stakeholders to 
develop our understanding of local needs the results will be used to update our plans 
which focuses on helping young unemployed people and women
corporate responsibility
56 petrofac annual report and accounts 2012 during 2012 we revised our code of conduct 
to incorporate best practice reﬂect new 
legislation and make it more aligned 
with the increasing risks that a company 
operating in multiple jurisdictions encounters 
innovations included qa sections guidance 
on what is expected of employees and third 
parties a new equal opportunities chapter 
explicit prohibition on the making of 
facilitation payments and extended sections 
on working with third parties covering 
antibribery efforts conﬂicts of interest and 
fair competition
protecting our reputation
the new code entitled ‘living our code’ 
will be sent to all employees and third party 
suppliers in booklet form in early 2013 
distribution will be supported by an extensive 
communications campaign guidance packs 
for managers and an expanded compliance 
section on the company intranet indicating 
the highlevel support for the code group 
chief executive ayman asfari has written in 
the booklet foreword “i expect everyone 
to follow our code our reputation as 
individuals and as a company and 
ultimately our success depends on it”
ethics
we consider that behaving ethically in accordance with one of our 
group values is everyone’s responsibility our code of conduct sets 
out the standards of behaviour that we expect from all our people and 
those who work for and with us at petrofac upholding the code is 
everyone’s business
establishing ethical new 
businesses
expansion into new territories is a pillar of our 
growth strategy and embedding compliant 
business standards is a seminal step in 
establishing new operations in 2012 
we assessed existing practices in our newest 
petrofac location mexico established 
compliance processes and systems and 
trained senior management in their upkeep 
the same process is now being undertaken 
in nigeria and will be used as a template for 
establishing ethical business foundations in 
all future new geographies 
we are mindful of the risks and prohibitions 
that are associated with some of our projects 
in close proximity to countries subject to 
international trade sanctions such as 
syria and iran in 2012 we hired a trade 
compliance manager to work exclusively 
with our turkmenistan based yoloten project 
ensuring that all of our procurement and 
logistics activities were in compliance with 
existing trade sanctions and regulations 
our group compliance function continues 
to advise businesses working close to 
sanctioned states on our obligations
transparency in reporting
we aim to be transparent and open in our 
reporting we are signatories of the un 
global compact ungc since signing up 
in 2009 we have aimed to integrate the 
compact’s ten principles in the way we do 
business in 2012 we conducted a ungc 
workshop with the management team of our 
new mexican operations which led to the 
development of ten sustainability principles 
for the national business
the booklet encourages employees and 
third parties to report breaches of the code 
through various means including our whistle 
blowing line to this end in 2012 we ran a 
threemonth groupwide communications 
campaign to raise awareness about speak 
up our phone and email service for reporting 
breaches we also increased the number of 
free conﬁdential 24hour national speak up 
phone lines from three to 20 to ensure 
increased access in different languages and 
geographies in line with our operations
in petrofac the compliance agenda is 
delivered by the businesses under the 
guidance of the compliance function 
the group compliance team sets 
policies procedures and processes but 
implementation such as the identiﬁcation 
and mitigation of compliance risks occurs 
locally in order to understand the issues 
that may occur in the businesses our two 
divisions both have compliance managers 
who report to their respective finance 
senior vice president 
we continue to embed the standard for the 
prevention of bribery and corruption that was 
launched in november 2010 for instance 
in 2012 we honed our third party screening 
process to differentiate between types 
of suppliers from joint venture partners to 
subcontractors to those who work with 
petrofac’s third parties on our behalf 
we also monitored entries in the gifts and 
entertainments register that we introduced 
in 2011 almost a third of our workforce 
has now completed our elearning 
module on the prevention of bribery and 
corruption standard
57 petrofac annual report and accounts 2012 safety 
safety as one of petrofac’s core values is a 
cornerstone of everything we do we aim to 
deliver safety across our operations by 
achieving excellence in the integrity of our 
assets in company processes and systems 
and in the skills and attitude of our people 
for more on our approach to safety 
see pages 28 and 29
security
petrofac’s security team works closely 
with the business to protect our people 
and assets and ensure operations proceed 
smoothly this is particularly important as 
with our growth strategy increasingly 
taking petrofac into new territories 
we increasingly work in volatile social 
and political environments
our ongoing security activity includes  
regular brieﬁngs to the board risk 
committee monitoring all petrofac 
geographies to ensure adequate security 
measures are in place weekly country 
updates and 24hour emergency support 
contingency planning for evacuations and 
other emergencies remains a high priority 
during 2012 our security arrangements 
allowed us to manage challenges in 
several locations
our riskbased group security management 
standard provides us with a consistent 
approach to assessing risks and accordingly 
enables us to ascribe the relevant 
precautionary measures to mitigate 
such risks 
our security systems like all areas of petrofac 
activity are changing with the evolution of our 
company reﬂecting the strategic expansion 
in our offshore business in 2012 we drafted 
a new maritime security standard
safety and  
security
in 2012 complementing our wider social investment programme 
our security experts worked to protect our people and assets and 
ensure operations proceeded smoothly 
corporate responsibility
58 petrofac annual report and accounts 2012 in november our planet petrofac 
environment month involved thousands of 
staff at 25 locations in energy saving 
initiatives the ‘think energy increase 
efﬁciency’ campaign educated and 
encouraged employees to change their 
behaviour at home and at work to reduce 
energy use complementing the staff 
programme the business carried out audits 
on ﬁve major sites to determine how carbon 
emissions could be cut the audits built on 
previous energysaving programmes 
our sharjah ofﬁce for example has reduced 
its energy use and spend by over onethird 
since 2010 a saving of almost us390000 
see page 60
our evolving environmental 
programme
building on the iso 14001 accreditation of 
environmental management systems at 
many petrofac locations we are continuing 
our oil spill response audit programme and 
expanding environmental management 
audits at key sites these audits are in 
addition to our regular internal inspections 
and iso 14001 audits
we were pleased to achieve an improved 
rating in the worldwide carbon disclosure 
project cdp which encourages companies 
to protect themselves from the impacts of 
climate change and become more energy 
efﬁcient our score rose to 78 out of a 
possible 100 from 53 in 2011 and 36 the 
year before the cdp reports that scores 
above 70 indicate “senior management 
understand the business issues related 
to climate change and are building 
climate related risks and opportunities 
into core business”
environmental  
protection
petrofac is committed to limiting the environmental impact  
of its operations around the globe
‘think energy increase efﬁciency’ campaign
185
214
208
227
202
2008
2010
2009
2011
2012
tonnes of carbon emissions 
generated in 2012
201675
lighting –  
a bright idea
replace your traditional light bulbs with 
energy saving bulbs as they are more 
efﬁcient and can last up to three times 
longer than traditional bulbs
59 petrofac annual report and accounts 2012 tracking emissions
the advance in petrofac’s cdp rating reﬂects 
the maturity of our processes environmental 
management innovation and more systematic 
reporting the latter follows the 2011 
introduction of standardised environmental 
reporting practice across the group 
this enables us to track our total energy 
consumption waste travel water use 
and air emissions more accurately 
to progress further we now aim to attain 
third party validation of our ﬁgures in line 
with the gri standard
in 2012 we again participated in the 
uk government’s carbon reduction 
commitment energy efﬁciency scheme for 
our assets located in the uk complying with 
all criteria
we have seen a reduction in our carbon 
footprint of approximately 11 this is a 
result of a reduction in ﬂaring activities in 
malaysia as well as changes to our reporting 
practices to be more in line with gri 
standards in all our operations including 
our share of joint ventures but excluding 
customerowned facilities emitted 201675 
tonnes of co2
 
2011 227390 
although we have a very good environmental 
performance track record we received a 
€3000 ﬁne for an onshore oil spill at our 
ticleni operation in romania
managing changing 
environmental risks
our environmental steering group which 
includes senior operational and functional 
managers continues to shape our approach 
to environmental management in 2012 
the group revised our environmental policy 
in line with petrofac’s recently introduced 
twodivisional structure and our evolving 
business model including the increase in our 
offshore activity changes included clarifying 
our commitments to environmental 
performance and outlining the respective 
environmental objectives for the group and 
individual service lines 
in 2012 we continued to explore opportunities 
in delivering capture transport and storage 
solutions for major co2 emitters through our 
whollyowned subsidiary co2deepstore
as well as measuring our own emissions 
we continue to do the same for our 
customers our specialist support includes 
providing extensive monitoring under the 
osloparis convention environmental 
management requirements and the european 
environmental emissions monitoring system
we remain active members of the arab 
forum for environment and development 
and the emirates environmental group
looking forward we intend to revise 
our environmental standards and overall 
approach to ensure our evolving business 
continues to manage environmental risk 
effectively and consistently
energy efﬁciencies at our sharjah 
ofﬁce reduced electricity use by 18 
in 2012
the energy reduction at our al khan 
tower building led to a saving of more 
than us150000 this cut followed an 
even larger reduction in 2011 when 
energy consumption fell by almost a 
quarter saving more than us230000 
the savings resulted from carbonsaving 
measures that cost little to implement 
we aim to go on saving energy and 
money at al khan in 2013 to ensure 
the building management system runs at 
optimum efﬁciency we will conduct daily 
reviews of electricity consumption and 
heating ventilation and air conditioning 
we hope this will lead to further savings 
of at least 3
corporate responsibility
60 petrofac annual report and accounts 2012 62 directors’ information
we have 11 board members comprising the nonexecutive chairman ﬁve 
independent nonexecutive directors and ﬁve executive directors the secretary 
to the board is responsible to our board and acted as secretary to all committees 
during the year 
64 corporate governance report
the fundamental value of good governance is that it seeks to ensure that a 
company is well run the board is committed to the highest standards of corporate 
governance throughout the group and for promoting longterm shareholder value 
in a responsible manner 
76 nominations committee report
following a recent period of change the nominations committee has concentrated 
on longerterm succession planning this year while continuing to review the 
composition and structure of the board
78 audit committee report
this year was very much business as usual for the audit committee which monitored 
the integrity of the company’s ﬁnancial statements and effectiveness of our ﬁnancial 
and regulatory compliance controls and systems
82 board risk committee report
the board risk committee has focused its attention this year on clarifying key 
elements of the enterprise risk proﬁle and the group’s risk management framework 
to provide assurance of governance commitments to the board
88 directors’ remuneration report
following another year of strong performance the remuneration committee 
has considered remuneration policy and compensation for the directors and 
senior managers of the group with awareness of the environment surrounding 
executive remuneration
104 directors’ statements
governance
61 petrofac annual report and accounts 2012 norman murray
nonexecutive chairman
appointment
appointed to the board on 1 march 2011 and became 
chairman on 13 may 2011
experience
prior to his portfolio career  norman spent 25 years in the 
venture capital industry  he cofounded morgan grenfell 
private equity limited and was also a director of morgan 
grenfell asset management limited until june 2011 
he was chairman of cairn energy plc having served on that 
board for 12 years in february 2012 norman stepped 
down as a nonexecutive director of robert wiseman dairies 
plc he then stepped down from the board of greene king 
plc in december 2012 norman is a former chairman of the 
british venture capital association and a past president of 
the institute of chartered accountants of scotland
key strengths
widereaching board ﬁnancial and commercial experience 
having served on various company boards as both 
director and chairman deep understanding of governance 
and regulatory matters gained in entrepreneurial 
environments and in energy markets
committee membership
chairman of nominations committee
external appointments
nonexecutive director of the edrington group limited
thomas thune andersen
nonexecutive director 
appointment
appointed to the board on 13 may 2010
experience
thomas spent 32 years at the ap  møllermærsk group 
with an international career ending as ceo and president 
of mærsk’ s oil and gas company  he also served on 
mærsk’ s main board and its executive committee from 
2005 to 2009 since 2009 thomas has a board portfolio in 
companies in the energy and critical infrastructure sectors 
committee membership
chairman of the remuneration committee and member 
of the audit and nominations committees
key strengths
wideranging international experience broad knowledge 
of energy industry and markets proven track record 
executing growth strategies and mobilising and developing 
organisations hse experience and extensive knowledge 
from both an executive and nonexecutive standpoint
external appointments
chairman of the lloyd’ s register group and chairman of 
the board of t rustees for the lloyds foundation he is also 
chairman of deepocean group vice chairman of vkr 
holding and a nonexecutive director of sse plc 
ayman asfari
group chief executive
appointment
appointed to the board on 11 january 2002
experience
ayman joined the group in 1991 to establish petrofac 
international of which he was ceo he has more than 
30 years’ experience in the oil and gas industry  having 
formerly worked as managing director of a major civil 
and mechanical construction business in oman 
key strengths
distinguished record with strong operational leadership 
skills clear strategic vision entrepreneurial track record 
international focus extensive business development skills 
wealth of oil industry knowledge
committee membership
member of nominations committee
external appointments
member of the board of trustees of the american university 
of beirut founder and chairman of the asfari foundation 
and member of the senior panel of advisors of 
chatham house
maroun semaan
president
appointment
appointed to the board on 11 january 2002
experience
maroun joined the group in 1991 to establish petrofac 
international he was group chief operating ofﬁcer from 
january 2009 before becoming president on 1 january 
2012 prior to joining petrofac he managed oil and gas 
pipeline process facilities and civil works construction 
contracts in oman and bahrain with the consolidated 
contractors international company  
key strengths
extensive leadership track record wide ranging business 
development skills commercial operational and 
engineering experience consistent execution of 
lumpsum engineering procurement and construction 
epc contracts deep knowledge of the middle east and 
north africa mena region deep appreciation of enterprise 
risks and comprehensive management of subsidiaries 
and joint ventures
committee membership
none
external appointments
member of the board of trustees of the american university 
of sharjah and a founding member of the board of trustees 
of the arab forum for environment and development
stefano cao
nonexecutive director
appointment
appointed to the board on 13 may 2010
experience
stefano has 32 years’ experience in the oil and gas industry  
from february 2009 to july 2012 he served as ceo of 
sintonia sa a holding company owning infrastructure 
assets including toll roads airports and telecoms 
from 2000 to 2008 stefano was chief operating ofﬁcer 
of eni’ s exploration  production division before which 
he spent 24 years at saipem spa the international oil 
and gas services group holding such senior roles as ceo 
chairman and chief operating ofﬁcer  during 2012 
stefano was appointed a director of a2a spa the largest 
italian multiutility company 
key strengths
strong international business experience broad knowledge 
of energy industry signiﬁcant knowledge of technical and 
commercial activities both as operator and contractor 
committee membership
chairman of the board risk committee and member of the 
remuneration and nominations committees
external appointments
he is a director of the management board of a2a spa and 
a director of the boards of sintonia spa atlantia spa 
autostrade per l’italia spa gemina spa and aeroporti 
di roma spa
roxanne decyk
nonexecutive director 
appointment
appointed to the board on 1 march 2011
experience
roxanne retired from the royal dutch shell group in 
december 2010 having held a number of roles including 
head of global government affairs and corporate affairs 
director over a period of 11 years she was a member of 
shell’ s executive committee from 2005 to 2009 prior to 
joining shell roxanne had various roles at amoco 
corporation and navistar international corporation 
key strengths
strong track record in global and international government 
relations extensive experience in the energy industry 
and experience leading strategy in several industries 
communications sales and marketing knowledge 
reputation and brand management expertise sustainable 
development knowledge broad international human 
resources knowledge
committee membership
member of the audit remuneration nominations and 
board risk committees
external appointments
she is an independent director of snapon incorporated 
and alliant t echsystems inc
62 petrofac annual report and accounts 2012
governance
directors’ information andy inglis
chief executive integrated energy services
appointment
appointed to the board on 1 march 2011
experience
andy joined petrofac in january 2011 having spent 
30 years with bp  latterly as ceo of its exploration and 
production business he was an executive director on the 
bp plc board between 2007 and 2010 he started his bp 
career as a project engineer on various north sea projects 
followed by commercial and operating roles in bp’ s 
upstream business he became executive vice president 
and deputy chief executive of bp exploration  production 
in 2004 he is a former nonexecutive director of bae 
systems plc 
key strengths
broad strategic understanding and deep technical 
knowledge of the oil and gas industry proven global and 
operational leadership considerable board and executive 
management experience 
committee membership
none
external appointments
none
rijnhard van tets
nonexecutive director 
appointment
appointed to the board on 11 may 2007
experience
senior independent director  rijnhard is general partner 
of laaken asset management nv  he advised the 
managing board of abn amro between 2002 and 2007 
having previously served as a managing board member 
for 12 years at abn amro his roles included that of 
chairman of the wholesale clients and investment 
banking group 
key strengths
extensive ﬁnancial background with solid international 
board and senior management experience achieved from 
serving on various company boards and advisory trusts 
excellent experience of governance and audit committees
committee membership
chairman of the audit committee and a member of the 
nominations and board risk committees
external appointments
he is nonexecutive chairman of arcadis nv  euronext 
amsterdam nv and euronext nv  and a nonexecutive 
director of iff europe nyse euronext inc and bnp 
paribas obam nv 
tim weller 
chief financial ofﬁcer 
appointment
appointed to the board on 13 october 2011 
experience
tim joined petrofac in september 2011 from cable  wireless 
worldwide where he had been chief ﬁnancial ofﬁcer between 
may 2010 and july 2011 a fellow of the institute of 
chartered accountants in england and wales with a degree 
in engineering science he started his career with kpmg 
in london eventually becoming a partner in kpmg’ s 
infrastructure business unit until may 2010 he was chief 
ﬁnancial ofﬁcer at united utilities group plc and had previously 
held chief ﬁnancial ofﬁcer roles with rwe thames water 
limited and innogy holdings plc now rwe npower holdings 
plc from 2002 to 2006 tim will become a nonexecutive 
director of g4s plc on 1 april 2013 he is due to step down 
from the board of bbc worldwide in march 2013 
key strengths
wideranging ﬁnancial management experience strategic 
and ﬁnancial planning cost control and capital efﬁciencies 
external stakeholder communications and management 
experience of major systems implementation
committee membership
none
external appointments
nonexecutive director of the carbon t rust and 
bbc worldwide
marwan chedid 
chief executive engineering construction 
operations and maintenance 
appointment
appointed to the board on 19 january 2012
experience
marwan joined petrofac in 1992 when the business was 
ﬁrst established in sharjah having previously worked for 
ccc a major consolidated contractor company based 
in the gulf and the middle east for eight years in 2007 
he was appointed chief operating ofﬁcer of the engineering 
 construction international business with daytoday 
responsibility for the successful delivery of overall 
operations in january 2009 he became managing 
director of engineering  construction ventures before 
being appointed as chief executive ecom with effect 
from 1 january 2012 
key strengths
thorough knowledge of the oil and gas sector and 
contracting environments solid commercial operational 
and engineering experience excellent understanding of 
growing a business 
committee membership
none
external appointments
none
mary hitchon 
secretary to the board 
appointment
appointed on 24 october 2005
experience
mary joined petrofac shortly after ipo and has responsibility 
for the group’ s governance and listing rule compliance 
framework she is secretary to the board and its 
committees mary is a chartered secretary with almost 
20 years’ experience in a uk listed environment having 
previously worked at tbi plc the axa group and savills plc
rené médori
nonexecutive director 
appointment
appointed to the board on 19 january 2012
experience
rené is ﬁnance director of anglo american plc a position 
he has held since september 2005 he was group ﬁnance 
director of the boc group plc between june 2000 to 
may 2005 having held several ﬁnance appointments 
including as ﬁnance director of boc’ s gases business in 
the americas from 1997 rené stepped down as a 
nonexecutive of sse plc in june 2012 
key strengths
extensive and current international ﬁnancial experience 
wellestablished knowledge of governance and regulatory 
matters good understanding of operational and strategic 
management experience of balance sheet strengthening 
opportunities and the whole range of ﬁnancing 
arrangements 
committee membership
member of the audit nominations and board risk 
committees
external appointments
he is an executive director of anglo american plc 
and nonexecutive director de beers and anglo 
platinum limited
63 petrofac annual report and accounts 2012 dear shareholder
i am pleased to present the company’s 
corporate governance report for 2012 
this report gives me the opportunity to 
outline our board’s continuing commitment 
to achieving the highest standards of 
governance since joining petrofac in 2011 
i have been encouraged by the governance 
framework evident across the group 
as stewards of the company i believe it is the 
responsibility of the whole board to ensure 
the company’s strategy is aligned with the 
interests of our investors and stakeholders 
during the year we have continued to engage 
with our major stakeholders to try to 
understand their views and to ensure we 
continue to improve and develop not just 
our governance reporting but our overall 
governance behaviours 
we believe that a robust governance 
framework based on integrity and 
transparency which promotes challenge 
and accountability is a cornerstone of our 
organisation throughout this report we have 
endeavoured to build on previous reports to 
provide clear information for all stakeholders 
on how petrofac sets out to achieve our goals 
norman murray
chairman
64 petrofac annual report and accounts 2012
governance
corporate governance report what is our approach to governance 
as a jersey incorporated company with a premium listing on the 
london stock exchange petrofac is required to report against the uk 
corporate governance code uk code meeting the uk’s highest 
standards of regulation and corporate governance in september 
2012 following a period of consultation the financial reporting 
council frc announced limited changes to the uk code which will 
take effect for ﬁnancial years beginning on or after 1 october 2012 
2012 updated code these changes have been designed to provide 
investors with greater insight into what companies are doing through 
the work of the board and its committees the frc has stated that 
changes to the 2012 updated code along with changes to the 
uk stewardship code ﬁrst published in 2010 are intended to 
increase director accountability and encourage greater stakeholder 
engagement whilst promoting the interests of shareholders 
this report including the reports from the nominations audit board 
risk and remuneration committees describes how the company 
has applied all of the principles set out in sections a to e of the uk 
code during the period under review where it can the company has 
already adopted some of the principles from the 2012 updated code 
such as in relation to disclosures on board evaluation external search 
consultants and remuneration consultants the company’s auditors 
ernst  young llp ernst  young are required to review whether 
the corporate governance report reﬂects the company’s compliance 
with the nine provisions of the uk code speciﬁed for their review by 
the listing rules of the uk listing authority and to report if it does not 
reﬂect such compliance no such report has been made copies of 
the uk code as well as the 2012 updated code are publicly 
available at wwwfrcorguk
how have we responded to recent 
governance developments
as chairman i take responsibility for providing our board with the 
opportunity to consider all governance developments and for ensuring 
that directors receive appropriate training and education on relevant 
issues the last year has seen the continuation of several government 
and regulatory consultations and where relevant for petrofac we 
have provided responses to a number of these including
 the department of business innovation and skills bis consultation 
on enhanced remuneration voting rights
 the subsequent bis consultation on revised remuneration reporting 
regulations
 the frc consultation on the future of narrative reporting 
 the competition private rights of actions
 input into the call for evidence report on eu women on board 
proposals published by the house of lords eu subcommittee
 the icsa in conjunction with the investor stewardship working 
party consultation on improving engagement practices between 
companies and institutional investors
we hope the increased engagement being promoted will help to 
shape future legislation and regulation as well as promote greater 
accountability and provide enhanced disclosures for all stakeholders 
how are we aspiring to achieve our 
diversity targets
diversity continues to be a signiﬁcant governance theme and at 
petrofac we see diversity as a wider topic than simply gender 
we remain committed to achieving our future growth aspirations by 
building a pipeline of talent organically we are therefore continuing 
to strengthen our hr processes including our recruitment and 
performance management frameworks we are conﬁdent that we are 
succeeding in building an organisation that recruits and promotes 
employees on the basis of ability irrespective of background or 
gender in order to support this aspiration the board approved 
a diversity and inclusion policy during the year and the company 
intends to support its rollout across the group with appropriate 
training over the next 12–18 months
notwithstanding that diversity is broader than simply gender we feel 
we should say something about the group’s gender imbalance 
given how pronounced it is historically engineering has been a 
predominantly maledominated profession and as such we currently 
have very few women in senior operational roles although we do 
have a number of women in senior functional roles whilst we do not 
anticipate this situation changing in the short term we should begin to 
see more female employees moving up through the hierarchy over the 
next few years as our new hr processes start to take effect in fact 
during 2012 21 of our graduate intake was female next year 
we will provide further metrics in relation to diversity within 
our organisation
in 2011 in response to lord davies’ review we publicly stated that 
we aspired to having a board comprised of 15 and 25 female 
representation by 2013 and 2015 respectively excluding the 
chairman i have previously explained that we would only achieve 
these aspirations by appointing new nonexecutive directors given 
our current lack of female operational management at a senior level 
the nominations committee has worked hard this year to identify 
possible female candidates for the board whilst progress has been 
slower than we would have liked we remain conﬁdent that we will 
appoint a further female nonexecutive director in the near future 
thus meeting our aspiration for 2013 in addition to complying with the 
eu proposal on ‘gender balance in business leadership’ consultation 
which aims to ﬁll 40 of nonexecutive director positions with 
women shareholders can rest assured however that any woman 
so appointed to the board will be the best candidate for the role on 
the basis of merit
further information on progress towards our boardroom targets and 
the work completed by the hr department around the development 
of our diversity and inclusion policy can be found in the nominations 
report on page 77 
65 petrofac annual report and accounts 2012 leadership
what should our board be doing
while the board has a schedule of matters reserved to it for formal 
decision see opposite we recognise that there are a number of 
key topics for which all boards should take responsibility we have 
categorised these into six key headings see above we acknowledge 
that as a board either directly or through our committees we should 
endeavour to focus on developing our processes in order to grow our 
business successfully and provide continuous improvement across 
the whole group
schedule of matters reserved to the board for formal 
consideration includes
 setting the group’s strategy
 approval to enter into contracts which are deemed to be material 
either strategically or by reason of size duration or liability
 approval of the annual budget
 approval of major corporate transactions
 approval of major changes to the group’s capital structure
 approval of key policies such as those relating to health safety 
security environment and integrity assurance hsseia our 
code of conduct coc and diversity and inclusion
 preparing the group’s and company’s ﬁnancial statements
 recommending or declaring a dividend
 reviewing the group’s overall governance arrangements including 
approval of the delegated authorities matrix
 maintaining effective internal controls and risk management
 succession planning and appointments to the board
 setting senior executive remuneration
 reviewing the performance of the board itself and its committees
how the board spent its time during the year
leadership and risk












board
strategy



setting the tone




30
31
9
7
16
7
governance






finance





66 petrofac annual report and accounts 2012
governance
corporate governance report continued what did our board do in 2012
having identiﬁed last year the key responsibilities on which we believe 
boards should be focused i now set out some of the speciﬁc matters 
our board considered and addressed during 2012 this is not an 
exhaustive list but it does include some of the year’s key highlights
setting the tone
the board is responsible for approving key policies the health 
safety security environment and integrity assurance hsseia policy 
and annual plan are reviewed and updated each january a further 
review of the health and safety framework for the group is being 
considered and will be completed during 2013 following the 
appointment in 2011 of a group head of compliance a decision was 
taken in early 2012 to refresh the company’s code of conduct coc 
this was completed during the year and the updated coc was 
approved by the board in december 2012 and is currently being 
rolled out across the group further details of this project are 
provided on page 57 
governance
closely linked to the work on setting the tone the board through the 
nominations committee reviewed and approved a new diversity and 
inclusion policy this policy draws upon the wider code of conduct 
noted above and aims to ensure that petrofac promotes and protects 
diversity across the group further details are provided on page 57 
in addition the new head of external affairs provided a report to 
the board on future plans for the group which included the 
implementation of a social impacts standard that will provide 
guidance on social assessments grievance mechanisms and 
stakeholder engagement in overseas jurisdictions 
strategy
to continue its commitment to focus on strategy the board again 
spent over 30 of its time discussing strategic matters two speciﬁc 
meetings a dedicated strategy day in may and a further half day in 
december are set out in the annual timetable and allow the board to 
review key strategic initiatives this year attention was given to the 
development of the fit for 2015 programme as detailed on pages 22 
and 23 in addition the board was able to monitor and measure 
progress against strategic delivery with reference to budget 
development as well as the endorsement of our ﬁveyear plans 
management also gave the board a series of ‘deep dive’ 
presentations on various strategic initiatives during the course of 
the year one of which was speciﬁcally on the development of our 
training services service line
leadership
the leadership at petrofac has been described as ‘entrepreneurial’ 
and this could be paraphrased as our management team putting 
strategy into action signiﬁcant time was spent during the year 
embedding the new divisional organisational structure and ensuring 
reporting lines were robust through the work of the nominations 
committee focus was given to continued succession planning and 
identifying key employees across the group 
our delegated authority framework stipulates the contracts and other 
matters which require board approval and some of the matters which 
our board considered and approved during 2012 include
 the agreement in january to enter into a cooperation agreement 
between integrated energy services and schlumberger production 
management under which a working relationship would be 
established to deliver integrated and highvalue projects in the 
emerging and growing production services and enhancement 
markets
 the bid for a us330 million lumpsum engineering procurement 
and construction epc contract for the ﬁrst phase of the badra 
oilﬁeld development project in iraq in february and a further 
inspection and repair contract valued at us229 million for the 
rumaila oil ﬁeld in southern iraq with our joint venture partner 
china petroleum engineering  construction corporation cpecc 
in november 
 the tender for a us220 million refurbishment project of the 
bekokc platform in malaysia by petronas in may
 the bid for an integrated production service contract in august to 
develop the arenque contract area in offshore mexico which will 
further strengthen the relationship with pemex and our commitment 
to assist in the development of mexican oil and gas reserves
 entering into the strategic alliance in november with bowleven the 
africanfocused oil and gas company to support the proposed 
development of the etinde permit offshore cameroon
 the proposed bid for two epc packages for saudi aramco’s jazan 
reﬁnery and terminal project in saudi arabia valued around 
us14 billion in december
risk
the board continued to review the signiﬁcant risks facing the business 
and these were outlined within the group chief executive’s regular 
reports to the board a new group head of enterprise risk was 
appointed during the year whose primary remit is to assist the 
business units in implementing effective and consistent processes 
and controls across the group which will facilitate the execution of 
risk management within our agreed framework the board risk 
committee also sought to embed the updated requirements around 
risk introduced by the uk code and further details are provided in its 
report on pages 82 to 87 
finance 
the board regularly monitors the group’s ﬁnancial performance and 
approves all ﬁnancial statements to the market the audit committee 
takes prime responsibility for assuring the board that the group 
has satisfactory ﬁnancial controls in place in august the board 
considered and approved the signing of a new us12 billion 
syndicated ﬁveyear revolving credit facility with the intention that 
this facility would provide petrofac with future ﬁnancing ﬂexibility 
in addition the board reviewed and approved the 2013 budget 
and ﬁveyear plan in december 
67 petrofac annual report and accounts 2012 who is on our board
following the appointment of rené médori and marwan chedid in 
january 2012 there have been no additional changes to our board 
the more recently appointed directors have now had time to become 
familiar with the organisation thus enhancing board effectiveness 
at 31 december 2012 and at the date of this report we have 
11 directors on the board comprising myself as chairman ﬁve 
nonexecutive directors and ﬁve executive directors as set out 
in the table below 
name position nationality
norman murray chairman
rijnhard van tets senior independent director
thomas thune andersen nonexecutive director
stefano cao nonexecutive director
roxanne decyk nonexecutive director
rené médori nonexecutive director 
appointed 190112
ayman asfari group chief executive
maroun semaan president
marwan chedid chief executive ecom 
appointed 190112
andy inglis chief executive ies
tim weller chief financial ofﬁcer
 mr asfari is a british citizen however he is syrian born and has dual nationality
full biographies of each of our directors are shown on pages 62 and 
63 as well as in the notice of meeting all our nonexecutive directors 
are independent in judgement and character all directors are required 
to disclose any potential conﬂict to our board for its consideration and 
i am not aware of any relationship or circumstance which is likely to 
prejudice or could appear to prejudice the judgement of any director 
we have made considerable efforts to build a board with the right 
balance of skills diversity and industry expertise you will see that our 
directors are drawn from across the world and have varied career 
histories with no single type of person dominating the board we are 
fortunate in that many of our directors bring a great deal of experience 
in the oil and gas industry both in lumpsum contracting and 
exploration and production we believe this is essential to safeguard 
the interests of our shareholders the additional strengths brought to 
the board by each director are detailed further on pages 62 and 63 
how is our board organised
role of the chairman
as chairman i am responsible for leading the board and ensuring its 
effectiveness i see my role as one which ensures that the board both 
challenges and supports management 
role of the group chief executive
ayman asfari is our group chief executive and is responsible for 
the implementation and execution of strategy and the daytoday 
management of the group he is supported by his fellow executive 
directors and the senior management team whose details are outlined 
on pages 24 and 25
ayman and i have clearly deﬁned terms of reference and these are set 
out in writing the split in responsibilities is shown in the table below
roles
chairman group chief executive
lead the board 
ensure effective communication 
with shareholders 
ensure effective communication 
ﬂows between directors 
facilitate the effective contribution 
of all directors 
 
