annual report and accounts 2014 we are an international service provider to the oil and gas production 
and processing industry with a diverse client portfolio including many 
of the world’s leading integrated independent and national oil and 
gas companies
we design build operate and maintain oil and gas facilities delivered 
through a range of innovative commercial models enabling us to 
respond to the distinct needs of each client and helping them to 
transform the value of their assets across the oil and gas life cycle 
our service offering is underpinned by our ability to develop resource 
holders’ local capability through the provision of skills training with 
competency development and assurance frameworks
at the heart of everything we do the six petrofac values guide our 
decisions and behaviours safe ethical innovative responsive quality 
and cost conscious and driven to deliver above all we aim to be the 
world’s most admired oilﬁeld service company
water injection  
project p32
integrated services 
contract ukcs p35
full range of services 
on rhip oman p38
combination of 
capabilities on cendor 
malaysia p40
safety  
hse bootcamps p53
putting values  
into action p06
incountry value p10 extracting  
client value p15
project delivery p19 innovating our 
commercial models p23
people graduate 
recruitment and 
development p56
incountry value  
instep training  
centre p61
environmental 
protection  
petrofac jsd6000 p64
board visit to  
abu dhabi p77
water injection project 
front cover and p32
introduction  with our strongest ever backlog 2014 was our 
most successful year for new business giving us 
excellent revenue visibility for 2015 and beyond
 across the majority of our operations projects 
and assets 2014 was a good year
 we identiﬁed the root causes of a number 
of executional issues and took steps to ensure 
such mistakes are not repeated
 irrespective of lower oil prices petrofac is 
well positioned to return to growth and deliver 
differentiated margins
 our focus for 2015 remains ensuring excellent 
execution repositioning ies securing sales to 
support our deepwater strategy and maintaining 
capital discipline
2014 at a glance contents
strategic report
02 group performance at a glance
04 our review of the year
07 chairman’s statement
11 group chief executive’s 
strategic review
16 our business model
18 resources and relationships
20 market outlook
24 key performance indicators
26 principal risks
30 segmental performance
44 financial review
48 corporate responsibility
governance
67 chairman’s introduction
68 directors’ information
70 our leadership team
72 corporate governance report
82 nominations committee report
84 audit committee report
90 board risk committee report
96 directors’ remuneration report
113 directors’ statements
financial statements
114 group ﬁnancial statements
115 independent auditor’s report
119 consolidated income statement
120 consolidated statement of other 
comprehensive income
121 consolidated statement of 
ﬁnancial position
122 consolidated statement of cash ﬂows
123 consolidated statement of changes  
in equity
124 notes to the consolidated  
ﬁnancial statements
171 company ﬁnancial statements
172 company income statement
172 company statement of 
comprehensive income
173 company statement of 
ﬁnancial position
174 company statement of cash ﬂows
175 company statement of changes 
in equity
176 notes to the company 
ﬁnancial statements
186 glossary
188 shareholder information
revenue usm
1 
2013
2014
2012
2011
2010
us6240m
us6329m
us6241m
us5801m
us4354m
net proﬁt usm
1 1 
2013
2014
2012
2011
2010
us632m
us650m
us581m
1
us540m
us433m
2014 us120m
2
1
backlog usbn
26
2013
2014
2012
2011
2010
us118bn
us150bn
us189bn
us108bn
us117bn
return on capital employed 
2013
2014
2012
2011
2010
46
28
18
1
62
53
earnings per share diluted ¢
1 1 
2013
2014
2012
2011
2010
18388¢s
18910¢s
16899¢s
1
157 13¢s
12609¢s
2014 3481¢s
2
1
ebitda usm
9
2013
2014
2012
2011
2010
us883m
us1031m
us935m
1
us760m
us634m
1 before exceptional items and certain remeasurements
2 after exceptional items and certain remeasurements
  throughout the strategic and governance 
reports references to ‘impairment’ and 
‘impairment charges’ include exceptional 
items and certain remeasurements
petrofac 
annual report and accounts 2014 01 group performance at a glance
reporting segment
onshore engineering  construction oec
onshore engineering  construction delivers onshore engineering 
procurement and construction projects we are predominantly 
focused on markets in the middle east africa and the caspian 
region of the cis
reporting segment
offshore projects  operations opo
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
division
engineering construction operations  maintenance ecom
31  of group revenue 50 of group revenue 
revenue usm
2013
2014
2012
2011
2010
us4288m
us3534m
us3241m
us4146m
us3254m
revenue usm
2013
2014
2012
2011
2010
us1403m
us1671m
us2009m
us1252m
us722m
net proﬁt usm
2013
2014
2012
2011
2010
us479m
us433m
us403m
us463m
us373m
net proﬁt usm
2013
2014
2012
2011
2010
us61m
us71m
us64m
us44m
us17m
net proﬁt margin 
2013
2014
2012
2011
2010
112
123
124
112
115
net proﬁt margin 
2013
2014
2012
2011
2010
43
42
32
35
24
employees 
2013
2014
2012
2011
2010
7800
6100
5900
6600
5400
employees 
2013
2014
2012
2011
2010
4300
5100
5500
4100
4400
02
petrofac 
annual report and accounts 2014 us189bn
onshore engineering
 construction 57
integrated energy 
services 17
offshore projects 
 operations 18 
engineering  
consulting services 8  
backlog by reporting segment
division
integrated energy services ies
reporting segment
engineering  consulting services ecs
engineering  consulting services is petrofac’s centre of technical 
engineering excellence from ofﬁces across the middle east and 
north africa cis asiapaciﬁc europe and the americas we provide 
engineering services across the life cycle of oil and gas assets 
our teams execute all aspects of engineering including conceptual 
studies frontend engineering and design feed and detailed design 
work for onshore and offshore oil and gas ﬁelds and facilities
7 of group revenue 12 of group revenue 
reporting segment
integrated energy services ies
integrated energy services provides an integrated service for 
hydrocarbon resource holders under innovative commercial models 
that are aligned with their requirements projects cover upstream 
developments both greenﬁeld and brownﬁeld and related energy 
infrastructure projects and can include investment
revenue usm
2013
2014
2012
2011
2010
us245m
us362m
us437m
us208m
us173m
revenue usm
2013
2014
2012
2011
2010
us708m
us934m
us782m
us519m
us384m
net proﬁt usm
2013
2014
2012
2011
2010
us29m
us32m
us33m
us31m
us22m
net proﬁt usm
2013
2014
2012
2011
2010
us89m
us125m
us131m
us22m
us38m
net proﬁt margin 
2013
2014
2012
2011
2010
118
88
76
148
122
net proﬁt margin 
2013
2014
2012
2011
2010
126
134
168
44
99
employees 
2013
2014
2012
2011
2010
2800
3900
4900
2300
2000
employees 
2013
2014
2012
2011
2010
3000
3200
3300
2300
2000
 before exceptional items and certain remeasurements
strategic report
financial statements
governance
petrofac 
annual report and accounts 2014 03 our review of the year
with a record yearend backlog of us189 billion 2014 was our  
best ever year for new business today our projects span 29 countries  
and we continue to extend our footprint
canada 
deepwater 
development project 
awarded october 2014
for more information 
see page 39
algeria 
reggane north 
development project 
awarded may 2014
for more information 
see page 33
iraq 
general construction 
management services 
awarded october 2014
for more information 
see page 37
uk 
enquest operations and 
maintenance contract 
awarded may 2014
for more information 
see page 36
uk 
gdf suez integrated 
services contract 
awarded august 2014
for more information 
see page 36
uk  
chevron north sea engineering 
and construction support 
awarded october 2014
for more information 
see page 37
petrofac
annual report and accounts 2014 04 oman 
khazzan central 
processing facility 
awarded february 2014
 
for more information 
see page 33
kuwait 
clean fuels project 
mina abdulla mab1 
reﬁnery 
awarded february 2014
 
for more information 
see page 33
oman 
rabab harweel 
integrated project rhip 
awarded march 2014
 
for more information 
see page 39
azerbaijan 
shah deniz 2 project 
awarded july 2014
 
for more information 
see page 39
abu dhabi 
thamama front end 
engineering design 
feed 
awarded february 2014
 
for more information 
see page 39
germany 
borwin3 wind farm  
grid connection 
awarded april 2014
for more information 
see page 36
kuwait 
gathering centre 29 
awarded july 2014
 
for more information 
see page 34
malaysia 
reﬁnery and 
petrochemicals 
integrated development 
rapid project 
awarded august 2014
 
for more information 
see page 34
petrofac 
annual report and accounts 2014 05
financial statements
governance
strategic report design build manage and maintain train
putting values into 
action in turkmenistan
as part of the galkynysh project in turkmenistan 
we were asked to connect the huge new gas 
plant with the region’s rapidly growing railway 
infrastructure – and incorporate a sophisticated 
system for weighing the freight wagons used 
for the export of condensate and sulphur 
travelling at speeds up to 56kph and operating 
16 hours a day
with no previous railway experience within 
the business to speak of we expected to 
rely heavily on specialist subcontractors 
however not fully comfortable with the 
proposed designs by them and the 
unavailability of components from local 
suppliers we took direct charge of the 
engineering and procurement
the team quickly identiﬁed railway industry 
experts from around the world and sought 
their advice to develop the front end engineering 
and design later alternative designs were 
developed by petrofac’s own team selecting 
equivalent european components that met 
the project speciﬁcations and schedule 
bitbybit they convinced the turkmen 
authorities to signoff their speciﬁcations 
and they kept a close eye on the construction 
and commissioning
the entire package was commissioned well  
ahead of schedule with substantial efﬁciencies 
meanwhile with rail rapidly becoming the 
preferred mode of transport for the region’s 
oil and gas industry petrofac now beneﬁts 
from having created its own inhouse expertise
as an extra accolade the team was named the 
2014 winner of a petrofac eve award in the 
driven to deliver category – held annually to 
celebrate employees who embody our values
 with every petrofac project 
comes a series of daunting 
technical challenges – and  
our company is full of  
ingenious people who go  
the extra mile to solve them
petrofac 
annual report and accounts 2014 06 chairman’s statement
during a tough year we adapted to signiﬁcant change recalibrated our 
strategic direction and renewed our focus on excellence in execution
at a glance
 despite the challenges of 2014 our ability to execute 
challenging contracts in difﬁcult conditions remains  
a core competence
 with our strongest ever backlog and our most 
successful year for new business we have excellent 
revenue visibility for 2015 and beyond
 our focus for 2015 remains ensuring excellent execution 
repositioning ies securing sales to support our 
deepwater strategy and maintaining capital discipline
against a difﬁcult background 
and a disappointing ﬁnancial 
performance the board has been 
systematically scrutinising the 
strategic direction particularly 
the trajectory of the ies business 
and the move by ocp into 
deepwater operations
rijnhard van tets
nonexecutive chairman
i regard 2014 as a year of transition for petrofac not only for the 
business but also for the board and its composition i would like 
to start by paying tribute to my predecessor norman murray 
who stepped down as chairman for compassionate reasons in 
august 2014 during the three years that norman led the board 
he consistently championed the necessity for robust processes 
and systems so that the board can appropriately exercise its 
judgement when assessing if a particular risk whether strategic 
or operational is justiﬁed by the potential reward on behalf of 
the entire board i would like to thank norman for his exemplary 
leadership and extend our best wishes to him as we reported  
last year andy inglis ceo of ies left at the start of 2014 
during the year the company adjusted to several other new 
realities some of them very challenging i want to address these 
onebyone before going on to talk about the 2014 performance 
our future prospects and the implications for our shareholders
restoring our reputation
one thing that has always set petrofac apart is its reputation 
for excellence in project delivery 
however for three projects in particular – the greater stella 
area and laggantormore both in the ukcs and the ticleni 
production enhancement contract in romania – that reputation 
suffered in 2014
for a company that puts so much store by its track record  
our pride has been hurt our trading update issued in november 
2014 which provided revised earnings guidance for 2015 
by chance coincided with the 2014 leadership conference 
what struck me when i attended a portion of this event was 
the clear acrosstheboard determination to learn from any 
shortcomings and recommit to petrofac’s distinctive delivery
focused culture the board is of a similar mind and will focus 
on supporting the management team as it seeks to restore the 
company’s reputation for consistently reliable execution
whilst nobody is complacent about the events of the last year 
our ability to execute challenging contracts in difﬁcult conditions 
remains a core competence we successfully completed several 
projects in the year namely the gas sweetening facilities project 
in qatar and the koc pipeline and koc efﬂuent water projects 
in kuwait during the year we started on the clean fuels project in 
kuwait the khazzan central processing facility in oman and after 
a period of delay due to the client rescoping the project have 
really started to gain momentum on the upper zakum project  
in abu dhabi in addition we have successfully bid for a number 
of signiﬁcant projects in our core markets 
07
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements adapting to a tougher environment
every company in the oil and gas world is adjusting to a major 
shift in economics it has been noticeable over the last year that 
concluding our commercial settlements has taken longer and 
required more effort few people would have predicted such a 
dramatic and sudden fall in oil prices everyone is suffering from  
a crisis of market conﬁdence and we are recalibrating our 
strategic approach accordingly
arguably petrofac is less susceptible than many
oil price ﬂuctuations only have a direct impact on parts 
of our business for example our ies business does 
have exposure to the oil price and winning deployment 
opportunities for our petrofac jsd6000 offshore installation 
vessel will remain challenging in the current price environment 
notwithstanding these pressures most of the group’s income 
comes from national oil companies which historically have 
continued to invest in their assets during periods of economic 
uncertainty and this gives us comfort that our backlog position 
is robust moreover our operations remain concentrated in the 
middle east and north africa where the costs of extracting 
hydrocarbons are relatively modest 
at the same time the longterm fundamentals remain strong
all indications support the view that the global energy appetite  
will continue to grow in the longer term largescale investments 
in oil and gas infrastructure will be needed to meet this demand 
as a result commercially innovative oilﬁeld services will continue 
to be sought after
progressing to a more balanced portfolio
against a difﬁcult background and a disappointing ﬁnancial 
performance the board has been systematically scrutinising the 
group’s strategic direction particularly the trajectory of the ies 
business and the move by ocp into deepwater operations
the details of the ies business are covered elsewhere in this 
report but the direction is towards a less capitalintensive 
more balanced portfolio with a greater emphasis on groupwide 
synergies addressing the future of ies has been an area of strong 
focus for the board in the second half of 2014 and will remain so 
in 2015 with regards to our deepwater ambitions the longterm 
strategic rationale remains valid the board agreed nevertheless 
that in view of the rapidly changing external environment the 
immediate priorities are to derisk our execution secure sales 
and manage the construction programme of our new installation 
vessel in light of the opportunities available for its use 
it is also important to acknowledge several strategic successes 
in oec the order book and the backlog continued to be 
replenished and now stands at a record level in opo the 
business continues to be successfully diversiﬁed outside the 
uk with additional international contract wins during the year 
in ecs we have focused on increasing our external sales not 
just supporting the oec business petroleum development oman 
awarded ecs an engineering and procurement contract with a 
value of more than us1 billion in march 2014 our largest ever 
reimbursable contract 
this means we exit 2014 with a more balanced and structurally 
sound portfolio
taking steps to improve our ﬁnancial returns
in reshaping our portfolio we are also working towards improving 
our ﬁnancial returns
with our strongest ever backlog and our most successful year for 
new business we have excellent revenue visibility for 2015 and beyond
at the same time we have focused on our capital discipline 
and are determined to become progressively less capital 
intensive a good example of our approach is the agreement 
we reached with first reserve to create petrofirst infrastructure 
partners as well as freeing up approximately us400 million of 
petrofac capital this innovative new approach provides us with 
a signiﬁcant pool of thirdparty capital – enabling the company to 
pursue more infrastructure opportunities in a capital efﬁcient way
further we recognise that in the current climate effective 
management of working capital will be crucial and the board 
is very much focused on ensuring our cash collection processes 
remain robust and disciplined 
at the end of 2014 our net debt was us733 million 2013 
us727 million and our cash generated from operations was 
us790 million 2013 us5 million the substantial improvement 
on 2013 cash generation reﬂects tight working capital 
management cash advances received on some of the major 
project awards in the year and the ﬁnalisation of a small number  
of commercial settlements with our clients
maintaining a strong board for the future
i have already spoken about changes to the board that took 
place this year looking ahead i am very sorry indeed to report 
that roxanne decyk has decided to step down from the board 
following the agm in may 2015 roxanne’s us commitments have 
increased signiﬁcantly recently and she is concerned that she will 
have insufﬁcient time to discharge her responsibilities as a director 
of petrofac i would like to thank roxanne for her signiﬁcant 
contribution over the last four years and wish her well on behalf 
of the board 
in view of these past and forthcoming resignations the 
nominations committee initiated a search in the middle of the 
year for at least one new nonexecutive director as a result 
the board is now delighted to recommend to shareholders the 
appointment of dr matthias bichsel as a nonexecutive director at 
our forthcoming agm matthias will help to maintain a board that 
is strong wellbalanced and multidisciplinary we have a good 
ratio of nonexecutivetoexecutive directors we have deep 
experience in energy engineering and corporate responsibility 
as well as ﬁnancial project and business management 
when i took over as chairman i already had seven years of 
board experience with petrofac so the transition promised to be 
seamless nevertheless the role of chairman is different from that of 
senior independent director whilst there is no recognised separate 
induction programme for a chairman i took time to reﬂect on 
what i might choose to do in order to help me discharge my 
responsibilities i have undertaken a series of meetings with our 
major shareholders in order to understand their views better 
consulted with our professional advisers with a view to deepening 
my appreciation of the uk governance framework and undertaken 
a number of visits to our ofﬁces across the globe as well as two 
site visits details of which can be found in my governance report 
i believe that the chairman in particular should get out into the 
business and talk to as many of our employees as possible as this 
gives a real insight into the group’s culture and values
chairman’s statement continued
08
petrofac
annual report and accounts 2014 reﬂecting on our 2014 ﬁnancial performance
ultimately the group delivered us581 million in earnings before 
exceptional items and certain remeasurements attributable to 
petrofac shareholders which falls short of our expectations at the 
start of the year but is in line with the revised guidance we gave 
during the course of the year aside from the impact of falling oil 
prices on ies’s trading performance and the three projects where 
our execution fell short of our high standards it is reassuring 
to note that we continue to deliver differentiated margins in 
ecom although market conditions do remain unpredictable 
we have also begun to take clear steps to return to longterm 
sustainable growth 
reﬂecting the lower oil price environment and future anticipated 
earnings from the ies contract portfolio we recognised 
charges for exceptional items and certain remeasurements 
of us461 million after tax in respect of ies this reduced 
overall group earnings attributable to petrofac shareholders to 
us120 million 
against this backdrop i want to thank all petrofac shareholders for 
your loyalty throughout the year we beneﬁted from a frank and 
constructive dialogue and as this report should demonstrate 
the board is determined to repay your trust with this in mind we 
are proposing a ﬁnal dividend of 4380 cents per share which if 
approved will be paid on 22 may 2015
looking to 2015 and beyond
in 2015 the board will have certain areas of focus of immediate 
concern as well as matters that are essential to underpin the 
company’s longer term sustainability 
regarding the former the big themes for 2015 are above all 
else ensuring excellent execution repositioning ies securing 
sales to support our deepwater strategy and maintaining 
capital discipline 
firmly in our sights will naturally be the delivery of laggan
tormore and the greater stella area projects the board will be 
given regular updates on these projects as a matter of course 
furthermore in reviewing and sanctioning forthcoming bids  
we will rigorously assess the quality of project management  
and resourcing capabilities behind them 
considering matters that are more long term i would like to mention 
in particular succession planning risk management and health 
safety security environmental and integrity assurance hsseia
succession planning across all levels and in all areas of the 
business will continue to receive our full attention for the board 
this not only means identiﬁcation of potential successors at a 
senior level but taking a deep dive into how the business identiﬁes 
nurtures and equips the upandcoming tranche of talent that 
will become the next generation of leaders over the forthcoming 
decade and beyond 
i will be building on our previous chairman’s legacy to ensure 
that our risk management systems are continuously reviewed 
and improved upon of course hsseia will remain high on our 
agenda given the nature and daytoday realities of our business 
risk and crisis management will always be important to the board 
whilst we are not complacent i am heartened that following a 
sustained effort resulting in a number of new procedures within 
ecom we saw an overall improvement in safety performance in 
2014 our lost time injury ﬁgure was slightly better than 2013 and 
we have had no fatalities in 2014 this is a solid performance on 
which management and employees should be commended
it is of course impossible to predict the future with absolute 
certainty we live in an uncertain world the geopolitical situation 
in the middle east and north africa continues to evolve although 
to date our business has been relatively unaffected by events in 
the region the sharp decline in oil price in 2014 took most people 
by surprise nevertheless against an uncertain backdrop i am 
heartened that our record backlog gives us excellent visibility of 
revenues through to 2015 and beyond and this is mainly in our 
core market where we have an established track record of delivery 
notwithstanding the geopolitical environment 
finally i do want to thank all of our employees for their 
commitment and professionalism during a challenging year 
in particular i would like to pay tribute to group chief executive 
ayman asfari no one is more committed to the success of 
petrofac than ayman it is encouraging to see how very hard he 
and his executive team are working to deliver on our collective 
commitments and position the group for sustainable growth  
over the longer term
09
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements  the petrofac story in oman 
began in 1988 with the award 
of our ﬁrst ever contract in 
the country and over the years 
we have consistently aimed 
to contribute far more to the 
country than we take away
collaborating to deliver 
incountry value in oman
local delivery has always been key to the 
petrofac model – employing local people 
working with local suppliers and developing 
local capabilities
the concept of incountry value seeks to 
formalise and quantify the contribution we 
make it is deﬁned by the omani authorities 
as the total spend retained incountry that 
beneﬁts development contributes to human 
capability and stimulates productivity in the 
national economy
all in all the contribution from petrofac 
is signiﬁcant 
since 2005 we have had a permanent 
presence in the country with 70 full time 
employees and right now we are working on 
three megaprojects with a combined value 
of more than us43 billion to deliver these 
we employ omani nationals we buy omani 
components and we use omani contractors
in partnership with takatuf oman we are also 
establishing the country’s largest technical 
training centre with a planned capacity of 
1000 students a year this will train oman’s 
energy workforce to international standards
for petrofac delivering incountry value has 
an important business dimension – growing 
our global capabilities and enabling us to 
establish productive relationships with local 
communities local businesses and the wider 
stakeholder community
design build manage and maintain train
petrofac 
annual report and accounts 2014 10 group chief executive’s strategic review
2014 was a tough year for petrofac and the oil and gas industry as a whole
we ﬁnished the year with a record backlog which gives us very 
good visibility of future revenues nonetheless our 2014 ﬁnancial 
performance fell short of everyone’s initial expectations and our 
reputation for operational excellence has been dented we also 
recognise that some investors are deeply concerned by our 
sector’s exposure to lower oil prices
in 2015 and beyond we aim to set the record straight by delivering 
to the highest standards on all our projects coping with the 
challenges of a lower price environment and positioning the 
group to beneﬁt from the projected longterm growth in global 
energy demand
before i talk about prospects for the future i would like to reﬂect 
candidly on our 2014 performance and the lessons learned
reﬂecting on the challenges of 2014 
across the majority of our operations projects and assets 2014 
was a good year for petrofac from a business development 
perspective it was our best year ever enabling us to build up a 
record backlog however as we fell short on the delivery of some 
of our operational objectives our record for excellence in project 
execution was compromised 
we have always assured all our stakeholders that as we enter 
new geographies and take on new disciplines we are more than 
capable of understanding and mitigating the associated risks 
however as the year unfolded and for three projects in particular 
it became clear that our performance was falling short of the high 
standards we expect of ourselves 
on the greater stella area project the original project scope 
lacked deﬁnition when we entered into the project and many 
changes in scope ensued the interfaces between ithaca  
as operator integrated energy services ies as partner and 
offshore projects  operations opo as contractor were not 
welldeﬁned and we did not coordinate ourselves internally  
or manage our fabrication subcontractors effectively to ensure  
our respective interests were fully aligned 
on the laggantormore project we failed to stresstest 
adequately our assessment of the risks of operating in a wholly 
new geography for the onshore engineering  construction oec 
business our ability to deliver on schedule was further impacted 
directly by challenging weather conditions affecting the shetland 
islands furthermore our construction contractors failed to deliver 
their agreed scope and though we had a lack of experience  
in managing direct construction we had little choice but to take 
on more direct construction activity on a day rate basis 
the third project is the ticleni production enhancement 
contract in romania here despite effective project execution 
enabling us to increase production in 2011 2012 and 2013 
it became apparent from new seismic data obtained in 2014 
at a glance
 while our overall portfolio is in good shape we have 
recently fallen short of the high execution standards 
we set for ourselves
 we have faced these challenges and we are taking robust 
action to address them
 irrespective of lower oil prices petrofac is well positioned 
to return to growth and deliver differentiated margins
 we will pursue the clear synergies between ies and 
ecom – and demonstrate to clients the considerable 
beneﬁts of our unique combined offer
fundamental to our success  
is petrofac’s distinctive  
deliveryfocused culture and  
the six values that sustain 
it safe ethical innovative 
responsive quality and cost 
conscious and driven to deliver
ayman asfari
group chief executive
11
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements that the subsurface had previously been poorly deﬁned 
consequently some of our investment did not yield sufﬁcient 
production improvement and we do not anticipate being able 
to create shareholder value from continued investment in the 
contract we have therefore decided to exit from the project 
and will be discussing exit options with omv petrom
as the signiﬁcance and the cumulative effect of the laggan
tormore and greater stella area projects in particular became 
apparent we were compelled to update our investors and 
inevitably the reaction from the markets was damning 
the situation was then compounded by the tumbling oil price 
which meant our sector fell even further from favour
for a company like petrofac the position in which we found 
ourselves in late 2014 was unprecedented and uncomfortable 
in equal measure 
as a signiﬁcant shareholder in my own right i certainly shared 
the concern of fellow investors quickly and purposefully we 
moved to resolve these executional issues we have identiﬁed 
the root causes and are taking steps to ensure such mistakes will 
not be repeated irrespective of lower oil prices i am conﬁdent 
petrofac is well positioned to return to growth and deliver 
differentiated margins
acknowledging the successes of 2014
whilst i do not intend to downplay the challenges of 2014 and  
will come on to explain how we are addressing them i do believe 
it is important to recognise the year’s successes
maintaining a sectorleading safety record 
safety is our ﬁrst and our most important value and a key 
component of operational excellence 
with no fatalities in 2014 and a lost time incident lti frequency 
rate of 0044 per 200000 manhours our performance indicators 
are better than industry norms and we did more to ensure that 
everyone who works for and with petrofac understands and 
abides by our safety ethos whilst i am pleased with our 2014 
safety record there can be no room for complacency and we will 
continue to keep safety paramount in our daily actions individually 
and collectively 
making good progress on challenging projects
across the bulk of the portfolio our record for operational 
excellence continued unabated we have approximately 50 
signiﬁcant projects currently in execution nine of them more 
than us1 billion in value 
where we did face execution issues we also moved to resolve 
them at the laggantormore shetland gas plant for example 
we have now completed most of the construction work agreed 
a commercial settlement with total and expect to complete the 
project in the third quarter of 2015
on the fpf1 modiﬁcation works for the greater stella area 
project progress has been slower than expected over the winter 
while the unit is in an advanced state mechanical completion 
is now expected in the third quarter of 2015 we have good 
visibility on the scope and the required resources are in place to 
complete the upgrade and modiﬁcation given the lower oil price 
environment we are prioritising cost optimisation certainty of 
delivery and completion of all works prior to sailaway ahead of 
the timing of ﬁrst production sailaway is now expected in early 
2016 following the winter weather window with ﬁrst production 
scheduled for mid2016 petrofac as modiﬁcations contractor 
has made a number of variation requests and other claims on the 
ﬁeld owners and we are continuing to discuss these with them
buildingup a record backlog
with a record yearend backlog of us189 billion 2014 was  
our best ever year for new business even after oil prices began 
to fall a respectable deal ﬂow continued along with sustainable 
bidding behaviour from our competitors in january 2015 we 
secured the lower fars heavy oil project in kuwait adding around 
us3 billion to our backlog with the softness in the market we 
are well positioned with a strong backlog and with execution 
risk reduced in a deﬂationary environment for procurement and 
subcontractor services
this brings excellent revenue visibility for 2015 and beyond 
further diversifying the ecom business
during 2014 our engineering construction operations and 
maintenance ecom business continued with its geographic 
and business model diversiﬁcation 
until recently for example opo was a ukcentric business 
it now secures more than 50 of its earnings from outside of 
the ukcs and made important entries into algeria iraq and 
uae at the same time engineering  consulting services ecs 
secured its ﬁrst major engineering procurement and construction 
management epcm contract at rabab harweel in oman which 
enables it to deliver project execution services on a reimbursable 
basis we also moved further downstream making progress on 
our ﬁrst major reﬁnery project located in oman and securing a 
package for the new clean fuels project in kuwait 
ensuring the strength and depth of our leadership
our continuing success depends on the quality and attitude  
of our people and in particular our leadership 
building our capability and reinforcing our values has always been 
important in 2014 we put more rigour behind our people strategy 
– with a particular emphasis on effective talent management 
and succession planning across our top 200 employees – which 
continues to be supported through the appointment of a new 
group director of human resources
group chief executive’s strategic review continued
12
petrofac
annual report and accounts 2014 building strong differentiating corporate  
responsibility credentials
another asset which we believe sets petrofac apart from many 
of our peers is our corporate responsibility cr commitment and 
capability this helps us to build productive relationships bid for 
challenging projects develop trust manage risk and improve our 
performance during 2014 we brought yet more discipline to our 
cr programmes thereby helping us to understand and live up  
to changing client and investor expectations
while we understand the gravity and impact of the challenges we 
faced in 2014 we are determined not to let them overshadow the 
progress made across the group as a whole
recommitting to our business strategy
our strategy is intended to maximise the opportunities available to 
us by using the breadth and depth of our services and capabilities 
to deliver excellent outcomes for our clients and create value for 
our colleagues and investors
fundamental to our success is petrofac’s distinctive delivery
focused culture and the six values that sustain it safe ethical 
innovative responsive quality and cost conscious and driven 
to deliver
our strategic intent is to build progressively on our core business 
which in turn enables us to achieve a more balanced geographic 
and business model mix and to work across the entire life cycle 
of our clients’ assets from early development right through to 
decommissioning in our core business our focus remains on 
delivering our backlog through a relentless focus on ﬁrst class 
project execution cost control and effective risk management 
building on our track record in core markets and further cementing 
our foothold in geographies where we are newer players
through most of 2014 the market conditions did nothing to deﬂect 
us from this strategy nonetheless towards the end of the year we 
found ourselves adapting to new market conditions as a result of 
lower oil prices 
having begun to refocus the ies business early in 2014 we then 
considered carefully how to derisk the delivery of our deepwater 
capabilities we also introduced several new commitments to 
ensure that we avoid unacceptable executional risks 
with regards to ies
the original strategic rationale was for ies to bring value to the 
wider petrofac group and offer another route to market for 
our full range of services in refocusing the business we are 
recommitting to this original purpose and we will focus on projects 
that play to our existing strengths to be successful in this we will 
work across the group together from the business development 
stage agreeing on the target and developing a robust pursuit and 
execution strategy along with clear accountabilities for delivery 
from the outset
we are therefore building on the successes of ies to date it has 
for example successfully established our position in the shallow 
water offshore market and taken us into several new geographies 
such as algeria malaysia and mexico it has also added 
signiﬁcantly to our wider capabilities
at the same time we are slowing down the pace of capital 
deployment reducing capital intensity where it makes sense 
to do so and looking at ways we can tap into thirdparty capital 
the creation of petrofirst infrastructure partners being a prime 
example and not committing signiﬁcant new capital until we have 
extracted the right value from the existing portfolio
the overall emphasis however is to pursue the clear synergies 
between ies and ecom – and demonstrate to clients the 
considerable beneﬁts of our unique combined offer
with regards to our deepwater ambitions
ultimately the scale of the deepwater market will be determined 
by the movements in the oil price however there are certainly 
opportunities out there and from speaking to clients competitors 
and potential partners alike i know that the market is impressed 
by the unique conﬁguration and capabilities of the petrofac 
jsd6000 – our new installation vessel which is currently under 
construction and due for delivery in 2017 
during 2015 we will monitor the market opportunities for use  
of the vessel and will manage its construction programme in  
the context of the prospects available for its use 
with regards to our focus on delivery excellence
simply put the challenges of 2014 can be traced back to a failure 
to appreciate fully the risks we faced as we worked in unfamiliar 
geographies and with untested partners and in areas where we 
strayed outside of our core competencies to ensure this does 
not happen again we have made a series of commitments
 with lumpsum contracts we will be more risk averse we will no 
longer take construction risk on large lumpsum projects within 
the uk and elsewhere we will scrutinise our assumptions with 
regard to workforce productivity
 wherever we work and on whatever basis we will ensure that 
we have robust contractual protection on both the time and cost 
associated with severe weather disruption
 with ﬂoating infrastructure upgrades we will also ensure that 
the interests of our fabrication partners are closely aligned with 
our own
 we will only undertake production enhancement contracts 
where the value is primarily driven by our core competencies 
rather than reservoir performance
yes this does reduce our ﬂexibility however we can satisfy 
ourselves that the right mix of risk and reward can be established 
for every project
13
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements group chief executive’s strategic review continued
well positioned to capitalise on a low 
price environment
i acknowledge that for many investors the prospect of a 
sustained period of low oil prices is an abiding concern i would 
like to assure you that petrofac is well positioned to cope with 
these market challenges and capitalise on the opportunities that  
i believe will present themselves in this environment
the strength of our backlog means our revenue visibility is better 
than it has been at any other point in our 34year history
secondly petrofac is strongest in those market segments 
that are least vulnerable to lower oil prices primarily we work 
with national oil companies many of whom have signalled an 
intention to keep on investing although we work globally our 
operations tend to be concentrated in the middle east and north 
africa a region that enjoys the world’s lowest marginal production 
costs and despite the market conditions we continue to see an 
attractive pipeline of bidding opportunities in our core markets
we do have operations in the ukcs where the picture is very 
different here our business beneﬁts from our clients’ operating 
expenditure rather than capital spending and we have already 
been working with clients to improve cost effectiveness 
ultimately our prospects in this region will depend on structural 
and ﬁscal considerations as well as changes in the oil price 
even if production has to be reined in clients will be looking for 
new models to run mature and extramature assets and we are 
well placed to compete for a substantial decommissioning market
with a weaker global economy and reduced demand for 
hitherto scarce skills the prospect of a deﬂationary environment 
should help to derisk the delivery of our record backlog through 
procurement cost savings
finally in these market conditions the core petrofac offer 
becomes more compelling with centres of excellence in 
the middle east and india our cost structure is competitive 
meanwhile our focus on operational excellence and our 
willingness to share project risk with our clients ensures alignment 
of our respective interests
weighing up these circumstances we expect to deliver 
around us460 million of net income in 2015 in line with 
our previous guidance
1

1 on 24 november 2014 we guided to net proﬁt in 2015 of around 
us500 million based on the then prevailing average 2015 forward oil price  
of around us82 per barrel and stated that a further increasedecrease of 
us1 in the price of oil would impact net earnings by around us2 million 
based on the current average 2015 forward oil price of around us60 per 
barrel we therefore currently expect net earnings to be around us460 million 
other than the movement in the oil price the group continues to perform in 
line with management expectations at the time of the november announcement
acknowledging our strongest asset – the skills 
and ethos of our people
i would like to pay tribute to our people who help make petrofac 
such a unique company and who are working together through 
these challenging times
i want to thank each and every one of them for their efforts in 2014 
and i look forward to working together during what i am conﬁdent 
will be a successful 2015
one person who deserves special recognition is norman murray 
who due to personal reasons stepped down as chairman of the 
board in mid2014 we were extremely sorry to see norman go 
and sympathise deeply with his situation he made a special and 
signiﬁcant contribution to petrofac’s success and the seamless 
transition to his successor rijnhard van tets is testament 
to norman’s outstanding professionalism i look forward to 
continuing to work with rijnhard and the rest of our board 
who have also been very supportive as we continue to deliver 
our agenda
strong foundations for longterm growth
over the longer term we anticipate increased demand for energy 
fuelled by a growing appetite for hydrocarbons and ongoing 
capital spending by resource holders the strength of our 
backlog underpinned by our competitive cost structure relentless 
focus on execution and our ﬂexibility to adapt our offering to client 
and market demands ensures petrofac and our shareholders 
will be well positioned to beneﬁt from these conditions over the 
longer term
14
petrofac
annual report and accounts 2014  as a business with a  
strong entrepreneurial heritage 
we are always looking for  
new ways to bring value to  
our clients – understanding  
their needs drawing on our 
resources and relationships 
and adapting our offer 
accordingly
extracting client value 
in mexico
our performance in mexico characterises 
this approach
back in 2011 we won two integrated services 
contracts to develop the magallanes and 
santuario blocks in southcentral mexico 
and were then awarded two more production 
enhancement contracts – for pánuco 
and arenque
since taking over we have boosted 
production increased drilling efﬁciency 
and pushed up the known resource base
in santuario for example our teams 
were convinced they could ﬁnd additional 
reserves in untapped adjacent blocks 
bringing together many different inhouse 
disciplines they argued their case 
proposed an effective drilling strategy 
and successfully made a new discovery 
of commercial proportions
meanwhile to add to our capability and 
drive new costefﬁciencies we partnered 
with the mexican conglomerate group alfa 
to create a new service company petroalfa 
quickly growing to more than 80 employees 
it now provides petrofac and the wider oil 
and gas industry with a growing range of 
engineering procurement drilling and 
maintenance services
design build manage and maintain train
financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 15 our business model
petrofac is an oilﬁeld services company  
working across the international oil and gas industry  
we help our clients unlock the full value of their energy assets
activities
driven to deliver
innovative
ethical
quality and cost conscious
responsive
operational 
excellence
design
from the concept to the 
detail we provide design 
and engineering services 
across the life cycle of oil 
and gas assets
train
we assess needs build 
facilities design curricula 
and deliver programmes 
to develop safe and 
effective workforces
build
onshore or off greenﬁeld 
or brown upstream or 
down we provide the full 
spectrum of epc epci 
and epcc services
manage and maintain
on behalf of owners we 
operate oil and gas assets 
andor enhance their 
production andor take 
responsibility for maintenance
safe
design build
manage and maintain train
all of our projects and operations deploy one 
or more of these activities they can be seen 
throughout the report and are indicated on 
our case studies using the following icons
petrofac 
annual report and accounts 2014 16 our  
people
as a peoplebased 
business we have  
a problemsolving 
culture clear values  
and strong leadership
our supply chain 
and contractors
with deep knowledge 
of the many businesses 
in our supply chain 
we know when and 
how to call on their 
respective strengths
financial 
capital
exerting capital 
discipline we operate  
a balanced portfolio  
we judiciously coinvest 
and sometimes tap into 
thirdparty capital
risk processes and 
risk management
by thinking through 
every eventuality we 
derisk our projects  
and bring certainty 
to clients
read more on page 18
outcomes innovative commercial models
reimbursable services
where the cost of our services is reimbursed  
by the client plus an agreed margin
cost plus kpis
often our reimbursable contracts will include 
income linked to the successful delivery 
of key performance indicators kpis
lumpsum turnkey
projects where we are remunerated on  
a ﬁxedprice or lumpsum basis
risk service contracts rscs
where we develop operate and maintain 
a ﬁeld while the resource holder retains 
ownership and control of the reserves 
often we coinvest in the development and 
are reimbursed based on our performance
production enhancement  
contracts pecs
where we are paid a tariff per barrel for 
enhancing oil and gas production above 
an agreed baseline and therefore have little 
direct commodity price exposure pecs are 
typically longterm and appropriate for 
mature ﬁelds with long production histories
equity upstream investments
upstream investments made through 
production sharing contracts or concession 
agreements which will typically have 
production and commodity price exposure
shareholder value
delivering sustainable longterm value 
through dividend payments to our 
shareholders and the ﬁnancial returns 
from share price growth
incountry value
developing local skills and capabilities 
beneﬁting local development and  
stimulating productivity in local economies
client value
beneﬁting from certainty of cost and delivery 
and taking advantage of commercial  
models that meet client needs
resources and relationships
financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 17 resources and relationships
to meet our clients’ needs and solve their problems we have 
developed a unique deliveryfocused culture and assembled  
a complex network of relationships
“ within petrofac people tend to take a holistic 
view of the full scope of every project rather 
than just the part that involves them”
the petrofac story is characterised by the steady expansion of our 
capabilities this enables us to access new markets and address 
client needs it also means that as we bid on new projects we 
can tailor a bespoke package of services and solutions from 
across the group for each client
to do this successfully internal relationships must be strong and 
mutually beneﬁcial and it must be in everyone’s interests to be 
ﬂexible and share expertise 
to this end we are putting more emphasis on our human 
resource processes – progressively building our leadership 
capability as well as our skills base actively looking for 
opportunities for key people to move between different parts  
of the group and establishing a global cohort of closely 
networked highly collaborative employees
“ this is about employing local people building 
local capabilities and engaging with local 
communities in so doing we aim to aid 
development and stimulate economies”
all of our projects in one way or another involve local 
stakeholders draw on local supply chains and have an impact  
on local communities
we have always had a commitment to local delivery by employing 
local people working with local suppliers and developing local 
capabilities this has become a key consideration for many clients 
and also enables us to work costeffectively as our company 
matures we take an ever more rigorous approach to our social 
performance and our contribution to local economies
meanwhile our project teams call on a broad network of local 
suppliers and their knowledge of the industry ecosystem is a 
key asset they also build close relationships with our partners 
clearly relationships with clients are central to delivering projects 
and winning new contracts
capabilities and people
incountry value
“ we have built a strong reputation for 
commitment and delivery and demonstrated 
many times that we can go the extra mile”
unlike some markets where buyers can easily ascertain the 
quality of the product our clients can only assess the quality of 
our service through longterm experience so our business model 
depends on our ability to continually provide a range of services 
and capabilities that are recognised as consistently high quality 
from the moment we decide to bid on a project the discipline 
begins a team is assembled a tailormade execution plan is 
developed risks are identiﬁed suppliers are engaged and a 
member of the management team takes full responsibility for 
its delivery
with a clear understanding of cost and complexity we can then 
bring our bestinclass ontime delivery culture at every step  
of the way formal reviews ensure incremental improvements  
in our overall approach
this level of rigour is reﬂected in everything we do
operational excellence
“ unless it makes clear business sense petrofac 
prefers not to tie up its money in equipment 
vehicles or any other physical assets”
petrofac is a business built on the capabilities of its staff we tend 
to invest our money in developing our skills and expertise rather 
than in physical assets that is where our specialism lies it is why 
we are able to earn differentiated margins – and it is what many 
shareholders have come to expect
however there are exceptions on occasion we will coinvest 
with a client in the case of a risk service contract or an 
equity upstream investment and in certain circumstances 
we will invest in specialist equipment that simply isn’t available 
on the rental markets such as the petrofac jsd6000 offshore 
installation vessel
to maintain our own ﬁnancial liquidity or capital efﬁciency  
we tap into thirdparty funds for example our partnership with 
first reserve aligns petrofac with a us4 billion infrastructure 
investment fund this puts us in contention for the type of 
opportunities where a client needs a ﬁnancial partner just  
as much as they need a service company
financial capital
18
petrofac
annual report and accounts 2014 design build manage and maintain train
 we have a relentless 
focus on project delivery 
you can see the evidence 
on every petrofac project 
but a good example is our 
work in kuwait
financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 19
project delivery 
in kuwait
it’s a challenging environment the heat can 
be debilitating the brownﬁeld sites can be 
strewn with undocumented pipelines live 
cables and in some cases unexploded 
munitions then stepping through the 
requisite bureaucracy it can take some time 
to get access permissions in place all par for 
the course when we are executing projects 
that are part of a country’s critical 
national infrastructure
petrofac tends to thrive in these 
circumstances with experienced project 
teams thinking through challenges 
developing plans and focusing on details
a case in point is our work on the kuwait oil 
company’s koc new power distribution 
network which was completed ahead of 
schedule earned a customer satisfaction 
rating of 95 out of 10 and received a 
prestigious environmental award 
equally challenging was the construction 
of large gas and oil pipelines totalling 
some 180km in existing live corridors with 
associated facilities in brownﬁeld areas also 
for koc from mina al ahmadi to the azzour 
and shuaiba power stations this project’s 
safety record was outstanding with more 
than 15 million man hours worked with no 
lost time for injury and this exceptional 
achievement also secured a prestigious  
koc award for hsse excellence
within the next ﬁve years plans are afoot 
to boost kuwait’s oil production from 33 
to 40 million barrels per day with several 
megaprojects underway petrofac is playing 
an important role world oil production by type in the new policies scenario mbd
20132040
1990 2013 2020 2025 2030 2035 2040 delta caagra
conventional 652 811 826 838 841 842 846 34 02
crude oil 596 686 680 684 678 670 664 23 01
existing ﬁelds 586 67 3 528 430 351 291 229 443 39
yet to be developed – – 132 17 4 187 193 213 213 na
yet to be found – – 05 55 103 138 164 164 na
enhanced oil delivery 10 14 16 24 36 48 58 44 55
natural gas liquids 56 125 146 154 164 172 182 57 14
unconventional 04 61 108 126 143 156 162 100 36
tight oil –29 5562 66 64 5425 23
total 656 873 934 964 984 998 1007 134 05
source world energy outlook 2014 table 36 page 117
1 2 3  international energy agency world energy outlook 2014
market outlook
our longterm market fundamentals are robust
irrespective of recent falls and ﬂuctuations in the price of oil the 
longerterm market fundamentals are robust – and petrofac is well 
positioned to beneﬁt
global energy demand is set to grow strongly and hydrocarbons 
will continue to play a signiﬁcant role largescale investments in 
oil and gas infrastructure will continue to be needed to meet this 
demand and to offset a natural decline in existing production
in terms of the global appetite for energy the most recent analysis 
from the international energy agency iea estimates that demand 
is set to grow by 37 by 2040 – by which time the world’s energy 
supply mix will divide into four almost equal parts oil gas coal 
and lowcarbon sources
1

this presupposes that demand for oil will grow by 14 million 
barrels per day to reach a total of 104 million barrels per day 
meanwhile demand for gas is estimated to grow by more 
than 50
2

clearly in order to meet this demand continued investment in 
the exploration and production of hydrocarbons will be required 
indeed the iea suggests that by 2040 annual investment in 
energy supply infrastructure will reach us2 trillion compared 
with just over us16 trillion in 2013 cumulatively this amounts 
to a spend of over us50 trillion with fossil fuel extraction 
transportation and oil reﬁning accounting for 60 of the total
3

whilst many oil and gas companies may face ﬁnancial pressure 
particularly in the short term we expect that many of the national 
oil companies nocs will continue to invest in longterm 
strategic projects – especially in regions with lower marginal 
costs of production
 power
a transmission 2281
b distribution 6405
c fossilfuel plants 3240
d nuclear 1533
e renewables 7377
 coal
i mining 1027
j transport 368
 oil
f upstream 14379
g transport 1167
h reﬁning 1757
 gas
k upstream 7954 
l transmission  distribution 2425
m lng 793
 biofuels
n  437
power 20836
total 51143
biofuels 437
coal 1395
gas 11172
oil 17304
a
n
b
d
e
f
g
h
i
j
k
l
m
c
cumulative global energy supply investment by fuel and type 
in the new policies scenario 20142040 us2013 billion  
source world energy outlook 2014 
figure 218 page 85
 compound average annual growth rate
20
petrofac
annual report and accounts 2014 meanwhile we see an inbuilt need for reinvestment in existing 
ﬁelds in order to arrest their declining production indeed once 
production has peaked a conventional oil ﬁeld can expect to see 
average declines of around 6 per year
4
 – and especially in a 
period of lower oil prices reinvesting in these assets can deliver a 
more immediate return on capital employed than more speculative 
exploration and production projects
petrofac is well positioned in the most promising 
market segment
while upstream spending is expected to fall by more than 15
5
  
in 2015 over the long term we expect upstream capital spending 
to grow to offset the underlying production decline
certain segments of the market are poised for higher levels of 
investment from which petrofac is well positioned to beneﬁt
good prospects in our core markets – where petrofac 
is well established 
petrofac’s operations tend to be concentrated in those regions 
which are expected to make the most signiﬁcant contribution  
to longterm energy supplies
petrofac is particularly strong in the middle east and north africa 
and according to the iea meeting longterm demand will depend 
increasingly on the larger resourceholders in these regions 
by 2040 for example oil production from the opec members 
located in the middle east is forecast to rise by more than 
10 million barrels per day up from 267 million barrels per day  
in 2013 to 369 million barrels per day in 2040 
the iea also forecasts strong growth in mexico where again 
petrofac has established a ﬁrm presence here production is 
expected to reach 34 million barrels per day by 2030 up from 
less than 30 million barrels per day in 2013 before falling back 
slightly to 33 million barrels per day by 2040
meanwhile the region that iea refers to as asia  oceania which 
includes petrofac’s operations in malaysia and central asia is 
expected to experience a compound average annual growth rate 
in oil production of 17 through to 2040
6

continued investment from nocs – where petrofac  
can draw on strong relationships
nocs collectively control around 80 of the world’s combined 
conventional and unconventional reserves given that nocs are 
typically less sensitive to shortterm ﬁnancial pressures and are 
relatively immune to market sentiment they will continue to invest 
in longterm strategic projects
by building on strong well established relationships with many of 
the world’s leading nocs petrofac is well positioned in this area
a compelling case for reinvestment in mature ﬁelds – 
where petrofac has strong credentials
again mature ﬁelds are expected to play an important role in 
meeting longterm energy demand
the number of producing ﬁelds is growing and the global 
portfolio is ageing consequently the related spend is increasing 
in particular we see potential for improving the management 
of mature ﬁelds innovative commercial models such as the 
production enhancement contracts pioneered by petrofac 
provide an additional incentive for resource holders and minimise 
their related risks
these trends are important for both our integrated energy 
services and offshore projects  operations segments 
our experience in mexico is a good demonstration of the ongoing 
potential of this model – where since taking over operations 
we have substantially increased production of the magallanes  
and santuario blocks
in addition to sustained spending on upstream oil and gas 
projects petrofac is well placed to participate in a market of 
downstream opportunities in the reﬁning and petrochemicals 
sectors for example we were recently selected as a 5050 
partner in the us21 billion reﬁnery improvement programme  
in sohar oman and were awarded a us17 billion share of  
the clean fuels project in kuwait 
source world energy outlook 2014 figure 214 page 76 
4  international energy agency world energy outlook 2013
5 jp morgan cazenove research 19 january 2015
6  international energy agency world energy outlook 2014
coal
other nonoecd
middle east
other oecd
china
0300 300 600
million tonnes of oil equivalent
900 1200 1500 1800
india
united states
russia
oecd europe
oil nuclear renewables gas
change in energy production by region 
in the new policies scenario 2012–2040
oil price threshold for economic return bbl
global oil production million bopd
marginal cost of new production
5101520253035404550556065707580859095
0
10
20
30
40
50
60
70
80
90
100
middle east
libya onshore  
greenﬁeld oil sands mining 
second generation deep and ultra deep water gulf of mexico

west africa   
first generation dw gulf of mexico and wafrica

current presalt brazil  
iea global demand
2014e 924 million bopd
2015e 933 million bopd
us
lrs
africa russia onshore 
central asia 
jpm 2019  brent oil price
assumption 90bbl 
source jp morgan cazenove research 30 january 2015
21
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements market outlook continued
compared with a number of its peers  
petrofac is less exposed to lower oil prices
petrofac is relatively well positioned to succeed in a period of 
lower oil prices 
more speciﬁcally our direct exposure to oil price ﬂuctuations is 
limited to our equity upstream investments within ies and our 
record yearend backlog gives us the best visibility of future 
revenues in our 34year history indeed we enter 2015 with an 
order book of us189 billion augmented by the award of the 
lower fars heavy oil project in kuwait in january 2015
also our existing operations tend to be concentrated in those 
geographies with lower production costs and again much of  
our income comes from nocs who we expect to continue to 
invest in their assets
we are of course particularly well established in the middle 
east and north africa mena these markets are the source of 
the majority of our backlog and we continue to see an attractive 
pipeline of bidding opportunities
as is well documented the leaders of the gulf cooperation 
council gcc states have stated that the region is ready for an 
extended period of low oil prices and has no intention of reducing 
production or cutting back on planned investments in a useful 
summary of the situation an editorial in a december 2014 issue 
of the middle east economic digest concluded “there are 
therefore three messages for the world to consider as the old 
year dies it needs gcc oil producers as much as it ever did 
gcc states are better equipped to cope with an extended period 
of low oil prices than any other and when it is over gcc states 
will be even stronger and more important than they were when  
the slump started”
7
improving our costeffectiveness  
in the north sea business 
there is of course greater uncertainty surrounding petrofac’s 
operations in the uk continental shelf ukcs here the future of 
the oil and gas sector rests on structural and ﬁscal considerations 
as well as the prospects for the oil price it should be noted 
however that our business in this region is more reliant on 
decisions on operational expenditure than on capital spending 
and we are working with clients to improve costeffectiveness 
on their assets we also believe petrofac is in prime position to 
compete for a substantial decommissioning market that through 
to 2040 is valued at some £37 billion
8
 