ensure effective board 
governance
implement strategy and objectives 
develop manageable goals and 
priorities 
lead and motivate the 
management teams 
develop proposals to present to 
the board on all areas reserved for 
its judgement 
develop group policies for 
approval by the board and ensure 
implementation
role of the senior independent director
rijnhard van tets is our senior independent director a position he 
assumed in may 2011 he is available to shareholders to answer any 
questions which cannot be addressed by me or the group chief 
executive he acts as a sounding board and conﬁdante to me as 
chairman and is also available as an intermediary for the other 
independent directors if required rijnhard would be called upon to 
chair our board in the unlikely event that i am unavailable to attend 
any meeting thus providing suitable continuity as noted in the 
nominations report on page 77 at the board’s request rijnhard will 
remain a director beyond the end of his second threeyear rotation 
it is felt rijnhard’s continued presence will provide continuity after a 
recent period of change to the board’s composition 
secretary to the board
our secretary to the board mary hitchon is responsible to our board 
and has acted as secretary to all committees during the year she is 
available to individual directors in respect of board procedures and 
provides general support and advice one of her key roles is to advise 
me on governance matters so that i can enhance the governance 
and effectiveness of the board the committees and our individual 
directors which she does with professionalism and integrity 
she ensures that our board is kept properly informed and is consulted 
on all matters reserved to it and that papers and other information are 
delivered in a timely fashion
68 petrofac annual report and accounts 2012
governance
corporate governance report continued how is the board structured
as a jersey company our board is unitary in nature this means that 
all our directors share equal responsibility for the decisions that we 
make executive and nonexecutive directors need to be able to work 
together in an atmosphere of openness trust and mutual respect it is 
therefore important that all directors see the chairman as a fair and 
impartial individual my relationships with the group chief executive 
and the senior independent director are of particular importance 
as these two individuals represent the views of management and 
nonexecutive directors respectively i believe that an effective 
working relationship between each of our directors provides a robust 
framework which assists in the progression of the company’s 
strategic aims i hold regular private meetings with ayman and with 
rijnhard between our board meetings and believe that i am equally 
informed about the views of management and nonexecutive 
directors in addition i set aside time during board meetings to see 
the nonexecutive directors separately each of these meetings 
provides insight which assists me in two ways i am better able to set 
the agenda for our board meetings and i can ensure that all directors 
contribute at our meetings through their individual and collective 
experience challenge and support 
the board is assisted by four committees as set out in the diagram 
below each committee is responsible for reviewing and overseeing 
activities within its particular terms of reference copies of which are 
available on the company’s website wwwpetrofaccom at each 
scheduled board meeting the chairman of each committee provides 
a summary of any committee meeting held since the previous board 
meeting and further the minutes of all committee meetings are 
circulated to the board individual reports from each committee 
chairman for 2012 are provided on pages 76 to 103 in addition 
to the four board committees there are a number of executive 
management committees which have been established to consider 
various issues involved in the daytoday operational management 
of petrofac and matters for recommendation to the board and 
its committees 
six years or more
three − ﬁve years
one − two years
less than one year
 board tenure
executive directors
nonexecutive directors
nonexecutive chairman
 executivenonexecutive 
director balance
uk
continental europe
us
middle east
 geographical mix of 
board members
board level committees
board
nonexecutive chairman  
5 executive directors  
and 5 nonexecutive directors
remuneration committee 
3 nonexecutive directors
agrees remuneration policy and sets 
individual compensation levels for 
members of senior management
board risk committee 
4 nonexecutive directors
oversees the group’s risk 
management and internal control 
processes for nonﬁnancial matters
nominations committee 
nonexecutive chairman  
5 nonexecutive directors and  
1 executive director
takes primary responsibility for 
succession planning boarddirector 
selection and board composition
audit committee 
4 nonexecutive directors
monitors the integrity of the 
company’s ﬁnancial statements and 
reviews ﬁnancial and regulatory 
compliance and controls 
shareholders 
elect the auditors elect the directors
executive management level committees
chief executive 
committee
executive 
committee
guarantee 
committee
group risk 
committee
treasury  
committee
disclosure 
committee
responsible for decisions of a strategic or substantive nature 
responsible for the communication and implementation of decisions and administrative matters 
committee report pages 88 to 103 committee report pages 76 and 77 committee report pages 82 to 87 committee report pages 78 to 81
69 petrofac annual report and accounts 2012 who attends board meetings
as well as directors and the secretary to the board guests from 
operational and functional management are periodically invited to 
attend board meetings during 2012 updates were provided from 
operational management one and two tiers below director level as 
well as from the functional heads of hsseia hr risk compliance 
and strategy we believe this interaction helps directors get to know 
the company and its senior management better enhances their 
understanding of the business and the implementation of strategy 
and makes for more effective board meetings that while always 
professional are nevertheless lively and engaging we also consider 
that providing senior management the opportunity to present to the 
board and meet the directors on more informal occasions is valuable 
for their development
where does our board meet
petrofac limited was incorporated in jersey under the companies 
jersey law 1991 and although we hold our board meetings at a 
variety of locations most are held in jersey we ensure that at least 
one of our six scheduled meetings is held in sharjah uae being the 
location of our largest ofﬁce and the centre of our oec business 
while in sharjah in 2012 the board took the opportunity to meet 
around 50 members of our local management team over an informal 
dinner every year we also hold one meeting in a location where 
petrofac has signiﬁcant business in october 2012 we visited the 
el merk project site in algeria see below meetings held outside 
of jersey allow the board to get to know petrofac its people its 
customers and its business partners 
how often does our board meet
the board meets facetoface at least six times a year at scheduled 
meetings in addition the board meets on an ad hoc basis either 
facetoface or telephonically where items of business arise which 
cannot be held over until the next scheduled meeting scheduled 
meetings are generally held over a twoday period though at least 
two of these meetings are longer as during our annual programme of 
events we also hold a dedicated strategy day as well as a site visit 
committee meetings are held prior to the full board meeting 
details of director attendance and eligibility to attend are set out in 
the table below
total number of meetings held during the year  
to 31 december 2012
board meetings attended eligible to attend
norman murray
 a
rijnhard van tets
thomas thune andersen
stefano cao
roxanne decyk
rené médori
 b c
ayman asfari
maroun semaan
marwan chedid
 b
andy inglis
tim weller
a
 chairman 
b
 rené médori and marwan chedid joined the board on 19 january 2012 
c
  rené médori was unable to attend one meeting due to a longstanding 
commitment arranged prior to his appointment to the board
how do we deal with potential 
conﬂicts of interest
processes and procedures are in place that require directors to 
identify and declare actual or potential conﬂicts of interest whether 
matterspeciﬁc or situational these notiﬁcations are required to be 
made by the director concerned prior to or at a board meeting 
all directors have a duty to update the whole board of any changes 
the board may authorise potential conﬂicts which can be limited in 
scope in accordance with the company’s articles of association 
during the year all conﬂict management procedures were adhered 
to and operated effectively 
in october the board held its board meeting at the el merk site 
in algeria where we were in the process of completing the 
construction of a central processing facility for our customers 
sonatrach and anadarko during this threeday visit the board 
was given the opportunity to understand some of the daytoday 
challenges faced by our onsite employees this has been even 
more pertinent for our directors given recent events in this country 
updates and presentations from local management were 
provided and directors had the chance to meet with a number 
of engineering graduates working on the base and to see 
ﬁrsthand the work being carried out the visit also gave directors 
the opportunity to meet and discuss the project with sonatrach 
and anadarko representatives thus gaining an insight into our 
customers’ concerns
70 petrofac annual report and accounts 2012
governance
corporate governance report continued effectiveness
how do we get the best out 
of our board
we invest time and effort in appointing our directors and arranging 
board meetings so it would be disappointing if we did not get the 
best out of our board i believe that the board must operate in an 
atmosphere of mutual trust and respect in order to be effective and 
i therefore encourage directors to be open and forthright as well as 
encouraging the right culture within the boardroom directors must 
be practically supported to enable them to engage fully with the 
company and allow them to make the best possible contribution 
i outline below these practical measures
information provided 
we spend considerable time developing the agenda for each of our 
scheduled board meetings there are a number of standing items 
and various matters such as the forthcoming year’s budget or 
hsseia plan which are brought to the board on the basis of a 
12month rolling programme however at least half of any board 
meeting agenda is devoted to strategic and nonrecurring items plus 
speciﬁc project and investment related opportunities i believe that 
taking this tailored approach encourages our board to engage more 
effectively as noted on page 73 time was spent during the year 
improving board paper content and focus as wellwritten papers 
facilitate constructive debate and challenge as recommended by the 
uk code and as part of our commitment to best practice we ensure 
papers are dispatched in a timely manner usually one week prior 
to each meeting during 2012 we moved to providing papers 
electronically through a dedicated application we believe this method 
of delivery is more secure and also reduces the environmental impact 
we also provide additional information via this portal which gives our 
directors easy and instant access to a useful resource bank which i 
believe is of particular importance given our geographical spread 
when telephonic board meetings are held the secretary to the board 
ensures that papers are circulated electronically generally at least 24 
hours prior to the meeting
our selection process 
we have a formal rigorous and transparent selection procedure 
for the appointment of directors the nominations committee is 
responsible for recommending new directors to our board board size 
and composition are considered very carefully to ensure the correct 
balance of individuals taking into account diversity and experience 
in addition individuals are made aware of the need to allocate 
sufﬁcient time to the company to discharge their responsibilities 
effectively care is taken to establish the existing commitments of 
all nonexecutive directors particularly the chairman should a 
director’s external commitments change after appointment they are 
required to make me and the board aware as soon as practicable 
so that we can consider any potential conﬂict of interest time 
commitment challenge or residency status conﬂict a process will be 
implemented to allow the board to conduct a review of interests and 
conﬂicts at the end of each year a report on the activities of the 
nominations committee is set out on pages 76 and 77 
director development and training 
the uk code puts signiﬁcant emphasis on director development and 
training a governance development which i fully support we do not 
however run an extensive programme of ‘one size ﬁts all’ director 
training but instead encourage all directors to pursue an individually 
tailored development programme during the year we maintain a 
record of each director’s training and development which i review 
during the evaluation process and over the course of this year 
over 300 hours were recorded this comprised a mixture of formal 
seminars led by external advisors ofﬁce and site visits and health 
and safety training as might be expected nonexecutive directors 
undertake a higher number of external seminars than their executive 
colleagues as these frequently focus on general governance 
developments whilst executive directors will complete more ofﬁce 
and site visits and health and safety training as such activities fall 
within senior management’s daytoday remit nevertheless almost 
10 of training time recorded by our nonexecutive directors 
was spent meeting senior executives across the group thus 
demonstrating their commitment to understanding the business 
during 2012 all directors received antibribery and corruption training 
either by an elearning module or in facetoface sessions with the 
group head of compliance in 2013 we plan to provide the board 
with a limited number of group training sessions which will include 
the diversity and inclusion training which is being rolledout across 
the group 
my own training programme included governance seminars 
including the abi investment conference a visit to our growing 
operations in mexico a visit to our laggantormore site in shetland 
and following the completion of an offshore safety training course in 
aberdeen tim weller and i were able to join a visit by the group chief 
executive the managing director of opo and the group director of 
hsseia to the kittiwake installation in the north sea uk this gave 
me the opportunity to see our commitments to safety and operational 
excellence in practice view the assets in operation meet some of our 
offshore employees and spend time with customers i also attended 
the company’s annual safety seminar as noted on page 28 which is 
attended by our senior operational employees this gave me a good 
insight into petrofac’s culture on safety
the board recognises that a directors’ development goes beyond 
formal and informal training sessions for that reason the board was 
happy to support tim weller’s forthcoming appointment to the board 
of g4s plc
do the directors have 
deeds of indemnity
during 2012 petrofac provided indemnities to its directors and 
ofﬁcers in respect of liabilities which may be incurred as a result of 
their ofﬁce in accordance with our articles of association and to the 
maximum extent permitted by jersey law petrofac has appropriate 
insurance coverage in respect of legal action which may be brought 
against the directors and its ofﬁcers neither the company’s 
indemnities nor insurance would provide any cover where a director 
or ofﬁcer was found to have acted fraudulently or dishonestly
71 petrofac annual report and accounts 2012 our induction programme
rené médori and marwan chedid both joined the board in january 2012 each were provided with an individually tailored induction programme 
to account for their differing requirements and needs details of which are set out below
name and position strengths focus areas induction programme
rené médori 
nonexecutive director
experience as chief 
ﬁnancial ofﬁcer within a 
major uklisted entity and 
as a nonexecutive director 
within the utility sector
to increase rené’s knowledge 
of petrofac and assist him 
in preparing for his role as 
a member of the audit 
board risk and 
nominations committees
rené attended a formal presentation led by 
freshﬁelds on the role and responsibilities of a 
uklisted company director – this is compulsory 
for all our new directors
he visited our ofﬁces in london aberdeen 
woking and sharjah as well as attending site 
visits in both algeria with the full board and the 
asab ﬁeld in abu dhabi these visits allowed 
him the opportunity to meet senior operational 
management key functional heads of the group 
and new graduates 
marwan chedid 
chief executive ecom
20 years’ of experience 
with the company 
promoted from within 
petrofac’s onshore 
engineering  construction 
business
to increase marwan’s 
understanding of the role 
of a director within a uk
listed entity
marwan attended the freshﬁelds’ seminar noted 
above freshﬁelds and jpmorgan cazenove also 
provided him with an individual training session 
on disclosure obligation in sharjah
marwan attended the london business school’s 
directors’ forum during the ﬁrst half of 2012 
this provided him the opportunity to work with 
leading ﬁgures from other companies’ boards 
and professional advisers with the aim of 
developing his boardroom skills through roleplay 
and sharing best practice
evaluation of board effectiveness
whilst i believe that our board should continuously endeavour to 
improve its effectiveness at the end of 2011 and start of 2012 
i carried out onetoone interviews with each director using a set 
of predeﬁned questions these questions focused on the themes 
identiﬁed during previous evaluations such as strategy risk 
succession planning and governance and sought to address any 
outstanding issues whilst highlighting areas for board performance 
improvement my aim was to address the activities and responsibilities 
of the board as well as the board committees each interview resulted 
in an open conversation which gave sufﬁcient time for matters of 
concern to be raised and suggested areas of development to be 
discussed my own appraisal was conducted by rijnhard van tets 
our senior independent director rijnhard did this through a series of 
interviews with our executive and nonexecutive directors before 
meeting with me to present feedback 
at the end of 2012 i conducted a further evaluation process on the 
same basis as last year the secretary to the board and i collated the 
results of these interviews into a report and this was presented to the 
board in february 2013 the outcome of this work will be presented 
in next year’s report we plan to carry out an externally facilitated 
board evaluation in accordance with the uk code during 2013 
the recommendations actions and progress from recent evaluations 
are shown in the table opposite 
as a result of the recent evaluations i can conﬁrm that the 
performance of each director was effective during the year and can 
conclude that the control and leadership required for a listed company 
is provided by the board as a whole 
72 petrofac annual report and accounts 2012
governance
corporate governance report continued progress report on evaluation recommendations from both the external review in 2010 and the internal review in 2011
action details progress
more strategic discussion
greater regard to competitive environment 
when discussing strategy
the board continues to engage in the development of its strategic 
management and the time spent on strategy over the last three years has 
changed as follows 2010 15  2011 32  2012 31
the increase is as a result of the introduction of a dedicated strategy day 
in may a half day in december as well as regular strategic ‘deep dive’ 
presentations at other board meetings in addition greater focus has been 
given to execution with additional strategic reviews providing a deeper 
understanding of the group’s operations and performance board papers 
relating to proposed projects are also now required to explain the strategic 
rationale for the matter under consideration
successful
revisit the group’s delegated authorities 
so the board uses its time more effectively
a new delegated authority matrix was approved by our board in 
november 2011
successful
greater ﬁnancial detail requested to permit 
better consideration of the group’s capital 
demands future ﬁnancing plans and 
ﬁnancial structures
building on work achieved to date we have increased the ﬁnancial 
information presented in the group’s ﬁveyear plans this has allowed the 
board to participate in strategy and treasury related discussions in a more 
focused and concentrated way 
successful
improvement to board papers 
including delivery
as a result of discussions held to establish the key considerations of the 
directors it was agreed that board papers should provide a pertinent 
summary of the matters under consideration including strategic rationale 
associated risks and ﬁnancial exposure a board paper portal was also 
introduced during the year to facilitate the delivery of board materials 
successful
articulate our risk appetite and signiﬁcant 
risks more effectively
the 2011 evaluation highlighted the requirement for increased scrutiny of 
risks that prevent strategic delivery a review of the group’s risk framework 
undertaken by the board risk committee resulted in the board having 
greater clarity about the group’s enterprise risk proﬁle it has since sought 
to develop metrics to monitor trends for 13 areas of enterprise risk and the 
board risk committee will review these metrics regularly further detail is 
shown on page 84
ongoing 
focus more on succession planning in 2011 considerable time was spent on the practical application of board 
succession planning following the appointment of a new chairman and 
two new directors little time was given to wider succession planning 
although the nominations committee broadened its remit from board 
succession to the management layer below the board 
during 2012 executive succession planning was discussed at a granular 
level in addition reports have been submitted to the nominations 
committee covering succession planning and talent management initiatives 
for the entire organisation such that the time spent on overall succession 
planning within the nominations committee has increased from 27 in 2011 
to over 35 in 2012
ongoing 
crisis management the development of crisis management planning and the board’s role 
in such plans is seen as extremely important speciﬁc and targeted 
training initiatives are planned to ensure directors are fully aware of 
their responsibilities
in progress 
understanding the brand following the appointment of a new group head of external affairs 
during 2012 we recognise that there is an opportunity to reinforce the 
communication of our brand and the group’s differentiated offering work 
with business development teams is progressing so that stakeholders’ 
views relating to potential opportunities can be fully understood
in progress
73 petrofac annual report and accounts 2012 what is our approach to shareholders 
reappointing directors
in line with the uk code all directors will seek reappointment by 
shareholders at the 2013 annual general meeting agm as required 
by the uk code the terms and conditions of appointment of all 
directors are available for inspection by any person at our registered 
ofﬁce in jersey and at our corporate services ofﬁce in london 
they will also be available for inspection prior to the agm to be 
held in london in may 2013
accountability
how does our board formally satisfy 
itself that it has sound risk management 
and internal control systems
the board is responsible for reviewing the effectiveness of petrofac’s 
risk management and internal control systems including ﬁnancial 
operational and compliance controls the board currently considers 
this by reference to the work undertaken during the year by both the 
audit and board risk committees in addition to which the board 
also receives regular reports from members of management with 
responsibility for the group’s material enterprise risks at yearend 
the audit committee provided our board with a formal report on the 
effectiveness of the group’s ﬁnancial and regulatory controls while the 
board risk committee provides a formal report on the effectiveness 
of the group’s risk management systems in relation to the group’s 
enterprise risks and project and investment risks these reports allow 
the board to take a view on whether or not the group has sound risk 
management and internal control systems in place the board is 
satisﬁed that sound risk management and internal control systems 
have been in place across the group throughout 2012 and as at 
today’s date when the ﬁnancial statements were approved petrofac 
also seeks to have a sound system of internal control based on the 
group’s policies and guidelines in all material associates and joint 
ventures as with all companies our systems of internal control and 
risk management are designed to mitigate and manage rather than 
eliminate business risk and can only ever provide reasonable and not 
absolute assurance against material misstatement or loss
how does our board identify 
petrofac’s signiﬁcant risks
management provides the board through the board risk committee 
with details of current signiﬁcant risks and how we plan to mitigate 
them the risks that are considered signiﬁcant today are shown on 
pages 47 to 49 these risks are identiﬁed by reference to
 risk matrices received from each of our individual service lines 
bottomup approach
 the views of senior management topdown approach
does our board receive information 
which allows it to identify when delivery 
of its goals are under threat
ayman asfari provides a full presentation on business operations 
at each facetoface board meeting during which any possible 
impediments to the delivery of our group goals are highlighted and 
discussed the board also receives a comprehensive written report 
from tim weller at each facetoface board meeting as well as 
periodic updates between such meetings this ensures the board 
is kept informed about the group’s ﬁnancial performance for the 
year to date as compared with the year’s budget or the latest 
revised forecast with explanations for any variances the budget and 
ﬁveyear plans submitted to the board incorporate risk analysis as 
a matter of course in addition to ﬁnancial goals we have strategic 
and operational goals and we continue to develop a broader set of 
ﬁnancial and nonﬁnancial key performance indicators which should 
assist us in monitoring delivery of these goals 
remuneration
how do we decide what 
directors are paid
the remuneration committee is responsible for determining the 
remuneration and terms of employment of executive directors as well 
as some members of senior management this committee is also 
responsible for determining the chairman’s fees a detailed report on 
the activities of the remuneration committee is provided on pages 88 
to 103 responsibility for determining the remuneration payable to 
the nonexecutive directors lies with the full board the executive 
directors and i therefore effectively determine the fees payable to the 
nonexecutive directors albeit we take independent external advice 
these fees are reviewed each year and further details are provided 
on page 93
74 petrofac annual report and accounts 2012
governance
corporate governance report continued recognising the importance of shareholder engagement towards 
the end of the year i once again contacted investors representative 
bodies and governance organisations offering them the opportunity 
to meet with the aim of understanding their governance concerns 
accompanied by our secretary to the board and the head of investor 
relations we met three of our largest institutional shareholders and 
with two key voting and advisory services providers whilst areas 
of focus varied between meetings succession planning directors’ 
remuneration risk awareness and hse issues were raised as areas of 
particular interest we welcome further engagement from institutions 
as they make progress in adopting the frc stewardship code and 
the recommendations from the kay review published in july 2012
a consultation exercise was also conducted by thomas thune 
andersen in his capacity as chairman of the remuneration 
committee in early 2012 this entailed interaction with 24 major 
shareholders as well as three key advisory services providers and 
included a number of facetoface meetings the purpose of the 
consultation was to discuss remuneration policy especially as this 
related to the introduction of our value creation plan further details 
of this consultation process are discussed on page 96
we place considerable importance on communication with our 
shareholders including our employee shareholders who all receive 
copies of our annual report and accounts and halfyear reviews 
this year we gave shareholders the choice of only receiving their 
communications in soft copyelectronic form as at the yearend 
over 13 of our shareholders had opted to receive their shareholder 
documents electronically all shareholder documents and all 
announcements made to the market together with copies of 
presentations to analysts and interviews with ayman are available 
on our website wwwpetrofaccom which we hope will encourage 
shareholders to become more informed investors
our annual general meeting agm
full details of this year’s agm which will be held in london are set 
out in the notice of agm which accompanies this report and which 
is also available on our website as a matter of good practice we 
will conduct all resolutions on a poll and announce the results to 
the market as soon as possible after the meeting all shareholders 
are invited to attend the company’s agm at which they have the 
opportunity to put questions to the board and meet with those board 
directors able to attend i look forward to seeing as many of you as 
possible this year when my colleagues and i will be available to 
answer your questions
norman murray
chairman of the board
26 february 2013
relations with shareholders
who are our major shareholders
ordinarily shareholders of jerseyincorporated companies with a uk 
listing need only disclose their holdings if they hold voting rights of 5 
or more in a company however our articles of association have been 
drafted so that any shareholder with 3 or more of our voting rights 
must disclose their holding bringing us in line with ukincorporated 
companies those shareholders with holdings of 3 or more at the 
yearend and as at the date of this report are as follows
number of 
ordinary shares
percentage  
of issued  
share capital
ayman asfari and family 62900835 1819
maroun semaan and family 28217864 816
how does our board engage with our 
shareholders and make sure that it is 
aware of shareholders’ views 
as a board we acknowledge our responsibilities to promote the 
success of petrofac for many people but our principal focus is of 
course our shareholders 
ayman asfari tim weller and the investor relations team headed by 
jonathan low have a regular programme of meetings scheduled 
each year and conduct a series of individual meetings with existing 
and potential shareholders following our full and half year results and 
interim management statements they also provide presentations to 
research analysts and institutional investors including a question and 
answer session following the announcement of our full and half year 
results these presentations are broadcast live on our website and 
accordingly may be followed by all shareholders in 2012 they held 
over 300 investor meetings of which ayman andor tim attended 
approximately 150 meetings in addition both andy inglis and 
marwan chedid joined a number of investor meetings during the year 
i believe therefore that ayman and tim are each well placed to 
provide the rest of the board with their insights into shareholder 
sentiment all directors receive brokers’ research notes from jonathan 
and an update from our joint brokers at each board meeting
75 petrofac annual report and accounts 2012 nominations committee report
role of the committee
membership and attendance at meetings held in 2012
 regularly reviews the composition and structure of the board and its 
committees
 identiﬁes and recommends for board approval suitable candidates 
to be appointed to the board
 considers succession planning for directors and other senior 
executives and in doing this considers diversity experience 
knowledge and skills
meetings attended eligible to attend
current members
norman murray chairman
ayman asfari
thomas thune andersen
stefano cao
roxanne decyk
rené médori
 a
rijnhard van tets
a
  rené médori was appointed a director and member of the committee in 
january 2012 he missed one meeting due to a longstanding commitment 
arranged prior to his appointment to the board
norman murray
chairman of the nominations committee
how the committee spent its time during the year
search for directors nonexecutive director
succession planning
governanceother matters
diversity
 governance
76 petrofac annual report and accounts 2012 dear shareholder
following a recent period of change to 
our board the nominations committee 
has over the last year been able to 
concentrate on longer term succession 
planning at board level and below 
in doing so we have been mindful of 
the continuing debate around diversity
petrofac appointed its ﬁrst external directors in the run up to the 
company’s admission to listing on the london stock exchange in 
2005 and as a consequence the company’s original nonexecutive 
directors stepped down from the board in quick succession at the 
end of their respective terms in 2010 and 2011 the committee has 
therefore spent signiﬁcant time over the last two years in search of 
new nonexecutive directors to refresh the board this exercise has 
now been completed following the appointment of rené médori in 
january 2012 at the same time marwan chedid was appointed 
as an executive director whilst it is our policy for nonexecutive 
directors to serve for no more than six years the committee has 
decided to make an exception for rijnhard van tets and invite him to 
remain on the board beyond the 2013 agm the committee believes 
that after a period of signiﬁcant change the board would beneﬁt from 
rijnhard continuing to serve as a director i am delighted that he has 
agreed to stay and i am grateful for his support and counsel in his role 
as senior independent director
whilst succession planning for the board has inevitably been less 
of an area of focus this year we have still spent considerable time 
discussing this matter last year we stated that excluding me we 
aspired for the board to be comprised of 15 women by 2013 and 
25 women by 2015 we explained that we would only be able to 
meet this aspiration by the appointment of female nonexecutive 
directors given our current pipeline of female executive talent 
the committee therefore worked extensively with egon zehnder 
international during 2012 with whom we have no other relationship 
to identify appropriately qualiﬁed candidates we remain conﬁdent 
that we will be able to meet our published target for 2013 in the near 
future i would emphasise that any woman who is appointed to our 
board will be appointed on merit
during last year’s evaluation exercise directors expressed the 
view that they wished the board to spend more time focusing on 
succession planning below board level as you will see on page 73 
we increased the amount of time spent on this vital part of our 
stewardship from 27 to over 35 between 2011 and 2012 
with the committee being the forum in which the board has 
discharged this responsibility 
throughout the year geoff tranﬁeld our group director of hr 
provided the committee with brieﬁngs about how the group is 
building its capability in general details were given at a granular level 
on the evolving pipeline of talent and the effective processes being 
implemented to retain and attract talented individuals across the 
group leadership development programmes continued throughout 
2012 and follow up modules tailored to petrofac’s speciﬁc needs 
are being developed which may include attendance by committee 
members who were very supportive of these programmes 
mr tranﬁeld also provided the committee with updates on the 
group’s enhanced processes in relation to recruitment performance 
management and talent management designed to support the overall 
hr strategy of meeting our strategic aims and growth targets 
the board has determined it will monitor diversity through the 
committee and following the committee’s recommendation 
formally adopted a diversity and inclusion policy at the end of 2012 
whilst we recognise that we have a gender imbalance within the 
group we are in many ways extremely varied with employees from 
more than 80 nations we believe that this policy should help to 
promote and protect diversity which we see as one of our key 
strengths and which draws upon the wider recently enhanced code 
of conduct details of which can be found on page 57 the adoption 
of this policy will be supported by communications and training 
programmes which are being rolled out across the group in a phased 
manner over the next 12 to 18 months next year we will review 
explain and report further on diversity in accordance with the revised 
uk corporate governance code which will take effect for ﬁnancial 
years commencing on or after 1 october 2012 the committee’s 
terms of reference were reviewed at the end of the year and it was 
agreed that they continue to conform to best practice and as a result 
they remain unchanged
norman murray
chairman of the nominations committee
26 february 2013
77 petrofac annual report and accounts 2012 audit committee report
role of the committee
membership and attendance at meetings held in 2012
 monitors the integrity of the company’s ﬁnancial statements and 
reviews signiﬁcant ﬁnancial reporting judgements
 reviews the effectiveness of ﬁnancial and regulatory compliance 
controls and systems
 monitors the effectiveness of the group’s internal audit function 
and reviews its material ﬁndings
 oversees the relationship with the external auditors 
including agreeing their fee and assessing their independence 
and effectiveness
meetings attended eligible to attend
current members
mr rijnhard van tets chairman 
mr thomas thune andersen 
ms roxanne decyk 
mr rené médori
 a
a
  rené médori was unable to attend one meeting due to a longstanding 
commitment arranged prior to his appointment to the board
rijnhard van tets
chairman of the audit committee
financial reporting
external audit including review 
of nonaudit services
 how the committee spent its time during the year
governanceother matters
 code of conduct including our 
speak up programme
policy review
internal control systems
 governance
78 petrofac annual report and accounts 2012 dear shareholder
the audit committee’s main responsibility 
is to oversee our ﬁnancial reporting and 
during 2012 the committee’s agenda also 
included the consideration of matters 
which coincide with key events in our 
ﬁnancial reporting calendar there were 
no changes in reporting standards that 
affected our ﬁnancial statements in 2012 
as the business evolves and the ies 
division grows the committee will need 
to continue to stay abreast of the 
accounting implications for the group
in addition to the general matters considered during the year focus 
was also given to
 appropriateness of the company’s nonaudit services policy
 related party transactions
 solvency and going concern statements
 dividend payments including compliance with jersey legislation
 continuing the development between the audit and board risk 
committees to ensure that the risk of any matter falling between 
the two committees is minimised
 monitoring progress on the implementation of our global enterprise 
resource planning system 
 awareness of cyber security risks
in september 2012 the frc published revised guidance in relation to 
audit committees which has been incorporated into the uk corporate 
governance code and which will take effect for ﬁnancial years 
beginning after 1 october 2012 the committee is fully aware of 
its current obligations and details of how the audit committee has 
discharged its responsibilities during the year are provided in this 
report during the year we reviewed our terms of reference 
we agreed that they continue to conform to best practice and 
as a result remain unchanged from last year it is likely they will 
be amended during 2013 to take account of the new governance 
reporting requirements
the audit committee consists of four independent nonexecutive 
directors and i consider that the committee has an appropriate 
balance between those individuals with ﬁnance or accounting training 
and those from an oil and gas background 
rijnhard van tets
chairman of the audit committee
26 february 2013
79 petrofac annual report and accounts 2012 financial reporting
the committee assists the board in the effective discharge of its 
responsibilities for ﬁnancial reporting and internal control as set out in 
our directors’ statements on page 104 directors are responsible for 
the preparation of group ﬁnancial statements in accordance with 
international financial reporting standards ifrs and for being 
satisﬁed that they give a balanced and understandable view and 
provide the information necessary for stakeholders to assess the 
performance business model and strategy of the company 
the group has an internal control and risk management framework in 
place which permits the company to prepare consolidated accounts 
this includes policies and procedures to ensure that adequate 
accounting records are maintained and transactions accurately 
recorded to ensure the company’s ﬁnancial reports and 
communications to the market give a clear and balanced assessment 
of the company’s position
during the year the committee considered and reviewed
 2011 fullyear and 2012 halfyear ﬁnancial statements including 
compliance with all ﬁnancial reporting requirements
 2011 annual ﬁnal results and 2012 halfyear results announcements 
made to the london stock exchange
 any proposed announcements to be made by the company to the 
extent that they contained material ﬁnancial information and which 
had not been considered by the whole board
 revised accounting policies
 appropriateness of the company’s nonaudit services policy
 the company’s application for a revolving credit facility 
 the dividend policy including consideration of the solvency 
statement required under companies jersey law 1991
 details of the group’s related party transactions and whether these 
were executed on an arm’s length basis
 results of management’s assessments of the group’s going concern 
and group solvency position including recommending to the board 
that the going concern assessment was reasonable
in addition we reviewed the 2012 fullyear results and the annual 
report and accounts at the start of 2013
as part of these reviews the committee discussed with the chief 
financial ofﬁcer and the external auditors all signiﬁcant accounting 
policies estimates and judgements that had been adopted any 
issues raised as part of the audit process were addressed during 
the year as detailed in note 2 on page 113
external auditors
ernst  young llp ernst  young who have been the company’s 
auditor since initial listing provide the committee with relevant 
reports reviews information and advice throughout the year as set 
out in their engagement letter their performance has been formally 
assessed by the committee having due regard to their expertise 
resourcing and independence the committee remains satisﬁed of 
their effectiveness there are no contractual obligations restricting the 
committee’s choice of external auditors and the committee did not 
consider it necessary this year to conduct a tender process for the 
appointment of its auditors in accordance with uk regulations 
ernst  young adhere to a strict partner rotation policy based on the 
mandatory requirements of auditing practices board ethical standard 
3 the committee monitors this rotation and conﬁrms that a new lead 
audit partner will be appointed following the completion of the 2012 
audit the committee is aware of the recommendations set out by 
the frc in the updated uk governance code in relation to audit 
tendering which states that companies should put the external 
audit contract out to tender at least every ten years it is understood 
that this provision has been drafted to enable audit committees to 
compare the quality and effectiveness of the services provided 
by all audit ﬁrms and in accordance with suggested transitional 
arrangements we believe this will be required by petrofac at the 
end of the next partner rotation
nonaudit services 
we have a nonaudit services policy that sets out the circumstances 
where we may appoint our external auditors to undertake additional 
nonaudit work the committee considered that the nonaudit 
services policy remained appropriate and no amendments were 
proposed during the year the current policy a copy of which can be 
found on the company’s website is summarised opposite 
management regularly provide the committee with reports on the 
extent of nonaudit services provided by our external auditors 
these reports are reviewed at each committee meeting and 
challenged where necessary to ensure such services fall within the 
agreed policy and do not impair the objectivity or independence of 
the auditors the majority of the nonaudit work carried out by the 
auditors during the year related to tax compliance services in the 
middle east and north africa jurisdictions and the committee believes 
that given their experience ernst  young was the most appropriate 
supplier of this work there were no breaches during the year of the 
us300000 threshold requiring prior approval by the committee 
details of nonaudit work carried out by ernst  young during 2012 
are provided in note 4e to the ﬁnancial statements 
the nonaudit fees have been monitored by the committee 
throughout the year and as a percentage of the overall audit fee 
for the year the nonaudit fees are 24 2011 32
80 petrofac annual report and accounts 2012
governance
audit committee report continued nonaudit services policy
 the external auditors are automatically prohibited from carrying out 
work which might impair their objectivity
 tim weller cfo will seek approval from the committee before 
appointing the external auditors to carry out a piece of nonaudit 
work where
 – the fee is above us300000
 – total nonaudit fees for the year are approaching 50 of the 
annual audit fee
 – the external auditors would ordinarily be prohibited from carrying 
out the work under the company’s nonaudit services policy but 
not prohibited under ethical standard 5 and the cfo wants to 
appoint them due to exceptional circumstances
 the chief financial ofﬁcer may appoint the external auditor to do 
other types of nonaudit work as listed in the policy
internal control systems
the committee took responsibility for reviewing the group’s internal 
controls as they relate to ﬁnancial matters primarily through its 
engagement with our internal audit function our group head of 
internal audit ajit nair is responsible for providing assurances on 
the adequacy of internal control functions throughout the group 
and attends each committee meeting at the start of the year the 
committee agrees the annual internal audit plan which is drawn up 
on a riskbased approach any signiﬁcant ﬁndings from internal 
control audits undertaken during the year have been appropriately 
investigated and the necessary actions taken to address and rectify 
any weaknesses that may have been identiﬁed ajit provides a 
progress report part way through the year as a consequence of 
which the plan may be revised a ﬁnal report on the achievement of 
the plan is given at the end of each year in february 2013 the 
internal audit department conﬁrmed it had completed 87 assignments 
across a broad crosssection of the group’s activities during 2012 
whilst the internal audit department is appropriately resourced 
the committee has requested that ajit seeks to broaden the 
department’s capabilities such that it has individuals ﬂuent in arabic 
spanish and russian especially as the group expands into new 
geographies it was further agreed that the 2013 audit plan should 
include a higher proportion of ies audits to reﬂect the growing 
signiﬁcance of this division 
cyber security 
there has been a great deal of external comment recently on cyber 
security and in august last year the uk government published 
guidance to boards on this subject during 2012 the committee 
and board risk committee held a combined meeting to consider 
the group’s it security in line with our policy that the board risk 
committee monitors operational risk while the committee concerns 
itself with ﬁnancial controls this matter was passed to the board risk 
committee at the start of 2013 the board risk committee has 
since received separate reports on the group’s it infrastructure 
and information management in addition it has included it security 
within our enterprise risk proﬁle and as a matter of course will 
therefore be provided with regular updates on it security using key 
risk indicators the group will shortly be launching an it security 
policy to all employees 
whistleblowing process
details on the company’s whistleblowing policy and our speak up 
programme are provided within the board risk committee report on 
page 86 however in accordance with our agreed process any 
alleged breaches of the code of conduct relating to ﬁnancial matters 
would be provided to the committee with analysis of the issues 
reported together with details of any action being taken all other 
matters are reviewed by the board risk committee
training
given that there were no changes to the accounting standards 
during the year which would impact the preparation of petrofac’s 
2012 ﬁnancial statements no speciﬁc training was provided to the 
committee however members were encouraged to attend any 
external seminars run by professional advisers which were felt to be 
relevant and it has been conﬁrmed that future training topics for the 
committee will be reviewed and reconsidered in early 2013
81 petrofac annual report and accounts 2012 board risk committee report
role of the committee
membership and attendance at meetings held in 2012
 recommends risk appetite and delegations of authority 
 approves the annual assurance plan for the review and assessment 
of enterprise risks
 reviews the group’s compliance system of corporate standards and 
procedures for enterprise risks
 recommends any areas of risk management change that may be 
required for enterprise risks
 reviews the company’s risk transfer strategy including insurance 
provision
 reviews the risk management and reporting systems for projects 
and investments
meetings attended eligible to attend
current members
mr stefano cao chairman 
ms roxanne decyk 
mr rené médori
 a
mr rijnhard van tets
a
 rené médori joined the board and committee on 19 january 2012
stefano cao
chairman of the board risk committee
how the committee spent its time during the year
compliance – including bribery 
and whistleblowing
 business continuity
group policies
insurance
 governanceother
risk management framework
 security and travel
 82 petrofac annual report and accounts 2012
governance dear shareholder
this year following a busy 2011 the 
committee has focused its attention on 
clarifying key elements of the group’s 
enterprise risk proﬁle through the lens of 
a series of key risk indicators which have 
been reﬁned during the course of the 
year focus has been given to assurance 
and reporting as we ensure our risk 
management framework beds down 
throughout the organisation
the committee has overseen the effective deployment of the 
company’s delegation of authorities doa which was revised 
in 2011 the revised matrix sets out clearly those issues requiring 
board approval and has helped to clarify the remit of the various risk 
review committees throughout the group 
i was delighted to welcome rené médori as a member of the 
committee in january 2012 he brings considerable experience 
and expertise which i believe will broaden further the committee’s 
perspective a new group head of enterprise risk was appointed 
during the year whose primary remit is to assist the business units 
in implementing effective and consistent processes and controls 
across the group and facilitating risk management within our 
agreed framework 
a great deal of support was received from management over the 
course of 2012 with all executive directors making themselves 
available to answer any question raised by the committee the new 
group head of enterprise risk along with the group director legal 
 commercial affairs led the overall review of the group’s risk 
management framework other members of the management team 
including the chief financial ofﬁcer group head of compliance 
group treasurer and group head of security has each during 2012 
made presentations to the committee it is intended that this 
programme be expanded during 2013 to include presentations from 
other members of the management team particularly around health 
and safety matters whilst the board as a whole will continue to take 
responsibility in reviewing health and safety matters for the group 
it has been decided that the committee will undertake periodic deep 
dives into certain health safety and environmental management 
areas the group director of hsseia attended the ﬁrst meeting of 
2013 to provide the committee with a presentation on asset 
integrity assurance 
as in previous years the committee reviewed the group policies 
that cover nonﬁnancial controls and received updates on business 
continuity planning security and the group’s insurance programme 
the committee uses the internal control guidance to directors 
formerly known as the turnbull guidance as its main guidance for 
discharging its responsibilities as this assists in the application of the 
updated requirements introduced by the uk corporate governance 
code uk code during 2013 the financial reporting council frc 
intends to begin a consultation on the guidance which was last 
revised in 2005 to determine whether further updates are required 
the committee will endeavour to participate in the consultation on 
the potential modiﬁcation of the guidance
we believe that any framework of internal controls must be 
underpinned by values and a culture which promotes good risk 
management processes we will continue to emphasise this 
petrofac has spent a substantial amount of time over the last few 
years considering its own circumstances and i believe that while we 
still have work to do our current processes and reporting capabilities 
provide us with an appropriate risk framework which we will continue 
to develop
stefano cao
chairman of the board risk committee
26 february 2013
83 petrofac annual report and accounts 2012 review of the group’s risk 
management framework
the uk code requires the board to determine “the nature and extent 
of the signiﬁcant risks it is willing to take in order to achieve its 
strategic objectives” in august 2011 the frc published a report 
‘boards and risk’ summarising the main issues to emerge from 
discussions with companies investors and advisers on how boards 
were addressing risk and internal control this report highlighted the 
need for clear differentiation between the roles of management and 
that of the board and that when dealing with risk identiﬁcation and 
management the board should focus on those signiﬁcant strategic 
and external risks with the potential to cause damage to the ﬁnancial 
viability or reputation of the company
recognising the evolving regulatory landscape and aiming to support 
petrofac’s strategy for growth the committee continued its efforts 
during the year by developing the enterprise risk management erm 
programme which commenced in 2011 
the erm programme was advanced during 2012 by the appointment 
of a new group head of enterprise risk who following a business 
review presented initial plans to the committee to develop the 
erm programme these plans include engaging and communicating 
on risk more effectively bringing greater clarity to petrofac’s 
risk management strategy and risk management framework 
and in accordance with recommendations made by the committee 
introducing further consistency to the process and language of risk 
and control across the business service lines the diagram below 
sets out the overall erm framework which is explained in further 
detail below
risk management objectives
petrofac’s restated objectives for managing risk are
 to create an environment which promotes the longterm sustainable 
growth of the group
 to articulate clear policy standards and deploy effective and efﬁcient 
processes
 to deﬁne clearly ownership and responsibilities for managing risk 
across the group
 to create a riskaware culture across the group by informing 
training and motivating employees to consider risk within their 
daytoday decision making
 to deploy effective project risk management processes and controls 
across all business service lines 
 to provide transparency on petrofac’s risk management approach to 
its board and other key stakeholders
enterprise risk management system
throughout the year the committee has sought greater levels of 
consistency in the process and language used for risk assessment 
and reporting an enterprise risk management system will be 
evaluated for implementation in 2013 with the aim of adding value 
through process simpliﬁcation during risk identiﬁcation assessment 
management monitoring and reporting and the production of 
clearer management information for decision makers at all levels 
of the group
enterprise risk proﬁle
the key risks that could lead to a signiﬁcant loss of reputation 
or prevent us from delivering our strategic plan are captured in our 
enterprise risk proﬁle the enterprise risk proﬁle is updated quarterly 
and is the means by which enterprise risks are reported to the board 
the groups’ enterprise risk proﬁle is assessed through key risk 
indicators kris see pages 42 and 43 for a summary of these key 
performance indicators which record exposure to potentially harmful 
events the enterprise proﬁle seeks to identify and measure risk 
across risk types and monitor emerging trends and exposures 
further work is being undertaken to deﬁne these kris and where 
possible to identify leading indicators 
key risk register