pursuing our deepwater ambitions 
a longerterm consideration is our ambition in the deepwater 
offshore market here we are building a differentiated toptier 
position which includes the construction of a new uniquely 
conﬁgured installation vessel the petrofac jsd6000
as yet there is no real consensus on the shorttomedium term 
prospects for the deepwater market although sentiment has 
been weakened by a number of project delays and cancellations 
it should be noted however a substantial proportion of deepwater 
projects remain economic at the current oil price forward curve 
we are therefore conﬁdent that the mediumtolongerterm 
fundamentals are robust
turning an industry challenge to our advantage
we believe that the dynamic economics within the industry play 
to petrofac’s strengths in operational excellence – as well as 
our ﬂexible approach and our expertise in developing innovative 
commercial approaches with our clients
with our strong ethos of balancing quality with cost
consciousness we had already begun to adapt to price 
constraints in the industry and we remain convinced that our 
approach will stand us in good stead during a period of lower 
oil prices 
as clients consider any new investments or seek to improve 
their existing operational efﬁciency it is abundantly clear that now 
more than ever they will demand certainty of delivery and budget 
and will incentivise gains in efﬁciency in particular we believe they 
will look for three key things from their suppliers
 a clear capability to deliver the work on the ground
 a competitive cost base with a culture of cost control and 
incremental improvement
 a willingness to share in the risk of delivery – whether that 
be through a lumpsum epc contract a performance
related operational contract or coinvestment and a fully 
integrated contract 
also while we would not want to downplay the challenges faced 
by our sector it is clear that a low price environment will also offer 
up some new opportunities for a company such as petrofac 
including
 reduced execution risk – in a lowinﬂation or perhaps even a 
deﬂationary environment executional risks such as cost over
runs and shortages of key materials equipment or components 
can be reduced
 increased availability of hitherto scarce skills – in recent years the 
industry has faced a crippling skills shortage the new industry 
economics may alleviate this pressure making it easier and 
cheaper to access expertise
 improved access to adjacent market segments – again 
any reiningin of production by deﬁnition opens up 
access to a potentially lucrative decommissioning market 
meanwhile petrofac is continuing to build its credentials 
in the downstream market which is less sensitive to oil 
price ﬂuctuations
given our business model and our distinctive deliveryfocused 
culture the new environment represents a deﬁnite opportunity 
for petrofac to increase market share grow earnings and retain 
differentiated margins it also means that as oil prices recover 
petrofac can emerge in an even stronger position 
7  why gcc producers are happy to see oil fall  
middle east economic digest 17 december 2014
8  uk oil  gas survey 2014
22
petrofac
annual report and accounts 2014  petrofac has a track  
record of creating innovative 
commercial models  
for example we pioneered  
the duty holder model in the  
uk north sea and now offer  
a range of commercial models 
– each of which is designed to 
recognise clients’ commercial 
goals and reward petrofac for 
the added value we bring
innovating our 
commercial models
in 2014 the creation of petrofirst 
infrastructure partners added another 
string to our bow
the deal which released more than 
us400 million from the group’s deployed 
assets saw us partner with first reserve 
the world’s largest private equity and 
infrastructure investment ﬁrm exclusively 
focused on energy 
together we committed up to us125 billion 
to petrofirst with borrowing the available 
capital could reach us4 billion and this 
puts petrofac in contention for a range of 
interesting opportunities – where potential 
clients need a ﬁnancial partner just as much 
as they need a service company
in the ﬁrst transaction petrofirst purchased 
three of our existing ﬂoating production 
vessels which released signiﬁcant capital that 
we had tiedup in these assets for the future 
we aim to help our clients create value where 
they require access to capital alongside 
petrofac’s project execution capability
financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 23 key performance indicators
1
to help the group assess its performance executive management 
sets kpi targets and monitors and assesses performance against 
these benchmarks on a regular basis
description
measures the level of operating activity  
and growth of the business
measurement
revenue for the year 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 per the consolidated 
balance sheet adjusted for gross up of 
ﬁnance lease creditors
measurement
roce is calculated as ebita earnings before 
interest tax and amortisation calculated as 
ebitda less depreciation per note 3 to the 
ﬁnancial statements divided by average 
capital employed being total equity and 
noncurrent liabilities per the consolidated 
balance sheet adjusted for gross up of 
ﬁnance lease creditors
description
ebitda means earnings before interest 
tax depreciation and amortisation and 
provides a measure of the operating 
proﬁtability of the business
measurement
ebitda is calculated as proﬁt before tax 
and net ﬁnance costs but after our share of 
results of associates as per the consolidated 
income statement adjusted to add back 
charges for depreciation and amortisation 
as per note 3 to the ﬁnancial statements
description
eps provides a measure of net proﬁtability 
of the group taking into account changes 
in the capital structure for example the 
issuance of additional share capital
measurement
as reported in the consolidated income 
statement and calculated in accordance 
with note 8 to the ﬁnancial statements
description
provides a measure of the net proﬁtability 
of the business ie proﬁt for the year 
attributable to petrofac limited shareholders
measurement
proﬁt for the year attributable to petrofac 
limited shareholders as reported in the 
consolidated income statement
description
provides an indication of the group’s 
service capacity
measurement
for the purposes of the annual report 
employee numbers include contract staff 
and the group’s share of joint venture 
employees
revenue 
1 
2013
2014
2012
2011
2010
us6240m
us6329m
us6241m
us5801m
us4354m
ebitda
9
2013
2014
2012
2011
2010
us883m
us1031m
us935m
us760m
us634m
1
net proﬁt
1 1 
2013
2014
2014
2012
2011
2010
us632m
us650m
us581m
us120m
2
us540m
us433m
1
return on capital employed roce
2013
2014
2012
2011
2010
46
28
18
1
62
53
earnings per share diluted eps
1 1 
2013
2014
2012
2011
2010
18388¢s
18910¢s
16899¢s
2014 3481¢s
2
15713¢s
12609¢s
1
employee numbers
8
2013
2014
2012
2011
2010
18000
18300
19800
15400
13900
1 excludes the gain from the enquest demerger in april 2010 and exceptional items and certain remeasurements unless otherwise stated
2 after exceptional items and certain remeasurements
24
petrofac
annual report and accounts 2014 description
these kpis measure both the absolute 
amount of cash generated from operations 
and the conversion of ebitda to cash
measurement
cash generated from operations is as per 
the consolidated cash ﬂow statement cash 
conversion is cash from operations divided 
by ebitda
description
provides a measure of the safety 
performance of the group including 
partners and subcontractors
measurement
lost time injury lti and recordable injury 
ri frequency rates are measured on the 
basis of reported lti and ri statistics for all 
petrofac companies subcontractors and 
partners expressed as a frequency rate per 
200000 manhours we aim continually to 
improve our safety record but our target for 
these measures is zero
description
the group uses this kpi as a measure  
of the visibility of future revenues
measurement
backlog consists of the estimated revenue 
attributable to the uncompleted portion of 
lumpsum engineering procurement and 
construction contracts and variation orders 
plus with regard to engineering operations 
maintenance and integrated energy 
services contracts the estimated revenue 
attributable to the lesser of the remaining 
term of the contract and ﬁve years  
backlog will not be booked on integrated 
energy services contracts where the group 
has entitlement to reserves the group 
uses this key performance indicator as a 
measure of the visibility of future revenue 
backlog is not an audited measure
part of 2014 executive directors’ remuneration 
see more on pages 96–112
lost time injury and recordable 
injury frequency rates
2013
2014
2012
2011
2010
0018
0046
0044
0018
0026
 
rates per 200000 man hours
2013
2014
2012
2011
2010
013
014
016
014
018
cash generated fromused in 
operations and cash conversion 
2013
2014
2012
2011
2010
us239m
us5m
us790m
us1423m
us207m
2013
2014
2012
2011
2010
27
0
84
187
33
backlog
26
2013
2014
2012
2011
2010
us118bn
us150bn
us189bn
us108bn
us117bn
25
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements principal risks
principal risks and uncertainties
principal risks are a risk or a combination of risks that given the company’s current position could seriously affect the 
performance future prospects or reputation of the company they include those risks that could threaten the business 
model performance solvency or liquidity or prevent us from delivering our strategic objectives in terms of managing 
these risks our systems of risk management and internal control are founded upon deployment of our enterprise risk 
management framework based upon iso 310002009 and our internal control framework based upon the coso 
2013 model details of which are included in the board risk committee report on pages 90 to 95
risk mitigation and management commentslinks
sovereign country and ﬁnancial market risks
overexposure to a single 
market risk
the risk of overconcentration in  
a particular market or geography
as we pursue our business strategy we are achieving a more balanced geographic 
and business model mix we are also working across the entire life cycle of our 
customers’ assets – from early development through to decommissioning
when considering entry into new territories or extending our activities in existing 
territories operational plans are reviewed by the group risk committee the board 
risk committee regularly reviews the group’s overall concentration of risk
we also take all reasonable measures to reduce and limit our commercial exposure 
in each territory this includes regular security risk assessments careful selection of 
contracting parties outofcountry arbitration advance payments and a disciplined 
approach to cash management
see the group chief 
executive’s strategic 
review pages 11–14 
for details on how we 
are diversifying our 
business model
counterparty risks
the risk of ﬁnancial or commercial 
exposure if counterparties  
such as key ﬁnancial 
institutions customers partners 
subcontractors or vendors 
default on their commitments
we aim to minimise our cash ﬂow exposure on contracts especially where we 
deploy capital alongside our services as in certain ies contracts we will only 
do so where we are comfortable with the level of counterparty risk and with the 
contractual terms and conditions
we regularly monitor our exposure and ensure that our ﬁnancial assets are 
spread across a number of creditworthy ﬁnancial institutions and that limits 
are not breached
our sovereign and financial market risk policy requires that material ﬁnancial 
counterparty risk is only held with counterparties that are rated by standard and 
poor’s as ‘a’ or better or the equivalent moody’s rating
financial counterparty risk is managed by group treasury and the board risk 
committee has established speciﬁc limits for ﬁnancial counterparties
see our sovereign 
and financial market 
risk policy – available 
from our website 
wwwpetrofaccom 
governance 
downloads
liquidity risk
the risk arising if we were 
not able to meet our 
ﬁnancial commitments
given the need to ﬁnance our ongoing operations and invest in future growth  
we are exposed to certain liquidity risks we manage these risks by ensuring that 
we always maintain an adequate level of liquidity in the form of readily available 
cash shortterm investments or committed credit facilities
as the group has grown we have invested more of our surplus cash into strategic 
investments and other opportunities assuming a greater spread of longerterm 
investments making the company more capital intensive in 2014 we began a 
programme to reduce this exposure
the board risk committee has deﬁned a minimum level of liquidity that must 
be maintained additionally the board has set a target for the maximum level of 
leverage cash ﬂow forecasting is carried out across all service lines on a regular 
basis in order to identify any funding requirements well in advance
see note 32 to the 
ﬁnancial statements
investment risks
the risk that poor investment 
decisions could negatively impact 
our business model 
this includes investments in the 
business itself and coinvestment 
in our customers’ assets as is 
often the case with ies contracts
as the group’s strategy for growth moves into new geographies and petrofac 
competes for larger more integrated projects the board is required to sanction 
more complex bids and investments such as the jsd6000 vessel in doing so 
it assesses the level of project management discipline and executive capability 
necessary to support them to satisfy itself that the right mix of risk capability  
and reward is established 
26
petrofac
annual report and accounts 2014 risk mitigation and management commentslinks
sovereign country and ﬁnancial market risks continued
business disruption risks
the risk of exposure to civil or 
political unrest civil war regime 
change or sanctions that could 
adversely affect our operations
there is also a risk that it security 
failings could result in the loss  
of commercially sensitive data
we face a range of political risks in a variety of territories including the possibility 
of unforeseen regime change as well as legal or regulatory changes the board 
regularly monitors the changing political landscape particularly in those countries 
regarded as unpredictable or core to our business
security risk assessments are carried out in all high risk territories before entering 
into new contracts careful consideration is also given to project investment 
and income exposures and to the associated contract terms and conditions 
as well as facing external cybersecurity threats almost every business is 
increasingly dependent on the ongoing capability and reliability of its it platforms 
across petrofac we are alert to the related risks and conscious of the need to be 
able to respond effectively to any farreaching systems failure
despite some 
continuing
unrest in the middle 
east and north africa 
during 2014 our 
activities suffered 
minimal disruption 
see pages 50–52  
for details
commodity or currency risks
volatility in oil and gas prices 
could inﬂuence the level of 
investment in the industry 
and hence the demand for 
our services 
signiﬁcant movements in 
exchange rates could impact 
our ﬁnancial performance
the ﬁnancial performance of ies 
is more susceptible to oil and 
gas price volatility due to equity 
upstream investments 
as detailed in the market outlook section pages 20 to 22 demand for services 
in 2014 was high and the company built its biggest ever yearend backlog at 
us189 billion largely insulating the company from the immediate effects of 
the fall in hydrocarbon prices 
however low prices and uncertainty in the forward oil price curve are having 
an impact on the level of investment exploration development and production 
activity among international oil companies iocs who are increasing their 
capital discipline 
this in turn could inﬂuence the level of demand for our services in this sector 
directly impacting returns from ies in 2015 and the longerterm prospects for 
ecom in mitigation of this risk we are maintaining strong client relationships 
with national oil companies diversifying operations by client and by geography 
increasing our activity in the oil and gas subsectors of maintenance modiﬁcations 
and operations mmo and extending our offshore portfolio
the majority of group revenues are denominated in us dollars or currencies 
pegged to the us dollar in instances where we are procuring equipment or 
incurring costs in other currencies we use forward currency contracts to hedge 
any related exposures
under our sovereign and financial market risk policy we aim to hedge on a rolling 
annual basis the net proﬁt exposure to hydrocarbon prices from 75 of our low
estimate of production however we do not begin hedging until a development has 
achieved steadystate production
see note 32 to the 
ﬁnancial statements 
for details of our oil 
and gas derivative 
instruments and 
foreign currency 
exposures and how 
they are managed
operational and contractual risks
customer concentration risks
the risk of overexposure to any 
one customer – and the impact 
this could have if the relationship 
were to be jeopardised
the board regularly monitors the total value of contracts by customer to ensure  
that we are not overly dependent on any one relationship
in ecom our customerbase is already widely disaggregated and we are also 
working towards a larger client portfolio for ies services through our business 
strategy we are progressively diversifying our business in terms of service lines 
locations and business models
in addition we have a formal programme of regular senior level dialogue with  
our major customers to understand and preempt any concerns they may have
under our operating 
framework for 
managing such risks 
we have a number  
of relevant policies 
including our 
operational and 
contractual risk 
policy
27
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements principal risks continued
risk mitigation and management commentslinks
operational and contractual risks continued
competition risks
the risk of a signiﬁcant change 
to the marketplace dynamics – 
and the ways in which this could 
threaten our market position or 
our geographic footprint
as noted in the market outlook section on pages 20 to 22 the capital discipline  
of iocs continues to increase and we therefore expect the demand for our services 
from this sector in 2015 to be challenging
our business strategy assumes that a high level of competition will continue – but 
our progressive diversiﬁcation aims to continue our drive to increase the size of our 
addressable market
bidtowin ratios and segmental competition is regularly analysed to monitor 
this risk
see the group chief 
executive’s foreword 
pages 11–14 for 
details on how we 
are diversifying 
our business
environmental asset integrity 
and safety risks
the risk of experiencing a serious 
environmental asset integrity 
or safety incident – and the 
commercial and reputational 
damage that could be caused
our strong culture of health safety and environmental awareness is central to our 
operational and business activities this culture is continually reemphasised and is 
supported by our operating framework and its associated management processes 
and systems – including our asset integrity framework
we also have a wide variety of controls embedded within the business 
including health safety security environment and integrity assurance hsseia 
processes safety case management processes major accident hazard risk 
assessments and audits and regular monitoring of integrity management and 
maintenance schedules
for all of our contracts the respective management teams also review the 
commercial arrangements with clients maintain emergency preparedness plans 
and review insurance coverage
see page 51 for 
details of our 
recorded incident 
performance – as 
well as our related 
policies and 
processes
contractual 
performance risks
the portfolio may sometimes 
include a relatively small number 
of very large contracts – and 
the implications for our ﬁnancial 
performance if any of these 
contracts were to be disrupted
we have a long history of successful project execution from bid submission 
through to project completion which has demonstrated our rigorous approach  
to risk identiﬁcation and mitigation 
the delivery of our portfolio in 2014 proved challenging and as a result we have 
reinforced our delivery framework in oec to include operational excellence 
margin capture cost reduction design optimisation changes to execution and 
subcontracting models and reinforced our system of governance within ies 
we have strengthened the engineering design technical authority subsurface 
and operational technical authorities increased our governance and assurance 
processes and provided greater interdependence between technical asset 
management and subsurface teams
we always seek to avoid liabilities that are unquantiﬁable or for which we could not 
reasonably be held responsible we also monitor the level of insurance provision and 
the extent to which we could bear the ﬁnancial consequences of a major disruption
see our operational 
and contractual risk 
policy – available  
on our website
wwwpetrofaccom
governance
downloads
risk transfer arrangements 
if we are unable to transfer 
certain risks to the insurance 
market due to the availability or 
cost of cover for example we 
could be exposed to material 
uninsured losses
we maintain a groupwide insurance programme to mitigate against signiﬁcant 
losses the programme is consistent with general industry practice and it also 
incorporates a captive insurance vehicle for the management of low level  
attritional losses
insurance premium costs are subject to changes based on various facts including 
a particular company’s loss experience the overall loss experience of the insurance 
markets and capacity constraints
to mitigate these risks we have worked with our insurance brokers aon to 
continually optimise the insurance policies that we purchase in terms of their limits 
deductibles and speciﬁc policy terms and conditions 
28
petrofac
annual report and accounts 2014 risk mitigation and management commentslinks
operational and contractual risks continued
organisation and 
succession risks
the availability of sufﬁciently 
skilled experienced and capable 
personnel particularly at 
senior levels is one of the most 
signiﬁcant challenges facing the 
oil and gas industry
given our longterm growth expectations it is necessary for petrofac to attract and 
retain signiﬁcant numbers of appropriately qualiﬁed employees we have therefore 
developed a more systematic groupwide approach to talent management
we regularly review our resourcing needs and aim to identify and nurture the 
best people through talent and performance management programmes linked 
to effective recruitment and succession planning
we remain conﬁdent that our policies to attract retain train promote and reward 
our people are appropriate for the group – and will enable us to meet our 
strategic goals
see pages 54–56  
for details of people 
and resourcing 
programmes and the 
related developments 
in 2014
ethical social and regulatory risks
major breaches of our  
code of conduct
the risk that employees or 
suppliers may fail to live up  
to our high ethical standards  
– and the consequent impact  
on our reputation
our code of conduct sets out the behaviours we expect of our employees and the 
third parties we work with including suppliers contractors agents and partners 
we have a full programme of ongoing activities to embed this code of conduct 
across the group
we are also disciplined in monitoring and managing the social impacts of 
our operations as set out in our social performance standard this includes 
supporting and investing in local communities affected by our operations
we seek assurances that the third parties we employ comply with our code of 
conduct and the principles set out in our ethical social and regulatory risk policy 
and our social performance standard
in addition our external affairs risk reviews help to identify possible areas of 
exposure and ensure that we put appropriate controls in place
see our ethical 
social and 
regulatory risk  
policy – available  
on our website 
wwwpetrofaccom 
governance 
downloads
major regulatory breaches 
including bribery 
and corruption
the potential ﬁnancial and 
reputational risk that would arise 
if any of our employees or third 
parties were to breach local or 
international laws
our business is conducted in a growing range of territories and is therefore subject 
to a broad range of legislation and regulations the group has an anticorruption 
compliance programme that seeks to manage related risks across all of our 
business activities
this programme recognises the requirements of the uk bribery act 2010  
and focuses on training monitoring risk management and due diligence
our management takes a riskbased approach to due diligence activities  
in recent years we have increased the level of due diligence for new contracts  
in higherrisk countries and where appropriate this includes the commissioning  
of independent investigations
we continue to emphasise our independently managed whistleblowing line 
available to all employees as well as third parties – and are fully committed  
to investigating any suspected breaches of our code of conduct
see page 65 for 
details of our code  
of conduct and the 
ways in which it is 
embedded across  
the group
see our bribery  
and corruption 
standard – available 
on our website 
wwwpetrofaccom 
governance 
downloads
29
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements segmental performance
engineering construction  
operations  maintenance ecom
onshore engineering  construction
 achieved order intake in 2014 of us63 billion securing major  
new awards in kuwait oman algeria and malaysia
 agreed capacity enhancements on the upper zakum ﬁeld 
development in abu dhabi and fully remobilised on the in salah 
southern ﬁelds development in algeria in early 2014
 recognised a cumulative loss of around us180 million on the 
laggantormore project and agreed a commercial settlement  
which should see us recognise no further proﬁt or loss
 reached ﬁnal agreement on a number of other longoutstanding 
commercial settlements with our clients
offshore projects  operations
 secured a number of extensions and new awards for services 
provided in the uk north sea including for bp  total gdf suez 
maersk centrica enquest and chevron
 secured a second contract extension with south oil company in 
iraq and awarded a threeyear general construction management 
services contract by bp iraq for the rumaila ﬁeld
 awarded our largest offshore epci project to date with the award  
of a contract from tennet for the borwin3 offshore wind farm
 we are marketing the petrofac jsd6000 which is scheduled to be 
available in mid2017 but we retain the ﬂexibility to delay the delivery 
of the vessel further dependent on project awards
engineering  consulting services 
 awarded an engineering and procurement contract to provide 
services for the rabab harweel integrated project facility worth  
more than us1 billion
 undertaken a wide range of studies during the year including a feed 
study for the thamama production zone for adco and a development 
study to work with the government of nova scotia
integrated energy services ies
 commenced production from cendor phase 2 on block pm304  
with production expected to continue to increase over the nearterm
 first production from greater stella area development now expected 
in mid2016
 continue to make good progress on our pecs in mexico while 
engaging in contract migration discussions as part of mexico’s 
energy reforms
 taken the decision to exit the ticleni pec in romania which when 
coupled with the impact of the latest view of cost and timing on 
the greater stella area project and reduced commodity price 
expectations resulted in substantial impairment and other charges
30
petrofac
annual report and accounts 2014  
segmental analysis
divisions
engineering construction operations  
 maintenance ecom
chief executive – marwan chedid
reporting 
segments
service 
lines
onshore 
engineering  
construction
oec
engineering
 consulting
services
ecs
offshore projects  operations
opo
integrated energy services ies
chief operating ofﬁcer – rob jewkes
integrated energy services
onshore
engineering  
construction
offshore
projects 
operations
offshore
capital
projects
engineering
 consulting
services
training
services
production
solutions
developments
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 2014 2013 2014 2013 2014 2013
4
2014 2013
onshore engineering  construction 3241 3534 395 483 403 433 438 539
offshore projects  operations 2009 1671 89 99 64 71 107 118
engineering  consulting services 437 362 39 33 33 32 45 38
integrated energy services 782 934 172 166 131 125 345 315
corporate consolidation  elimination 228 172 4 12 50 1 1 – 21
group 6241 6329 691 793 581 650 935 1031
revenue growth operating margin net margin ebitda margin
growthmargin analysis  2014 2013 2014 2013 2014 2013
4
2014 2013
onshore engineering  construction 83 17 6 122 137 124 123 135 153
offshore projects  operations 202 19 1 44 59 32 42 53 7 1
engineering  consulting services 207 47 8 89 91 76 88 103 105
integrated energy services 163 319 220 17 8 168 134 441 337
group 14 14 111 125 93 103 150 163
1 proﬁt from operations before tax and ﬁnance costs
2 operating proﬁt and ebitda includes the group’s share of results of associates
3 proﬁt for the year attributable to petrofac limited shareholders
4 as restated
before exceptional items and certain remeasurements
31
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements  the recently completed 
water injection project 
handed over to our client the 
kuwait oil company koc in 
august 2014 is one of a kind
water injection project 
kuwait
of course in many oilﬁelds around the world 
water injection techniques are used to boost 
production but what sets this particular 
initiative apart is its sheer scale and the high 
levels of injection pressure being deployed
awarded through a competitive tender back  
in 2010 the us430 million engineering 
procurement and construction project involved 
the installation of a new central injection and 
pumping facility as well as modiﬁcations to 
three existing gathering centres and a seawater 
treatment facility the completed plant enables 
both efﬂuent water and sea water to be injected 
at high pressure through an intricate network  
of highdensity polythene hdpe lined pipelines 
into the wells of nearby oil ﬁelds – thereby 
enhancing their oil recovery capacity
it is the ﬁrst time anywhere in the world that 
such high levels of injection pressure have 
been exerted on hdpelined pipes and this 
combined with the corrosive properties of the 
efﬂuent and sea water presented some complex 
safety and integrity considerations
even so the project was delivered to koc’s 
satisfaction with an excellent safety record 
throughout the team achieved more than 
21 million manhours with just one lost time 
incident and the project won two consecutive 
american society of safety engineers’ gold 
awards for health and safety excellence
design build manage and maintain train
petrofac 
annual report and accounts 2014 32 onshore engineering  construction
onshore engineering  construction delivers 
onshore engineering procurement and 
construction projects we are predominantly 
focused on markets in the middle east africa 
and caspian region of the cis
contribution to  
group revenue
contribution to  
group net proﬁt
employees
5900 2013 6100
50 64
activity levels on our portfolio of engineering and construction 
projects increased substantially during the year and we expect 
activity levels to remain high throughout 2015 as we move into 
the execution phase on a number of projects secured over 
recent months these include the clean fuels project in kuwait 
the khazzan central processing facility cpf in oman and the 
reggane north development project in algeria
during 2014 we substantially completed the gas sweetening 
facilities project in qatar for qatar petroleum and the new power 
distribution network project for kuwait oil company
in respect of the laggantormore project in shetland in line with 
our latest assessment of the schedule and costtocomplete 
and the ﬁnal commercial settlement agreed with our client 
we have recognised a loss on the project in 2014 of around 
us200 million the impact of the loss on laggantormore was 
mitigated by a good margin performance on a number of latelife 
contracts and the net release of tax provisions with a further loss 
of around us30 million being recognised in offshore projects 
 operations in 2014 on their scope of the project and around 
us50 million of proﬁts having been recognised in previous years 
across the group overall the group has recorded a cumulative 
loss on laggantormore of around us180 million
following the terrorist attack which took place in january 2013 
at the in amenas natural gas site in algeria at the request of 
our client we evacuated our staff on a temporary basis from 
the in salah southern ﬁelds development full remobilisation 
to site commenced in early 2014 and we expect to complete 
construction of the project during 2016
we also agreed capacity enhancements and the commercial 
impact of the changes on the upper zakum ﬁeld development 
in abu dhabi during the ﬁrst half of 2014
new awards
order intake for the year totalled us63 billion 2013 
us62 billion including the following major awards
clean fuels project kuwait
in february 2014 leading a joint venture with korean based 
samsung engineering co ltd and cbi nederland bv we 
received an award notiﬁcation for kuwait national petroleum 
company’s clean fuels project mina abdulla reﬁnery in 
kuwait the project is worth us37 billion of which petrofac’s 
share is us17 billion and will be completed over a period 
of approximately four years the lumpsum engineering 
procurement and construction scope of work includes the 
provision of 19 new reﬁning units at mina abdulla revamping 
of ﬁve existing units at the shouaiba reﬁnery site and the 
accompanying interreﬁnery transfer lines 
khazzan central processing facility oman
in february 2014 we were awarded a contract by bp for the cpf 
for the khazzan gas project in the sultanate of oman this has 
been awarded on a convertible lumpsum basis and will convert 
to a full lumpsum contract worth approximately us12 billion 
at a predetermined point during execution the scope of work 
includes engineering procurement and construction of the cpf 
at the khazzan ﬁeld the cpf will include two process trains 
each having a capacity of 525 million standard cubic feet of gas 
per day an associated condensate processing system power 
generation plant water treatment system and all associated 
utilities and infrastructure the project is expected to be 
completed in 2017  
reggane north development project algeria
in may 2014 we were awarded a threeyear contract worth 
more than us970 million for the gas gathering treatment and 
export facilities package of the reggane north development 
project located in the reggane basin of the algerian sahara 
desert 1500 km southwest of algiers the scope of the project 
includes engineering procurement construction commissioning 
and startup of the gas treatment plant gathering system and 
export pipeline 
segmental performance continued
engineering construction  
operations  maintenance ecom
 before exceptional items and remeasurements
33
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements segmental performance continued
gathering centre 29 kuwait
in july 2014 we received an award notiﬁcation for kuwait 
oil company’s gathering centre 29 gc29 which is located 
approximately 70 km north of kuwait city valued at approximately 
us700 million the project will be completed over a period of 
approximately three years the competitively tendered lumpsum 
greenﬁeld scope of work includes the engineering procurement 
construction precommissioning and commissioning of gc29
rapid project malaysia
in august 2014 we were awarded an engineering procurement 
construction and commissioning epcc contract by prpc 
reﬁnery and cracker sdn bhd a subsidiary of petronas  
for a reﬁnery package in the reﬁnery and petrochemicals 
integrated development rapid project in pengerang johor 
malaysia worth more than us500 million the competitively 
tendered lumpsum epcc scope of work includes three sulphur 
recovery units two amine regeneration units two sour water 
stripping units a liquid sulphur storage unit and a sulphur 
solidiﬁcation package unit
we were also successful in securing the following project in 
early 2015
lower fars heavy oil project kuwait
in january 2015 we announced that we had been awarded the 
lower fars heavy oil project in kuwait for kuwait oil company 
with a project value in excess of us4 billion petrofac is leading 
a consortium with athensbased consolidated contractors 
company the award represents the ﬁrst phase of the substantial 
lower fars heavy oil development programme our scope of 
work covers greenﬁeld and brownﬁeld facilities and includes 
engineering procurement construction precommissioning 
commissioning startup and operations and maintenance work 
for the main cpf and associated infrastructure as well as the 
production support complex this includes a 162 km pipeline 
which will transport heavy crude oil from the cpf to the south 
tank farm located in ahmadi from where koc has the option  
to send it to the proposed alzour reﬁnery in the south of kuwait
financial performance
revenue for the year was lower at us3241 million 2013 
us3534 million reﬂecting the phasing of project delivery 
in comparison with 2013 when several large projects were 
substantially completed activity levels and revenue in the ﬁrst half 
of 2014 were low while the projects were in their early stages 
activity levels and revenue increased substantially in the second 
half of 2014 as we moved into the execution phase on a number 
of projects
net proﬁt for the year was us403 million 2013 restated 
us433 million representing a net margin of 124 2013 
restated 123 broadly in line with the prior year the impact 
in 2014 of the loss of around us200 million recognised on the 
laggantormore project noted above has been mitigated by the 
net release of tax provisions and other ﬁnancial outperformance 
on latelife contracts elsewhere in the contract portfolio
onshore engineering  construction headcount stood at 5900 
at 31 december 2014 2013 6100 while lower than the prior 
yearend this represents a signiﬁcant increase from 5200 at 
30 june 2014 reﬂecting an increase in activity levels as we move 
into the execution phase on a number of projects secured over 
recent months
onshore engineering  construction backlog increased by 38 
over the year to stand at us108 billion at 31 december 2014 
2013 us7 8 billion reﬂecting the strong order intake in 2014  
as noted above the yearend backlog has been further 
augmented by the award of the lower fars heavy oil project  
in kuwait in january 2015
timeline for ecom key projects
laggantormore gas processing plant ukcs
in salah southern ﬁelds development algeria
badra oilﬁeld iraq
petro rabigh saudi arabia
jazan oil reﬁnery saudi arabia 
sarb3 abu dhabi
upper zakum ﬁeld development abu dhabi
bab compression and bab habshan abu dhabi
alrar gas ﬁeld algeria
sohar reﬁnery improvement project oman
clean fuels project kuwait
rabab harweel integrated project oman
khazzan central processing facility oman
borwin 3 german north sea
reggane north development project algeria
gathering centre 29 kuwait
rapid reﬁnery project malaysia
lower fars heavy oil project kuwait
us800m
us1200m
us330m
undisclosed
us1400m
us500m
us2900m
us700m
us450m
us1050m
us1700m
us1000m
us1200m
undisclosed
us970m
us700m
us500m
us3000m
original contract  
value to petrofac
2012 2013 2014 2016 2015
 nocnoc led companyconsortium  joint nocioc companyconsortium  iocioc led companyconsortium
34
petrofac
annual report and accounts 2014  in the ukcs offshore 
projects  operations is  
playing a key role in supporting 
gdf suez ep uk and its 
partners to deliver the largest 
gas ﬁeld discovery in the 
southern north sea for  
25 years
integrated services 
contract ukcs
the cygnus ﬁeld operated by gdf suez 
ep uk ltd 3875 with partners centrica 
4875 and bayerngas 125 has reserves 
of approximately 18 billion cubic metres of 
gas by 2016 it will be the second largest 
producing gas ﬁeld in the uk and is expected 
to contribute 5 to uk gas production at peak 
– supplying gas to the equivalent of 15 million 
homes in britain
cygnus is the ﬁrst project of a multimillion 
dollar frame contract awarded in june 2014 
for three years it combines services that we 
were already providing under two previous 
contracts – an integrated services contract 
and an engineering services contract – both 
originally awarded in 2011 our immediate 
focus is on operational readiness support 
followed by the provision of operations and 
maintenance services for the cygnus 
asset offshore 
opo has recruited a crew of around 60 
offshore staff and ten onshore supporting 
staff we are also delivering the maintenance 
build subcontractor management operation 
procedure coordination small bore pipework 
surveys and management and commissioning 
documentation development 
the cygnus infrastructure comprises three 
bridgelinked platforms alpha and a second 
remote well head platform bravo the alpha 
wellhead topsides sailed from heerema’s 
hartlepool yard in may 2014 and is expected 
to be followed by the remaining topsides 
infrastructure in june ahead of targeted  
ﬁrst gas in late 2015
design build manage and maintain train
financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 35 segmental performance continued
offshore projects  operations
offshore projects  operations which includes 
our offshore capital projects ocp 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
contribution to  
group revenue
contribution to  
group net proﬁt
employees
5500 2013 5100
31 10
overall activity levels in 2014 on operations support contracts 
were similar to 2013 there was a signiﬁcant increase in the level 
of activity on capital projects such as the laggantormore gas 
plant on shetland in the uk the upgrade and modiﬁcation of the 
fpf1 which will subsequently be deployed on the greater stella 
area – see integrated energy services section and the satah  
al razboot package 3 sarb3 engineering procurement 
construction and installation epci project in abu dhabi which 
was awarded in april 2013
new awards and extensions
we secured a number of extensions during the year for services 
provided in the uk north sea from a range of clients including 
bp  total maersk centrica and enquest in respect of duty 
holder services on the kittiwake platform in addition we secured 
a second contract extension from south oil company soc for 
support on its iraq crude oil expansion project
we also secured the following major new contracts during 
the year
borwin3 offshore wind farm grid connection germany
in april 2014 we secured our largest offshore engineering 
procurement construction and installation project to date with 
the award of a major contract from tennet in consortium with 
siemens the germandutch transmission grid operator for the 
borwin3 offshore wind farm grid connection in the north sea 
our scope includes the construction and offshore installation of 
the borwin3 platform which will house a siemens high voltage 
direct current hvdc station that converts the alternating 
current produced by the wind turbines to direct current before 
transmitting it onshore to the german national grid the hvdc 
station will be one of the biggest of its kind with a transmission 
capacity of 900 megawatts the commencement of commercial 
operation of borwin3 is scheduled for 2019
enquest north sea operations and maintenance  
contract uk
in may 2014 we were awarded a tenyear operations and 
maintenance contract with enquest which supersedes an 
initial ﬁve year contract awarded to petrofac in 2013 and which 
will see us continue to provide operations and maintenance 
services on the thistle heather and northern producer assets 
and the enquest producer ﬂoating production storage and 
ofﬂoading vessel
gdf suez integrated services contract uk
in august 2014 we announced the renewal of our integrated 
services contract with gdf suez ep uk the threeyear multi
million dollar frame contract covers operations maintenance and 
engineering services support to gdf suez ep uk throughout 
its operations in the ukcs including cygnus the largest gas ﬁeld 
discovery in the southern north sea for 25 years the contract 
will initially continue to support cygnus operational readiness 
followed by the provision of operations and maintenance 
services for the cygnus asset offshore the contract combines 
the services previously provided under the integrated services 
contract and engineering services contract both originally 
awarded in 2011
 before exceptional items and remeasurements
36
petrofac
annual report and accounts 2014 general construction management services iraq
in october 2014 we were awarded a major contract in iraq to 
provide general construction management services to bp iraq nv 
bp on the rumaila ﬁeld near basra in the south of the country 
petrofac will provide management and personnel to manage 
brownﬁeld modiﬁcations to assist bp – and its partners in the 
rumaila operations organisation china national petroleum 
company and south oil company – in executing its strategy 
to increase production safely from one of the world’s largest 
ﬁelds the contract which runs for three years with an option 
for further extension of two years has a potential value of up to 
us500 million petrofac will provide the overall management 
and coordination of multiple construction projects including 
construction management and supervision of work undertaken  
by third party contractors on the ﬁeld
chevron north sea engineering and construction  
support uk
in october 2014 we were awarded a contract worth up to 
us120 million to provide engineering and construction support 
for chevron’s three operated assets the captain alba and 
erskine platforms in the north sea the contract awarded  
under a competitive tender is for up to three years plus two  
one year options
awards in 2015
with the award of the lower fars heavy oil project in kuwait 
in january 2015 offshore projects  operations will book 
approximately us125 million in backlog for the operations and 
maintenance scope of the project which will follow the epc phase
financial performance
revenue for the year increased 202 to us2009 million 2013 
us1671 million reﬂecting higher levels of activity particularly 
on capital projects such as the laggantormore gas plant 
project in shetland the fpf1 modiﬁcation and upgrade and the 
sarb3 project in abu dhabi 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 for the year was slightly higher than the 
prior year excluding the impact of the exchange rate movement 
revenue growth would have been marginally lower than reported 
at approximately 16
financial reporting exchange rates
ussterling
year ended  
31 december 2014
year ended  
31 december 2013
average rate for period 165 157
yearend rate 155 166
net proﬁt for the year was lower at us64 million 2013 restated 
us71 million reﬂecting a loss of around us30 million on 
offshore projects  operations’ scope of work on the laggan
tormore gas plant and no margin on the fpf1 upgrade and 
modiﬁcation in addition there was a us8 million foreign 
exchange loss on forward contracts on a longterm project which 
management considers provide effective hedges in economic 
terms but which do not meet the requirements to be accounted 
for as hedging instruments under ias39 consequently net 
margins were lower at 32 2013 restated 42
the group’s results for the year ended 31 december 2013 
included a oneoff gain of us22 million reported within 
‘consolidation adjustments  eliminations’ reﬂecting the 
recognition on granting a ﬁnance lease over the fpf5 to the 
partners on the pm304 production sharing contract in malaysia 
of margin from the modiﬁcation and upgrade of the fpf5 
by offshore projects  operations which was eliminated on 
consolidation in prior years
headcount increased to 5500 at 31 december 2014 
2013 5100 reﬂecting the signiﬁcant increase in activity
offshore projects  operations backlog stood at us34 billion 
at 31 december 2014 2013 us31 billion with a number of new 
awards and extensions offsetting the unwinding of backlog as we 
make progress on the existing portfolio of projects
37
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements  with our work on the  
rabab harweel integrated 
project rhip in oman we  
are extending our engineering 
procurement and construction 
management service – thereby 
bringing more value to our 
clients and supplementing  
our wider engineering 
procurement and  
construction business 
full range of services 
on rabab harweel 
integrated project 
oman
in march 2014 we secured a four and a half 
year engineering and procurement contract 
with petroleum development oman pdo – 
through which we are providing a full range 
of services for the rhip development 
which is in the south of the sultanate which 
encompasses gathering systems sour gas 
processing facilities injection systems and 
associated ﬂowlines and pipelines
the contract sees us providing detailed 
engineering and construction and 
commissioning management support services 
on a reimbursable basis and procurement 
services on a reimbursable passthrough basis 
the total value is expected to be more than 
us1 billion with around a quarter of the 
revenues relating to the provision of 
professional services 
having won the contract we quickly mobilised 
some 300 petrofac people across our various 
sites and accommodated around 70 pdo 
employees in our sharjah ofﬁces as the 
project progresses there will be a concerted 
emphasis on local delivery which will see us 
employ many more omanis and prioritise local 
service providers and manufacturers at the 
peak more than 500 people will be working 
on the project
design build manage and maintain train
petrofac 
annual report and accounts 2014 38 segmental performance continued
engineering  consulting services
engineering  consulting services operates as  
our centre of technical engineering excellence 
from ofﬁces across the middle east and north 
africa cis asiapaciﬁc europe and the americas 
we provide engineering services across the life 
cycle of oil and gas assets our teams execute 
all aspects of engineering including conceptual 
studies frontend engineering and design feed 
and detailed design work for onshore and offshore 
oil and gas ﬁelds and facilities 
contribution to  
group revenue
contribution to  
group net proﬁt
employees
4900 2013 3900
7 5
as well as supporting the rest of the group engineering  consulting 
services has secured and undertaken a wide range of conceptual 
studies and feed studies during the year for external customers 
engineering  consulting services’ larger awards during 2014 included
thamama front end engineering design abu dhabi
in february 2014 we announced the award of a us21 million 
feed contract by abu dhabi company for onshore oil operations 
adco the project in the thamama production zone forms 
part of adco’s bab integrated facilities project located 150 km 
southwest of abu dhabi city prior to award of the feed we 
also successfully completed conceptual studies for the same 
development the scope of work speciﬁcally looked at enhancing 
aspects of the ﬁeld for its future development and expansion
rabab harweel integrated project rhip oman
in march 2014 we were awarded engineering  consulting 
services’ largest project to date an engineering and procurement 
contract with petroleum development oman pdo to provide 
services for the rhip facility located in the harweel cluster of 
ﬁelds in the south of the sultanate of oman the rhip facility will 
include sour gas processing facilities and associated gathering 
and injection systems and export pipelines under the terms of 
the four and a half year rhip contract we will provide detailed 
engineering and construction and commissioning management 
support services on a reimbursable basis and procurement on 
an incentivised passthrough basis the total contract value is 
expected to be more than us1 billion with around onequarter 
of the revenues relating to professional services engineering 
construction and commissioning management 
shah deniz 2 project azerbaijan
in july 2014 we secured a contract with the bpoperated 
shah deniz 2 project to provide maintenance build capabilities 
the contract valued at around £5 million covers new onshore 
offshore and pipeline assets in the azerbaijan sector of the 
caspian sea for what is one of the largest gas developments in 
the world plant asset management petrofac’s asset performance 
management consulting business will be responsible for the 
delivery of the work 
deepwater development project canada
in october 2014 we secured a contract to work with the 
government of nova scotia to help it identify the best way 
to exploit its ultradeepwater oil potential under the terms of 
the contract petrofac will deliver a development study for a 
prospective oil reservoir 3000 metres beneath the seabed lying in 
2000 metres of water this is a multidiscipline integrated project 
being led by petrofac’s specialist subsea engineering business 
kw subsea teams from across the group will provide support 
to the project ranging from process design naval architecture 
subsea engineering cost estimating as well as a speciﬁc drilling 
scope we expect to complete the project in early 2015
awards in 2015
in early 2015 we also announced two strategic contract 
agreements with algerian stateowned sonatrach the ﬁrst 
is a ﬁve year contract where we will be providing a range of 
multidiscipline engineering design and procurement services 
in support of sonatrach’s upstream hydrocarbon development 
programme within the procedures that govern the tendering 
process under the terms of the second agreement we signed 
a memorandum of understanding with sonatrach committing 
both parties to establish an algerian joint venture to undertake 
engineering and project execution of selected upstream and 
downstream developments the joint venture is expected to  
be ﬁnalised by mid2015
financial performance
revenue for the year increased 207 to us437 million 2013 
us362 million reﬂecting a substantial increase in activity levels 
including rhip and the in salah gas and in amenas consultancy 
contract which was awarded in january 2013 but on which 
substantial activity only commenced in 2014 
net proﬁt for the year was marginally higher at us33 million 
2013 us32 million while activity levels were signiﬁcantly higher 
than the prior year much of the activity on rhip is at lower margin 
as the procurement is undertaken on an incentivised pass
through basis
headcount increased to 4900 at 31 december 2014 
2013 3900 with signiﬁcant increases in our indian ofﬁces to 
support increased activity in onshore engineering  construction 
and in sharjah uae to support rhip and other projects in the 
middle east and north africa
engineering  consulting services’ backlog stood at 
us14 billion at 31 december 2014 2013 us03 billion 
following the award of the rabab harweel integrated project 
in oman in march 2014
 before exceptional items and remeasurements
39
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements  a highlight for ies in 2014 
was the successful transition 
from phase 1 to phase 2  
of the cendor ﬁeld  
development contract
combination of 
capabilities on cendor 
field development 
malaysia
part of malaysia’s block pm304 this was 
originally classed as a marginal resource 
deemed too challenging to develop so ever 
since petrofac began its production sharing 
agreement with petronas we have used a 
combination of broad operational capability 
innovation and sheer determination
for the shift from phase 1 to phase 2 it was 
necessary to remove the existing mobile 
offshore production unit mopu and 
introduce a new ﬂoating production storage 
and ofﬂoading vessel fpso alongside two 
newly installed production platforms 
as the ﬁnal piece of the jigsaw the team came 
up with a novel idea for a ‘bridge’ – that is a 
ﬂexible riser which would allow oil to ﬂow 
from the existing wells over both of the 
production platforms and on to the 
new fpso
in total the task entailed more than 9 million 
manhours of construction and commissioning 
work without a single lti it will enable us 
to increase production from the cendor ﬁeld 
and also receive oil from the nearby west 
desaru ﬁeld 
meanwhile our innovative work in visualising 
the oilﬁeld’s complex and highly stratiﬁed 
geology was recognised through a technology 
award from schlumberger
design build manage and maintain train
petrofac 
annual report and accounts 2014 40 integrated energy services
integrated energy services provides an integrated 
service for hydrocarbon resource holders under 
innovative commercial models that are aligned 
with their requirements projects cover upstream 
developments both greenﬁeld and brownﬁeld 
and related energy infrastructure projects 
and can include investment
contribution to  
group revenue
contribution to  
group net proﬁt
employees
3300 2013 3200
12 21
integrated energy services deploys the group’s capabilities 
to meet the individual needs of customers using a range of 
commercial frameworks including
 production enhancement contracts pecs
 risk service contracts rscs
 traditional equity upstream investment models including 
both production sharing contracts pscs and 
concession agreements
our service offering is underpinned by our ability to develop 
resource holders’ local capability through the provision 
of skills training with competency development and 
assurance frameworks 
production enhancement contracts
we continue to make good progress on our pecs in mexico 
including early appraisal success on santuario initial activity 
on pánuco has focused on drilling new wells undertaking new 
seismic studies and production optimisation initiatives with a view 
to agreeing a field development plan in early 2015 early activities 
on arenque have focused on asset integrity studies and drilling 
our ﬁrst offshore well to help establish a field development plan 
later in 2015 
as part of the ongoing energy reforms in mexico we have the 
opportunity to migrate our portfolio of pecs to a new form of 
contract at this stage the detailed commercial terms of the new 
contractual arrangements are unknown and we cannot therefore 
forecast the ﬁnancial impact but anticipate being able to provide 
further clarity during 2015 
during 2014 we worked towards a revised field development 
plan and contractual framework for the ticleni pec in romania 
however following a review of the project in early 2015 we have 
decided to exit the contract we have therefore recorded an 
impairment of the full carrying value of the contract and provided 
for anticipated exit costs to reﬂect the current situation and will be 
discussing exit options with omv petrom
we earn a tariff per barrel on pecs for an agreed level of baseline 
production and an enhanced tariff per barrel on incremental 
production during the year we earned tariff income on a total 
of 92 million barrels of oil equivalent mboe 2013 7 8 mboe 
reﬂecting improvement in average production from magallanes 
and santuario and a full year of production on arenque and 
pánuco which offset lower production on ticleni
risk service contracts
production from the berantai risk service contract continues in 
line with expectations and we have commenced early activities on 
oml119 in nigeria but do not expect material investment until the 
field development plan has been ﬁnalised and agreed
following the announcement of bowleven’s farmout transaction 
on 24 june 2014 we reached a mutually acceptable agreement 
to terminate our strategic alliance agreement in respect of the 
etinde permit in cameroon under the arrangement bowleven 
has agreed to pay us9 million to petrofac following completion 
of the farmout transaction as full and ﬁnal settlement and the 
strategic alliance agreement shall then terminate 
equity upstream investments
first oil was achieved from cendor phase 2 in early september 
marking a major milestone in the development of block pm304 
we have disconnected the original cendor phase 1 mobile 
offshore production unit mopu and installed a bridge linking the 
cendor phase 1 wells to the cendor phase 2 wellhead platforms 
the west desaru tiein to the cendor phase 2 fpso has been 
safely and successfully completed production from block pm304 
is expected to continue to increase in the near term as the facilities 
are fully commissioned and new wells are brought on line 
segmental performance continued
 before exceptional items and remeasurements
41
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements segmental performance continued
on the fpf1 modiﬁcation works for the greater stella area 
project progress has been slower than expected over the winter 
while the unit is in an advanced state with all topside equipment 
placed 85 of piping erected 68 of cables run and pre
commissioning checksheets being progressed mechanical 
completion is now expected in the third quarter of 2015 we have 
agreed an incentivised schedule with the fabrication yard to 
deliver mechanical completion we have good visibility on the 
scope and the required resources are in place to complete the 
upgrade and modiﬁcation given the lower oil price environment 
we are prioritising cost optimisation certainty of delivery and 
completion of all works prior to sailaway ahead of the timing of 
ﬁrst production sailaway is now expected in early 2016 following 
the winter weather window with ﬁrst production scheduled 
for mid2016 petrofac as modiﬁcations contractor has made 
a number of variation requests and other claims on the ﬁeld 
owners and we are continuing to discuss these with them
in tunisia we have commenced production from a ﬁfth well  
and successfully completed debottlenecking of the plant during  
a short planned shutdown of the central processing facility on  
the chergui gas concession
our net entitlement from production for 2014 from block 
pm304 and the chergui gas plant increased to 21 million 
barrels of oil equivalent mboe 2013 16 mboe reﬂecting a 
signiﬁcant increase in production from block pm304 following 
commencement of production from west desaru in august 2013
petrofac training
in march 2014 we signed an agreement with oman oil company 
to establish an industryleading ‘centre of excellence’ to train 
oman’s energy and energyrelated workforce to international 
standards also in march we opened the instep training 
facilities in malaysia through our joint venture with petronas 
the facilities include three highspeciﬁcation training facilities that 
petrofac is building to support petronas’ workforce capability 
enhancement programme
seven energy
following seven energy’s capital raising on 15 april 2014 
our equity interest has been diluted to approximately 15 
consequently we are no longer accounting for seven energy as 
an associate and are therefore no longer recognising our share  
of the results of seven energy from this date
first reserve
in june 2014 petrofac entered into a framework agreement with 
first reserve the global energyfocused infrastructure investment 
ﬁrm to create petrofirst infrastructure partners
the new venture will be funded 80 by first reserve and its 
investors with petrofac retaining the balance of ownership up  
to us1 billion is expected to be committed by the first reserve 
energy infrastructure funds and its investors and petrofac expects 
to contribute up to a maximum of us250 million in the form of 
existing assets and cash 
summary of integrated energy services key projects
production enhancement 
contracts pecs
magallanes and santuario 
mexico
pánuco mexico
arenque mexico
risk service contracts 
rscs
berantai development 
malaysia
equity upstream 
investments
block pm304 malaysia
chergui gas plant tunisia
greater stella area uk
end date
 