preparation of a key risk register krr also progressed during 
the year comprising all petrofac’s ‘critical’ and ‘signiﬁcant’ risks 
the purpose of this is to i map speciﬁc risks to the risk proﬁle making 
those relationships more explicit and ii promote and support the 
active management of important risks the register will provide further 
clarity around ownership accountability and mitigation strategies
erm framework 
key controls
 governance
 policies
 standards
 processes
 doa
 assurance and 
reporting
 bcm
 insurance programme
erm system
 identify assess manage monitor report
enterprise risk proﬁle 
vision and strategy
performance
84 petrofac annual report and accounts 2012
governance
board risk committee report continued governance arrangements
petrofac’s system of risk governance relies on a number of 
committees and management processes which bring together reports 
on the management of risk at various levels
the governance process relies upon regular risk assessments and 
reviews of existing and new opportunities by considering the risk 
exposure and appetite of each business unit service line and function 
the diagram above sets out the risk governance structure in 
operation showing the interaction between the various risk review 
and management committees terms of reference are in place for 
each individual committee 
the board retains ultimate responsibility for setting the group’s risk 
appetite and reviewing the risks which the board considers sufﬁciently 
signiﬁcant that they might prevent the delivery of strategy or threaten 
petrofac’s continued existence while the revised doa has generally 
increased management’s authority with regard to routine business 
the board has increased its oversight of business in any new territory 
joint venture arrangement and contracts with novel technology 
services or terms 
the board risk committee is constituted by the board to assist 
it in discharging this responsibility the committee has responsibility 
for providing oversight and advice to the board on the current risk 
exposures and future risk strategy and in doing so is responsible 
for making recommendations to the board in relation to the erm 
framework the group’s risk appetite and tolerance in pursuit of 
business objectives and for approval of the doa 
the committee also assists the board with the deﬁnition and 
execution of an effective risk management strategy and has 
responsibility for oversight of the company’s compliance system of 
corporate standards processes and procedures in addition the 
committee provides the board with assurance on an annual basis 
that the design and operating effectiveness of these systems remain 
ﬁt for purpose 
the group risk committee is a management committee 
constituted as the principal executive forum for the review of 
enterprise project and investment risks in accordance with the doa 
approved by the board the group risk committee grc reviews all 
material new business opportunities and projects including bid 
submissions country entry joint ventures investments acquisitions 
and disposals and is responsible for making recommendations as to 
the management and mitigation of risk exposure and recommending 
the proposal for approval by the board or the relevant executive 
the grc is responsible for the assurance of the erm framework 
agreed by the board including the approval of group standards and 
the application of the board’s doa
divisional risk review each division has a risk review committee 
chaired by its chief executive which provides peer review of proposed 
projects and investments in accordance with the doa approved by 
the board the committee reviews the risks and mitigation strategies 
in respect of new business opportunities or projects where required 
by the doa it then prepares appropriate materials for the grc and 
ensures that no proposal is presented to the grc without being 
reviewed and supported by the divisional risk review committee
board oversight of framework of 
internal controls and risk management
responsible for approval of signiﬁcant 
projects and investments and approval 
of enterprise risk proﬁle
senior management consider risk on 
signiﬁcant projects and investments 
for formal consideration by the board 
oversight of enterprise risk proﬁle
risk management is embedded 
within each business unit
divisional management oversight 
and review of projects
assurance to management 
and the board
enterprise risk 
proﬁle given to 
board risk 
committee
provides 
assurance on 
framework
provides 
assurance on 
framework
board risk committee
divisional risk review
audit committee 
board 
business units
group functions internal audit
group risk committee 
risk governance framework
85 petrofac annual report and accounts 2012 business service line review each of our individual businesses 
has its own business management system that incorporates risk 
management policies and procedures and produces its own risk 
register each business unit’s management team meets regularly 
and monitors risk as a matter of course notes any change in 
risk assessment and seeks to take appropriate mitigating action 
the risk registers for each business are formally reviewed each 
month by that business’ senior leadership team
risk appetite
as part of the review of our risk management framework 
the committee continued to believe that it should not apply 
a single aggregate risk appetite for the group as a whole 
the group’s risk appetite is articulated in a number of ways 
appropriate to the type of risk and the committee has continued 
to review the matter during 2012 to ensure that it is able to exercise 
appropriate stewardship this can be seen in our policy statements 
which describe the committee’s approach to each risk category 
and our policy standards which describe acceptable controls and 
limits examples can be found in the enterprise risk management 
policy the sovereign and financial market risk policy and the 
operational and contractual risk policy 
in terms of concentration risk our country entry assessments control 
entry into new territories business plans quantify maximum 
exposures in those territories through measures such as backlog 
revenue and net income other risk appetite statements are 
embedded within our approach to issues such as 
 earnings volatility – focusing on the deviation from expectations 
 credit headroom – for assessing liquidity risk
 deterministic scenarios focussing on speciﬁc project based 
opportunities eg using irr or net income 
 reputation – focused on impact on stakeholders
during 2013 the board will continue to review the group’s 
enterprise risk proﬁle together with the evolving key risk register 
these documents will increasingly become the means by which the 
group’s risk appetite and tolerance are deﬁned
assurance and reporting
the committee has continued its work in relation to the group’s risk 
management framework during 2012 its primary areas of focus were 
developing further the assurance programme for the group’s 
enterprise risk management system and ensuring the clarity and 
appropriateness of risk reporting through the chain of command
group internal audit has focused on providing assurance regarding 
ﬁnancial and regulatory controls and therefore continues to report 
solely to the audit committee as explained below
interface between the board risk 
committee and audit committee
the committee and audit committee both revised their respective 
terms of reference during 2011 as a result the committee has 
responsibility for assurance and oversight of enterprise risk 
management while the audit committee has responsibility for 
assurance and oversight of ﬁnancial and regulatory controls 
whilst the board has delegated the detailed work to these two 
committees it retains overall responsibility for ensuring that the group 
has effective internal control and risk management and therefore 
receives regular reports on the work of the committees from their 
respective chairmen in addition the board retains ultimate 
responsibility for the group enterprise risk proﬁle
bribery
the uk bribery act created a new corporate offence of failing to 
prevent bribery our code of conduct was updated in 2012 and 
relaunched in early 2013 and continues to make it clear that petrofac 
does not permit the giving or receiving of bribes nevertheless 
we have to ensure that we have in place adequate procedures 
designed to counteract the risk of bribery in our value chain 
the primary remit of our group head of compliance is to ensure 
that employees are aware of and adhere to the code of conduct 
he has initially focused on rolling out petrofac’s standard for the 
prevention of bribery and corruption including the implementation 
of an extensive educational and training programme and raising 
awareness of our ‘speak up’ programme online training designed 
to communicate the existence of our standard and its key principles 
was rolled out to an initial targeted population of 3000 employees 
by the end of 2012 approximately 5000 employees across the 
group had completed the antibribery training with new employees 
being required to undertake the training within 90 days of joining the 
group facetoface antibribery training has been delivered to teams 
from iraq turkmenistan and algeria and there has been engagement 
with project teams in nigeria and mexico
whistleblowing
the company’s whistleblowing policy is communicated to employees 
via the ‘speak up’ programme through the company’s code of 
conduct to provide further education and publicity a global 
multilanguage communication campaign was launched in each of 
our sites during 2012 the ‘speak up’ programme allows those who 
know or have suspicions of any breaches of the code of conduct 
to report the matter to a manager or anonymously contact the 
independent helpline by telephone or online without fear of reprisal or 
recrimination our international external facility has been available for a 
number of years and this service operates 24 hours a day seven days 
a week access to the helpline was extended to third parties in 2012 
for the ﬁrst time all matters reported are reviewed and assessed 
by our group head of compliance to determine whether further 
investigation is warranted and to ensure that appropriate action is 
taken the committee receives details of the issues reported together 
with any action being taken any alleged breaches relating to ﬁnancial 
compliance are dealt with by the audit committee 
86 petrofac annual report and accounts 2012
governance
board risk committee report continued group policies
in addition to the code of conduct the company currently has in place a number of policies standards and codes of practice these are 
policy articulates our attitude to risks related to
sovereign and financial market risk policy country inﬂation commodity liquidity currency credit and counterparty risk
ethical social and regulatory risk policy ethics noncompliance with a country’s local laws and regulations
operational and contractual risk policy project performance business continuity leadership change and health safety security 
environment and integrity assurance ‘hsseia’
enterprise risk management policy all critical and signiﬁcant risks political economic strategic technological legal 
environmental etc including key operational risks
health  safety policy injury and illhealth pursuing the goal of zero accidents and incidents complying with 
all applicable health and safety laws and regulations continual improvement of health and 
safety performance
environmental policy applicable environmental laws and regulations minimising impact on the environment 
through pollution prevention minimisation of waste and emissions and the efﬁcient use of 
energy and resources
asset integrity management policy asset integrity maintaining appropriate standards mitigating risks to prevent undesired events 
transparency in reporting of the company’s integrity assurance
security policy security of the business environment for the protection our people and our assets 
minimising business loss and disruption transparency in reporting of the company’s 
security performance
guidelines for acceptable use of 
information systems
information generated by or entrusted to petrofac safeguarding conﬁdentiality and integrity 
protecting information resources from theft abuse misuse and legal or regulatory exposures
quality policy our quality management systems quality policy and standards as part of the management 
system framework transparency in the reporting of the company’s quality performance
security
petrofac’s security department monitors the security environment in all 
countries of operation to ensure that adequate protective measures 
are in place the security management system developed to protect 
personnel and assets across the group remains consistent with the 
scale and geography of petrofac’s operations as detailed further on 
page 58 the committee has closely followed events in the middle 
east and north africa mena as a large proportion of our work is in 
the mena region during 2012 the group suffered minimal disruption 
to its activities contingency planning for securityled evacuations 
and other security emergencies continues to be a high priority and 
this has been tested recently by events in algeria our group head 
of security provides regular updates to the board and the committee 
on the security status of each country
business continuity management
hub ofﬁces in sharjah aberdeen mumbai chennai london 
woking and kuala lumpur have business continuity management 
and disaster recovery plans in place and testing these plans has 
been completed for a number of these ofﬁces as a result of recent 
growth in malaysia business impact analysis is being updated in 
singapore jakarta and kuala lumpur 
insurance
petrofac commenced a review of insurance arrangements in 2011 
with the ultimate objective of conﬁrming that the programmes 
continue to be ‘fit for purpose’ given the recent changes in the scale 
and nature of the group’s activities following a full tender exercise 
aon was appointed as the group’s insurance broker and adviser in 
january 2012 during the course of the year speciﬁc recommendations 
were made in relation to the structure of the future insurance 
programme and these are in the process of being implemented
87 petrofac annual report and accounts 2012 directors’ remuneration report
role of the committee
membership and attendance at meetings held in 2012
 determine and agree with the board the broad policy and 
framework for the remuneration of executive directors 
the chairman and certain senior managers
 review the continued appropriateness and relevance of the 
remuneration policy
 ensure that incentives are appropriate to encourage enhanced 
performance and provide alignment with longterm shareholder 
value
 approve the design of and determine the targets for performance 
related pay schemes
 review the design of all share incentive plans before approval by the 
board and shareholders and monitor the application of the rules of 
such schemes and the overall aggregate amount of the awards
 determine the remuneration of all executive directors the chairman 
and certain senior managers within the agreed policy taking into 
account remuneration trends across the company and 
remuneration practices in other peer companies
meetings attended eligible to attend
current members
thomas thune andersen chairman
stefano cao
roxanne decyk
  thomas thune andersen was unable to attend one telephonic meeting due 
to a prior business commitment
thomas thune andersen
chairman of the remuneration committee
how the committee spent its time during the year
2012 remuneration review including 
annual bonus and psp arrangements
 review of external environment
governanceother
 design consideration and approval 
of value creation plan 
 88 petrofac annual report and accounts 2012
governance dear shareholder
as chairman of petrofac’s remuneration 
committee i am pleased to present the 
directors’ remuneration report following 
another year of strong performance
2012 performance
as set out on page 3 petrofac has continued to perform well during 
2012 delivering strong ﬁnancial performance and achievement of key 
strategic milestones
in terms of ﬁnancial performance we again achieved net proﬁt 
growth of 17 and are making good progress towards our target 
set out in 2011 of more than doubling group 2010 earnings by 
2015 there was continued growth in our backlog to us118 billion 
which reﬂected major project wins in saudi arabia iraq kuwait 
the uk and mexico
notwithstanding this level of performance the committee sets 
stretching targets and as a result some of our operational and safety 
goals were not met in general performance against these measures 
was good but we did not meet our own expectations in all respects 
in particular there were two fatalities of petrofac contract workers 
one at the kauther site in oman and one at the ngl4 site in the uae 
in addition the achievement of some backlog targets was delayed as 
a result of slippage in the timing of certain contract tender processes 
during the year
all of this was taken into account when we were determining 
annual bonuses as a result when coupled with strong individual 
performance 2012 bonus outcomes were generally 75 – 85 
of maximum
our threeyear tsr and eps performance over years 2010 to 2012 
was such that the 2010 psp awards have been earned in full
shareholder consultation
following consultation with major shareholders in early 2012 the 
value creation plan vcp was approved at the 2012 agm with 
support received from almost 80 of our shareholders
during the consultation we took into consideration all comments 
received and i am very grateful for the constructive and helpful 
feedback as a direct result we made several changes to the 
original proposal including incorporating a number of performance 
underpins and substantial shareholding requirements for participants 
we consider that these revisions help to support the underlying 
business objectives of the vcp  whilst also providing shareholders 
with additional comfort
as a committee we recognise the difﬁcult environment surrounding 
executive remuneration at the current time and the relatively 
unconventional nature of the vcp  in this context we are particularly 
appreciative of the extent of support received
2013 proposals
petrofac has a history of setting salaries at moderate levels with 
emphasis placed on variable remuneration to ensure that individuals 
only receive substantial remuneration for exceptional performance 
and delivery of sustained longterm shareholder value creation
we believe that our existing remuneration framework remains 
appropriate for petrofac and accordingly we will be making no 
changes to our policy there have been moderate increases to 
executive director salaries in line with those determined for the 
wider workforce
as a matter of course the committee considers executive 
remuneration matters with due reference to risk management 
and there are clear risk management measures within all of 
our incentive plans
the committee values all feedback from shareholders 
and hopes to receive your support at the forthcoming agm
thomas thune andersen
chairman of the remuneration committee
26 february 2013
89 petrofac annual report and accounts 2012 introduction
this report has been prepared in accordance with schedule 8 to 
the large and mediumsized companies and groups accounts and 
reports regulations 2008 of the united kingdom and relevant listing 
rules of the financial services authority the committee takes 
responsibility for the preparation of the report which is approved 
by the board
we fully support the focus on transparency set out in the new 
disclosure regulations for uklisted companies proposed by the 
department of business innovation and skills bis which are 
due to take effect for ﬁnancial years ending after october 2013 
petrofac has voluntarily taken the opportunity to structure the 
2012 report to incorporate as many of the proposed features this 
year as practicable while retaining all of the content required under 
the existing regulations 
this report therefore contains
1 a policy report which outlines petrofac’ s proposed future 
remuneration policy and
2 an implementation report which explains how our remuneration policy 
was implemented during 2012
the sections of this report dealing with directors’ emoluments and 
share interests pages 97 to 103 have been audited by ernst  
young the group’s external auditors
at the time of publication there remains a degree of uncertainty 
around how the binding vote on remuneration policy will operate in 
future years as such the company has chosen to monitor how the 
regulations develop in this respect and does not intend to put the 
remuneration policy to a binding vote at the 2013 agm
although not a requirement of jersey law shareholders will once 
again be invited to approve the entire remuneration report at the 
agm on 17 may 2013 in accordance with the current regulations 
the vote on this resolution is an advisory vote and will cover the 
remuneration policy and overall remuneration packages members of 
the committee will be available at the agm to answer shareholders’ 
questions regarding directors’ remuneration
the board and the committee consider that throughout 2012 and 
up to the date of this report the company has complied with the 
provisions of the uk corporate governance code uk code relating 
to directors’ remuneration in addition the guidelines issued by the 
association of british insurers abi and the national association of 
pension funds napf have been noted
as set out above the committee considers executive remuneration 
matters in the context of alignment with risk management 
two members of the board risk committee sit on the committee 
which allows them to provide oversight on any group risk factors 
relating to remuneration matters the committee believes that the 
remuneration arrangements in place do not raise health and safety 
environmental social or ethical issues nor inadvertently motivate 
irresponsible behaviours
policy report summary of 2013 
remuneration policy
the committee aims to establish a level of remuneration which
 is sufﬁcient to retain attract and motivate executive directors 
and key executives of the calibre required to achieve the 
group’s objectives
 reﬂects the size complexity and international scope of the group’s 
business together with an executive’s individual contribution and 
geographical location
the remuneration policy for executive directors and certain senior 
managers is as follows
 basic salaries are generally median or below against a relevant 
benchmarking group
 the variable elements of remuneration are structured so that 
individuals can achieve upper quartile total remuneration subject 
to achievement of challenging performance standards
this remuneration policy has remained unchanged since 2007 and 
the committee considers that it remains ﬁt for purpose and ensures 
that executive directors and senior managers are incentivised to 
deliver the group’s strategic goals and longterm shareholder value
the committee believes that the most appropriate pay 
comparators are
 for the group chief executive and certain operational executives 
a select group of international and uk oil and gas services 
companies to the extent that data in relation to such companies 
is publicly available
 for certain functional executives ftse companies of a similar size 
and complexity
the committee also uses remuneration in uk companies of a similar 
size and complexity as an additional reference point when considering 
the remuneration of operational executive directors and senior 
managers
90 petrofac annual report and accounts 2012
governance
directors’ remuneration report continued executive directors
summary of ﬁxed remuneration arrangements for 2013 onwards
element 
purpose and 
link to strategy operation opportunity
performance 
metrics planned changes
salary core 
element of 
remuneration 
paid for doing 
the expected 
daytoday job
 basic salaries are reviewed 
at the beginning of each year 
and any change is applied 
with effect from 1 january
 dependent on the individual’s 
role and contribution
 generally set at median or 
below against a relevant 
benchmarking group
 salary increases for executive 
directors will normally be in line 
with those of the wider workforce
where the committee considers it 
appropriate and necessary larger 
increases may be awarded in 
exceptional circumstances or if 
an individual assumes signiﬁcantly 
more responsibility
 na no changes 
proposed to 
the policy
 all 2013 salary 
increases broadly 
in line with the 
wider employee 
population in 
relevant market 
– see page 95 
for further details
cash allowance provide 
employees 
with an 
allowance for 
beneﬁts and 
retirement 
planning
 ukresident executive 
directors receive a cash 
allowance in place of beneﬁts 
including but not limited to 
car allowances and pension 
contributions
 uaeresident executive 
directors receive a cash 
allowance in respect of 
housing and transport in line 
with local market practice
 market standard for role and 
geographical location although 
current levels are below median
 with effect from 1 january 2013 
ukbased executive directors are 
entitled to an annual cash allowance 
of £70000
 with effect from 1 january 2013 
uaebased executive directors are 
entitled to an annual cash allowance 
of 220000
 cash allowance levels are kept 
under regular review by the 
committee
 na no changes 
proposed to 
the policy
 from 1 january 
2013 cash 
allowances 
for ukbased 
executive directors 
were increased 
by £5000 and 
marwan chedid’s 
cash allowance 
was increased 
by us20000 
these were the 
ﬁrst changes made 
in two years
beneﬁts provide 
employees 
with market 
competitive 
beneﬁts
 all ukbased executive 
directors receive private 
health insurance life 
assurance and longterm 
disability insurance
 uaebased executive 
directors receive similar 
beneﬁts to ukresident 
executive directors and 
in addition receive other 
typical expatriate beneﬁts 
including children’s education 
and return ﬂights to their 
permanent home
 dependent on the individual’s 
role and circumstances
 the committee keeps the beneﬁt 
policy and beneﬁt levels under 
regular review
 none no changes 
proposed to 
the policy
end of service 
indemnity 
uae executive 
directors only
 to comply 
with local 
uae statute
 the statutory end of service 
payment is due to all 
nonuae national employees 
working in the uae only at 
the end of their contracted 
employment
 the statutory payment is based on 
the individual’s number of years of 
service and salary level at the time 
of their departure
 none no changes 
proposed to 
the policy
pension petrofac does not provide any formal pension arrangements for executive directors
91 petrofac annual report and accounts 2012 summary of variable remuneration arrangements for 2013 onwards
element 
purpose and  
link to strategy operation opportunity performance metrics planned changes
annual  
bonus
 incentivise 
achievement 
of shortterm 
ﬁnancial targets 
and personal 
objectives that 
the committee 
considers are 
critical drivers of 
business growth
 awarded annually 
 bonus level is 
determined by 
the committee 
following the year 
end based on 
performance 
against targets
 maximum cash 
award of 200 
of basic salary
 performance is assessed over one 
ﬁnancial year 
 subject to achievement against a balanced 
scorecard of metrics including 
 – hse and integrity measures
 – financial including net income backlog 
and cost management 
 – group and where relevant business 
service line strategic and operational 
performance measures and 
 – peoplerelated measures
 no changes 
proposed to 
the policy
performance 
share plan 
psp
 incentivise 
executive 
performance 
over the 
longer term 
 performance 
measures linked 
to the longterm 
strategy of the 
business and 
the creation of 
shareholder 
value over the 
longer term
 award levels 
are determined 
by reference 
to individual 
performance 
prior to grant
 awards vest 
after three years 
subject to 
achievement of 
performance 
conditions 
as set out in the 
performance 
tables opposite
 maximum 
award of 200 
of basic salary
 awards of up 
to 300 of 
basic salary 
may be made 
in exceptional 
circumstances
 performance is assessed over three 
ﬁnancial years
 50 of the award is based on total 
shareholder return tsr relative to a peer 
group on an index tsr basis 
below index performance 0 vesting 
performance equal to the index 30 vesting 
signiﬁcant outperformance 
of the index 
25 outperformance over 
three years for 2013 awards 100 vesting 
the international peer group comprises the 
following companies for 2013 psp awards 
aker solutions saipem
amec schlumberger
chicago bridge  iron co snclavalin group
fluor corporation technip
fosterwheeler tecnicas reunidas
halliburton wood group john
jgc worleyparsons
maire tecnimont
 50 of awards are subject to achievement of 
compound annual growth in earnings per 
share eps 
threshold performance 
10 pa eps growth 
for 2013 awards 0 vesting 
target performance 
15 pa eps growth 
for 2013 awards 30 vesting 
maximum performance 
20 pa eps growth 
for 2013 awards 100 vesting 
 for both the tsr and eps element straight
line vesting operates between the points 
shown
 no changes 
proposed to 
the policy
as the value creation plan was a oneoff plan and does not form part of our ongoing remuneration policy it has not been shown in the table 
above more information on the vcp can be found in the implementation section of the report on pages 99 and 100
92 petrofac annual report and accounts 2012
governance
directors’ remuneration report continued senior management remuneration
the remuneration policy for senior management is consistent with 
the values of the policy for the executive directors set out above and 
intentionally places signiﬁcant emphasis on variable remuneration 
remuneration as for the wider workforce is linked to the ﬁnancial 
and nonﬁnancial performance metrics of the group and each 
business service line and to appropriate individual objectives 
around 40 senior employees who are essential to the success of the 
business participate in the psp and 12 key individuals excluding the 
ceo and president participate in the vcp  this framework promotes 
signiﬁcant alignment with shareholders and ensures that a substantial 
proportion of senior management remuneration is dependent on 
stretching longterm performance goals
a signiﬁcant proportion of petrofac employees including senior 
employees participate in the deferred bonus share plan dbsp 
under which they are required to defer a proportion of their cash 
bonus into company shares these contributions have historically 
been matched by the company on a 11 basis
subject to continued employment invested and matching shares 
either vest over three years usually on an annual pro rata basis or 
in full on the third anniversary of award executive directors are not 
eligible to participate in the dbsp  except prior to joining the board 
participation in the restricted share plan rsp is not offered on a 
regular basis key employees may however receive awards under 
the rsp on their appointment to the company awards are typically 
made to individuals who join the company part way through the year 
in compensation for remuneration opportunities foregone elsewhere 
executive directors are not eligible to participate in the rsp  except 
prior to joining the board 
prior to their respective appointments as executive directors 
andy inglis and tim weller both received awards under the rsp 
as part of the joining arrangements put in place to secure their 
appointments and marwan chedid participated in the dbsp 
whilst executive directors do not participate in a pension plan the 
company operates a deﬁned contribution pension scheme for its 
uk employees in line with new legislation petrofac will also be 
introducing pensions autoenrolment to its uk workforce during 2013
recruitment policy
in cases where the company hires a new executive director the 
remuneration committee will use the above policy to determine the 
executive director’s ongoing remuneration package
to facilitate recruitment the remuneration committee may make a 
oneoff award to ‘buy out’ incentives and any other compensation 
arrangements forfeited on leaving a previous employer in doing 
so the committee will ensure that any such awards would be on a 
comparable basis taking account of all relevant factors including any 
performance conditions attached to those awards the likelihood of 
those conditions being met the proportion of the vestingperformance 
period remaining and the form of the award
in determining whether it is appropriate to use such judgement the 
committee will ensure that any awards made are in the best interests 
of both petrofac and its shareholders and will give due regard to all 
relevant factors including quantum the nature of remuneration and 
the jurisdiction the candidate was recruited from
the committee is at all times conscious of the need to pay no more 
than is necessary
nonexecutive directors
summary of remuneration arrangements for 2012 onwards
element 
purpose and  
link to strategy operation opportunity
performance 
metrics
planned  
changes to policy
nonexecutive 
fees
 core element 
of remuneration 
paid for fulﬁlling 
the role in  
question
 paid quarterly
 based on the level of fees generally 
paid to nonexecutive directors 
serving on boards of similarlysized 
uklisted companies and the size 
responsibility and commitment 
required of the role
 the remuneration of the company 
chairman is set by the remuneration 
committee
 the board as a whole is responsible 
for deciding nonexecutive directors’ 
fees unless such fees exceed 
£1000000 per annum in aggregate 
in which case shareholder approval in 
a general meeting would be sought
 fees are set at a level which 
is considered appropriate to 
retain and attract the calibre 
of nonexecutive director 
petrofac requires
 this is the sole element 
of nonexecutive director 
remuneration nonexecutive 
directors are not eligible 
for annual bonus share 
incentives pensions or 
other beneﬁts
 na no changes 
proposed to 
the policy
93 petrofac annual report and accounts 2012 performance measures
petrofac strives to align the performance measures under the psp 
with the longterm strategy of the company the psp is based upon 
tsr and eps performance metrics in which the committee considers 
strong performance should result in longterm sustainable shareholder 
value creation as detailed in the policy table on page 92
relative tsr remains the best measure of the company’s ultimate 
delivery of shareholder returns and ensures that the company must 
outperform its most important competitors in order for executive 
directors to receive signiﬁcant levels of remuneration
eps is the most relevant indicator of the underlying ﬁnancial 
performance of petrofac and is the measure most closely linked to 
value creation in the oil and gas services business
executive director awards subject to performance conditions
under its remuneration policy the company only makes awards of 
variable remuneration to executive directors that are subject to 
stretching performance conditions
further information
remuneration mix and performance scenarios
a signiﬁcant proportion of petrofac’s total remuneration 
package is variable there is a particular emphasis on longterm 
sharebased incentives to align closely directors’ interests with 
shareholders’ interests the balance between ﬁxed basic salary 
beneﬁts and cash allowances and variable annual bonus and psp 
elements of remuneration varies depending on performance
the chart below provides an illustration of expected remuneration for 
executive directors at three levels of performance below threshold 
target and maximum all executive directors have the same structure 
of remuneration package and therefore an individual’s graph would 
have a similar shape to that shown below the actual outcome may 
differ from that shown depending on a number of factors including 
company share price growth
fixed
belowthreshold target maximum
total remuneration all ﬁgures expressed as a  of salary
p salary p beneﬁts
200
p cash allowance
p annual bonus p psp
variable
200
11
8
100
60
100
11
8
100
11
8
100
 the graph above reﬂects the mix between ﬁxed and variable pay for 
information at ‘target’ performance ﬁxed pay would equate to approximately 
42 of total remuneration with bonus and psp equating to 36 and 22 of 
total remuneration respectively at maximum performance ﬁxed pay would 
equate to approximately 22 of total remuneration with bonus and psp each 
equating to 39 of total remuneration
for the purposes of the chart above the following assumptions have 
been made
 beneﬁts – amount received by the chief executive ofﬁcer in 2012
 target annual bonus – 50 of maximum ie 100 of base salary
 maximum annual bonus – 200 of base salary
 target vesting under the psp – 30 of maximum ie 60 of base 
salary
 maximum vesting under the psp – 200 of base salary
 no share price growth or dividend accrual assumptions have been 
incorporated under the psp
 the vcp has been excluded as it is a oneoff plan and does 
not form part of the company’s ongoing remuneration policy
service contracts and exit payment policy
executive directors have 12month rolling service contracts with the 
company and are contractually restricted to a termination payment 
equal to 12 months’ salary and beneﬁts 
name of 
executive 
director
date of  
service contract
date appointed  
to the board
number of  
months’ notice
company director
ayman 
asfari 13 september 2005 11 january 2002 12 12
maroun 
semaan
1
13 september 2005 11 january 2002 12 12
marwan 
chedid 18 january 2012 19 january 2012 12 12
andy inglis 4 january 2011 1 march 2011 12 12
tim weller 29 june 2011 13 october 2011 12 12
1
  maroun semaan’s contract was varied on 1 december 2011 to reﬂect his 
new role as president 
none of the executive directors is subject to a contractual retirement 
date new appointments will normally be made on a oneyear 
rolling contract the company may terminate employment by making 
a payment in lieu of notice equivalent to the value of base salary and 
beneﬁts in respect of the notice period the company would normally 
expect executive directors to mitigate any loss upon their departure 
in addition maroun semaan and marwan chedid as uae resident 
executive directors are entitled by local statute to receive a cash sum 
called an end of service indemnity payment from their employer on 
the termination of their employment within the uae such payments 
are due to all nonuae national employees working in the uae and 
are based on years of service and salary further details are provided 
on pages 97 and 139
94 petrofac annual report and accounts 2012
governance
directors’ remuneration report continued nonexecutive directors
nonexecutive directors are retained on terms set out in their letters of 
appointment they do not have service contracts and are not entitled 
to compensation on leaving the board 
however if the chairman or a nonexecutive director is requested 
to resign they are entitled to prior notice or fees in lieu of three 
months’ notice
director
date of latest  
letter of appointment
date appointed  
to the board
required 
notice from 
company 
in months
norman murray 28 january 2011 1 march 2011 3
thomas thune 
andersen 11 february 2010 13 may 2010 3
stefano cao 11 february 2010 13 may 2010 3
roxanne decyk 28 january 2011 1 march 2011 3
rené médori 19 january 2012 19 january 2012 3
rijnhard van tets 2 february 2007 11 may 2007 3
wider workforce remuneration
when determining remuneration arrangements for executive 
directors the committee takes into consideration as a matter of 
course the pay and conditions of employees throughout the group
in particular the committee paid speciﬁc attention to the level of 
salary increases and the size of the annual bonus pool in the wider 
population with particular reference to the yearonyear change in 
these ﬁgures
for 2013 uk and uae wider workforce salary increases are around 
4 and 6 respectively ukbased executive director salary 
increases are c 3 – 4 for marwan chedid a uaebased 
executive director the salary adjustment is c 6 all of these 
increases are broadly in line with the wider employee population 
in the relevant local market
the total remuneration for the ceo decreased yearonyear by 
c15 primarily due to the lower absolute number of shares 
awarded under the psp in 2010 that were earned in the period to 
31 december 2012 the total remuneration ﬁgure calculated for 
2012 for the ceo is on the basis of our current understanding of 
the bis ‘singleﬁgure’ methodology detailed on page 97
within our highly competitive sector there is upward pressure on 
remuneration levels at all grades the committee is aware that 
securing increasingly soughtafter key talent is critical to the continued 
success of petrofac as such some areas of the business are 
experiencing signiﬁcant pay inﬂation and in these locations wider 
workforce increases are considerably ahead of those received by 
the executive directors
allemployee annual bonus arrangements are aligned with those 
of the executive directors ensuring that individuals throughout the 
company are incentivised towards consistent business goals and 
objectives with annual bonuses subject to company and individual 
performance targets 
approximately onethird of employees participate in the dbsp  under 
which they are required to defer a proportion of their cash bonus into 
company shares awards may also be made under the rsp to key 
employees from time to time further information on these plans is 
outlined on page 93 
the company also operates a uk taxapproved share incentive plan 
sip under the sip  eligible employees may invest up to £1500 of 
gross salary per tax year to purchase ordinary shares there is no 
holding period for these shares the company does not make awards 
of matching or free shares under the sip  participation is offered to 
all uk resident employees including executive directors tim weller 
contributes the maximum amount each month to buy shares under 
this plan
as a result of the company’s share incentive plans as well as shares 
owned and purchased by employees prior to and since ipo petrofac 
is proud of the signiﬁcant levels of share ownership within the 
company and we consider that this helps drive performance 
throughout the business
the committee has noted the proposal put forward in the bis 
regulations for companies to disclose whether the wider workforce 
was consulted in drawing up the remuneration policy presented in this 
report while the company does not directly consult with employees 
as part of the process of reviewing executive pay the committee 
does receive feedback from employee engagement surveys and 
takes this into account when reviewing executive pay
spend on pay
for information purposes the following table shows the percentage 
yearonyear change in dividends net proﬁt and group total 
remuneration between the 2011 to 2012 ﬁnancial years compared 
with the two preceding periods 
for the purposes of the chart above the following deﬁnitions have 
been used
 dividends – dividends per share paid in respect of the ﬁnancial year
 net proﬁt – proﬁt for the year attributable to petrofac limited 
shareholders as reported in the consolidated income statement 
excluding the gain from the enquest demerger in april 2010
 group total remuneration – total staff costs
0
10
20
percentage yearonyear change
dividends net proﬁt group total remuneration
percentage yearonyear change
p 200910 p 201011
30
25
15
5
p 201112
95 petrofac annual report and accounts 2012 in respect of incentive plans the remuneration committee determines the treatment of all leavers in accordance with the relevant plan rules 
the standard petrofac policy for the treatment of outstanding awards under the psp and vcp is outlined below 
plan automatic good leaver categories treatment for good leaver
treatment for  
bad leaver  
ie any other leaver
performance 
share plan
 death 
 injury illhealth or disability 
 transfer of employing company 
outside group 
 retirement by agreement 
with employer 
 redundancy 
 other scenario where 
remuneration committee 
determines good leaver 
treatment justiﬁed
awards will normally vest on a timeapportioned basis and 
subject to the achievement of performance conditions at the 
relevant vesting date 
the vesting date for such awards will normally be the original 
vesting date although the committee has the ﬂexibility to 
determine that awards can vest upon cessation of employment 
in the event of death all unvested awards shall vest in full 
on the date of death
awards lapse  
in full value  
creation plan
 death 
 injury illhealth or disability 
 transfer of employing company 
outside group 
 retirement by agreement 
with employer 
 other scenario where 
remuneration committee 
determines good leaver 
treatment justiﬁed
awards will normally vest on a timeapportioned basis and 
subject to the achievement of performance conditions at the 
relevant vesting date 
the vesting date for such awards will normally be the original 
vesting date although the committee has the ﬂexibility to 
determine that awards can vest upon cessation of employment 
in the event of death all unvested awards shall vest as soon as 
practicable following death unless determined otherwise by the 
committee awards will normally vest on a timeapportioned 
basis and subject to the achievement of performance 
conditions at the relevant vesting date
shareholder context
the company places great emphasis on our relationship with 
shareholders and recognises the importance of clear and full 
consultation on all aspects of remuneration and governance at petrofac
in early 2012 a total of 24 major shareholders and three shareholder 
representative bodies were consulted in relation to a number of 
executive remuneration matters
the consultation included details on
 introduction of the value creation plan
 2012 salary increases and 2011 annual bonus amounts 
 remuneration arrangements for marwan chedid upon appointment 
to the board in january 2012
key shareholders were invited to attend brieﬁng sessions on these 
proposals and we greatly appreciate the number who took up this 
opportunity following these meetings we entered into further dialogue 
with shareholders and were grateful for the constructive and helpful 
feedback received the committee considered all commentary 
received and as a direct result made a number of changes to the 
value creation plan proposal these changes provided shareholders 
with additional comfort and assurance from a risk management 
perspective that participants would only receive value if underlying 
company performance was strong
the committee is pleased to note that the 2011 directors’ 
remuneration report received a vote in favour from over 975 
of shareholders at the 2012 agm in addition the resolution on 
the introduction of the value creation plan received support from 
almost 80 of shareholders
the committee continues to monitor shareholder views when 
evaluating and setting ongoing remuneration strategy and commits 
to consulting with shareholders prior to any signiﬁcant changes to 
our remuneration policy
96 petrofac annual report and accounts 2012
governance
directors’ remuneration report continued implementation report summary of 2012 remuneration outcomes – 
audited information
single ﬁgure of remuneration for each director in respect of the 2012 ﬁnancial year
the following table shows the emoluments of the executive directors and nonexecutive directors for the year ended 31 december 2012 
the subtotal ﬁgures shown for 2012 and 2011 represent the requirements of the current legislation the ﬁnal column on the right represents 
our understanding of the methodology currently proposed by bis for calculation of the ‘single ﬁgure’ of remuneration
executive directors 
executive 
director
base salary
fees
1
 us’000
beneﬁts
2
 us’000
cash in lieu 
of pension
3
 us’000
annual 
bonus
4
 us’000
post
employment 
beneﬁt
5
 us’000
2012 
subtotal 
us’000
2011 
subtotal
 us’000
2010 –  
2012
psp
6
 us’000
2012  
total 
including 
psp 
us’000
ayman asfari
10
969 40 103 1571 – 2683 2510 2400 5083
maroun semaan 595 54 220 500 94 1463 1897 1808 3271
marwan chedid
9
541 37 200 850 136 1764 – 510 2274
andy inglis
7 10
833 2 103 1428 – 2366 3063 – 2366
tim weller
8 10
674 2 103 1031 – 1810 608 – 1810
nonexecutive 
directors
11
norman murray
7 10
400–––– 400 247 – 400
thomas thune 
andersen 121–––– 121 117 – 121
stefano cao 121–––– 121 117 – 121
roxanne decyk
7
98–––– 98 79 – 98
rené médori
9
93–––– 93 – 93
rijnhard van tets 121–––– 121 117 – 121
total 4566 135 729 5380 230 11040 8755 4718 15758
methodology and notes
1
 base salary or fees paid in ﬁnancial year 2012
2
  all taxable beneﬁts received in 2012 ukresident executive directors receive private health insurance life assurance and longterm disability insurance 
ayman asfari’s beneﬁts primarily relate to the employment of a personal assistant who spends part of her time in the administration of his personal affairs 
uaeresident executive directors receive similar beneﬁts to ukresident executive directors and in addition receive other typical expatriate beneﬁts such as 
children’s education and return ﬂights to their permanent home 
3
  ukresident executive directors receive a cash allowance in place of beneﬁts including but not limited to car allowances and pension contributions 
directors do not receive pension contributions from the company uaeresident executive directors receive a cash allowance in respect of housing and 
transport in line with local market practice
4
  full cash bonus awarded in respect of ﬁnancial year 2012
5
  uaeresident executive directors are required by local statute to receive an end of service indemnity payment such payments are due to all nonuae national 
employees working in the uae and are based on years of service and salary these sums will be payable by the company only on termination of the individual’s 
employment from the uae the amounts disclosed are the increase in entitlement beneﬁt for 2012 the total amounts retained in respect of maroun semaan 
and marwan chedid are us984256 and us854749 respectively
6
  2010 awards under the performance share plan are due to vest in full on 19 march 2013 the value shown represents an estimate of the market value of 
these awards using a threemonth average share price of 160633p 1 october to 31 december 2012
7
  norman murray andy inglis and roxanne decyk were appointed directors on 1 march 2011 and their 2011 total remuneration ﬁgures reﬂect the period 
from this date to 31 december 2011 the 2011 comparison ﬁgure for andy inglis included a oneoff relocation allowance under the terms of his appointment 
as disclosed in the 2011 directors’ remuneration report
8
  tim weller was appointed as a director on 13 october 2011 and his 2011 total remuneration ﬁgure reﬂects the period from this date to 31 december 2011
9
  marwan chedid and rené médori were appointed as directors on 19 january 2012
10
  ukbased directors are paid in sterling amounts have been translated to us dollars based on the prevailing rate at the date of payment or award with the 
exception of the bonus amounts which have been translated using the average exchange rate for the year of £1us15866
11
  nonexecutive directors receive a basic fee of £60000 per annum and an additional fee of £14000 per annum for acting as a chairman of a board committee 
both of these fees are unchanged since 1 january 2011 since appointment as nonexecutive chairman in may 2011 norman murray has received a fee of 
£230000 per annum following a review of the time commitment required for this role this fee was increased to £270000 effective from 1 july 2012
97 petrofac annual report and accounts 2012 individual elements of remuneration
basic salary
in 2012 in line with the relevant local market executive directors 
received salary increases of 5 effective from 1 january 2012
in determining salaries for 2013 the committee has taken into 
consideration a number of factors including the level of salary 
increases in the wider workforce internal and external positioning 
and the general economic climate
the committee also recognises that petrofac has continued to 
perform strongly during the year and accordingly the committee 
proposes to increase salaries by c 3 – 4 for ukbased executive 
directors effective from 1 january 2013 for marwan chedid a 
uaebased executive director the salary adjustment proposed is 
c6 recognising his strong performance since appointment to 
the board all increases are broadly in line with the wider employee 
population in the relevant local market as outlined on page 95
the table below shows base salaries proposed for 2013 and those 
paid in 2012
2013  
basic salary
2012  
basic salary
ayman asfari £632000 £611000
maroun semaan us595000 us595000
marwan chedid us575000 us540500
andy inglis £545000 £525000
tim weller £440000 £425000
beneﬁts in kind and cash allowance in lieu of pension
details of beneﬁts in kind are provided in the table on page 97 
in 2012 cash allowances for all executive directors were held 
at the same level as in 2011 with effect from 1 january 2013 
the committee has increased cash allowances for all ukbased 
executive directors by £5000 and for marwan chedid  
a uaebased executive director by us 20000 
the table below shows cash allowances for 2013 and those paid 
in 2012
2013  
cash allowance
2012  
cash allowance
ayman asfari £70000 £65000
maroun semaan us220000 us220000
marwan chedid us220000 us200000
andy inglis £70000 £65000
tim weller £70000 £65000
annual bonus
for 2012 in line with the stated policy the committee set the 
maximum bonus potential at 200 of basic annual salary in january 
2013 the committee determined whether to award each executive 
director a cash bonus in respect of 2012 in doing so the committee 
considered the extent of achievement of executive directors against a 
balanced scorecard of metrics including
 hse and integrity measures 
 ﬁnancial performance including net income backlog and costs
 group and where relevant business service line strategic and 
operational performance measures and
 peoplerelated measures
in addition some executive directors have targets related to 
succession planning risk management and the development and 
implementation of the group’s cr programme in this way the 
committee considers that it has an incentive structure for senior 
management that promotes responsible behaviour
the committee awarded bonuses of between 153 and 171 of 
salary to ayman asfari marwan chedid andy inglis and tim weller 
in recognition of strong ﬁnancial performance and achievement of key 
strategic milestones
in terms of ﬁnancial performance net proﬁt growth was again in excess 
of 15 and good progress was made towards the target set out last 
year of more than doubling group 2010 earnings by 2015 there was 
continued growth in our backlog to us118 billion which reﬂected 
major project wins in saudi arabia iraq kuwait the uk and mexico
notwithstanding this level of performance the committee sets 
stretching targets and as a result some operational and safety goals 
were not met in general performance against these measures was 
good but expectations were not met in all respects in particular 
there were two fatalities and the achievement of some backlog targets 
were delayed as a result of slippage in the timing of certain contract 
tender processes during the year 
the table below sets out 2012 annual bonus awards made to 
executive directors
2012  
annual bonus
as  of  
2012 salary
ayman asfari £990000 162
maroun semaan us500000 84
marwan chedid us850000 157
andy inglis £900000 171
tim weller £650000 153
98 petrofac annual report and accounts 2012
governance
directors’ remuneration report continued performance share plan
vesting of 2010 psp award
the performance period for the 2010 psp award ended on 31 december 2012 the structure and vesting schedule for this award is consistent 
with that set out in the psp section of the remuneration policy table on page 92
half of the award was based on relative tsr performance against the peer group companies set out below
aker solutions fluor corporation maire tecnimont technip
amec foster wheeler saipem tecnicas reunidas
chicago bridge  iron co halliburton schlumberger wood group john
entrepose contracting jgc snclavalin group worleyparsons
over the performance period petrofac outperformed the index by 38 which will result in 100 of this element of the award vesting
the remaining half of the award was based on eps growth over the performance period petrofac’s eps growth was 22 over the period 
eps growth of 20 per annum was required for full vesting accordingly this performance will result in 100 of this element of the 
award vesting
overall for psp awards made in 2010 100 of the award is due to vest on 19 march 2013 the committee also gave consideration to the 
strength of underlying company performance and determined that no reduction in the overall vesting level was required
longterm incentives awarded during the ﬁnancial year
2012 psp award
for awards made under the psp in march 2012 the structure and vesting schedule are in line with that set out in the remuneration policy 
table on page 92 psp awards granted on 19 march 2012 are set out in the table below further details on the actual number of shares 
granted under the psp are set out on page 102
director
type of award 
made during  
the year
basis of award  
 of salary
face value of award  
on date of grant
percentage vesting  
at threshold performance period
ayman asfari
psp
196 £1201548
0
1 january 2012 to  
31 december 2014 
maroun semaan 168 £630918
marwan chedid 231
1
£788665
andy inglis 191 £1001278
tim weller 159 £675862
1
  marwan chedid received an exceptional award of 231 of base salary in 2012 in recognition of his strong individual contribution to the business and his 
promotion to the board
2012 value creation plan award
the value creation plan vcp was approved by shareholders at the 2012 agm awards of premiumpriced share options were then made 
under the vcp to key individuals with responsibility for driving business growth including three executive directors summary information on the 
vcp is laid out for your reference below further information is provided in our 2011 directors’ remuneration report and our 2012 notice of 
agm both of which are available on our website at wwwpetrofaccom
as stated on page 96 the vcp is closely aligned with our policy of aligning executive and shareholders’ interests and providing upper quartile 
remuneration where challenging standards are met while paying basic ﬁxed remuneration at median or below participants in the vcp will only 
gain signiﬁcant amounts of reward through the vcp for the delivery of very stretching group and in some cases additional business service 
line performance targets which would likely result in the creation of substantial shareholder value vcp awards granted to the executive 
directors on 18 may 2012 are set out in the table below
director
type of award 
made during 
the year
expected 
value of ‘core’ 
option award
 1
 