2037 
2043 
2043 
 
 
2020 
 
 
2026
2031
life of ﬁeld
2011 2013 2012 2014
transition period
transition period
transition period
 in joint venture with schlumberger
42
petrofac
annual report and accounts 2014 the ﬁrst transaction under the agreement saw petrofac and 
first reserve establish a joint venture in respect of three of 
petrofac’s deployed and contracted ﬂoating production facilities 
petrofac sold 80 of the share capital of petrofac fpso holding 
limited to petrofirst infrastructure limited wholly owned by the 
first reserve energy infrastructure holdings fund i through its 
subsidiaries petrofac fpso holding limited owns interests in 
the fpso berantai fpf3 formerly jasmine venture and fpf5 
formerly ocean legend
the total consideration was us341 million and us128 million 
of existing project ﬁnance in relation to the berantai fpso 
was transferred to petrofirst infrastructure holdings limited 
petrofac is entitled to a share of additional future cashﬂows upon 
renewal or redeployment of the facilities at the end of their current 
deployment contracts
prior to this transaction petrofac had expected to recognise a net 
trading proﬁt of between us50 million and us60 million in the 
full year ending 31 december 2014 from the ﬂoating production 
facilities that were sold petrofac reported 100 of the earnings 
from the ﬂoating production facilities up to the closing date and 
20 of the earnings of petrofac fpso holding limited thereafter
petrofac fpso holding limited has retained a put option such 
that petrofac may be required to repurchase one or more of 
the facilities or their holding companies for agreed aggregate 
consideration of between us39 million and us105 million 
at the end of their deployment or at certain other key junctures 
we believe that the repurchase consideration accurately reﬂects 
the forecast residual values of the ﬂoating production facilities at 
the times when the put options would vest
financial performance
integrated energy services’ revenue was lower at us782 million 
2013 us934 million reﬂecting a reduction in revenue on the 
berantai risk service contract which is now in its operational 
phase a reduction in revenue from our production enhancement 
contracts in mexico due to the rephasing of certain ﬁeld 
development activities and in romania as we managed 
ﬁeld investment prudently while we sought to agree revised 
commercial terms on the ticleni production enhancement 
contract and the sale of ﬂoating production facilities to petrofirst 
see above
net proﬁt before exceptional items and certain remeasurements 
increased to us131 million 2013 us125 million net proﬁt in 
2014 includes a gain of us56 million from the sale of ﬂoating 
production facilities to petrofirst which more than offset the 
earnings foregone following the sale of the ﬂoating production 
facilities to petrofirst and a reduction in earnings on the berantai 
risk service contract which is now in its operational phase
as part of our normal yearend process we reviewed the carrying 
value of the ies portfolio for potential impairment given the decision 
to exit ticleni noted above the rapid reduction in oil prices and the 
anticipated outcome of the greater stella area project we have 
recorded a provision for impairment remeasurement and exit 
costs totalling us461 million after tax at 31 december 2014  
as detailed in the financial review on page 44
headcount increased marginally to 3300 at 31 december 2014 
2013 3200
integrated energy services backlog stood at us33 billion at 
31 december 2014 2013 us39 billion reﬂecting the anticipated 
exit of the ticleni production enhancement contract and the sale 
of ﬂoating production facilities to petrofirst
43
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements financial review
at a glance
 revenue of us62 billion  
2013 us63 billion
 ebitda
1
 of us935 million 2013 us1031 million
 net proﬁt
1
 of us581 million 2013 us650 million 
net proﬁt after exceptional items and certain 
remeasurements of us120 million 2013 
us650 million
 integrated energy services portfolio exceptional 
charges of us461 million predominantly due  
to greater stella area exit from ticleni contract  
and the lower oil price environment
 net book value of ies project portfolio stands  
at us18 billion
we delivered net proﬁt for the  
year of us581 million
1
 ebitda  
of us935 million
1
 and backlog 
increased 26 to a record year 
end level of us189 billion
tim weller
chief financial ofﬁcer
revenue
group revenue was marginally lower at us6241 million 2013 
us6329 million with good growth in offshore projects  
operations and engineering  consulting services more than 
offset by lower revenue from onshore engineering  construction 
and integrated energy services activity levels revenue and 
net proﬁt in onshore engineering  construction increased 
substantially in the second half of 2014 as we moved into 
the execution phase on a number of projects revenue from 
integrated energy services was lower due to lower levels of 
activity and lower average commodity prices
operating proﬁt
12
group operating proﬁt for the year was lower at us691 million 
2013 us793 million representing an operating margin of 111 
2013 125 the lower operating proﬁt is predominantly due 
to onshore engineering  construction where activity levels 
were lower in 2014 and the group recognised an operating loss 
of around us230 million on the laggantormore project on 
shetland uk this was partially offset by ﬁnancial outperformance 
elsewhere in the onshore engineering  construction portfolio 
and a gain of us56 million in integrated energy services from the 
sale of ﬂoating production facilities to petrofirst which more than 
offset the earnings foregone following that sale
net proﬁt
reported proﬁt for the year attributable to petrofac 
limited shareholders was lower at us120 million 2013 
us650 million predominantly due to exceptional items and 
certain remeasurements in relation to the integrated energy 
services portfolio
as part of our normal yearend process we reviewed the carrying 
value of the ies portfolio for potential impairment given the 
decision to exit ticleni noted above the rapid reduction in 
oil prices and the anticipated outcome of the greater stella 
area project we have recorded a provision for impairment 
remeasurement and exit costs totalling us461 million after  
tax at 31 december 2014 of this amount us167 million relates 
to ticleni and represents a writeoff of the entire book value of 
our ticleni assets totalling us137 million and a provision of 
us30 million for the anticipated costs we expect to incur over 
the period to ﬁnal exit a further us207 million charge has been 
recorded in respect of the greater stella area project due to cost 
overruns and schedule delays on the fpf1 modiﬁcation contract 
and the ﬁeld development as well as lower commodity prices and 
the balance of us87 million represents impairment as a result of 
the impact of lower commodity prices across the rest of the ies 
assets including provisions against the carrying value of berantai 
in malaysia the fpso opportunity oml119 in nigeria warrants 
1  before exceptional items and certain remeasurements
2 proﬁt from operations before tax and ﬁnance costs  income and our share of results of associates
44
petrofac
annual report and accounts 2014 held by the group over shares in seven energy international 
limited and ies goodwill of us18 million 
excluding exceptional items and certain remeasurements 
reported proﬁt for the year attributable to petrofac limited 
shareholders was lower at us581 million 2013 us650 million 
predominantly due to lower net proﬁt from onshore engineering  
 construction and higher net corporate and other costs 
as noted above activity levels in onshore engineering  
construction across the full year were lower in 2014 compared 
with 2013 the net proﬁt in onshore engineering  construction 
is after recognising a loss of around us200 million on the 
laggantormore project a further loss of around us30 million 
was recorded in offshore projects  operations although this 
was largely offset by the lower effective tax rate and the gain 
of us56 million in integrated energy services from the sale 
of ﬂoating production facilities to petrofirst net corporate 
consolidation and elimination costs were lower in 2013 due to  
the gain of us22 million on the fpf5 transaction see page 37 
and net ﬁnance costs were higher in the current year due to  
higher average levels of net debt
the net margin
1
 for the group decreased to 93 2013 103 
reﬂecting lower net margin in offshore projects  operations 
and engineering  consulting services partially offset by higher 
net margin in integrated energy services due to the gain from 
the petrofirst transaction offshore projects  operations net 
margin was lower in 2014 due to the recognition of the loss 
on the laggantormore project and the recognition of a foreign 
exchange loss of us8 million engineering  consulting services 
net margin was lower due to low margin ‘passthrough’ revenue 
see note 4a to the ﬁnancial statements in relation to procurement 
activities on the rabab harweel project in oman see page 39
earnings before interest tax depreciation 
amortisation ebitda
13
 
ebitda was lower at us935 million 2013 us1031 million 
representing an ebitda margin of 150 2013 163 
onshore engineering  construction offshore projects  
operations and engineering  consulting services’ ebitda 
margins were lower than in the prior year due to the reasons 
outlined above these were partly offset by a higher ebitda 
margin in integrated energy services predominantly due to the 
petrofirst transaction see page 42 which resulted in a gain  
of us56 million for both ebitda and net proﬁt 
backlog
the group’s backlog increased 26 to a record yearend level 
of us189 billion at 31 december 2014 2013 us150 billion 
reﬂecting a strong intake of new orders in onshore engineering  
 construction offshore projects  operations and engineering 
 consulting services
exchange rates
the group’s reporting currency is us dollars a signiﬁcant 
proportion of offshore projects  operations’ revenue is 
generated in the uk around 70 and those revenues and 
associated costs are generally denominated in sterling 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
year ended  
31 december 2014
year ended  
31 december 2013
average rate for period 165 157
yearend rate 155 166
interest 
net ﬁnance costs for the year were us57 million 2013 
us4 million predominantly reﬂecting higher average net 
debt balances 
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 that  
we operate in to build positive longterm relationships
 where disputes occur to address them promptly
 manage tax in a proactive manner to maximise value for  
our customers and shareholders
management responsibility and oversight for our tax strategy 
and responsibility and governance over our tax policy which 
is approved by the board and audit committee rests with the 
chief financial ofﬁcer and the group head of tax who monitor 
our tax activities and report regularly to the board and the audit 
committee the group’s tax affairs and the management of tax 
risk are delegated to a global team of tax professionals 
the group’s effective tax rate for the year ended 31 december 
2014 was 184 2013 180 the group’s effective tax rate 
excluding the impact of exceptional items and certain re
measurements for the year ended 31 december 2014 was 52 
2013 180 
a number of factors have impacted the effective tax rate excluding 
the impact of exceptional items and certain remeasurements 
this year principally being the net release of tax provisions held 
in respect of income taxes which is partially offset by the impact 
of tax losses created in the year for which the realisation against 
future taxable proﬁts is not probable 
in line with prior years the effective tax rate was also driven by 
the mix of proﬁts in the jurisdictions in which proﬁts are earned 
the adjustments in respect of prior periods include the utilisation 
of tax losses which were previously unrecognised in addition to 
the tax provision release mentioned above
earnings per share 
fully diluted earnings per share before exceptional items 
and certain remeasurements was 16899 cents per share 
2013 18910 cents in line with the group’s decrease in 
proﬁt for the year attributable to petrofac limited shareholders 
fully diluted earnings per share after exceptional items and certain 
remeasurements was 3481 cents per share 2013 18910 cents
3 including our share of results of associates
45
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements financial review continued
operating cash ﬂow and liquidity
cash generated from operations was us790 million 2013 
us5 million the substantial improvement in operating cash ﬂow 
reﬂected a much smaller outﬂow from working capital movements 
than the prior year resulting from the ﬁnalisation of a small number 
of longoutstanding commercial settlements with our clients a 
stepup in the level of cash advances received on our longterm 
contracts and ongoing tight management of working capital 
the group’s net debt stood at us07 billion at 31 december 
2014 2013 us07 billion as the net result of
 operating proﬁts before working capital and other noncurrent 
changes of us913 million
 net working capital outﬂows of us60 million including
–  a signiﬁcant increase in trade and other receivables  
and trade and other payables which broadly offset each other 
–  a cash inﬂow from a decrease in other current ﬁnancial assets 
of us131 million predominately in relation to cash received 
on the berantai risk service contract 
  an increase in work in progress of us129 million as activity 
increased on our onshore engineering  construction portfolio 
as a number of projects won in recent months entered the 
execution stage
  net investing activities of us528 million including cash 
capital expenditure of us537 million on integrated energy 
services projects and us167 million on the petrofac jsd6000 
installation vessel net of us259 million of cash consideration 
in relation to the petrofirst transaction see note 4 f to the 
ﬁnancial statements
 transfer of us128 million of project ﬁnance in relation to the 
petrofirst transaction see note 4 f to the ﬁnancial statements
 ﬁnancing activities in particular payment of the 2013 ﬁnal 
dividend and 2014 interim dividend totalling us225 million 
and ﬁnancing the purchase of shares for us25 million for the 
purpose of making awards under the group’s share schemes
 net taxes paid of us76 million and interest paid of 
us66 million 
gearing ratio 2014 2013
us millions unless otherwise stated
interestbearing loans  
and borrowings a
1719 1344
cash and shortterm  
deposits b
986 617
net debt c  b – a 733 727
equity attributable to petrofac 
limited shareholders d
1861 1989
gross gearing ratio ad 92 68
net gearing ratio cd 39 37
net debtebitda 78 71
the group’s total gross borrowings less associated debt 
acquisition costs and the discount on senior notes issuance at 
the end of 2014 were us1719 million 2013 us1344 million 
the group entered into a us500 million twoyear committed 
facility in august 2014 which is available for general corporate 
purposes see note 26 to the ﬁnancial statements
none of the company’s subsidiaries are subject to any material 
restrictions on their ability to transfer funds in the form of cash 
dividends loans or advances to the company
capital expenditure
capital expenditure on property plant and equipment totalled 
us668 million in the year ended 31 december 2014 see note  
10 to the ﬁnancial statements 2013 us597 million comprising
 oil and gas assets and oil and gas facilities in integrated energy 
services of us397 million see table opposite predominantly  
in relation to the group’s four production enhancement 
contracts in mexico and the capitalisation of a ﬁnance lease  
for an fpso deployed on block pm304 offshore malaysia
 us167 million on the construction of the petrofac jsd6000 
installation vessel
capital expenditure on intangible oil and gas assets during the 
year was us97 million 2013 us43 million predominantly 
in respect of predevelopment activities on block pm304 
offshore malaysia
total additions to integrated energy services’ production 
enhancement contracts equity upstream investments and 
ﬂoating production facilities in the year were us693 million 
including us184 million in relation to a fpso acquired under a 
ﬁnance lease for block pm304 in malaysia and us199 million 
increase in the receivable in respect of the greater stella 
area project
46
petrofac
annual report and accounts 2014 expenditure on integrated energy services projects
cost
oil and gas  
assets per note 10  
block pm304  
chergui and pecs 
usm
oil and gas facilities 
per note 10 ohanet 
fully depreciated  
and ﬂoating  
production  
facilities
 usm
intangible oil and gas 
assets per note 13 
block pm304  
oml119 and other  
predevelopment 
costs 
usm
greater stella 
area per note 16
usm
total 
usm
at 1 january 2014 828 448 290 200 1766
additions 172 225 97 199 693
disposals – 48 – – 48
increase in provision  
for decommissioning
–47–47
transfers 269 – 264 – 5
writeoff – –9 –9
exchange difference 13 – – 13
at 31 december 2014 1256 625 161 399 2441
depreciation
at 1 january 2014 200 175 – – 375
charge for the year 116 24 – – 140
charge for impairment 99 15 5 207 326
disposals – 17 – – 17
at 31 december 2014 415 197 5 207 824
net carrying amount
at 31 december 2014 841 428 156 192 1617
at 31 december 2013 628 273 290 200 1391
less ﬂoating production facilities 
held under ﬁnance leases within 
‘oil and gas facilities’ 393
berantai longterm receivable 
see note 16 381
investment in seven energy 
international limited 
see notes 14 and 15 185
total ies investment  
before working capital 
at 31 december 2014 1790
note the above table excludes working capital balances
total equity
total equity at 31 december 2014 was us1871 million 2013 
us1992 million the main elements of the net movement were 
proﬁt for the year of us140 million less dividends in the year of 
us224 million and other comprehensive loss of us57 million 
in relation to foreign currency translation losses net changes in 
the fair value of derivatives and ﬁnancial assets designated as 
cash ﬂow hedges and net gains on maturity of cash ﬂow hedges 
recycled in the year
return on capital employed
the group’s return on capital employed for the year ended 
31 december 2014 was lower at 18 2013 28 reﬂecting lower 
ebita earnings before interest tax amortisation and impairment 
and due to an increase in capital employed reﬂecting investment 
in integrated energy services and the petrofac jsd6000
dividends
the company proposes a ﬁnal dividend of 4380 cents per share 
for the year ended 31 december 2014 2013 4380 cents which 
if approved will be paid to shareholders on 22 may 2015 provided 
they are on the register on 17 april 2015 the ‘record date’ 
shareholders who have not elected to receive dividends in us 
dollars will receive a sterling equivalent based on the exchange 
rate on the record date shareholders have the opportunity to 
elect by close of business on the record date to change their 
dividend currency election
together with the interim dividend of 2200 cents per share 
2013 2200 cents this gives a total dividend for the year of 6580 
cents per share 2013 6580 cents in line with the prior year
47
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements corporate responsibility
these values lie at 
the heart of our work 
differentiate us from 
competitors and guide 
our decisions and 
actions they also force 
us to take a disciplined 
longterm approach  
to our corporate 
responsibilities 
for example
 being ethical is evident in our code 
of conduct
 our insistence on safety is visible in the way 
we safeguard our people our partners and 
our assets
 our responsiveness is demonstrated 
in the way we seek to understand the 
concerns of our stakeholders from clients 
to communities and address them in the 
way we report 
 being driven to deliver means our projects 
and activities are designed to create 
longterm value for local communities 
and host societies
during 2014 we continued to formalise  
our approach to cr with greater levels of 
discipline and improved reporting standards
the petrofac 
corporate 
responsibility cr 
ethos is embodied 
in our values
48
petrofac
annual report and accounts 2014  
a safe ethical responsive  
business that is driven to deliver
why cr is important to our continued 
business success
petrofac is here for the long term – and we understand that sustained 
commercial success and disciplined cr go handinhand 
we therefore recognise and manage the impact of our business 
and its contribution to society we see it not just as an ethical way 
to act rather for a service company like petrofac we know that 
cr makes sound business sense it helps us to
 build productive relationships with our clients – which we achieve 
for example by employing and training local workforces
 develop trust in our reliability and integrity – which we are 
reinforcing for instance by developing a global compliance network
 manage risk more effectively – as we do with the social and 
environmental impact assessments that we carry out in 
all geographies
 improve our performance – which we do for example by 
maintaining the integrity of our assets and caring about the 
safety of our people and our suppliers
 maintain strong employee engagement – which we do by 
protecting our distinctive culture and progressively strengthening 
our hr processes
progressively raising our reporting standards
we continue to work towards the global reporting initiative gri 
g4 guidelines this in turn helps to bring more discipline and 
continual improvement to our cr programmes and allows us 
to prioritise areas of improvement 
as a commonly used framework for reporting on environmental 
social and governance matters the gri guidelines help us to
 identify and address the material issues that matter the most 
to our stakeholders – including investors clients employees 
and ngos
 prioritise areas for improvement and track our progress over time
 benchmark our performance against our peers
during 2014 we made further progress – by deﬁning in more detail 
the material issues we should be reporting against and also by 
developing a roadmap for being able to report in full accordance 
with the gri g4 guidelines 
understanding what matters most  
to our stakeholders
we ﬁrst enlisted the support of our cr advisors in 2012 and their 
brief was to help us develop our reporting in line with good industry 
practice as well as with stakeholder and investor expectations
the ﬁrst step was an initial materiality assessment working with 
representatives from across our business we identiﬁed a series  
of cr topics that we believed were most relevant to our business 
in 2013 we set out to validate these assumptions through a series of 
indepth interviews with several of our most important stakeholders 
including clients suppliers investors ngos government 
representatives and industry associations then in 2014 we sought 
greater clarity by engaging with a wider selection of stakeholders
based on this work we have arrived at an authoritative 
‘materiality matrix’
this informs our management approach to cr and is used by the 
wider business to help improve the quality of our cr programmes 
and feed through to our reporting
improving our performance and providing 
a fuller picture
our external advisers also conducted a full gap analysis of our 
2013 annual report and accounts this identiﬁed those areas 
where our reporting is already in accordance with the gri g4 
guidelines highlighted areas for improvement and enabled us 
to set several new targets
drawing on this analysis we continue to raise our standards 
for example we have reﬁned our reporting around social 
performance environmental protection and human rights
for 2015 we will continue to engage with external consultants to 
help us track our performance we will also increase the quality 
and detail of cr reporting at wwwpetrofaccom 
high medium
importance to external stakeholders
low
a environmental incidents 
b supplier and contractor management 
b incountry value
c social licence to operate 
e major accidentsprocess safety
e worker safetyfatalities
e contractor safety and management
e emergency preparedness
f security risks
g learning and development
g diversity and equality
h bribery and corruption
h ethical conduct
h governance
c employee volunteering
c industrial relations disputes
g succession and career planning
g employee retention
g employee recruitment
h whistleblowing
a environmental management 
a energy and climate change 
b political risk 
c social investment 
c human rights
h revenue and tax transparency
a legacy soil contamination 
c indigenous populations
c land acquisition and resettlement
h trade sanctions
a waste management 
a water management 
a  biodiversity and habitat protection 
when operating in sensitive locations
b joint venture management 
d occupational health
a materials 
d wellbeing and stress management
d disease prevention
low medium high
importance to petrofac
petrofac materiality matrix 
and issues for 2014
over the past few years we have 
engaged with a range of internal 
and external stakeholders to 
identify the cr issues that are 
most relevant to our business  
in 2014 these issues were reﬁned 
and reprioritised to reﬂect 
prevailing attitudes and take 
account of changing expectations
what matters most  
to our stakeholders
key issues by group
a environmental protection
b economic performance
c social performance
d health
e safety
f security
g people and resourcing
h ethics
49
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements  
safety asset integrity and security
nothing is more important to petrofac than safety – 
protecting our people our clients and the communities  
we work in as well as the assets we design build operate 
and maintain
safety asset integrity and security are fundamental to the way we 
work at petrofac 
they matter to our people our clients our suppliers and our wider 
stakeholders they reﬂect our relentless focus on operational 
excellence they also help us sustain our unique delivery
focused culture
during 2014 we continued to enhance our wellestablished 
programme of health safety security environment and integrity 
assurance hsseia measures we also started to gearup 
for 2015 when with our largest ever backlog we are due to 
commence the construction phase of several large projects 
meanwhile we continued to reﬁne our asset integrity programme 
which includes systematic scrutiny of key performance indicators 
across all of our operations 
‘safe’ – a core petrofac value
reﬂecting on our safety performance
across petrofac we are committed to a future in which we have 
zero safety incidents as reﬂected in the name of our horizon zero 
global safety campaign we are proud to say that much of the 
time we do live up to this goal – and during 2014 we were able 
to celebrate several encouraging landmarks
for example petrofac training services has now gone three 
years without a single lost time incident lti during the past 
24 months it also reduced the incidence of reportable events by 
70 and in the very ﬁrst year of entering the royal society for the 
prevention of accidents rospa occupational health and safety 
awards it achieved the coveted gold award
our ltifree record has also been extended across several  
of our operations including
 9 years at the kittiwake platform in the north sea
 8 years at the cendor field development project in malaysia
 10 million manhours at kuwait oil company’s efﬂuent water 
injection project
 4 million manhours at the badra oilﬁeld development project 
in iraq
 4 million manhours at the gdansk shipyards in poland
 2 million manhours at apache’s north sea assets
meanwhile the number of managers who have participated in our 
ies safety leadership training programme has exceeded 400
we are pleased to report that there were no fatalities at any of our 
operations during 2014 nevertheless we continue to focus close 
attention on what we term “high potential incidents” hipos that 
is to say incidents that could have resulted in a fatality or serious 
injury had the circumstances been slightly different 
compared with 2013 the number of hipos reduced from 81 
incidents to 78 we regard this as a critical measure and seek to 
understand the circumstances behind every case – each of which 
is fully investigated and the lessons learned are shared across 
the group
we measure our wider safety performance according to the 
occupational safety and health administration rules in every 
category the absolute number of incidents and their severity 
decreased due to a reduction in manhours worked but for two 
categories the underlying rates edged upwards
 our recordable incident frequency rate was 016 per 
200000 manhours compared with a rate of 014 in 2013 and 
a target of zero this is well below the industry norm of 032 
as extrapolated from the ﬁgures published by the international 
association of oil and gas producers
 our lost time incident lti frequency rate was 0044 per 
200000 manhours compared with a rate of 0046 in 2013 and 
a target of zero again this compares well with the industry norm 
of 0090 as extrapolated from the international association of oil 
and gas producers ﬁgures
 the driving incident frequency rate was 012 per million kilometres 
driven this is up from a rate of 002 we do not have a reliable 
industry benchmark with which to compare this performance
strengthening our safety culture
during 2014 we continued with our groupwide safety 
improvement plan the purpose of which is to continue to 
strengthen our safety culture – whilst also preparing the company 
for the forthcoming increase in projects
our analysis of reported incidents reveals that their root cause 
almost always lies in a basic failure to observe our golden rules  
of safety continually improving awareness of these rules and 
their importance is therefore our emphasis
for example in 2014
 we completed a golden rules of safety elearning package 
using clear illustrations and graphics this clearly articulates the 
rules and our insistence that they should always be followed 
and will be rolled out throughout 2015
 we enhanced our hsse management frameworks and made 
a number of changes to our related policies these have 
been approved by the board and will be implemented and 
communicated during 2015
 we held a safety managers forum bringing together senior 
hsse personnel from across the group establishing priorities 
and forming a number of new workgroups to follow through  
on related initiatives
 in preparation for forthcoming construction and fabrication 
projects we established new onsite hsse teams in both 
shanghai and abu dhabi
corporate responsibility continued
50
petrofac
annual report and accounts 2014 leading by example
when it comes to safety we expect all of our senior executives  
to lead by example for example during 2014
 the importance and effectiveness of “role modelling” was one 
of the themes of our annual safety conference attended by 130 
of our most senior leaders including our group chief executive 
and all service line managing directors 
 we developed a framework and supporting tools to improve the 
visibility and the positive impact of site visits by any members of 
our leadership team this ensures that they lead by example are 
well aware of any sitespeciﬁc issues and always address safety 
matters when speaking to our people
recognising the risks relating to the ebola crisis
although we were not working in the three countries worst 
affected by the ebola outbreak with an ofﬁce in lagos nigeria 
and many of our people travelling through hub airports we put 
in place measures to monitor the situation provide advice to 
employees and prepare for any worsening of the situation
putting emergency preparedness to the test
given the fact that we work in a major hazard industry and 
sometimes in difﬁcult security environments we are acutely aware 
of the importance of emergency preparedness 
we are therefore fortunate that petrofac training services is one  
of the industry’s foremost providers of emergency response 
training and we drew on these specialist capabilities on several 
occasions during 2014 for example major emergency response 
exercises were conducted in the uk malaysia mexico and 
romania in each case our teams were assessed on the quality 
of their response and lessons learnt were shared
extending our commitment to our suppliers and partners
all petrofac safety policies and procedures apply equally to 
our suppliers and partners as well as our own employees 
to underline this principle we held our inaugural contractor 
safety forum in 2014 
the event held in sharjah was attended by more than 150 
representatives from over 40 of our key contractors from 
around the world the main themes were around embedding 
safety behaviours enhancing collaboration between different 
companies sharing learnings and emphasising the importance 
of teamwork once again we highlighted the importance of 
the golden rules of safety – and we emphasised the need 
for complete openness and transparency regarding hsse 
performance and issues 
sharing best practice across the industry
we continue to share expertise and reduce risk across the 
industry by collaborating with our peers for example we remain 
an active member of the uk oil response forum and the step 
change in safety initiative which is cochaired by a petrofac 
representative we are also active in the asset integrity workgroup 
and helicopter safety steering group where we played our part 
in the mandatory introduction in 2014 of emergency breathing 
systems for all helicopter passengers travelling offshore in the uk
continuing to improve our capability
for 2015 and beyond we will continue to implement our group
wide safety improvement plan key components include
 establishing and implementing a new control of work standard 
 developing new techniques to assess and improve 
supplier safety
 implementing our revised hsse management framework
 sharing best practice across the group
this groupwide plan is supplemented by and aligned with local 
plans that have been established by each service line
2013
2014
2012
2011
2010
272
160
115
143
76
total manhours worked million
million manhours completed by employees and subcontractors
2013
2014
2012
2011
2010
0018
0046
0044
0018
0026
lost time injury frequency rate
per 200000 manhours
2013
2014
2012
2011
2010
013
014
016
014
018
recordable incident frequency rate
per 200000 manhours
2013
2014
2012
2011
2010
011
002
012
011
003
driving incident frequency rate
incidents per million kilometres driven
51
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements corporate responsibility continued
asset integrity – fundamental to our business
at petrofac we design build and operate assets that are safe 
reliable and meet or exceed their speciﬁed purpose key to this 
is our asset integrity framework which enables us to take a 
structured and consistent approach to integrity across all petrofac 
operations this framework comprises
 our asset integrity management policy
 our asset integrity standard comprising the 12 elements  
of asset integrity
 related guidance documents and a toolkit of 
supporting processes
across the group we are responsible for protecting the integrity 
of 23 operating assets and we seek to apply the underlying 
principles across all of our operations wherever they take place
a rigorous consistent process
every month each of our 23 operating assets is obliged to 
report against a range of key performance indicators which are 
derived from the uk health and safety executive’s guidance on 
developing process safety indicators these comprise 
 lagging indicators – relating to the physical condition of 
our assets and the status of their respective maintenance 
programmes for example this includes us tracking any 
unplanned plant shutdowns 
 leading indicators – relating to the quality of our management 
processes and the degree of compliance with our asset integrity 
management policy this includes the level of compliance with 
our planned maintenance programmes
drawing on this data an asset integrity dashboard is published 
monthly and distributed to more than 100 people across the 
group additionally our asset integrity review board consisting 
of senior representatives from each operating asset holds 
monthly teleconferences to review the performance of each asset 
discuss integrity issues receive challenge support and share 
learnings with their counterparts
during 2014 the format of these monthly meetings was reﬁned 
to take account of the increased number of assets under review 
and to give more focus to strategic considerations and lessons 
learned we also developed and launched a new webbased 
tool that enables us to track and report on the asset integrity 
considerations of our engineering and construction projects
seeking continuous improvement
we seek to continue to improve our approach to asset 
management enhancements in 2014 included
 updating our asset integrity standard – to provide more speciﬁc 
guidance minimise the risk of misinterpretation and ensure that 
our practices are aligned across all of our operations
 developing a groupwide hydrocarbon leak reduction elearning 
package – to build on our related work in the uk and emphasise 
the role of asset integrity in minimising the risk of accidents
 implementing a revised technical authority framework 
– to reﬂect the global nature of our business and provide 
aroundtheclock technical support to those people across the 
group who operate our assets and manage high hazard risks
plans for 2015 include
 launching a new elearning tool to support the updated asset 
integrity standard – to include both primerlevel and practitioner
level modules
 developing a new control of work standard – to ensure that our 
asset integrity disciplines and processes are consistently applied 
to our construction projects 
security – protecting our people and assets
petrofac’s security team works closely with the business to protect 
our people and assets and to ensure that our operations proceed 
smoothly this becomes more important as we enter new 
territories and work in volatile social and political environments
improved intelligence gathering and analysis
during 2014 we continued to improve our intelligencegathering 
capability building on the enhancements implemented in 2013 
we introduced a new system to identify quickly geographies 
in which the risks of political and social unrest go beyond an 
acceptable threshold this information is used to inform our 
advice to travelling employees and our project decision making
meanwhile we continue to share intelligence and information  
with other companies in the oil and gas sector
respecting human rights
all of our security policies and practices are consistent with 
the voluntary principles on security and human rights and 
we ensure that our teams and partners are fully aware of the 
related considerations 
tightening our everyday processes 
we continued to review and evolve our security processes 
to reﬂect the changing nature of the environments in which 
we operate and our ongoing security activities include 
 regular brieﬁngs to the board risk committee 
 weekly travel security and country updates
 24hour emergency support
plans for 2015 include the enhancement of our audit  
and risk assessment processes
52
petrofac
annual report and accounts 2014  safe is the ﬁrst and most 
important petrofac value 
everyone in the group would 
agree on how important it is 
but making sure safety is 
always top of mind requires 
consistent communication  
and continual commitment
financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 53
safety hse bootcamps
petrofac enjoys an excellent safety record 
our performance tends to be better than 
industry norms even so things can 
and sometimes do go wrong 
in response to learnings from 2013 we 
developed a programme of safetyrelated 
initiatives for 2014 – including a series of 
hse bootcamps
these threeday training courses were an 
eyeopener for many participants they are 
not intended for hse people instead they 
were aimed at managers team leaders and 
supervisors who take decisions and lead 
teams at our sites
often safety’s biggest enemies are too 
much focus only on schedule and cost 
the bootcamps set out to show how any 
safety compromises can easily lead to time 
and cost overruns and the consequences 
can be lifechanging for everyone involved
encouraging people to take personal 
accountability for their colleagues and their 
decisions the training introduced new ways 
to convert hse knowledge into action
the team behind the hse bootcamps team 
were selected as ﬁnalists in our annual eve 
awards but most importantly of all there is 
evidence to show that they have contributed 
to better safer onsite decisions corporate responsibility continued
petrofac is a peoplebased business we recognise that 
it is our people their attitude and skills that are the 
key to our distinctive delivery focused culture it is our 
people that set us apart from our competitors allow 
us to attract and retain clients and enable us to earn 
differentiated margins 
for the next phase of our development we need to bring more 
efﬁciency consistency and effectiveness to the way we recruit 
and manage our people – while also enabling and encouraging 
employees from around the world to pursue the considerable 
career opportunities that are opening up across the group
we enter 2015 with our biggest ever order backlog and anticipate 
that over the coming ﬁve years our global workforce will need 
to continue to grow as well as creating signiﬁcant career 
development opportunities for our existing employees this 
also requires us to attract many more new employees
in a company with such a strong culture we need everyone to 
understand and live up to our values our hr teams are therefore 
working closely with their colleagues from across the business to 
ensure we meet the challenge
establishing a businessfocused hr strategy
throughout the group we employ hr professionals with 
expertise in a number of disciplines who are based across the 
world in 2014 this global team came together with our new 
group director of human resources cathy mcnulty to reﬁne 
the hr strategy
aligned directly to petrofac’s business priorities this strategy 
sees us place more emphasis on developing our talented 
people and leveraging their collective capability the guiding 
principles include
 developing our people – viewing current employees as the 
natural candidates for tomorrow’s roles and equipping them 
to pursue these opportunities
 strengthening our leadership capabilities – developing the 
skills of our highest potential employees with effective talent 
management and succession planning
 driving high performance – cascading consistent and 
aligned performance measures to enable us to achieve our 
business plans
 attracting and developing the right graduates – evolving our 
graduate programmes to create a global cohort who are closely 
networked and highly collaborative
 encouraging people to ‘join our journey’ – portraying a 
consistent employee value proposition that helps us to compete 
for and retain talent 
 getting the hr fundamentals right – seeking greater efﬁciency 
integration consistency and effectiveness across all our 
hr activities 
in 2014 the total number of employees and longterm contractors 
increased by around 8 to reach 19800 meanwhile voluntary 
staff attrition levels measured in terms of those leaving the 
company by choice remained at an acceptable rate with 
turnover of some 85
recruiting a new generation of homegrown talent
given the rapid growth of the company we have typically relied 
on external recruitment to ﬁll key roles going forward we want 
our employees to aspire to such positions with this greater 
emphasis on personal and career development we aim to be 
seen as an attractive employer offering continual opportunities 
for career progression and personal development
to support our ongoing recruitment needs we progressed with  
a range of initiatives including
 establishing a compelling ‘employee value proposition’ 
in 2014 based on formal research we ﬁnalised our ‘employee 
value proposition’ – which is now reﬂected both within the 
company and externally – through for example a globally 
consistent approach to recruitment advertising and collateral 
as well as the recruitment pages of our website 
the central message is ‘join our journey’ indicating that 
petrofac is an ambitious company with a commitment to career 
progression after applying the new ‘employee value proposition’ 
to the linkedin petrofac pages we quickly became the ﬁfth 
most followed company in the oil and gas sector – and became 
ranked as one of linkedin’s top 20 most inﬂuential uk brands
 rollingout our new recruitment systems 
throughout the year we continued with the implementation 
of a consistent automated recruitment and applicant tracking 
system this enables us to
 – improve the experience of potential and future employees
 – streamline and standardise our recruitment procedures
 – access and share the details of candidates across the group
 – bring more rigour to the planning and evaluation of our 
recruitment advertising 
 – reduce the reliance on and the costs of external 
recruitment agencies
following its original introduction in 2013 the system was 
fully implemented across much of the group during 2014 
since its introduction the proportion of employees recruited 
directly by petrofac as opposed to through external agencies 
has increased from 20 to 46 and we expect this ﬁgure to 
continue to grow 
driving high performance across the group
to achieve our business goals it is important for all of our 
employees to understand what is expected of them and the 
contribution they make to the success of their teams 
to this end our recently introduced performance management 
process provides a standardised way of setting employee 
objectives and conducting midyear reviews and yearend 
appraisals it also recognises the importance of the petrofac 
values and the role they play in our distinctive delivery
focused culture
each year we also celebrate employees and teams who embody 
our values through the eve excellence values energy awards 
this year we received 323 entries – an increase of more than 
100 on 2013
 
people and resourcing
54
petrofac
annual report and accounts 2014 a commitment to continuous learning 
and development 
again the central ethos of our hr strategy is to develop our 
own people we want to enable all employees to progress in 
their careers we also want to enable those employees who 
are responsible for others to improve their management and 
leadership skills 
 individual development 
we offer a growing range of programmes and resources to help 
individual employees develop their respective competencies 
for example during 2014 we introduced a new asset managers 
development programme and for 2015 we are creating a 
similar programme for project directors going forward we 
intend to review our elearning resources – thereby providing 
more ﬂexibility for employees and ensuring that programmes 
developed in one part of the group can be accessed by 
colleagues elsewhere 
 management and leadership development 
this was a particular focus for our hr teams during 2014 
for example we introduced a new groupwide leadership 
and management competency framework this clearly 
sets out what we expect of all our managers from ﬁrst line 
supervisors right through to our most senior leaders and covers 
four dimensions
 driving performance
 developing people
 delivering for clients
 being a role model for our values 
the framework draws heavily on our values and is aligned 
with our selection criteria and our performance management 
system see above it applies to everyone in the group with 
responsibility for the performance of others
with the framework in place we have also developed an 
allembracing management and leadership development 
programme which we call the petrofac pathway this comprises 
ﬁve key elements
 managing the petrofac way – an induction programme for all 
newly appointed and recruited managers which emphasises 
the petrofac culture
 supervisor toolkit – a twoday programme for newly appointed 
supervisors who for the ﬁrst time have responsibility for 
other colleagues 
 management essentials – a programme concentrating on basic 
management skills for ﬁrstline managers 
 management  leadership development programme – an 
ongoing programme covering more advanced management 
skills for midtosenior managers 
 leadership excellence programme – ﬁrst introduced in 
2011 and so far attended by almost 200 senior leaders this 
comprises an annual leadership event and a series of ﬁnancial 
and people management modules
during 2014 we created all of the related course components and 
materials for each of these elements the priority for 2015 will be 
to embed the petrofac pathway across the entire group and to 
support local ofﬁces with its implementation
a disciplined approach to succession  
and career planning 
a focus of our hr strategy is to develop the group’s 
leadership capabilities
in 2014 following a thorough talent review of our most senior 
managers we reviewed and updated succession plans for all our 
critical roles for 2015 we will extend our talent reviews further 
into the organisation
we will also look at ways to gain more value from the combined 
knowledge and experience of our most senior managers such 
as more internal secondments and appointments the aim is to 
ensure that we can always place our most effective people into 
our most important roles 
global mobility where it makes business sense
wherever possible petrofac delivers locally by employing 
local people working with local partners and developing local 
capabilities however in many instances it makes good business 
sense for us to facilitate international moves 
by mobilising some of our key people we can supplement local 
technical and professional skills we can also strengthen our 
global culture and we can add to the experience of our managers 
and leaders
during 2014 we brought more consistency and rigour to the 
way we handle these international moves we established a 
‘community of practice’ to develop inhouse expertise in global 
mobility and enable hr teams to advise local business leaders 
support assignees and improve related processes
at the end of 2014 around 100 of our employees were covered 
by our global mobility programmes looking ahead we 
anticipate an increase in the number of shortterm and rotational 
assignments and expect assignees to be drawn from a wider 
range of countries 
an engaged workforce with a sense of ownership
we formally and regularly monitor employee engagement levels 
across the group 
to this end we will be conducting our ﬁfth biennial employee 
survey petrovoices during 2015 
meanwhile we actively encourage employee share ownership 
believing that it builds commitment to the company’s goals and 
rewards our people for their contribution in 2014 31 of our 
employees participated in at least one of the petrofac employee 
share schemes
55
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements people graduate recruitment and development 
we continue to be a popular career choice 
for today’s graduates 
across europe for example our opo 
business received over 3000 graduate 
applications in the uk ecs received more 
than 2000 applications for the ﬁrst time 
petrofac appeared in ‘the guardian uk 
300’ – which ranks employers by their 
popularity amongst students
during 2014 we reviewed our approach to 
graduate recruitment taking stock of the 
ways that our various business units select 
and develop graduates this includes the 
work of the petrofac academy located in 
our uae ofﬁces which focuses on graduate 
training accelerates the acquisition of 
skills and helps young professionals 
achieve autonomy more quickly
going forward our aspiration is to move 
towards a more coordinated global 
approach whereby we operate a group
wide recruitment induction and training 
programme this would mean that we 
plan strategically for each year’s intake 
target particular universities introduce 
standardised selection processes run a 
groupwide induction and development 
programme and ultimately establish a 
global cohort of closely networked highly 
collaborative trainees
we are proud that our graduates reﬂect the 
level of diversity we enjoy across the wider 
group for example they represent almost 
50 nationalities and females make up more 
than 20 of the total we also beneﬁt from 
particularly high levels of retention
about our graduate population
151 0
recruited since 2004
742
retention rate since 2004
petrofac 
annual report and accounts 2014 56  
social performance
corporate responsibility continued
as our business strategy takes us into new geographies 
and we embark on longerterm contracts we are 
becoming ever more disciplined in understanding 
planning and managing the impact we have on 
local communities
often we are contractually required to run social performance 
programmes particularly for our ies contracts however the 
related skills and disciplines can beneﬁt our wider operations 
– helping us to manage risks develop trust and build more 
productive relationships with customers suppliers and 
local communities
implementing and enhancing our 
social performance framework
our social performance framework incorporates our ethical 
social and regulatory policy our social performance standard 
and a set of supporting guidance notes it is fully consistent 
with international standards such as the international finance 
corporation ifc performance standards on environmental  
and social sustainability and the equator principles
the framework was established in 2012 and continues to be 
reﬁned in 2014 for example we developed guidance on how  
to manage cultural heritage impacts we also piloted an internal 
assurance process to monitor compliance with the social 
performance standard in 2015 we will conduct assurance 
processes on all relevant petrofac assets and update the social 
performance framework as part of a threeyearly review
the framework is signiﬁcant in three main ways
1  for those contracts primarily ies contracts where we have 
direct accountability for managing social impacts or a 
contractual requirement to do so the framework provides 
the necessary rigour it sets out our minimum requirements 
ensures that everyone is familiar with our commitments and 
provides assurance that our obligations are being fulﬁlled 
2  for other contracts such as epc contracts the framework 
demonstrates to clients that we work responsibly this can be 
particularly important during the construction phase of large 
projects – when heavy work commences trafﬁc and noise 
volumes increase large numbers of workers are involved 
and the potential for negative impacts can escalate
  a good example is our work for bp on the khazzan central 
processing facility in oman here as part of the contract we 
have worked with our clients to develop a contractor grievance 
mechanism to ensure that any communityrelated concerns 
can be raised easily and addressed quickly
3  the framework can also provide additional reassurance to 
institutions that provide ﬁnance for any projects we work 
on such as the international finance corporation world 
bank european bank for reconstruction and development 
export credit agencies and the wider banking community 
again the framework’s existence demonstrates that we 
have the right credentials to work in sensitive locations 
and are capable of fulﬁlling internationally recognised social 
performance requirements
our social performance standard is now being implemented 
across all relevant countries particularly our ies operations in 
mexico romania and tunisia 
in each of these countries we have conducted socioeconomic 
baseline assessments wherever relevant we have completed 
impact assessments and have mitigation measures in place 
in addition grievance mechanisms are now well established in 
tunisia and are under development in mexico and romania
during 2014 we continued to raise awareness of social 
performance issues across the group and incorporate them 
into our wider business processes for example we regularly 
incorporate social performance considerations into 
 the petrofac enterprise risk management system perms
 the risk assessment phase of prebidding and bidding 
processes in order for example to anticipate potential 
community relations considerations
 our approach to security to understand and address any 
situations where community relations could constitute a 
security risk 
for 2015 we will focus on continued improvement in the 
implementation of the framework as part of this we will conduct 
social performance training and awarenessraising across a range 
of relevant areas of the company
social investment programmes
for 2014 our spending on social investments reached 
us41 million up from us19 million in 2013
1
 the increase in 
spend yearonyear was primarily a result of a signiﬁcant increase 
in activity levels in mexico see below
most of this investment went to community development initiatives 
in mexico and tunisia where petrofac operates longterm 
production sharing and production enhancement contracts 
in mexico for example we are contractually committed to 
spending 1 of our total annual expenditure on sustainable 
development initiatives in 2014 this amounted to just over 
us3 million and was primarily used to support education health 
and public infrastructure needs in our four concession areas
in line with our social performance objectives our approach is to 
move towards more longterm sustainable projects that support 
the livelihoods of local people and responds to issues identiﬁed 
in social impact assessments and through stakeholder dialogue 
both of which are covered by guidance notes more speciﬁcally 
we want to prevent local communities from being overly 
dependent on the oil and gas industry and to support the 
diversiﬁcation of local economies 
1 from 2014 we are not including our investment in technical training centres 
in addition we are no longer reporting sponsorship activities as a social 
investment which were previously reported in the ‘other’ category the 2013 
ﬁgure quoted above is therefore us28 million lower than reported in that 
year’s annual report and accounts this enables us to report on a like for 
like comparison 
57
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements examples include
 supporting entrepreneurialism in tunisia – in 2014 we helped six 
entrepreneurs to set up new businesses on kerkennah island 
this included modest grants to cover startup costs as well as 
technical assistance to prepare business development plans 
and secure ﬁnancing from third parties examples include a 
boat construction and repair shop a physiotherapy business 
and a plastic bottle recycling enterprise petrofac will continue to 
provide business mentoring for these and other startups and 
we will monitor the longerterm impact on employment and the 
provision of local services
 supporting cocoa farming in mexico – we continued our three
year initiative to provide technical assistance and agricultural 
supplies to over 400 smallholders who farm more than 600 
hectares with a view to increasing cocoa yields and household 
income during the year we worked with maxi terra a local 
expert agricultural organisation to provide training to these 
smallholders and understand further the challenges they face 
in 2015 we aim to set up a local school to provide group training 
we will also conduct a preliminary assessment of the projects’ 
impact on cocoa yields
during 2014 we enhanced the governance of our social 
investment initiatives to ensure that both petrofac and our 
intended beneﬁciaries can enjoy a decent return on our spending 
this entails
 rigorous community needs assessments – to enable us to 
develop appropriate strategies and pursue relevant plans
 consistent criteria and implementation procedures – to give 
clarity to all local groups who request support from petrofac
in 2014 76 of our social investment was covered by a long
term strategic plan mainly from our community development 
investments in tunisia mexico and romania we aim for all 
of our social investments to be governed by such a plan to 
ensure that our spending leads to tangible beneﬁts for those we 
support as well as for petrofac in 2015 we will establish long
term strategic corporate giving plans in key operating centres in 
order to bring a continual improvement to this ﬁgure we will also 
continue the shift towards a smaller number of higher value social 
investment projects
looking towards longterm beneﬁts
community development
spending on initiatives that beneﬁt neighbouring andor impacted 
communities in our areas of operation these initiatives are 
designed to create community beneﬁts over and above those 
that would automatically come from our standard project and 
operational expenditure they are generally based on rigorous 
needs assessments to help local communities meet their long
term priorities
strategic corporate giving
spending on philanthropic initiatives that have altruistic aims but 
nonetheless contribute to petrofac’s reputation these initiatives 
are typically implemented at a national or regional level and are 
managed by our local ofﬁces matched giving is also classiﬁed as 
part of our strategic corporate giving
note from 2014 we are not including our investment in technical 
training centres in addition we are no longer reporting sponsorship 
activities as a social investment which were previously reported 
in the ‘other’ category the 2013 ﬁgure quoted above is therefore 
us28 million lower than reported in that year’s annual report and 
accounts this enables us to report on a like for like comparison
our social investment spending continues to rise
2014
2013
us41 million
us19 million
community development strategic corporate giving
corporate responsibility continued
58
petrofac
annual report and accounts 2014 strategic corporate giving
petrofac has a formal corporate giving strategy focusing on 
initiatives that
 promote science technology engineering and mathematics 
stem education
 improve access to education and employability for young people 
from marginalised groups
in the uk we have a longstanding partnership with the 
royal academy of engineering and in 2014 our group chief 
executive ayman asfari was appointed a fellow of the academy 
we support several of their initiatives including 
 extending our support of the royal academy of engineering 
fellowship programme – this programme provides funding for 
graduate engineers to pursue a oneyear masters programme 
in applied technical roles in the oil and gas industry we have 
participated in this programme since 2009 and in 2014 a 
further ﬁve fellows were supported bringing the cumulative total 
of engineers supported by the company to 27
 extending our support of the stem teacher connectors 
project – this programme employs an expanding network of 
teacher coordinators who provide local stem teachers with 
free training resources and networking opportunities in 2014 a 
further two coordinators were supported by petrofac bringing 
the total number of coordinators supported by the company 
to four
 encouraging our employees to become stemnet ambassadors 
– eight employees from our woking ofﬁces completed a 
stemnet training course to become stem ambassadors 
this means they can volunteer for local stem initiatives such 
as careers talks and afterschool clubs we plan to train more 
stemnet ambassadors in 2015
we expect to continue with this partnership during 2015 and beyond
managing and monitoring our  
human rights performance
petrofac’s ethical social and regulatory policy prevents us 
from engaging in any business activities that could implicate the 
company – either directly or indirectly – in the abuse of human 
rights or the breach of internationally recognised labour standards
as such we respect human rights as set out in the united 
nations’ universal declaration of human rights as well as 
the core conventions of the international labour organization 
we also support the united nations’ guiding principles on 
business and human rights
most human rights protections are implicitly covered in a range of 
company policies and standards such as our code of conduct 
social performance framework and hr policies however in 
line with the gri g4 reporting requirements and in response to 
stakeholder expectations see the materiality matrix on page 49 
we recognise the need to
 become more explicit in our reporting on human rights issues
 demonstrate that we conduct due diligence in relation to human 
rights issues
 ensure that all related risks are appropriately monitored 
and managed
during 2014 as a ﬁrst step and with support from external 
advisors we conducted a thorough review of all our existing 
policies to identify any gaps or vulnerabilities we also engaged 
with a selection of internal stakeholders to assess their 
understanding of human rights issues – as well as any potential 
opportunities and challenges associated with the everyday 
ontheground management and monitoring of our human 
rights performance
this work concluded that the key human rights risks and 
vulnerabilities for petrofac – in common with the oilﬁeld services 
sector as a whole – relate to the management of large temporary 
workforces particularly those working on projects that entail 
large numbers of contractors and subcontractors assessing 
monitoring and mitigating the related risks is regarded as a key 
challenge for companies in our sector
in 2015 we plan to prioritise how we address the central ﬁndings 
of this review beginning with explicitly stating our policy on 
child labour and reinforcing our social performance framework 
in this regard we will also address the other human rights 
considerations across the group and agree how to address 
the most signiﬁcant risks
59
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements  
economic performance
as a global business petrofac operates across 
many different countries – and we always seek to 
make a positive and tangible contribution to their 
respective economies
quantifying and maximising our incountry value
the concept of ‘incountry value’ seeks to quantify the net 
contribution that petrofac makes to the economies in which 
we operate
to date this is most advanced in oman where the concept  
of incountry value has government backing – and is deﬁned 
by the national authorities as the total spend retained incountry 
that beneﬁts development contributes to human capability and 
stimulates productivity in the economy
for all of our omani projects a formal incountry value plan is 
therefore agreed with each client this sets out detailed targets 
for the employment and training of local people the use of 
local suppliers and the procurement of local goods it may also 
have various sustainability and social performance targets 
and will typically favour the use of local community contractors 
that is those established by villages or settlements and 
smaller businesses
we will then track our performance against the agreed targets and 
report back to clients on a monthly basis the details of each plan 
remain conﬁdential however in future years we aim to become 
more consistent in the way that we set and monitor targets and  
to share the lessons learned with projects
all in all the contribution from petrofac to the omani economy  
is signiﬁcant at the start of 2015 we were working on three large 
projects with a combined value of more than us43 billion and 
had agreed incountry value targets across every aspect  
of their delivery
in partnership with takatuf oman we are also establishing the 
country’s largest technical training centre with a planned capacity 
of 1000 students a year this will train the energy workforce to 
international standards
making a signiﬁcant contribution  
to public ﬁnances
through the taxes we pay petrofac makes a signiﬁcant ﬁnancial 
contribution to the public ﬁnances of the local economies 
in which we operate in 2014 the total amount paid to 
governments in tax was us720
1
 million comprised of corporate 
income tax employment taxes other forms of tax and social 
security contributions
over and above the monies we pay to and collect on behalf of 
revenue authorities petrofac supports a signiﬁcant number of jobs 
through our supply chain
bringing more transparency to our tax reporting 
we are in favour of bringing more transparency and consistency 
to the way that companies report on their tax arrangements 
and payments 
for example
 we support the extractive industries transparency initiative 
which seeks to introduce countrybycountry reporting on 
payments made to governments in respect of companies’ 
extractive activities and were actively involved in developing 
the related policies
 we contribute to research into the structure of business taxation 
and its economic impact by participating and contributing to 
the organisation for economic cooperation and development 
oecd including public consultations into tax transparency the 
issues surrounding base erosion and proﬁt shifting beps and 
other proposed legislative initiatives
 we are members of a number of industry groups that participate 
in the development of future tax policy 
our worldwide tax contribution – total taxes paid
1
2014
2013
us720 million
us912 million
reﬂecting public interest in the issue the level and type of 
information we provide with respect to our total tax contribution 
goes beyond the statutory requirements
the total amount that we pay is not conﬁned to the corporate 
income tax disclosed within the ﬁnancial statements the total 
tax collected includes payments made in respect of corporate 
income taxes employee and employer taxes and social security 
payments vat and sales taxes and other taxes such as 
withholding property and other indirect taxes the total taxes 
collected shows the contribution made by petrofac in payments 
to governments so includes those taxes which are borne by 
petrofac as well as those collected by petrofac but recoverable 
from tax authorities or customers and suppliers vat and sales 
taxes are shown on an accruals basis which is not expected to 
be materially different to a paid basis
tightening up on our supplier  
and contractor management 
as discussed in several sections of this report we are bringing 
greater consistency and rigour to our supplier and contractor 
management policies and procedures
we continue to reﬁne the way that we screen our thirdparty 
suppliers suppliers and contractors have become a focus of 
our safety programmes and the treatment of large temporary 
workforces is at the heart of our plans to improve our reporting 
on human rights issues
over the course of the year we had a number of issues with 
unions representing parts of the workforce on total’s laggan
tormore shetland gas plant project while some of the disputes 
resulted in industrial action we reached agreement with the 
unions without any signiﬁcant stoppages
for 2014 we were not aware of any reported incidents of labour 
rights impacts anywhere in our global operations
corporate responsibility continued
1 total taxes collected have not been subject to audit
60
petrofac
annual report and accounts 2014  wherever possible petrofac 
delivers locally – employing 
local people working with  
local contractors and 
developing local capabilities
incountry value 
instep oil  gas 
training centre 
a prime example is our work with petronas 
and the 2014 opening of a brand new training 
facility – which is part of the integrated oil  
 gas training centre at instep or institut 
teknologi petroleum petronas on the east 
coast of malaysia
guided by petrofac training services pts 
the new facility was designed by petrofac 
engineering  consulting services and built 
using local contractors with petronas’ 
project management team pmt overseeing 
the epcc project
it replicates a range of reallife upstream and 
downstream production facilities including 
two fullscale offshore modules a reﬁnery 
and a control room plus engineering 
workshops and classrooms 
looking at the production facilities you might 
assume they were the real thing in fact they 
are a costeffective way to introduce aspiring 
oil and gas technicians to the realities of 
working onsite and provide onthejob 
training in a safe controlled environment 
the facility also increases instep’s capacity 
to more than 1500 trainees a year 
having developed the training curriculum  
pts now provides expert trainers and will 
manage the upstream programme for an 
initial period of ﬁve years as a result we are 
helping petronas and the wider malaysian 
economy beneﬁt from a steady stream of 
internationallycertiﬁed locallydeveloped 
technical expertise
design build manage and maintain train
financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 61  
environmental protection
we are committed to understanding and minimising  
the environmental impact of our business
petrofac is committed to operating its business in an 
environmentally responsible manner 
for 2014 our emphasis has been to enhance the consistency  
of our data collection and the quality of our reporting based on  
a clear understanding of our true environmental impact we will  
be better positioned to benchmark our performance and bring 
about progressive reductions to the environmental footprint of  
our global operations
improving consistency across our operations
during 2014 we developed a new group environmental framework
this brings more rigour to our existing standards and ensures 
that right across our global operations we have a consistent way 
of understanding and managing environmental considerations
to support the new framework we also developed a new 
group environmental data reporting guide which means that 
we now have an improved standardised way of measuring our 
environmental impact 
the content of this guide is aligned with recognised international 
reporting standards such as the greenhouse gas protocol the 
global reporting initiative the petroleum industry guidance on 
voluntary sustainability reporting and the uk’s greenhouse gas 
mandatory reporting guidelines 
the guide therefore provides us with a groupwide standard for 
our data reporting scope and boundaries and includes consistent 
deﬁnitions of our environmental performance indicators it is also 
supported by a data reporting tool enabling us to minimise 
uncertainties and maintain consistency
moreover the guide enables us to monitor and compare the 
respective performance of our operations and helps us to 
manage and reduce our environmental footprint it will also allow 
us to report on our performance in accordance with the gri 
g4 guidelines 
the framework and the guide will be implemented from the start 
of 2015
strengthening our spillresponse measures
during 2014 we implemented a range of activities to improve 
the way we respond to any unplanned hydrocarbon releases 
for example we
 reviewed and reﬁned our existing spillresponse procedures
 carried out detailed assessments of those sites that face the 
greatest risk of spills
 conducted onsite veriﬁcation of compliance with our spill
response procedures 
we also conducted 20 separate spill response exercises involving 
both our own employees and our subcontractors these exercises 
will enable us to review our spill response procedures and develop 
a competent trained team capable of effectively responding to 
unplanned releases of hydrocarbons for 2015 we will continue 
with a programme of capability reviews of our oil spill contingency 
plans to demonstrate operational excellence
joint spill response exercise in mexico
in september 2014 a joint spill response exercise was conducted 
at our arenque operations in mexico helicopters marine vessels 
spill containment booms skimmers and other spill response 
equipment were deployed to simulate a truetolife scenario
the exercise enabled us to assess our current capabilities in 
responding to a major offshore emergency and it involved the 
emergency response teams of our partners at pemex and 
semar as well as our own people the lessons learned will 
strengthen the emergency preparedness of all participants 
our reporting principles and procedures
with regards to our emissions petrofac is fully compliant with the 
requirements of the uk companies act 2006 strategic report 
and directors’ reports regulations 2013 which the company 
complies with on a voluntary basis 
to assure and validate our data collection processes in 2014 we 
employed the services of ricardoaea a specialist consultancy 
to perform an independent review
to provide an accurate and consistent estimate of our 
performance we abide by the following principles
 our emissions data is calculated in line with the principles 
of the greenhouse gas protocol corporate accounting and 
reporting standard produced by the world resources institute 
and the world business council for sustainable development – 
a globally recognised standard
 greenhouse gas emissions and our corporate carbon footprint 
report are based on 
 – for fuels and electricity use – emission factors from the uk 
department for the environment food and rural affairs 
defra 
 – for gas ﬂaring – the american petroleum institute’s 
sangea methodology
 for those operations that are jointly owned we use an equity 
share approach to account for emissions
 those operations that are wholly controlled by third parties are 
excluded from our reporting
 all petrofac operational sites are included in this report
as well as calculating our own emissions we also monitor and 
report on air emission data to our clients for the facilities we 
manage on their behalf in the case of our north sea operations 
our monitoring meets the stringent standards of the osloparis 
convention in accordance with the european environmental 
emissions monitoring system we measure
 all discharges of hydrocarbons heavy metal and 
radiation contamination
 all air emissions of sulphur dioxide nitrogen oxides and volatile 
organic carbons
our environmental data collection and analysis enables us to 
monitor and improve on our energy use and waste management 
which helps to minimise our related environmental impact 
our environmental performance data is also made available to 
various stakeholders to demonstrate that we comply with all 
related requirements and show that petrofac is fully committed 
to environmental protection
corporate responsibility continued
62
petrofac
annual report and accounts 2014 in addition to greenhouse gas emissions data we collect data on 
the waste that leaves our facilities which is typically segregated 
measured and reported by category as standard practice a 
waste management plan is developed for each of our projects 
which takes full account of prevailing regulatory requirements 
in 2014 our waste segregation and recycling achievements were 
recognised by the emirates environmental group eeg a leading 
ngo operating in the uae
emissions and spills performance
we have been monitoring and reporting our carbon emissions 
since 2008 and in 2014 we saw a decrease in our emissions 
compared with 2013
as a condition of the mandatory reporting requirement of the companies 
act 2006 petrofac must report its emissions in its annual report against an 
intensity metric that is representative of its business activities the intensity 
ratio for 2014 is 4222 tco2e per million us revenue we have chosen to 
use “tonnes million us revenue” as this metric is the most representative 
across the entire business
we continue to participate in the carbon disclosure project 
cdp which provides a global disclosure system for companies 
to report their environmental impacts and strategies in respect of 
greenhouse gas emissions for 2014 we received an improved 
cdp score achieving a rate of 83 for disclosure compared with 
77 in 2013 and band b for performance given that more than 
half of reporting companies are rated in band c or lower it is clear 
that petrofac is outperforming many of our peers
in 2014 we again participated in the uk government’s crc 
energy efﬁciency scheme we are registered for phase 2 of 
this scheme and our ukbased assets complied with all of the 
related criteria
during the year we experienced a slight rise in the number of 
reported oil spills associated with our operations most of these 
spills involved less than one barrel of oil and had a negligible 
environmental impact regrettably we experienced 19 spills 
involving more than one barrel one of these took place in the 
uae with all of the others occurring in mexico and romania 
in each case the appropriate spillresponse measures were 
implemented and a full investigation was conducted
continuing improvements in our energy efﬁciency
across our operations and projects we have an ongoing focus 
on how to improve our energy efﬁciency 
at petrofac training services for example a programme 
of initiatives resulted in an 8 reduction of overall energy 
consumption in 2014 to achieve further savings the montrose 
training facility supported by external consultants conducted 
energy modelling assessments and subsequently implemented 
a plan which is set to reduce consumption by more than 25 
by 2020
energy efﬁciency is also a key consideration for many of our 
projects for example our design team generally works beyond 
customer requirements to optimise energy efﬁciency during the life 
cycle of facilities 
in one such case we modiﬁed and reengineered a standard 
aircooled heat exchange unit which delivered an annual energy 
saving of 3896 mwh – equivalent to 2627 tonnes of co 2 
in another such case our design team proposed an innovative 
way to insulate pipework by reducing the amount of power 
needed for heat tracing this resulted in an annual energy saving  
of more than 1085 mwh
in 2015 we will participate in the uk energy saving opportunity 
scheme esos and carry out studies on energy consumption  
to identify opportunities for further improvements 
raising awareness and encouraging action
to raise awareness of environmental issues among our 
employees partners and local communities we hold an 
annual petrofac environmental month and encourage our local 
operations to implement environmental initiatives in 2014 there 
were many initiatives across the group which ranged from 
conserving marine biodiversity to improving waste management 
a few of the examples from 2014 include
reducing our carbon footprint
petrofac emirates and its subcontractors instigated a widescale 
environmental campaign across the sites of the babhabshan1 
project and the bab gas compression project in abu dhabi 
to minimise carbon emissions a 368kw solar park and solar 
powered street lighting system was installed at the site ofﬁces 
meanwhile a treeplanting programme has brought 1575 square 
metres of greenery to the site helping to minimise soil erosion 
provide sand screening and improve living conditions for the 
workforce a monthlong campaign on water conservation helped 
the site to reuse 95 of its wastewater
promoting biodiversity conservation 
petrofac partnered with the uae ministry of the environment and 
the al jazeera diving and swimming centre to create an artiﬁcial 
reef six kilometres off the coast of the uae
the reef which was constructed from 20 large 350kg concrete 
pyramids will encourage the growth and development of 
many marine organisms and in turn provide food shelter and 
protection for ﬁsh as well as sponsoring the project petrofac staff 
participated in the installation of the pyramids
meanwhile in mexico petrofac partnered with the national 
forestry commission local authorities and communities on 
a 600hectare mangrove conservation project
involving younger generations in environmental protection
we understand that younger generations can play an important 
role in the conservation of our environment and in the uae we 
encouraged children in our local communities to participate 
in initiatives such as tree planting quizzes art competitions 
awareness sessions and litter reduction drives in 2014 more 
than 500 children participated in such activities 
2013
2014
2012
2011
2010
202
285
264
227
214
tonnes of carbon emissions generated
000 tco 2e
63
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements  in designing our new 
deepwater installation vessel 
the petrofac jsd6000 we 
wanted to be sure it would 
exceed the most exacting 
environmental standards – 
whether existing planned 
or potential
environmental 
protection  
petrofac jsd6000 
we took as our baseline the eco rules of 
lloyd’s register which set standards for 
design construction and operation and 
went well beyond all statutory requirements
environmental considerations therefore loom 
large in every facet of this remarkable vessel 
– from energy consumption to operational 
performance to waste management to living 
quarters and working conditions
so for example this is the ﬁrst vessel in the 
offshore industry to deploy a fuel recovery 
separator system which separates reusable 
fuel from waste fuel oil it also uses highly 
efﬁcient selective catalytic reduction 
systems which reduce nox emissions by up 
to 90 it is powered by the latest generation 
of highly efﬁcient “common rail” engines
innovative air conditioning techniques 
are also used such as enthalpy recovery 
absorption chillers and mechanical 
ventilation and lowenergy led lighting 
is ﬁtted throughout
also with such an array of onboard 
equipment and facilities the petrofac 
jsd6000 can operate autonomously with no 
need for a ﬂotilla of support vessels costs are 
cut and environmental performance is lifted 
yet further
due to set sail in 2017 we are conﬁdent that 
the petrofac jsd6000 will be considered the 
offshore industry’s environmental benchmark 
for 30 years at least
design build manage and maintain train
petrofac 
annual report and accounts 2014 64  
ethics
‘ethical’ is one of the six petrofac values our code of 
conduct the code sets out the standards we insist upon 
everyone who works for and with petrofac is obliged 
to uphold the code – and speak up if they suspect 
any breaches
it is vital for petrofac to be and to be seen as an ethical company 
to achieve our business ambitions we must be regarded as a 
trusted partner by clients regulators across the world and ngos 
accordingly we are bringing ever more rigour to our internal 
communication and employee education activities as well as 
our related certiﬁcation and compliance programme
giving clear guidance to employees  
and business partners
the code founded on the six petrofac values provides guidance 
to our employees and business partners
the code is clearly explained using easytofollow language 
following the most recent review in 2013 printed copies were 
distributed to all employees and representatives as well as to a 
large number of third parties the code is now routinely provided 
to all new employees and newly contracted suppliers
embedding the code throughout our business
the emphasis for 2014 was to raise awareness of the code and 
its requirements
we launched a new elearning course that brings the code to 
life through a range of everyday examples all employees and 
contractors are expected to complete this programme to make 
it widely accessible and monitor levels of participation we utilised 
our new webbased compliance portal the course was launched 
in june 2014 and by the yearend close to 14000 of our 
employees had registered and completed the training
a disciplined certiﬁcation process
upholding the code and looking out for suspected breaches 
is a key accountability of all petrofac managers from ﬁrstlevel 
supervisors right through to our executive leadership team 
in 2014 we continued to conduct the annual code of conduct 
certiﬁcation process in addition to the mandate to our managers 
to certify to their own compliance to our code and alert us of 
possible breaches this year the process was modiﬁed to include 
questions on conﬂict of interest and on the recording of gifts 
and entertainment 
more than 3000 managers were required to conﬁrm online 
that they had read and understood the code and observed its 
requirements in all of their business dealings 
speaking up about any breaches of the code
we continue to draw attention to speak up – our telephone  
email and webbased service enabling any employee or third 
party to report suspected breaches of the code
anyone can raise in conﬁdence a possible breach of the 
code from 19 locations in one of eight languages during the 
year 46 suspected breaches were reported each of which 
was investigated and all violations reported to the board risk 
committee individuals found to be in serious breach of the  
code have had their employment terminated
during the year we also reviewed and reﬁned our investigation 
guidelines which govern the way that we investigate any 
suspected breaches of the code during 2015 we will ensure  
that these are understood and followed by all relevant 
departments such as the hr and internal audit teams
screening thirdparty suppliers  
and business partners
we continue to reﬁne the way that we screen our thirdparty 
suppliers – in order to assess their level of technical ﬁnancial  
and reputational strength and ensure their ethical standards  
are consistent with our own
in 2014 an area of emphasis was to work with our largest clients 
to ensure that our screening procedures meet their respective 
standards this will continue throughout 2015 
during the year we also conducted a thorough review of all our 
agent relationships we subjected each of them to due diligence 
and updated their respective contracts any relationships 
that were deemed to be no longer appropriate or relevant 
were terminated
our aspiration for 2015 and beyond is to conduct a similar 
exercise among our service providers including freight forwarders 
and customs agents
corporate responsibility continued
65
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements 66
petrofac 
annual report and accounts 2014
corporate governance
highlights of 2014
  to ensure continued board effectiveness 
an external evaluation process was 
conducted during the year which observed 
that the level of challenge along with the 
openness of contribution results in a positive 
dynamic at each meeting
  succession planning for the board and 
senior management remains a key focus 
to ensure unforeseen changes are managed 
effectively and efﬁciently
  initiatives to align our methodology for 
identifying evaluating and managing risks 
have been adopted during the year to 
allow us to ensure that our internal control 
framework continues to evolve as the 
company grows
  several changes to the underlying bonus 
framework have been made which are 
intended to ensure there is increased 
transparency of individual outcomes 
in line with best practice developments
  malus and clawback provisions are now 
in place on all variable pay elements which 
executive directors are eligible to receive
the development 
of the company’s 
governance framework 
has been extremely 
important and 
throughout this report 
there are examples 
of how we are 
endeavouring to attain 
our corporate goals 
whilst underpinning 
our core values 67
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
dear shareholder
following my appointment to the role of chairman in august i am 
pleased to present my ﬁrst corporate governance report for 2014 
having been a member of the board for seven years i have seen 
the company develop considerably over the years adapting to 
the changes required at each stage of growth and development 
this year has been a challenging one for the company whilst we 
have grown our backlog to a record level of us189 billion the 
rephasing of certain ﬁeld development activities under existing 
contracts and lower expectations on the delivery of some key 
projects has resulted in us having to issue two proﬁts’ warnings 
the ﬁrst in may revising our earnings’ guidance for 2014 and the 
second in november for 2015 the second warning gave rise 
to a sharp drop in our share price ultimately resulting in our exit 
from the ftse 100 in december our difﬁculties are not entirely 
divorced from the current external environment but nevertheless 
three projects in particular played a signiﬁcant part in our poorer 
than anticipated performance and management is questioning 
how it might have executed these projects more effectively 
at the start of 2015 a lessons learned review was conducted 
to understand better some of the issues highlighted from 
key projects
over the last few years the development of the company’s 
governance framework has been extremely important and 
throughout this report there are examples of how we are 
endeavouring to attain our corporate goals whilst underpinning our 
core values and building on our strategy as we look to the future 
board changes
following norman murray’s departure from the board in august 
for compassionate reasons the nominations committee took 
the opportunity to review and restructure some of our committee 
memberships further details are set out in the respective reports 
on pages 82 to 112
i am pleased to report that after a detailed search process we 
will announce the appointment of matthias bichsel as a non
executive director on 25 february 2015 matthias will subject to 
shareholder approval join the board in may 2015 and the board 
looks forward to working with him further details are set out  
on page 83
board effectiveness
at the end of 2013 an externally facilitated evaluation was carried 
out by sheena crane the observations received as a result 
of this process are detailed on page 79 this year i conducted 
individual onetoone interviews with each member of the board 
which focused on key themes and recommendations using the 
feedback received from last year’s evaluation the outcome of 
these interviews will be presented in next year’s report 
governance
as chairman it is my responsibility to provide our board with the 
opportunity to consider all governance developments as they 
impact the company and for ensuring that the directors receive 
appropriate training on relevant issues whilst recent statutory 
changes introduced within the uk over the last few years do 
not technically apply to petrofac as a jersey company we have 
where practicable endeavoured to comply voluntarily with 
recommended changes it is our view that greater accountability 
and enhanced disclosure improves stakeholder engagement and 
will ultimately promote an overall better governance structure for 
all companies it is my view that the company has maintained 
effective governance procedures throughout the year
priorities for 2015
as we head into 2015 the board’s primary focus is on execution 
both in terms of strategic implementation and operational delivery 
together with management the board will ensure that project 
delivery and risk management remain key priorities as we look 
towards an unpredictable industry environment attention will 
continue on succession planning throughout the organisation to 
ensure we have the right people in the right roles thereby allowing 
us to continue our goal of striving for operational excellence
rijnhard van tets
chairman
24 february 2015 
following my appointment to 
the role of chairman in august 
i am pleased to present my 
ﬁrst corporate governance 
report for 2014 68
petrofac 
annual report and accounts 2014
directors’ information
1 rijnhard van tets
nonexecutive chairman
appointed may 2007 as senior 
independent director in may 2011  
and as chairman from august 2014
board committees
chairman of the 
nominations committee
key strengths
extensive ﬁnancial background with 
solid international board and senior 
management experience achieved from 
serving on various company boards  
and advisory trusts 
experience
general partner of laaken asset 
management nv he advised the 
managing board of abn amro between 
2002 and 2007 having previously served 
as a managing board member for 12 years 
at abn amro his roles included that of 
chairman of the wholesale clients and 
investment banking group
external appointments
nonexecutive chairman euronext 
amsterdam nv and euronext nv and 
nonexecutive director of bnp paribas 
obam nv
2 ayman asfari
group chief executive
appointed january 2002
board committees
member of the nominations committee
key strengths
distinguished record with strong 
operational leadership skills 
clear strategic vision with an 
entrepreneurial track record 
international focus extensive business 
development skills and a wealth of oil 
industry knowledge
experience
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 md of a 
major civil and mechanical construction 
business in oman
external appointment
fellow of the royal academy of 
engineering founder and chairman 
of the asfari foundation member of 
the board of trustees of the american 
university of beirut and the senior  
panel of advisors of chatham house
3 marwan chedid
chief executive engineering 
construction operations  
and maintenance
appointed january 2012
board committees
none
key strengths
thorough knowledge of the oil 
and gas sector and contracting 
environments solid commercial 
operational and engineering experience 
excellent understanding of growing 
a business
experience
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 the daytoday responsibility for the 
successful delivery of overall operations 
in 2009 he became managing director 
of engineering  construction ventures 
external appointments
member of the board of trustees of the 
university of balamand
4 tim weller
chief financial officer
appointed october 2011
board committees
none
key strengths
wideranging ﬁnancial management 
experience strategic and ﬁnancial 
planning cost control and capital 
efﬁciencies external stakeholder 
communications and management 
and experience of major 
systems implementation
experience
joined petrofac in september 2011 from 
cable  wireless worldwide where he 
had been chief ﬁnancial ofﬁcer between 
may 2010 and july 2011 fellow of the 
institute of chartered accountants in 
england and wales with a degree in 
engineering science started his career 
with kpmg eventually becoming a 
partner in kpmg’s infrastructure 
business unit previously held chief 
ﬁnancial ofﬁcer roles with rwe thames 
water limited and innogy holdings plc 
now rwe npower holdings plc and 
until may 2010 was chief ﬁnancial ofﬁcer 
at united utilities group plc served  
as a nonexecutive director of bbc 
worldwide until march 2013
external appointments
nonexecutive director of the carbon 
trust and g4s plc
5 thomas thune andersen
senior independent director
appointed may 2010 and as senior 
independent director from august 2014
board committees
chairman of the remuneration 
committee member of the audit and 
nominations committees
key strengths
wideranging international experience 
with broad knowledge of the energy 
industry and markets proven track 
record executing growth strategies and 
mobilising and developing organisations 
hse experience extensive knowledge 
at board and senior management 
level from both an executive and 
nonexecutive standpoint
experience
spent 32 years at the ap møller
mærsk group with an international 
career ending as ceo and president 
of mærsk’s oil and gas company 
served on mærsk’s main board and its 
executive committee from 2005 to 2009 
was a nonexecutive director of sse 
plc until july 2014 since 2009 has had 
a board portfolio in companies in the 
energy and critical infrastructure sectors
external appointments
chairman of the lloyd’s register group 
and board of trustees for the lloyds 
foundation chairman of deepocean 
group and of dong energy as 
vice chairman of vkr holding
1
2 5 3
4 69
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
6 stefano cao
nonexecutive director
appointed may 2010
board committees
chairman of the board risk committee 
member of the nominations and 
remuneration committees
key strengths
strong international business experience 
broad knowledge of energy industry 
signiﬁcant knowledge of technical and 
commercial activities both as operator 
and contractor
experience
has 32 years’ experience in the oil and 
gas industry from february 2009 to 
july 2012 served as ceo of sintonia 
sa a holding company investing in 
infrastructure assets such as toll roads 
and airports between 2000 and 2008 
was chief operating ofﬁcer of eni’s 
exploration and production division 
spent 24 years at saipem spa the 
international oil and gas services group 
where he held a number of senior roles 
including ceo chairman and chief 
operating ofﬁcer in 2013 he joined the 
advisory board of ambienta sgr an 
sme investment company which targets 
the environmental sector 
external appointments
nonexecutive chairman of spig spa 
director of a2a spa autostrade per 
l’italia spa and aeroporti di roma 
spa member of the advisory board 
of ambienta sgr
7 roxanne decyk
nonexecutive director
appointed march 2011
board committees
member of the board risk nominations 
and remuneration committees
key strengths
strong track record in global and 
international government relations 
extensive experience in the energy 
industry and experience leading strategy 
in several industries communications 
sales and marketing knowledge including 
reputation and brand management 
expertise sustainable development 
knowledge broad international human 
resources knowledge
experience
retired from the royal dutch shell 
group in december 2010 having held  
a number of roles over an 11year period 
including head of global government 
affairs and corporate affairs director 
from 2005 to 2009 was a member of 
shell’s executive committee prior to 
joining shell roxanne had various roles 
at amoco corporation and navistar 
international corporation stepped  
down as a director of snapon inc 
in 2014
external appointments
independent director of alliant 
techsystems inc ensco inc and  
digital globe inc
8 kathleen hogenson
nonexecutive director
appointed august 2013
board committees
member of the audit board risk  
and nominations committees
key strengths
30 years’ experience in the oil 
and gas industry with particular 
expertise in reservoir management 
and subsurface engineering 
extensive commercial and strategic 
knowledge and proven operational 
leadership entrepreneurial track  
record and excellent understanding  
of growing a business
experience
president and ceo of zone energy 
llc a company she founded in 2009 
which focuses on the acquisition and 
development of oil and gas properties 
from 2001 to 2007 was ceo of santos 
usa corporation responsible for 
santos americas and europe has held 
a number of senior roles at santos 
ltd unocal corporation and maxus 
energy corporation
external appointments
president and ceo of zone energy 
llc director of parallel petroleum 
llc a member of the advisory 
board of samsung oil  gas usa 
corporation and trustee of the society 
of exploration geophysicists
9 rené médori
nonexecutive director
appointed january 2012
board committees
chairman of the audit committee 
member of the board risk and 
nominations committees
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
experience
finance director of anglo american plc 
a position he has held since september 
2005 from june 2000 to may 2005 
was group ﬁnance director of the boc 
group plc holding several ﬁnance 
appointments including ﬁnance director 
of boc’s gases business in the americas 
from 1997 until june 2012 was a non
executive director of sse plc 
external appointments
executive director of anglo american plc 
and nonexecutive director of de beers 
and anglo platinum limited
6 8 9
7 70
petrofac 
annual report and accounts 2014
our leadership team
1 subramanian sarma
managing director  
onshore engineering  
 construction
tenure
joined petrofac in march 1997
responsibility
has held various positions since joining 
including executive vice president 
projects and deputy chief operating 
ofﬁcer of petrofac international as md 
of onshore engineering  construction 
within ecom he is responsible for all our 
onshore epc projects worldwide which 
are delivered predominantly under lump 
sum turnkey commercial models and  
a workforce of over 5000
previous experience
previously worked for kvaerner and 
jacobs in india and oman he has  
more than 30 years’ experience in the  
oil and gas industry and holds an msc  
in chemical engineering from the  
indian institute of technology 
2 yves inbona
managing director  
offshore capital projects
tenure
joined petrofac in june 2012
responsibility
as md of our offshore capital projects 
business within ecom he is responsible 
for turnkey delivery of offshore platforms 
ﬂoaters and pipelines in shallow 
and deepwater worldwide he 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 managed the offshore 
business which was the most proﬁtable 
of all saipem’s business units he speaks 
seven languages and is a graduate 
engineer from ecole centrale de paris
3 craig muir
managing director  
engineering  consulting 
services 
tenure
joined petrofac in february 2012
responsibility
as md of engineering  consulting 
services within ecom his responsibilities 
include the effective management and 
execution of petrofac’s engineering 
service centres across the middle east 
and north africa cis asiapaciﬁc 
europe and the americas as well as our 
subsidiary businesses kw subsea tnei 
and plant asset management
previous experience
previously held the position of executive 
vice president within growth regions 
covering the middle east africa and 
cis for amec based in abu dhabi 
his key focus was the development 
of engineering services and project 
management contracts prior to joining 
amec he held numerous roles working 
in the oilﬁeld services sector including 
positions with kbr brown  root and 
aoc international he has worked in 
the north sea extensively in the middle 
east and in asiapaciﬁc
4 rob jewkes
chief operating officer 
integrated energy services 
tenure
joined petrofac in january 2004 
responsibility
joined petrofac to build a europe
based engineering services business 
in woking uk which now forms part 
of petrofac’s engineering  consulting 
services business in 2009 he was 
appointed md of developments within 
the ies division with responsibility for 
leveraging our engineering and project 
management capability through risk 
service contracts and equity upstream 
investments in january 2014 rob 
assumed the role of chief operating 
ofﬁcer ies with full responsibility for  
the ies business portfolio
previous experience
he has over 35 years’ 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 
he holds a degree in civil engineering 
from the university of western australia
3
4
1
2 71
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
5 gordon east
managing director  
production solutions 
tenure
joined petrofac in july 2006 
responsibility
he 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 he spent more 
than 20 years with conocophillips in 
various leadership and management 
roles throughout the upstream business 
worldwide having previously held non
executive roles in the dti and cabinet 
ofﬁce he has an ma in engineering 
from cambridge university and an msc 
in petroleum engineering from imperial 
college london
6 richard milne
group director commercial 
tenure
joined petrofac in may 2004 
responsibility
he oversees speciﬁc key complex 
projects managing the ﬁnancial and 
risk implications and reviewing the 
achievements of commercial goals 
he also oversees client relationships 
aiming to ensure compliance with and 
successful delivery of proﬁtable projects 
he participates in the group’s risk review 
process and advises on corporate 
matters in addition to signiﬁcant 
commercial issues
previous experience
until december 2014 he held overall 
responsibility for advising on the legal 
and commercial aspects of the group’s 
activities he played a signiﬁcant role 
in petrofac’s successful admission to 
listing on the london stock exchange 
in 2005 and in developing the group’s 
governance compliance and risk 
frameworks prior to joining petrofac 
spent some 15 years in corporate 
ﬁnance which followed a career in the 
insurance brokerage industry he is 
qualiﬁed as a solicitor and graduate  
of oxford university
7 cathy mcnulty
group director of  
human resources
tenure
joined petrofac in february 2014 
responsibility
as group hr director she has overall 
responsibility for advising on all people 
aspects of the business this includes 
creating the people strategy to support 
the company in achieving its strategic 
ambitions focusing on succession 
planning talent management leadership 
development key hires creating a 
performance culture compensation and 
beneﬁts and employee engagement 
she partners with the business 
leaders to build the strengths and 
capabilities we need to meet the ever 
changing demands of our markets 
and environments
previous experience
has more than 25 years’ experience in 
hr and has held a number of senior 
roles most recently with arup the 
international consulting and engineering 
group and hewlett packard 
8 mary hitchon
group director of legal 
secretarial and compliance 
services 
tenure
joined petrofac in october 2005 
responsibility
joining petrofac shortly after ipo 
she had responsibility for the group’s 
governance and listing rule compliance 
framework over the last ten years 
she has built a company secretarial 
department and developed processes 
and procedures commensurate with 
a listed entity she was appointed as 
group director of legal secretarial 
and compliance services in january 
2015 and now has responsibility for 
all key aspects of legal regulatory 
and governance compliance across 
the group
previous experience
a fellow of the institute of chartered 
secretaries with more than 20 years’ 
experience in a uk listed environment 
previously worked at tbi plc the axa 
group and savills plc
5 7
8 6 72
petrofac 
annual report and accounts 2014
corporate governance continued
leadership
what is our approach to governance
with a premium listing on the london stock exchange petrofac is 
required under the uk listing rules to comply with the provisions 
of the 2012 uk corporate governance code uk code copies 
of which are publicly available at wwwfrcorguk the uk code 
sets out 18 main principles of good governance in relation to 
leadership effectiveness accountability remuneration and 
relations with shareholders the uk code also requires the board 
to acknowledge its responsibility for ensuring the annual report 
when taken as a whole is fair balanced and understandable  
so that shareholders are provided with the necessary information 
to assess company performance and strategy this report 
including the reports from the nominations audit board risk  
and remuneration committees describes how the company  
has applied each of these principles as set out in sections  
a to e of the uk code during the period under review 
the company’s auditors ernst  young llp ey are required  
to review whether or not the corporate governance report reﬂects 
the company’s compliance with the provisions of the uk code 
speciﬁed for their review by the ukla listing rules and to 
report if it does not reﬂect such compliance no such report has 
been made
during the year the frc issued an updated uk governance 
code which will apply to accounting periods commencing on or 
after 1 october 2014 the company will report formally on the 
adoption of the updated principles in next year’s report 
what is the role of the board
the uk companies act 2006 sets out a number of general 
duties by which all directors should comply and although as a 
jersey incorporated company we do not have to comply with 
this legislation we believe each of our directors must act in 
good faith to promote the longterm success of the company 
for the beneﬁt of our stakeholders as a unitary board each 
of our directors shares equal responsibility for decisions taken 
with directors being collectively responsible for the strategic 
direction of the company and we believe they are able to work 
together in an atmosphere of openness trust and mutual 
respect our board has been structured to ensure that no single 
individual can dominate the decisionmaking processes of the 
board and we feel that having an effective working relationship 
between our executive and nonexecutive directors provides a 
robust framework which is essential for the progression of the 
company’s strategic aims 
who is on our board
at the date of this report following the departure of andy inglis 
on 28 february 2014 and norman murray on 22 august 2014 we 
have nine directors on the board comprising ﬁve nonexecutive 
directors three executive directors and me as chairman as set 
out in the table below
name position nationality
rijnhard van tets chairman
thomas thune andersen senior independent director
stefano cao nonexecutive director
roxanne decyk nonexecutive director
kathleen hogenson nonexecutive director
rené médori nonexecutive director
ayman asfari
1
group chief executive
marwan chedid chief executive ecom
tim weller chief financial ofﬁcer
1 mr asfari is a british citizen however he is syrian born and has 
dual nationality 
our directors are drawn from across the world and have varied 
career histories with no single type of person dominating the 
board which we believe is essential to safeguard the longterm 
interests of our shareholders considerable effort has been taken 
to ensure our board has the right balance of skills diversity 
and industry expertise and we are fortunate in that many of 
our directors bring a great deal of experience in the oil and gas 
industry our nonexecutive directors are encouraged to share 
their skills and experience and each is wellpositioned to support 
management while providing constructive challenge the board 
considers all nonexecutive directors to be independent in 
judgement and character and free from any relationship or 
circumstance which is likely to prejudice or could appear to 
prejudice their judgement each was appointed through an 
impartial recruitment process and none has any other connection 
with the company full biographies of each of our directors in 
ofﬁce at year end are shown on pages 68 and 69 and are also 
included in the 2015 notice of annual general meeting  73
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
what should our board be doing
the board has a schedule of matters reserved to it for 
formal decision a copy of which is available on our website 
www petrofaccom while we recognise that there are a number 
of topics for which all boards should take responsibility in support 
of strategic priorities the board concentrated on a number of key 
areas during the year we set out below how we believe either 
directly or through our committees we have concentrated on 
these areas with due regard to our key values
this year the agenda focused on a number of key areas in 
support of the company’s strategic objectives which were 
underpinned by our core values
strategy – discussions on the company’s strategic direction 
including resource planning across the group and the ongoing 
monitoring of company strategy the risks and opportunities 
associated with our ocp business and delivery of the petrofac 
jsd6000 vessel were reviewed and we also gave considerable 
consideration to the refocusing of the ies division and its 
alignment with the ecom business
financial reporting and ﬁnancing arrangements – focus given to 
the company’s reporting obligations consideration was given to 
funding arrangements including eca ﬁnancing a twoyear term 
loan and the creation of the petrofirst vehicle to respond to the 
changing needs and requirements of the business
succession planning – following the departure of two directors 
during the year consideration was given to board composition 
and succession planning arrangements time was spent on 
talent and succession review of all senior roles throughout the 
organisation focusing on key leadership positions
risk management – increased monitoring of key risks across 
the group maintenance and development of the board risk 
assurance oversight 
health safety and security matters – annual review of the 
group’s hsseia policies and approval of the hsseia plan for 
2014 particular focus was given to security arrangements in the 
mena region
it oversight – discussed cyber security matters to understand 
the key risks and threats to the business reviewed the 
standardisation of it infrastructure and the removal of legacy 
systems across the group which will ultimately enable greater 
streamlining of processes better data integrity between functions 
and business units thereby increasing our ability to report against 
groupwide kpis 
shareholder engagement – details of our shareholder 
engagement during the year are set out on page 81
crisis management planning – focus was given to crisis 
management planning testing the group’s preparedness for 
responding to multiple emergenciescrises and understanding 
the role of the board in the event of an emergencycrisis 
new project approvals – transactions previously approved by 
the board and announced during the year included knpc 
clean fuels project mina abdulla mabi reﬁnery in kuwait 
contract value us37 billion koc gathering centre in kuwait 
us700 million khazzan central processing facility in oman 
us12 billion reggane north development project in algeria 
contract value us970 million an epcc contract on a reﬁnery 
project in malaysia contract value us500 million 
further details relating to our projects  
can be found on pages 33 to 43
strategy
succession 
planning
shareholder  
sentiment 
engagement
health and 
safety 
matters
new project 
approvals
crisis 
management
it oversight 
including 
cyber security
risk 
assurance 
oversight
financial 
reporting and 
ﬁnancing 
arrangements
safe
ethical
 innovative
responsive
cost conscious
board 
focus
quality and
deliver
driven to 74
petrofac 
annual report and accounts 2014
corporate governance continued
how is the board organised
as recommended by the uk code the company has clearly 
deﬁned areas of responsibility as chairman i am responsible 
for leading the board and ensuring its effectiveness whilst 
maintaining a clear structure that permits the board to 
challenge and support management it is very 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 sid are of particular importance as 
these two individuals represent the views of management and 
nonexecutive directors respectively ayman asfari as group 
chief executive is responsible for the daytoday management 
of the group and for the design and execution of our strategy 
ayman is supported by his senior management team whose 
details are outlined on pages 70 and 71 thomas thune andersen 
succeeded me as senior independent director in august 2014 
he is available to shareholders to answer any questions or 
concerns which cannot be addressed by me or ayman and 
is also available to marshal the opinions and views of the non
executive directors as was seen during the chairmanship 
changes in 2014
i hold regular private meetings with ayman and we will often 
discuss matters before and after they are considered at board 
meetings in order that we can reach a mutual understanding 
of each other’s views especially in matters where we may not 
initially be in agreement i also maintain regular contact with 
thomas between our scheduled board meetings and believe that 
i am equally informed about the views of both management and 
nonexecutive directors time is also set aside at each meeting 
for me to meet with the nonexecutive directors without the 
presence of management all of these meetings provide insight 
which assists me in two ways i am better able to set the agenda 
for board meetings and i can ensure that all directors contribute 
at our meetings through their individual and collective experience 
challenge and support 
mary hitchon continues to act as secretary to the board 
notwithstanding that her role and job title have changed during the 
year one of her key roles is to advise on governance matters so that 
the governance and effectiveness of the board the committees and 
our individual directors can be enhanced the responsibilities for the 
roles of the group chief executive chairman and that of the senior 
independent director and group director of legal secretarial and 
compliance services are shown in the table below
chairman
 lead the board
 facilitate the effective contribution of all directors
 ensure effective communication with shareholders
 ensure effective communication ﬂows between directors
 ensure effective board governance
senior independent director
 acts as a sounding board and conﬁdante to the chairman
 available to shareholders to answer questions which cannot 
be addressed by chairman or group chief executive 
 will chair the board if chairman is unavailable and will chair 
the nominations committee when considering succession  
to the role of chairman of the board
 will meet with other directors to appraise the chairman’s 
performance and on such other occasions as 
deemed appropriate
 acts as intermediary for other independent directors
effective division of responsibilities
group chief executive
 implement strategy and objectives
 develop manageable goals and priorities
 lead and motivate the management teams
 develop proposals to present to the board on all areas 
reserved for its judgement
 develop group policies for approval by the board  
and ensure implementation
group director of legal secretarial  
and compliance services 
 acts as secretary to the board and its committees
 assists in and coordinates the board evaluation process
 ensures the board is kept informed and is consulted on all 
matters reserved to it and that papers and other information 
are delivered in a timely fashion
 ensures the board is kept informed on governance matters 
providing advice through the chairman
 available to individual directors in respect of board 
procedures and provides general support and advice 75
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
the board is assisted by four committees 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 with the minutes of all committee meetings 
circulated to the board when appropriate individual reports from 
each committee chairman for 2014 are provided on pages 82 
to 112 in addition to the four board committees the company 
has a number of executive management committees which are 
involved in the daytoday operational management of petrofac 
these have been established to consider various issues and 
matters for recommendation to the board and its committees 
as set out in the diagram below 
who attends board meetings
to enhance their understanding of the business and to see the 
implementation of agreed strategy in action the board invite 
operational and functional management to attend meetings 
throughout the year during 2014 updates were received 
from the functional heads of hsseia hr it group risk 
security compliance group tax treasury external affairs and 
strategy in addition updates were provided from operational 
management one and two tiers below director level in each of 
the business locations visited by the board we believe giving 
senior management the opportunity to present to the board as 
well as meet the directors informally is valuable for their personal 
development and moreover this interaction helps directors gain  
a deeper understanding of the company at both a corporate  
and local level 
how often does our board meet
the board meets facetoface at least six times a year at 
scheduled meetings held over a twoday period the board also 
meets on an ad hoc telephonic basis when items of business 
arise which cannot be held over until the next planned meeting 
corporate structureframework
audit committee
monitors the integrity of the company’s 
ﬁnancial statements and reviews ﬁnancial 
and regulatory compliance and controls
committee report on pages 84 to 89
shareholders
board risk committee
oversees the group’s risk management 
and internal control processes for  
nonﬁnancial matters
committee report on pages 90 to 95
remuneration committee
agrees remuneration policy and sets 
individual compensation levels for  
members of senior management
committee report on pages 96 to 112
nominations committee
takes primary responsibility for succession 
planning director selection and 
board composition
committee report on pages 82 and 83
executive  
committee
chief executive 
 committee
disclosure  
committee
group risk  
committee
treasury  
committee
guarantee  
committee
board
elect the  
external auditors
ongoing 
dialogue
responsible for the communication 
and implementation of decisions 
administrative matters and matters 
for recommendation to the board  
and its committees
elect the  
directors
daytoday operational management 
implement strategic decisions
take decisions of a strategic nature
 
nonexecutive 
 
executive and nonexecutive 
 
executive 76
petrofac 
annual report and accounts 2014
corporate governance continued
dedicated strategy days as well as a site visit also form part  
of our annual programme of events
where does our board meet
petrofac limited was incorporated in jersey under the companies 
jersey law 1991 and although board meetings are held at a 
variety of locations at least half are held in jersey we believe that 
meetings held outside of jersey allow the board to gain a wider 
understanding of petrofac its people its customers its suppliers 
and its partners the board therefore visits our largest ofﬁce and 
the centre of our onshore engineering  construction business 
in sharjah each year and 2014 was no exception during this visit 
directors met with around 50 members of our local management 
team from oec ocp and ecs as well as having lunch with  
a group of graduates from the petrofac academy in october  
a site visit was held in abu dhabi – further details are set out on 
page 77 and in november the board meeting coincided with 
the company’s leadership conference giving the directors the 
opportunity to meet with nominees for our eve awards 
details of director attendance during the year and eligibility
name
physical board  
meetings 
attended
adhoc telephonic 
board meetings – 
usually held at 
short notice 
and attendance 
must take place
 outside of uk
5
strategy 
days
rijnhard van tets
1
6 6 22 2
thomas thune andersen 6 6 12 2
stefano cao 6 6 32 2
roxanne decyk 6 6 32 2
kathleen hogenson
2
5 6 32 2
rené médori 6 6 02 2
ayman asfari 6 6 02 2
marwan chedid 6 6 32 2
tim weller 6 6 22 2
former directors
norman murray
3
4 4 11 1
andy inglis
4
1 2 00 0
1 mr van tets became chairman on 22 august 2014
2 ms hogenson was unable to attend one meeting during the year  
due to an unforeseen family emergency
3 mr murray stepped down from the board on 22 august 2014 
4 mr inglis stepped down from the board on 28 february 2014
5 directors may join meetings in an advisory capacity and on such 
occasions are not included in the quorum of the meeting
figures in brackets are meetings eligible to attend those not in brackets 
are meetings attended
as at the date of this report
board skill set
2014
oil and gas experience 78
engineering 56
finance 33
international experience 100
regulatory and governance 56
hse 67
operationalstrategic management 100
45 years
12 years
1
4
2
2
23 years
five years or more
board tenure
executive directors
nonexecutive chairman
nonexecutive directors
executive and nonexecutive director balance
1
5
3
uk
continental europe
middle east
us
nationality of board members
2
1
2
4
north  central
america
asia
middle east and
north africa
europe
cultural diversity of the group
2
42
42
14 financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 77
 we believe holding at 
least one board meeting 
where petrofac has 
signiﬁcant operations  
gives the board an 
invaluable insight into  
the business
board visit to abu dhabi 
each year the board will hold at least one 
meeting in a location where petrofac has 
signiﬁcant operations we believe this gives 
the board an invaluable insight into the 
business the opportunity to gain a deeper 
understanding of our operations and to 
recognise some of the challenges being  
faced by our employees in what can 
sometimes be difﬁcult and remote locations 
in october a visit fully supported by our 
client adco was arranged to our bab 
habshan and bab compression sites in  
abu dhabi uae as well as viewing the 
progress of the construction the board 
received updates and presentations from 
local management on all signiﬁcant live 
projects in abu dhabi including upper  
zakum and sarb 3 as well as the wider  
middle eastern landscape and future 
growth opportunities 
over the course of the twoday visit the 
board also had the opportunity to meet with 
petrofac emirates employees as well as a 
number of key stakeholders from the abu 
dhabi business community at a petrofac 
hosted dinner which included his highness 
sheikh nahyan bin mubarak al nahyan 
minister of culture youth and social 
development for the united arab emirates 78
petrofac 
annual report and accounts 2014
effectiveness
how do we get the best out of our board
time and effort is invested when appointing new board members 
to ensure the right balance and mix of directors can be obtained 
directors are encouraged to be open and forthright in their 
approach with active debate encouraged during meetings 
before any board decisions are taken we believe this boardroom 
culture helps to forge strong and open working relationships while 
enabling our directors to engage fully with the company and 
allowing them to make their best possible contribution 
set out below are some of the practical measures we take  
to support our directors
our selection process
the company has a formal rigorous and transparent 
selection procedure for the appointment of new directors 
board composition is considered very carefully by the 
nominations committee to ensure the right balance of individuals 
taking into account experience skills and diversity is achieved 
care is taken to establish the existing commitments of all 
nonexecutive directors who on appointment are each made 
aware of the need to allocate sufﬁcient time to the company 
to discharge their responsibilities effectively in the event that a 
director’s external commitments change once appointed they are 
required to make the board aware as soon as practicable so that 
any potential conﬂict of interest time commitment challenge or 
residency status issue can be considered 
a report on the activities of the nominations committee  
is set out on page 82 and 83
information provided
whilst some agenda items are brought to the board on the  
basis of a 6 or 12month rolling programme such as strategy  
the forthcoming year’s budget or hsseia plan other reports 
such as the operational and ﬁnancial reports from the group  
chief executive and chief financial ofﬁcer are standing items 
which are reviewed and discussed at each meeting 
generally however a tailored approach to developing board 
agendas is adopted with the majority of each agenda comprising 
nonrecurring items such as strategic matters or project speciﬁc 
and investment related opportunities we believe this allows 
directors to engage more effectively and encourages scrutiny  
and constructive debate during each meeting
as part of our commitment to best practice and as recommended 
by the uk code we endeavour to dispatch papers in a timely 
manner usually one week prior to each meeting papers are 
provided electronically through a dedicated secure application 
giving directors instant access to papers 
director development and training
we maintain training records for all directors and these are reviewed 
during the evaluation process while we do not run an extensive 
programme of ‘onesizeﬁts all’ training directors are encouraged 
to pursue an individually tailored development programme 
throughout the year comprising a mixture of formal seminars led 
by external advisers ofﬁce and site visits as well as governance 
and health and safety training during 2014 various ofﬁce and site 
visits were accommodated and an externally facilitated training 
workshop entitled “a price worth paying” was provided to the 
audit committee members and attendees in november 
following my appointment as chairman  
a detailed and tailored programme was 
initiated to ensure i had a full 
understanding of the role and my new 
responsibilities this programme included 
meeting individually with senior 
management for each group function 
visiting our ofﬁces in london aberdeen 
woking mexico and sharjah and meeting 
both management and project teams 
meeting with some of our signiﬁcant 
shareholders so that i could understand 
their concerns meeting with our 
auditors external lawyers and brokers 
and attending meetings and seminars 
organised by regulatory bodies 
in addition to visiting our ofﬁces 
i believed it was essential for me to 
see some of our operations ﬁrst hand 
i visited the bab habshan and bab 
compression projects in abu dhabi with 
the rest of the board in october 2014 
as well as attending two further site 
visits by myself 
i wanted to visit one of our offshore 
installations and consequently 
underwent compulsory offshore survival 
training at our training centre in 
aberdeen in november without which  
i would have been unable to travel 
offshore i took the earliest opportunity 
to visit an offshore installation the 
forties alpha platform in the ukcs 
i was able to experience ﬁrsthand some 
of the challenges faced when living and 
working 180km off the coast of aberdeen 
– including sharing a room with one of 
our regular offshore workers as we 
arrived on the platform late in the day 
on the visit i was given a tour of the 
platform by senior management meeting 
both employees and client representatives 
my second trip was to the laggan
tormore project on the shetland islands 
as reported on page 11 this has been a 
difﬁcult project and the subject of much 
recent board debate it was therefore 
very helpful to visit the site in order to 
understand better some of the 
challenges being faced
my schedule of meetings and visits since 
my appointment has been extensive 
it has required me to make a substantial 
time commitment with the company 
providing signiﬁcant managerial and 
logistical support to make these trips 
happen nevertheless i think the 
programme of visits has been 
worthwhile it has given me a better 
understanding of the many daytoday 
operational challenges faced by our 
employees and management teams and 
this insight is of enormous value back  
in the boardroom
corporate governance continued
chairman induction programme 79
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
this workshop covered risk and governance matters and sought 
to highlight the potentially disastrous consequences when a board 
does not discharge its responsibilities with appropriate curiosity and 
persistence over the course of this year over 200 hours of 
training were recorded 
reappointment of directors
in line with the uk code all directors seek reappointment by 
shareholders at each annual general meeting agm in addition 
the terms and conditions of appointment of all directors are 
available for inspection by any person at our registered ofﬁce in 
jersey and at our corporate services ofﬁce in london they are 
also made available for inspection during the 30 minutes prior  
to the start of our agm each year
our induction programme
while we had no new appointments in 2014 individually tailored 
induction programmes are prepared for each new appointment 
to the board we ﬁnd this is the best approach as it allows the 
company to account for differing requirements and needs 
concentrating on key focus areas to ensure the relevant director 
is fully prepared for their new role all new appointees spend time 
with each of the executive directors and are encouraged to meet 
with senior members of operational and functional management 
to gain a deeper understanding of the company they also attend 
a compulsory presentation led by freshﬁelds on the role and 
responsibilities of being a uklisted company director 
evaluation of board effectiveness
the board understands the beneﬁts of annual evaluations  
both for the board as a whole its committees and for directors 
on an individual basis and believes they can provide a 
valuable opportunity for continuous improvement at the end 
of 2013 the board engaged the services of sheena crane to 
conduct an externally facilitated evaluation ms crane is an 
independent facilitator and has no other connection to the group 
the evaluation involved attendance at board and committee 
meetings with full access to all papers as well as onetoone 
interviews with each director the group director of legal and 
commercial affairs and the secretary to the board the feedback 
from the evaluation was reviewed by norman murray our previous 
chairman and the full report setting out her observations and 
recommendations was presented to the board in february 2014 
the review observed that the board works well as a group and 
the level of constructive challenge along with the openness of the 
contribution from individual directors results in a positive dynamic at 
each meeting directors reported to ms crane that they felt that there 
had been a marked improvement in the challenges being raised by 
the audit and board risk committees and this was considered to be 
indicative of improved risk management practices across the group 
as well as these positive observations the evaluation identiﬁed 
a number of areas where the board might improve and 
these include
 improved oversight of ongoing project execution
 better ﬁnancial risk assessments in relation to projects subject  
to board approval 
 more regular and rigorous updates on strategy execution
 an increased focus on succession planning for both the board 
and management
 the development of nonﬁnancial key performance indicators 
as a board we recognise that this is a continuous process and for 
20142015 onetoone interviews with each director have been 
held by me to recognise individual performance and contribution 
as well as giving consideration to the principal ﬁndings and 
recommendations from the external evaluation process and 
identifying further development opportunities this will ensure  
we continue to have an effective board thomas thune andersen 
as sid will conduct an evaluation with me in my role as chairman 
later in 2015
dealing with potential conﬂicts of interest
as far as is possible the other directors and i endeavour to 
avoid conﬂicts of interest with the company however potential 
conﬂicts can occasionally arise during a term of appointment and 
accordingly we have processes and procedures in place that 
require directors to identify and declare any actual or potential 
conﬂicts of interest whether matterspeciﬁc or situational 
such notiﬁcations are required to be made by the director 
concerned prior to or at a board meeting and all directors have a 
duty to update the whole board of any changes in circumstances 
in accordance with the company’s articles of association the 
board may authorise potential conﬂicts which can be limited in 
scope during the year all conﬂict management procedures were 
adhered to and operated effectively with most potential conﬂicts 
quickly resolved or having no impact on the running of the board 
in august 2014 thomas thune andersen was appointed 
chairman of dong energy as dong dong is a junior member 
of the client consortium on our laggantormore project 
prior to being appointed to dong thomas raised the potential 
appointment with the chairman who having consulted with 
ayman agreed that any potential conﬂict could be appropriately 
managed and that the appointment would not therefore 
compromise thomas’s effectiveness as a director of petrofac 
following thomas’ appointment to the dong board the board 
has for commercial reasons increased its level of ongoing 
review of the laggantormore contract as a result thomas 
has absented himself from all board and committee discussions 
relating to this project the secretary has not sent any papers on 
the matter to him and minutes circulated have been redacted 
as detailed on page 7  norman very unexpectedly stepped 
down from our board as chairman in august as sid i would 
have ordinarily led the process to identify a potential successor 
however to avoid any conﬂict of interest thomas thune andersen 
was appointed by the board to lead the exercise
deeds of indemnity
in accordance with our articles of association and to the 
maximum extent permitted by jersey law all directors and 
ofﬁcers of petrofac limited are provided with deeds of indemnity 
in respect of liabilities which may be incurred as a result of their 
ofﬁce in addition petrofac has appropriate insurance coverage 
regarding 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 80
petrofac 
annual report and accounts 2014
accountability 
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 these are 
considered by reference to the work undertaken during the year 
by both the audit and board risk committees in addition to the 
regular reports received from members of management with 
responsibility for the group’s material enterprise risks to facilitate 
the yearend process the audit and board risk committees 
held a joint meeting in order to provide the board with formal 
assurance on the robustness integrity and effectiveness of the 
group’s ﬁnancial controls and the group’s risk management 
systems in relation to the group’s enterprise risks and project 
and investment risks – thus enabling 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 2014 and as at the date 
when the 2014 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
identifying petrofac’s signiﬁcant risks
the board risk committee receives a key risk report krr 
which identiﬁes the principal risks facing the company and 
evaluates the likelihood of their incidence and their impact on 
the group if they were to materialise the board risk committee 
assesses the availability and likely effectiveness of the actions that 
are planned to manage and mitigate these risks in order to avoid 
or reduce the impact of the underlying risk in terms of process 
risks which appear in the krr are identiﬁed managed and 
reported at ﬁve primary levels within the group as set out in the 
diagram below at the lowest level level 5 we identify operational 
risks relevant geographical regional or portfolio exposures are 
introduced at level 4 risks to speciﬁc business service lines 
appear at level 3 tactical risks are introduced at divisional level 
2 and ﬁnally risks to the delivery of our strategy are identiﬁed and 
reviewed at level 1 – group level the krr consolidates each  
of these exposures 
further details on the principal risks can be found on pages 26 to 29
the process of identiﬁcation is both topdown and bottom
up so that management is able to review and challenge at 
each level in addition to which management at all levels of 
the hierarchy review and address the risks for which they are 
organisationally responsible
delivery of our goals 
as detailed within the strategic report petrofac’s strategy and 
business plan set out the group’s priorities which are designed 
to increase shareholder value over the medium to long term 
fiveyear business plans which set ﬁnancial targets for the group 
and incorporate risk analysis as a matter of course are also 
submitted to the board annually for approval the group formally 
measures performance against these strategic goals and ﬁnancial 
targets quarterly with each business unit reporting its operational 
progress monthly at each board meeting ayman provides a 
full update on business operations highlighting and discussing 
any possible impediments to the delivery of our group goals and 
noting all signiﬁcant health safety and security matters 
the board also receives comprehensive ﬁnancial reports from our 
chief financial ofﬁcer thus ensuring the board is kept informed 
of 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 we continue to develop a broader 
set of ﬁnancial and nonﬁnancial key performance indicators which 
we believe should assist us in monitoring delivery of our goals
uk listing rule 984 disclosures
there are no disclosures required to be made under uk listing 
rule 984
remuneration
how do we decide what directors are paid
responsibility for determining the remuneration payable to the 
nonexecutive directors lies with the full board and therefore  
the executive directors and i effectively determine the fees 
payable to nonexecutive directors albeit independent external 
advice is taken these fees are reviewed each year and further 
details are provided on page 111 all remuneration matters 
including terms of appointment for the chairman the executive 
directors and some members of senior management is 
determined by the remuneration committee a detailed report  
on the activities of the remuneration committee is provided  
on pages 96 to 112 
 