 of salary
expected 
value of core 
award
face value of 
‘core’ option 
award
 1
 
 of salary
face value of 
option award
2 
exercise price 
pence
percentage 
vesting at 
threshold
performance 
period
marwan chedid
vcp  
premium
priced share 
options
200 £684654 1026 £5266568
171028  
10 premium  
to share price  
at grant
 3

0
1 january 2012 
to 31 december 
2015
andy inglis 200 £1050000 1026 £8076923
tim weller 100 £425000 513 £2179487
1
  the core award represents the value of the award on a face value basis prior to application of the divisionalbusiness service line multiplier which can reduce or 
increase vesting by 05x to 15x tim weller does not have a divisionalbusiness service line multiplier and therefore this represents his maximum award at grant 
options were valued at 195 of face value using a recognised simulation model which translates into a face value award of roughly ﬁve times expected value
2
  the face value of the option award is based upon the maximum numbers of shares that may vest subject to the achievement of stretching targets including 
where relevant the impact of the divisionalbusiness service line multiplier
3
  the share price used for setting the exercise price was 1555 pence this represents the average closing price over the ﬁveday period immediately prior to the 
date of grant
99 petrofac annual report and accounts 2012 performance conditions
before any vcp share option award can be exercised there are ﬁve distinct stretching performance measures that must be achieved 
performance condition details
exercise price the exercise price for the awards was set at 171028 pence a 10 premium to the company’s share price at grant 
accordingly share price growth of at least 10 must be achieved before participants realise any value
group proﬁt after tax
pat
threshold maximum
fy2015 group pat below us862m us1293m or more 
level of vesting
1
0 100
1
 between us862m and us1293m vesting would be on a straightline basis
divisionalbusiness 
service line performance 
for individuals with 
divisionalbusiness 
service line 
responsibilities only
multiplier which may potentially reduce or increase the award by 50 dependent 
on individual divisional or business service line earnings performance in fy2015  
there is no divisional or business service line multiplier for awards to group roles 
level of achievement threshold target maximum
divisional or business service line 
performance multiplier 05x 10x 15x
malus the committee may reduce vesting outcomes in certain circumstances prior to the vesting date  
these include material misstatement of results and misconduct under the company’s code of conduct
additional performance 
safeguards
at each vesting date the committee will also evaluate performance taking full account of the following safeguards
 hse and ethical performance
 eps growth consistent with pat growth 
 positive economic proﬁt performance
 tsr performance against peers no vesting below median 
 delivery of boardapproved business plan and
 any other material factors impacting risk management
following the end of the fouryear performance period 2012 to 2015 shares will vest in equal tranches on the fourth ﬁfth and sixth 
anniversaries of grant only to the extent that performance conditions have been satisﬁed with full vesting only occurring six years after award
shareholding guidelines and interests in shares
as a result of discussions with shareholders in relation to the vcp  the committee introduced a shareholding requirement of 300 of base 
salary for those executive directors participating in the plan ayman asfari and maroun semaan are not vcp participants and therefore do not 
have a formal shareholding requirement however these two individuals already have substantial shareholding interests in the company 
signiﬁcantly in excess of the required levels as set out in the table below
until these shareholding guidelines have been met executive directors are also encouraged to retain vested shares earned under the 
company’s incentive plans current shareholding requirements and the number of shares held by directors are set out in the table below
director
shareholding requirement  
as a  of salary  
target  achieved
number of shares
shares owned  
outright at  
31 december 2011
shares owned  
outright at 
31 december 2012
1
interests in share  
incentive schemes  
awarded without  
performance  
conditions at
31 december 2012
2
interests in share  
incentive schemes  
awarded subject to  
performance  
conditions at  
31 december 2012
ayman asfari founding shareholder 62900835 – 275540 62837968
maroun semaan founding shareholder 28217864 – 159929 28135388
andy inglis
3
300 18 18035 42929 172719 –
marwan chedid
3
300 2099 1321913 47700 88291 1283765
tim weller
3
300 36 28211 20444 40598 –
norman murray – 9630 – – 7730
thomas thune andersen – 4000 – – 4000
stefano cao – – – – –
roxanne decyk – 5804 – – 5804
rijnhard van tets – 100000 – – 100000
rené médori – – – – –
1
  includes shares purchased through the sip for tim weller totaling 78 shares at 31 december 2012 
2
  these include exceptional oneoff awards made to andy inglis and tim weller under the rsp at the time of their appointments prior to them joining the board 
also included are the shares awarded under the dbsp to marwan chedid prior to his appointment as an executive director
3
  relevant executive directors are expected to build up a shareholding of three times salary over a period of ﬁve years from appointment andy inglis was appointed 
as an executive director on 1 march 2011 and tim weller was appointed as an executive director on 13 october 2011 whilst at this stage both individuals have 
yet to meet the shareholding requirement they have both taken steps to acquire shares since their appointment marwan chedid’ s shareholding requirement has been 
met in full for the purposes of determining executive director shareholdings the individual’ s salary and the share price as at 31 december 2012 1623 pence has been 
used although neither ayman asfari nor maroun semaan have formal shareholding requirements both substantially exceed the target set for the executive directors
100 petrofac annual report and accounts 2012
governance
directors’ remuneration report continued support for the committee
the committee has appointed deloitte llp deloitte to provide 
independent advice on remuneration matters deloitte is a member 
of the remuneration consultants group and as such voluntarily 
operates under the code of conduct in relation to executive 
remuneration consulting in the uk during 2012 deloitte also 
provided tax services and secondees who assisted in routine internal 
ﬁnance functions
in addition the committee received support during 2012 from legal 
advisers norton rose who provided advice on certain matters 
relating to current and future compensation and beneﬁts norton 
rose also provided formal advice on share plan matters to the 
company during the year 
the following individuals none of whom were committee members 
attended at least part of one meeting held in 2012 none of the 
individuals attended part of any meeting in which their own 
compensation was discussed
director role reason for attendance
ayman asfari group chief executive to provide context 
for matters under 
discussion
norman murray chairman of the board to provide context 
for matters under 
discussion
geoff tranﬁeld group director of hr to provide context 
for matters under 
discussion
mary hitchon secretary to the board secretary to the 
committee
carol arrowsmith partner at deloitte llp adviser
shareholder voting
the table below outlines the result of the advisory vote on the 2011 
directors’ remuneration report
number of votes cast for against abstentions
253591459 248229740 
9788
5270571 
208
91148 
004
the committee is pleased to note that over 97 of shareholders 
approved the 2011 directors’ remuneration report since our listing 
in october 2005 we have received at least 95 support for the 
directors’ remuneration report at all agms excluding abstentions 
and the committee would like to take this opportunity to thank 
shareholders for their support over this period
additional information required under 
existing reporting regulations
tsr performance graph
the company’s total shareholder return is deﬁned as our share price 
growth plus any dividends used to acquire further shares in petrofac 
for shareholders’ information the chart below illustrates the 
company’s tsr performance over a ﬁveyear period from 1 january 
2008 to 31 december 2012 compared with the performance of the 
ftse 100 index
the committee believes the ftse 100 index is the most appropriate 
index given the company’s current market capitalisation
50
100
150
200
250
300
350
400
2008 2012 2011 2010 2009
petrofac ftse 100
tsr rebased to 100 on 1 january 2008
101 petrofac annual report and accounts 2012 awards of shares
share awards held at the year end including awards of shares made during the year to executive directors are given in the table below
director and  
date of grant plan
 of basic 
salary in 
year of 
grant
number of 
shares under 
award at 
311211
shares 
granted 
in year
dividend 
shares 
granted 
in year
 1
lapsed 
in year
vested 
in year
total 
number of 
shares 
under award 
at 311212
date 
from which 
shares vest
market 
price on 
date of grant
ayman asfari
19 march 2009 psp 131 131188
2
– – – 131188
3
– 190312 545p
14 may 2010 psp 200 91945
2
– 2224 – – 94169
5
190313 1103p
19 march 2011 psp 250 106616
2
– 2579 – – 109195
6
190314 1426p
19 march 2012 psp 196 – 70472 1704 – – 72176
6
190315 1705p
275540
maroun semaan
19 march 2009 psp 122 82476
2
– – – 82476
3
– 190312 545p
14 may 2010 psp 225 69274
2
– 1675 – – 70949
5
190313 1103p
19 march 2011 psp 194 49875
2
– 1206 – – 51081
6
190314 1426p
19 march 2012 psp 168 – 37004 895 – – 37899
6
190315 1705p
159929
marwan chedid
19 march 2009 psp 58 32989
2
– – – 32989
3
– 190312 545p
19 march 2009 dbsp 95 29994 – – – 29994
4
– 190312 545p
19 march 2010 dbsp 122 26500 – 468 – 7130
4
19838 190313 1185p
14 may 2010 psp 67 19547
2
– 473 – – 20020
5
190313 1103p
19 march 2011 psp 94 20403
2
– 494 – – 20897
6
190314 1426p
19 march 2011 dbsp 156 34002 – 656 – 6796
4
27862 190314 1426p
19 march 2012 psp 231 – 46256 1118 – – 47374
6
190315 1705p
88291
andy inglis
05 january 2011 rsp 200 62867
7
– 1014 – 20952 42929
8
050113 1649p
19 march 2011 psp 300 109914
2
– 2659 – – 112573
6
190314 1426p
19 march 2012 psp 191 – 58726 1420 – – 60146
6
190315 1705p
215648
tim weller
06 september 2011 rsp 89 29938
7
– 639 – 10133 20444 060913 1281p
19 march 2012 psp 159 – 39640 958 – – 40598
6
190315 1705p
61042
1
  dividends awarded on shares granted under the share plans are reinvested to buy further shares
2
  the award amounts disclosed under the psp are the maximum number that can vest subject to the performance conditions attached to awards the psp 
performance conditions under which these awards would vest in full are explained on page 92
3
  the performance conditions for the march 2009 psp award were satisﬁed and the award vested in full on 19 march 2012 when the share price was 1705 pence 
4
  following his appointment to the board on 19 january 2012 no further awards will be made to marwan chedid under the dbsp  on 19 march 2012 marwan 
chedid’s 2009 dbsp award vested in full and a third of his 2010 and 2011 dbsp awards also vested the closing share price on 19 march 2012 was 1705 
pence
5
  shares awarded on 14 may 2010 have satisﬁed their performance conditions in full and are due to vest at 100 on 19 march 2013 based on a share price of 
1589 pence which is the share price at 22 february 2013 being the latest practicable date prior to the adoption of this report by the committee the value of the 
awards made to the current executive directors would be as follows ayman asfari £1496345 maroun semaan £1127380 and marwan chedid £318118
6
  shares awarded under the psp on 19 march 2011 and 19 march 2012 are not due to vest until 19 march 2014 and 19 march 2015 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
7
  shares awarded under the rsp on 5 january 2011 and 6 september 2011 are not subject to performance conditions and will vest in equal annual tranches over 
three years from the date of grant subject to continued employment
8
  a total of 21459 of these shares were originally due to vest under the rsp on 5 january 2013 but were delayed as a result of the company being unable to deal 
at that time
102 petrofac annual report and accounts 2012
governance
directors’ remuneration report continued awards of share options
share options held at the year end including awards of shares made during the year to executive directors are given in the table below
director and date of grant plan
number of 
options held  
at 311211
options 
granted in 
year
options 
exercised
lapsed  
in year
number of 
options at 
311212
exercise 
price
date from  
which exercisable
market  
price on 
date of grant
 3
marwan chedid
18 may 2012 vcp – 112910
1
– 112910 171028p 18 may 2016 1486p 
112910
1
112910 171028p 18 may 2017 1486p 
112910
1
112910 171028p 18 may 2018 1486p 
338730
andy inglis
18 may 2012 vcp – 173161
1
– 173161 171028p 18 may 2016 1486p
173161
1
173161 171028p 18 may 2017 1486p 
173161
1
173161 171028p 18 may 2018 1486p 
519483
tim weller
18 may 2012 vcp – 46726
2
– 46726 171028p 18 may 2016 1486p 
46726
2
46726 171028p 18 may 2017 1486p 
46726
2
46726 171028p 18 may 2018 1486p 
140178
1
  share options will only vest subject to achievement of stretching 2015 group pat and divisionalbusiness service line proﬁt targets the number of share options 
shown represents the maximum number of shares that will vest at each vesting date in addition at each vesting date the committee will assess performance 
against the performance safeguards as set out on page 100 retaining discretion to reduce the number of share options that vest in certain circumstances 
following vesting all options will be exercisable until 18 may 2020
2
  share options will only vest subject to achievement of stretching 2015 group pat targets the number of share options shown represents the maximum number 
that will vest at each vesting date in addition at each vesting date the committee will assess performance against the performance safeguards as set out on 
page 100 retaining discretion to reduce the number of share options that vest in certain circumstances following vesting all options will be exercisable until 
18 may 2020
3
  the share price used for setting the exercise price of these awards was 1555 pence which represents the average closing price over the ﬁveday period 
immediately prior to the date of grant the ﬁgure disclosed here is the market share price on the date of grant
the company’s share price at the end of the ﬁnancial year was 1623 pence and the market price during the year was in the range of 
1346 pence to 1772 pence 
loss of ofﬁce payments
no director left the board during 2012
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 2011 nil 
external appointments
executive directors are normally entitled to accept one nonexecutive appointment outside the company with the consent of the board 
any fees received may be retained by the director as at the date of this report tim weller is a nonexecutive director with the carbon trust 
and bbc worldwide for which he received £17000 and £40800 respectively in fees during the year tim weller will step down from the bbc 
worldwide board during march 2013 and will join the board of g4s plc as a nonexecutive director on 1 april 2013
annual general meeting
this remuneration report will be submitted for approval to the agm to be held on 17 may 2013
on behalf of the board
thomas thune andersen 
chairman of the remuneration committee
26 february 2013
103 petrofac annual report and accounts 2012 directors’ responsibilities
the directors are responsible for preparing the annual report and 
the ﬁnancial statements in accordance with applicable law and 
regulations the directors have chosen to prepare the ﬁnancial 
statements in accordance with international financial reporting 
standards ifrs the directors are also responsible for the 
preparation of the directors’ remuneration report which they have 
chosen to prepare being under no obligation to do so under jersey 
law the directors are also responsible for the preparation of the 
corporate governance report under the listing rules
jersey company law the ‘law’ requires the directors to prepare 
ﬁnancial statements for each ﬁnancial period in accordance with 
generally accepted accounting principles the ﬁnancial statements 
are required by law to give a true and fair view of the state of affairs 
of the company at the period end and the proﬁt or loss of the 
company for the period then ended in preparing these ﬁnancial 
statements the directors should
 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 the company’s transactions 
and as such as to disclose with reasonable accuracy at any time the 
ﬁnancial position of the company and enable them to ensure that the 
ﬁnancial statements prepared by the company comply with the law 
they are also responsible for safeguarding the assets of the company 
and hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of 
the corporate and ﬁnancial information included on the company’s 
website legislation in jersey governing the preparation and 
dissemination of ﬁnancial statements may differ from legislation in 
other jurisdictions
directors’ approach
the board’s objective is to present a 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 26 to 40 the ﬁnancial position of the 
company its cash ﬂows liquidity position and borrowing facilities 
are described in the ﬁnancial review on pages 44 to 46 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
responsibility statement under the 
disclosure and transparency rules
each of the directors listed on pages 62 and 63 conﬁrm that to the 
best of their knowledge
 the ﬁnancial statements prepared in accordance with ifrs give a 
true and fair view of the assets liabilities ﬁnancial position and proﬁt 
of the company and the undertakings included in the consolidation 
taken as a whole and
 the operating and ﬁnancial review includes a fair view of the 
development and performance of the business and the position of 
the company and the undertakings included in the consolidation 
taken as a whole together with a description of the principal risks 
and uncertainties that they face
 
by order of the board
tim weller
chief financial ofﬁcer
104 petrofac annual report and accounts 2012
governance
directors’ statements 106 independent auditor’s report
107 consolidated income statement
108 consolidated statement of comprehensive income
109 consolidated statement of ﬁnancial position
110 consolidated statement of cash ﬂows
111 consolidated statement of changes in equity
112 notes to the consolidated ﬁnancial statements
group ﬁnancial 
statements
105 petrofac annual report and accounts 2012 106 petrofac annual report and accounts 2012
independent auditor’s report to the members of petrofac limited 
 
we have audited the group financial statements of petrofac limited 
for the year ended 31 december 2012 which comprise the 
consolidated income statement the consolidated statement of 
comprehensive income the consolidated statement of financial 
position the consolidated statement of cash flows the consolidated 
statement of changes in equity and the related notes 1 to 32 
the financial reporting framework that has been applied in 
their preparation is applicable law and international financial 
reporting standards 
this report is made solely to the company’s members as a body 
in accordance with article 113a of the companies jersey law 
1991 and our engagement letter dated 15 february 2011 our audit 
work has been undertaken so that we might state to the company’s 
members those matters we are required to state to them in an 
auditor’s report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to 
anyone other than the company and the company’s members as 
a body for our audit work for this report or for the opinions we 
have formed 
respective responsibilities of directors and auditor 
as explained more fully in the directors’ responsibilities statement 
set out on page 104 the directors are responsible for the 
preparation of the group financial statements and for being satisfied 
that they give a true and fair view our responsibility is to audit and 
express an opinion on the group financial statements in accordance 
with applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing 
practices board’s ethical standards for auditors 
in addition the company has also instructed us to 
 report as to whether the information given in the corporate 
governance statement with respect to internal control and risk 
management systems in relation to financial reporting processes 
and about share capital structures is consistent with the financial 
statements 
 review the directors’ statement in relation to going concern as set 
out on page 104 which for a premium listed uk incorporated 
company is specified for review 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 in addition we read all the financial and non
financial information in the annual report to identify material 
inconsistencies with the audited financial statements if we become 
aware of any apparent material misstatements or inconsistencies 
we consider the implications for our report 
opinion on financial statements 
in our opinion the group financial statements 
 give a true and fair view of the state of the group’s affairs as at 
31 december 2012 and of its profit for the year then ended 
 have been properly prepared in accordance with international 
financial reporting standards and 
 have been prepared in accordance with the requirements of the 
companies jersey law 1991 
opinions on other matters 
in our opinion the information given in the corporate governance 
statement set out on pages 64 to 87 with respect to internal control 
and risk management systems in relation to financial reporting 
processes and about share capital structures is consistent with the 
financial statements 
matters on which we are required to report by exception 
we have nothing to report in respect of the following 
 where the companies jersey law 1991 requires us to report to 
you if in our opinion 
−proper accounting records have not been kept or proper returns 
adequate for our audit have not been received from branches 
not visited by us or 
−the financial statements are not in agreement with the 
accounting records and returns or 
−we have not received all the information and explanations we 
require for our audit 
 under the listing rules we are required to review the part of the 
corporate governance statement relating to the company’s 
compliance with the nine provisions of the uk corporate 
governance code specified for our review 
 where the company instructed us to review the directors’ 
statement set out on page 104 in relation to going concern 
other matter 
we have reported separately on the parent company financial 
statements of petrofac limited for the year ended 31 december 
2012 and on the information in the directors’ remuneration report 
that is described as having been audited 
justine belton 
for and on behalf of ernst  young llp 
london 
26 february 2013 
notes 
1
 the maintenance and integrity of the petrofac limited web site is the 
responsibility of the directors the work carried out by the auditors does not 
involve consideration of these matters and accordingly the auditors accept 
no responsibility for any changes that may have occurred to the financial 
statements since they were initially presented on the web site 
2
 legislation in jersey governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions  107 petrofac annual report and accounts 2012
consolidated income statement 
for the year ended 31 december 2012 
 
notes  
2012 
 usm 
2011
 usm
revenue 4a  6324 5801
cost of sales 4b  5244 4841
gross profit   1080 960
selling general and administration expenses 4c  359 283
other income 4f  65 12
other expenses 4g  20 5
profit from operations before tax and finance costsincome   766 684
finance costs 5  5 7
finance income 5  12 8
share of losses of associates 12  8 4
profit before tax   765 681
income tax expense 6  135 141
profit for the year   630 540
 
attributable to    
 petrofac limited shareholders   632 540
 noncontrolling interests   2 –
   630 540
    
earnings per share us cents 7   
– basic   18555 15901
– diluted   18388 15713
the attached notes 1 to 32 form part of these consolidated financial statements 
  108 petrofac annual report and accounts 2012
consolidated statement of comprehensive income 
for the year ended 31 december 2012 
notes  
2012 
 usm 
2011
 usm
profit for the year   630 540
foreign currency translation gainslosses 23  10 16
net lossgain on maturity of cash flow hedges recycled in the period 23  20 3
net changes in fair value of derivatives and financial assets designated as cash flow hedges 23  – 14
other comprehensive income   30 33
total comprehensive income for the period    660 507
 
attributable to    
 petrofac limited shareholders   662 507
 noncontrolling interests    2 –
   660 507
the attached notes 1 to 32 form part of these consolidated financial statements 
   109 petrofac annual report and accounts 2012
consolidated statement of financial position 
at 31 december 2012 
 
notes  
2012 
 usm 
2011
 usm
assets     
noncurrent assets    
property plant and equipment 9  905 594
goodwill 10  125 107
intangible assets 11  307 122
investments in associates 12  177 164
other financial assets 14  444 140
deferred income tax assets 6c  43 29
   2001 1156
current assets    
noncurrent asset held for sale 15  – 44
inventories 16  27 11
work in progress 17  656 612
trade and other receivables 18  1915 1353
due from related parties 30  22 99
other financial assets 14  85 30
income tax receivable   12 15
cash and shortterm deposits 19  614 1572
   3331 3736
total assets   5332 4892
equity and liabilities  
equity attributable to petrofac limited shareholders    
share capital 20  7 7
share premium   4 2
capital redemption reserve   11 11
treasury shares 21  100 75
other reserves 23  38 6
retained earnings   1589 1161
   1549 1112
noncontrolling interests   1 3
total equity   1550 1115
noncurrent liabilities     
interestbearing loans and borrowings 24  292 16
provisions 25  100 60
other financial liabilities 26  8 24
deferred income tax liabilities 6c  143 60
   543 160
current liabilities    
trade and other payables 27  1981 1742
due to related parties 30  38 23
interestbearing loans and borrowings 24  57 61
other financial liabilities 26  17 32
liabilities directly associated with noncurrent asset held for sale 15  – 5
income tax payable   75 96
billings in excess of cost and estimated earnings  17   328 389
accrued contract expenses 28  743 1269
   3239 3617
total liabilities    3782 3777
total equity and liabilities   5332 4892
the financial statements on pages 107 to 149 were approved by the board of directors  
on 26 february 2013 and signed on its behalf by tim weller – chief financial officer 
the attached notes 1 to 32 form part of these consolidated financial statements 110 petrofac annual report and accounts 2012
consolidated statement of cash flows 
for the year ended 31 december 2012 
notes  
2012 
 usm 
2011
 usm
operating activities     
profit before tax   765 681
noncash adjustments to reconcile profit before tax to net cash flows 
 depreciation amortisation impairment and write off 4b 4c   130 80
 sharebased payments 4d   26 23
 difference between other longterm employment benefits paid and  
  amounts recognised in the income statement   11 9
 net finance income 5   7 1
 lossgain on fair value changes in seven energy warrants 4g 4f  6 6
 gain on disposal of an investment in a joint venture 4f  6 –
 share of losses of associates 12  8 4
 gain on disposal of noncurrent asset held for sale 4f  27 –
 fair value gain on initial recognition of investment in associate 12  9 –
 debt acquisition costs written off   3 –
 other noncash items net   7 6
   907 796
working capital adjustments 
 trade and other receivables   549 301
 work in progress   44 192
 due from related parties   77 99
 inventories   16 3
 other current financial assets   68 17
 trade and other payables   253 735
 billings in excess of cost and estimated earnings   61 211
 accrued contract expenses   525 7
 due to related parties   15 12
   11 1553
longterm receivable from a customer 14  300 130
other noncurrent items net   4 –
cash used ingenerated from operations   315 1423
interest paid   3 3
income taxes paid net   83 157
net cash flows used infrom operating activities   401 1263
investing activities    
purchase of property plant and equipment   397 420
acquisition of subsidiaries net of cash acquired   20 –
payment of contingent consideration on acquisition   1 16
purchase of other intangible assets 11   7 6
purchase of intangible oil and gas assets 11   165 40
investments in associates 12   25 50
proceeds from disposal of property plant and equipment   1 –
proceeds from disposal of noncurrent asset held for sale   60 –
proceeds from disposal of an investment in a joint venture   5 –
interest received   5 9
net cash flows used in investing activities   544 523
financing activities    
interest bearing loans and borrowings obtained net of debt acquisition cost   291 –
repayment of interestbearing loans and borrowings   50 19
treasury shares purchased 21   76 49
equity dividends paid   201 159
net cash flows used in financing activities   36 227
net increasedecrease in cash and cash equivalents   981 513
net foreign exchange difference   3 12
cash and cash equivalents at 1 january   1535 1034
cash and cash equivalents at 31 december 19   557 1535
the attached notes 1 to 32 form part of these consolidated financial statements 111 petrofac annual report and accounts 2012
consolidated statement of changes in equity 
for the year ended 31 december 2012 
 