group
division
business service line
geographical region
operations 
individual projects and assets
corporate governance continued 81
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
relations with shareholders 
our major shareholders
in accordance with the fca’s disclosure and transparency rules 
dtr 5 as at 31 december 2014 and at the date of this report 
the company had received notiﬁcation of the following material 
interests in voting rights over the company’s issued ordinary 
share capital
number of  
ordinary shares
percentage of  
issued share capital 
ayman asfari and family 62958426 1820
maroun semaan and family 27 545091 7 96
standard life investments ltd 17 327 409 501
shareholder engagements and recognition  
of shareholders’ views
as a board we acknowledge our responsibilities to promote 
the success of petrofac for many of our stakeholders however 
our principal focus is of course our shareholders this year 
shareholder sentiment has inevitably been an area of increased 
discussion given our two proﬁts’ warnings and decline in 
share price
each year our investor relations team schedules a programme  
of meetings with existing and potential shareholders this 
programme includes meetings following the publication of our 
full and half year results presentations to institutional investors 
and research analysts including question and answer sessions 
are also provided these presentations are broadcast live on our 
website and accordingly may be followed by all shareholders 
in addition management also arranges calls or meetings at much 
shorter notice usually following the release of trading updates to 
the market during 2014 over 300 investor meetings were held  
by the investor relations team of which ayman andor tim 
attended approximately 40 
our nonexecutive directors also engage with our shareholders 
as and when required this year we have had several such 
engagements early in the year norman met a number of 
institutional investors to discuss governance matters in general 
and to explain in particular the company’s position in relation 
to our remuneration recruitment policy and the directors’ 
remuneration reporting regulations 2013 thomas undertook a 
formal process of engagement with shareholders in august prior 
to my appointment as chairman and towards the end of the year 
i met in my new role with a number of institutional shareholders 
and some key voting and advisory service providers finally both 
rené and stefano have met with a shareholder adviser who 
speciﬁcally requested a meeting with the chairmen of our audit 
and board risk committees
a brokers’ report is circulated in advance of each board meeting 
and in addition jonathan low our head of investor relations 
circulates brokers’ research notes throughout the year this year 
a representative from one of our corporate brokers jp morgan 
cazenove also attended one of our board meetings to provide a 
thorough update on market sentiment including areas of potential 
shareholder concern in relation to the company 
any director who has undertaken any kind of shareholder 
engagement is encouraged to provide the full board with an 
update at the next scheduled meeting considering all of the 
above i believe that the board is provided with a thorough insight 
into shareholder sentiment 
considerable importance is placed on communications with our 
shareholders whether they are large institutional shareholders or 
private shareholders and accordingly all shareholder documents 
market announcements together with recorded interviews 
are available on our website which we hope encourages 
shareholders to become more informed investors 
we intend to hold an extended presentation with our full year 
results in london on 25 february 2015 to provide an update on 
the group’s strategy and ﬁnancial proﬁle each of our executive 
directors as well as members of senior management will be  
in attendance to answer questions on strategic outlook
our annual general meeting agm
full details of this year’s agm which will be held in london are 
set out in the notice of meeting which accompanies this report 
and which is also available on our website as a matter of good 
practice we will conduct all resolutions on a poll and announce 
the results to the market as soon as possible after the meeting 
all shareholders are invited to attend the company’s agm at 
which they have the opportunity to put questions to the board 
and meet with those directors able to attend shareholders who 
are unable to attend the agm are invited to email questions to 
me in advance at agmquestionspetrofaccom i look forward to 
seeing as many of you as possible this year when my colleagues 
and i will be available to answer your questions
rijnhard van tets
chairman
24 february 2015 82
petrofac 
annual report and accounts 2014
nominations committee report
role of the committee
 regularly reviews the composition and structure of the board 
and its committees
 identiﬁes and recommends for board approval suitable 
candidates to be appointed to the board
 considers succession planning for directors and other senior 
executives and in doing this considers diversity experience 
knowledge and skills
terms of reference
the committee reviewed its terms of reference during the year 
copies are available on our website
membership and attendance at meetings held during 2014
members meetings attended eligible
rijnhard van tets 5 5
norman murray
1
 3 3
thomas thune andersen 5 5
ayman asfari 5 5
stefano cao 5 5
roxanne decyk 5 5
kathleen hogenson
2
4 5
rené médori 5 5
1 norman murray stepped down from the board on 22 august 2014
2 kathleen hogenson was unable to attend one meeting due to an 
unforeseen family emergency
dear shareholder
this has been a very busy year for the committee as it was 
required to devote considerable time and consideration to the 
board’s composition as well as succession planning both at 
board and senior management level 
2014 board changes 
norman murray’s departure from the board for compassionate 
reasons in august was unexpected after three years as 
chairman i would like to extend the board’s thanks to norman 
for his exemplary leadership and signiﬁcant contribution to the 
company and we extend our best wishes to him on notiﬁcation 
from norman of his intentions the committee gave due 
consideration to all necessary governance requirements and 
ensured that a full and detailed process to ﬁnd a successor 
was followed ordinarily as the senior independent director 
sid at the time i would have led that process however given 
that at an early stage the board had expressed the view that i 
should be considered to take over from norman to avoid any 
conﬂict of interest on my part the committee appointed thomas 
thune andersen to conduct an independent review of potential 
successors to ensure that a fair and transparent process was 
followed thomas engaged in a series of discussions with each 
board member myself excluded as well as with our brokers 
lawyers and key institutional shareholders the result was that 
the committee supported my appointment to chairman – a role 
which i was honoured to accept having been on the board since 
2007 and sid since 2011 i felt i already had a good working 
relationship with each of our directors and was aware of many 
of the issues facing the company and the board over the last 
few months however i have had the opportunity to gain a fuller 
understanding of the daytoday operational challenges being 
faced and as a result feel i am able to offer a better informed 
view in boardroom discussions
we announced in last year’s report that andy inglis would 
leave the board with effect from february 2014 following the 
publication of our 2013 ﬁnal results following the announcement 
of his departure rob jewkes assumed the role of chief operating 
ofﬁcer of the ies division with ayman overseeing the strategic 
management of this business 
2014 focus
succession planning continued to be a main focus and this  
year the committee devoted more than 50 of its time on it 
the committee is very aware of its responsibilities in relation  
to board and senior management succession plans to ensure  
that unforeseen changes are managed effectively and  
efﬁciently without disruption to the group’s strategy or  
daytoday operations 
rijnhard van tets
chairman of the nominations committee
board composition
18
succession
planning 55
search for 
directors 15
governance
other 12
how the committee spent its time during the year 2014 83
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
2015 plans 
as part of its remit the committee has responsibility for the 
identiﬁcation and recommendation of prospective directors for 
board approval a formal procedure for selecting and recruiting 
directors is in place and extensive consideration is given to 
identifying the capabilities required of potential candidates taking 
into account the balance of existing skills knowledge experience 
and diversity on the board 
following the departure of both norman and soon roxanne 
from the board we initiated a search for at least one new non
executive director at the end of 2014 working with korn ferry 
an executive search ﬁrm with whom we have no other relationship 
we identiﬁed a number of potential candidates with international 
and relevant industry experience we are now in a position to 
unanimously recommend to shareholders that matthias bichsel 
be appointed to the board at our forthcoming agm matthias has 
over 30 years’ relevant experience most recently as director of 
projects  technology at royal dutch shell plc he brings an 
extensive understanding of the oil and gas industry from a client’s 
perspective in addition to invaluable insight and experience 
of project management the committee plans to review the 
committee structures following his appointment in the meantime 
the committee will continue to look at the possibility of another 
ned appointment in due course and when relevant will provide 
the board with a shortlist of candidates for further consideration 
talent management
we ﬁrmly believe that a talent pipeline is essential for ensuring the 
company’s longterm success and over the past few years hr 
processes have been embedded across the group to assist in 
retaining and developing existing employees while attracting new 
personnel into the organisation our framework for performance 
and talent management allows us to identify clearly critical roles 
and gaps which in turn informs our succession planning process 
where weaknesses or development opportunities are identiﬁed on 
an individual basis action plans and bespoke training opportunities 
have been developed to ensure that highcalibre employees have 
the required skills and knowledge to become our future leaders
rijnhard van tets
chairman of the nominations committee
24 february 2015 
committee structures 
as a result of my new appointment in august the committee 
took the opportunity to review the role of sid as well as the 
composition of our board committees it was agreed by the 
board that thomas thune andersen with four years of board 
service and having broad experience of the uk market as well  
as familiarity with the company’s institutional shareholders having 
led previous consultation exercises in his capacity as chairman  
of the remuneration committee should be appointed as sid with 
immediate effect it was also recommended that in accordance 
with the uk code i would resign as a member of the audit and 
board risk committees although i continue to be invited to 
attend meetings as required details of the current membership 
of each committee are disclosed within the individual 
committee reports 
diversity
details of our current gender diversity statistics are set out below 
at board level we have made good progress over the last few 
years achieving our published target of women on the board 
during the year however roxanne decyk has informed us she will 
be stepping down from the board at the end of our 2015 agm in 
may we wish to thank roxanne for her contribution to the board 
over the last four years and whilst consideration will be given to 
the appointment of another female director our aim will always be 
to appoint the best candidate for the role irrespective of gender 
we fully recognise that across the group we continue to have a 
gender imbalance but we are pleased to report that even though 
engineering remains a predominately maledominated profession 
approximately 21 of our graduate recruits during 2014 were 
female demonstrating our commitment to building diversity from 
the bottom up 
from the boardroom to our graduate intakes we believe that 
diversity is wider than simply gender and as a consequence 
consider that our business beneﬁts greatly from a varied 
employee base of over 80 nationalities and irrespective of 
background or gender we aim to recruit on merit and hire the 
best candidates with the widest range of skills and experience 
following the recent introduction of our groupwide diversity 
and inclusion policy an elearning training module was made 
available to all employees during 2014 it is our aim that the policy 
will ensure equality of opportunity and fairness in all areas of 
employment allowing us to value the diversity of our employees 
while promoting an inclusive culture across our business
gender diversity women as a percentage of the total
board 25
group 13
senior management 10
graduates 21
 excluding the chairman 84
petrofac 
annual report and accounts 2014
audit committee report
rené médori 
chairman of the audit committee
role of the committee 
 monitors the integrity of the company’s ﬁnancial statements 
and reviews signiﬁcant ﬁnancial reporting judgements
 reviews the effectiveness of ﬁnancial compliance controls 
and systems
 monitors the effectiveness of the group’s internal audit 
function and reviews its material ﬁndings
 reviews the effectiveness of the external audit process  
and independence of the external auditors
 approves the remuneration of the external auditors and 
makes recommendations to the board regarding their  
reappointment
 advises the board on whether the annual report 
and accounts taken as a whole is fair balanced 
and understandable
terms of reference
terms of reference setting out the role and responsibilities of 
the audit committee were reviewed during the year and other 
than changes to committee membership no amendments 
were made copies are available on our website 
audit committee priorities for 2015
 continued oversight of ies assets 
 revenue and cost recognition of key contracts
 internal control effectiveness 
 taxation matters in the enhanced global 
reporting environment
 ensure provisions under new corporate governance  
code are met
membership and attendance at meetings held during 2014
members meetings attended eligible
rené médori 3 3
thomas thune andersen 3 3
kathleen hogenson 3 3
rijnhard van tets
1
2 2
1  rijnhard van tets was a member of the committee until 22 august 2014
governanceother 10
code of conduct
whistleblowing 10
internal control systems 25
tax update 7
external audit including
nonaudit services review 17
financial reporting 31
how the committee spent its time during the year 85
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
dear shareholder
as has already been discussed 2014 was difﬁcult for petrofac  
and the committee has been actively engaged in assisting the 
board in how it responds to some of those recent challenges
the committee met formally three times during the year at 
key times within our ﬁnancial reporting cycle arguably the 
most signiﬁcant meeting is held in february each year when 
the committee considers the previous year’s ﬁnancial results 
and the group’s draft ﬁnancial statements in 2014 the board 
decided for the ﬁrst time that this meeting should be a joint 
one between the committee and the board risk committee 
it was believed that this would provide the board with a more 
comprehensive and coherent assessment of the group’s risk 
management framework given the requirement for the board 
to provide assurance on the group’s system of internal controls 
within the annual ﬁnancial statements in february 2015 the audit 
and board risk committees once again held a joint meeting to 
consider the group’s framework of controls comprising ﬁnancial 
operational and compliance controls the committees concluded 
that the group continues to operate a sound system of controls 
and accordingly provided the board with an assessment to 
that effect 
in considering general ﬁnancial reporting matters during the year 
including the 2014 ﬁnancial statements the committee focused 
on how the group accounts for signiﬁcant oec contracts paying 
particular attention to the timing of revenue and cost recognition 
as well as the carrying value ascribed to ies assets particularly 
given the sudden decline in the oil price in the second half of the 
year other matters considered by the committee during the 
course of the year included solvency and going concern matters 
the company’s tax position fraud protection arrangements and 
operational challenges on longterm contracts the committee 
concluded that management had adopted an appropriate 
approach in all signiﬁcant areas noting that several ies assets had 
been impaired as at 31 december 2014 taken as a whole the 
committee considers the annual report and accounts to be fair 
balanced and understandable and provides shareholders with 
the necessary information to assess the group’s performance 
business model and strategy 
all members of the committee are considered by the board 
to be independent nonexecutive directors in compliance with 
the uk code and have a wide range of business experience 
in keeping with best practice following his appointment as 
chairman of the board rijnhard van tets stepped down as a 
member of the committee in august 2014 i wish to express my 
thanks to rijnhard for his contribution to the committee the audit 
partners from ernst  young llp and the head of internal audit 
attend all committee meetings with the chairman group chief 
executive chief financial ofﬁcer and selected members of senior 
management also attending meetings by invitation
as previously noted on page 72 in september 2014 the financial 
reporting council frc published an updated version of the 
uk code together with guidance on risk management internal 
control and related financial and business reporting both of 
these guidance requirements will take effect for ﬁnancial years 
beginning on or after 1 october 2014 the committee is aware of 
the new obligations set out within these reports and plans for the 
adoption of the relevant provisions are in place for ﬁnancial year 
2015 and these will be reported on next year 
rené médori
chairman of the audit committee
24 february 2015 86
petrofac 
annual report and accounts 2014
audit committee report continued
internal audit
the committee is responsible for reviewing and monitoring the 
effectiveness of the group’s internal audit function and ﬁnancial 
controls to assist with this the group head of internal audit 
who is tasked with providing the committee with assurances on 
the adequacy of internal ﬁnancial controls attends each meeting 
in addition the committee also meets with the group head of 
internal audit without any members of the executive management 
team present 
in february the committee considered and approved the 
internal audit plan to be executed over the course of the year 
summary progress reports were provided at each subsequent 
meeting detailing key ﬁndings of the work undertaken by the 
internal audit department the reports highlighted any signiﬁcant 
areas of concern which were then discussed and where required 
action plans to address any matters raised were agreed with 
management during the year necessary amendments to 
the internal audit plan were considered and approved by the 
committee and were usually required in instances where
 the level of risk had increased or decreased signiﬁcantly or
 circumstances within the group had changed or
 speciﬁcally requested by management
following on from the work started in 2013 kpmgforensics 
completed their independent fraud risk assessment fra within 
the oec business further fra exercises by pwc and deloitte 
have now commenced within opo and the ies mexico business 
respectively which aim to understand the major fraud risks which 
may affect each business and to identify any weaknesses in 
our current processes this work will continue throughout 2015 
we believe that these exercises are very timely as during 2014 a 
small number of cases of potential fraud were identiﬁed in different 
parts of the business each of these issues whilst not material in 
the context of the group’s results was brought to the attention 
of the committee with full investigations conducted and ongoing 
during 2015 continued assurance that all appropriate internal 
control changes have been implemented will be sought from 
internal audit 
internal controls
the committee considered the group’s overall system of 
internal controls which are broadly divided according to three 
categories operational effectiveness and efﬁciency reliability 
of ﬁnancial reporting and compliance with applicable laws and 
regulations in accordance with the requirements of the turnbull 
guidance on internal control as the group has grown the risks 
faced have evolved our internal control framework has had to 
adjust accordingly and assurance is now also being provided 
in accordance with the revised coso framework as such 
initiatives necessary to align our methodology for identifying 
evaluating and managing risk were adopted during the course of 
the year major internal control themes were considered at each 
meeting with particular attention given by the committee to any 
weaknesses identiﬁed and need for a systematic approach to be 
taken for managing risk 
activities during the year
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 113 directors 
are responsible for the preparation of group ﬁnancial statements 
in accordance with international financial reporting standards 
ifrs the group has an internal control and risk management 
framework in place which includes policies and procedures to 
ensure that adequate accounting records are maintained and 
transactions are accurately recorded to ensure the company’s 
ﬁnancial reports and communications to the market give a clear 
and balanced assessment of the company’s position in addition 
to the matters considered during the year set out below the 
committee also reviewed the 2014 full year results and this annual 
report and accounts at the beginning of 2015
matters considered and reviewed by the committee 
during the year are summarised in the table below
feb aug nov
financial reporting  
full and halfyear ﬁnancial statements including 
associated announcements
••
consideration of going concern statement liquidity 
review cash ﬂow forecasts and compliance  
with all ﬁnancial reporting requirements
••
the company’s dividend policy including 
consideration of the solvency statement required 
under companies jersey law 1991
••
appropriateness of the company’s  
accounting policies
•
longterm contracting and impairment reports ••
internal controls
internal audit report including the approval  
and monitoring of the 2014 internal audit plan  
and draft 2015 plan 
•••
effectiveness of the internal control framework 
ﬁnancial and nonﬁnancial controls
•
appropriateness of the company’s nonaudit 
services policy
•
details of the group’s related party transactions ••
application of the company’s fraud policy •
the company’s compliance with its tax ﬁling  
and reporting obligations
•
whistleblowing review in relation to matters  
of a ﬁnancial nature
•
consideration of the committee’s terms of reference •
external auditors 
2014 audit plan •
reports regarding assessments and ﬁndings  
in respect of the full and halfyear results
••
letters of representation ••
annual review of independence and effectiveness •
appropriateness of the proposed audit fee for the 
year having regard to the nonaudit services policy
• 87
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
a joint meeting of the committee and the board risk committee 
was held at yearend so that combined formal assurance could 
be given to the board that effective governance risk management 
and control processes were in place as required by the uk code 
this assurance covered all material controls including ﬁnancial 
operational and compliance controls
external auditors
ernst  young llp ey have been the company’s auditors since 
initial listing and provide the committee with reports information 
and advice throughout the year the committee remain satisﬁed 
as to the auditors’ effectiveness and in making this assessment 
had due regard to their expertise and understanding of the group 
their resourcing capabilities independence and objectivity 
annually the committee meets with the auditors without 
management present to discuss any signiﬁcant issues not least 
the conduct of the audit in addition the committee chairman 
has regular contact with the lead audit partner outside of formal 
committee meetings 
each year ey set out their proposed audit approach and 
scope to ensure that the audit is aligned with the committee’s 
expectations this is done with due regard to continuing 
developments within the company such as for 2014 the revenue 
and margin recognition of ecom longterm contracts orders 
placed to commence construction of the petrofac jsd6000 
vessel operational challenges and the ongoing execution of ies 
projects disposals using the petrofirst vehicle and publication 
of the revised earnings guidance in both may and november 
where changes to the audit scope have occurred during the 
year the committee has been encouraged by the auditors’ 
interaction with the committee chairman and management to 
ensure no adverse impact occurs to the overall audit process 
thereby ensuring strong governance processes at yearend a 
report was provided to the committee detailing areas of audit 
risk the ﬁndings of which were reviewed and considered by 
the committee
audit tender
the uk code provides that a listed company should put its 
external audit contract out to public tender at least every ten 
years the committee gave consideration to the reappointment 
of the external auditor during 2014 and decided that it would not 
undertake a formal audit tender during this period an external 
audit ﬁrm is required to rotate the audit partner responsible for 
the group audit every ﬁve years and the company’s current 
audit partner was appointed following the end of the 2012 year
end audit the committee had previously considered adopting 
the published recommendations to tender the audit after the 
end of our current audit partner tenure in 2018 the company 
will actively monitor this area including the proposed changes 
recommended by the eu and competition commission and will 
take any necessary actions where a tender is required ahead of 
our current expectations 
nonaudit services
to safeguard the objectivity of our external auditors and to ensure 
the independence of the audit is not compromised we have a 
nonaudit services policy that sets out the circumstances where 
we may appoint our external auditors to undertake additional non
audit work to ensure compliance with this policy the committee 
regularly reviews the group’s cumulative nonaudit spend and 
furthermore gives prior approval to the appointment of ey should 
the nature or size of the proposed work require it the committee 
is satisﬁed that ey’s objectivity and independence has not been 
affected by any nonaudit work undertaken by them during 
the year
there were no breaches in 2014 of the us300000 threshold 
requiring prior approval by the committee during the year the 
committee reiterated the importance of ensuring the nonaudit 
fee remained below 50 of the total audit fee and the nonaudit 
spend for the year as a percentage of the overall audit fee was 
21 2013 32 the majority of these costs relate largely to 
the use of ey in certain jurisdictions mainly in north africa the 
middle east and central asia to provide advice and incountry 
tax compliance services we feel that given ey’s experience 
their presence in these regions assures us that they are the most 
appropriate provider of this work details of the fees in respect of 
audit and nonaudit related services can be found on page 141 
and in note 4e to the ﬁnancial statements
the nonaudit services policy provides clear deﬁnitions of 
services that our external auditors may and may not provide 
new eu legislation has introduced increased restrictions on audit 
ﬁrms providing certain nonaudit services and the timing of the 
uk adoption of these regulations is being closely monitored 
the committee however considers that the existing policy 
remains appropriate but will revisit the policy once the new 
regime has been formally adopted in the uk the current policy 
a copy of which can be found on the company’s website is 
summarised below
nonaudit services policy
 the external auditors are automatically prohibited from carrying 
out work which might impair their objectivity
  the cfo will seek approval from the committee before 
appointing the external auditors to carry out a piece of nonaudit 
work where
– the fee is above us300000 or
–  total nonaudit fees for the year are approaching 50 of the 
annual audit fee or
–  the external auditors would ordinarily be prohibited from carrying 
out the work under the company’s nonaudit services policy 
but not prohibited under ethical standard 5 and the cfo wants 
to appoint them due to exceptional circumstances
 the cfo may appoint the external auditor to do other types  
of nonaudit work as listed in the policy 88
petrofac 
annual report and accounts 2014
audit committee report continued
signiﬁcant judgements
signiﬁcant judgements considered by the committee during  
the year are set out in the table below
signiﬁcant judgements 
considered by  
the committee how the issue was addressed by the committee
revenue and margin 
recognition on ﬁxed 
price engineering 
procurement 
and construction 
contracts
the committee reviewed the 
reasonableness of judgements made 
regarding the cost to complete estimates 
the timing of recognition of variation 
orders and the adequacy of contingency 
provisions to mitigate contract speciﬁc 
risks for projects signiﬁcantly behind 
schedule consideration was also given 
to the assessments made in relation to 
the recognition of liquidated damage 
provisions and to the impact of certain 
larger contracts being entered into as 
part of consortiums the committee held 
discussions with executive directors and 
received regular internal audit reports into 
the operating effectiveness of internal 
controls relevant to these judgements 
the external auditors challenged 
management on the revenue recognition 
amounts and reported their ﬁndings to the 
committee 
the committee concluded that the timing 
of recognition continues to be in line with 
ifrs requirements although ongoing 
monitoring of the judgements was 
requested as part of the group’s regular 
management reporting
accounting  
for ies contracts
the appropriateness of the accounting 
treatments adopted in respect of the 
subsisting ies contracts was reviewed 
by the committee initial recognition 
and subsequent accounting for these 
ies contracts is an area of focus for the 
external auditor but given that no new ies 
contracts were entered into during 2014 
they addressed this issue as part of their 
work on goodwill and asset impairment 
the committee was content that the 
accounting treatment adopted in respect 
of ies contracts continued to be in line 
with ifrs requirements
signiﬁcant judgements 
considered by  
the committee how the issue was addressed by the committee
goodwill and  
asset impairment 
in response to the volatility in oil prices 
the committee requested management 
to strengthen its impairment testing for 
ies contracts and individual projects 
an initiative which was supported by the 
external auditors ies investment reports 
were presented to the full board twice 
during the year with updates being 
provided to the committee at each 
meeting as part of the half year process 
management conducted an analysis of 
the ies assets and held discussions with 
the external auditor to review the ﬁndings 
it was agreed that greater consistency of 
the methodology used in the impairment 
calculation standardisation of impairment 
valuations built into planning models and 
an enhanced signoff procedure had 
improved the process the impact of the 
negative oil price movement and its effect 
on goodwill and asset impairment testing 
was considered as part of the yearend 
process
oil price volatility the price of brent crude fell substantially 
in the latter part of 2014 the volatility 
in oil and gas prices and the effect 
this may have on ies assets as well as 
future investments in the industry was 
considered by the committee the 
situation will continue to be monitored 
throughout 2015
taxation the tax positions within the group were 
reviewed by the committee to ensure 
that the group’s effective tax rate tax 
provisions and the recognition of deferred 
tax assets continue to be appropriate 
taxation issues were discussed with 
senior management and a report outlining 
key tax issues was reviewed the external 
auditor also reported to the committee on 
the ﬁndings of their audit of the group’s 
tax charge and provisions
signiﬁcant changes in the global tax 
landscape were considered and the 
committee agreed that preparations be 
made to ensure the company will be 
able to respond to the enhanced global 
reporting requirements over the next  
few years 89
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
whistleblowing
the board risk committee has responsibility for the company’s 
whistleblowing policy which includes our speak up programme 
details of which are provided on page 65 however in accordance 
with the company’s code of conduct any alleged breaches of 
this code in connection with ﬁnancial matters are reported to the 
committee during the year a small number of incidents involving 
the override of major internal controls were identiﬁed including 
noncompliance with the code of conduct and these were duly 
reported to the committee discussions were held to outline the 
investigation and actions taken including preventative activities 
required to avoid recurrence 
training
in november a training workshop was facilitated by dechert llp  
and was attended by all committee members in addition to other 
directors executive management and the external audit partner 
the interactive session centred around the ﬁlm ‘a price worth 
paying’ and a wide range of topics were discussed including 
risk management internal controls whistleblowing and fraud 
committee members are also encouraged to attend any relevant 
external seminars run by professional advisers throughout the 
year if it is felt relevant 90
petrofac 
annual report and accounts 2014
board risk committee report
stefano cao 
chairman of the board risk committee
role of the committee 
 recommends risk appetite and delegation of authorities
 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 including insurance provision
 reviews the group’s risk management maturity assessment 
process and ﬁndings
terms of reference
terms of reference setting out the role and responsibilities 
of the board risk committee were reviewed during the year 
and other than changes to committee membership no 
amendments were made copies are available on our website 
membership and attendance at meetings held during 2014
members meetings attended eligible
mr stefano cao chairman 4 4
mr thomas thune andersen
1
3 3
ms roxanne decyk 4 4
ms kathleen hogenson
2
3 4
mr rené médori 4 4
mr rijnhard van tets
3
3 3
1  thomas thune andersen stepped down from the committee on 
22 august 2014
2  kathleen hogenson was unable to attend one meeting due to an 
unforeseen family emergency
3  rijnhard van tets stepped down from the committee on 22 august 2014
governanceother 12
insurance 5
group policies 7
compliance– including 
briberywhistleblowing 14
internal control 
framework 7
health and safety 16
security and travel 10
risk management
framework 29
how the committee spent its time during the year 91
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
dear shareholder
recognising that this has been a tough year for the company and 
one of signiﬁcant change the committee focused its attention on 
further embedding our risk and control frameworks through greater 
systematisation of our risk processes and through deployment 
of the globally recognised 2013 version of the coso internal 
control framework 
2014 may be characterised as a year when many of the beneﬁts of 
the risk initiatives introduced over the past few years started to pay 
dividends but this was unfortunately overtaken by incidences of poor 
risk appraisal processes becoming apparent on three projects two in 
the ukcs laggantormore and greater stella area fpf1 dating back 
to their inceptions in 201011 and ticleni in romania
the committee has drawn together a number of lessons learned from 
these incidents and has identiﬁed the actions required to remedy the 
issues in reviewing and sanctioning future bids we will reinforce the 
rigour necessary in assessing the risk exposures quality of project 
management and resourcing capabilities behind them and renew our 
focus on excellence in execution 
notwithstanding these setbacks the committee believes that there 
has been real progress made in identifying and controlling risk during 
the year and that we will see additional improvement during 2015 
as systems and cultural initiatives continue to embed and mature 
to underpin the company’s longer term sustainability
the director of legal and commercial affairs and group head 
of enterprise risk led the deployment phase of our new petrofac 
enterprise risk management system perms during 2014 
its purpose is to systematise our risk management process with the 
aim of providing an integrated approach to the management of risk 
increasing oversight and promoting increased cultural awareness 
and accountability
the key risk register krr identiﬁes the principal risks facing the 
group together with their mitigating factors the krr is regularly 
reviewed by management as well as the committee to promote active 
engagement informed debate and constructive challenge and to keep 
under review the effectiveness of our decisionmaking processes 
the krr is supported by a number of key risk indicators kris which 
are continuously monitored to help the committee with the oversight 
of risk trends in the light of our current risk appetite
as with all aspects of good governance the effectiveness of risk 
management and control also depends on the individuals responsible 
for operating the systems in order to ensure the appropriate culture 
is in place the committee carried out a risk management maturity 
assessment in 2014 analysis from which will be developed during 
2015 into a number of action plans to encourage and incentivise 
desired behaviours and further increase capabilities so that they are 
embedded at all levels an example of which will be the improved 
awareness of new risks associated with entry into our offshore 
construction operations
whilst the committee has made great strides in developing a 
more systematic and empirical approach to risk management and 
its oversight it has also continued to rely on reports from various 
functional heads as part of the general assurance process our group 
head of compliance group treasurer group director of hsseia 
group head of it and group head of security each provided general 
updates together with deepdives during 2014 the group director of 
hsseia supplemented his general updates to the board with more 
technical presentations to the committee including detailed brieﬁngs 
on integrity assurance and our process safety framework
in response to the uk code’s guidance that the board as a whole 
should take responsibility for risk management the committee is 
supported by the executive directors all of whom make themselves 
available at each meeting to answer any operational matters 
in accordance with best practice rijnhard van tets stepped down 
from the committee following his appointment as chairman in 
august 2014 
looking ahead we will continue to improve our risk governance 
arrangements in accordance with the recently published frc 
guidance on risk management internal control and related 
business and financial reporting which revises integrates and 
replaces previous editions of the turnbull guidance and reﬂects 
changes made to the uk code 
the committee is pleased by the overall progress made this year but 
in the light of events remains vigilant we will concentrate our focus so 
that we discharge our primary responsibilities to identify and manage 
the principal risks to the enterprise and its strategic execution and 
to be assured that effective risk management systems are in place 
throughout the group
stefano cao
chairman of the board risk committee
24 february 2015 92
petrofac 
annual report and accounts 2014
review of the group’s risk management framework
the diagram below sets out petrofac’s enterprise risk management erm framework it encompasses the policies culture organisation 
behaviours processes systems and other aspects of the company that taken together facilitate its effective and efﬁcient operation 
the framework is designed to underpin the company’s longer term sustainability
the framework supports the board to exercise its overall 
responsibilities and to
 regulate the entry of appropriate opportunities and risks into 
the group
 develop our understanding of the most signiﬁcant threats 
and opportunities
 promote active management of risk exposures down to acceptable 
levels and
 assist the group in its achievement of business plan objectives  
and operational performance
the principal aspects of this framework are explained in the 
following sections
enterprise risk management system
petrofac’s new erm system was deployed during 2014 and it will 
continue to be embedded across the group in 2015 its purpose is to 
systematise our risk management process which itself is based upon 
the principles and guidelines of bs iso 310002009 with the aim of 
providing an integrated approach to risk and control and to standardise 
the means of assessing reviewing and reporting on risk and to 
enhance visibility and accountability the system aggregates and 
records risks by type and by exposure under the same framework
key risk register
the key risk register krr identiﬁes those risks that given the 
company’s current position could threaten its business model future 
performance or prospects solvency liquidity reputation or prevent 
us from delivering our strategic objectives the board treats such risks 
as principal risks the krr is the means by which the company’s 
principal risks are reported to the committee and the board for their 
review it includes business ﬁnancial hazard and operational risks 
together with external factors over which the group may have little or 
no direct control the krr is updated on an ongoing basis and looks 
forward over a three year time horizon to identify the
 nature and extent of the risks facing the company
 likelihood of the risks materialising and their potential impact on the 
achievement of business plan objectives
 company’s ability to reduce or control the incidence or impact on the 
business of risks that do materialise 
 aggregate enterprise risk proﬁle and associated key risk indicators 
and therefore the extent to which different categories of risk are 
regarded as acceptable for the company to bear
group’s risk management framework
infrastructure 
 company vision 
and strategy
 company values
 group policies 
and standards
 appetite and 
delegated authorities
 asset integrity framework
 code of conduct
 risk management process
 risk review committees
 global insurance 
programme
 emergency preparedness
risk integration 
 strategic planning
 medium term planning
 prospect phase
 gonogo process
 proposal phase
 design
 procurement
 execution
 operation
 hand over
 management 
support processes
company values and culture
leadership communications and engagement
risk management process
communicate and consult
assurance
risk 
identiﬁcation
risk 
assessment
risk 
treatment
risk 
monitoring
risk 
reporting
enterprise risk management system and other tools
board risk committee report continued 93
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
the krr is designed to provide the committee with clarity around 
ownership accountability and mitigation strategies to promote active 
engagement informed debate and constructive challenge and to  
keep under review the effectiveness of its decisionmaking processes
risk appetite
the group’s risk appetite has developed organically over a number 
of years based on historical risk taking characteristics and this has 
continued to develop during 2014 as we pursue our growth strategy 
further our appetite for risk is largely governed through the delegated 
authorities and risk review committees rrcs which are embedded 
across the group
as part of the review of our risk framework the committee continues 
to believe that it should not apply a single aggregate risk appetite for 
the group as a whole preferring to see risk appetite managed through 
limits and parameters which are continuously monitored in each 
business service line and aggregated for review at group level
risk appetite is articulated in a variety of ways appropriate to the 
category of risk being considered for example at the highest level 
are our policy statements which describe our riskbased approach to 
each category and our policy standards which describe acceptable 
controls and limits examples of which can be found in the sovereign 
and financial market risk policy or our asset integrity policy 
some of the parameters which exercise control over risk 
appetite include
 health  safety – monthly reviews of kpis for lost time injuries  
and hipo incidents
 asset integrity – monthly reviews of control kpis associated with  
all key assets across the group
 concentration risk –tolerable exposure by territory client contract 
type revenue 
 market growth risk – agreed biannually in strategy setting meetings 
with trends reviewed monthly
 investment limits – for capital expenditures minimum rates of irr  
or annual free cashﬂow targets
 liquidity headroom – agreed by the board and speciﬁed in sovereign 
and financial market risk policy
 ﬁnancial strength – maintain an ebitda debt ratio agreed with 
the board
 people risks – nonconformances with code of conduct incident 
reporting and attrition rates
 offstrategy risks – where the company has a zero tolerance  
for example sanctioned territories
risk culture
as with all aspects of good governance the effectiveness of risk 
management and internal control also depend on the individuals 
responsible for operating the systems that are put in place in order to 
ensure the appropriate culture is established the committee carried 
out a risk management maturity assessment in 2014 analysis from 
the assessment was communicated to management to encourage 
and incentivise desired behaviours and to further increase capabilities 
plans for 2015 will continue to develop the desired values behaviours 
and capabilities so that they become embedded at all levels 
assurance and reporting
as well as regular reports from the group head of enterprise 
risk further reports to the board and committee are provided by 
management and included deepdives into the effectiveness of 
health  safety processes asset integrity processes compliance 
nonconformances security and information technology which 
together with other sources of information have provided a balanced 
assessment of the principal risks and the effectiveness of the systems 
of internal control 
any control failings or weaknesses are identiﬁed and discussed 
in these reports for example compliance issues or whistleblowing 
statistics including the underlying reasons the impact that they have 
had on the company and the actions being taken to rectify them 
when reviewing these reports the committee has considered how 
effectively risks have been identiﬁed how they have been mitigated 
and managed whether actions are being taken promptly to remedy 
any failings or weaknesses and whether the causes of the failing or 
weakness have indicated poor decisiontaking or a need for more 
extensive monitoring or a reassessment of process effectiveness 
where major performance issues or nonconformances are 
concerned the company undertakes a lessons learned analysis
interface between the board risk committee and 
audit committee
petrofac has established separate audit and board risk committees 
and as such there are some areas that span both committees’ 
responsibilities such as internal control thereby requiring effective 
interfaces between the committees both committees agreed in 
january 2014 to strengthen the company’s internal control framework 
and have recently deployed the 2013 version of the coso framework
the key areas where both committees have common responsibilities 
are risk management compliance internal control and assisting the 
board in reviewing the effectiveness of the company’s internal control 
environment covering
 mechanisms to support the achievement of strategic objectives
 reliability of ﬁnancial reporting
 appropriateness of the control environment
 effectiveness and efﬁciency of operations and
 compliance with applicable laws and regulations
in monitoring the effectiveness of its systems of risk and internal 
control the committees have this year identiﬁed weaknesses in the 
risk appraisal process in respect of the laggantormore and greater 
stella area fpf1 projects dating back to their inceptions in 201011 
this has culminated in the drawing together of a number of lessons 
learned from these incidents enabling the committee to identify the 
actions necessary to remedy the issues 
whilst the board has delegated the detailed work to these two 
committees it retains overall responsibility for ensuring that the group 
maintains effective internal control and risk management frameworks 
and receives regular reports on the work of each committee from 
their respective chairmen in addition the board retains ultimate 
responsibility for the group krr 94
petrofac 
annual report and accounts 2014
risk framework
sets risk appetite 
approves key  
risk register and  
signiﬁcant projects
board oversight of  
framework of internal  
controls and risk  
management
senior management  
consider risks on  
signiﬁcant projects and  
investments for formal  
consideration by the  
board oversight of  
key risk register 
divisional management  
oversight and review  
of projects
risk management is  
embedded within  
each business service line
assurance to  
management  
and the board
board
board risk 
committee
audit 
committee
divisional 
risk review
business 
service line
group 
functions
internal 
audit
provides assurance 
on framework
provides assurance 
on framework
key risk register  
given to board risk 
committee
group risk 
committee
risk governance arrangements
petrofac’s overall system of risk governance relies on a number of committees and management 
processes which bring together reports on the management of risk at various levels
the risk governance process relies upon regular risk assessments and reviews of existing 
and new opportunities by considering the risk exposure and appetite of each business 
unit service line and function the diagram below sets out the risk governance structure 
in operation showing the interaction between the various risk review and management 
committees terms of reference are in place for each of the key committees 
the board retains ultimate responsibility 
for setting the group’s risk appetite and 
reviewing the risks which the board considers 
sufﬁciently signiﬁcant that they might prevent 
the delivery of strategy or threaten petrofac’s 
continued existence
the board risk committee is constituted 
by the board to assist it in discharging this 
responsibility the committee is responsible 
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 approval 
of the delegated authorities 
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 grc is a 
management committee constituted as the 
principal executive forum for the review of 
enterprise project and investment risks in 
accordance with the delegated authorities 
approved by the board 
the grc reviews all material new business 
opportunities and projects including bid 
submissions country entry joint ventures 
investments acquisitions and disposals and 
is responsible for making recommendations 
as to the management and mitigation 
of risk exposure and also recommends 
proposals 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 group’s delegated 
authorities in addition the grc reviews the 
krr prior to its submission to the committee
board risk committee report continued 95
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
divisional risk review committee drrc each division has a 
risk review committee chaired by the responsible chief executive 
 chief operating ofﬁcer which provides peer review of proposed 
projects and investments in accordance with the delegated authorities 
where required by the delegated authorities it then prepares 
appropriate materials for the grc and ensures that no proposal is 
presented without being reviewed and supported by the drrc
business service line review each of our individual businesses 
has its own business management system that incorporates risk 
management policies and procedures and produces its own risk 
register each business service line’s management team meets 
regularly and monitors these risks as a matter of course notes risk 
assessment changes and seeks to take appropriate mitigating action 
code of conduct and whistleblowing
a compulsory elearning module on the company’s code of conduct 
was launched during 2014 and to date over 77 of employees and 
thirdparty contractors have completed the training in early 2015 the 
module was launched in arabic romanian french and spanish to 
ensure greater completion across the group as a result of greater 
awareness of the code of conduct increased reports of possible 
breaches have been received either directly or through speak up the 
company’s whistleblowing hotline all investigations are governed by 
a protocol which has been jointly developed by group compliance 
legal hr and internal audit and reported breaches are reviewed and 
assessed to determine what further investigation is warranted and 
to ensure that appropriate action is taken the committee receives 
details of the issues reported together with the action being taken 
any alleged breaches relating to ﬁnancial compliance are dealt with by 
the audit committee further details of our code of conduct including 
our whistleblowing facility are provided on page 65
security
petrofac’s security department enhanced its intelligence capability 
during 2014 in light of the ﬂuid nature of the security environment 
across the middle east and north africa region as detailed further 
on page 52 this helps provide assurance to the committee that 
the group is kept informed of any changes in our core market place 
and that appropriate protective measures and controls are taken 
to reinforce the message of a safe and secure environment for all our 
staff and assets a global engagement programme was undertaken 
in 2014 to promote ‘security awareness’ other key group security 
controls include
 compliance with security policy  security standards for operations 
in high risk territories
 security incident review board investigations and feedback
 emergency response and group crisis plans in place on high risk 
projects and regions
 group level crisis response capabilities and procedures
 group security forum reviews of all our operations
 operational security status assessments in place in high risk areas
 business service lines record and update speciﬁc plans for entering 
high risk territories and
 compliance with security planningjourney management processes
information technology it security
following a global assessment of potential it threats and external 
cybersecurity threats in 2013 the company decided to embark on 
a programme to reinforce our it resilience arrangements to respond 
effectively to any farreaching systems failures the causes of these 
risks include threats to data and operations through externally 
developed malware or internal threats together with geopolitical cyber 
activity designed to sabotage businesses or steal commercial data 
petrofac’s it strategy is focused on our ability to mitigate both internal 
and external cyber threats and our ability to respond effectively to a 
catastrophic system failure and restore critical systems and data 
recent controls include new global data centres now online to host 
critical applications 247 monitoring of the global data centres and 
the wide area network wan a new information security policy and 
guidance in line with iso 27001 a range of new security standards to 
support implementation of the policy and development of a three year 
strategy and roadmap for information risk management irm controls 
and processes
business continuity management 
petrofac has hub ofﬁces in sharjah aberdeen mumbai chennai 
london woking and kuala lumpur which each have business 
continuity management and disaster recovery plans in place as a 
result of recent growth in the region business impact analysis was 
updated in 2014 in singapore jakarta and kuala lumpur in addition 
the sharjah ofﬁces maintain a dedicated crisis management facility 
capable of responding and managing a crisis in any of its operations 
on a 247 basis
petrofac training services pts in aberdeen is accredited to iso 
22301 for the business continuity structure of its emergency response 
service centre this formal globally recognised accreditation 
demonstrates that pts has the means and facilities to offer resilience 
and continuity in a dedicated onshore emergency response capability 
to its customers in the event of an unforeseen incident
insurance programme
given the scale and nature of the group’s activities petrofac continued 
to develop its global insurance programme coverage during 2014 
by building its relationship with the group’s insurance brokers and 
advisors as examples of that work we undertook a number of asset 
surveys to satisfy the insurer’s assessment of the risks and associated 
policy terms and worked with ecom management to increase its 
professional indemnity coverage and limits 
following a commitment to the committee a number of claims 
scenario workshops were carried out in 2014 with each division in 
conjunction with our insurers and loss adjusters the principal objective 
being to provide assurance that the group’s insurance arrangements 
remain “ﬁt for purpose” and that the insurance programme will respond 
as expected in the event of a loss policy limits deductibles and 
wording are reviewed each year at programme renewal to ensure that 
we have the optimum mix of policy coverage and competitive terms 
looking forward to 2015 we anticipate greater participation of our 
captive insurance company across a broader range of policies 96
petrofac 
annual report and accounts 2014
directors’ remuneration report
thomas thune andersen
chairman of the remuneration committee
role of the committee
 determine and agree with the board the broad policy and 
framework for the remuneration of executive directors 
the chairman and certain senior managers review the 
continued appropriateness and relevance of the 
remuneration policy
 ensure that incentives are appropriate to encourage enhanced 
performance and provide alignment with longterm shareholder 
value approve the design of and determine the targets for 
performance related pay schemes
 review the design of all share incentive plans before approval 
by the board and shareholders and monitor the application of 
the rules of such schemes and the overall aggregate amount 
of the awards
 determine the remuneration of all executive directors 
the chairman and certain senior managers within the 
agreed policy taking into account remuneration trends 
across the company and remuneration practices in other 
peer companies
terms of reference
the committee reviewed its terms of reference during  
the year no amendments were made copies are available  
on our website 
membership and attendance at meetings held in 2014
members meetings attended eligible
thomas thune andersen 9 9
stefano cao 9 9
roxanne decyk 9 9
how to use this report 
this report has been divided into two sections
policy report –  
looking forward
this section contains a table showing the details of the company’s 
approved remuneration policy and notes which governs the future 
remuneration payments that the company will make 
the full policy is available on wwwpetrofaccomremuneration 
see pages 98 to 103 
for more details
annual report on remuneration –  
looking backwards – implementation of the policy in 2014
this section provides details of how the company’s remuneration 
policy was implemented during 2014
within the report we have used different colours to 
differentiate between
 fixed elements of remuneration and
 variable elements of remuneration
see pages 104 to 110  
for more details
looking forward – implementation of the policy in 2015
this section provides details on how the company will implement 
our remuneration policy in 2015 
see pages 110 and 111  
for more details
new remuneration reporting
regulations and shareholder
consultation 7
2014 remuneration
arrangements including
grant of awards 57
governanceother 12
review of external
environment 6
2015 remuneration
review 18
how the committee spent its time during the year 97
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
dear shareholder
on behalf of the board and as chairman of the remuneration 
committee i am pleased to present the directors’ remuneration 
report for the year ended 31 december 2014 this report is split 
into two parts
 a summary of our remuneration policy approved at the 2014 
agm no changes have been made to the policy this year and 
this section is for information only
 our annual report on remuneration this outlines how our 
policy was implemented in 2014 and how it is intended to 
apply in 2015 this will be subject to an advisory vote at the 
2015 agm
2014 performance and remuneration outcomes
petrofac’s performance during 2014 and the economic 
challenges which we have faced are discussed in greater depth 
throughout this annual report so i have conﬁned myself to some 
key observations
 the external environment is undoubtedly more challenging and 
this has impacted petrofac and our peers
 we did not meet our expectations of outstanding project delivery 
on three projects during 2014
 we have fallen short of the ﬁnancial performance anticipated 
for 2014
 we have however completed a number of contracts to our 
usual high standards and have a record backlog which provides 
good revenue visibility over the coming years and
 we have achieved a strong safety outcome with no fatalities 
during 2014 and improvements under both our lti and 
ri metrics
the bonus framework in place for 2014 captures a wide variety 
of measures to ensure that bonuses cannot be earned without 
a fully evaluated set of achievements however the committee 
considered that there was insufﬁcient emphasis on ﬁnancial 
performance and accordingly exercised its judgement to reduce 
bonus levels signiﬁcantly despite achieving a number of the 
individual performance measures set the group chief executive 
proposed that he should not receive a bonus for 2014 and the 
committee accepted this proposal the bonuses for the chief 
financial ofﬁcer and the chief executive of ecom have been 
reduced to 30 and 50 of maximum respectively
our executive directors also participated in a performance share 
plan psp which provided the opportunity to earn shares based 
on our threeyear returns to shareholders tsr and our earnings 
per share eps performance against targets set for 201214 
performance fell short of these targets and as a result awards  
will not vest in 2015 meaning participants will not receive 
any value from their psp awards for the ﬁrst time since our 
initial listing
2015 proposals
for our ukbased executive directors for 2015 there will be no 
increase in either their salaries or cash allowances paid in lieu of 
pension contributions or car allowances
marwan chedid our uaebased executive director received 
a salary increase of 3 effective from 1 january 2015 which 
is slightly below salary increases in our wider uae workforce 
his cash allowance was increased by 9200 reﬂecting a general 
increase in the cost of living in that locality
for the 2015 performance year we have made several changes 
to the underlying framework of our annual bonus these changes 
are intended to ensure that there is increased transparency of 
individual outcomes under the annual bonus in line with best 
practice developments we have taken the opportunity to increase 
the proportion of the bonus which is dependent on ﬁnancial 
performance to 60 the remainder of the bonus will be subject 
to a balanced scorecard of measures capturing key operational 
strategic and individual performance goals further details on the 
new bonus framework can be found on page 110 and 111
we have also considered the performance targets under the psp 
to ensure that they remain appropriate for 2015 in light of our 
strategic priorities and earnings expectations based on internal 
and external forecasts the eps targets in particular now represent 
very stretching performance targets the committee is not 
proposing to make any changes for the 2015 awards however 
we intend to review the measures and targets used under the psp 
performance framework for future awards later this year to ensure 
that they support the business strategy and represent stretching 
performance at an appropriate level of risk
malus and clawback
when the company’s employee share plan rules were re
approved by shareholders at the 2014 agm we took the 
opportunity to introduce malus and clawback provisions 
in line with best practice these provisions provide the 
committee with the ability to reduce or cancel awards under 
certain circumstances 
the committee has considered the recent update to the uk 
corporate governance code particularly the clause relating 
to malus and clawback provisions being present on all forms 
of variable pay as the committee seeks to adhere to uk 
best practice it has been agreed that clawback provisions for 
annual bonuses for the 2015 performance year onwards be 
introduced these provisions should provide shareholders with 
additional comfort as they allow the committee in exceptional 
circumstances to require repayment of all or part of a bonus for 
up to two years postdetermination as a result we now have 
malus and clawback provisions in place on all of the variable pay 
elements which executive directors are eligible to receive
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
24 february 2015 98
petrofac 
annual report and accounts 2014
policy report
looking forward
our directors’ remuneration policy the ‘policy’ was approved by shareholders at the agm held on 15 may 2014 for a period of up to  
three years in order to provide the context in which individual remuneration decisions have been made during the year the approved  
policy table and notes to the table have been included below the full remuneration policy as approved is available on 
wwwpetrofaccomremuneration the policy for executive directors is designed in line with the remuneration philosophy and principles  
that underpin remuneration for the wider group and all our reward arrangements are built around common objectives and principles
as a jerseyincorporated company petrofac does not have the beneﬁt of the statutory protections afforded by the uk companies act 
2006 in relation to the new reporting regime while the policy report was not submitted as a binding resolution at the agm the committee 
considers the vote of shareholders to be binding in its application however if there is any inconsistency between the company’s policy 
report as approved by shareholders in 2014 and any contractual entitlement or other right of a director the company may be obliged  
to honour that existing entitlement or right
fixed remuneration
elementpurpose  
and link to strategy operation maximum opportunity
performance 
measures
salary
core element  
of remuneration  
paid for doing  
the expected  
daytoday job
 the committee takes into consideration a number 
of factors when setting salaries including but not 
limited to
–  size and scope of the individual’s responsibilities
–  the individual’s skills experience and 
performance
–  typical salary levels for comparable roles within 
appropriate pay comparators and
–  pay and conditions elsewhere in the group
 basic salaries are normally reviewed at the 
beginning of each year with any change usually 
being effective from 1 january
 whilst there is no maximum salary level any 
increases will normally be broadly in line with  
the wider employee population within the relevant 
geographic area
 higher increases may be made under certain 
circumstances at the committee’s discretion 
for example this may include
–  increase in the scope andor responsibility  
of the individual’s role and
– development of the individual within the role
 in addition where an executive director has 
been appointed to the board at a lower than 
typical salary larger increases may be awarded 
to move them closer to market practice as their 
experience develops
 none
beneﬁts
provide 
employees 
with market 
competitive 
beneﬁts
 ukbased executive directors receive beneﬁts 
which typically may include but are not limited to 
private health insurance for the executive director 
and their family life assurance and longterm 
disability insurance
 uaebased executive directors receive similar 
beneﬁts to ukresident executive directors and  
in addition receive other typical expatriate beneﬁts 
which may include but are not limited to children’s 
education return ﬂights to their permanent home 
and appropriate insurance arrangements
 where executive directors are required to relocate 
the committee may offer additional expatriate 
beneﬁts if considered appropriate
 ukbased executive directors are also eligible to 
participate in any taxapproved all employee share 
plans operated by the company on the same basis 
as other eligible employees petrofac currently 
operates a share incentive plan in the uk
 whilst no maximum level of beneﬁts is prescribed 
they are generally set at an appropriate market 
competitive level taking into account a number  
of factors which may include
– the jurisdiction in which the individual is based
–  the level of beneﬁts provided for other 
employees within the group and
–  market practice for comparable roles within 
appropriate pay comparators
 the committee keeps the beneﬁt policy  
and beneﬁt levels under regular review
 none
directors’ remuneration report continued 99
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
elementpurpose  
and link to strategy operation maximum opportunity
performance 
measures
cash allowance 
in lieu of 
pension and 
other beneﬁts
provide 
employees with 
an allowance 
for beneﬁts 
and retirement 
planning
 ukresident executive directors receive a cash 
allowance in place of certain beneﬁts including  
but not limited to car allowances and 
pension contributions
 uaeresident executive directors receive a cash 
allowance in respect of housing utilities and 
transport in line with local market practice
 whilst there is no maximum level of cash 
allowance prescribed in general the levels 
provided are intended to be broadly market typical 
for role and geographic location
 the levels of cash allowance provided are kept 
under regular review by the committee
 normally in determining any increase to cash 
allowances the committee will have regard to 
the rate of increase in the cost of living in the local 
market and other appropriate indicators
 none
end of service 
indemnity
paid to uae
based executive 
directors only in 
order to comply 
with local uae 
statute
 a statutory end of service payment is due to all  
nonuae national employees working in the uae  
at the end of their contracted employment
 the company accrues an amount each year in 
order to satisfy this indemnity when it falls due
 the statutory payment is based on the individual’s 
number of years of service and salary level at the 
time of their departure
 none
pension
no executive 
director currently 
participates in a 
formal pension 
arrangement
 executive directors receive a cash allowance  
in lieu of pension provision see above
 the company operates deﬁned contribution 
pension arrangements across the group in line 
with legal requirements the company offers 
participation in the uk pension plan to its ukbased 
executive directors however both current uk
based executive directors chose to opt out of these 
arrangements and as such continue to receive  
a cash allowance in lieu of pension provision
 although both current ukbased executive 
directors have opted to receive a cash allowance 
in lieu of pension provision this position is kept 
under review
 as the committee would want to conduct a 
thorough review prior to executive directors 
joining a group pension arrangement it would 
not be appropriate to provide a maximum level 
of pension provision at this time however if this 
did occur the level of provision would typically 
be dependent on seniority the cost of the 
arrangements market practice and pension 
practice elsewhere in the group
 none 100
petrofac 
annual report and accounts 2014
variable remuneration
element operation maximum opportunity performance measures
annual bonus
incentivise 
delivery of the 
business plan on 
an annual basis
rewards 
performance 
against key 
performance 
indicators which 
are critical to the 
delivery of our 
business strategy
  awards based on  
performance  
in the relevant ﬁnancial year
 performance measures are set 
annually and payout levels are 
determined by the committee after 
the yearend based on performance  
against those targets
 delivery in cash  
 maximum 
bonus opportunity  
of 200 of 
basic salary
 the precise bonus targets are set by the committee 
each year taking into account a number of internal 
and external reference points including the 
company’s key strategic objectives for the year
 when setting these targets the committee ensures 
that they are appropriately stretching in the context 
of the business plan and that there is an appropriate 
balance between incentivising executive directors 
to meet ﬁnancial targets for the year and to deliver 
speciﬁc nonﬁnancial strategic operational and 
personal goals this balance allows the committee 
to effectively reward performance against the key 
elements of our strategy
 measures used typically include but are not limited to
– hse and integrity measures
– ﬁnancial measures
–  group andor business service line strategic  
and operational performance measures and
– peoplerelated measures
 normally each of these measures will have a broadly 
equal weighting but the committee will keep this 
under review on an annual basis
 typically 30 of the maximum opportunity is paid  
for ‘threshold’ performance ie the minimum level  
of performance which results in a payment
share incentive 
plan
1
 sip
encourage 
longterm 
shareholding 
and to align the 
interests of uk 
employees with 
shareholders
 participants may invest gross salary 
to purchase ordinary shares
 the company does not make 
awards of matching free or  
dividend shares under the sip 
 participants may 
invest up to the 
prescribed hmrc 
limits in operation 
which is currently 
£1800 gross salary 
per tax year
 none
1 the committee may in the event of any variation of the company’s share capital demerger delisting or other event which may affect the value of awards 
adjust or amend the terms of awards in accordance with the rules of the relevant share plan in the case of the sip any required changes may be subject  
to hmrc approval
directors’ remuneration report continued 101
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
element operation maximum opportunity performance measures
performance  
share plan
1
incentivise 
executive 
performance 
over the  
longer term
rewards the 
delivery of targets 
linked to the  
longterm 
strategy of the 
business and 
the creation of 
shareholder  
value over the 
longer term
 award levels are determined by 
reference to individual performance 
prior to grant
 vesting of awards is dependent on 
achievement of stretching threeyear 
performance targets
 at vesting the committee considers 
if the company’s tsr is a genuine 
reﬂection of the underlying company 
performance and may reduce or 
cancel the portion of award subject 
to tsr if it considers it appropriate
 awards are normally made in the 
form of conditional share awards 
but may be awarded in other forms if 
appropriate such as nil cost options 
awards may also be satisﬁed in cash
 additional shares are accrued in lieu 
of dividends and paid on any shares 
which vest
 the committee may adjust or 
amend the terms of the awards in 
accordance with the plan rules
 new psp rules were approved by 
shareholders at the 2014 agm 
all psp awards now incorporate 
malus and clawback provisions such 
that the committee may reduce or 
cancel unvested awards or require 
repayment of amounts already paid 
out at any time up to the second 
anniversary of the vesting date of 
the relevant award in a number of 
speciﬁc circumstances including
–  material misstatement of ﬁnancial 
results
– material failure of risk management
–  material breach of any relevant 
health and safety or environment 
regulations and
–  serious reputational damage to the 
company or any group member
 the maximum award 
that can be granted in 
respect of a ﬁnancial 
year of the company 
under the psp is 
200 of basic salary 
or in circumstances 
which the committee 
deems to be 
exceptional awards 
up to 300 of 
base salary can 
be granted
 awards vest based on threeyear performance 
against a combination of ﬁnancial and share price 
performance measures
 the ultimate goal of the company’s strategy is to 
provide longterm sustainable returns to shareholders 
the committee strives to do this by aligning the 
performance measures under the psp with the 
longterm strategy of the company and considers 
that strong performance under the chosen measures 
should result in sustainable value creation
–  ﬁnancial measure – to reﬂect the ﬁnancial 
performance of our business and a direct  
and focused measure of company success 
the committee sets targets to be appropriately 
stretching with regard to a number of internal  
and external reference points
–  share price performance measure – a measure  
of the ultimate delivery of shareholder returns  
this promotes alignment between executive 
director reward and the shareholder experience 
targets are set with reference to wider market 
practice and positioned at a level which the 
committee considers represent stretching 
performance
 normally the weighting would be split equally across 
these two measures
 for ‘threshold’ levels of performance under 
the ﬁnancial performance measure 0 of the 
award vests increasing to 100 of the award for 
maximum performance
 for ‘threshold’ levels of performance under the 
share price performance measure 30 of the 
award vests increasing to 100 of the award for 
maximum performance
 the committee sets targets each year achievement 
of which it considers would represent stretching 
performance in the context of the business plan
 the committee may amend the performance 
conditions applicable to an award if events happen 
which cause the committee to consider that it fails to 
fulﬁl its original purpose and would not be materially 
less difﬁcult to secure
1 the committee may in the event of any variation of the company’s share capital demerger delisting or other event which may affect the value of awards 
adjust or amend the terms of awards in accordance with the rules of the relevant share plan in the case of the sip any required changes may be subject  
to hmrc approval 102
petrofac 
annual report and accounts 2014
notes to the policy table
legacy matters
the committee can make remuneration payments and payments for loss of ofﬁce outside of the policy set out above where the terms  
of the payment were agreed before the policy came into effect or at a time when the relevant individual was not a director of the company 
provided that in the opinion of the committee the payment was not in consideration for the individual becoming a director of the 
company this includes the exercise of any discretion available to the committee in connection with such payments for these purposes 
payments include the committee satisfying awards of variable remuneration and in relation to an award over shares the terms of the 
payment are agreed at the time the award is granted
in relation to the company’s recruitment policy for new appointments to the board full details of which are available at wwwpetrofaccom
remuneration the committee will have regard to the best interests of both petrofac and its shareholders when agreeing remuneration 
arrangements and remains conscious of the need to pay no more than is necessary particularly when determining buyout arrangements
nonexecutive directors
elementpurpose and link to strategy operation opportunity performance measures
nonexecutive director  
ned fees
core element of remuneration  
paid for fulﬁlling the relevant role
 neds receive a basic annual fee 
paid quarterly in respect of their 
board duties
 further fees are paid to neds 
in respect of chairmanship of 
board committees and as senior 
independent director no fees 
are paid for membership of a 
board committee
 the nonexecutive chairman 
receives an allinclusive fee for 
the role
 the remuneration of the non
executive chairman is set by the 
remuneration committee
 the board as a whole is  
responsible for determining ned 
fees these fees are the sole 
element of ned remuneration 
neds are not eligible for annual 
bonus share incentives pensions  
or other beneﬁts
 fees are typically reviewed annually
 expenses incurred in the 
performance of duties for the 
company may be reimbursed or 
paid for directly by the company  
as appropriate including any tax  
due on the payments
 current fee levels can be found in  
the annual report on remuneration 
on page 111
 fees are set at a level which is 
considered appropriate to attract and 
retain the calibre of individual required 
by the company
 fee levels are normally set by 
reference to the level of fees paid to 
neds serving on boards of similarly
sized uklisted companies and 
the size responsibility and time 
commitment required of the role
 the company’s articles of 
association provide that the total 
aggregate remuneration paid to the 
chairman and neds will be within the 
limits set by shareholders the current 
aggregate limit of £1 million was 
approved by shareholders at the 
2011 agm
 none
minor amendments
the committee may make minor amendments to the policy set out above for regulatory exchange control tax or administrative purposes 
or to take account of a change in legislation without obtaining shareholder approval for that amendment
directors’ remuneration report continued 103
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
these charts provide illustrative values of the remuneration 
package in 2015 actual outcomes may differ from 
that shown
illustration of the remuneration policy
petrofac’s remuneration arrangements have been designed to 
ensure that a signiﬁcant proportion of pay is dependent on the 
delivery of stretching short and longterm performance targets 
aligned with the creation of sustainable shareholder value 
the committee considers the level of remuneration that may be 
received under different performance outcomes to ensure that 
this is appropriate in the context of the performance delivered and 
the value added for shareholders
the charts opposite provide illustrative values of the remuneration 
package in 2015 for executive directors under three assumed 
performance scenarios
  assumed performance assumptions used
fixed pay all performance 
scenarios 
 consists of total ﬁxed 
pay including base salary 
and cash allowance as 
at 1 january 2015 and 
beneﬁts as received 
during 2014
variable pay minimum 
performance 
 no payout under the 
annual bonus
 no vesting under the 
performance share plan
performance in line  
with expectations 
 50 of the maximum  
payout under the annual 
bonus ie 100 of salary
 30 vesting under the 
performance share plan 
ie 60 of salary
maximum 
performance
1
  
 100 of the maximum  
payout under the annual 
bonus ie 200 of salary
 
 100 vesting under the 
performance share plan  
ie 200 of salary
1 we have used a maximum psp award opportunity of 200 of base 
salary in line with the usual maximum award under the plan rules 
please note that in circumstances which the committee deems to  
be exceptional awards up to 300 of base salary may be made
performance share plan awards have been shown at face value 
with no share price growth or discount rate assumptions  
allemployee share plans have been excluded as have any legacy 
awards held by executive directors for ukbased executive 
directors who are paid in sterling amounts have been translated 
to us dollars based on the average exchange rate for 2014 of 
£1us16476
group chief executive – ayman asfari
all ﬁgures expressed as a  of total
below
threshold
target
100
us1245
42
36
22
22
us2959
39
39
us5529
maximum
fixed remuneration
annual bonus
psp
chief executive engineering construction
operations  maintenance – marwan chedid
all ﬁgures expressed as a  of total
below
threshold
target
100
us868
47
33
26
20
us1865
37
37
us3361
maximum
fixed remuneration
annual bonus
psp
chief financial ofﬁcer – tim weller
all ﬁgures expressed as a  of total
below
threshold
target
100
us875
42
36
22
22
us2088
39
39
us3906
maximum
fixed remuneration
annual bonus
psp
us000
salary us1071
beneﬁts us59
cash allowance us115
fixed remuneration us1245
us000
salary us623
beneﬁts us6
cash allowance us239
fixed remuneration us868
us000
salary us758
beneﬁts us2
cash allowance us115
fixed remuneration us875 104
petrofac 
annual report and accounts 2014
notes to the table
1  ukbased directors are paid in sterling amounts have been translated 
to us dollars based on the prevailing rate at the date of payment or 
award with the exception of the bonus amounts which have been 
translated using the average exchange rate for 2014 of £1us16476
2  rijnhard van tets succeeded norman murray as chairman with effect 
from 22 august 2014
3  kathleen hogenson was appointed as a director on 1 august 2013 
the 2013 ﬁgure reﬂects the period from this date to 31 december 2013
4  rené médori succeeded rijnhard van tets as chairman of the audit 
committee on 1 august 2013 the 2013 ﬁgure reﬂects the period from 
this date to 31 december 2013
5  andy inglis ceased to be a director from 28 february 2014
6  norman murray ceased to be a director from 22 august 2014
7  nonexecutive directors receive a basic fee of £67000 per annum and 
an additional fee of £15000 per annum for acting as a chairman of a 
board committee rijnhard van tets receives a fee of £290000 per 
annum these fees were last reviewed in july 2014 
annual report on remuneration
looking backwards
the information presented from this section until the relevant note on page 110 represents the audited section of this report
single total ﬁgure of remuneration
the following table sets out the total remuneration for executive directors and nonexecutive directors for the year ended 31 december 2014 
with prior year ﬁgures also shown all ﬁgures are presented in usd 
director
base salary
fees 
a 
us’000
taxable 
beneﬁts 
b 
us’000
cash in lieu  
of pension 
c 
us’000
post
employment 
beneﬁt 
d 
us’000
annual 
bonus 
e 
us’000
longterm 
incentives 
f 
us’000
total 
us’000
executive directors
ayman asfari
1
2014 1071 59 115 – – – 1245
2013 988 56 109 – 1173 332 2658
marwan chedid 2014 605 6 230 50 600 – 1491
2013 575 21 220 48 700 64 1628
tim weller
1
2014 758 2 115– 453– 1328
2013 688 2 109 – 782 – 1581
nonexecutive directors
7
rijnhard van tets
2
2014 234––––– 234
2013 114––––– 114
thomas thune andersen 2014 133––––– 133
2013 125––––– 125
stefano cao 2014 133––––– 133
2013 125––––– 125
roxanne decyk 2014 108––––– 108
2013 101––––– 101
kathleen hogenson
3
2014 108––––– 108
2013 44 ––––– 44
rené médori
4
2014 133––––– 133
2013 111 – – – – – 111
former directors
andy inglis
15
2014 151 1 19 – – – 171
2013 852 2 109––– 963
norman murray
16
2014 303––––– 303
2013 434 – – – – – 434
directors’ remuneration report continued 105
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
further notes to the table – methodology
a  salary and fees – the cash paid in respect of 2014
b  beneﬁts – the taxable value of all beneﬁts paid in respect of 2014 uk
resident executive directors receive private health insurance life assurance 
and longterm disability insurance ayman asfari’s beneﬁts primarily relate 
to the employment of a personal assistant who is partly engaged in support 
of the administration of his personal affairs marwan chedid receives similar 
beneﬁts to ukresident executive directors and in addition receives other 
typical expatriate beneﬁts such as return ﬂights to his permanent home
c  cash in lieu of pension and car allowance – ukresident executive 
directors receive a cash allowance in place of beneﬁts including but 
not limited to car allowances and pension contributions directors do 
not receive pension contributions from the company marwan chedid 
receives a cash allowance in respect of housing utilities and transport 
in line with local market practice
d  postemployment beneﬁt – all nonuae national employees including 
directors working in the uae are required by local statute to receive 
an end of service indemnity payment these sums based on years of 
service and salary will be paid by the company only on termination of the 
individual’s employment from the uae the total amount retained as at 
31 december 2014 in respect of marwan chedid is us1057 583 
e  annual bonus – cash bonus paid in respect of 2014 ayman asfari 
proposed that he should not receive a bonus for 2014 and the 
committee endorsed his proposal
f  longterm incentives – none of the 2012 awards under the performance 
share plan will vest on 19 march 2015 the 2013 values in this column 
relating to awards which vested in may 2014 have been revised from last 
year’s report based on the actual share price of 1376 pence at the date of 
vesting on 19 march 2014 and the ﬁnal vesting level of 13 
additional disclosures in respect  
of the single ﬁgure table
beneﬁts
the single total ﬁgure table on page 104 sets out the total amount 
of beneﬁts received by each executive director the table below 
provides an overview of the most signiﬁcant components of the 
relevant beneﬁts
provision of  
personal assistant
housing and  
transport
ayman asfari us57 717 –
marwan chedid – us230004
annual bonus
the table below sets out the annual bonus awards made to 
executive directors in respect of 2014
2014 annual  
bonus
as a  of 
maximum 
opportunity
as a  of base 
salary
ayman asfari –––
marwan chedid us600000 50 99
andy inglis – – –
tim weller £275000 30 60
the committee evaluated the performance of petrofac and the 
executive directors in determining whether to award a cash bonus 
to individuals in respect of 2014 
the bonus framework for 2014 captures a wide variety of 
measures allowing the committee to obtain a balanced view of 
the performance of the company and individuals against a broad 
scope of performance indicators the balanced scorecard is 
set by reference to the group’s corporate plan and the targets 
are aligned with our key ﬁnancial operational and strategic 
goals these measures are cascaded through the organisation 
ensuring that individuals are incentivised towards consistent and 
meaningful goals
the balanced scorecard is used as a framework for the committee 
to use its judgement to determine bonuses for each executive 
director on a discretionary basis and does not provide a formulaic 
outturn targets are set to be appropriately stretching within the 
context of the corporate plan
the measures used in determining 2014 bonuses include
 ﬁnancial performance – including net income total revenue  
order intake cashﬂow backlog and cost targets
 hse and asset integrity
 operational and project delivery objectives
 strategic and growth measures 
 peoplerelated measures
in addition individual executive directors have targets related to 
succession planning risk management and speciﬁc capability 
measures this ensures that the committee considers not only 
the achievements that were delivered but also the manner and 
behaviours by which they were delivered
in assessing performance during 2014 the committee took into 
account many factors as a whole the bonuses reﬂect that 2014 
has been a challenging year for petrofac
 whilst the external environment has deﬁnitely impacted the 
business we have not met our expectations of outstanding 
delivery on certain projects this year in particular our execution 
has been below our normal standards on the laggantormore 
greater stella area and ticleni projects 
 this has also led to ﬁnancial performance being below our targets 
set at the start of the year in particular our net income was 
roughly 10 and revenue was c15 below target 
 we have however completed a number of contracts to our usual 
high standards and have a record backlog of us189bn which 
provides clear visibility on future revenues 
 in addition our safety performance has been strong with no fatalities 
during 2014 and improvements under both our lti and ri metrics 
the committee has taken all of these factors into account in 
assessing performance against the bonus framework set at the 
beginning of 2014 ultimately bearing in mind our overall ﬁnancial 
performance the committee exercised its judgement to reduce 
bonus levels signiﬁcantly as shown above the bonuses for tim 
weller and marwan chedid have been reduced to 30 and 50 of 
maximum respectively in addition ayman asfari proposed that he 
should not receive a bonus for 2014 and the committee accepted 
this proposal
at this stage the committee considers that the goals within the 
balanced scorecard remain commercially sensitive we always seek 
to be as transparent as possible with shareholders as such we 
will continue to keep the disclosure of our performance framework 
under review so that we can respond to developing best practice 
and provide shareholders with as much context as possible within 
commercial constraints in addition as set out in more detail on 
page 110 and 111 we are moving to a new bonus framework 
for 2015 which will provide enhanced transparency of individual 
outcomes going forward 106
petrofac 
annual report and accounts 2014
performance share plan
the performance conditions for the 2012 award are set out below these targets were not achieved and as a result no awards will vest  
in march 2015
a  50 of the award – threeyear relative tsr performance against a sectoral peer group the ‘index’
threeyear petrofac tsr performance percentage of tsr element vesting
less than the index 0
equal to the index 30
25 outperformance of the index 100
straightline vesting operates between these points
the peer group for the 2012 award is set out below
aker solutions halliburton snclavalin group
amec jgc technip
chicago bridge  iron co maire tecnimont tecnicas reunidas
fluor corporation saipem wood group john
foster wheeler schlumberger worleyparsons
b 50 of the award – threeyear eps growth
eps growth per annum percentage of eps element vesting
10 or less 0
15 30
20 or more 100
straightline vesting operates between these points
the table below provides an overview of petrofac’s performance against the 2012 psp award targets and resulting vesting
actual performance vesting as  of element
relative tsr performance less than the index 0
eps growth 
performance less than 10 0
total vesting  0
scheme interests awarded during the ﬁnancial year
performance share plan awards
as outlined in the policy table on page 101 psp awards are granted over petrofac shares representing an opportunity to receive ordinary 
shares if performance conditions are met over the relevant three year period the number of shares under award is determined by 
reference to a percentage of base salary award levels are based on individual performance prior to grant details of the actual number 
of shares granted are set out on page 108 the following table provides details of the awards made under the psp on 19 march 2014 
performance for these awards is measured over the three ﬁnancial years from 1 january 2014 to 31 december 2016
  type of award face value £
face value  
 of salary threshold vesting  of face value
maximum vesting 
 of face value
end of performance 
period
ayman asfari
performance 
shares
£1149990 177 for tsr element 50 of award  
30 of face value
for eps element 50 of award  
0 of face value
 
marwan chedid £660534 182 100 31 december 2016
tim weller £799989 174
awards were made based on a share price of 135960 pence and the face values shown have been calculated on this basis this share price represents  
the ﬁveday average share price up to 19 march 2014 
the committee reviewed targets in early 2014 by reference to a number of internal and external reference points to ensure that they are 
positioned at a level which it considers appropriate and stretching in the context of the business strategy and earnings expectations for  
the next three years whilst ensuring that they do not drive unacceptable levels of risk and encourage inappropriate behaviours
directors’ remuneration report continued 107
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
as a result the eps targets were repositioned for the 2014 awards as follows
eps growth per annum percentage of eps element vesting
75 or less 0
10 30
15 or more 100
the tsr peer group used for this award is the same as outlined on page 106 save that maire tecnimont is replaced by baker hughes 
the tsr outperformance requirements and associated vesting schedule remain unchanged 
share incentive plan awards
ukbased executive directors are eligible to participate in hmrcapproved allemployee share plans on the same basis as other eligible 
employees during 2014 tim weller participated in the share incentive plan sip and purchased 133 shares
payments for loss of ofﬁce
norman murray ceased to be a director from 22 august 2014 and no payment for loss of ofﬁce was made
andy inglis ceased to be an executive director of the company on 28 february 2014 and no payment for loss of ofﬁce was made mr inglis 
received his base salary beneﬁts and cash allowance for 2014 up until that date he did not receive any annual bonus in respect of 2014 and all 
outstanding longterm incentive awards held under the performance share plan lapsed on his date of leaving no discretion was granted by the 
committee in relation to his ﬁnal tranche of his restricted share plan shares and subsequently these also lapsed on his date of leaving 
statement of directors’ shareholding and share interests
directors’ shareholdings held during the year and as at 31 december 2014 and share ownership guidelines
following discussions with shareholders in relation to the vcp in 2012 the committee introduced a shareholding requirement of 300  
of base salary for those executive directors participating in the plan ayman asfari was not a participant in the vcp and was therefore not 
subject to the formal shareholding requirement in any event as a founder ayman already had a substantial shareholding interest in the 
company signiﬁcantly in excess of the required levels
until the relevant shareholding guidelines have been met executive directors are encouraged to retain vested shares earned under the 
company’s incentive plans unvested share awards are not taken into account when considering an executive director’s progress towards 
the shareholding requirements
shareholding requirements and the number of shares held by directors during the year and as at 31 december 2014 are set out in the table below
 
shareholding requirement 
as a  of salary 
target –  achieved
shares owned 
outright at 
31 december 2014
interests in share incentive schemes 
awarded subject to performance 
conditions at 31 december 2014
shares owned 
outright at  
31 december 2013
director
ayman asfari
1
no formal shareholding requirement 62958426 249477 62950678
marwan chedid
2
 300 8891393092 1514781368733
tim weller
2
300 39 77 110
3
163391 46208
thomas thune andersen – 4000 – 4000
stefano cao – – – –
roxanne decyk – 5804 – 5804
kathleen hogenson – – – –
rené médori – – – –
rijnhard van tets – 100000 – 100000
former director
andy inglis
4
– 39494 – 39494
norman murray
5
–17130 – 17130
1 although ayman asfari does not have formal shareholding requirements he substantially exceeds the shareholding requirement set for the other executive directors
2 marwan chedid and tim weller are expected to build up a shareholding of three times salary over a period of ﬁve years from appointment tim weller was 
appointed as an executive director on 13 october 2011 whilst at this time tim has yet to meet the shareholding requirement fully he has taken steps to 
acquire shares since his appointment marwan chedid’s shareholding requirement has been met in full for the purposes of determining executive director 
shareholdings the individual’s salary and the share price as at 31 december 2014 of 703 pence has been used
3 includes shares purchased through the sip totalling 320 shares as at 31 december 2014
4 andy inglis ceased to be a director from 28 february 2014 the shares owned outright reﬂect the position at the date of stepping down from the board
5 norman murray ceased to be a director from 22 august 2014 the shares owned outright reﬂect the position at the date of stepping down from the board 108
petrofac 
annual report and accounts 2014
share interests – share awards at 31 december 2014
share awards held at the year end including awards of shares made during 2014 to executive directors are given in the table below
director and date of grant plan
number of 
shares under 
award at  
31 december
2013
1
shares 
granted 
in year
1
dividend 
shares 
granted 
in year
2
shares  
lapsed 
in year
shares 
vested 
in year
total number 
of shares 
under 
award at  
31 december 
2014
dates from  
which shares 
ordinarily vest
ayman asfari
19 march 2011 psp 112621 – – 97 981
3
14640
3
– 19 march 2014
19 march 2012 psp 74440 – 2525 – – 76965
5
19 march 2015
24 may 2013 psp 82271 – 2790 – – 85061 19 march 2016
19 march 2014 psp – 84583 2868 – – 87 451 19 march 2017
249477
marwan chedid
19 march 2011 psp 21552 – – 18751
3
2801
3
– 19 march 2014
19 march 2011 dbsp 21558
4
– – – 21558 – 19 march 2014
19 march 2012 psp 48861 – 1657 – – 50518
5
19 march 2015
24 may 2013 psp 49066 – 1664 – – 50730 19 march 2016
19 march 2014 psp – 48583 1647 – – 50230 19 march 2017
151478
andy inglis
5 january 2011 rsp 22144 – – 22144
7
– – 5 january 2014
19 march 2011 psp 116104 – – 116104
7
– – 19 march 2015
19 march 2012 psp 62033 – – 62033
7
– – 19 march 2016
24 may 2013 psp 70807 – – 70807
7
– – 19 march 2017
 –
tim weller
6 september 2011 rsp 10548
6
– 221 – 10769 – 6 september 2014
19 march 2012 psp 41872 – 1420 – – 43292
5
19 march 2015
24 may 2013 psp 57 320 – 1944 – – 59264 19 march 2016
19 march 2014 psp – 58840 1995 – – 60835 19 march 2017
163391
1 the award amounts disclosed under the psp are the maximum number that may vest if all performance conditions attached to the awards are satisﬁed 
in full
2 dividends awarded on shares granted under the share plans are reinvested to purchase further shares
3 following the end of the threeyear performance period in respect of the march 2011 psp award the performance conditions were satisﬁed such that 13 
of the award vested on 19 march 2014 when the closing share price was 1376p the balance lapsed
4 following his appointment to the board on 19 january 2012 no further awards have been made to marwan chedid under the dbsp on 19 march 2014 
the ﬁnal tranche of his dbsp awards granted in 2011 vested in full the closing share price on 19 march 2014 was 1376p 
5 shares awarded on 19 march 2012 did not satisfy performance conditions and therefore no awards will vest on 19 march 2015 
6 shares awarded under the rsp on 6 september 2011 were not subject to performance conditions and the ﬁnal tranche vested to tim weller on monday 
8 september 2014 when the closing share price was 1095p
7  all outstanding awards of shares lapsed on 28 february 2014 when andy inglis ceased to be an executive director of the company
directors’ remuneration report continued 109
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
share interests – share options
share options held at the yearend to executive directors are given in the table below
director plan
exercise  
price p
number of  
options awarded
shares  
lapsed 
in year
total number of options  
at 31 december 2014
dates from which 
ordinarily exercisable
marwan chedid
1
18 may 2012 vcp 171028 112910 – 112910 18 may 2016
18 may 2012 vcp 171028 112910 – 112910 18 may 2017
18 may 2012 vcp 171028 112910 – 112910 18 may 2018
338730
andy inglis 
12
18 may 2012 vcp 171028 173161 173161 – 18 may 2016
18 may 2012 vcp 171028 173161 173161 – 18may 2017
18 may 2012 vcp 171028 173161 173161 – 18 may 2018
–
tim weller
1
18 may 2012 vcp 171028 46726 – 46726 18 may 2016
18 may 2012 vcp 171028 46726 – 46726 18 may 2017
18 may 2012 vcp 171028 46726 – 46726 18 may 2018
140178
1 as outlined in our 2012 remuneration report share options under the vcp will only vest subject to the achievement of stretching performance targets 
in addition awards will only have value should the share price at the time of vesting exceed the exercise price set at the time of award the number of share 
options shown represents the maximum number of shares that will vest at each vesting date in addition at each vesting date the committee will assess 
performance against certain performance safeguards retaining discretion to reduce the number of share options that may vest in certain circumstances
2 all outstanding options lapsed on 28 february 2014
this represents the end of the audited section of the report
historical tsr performance and group chief executive remuneration outcomes
the chart below compares the tsr performance of the company over the past seven years with the tsr of the ftse 100 index this index 
has been chosen because it is a recognised equity market index of which petrofac was a member until december 2014 the table below 
the chart summarises the ceo single ﬁgure for total remuneration annual bonus payouts and ltip vesting levels as a percentage of 
maximum opportunity over this period
tsr chart rebased to 100 on 1 january 2009
2009
600
300
400
500
200
100
0
2013 2014 2015 2012 2011 2010
petrofac ftse 100 source datastream
tsr rebased to 100 on 1 january 2009
group chief executive 2009 2010 2011 2012 2013 2014
group chief executive single ﬁgure of remuneration us’000 3501 4889 6088 4663 2658 1245
annual bonus payout as a  of maximum opportunity 100 100 75 81 59 0
psp vesting outturn as a  of maximum opportunity 100 100 100 100 13 0 11 0
petrofac 
annual report and accounts 2014
percentage change in remuneration  
of the group chief executive
the table below illustrates the increase in salary beneﬁts 
excluding cash allowance in lieu of pension and annual bonus 
for the group chief executive and that of a representative group 
of the company’s employees for these purposes we have 
used all ukbased employees as the comparator group as this 
represents the most appropriate comparator group for reward 
purposes for our ukbased group chief executive
 change in 
base salary 
20142013
 change  
in beneﬁts 
excluding cash 
allowance in  
lieu of pension 
20142013
 change 
in annual 
bonus 
20142013
group chief executive 29 4 100
all ukbased employees 45 0 20
relative importance of the spend on pay
the chart below illustrates the change in total remuneration 
dividends paid and net proﬁt from 2013 to 2014
the ﬁgures presented have been calculated on the 
following bases
 dividends – dividends paid in respect of the ﬁnancial year
 net proﬁt – our reported net proﬁt in respect of the ﬁnancial 
year this is a key performance indicator for the company 
the committee therefore believes it is the most direct reﬂection 
of our underlying ﬁnancial performance
 total remuneration – represents total salaries paid to all 
company employees in respect of the ﬁnancial year see page 
136 of the report for an explanation as to how this value is 
calculated note that this includes social security costs beneﬁt 
and pension costs and sharebased payment expenses
spend in respect of the ﬁnancial year chart 2013 compared with 
2014 dividendsnet proﬁttotal remuneration
looking forward to 2015
implementation of remuneration policy in 2015
this section provides an overview of how the committee is 
proposing to implement our remuneration policy in 2015
base salary
in determining salary increases for 2015 the committee took 
into account a number of factors including the level of salary 
increases in the wider workforce internal and external positioning 
and the general economic climate
for 2015 there will be no increase in salary for our two uk
based executive directors in line with the position for the wider 
work force marwan chedid our uaebased executive director 
received a salary increase of 3 effective from 1 january 
2015 which is slightly below salary increases for our wider 
uae population
the table below shows base salaries for 2015
  2015 basic salary 2014 basic salary
ayman asfari £650000 £650000
marwan chedid us623150 us605000 
tim weller £460000 £460000
beneﬁts
the committee sets beneﬁts in line with our policy set out on 
page 98 and detailed on our website there are no changes 
proposed to the beneﬁt framework in 2015
cash allowance in lieu of pension and car allowance
no increase in cash allowance is proposed for ukbased 
executive directors the cash allowance for marwan chedid a 
uae based executive director has been increased by us9200 
4 with effect from 1 january 2015 this reﬂects an increase  
in the general cost of living in the uae
the table below shows cash allowances for 2015
  2015 cash allowance 2014 cash allowance 
ayman asfari £70000 £70000
marwan chedid us239200 us230000 
tim weller £70000 £70000
annual bonus
the maximum annual bonus opportunity for executive directors 
will remain at 200 of base salary in 2015
as described previously in this report we have made a number 
of changes to the underlying framework of our annual bonus 
these are intended to provide greater transparency of individual 
outcomes both for shareholders and participants in particular we 
consider that it is important for ﬁnancial performance to comprise 
a signiﬁcant proportion of the overall framework and as such have 
implemented the following annual bonus structure for 2015
60 – financial performance including measures related to net 
income cashﬂow roce and order intake and
40 – balanced scorecard including measures related to health 
 safety operational strategic and individual objectives
directors’ remuneration report continued
total remuneration dividends
 before exceptional items and certain remeasurements
net proﬁt
227
650
1265
1296
224
13
106
25
581
spend in respect of the ﬁnancial year
usm
fy2014
fy2013 111
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
at this stage the committee considers that the detailed annual 
bonus targets for 2015 remain commercially sensitive we intend 
to provide retrospective disclosure of these targets as soon as 
we consider that these restrictions no longer apply and that 
disclosure would not compromise our commercial position
following the recent update to the uk code we have responded 
to developing best practice and have introduced clawback 
provisions for the 2015 annual bonus these provisions allow 
the committee to require repayment of amounts already paid 
out at any time up to the second anniversary of the payment 
date in a number of speciﬁc circumstances including material 
misstatement of ﬁnancial results material failure of risk 
management material breach of any relevant health and safety 
regulations and serious reputational damage to the company or 
any group member the proposed changes to the annual bonus 
framework remain within our approved remuneration policy
performance share plan
the usual maximum psp award for executive directors is 200 
of base salary awards up to 300 of base salary can be made  
in exceptional circumstances and it is proposed that all executive 
directors will receive an award of 200 of base salary in 2015
there are no changes to the performance conditions for the 2015 
psp awards awards will be based on threeyear performance 
against the following measures
50 – relative tsr performance against a sectoral peer group
50 – compound annual eps growth
1 tsr element
minor changes have been made to the comparator group for 
the relative tsr element of the 2015 award reﬂecting recent 
corporate events that have affected some members of the group 
fosterwheeler was acquired by amec in november 2014 
and has therefore been removed from the group and jacobs 
engineering has been added as a new constituent to retain a 
consistent number of companies as a result the group for the 
2015 awards will be as set out below
proposed 2015 awards to be granted to executive directors have 
been set by reference to individual performance during 2014 
the following table sets out the proposed comparator group for 
the 2015 psp awards for executive directors
aker  
solutions
fluor  
corp
saipem
tecnicas 
reunidas
amec 
fosterwheeler
halliburton schlumberger
wood group 
john
baker hughes
jacobs 
engineering
snclavalin worleyparsons
chicago  
bridge  iron co
jgc  
corp
technip
the tsr outperformance requirements and associated vesting 
schedule remain the same and are consistent with those set out 
on page 106 
2 eps element
the remaining 50 of the 2015 psp award will be subject to 
a threeyear eps performance condition the outperformance 
requirements and associated vesting schedule remain the same 
and are consistent with those set out on page 107  
as outlined in the chairman’s statement on page 97  the psp 
performance targets now represent very stretching performance 
hurdles the committee intends to review the measures and 
targets used under the psp performance framework for future 
awards later this year to ensure that they support the business 
strategy and represent stretching performance at an appropriate 
level of risk
nonexecutive director remuneration
the table below shows the nonexecutive director current 
fee structure
 2015 fees
chairman of the board fee £290000
basic nonexecutive director fee £67 000
board committee chairman fee £15000
senior independent director fee £15000
there are no fees paid for membership of board committees 
in respect of the additional board duties which thomas thune 
andersen took on upon appointment as senior independent 
director he receives an additional fee of £15000 per annum
consideration by the directors of matters  
relating to directors’ remuneration
support for the committee
during the year the committee received independent advice 
on executive remuneration matters from deloitte llp deloitte 
deloitte were formally appointed as advisers by the committee 
in october 2005 following a recommendation from the non
executive chairman at the time deloitte is a member of the 
remuneration consultants group and as such voluntarily 
operates under the code of conduct in relation to executive 
remuneration consulting in the uk
the committee has reviewed the advice provided by deloitte 
during the year and is satisﬁed that it has been objective and 
independent total fees received by deloitte in relation to 
the remuneration advice provided to the committee during 
2014 amounted to £121000 based on the required time 
commitment deloitte also provided other tax services during 
the year and a secondee who assisted in routine internal ﬁnance 
function activities
during 2014 the committee also received support from legal 
advisers freshﬁelds bruckhaus deringer llp freshﬁelds who 
provided advice on the amendments to the employee share plan 
rules and their practical application 11 2
petrofac 
annual report and accounts 2014
the individuals listed in the table below none of whom were 
committee members materially assisted the committee in 
considering executive remuneration and attended at least part 
of one meeting by invitation during the year
attendee position comments
rijnhard van tets chairman of board
to provide  
context for  
matters under 
discussion
norman murray former chairman of board
ayman asfari group chief executive
cathy mcnulty group director of hr
richard milne group director of legal  
 commercial affairs
mary hitchon secretary to the board secretary to 
committee
carol arrowsmith deloitte llp adviser
john cotton deloitte llp adviser
simon evans freshﬁelds legal adviser
none of the individuals attended part of any meeting in which  
their own compensation was discussed
governance
the board and the committee consider that throughout 2014 
and up to the date of this report the company has complied with 
the provisions of the 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 the company also took the opportunity 
to respond to the gc100 working group consultation on the new 
remuneration reporting regulations
the committee considers executive remuneration matters in 
the context of alignment with risk management members of 
the committee are also members of the board risk 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 behaviour
external board appointments
executive directors are normally entitled to accept one non
executive appointment outside the company with the consent 
of the board any fees received may be retained by the director
as at the date of this report tim weller is a nonexecutive director 
with the carbon trust and g4s plc for which he received 
£17 000 and £68592 respectively in fees during the year 
shareholder voting
the tables below outline the result of the advisory votes on the 
2013 directors’ remuneration report and policy report received 
at the 2014 agm
annual report on remuneration
number of votes cast
excluding abstentions for against abstentions
251340695 247 231581 4109114 1558786
 9837163
remuneration policy report
number of votes cast 
excluding abstentions for against abstentions
226175875 175228016 50947 859 26723606
 77472253
the committee is pleased to note that over 98 of shareholder 
votes approved the 2013 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
this was the ﬁrst year the company was required to submit its 
remuneration policy report to shareholders as noted on page 
98 the company does not beneﬁt from the statutory protections 
of the uk companies act 2006 accordingly some of the 
provisions set out in the new regulations were not fully adopted 
consultation with key institutions took place during the year and 
the company is aware of the concerns raised when our policy  
is next reviewed these concerns will be further considered 
availability of documentation
service contracts and letters of appointment for all directors are 
available for inspection by any person at our registered ofﬁce in 
jersey and at our corporate services ofﬁce in london they will  
also be available for inspection during the 30 minutes prior to the 
start of our agm to be held in london in may 2015
annual general meeting
as set out in my statement on page 97  with consideration to the 
new remuneration reporting regulations our annual report on 
remuneration will be subject to an advisory shareholder vote at 
the agm to be held on 14 may 2015
on behalf of the board
thomas thune andersen
chairman of the remuneration committee
24 february 2015
directors’ remuneration report continued 11 3
petrofac 
annual report and accounts 2014
financial statements
strategic report
governance
directors’ statements
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
 specify which generally accepted accounting principles have 
been adopted in their presentation and
 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 group and company and hence for taking 
reasonable steps for the prevention and detection of fraud and 
other irregularities
the directors are responsible for the maintenance and 
integrity of the corporate and ﬁnancial information included on 
the company’s website legislation in jersey governing the 
preparation and dissemination of ﬁnancial statements may differ 
from legislation in other jurisdictions
directors’ approach
the board’s objective is to present a fair balanced and 
understandable assessment of the company’s position and 
prospects particularly in the annual report half year report 
formerly the interim report and other published documents 
and reports to regulators the board has established an audit 
committee to assist with this obligation
going concern
the company’s business activities together with the factors likely 
to affect its future development performance and position are 
set out in the strategic report on pages 11 to 22 the ﬁnancial 
position of the company its cash ﬂows liquidity position and 
borrowing facilities are described in the ﬁnancial review on pages 
44 to 47  in addition note 32 to the ﬁnancial statements include 
the company’s objectives policies and processes for managing 
its capital its ﬁnancial risk management objectives details of its 
ﬁnancial instruments and hedging activities and its exposures  
to credit risk and liquidity risk
the company has considerable ﬁnancial resources together 
with longterm contracts with a number of customers and 
suppliers across different geographic areas and industries 
as a consequence the directors believe that the company is well 
placed to manage its business risks successfully the directors 
have a reasonable expectation that the company has adequate 
resources to continue in operational existence for the foreseeable 
future thus they continue to adopt the going concern basis of 
accounting in preparing the annual ﬁnancial statements
responsibility statement under the  
disclosure and transparency rules
each of the directors listed on pages 68 and 69 conﬁrms that  
to the best of their knowledge
 the annual report and accounts taken as a whole is fair 
balanced and understandable and provides the information 
necessary for shareholders to assess the company’s 
performance business model and strategy
 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 strategic report contained on pages 2 to 65 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 11 4
petrofac 
annual report and accounts 2014
group ﬁnancial statements
115  independent auditor’s report to the members 
of petrofac limited
119 consolidated income statement
120 consolidated statement of other comprehensive income
121 consolidated statement of ﬁnancial position
122 consolidated statement of cash ﬂows
123 consolidated statement of changes in equity
124 notes to the consolidated ﬁnancial statements 11 5
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
we present our audit report on the group and parent company’s 
ﬁnancial statements of petrofac limited the ‘ﬁnancial statements’ 
which comprise the group primary statements and related notes  
and parent company’s primary statements and related notes
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 engagement letter dated 19 february 2014 
opinion on ﬁnancial statements
in our opinion petrofac limited’s ﬁnancial statements
 give a true and fair view of the state of the group’s and of the  
parent company’s affairs as at 31 december 2014 and of the group 
and parent company’s proﬁts 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 
the ﬁnancial statements comprise the group and parent company 
income statements the group and parent company statements of 
comprehensive income the group and parent company statements 
of financial position the group and parent company statements 
of cash flows the group and parent company statements of 
changes in equity and the related group notes 1 to 33 and parent 
company notes 1 to 20 the ﬁnancial reporting framework that has 
been applied in their preparation is applicable law and international 
financial reporting standards
opinion on other matters requested  
by the group and company
in our opinion 
 the information given in the corporate governance statement set 
out on pages 80 and 81 in the annual report and accounts with 
respect to internal control and risk management systems in relation 
to ﬁnancial reporting processes and about share capital structures 
is consistent with the ﬁnancial statements
 the information given in the strategic report is consistent with the 
group ﬁnancial statements and
 the part of the directors’ remuneration report to be audited has 
been properly prepared in accordance with the basis of preparation 
as described theirin
overview 
our application of materiality
materiality is a key part of planning and executing our audit strategy 
for the purposes of determining whether the ﬁnancial statements 
are free from material misstatement we deﬁne materiality as the 
magnitude of an omission or misstatement that individually or in 
the aggregate in light of the surrounding circumstances could 
reasonably be expected to inﬂuence the economic decisions of 
the users of the ﬁnancial statements 
as we developed our audit strategy we determine materiality 
at the overall level and at the individual account level 
performance materiality is the application of materiality at the 
individual account or balance level in assessing whether errors are 
material either individually or in aggregate we consider qualitative  
as well as quantitative factors
planning materiality
the planning materiality ﬁgure provides a basis for determining the 
nature timing and extent of risk assessment procedures identifying 
and assessing the risk of material misstatement and determining the 
nature timing and extent of further audit procedures
we determined planning materiality for the group to be us30 
million 2013 us38 million which is approximately 5 2013 5 
of pretax proﬁt for the year before impairments onerous contracts 
and certain fair value remeasurements pretax proﬁt is normalised 
for the materiality calculation to exclude nonrecurring items that are 
audited separately and would if included signiﬁcantly distort the 
materiality calculation year on year this adjustment was considered 
appropriate in light of the volatile market conditions driven by the fall 
in oil prices  
performance materiality
on the basis of our risk assessments together with our assessment 
of the overall control environment our judgement is that performance 
materiality was 50 2013 50 of our planning materiality namely 
us15 million 2013us19 million our objective in adopting 
this approach was to ensure that uncorrected and undetected 
audit differences in all accounts did not exceed our planning 
materiality level 
reporting threshold
we agreed with the audit committee that would report to them  
all uncorrected audit differences in excess of us15 million 2013 
us19 million which is set at 5 of planning materiality we report 
all corrected audit differences that in our view warrant reporting 
on qualitative grounds or where the corrected difference exceeds 
performance materiality reclassiﬁcation differences are reported 
to the audit committee where the difference exceeds 2 of the 
applicable primary ﬁnancial statement line items
we evaluate any uncorrected misstatements against both the 
quantitative measures of materiality discussed above and in light  
of other relevant qualitative considerations 
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 and 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 
materiality
5 of proﬁt before tax
us30m
scope
full scope – 6

 
speciﬁc scope – 5 
89 consolidated 
revenue coverage
areas  
of focus
ecom long term contracts
accounting for tax
impairment of goodwill  
and other assets
 full scope includes head ofﬁce and group consolidation procedure
independent auditor’s report  
to the members of petrofac limited 11 6
petrofac 
annual report and accounts 2014
identify material inconsistencies with the audited ﬁnancial statements 
and to identify any information that is apparently materially incorrect 
based on or materially inconsistent with the knowledge acquired by 
us in the course of performing the audit if we become aware of any 
apparent material misstatements or inconsistencies we consider the 
implications for our report 
an overview of the scope of our audit
for the parent company – our assessment of audit risk and our 
evaluation of materiality determines our audit scope for the parent 
company ﬁnancial statements this helps us to form an opinion on 
the parent company ﬁnancial statements under the international 
standards on auditing uk and ireland
for the group – our assessment of audit risk our evaluation of 
materiality and our allocation of that materiality determine our 
audit scope for each entity within the group which when taken 
together enable us to form an opinion on the consolidated ﬁnancial 
statements under international standards on auditing uk and 
ireland we take into account the size risk proﬁle changes in the 
business environment and other factors when assessing the level 
of work to be performed at each entity the range of performance 
materiality allocated to components in 2014 was us38 million to 
us107 million 2013 us48 million to us152 million
in assessing the risk of material misstatement to the group 
ﬁnancial statements we selected 11 components covering entities 
within the united arab emirates uae malaysia mexico and 
scotland our group audit scope focussed predominantly on six

 
components all of which were subject to a full scope audit for the 
year ended 31 december 2014 and were selected based on our 
assessment of the risk of material misstatement due to both size 
and risk an additional ﬁve components were selected for a speciﬁc 
scope audit on selected account balances where the extent of 
audit work was based on our assessment of the risks of material 
misstatement and of the materiality of those locations to the group’s 
business operations  
for the remaining components not classiﬁed as full and speciﬁc 
there are multiple small low risk components we assess 
managements’ group wide controls and undertake analytical 
review and enquiry procedures to address the residual risk of 
material misstatement 
full 65
remaining components 11
speciﬁc 24
group revenue
together with the group functions which were also subject to a full 
scope audit for the year ended 31 december 2013 these locations 
represent the principal business units of the group we audited 89 
2013 82 of group revenue through our audit procedures at full 
and speciﬁc scope locations 
the group audit team follows a programme of planned site visits 
that is designed to ensure that a senior member of the team visits 
each of the six full audit scope locations at least once a year in 2014 
the group audit team including the senior statutory auditor visited 
the main operating location in the united arab emirates during the 
conclusion of the year end audit procedures a group team audit 
partner also visited the remaining full scope locations in malaysia 
and mexico reviewed key working papers attended the closing 
meeting and participated in the component team’s planning 
including the discussion of fraud and error the group audit team 
attended the audit planning and closing meetings for each full audit 
scope component
our assessment of risk of material misstatements 
we designed our audit by determining materiality and assessing 
the risks of material misstatement in the ﬁnancial statements 
in particular we looked at where the directors made subjective 
judgements for example in respect of signiﬁcant accounting 
estimates that involved making assumptions and considering future 
events that are inherently uncertain as in all our audits we also 
addressed the risk of management override of internal controls 
including evaluating whether there is evidence of bias by the directors 
that may represent a risk of material misstatement due to fraud 
we identiﬁed the following risks that had the greatest effect on the 
overall audit strategy the allocation of resources in the audit and 
directing the efforts of the engagement team 
 revenue and margin recognition in respect of ecom long 
term contracting
 taxation as a result of the complexity of the group’s operations 
and the large number of jurisdictions in which the group operates
 consideration of potential impairment of goodwill and other ies 
assets and
 initial recognition and determination of subsequent accounting 
for contracts in the integrated energy services segment of 
the business
changes from the prior year
our audit approach and assessment of areas of focus changes in 
response to changes in circumstances affecting petrofac limited and 
impacting the group ﬁnancial statements the profound downturn 
in the oil price has resulted in heightened risks associated with 
recoverability of ies assets the decline in oil price also impacts 
our assessment of risk in relation to contract cost estimates the 
ability to achieve variation orders and limit liquidated damages 
counterparty credit risk and judgements made in respect of taxation 
our procedures to address these risks are included within the 
discussion of risks in the section below
in respect of the identiﬁed risk initial recognition and subsequent 
accounting at inception for ies contracts no new ies contracts were 
entered into during 2014 our areas of focus with respect to these 
contracts is captured by the risk ‘impairment of goodwill and other 
assets’ described below
 full scope includes head ofﬁce and group consolidation procedure
independent auditor’s report to the members of petrofac limited continued 11 7
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
our responses to the risk of material misstatement identiﬁed
area of focus audit approach 
ecom long term contracts – revenue and margin recognition
accounting for ecom long term contracts is a key area of 
audit focus due to the signiﬁcant judgement and estimation 
applied by management as described in the group’s 
signiﬁcant accounting judgements and estimates in note 
2 on page 125 signiﬁcant management judgement is 
required in recognising revenue on ﬁxedprice engineering 
procurement and construction contracts and estimation 
is applied in recognising variation orders project costs
tocomplete and provisions for liquidated damages there 
is an increasing trend of larger contracts being entered 
into as part of consortia which adds extra complexity and 
judgement in the accounting process 
we challenged management and assessed their evaluations in respect of
 judgements made regarding the initial recognition and timing of variation 
orders and the potential for liquidated damages on projects presently behind 
schedule we reviewed correspondence with clients and challenged project 
directors as part of our audit
 consistency of judgements made regarding coststocomplete by reference to 
the historical accuracy of previous forecasts we also challenged management 
on the adequacy of contingency provisions to mitigate contract speciﬁc risks 
 the nature of contracts as part of consortia and the appropriateness of timing  
of revenue recognition for these contracts
 the processes in place to ensure the appropriate determination of the 
percentage completion of each signiﬁcant contract were audited ensuring 
appropriate approval from customers was evidenced and
 revenues recognised for extension of time requests contractual incentive 
bonuses and costplus contracts for locations where revenue is not recognised 
on a poc basis 
we also ensured that management’s policies and processes for making these 
estimates and judgements continue to be applied consistently
accounting for taxation assets liabilities income and expenses
the wide geographical spread of the group’s operations  
the complexity of application of local tax rules in many 
different jurisdictions and transfer pricing risks affecting 
the allocation of income and costs charged between 
jurisdictions and businesses increase the risk of 
misstatement of tax balances the assessment of tax 
exposures by management requires judgement given the 
structure of individual contracts and the increasing activity  
of tax authorities in the jurisdictions in which petrofac 
operates furthermore the recognition of deferred tax assets 
and liabilities needs to be reviewed regularly to ensure that 
any changes in local tax laws and proﬁtability of associated 
contracts are appropriately considered refer to note 7  
of the ﬁnancial statements for disclosures in respect of 
taxation for the year
we utilised tax specialists in our london team in the planning stages to 
determine which jurisdictions should be in scope as well as in the audit of tax 
balances we also involved local tax specialists in the relevant jurisdictions  
where we deemed it necessary 
we considered and challenged the tax exposures estimated by management 
and the risk analysis associated with these exposures along with claims or 
assessments made by tax authorities to date 
we also audited the calculation and disclosure of current and deferred tax refer 
to note 7 to ensure compliance with local tax rules and the group’s accounting 
policies including the impact of complex items such as share based payments 
and the review of management’s assessment of the likelihood of the realisation  
of deferred tax balances
impairment of goodwill and other assets
this became an area of focus in the prior year and enhanced 
focus has been given to impairment for the current year 
following key events unfolding in 2014 
the signiﬁcant fall in oil prices will impact the current and 
future ﬁnancial performance of ies and also inﬂuence the 
level of investment in the industry and demand for petrofac 
services the oil price is a key assumption in the oil and gas 
assets and goodwill impairment testing models 
in addition the ies business has not met its stretching 
growth targets and in some cases has not performed in 
line with the initial investment case this has impacted the 
recoverable amount of assets within the business including 
ies goodwill operational challenges on the greater stella 
project pm304 berantai and ticleni projects have resulted 
in ies performance being weaker than forecast
we focused on this area as it involves complex and subjective judgements by 
the directors about the future results of the business in evaluating whether any 
impairment was necessary to the remaining carrying value of goodwill and other 
assets our audit work involved obtaining evidence regarding its recoverable 
amount and how it compared to the amount at which the goodwill or other 
assets are currently recorded 
we challenged management’s assessment of impairment which are primarily 
based on discounted cashﬂows and include the following key inputs 
 forecast oil price curves
 operating and capital expenditure
 discount rate 
 assumed long term growth rate and inﬂation and
 judgements in respect of outcome of commercial negotiations
we assessed the historical accuracy of budgets and we used a valuation 
specialist to assist us with our consideration of the discount rate
we evaluated management’s sensitivity analysis on goodwill impairment testing 
and considered the ﬁnancial statement disclosures for compliance with the 
requirements of accounting standards refer to note 5 for management’s 
disclosure of asset impairments and remeasurements and note 12 for sensitivity 
analysis performed on goodwill impairment testing 11 8
petrofac 
annual report and accounts 2014
respective responsibilities of directors and auditor
as explained more fully in the directors’ statements set out on page 
113 the directors are responsible for the preparation of the group 
and parent company’s 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 and parent company’s 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 
 report as to whether the information given in the strategic report 
is consistent with the group ﬁnancial statements 
 report as to 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 and
 review the directors’ statements in relation to going concern as 
set out on page 113 which for a premium listed uk incorporated 
company is speciﬁed for review by the listing rules of the financial 
conduct authority
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 
matters on which we are required to report  
by exception
under the isas uk and ireland we are required to report to you if 
in our opinion information in the annual report is 
 materially inconsistent with the information in the audited ﬁnancial 
statements or
 apparently materially incorrect based on or materially inconsistent 
with or knowledge of the group acquired in the course of 
performing our audit or
 is otherwise misleading
in particular we are required to consider whether we have identiﬁed 
any inconsistencies between our knowledge acquired during 
the audit and the directors’ statement that they consider the 
annual report is fair balanced and understandable and whether 
the annual report appropriately discloses those matters that we 
communicated to the audit committee which we consider should 
have been disclosed 
under companies jersey law 1991 we are required to report  
to you if in our opinion 
 proper accounting records have not been kept or proper returns 
adequate for our audit have not been received from branches not 
visited by us or
 the ﬁnancial statements are not in agreement with the accounting 
records and returns or
 we have not received all the information and explanations we 
require for our audit
under the listing rules we are required to review the part of the 
corporate governance statement relating to the company’s 
compliance with the nine provisions of the uk corporate governance 
code speciﬁed for our review
the company has voluntarily complied with and has instructed us 
to review the directors’ statement set out on page 113 in relation to 
going concern this statement is speciﬁed for review by the listing 
rules of the financial conduct authority for premium listed uk 
incorporated companies 
we have nothing to report in respect of these matters
john flaherty 
for and on behalf of ernst  young llp
london 
24 february 2015
independent auditor’s report to the members of petrofac limited continued
1 the maintenance and integrity of the petrofac limited website 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 website
2 legislation in jersey governing the preparation and dissemination of 
ﬁnancial statements may differ from legislation in other jurisdictions 11 9
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
consolidated income statement 
for the year ended 31 december 2014 
notes
business 
performance
usm
exceptional 
items and certain 
remeasurements 
usm  
total
2014
usm
2013
usm
revenue 4a 6241 –  6241 6329
cost of sales 4b 5242 –  5242 5165
gross profit 999 –  999 1164
selling general and administration expenses 4c 368 –  368 387
exceptional items and certain remeasurements 5 – 463  463 –
other operating income 4f 95 –  95 11
other operating expenses 4g 42 –  42 17
profit from operations before tax and finance costsincome 684 463  221 771
finance costs 6 79 –  79 28
finance income 6 22 –  22 24
share of profits of associatesjoint ventures 14 7 –  7 22
profitloss before tax 634 463  171 789
income tax expensecredit 7a 33 2  31 142
profitloss for the year 601 461  140 647
 
attributable to   
 petrofac limited shareholders 581 461  120 650
 noncontrolling interests 11 20 –  20 3
 601 461  140 647
earnings per share us cents on profit attributable 
to petrofac limited shareholders 8  
– basic 17038 13529  3509 19085
– diluted 16899 13418  3481 18910
 this measurement is shown by petrofac as it is used as a means of measuring the underlying performance of the business see note 2 there were no items of a similar 
nature to the 2014 exceptional items and certain remeasurements in 2013 therefore no comparatives are presented 
the attached notes 1 to 33 form part of these consolidated financial statements  120
petrofac 
annual report and accounts 2014
consolidated statement of other comprehensive income 
for the year ended 31 december 2014 
notes  
2014 
 usm 
2013
 usm
profit for the year   140 647
    
other comprehensive income    
foreign currency translation losses 25  22 4
net gain on maturity of cash flow hedges recycled in the year 25  14 1
net changes in fair value of derivatives and financial assets designated as cash flow hedges 25  21 29
other comprehensive lossincome to be reclassified to consolidated income statement in  
subsequent periods   57 24
total comprehensive income for the year    83 671
 
attributable to    
 petrofac limited shareholders   76 674
 noncontrolling interests  11  7 3
   83 671
the attached notes 1 to 33 form part of these consolidated financial statements 
  121
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
consolidated statement of financial position 
at 31 december 2014 
notes  
2014
 usm
2013
 usm
assets   
noncurrent assets   
property plant and equipment 10  1698 1191
goodwill 12  115 155
intangible assets 13  186 330
investments in associatesjoint ventures 14  71 215
availableforsale investment 15  185 –
other financial assets 16  790 527
income tax receivable   9 9
deferred tax assets 7c  34 37
   3088 2464
current assets   
inventories 18  16 16
work in progress 19  1602 1473
trade and other receivables 20  2783 2360
due from related parties 30  2 5
other financial assets 16  435 320
income tax receivable   18 2
cash and shortterm deposits 21  986 617
   5842 4793
total assets   8930 7257
equity and liabilities    
equity   
share capital 22  7 7
share premium   4 4
capital redemption reserve   11 11
treasury shares 23  101 110
other reserves 25  31 63
retained earnings   1909 2014
equity attributable to petrofac limited shareholders   1861 1989
noncontrolling interests 11  10 3
total equity   1871 1992
noncurrent liabilities    
interestbearing loans and borrowings 26  1710 1291
provisions 27  273 213
other financial liabilities 16  756 2
deferred tax liabilities 7c  151 140
   2890 1646
current liabilities   
trade and other payables 28  2670 2296
due to related parties 30  3 3
interestbearing loans and borrowings 26  9 53
other financial liabilities 16  317 37
income tax payable   105 140
billings in excess of cost and estimated earnings  19   265 254
accrued contract expenses 31  800 836
   4169 3619
total liabilities    7059 5265
total equity and liabilities   8930 7257
the financial statements on pages 119 to 170 were approved by the board of directors on 24 february 2015 and signed on its behalf by tim weller – 
chief financial officer 
the attached notes 1 to 33 form part of these consolidated financial statements 122
petrofac 
annual report and accounts 2014
consolidated statement of cash flows 
for the year ended 31 december 2014 
notes  
2014
 usm
2013
 usm
operating activities    
profit before tax   171 789
exceptional items and certain remeasurements 5  463 –
profit before tax exceptional items and certain remeasurements  634 789
adjustments to reconcile profit before tax exceptional items and certain remeasurements to net cash flows   
 depreciation amortisation and write off 4b 4c   244 238
 sharebased payments 4d   22 15
 difference between other longterm employment benefits paid and amounts recognised in the income statement   8 7
 net finance expenseincome 6   57 4
 gain arising from disposal of noncurrent asset 4f  56 –
 provision for costs in excess of revenues on a contract 31  27 –
 gain arising from sale of a vessel under a finance lease   – 22
 loss on fair value changes in seven energy warrants 4g  – 1
 share of profits of associatesjoint ventures 14  7 22
 other noncash items net   16 16
   913 1026
working capital adjustments   
 trade and other receivables   407 252
 work in progress   129 817
 due from related parties   26 5
 inventories   – 11
 other current financial assets   131 75
 trade and other payables   441 116
 billings in excess of cost and estimated earnings   11 92
 accrued contract expenses   93 92
 due to related parties   40 31
   853 133
longterm receivables from customers 16  63 134
other noncurrent items net   – 6
cash generated from operations   790 5
interest paid   66 14
income taxes paid net   76 77
net cash flows fromused in operating activities   648 86
investing activities   
purchase of property plant and equipment   470 487
acquisition of subsidiaries net of cash acquired   – 23
payments for intangible oil and gas assets 13   119 43
purchase of other intangible assets 13   – 10
loan extended to an associate  investments in an associate  14   13 4
dividend received from joint ventures   10 10
loan in respect of the development of the greater stella area 16  199 85
proceeds from disposal of property plant and equipment   2 2
proceeds from disposal of subsidiary net of cash disposed 4f  39 –
proceeds from repayments of loans on disposal of subsidiary 4f  220 –
interest received   2 1
net cash flows used in investing activities   528 593
financing activities   
interestbearing loans and borrowings obtained net of debt acquisition cost   1696 1919
repayment of interestbearing loans and borrowings   1172 910
treasury shares purchased 23   25 47
equity dividends paid   225 224
net cash flows from financing activities   274 738
net increase in cash and cash equivalents   394 59
net foreign exchange difference   2 1
cash and cash equivalents at 1 january   585 525
cash and cash equivalents at 31 december 21  977 585
the attached notes 1 to 33 form part of these consolidated financial statements 123
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
consolidated statement of changes in equity 
for the year ended 31 december 2014 
  attributable to petrofac limited shareholders  
  
issued  
share  
capital 
usm 
 
 
share 
premium 
usm
capital 
redemption 
reserve 
usm
treasury 
shares 
usm 
note 23
other 
reserves 
usm 
note 25
 
retained 
earnings 
usm 
  
 
total  
usm 
 
non
controlling 
interests 
usm
total 
equity 
usm
balance at 1 january 2014  7  4 11 110 63 2014  1989  3 1992
profit for the year  –  – – – – 120  120  20 140
other comprehensive loss  –  – – – 44 –  44  13 57
total comprehensive income for the year  –  – – – 44 120  76  7 83
sharebased payments charge note 24  –  – – – 22 –  22  – 22
shares vested during the year note 23  –  – – 34 33 1  –  – –
transfer to reserve for sharebased payments 
note 24  –  – – – 24 –  24  – 24
treasury shares purchased note 23  –  – – 25 – –  25  – 25
income tax on sharebased  
payments reserve  –  – – – 1 –  1  – 1
dividends note 9  –  – – – – 224   224  – 224
balance at 31 december 2014  7  4 11 101 31 1909  1861  10 1871
 
  attributable to petrofac limited shareholders  
non
controlling 
interests 
usm
total 
equity 
usm
  
issued  
share  
capital 
usm 
 
 
share 
premium 
usm
capital 
redemption 
reserve 
usm
treasury 
shares 
usm 
note 23
other 
reserves 
usm 
note 25
 
retained 
earnings 
usm 
  
 
total  
usm 
 
balance at 1 january 2013  7  4 11 100 38 1589  1549  1 1550
profit for the year  –  – – – – 650  650  3 647
other comprehensive income  –  – – – 24 –  24  – 24
total comprehensive income for the year  –  – – – 24 650  674  3 671
sharebased payments charge note 24  –  – – – 15 –  15  – 15
shares vested during the year note 23  –  – – 37 34 3  –  – –
transfer to reserve for share  
based payments note 24  –  – – – 22 –  22  – 22
treasury shares purchased note 23  –  – – 47 – –  47  – 47
income tax on sharebased  
payments reserve  –  – – – 2 –  2  – 2
noncontrolling interest arising on a 
business combination  –  – – – – –  –  5 5
dividends note 9  –  – – – – 222  222  – 222
balance at 31 december 2013  7  4 11 110 63 2014  1989  3 1992
 shares held by petrofac employee benefit trust and petrofac joint venture companies employee benefit trust 
the attached notes 1 to 33 form part of these consolidated financial statements  12 4
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements 
for the year ended 31 december 2014 
1 corporate information 
the consolidated financial statements of petrofac limited 
the ‘company’ for the year ended 31 december 2014 were 
authorised for issue in accordance with a resolution of the 
directors on 24 february 2015 
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 2014 financial statements are 
shown on pages 172 to 185 the group’s principal activity is the provision of 
services to the oil and gas production and processing industry 
information on the group’s subsidiaries and joint ventures are contained 
in note 33 to these consolidated financial statements information on 
other related party relationships of the group is provided in note 30 
2 summary of significant accounting policies 
basis of preparation 
the consolidated financial statements of the group have been prepared 
in accordance with international financial reporting standards ifrs 
as issued by the international accounting standards board iasb 
and applicable requirements of jersey law 
the consolidated financial statements have been prepared on a historical 
cost basis except for availableforsale afs financial assets derivative 
financial instruments financial assets held at fair value through profit and 
loss and contingent consideration which have been measured at 
fair value the consolidated financial statements are presented in united 
states dollars and all values are rounded to the nearest million usm 
except when otherwise indicated 
basis of consolidation 
the consolidated financial statements comprise the financial statements 
of petrofac limited and its subsidiaries as at 31 december 2014 control 
is achieved when the group is exposed or has rights to variable returns 
from its involvement with the investee and has the ability to affect those 
returns through its power over the investee 
generally there is a presumption that a majority of voting rights result 
in control to support this presumption and when the group has less 
than a majority of the voting or similar rights of an investee the group 
considers all relevant facts and circumstances in assessing whether 
it has power over an investee including  
• the contractual arrangement with the other vote holders  
of the investee 
• rights arising from other contractual arrangements 
• the group’s voting rights and potential voting rights 
the group reassesses whether or not it controls an investee if facts 
and circumstances indicate that there are changes to one or more of the 
three elements of control consolidation of a subsidiary begins when the 
group obtains control over the subsidiary and ceases when the group 
loses control of the subsidiary assets liabilities income and expenses 
of a subsidiary acquired or disposed of during the year are included in 
the statement of comprehensive income from the date the group gains 
control until the date the group ceases to control the subsidiary 
profit or loss and each component of other comprehensive income are 
attributed to the petrofac limited shareholders and to the noncontrolling 
interests even if this results in the noncontrolling interests having a 
deficit balance when necessary adjustments are made to the financial 
statements of subsidiaries to bring their accounting policies into line with 
the group’s accounting policies 
all intragroup assets and liabilities equity income expenses and cash 
flows relating to transactions between members of the group are 
eliminated in full on consolidation 
a change in the ownership interest of a subsidiary without a loss 
of control is accounted for as an equity transaction 
if the group loses control over a subsidiary it derecognises the related 
assets including goodwill liabilities noncontrolling interest and other 
components of equity while any resultant gain or loss is recognised in 
profit or loss any investment retained is recognised at fair value 
presentation of results 
petrofac presents its results in the income statement to identify 
separately the contribution of impairments provision for onerous 
contract and certain remeasurements in order to provide readers with a 
clear and consistent presentation of the underlying operating 
performance of the group’s ongoing business 
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 2014 the principal effects 
of the adoption of the relevant new and amended standards and 
interpretations are discussed below 
offsetting financial assets and financial liabilities – 
amendments to ias 32 
these amendments clarify the meaning of ‘currently has a legally 
enforceable right to setoff’ and the criteria for nonsimultaneous 
settlement mechanisms of clearing houses to qualify for offsetting and 
is applied retrospectively these amendments have no impact on the 
group since none of the entities in the group has any offsetting 
arrangements 
novation of derivatives and continuation of hedge 
accounting – amendments to ias 39 
these amendments provide relief from discontinuing hedge accounting 
when novation of a derivative designated as a hedging instrument 
meets certain criteria and retrospective application is required 
these amendments have no impact on the group as the group has 
not novated its derivatives during the current or prior periods 
standards issued but not yet effective 
standards issued but not yet effective up to the date of issuance of the 
group’s financial statements are listed below and include only those 
standards and interpretations that are likely to have an impact on the 
disclosures financial position or performance of the group at a future 
date the group intends to adopt these standards when they become 
effective 
ifrs 9 financial instruments classification 
and measurement 
in july 2014 the iasb issued the final version of ifrs 9 financial 
instruments which reflects all phases of the financial instruments 
project and replaces ias 39 financial instruments recognition and 
measurement and all previous versions of ifrs 9 the standard 
introduces new requirements for classification and measurement 
impairment and hedge accounting ifrs 9 is effective for annual periods 
beginning on or after 1 january 2018 with early application permitted 
retrospective application is required but comparative information is not 
compulsory the adoption of ifrs 9 will have an effect on the 
classification and measurement of the group’s financial assets but no 
impact on the classification and measurement of the group’s financial 
liabilities  the group is currently assessing the impact of ifrs 9 and 
plans to adopt the new standard on the required effective date 125
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
ifrs 15 – revenue from contracts with customers 
ifrs 15 was issued in may 2014 and will supersede all current revenue 
recognition requirements under ifrs eg ias 11 construction 
contracts ias 18 revenue and ifric 18 transfers of assets from 
customers the new standard will be applied using a fivestep model 
and outlines a core principle of recognising revenue at an amount that 
reflects the consideration to which the entity expects to be entitled in 
exchange for transferring goods or services to a customer the 
principles in ifrs 15 are more prescriptive and provide a more 
structured approach to measuring and recognising revenue either 
a full or modified retrospective application is required for annual periods 
beginning on or after 1 january 2017 with early adoption permitted 
the group is currently assessing the impact of ifrs 15 and plans to 
adopt the new standard on the required effective date 
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 fixed
price 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 consortium contracts the group recognises 
their share of revenue and backlog revenue from contracts agreed as 
part of consortium the group uses the percentageofcompletion 
method based on surveys of work performed to recognise revenue for 
the period and then recognises their share of revenue and costs as per 
the agreed consortium contractual arrangement in selecting the 
appropriate accounting treatment the main considerations are 
– determination of whether the joint arrangement is a joint venture or 
joint operation though not directly related to revenue recognition this 
element has a material impact on the presentation of revenue for 
each project 
– at what point can the revenues costs and margin from this type of 
service contract be estimatedreliably measured in accordance with 
ias 11 and 
– whether there are any other remaining features unique to the contract 
that are relevant to the assessment  
• revenue recognition on integrated energy services ies contracts 
the group assesses on a case by case basis the most appropriate 
treatment for its various of commercial structures which include risk 
service contracts production enhancement contracts and equity 
upstream investments including production sharing contracts see 
accounting policies note on page 131 for further details 
in selecting the most relevant and reliable accounting policies for ies 
contracts the main considerations are as follows 
• determination of whether the joint arrangement is a joint venture or 
joint operation though not directly related to revenue recognition this 
element has a material impact on the presentation of revenue for 
each project 
• whether the multiple service elements under the contract should be 
bifurcated such as construction phase followed by an operations and 
maintenance stage 
• whether the group has legal rights to the production output and 
therefore are able to book reserves in respect of the project
• the nature and extent if any of volume and price financial exposures 
under the terms of the contract 
• the extent to which the group’s capital investment is at risk and 
the mechanism for recoverability under the terms of the contract 
• at what point can the revenues from this type of service contract 
be estimatedreliably measured in accordance with ias 18 
• whether there are any other remaining features unique to the contract 
that are relevant to the assessment 
estimation uncertainty 
the key assumptions concerning the future and other key sources of 
estimation uncertainty at the statement of financial position date that 
have a significant risk of causing a material adjustment to the carrying 
amounts of assets and liabilities within the next financial year are 
discussed below 
• provisions for liquidated damages claims ld’s the group provides for 
ld claims where there have been significant contract delays and it is 
considered probable that the customer will successfully pursue such 
a claim this requires an estimate of the amount of ld’s payable under 
a claim which involves a number of management judgements and 
assumptions regarding the amounts to recognise 
• project cost to complete estimates at each reporting 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 reporting date this estimate will impact 
revenues cost of sales workinprogress billings in excess of costs 
and estimated earnings and accrued contract expenses 
• recognition of contract variation orders vo’s the group recognises 
revenues and margins from vo’s where it is considered probable that 
they will be awarded by the customer and this requires management 
to assess the likelihood of such an award being made by reference to 
customer communications and other forms of documentary evidence 
• onerous contract provisions the group provides for future losses on 
longterm contracts where it is considered probable that the contract 
costs are likely to exceed revenues in future years estimating these 
future losses involves a number of assumptions about the achievement 
of contract performance targets and the likely levels of future cost 
escalation over time us57m was provided at 31 december 2014 
2013 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 2014 was us115m 2013 us155m note 12 
• 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 2014 was us34m 2013 us37m 
 