  attributable to shareholders of petrofac limited  
non
controlling 
interests 
usm
total 
equity 
usm
  
issued  
share  
capital 
usm 
  
share  
premium 
usm 
  
capital 
redemption 
reserve 
usm
shares to 
be issued 
usm
treasury 
shares 
usm 
note 21
other 
reserves 
usm 
note 23
retained 
earnings 
usm
 
total  
usm 
  
balance at 1 january 2012  7  2  11 – 75 6 1161 1112  3 1115
net profit for the year  –  –  –––– 632 632  2 630
other comprehensive income  –  –  – – – 30 – 30  – 30
total comprehensive income  
 for the year  –  –  – – – 30 632 662  2 660
shares issued as payment of  
 consideration on acquisition  –  2  –––– – 2  – 2
sharebased payments  
 charge note 22  –  –  – – – 26 – 26  – 26
shares vested during the year 
  note 21  –  –  – – 51 45 6  –  – –
transfer to reserve for share  
 based payments note 22  –  –  – – – 20 – 20  – 20
treasury shares purchased  
  note 21  –  –  – – 76 – – 76  – 76
income tax on sharebased  
 payments reserve  –  –  – – – 1 – 1  – 1
dividends note 8  –  –  –––– 198  198  – 198
balance at  
 31 december 2012  7  4  11 – 100 38 1589 1549  1 1550
 
  attributable to shareholders of petrofac limited  
non
controlling 
interests 
usm
total 
equity 
usm
  
issued  
share  
capital 
usm 
  
share  
premium 
usm 
  
capital 
redemption 
reserve 
usm
shares to 
be issued 
usm
treasury 
shares 
usm 
note 21
other 
reserves 
usm 
note 23
retained 
earnings 
usm
 
total  
usm 
  
balance at 1 january 2011  7  1  11 1 65 35 787 777  3 780
net profit for the year  –  –  –––– 540 540  – 540
other comprehensive income  –  –  – – – 33 – 33  – 33
total comprehensive income  
 for the year  –  –  – – – 33 540 507  – 507
shares issued as payment of  
 consideration on acquisition  –  1  – 1 – – – –  – –
sharebased payments  
 charge note 22  –  –  – – – 23 – 23  – 23
shares vested during the year 
  note 21  –  –  – – 39 34 5  –  – –
transfer to reserve for share  
 based payments note 22  –  –  – – – 18 – 18  – 18
treasury shares purchased  
  note 21  –  –  – – 49 – – 49  – 49
income tax on sharebased  
 payments reserve  –  –  – – – 3 – 3  – 3
dividends note 8  –  –  –––– 161  161  – 161
balance at 31 december 2011  7  2  11 – 75 6 1161 1112  3 1115
shares held by petrofac employee benefit trust and petrofac joint venture companies employee benefit trust 
the attached notes 1 to 32 form part of these consolidated financial statements  112 petrofac annual report and accounts 2012
notes to the consolidated financial statements 
for the year ended 31 december 2012 
1 corporate information 
the consolidated financial statements of petrofac limited 
the ‘company’ for the year ended 31 december 2012 were 
authorised for issue in accordance with a resolution of the 
directors on 26 february 2013 
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 
2012 financial statements are shown on pages 152 to 165 
the group’s principal activity is the provision of services to the 
oil and gas production and processing industry 
the principal group companies and joint venture entities 
are contained in note 32 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 
which have been measured at fair value the presentation currency 
of the consolidated financial statements is united states dollars and 
all values in the financial statements are rounded to the nearest 
million usm except where otherwise stated 
statement of compliance 
the consolidated financial statements of petrofac limited and its 
subsidiaries have been prepared in accordance with international 
financial reporting standards ifrs and applicable requirements 
of jersey law 
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 
noncontrolling interests in subsidiaries consolidated by the group 
are disclosed separately from the group’s equity and income 
statement and noncontrolling interests are allocated their share 
of total comprehensive income for the year even if this results 
in a deficit balance 
new standards and interpretations 
the group has adopted new and revised standards and 
interpretations issued by the international accounting standards 
board iasb and the international financial reporting 
interpretations committee ifric of the iasb that are relevant to its 
operations and effective for accounting periods beginning on or after 
1 january 2012 the following new amendments and enhanced 
disclosures did not have any current impact on the financial position 
performance or disclosures of the group 
 ias 12 income taxes amendment – deferred taxes recovery 
of underlying assets effective 1 january 2012 
 ifrs 7 financial instruments disclosures – enhanced 
derecognition disclosure requirements effective 1 july 2011 
 
standards issued but not yet effective 
standards issued but not yet effective up to the date of issuance 
of the group’s financial statements are listed below and include only 
those standards and interpretations that are likely to have an impact 
on the disclosures financial position or performance of the group 
at a future date the group intends to adopt these standards when 
they become effective 
ias 1 financial statement presentation – presentation 
of items of other comprehensive income oci 
the amendments to ias 1 change the grouping of items presented 
in oci items that could be reclassified or ‘recycled’ to profit 
or loss at a future point in time for example upon derecognition 
or settlement would be presented separately from items that will 
never be reclassified the amendment affects presentation only 
and has therefore no impact on the group’s financial position or 
performance the amendment becomes effective for annual periods 
beginning on or after 1 july 2012 
ias 27 separate financial statements as revised in 2011 
as a consequence of the new ifrs 10 and ifrs 12 what remains 
of ias 27 is limited to accounting for subsidiaries jointly controlled 
entities and associates in separate financial statements 
the amendment becomes effective for annual periods beginning 
on or after 1 january 2013 but is not expected to have any 
financial impact on the separate financial statements of the 
company but will require some changes in disclosure 
ias 28 investments in associates and joint ventures 
as revised in 2011 
as a consequence of the new ifrs 11 and ifrs 12 ias 28 has 
been renamed ias 28 investments in associates and joint ventures 
and describes the application of the equity method to investments 
in joint ventures in addition to associates the amendment becomes 
effective for annual periods beginning on or after 1 january 2013 
ifrs 9 financial instruments classification 
and measurement 
ifrs 9 as issued reflects the first phase of the iasb’s work 
on the replacement of ias 39 and applies to classification and 
measurement of financial assets and financial liabilities as defined 
in ias 39the standard is effective for annual periods beginning 
on or after 1 january 2015 in subsequent phases the iasb will 
address hedge accounting and impairment of financial assets 
the adoption of the first phase of ifrs 9 will have an effect on the 
classification and measurement of the group’s financial assets 
but will not have an impact on classification and measurements of 
financial liabilities the group will quantify the effect in conjunction 
with the other phases when the final standard including all phases 
is issued 
ifrs 10 consolidated financial statements 
ifrs 10 replaces the portion of ias 27 consolidated and 
separate financial statements that addresses the accounting 
for consolidated financial statements it also includes the issues 
raised in sic12 consolidation – special purpose entities 
ifrs 10 establishes a single control model that applies to all entities 
including special purpose entities the changes introduced by ifrs 
10 will require management to exercise significant judgement to 
determine which entities are controlled and therefore are required 
to be consolidated by a parent compared with the requirements 
that were in ias 27 based on the preliminary analyses performed 
ifrs 10 is not expected to have any impact on the currently held 
investments of the group 
this standard becomes effective for annual periods beginning 
on or after 1 january 2013 
 
  113 petrofac annual report and accounts 2012
 
 
 
ifrs 11 joint arrangements 
ifrs 11 replaces ias 31 interests in joint ventures and sic13 
jointlycontrolled entities – nonmonetary contributions 
by venturers 
ifrs 11 removes the option to account for jointlycontrolled entities 
jces using proportionate consolidation instead jces that meet 
the definition of a joint venture must be accounted for using the 
equity method 
the application of this new standard will impact the financial position 
of the group by eliminating proportionate consolidation of certain 
joint ventures with the application of the new standard the 
investment in those joint ventures will be accounted for using the 
equity method of accounting this standard becomes effective for 
annual periods beginning on or after 1 january 2013 and is to be 
applied retrospectively for joint arrangements held at the date of 
initial application the expected impact of ifrs 11 on the current 
period which will be the comparative period in the financial 
statements as of 31 december 2013 given the current status of 
our joint arrangements is expected to be a reduction of revenue of 
us76m and a reduction in profit from operations of us2m as 
income from joint ventures will be presented outside operating profit 
going forward current assets and current liabilities will be reduced 
by us47m and us89m respectively while the impact on non
current assets will be a reduction of us65m and the noncurrent 
liabilities will be reduced by us2m the reduction in net assets 
above will result in recognition of investments in joint ventures which 
will be included within noncurrent assets  
ifrs 12 disclosure of involvement with other entities 
ifrs 12 includes all of the disclosures that were previously in 
ias 27 relating to consolidated financial statements as well as all 
of the disclosures that were previously included in ias 31 and ias 
28these disclosures relate to an entity’s interests in subsidiaries 
joint arrangements associates and structured entities a number 
of new disclosures are also required this standard becomes 
effective for annual periods beginning on or after 1 january 
2013the application of this standard affects disclosure only 
and will have no impact on the group’s financial position 
or performance 
ifrs 13 fair value measurement 
ifrs 13 establishes a single source of guidance under ifrs for all 
fair value measurements ifrs 13 does not change when an entity 
is required to use fair value but rather provides guidance on how 
to measure fair value under ifrs when fair value is required or 
permitted the group is currently assessing the impact that this 
standard will have on the financial position and performance 
of the group this standard becomes effective prospectively for 
annual periods beginning on or after 1 january 2013 
significant accounting judgements and estimates 
judgements 
in the process of applying the group’s accounting policies 
management has made the following judgements apart from those 
involving estimations which have the most significant effect on the 
amounts recognised in the consolidated financial statements  
 revenue recognition on fixedprice engineering procurement 
and construction contracts the group recognises revenue on 
fixedprice engineering procurement and construction contracts 
using the percentageofcompletion method based on surveys 
of work performed the group has determined this basis of 
revenue recognition is the best available measure of progress 
on such contracts 
 revenue recognition on integrated energy services contracts 
the group assesses on a case by case basis the most 
appropriate treatment for its various of commercial structures 
which include risk service contracts production enhancement 
contracts and equity upstream investments including production 
sharing contracts see accounting policies note on page 117 for 
further details 
estimation uncertainty 
the key assumptions concerning the future and other key sources 
of estimation uncertainty at the statement of financial position date 
that have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial 
year are discussed below  
 project cost to complete estimates at each statement of financial 
position date the group is required to estimate costs to complete 
on fixedprice contracts estimating costs to complete on such 
contracts requires the group to make estimates of future costs 
to be incurred based on work to be performed beyond the 
statement of financial position date this estimate will impact 
revenues cost of sales workinprogress billings in excess of 
costs and estimated earnings and accrued contract expenses 
 onerous contract provisions the group provides for future losses 
on longterm contracts where it is considered probable that the 
contract costs are likely to exceed revenues in future years 
estimating these future losses involves a number of assumptions 
about the achievement of contract performance targets and 
the likely levels of future cost escalation over time us nil at 
31 december 2012 2011 us nil 
 impairment of goodwill the group determines whether goodwill 
is impaired at least on an annual basis this requires an estimation 
of the value in use of the cashgenerating units to which the 
goodwill is allocated estimating the value in use requires the 
group to make an estimate of the expected future cash flows 
from each cashgenerating unit and also to determine a suitable 
discount rate in order to calculate the present value of those cash 
flows the carrying amount of goodwill at 31 december 2012 was 
us125m 2011 us107m note 10 
 deferred tax assets the group recognises deferred tax assets 
on all applicable temporary differences where it is probable that 
future taxable profits will be available for utilisation this requires 
management to make judgements and assumptions regarding 
the amount of deferred tax that can be recognised based on the 
magnitude and likelihood of future taxable profits the carrying 
amount of deferred tax assets at 31 december 2012 was 
us43m 2011 us29m 
   114 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
2 summary of significant accounting 
policies continued 
 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 and gas and other intangible 
assets the group determines at each statement of financial 
position date whether there is any evidence of indicators of 
impairment in the carrying value of its intangible oil and gas and 
other intangible assets where indicators exist an impairment test 
is undertaken which requires management to estimate the 
recoverable value of its 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 and gas 
assets such that the depreciation charge is proportional to the 
depletion of the remaining reserves over their life of production 
these calculations require the use of estimates including the 
amount of economically recoverable reserves and future oil and 
gas capital expenditure 
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 these arrangements require unanimous agreement 
for financial and operating decisions among the venturers 
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 consolidated income statement assets controlled by the group 
and liabilities incurred by it are recognised in the statement of 
financial position 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 
investments in associates 
the group’s investment in its associates entities in which the group 
has significant influence are accounted for using the equity method 
under the equity method the investment is initially carried at cost 
and adjusted for post acquisition changes in the group’s share of 
net assets of the associate goodwill on the initial investment forms 
a part of the carrying amount of the investment and is not 
individually tested for impairment 
the group recognises its share of the net profits after tax and  
noncontrolling interest of the associates in its consolidated income 
statement share of associate’s changes in equity is also recognised 
in the group’s consolidated statement of changes in equity 
any unrealised gains and losses resulting from transactions 
between the group and the associate are eliminated to the extent 
of the interest in associates 
the financial statements of the associate are prepared using 
the same accounting policies and reporting periods as that 
of the group 
the carried value of the investment is tested for impairment at each 
reporting date impairment if any is determined by the difference 
between the recoverable amount of the associate and its carrying 
value and is reported within the share of income of an associate 
in the group’s consolidated income statement 
foreign currency translation 
the company’s functional and presentational currency is us dollars 
in the financial statements of individual subsidiaries joint ventures 
and associates transactions in currencies other than a company’s 
functional currency are recorded at the prevailing rate of exchange 
at the date of the transaction at the year end monetary assets and 
liabilities denominated in foreign currencies are retranslated at the 
rates of exchange prevailing at the statement of financial position 
date nonmonetary assets and liabilities that are measured at 
historical cost in a foreign currency are translated using the rate 
of exchange as at the dates of the initial transactions nonmonetary 
assets and liabilities measured at fair value in a foreign currency are 
translated using the rate of exchange at the date the fair value was 
determined all foreign exchange gains and losses are taken to the 
consolidated income statement with the exception of exchange 
differences arising on monetary assets and liabilities that form part 
of the group’s net investment in subsidiaries these are taken 
directly to the statement of changes in equity until the disposal 
of the net investment at which time they are recognised in the 
consolidated income statement 
the statements of financial position of overseas subsidiaries joint 
ventures and associates are translated into us dollars using the 
closing rate method whereby assets and liabilities are translated 
at the rates of exchange prevailing at the statement of financial 
position 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 other reserves within the statement of changes 
in equity 
on the disposal of a foreign entity accumulated exchange 
differences are recognised in the consolidated income statement 
as a component of the gain or loss on disposal 
property plant and equipment 
property plant and equipment is stated at cost less accumulated 
depreciation and any impairment in value cost comprises the 
purchase price or construction cost and any costs directly 
attributable to making that asset capable of operating as intended 
the purchase price or construction cost is the aggregate amount 
paid and the fair value of any other consideration given to acquire 
the asset depreciation is provided on a straightline basis 
other than on oil and gas assets at the following rates 
oil and gas facilities 10 – 125 
plant and equipment 4 – 33 
buildings and leasehold improvements 5 – 33  
 or lease term if shorter 
office furniture and equipment 25 – 50 
vehicles 20 – 33 
tangible oil and gas assets are depreciated on a fieldbyfield basis 
using the unitofproduction method based on entitlement to proven 
and probable reserves taking account of estimated future 
development expenditure relating to those reserves 
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 
   115 petrofac annual report and accounts 2012
 
 
 
the carrying amount of an item of property plant and equipment 
is derecognised on disposal or when no future economic benefits 
are expected from its use or disposal the gain or loss arising from 
the derecognition of an item of property plant and equipment is 
included in the consolidated income statement when the item is 
derecognised gains are not classified as revenue 
noncurrent assets held for sale 
noncurrent assets or disposal groups are classified as held for 
sale when it is expected that the carrying amount of an asset will 
be recovered principally through sale rather than continuing use 
assets are not depreciated when classified as held for sale 
borrowing costs 
borrowing costs directly attributable to the construction of qualifying 
assets which are assets that necessarily take a substantial period 
of time to prepare for their intended use are added to the cost of 
those assets until such time as the assets are substantially ready 
for their intended use all other borrowing costs are recognised as 
interest payable in the consolidated income statement in the period 
in which they are incurred 
goodwill 
goodwill acquired in a business combination is initially measured at 
cost being the excess of the cost of the business combination over 
the net fair value of the identifiable assets liabilities and contingent 
liabilities of the entity at the date of acquisition following initial 
recognition goodwill is measured at cost less any accumulated 
impairment losses goodwill is reviewed for impairment annually 
or more frequently if events or changes in circumstances indicate 
that such carrying value may be impaired all transaction costs 
associated with business combinations are charged to the 
consolidated income statement in the year of such combination 
for the purpose of impairment testing goodwill acquired is allocated 
to the cashgenerating units that are expected to benefit from the 
synergies of the combination each unit or units to which goodwill 
is allocated represents the lowest level within the group at which 
the goodwill is monitored for internal management purposes and 
is not larger than an operating segment determined in accordance 
with ifrs 8 ‘operating segments’ 
impairment is determined by assessing the recoverable amount of 
the cashgenerating units to which the goodwill relates where the 
recoverable amount of the cashgenerating units is less than the 
carrying amount of the cashgenerating units and related goodwill 
an impairment loss is recognised 
where goodwill has been allocated to cashgenerating units and 
part of the operation within those units is disposed of the goodwill 
associated with the operation disposed of is included in the carrying 
amount of the operation when determining the gain or loss on 
disposal of the operation goodwill disposed of in this circumstance 
is measured based on the relative values of the operation disposed 
of and the portion of the cashgenerating units retained 
contingent consideration payable on a business combination  
when as part of a business combination the group defers a 
proportion of the total purchase consideration payable for an 
acquisition the amount provided for is the acquisition date fair value 
of the consideration the unwinding of the discount element is 
recognised as a finance cost in the consolidated income statement 
for business combinations prior to 1 january 2010 all changes in 
estimated contingent consideration payable on acquisition are 
adjusted against the carried goodwill for business combinations 
after 1 january 2010 changes in estimated contingent 
consideration payable on acquisition are recognised in the 
consolidated income statement unless they are measurement 
period adjustments which arise as a result of additional 
information obtained after the acquisition date about the facts 
and circumstances existing at the acquisition date which are 
adjusted against carried goodwill 
intangible assets – non oil and gas assets 
intangible assets acquired in a business combination are initially 
measured at cost being their fair values at the date of acquisition 
and are recognised separately from goodwill where the asset is 
separable or arises from a contractual or other legal right and its fair 
value can be measured reliably after initial recognition intangible 
assets are carried at cost less accumulated amortisation and any 
accumulated impairment losses intangible assets with a finite life 
are amortised over their useful economic life using a straightline 
method unless a better method reflecting the pattern in which the 
asset’s future economic benefits are expected to be consumed 
can be determined the amortisation charge in respect of intangible 
assets is included in the selling general and administration 
expenses line of the consolidated income statement the expected 
useful lives of assets are reviewed on an annual basis any change 
in the useful life or pattern of consumption of the intangible asset is 
treated as a change in accounting estimate and is accounted for 
prospectively by changing the amortisation period or method 
intangible assets are tested for impairment whenever there is an 
indication that the asset may be impaired 
oil and gas assets 
capitalised costs 
the group’s activities in relation to oil and gas assets are limited 
to assets in the evaluation development and production phases 
oil and gas evaluation and development expenditure is accounted 
for using the successful efforts method of accounting 
evaluation expenditures 
expenditure directly associated with evaluation or appraisal 
activities is capitalised as an intangible asset such costs include the 
costs of acquiring an interest appraisal well drilling costs payments 
to contractors and an appropriate share of directly attributable 
overheads incurred during the evaluation phase for such appraisal 
activity which may require drilling of further wells costs continue to 
be carried as an asset whilst related hydrocarbons are considered 
capable of commercial development such costs are subject to 
technical commercial and management review to confirm the 
continued intent to develop or otherwise extract value when this 
is no longer the case the costs are writtenoff in the income 
statement when such assets are declared part of a commercial 
development related costs are transferred to tangible oil and gas 
assets all intangible oil and gas assets are assessed for any 
impairment prior to transfer and any impairment loss is recognised 
in the consolidated income statement 
development expenditures 
expenditure relating to development of assets which include the 
construction installation and completion of infrastructure facilities 
such as platforms pipelines and development wells is capitalised 
within property plant and equipment 
changes in unitofproduction factors 
changes in factors which affect unitofproduction calculations 
are dealt with prospectively in accordance with the treatment of 
changes in accounting estimates not by immediate adjustment of 
prior years’ amounts 
   116 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
2 summary of significant accounting 
policies continued 
decommissioning 
provision for future decommissioning costs is made in full when 
the group has an obligation to dismantle and remove a facility 
or an item of plant and to restore the site on which it is located 
and when a reasonable estimate of that liability can be made 
the amount recognised is the present value of the estimated future 
expenditure an amount equivalent to the discounted initial provision 
for decommissioning costs is capitalised and amortised over the life 
of the underlying asset on a unitofproduction basis over proven 
and probable reserves any change in the present value of the 
estimated expenditure is reflected as an adjustment to the provision 
and the oil and gas asset 
the unwinding of the discount applied to future decommissioning 
provisions is included under finance costs in the consolidated 
income statement 
impairment of assets excluding goodwill 
at each statement of financial position date the group reviews 
the carrying amounts of its tangible and intangible assets to assess 
whether there is an indication that those assets may be impaired 
if any such indication exists the group makes an estimate of the 
asset’s recoverable amount an asset’s recoverable amount is 
the higher of an asset’s fair value less costs to sell and its value 
in use in assessing value in use the estimated future cash flows 
attributable to the asset are discounted to their present value using 
a pretax discount rate that reflects current market assessments 
of the time value of money and the risks specific to the asset 
if the recoverable amount of an asset is estimated to be less than its 
carrying amount the carrying amount of the asset is reduced to its 
recoverable amount an impairment loss is recognised immediately 
in the consolidated income statement unless the relevant asset is 
carried at a revalued amount in which case the impairment loss is 
treated as a revaluation decrease 
where an impairment loss subsequently reverses the carrying 
amount of the asset is increased to the revised estimate of its 
recoverable amount but so that the increased carrying amount 
does not exceed the carrying amount that would have been 
determined had no impairment loss been recognised for the 
asset in prior years a reversal of an impairment loss is recognised 
immediately in the consolidated income statement unless the 
relevant asset is carried at a revalued amount in which case the 
reversal of the impairment is treated as a revaluation increase 
inventories 
inventories are valued at the lower of cost and net realisable value 
net realisable value is the estimated selling price in the ordinary 
course of business less estimated costs of completion and the 
estimated costs necessary to make the sale cost comprises 
purchase price cost of production transportation and other directly 
allocable expenses costs of inventories other than raw materials 
are determined using the firstinfirstout method costs of raw 
materials are determined using the weighted average method 
work in progress and billings in excess of cost and 
estimated earnings 
fixed price lump sum engineering procurement and construction 
contracts are presented in the statement of financial position 
as follows  
 for each contract the accumulated cost incurred as well as 
the estimated earnings recognised at the contract’s percentage 
of completion less provision for any anticipated losses after 
deducting the progress payments received or receivable from 
the customers are shown in current assets in the statement 
of financial position under ‘work in progress’ 
 where the payments received or receivable for any contract 
exceed the cost and estimated earnings less provision for any 
anticipated losses the excess is shown as ‘billings in excess 
of cost and estimated earnings’ within current liabilities 
trade and other receivables 
trade receivables are recognised and carried at original invoice 
amount less an allowance for any amounts estimated to be 
uncollectable an estimate for doubtful debts is made when there is 
objective evidence that the collection of the full amount is no longer 
probable under the terms of the original invoice impaired debts are 
derecognised when they are assessed as uncollectable 
cash and cash equivalents 
cash and cash equivalents consist of cash at bank and in hand 
and shortterm deposits with an original maturity of three months 
or less for the purpose of the cash flow statement cash and cash 
equivalents consists of cash and cash equivalents as defined above 
net of outstanding bank overdrafts 
interestbearing loans and borrowings 
all interestbearing loans and borrowings are initially recognised at 
the fair value of the consideration received net of issue costs directly 
attributable to the borrowing 
after initial recognition interestbearing loans and borrowings 
are subsequently measured at amortised cost using the effective 
interest rate method amortised cost is calculated by taking 
into account any issue costs and any discount or premium 
on settlement 
provisions 
provisions are recognised when the group has a present legal or 
constructive obligation as a result of past events it is probable that 
an outflow of resources will be required to settle the obligation and 
a reliable estimate can be made of the amount of the obligation 
if the time value of money is material provisions are discounted 
using a current pretax rate that reflects where appropriate the 
risks specific to the liability where discounting is used the increase 
in the provision due to the passage of time is recognised in the 
consolidated income statement as a finance cost 
derecognition of financial assets and liabilities 
financial assets 
a financial asset or where applicable a part of a financial asset 
is derecognised where 
 the rights to receive cash flows from the asset have expired 
 the group retains the right to receive cash flows from the asset 
but has assumed an obligation to pay them in full without material 
delay to a thirdparty under a ‘passthrough’ arrangement or 
 the group has transferred its rights to receive cash flows from the 
asset and either a has transferred substantially all the risks and 
rewards of the asset or b has neither transferred nor retained 
substantially all the risks and rewards of the asset but has 
transferred control of the asset  
financial liabilities 
a financial liability is derecognised when the obligation under the 
liability is discharged or cancelled or expires 
if an existing financial liability is replaced by another from the same 
lender on substantially different terms or the terms of an existing 
liability are substantially modified such an exchange or modification 
is treated as a derecognition of the original liability and the 
recognition of a new liability such that the difference in the 
respective carrying amounts together with any costs or fees 
incurred are recognised in the consolidated income statement 
pensions and other longterm employment benefits 
the group has various defined contribution pension schemes in 
accordance with the local conditions and practices in the countries 
in which it operates the amount charged to the consolidated 
income statement in respect of pension costs reflects the 
contributions payable in the year differences between contributions 
payable during the year and contributions actually paid are shown 
as either accrued liabilities or prepaid assets in the statement of 
financial position 
   117 petrofac annual report and accounts 2012
 
 
 
the group’s other longterm employment benefits are provided in 
accordance with the labour laws of the countries in which the group 
operates further details of which are given in note 25 
sharebased payment transactions 
employees including directors of the group receive remuneration 
in the form of sharebased payment transactions whereby 
employees render services in exchange for shares or rights over 
shares ‘equitysettled transactions’ 
equitysettled transactions 
the cost of equitysettled transactions with employees is measured 
by reference to the fair value at the date on which they are granted 
in valuing equitysettled transactions no account is taken of any 
service or performance conditions other than conditions linked 
to the price of the shares of petrofac limited ‘market conditions’ 
if applicable 
the cost of equitysettled transactions is recognised together with 
a corresponding increase in equity over the period in which the 
relevant employees become fully entitled to the award the ‘vesting 
period’the cumulative expense recognised for equitysettled 
transactions at each reporting date until the vesting date reflects the 
extent to which the vesting period has expired and the group’s best 
estimate of the number of equity instruments that will ultimately vest 
the income statement charge or credit for a period represents the 
movement in cumulative expense recognised as at the beginning 
and end of that period 
no expense is recognised for awards that do not ultimately vest 
except for awards where vesting is conditional upon a market or 
nonvesting condition which are treated as vesting irrespective 
of whether or not the market or nonvesting condition is satisfied 
provided that all other performance conditions and service 
conditions are satisfied equity awards cancelled are treated as 
vesting immediately on the date of cancellation and any expense 
not recognised for the award at that date is recognised in the 
consolidated income statement 
petrofac employee benefit trusts 
the petrofac employee benefit trust and the petrofac joint venture 
companies employee benefit trust warehouse ordinary shares 
purchased to satisfy various new share scheme awards made to the 
employees of the company and its joint venture partner employees 
which will be transferred to the members of the scheme on their 
respective vesting dates subject to satisfying the performance 
conditions of each scheme the trusts have been consolidated in 
the group financial statements in accordance with sic 12 ‘special 
purpose entities’ the cost of shares temporarily held by the trusts 
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 and 
whether the fulfilment of the arrangement is dependent on the use 
of a specific asset or assets or the arrangement conveys the right 
to use the asset 
leases are classified as finance leases whenever the terms of the 
lease transfer substantially all the risks and rewards of ownership 
to the lessee all other leases are classified as operating leases 
assets held under finance leases are recognised as noncurrent 
assets of the group at the lower of their fair value at the date of 
commencement of the lease and the present value of the minimum 
lease payments these assets are depreciated on a straightline 
basis over the shorter of the useful life of the asset and the lease 
term the corresponding liability to the lessor is included in the 
consolidated statement of financial position as a finance lease 
obligation lease payments are apportioned between finance costs 
in the income statement and reduction of the lease obligation so as 
to achieve a constant rate of interest on the remaining balance of 
the liability 
the group has entered into various operating leases the payments 
for which are recognised as an expense in the consolidated income 
statement on a straightline basis over the lease terms 
revenue recognition 
revenue is recognised to the extent that it is probable economic 
benefits will flow to the group and the revenue can be reliably 
measured the following specific recognition criteria also apply 
onshore engineering  construction 
revenues from fixedprice lumpsum contracts are recognised 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 statement of financial position date 
whether or not work has commenced on these contracts 
incentive payments are included in revenue when the contract 
is sufficiently advanced that it is probable that the specified 
performance standards will be met or exceeded and the 
amount of the incentive payments can be measured reliably 
variation orders are only included in revenue when it is probable 
they will be accepted and can be measured reliably and claims 
are only included in revenue when negotiations have reached an 
advanced stage 
offshore projects  operations engineering  consulting services 
and integrated energy services 
revenues from reimbursable contracts are recognised in the period 
in which the services are provided based on the agreed contract 
schedule of rates 
revenues from fixedprice contracts are recognised on the 
percentageofcompletion method measured by milestones 
completed or earned value once the outcome of a contract can be 
estimated reliably in the early stages of contract completion when 
the outcome of a contract cannot be estimated reliably contract 
revenues are recognised only to the extent of costs incurred that 
are expected to be recoverable 
incentive payments are included in revenue when the contract 
is sufficiently advanced that it is probable that the specified 
performance standards will be met or exceeded and the amount 
of the incentive payments can be measured reliably claims are only 
included in revenue when negotiations have reached an advanced 
stage such that it is probable the claim will be accepted and can be 
measured reliably 
integrated energy services 
oil and gas revenues comprise the group’s share of sales from the 
processing or sale of hydrocarbons on an entitlement basis when 
the significant risks and rewards of ownership have been passed 
to the buyer 
revenue from production enhancement contracts is recognised 
based on the volume of hydrocarbons produced in the period and 
the agreed tariff and the reimbursement arrangement for costs 
incurred 
precontractbid costs 
precontractbid costs incurred are recognised as an expense until 
there is a high probability that the contract will be awarded after 
which all further costs are recognised as assets and expensed over 
the life of the contract  118 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
2 summary of significant accounting 
policies continued 
income taxes 
income tax expense represents the sum of current income tax and 
deferred tax 
current income tax assets and liabilities for the current and prior 
periods are measured at the amount expected to be recovered 
from or paid to the taxation authorities taxable profit differs from 
profit as reported in the consolidated income statement because it 
excludes items of income or expense that are taxable or deductible 
in other years and it further excludes items that are never taxable or 
deductible the group’s liability for current tax is calculated using 
tax rates that have been enacted or substantively enacted by the 
statement of financial position date 
deferred income tax is recognised on all temporary differences 
at the statement of financial position date between the carrying 
amounts of assets and liabilities in the financial statements and the 
corresponding tax bases used in the computation of taxable profit 
with the following exceptions  
 where the temporary difference arises from the initial recognition 
of goodwill or of an asset or liability in a transaction that is not a 
business combination that at the time of the transaction affects 
neither accounting nor taxable profit or loss 
 in respect of taxable temporary differences associated with 
investments in subsidiaries associates and joint ventures 
where the timing of reversal of the temporary differences can be 
controlled and it is probable that the temporary differences will 
not reverse in the foreseeable future and 
 deferred 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 statement of financial position date and reduced to the extent 
that it is no longer probable that sufficient taxable profit will be 
available to allow all or part of the deferred income tax assets to be 
utilised unrecognised deferred income tax assets are reassessed 
at each statement of financial position date and are recognised to 
the extent that it has become probable that future taxable profit will 
allow the deferred tax asset to be recovered 
deferred 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 
statement of financial position 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 consolidated 
income statement 
derivative financial instruments and hedging 
the group uses derivative financial instruments such as forward 
currency contracts and oil price collars and forward contracts to 
hedge its risks associated with foreign currency and oil price 
fluctuations such derivative financial instruments are initially 
recognised at fair value on the date on which a derivative contract is 
entered into and are subsequently remeasured at fair value 
derivatives are carried as assets when the fair value is positive and 
as liabilities when the fair value is negative 
any gains or losses arising from changes in the fair value of 
derivatives that do not qualify for hedge accounting are taken 
to the consolidated income statement 
the fair value of forward currency contracts is calculated by 
reference to current forward exchange rates for contracts with 
similar maturity profiles the fair value of oil price collar contracts is 
determined by reference to market values for similar instruments 
for the purposes of hedge accounting hedges are classified as 
 fair value hedges when hedging the exposure to changes in the 
fair value of a recognised asset or liability or 
 cash flow hedges when hedging exposure to variability in cash 
flows that is either attributable to a particular risk associated 
with a recognised asset or liability or a highly probable forecast 
transaction 
the group formally designates and documents the relationship 
between the hedging instrument and the hedged item at the 
inception of the transaction as well as its risk management 
objectives and strategy for undertaking various hedge transactions 
the documentation also includes identification of the hedging 
instrument the hedged item or transaction the nature of risk being 
hedged and how the group will assess the hedging instrument’s 
effectiveness in offsetting the exposure to changes in the hedged 
item’s fair value or cash flows attributable to the hedged risk 
the group also documents its assessment both at hedge inception 
and on an ongoing basis of whether the derivatives that are used 
in the hedging transactions are highly effective in offsetting changes 
in fair values or cash flows of the hedged items 
the treatment of gains and losses arising from revaluing derivatives 
designated as hedging instruments depends on the nature of the 
hedging relationship as follows 
cash flow hedges 
for cash flow hedges the effective portion of the gain or loss on 
the hedging instrument is recognised directly in the statement of 
changes in equity while the ineffective portion is recognised in the 
consolidated income statement amounts taken to equity are 
transferred to the consolidated income statement when the hedged 
transaction affects the consolidated income statement 
if the hedging instrument expires or is sold terminated or exercised 
without replacement or rollover or if its designation as a hedge is 
revoked any cumulative gain or loss existing in equity at that time 
remains in equity and is recognised when the forecast transaction is 
ultimately recognised in the consolidated income statement when a 
forecast transaction is no longer expected to occur the cumulative 
gain or loss that was reported in the statement of changes in equity 
is immediately transferred to the consolidated income statement 
embedded derivatives 
contracts are assessed for the existence of embedded derivatives 
at the date that the group first becomes party to the contract 
with reassessment only if there is a change to the contract that 
significantly modifies the cash flows embedded derivatives which 
are not clearly and closely related to the underlying asset liability 
or transaction are separated and accounted for as 
standalone derivatives 
  119 petrofac annual report and accounts 2012
 
 
 