   126
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
for the year ended 31 december 2014 
2 summary of significant accounting policies 
continued 
• contingent consideration the group assesses the amount of 
consideration receivable on disposal of noncurrent assets which 
requires the estimation of the fair value of additional consideration 
receivable from third parties where it is considered probable that such 
consideration is due to the group these amounts are recognised as 
receivable at 31 december 2014 us34m was recognised as a due 
receivable 2013 us nil 
• income tax the company and its subsidiaries are subject to routine tax 
audits and also a process whereby tax computations are discussed 
and agreed with the appropriate authorities whilst the ultimate 
outcome of such tax audits and discussions cannot be determined 
with certainty management estimates the level of provisions required 
for both current and deferred tax on the basis of professional advice 
and the nature of current discussions with the tax authority concerned 
• recoverable value of property plant and equipment intangible oil 
and gas assets other intangible assets and other financial assets the 
group determines at each reporting date whether there is any evidence 
of indicators of impairment in the carrying value of its property plant 
and equipment intangible oil and gas assets other intangible assets 
and other financial assets where indicators exist an impairment test 
is undertaken which requires management to estimate the recoverable 
value of its assets which is initially based on its value in use when 
necessary fair value less costs of disposal is estimated for example 
by reference to quoted market values similar arms length transactions 
involving these assets or risk adjusted discounted cash flow models 
for certain oil and gas assets where impairment triggers were 
identified the recoverable amounts for these assets were estimated 
using fair value less costs of disposal discounted cash flow models 
in 2014 there were pretax impairment charges of us433m posttax 
us431m 2013 us nil which are explained in note 5 the key 
sources of estimation uncertainty for these tests are consistent with 
those disclosed in note 5 and 12 
• 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 
• decommissioning costs the recognition and measurement of 
decommissioning provisions involves the use of estimates and 
assumptions which include the existence of an obligation to dismantle 
and remove a facility or restore the site on which it is located the 
appropriate discount rate to use in determining the net present value 
of the liability the estimated costs of decommissioning based on 
internal and external estimates and the payment dates for expected 
decommissioning costs as a result actual costs could differ from 
estimated cost estimates used to provide for decommissioning 
obligations the provision for decommissioning at 31 december 2014 
of us189m 2013 us136m represents management’s best 
estimate of the present value of the future decommissioning 
costs required 
investment in associates and joint ventures 
an associate is an entity over which the group has significant influence 
significant influence is the power to participate in the financial and 
operating policy decisions of the investee but is not control or joint 
control over those policies 
a joint venture is a type of joint arrangement whereby the parties that 
have joint control of the arrangement have rights to the net assets of the 
joint venture a joint operation is a type of joint arrangement whereby 
the parties that have joint control of the arrangement have rights to the 
assets and obligations for the liabilities relating to the arrangement joint 
control is the contractually agreed sharing of control of an arrangement 
which exists only when decisions about the relevant activities require 
unanimous consent of the parties sharing control 
the considerations made in determining significant influence or 
joint control are similar to those necessary to determine control  
over subsidiaries 
the group’s investments in its associate and joint venture are accounted 
for using the equity method 
under the equity method the investment in an associate or a joint 
venture is initially recognised at cost the carrying amount of the 
investment is adjusted to recognise changes in the group’s share of net 
assets of the associate or joint venture since the acquisition date 
goodwill relating to the associate or joint venture is included in the 
carrying amount of the investment and is neither amortised nor 
individually tested for impairment 
the consolidated income statement reflects the group’s share of the 
results of operations of the associate or joint venture any change in 
other comprehensive income oci of those investees is presented as 
part of the group’s oci in addition when there has been a change 
recognised directly in the equity of the associate or joint venture the 
group recognises its share of any changes when applicable in the 
statement of changes in equity the aggregate of the group’s share of 
profit or loss of an associate and a joint venture is shown on the face of 
the consolidated income statement outside operating profit and 
represents profit or loss after tax and noncontrolling interests in the 
subsidiaries of the associate or joint venture any unrealised gains and 
losses resulting from transactions between the group and the associate 
and joint venture are eliminated to the extent of the interest in its 
associates and joint ventures 
the financial statements of the associate or joint venture are prepared for 
the same reporting period as the group when necessary adjustments 
are made to bring the accounting policies in line with those of the group 
after application of the equity method the group determines whether it 
is necessary to recognise an impairment loss on its investment in its 
associate or joint venture at each reporting date the group determines 
whether there is objective evidence that the investment in the associate 
or joint venture is impaired if there is such evidence the group 
calculates the amount of impairment as the difference between the 
recoverable amount of the associate or joint venture and its carrying 
value then recognises the loss as ‘selling general and administration 
expenses’ in the consolidated income statement 
upon loss of significant influence over the associate or joint control over 
the joint venture the group measures and recognises any retained 
investment at its fair value any difference between the carrying amount 
of the associate or joint venture upon loss of significant influence or joint 
control and the fair value of the retained investment and proceeds from 
disposal is recognised in consolidated income statement 
the group’s interests in joint operations are recognised in relation to its 
interest in a joint operation’s  
• assets including its share of any assets held jointly 
• liabilities including its share of any liabilities incurred jointly 
• revenue from the sale of its share of the output arising from  
the joint operation 
• share of the revenue from the sale of the output by the  
joint operation 
• expenses including its share of any expenses incurred jointly  127
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
under joint operations the expenses that the group incurs and its 
share of the revenue earned is recognised in the consolidated income 
statement assets controlled by the group and liabilities incurred by it 
are recognised in the statement of financial position 
the statements of financial position of overseas subsidiaries joint 
ventures joint operations and associates are translated into us dollars 
using the closing rate method whereby assets and liabilities are 
translated at the rates of exchange prevailing at the reporting date 
the income statements of overseas subsidiaries and joint operations are 
translated at average exchange rates for the year exchange differences 
arising on the retranslation of net assets are taken directly to other 
reserves within the statement of changes in equity 
on the disposal of a foreign entity accumulated exchange differences 
are recognised in the consolidated income statement as a component 
of the gain or loss on disposal 
property plant and equipment 
property plant and equipment is stated at cost less accumulated 
depreciation and any impairment in value cost comprises the purchase 
price or construction cost and any costs directly attributable to making 
that asset capable of operating as intended the purchase price or 
construction cost is the aggregate amount paid and the fair value 
of any other consideration given to acquire the asset depreciation is 
provided on a straightline basis other than on oil and gas assets at the 
following rates 
oil and gas facilities 10 – 125 
plant and equipment 4 – 33 
buildings and leasehold improvements 5 – 33  
 or lease term if shorter 
office furniture and equipment 25 – 50 
vehicles 20 – 33 
tangible oil and gas assets are depreciated on a fieldbyfield basis 
using the unitofproduction method based on entitlement to proven 
and probable reserves taking account of estimated future development 
expenditure relating to those reserves refer to page 42 for life of 
these fields 
each asset’s estimated useful life residual value and method 
of depreciation are reviewed and adjusted if appropriate at each financial 
year end 
no depreciation is charged on land or assets under construction 
the carrying amount of an item of property plant and equipment 
is derecognised on disposal or when no future economic benefits are 
expected from its use or disposal the gain or loss arising from the 
derecognition of an item of property plant and equipment is included 
in the consolidated income statement when the item is derecognised 
gains are not classified as revenue 
noncurrent assets held for sale 
noncurrent assets or disposal groups are classified as held for 
sale when it is expected that the carrying amount of an asset will 
be recovered principally through sale rather than continuing use 
assets are not depreciated when classified as held for sale 
borrowing costs 
borrowing costs directly attributable to the construction of qualifying 
assets which are assets that necessarily take a substantial period 
of time to prepare for their intended use are added to the cost of those 
assets until such time as the assets are substantially ready for their 
intended use all other borrowing costs are recognised as interest 
payable in the consolidated income statement in the period in which 
they are incurred 
business combinations and goodwill 
business combinations are accounted for using the acquisition 
method the cost of an acquisition is measured as the aggregate of the 
consideration transferred measured at acquisition date fair value and 
the amount of any noncontrolling interests in the acquiree for each 
business combination the group elects whether to measure the non
controlling interests in the acquiree at fair value or at the proportionate 
share of the acquiree’s identifiable net assets acquisitionrelated costs 
are expensed as incurred and included in administrative expenses 
when the group acquires a business it assesses the financial assets 
and liabilities assumed for appropriate classification and designation 
in accordance with the contractual terms economic circumstances 
and pertinent conditions as at the acquisition date this includes the 
separation of embedded derivatives in host contracts by the acquiree 
if the business combination is achieved in stages any previously held 
equity interest is remeasured at its acquisition date fair value and any 
resulting gain or loss is recognised in profit or loss 
goodwill is initially measured at cost being the excess of the aggregate 
of the consideration transferred and the amount recognised for non
controlling interests and any previous interest held over the net fair 
value of the identifiable assets acquired and liabilities assumed if the 
fair value of the net assets acquired is in excess of the aggregate 
consideration transferred the group reassesses whether it has correctly 
identified all of the assets acquired and all of the liabilities assumed and 
reviews the procedures used to measure the amounts to be recognised 
at the acquisition date if the reassessment still results in an excess of 
the fair value of net assets acquired over the aggregate consideration 
transferred then the gain is recognised in profit or loss  
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 value portion 
of the cashgenerating units retained 
 
  128
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
for the year ended 31 december 2014 
2 summary of significant accounting policies 
continued 
contingent consideration payable on a business combination  
when as part of a business combination the group defers a 
proportion of the total purchase consideration payable for an acquisition 
the amount provided for is the acquisition date fair value of the 
consideration the unwinding of the discount element is recognised 
as a finance cost in the consolidated income statement for business 
combinations prior to 1 january 2010 all changes in estimated 
contingent consideration payable on acquisition are adjusted against 
the carried goodwill for business combinations after 1 january 2010 
changes in estimated contingent consideration payable on acquisition 
are recognised in the consolidated income statement unless they are 
measurement period adjustments which arise as a result of additional 
information obtained after the acquisition date about the facts and 
circumstances existing at the acquisition date which are adjusted 
against carried goodwill contingent consideration that is classified 
as equity is not remeasured and subsequent settlement is accounted 
for within equity 
intangible assets – non oil and gas assets 
intangible assets acquired in a business combination are initially 
measured at cost being their fair values at the date of acquisition and 
are recognised separately from goodwill where the asset is separable 
or arises from a contractual or other legal right and its fair value can be 
measured reliably after initial recognition intangible assets are carried 
at cost less accumulated amortisation and any accumulated impairment 
losses intangible assets with a finite life are amortised over their useful 
economic life using a straightline method unless a better method 
reflecting the pattern in which the asset’s future economic benefits are 
expected to be consumed can be determined the amortisation charge 
in respect of intangible assets is included in the selling general and 
administration expenses line of the consolidated income statement 
the expected useful lives of assets are reviewed on an annual basis 
any change in the useful life or pattern of consumption of the intangible 
asset is treated as a change in accounting estimate and is accounted for 
prospectively by changing the amortisation period or method intangible 
assets are tested for impairment whenever there is an indication 
that the asset may be impaired 
oil and gas assets 
capitalised costs 
the group’s activities in relation to oil and gas assets are limited 
to assets in the evaluation development and production phases 
oil and gas evaluation and development expenditure is accounted 
for using the successful efforts method of accounting 
evaluation expenditures 
expenditure directly associated with evaluation or appraisal activities 
is capitalised as an intangible asset such costs include the costs 
of acquiring an interest appraisal well drilling costs payments to 
contractors and an appropriate share of directly attributable overheads 
incurred during the evaluation phase for such appraisal activity which 
may require drilling of further wells costs continue to be carried as an 
asset whilst related hydrocarbons are considered capable of commercial 
development such costs are subject to technical commercial and 
management review to confirm the continued intent to develop or 
otherwise extract value when this is no longer the case the costs are 
writtenoff in the income statement when such assets are declared part 
of a commercial development related costs are transferred to tangible oil 
and gas assets all intangible oil and gas assets are assessed for any 
impairment prior to transfer and any impairment loss is recognised in the 
consolidated income statement 
development expenditures 
expenditure relating to development of assets which includes the 
construction installation and completion of infrastructure facilities such 
as platforms pipelines and development wells is capitalised within 
property plant and equipment 
changes in unitofproduction factors 
changes in factors which affect unitofproduction calculations are 
dealt with prospectively in accordance with the treatment of changes 
in accounting estimates not by immediate adjustment of prior 
years’ amounts 
decommissioning 
provision for future decommissioning costs is made in full when 
the group has an obligation to dismantle and remove a facility 
or an item of plant and to restore the site on which it is located 
and when a reasonable estimate of that liability can be made 
the amount recognised is the present value of the estimated future 
expenditure an amount equivalent to the discounted initial provision for 
decommissioning costs is capitalised and amortised over the life of the 
underlying asset on a unitofproduction basis over proven and probable 
reserves any change in the present value of the estimated expenditure 
is reflected as an adjustment to the provision and the oil and gas asset 
the unwinding of the discount applied to future decommissioning 
provisions is included under finance costs in the consolidated 
income statement 
impairment of assets excluding goodwill 
at each statement of financial position date the group reviews 
the carrying amounts of its tangible and intangible assets to assess 
whether there is an indication that those assets may be impaired if any 
such indication exists the group makes an estimate of the asset’s 
recoverable amount an asset’s recoverable amount is the higher of its 
fair value less costs of disposal 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 fair value less costs of disposal is based on 
the riskadjusted discounted cash flow models and includes value 
attributable to contingent resources a posttax discount rate is used 
in such calculations  
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 firstin
firstout method costs of raw materials are determined using the 
weighted average method 
   129
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
work in progress and billings in excess of cost and 
estimated earnings 
fixed price lump sum engineering procurement and construction 
contracts are presented in the statement of financial position as follows  
• for each contract the accumulated cost incurred as well as 
the estimated earnings recognised at the contract’s percentage 
of completion less provision for any anticipated losses after deducting 
the progress payments received or receivable from the customers are 
shown in current assets in the statement of financial position under 
‘work in progress’ 
• where the payments received or receivable for any contract exceed the 
cost and estimated earnings less provision for any anticipated losses 
the excess is shown as ‘billings in excess of cost and estimated 
earnings’ within current liabilities 
trade and other receivables 
trade receivables are recognised and carried at original invoice amount 
less an allowance for any amounts estimated to be uncollectable 
an estimate for doubtful debts is made when there is objective evidence 
that the collection of the full amount is no longer probable under the 
terms of the original invoice impaired debts are derecognised when they 
are assessed as uncollectable 
cash and cash equivalents 
cash and cash equivalents consist of cash at bank and in hand 
and shortterm deposits with an original maturity of three months or less 
for the purpose of the cash flow statement cash and cash equivalents 
consists of cash and cash equivalents as defined above net of 
outstanding bank overdrafts 
interestbearing loans and borrowings 
all interestbearing loans and borrowings are initially recognised at the 
fair value of the consideration received net of issue costs directly 
attributable to the borrowing 
after initial recognition interestbearing loans and borrowings are 
subsequently measured at amortised cost using the effective interest 
rate method amortised cost is calculated by taking into account any 
issue costs and any discount or premium on settlement 
provisions 
provisions are recognised when the group has a present legal or 
constructive obligation as a result of past events it is probable that an 
outflow of resources will be required to settle the obligation and a reliable 
estimate can be made of the amount of the obligation if the time value 
of money is material provisions are discounted using a current pretax 
rate that reflects where appropriate the risks specific to the liability 
where discounting is used the increase in the provision due to the 
passage of time is recognised in the consolidated income statement 
as a finance cost 
fair value measurement 
the group measures financial instruments such as derivatives 
receivable from customer under berantai rsc availableforsale financial 
assets and amounts receivable in respect of the development of the 
greater stella area at fair value at each reporting date fair value related 
disclosures for financial instruments are disclosed in note 32 
fair value is the price that would be received to sell an asset or paid to 
transfer a liability in an orderly transaction between market participants 
at the measurement date the fair value measurement is based on the 
presumption that the transaction to sell the asset or transfer the liability 
takes place either  
• in the principal market for the asset or liability or 
• in the absence of a principal market in the most advantageous market 
for the asset or liability 
the principal or the most advantageous market must be accessible 
by the group 
the fair value of an asset or a liability is measured using the assumptions 
that market participants would use when pricing the asset or liability 
assuming that market participants act in their economic best interest 
a fair value measurement of a nonfinancial asset takes into account a 
market participants ability to generate economic benefits by using the 
asset in its highest and best use or by selling it to another market 
participant that would use the asset in its highest and best use 
the group uses valuation techniques that are appropriate in the 
circumstances and for which sufficient data are available to measure fair 
value maximising the use of relevant observable inputs and minimising 
the use of unobservable inputs 
all assets and liabilities for which fair value is measured or disclosed in 
the financial statements are categorised within the fair value hierarchy 
described as follows based on the lowest level input that is significant 
to the fair value measurement as a whole 
• level 1 – quoted unadjusted market prices in active markets for 
identical assets or liabilities 
• level 2 – valuation techniques for which the lowest level input that 
is significant to the fair value measurement is directly or indirectly 
observable 
• level 3 – valuation techniques for which the lowest level input that 
is significant to the fair value measurement is unobservable 
for assets and liabilities that are recognised in the financial statements 
on a recurring basis the group determines whether transfers have 
occurred between levels in the hierarchy by reassessing categorisation 
based on the lowest level input that is significant to the fair value 
measurement as a whole at the end of each reporting period 
for the purpose of fair value disclosures the group has determined 
classes of assets and liabilities on the basis of the nature characteristics 
and risks of the asset or liability and the level of the fair value hierarchy 
as explained above during the year amounts receivable in respect of the 
development of the greater stella area were transferred from level 2 to 
level 3 due to the use of unobservable inputs involved to fair value the 
financial asset  
financial assets 
initial recognition and measurement 
financial assets are classified at initial recognition as financial assets at 
fair value through profit or loss loans and receivables heldtomaturity 
investments availableforsale financial assets or as derivatives 
designated as hedging instruments in an effective hedge as appropriate 
all financial assets are recognised initially at fair value plus in the case 
of financial assets not recorded at fair value through profit or loss 
transaction costs that are attributable to the acquisition of the financial 
asset 
subsequent measurement 
for purposes of subsequent measurement financial assets are classified 
in following categories 
• financial assets at fair value through profit or loss 
• loans and receivables 
• availableforsale financial assets 
   130
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
for the year ended 31 december 2014 
2 summary of significant accounting policies 
continued 
financial assets at fair value through profit or loss 
financial assets at fair value through profit or loss include financial assets 
held for trading and financial assets designated upon initial recognition at 
fair value through profit or loss financial assets are classified as held for 
trading if they are acquired for the purpose of selling or repurchasing in 
the near term derivatives including separated embedded derivatives 
are also classified as held for trading unless they are designated as 
effective hedging instruments as defined by ias 39 the receivables 
under the berantai rsc are classified as fair value through profit or loss 
financial assets as it is managed and the performance evaluated by 
management on a fair value basis amounts receivable in respect of the 
development of the greater stella area are also classified as financial 
assets held at fair value through profit or loss and are measured at the 
value which management expects would be converted to oil and gas 
assets upon transfer of legal title of the licence financial assets at fair 
value through profit or loss are carried in the statement of financial 
position at fair value with net changes in fair value reported in the 
consolidated income statement  
the fair value changes to undesignated forward currency contracts are 
reported within other operating incomeexpenses the fair value changes 
relating to the internal rate of return under the berantai rsc receivable 
are recognised as revenue whereas the unwinding of discount is 
reported as finance income negative fair value changes on the berantai 
rsc as a result of changes in the expected recovery of the receivable 
and negative fair value changes to the amounts receivable in respect of 
the development of the greater stella area are recorded as an expense 
in the consolidated income statement refer to note 5 
loans and receivables 
loans and receivables are nonderivative financial assets with fixed or 
determinable payments that are not quoted in an active market after 
initial measurement such financial assets are subsequently measured 
at amortised cost using the effective interest rate eir method less 
impairment amortised cost is calculated by taking into account any 
discount or premium on acquisition and fees or costs that are an integral 
part of the eir the eir amortisation is included in finance income in the 
consolidated income statement this category generally applies to trade 
and other receivables 
availableforsale afs financial assets 
afs financial assets include equity investments equity investments 
classified as afs are those that are neither classified as heldfortrading 
nor designated at fair value through profit or loss 
after initial measurement afs financial assets are subsequently 
measured at fair value with unrealised gains or losses recognised in other 
comprehensive income and credited in the availableforsale reserve until 
the investment is derecognised at which time the cumulative gain or loss 
is recognised in consolidated income statement within other operating 
income expenses or the investment is determined to be impaired 
when the cumulative loss is reclassified from the afs reserve to the 
consolidated income statement in other operating income expenses 
derecognition of financial assets and liabilities 
financial assets 
a financial asset or where applicable a part of a financial asset 
is derecognised where 
• the rights to receive cash flows from the asset have expired 
• the group retains the right to receive cash flows from the asset but 
has assumed an obligation to pay them in full without material delay 
to a thirdparty under a ‘passthrough’ arrangement or
• the group has transferred its rights to receive cash flows from the 
asset and either a has transferred substantially all the risks and 
rewards of the asset or b has neither transferred nor retained 
substantially all the risks and rewards of the asset but has transferred 
control of the asset  
financial liabilities 
a financial liability is derecognised when the obligation under the liability 
is discharged or cancelled or expires 
if an existing financial liability is replaced by another from the same 
lender on substantially different terms or the terms of an existing liability 
are substantially modified such an exchange or modification is treated 
as a derecognition of the original liability and the recognition of a new 
liability such that the difference in the respective carrying amounts 
together with any costs or fees incurred are recognised in the 
consolidated income statement 
offsetting of financial instruments 
financial assets and financial liabilities are offset and the net amount is 
reported in the consolidated statement of financial position if there is a 
currently enforceable legal right to offset the recognised amounts and 
there is an intention to settle on a net basis to realise the assets and 
settle the liabilities simultaneously 
pensions and other longterm employment benefits 
the group has various defined contribution pension schemes in 
accordance with the local conditions and practices in the countries in 
which it operates the amount charged to the consolidated income 
statement in respect of pension costs reflects the contributions payable 
in the year differences between contributions payable during the year 
and contributions actually paid are shown as either accrued liabilities 
or prepaid assets in the statement of financial position 
the group’s other longterm employment benefits are provided in 
accordance with the labour laws of the countries in which the group 
operates further details of which are given in note 27 
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 
   131
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
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 schemes on their 
respective vesting dates subject to satisfying any performance 
conditions of each scheme the trusts continue to be included in the 
group financial statements under ifrs 10 
treasury shares 
for the purpose of making awards under the group’s employee share 
schemes shares in the company are purchased and held by the 
petrofac employee benefit trust and the petrofac joint venture 
companies employee benefit trust all these shares have been 
classified in the statement of financial position as treasury shares within 
equity shares vested during the year are satisfied with these shares 
leases 
the determination of whether an arrangement is or contains a lease 
is based on the substance of the arrangement at inception date and 
whether the fulfilment of the arrangement is dependent on the use 
of a specific asset or assets or the arrangement conveys the right 
to use the asset 
leases are classified as finance leases whenever the terms of the lease 
transfer substantially all the risks and rewards of ownership to the lessee 
all other leases are classified as operating leases 
assets held under finance leases are recognised as noncurrent assets 
of the group at the lower of their fair value at the date of commencement 
of the lease and the present value of the minimum lease payments 
these assets are depreciated on a straightline basis over the shorter of 
the useful life of the asset and the lease term the corresponding liability 
to the lessor is included in the consolidated statement of financial 
position as a finance lease obligation lease payments are apportioned 
between finance costs in the income statement and reduction of the 
lease obligation so as to achieve a constant rate of interest on the 
remaining balance of the liability 
the group has entered into various operating leases the payments 
for which are recognised as an expense in the consolidated income 
statement on a straightline basis over the lease terms 
revenue recognition 
revenue is recognised to the extent that it is probable economic 
benefits will flow to the group and the revenue can be reliably measured 
the following specific recognition criteria also apply 
onshore engineering  construction 
revenues from fixedprice lumpsum contracts are recognised using the 
percentageofcompletion method based on surveys of work performed 
once the outcome of a contract can be estimated reliably in the early 
stages of contract completion when the outcome of a contract cannot 
be estimated reliably contract revenues are recognised only to the 
extent of costs incurred that are expected to be recoverable 
revenues from costplusfee contracts are recognised on the basis 
of costs incurred during the year plus the fee earned measured by the 
costtocost method 
revenues from reimbursable contracts are recognised in the period in 
which the services are provided based on the agreed contract schedule 
of rates 
provision is made for all losses expected to arise on completion 
of contracts entered into at the statement of financial position date 
whether or not work has commenced on these contracts 
incentive payments are included in revenue when the contract 
is sufficiently advanced that it is probable that the specified performance 
standards will be met or exceeded and the amount of the incentive 
payments can be measured reliably variation orders are only included 
in revenue when it is probable they will be accepted and can be 
measured reliably and claims are only included in revenue when 
negotiations have reached an advanced stage such that it is probable 
that the claim will be accepted and can be measured reliably 
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 percentage
ofcompletion 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 
equity upstream investments 
oil and gas revenues comprise the group’s share of sales from the 
processing or sale of hydrocarbons from the group’s equity upstream 
investments on an entitlement basis when the significant risks and 
rewards of ownership have been passed to the buyer 
production enhancement contracts 
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 
risk services contract rsc 
revenue from the risk services contract is recognised as follows 
• the construction services element of the rsc is accounted for using 
a percentageofcompletion method at the end of the reporting period 
measured on the basis of the extent of the schedule of work 
completed to date due to uncertainties about the eventual financial 
outcome of the construction work no margin is recognised in the early 
stages of the construction and revenues are only recognised to the 
extent of costs until the outcome can be estimated reliably 
• the operation and management activities revenuesmargins are 
recognised on a proportionate basis over the life of the contract 
on the basis of the level of operating expenditure incurred each year 
• the total remuneration fee is a multiple of the estimated capital 
expenditure control budget agreed with the customer with this 
multiple designed to deliver the contractor’s internal rate of return 
which is determined by the contractor’s performance against a matrix 
of kpi’s which include actual cost of field development vs control 
budget set the time taken to achieve first gas from the field and the 
timing of final project completion 
  132
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
for the year ended 31 december 2014 
2 summary of significant accounting policies 
continued 
• payment of cost recovery commences from first oilgas in equal 
quarterly instalments over seven years and payment of the 
remuneration fee commences from the quarter following completion of 
the construction phase of the project and concludes at the end of the 
rsc term these receivable amounts under the rsc are classified as 
a financial asset at fair value through profit or loss as the contract is 
managed and the performance evaluated by management on a fair 
value basis for measurement purposes fair value principles are 
applied to calculate the present value of earned remuneration under 
the contract by discounting back to present value and then splitting 
between due within one year and long term receivables within other 
financial assets see note 16 on page 149  
precontractbid costs 
precontractbid costs incurred are recognised as an expense until there is a 
high probability that the contract will be awarded after which all further costs 
are recognised as assets and expensed over the life of the contract 
income taxes 
income tax expense represents the sum of current income tax and 
deferred tax 
current income tax assets and liabilities for the current and prior periods 
are measured at the amount expected to be recovered from or paid to 
the taxation authorities taxable profit differs from profit as reported in 
the consolidated income statement because it excludes items of income 
or expense that are taxable or deductible in other years and it further 
excludes items that are never taxable or deductible the group’s liability 
for current tax is calculated using tax rates that have been enacted or 
substantively enacted by the statement of financial position date 
deferred tax is recognised on all temporary differences at the statement 
of financial position date between the carrying amounts of assets and 
liabilities in the financial statements and the corresponding tax bases 
used in the computation of taxable profit with the following exceptions  
• where the temporary difference arises from the initial recognition 
of goodwill or of an asset or liability in a transaction that is not a 
business combination that at the time of the transaction affects neither 
accounting nor taxable profit or loss 
• in respect of taxable temporary differences associated with 
investments in subsidiaries associates and joint ventures where the 
timing of reversal of the temporary differences can be controlled and it 
is probable that the temporary differences will not reverse in the 
foreseeable future and 
• deferred tax assets are recognised only to the extent that it is probable 
that a taxable profit will be available against which the deductible 
temporary differences carried forward tax credits or tax losses can 
be utilised 
the carrying amount of deferred tax assets is reviewed at each 
statement of financial position date and reduced to the extent that it 
is no longer probable that sufficient taxable profit will be available to 
allow all or part of the deferred tax assets to be utilised unrecognised 
deferred tax assets are reassessed at each statement of financial 
position date and are recognised to the extent that it has become 
probable that future taxable profit will allow the deferred tax asset to 
be recovered 
deferred tax assets and liabilities are measured on an undiscounted 
basis at the tax rates that are expected to apply when the asset is 
realised or the liability is settled based on tax rates and tax laws enacted 
or substantively enacted at the statement of financial position date 
current and deferred tax is charged or credited directly to other 
comprehensive income or equity if it relates to items that are credited or 
charged to respectively other comprehensive income or equity otherwise 
income tax is recognised in the consolidated income statement 
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 other comprehensive 
income in net unrealised gainslosses on derivatives while the 
ineffective portion is recognised in the consolidated income statement 
amounts taken to other comprehensive income are transferred to the 
consolidated income statement when the hedged transaction affects the 
consolidated income statement 
if the hedging instrument expires or is sold terminated or exercised 
without replacement or rollover or if its designation as a hedge is 
revoked any cumulative gain or loss previously recognised in other 
comprehensive income remains separately in equity until the forecast 
transaction occurs and affects the consolidated income statement 
when a forecast transaction is no longer expected to occur the 
cumulative gain or loss that was reported in other comprehensive 
income is immediately transferred to the consolidated income statement 
embedded derivatives 
contracts are assessed for the existence of embedded derivatives 
at the date that the group first becomes party to the contract 
with reassessment only if there is a change to the contract that 
significantly modifies the cash flows embedded derivatives which are 
not clearly and closely related to the underlying asset liability 
or transaction are separated and accounted for as 
standalone derivatives  133
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
3 segment information 
the group delivers its services through the four reporting segments set out below 
• onshore engineering  construction which provides engineering procurement and construction project execution services to the onshore oil 
and gas industry  
• offshore projects  operations which provides offshore engineering operations and maintenance onshore and offshore and engineering 
procurement and construction project execution services to the offshore oil and gas industry 
• engineering  consulting services which provides technical engineering consultancy conceptual design front end engineering and design feed 
and project management consultancy pmc across all sectors including renewables  
• 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 
for making decisions about how resources are allocated from 1 january 2014 internal management reporting was changed such that interest costs 
and income arising from borrowings and cash balances which are not directly attributable to individual operating segments are allocated to corporate 
rather than allocated to individual segments the presentation of profitability for each segment in the 31 december 2014 consolidated financial 
statements reflects this treatment and the 31 december 2013 comparative period has been restated accordingly in addition as in prior periods certain 
shareholder services related overheads intragroup financing and consolidation adjustments are managed at a corporate level and are not allocated 
to reporting segments 
the presentation of the group results below also separately identifies the effect of asset impairments provision for onerous contract and re
measurements results excluding these nonrecurring items are used by management and presented in order to provide readers with a clear and 
consistent presentation of the underlying operating performance of the business 
the following tables represent revenue and profit information relating to the group’s reporting segments for the year ended 31 december 2014 
year ended 31 december 2014 
  
onshore 
engineering  
construction 
usm  
offshore 
projects  
operations 
usm  
engineering  
consulting
services
usm
integrated 
energy 
services 
usm
corporate
 others
usm
consolidation 
adjustments 
 eliminations
usm
business 
performance 
usm  
integrated
energy services 
exceptional 
items and certain 
remeasurements 
usm
total
usm
revenue        
external sales  3207  2000  276 768 –
1
10 6241  – 6241
intersegment sales  34  9  161 14 – 218 –  – –
total revenue  3241  2009  437 782 – 228 6241  – 6241
 
segment results  395  89  39 165 4
2
11 695  463 232
unallocated 
corporate costs  –  –  – – 11 – 11  – 11
profitloss before 
tax and finance 
incomecosts  395  89  39 165 15 11 684  463 221
share of profits of 
associatesjoint 
ventures  –  –  – 7 – – 7  – 7
finance costs  –   –  – 25 54 – 79  – 79
finance income  –   –  – 20 2 – 22  – 22
profitloss before 
income tax  395  89  39 167 67 11 634  463 171
income tax 
expensecredit  28  25  6 36 6 – 33  2 31
noncontrolling 
interests  20  –  – – – – 20  – 20
profitloss for 
the year 
attributable to  
petrofac limited 
shareholders  403  64  33 131 61 11 581  461 120
1 negative elimination of external sales shown above of us10m represents a group adjustment to the overall project percentage of completion on the laggantormore 
project as oec and opo are reflecting in their segments progress on their own respective shares of the total project scope 
2 represents release of previously eliminated margin relating to west desaru and berantai vessel on disposal of subsidiary
   134
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
3 segment information continued 
  
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
other segment information    
capital expenditures    
property plant and equipment  28 171 9 437 12  11 668
intangible oil and gas assets  – – – 144 –  – 144
 
charges    
depreciation  431861594  – 230
amortisation and write off  – – – 14 –  – 14
exceptional items and certain remeasurements  – – – 433 –  – 433
other longterm employment benefits  18 1 – – –  – 19
sharebased payments  11 4 1 3 3  – 22
year ended 31 december 2013  
as restated 
  
onshore 
engineering 
construction
usm
offshore 
projects  
operations 
usm
engineering  
consulting
services
usm
integrated 
energy 
services 
usm
corporate 
 others 
usm  
consolidation 
adjustments 
 eliminations
usm
total
usm
revenue    
external sales  3524 1639 196 922 –  
1
48 6329
intersegment sales  10 32 166 12 –  220 –
total revenue  3534 1671 362 934 –  172 6329
 
segment results  483 99 31 146 2  
2
19 780
unallocated corporate costs  – – – – 9  – 9
profitloss before tax and finance incomecosts  483 99 31 146 7  19 771
share of profits of associatesjoint ventures  – – 2 20 –  – 22
finance costs  – – – 4 24  – 28
finance income  – – – 23 1  – 24
profitloss before income tax  483 99 33 185 30  19 789
income tax expensecredit  50 28 4 60 1  1 142
noncontrolling interests  – – 3 – –  – 3
profitloss for the year attributable to 
petrofac limited shareholders  433 71 32 125 29  18 650
 
other segment information    
capital expenditures    
property plant and equipment  60 40 6 497 5  11 597
intangible oil and gas assets  – – – 43 –  – 43
 
charges    
depreciation  5219514411  2229
amortisation and write off  4 – – 5 –  – 9
other longterm employment benefits  19 1 – – –  – 20
sharebased payments  9 2 1 2 1  – 15
1 positive elimination of external sales shown above of us48m represents a group adjustment to the overall project percentage of completion on the laggantormore 
project as oec and opo are reflecting in their segments progress on their own respective shares of the total project scope 
2 includes us22m gain arising from the granting of a finance lease for the fpf5 floating production facility to the pm304 joint venture in which the group has a 
30 interest 
   135
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
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 2014 and 2013 
year ended 31 december 2014 
  
united 
kingdom 
usm  
united arab 
emirates 
usm  
algeria
usm
malaysia 
usm
oman
usm
kuwait
 usm
saudi arabia 
 usm  
other 
countries 
usm
consolidated 
usm
revenues 
from external 
customers  1401  925  688 515 469 450 355  1438 6241
 
  
united 
kingdom 
usm  
united arab 
emirates 
usm
mexico 
usm
romania 
usm
malaysia
usm
tunisia  
usm  
other 
countries 
usm
consolidated 
usm
noncurrent assets      
property plant and equipment  54  299 421 – 800 61  63 1698
intangible oil and gas assets  11  – – – 135 9  1 156
other intangible assets  7  – 23 – – –  – 30
goodwill  67  44 – – 3 –  1 115
year ended 31 december 2013 
  
united 
kingdom 
usm  
 
turkmenistan 
usm  
algeria
usm
united arab 
emirates 
usm
malaysia 
usm
saudi arabia
usm
iraq 
 usm  
other 
countries 
usm
consolidated 
usm
revenues 
from external 
customers  1640  697  714 678 556 395 388  1261 6329
 
  
united 
kingdom 
usm  
united arab 
emirates 
usm
mexico 
usm
romania 
usm
malaysia
usm
tunisia  
usm  
other 
countries 
usm
consolidated 
usm
noncurrent assets      
property plant and equipment  48  139 327 139 377 50  111 1191
intangible oil and gas assets  11  – – – 270 8  1 290
other intangible assets  10  – 24 5 – –  1 40
goodwill  107  44 – – – –  4 155
revenues disclosed in the above tables are based on where the project is located revenues representing greater than 10 of group revenues arose 
from two customers amounting to us525m in the onshore engineering  construction segment and us449m in the offshore projects  operations 
segment 2013 one customer us696m in the onshore engineering  construction segment 
4 revenues and expenses 
a revenue 
  
2014
 usm
2013
 usm
rendering of services  6044 6181
sale of crude oil and gas  197 148
  6241 6329
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 us226m 2013 us389mthe 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 2014 is depreciation charged on property plant and equipment of us210m during 2014 
2013 us207m note 10 oil and gas intangible amounting to us8m 2013 usnil written off during the year note 13 and intangible amortisation 
of us2m 2013 usnil 
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 us10m 2013 usnilthese 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 
   136
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
4 revenues and expenses continued 
c selling general and administration expenses 
  
2014
 usm
2013
 usm
staff costs   223 245
depreciation note 10   20 22
amortisation note 13    3 9
write off of intangible oil and gas assets note 13   1 –
other operating expenses    121 111
   368 387
other operating expenses consist mainly of office travel legal and professional and contracting staff costs 
d staff costs 
  
2014
 usm
2013
 usm
total staff costs    
wages and salaries    1164 1154
social security costs    68 58
defined contribution pension costs    23 18
other longterm employee benefit costs note 27    19 20
expense of sharebased payments note 24    22 15
   1296 1265
of the us1296m 2013 us1265m of staff costs shown above us1073m 2013 us1020m 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 16135 2013 15948 
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 
  
2014
 usm
2013
 usm
group audit fee   2 2
audit of accounts of subsidiaries    1 1
others   1 1
   4 4
others include audit related assurance services of us380000 2013 us350000 tax advisory services of us210000 2013 us460000 
tax compliance services of us240000 2013 us200000 and other nonaudit services of us40000 2013 us340000 
f other operating income 
  
2014
 usm
2013
 usm
gain on disposal of noncurrent asset     56 –
foreign exchange gains    30 10
other income    9 1
   95 11
other income includes us5m receipt of liquidated damages from a vendor for late delivery of a mopu 
disposal of noncurrent asset 
on 13 august 2014 the group sold 80 of the share capital of petrofac fpso holding limited which via its subsidiaries owns interests in the 
fpso berantai fpf3 formerly jasmine venture and fpf5 formerly ocean legend to petrofirst infrastructure holdings limited for an initial cash 
consideration of us307m at 31 december 2014 there was a further us34m of contingent consideration payable and this together with the initial 
consideration of us307m resulted in the recognition of a total gain on disposal of us56m in the ies segment which includes fair value gain of 
us31m on initial recognition of remaining 20 investment in associate 
   137
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
the gain on disposal has been computed as follows 
  
2014
usm
fair value of consideration for 80 of the equity received in cash  87
proceeds from repayments of loans due from fpso holding limited  220
  307
fair value of contingent consideration for 80 of the equity receivable at reporting date  34
total consideration  341
  
property plant and equipment  31
cash  48
finance lease receivables  336
trade and other receivables  16
debt acquisition costs  3
total book value of assets disposed  434
  
berantai rsc project financing debt transferred note 26  128
trade and other payables  25
total book value of liabilities disposed  153
  
due todue from related parties arising on disposal   
due from related parties  23
due to related parties  40
  17
  
allocated goodwill written off note 12  15
transaction costs  3
fair value gain on initial recognition of remaining 20 investment in associate   31
gain on disposal  56
g other operating expenses 
  
2014
 usm
2013
 usm
foreign exchange losses   39 15
loss on fair value changes in seven energy warrants note 15  – 1
other expenses   3 1
  42 17
 
   138
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
5 exceptional items and certain remeasurements 
  
2014
 usm
2013
 usm
impairment of assets including goodwill   172 –
fair value remeasurements  261 –
  433 –
provision for onerous contract  30 –
total exceptional items and certain remeasurements  463 –
tax relief  2 –
income statement charge for the year  461 –
as a result of significantly lower commodity price expectations cost overruns on the conversion of the fpf1 vessel and the latest view of the timing of 
first production the group reviewed the carrying value of its loan receivable from ithaca energy in respect of the greater stella area in the uk the 
review was carried out on a fair value basis using risk adjusted cash flow projections discounted at a posttax rate of 90 this resulted in a pretax 
reduction in fair value of the greater stella area receivable of us207m posttax us207m in the ies segment 
following the review of the ticleni production enhancement contract in romania the group has taken the decision to exit the contract and 
consequently has fully impaired the carrying value of the property plant and equipment relating to the contract of us130m and other intangible assets 
of us4m this resulted in a pretax impairment charge of us134m posttax us137m and the group has also provided for expenses relating to 
termination of this contract of us30m in the ies segment  
the group has also reviewed the carrying value of the other assets including goodwill in the ies portfolio in light of lower commodity price 
expectations as a result of this review further impairment charges of us20m posttax us25m have been recognised in the ies segment in respect 
of the fpso opportunity and oml119 in nigeria and us18m of ies goodwill has been written off pretax fair value remeasurements of us54m 
posttax us44m have been recognised on the berantai rsc in malaysia and the warrants the group holds over shares in seven energy international 
limited 
for impairment of property plant and equipment and intangible oil and gas assets fair value less costs of disposal are determined by discounting the 
posttax cash flows expected to be generated from oil and gas production net of selling costs taking into account assumptions that market 
participants would typically use in estimating fair values these estimates are categorised within level 3 of the fair value hierarchy posttax cash flows 
are derived from projected production profiles for each asset taking into account forward market commodity prices over the relevant period and where 
external forward prices are not available the group’s board approved five year business planning assumptions are used as each field has different 
reservoir characteristics and contractual terms the posttax cash flows for each asset are calculated using individual economic models which 
include assumptions around the amount of recoverable reserves production costs life of the fieldlicence period and the selling price of the 
commodities produced refer to note 32 for fair value disclosures in respect of assets carried at fair value 
  
   139
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
6 finance costsincome 
  
2014
 usm
2013
 usm
finance costs   
longterm borrowings   54 23
finance leases   19 –
shortterm loans and overdrafts   – 1
unwinding of discount on provisions note 27  6 4
total finance costs   79 28
finance income  
bank interest   2 1
unwinding of discount on longterm receivables from customers note 16  20 23
total finance income   22 24
7 income tax 
a tax on ordinary activities  
the major components of income tax expense are as follows 
business 
performance
usm
exceptional 
items and certain 
remeasurements 
usm  
total
2014
 usm
2013
 usm
current income tax   
current income tax charge 108 –  108 170
adjustments in respect of current income tax of previous years 89 –  89 29
deferred tax 
relating to origination and reversal of temporary differences 16 7  9 2
recognition of tax losses relating to prior periods 2 5  3 1
income tax expensecredit reported in the income statement  33 2  31 142
income tax reported in equity   
deferred tax related to items charged directly to equity 2 –  2 2
current income tax related to share schemes 1 –  1 –
income tax income reported in equity 1 –  1 2
the split of the group’s tax charge between current and deferred tax varies from year to year depending largely on 
• the variance between tax provided on the percentage of completion of projects versus that paid on accrued income for engineering procurement 
and construction contracts and  
• the tax deductions available for expenditure on risk service contracts and production enhancement contracts pecs which are partially offset by 
the creation of losses 
see 7c below for the impact on the movements in the year 
   140
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
7 income tax continued 
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 
business 
performance
usm
exceptional 
items and certain 
remeasurements 
usm  
total
2014
 usm
2013
 usm
accounting profit before tax  634 463  171 789
at jersey’s domestic income tax rate of 0 2013 0  
– –  
– –
expected tax charge in higher rate jurisdictions  69 38  31 154
expenditure not allowable for income tax purposes  15 1  16 20
adjustments in respect of previous years  90 1  89 28
adjustments in respect of losses not previously recognisedderecognised  4 2  2 8
unrecognised tax losses  39 6  45 1
other permanent differences  4 26  30 2
effect of change in tax rates  – –  – 1
at the effective income tax rate of 184 2013 180  33 2  31 142
the groups effective tax rate for the year ended 31 december 2014 is 184 2013 180 the group’s effective tax rate excluding the impact of 
exceptional items and certain remeasurements for the year ended 31 december 2014 is 52 2013 180  
a number of factors have impacted the effective tax rate excluding the impact of exceptional items and certain remeasurements this year principally 
being the net release of tax provisions held in respect of income taxes which is partially offset by the impact of tax losses created in the year for which 
the realisation against future taxable profits is not probable  
in line with prior years the effective tax rate is also driven by the mix of profits in the jurisdictions in which profits are earned the adjustments in respect 
of prior periods include the utilisation of tax losses which were previously unrecognised in addition to the tax provision release mentioned above  
from 1 april 2015 the main uk corporation tax rate will be 20 the change in the uk rate to 20 was substantively enacted prior to 1 jan 2014 and 
the impact of the change included within the prior year charge there is therefore no impact of the change on the current year charge from 1 january 
2016 the main malaysian rate of corporation tax will reduce by 1 to 24 this change was substantively enacted prior to the reporting date and 
therefore the impact of the change on the current year tax charge has been included above 
c deferred tax 
deferred tax relates to the following 
consolidated statement 
of financial position  
consolidated income 
statement 
2014
 usm
2013 
 usm  
2014
 usm
2013
 usm
deferred tax liabilities  
fair value adjustment on acquisitions 2
 
3  1 –
accelerated depreciation 239 204  35 83
profit recognition 58 32  26 68
other temporary differences 2 2  – 2
gross deferred tax liabilities 301 241  
deferred tax assets 
losses available for offset 108 93  15 3
decelerated depreciation for tax purposes 3 2  1 1
share scheme 4 6  – 1
profit recognition 5 6  1 5
other temporary differences 64 31  33 26
gross deferred tax assets 184 138  
net deferred tax liabilitydeferred tax charge 117 103  12 1
   
of which   
 deferred tax assets 34 37  
 deferred tax liabilities 151 140  
   141
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
d unrecognised tax losses and tax credits 
deferred income tax assets are recognised for tax loss carry forwards and tax credits to the extent that the realisation of the related tax benefit through 
offset against future taxable profits is probable the group did not recognise deferred income tax assets of us231m 2013 us29m 
  
2014
 usm
2013
 usm
expiration dates for tax losses  
no earlier than 2019  18 –
no earlier than 2024  – –
no expiration date  201 17
  219 17
tax credits no expiration date  12 12
  231 29
during 2014 the group recognised a tax benefit from the utilisation of tax losses us1m 2013 us2m recognised losses not previously recognised 
of us4m 2013 us7m and derecognised tax losses from a prior period of us2m 2013 us nil 
8 earnings per share 
basic earnings per share amounts are calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted average 
number of ordinary shares outstanding during the year 
diluted earnings per share amounts are calculated by dividing the profit attributable to ordinary shareholders after adjusting for any dilutive effect by 
the weighted average number of ordinary shares outstanding during the year adjusted for the effects of ordinary shares granted under the employee 
share award schemes which are held in trust 
the following reflects the income and share data used in calculating basic and diluted earnings per share 
  
2014
 usm
2013
 usm
profit attributable to ordinary shareholders for basic and diluted earnings per share excluding exceptional 
items and certain remeasurements  581 650
profit attributable to ordinary shareholders for basic and diluted earnings per share including exceptional 
items and certain remeasurements  120 650
 
  
2014 
number
’m
2013 
number
’m
weighted average number of ordinary shares for basic earnings per share   341 341
effect of dilutive potential ordinary shares granted under sharebased payment schemes   3 3
adjusted weighted average number of ordinary shares for diluted earnings per share   344 344
  
9 dividends paid and proposed 
  
2014
 usm
2013
 usm
declared and paid during the year   
equity dividends on ordinary shares  
final dividend for 2012 4300 cents per share 
 – 147
interim dividend 2013 2200 cents per share  – 75
final dividend for 2013 4380 cents per share   149 –
interim dividend 2014 2200 cents per share  75 –
  224 222
 