3 segment information 
the group delivers its services through the four reporting segments set out below 
 onshore engineering  construction which provides engineering procurement and construction project execution services to the 
onshore oil and gas industry  
 offshore projects  operations which provides offshore engineering operations and maintenance on and offshore and engineering 
procurement and construction project execution services to the offshore oil and gas industry 
 engineering  consulting services which provides technical engineering consultancy conceptual design front end engineering 
and design feed and project management consultancy pmc across all sectors including renewables and carbon capture  
 integrated energy services which coinvests with partners in oil and gas production processing and transportation assets provides 
production improvement services under value aligned commercial structures and oil and gas related technical competency training 
and consultancy services  
management separately monitors the trading results of its four reporting segments for the purpose of making an assessment of their 
performance and making decisions about how resources are allocated to them each segment’s performance is measured based on 
its profitability which is reflected in a manner consistent with the results shown below however certain shareholder services related 
overheads group financing and consolidation adjustments are managed at a corporate level and are not allocated to reporting segments 
the following tables represent revenue and profit information relating to the group’s reporting segments for the year ended 
31 december 2012 
year ended 31 december 2012 
  
onshore 
engineering 
construction
usm
offshore 
projects  
operations 
usm
engineering 
 consulting
services
usm
integrated 
energy 
services 
usm
corporate 
 others 
usm  
consolidation 
adjustments 
 eliminations 
usm 
total
usm
revenue     
external sales  4332 1237 100 704 –  49 6324
intersegment sales  26 166 148 15 –  355 –
total revenue  4358 1403 248 719 –  404 6324
 
segment results  540 79 30 141 6  26 770
unallocated corporate costs  – – – – 4  – 4
profitloss before tax and finance 
incomecosts  54079301412  26 766
share of losses of associates  – – – 8 –  – 8
finance costs  – – – 4 6  5 5
finance income  8 – 1 7 9  13 12
profitloss before income tax  548 79 31 136 5  34 765
income tax expenseincome  69 18 4 47 8  5 135
noncontrolling interests  – – 2 – –  – 2
profitloss for the year attributable to  
 petrofac limited shareholders  479 61 29 89 13  39 632
 
other segment information     
capital expenditures     
property plant and equipment  76 13 7 355 4  25 430
intangible oil and gas assets  – – – 165 –  – 165
 
charges     
depreciation  40155556  2 119
amortisation and net impairment  – 1 1 8 1  – 11
other longterm employment benefits  16 1 – 1 –  1 19
sharebased payments  13 3 1 5 4  – 26
 elimination of external sales shown above of us49m represents a group adjustment to the overall project percentage of completion on the laggan tormore 
project as oec and opo are reflecting in their segments progress on their own respective shares of the total project scope 
  120 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
3 segment information continued 
year ended 31 december 2011 
  
onshore 
engineering 
construction
usm
offshore 
projects  
operations 
usm
engineering 
 consulting 
services
usm
integrated 
energy 
services 
usm
corporate 
 others 
usm  
consolidation 
adjustments 
 eliminations 
usm 
total
usm
revenue     
external sales  4068 1165 64 504 –  – 5801
intersegment sales  78 87 144 15 –  324 –
total revenue  4146 1252 208 519 –  324 5801
 
segment results  554 57 33 57 –  8 693
unallocated corporate costs  – – – – 9  – 9
profitloss before tax and finance  
 incomecosts  554 57 33 57 9  8 684
share of losses of associates  – – – 4 –  – 4
finance costs  2 1 – 3 3  2 7
finance income  9 – – – 2  3 8
profitloss before income tax  561 56 33 50 10  9 681
income tax expenseincome  98 12 2 28 1  2 141
noncontrolling interests  – – – – –  – –
profitloss for the year attributable to  
 petrofac limited shareholders  463 44 31 22 9  11 540
 
other segment information     
capital expenditures     
property plant and equipment  54 58 8 312 6  3 435
intangible oil and gas assets  – – – 40 –  – 40
 
charges  
 
 
 
depreciation  3146351  – 77
amortisation  –111–  – 3
other longterm employment benefits  12 – – 1 –  – 13
sharebased payments  12 2 1 4 4  – 23
geographical segments 
the following tables present revenue from external customers based on their location and noncurrent assets by geographical segments for 
the years ended 31 december 2012 and 2011 
year ended 31 december 2012 
  
turkmenistan 
usm
united 
kingdom 
usm  
algeria
usm
united 
arab 
emirates 
usm
malaysia 
usm
kuwait
usm
qatar 
usm  
other 
countries 
usm 
consolidated 
usm
revenues from  
 external customers  1697 1186  862 793 448 319 259  760 6324
 
united 
kingdom 
usm  
united arab 
emirates 
usm
mexico 
usm
romania 
usm
malaysia
usm
singapore 
usm  
other 
countries 
usm 
consolidated 
usm
noncurrent assets      
property plant and equipment 68  127 86 75 382 76  91 905
intangible oil and gas assets 10  – – – 251 –  7 268
other intangible assets 13  – 16 5 – –  5 39
goodwill 107  17––––  1 125
 
   121 petrofac annual report and accounts 2012
 
 
 
 
year ended 31 december 2011 
  
united arab 
emirates 
usm
united 
kingdom 
usm  
turkmenistan 
usm
malaysia 
usm
algeria 
usm
kuwait
usm
qatar 
usm  
other 
countries 
usm 
consolidated 
usm
revenues from  
 external customers  1291 939  768 653 749 379 257  765 5801
 
united 
kingdom 
usm  
united arab 
emirates 
usm
tunisia 
usm
algeria 
usm
malaysia
usm
thailand 
usm  
other 
countries 
usm 
consolidated 
usm
noncurrent assets      
property plant and equipment 71  105 42 27 256 48  45 594
intangible oil and gas assets 1  – – – 102 –  – 103
other intangible assets 13  – – – – –  6 19
goodwill 91  15––––  1 107
revenues disclosed in the above tables are based on where the project is located revenues representing greater than 10 of group 
revenues arose from one customer amounting to us1697m 2011 two customers us1653m in the onshore engineering  
construction segment 
4 revenues and expenses 
a revenue 
  
2012 
 usm 
2011
 usm
rendering of services   6205 5651
sale of crude oil and gas   111 143
sale of processed hydrocarbons    8 7
   6324 5801
included in revenues from rendering of services are offshore projects  operations engineering  consulting services and integrated 
energy services revenues of a ‘passthrough’ nature with zero or low margins amounting to us220m 2011 us229mthe revenues 
are included as external revenues of the group since the risks and rewards associated with recognition are assumed by the group 
b cost of sales 
included in cost of sales for the year ended 31 december 2012 is depreciation charged on property plant and equipment of us101m 
during 2012 2011 us62m note 9 
also included in cost of sales are forward points and ineffective portions on derivatives designated as cash flow hedges and losses on 
undesignated derivatives of us2m 2011 us6m lossthese amounts are an economic hedge of foreign exchange risk but do not meet 
the criteria within ias 39 and are most appropriately recorded in cost of sales 
c selling general and administration expenses 
  
2012 
 usm 
2011
 usm
staff costs   228 187
depreciation note 9   18 15
amortisation note 11    4 3
net impairment of an investment in associate note 12    7 –
other operating expenses    102 78
   359 283
other operating expenses consist mainly of office travel legal and professional and contracting staff costs 
   122 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
4 revenues and expenses continued 
d staff costs 
  
2012 
 usm 
2011
 usm
total staff costs     
wages and salaries    1179 1045
social security costs    52 38
defined contribution pension costs    20 21
other longterm employee benefit costs note 25    19 13
expense of sharebased payments note 22    26 23
   1296 1140
of the us1296m 2011 us1140m of staff costs shown above us1068m 2011 us953m is included in cost of sales with the 
remainder in selling general and administration expenses 
the average number of payrolled staff employed by the group during the year was 15259 2011 13212 
e auditors’ remuneration 
the group paid the following amounts to its auditors in respect of the audit of the financial statements and for other services provided 
to the group 
  
2012 
 usm 
2011
 usm
group audit fee   1 1
audit of accounts of subsidiaries    1 1
others   1 1
   3 3
others include audit related assurance services of us327000 2011 us283000 tax advisory services of us235000 2011 us432000 
tax compliance services of us113000 2011 us208000 and other nonaudit services of us118000 2011 us90000 
f other income 
  
2012 
 usm 
2011
 usm
foreign exchange gains    9 3
gain on disposal of noncurrent asset held for sale note 15   27 –
fair value on initial recognition of investment in associate note 12   9 –
gain on disposal of an investment in a joint venture    6 –
recovery of legal claim    6 –
gain on fair value changes in seven energy warrants note 12   – 6
other income    8 3
   65 12
gain on sale of noncurrent asset held for sale of us36m comprises us27m on disposal of 752 of petrofac’s interest in petrofac 
fpf1 limited to ithaca energy inc and us9m being the increase in fair value of the remaining 248 interest held which is classified as 
an associate 
g other expenses 
  
2012 
 usm 
2011
 usm
foreign exchange losses    11 4
loss on fair value changes in seven energy warrants note 12   6 –
other expenses    3 1
   20 5
 
   123 petrofac annual report and accounts 2012
 
 
 
5 finance costsincome 
  
2012 
 usm 
2011
 usm
interest payable     
longterm borrowings    2 3
other interest including shortterm loans and overdrafts    1 2
unwinding of discount on provisions note 25   2 2
total finance cost    5 7
interest receivable    
bank interest receivable    5 8
unwinding of discount on longterm receivables from customers   7 –
total finance income    12 8
6 income tax 
a tax on ordinary activities  
the major components of income tax expense are as follows 
  
2012 
 usm 
2011
 usm
current income tax    
current income tax charge   97 138
adjustments in respect of current income tax of previous years    29 1
deferred income tax    
relating to origination and reversal of temporary differences   73 9
recognition of tax losses relating to prior periods   6 –
adjustments in respect of deferred income tax of previous years    – 7
income tax expense reported in the income statement    135 141
income tax reported in equity    
deferred income tax related to items credited directly to equity   4 5
current income tax related to share schemes   5 4
income tax incomeexpense reported in equity   1 1
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 
  
2012 
usm 
2011
 usm
accounting profit before tax    765 681
at jersey’s domestic income tax rate of 0 2011 0    – –
expected tax charge in higher rate jurisdictions    160 141
expenditure not allowable for income tax purposes    13 3
adjustments in respect of previous years    36 6
adjustments in respect of losses not previously recognisedderecognised    2 1
unrecognised tax losses    – 2
other permanent differences    1 1
effect of change in tax rates    1 1
at the effective income tax rate of 177 2011 207    135 141
the group’s effective tax rate for the year ended 31 december 2012 is 177 2011 207 a number of factors have impacted the 
effective tax rate this year including the net release of tax provisions held in respect of income taxes the recognition of tax losses previously 
unrecognised and the mix of profits in the jurisdictions in which profits are earned adjustments in respect of prior periods represent the 
creation or release of tax provisions following the normal review audit and final settlement process that occurs in the territories in which the 
group operates from 1 april 2013 the main uk corporation tax rate will be 23 subsequently reducing to 21 in 2014 the change in 
the main uk rate to 23 was substantively enacted as at the balance sheet date this change will impact the reversal of the temporary 
difference from this date onwards reducing the group’s uk deferred tax assets and liabilities for the year ended 31 december 2012 
it is not expected that the proposed future rate reduction will have a significant effect on the net uk deferred tax position 
   124 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
6 income tax continued 
c deferred income tax 
deferred income tax relates to the following 
consolidated statement 
of financial position  
consolidated income 
statement 
2012
 usm
2011 
 usm  
2012 
 usm 
2011
 usm
deferred income tax liabilities  
fair value adjustment on acquisitions 
3 3  
 
– 2
accelerated depreciation 121 43  78 6
profit recognition 100 14  86 6
other temporary differences – –  – 2
gross deferred income tax liabilities 224 60   
deferred income tax assets 
losses available for offset 96 2  94 –
decelerated depreciation for tax purposes 3 2  1 –
share scheme 9 10  1 1
profit recognition 11 11  – 7
other temporary differences 5 4  1 2
gross deferred income tax assets 124 29   
net deferred tax liabilitydeferred income tax charge  100 31  67 2
of which    
deferred income tax assets 43 29   
deferred income tax liabilities 143 60   
d unrecognised tax losses and tax credits 
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 us27m 2011 us31m 
the 2011 values of unrecognised losses have been restated to reflect the revised loss position 
  
2012 
 usm 
2011
 usm
expiration dates for tax losses  
no earlier than 2017   7 –
no earlier than 2022   – 9
no expiration date   8 8
   15 17
tax credits no expiration date   12 14
   27 31
during 2012 the group recognised a tax benefit from the utilisation of tax losses of us3m 2011 us1m recognition of losses not 
previously recognised of us6m 2011 us nil and derecognition of tax losses from a prior period us7m 2011 us nil 
 
   125 petrofac annual report and accounts 2012
 
 
 
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 
  
2012 
 usm 
2011
 usm
net profit attributable to ordinary shareholders for basic and diluted earnings  
 per share 
  
 
632 540
 
  
2012 
number 
’m 
2011 
number
’m
weighted average number of ordinary shares for basic earnings per share    340 339
effect of dilutive potential ordinary shares granted under sharebased payment schemes    3 4
adjusted weighted average number of ordinary shares for diluted earnings per share    343 343
8 dividends paid and proposed 
  
2012 
 usm 
2011
 usm
declared and paid during the year     
equity dividends on ordinary shares  
final dividend for 2010 3000 cents per share 
  
 
– 102
interim dividend 2011 1740 cents per share   – 59
final dividend for 2011 3720 cents per share    127 –
interim dividend 2012 2100 cents per share   71 –
   198 161
 
  
2012 
 usm 
2011
 usm
proposed for approval at agm     
not recognised as a liability as at 31 december    
equity dividends on ordinary shares  
final dividend for 2012 4300 cents per share 2011 3720 cents per share 
  
 
149 129
 
   126 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
9 property plant and equipment 
  
oil and gas 
assets 
usm  
oil and gas 
facilities 
usm
land 
buildings 
and 
leasehold 
improvements 
usm
plant and 
equipment 
usm
vehicles 
usm
office  
furniture  
and 
equipment 
usm  
assets  
under 
construction 
usm 
total 
usm
cost        
at 1 january 2011  118  166 158 23 15 87  13 580
additions  3  306 64 5 3 30  24 435
disposals  –  – 2 2 1 10  – 15
transfers  –  44 – – – 13  13 44
exchange difference  3  2 2 – – 1  – 8
at 1 january 2012  118  426 218 26 17 119  24 948
additions  170  139 30 3 6 29  53 430
disposals  –  7 4 10 – 2  – 23
transfers  –  – – – – –  – –
exchange difference  –  – 1 – – 1  – 2
at 31 december 2012  288  558 245 19 23 147  77 1357
 
depreciation   
     
at 1 january 2011  50  118 45 18 8 54  – 293
charge for the year  14  19 20 1 4 19  – 77
disposals  –  – 2 2 – 10  – 14
transfers  –  – – – – –  – –
exchange difference  2  – – – – –  – 2
at 1 january 2012  62  137 63 17 12 63  – 354
charge for the year  36  11 33 2 4 33  – 119
disposals  –  7 4 10 – 1  – 22
transfers  –  – – – – –  – –
exchange difference  –  – – – – 1  – 1
at 31 december 2012  98  141 92 9 16 96  – 452
net carrying amount 
at 31 december 2012  190  417 153 10 7 51  77 905
at 31 december 2011  56  289 155 8 6 56  24 594
 
   127 petrofac annual report and accounts 2012
 
 
 
additions to oil and gas assets mainly comprise field development costs relating to the santuario and magallanes fields of us106m and 
ticleni field of us48m 
additions to oil and gas facilities in 2012 mainly comprise the upgrade of the fpf5 at a cost of us104m 2011 us305m purchase and 
upgrade of the fpf1 fpso berantai fpf3 fpf4 and fpf5 transfers from oil and gas facilities in 2011 include transfer of the fpf1 to 
noncurrent asset held for sale as part of the pending ithaca transaction note 15 
of the total charge for depreciation in the income statement us101m 2011 us62m is included in cost of sales and us18m 
2011 us15m in selling general and administration expenses 
assets under construction comprise expenditures incurred in relation to a new office building in the united arab emirates and the group 
enterprise resource planning erp project 
included in land buildings and leasehold improvements is property plant and equipment under finance lease agreements for which book 
values are as follows 
acquisitions during the year comprise the goodwill recognised on acquisition of kw limited of us14m being the difference between the 
fair value of the consideration of us16m and the fair value of the assets acquired of us2m and hlspd americas s de rl of us1m 
reassessment of contingent consideration payable comprises of the increase in contingent consideration payable on spd group limited 
of us nil 2011 us1m and a decrease in contingent consideration payable on caltec limited of us1m 2011 us nil 
goodwill acquired through business combinations has been allocated to three groups of cashgenerating units for impairment testing 
as follows  
 offshore projects  operations  
 engineering  consulting services  
 integrated energy services 
these represent the lowest level within the group at which the goodwill is monitored for internal management purposes  
offshore projects  operations engineering  consulting services and integrated energy services cashgenerating units 
the recoverable amounts for the offshore projects  operations engineering  consulting services and integrated energy services  
cashgenerating units have been determined based on value in use calculations using discounted pretax cash flow projections 
management have adopted projection periods appropriate to each unit’s value in use for offshore projects  operations and engineering 
 consulting services cashgenerating units the cash flow projections are based on financial budgets approved by senior management 
covering a fiveyear period extrapolated at a growth rate of 25 for the integrated energy services business the cash flows are based 
on field models over the length of the contracted period for production enhancement contracts and risk service contracts for other 
operations included in integrated energy services cash flows are based on financial budgets approved by senior management covering 
a fiveyear period extrapolated at a growth rate of 25 the carrying amount of goodwill for the offshore projects  operations and 
engineering  consulting services cashgenerating units are not individually significant in comparison with the total carrying amount of 
goodwill and therefore no analysis of sensitivities has been provided below 
  
net book value   
2012 
usm 
2011
usm
gross book value    35 36
addition   5 –
depreciation   7 1
exchange difference   1 –
at 31 december   34 35
10 goodwill 
a summary of the movements in goodwill is presented below 
  
2012 
usm 
2011
 usm
at 1 january    107 106
acquisitions during the year   15 –
reassessment of contingent consideration payable    1 1
exchange difference    4 –
at 31 december    125 107 128 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
10 goodwill continued 
carrying amount of goodwill allocated to each group of cashgenerating units 
  
2012 
 usm 
2011
 usm
offshore projects  operations unit    29 28
engineering  consulting services unit   23 8
integrated energy services unit    73 71
   125 107
key assumptions used in value in use calculations for the integrated energy services unit 
market share for the training business which is within integrated energy services the key assumptions relate to management’s 
assessment of maintaining the unit’s market share in the uk and developing further the business in international markets 
capital expenditure the production enhancement contracts in the integrated energy services unit require a minimum level of capital spend 
on the projects in the initial years to meet contractual commitments if the capital is not spent a cash payment of the balance is required 
which does not qualify for cost recovery the level of capital spend assumed in the value in use calculation is that expected over the period 
of the budget based on the current field development plans which assumes the minimum spend is met on each project and the contracts 
remain in force for the entire duration of the project 
reserve volumes and production profiles management has used its internally developed economic models of reserves and production as 
inputs into the value in use for the production enhancement risk service and production sharing contracts management has used an oil 
price of us100 per barrel 2011 us85 per barrel to determine reserve volumes on production sharing contracts 
tariffs and payment terms the tariffs and payment terms used in the value in use calculations for the production enhancement and risk 
service contracts are those specified in the respective contracts with assumptions consistent with the current field development plan where 
kpi’s influence the payment terms 
growth rate estimates are based on management’s assessment of market share having regard to macroeconomic factors and the growth 
rates experienced in the recent past in the markets in which the unit operates a growth rate of 25 per annum has been applied for 
businesses within the integrated energy services cashgenerating unit where the cash flows are not based on longterm contractual 
arrangements 
discount rate management has used a pretax discount rate of 132 per annum 2011 138 per annum the discount rate is derived 
from the estimated weighted average cost of capital of the group and has been calculated using an estimated risk free rate of return 
adjusted for the group’s estimated equity market risk premium 
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 and gas industry and the commercial arrangements with customers underpinning 
the cash flow forecasts for each of the units 
   129 petrofac annual report and accounts 2012
 
 
 
11 intangible assets 
  
2012 
 usm 
2011
 usm
intangible oil and gas assets     
cost     
at 1 january    103 69
additions    165 40
transfer to costs    – 6
net book value of intangible oil and gas assets at 31 december    268 103
 
other intangible assets    
 
cost     
at 1 january    30 25
additions on acquisition   6 –
transfer from other noncurrent financial assets note14   10 –
additions    7 6
disposals   – –
exchange difference    1 1
at 31 december    54 30
accumulated amortisation     
at 1 january    11 8
amortisation    4 3
disposal    – –
exchange difference    – –
at 31 december    15 11
net book value of other intangible assets at 31 december    39 19
total intangible assets   307 122
intangible oil and gas assets 
oil and gas assets part of the integrated energy services segment additions above comprise largely us149m 2011 us39m 
of capitalised expenditure on the group’s assets in malaysia 
there were investing cash outflows relating to capitalised intangible oil and gas assets of us165m 2011 us40m in the current period 
arising from predevelopment activities 
us6m transfer in 2011 relates to a longterm receivable from a customer on the berantai rsc contract being their share of development 
expenditure which was transferred to costs 
other intangible assets 
other intangible asset additions on acquisition represent us6m of elearning software that formed part of the acquisition during the year 
of oilennium limited transfers from other noncurrent financial assets are transition costs relating to the santuario magallanes and ticleni 
production enhancement contracts of us10m note 14 
other intangible assets comprising project development expenditure customer contracts proprietary software lng intellectual property 
and patent technology are being amortised over their estimated economic useful life on a straightline basis and the related amortisation 
charges included in selling general and administration expenses note 4c 
   130 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
12 investments in associates 
  
2012 
 usm 
2011
 usm
investment in gateway storage company limited    – 14
associates acquired through acquisition of subsidiary   1 1
transfer from subsidiary to investment in associate – petrofac fpf1 limited   9 –
investment in seven energy international limited   167 149
   177 164
as a result of the disposal of 752 of petrofac fpf1 limited see note 4f the remaining 248 investment is classified as an associate 
recognised at a fair value of us9m 
gateway storage company limited 
during the year the group’s investment of us14m representing 20 of the equity of gateway storage company limited has been written 
off in the consolidated income statement and the associated contingent consideration payable of us7m note 26 has also been reversed 
in the consolidated income statement due to continuing uncertainty over the future prospects for the company’s business 
seven energy international limited 
on 25 november 2010 the group invested us100m for 150 126 on a fully diluted basis of the share capital of seven energy 
international limited seven energy a leading nigerian gas development and production company incurring us1m of transaction costs 
this investment which was previously held under availableforsale financial assets was transferred to investments in associates pursuant 
to an investment on 10 june 2011 of us50m for an additional 46 of the share capital of seven energy which resulted in the group 
being in a position to exercise significant influence over seven energy on 30 october 2012 the group invested us25m for an additional 
24 of the share capital of seven energy the additional us25m investment was made as part of a discounted rights issue required to 
deal with a shortterm funding requirement by seven energy at a subscription price of us150 per share and in light of this the carrying 
value of the investment has been tested for impairment and no impairment provision is required no negative goodwill has been accounted 
for on the rights issue as the range of possible outcomes was immaterial the group also has the option to subscribe for 148571 of 
additional warrants in seven energy at a cost of a further us52m subject to the performance of certain service provision conditions and 
milestones in relation to project execution these warrants have been fair valued at 31 december 2012 as derivative financial instruments 
under ias 39 using a black scholes model amounting to us12m 2011 us18m us6m 2011 us6m other income has been 
recognised as other expense in the current period income statement as a result of the revaluation of these derivatives at 31 december 2012 
note 4g during 2012 deferred revenue recognised in trade and other payables of us2m at 31 december 2012 was released in full to the 
consolidated income statement as 100 of the performance conditions required to subscribe for the remaining warrants in the company 
were satisfied 2011 80 satisfied with revenue recognised of us10m 
the share of the associate’s statement of financial position is as follows 
  
2012 
 usm 
2011
 usm
noncurrent assets   163 93
current assets   22 22
noncurrent liabilities   56 48
current liabilities   59 11
equity    70 56
transaction costs incurred    2 2
residual goodwill    95 91
carrying value of investment   167 149
share of associates revenues and net loss 
revenue 
  
 
23 24
net loss   8 3
 
   131 petrofac annual report and accounts 2012
 
 
13 interest in joint ventures 
in the normal course of business the group establishes jointly controlled entities for the execution of certain of its operations and contracts 
a list of these joint ventures is disclosed in note 32 
the group’s share of assets liabilities revenues and expenses relating to jointly controlled entities is as follows 
  
2012 
 usm 
2011
 usm
revenue    266 453
cost of sales    195 376
gross profit    71 77
selling general and administration expenses    50 50
finance expenseincome net    2 1
profit before income tax    19 28
income tax    3 1
net profit    16 27
 
current assets    
 
95 172
noncurrent assets    256 183
total assets    351 355
 
current liabilities    
 
133 272
noncurrent liabilities    184 57
total liabilities    317 329
net assets    34 26
14 other financial assets 
  
2012 
 usm 
2011
 usm
other financial assets – noncurrent    
longterm receivables from customers   437 130
restricted cash   7 –
other   – 10
   444 140
other financial assets – current  
shortterm component of receivable from a customer    67 –
seven energy warrants note 12   12 18
fair value of derivative instruments note 31   2 9
restricted cash   4 2
other   – 1
   85 30
the longterm receivables from customers relate to the discounted value of amounts due under the berantai rsc which are being 
recovered over a six year period from 2013 in line with the contractual terms of the project and to amounts receivable in respect of the 
development of the greater stella area 
restricted cash comprises deposits with financial institutions securing various guarantees and performance bonds associated with the 
group’s trading activities note 29this cash will be released on the maturity of these guarantees and performance bonds included in 
other noncurrent financial assets in 2011 are transition costs relating to the santuario magallanes and ticleni production enhancement 
contracts which have been transferred to other intangible assets in 2012 note 11 
   132 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
15 noncurrent asset held for sale 
  
2012 
 usm 
2011
 usm
noncurrent asset held for sale note 9   – 44
liabilities directly associated with noncurrent asset held for sale   – 5
the noncurrent asset held for sale part of the integrated energy services segment at 31 december 2011 comprising fpf1 ltd was partly 
disposed of to the extent of 752 the retained interest of 248 was recognised as an investment in associate at fair value note 12 
16 inventories 
  
2012 
 usm 
2011
 usm
crude oil   3 4
stores and spares   23 6
raw materials   1 1
   27 11
included in the consolidated income statement are costs of inventories expensed of us18m 2011 us32m 
17 work in progress and billings in excess of cost and estimated earnings 
  
2012  
usm 
2011 
usm
cost and estimated earnings   10619 12066
less billings   9963 11454
work in progress   656 612
 
billings   5790 2856
less cost and estimated earnings   5462 2467
billings in excess of cost and estimated earnings   328 389
 
total cost and estimated earnings   16081 14533
 
total billings   15753 14310
18 trade and other receivables 
  
2012 
 usm 
2011
 usm
trade receivables   1227 869
retentions receivable   180 71
advances   144 216
prepayments and deposits   41 31
receivables from joint venture partners   268 131
other receivables   55 35
   1915 1353
other receivables mainly consist of value added tax recoverable of us46m 2011 us8m with the balance being miscellaneous non
trading receivables 
   133 petrofac annual report and accounts 2012
 
 
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 us1227m 2011 us869m are as follows 
2012 2011 
specific 
impairment 
usm
general 
impairment 
usm
total 
usm
specific 
impairment 
usm  
general 
impairment 
usm 
total 
usm
at 1 january 21 3 3  3 6
charge for the year –22 –  – –
amounts writtenoff – 2 2 1  2 3
at 31 december 2 1 3 2  1 3
at 31 december the analysis of trade receivables is as follows 
neither past 
due nor 
impaired 
usm 
 number of days past due 
 
 30
days 
usm
31–60
days 
usm
61–90
 days
 usm
91–120
days
 usm
121–360 
days 
 usm  
 360 
 days 
 usm 
total
 usm
unimpaired 838  252 58 21 5 24  10 1208
impaired –  – – – 13 5  4 22
 838  252 58 21 18 29  14 1230
less impairment provision –  – – – 1 1  1 3
net trade receivables 2012 838  252 58 21 17 28  13 1227
 
unimpaired 570  156 109 14 4 13  1 867
impaired –  – – – 2 2  1 5
 570  156 109 14 6 15  2 872
less impairment provision –  – – – – 2  1 3
net trade receivables 2011 570  156 109 14 6 13  1 869
the credit quality of trade receivables that are neither past due nor impaired is assessed by management with reference to externally 
prepared customer credit reports and the historic payment track records of the counterparties 
advances represent payments made to certain of the group’s subcontractors for projects in progress on which the related work had not 
been performed at the statement of financial position date the decrease in advances during 2012 relates to the unwinding of advances on 
more mature contracts in the onshore engineering  construction reporting segment 
receivables from joint venture partners are amounts recoverable from venture partners on the berantai fpso block pm304 and petrofac 
emirates on an engineering procurement and construction project 
all trade and other receivables are expected to be settled in cash 
certain trade and other receivables will be settled in cash using currencies other than the reporting currency of the group and will be largely 
paid in sterling and euros 
19 cash and shortterm deposits 
  
2012 
 usm 
2011
 usm
cash at bank and in hand   398 490
shortterm deposits   216 1082
total cash and bank balances   614 1572
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 us614m 2011 
us1572m 
for the purposes of the consolidated cash flow statement cash and cash equivalents comprise the following 
  
2012 
 usm 
2011
 usm
cash at bank and in hand   398 490
shortterm deposits   216 1082
bank overdrafts note 24   57 37
   557 1535
 
   134 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
20 share capital 
the share capital of the company as at 31 december was as follows 
  
2012 
usm 
2011
usm
authorised   
750000000 ordinary shares of us0020 each 2011 750000000 ordinary shares of us0020 each  15 15
 
issued and fully paid   
345891490 ordinary shares of us0020 each 2011 345821729 ordinary shares of us0020 each  7 7
the movement in the number of issued and fully paid ordinary shares is as follows 
  number
ordinary shares  
ordinary shares of us0020 each at 1 january 2011  345715053
issued during the year as further contingent consideration payable for the acquisition of a subsidiary  106676
ordinary shares of us0020 each at 1 january 2012  345821729
issued during the year as further contingent consideration payable for the acquisition of a subsidiary  69761
ordinary shares of us0020 each at 31 december 2012  345891490
the share capital comprises only one class of ordinary shares the ordinary shares carry a voting right and the right to a dividend 
share premium the balance on the share premium account represents the amount received in excess of the nominal value of the 
ordinary shares 
capital redemption reserve the balance on the capital redemption reserve represents the aggregated nominal value of the ordinary 
shares repurchased and cancelled 
21 treasury shares 
for the purpose of making awards under its employee share schemes the company acquires its own shares which are held by the 
petrofac employee benefit trust and the petrofac joint venture companies employee benefit trust all these shares have been classified 
in the statement of financial position as treasury shares within equity 
the movements in total treasury shares are shown below 
2012  2011 
number usm  number  usm
at 1 january 5736017 75  6757339  65
acquired during the year 3000000 76  2074138  49
vested during the year 3269804 51  3095460  39
at 31 december 5466213 100  5736017  75
shares vested during the year include dividend shares and 8 uplift adjustment made in respect of the enquest demerger of 375040 
shares 2011 393344 shares 
22 sharebased payment plans 
performance share plan psp 
under the company’s performance share plan share awards are granted to executive directors and a restricted number of other senior 
executives of the group the shares vest at the end of three years subject to continued employment and the achievement of certain pre
defined market and nonmarketbased performance conditions the 50 market performance based part of these awards is dependent 
on the total shareholder return tsr of the group compared with an index composed of selected relevant companies the fair value of 
the shares vesting under this portion of the award is determined by an independent valuer using a monte carlo simulation model taking 
into account the terms and conditions of the plan rules and using the following assumptions at the date of grant 
2012
awards
2011 
awards  
2010 
awards  
2009
awards
expected share price volatility based on median of comparator  
 group’s threeyear volatilities 380 510  500  490
share price correlation with comparator group 460 430  390  360
riskfree interest rate 04 17  150  210
expected life of share award 3 years 3 years  3 years  3 years
fair value of tsr portion 1103p 788p  743p  456p 135 petrofac annual report and accounts 2012
 
 
 
the nonmarketbased condition governing the vesting of the remaining 50 of the total award is subject to achieving between 10 and 
20 earnings per share eps growth targets over a threeyear period the fair values of the equitysettled award relating to the eps part of 
the scheme are estimated based on the quoted closing market price per company share at the date of grant with an assumed vesting rate 
per annum built into the calculation subsequently trued up at year end based on the actual leaver rate during the period from award date to 
year end over the threeyear vesting period of the plan  
deferred bonus share plan dbsp 
under the dbsp selected employees are required to defer a proportion of their annual cash bonus into company shares ‘invested award’ 
following such an award the company will generally grant the participant an additional award of a number of shares bearing a specified 
ratio to the number of his or her invested shares ‘matching shares’ typically using a 11 ratio subject to a participant’s continued 
employment invested and matching share awards may either vest 100 on the third anniversary of grant or alternatively vest onethird on 
the first anniversary of the grant onethird on the second anniversary and the final proportion on the third anniversary 
at the year end the values of the bonuses settled by shares cannot be determined until the remuneration committee has approved the 
portion of the employee bonuses to be settled in shares once the portion of the bonus to be settled in shares is determined the final 
bonus liability to be settled in shares is transferred to the reserve for sharebased payments the costs relating to the matching shares are 
recognised over the corresponding vesting period and the fair values of the equitysettled matching shares granted to employees are based 
on the quoted closing market price at the date of grant with the charge adjusted to reflect the expected vesting rate of the plan 
share incentive plan sip 
all uk employees including uk executive directors are eligible to participate in the sip employees may invest up to sterling £1500 per tax 
year of gross salary or if lower 10 of salary to purchase ordinary shares in the company there is no holding period for these shares 
restricted share plan rsp 
under the rsp selected employees are made grants of shares on an ad hoc basis the rsp is used primarily but not exclusively to make 
awards to individuals who join the group part way through the year having left accrued benefits with a previous employer the fair values of 
the awards granted under the rsp at various grant dates during the year are based on the quoted market price at the date of grant 
adjusted for an assumed vesting rate over the relevant vesting period  
value creation plan vcp 
during 2012 the company introduced a new oneoff value creation plan vcp which is a share option scheme for executive directors and 
key senior executives within the company the vcp is a premium priced share option scheme with options granted with an exercise price 
set at a 10 premium to the grant date price options will vest to the extent of satisfying group and divisional profit after tax targets 
together with various other performance underpins and riskmalus provisions that can be imposed at the discretion of the remuneration 
committee of the board the share options vest in equal tranches on the fourth fifth and sixth anniversaries of the original grant date but 
may be exercised up to eight years from the date of grant 
the vcp share options were fair valued by an independent valuer using a blackscholes option pricing model taking into account the rules 
of the plan and using the following key assumptions 
tranche 1 
share price at the date of grant 1555p 
exercise price 1710p 
expected lives of the award 6 years 
share price volatility 41 
share price dividend yield 23 
riskfree interest rates 11 
per share fair values 451p 
sharebased payment plans information 
the details of the fair values and assumed vesting rates of the sharebased payment plans are below 
   psp eps portion dbsp  rsp 
   
fair value per 
share 
assumed 
vesting rate
fair value per 
share
assumed 
vesting rate 
fair value per 
share  
assumed 
vesting rate
2012 awards   1705p 970 1705p 946 1555p  890
2011 awards   1426p 943 1426p 913 1463p  902
2010 awards   1103p 938 1185p 875 990p  905
2009 awards   545p 931 545p 913 430p  700
  
tranche 2 tranche 3
1555p 1555p
1710p 1710p
65 years 7 years
41 41
23 23
12 13
467p 482p 136 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
22 sharebased payment plans continued 
the following table shows the movements in the number of shares held under the sharebased payment plans outstanding but 
not exercisable 
  psp  dbsp rsp   total 
  
2012 
number  
2011 
number  
2012 
number  
2011
number
2012
number
2011
number
vcp  
2012 
number  
2012 
number  
2011
number
outstanding 
 at 1 
 january  1358046  1350189  3809746  4082311 534780 1003712 –  5702572  6436212
granted 
 during 
 the year  409212  482379  1507614  1538252 227726 204402 1773713  3918265  2225033
vested 
 during 
 the year   535072  421309  
 
1991385  1681130 210836 664512 –   2737293  2766951
forfeited 
 during 
 the year  –  53213   205007  129687 29499 8822 –   234506  191722
outstanding 
 at 31  
 december  1232186  1358046  3120968  3809746 522171 534780 1773713  6649038  5702572
includes invested and matching shares 
the number of shares still outstanding but not exercisable at 31 december 2012 for each award is as follows 
  psp  dbsp rsp   total 
  
2012 
number  
2011 
number  
2012 
number 
2011
number
2012
number
2011
number
vcp  
2012 
number  
2012 
number 
2011
number
2012 awards  409212  –  1421132 – 222056 – 1773713  3826113 –
2011 awards  454969  454969  1049174 1491298 138135 204402 –  1642278 2150669
2010 awards  368005  368005  650662 984496 161980 186758 –  1180647 1539259
2009 awards  –  535072  – 1333952 – 36658 –  – 1905682
2008 awards  –  –  – – – 1030 –  – 1030
2007 awards  –  –  – – – 105932 –  – 105932
total awards  1232186  1358046  3120968 3809746 522171 534780 1773713  6649038 5702572
the weighted average share price of the company shares during 2012 was us2491 sterling equivalent of £1570 
the number of outstanding shares excludes the 8 uplift adjustment made in respect of the enquest demerger and dividend shares 
shown below 
   psp dbsp rsp  total 
   
2012 
number  
2011
number
2012
number
2011
number
2012
number
2011 
number  
2012 
number 
2011
number
enquest 8 uplift  –  47335 52037 188177 4542 27982  56579 263494
dividend shares  55511  68073 119699 158691 14058 27090  189268 253854
outstanding at 31 december  55511  115408 171736 346868 18600 55072  245847 517348
the charge in respect of sharebased payment plans recognised in the consolidated income statement is as follows 
   psp  dbsp rsp vcp  total 
   
2012 
 usm  
2011 
 usm  
2012
 usm
2011
 usm
2012
 usm
2011
 usm
2012 
 usm  
2011 
 usm  
2012
 usm
2011
 usm
share based payment charge  6  6  15 13 4 4 1  –  26 23
represents charge on matching shares only 
the group has recognised a total charge of us26m 2011 us23m in the consolidated income statement during the year relating 
to the above employee sharebased schemes see note 4d which has been transferred to the reserve for sharebased payments along 
with us20m of the bonus liability accrued for the year ended 31 december 2011 which has been settled in shares granted during the year 
2011 us18m 
for further details on the above employee sharebased payment schemes refer to pages 92 96 and 99 to 103 of the directors’ 
  
remuneration report  137 petrofac annual report and accounts 2012
 
 
 
23 other reserves 
net unrealised 
gainslosses
on derivatives 
usm
foreign 
currency 
translation 
usm  
reserve for 
sharebased 
payments 
usm  
total
usm
balance at 1 january 2011 3 19  57  35
foreign currency translation losses – 16  –  16
net gains on maturity of cash flow hedges recycled in the year 3 –  –  3
net fair value losses on derivatives and financial assets  
 designated as cash flow hedges 
14 – 
 
– 
 
14
sharebased payments charge note 22 – –  23  23
transfer during the year note 22 – –  18  18
shares vested during the year – –  34  34
deferred tax on sharebased payments reserve – –  3  3
balance at 1 january 2012 20 35  61  6
foreign currency translation – 10  –  10
net losses on maturity of cash flow hedges recycled in the year 20 –  –  20
net changes in fair value of derivatives and financial assets  
 designated as cash flow hedges ––  –  –
sharebased payments charge note 22 – –  26  26
transfer during the year note 22 – –  20  20
shares vested during the year – –  45  45
deferred tax on sharebased payments reserve – –  1  1
balance at 31 december 2012 – 25  63  38
nature and purpose of other reserves 
net unrealised gainslosses on derivatives 
the portion of gains or losses on cash flow hedging instruments that are determined to be effective hedges is included within this reserve 
net of related deferred tax effects when the hedged transaction occurs or is no longer forecast to occur the gain or loss is transferred 
out of equity to the consolidated income statement realised net losses amounting to us20m 2011 us3m net gain relating to foreign 
currency forward contracts and financial assets designated as cash flow hedges have been recognised in cost of sales 
the forward currency points element and ineffective portion of derivative financial instruments relating to forward currency contracts and 
gains on undesignated derivatives amounting to a net loss of us2m 2011 us6m loss have been recognised in the cost of sales 
foreign currency translation reserve 
the foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements 
in foreign subsidiaries it is also used to record exchange differences arising on monetary items that form part of the group’s net investment 
in subsidiaries 
reserve for sharebased payments 
the reserve for sharebased payments is used to record the value of equitysettled sharebased payments awarded to employees and 
transfers out of this reserve are made upon vesting of the original share awards 
the transfer during the year reflects the transfer from accrued expenses within trade and other payables of the bonus liability relating to the 
year ended 2011 of us20m 2010 bonus of us18m which has been voluntarily elected or mandatorily obliged to be settled in shares 
during the year note 22 
   138 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
24 interestbearing loans and borrowings 
the group had the following interestbearing loans and borrowings outstanding 
 
31 december 2012 
actual interest rate 
31 december 2011 
actual interest rate 
effective interest 
rate  maturity  
2012 
usm 
2011 
usm
current    
bank overdrafts i uk libor  150
us libor  150
uk libor  150
us libor  150
uk libor
 150
us libor
 150
on demand  57 37
other loans    
current portion of term loan iii – usuk libor
 0875
na 
2011 316 
to 396
na  – 17
current portion of term loan iv – usuk libor 
 0875
na 
2011 167 
to 355
na  – 7
   57 61
noncurrent    
revolving credit facility ii us libor  150 – us libor
 150
5 years  303 –
term loan iii – usuk libor 
 0875
na 
2011 316 
to 396
na  – 12
term loan iv – usuk libor
 0875
na 
2011 167 
to 355
na  – 7
   303 19
less    
debt acquisition costs net of 
 accumulated amortisation
 and effective interest rate 
 adjustments 
   
 
 
11 3
   292 16
details of the group’s interestbearing loans and borrowings are as follows 
i bank overdrafts 
bank overdrafts are drawn down in us dollars and sterling denominations to meet the group’s working capital requirements 
these are repayable on demand 
ii revolving credit facility 
on 11 september 2012 petrofac entered into a us1200m five year committed revolving credit facility with a syndicate of 13 international 
banks which is available for general corporate purposes the facility which matures on 11 september 2017 is unsecured and is subject 
to two financial covenants relating to leverage and interest cover petrofac was in compliance with these covenants for the year ending 
31 december 2012 as at 31 december 2012 us303m was drawn under this facility 
interest is payable on the drawn balance of the facility at libor  15 and in addition utilisation fees are payable depending on the level 
of utilisation 
iii term loan 
the loan was repaid in full during 2012 and no amounts were drawn during the year 2011 drawings of us15m denominated in us dollars 
and us15m denominated in sterling 
iv term loan 
the loan was repaid in full during 2012 and no amounts were drawn during the year 2011 drawings of us10m denominated in us dollars 
and us4m denominated in sterling 
the group’s credit facilities contain covenants relating to interest and net borrowings cover 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 
   139 petrofac annual report and accounts 2012
 
 
25 provisions 
other 
longterm 
employment 
benefits 
provision
usm
provision for 
decommissioning 
usm  
other 
provisions 
usm 
total
 usm
at 1 january 2012 51 6  3 60
additions during the year 19 27  1 47
paid in the year 8 1  – 9
unwinding of discount 1 1  – 2
at 31 december 2012 63 33  4 100
other longterm employment benefits provision 
labour laws in the united arab emirates require employers to provide for other longterm employment benefits these benefits are payable 
to employees on being transferred to another jurisdiction or on cessation of employment based on their final salary and number of years’ 
service all amounts are unfunded the longterm employment benefits provision is based on an internally produced end of service benefits 
valuation model with the key underlying assumptions being as follows 
  
senior 
employees 
other 
employees
average number of years of future service  5 3
average annual  salary increases  6 4
discount factor  5 5
senior employees are those earning a base of salary of over us96000 per annum 
discount factor used is the local dubai fiveyear sukuk rate 
provision for decommissioning 
the decommissioning provision primarily relates to the group’s obligation for the removal of facilities and restoration of the sites at the 
pm304 field in malaysia chergui in tunisia and santuario and magallanes production enhancement contracts in mexico the liability 
is discounted at the rate of 416 on pm304 2011 416 525 on chergui 2011 525 and 538 on santuario and magallanes 
production enhancement contracts 2011 na the unwinding of the discount is classified as finance cost note 5 the group estimates 
that the cash outflows against these provisions will arise in 2026 on pm304 2018 on chergui and 2029 on santuario and magallanes 
production enhancement contracts 
other provisions 
this represents amounts set aside to cover claims against the group which will be settled via the captive insurance company jermyn 
insurance company limited 
26 other financial liabilities 
  
2012 
usm 
2011 
usm
other financial liabilities – noncurrent   
contingent consideration payable  1 13
finance lease creditors note 29  6 11
fair value of derivative instruments note 31  1 –
other  – –
  8 24
other financial liabilities – current   
contingent consideration payable  7 3
fair value of derivative instruments note 31  3 23
finance lease creditors note 29  7 5
other  – 1
  17 32
contingent consideration payable to the group’s investment in gateway storage company limited of us7m note 12 has been reversed 
during the year 
   140 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
27 trade and other payables 
  
2012 
 usm 
2011
 usm
trade payables  862 477
advances received from customers  373 770
accrued expenses  601 415
other taxes payable  40 24
other payables  105 56
  1981 1742
advances from customers represent payments received for contracts on which the related work had not been performed at the statement 
of financial position date 
other payables mainly consist of retentions held against subcontractors of us86m 2011 us29m 
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 
28 accrued contract expenses 
  
2012 
 usm 
2011
 usm
accrued contract expenses  743 1269
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 2012 the group had letters of credit of us nil 2011 us6m and outstanding letters of guarantee including 
performance advance payments and bid bonds of us2296m 2011 us2185m against which the group had pledged or restricted 
cash balances of in aggregate us11m 2011 us2m 
at 31 december 2012 the group had outstanding forward exchange contracts amounting to us228m 2011 us324m 
these commitments consist of future obligations either to acquire or to 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 noncancellable 
leases have remaining noncancellable lease terms of between one and 17 years and for certain property leases are subject to 
renegotiation at various intervals as specified in the lease agreements the future minimum rental commitments under these noncancellable 
leases are as follows 
  
2012 
 usm 
2011
 usm
within one year  25 24
after one year but not more than five years  108 45
more than five years  198 49
  331 118
included in the above are commitments relating to the leasing of an fpso for the cendor phase 2 project of us149m 2011 us nil 
and the lease of office buildings in aberdeen united kingdom of us127m 2011 us34m 
minimum lease payments recognised as an operating lease expense during the year amounted to us37m 2011 us37m 
   141 petrofac annual report and accounts 2012
 
 
 
longterm finance lease commitments are as follows 
future 
minimum 
lease 
payments 
usm  
finance cost 
usm 
present 
value
 usm
land buildings and leasehold improvements 14  1 13
the commitments are as follows    
within one year 8  1 7
after one year but not more than five years 6  – 6
more than five years –  – –
 14  1 13
capital commitments 
at 31 december 2012 the group had capital commitments of us493m 2011 us480m excluding the above lease commitments 
included in the us493m of commitments are 
  
2012 
 usm 
2011
 usm
production enhancement contracts in mexico   146 225
costs to refurbish the berantai fpso in malaysia  – 89
further appraisal and development of wells as part of block pm304 in malaysia  287 111
costs in respect of ithaca greater stella field development in the north sea   50 –
production enhancement contract on the ticleni field in romania  – 25
commitments in respect of the construction of a new office building in united arab emirates  5 21
30 related party transactions 
the consolidated financial statements include the financial statements of petrofac limited and the subsidiaries listed in note 32 
petrofac limited is the ultimate parent entity of the group 
the following table provides the total amount of transactions which have been entered into with related parties 
sales to 
related 
parties 
usm
purchases 
from  
related 
parties  
usm  
amounts 
owed  
by related  
parties  
usm 
amounts 
owed 
to related 
parties 
usm
joint ventures 2012 170 135  5 38
 2011 323 187  95 23
associates 2012 3 –  17 –
 2011 14 –  4 –
key management personnel interests 2012 – 2  – –
 2011 – 2  – –
all sales to and purchases from joint ventures are made at normal market prices and the pricing policies and terms of these transactions are 
approved by the group’s management 
all related party balances will be settled in cash 
purchases in respect of key management personnel interests of us1521000 2011 us1411000 reflect the costs of chartering the 
services of an aeroplane used for the transport of senior management and directors of the group on company business which is owned by 
an offshore trust of which the group chief executive of the company is a beneficiary the charter rates charged for group usage of the 
aeroplane are significantly less than comparable market rates 
also included in purchases in respect of key management personnel interests is us189000 2011 us180000 relating to client 
entertainment provided by a business owned by a member of the group’s key management 
for details of the rights issue by seven energy and the warrants held see note 12 to the financial statements  
   142 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
30 related party transactions continued 
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 88 to 103 
  
2012 
 usm 
2011
 usm
shortterm employee benefits  21 20
sharebased payments  8 8
fees paid to nonexecutive directors  1 1
  30 29
31 risk management and financial instruments 
risk management objectives and policies 
the group’s principal financial assets and liabilities other than derivatives comprise availableforsale financial assets trade and other 
receivables amounts due fromto related parties cash and shortterm deposits workinprogress interestbearing loans and borrowings 
trade and other payables and contingent consideration 
the group’s activities expose it to various financial risks particularly associated with interest rate risk on its variable rate cash and shortterm 
deposits loans and borrowings and foreign currency risk on both conducting business in currencies other than reporting currency as well as 
translation of the assets and liabilities of foreign operations to the reporting currency these risks are managed from time to time by using a 
combination of various derivative instruments principally forward currency contracts in line with the group’s hedging policies the group 
has a policy not to enter into speculative trading of financial derivatives 
the board of directors of the company has established an audit committee and board risk committee to help identify evaluate and 
manage the significant financial risks faced by the group and their activities are discussed in detail on pages 78 to 87 
the other main risks besides interest rate and foreign currency risk arising from the group’s financial instruments are credit risk liquidity risk 
and commodity price risk and the policies relating to these risks are discussed in detail below 
interest rate risk 
interest rate risk arises from the possibility that changes in interest rates will affect the value of the group’s interestbearing financial liabilities 
and assets 
the group’s exposure to market risk arising from changes in interest rates relates primarily to the group’s longterm variable rate debt 
obligations and its cash and bank balances the group’s policy is to manage its interest cost using a mix of fixed and variable rate debt 
the group’s cash and bank balances are at floating rates of interest 
interest rate sensitivity analysis 
the impact on the group’s pretax profit and equity due to a reasonably possible change in interest rates on loans and borrowings at the 
reporting date is demonstrated in the table below the analysis assumes that all other variables remain constant 
  pretax profit  equity 
  
100 basis 
point 
increase 
usm
100 basis 
point 
decrease 
usm  
100 basis 
point 
increase 
usm 
100 basis 
point 
decrease 
usm
31 december 2012  2 2  – –
31 december 2011  1 1  – –
the following table reflects the maturity profile of these financial liabilities and assets 
year ended 31 december 2012 
  
within
1 year
usm
1–2
years
usm
2–3
years 
usm
3–4 
years 
usm
4–5  
years  
usm  
more than 
5 years 
usm 
total
usm
financial liabilities     
floating rates      
bank overdrafts note 24  57 – – – –  – 57
term loans note 24  – – – – 303  – 303
  57 – – – 303  – 360
financial assets     
floating rates     
cash and shortterm deposits note 19  614 – – – –  – 614
restricted cash balances note 14  47 – – –  – 11
  618 7 – – –  – 625
 
   143 petrofac annual report and accounts 2012
 
 
year ended 31 december 2011 
  
within
1 year
usm
1–2 
years 
usm
2–3 
years 
usm
3–4 
years 
usm
4–5  
years  
usm  
more than 
5 years 
usm 
total
usm
financial liabilities     
floating rates      
bank overdrafts note 24  37 – – – –  – 37
term loans note 24  24 19 – – –  – 43
  6119–––  – 80
financial assets     
floating rates     
cash and shortterm deposits note 19  1572 – – – –  – 1572
restricted cash balances note 14  2 – – – –  – 2
  1574––––  – 1574
financial liabilities in the above table are disclosed gross of debt acquisition costs and effective interest rate adjustments of us11m 
2011 us3m 
interest on financial instruments classified as floating rate is repriced at intervals of less than one year the other financial instruments of 
the group that are not included in the above tables are noninterest bearing and are therefore not subject to interest rate risk 
foreign currency risk 
the group is exposed to foreign currency risk on sales purchases and translation of assets and liabilities that are in a currency other than 
the functional currency of its operating units the group is also exposed to the translation of the functional currencies of its units to the us 
dollar reporting currency of the group the following table summarises the percentage of foreign currency denominated revenues costs 
financial assets and financial liabilities expressed in us dollar terms of the group totals 
  
2012 
 of foreign 
 currency 
denominated 
 items  
2011
 of foreign
 currency
 denominated
 items
revenues  345  364
costs  547  577
current financial assets  378  325
noncurrent financial assets  00  00
current financial liabilities  339  347
noncurrent financial liabilities  27  542
the group uses forward currency contracts to manage the currency exposure on transactions significant to its operations it is the group’s 
policy not to enter into forward contracts until a highly probable forecast transaction is in place and to negotiate the terms of the derivative 
instruments used for hedging to match the terms of the hedged item to maximise hedge effectiveness 
foreign currency sensitivity analysis 
the income statements of foreign operations are translated into the reporting currency using a weighted average exchange rate of 
conversion foreign currency monetary items are translated using the closing rate at the reporting date revenues and costs in currencies 
other than the functional currency of an operating unit are recorded at the prevailing rate at the date of the transaction the following 
significant exchange rates applied during the year in relation to us dollars 
2012  2011 
average 
rate
closing 
rate  
average  
rate 
closing
 rate
sterling 159 163  160 155
kuwaiti dinar 357 355  362 359
euro 129 132  140 130
the following table summarises the impact on the group’s pretax profit and equity due to change in the fair value of monetary assets 
liabilities and derivative instruments of a reasonably possible change in us dollar exchange rates with respect to different currencies 
pretax profit  equity 
10 us
dollar rate
increase
usm
−10 us 
 dollar rate 
decrease 
usm  
10 us 
 dollar rate 
 increase 
 usm 
−10 us
dollar rate
 decrease
usm
31 december 2012 10 10  19 19
31 december 2011 4 4  50 50
   144 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
31 risk management and financial instruments continued 
derivative instruments designated as cash flow hedges 
at 31 december 2012 the group had foreign exchange forward contracts as follows 
  contract value fair value undesignated fair value designated  net unrealised gainloss 
  
2012  
usm  
2011
usm
2012
usm
2011
usm
2012 
usm
2011 
usm  
2012  
usm 
2011
usm
euro purchases  67  223 – – – 10  – 8
sterling sales purchases  103  40 2 – – 2  – 1
yen sales   4  4 – – – –  – –
singapore dollar purchases  –  46 – – – 1  – 1
    2 – – 13  – 10
the above foreign exchange contracts mature and will affect income between january 2013 and july 2014 2011 between january 2012 
and july 2013 
at 31 december 2012 the group had cash and shortterm deposits designated as cash flow hedges with net unrealised gainslosses of 
us nil 2011 us9m loss as follows 
fair value  net unrealised gainloss 
2012
usm
2011 
 usm  
2012 
 usm 
2011
 usm
euro cash and shortterm deposits 118 181  – 9
sterling cash and shortterm deposits 7 15  – –
yen cash and shortterm deposits 1 3  – –
swiss francs cash and shortterm deposits – –  – –
   – 9
during 2012 changes in fair value gains of us2m 2011 losses us14m relating to these derivative instruments and financial assets 
were taken to equity and us18m of losses 2011 us3m gains were recycled from equity into cost of sales in the income statement 
the forward points and ineffective portions of the above foreign exchange forward contracts and loss on undesignated derivatives 
of us2m 2011 us6m loss were recognised in the income statement note 4b 
commodity price risk – oil prices 
the group is exposed to the impact of changes in oil and gas prices on its revenues and profits generated from sales of crude oil and gas 
the group’s policy is to manage its exposure to the impact of changes in oil and gas prices using derivative instruments primarily swaps 
and collars hedging is only undertaken once sufficiently reliable and regular longterm forecast production data is available 
during the year the group entered into various crude oil swaps and zero cost collars hedging oil production of 1000000 barrels bbl 
2011 163766 bbl with maturities ranging from january 2013 to december 2013 in addition fuel oil swaps were also entered into 
for hedging gas production of 31743 metric tonnes mt 2011 21100mt with maturities from january 2013 to september 2013 
the fair value of oil derivatives at 31 december 2012 was us nil 2011 us1m liability with net unrealised losses deferred in equity of 
us nil 2011 us nil during the year losses of us2m 2011 us nil loss were recycled from equity into the consolidated income 
statement on the occurrence of the hedged transactions and a loss in the fair value recognised in equity of us2m 2011 us nil 
the following table summarises the impact on the group’s pretax profit and equity due to a change in the fair value of oil derivative 
instruments and the underlifting assetoverlifting liability of a reasonably possible change in the oil price 
pretax profit  equity 
10
 usbbl
 increase
 usm
−10 
 usbbl 
 decrease 
 usm  
10  
usbbl 
 increase 
 usm 
−10
usbbl
 decrease
 usm
31 december 2012 ––  12 12
31 december 2011 1 1  2 2
credit risk 
the group trades only with recognised creditworthy third parties business unit risk review committees burrc evaluates the 
creditworthiness of each individual thirdparty at the time of entering into new contracts limits have been placed on the approval authority 
of the burrc above which the approval of the board of directors of the company is required receivable balances are monitored on an 
ongoing basis with appropriate followup action taken where necessary at 31 december 2012 the group’s five largest customers 
accounted for 488 of outstanding trade receivables and work in progress 2011 471 
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 
   145 petrofac annual report and accounts 2012
 
 
liquidity risk 
the group’s primary objective is to ensure sufficient liquidity is available to support future growth our strategy includes the provision of 
financial capital and the potential impact on the group’s capital structure is reviewed regularly the group is not exposed to any external 
capital constraints the maturity profiles of the group’s financial liabilities at 31 december 2012 are as follows 
year ended 31 december 2012 
  
6 months
or less 
usm
6–12
months 
usm
1–2
years 
usm
2–5
years
 usm
more than 
5 years 
usm  
contractual 
undiscounted 
 cash flows 
 usm 
carrying
 amount
 usm
financial liabilities     
interestbearing loans and borrowings  57 – – 303 –  360 349
finance lease creditors  – 8 6 – –  14 13
trade and other payables excluding 
 advances from customers and other 
 taxes payable  1464 104 – – –  1568 1568
due to related parties  38 – – – –  38 38
contingent consideration  1 6 2 – –  9 8
derivative instruments  3– 1– –  4 4
interest payments  43 66 –  19 –
  1567 121 15 309 –  2012 1980
year ended 31 december 2011 
  
6 months
or less 
usm
6–12
months 
usm
1–2 
years 
usm
2–5 
years
 usm
more than 
5 years 
usm  
contractual 
undiscounted 
cash flows 
usm 
carrying 
amount 
usm
financial liabilities     
interestbearing loans and borrowings  48 12 20 – –  80 77
finance lease creditors  – 6 11 – –  17 16
trade and other payables excluding 
 advances from customers and other 
 taxes payable  932 16 – – –  948 948
due to related parties  23 – – – –  23 23
contingent consideration  2 2 13 – –  17 16
derivative instruments  20 3 – – –  23 23
  10253944––  1108 1103
the group uses various funded facilities provided by banks and its own financial assets to fund the above mentioned financial liabilities 
capital management 
the group’s policy is to maintain a healthy capital base to sustain future growth and maximise shareholder value 
the group seeks to optimise shareholder returns by maintaining a balance between debt and capital and monitors the efficiency of its 
capital structure on a regular basis the gearing ratio and return on shareholders’ equity is as follows 
  
2012 
usm 
2011 
usm
cash and shortterm deposits  614 1572
interestbearing loans and borrowings a  349 77
net cash b  265 1495
equity attributable to petrofac limited shareholders c  1549 1112
profit for the year attributable to petrofac limited shareholders d  632 540
gross gearing ratio ac  225 69
net gearing ratio bc 
 
net cash 
position 
net cash 
position
shareholders’ return on investment dc  408 486
 
   146 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
31 risk management and financial instruments continued 
fair values of financial assets and liabilities 
the fair value of the group’s financial instruments and their carrying amounts included within the group’s statement of financial position 
are set out below 
carrying amount  fair value 
2012
 usm
2011 
 usm  
2012 
 usm 
2011
 usm
financial assets      
cash and shortterm deposits 614 1572  614 1572
restricted cash 11 2  11 2
seven energy warrants 12 18  12 18
forward currency contracts – designated as cash flow hedge 1 9  1 9
forward currency contracts – undesignated 1 –  1 –
 
financial liabilities 
 
 
 
interestbearing loans and borrowings 349 77  360 80
contingent consideration 8 16  8 16
oil derivative – 1  – 1
forward currency contracts – designated as cash flow hedge 1 22  1 22
forward currency contracts – undesignated 3 –  3 –
fair values of financial assets and liabilities 
market values have been used to determine the fair values of availableforsale financial assets forward currency contracts and oil 
derivatives the fair value of warrants over equity instruments in seven energy has been calculated using a black scholes option valuation 
model note 12 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 workinprogress trade and other payables other current and noncurrent financial assets and liabilities 
approximate their fair values and are therefore excluded from the above table 
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 
year ended 31 december 2012 
  
tier 2  
 usm  
tier 3
usm
financial assets   
seven energy warrants  –  12
forward currency contracts – designated as cash flow hedge  1  –
forward currency contracts – undesignated   1  –
 
financial liabilities  
 
forward currency contracts – designated as cash flow hedge   1 –
forward currency contracts – undesignated   3 –
year ended 31 december 2011 
 
tier 2
 usm
financial assets 
seven energy warrants 18
forward currency contracts – designated as cash flow hedge 9
forward currency contracts – undesignated –
 
financial liabilities 
forward currency contracts – designated as cash flow hedge 21
forward currency contracts – undesignated 1
oil derivative 1
 
   147 petrofac annual report and accounts 2012
 
 
 
32 principal subsidiaries and joint ventures 
at 31 december 2012 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  2012 2011
trading subsidiaries    
petrofac algeria eurl algeria  100 100
petrofac cyprus limited cyprus  100 100
co2deepstore aspen limited england  100 100
eclipse petroleum technology limited england  100 100
k w limited england  100 –
oilennium limited england  100 –
petrofac malaysiapm304 limited england  100 100
petrofac contracting limited england  100 –
petrofac engineering limited england  100 100
petrofac services limited england  100 100
petrofac uk holdings limited england  100 100
the new energy industries limited england  100 100
tnei services limited england  100 100
caltec limited england  100 100
petrofac energy developments uk limited england  100 100
jermyn insurance company limited guernsey  100 100
petrofac engineering india private limited india  100 100
petrofac engineering services india private limited india  100 100
petrofac information services private limited india  100 100
pt pci indonesia indonesia  80 80
petrofac iran pjsc iran  – 100
petrofac pars pjsc iran  – 100
co2deepstore holdings limited jersey  100 100
fpf1 limited jersey  25
1
 100
monsoon shipmanagement limited jersey  100 100
petrofac energy developments ohanet jersey limited jersey  100 100
petrofac energy developments international limited jersey  100 100
petrofac energy developments west africa limited jersey  100 –
petrofac facilities management international limited jersey  100 100
petrofac fpf004 limited jersey  100 100
petrofac fpso holding limited jersey  100 100
petrofac gsa limited jersey  100 100
petrofac international ltd jersey  100 100
petrofac offshore management limited jersey  100 100
petrofac platform management services limited jersey  100 100
petrofac training international limited jersey  100 100
petroleum facilities e  c limited jersey  100 100
petrokyrgyzstan limited kyrgyzstan  100 100
petrofac ec sdn bhd malaysia  100 100
petrofac energy developments sdn bhd malaysia  100 100
petrofac engineering services malaysia sdn bhd malaysia  100 –
petrofac fpf005 limited malaysia  100 100
petrofac training sdn bhd malaysia  100 100
pfmap sdn bhd malaysia  100 100
1
 associate in 2012 
   148 petrofac annual report and accounts 2012
notes to the consolidated financial statements continued 
for the year ended 31 december 2012 
 
32 principal subsidiaries and joint ventures continued 
   
proportion of nominal  
value of issued shares 
controlled by the group 
name of company country of incorporation  2012 2011
trading subsidiaries continued    
spd well engineering sdn bhd  malaysia  100 –
hlspd americas s de rl mexico  100 –
petrofac mexico sa de cv mexico  100 100
petrofac mexico servicios sa de cv mexico  100 100
petrospm integrated services sa de cv mexico  50 –
petrofac kazakhstan bv netherlands  100 100
petrofac mexico holdings bv netherlands  100 –
petrofac netherlands cooperatief ua netherlands  100 100
petrofac netherlands holdings bv netherlands  100 100
petrofac treasury bv netherlands  100 100
pts bv netherlands  100 100
petrofac energy services nigeria limited nigeria  100 –
petrofac international nigeria limited nigeria  100 100
kw norge as norway  100 100
petrofac norge as norway  100 100
petrofac ec oman llc oman  100 100
petrofac solutions  facilities support srl romania  100 100
pkt technical services ltd russia  50 50
pkt training services ltd russia  100 100
sakhalin technical training centre russia  80 80
petrofac saudi arabia company limited saudi arabia  100 100
atlantic resourcing limited scotland  100 100
co2deepstore limited scotland  100 100
petrofac facilities management group limited scotland  100 100
petrofac facilities management limited scotland  100 100
petrofac training limited scotland  100 100
scotvalve services limited scotland  100 100
spd limited scotland  100 100
stephen gillespie consultants limited scotland  100 100
i perform limited scotland  100 100
petrofac training group limited scotland  100 100
petrofac training holdings limited scotland  100 100
plant asset management limited scotland  100 100
petrofac fpf003 pte limited singapore  100 100
petrofac south east asia pte ltd singapore  100 100
petrofac training institute pte limited singapore  100 100
petrofac international south africa pty limited south africa  100 100
petrofac ec international limited united arab emirates  100 100
petrofac fze united arab emirates  100 100
petrofac international uae llc united arab emirates  100 100
spd llc united arab emirates  49 49
petrofac energy developments ohanet llc united states  100 100
petrofac inc united states  100 100
petrofac training inc united states  100 100
spd group limited british virgin islands   100 100
 
   149 petrofac annual report and accounts 2012
 
 
 
 
   
proportion of nominal  
value of issued shares 
controlled by the group 
name of company country of incorporation  2012 2011
joint ventures    
mjvi sdn bhd brunei  50 50
costain petrofac limited england  50 50
pt petrofac ikpt international indonesia  51 51
spie capag – petrofac international limited jersey  50 50
tte petrofac limited jersey  50 50
kyrgyz petroleum company kyrgyz republic  – 50
berantai floating production limited malaysia  51 51
china petroleum petrofac engineering services cooperatif ua netherlands  49 49
professional mechanical repair services company saudi arabia  50 –
petrofac emirates llc united arab emirates  49 49
 
 
 
dormant subsidiaries 
 
  
monsoon shipmanagement limited cyprus  – 100
joint venture international limited scotland  100 100
montrose park hotels limited scotland  100 100
rgit ethos health  safety limited scotland  100 100
rubicon response limited scotland  100 100
scota limited scotland  100 100
petrofac training trinidad limited trinidad  100 100
petrofac services inc usa  100 100
petrofac esop trustees limited jersey  100 100
 directly held by petrofac limited 
 companies consolidated as subsidiaries on the basis of control 
the company’s interest in joint venture operations are disclosed on page 131  company ﬁnancial 
statements
151 independent auditor’s report petrofac limited
152 company income statement
152 company statement of comprehensive income
153 company statement of ﬁnancial position
154 company statement of cash ﬂows
155 company statement of changes in equity
156 notes to the company ﬁnancial statements
166 shareholder information
167 glossary
150 petrofac annual report and accounts 2012 151 petrofac annual report and accounts 2012
independent auditor’s report to the members of petrofac limited  
we have audited the parent company financial statements of 
petrofac limited for the year ended 31 december 2012 which 
comprise the company income statement the company statement 
of comprehensive income the company statement of financial 
position the company statement of cash flows the company 
statement of changes in equity and the related notes 1 to 18 
the financial reporting framework that has been applied in 
their preparation is applicable law and international financial 
reporting standards 
this report is made solely to the company’s members as a body 
in accordance with article 113a of the companies jersey law 
1991 and our engagement letter dated 15 february 2011 our audit 
work has been undertaken so that we might state to the company’s 
members those matters we are required to state to them in an 
auditor’s report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to 
anyone other than the company and the company’s members as a 
body for our audit work for this report or for the opinions we have 
formed 
respective responsibilities of directors and auditor 
as explained more fully in the directors’ responsibilities statement 
set out on page 104 the directors are responsible for the 
preparation of the parent company financial statements and for 
being satisfied that they give a true and fair view our responsibility 
is to audit and express an opinion on the parent company financial 
statements in accordance with applicable law and international 
standards on auditing uk and ireland those standards require 
us to comply with the auditing practices board’s ethical standards 
for auditors 
in addition the company has also instructed us to 
 report to you our opinion on whether the section of the directors’ 
remuneration report that is described as audited has been 
properly prepared in accordance with the basis of preparation 
described therein  
 review certain elements of the report to shareholders by the board 
of directors’ remuneration which for a premium listed uk 
incorporated company is specified for review 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 parent company’s circumstances and have been consistently 
applied and adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the overall 
presentation of the financial statements in addition we read all the 
financial and nonfinancial information in the annual report to identify 
material inconsistencies with the audited financial statements 
if we become aware of any apparent material misstatements or 
inconsistencies we consider the implications for our report 
opinion on financial statements 
in our opinion the parent company financial statements 
 give a true and fair view of the state of the company’s affairs as at 
31 december 2012 and of its profit for the year then ended 
 have been properly prepared in accordance with international 
financial reporting standards and 
 have been prepared in accordance with the requirements of the 
companies jersey law 1991 
opinion on other matter 
in our opinion the part of the directors’ remuneration report to 
be audited which you have instructed us to audit has been 
properly prepared in accordance with the basis of preparation 
as described therein 
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters 
 where the companies jersey law 1991 requires us to report to 
you if in our opinion 
−proper accounting records have not been kept or proper returns 
adequate for our audit have not been received from branches 
not visited by us or 
−the financial statements are not in agreement with the 
accounting records and returns or 
−we have not received all the information and explanations we 
require for our audit 
 where the company instructed us to review certain elements of 
the report to shareholders by the board of directors’ remuneration 
other matter 
we have reported separately on the group financial statements of 
petrofac limited for the year ended 31 december 2012 
justine belton  
for and on behalf of ernst  young llp 
london 
26 february 2013 
notes 
1 
the maintenance and integrity of the petrofac limited web site is the 
responsibility of the directors the work carried out by the auditors does not 
involve consideration of these matters and accordingly the auditors accept 
no responsibility for any changes that may have occurred to the financial 
statements since they were initially presented on the web site 
2 
legislation in jersey governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions 
  152 petrofac annual report and accounts 2012
company income statement 
for the year ended 31 december 2012 
 
 
notes  
2012 
 usm 
2011
 usm
revenue 3  354 281
general and administration expenses 4  12 15
other income 5  2 6
other expenses 6  15 1
profit before tax and finance costsincome   329 271
finance costs 7  5 2
finance income 7  10 2
profit before tax   334 271
income tax expense   – –
profit for the year   334 271
 
 
 
 
company statement of comprehensive income 
for the year ended 31 december 2012 
 
  
2012 
 usm 
2011
 usm
profit for the year  334 271
other comprehensive income loss  – –
total comprehensive income for the year  334 271
the attached notes 1 to 18 form part of these company financial statements 
  153 petrofac annual report and accounts 2012
company statement of financial position  
at 31 december 2012 
notes  
2012 
 usm 
2011
 usm
assets     
noncurrent assets    
investments in subsidiaries 9  194 236
investment in associate 10  176 151
other noncurrent asset   11 –
   381 387
current assets    
trade and other receivables   1 –
amounts due from subsidiaries 11  902 191
warrants on investment in associate 10  12 18
cash and shortterm deposits 12  19 432
   934 641
total assets   1315 1028
 
equity and liabilities  
equity attributable to petrofac limited shareholders    
share capital 18  7 7
share premium   4 2
capital redemption reserve   11 11
treasury shares 13  100 75
sharebased payments reserve   53 52
retained earnings   253 123
total equity   228 120
 
noncurrent liabilities     
interestbearing loans and borrowings 15  – 11
   – 11
current liabilities    
trade and other payables   2 8
other financial liabilities – derivatives   2 –
amounts due to subsidiaries 11  1081 873
interestbearing loans and borrowings 15  2 16
   1087 897
total liabilities    1087 908
total equity and liabilities   1315 1028
the financial statements on pages 152 to 165 were approved by the board of directors  
on 26 february 2013 and signed on its behalf by tim weller – chief financial officer 
the attached notes 1 to 18 form part of these company financial statements 
  154 petrofac annual report and accounts 2012
company statement of cash flows 
for the year ended 31 december 2012 
notes  
2012 
 usm 
2011
 usm
operating activities     
profit before tax   334 271
   334 271
 
adjustments for    
 sharebased payments 14  1 1
 net finance income 7  5 –
 net lossgain on share warrants 6 5  6 6
 other noncash items net   5 1
operating profit before working capital changes   339 265
 amounts due from subsidiaries   683 124
 trade and other receivables   1 –
 trade and other payables   6 11
 amounts due to subsidiaries   208 471
cash generated from operations   143 601
interest paid   5 2
net cash flows generated from operating activities   148 599
 
investing activities     
purchase of investment in subsidiary 9  18 –
purchase of investment in associates 10  25 50
repayment of investment by subsidiaries 9  80 14
interest received   10 2
net cash flows used in investing activities   47 34
 
financing activities    
repayment of interestbearing loans and borrowings   29 13
debt financing fees paid   11 –
treasury shares purchased 13  76 49
equity dividends paid   198 159
net cash flows used in financing activities   314 221
 
net decrease in cash and cash equivalents   415 344
cash and cash equivalents at 1 january   432 88
cash and cash equivalents at 31 december 12  17 432
the attached notes 1 to 18 form part of these company financial statements 
  155 petrofac annual report and accounts 2012
company statement of changes in equity 
for the year ended 31 december 2012 
 
 
  
issued 
share 
capital 
usm 
note 18
share 
premium 
usm
capital 
redemption 
reserve 
usm
treasury 
shares 
usm 
note 13
reserve for 
sharebased 
payments 
usm  
note 14  
retained 
earnings 
usm 
 
total 
equity
 usm
balance at 1 january 2011  7 1 11 65 45  18 17
net profit for the year  – – – – –  271 271
other comprehensive income  – – – – –  – –
total comprehensive income  – – – – –  271 271
sharebased payments charge note 14  – – – – 1  – 1
shares vested during the year  – – – 39 34  5 –
treasury shares purchased note 13  – – – 49 –  – 49
transfer to reserve for sharebased 
 payments  – – – – 40  – 40
shares issued as payment of 
 deferred consideration  – 1 – – –  – 1
dividends note 8  – – – – –  161 161
balance at 1 january 2012  7 2 11 75 52  123 120
net profit for the year  – – – – –  334 334
other comprehensive income  – – – – –  – –
total comprehensive income  – – – –  334 334
sharebased payments charge note 14  – – – – 1  – 1
shares vested during the year  – – – 51 45  6 –
treasury shares purchased note 13  – – – 76 –  – 76
transfer to reserve for sharebased 
 payments  – – – – 45  – 45
shares issued as payment of  
 deferred consideration  – 2 – – –  – 2
dividends note 8  – – – – –  198 198
balance at 31 december 2012  7 4 11 100 53  253 228
shares held by petrofac employee benefit trust and petrofac joint venture companies employee benefit trust 
the attached notes 1 to 18 form part of these company financial statements 
  156 petrofac annual report and accounts 2012
notes to the company financial statements 
for the year ended 31 december 2012 
1 corporate information 
the financial statements of petrofac limited the ‘company’ 
referred to as the company financial statements for the year ended 
31 december 2012 were authorised for issue in accordance with 
a resolution of the directors on 26 february 2013 
petrofac limited is a limited liability company registered in 
jersey under the companies jersey law 1991 and is the 
holding company for the international group of petrofac 
subsidiaries together the ‘group’ the group’s principal activity 
is the provision of facilities solutions to the oil and gas production 
and processing industry 
2 summary of significant accounting 
policies 
basis of preparation 
the separate financial statements have been prepared on a 
historical cost basis except for derivative financial instruments that 
have been measured at fair value the functional and presentation 
currency of the separate financial statements is us dollars and all 
values in the separate financial statements are rounded to the 
nearest million usm except where otherwise stated  
statement of compliance 
the separate financial statements have been prepared in 
accordance with international financial reporting standards ifrs 
and applicable requirements of jersey law 
investments in subsidiaries 
investments in subsidiaries are stated at cost less any provision 
for impairment 
investments in associates 
investments in associates are stated at cost less any provision 
for impairment 
longterm loan receivables from subsidiaries 
longterm loan receivables from subsidiaries are initially stated at 
fair value after initial recognition they are subsequently measured 
at amortised cost using the effective interest rate method 
due fromdue to subsidiaries 
due fromdue to subsidiaries are both interestbearing and  
noninterestbearing shortterm funding to and from subsidiaries 
these are recognised at the fair value of consideration 
receivedpaid less any provision for impairment 
cash and cash equivalents 
cash and cash equivalents consist of cash at bank and in hand 
and shortterm deposits with an original maturity of three months 
or less for the purpose of the cash flow statement cash and cash 
equivalents consists of cash and cash equivalents as defined above 
net of any outstanding bank overdrafts 
interestbearing loans and borrowings 
all interestbearing loans and borrowings are initially recognised 
at the fair value of the consideration received net of issue costs 
directly attributable to the borrowing 
after initial recognition interestbearing loans and borrowings are 
subsequently measured at amortised cost using the effective 
interest rate method amortised cost is calculated by taking 
into account any issue costs and any discount or premium 
on settlement 
employee benefit trusts 
the petrofac employee benefit trust and the petrofac joint 
venture companies employee benefit trust ebt’s are treated as 
extensions of the activities of the company and accordingly the 
company financial statements include all transactions and balances 
of the ebt’s except for transaction and balances between the 
company and the ebt’s 
sharebased payment transactions 
employees including directors of the group receive remuneration 
in the form of sharebased payment transactions whereby 
employees render services in exchange for shares or rights over 
shares ‘equitysettled transactions’ 
equitysettled transactions 
the cost of equitysettled transactions with employees is measured 
by reference to the fair value at the date on which they are granted 
in valuing equitysettled transactions no account is taken of any 
service or performance conditions other than conditions linked 
to the price of the shares of petrofac limited ‘market conditions’ 
if applicable 
the cost of equitysettled transactions is recognised together with 
a corresponding increase in equity over the period in which the 
relevant employees become fully entitled to the award the ‘vesting 
period’ the cumulative expense recognised for equitysettled 
transactions at each reporting date until the vesting date reflects 
the extent to which the vesting period has expired and the group’s 
best estimate of the number of equity instruments that will ultimately 
vest the income statement charge or credit for a period represents 
the movement in cumulative expense recognised as at the 
beginning and end of that period 
no expense is recognised for awards that do not ultimately vest 
except for awards where vesting is conditional upon a market or 
nonvesting condition which are treated as vesting irrespective 
of whether or not the market or nonvesting condition is satisfied 
provided that all other performance conditions are satisfied 
equity awards cancelled are treated as vesting immediately on 
the date of cancellation and any expense not recognised for 
the award at that date is recognised in the income statement 
the company operates a number of share award schemes on 
behalf of the employees of the group which are described in detail 
in note 22 of the consolidated financial statements of the group 
the reserve for sharebased payments is used to record the value 
of equitysettled sharebased payments awarded to employees and 
transfers out of this reserve are made upon vesting of the original 
share awards the sharebased payments charges pertaining to 
fellow group companies are recharged to them and shown as 
investment in subsidiaries subsequently they are transferred to due 
from subsidiaries and settled in cash 157 petrofac annual report and accounts 2012
 
 
3 revenues 
dividends from subsidiaries are recognised when the right to receive payment is established  
seven energy warrant revenues relate to the achievement of 100 2011 80 of the project execution milestones required to earn the 
option to subscribe for 148571 warrants in seven energy note 10 
  
2012 
 usm 
2011
 usm
dividend income from subsidiaries  352 271
seven energy warrant revenues note 10  2 10
  354 281
4 general and administration expenses 
  
2012 
 usm 
2011
 usm
staff costs  8 10
other operating expenses  4 5
  12 15
included in other operating expenses above is auditors’ remuneration of us75720 2011 us74750 related to the fee for the audit of the 
parent company financial statements it excludes fees in relation to the audit of the group financial statements which are borne by petrofac 
services limited 
5 other income 
  
2012 
 usm 
2011
 usm
increase in seven energy warrant valuation note 10  – 6
write back of intercompany loan receivable from subsidiary  2 –
  2 6
6 other expenses 
  
2012 
 usm 
2011
 usm
decrease in seven energy warrant valuation note 10  6 –
revolving credit facility acquisition cost amortisation  1 –
exchange loss  1 1
others  7 –
  15 1
others include 2m of debt acquisition costs written off on repayment of the term loans during 2012 
7 finance costsincome 
  
2012 
 usm 
2011
 usm
interest payable   
longterm borrowings  3 1
on amounts due to subsidiaries  2 1
total finance cost  5 2
 
interest receivable 
  
bank interest receivable  2 1
on amounts due from subsidiaries  8 1
total finance income  10 2
   158 petrofac annual report and accounts 2012
notes to the company financial statements continued  
for the year ended 31 december 2012 
8 dividends paid and proposed 
  
2012 
 usm 
2011
 usm
declared and paid during the year   
equity dividends on ordinary shares   
final dividend for 2010 3000 cents per share   – 102
interim dividend 2011 1740 cents per share   – 59
final dividend for 2011 3720 cents per share   127 –
interim dividend 2012 2100 cents per share   71 –
  198 161
 
  
2012 
 usm 
2011
 usm
proposed for approval at agm not recognised as a liability as at 31 december   
equity dividends on ordinary shares   
final dividend for 2012 4300 cents per share 2011 3720 cents per share  149 129
9 investments in subsidiaries 
  
2012 
 usm 
2011
 usm
at 1 january  236 233
investment in petrofac uk holdings limited  18 3
investment repaid by pedil  60 –
invested bonus in deferred bonus share plan dbsp charged to subsidiaries  20 17
receipt of invested bonus in dbsp from subsidiaries  20 17
share based payment amounts receivable from subsidiaries  26 23
transferred to due from subsidiaries  26 23
as at 31 december  194 236
at 31 december 2012 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 2012  2011
trading subsidiaries    
petrofac energy developments uk limited england 100  100
petrofac services limited england 100  100
petrofac uk holdings limited england 100  100
jermyn insurance company limited guernsey 100  100
petrofac international ltd jersey 100  100
petrofac energy developments international limited jersey 100  100
petrofac facilities management international limited jersey 100  100
petrofac training international limited jersey 100  100
petroleum facilities e  c limited jersey 100  100
petrofac south east asia limited singapore 99  99
petrofac inc usa 100  100
petrofac services inc usa 100  100
 
   159 petrofac annual report and accounts 2012
 
 
10 investment in associate 
  
2012 
 usm 
2011
 usm
at 1 january  151 –
transfer from availableforsale financial assets  – 101
investment in share capital  25 50
at 31 december  176 151
on 25 november 2010 the company invested us100m for 15 126 on a fully diluted basis of the share capital of seven energy 
international limited seven energy a leading nigerian gas development and production company incurring us1m of transaction costs 
this investment which was previously held under availableforsale financial assets was transferred to investments in associates pursuant to 
an investment on 10 june 2011 of us50m for an additional 5 of the share capital of seven energy which resulted in the company being 
in a position to exercise significant influence over seven energy on 30 october 2012 the company invested us25m for an additional 
24 of the share capital of seven energy the additional us25m investment was made as part of a discounted rights issue required to 
deal with a shortterm funding requirement by seven energy at a subscription price of us150 per share and in light of this the carrying 
value of the investment has been tested for impairment and no impairment provision is required no negative goodwill has been accounted 
for on the rights issue as the range of possible outcomes was immaterial 
the company also has the option to subscribe for 148571 of additional warrants in seven energy at a cost of a further us52m subject to 
the performance of certain service provision conditions and milestones in relation to project execution these warrants have been fair valued 
at 31 december 2012 as derivative financial instruments under ias 39 using a blackscholes model amounting to us12m 2011 
us18m us6m 2011 us6m other income has been recognised as other expense in the current period income statement as a result 
of the revaluation of these derivatives at 31 december 2012 note 6 during 2012 deferred revenue recognised in trade and other payables 
of us2m at 31 december 2012 was released in full to the income statement as 100 of the performance conditions required to subscribe 
for the remaining warrants in the company were satisfied 2011 80 satisfied with revenue recognised of us10m 
11 amounts due fromdue to subsidiaries 
amounts due fromdue to subsidiaries comprise both interest and noninterest bearing shortterm loans provided toreceived from 
subsidiaries listed in note 9 
12 cash and shortterm deposits 
  
2012 
 usm 
2011
 usm
cash at bank and in hand  19 25
shortterm deposits  – 407
total cash and bank balances   19 432
shortterm deposits are made for varying periods of between one day and one month depending on the immediate cash requirements 
of the company and earn interest at respective shortterm deposit rates the fair value of cash and bank balances is us19m 
2011 us432m for the purposes of the company cash flow statement 2012 cash and cash equivalents comprise total cash and 
bank balances shown above less an overdraft of us2m 2011 overdraft us nil 
   160 petrofac annual report and accounts 2012
notes to the company financial statements continued  
for the year ended 31 december 2012 
13 treasury shares 
for the purpose of making awards under its employee share schemes the company acquires its own shares which are held by the petrofac 
employee benefit trust and the petrofac joint venture companies employee benefit trust all these shares have been classified in the 
statement of financial position as treasury shares within equity 
the movements in total treasury shares are shown below 
2012  2011 
number usm  number  usm
at 1 january 5736017 75  6757339  65
acquired during the year 3000000 76  2074138  49
vested during the year 3269804 51  3095460  39
at 31 december 5466213 100  5736017  75
14 sharebased payments chargereserve 
share based payment charge 
sharebased payment plan information is disclosed in note 22 of the consolidated financial statements of the group the following table 
shows the movements in the number of shares held under the three group employee schemes for the employees of the company 
deferred 
bonus share 
plan number  
performance 
share plan 
number 
restricted 
share plan 
number
outstanding at 1 january 2011 62125  211402 5585
granted during the period 30004  55579 –
vested during the period 30343  51159 –
forfeited during the period 1100  – –
outstanding at 1 january 2012 60686  215822 5585
granted during the period 13876  45144 –
vested during the period 32994  85033 –
forfeited during the period –  – –
outstanding but not exercisable at 31 december 2012 41568  175933 5585
 
deferred 
bonus share 
plan number  
performance 
share plan 
number 
restricted 
share plan 
number
made up of following awards    
2010 8114  75210 5585
2011 19578  55579 –
2012 13876  45144 –
 41568  175933 5585
during the year a sharebased payment scheme charge of us1m 2011 us1m was recognised by the company in respect of its own 
employees time spent on shareholder related services 
sharebased payment reserve 
the transfer during the year into sharebased payment reserve disclosed in the statement of changes in equity of us45m 
2011 us40m is the charge for sharebased payments awards by the company to its own employees as well as employees 
of subsidiaries including bonus amounts converted into shares 
 
   161 petrofac annual report and accounts 2012
 
 
15 interestbearing loans and borrowings 
the company had the following interestbearing loans and borrowings outstanding 
  
31 december 2012  
actual interest rate  
31 december 2011 
actual interest rate 
effective interest 
rate  maturity  
2012 
usm 
2011
 usm
current      
bank overdrafts  i  uk libor 
 175 
 na  uk libor 
 175
on demand  2 –
current portion of term loan  ii – us libor 
 0875
na 
2011 316
na  – 9
current portion of term loan  ii – usuk libor 
 0875
na
2011 167 to 
355
na  – 7
   2 16
noncurrent      
term loan  ii – usuk libor 
 0875
na 
2011 167 to 
355
na  – 7
term loan ii – us libor 
 0875
na 
2011 316
na  – 6
   – 13
less 
debt acquisition costs net of  
 accumulated amortisation 
 and effective interest rate  
 adjustments  
 
– 2
     – 11
details of the company’s interestbearing loans and borrowings are as follows 
i bank overdraft 
bank overdrafts are drawn down in us dollars to meet the group’s working capital requirements these are repayable on demand  
ii term loan 
these term loans were repaid in full during the year 
 
   162 petrofac annual report and accounts 2012
notes to the company financial statements continued  
for the year ended 31 december 2012 
16 risk management and financial instruments 
risk management objectives and policies 
the company’s principal financial assets and liabilities are amounts due from and due to subsidiaries cash and shortterm deposits and 
interestbearing loans and borrowings 
the company’s activities expose it to various financial risks particularly associated with interest rate risks on its external variable rate loans 
and borrowings the company has a policy not to enter into speculative trading of financial derivatives 
the other main risks besides interest rate are foreign currency risk credit risk and liquidity risk and the policies relating to these risks are 
discussed in detail below 
interest rate risk 
interest rate risk arises from the possibility that changes in interest rates will affect the value of the company’s interestbearing financial 
liabilities and assets the company does not hedge its exposure on its interestbearing funding tofrom subsidiaries the company is not 
exposed to any significant interest rate risk at the reporting date 
the following table reflects the maturity profile of interest bearing financial liabilities and assets excluding interest bearing subsidiary related 
financial assets and liabilities 
year ended 31 december 2012 
  
within 1 
year 
usm
1–2 
years 
usm
2–3 
years 
usm
3–4 
years 
usm
4–5  
years  
usm  
more than  
5 years  
usm 
total 
usm
financial liabilities     
floating rates  
bank overdraft note 15  2 – – – –  – 2
amount due to subsidiaries interestbearing  997 – – – –  – 997
  999 – – – –  – 999
financial assets     
floating rates  
cash and shortterm deposits note 12  19 – – – –  – 19
amount due from subsidiaries  
interestbearing  559––––  – 559
  578 – – – –  – 578
 
   163 petrofac annual report and accounts 2012
 
 
16 risk management and financial instruments continued 
year ended 31 december 2011 
  
within 1 
year 
usm
1–2 
years 
usm
2–3 
years 
usm
3–4 
years 
usm
4–5  
years  
usm  
more than  
5 years  
usm 
total 
usm
financial liabilities     
floating rates  
term loan note 15  16 13 – – –  – 29
amount due to subsidiaries interestbearing  873 – – – –  – 873
  88913–––  – 902
financial assets     
floating rates  
cash and shortterm deposits note 12  432 – – – –  – 432
amount due from subsidiaries  
interestbearing  170––––  – 170
  602––––  – 602
financial liabilities in the above table are disclosed gross of debt acquisition costs and effective interest rate adjustments of nil in respect of 
2012 2011 us2m 
interest on financial instruments classified as floating rate is repriced at intervals of less than one year 
foreign currency risk 
almost all of the financial assets and liabilities of the company are denominated in us dollars the foreign currency exposure at 
31 december 2012 is limited to sterling £131m with an equivalent value of us213m 2011 sterling £10m equivalent us16m 
the following table summarises the impact on the company’s pretax profit and equity due to change in the fair value of monetary assets 
liabilities and derivative instruments of a reasonably possible change in us dollar exchange rates with respect to different currencies 
pretax profit  equity 
10 us dollar 
rate increase 
usm
–10 us dollar 
rate decrease 
usm 
10 us dollar 
rate increase 
usm  
–10 us dollar 
rate decrease 
usm
31 december 2012 22 22 –  –
31 december 2011 2 2 –  –
at 31 december 2012 the company had foreign exchange forward contracts as follows 
contract value  fair value undesignated 
2012 
usm
2011 
usm  
2012
usm
2011
usm
sterling sales 103 –  2 –
the above foreign exchange contracts mature and will affect income between january 2013 and february 2013 2011 na 
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 
   164 petrofac annual report and accounts 2012
notes to the company financial statements continued  
for the year ended 31 december 2012 
the maturity profiles of the company’s financial liabilities at 31 december 2012 are as follows 
year ended 31 december 2012 
  
6 months 
or less 
usm
6–12 
months 
usm
1–2 
years
 usm
2–5 
years 
usm
more than  
5 years 
usm  
contractual 
undiscounted 
cash flows 
usm 
carrying 
amount 
usm
financial liabilities     
interestbearing loans and borrowings  2 – – – –  2 2
trade and other payables  2 – – – –  2 2
amounts due to subsidiaries  – 1081 – – –  1081 1081
derivatives  2––––  2 2
  6 1081 – – –  1087 1087
year ended 31 december 2011 
  
6 months 
or less 
usm
6–12 
months 
usm
1–2 
years
 usm
2–5 
years 
usm
more than  
5 years 
usm  
contractual 
undiscounted 
cash flows 
usm 
carrying 
amount 
usm
financial liabilities     
interestbearing loans and borrowings  8 8 13 – –  29 27
trade and other payables  8 – – – –  8 8
amounts due to subsidiaries  – 873 – – –  873 873
  1688113––  910 908
the company uses various funded facilities provided by banks and its own financial assets to fund the above mentioned financial liabilities 
capital management 
the company’s policy is to maintain a healthy capital base using a combination of external and internal financing to support its activities as 
the holding company for the group 
the company’s gearing ratio is as follows 
  
2012 
 usm 
2011
 usm
cash and shortterm deposits note 12  19 432
interestbearing loans and borrowings a note 15  2 27
net cash b  17 405
   
total equity c  228 120
   
gross gearing ratio ac  09 223
net gearing ratio bc  net cash 
position 
net cash 
position
   165 petrofac annual report and accounts 2012
 
 
16 risk management and financial instruments continued 
fair values of financial assets and liabilities 
the fair value of the company’s financial instruments and their carrying amounts included within the company’s statement of financial 
position are set out below 
carrying amount  fair value 
2012
 usm
2011 
 usm  
2012 
 usm 
2011
 usm
financial assets      
warrants on investment in associate note 10 12 18  12 18
cash and shortterm deposits note 12 19 432  19 432
 
financial liabilities  
 
 
  
interestbearing loans and borrowings note 15 2 27  2 29
forward currency contracts – undesignated 2 –  2 –
the fair values of longterm interestbearing loans and borrowings and longterm receivable from a subsidiary are equivalent to amortised 
costs determined as the present value of discounted future cash flows using the effective interest rate the company considers that the 
carrying amounts of trade and other receivables amounts due fromdue to subsidiaries trade and other payables and other current financial 
liabilities approximate their fair values and are therefore excluded from the above table 
fair value hierarchy 
the following financial instruments are measured at fair value using the hierarchy below for determination and disclosure of their respective 
fair values 
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 
 
year ended 31 december 2012 
  
tier 2 
 usm 
tier3
 usm
financial assets   
seven energy warrants  – 12
 
financial liabilities 
 
  
forward currency contracts – undesignated  2 –
 
year ended 31 december 2011 
 
tier 2
 usm
financial assets 
seven energy warrants 18
17 related party transactions 
the company’s related parties consist of its subsidiaries and the transactions and amounts due todue from them are either of funding 
or investing nature note 9 the company is recharged a portion of the key management personnel cost by one of its subsidiaries 
the amount recharged during the year was us2m 2011 us3m for further details of the full amount of key management personnel 
costs refer to the group’s consolidated financial statements for details of the rights issue by seven energy and the warrants held see note 
10 the company is listed as a guarantor of the revolving credit facility obtained by a wholly owned subsidiary 
18 share capital 
the movements in share capital are disclosed in note 20 to the consolidated financial statements of the group 
  166 petrofac annual report and accounts 2012
shareholder information  
at 31 december 2012 
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 
corporate brokers 
goldman sachs  
peterborough court 
133 fleet street 
london ec4a 2bb  
jp morgan cazenove 
25 bank street 
canary wharf 
london e14 5jp 
company secretary and registered office 
ogier corporate services jersey limited 
ogier house  
the esplanade  
st helier 
jersey je4 9wg 
auditors 
ernst  young llp 
1 more london place 
london se1 2af 
legal advisers to the company  
freshfields bruckhaus deringer llp 
65 fleet street 
london ec4y 1hs 
corporate and financial pr 
tulchan communications group 
85 fleet street 
london ec4y 1ae 
 
 
stock exchange listing 
petrofac shares are listed on the london stock exchange using code ‘pfcl’ 
financial calendar 
17 may 2013 annual general meeting
24 may 2013 final dividend payment
27 august 2013 half year results announcement
october 2013 interim dividend payment
dates are based on current expectations 
copies of all announcements will be available on the company’s website at wwwpetrofaccom following their release  glossary
a
agm
annual general meeting
airb
asset integrity review board
appraisal well 
a well drilled into a discovered  
accumulation to provide data necessary  
to deﬁne a field development  
plan for the accumulation
b
backlog
backlog consists of the estimated revenue 
attributable to the uncompleted portion of 
lumpsum engineering procurement and 
construction contracts and variation orders 
plus with regard to engineering operations 
maintenance and integrated energy services 
contracts the estimated revenue attributable 
to the lesser of the remaining term of the 
contract and ﬁve years backlog will not be 
booked on integrated energy services 
contracts where the group has entitlement to 
reserves the group uses this key 
performance indicator as a measure of the 
visibility of future earnings backlog is not 
an audited measure
barrel 
a unit of volume measurement used 
for petroleum
bbl
one barrel of oil
block 
a subdivision of an underground petroleum 
reservoir by a resource owner for the 
purposes of licensing and administering 
exploration appraisal and production of 
resources by oil and gas companies 
boe
barrel of oil equivalent
bpd
barrel per day
brownﬁeld development
further investment in a mature ﬁeld to 
enhance its production capacity thereby 
increasing recovery and extending ﬁeld life
c
capex 
capital expenditure
cis
commonwealth of independent states
cost plus kpis
a reimbursable contract which includes an 
incentive income linked to the successful 
delivery of key performance indicators kpis
cpecc
china petroleum engineering  construction 
corporation
cppes
china petroleum petrofac engineering 
services
cr
corporate responsibility
d
dbsp
deferred bonus share plan
decc
department of energy and climate  
change uk
decommissioning 
the reuse recycling and disposal  
of redundant oil and gas facilities
duty holder 
a contracting model under which petrofac 
provides a complete managed service 
covering production and maintenance work 
both offshore and onshore to reduce the 
costs of operating and to extend the life of 
the facilities
e
ebitda 
calculated as proﬁt before tax and net 
ﬁnance income but after our share of losses 
from associates as per the consolidated 
income statement adjusted to add back 
charges for depreciation and amortisation 
as per note 3 to the ﬁnancial statements
ebt
employee beneﬁt trust
ecs
engineering  consulting services 
this service line is petrofac’s centre of 
technical engineering excellence delivering 
earlystage engineering studies including 
conceptual and frontend engineering and 
design work across onshore and offshore 
oil and gas ﬁelds
ecom 
engineering construction operations 
 maintenance one of two divisions 
which designs and builds oil and gas facilities 
and operates manages and maintains them 
on behalf of petrofac’s customers
epc 
engineering procurement and construction
epcic
engineering procurement construction 
installation and commissioning
epic
engineering procurement installation  
and construction
eps
earnings per share
excom 
executive committee
f
feed 
front end engineering and design 
field development plan fdp 
a document setting out the manner in which 
a hydrocarbon discovery is to be developed 
and operated
fpso 
floating production storage and ofﬂoading 
vessel
fpf
floating production facility
g
gas ﬁeld 
a ﬁeld containing natural gas but no oil 
greenﬁeld development
development of a new ﬁeld
167 petrofac annual report and accounts 2012 h 
hydrocarbon
a compound containing only the elements 
hydrogen and carbon – can be solid liquid or 
gas
hse
health  safety executive uk
hsseia 
health safety security environment and 
integrity assurance
i
ias
international accounting standards
ifrs
international financial reporting standards 
ioc
international oil company 
ies 
integrated energy services the ies division 
harnesses petrofac’s existing service 
capabilities and delivers them on an 
integrated basis to resource holders with the 
aim of supporting the development of their oil 
and gas resources enhancing production 
from their mature reservoirs and helping them 
to build national capability
k
kpi
key performance indicator
l
lng 
liqueﬁed natural gas 
lumpsum turnkey project
an agreement in which a contractor designs 
constructs and manages a project until it is 
ready to be handed over to the customer and 
operation can begin immediately
lti
lost time injury
m
mena
middle east and north africa region
mm boe 
million barrels of oil equivalents 
mmscfd
million standard cubic feet per day
mopu
mobile offshore production unit
mou
memorandum of understanding
n
noc
national oil company
o
ocp
offshore capital projects a service line 
which specialises in offshore engineering 
procurement installation and construction 
services for greenﬁeld projects
oec 
onshore engineering  construction 
a service line which delivers onshore 
engineering procurement and 
construction projects
oecd
organisation for economic cooperation 
and development
oil ﬁeld 
a geographic area under which an oil 
reservoir lies
opec 
organisation of petroleum exporting 
countries 
opo 
offshore projects  operations a service 
line which specialises in offshore engineering 
and construction services for brownﬁeld 
projects and the provision of operations and 
maintenance support on and offshore
p
pec
production enhancement contract is where 
petrofac is paid a tariff per barrel for oil 
and gas production and therefore has no 
commodity price exposure pecs are 
appropriate for mature ﬁelds which have 
a long production history
pmc 
project management contractor – managing 
an external construction contractor to 
manage construction of a facility
psc
production sharing contract
psp 
performance share plan
r
reimbursable services
where the cost of petrofac’s services are 
reimbursed by the customer plus an 
agreed margin
ri
recordable injury
roce
return on capital employed
rsc 
risk service contract is where petrofac 
develops operates and maintains a ﬁeld 
while the resource holder retains ownership 
and control of its reserves 
rsp 
restricted share plan
s
sip 
share incentive plan
surf 
subsea umbilicals risers and flowlines
t
tsr 
total shareholder return
u
ukcs 
united kingdom continental shelf
ungc
united nations global compact
upstream
the segment of the petroleum industry 
having to do with exploration development 
and production of oil and gas resources
v
vcp
value creation plan
168 petrofac annual report and accounts 2012 design and production by radley yeldar wwwrycom
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wwwpetrofaccom


Summary:
 chairman’s  
statement
2012 was another good year for petrofac despite the marketplace 
remaining competitive we continued to grow increasing revenue by 
9 to us6324 million and earnings by 17 to us632 million
marketplace
despite the continuing global economic 
uncertainty demand for energy has remained 
strong more importantly we expect to 
see growth in demand for energy including 
oil and gas over the very long term 
coupled with the natural decline in existing oil 
and gas production this creates a need for 
largescale investment in oil and gas 
infrastructure this should ensure demand 
for our services remains strong we also see 
strong industry demand for commercially 
innovative integrated oilﬁeld services 
which are helping to build longterm 
sustainable earnings for the group
dividends
the company proposes a ﬁnal dividend of 
4300 cents per share for the year ended 
31 december 2012 2011 3720 cents 
which if approved will be paid to 
shareholders on 24 may 2013 provided 
they were on the register on 19 april 2013 
shareholders who have not elected 
by 26 february 2013 to receive dividends 
in us dollars will receive a sterling equivalent 
of 2840 pence per share
together with the interim dividend of 
2100 cents per share 2011 1740 cents 
equivalent to 1345 pence this gives a total 
dividend for the year of 6400 cents per share 
2011 5460 cents an increase of 17 
in line with the increase in net proﬁt
from strategy to delivery
petrofac is in business for the long term 
as well as having the exacting mediumterm 
aim of more than doubling recurring 2010 
group earnings by 2015
1
 we aspire to 
be the world’s most admired oilﬁeld 
service company
while we will continue to build on our existing 
strengths we aim to deliver on our strategy 
across three key areas geographical 
expansion broadening our offshore capability 
and implementing our ies strategy we are 
expanding to new markets such as mexico 
where we now have four longterm contracts 
we have made good progress with our 
offshore strategy where we are looking to 
build a differentiated offshore business that 
will give access to top tier projects
1
  our group earnings target is net proﬁt after tax 
of more than us862 million by 2015 at least 
a doubling of 2010 recurring earnings
overview
petrofac annual report and accounts 2012 06 we have achieved signiﬁcant milestones on 
our portfolio of integrated energy services 
projects which are building longterm 
sustainable earnings for the group
to be able to deliver our strategy we face 
various challenges we particularly want 
to protect and improve our execution 
capabilities and we need to keep building 
our overall resource the fit for 2015 
programme which was launched in 2012 
is designed to improve all our existing 
processes with a view to helping us work 
smarter and better this year we continued to 
improve our capability but we still need to 
recruit a substantial number of people over 
the next ﬁve years if we are to keep growing 
the business in line with our plans 
notwithstanding the scale of the task 
i am conﬁdent that we will be able to do this 
as the group has been building its human 
resources capability over a number of years 
given the large number of people who will 
be joining our group it is essential that we 
continue to promote petrofac’s longstanding 
values in order to preserve what makes the 
group unique
our board
the governance report on pages 64 to 87 
explains what the board did during 2012 but 
i would like to highlight two areas of board 
focus our risk management framework and 
capability building
our board risk committee has continued to 
strengthen our risk management framework 
it identiﬁed 13 areas of risk which would 
threaten the overall health of the group 
including delivery of our strategic goals 
we have developed a number of metrics 
for each of these areas which we will 
monitor we intend to build on this work in 
2013 and will continue to develop our key 
enterprise risk proﬁle 
following a recent period of board change 
our nominations committee has been able 
to spend more time reviewing executive 
succession planning this year we intend to 
continue concentrating on this vital area next 
year in addition the board has devoted 
considerable time to reviewing our 
human resources strategy and has been 
much encouraged over the last few years 
there have been a number of initiatives 
introduced relating to retention recruitment 
performance management and capability 
mapping these will be essential for delivery 
of the necessary capability
at the start of 2012 we welcomed marwan 
chedid and rené médori to the board 
marwan is our chief executive of engineering 
construction operations  maintenance 
and rené joined as a nonexecutive director 
becoming a member of our audit board 
risk and nominations committees 
these appointments complete a period 
of change over the last two years our broad 
mix of skills experience and nationalities 
mean that there is little danger of ‘group 
think’ our discussions are informed honest 
and vigorous once we have agreed on a 
course of action we all align ﬁrmly behind it 
setting the tone
it is essential that we promote our values if 
petrofac is to maintain its distinctive culture 
the board should lead by example and 
be seen to be safe ethical innovative 
responsive quality and cost conscious 
and driven to deliver
in considering how the board espouses 
company values two particular occasions 
this year come to mind our annual 
safety conference and petrofac’s eve 
awards ceremony
 safety is one of our most important 
values as beﬁts our potentially hazardous 
industry the attendance of our executive 
directors at the safety conference in april 
was a clear demonstration of the emphasis 
we place on safety lord cullen of 
whitekirk who led the 1990 public inquiry 
into the piper alpha oil rig disaster was our 
keynote speaker 
 our internal recognition programme 
the eve awards stand for excellence 
values and energy and honour the 
employees who best embody our values 
the 2012 awards presentation was held 
at our leadership conference in november 
attended by our 100 top leaders i was 
delighted to present this year’s ethical 
behaviour award it was clear how much 
the awards and the high proﬁle given to 
them meant to the winners
our people
the board makes a point of getting out 
into the business meeting customers and 
employees is always a highlight of such 
visits i continue to be struck by the 
capabilities and positive problemsolving 
attitude of our people they are quite 
exceptional at identifying customer needs 
and delivering the right solutions on time 
and to budget i would like to thank each of 
them for the sterling work they do much 
of which is complex arduous and carried 
out in challenging environments
outlook
whilst the situation in the middle east and 
north africa continues to be uncertain 
and the global economic outlook remains 
challenging petrofac is well positioned 
global demand for hydrocarbons is 
expected to continue to rise and our principal 
customers the national oil companies 
continue to invest and furthermore welcome 
the innovative commercial solutions that we 
are able to offer plus our commitment to 
developing local capability whilst 2012 was 
characterised by onshore engineering  
construction customers delaying awards 
we think the situation will improve during 
2013 in the meantime our integrated energy 
services division has many opportunities
our backlog gives us very good visibility of 
revenues for the coming year and we have 
a healthy bidding pipeline combined with 
an exceptional management team and a 
robust and ambitious strategy if we retain 
our values cando culture and capable 
workforce i have every conﬁdence that 
2013 will prove another successful year
norman murray
nonexecutive chairman
petrofac annual report and accounts 2012 07 interview with the  
group chief executive
group chief executive ayman asfari reﬂects on the operational and 
contract highlights of 2012 and outlines the group’s strategic drivers 
which underpin its 2015 goals
overview
petrofac annual report and accounts 2012 08 2012 has been another successful year 
for petrofac how does the company 
continue to deliver strong results and a 
good operational performance despite 
the challenging economy
our achievements are driven by our people and their passion for 
delivery despite the challenging macroenvironment the fundamentals 
for our sector remain positive and strong oil prices are encouraging 
hydrocarbon resource holders to invest in their assets and 
infrastructure across the world our talented men and women 
are responding to these opportunities
what are the three key things you want 
to report to shareholders this year
i the success of our two divisional structure
the organisational structure that we implemented at the start of last 
year is working very well and both divisions had a good ﬁrst full year of 
operations marwan chedid and andy inglis chief executives of 
ecom and ies respectively have done an excellent job of 
establishing and leading their businesses as we intended the new 
structure is proving simpler for customers to understand enables us 
to focus more clearly on our strategic goals and helps the business 
work more closely together to integrate our services
ii the rapid development of ies
building ies is one of our three strategic growth priorities in 2012 
the division increased earnings signiﬁcantly and secured major 
contracts in both new and existing geographies in mexico for 
example by the second half of this year we will be operating four 
ﬁelds and will then be the second biggest producer in the country 
next to national oil company pemex the ies leadership team has 
made excellent progress in developing the technical and management 
strength of the division providing a sound platform for further strong 
growth
iii continued excellence in execution capability
operationally we had another very good year across the group 
our portfolio is in excellent shape and most importantly customers 
are pleased with our service
in the light of petrofac’s strategic 
ambition to grow its offshore 
engineering procurement installation 
and construction epic business what 
is the signiﬁcance of the creation of 
offshore capital projects ocp
our offshore business has historically been focused on operations 
maintenance and integrity management particularly in the ukcs 
such as our contract with apache in the north sea for the forties and 
beryl assets in the past few years we have been responding to our 
customer needs and delivering large scale offshore developments in 
the uk continental shelf dons and greater stella area and in 
malaysia cendor west desaru berantai and sepat 
so we’ve been building our track record and we see continuing 
demand in this sector and a growing requirement from our customers 
for more effective delivery solutions the establishment of our ocp 
service line which is led by yves inbona and is part of our ecom 
division gives us a greater focus on this important market ocp has 
a good pipeline of bidding opportunities we are aiming to build upon 
our existing track record by deepening our offshore technical 
capability and investing in selected assets to provide access to these 
markets
what were the operational highlights of 
the year 
there have been many operational landmarks this year including
 the introduction in october 2012 of ﬁrst gas at berantai 
offshore malaysia under our risk services contract with 
petronas malaysia’s national oil company we met a very 
challenging development schedule to achieve this from concept 
selection to ﬁrst gas in just 21 months 
 the swift establishment of our operations in mexico from a 
standing start we created a fully functioning business by the end 
of the year and secured four production enhancement contracts 
in 12 months 
 our success in delivering largescale onshore projects at sites like 
asab in abu dhabi and at el merk in algeria 
 offshore projects  operations maintained its focus on asset 
integrity and safety signiﬁcantly reducing lost time incidents 
compared with previous years against an overall increase in 
manhours worked 
 we made two small yet strategic capability enhancing acquisitions 
during the year and welcomed kw limited a subsea specialist 
consultancy and oilennium limited an elearning business into our 
engineering  consulting services and training services service 
lines respectively
 also in the year and in line with our ies strategy to help resource 
holders develop their assets and the capability of their workforces 
training services formed a strategic partnership with petronas 
and was appointed to design and build two training facilities 
in malaysia
petrofac annual report and accounts 2012 09