  
2014
 usm
2013
 usm
proposed for approval at agm   
not recognised as a liability as at 31 december  
equity dividends on ordinary shares  
final dividend for 2014 4380 cents per share 2013 4380 cents per share  152 152
 
   142
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
10 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 2013  288  558 231 18 23 144  77 1339
additions  491  – 38 8 1 36  23 597
acquisition of subsidiaries  –  – 31 5 – 6  – 42
disposals  –  110 1 1 1 4  – 117
transfer from intangible oil and gas 
assets note 13  21  – – – – –  – 21
transfers  28  – 43 – – –  71 –
exchange difference  –  – 1 – – 1  – 2
at 1 january 2014  828  448 343 30 23 183  29 1884
additions  172  225 28 15 2 26  200 668
disposals  –  48 7 – 1 9  – 65
transfer from intangible oil and gas 
assets note 13 
 264  – – – – –  – 264
transfers  5  – 13 3 – 14  7 –
exchange difference  13  – 3 1 – 6  – 23
at 31 december 2014  1256  625 374 47 24 180  222 2728
 
depreciation   
     
at 1 january 2013  98  141 84 9 16 94  – 442
charge for the year  102  34 53 6 4 30  – 229
acquisition of subsidiaries  –  – 18 3 – 4  – 25
disposals  –  – 1 – 1 3  – 5
transfers  –  – 7 – – 7  – –
exchange difference  –  – 1 – – 1  – 2
at 1 january 2014   200  175 162 18 19 119  – 693
charge for the year  116  24 52 12 3 23  – 230
charge for impairment note 5  99  15 – 2 – –  29 145
disposals  –  17 6 – 1 8  – 32
transfers  –  – 5 – – 5  – –
exchange difference  –  – 2 1 – 3  – 6
at 31 december 2014  415  197 211 31 21 126  29 1030
net carrying amount 
at 31 december 2014  841  428 163 16 3 54  193 1698
at 31 december 2013  628  273 181 12 4 64  29 1191
additions to oil and gas assets mainly comprise santuario magallanes and arenque pecs of us160m and pánuco pec of us12m 2013 field 
development costs relating to block pm304 in malaysia of us46m santuario and magallanes pecs of us211m ticleni pecs of us54m pánuco 
pecs of us22m and capitalised decommissioning costs provided on the pm304 block in malaysia of us13m santuario magallanes and arenque 
pecs of us77m and pánuco pecs of us10m  
additions to oil and gas facilities in 2014 mainly comprise an fpso acquired under a finance lease for block pm304 in malaysia of us184m 
the upgrade of the fpso opportunity at a cost of us5m and upgrade work on berantai vessel of us10m 
transfer from intangible oil and gas assets of us264m mainly comprises field development costs on block pm304 in malaysia of us236m 
2013 us21m and ticleni pec costs of us28m 
of the total charge for depreciation in the income statement us210m 2013 us207m is included in cost of sales and us20m 2013 us22m 
in selling general and administration expenses 
assets under construction represent expenditures incurred in relation to construction of the new petrofac jsd6000 installation vessel 
   143
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
included in ‘oil and gas facilities’ ‘land buildings and leasehold improvements’ and ‘plant and equipment’ is property plant and equipment under 
finance lease agreements for which book values are as follows 
net book value  
2014
usm
2013
usm
gross book value   19 34
finance leased assets arising on disposal of subsidiary note 4f  215 –
additions  197 10
depreciation  30 24
exchange difference  – 1
at 31 december  401 19
additions to finance leased assets mainly comprise an fpso acquired under a finance lease for block pm304 in malaysia of us184m 
11 material partlyowned subsidiaries 
petrofac emirates llc is the only material partlyowned subsidiary in the group and the proportion of the nominal value of issued shares controlled by 
the group is disclosed in note 33  
movement of noncontrolling interest in petrofac emirates llc  
2014
usm
2013
 usm
at 1 january   5 –
noncontrolling interest arising on a business combination  – 5
profit for the year  20 –
net unrealised gainslosses on derivatives note 25  13 –
at 31 december   12 5
the balance of noncontrolling interests relate to other partlyowned subsidiaries that are not material to the group 
financial information of petrofac emirates llc that has material noncontrolling interests is provided below 
summarised income statement  
2014
 usm
2013
 usm
revenue   848 559
cost of sales   715 537
gross profit   133 22
selling general and administration expenses   54 24
finance income   – 2
profit for the year   79 –
attributable to noncontrolling interest  20 –
 
summarised statement of financial position  
current assets   604 564
noncurrent assets   200 123
total assets   804 687
 
current liabilities   745 662
noncurrent liabilities   10 3
total liabilities   755 665
total equity   49 22
 
attributable to  
 petrofac limited shareholders  37 17
 noncontrolling interests   12 5
summarised cash flow information 
operating   133 32
investing   38 32
financing   – 16
no dividends were paid to noncontrolling interests during 2014 and 2013 
   144
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
12 goodwill 
a summary of the movements in goodwill is presented below 
  
2014
usm
2013
 usm
at 1 january   155 125
acquisitions during the year  – 32
reassessment of contingent consideration payable   – 4
impairment note 5   18 – 
goodwill written off on disposal of subsidiary note 4f   15 – 
exchange difference   7 2
at 31 december   115 155
goodwill written off on disposal of subsidiary relates to the sale of 80 of the share capital of petrofac fpso holding limited to petrofirst 
infrastructure holdings limited note 4f 
goodwill of us18m relating to integrated energy services cashgenerating unit was impaired during the year note 5 
reassessment of contingent consideration payable in 2013 comprised a decrease in contingent consideration payable on caltec limited of us4m 
goodwill acquired through business combinations has been allocated to four groups of cashgenerating units for impairment testing as follows  
• onshore engineering  construction 
• offshore projects  operations  
• engineering  consulting services  
• integrated energy services 
these represent the lowest level within the group at which the goodwill is monitored for internal management purposes the group considers 
cashgenerating units to be individually significant where they represent greater than 25 of the total goodwill balance  
onshore engineering  construction offshore projects  operations engineering  consulting services and integrated energy 
services cashgenerating units 
recoverable amounts have been determined based on value in use calculations using discounted pretax cash flow projections management have 
adopted projection periods appropriate to each unit’s value in use for onshore engineering  construction offshore projects  operations and 
engineering  consulting services cashgenerating units the cash flow projections are based on financial budgets approved by senior management 
covering a fiveyear period extrapolated at a growth rate of 25 per annum 
for the integrated energy services business the cash flows are based on economic models over the length of the contracted period for production 
enhancement contracts equity upstream investments and risk service contracts for other operations included in integrated energy services cash 
flows are based on financial budgets approved by senior management covering a fiveyear period extrapolated at a growth rate of 25 per annum  
the carrying amount of goodwill for the onshore engineering  construction offshore projects  operations and engineering  consulting services 
cashgenerating units is not individually significant in comparison with the total carrying amount of goodwill and therefore no analysis of sensitivities 
has been provided below 
carrying amount of goodwill allocated to each group of cashgenerating units 
  
2014
 usm
2013
 usm
onshore engineering  construction unit   29 29
offshore projects  operations unit  28 30
engineering  consulting services unit  24 26
integrated energy services unit   34 70
  115 155
key assumptions used in value in use calculations for the integrated energy services unit 
the following key assumptions were included in the value in use calculations used to estimate the recoverable amount of the integrated energy 
services cashgenerating unit where management has identified a reasonably possible change in any of these assumptions that would result in 
impairment details have been provided below 
market share for the training business which is within integrated energy services the key assumptions relate to management’s assessment of 
maintaining the unit’s market share in the uk and developing further the business in international markets 
capital expenditure the production enhancement contracts in the integrated energy services unit require a minimum level of capital spend on the projects in 
the initial years to meet contractual commitments if the capital is not spent a cash payment of the balance is required which does not qualify for cost recovery 
the level of capital spend assumed in the value in use calculation is that expected over the period of the budget based on the current field development plans 
which assumes the minimum spend is met on each project and the contracts remain in force for the entire duration of the project for other equity upstream 
investments the level of capital spend assumed is based on sanctioned field development plans and represents the activities required to access commercial 
reserves a 10 increase in capital expenditure representing a total overspend of us115m undiscounted across the portfolio of integrated energy services 
projects would result in an additional impairment charge equal to the carrying value of goodwill of us34m  145
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
reserve volumes and production profiles management has used its internally developed economic models of reserves and production profiles as 
inputs in to the value in use for the production enhancement contracts risk service contracts and equity upstream investments these economic 
models are revised annually as part of the preparation of the group’s five year business plans which are approved by the board management has 
used forward curve oil prices of us61 per barrel for 2015 and us69 per barrel for 2016 and long term planning prices of us80 per barrel for 2017 
and us85 per barrel for 2018 and us90 per barrel for 2019 and beyond 2013 us100 per barrel for 2014 and beyond to determine reserve 
volumes a 10 decrease in forecast production across the portfolio of integrated energy services projects would result in an additional impairment 
charge equal to the carrying value of goodwill of us34m and a 10 reduction in the oil price would result in an additional impairment charge equal to 
the carrying value of goodwill of us34m 
growth rate estimates are based on management’s assessment of market share having regard to macroeconomic factors and the growth rates 
experienced in the recent past in the markets in which the unit operates a growth rate of 25 per annum has been applied for businesses within 
the integrated energy services cashgenerating unit where the cash flows are not based on long term contractual arrangements 
discount rate management has used a pretax discount rate of 116 per annum 2013 104 per annum the discount rate is derived from the 
estimated weighted average cost of capital wacc of the group and has been calculated using an estimated risk free rate of return adjusted for the 
group’s estimated equity market risk premium a 100 basis point increase in the pretax discount rate to 126 would result in an additional 
impairment charge equal to the carrying value of goodwill of us34m 
13 intangible assets 
  
2014
 usm
2013
 usm
intangible oil and gas assets   
cost   
at 1 january   290 268
additions   97 43
assets related to increase in decommissioning provision note 27  47 –
transfer to oil and gas assets note 10  264 21
impairments note 5  5 –
write off note 4b and note 4c  9 –
net book value of intangible oil and gas assets at 31 december   156 290
other intangible assets   
cost   
at 1 january   60 54
additions   – 10
impairments note 5  4 –
write off  – 4
exchange difference   3 –
at 31 december   53 60
accumulated amortisation   
at 1 january   20 15
amortisation  5 5
exchange difference  2 – 
at 31 december   23 20
net book value of other intangible assets at 31 december   30 40
total intangible assets  186 330
intangible oil and gas assets 
oil and gas assets part of the integrated energy services segment additions and assets additions related to increase in decommissioning provision 
above comprise largely us137m 2013 us40m capitalised expenditure on the group’s assets in malaysia 
there were investing cash outflows relating to capitalised intangible oil and gas assets of us119m 2013 us43m in the current period arising from 
predevelopment activities 
transfers within intangible oil and gas assets represent transfers to oil and gas assets relating to block pm304 in malaysia of us236m and ticleni 
pecs of us28m note 10 
the us8m write off of intangible oil and gas assets is in respect of a dry well in chergui and us1m is in respect of bowleven license costs 
written off 
other intangible assets 
other intangible assets comprising project development expenditure customer contracts proprietary software and patent technology are being 
amortised over their estimated economic useful life on a straightline basis and the related amortisation charges included in selling general and 
administration expenses note 4c 
us4m relating to lng intellectual property was written off during 2013  146
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
14 investments in associatesjoint ventures 
associates 
usm  
joint 
ventures
 usm
total
 usm
as at 1 january 2013 189  21 210
loan made to petrofac fpf1 limited 4  – 4
share of profits 17  5 22
transferred to investment in subsidiary –  11 11
dividends received  –  10 10
as at 31 december 2013 210  5 215
loan made to petrofac fpf1 limited 13  – 13
share of profits 4  3 7
fair valuation gain on initial recognition of investment in associate note 4f 31  – 31
transfer to availableforsale investment note 15 185  – 185
dividends received  7  3 10
as at 31 december 2014 66  5 71
dividends received include us7m received from petrofirst infrastructure limited and us3m received from tte petrofac limited 2013 us2m 
received from tte petrofac limited and us8m received from petrofac emirates llc 
fair value gain of us31m represents the increase in fair value of the remaining 20 share in petrofirst infrastructure limited post disposal of 80 of 
the share capital of petrofac fpso holding limited note 4f 
associates 
  
2014
 usm
2013
 usm
associates acquired through acquisition of subsidiary  – 1
petrofirst infrastructure limited  28 –
petrofac fpf1 limited  38 25
investment in seven energy international limited  – 184
  66 210
seven energy international limited 
the share of the seven energy’s statement of financial position is as follows 
  
2014
 usm
2013
 usm
noncurrent assets  – 1140
current assets  – 220
noncurrent liabilities  – 284
current liabilities  – 682
equity   – 394
group’s share of net assets  – 87
transaction costs incurred   – 2
residual goodwill   – 95
carrying value of investment  – 184
share of associates revenues and net profitloss 
revenue 
 – 76
net profit  – 17
seven energy investment in associate was transferred to availableforsale investment during the year and therefore only comparative 2013 information 
is shown above see note 15 at the time of transfer on carrying out a fair valuation there was no gainloss on derecognition of the investment in 
associate and recognition as an availableforsale investment 
   14 7
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
interest in other associates 
summarised financial information of petrofirst infrastructure limited and petrofac fpf1 limited based on their ifrs financial statements and 
reconciliation with the carrying amount of the investment in consolidated financial statements are set out below 
  
2014
 usm
2013
 usm
revenue   28 –
cost of sales   ––
gross profit   28 –
selling general and administration expenses   8 –
finance expenseincome net   6 –
profit before income tax   14 –
income tax   ––
profit   14 –
group’s share of profit for the year  4 –
 
current assets   40 2
noncurrent assets   595 102
total assets   635 104
 
current liabilities   20 –
noncurrent liabilities   328 2
total liabilities   348 2
net assets   287 102
group’s share of net assets  66 26
carrying amount of the investment  66 26
the associates had no contingent liabilities or capital commitments as at 31 december 2014 and 2013 
   148
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
14 investments in associatesjoint ventures continued 
interest in joint ventures 
summarised financial information of the joint ventures
1
 based on their ifrs financial statements and reconciliation with the carrying amount of the 
investment in consolidated financial statements are set out below 
  
2014
 usm
2013
 usm
revenue   35 38
cost of sales   26 25
gross profit   9 13
selling general and administration expenses   2 2
finance expenseincome net   – –
profit before income tax   7 11
income tax   1 1
profit   6 10
group’s share of profit for the year  3 5
 
current assets   20 12
noncurrent assets   5 2
total assets   25 14
 
current liabilities   11 2
noncurrent liabilities   4 2
total liabilities   15 4
net assets   10 10
group’s share of net assets  5 5
carrying amount of the investment  5 5
1 a list of these joint ventures is disclosed in note 33 
the joint ventures had no contingent liabilities or capital commitments as at 31 december 2014 and 2013 the joint ventures cannot distribute their 
profits until they obtain consent from the venturers 
15 availableforsale investment  
on 15 april 2014 seven energy secured additional equity capital that resulted in dilution of the company’s interest in seven energy from 235 to 
154 following the dilution of ownership interest the group does not exercise significant influence over the activities of seven energy and as a result 
has transferred the investment of us185m from investment in associate to availableforsale investment note 14 
the group continues to have 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 however at 31 december 2014 the residual fair 
value of these warrants was assessed as nil resulting in an income statement charge for the year of us11m note 5  
  149
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
16 other financial assets and other financial liabilities 
other financial assets classification  
2014
 usm
2013
 usm
noncurrent   
receivable under the berantai rsc fair value through profit and loss  343 394
receivable from joint venture partners loans and receivables  396 127
forward currency contracts designated as hedges note 32 designated as cash flow hedges  50 5
restricted cash fair value through profit and loss  1 1
   790 527
current   
receivable under the berantai rsc fair value through profit and loss  38 82
receivable in respect of the development of the greater stella area  fair value through profit and loss  399 200
fair value change in respect of the greater stella area receivable note 5 fair value through profit and loss  207 –
receivable from joint venture partners loans and receivables  150 –
seven energy warrants note 15 fair value through profit and loss  – 11
forward currency contracts designated as hedges note 32 designated as cash flow hedges  27 23
oil derivative note 32 designated as cash flow hedges  20 –
restricted cash fair value through profit and loss  8 4
   435 320
other financial liabilities   
noncurrent   
contingent consideration payable fair value through profit and loss  – 1
interest rate swaps note 32 fair value through profit and loss  – 1
finance lease creditors note 29 loans and borrowings  738 –
forward currency contracts designated as hedges note 32 designated as cash flow hedges  18 –
   756 2
current   
contingent consideration payable fair value through profit and loss  1 1
forward currency contracts designated as hedges note 32 designated as cash flow hedges  74 2
forward currency contracts undesignated note 32 fair value through profit and loss  – 11
oil derivative note 32 designated as cash flow hedges  – 1
finance lease creditors note 29 loans and borrowings  234 15
interest rate swaps note 32 fair value through profit and loss  – 1
interest payable fair value through profit and loss  8 6
   317 37
the longterm and shortterm receivables under the berantai rsc represent the discounted value of amounts due under the contract which are being 
recovered over a six year period from 2013 in line with the contractual terms of the project 
the shortterm receivable in respect of the development of the greater stella area represents a loan made to the consortium partners to fund 
petrofac’s share of the development costs of the field 
the shortterm and long term receivable from joint venture partners represents the 70 gross up on finance leases in respect of oil and gas facilities 
relating to block pm304 in malaysia that are included 100 in the group’s consolidated statement of financial position group’s 30 share us234m  
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 
 
   150
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
17 fair value measurement 
the following financial instruments are measured at fair value using the hierarchy below for determination and disclosure of their respective fair values 
level 1  unadjusted quoted prices in active markets for identical financial assets or liabilities 
level 2  other valuation techniques where the inputs are based on significant observable factors 
level 3  other valuation techniques where the inputs are based on significant unobservable market data 
year ended 31 december 2014 
date of valuation  
level 2 
usm 
level 3 
usm
financial assets    
receivable under the berantai rsc note 32 pg 166  31 december 2014  – 381
availableforsale investment note 32 pg 166 31 december 2014  – 185
amounts receivable in respect of the development of the greater stella area net of 
fair value changes note 32 pg 167 
31 december 2014  
 
– 192
oil derivative 31 december 2014  20 –
euro forward currency contracts – designated as cash flow hedge 31 december 2014  77 –
assets for which fair values are disclosed note 32    
cash and shortterm deposits 31 december 2014  986 –
restricted cash 31 december 2014  9 –
financial liabilities    
euro forward currency contracts – designated as cash flow hedge 31 december 2014  91 –
sterling forward currency contracts – designated as cash flow hedge 31 december 2014  1 –
liabilities for which fair values are disclosed note 32    
interestbearing loans and borrowings    
senior notes 31 december 2014  750 –
term loan 31 december 2014  500 –
revolving credit facility 31 december 2014  475 –
bank overdrafts 31 december 2014  9 –
finance lease creditors 31 december 2014  972 –
contingent consideration 31 december 2014  1 –
year ended 31 december 2013 
date of valuation  
level 2 
usm 
level 3 
usm
financial assets    
seven energy warrants note 15 31 december 2013  – 11
receivable under the berantai rsc pg 166 31 december 2013  – 476
amounts receivable in respect of the development of the greater stella area  31 december 2013  200 –
euro forward currency contracts – designated as cash flow hedge 31 december 2013  24 –
sterling forward currency contracts – designated as cash flow hedge 31 december 2013  4 –
assets for which fair values are disclosed note 32    
cash and shortterm deposits 31 december 2013  617 –
restricted cash 31 december 2013  5 –
financial liabilities    
euro forward currency contracts – designated as cash flow hedge 31 december 2013  2 –
sterling forward currency contracts – undesignated 31 december 2013  11 –
interest rate swaps 31 december 2013  2 –
oil derivative 31 december 2013  1 –
liabilities for which fair values are disclosed note 32    
interestbearing loans and borrowings    
senior notes 31 december 2013  750 –
revolving credit facility 31 december 2013  444 –
project financing 31 december 2013  138 –
bank overdrafts 31 december 2013  32 –
finance lease creditors 31 december 2013  15 –
contingent consideration 31 december 2013  2 – 15 1
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
18 inventories 
  
2014
 usm
2013
 usm
crude oil   3 4
stores and spares   12 12
raw materials   1 –
   16 16
included in the consolidated income statement are costs of inventories expensed of us73m 2013 us43m 
19 work in progress and billings in excess of cost and estimated earnings 
  
2014
 usm
2013
 usm
cost and estimated earnings   15892 14244
less billings   14290 12771
work in progress   1602 1473
 
billings   5638 5690
less cost and estimated earnings   5373 5436
billings in excess of cost and estimated earnings   265 254
 
total cost and estimated earnings   21265 19680
 
total billings   19928 18461
20 trade and other receivables 
  
2014
 usm
2013
 usm
trade receivables   1680 1294
retentions receivables   344 254
advances   275 216
prepayments and deposits   47 70
receivables from joint venture partners   196 314
other receivables   241 212
   2783 2360
other receivables mainly consist of value added tax recoverable of us140m 2013 us130m us34m receivable from petrofirst infrastructure 
holdings limited relating to disposal of 80 of the share capital of petrofac fpso holding limited note 4f 
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 us1684m 2013 us1299m are as follows 
2014 2013 
specific 
impairment 
usm
general 
impairment 
usm
total 
usm
specific 
impairment 
usm  
general 
impairment 
usm
total 
usm
at 1 january 4 1 5 2  1 3
charge for the year – 1 1 2  – 2
amounts written off 2 – 2 –  – –
at 31 december 2 2 4 4  1 5
   152
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
20 trade and other receivables continued 
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  1228  285 74 15 21 37  15 1675
impaired  –  – 1 1 1 4  2 9
  1228  285 75 16 22 41  17 1684
less impairment provision  –  – – – – 2  2 4
net trade receivables 2014  1228  285 75 16 22 39  15 1680
 
unimpaired   532  586 91 23 8 31  6 1277
impaired  –  – – – 7 6  9 22
  532  586 91 23 15 37  15 1299
less impairment provision  –  – – – 1 1  3 5
net trade receivables 2013  532  586 91 23 14 36  12 1294
the credit quality of trade receivables that are neither past due nor impaired is assessed by management with reference to externally prepared 
customer credit reports and the historic payment track records of the counterparties 
advances represent payments made to certain of the group’s subcontractors for projects in progress on which the related work had not been 
performed at the statement of financial position date  
receivables from joint venture partners are amounts recoverable from venture partners on the fpso berantai block pm304 and petrofac emirates 
on an engineering procurement and construction project 
all trade and other receivables are expected to be settled in cash 
certain trade and other receivables will be settled in cash using currencies other than the reporting currency of the group and will be largely paid 
in sterling euros and kuwaiti dinars 
21 cash and shortterm deposits 
  
2014
 usm
2013
 usm
cash at bank and in hand   899 506
shortterm deposits   87 111
total cash and bank balances   986 617
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 us986m 2013 us617m 
for the purposes of the consolidated statement of cash flows cash and cash equivalents comprise the following 
  
2014
 usm
2013
 usm
cash at bank and in hand   899 506
shortterm deposits   87 111
bank overdrafts note 26   9 32
   977 585
 
   153
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
22 share capital 
the share capital of the company as at 31 december was as follows 
  
2014
usm
2013
usm
authorised  
750000000 ordinary shares of us0020 each 2013 750000000 ordinary shares of us0020 each  15 15
 
issued and fully paid  
345912747 ordinary shares of us0020 each 2013 345912747 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 us 0020 each at 1 january 2013 345891490
issued during the year as further contingent consideration payable for the acquisition of a subsidiary 21257
ordinary shares of us0020 each at 1 january 2014 345912747
ordinary shares of us0020 each at 31 december 2014 345912747
the share capital comprises only one class of ordinary shares the ordinary shares carry a voting right and the right to a dividend 
share premium the balance on the share premium account represents the amount received in excess of the nominal value of the ordinary shares 
capital redemption reserve the balance on the capital redemption reserve represents the aggregated nominal value of the ordinary shares 
repurchased and cancelled 
23 treasury shares 
for the purpose of making awards under the group’s employee share schemes shares in the company are purchased and 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 
2014  2013 
number usm  number usm
at 1 january 5672691 110  5466213 100
acquired during the year 1000000 25  2300000 47
vested during the year 1686754 34  2093522 37
at 31 december 4985937 101  5672691 110
shares vested during the year include dividend shares and 8 uplift adjustment made in respect of the enquest demerger of 102514 shares 
2013 153408 shares 
24 sharebased payment plans 
performance share plan psp 
under the psp share awards are granted to executive directors and a restricted number of other senior executives of the group the shares vest at 
the end of three years subject to continued employment and the achievement of certain predefined market and nonmarketbased performance 
conditions the 50 market performance based part of these awards is dependent on the total shareholder return tsr of the group compared with 
an index composed of selected relevant companies the fair value of the shares vesting under this portion of the award is determined by an 
independent valuer using a monte carlo simulation model taking into account the terms and conditions of the plan rules and using the following 
assumptions at the date of grant 
  
2014
awards
22 mar 2013
awards
18 apr 2013
awards
24 may 2013 
awards  
2012
awards
2011
awards
expected share price volatility based on median of 
comparator group’s threeyear volatilities 
 327 346 347 339  380 510
share price correlation with comparator group  404 440 443 420  460 430
riskfree interest rate  12 04 04 05  04 17
expected life of share award  3 years 3 years 3 years 3 years  3 years 3 years
fair value of tsr portion  827p 692p 492p 571p  1103p 788p
   154
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
24 sharebased payment plans continued 
the nonmarketbased condition governing the vesting of the remaining 50 of the total award is subject to achieving between 75 and 15 
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 £1800 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 oneoff value creation plan vcp which is a share option scheme for executive directors and key senior 
executives within the company vcp is a premium priced share option scheme with options granted with an exercise price set at a 10 premium to 
the grant date price options will vest to the extent of satisfying group and divisional profit after tax targets together with various other performance 
underpins and riskmalus provisions that can be imposed at the discretion of the remuneration committee the share options vest in equal tranches 
on the fourth fifth and sixth anniversaries of the original grant date but may be exercised up to eight years from the date of grant 
the vcp share options were fair valued by an independent valuer using a blackscholes option pricing model taking into account the rules of the plan 
and using the following key assumptions 
tranche 1  tranche 2  tranche 3
share price at the date of grant 1555p  1555p  1555p
exercise price 1710p  1710p  1710p
expected lives of the award 6 years  65 years  7 years
share price volatility 41  41  41
share price dividend yield 23  23  23
riskfree interest rates 11  12  13
per share fair values 451p  467p  482p
sharebased payment plans information 
the details of the fair values and assumed vesting rates of the sharebased payment plans are below 
  psp eps portion dbsp  rsp 
  22 mar 18 apr 24 may   
  
fair value 
per share  
assumed 
vesting rate 
fair value 
per share  
assumed 
vesting rate
fair value 
per share
assumed 
vesting rate
fair value 
per share
assumed 
vesting rate  
fair value 
per share
assumed 
vesting rate
2014 awards  1376p  00 –  – – – 1376p 909  1157p 967
2013 awards  1446p  00 1266p  00 1340p 00 1446p 825  1366p 924
2012 awards  1705p  00 –  – – – 1705p 841  1555p 776
2011 awards  1426p  260 –  – – – 1426p 878  1463p 767
 
   155
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
the following table shows the movements in the number of shares held under the sharebased payment plans outstanding but not exercisable 
  psp  dbsp rsp vcp  total 
  
2014 
number  
2013 
number  
2014 
number  
2013
number
2014
number
2013
number
2014
number 
2013 
number  
2014
number
2013
number
outstanding at 
1 january  1315870  1232186  3708306  3120968 538874 522171 1701150 1773713  7264200 6649038
granted 
during 
the year  406830  499221  2226630  1948702 82591 204722 – –  2716051 2652645
vested during 
the year  43308  368005  1802020  1097127 227892 123133 – –  2073220 1588265
forfeited 
during 
the year  539461  47532  310720  264237 36210 64886 346322  72563  1232713 449218
outstanding at 
31 december  1139931  1315870  3822196  3708306 357363 538874 1354828 1701150  6674318 7264200
includes invested and matching shares 
the number of shares still outstanding but not exercisable at 31 december 2014 for each award is as follows 
  psp  dbsp rsp vcp  total 
  
2014 
number  
2013 
number  
2014 
number  
2013
number
2014
number
2013
number
2014 
number  
2013 
number  
2014
number
2013
number
2014 awards  401931  –  2034728  – 82591 – –  –  2519250 –
2013 awards  413763  488879  1191476  1794234 170189 201635 –  –  1775428 2484748
2012 awards  324237  385312  595992  1251020 65239 198424 1354828  1701150  2340296 3535906
2011 awards  –  441679  –  663052 20565 108453 –  –  20565 1213184
2010 awards  –  –  –  – 18779 30362 –  –  18779 30362
total awards  1139931  1315870  3822196  3708306 357363 538874 1354828  1701150  6674318 7264200
 includes invested and matching shares 
the average share price of the company shares during 2014 was us1919 sterling equivalent of £1165 
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 
   
2014 
number  
2013
number
2014
number
2013
number
2014
number
2013 
number  
2014
number
2013
number
enquest 8 uplift  –  – 318 318 384 916  702 1234
dividend shares  72514  74196 202781 155741 14873 17992  290168 247929
outstanding at 31 december  72514  74196 203099 156059 15257 18908  290870 249163
 includes invested and matching shares 
the charge in respect of sharebased payment plans recognised in the consolidated income statement is as follows 
   psp dbsp rsp vcp  total 
   
2014 
 usm  
2013 
 usm 
2014
 usm
2013
 usm
2014
 usm
2013
 usm
2014 
 usm  
2013 
 usm  
2014
 usm
2013
 usm
share based payment 
chargecredit  –   1 19 14 3 3 –  
 
1  22 15
 represents charge on matching shares only 
the group has recognised a total charge of us22m 2013 us15m 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 us24m of the bonus 
liability accrued for the year ended 31 december 2013 which has been settled in shares granted during the year 2012 bonus of us22m 
the increase in the share based payments charge compared with the previous year is due to there being a significant decrease in 2013 in the 
expected future vesting rates of the performance share plans and the value creation plan which resulted in ifrs 2 cost credits being recognised 
for further details on the above employee sharebased payment schemes refer to pages 101 106109 and 111 of the directors’  
remuneration report   156
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
25 other reserves 
net unrealised 
gainslosses
on derivatives 
usm
foreign 
currency 
translation 
usm  
reserve for 
sharebased 
payments 
usm 
total
usm
balance at 1 january 2013 – 25  63 38
foreign currency translation – 4  – 4
net gains on maturity of cash flow hedges recycled in the year 1 –  – 1
net changes in fair value of derivatives and financial assets  
designated as cash flow hedges 29 –  – 29
sharebased payments charge note 24 – –  15 15
transfer during the year note 24 – –  22 22
shares vested during the year – –  34 34
deferred tax on sharebased payments reserve – –  2 2
balance at 1 january 2014 28 29  64 63
foreign currency translation – 22  – 22
net gains on maturity of cash flow hedges recycled in the year 14 –  – 14
net changes in fair value of derivatives and financial assets  
designated as cash flow hedges 21 –  – 21
sharebased payments charge note 24 – –  22 22
transfer during the year note 24 – –  24 24
shares vested during the year – –  33  33
deferred tax on sharebased payments reserve – –  1 1
balance at 31 december 2014 7 51  76 18
 
attributable to    
 petrofac limited shareholders 6 51  76 31
 noncontrolling interests 13–  – 13
balance at 31 december 2014 7 51  76 18
nature and purpose of other reserves 
net unrealised gainslosses on derivatives 
the portion of gains or losses on cash flow hedging instruments that are determined to be effective hedges is included within this reserve net of 
related deferred tax effects when the hedged transaction occurs or is no longer forecast to occur the gain or loss is transferred out of equity to the 
consolidated income statement realised net gains amounting to us8m 2013 us1m 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 us10m 2013 usnil have been recognised in 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 
2013 of us24m 2012 bonus of us22m which has been voluntarily elected or mandatorily obliged to be settled in shares during the year note 24 
   157
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
26 interestbearing loans and borrowings  
the group had the following interestbearing loans and borrowings outstanding 
  
31 december 2014 
actual interest rate 
31 december 2013
actual interest rate 
effective interest 
rate  maturity  
2014
usm
2013
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  9 32
other loans     
current portion of project financing v na us libor 
 270
us libor
  270 na – 21
    9 53
noncurrent     
senior notes ii 340 340 368 4 years  750 750
term loan iii us libor 
 085
na us libor 
 085 2 years 
 
500
 
–
revolving credit facility rcf iv us libor 
 150
us libor 
 150
us libor
 150
3 years 
 
475
 
444
project financing v na us libor 
 270 na na 
 
– 117
    1725 1311
less     
debt acquisition costs net of 
accumulated amortisation and 
effective interest rate adjustments 
   
13
 
17
discount on senior notes issuance    2 3
    1710 1291
total interestbearing loans and borrowings   1719 1344
details of the group’s interestbearing loans and borrowings are as follows 
i bank overdrafts 
bank overdrafts are drawn down in us dollars and sterling denominations to meet the group’s working capital requirements these are repayable 
on demand 
ii senior notes 
petrofac has an outstanding aggregate principal amount of us750m senior notes due in 2018 notes the group pays interest on the notes at 
an annual rate equal to 340 of the outstanding principal amount interest on the notes is payable semiannually in arrears in april and october 
each year the notes are senior unsecured obligations of the company and will rank equally in right of payment with the company’s other 
existing and future unsecured and unsubordinated indebtedness petrofac international ltd and petrofac international uae llc irrevocably and 
unconditionally guarantee jointly and severally the due and prompt payment of all amounts at any time becoming due and payable in respect of the 
notes the guarantees are senior unsecured obligations of each guarantor and will rank equally in right of payment with all existing and future senior 
unsecured and unsubordinated obligations of each guarantor  
iii term loan 
on 31 august 2014 petrofac entered into a us 500m 2 year term loan facility with a syndicate of 5 international banks the facility which matures 
on 31 august 2016 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 2014 the loan was fully drawn as of 31 december 2014 2013 nil 
interest is payable on the facility at libor  085 
iv revolving credit facility 
petrofac has a us1200m 5 year committed revolving credit facility with a syndicate of 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 2014 as at 31 december 2014 us475m was drawn 
under this facility 2013 us444m 
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 
   158
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
26 interestbearing loans and borrowings continued 
v project financing 
as a result of the disposal of 80 of petrofac fpso holding limited the project financing related to the berantai fpso was transferred to petrofirst 
infrastructure holdings limited in august 2014 and is no longer shown in the group’s accounts note 4f 
fees relating to the group’s financing arrangements have been capitalised and are being amortised over the term of the respective borrowings 
none of the company’s subsidiaries are subject to any material restrictions on their ability to transfer funds in the form of cash dividends loans or 
advances to the company 
27 provisions 
other longterm 
employment 
benefits provision
usm
provision for 
decommissioning 
usm  
other
provisions
usm
total
 usm
at 1 january 2013 63 33  4 100
additions during the year 20 100  2 122
paid in the year 13 –  – 13
unwinding of discount 13  – 4
at 1 january 2014 71 136  6 213
additions during the year 19 47  – 66
paid in the year 11 –  – 11
exchange difference – –  1 1
unwinding of discount –6  – 6
at 31 december 2014 79 189  5 273
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  53
average annual  salary increases  6 4
discount factor  5 5
senior employees are those earning a base of salary of over us96000 per annum 
discount factor used is the local dubai fiveyear sukuk rate 
provision for decommissioning 
the decommissioning provision primarily relates to the group’s obligation for the removal of facilities and restoration of the sites at the pm304 field in 
malaysia chergui in tunisia and santuario magallanes arenque and pánuco production enhancement contracts in mexico additions during the year 
were in relation to pm304 field in malaysia the liability is discounted at the rate of 428 on pm304 2013 416 600 on chergui 2013 525 
and 538 on santuario magallanes arenque and pánuco production enhancement contracts 2013 586 the unwinding of the discount is 
classified as finance cost note 6the group estimates that the cash outflows against these provisions will arise in 2026 on pm304 2031 on chergui 
2033 on santuario and magallanes 2038 on arenque and 2030 on pánuco 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 
   159
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
28 trade and other payables 
  
2014
 usm
2013
 usm
trade payables  564 629
advances received from customers  975 444
accrued expenses  921 982
other taxes payable  46 44
other payables  164 197
  2670 2296
advances received from customers represent payments received for contracts on which the related work had not been performed at the statement 
of financial position date 
other payables mainly consist of retentions held against subcontractors of us78m 2013 us73m and payable to joint venture partners of us35m 
2013 us50m 
us298m was reclassified from trade payables to accrued expenses in the comparative year to conform to current year presentation 
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 
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 2014 the group had letters of credit of us10m 2013 us29m and outstanding letters of guarantee including performance 
advance payments and bid bonds of us4211m 2013 us3602m against which the group had pledged or restricted cash balances of 
in aggregate us9m 2013 us5m 
at 31 december 2014 the group had outstanding forward exchange contracts amounting to us2276m 2013 us1273m these commitments 
consist of future obligations either to acquire or to sell designated amounts of foreign currency at agreed rates and value dates note 32 
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 
  
2014
 usm
2013
 usm
within one year  25 33
after one year but not more than five years  69 73
more than five years  74 89
  168 195
included in the above are commitments relating to the lease of office buildings in aberdeen united kingdom of us115m 2013 us120m 
minimum lease payments recognised as an operating lease expense during the year amounted to us44m 2013 us44m 
longterm finance lease commitments are as follows 
future 
minimum 
lease 
payments 
usm  
finance cost 
usm
present value
 usm
land buildings and leasehold improvements   
the commitments are as follows   
within one year 343  109 234
after one year but not more than five years 785  281 504
more than five years 326  92 234
 1454  482 972
the finance leased assets mainly comprise oil and gas facilities in berantai rsc and block pm304 in malaysia the lease term for such leases range 
between 4 years to 10 years the above finance lease commitments include 70 gross up of us546m on finance leases in respect of oil and gas 
facilities relating to block pm304 in malaysia  160
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
29 commitments and contingencies continued 
capital commitments 
at 31 december 2014 the group had capital commitments of us1034m 2013 us942m excluding the above lease commitments 
included in the us1034m of commitments are 
  
2014
 usm
2013
 usm
building of the petrofac jsd6000 installation vessel   392 489
production enhancement contracts in mexico   229 390
further appraisal and development of wells as part of block pm304 in malaysia  192 20
costs in respect of ithaca greater stella field development in the north sea   193 41
commitments in respect of the construction of a new training centre in oman  28 –
 
30 related party transactions 
the consolidated financial statements include the financial statements of petrofac limited and the subsidiaries listed in note 33 petrofac limited is the 
ultimate parent entity of the group 
the following table provides the total amount of transactions which have been entered into with related parties 
sales to 
related 
parties 
usm
purchases 
from  
related parties  
usm  
amounts 
owed 
by related 
parties 
usm
amounts 
owed 
to related 
parties 
usm
joint ventures 2014 – –  1 3
 2013 1 7  5 3
associates 2014 – –  1 –
 2013 – –  – –
key management personnel interests 2014 – –  – –
 2013 – –  – –
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 in 2013 included us264000 reflecting 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 were significantly less 
than comparable market rates no similar related party transactions took place during 2014 
also included in purchases in respect of key management personnel interests is us26000 2013 us138000 relating to client entertainment 
provided by a business owned by a member of the group’s key management 
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 96 to 112 
  
2014
 usm
2013
 usm
shortterm employee benefits  12 17
sharebased payments  3 –
fees paid to nonexecutive directors  1 1
  16 18
31 accrued contract expenses 
  
2014
 usm
2013
 usm
accrued contract expenses  743 836
reserve for contract losses  57 –
  800 836
the reserve for contract losses includes provision to cover costs in excess of revenues on a contract of us27m and a provision for an onerous 
contract of us30m relating to ticleni production enhancement contract in romania note 5   161
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
32 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 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 84 to 95 
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 2014  9 9  – –
31 december 2013  5 5  – –
the following table reflects the maturity profile of these financial liabilities and assets 
year ended 31 december 2014 
  
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 26  9 – – – –  – 9
term loans note 26  – 500 475 – –  – 975
  9 500 475 – –  – 984
financial assets    
floating rates    
cash and shortterm deposits note 21  986 – – – –  – 986
restricted cash balances note 16  8 1 – – –  – 9
  994 1 – – –  – 995
 
 
   162
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
32 risk management and financial instruments continued 
year ended 31 december 2013 
  
within 
1 year 
usm 
1–2
years
usm
2–3
years 
usm
3–4 
years 
usm
4–5  
years  
usm  
more than
5 years
usm
total
usm
financial liabilities     
floating rates      
bank overdrafts note 26  32 – – – –  – 32
term loans note 26  21 22 23 467 24  25 582
  53 22 23 467 24  25 614
financial assets     
floating rates     
cash and shortterm deposits note 21  617 – – – –  – 617
restricted cash balances note 16  4 1 – – –  – 5
  621 1 – – –  – 622
financial liabilities in the above table are disclosed gross of debt acquisition costs effective interest rate adjustments and discount on senior notes of 
us15m 2013 us20m 
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 
  
2014 
 of foreign 
 currency 
denominated 
 items 
2013
 of foreign
 currency
 denominated
 items
revenues  265 324
costs  565 450
current financial assets  336 331
noncurrent financial assets  00 10
current financial liabilities  364 222
noncurrent financial liabilities  13 00
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 
2014  2013 
average rate closing rate  average rate closing rate
sterling 165 155  157 166
kuwaiti dinar 351 342  352 354
euro 133 121  133 137
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 2014 9 9  85 85
31 december 2013 34 34  66 66 163
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
derivative instruments designated as cash flow hedges 
at 31 december the group had foreign exchange forward contracts as follows 
  contract value fair value undesignated fair value designated  net unrealised gainloss 
  
2014 
usm  
2013
usm
2014
usm
2013
usm
2014
usm
2013 
usm  
2014
usm
2013
usm
euro purchases  643  561 – – 14 22  22 26
sterling purchasessales  394  349 – 11 1 4  3 4
kuwaiti dinars sales  313  – – – – –  – –
yen sales   3  3 – – – –  – –
    – 11 15 26  25 30
the above foreign exchange contracts mature and will affect income between january 2015 and june 2019 2013 between january 2014 and 
november 2015 
at 31 december 2014 the group had cash and shortterm deposits designated as cash flow hedges with net unrealised losses of us2m 
2013 us1m gain as follows 
fair value  net unrealised gainloss 
2014
usm
2013 
 usm  
2014
usm
2013
 usm
euro cash and shortterm deposits 22 32  2 1
during 2014 changes in fair value loss of us50m 2013 gains us32m relating to these derivative instruments and financial assets were taken to 
equity and gains of us8m 2013 us1m 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 us10m 2013 usnil 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 hedging oil production of 608999 barrels bbl 2013 323657 bbl with maturities 
ranging from january 2015 to december 2015 in addition fuel oil swaps were also entered into for hedging gas production of 46260 metric tonnes 
mt 2013 35147mt with maturities from january 2015 to december 2015 
the fair value of oil derivatives at 31 december 2014 was an asset of us20m 2013 us1m liability with net unrealised gains deferred in equity of 
us20m 2013 us1m loss during the year us6m gain 2013 usnil was recycled from equity into the consolidated income statement on the 
occurrence of the hedged transactions and a gain in the fair value recognised in equity of us27m 2013 us1m loss 
the following table summarises the impact on the group’s pretax profit and equity due to a change in the fair value of oil derivative instruments and 
the underlifting assetoverlifting liability of a reasonably possible change in the oil price 
pretax profit  equity 
30
 usbbl
 increase
 usm
−30 
 usbbl 
 decrease 
 usm  
30 
usbbl
 increase
 usm
−30
usbbl
 decrease
 usm
31 december 2014 – –  18 18
31 december 2013 3 3  9 9
for sensitivity relating to the impact of changes in the oil price on other financial assets refer to pages 166 and 167 
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 2014 the group’s five largest customers accounted for 487 of outstanding trade receivables 
retention receivables work in progress receivable under berantai rsc and receivable in respect of the development of the greater stella area 
2013 493 
with respect to credit risk arising from the other financial assets of the group which comprise cash and cash equivalents short and long term 
receivables from customers including the berantai rsc and greater stella area projects 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 
   164
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
32 risk management and financial instruments continued 
liquidity risk 
the group’s objective is to ensure sufficient liquidity is available to support future growth our strategy includes the provision of financial capital and the 
potential impact on the group’s capital structure is reviewed regularly the group is not exposed to any external capital constraints the maturity 
profiles of the group’s financial liabilities at 31 december are as follows 
year ended 31 december 2014 
  
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  9  – 500 1225 –  1734 1719
finance lease creditors  225  118 243 542 326  1454 972
trade and other payables excluding 
advances from customers and other 
taxes payable 
 1307  342 – –
 
 
–  1649 1649
due to related parties  3  – – – –  3 3
contingent consideration  –  1 – – –  1 1
derivative instruments  47  24 13 8 –  92 92
interest payments  25  25 49 62 –  161 –
  1616  510 805 1837 326  5094 4436
year ended 31 december 2013 
  
6 months 
or less  
usm  
6–12
months 
usm
1–2
years 
usm
2–5
years
 usm
more than 
5 years  
usm  
contractual
undiscounted
 cash flows
 usm
carrying
 amount
 usm
financial liabilities      
interestbearing loans and borrowings  42  11 22 1264 25  1364 1344
finance lease creditors  10  6 – – –  16 15
trade and other payables excluding 
advances from customers and other 
taxes payable  1760  48 – – –  1808 1808
due to related parties  3  – – – –  3 3
contingent consideration  –  1 1 – –  2 2
derivative instruments  13  1 – – –  14 14
interest payments  20  19 38 101 1  179 –
  1848  86 61 1365 26  3386 3186
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 
  
2014
usm
2013
usm
cash and shortterm deposits  986 617
interestbearing loans and borrowings a  1719 1344
net debt b  733 727
equity attributable to petrofac limited shareholders c  1861 1989
profit for the year attributable to petrofac limited shareholders d  120 650
gross gearing ratio ac  924 676
net gearing ratio bc  394 366
shareholders’ return on investment dc  64 327
 
   165
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
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 
2014
 usm
2013 
 usm  
2014
 usm
2013
 usm
financial assets         
cash and shortterm deposits  986 617  986 617
restricted cash  9 5  9 5
seven energy warrants note 15  – 11  – 11
availableforsale investment  185 –  185 –
receivable under berantai rsc  381 476  381 476
amounts receivable in respect of the development of the greater stella area net of fair 
value changes 
 192 200  192 200
oil derivative  20 –  20 –
euro forward currency contracts – designated as cash flow hedge  77 24  77 24
sterling forward currency contracts – designated as cash flow hedge  – 4  – 4
 
financial liabilities      
interestbearing loans and borrowings      
 senior notes  743 742  750 750
 term loan  498 –  500 –
 revolving credit facility  469 435  475 444
 project financing  – 135  – 138
 bank overdrafts  9 32  9 32
finance lease creditors  972 15  972 15
contingent consideration  1 2  1 2
interest rate swaps  – 2  – 2
oil derivative  – 1  – 1
euro forward currency contracts – designated as cash flow hedge  91 2  91 2
sterling forward currency contracts – designated as cash flow hedge  1 –  1 –
sterling forward currency contracts – undesignated  – 11  – 11
the group considers that the carrying amounts of trade and other receivables workinprogress trade and other payables other current and non
current financial assets and liabilities approximate their fair values and are therefore excluded from the above table 
the fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction 
between willing parties other than in a forced or liquidation sale  
the following methods and assumptions were used to estimate the fair values 
• the group enters into derivative financial instruments with various counterparties principally financial institutions with investment grade credit ratings 
derivatives valued using valuation techniques with market observable inputs are mainly foreign exchange forward contracts and oil derivatives 
market values have been used to determine the fair values of availableforsale financial assets forward currency contracts interest rate swaps 
and oil derivatives  
• the fair values of longterm interestbearing loans and borrowings and finance lease creditors are equivalent to their amortised costs determined as 
the present value of discounted future cash flows using the effective interest rate 
   166
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
32 risk management and financial instruments continued 
• the fair value of the receivable under berantai rsc note 17 has been calculated using a discounted cash flow model the valuation requires 
management to make certain assumptions about unobservable inputs to the model the oil price assumptions used are the same as disclosed 
in note 12 other significant unobservable inputs are disclosed in the table below 
  2014 2013
internal rate of return  115 150
discount rate  60 60
management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on 
the total fair value the fair value of the receivable under berantai rsc is only sensitive to a reasonable change in the internal rate of return and the 
discount rate the table below explains the impact on the fair value of the receivable as a result of changes to these inputs 
  
2014
usm
2013
usm
100 basis points decrease in the internal rate of return  1 16
100 basis points increase in the discount rate  2 10
100 basis points decrease in the discount rate  2 10
reconciliation of fair value measurement of the receivable under berantai rsc 
  usm usm
as at 1 january 2014  476 389
billings during the year  65 118
fair value lossgain included in revenue  3 16
fair value loss on contract receivables note 5  43 –
unwinding of discount  20 23
receipts during the year  134 70
as at 31 december 2014  381 476
• the fair value of the availableforsale investment note 17 has been calculated using a discounted cash flow model the oil price assumptions used 
are the same as disclosed in note 12 the risk adjusted cash flow projections are discounted at a posttax rate of 90 
the table below explains the impact on the fair value of the availableforsale investment as a result of changes to these inputs 
  
2014
usm
2013
usm
10 decrease in the oil price per barrel  4 –
10 increase in the oil price per barrel  4 –
100 basis points decrease in the discount rate  14 –
100 basis points increase in the discount rate  14 –
reconciliation of fair value measurement of the availableforsale investment 
  usm usm
transferred from investment in associate  185 –
fair value change  – –
as at 31 december 2014  185 –
   167
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
• the fair value of the amounts receivable in respect of the development of the greater stella area note 17 has been calculated using a discounted 
cash flow model that represents the value which management expects would be converted to oil and gas assets upon transfer of legal title of the 
licence on achieving first oil the oil price assumptions used are the same as disclosed in note 12 the risk adjusted cash flow projections are 
discounted at a posttax rate of 90 
the table below explains the impact on the fair value of the amounts receivable in respect of the development of the greater stella area as a result of 
changes to these inputs 
  
2014
usm
2013
usm
10 decrease in the oil price per barrel and gas per mcf  59 –
10 increase in the oil price per barrel and gas per mcf  57 –
100 basis points decrease in the discount rate  19 –
100 basis points increase in the discount rate  17 –
reconciliation of fair value measurement of the amounts receivable in respect of the development of the greater stella area 
  usm usm
as at 1 january 2014  200 115
advances during the year to the partners  199 85
fair value loss note 5  207 –
as at 31 december 2014  192 200
   168
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
33 subsidiaries and joint arrangements 
at 31 december 2014 the group had investments in the following subsidiaries and joint arrangements 
   
proportion of nominal  
value of issued shares 
controlled by the group 
name of company country of incorporation  2014 2013
trading subsidiaries   
petrofac algeria eurl algeria  100 100
petrofac cyprus limited cyprus  100 100
eclipse petroleum technology limited england  100 100
k w limited england  100 100
oilennium limited england  100 100
petrofac malaysiapm304 limited england  100 100
petrofac contracting limited england  100 100
petrofac engineering limited england  100 100
petrofac services limited england  
1
100
1
100
petrofac uk holdings limited england  
1
100
1
100
the new energy industries limited england  100 100
tnei services limited england  100 100
caltec limited england  100 100
petrofac energy developments uk limited england  
1
100
1
100
petrofac deutschland gmbh germany  100 100
jermyn insurance company limited guernsey  
1
100
1
100
petrofac engineering india private limited india  100 100
petrofac engineering services india private limited india  100 100
petrofac information services private limited india  100 100
pt pci indonesia indonesia  80 80
pt petrofac ikpt international indonesia  51 51
petrofac integrated energy services limited jersey  
1
100
1
100
monsoon shipmanagement limited jersey  100 100
petrofac energy developments ohanet jersey limited jersey  100 100
petrofac energy developments international limited jersey  
1
100
1
100
petrofac energy developments west africa limited jersey  
1
100
1
100
petrofac facilities management international limited jersey  
1
100
1
100
petrofac fpf004 limited jersey  100 100
petrofac gsa limited jersey  100 100
petrofac international ltd jersey  
1
100
1
100
petrofac offshore management limited jersey  100 100
petrofac platform management services limited jersey  100 100
petrofac training international limited jersey  
1
100
1
100
petroleum facilities e  c limited jersey  
1
100
1
100
petrofac jsd 6000 limited jersey  100 100
petrokyrgyzstan limited jersey  100 100
petrofac ec sdn bhd malaysia  100 100
petrofac energy developments sdn bhd malaysia  100 100
petrofac engineering services malaysia sdn bhd malaysia  100 100
petrofac training sdn bhd malaysia  100 100
pfmap sdn bhd malaysia  100 100
   169
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
 
 
   
proportion of nominal  
value of issued shares 
controlled by the group 
name of company country of incorporation  2014 2013
trading subsidiaries continued 
 
 
spd well engineering sdn bhd  malaysia  100 100
hlspd americas s de rl mexico  100 100
petrofac mexico sa de cv mexico  100 100
petrofac mexico servicios sa de cv mexico  100 100
operadora de campos del noreste sa de cv mexico  100 100
petrofac global employment bv netherlands  100 100
petrofac kazakhstan bv netherlands  100 100
petrofac mexico holdings bv netherlands  100 100
petrofac netherlands cooperatief ua netherlands  100 100
petrofac netherlands holdings bv netherlands  100 100
petrofac treasury bv netherlands  100 100
pts bv netherlands  100 100
petrofac kazakhstan ventures bv netherlands  100 100
petrofac nigeria bv netherlands  100 100
petrofac norge bv netherlands  100 100
petrofac oman bv formerly petrofac russia bv netherlands  100 100
petrofac energy services nigeria limited nigeria  100 100
petrofac international nigeria limited nigeria  
2
40 100
petrofac holdings as norway  100 100
petrofac norge as norway  100 100
petrofac ec oman llc oman  100 100
petrofac solutions  facilities support srl romania  100 100
pkt technical services ltd russia  
2
50
2
50
pkt training services ltd russia  100 100
sakhalin technical training centre russia  100 100
petrofac saudi arabia company limited saudi arabia  100 100
atlantic resourcing 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
petrofac training group limited scotland  100 100
petrofac training holdings limited scotland  100 100
plant asset management limited scotland  100 100
petrofac south east asia pte ltd singapore  
1
100
1
100
petrofac training institute pte limited singapore  100 100
petrofac international south africa pty limited south africa  100 100
petrofac emirates llc note 11 united arab emirates  75
2
49
petrofac ec international limited united arab emirates  100 100
petrofac fze united arab emirates  100 100
petrofac international uae llc united arab emirates  100 100
spd llc united arab emirates  
2
49
2
49
petrofac energy developments ohanet llc united states  100 100
petrofac inc united states  
1
100
1
100
petrofac training inc united states  100 100
spd group limited british virgin islands   100 100 170
petrofac 
annual report and accounts 2014
notes to the consolidated financial statements continued 
 
 
33 subsidiaries and joint arrangements continued 
   
proportion of nominal  
value of issued shares 
controlled by the group 
name of company country of incorporation  2014 2013
dormant subsidiaries   
kw norge as norway  100 100
i perform limited scotland  100 100
joint venture international limited scotland  100 100
montrose park hotels limited scotland  – 100
rgit ethos health  safety limited scotland  – 100
rubicon response limited scotland  100 100
scota limited scotland  – 100
petrofac training trinidad limited trinidad  100 100
petrofac services inc united states  
1
100
1
100
 
  
country of 
incorporation 
 
proportion of nominal  
value of issued shares 
controlled by the group 
name of joint arrangement principal activities  2014 2013
joint arrangements    
joint ventures    
mjvi sdn bhd dormant brunei  50 50
costain petrofac limited dormant england  50 50
spie capag – petrofac international limited dormant jersey  50 50
tte petrofac limited operation and management of a training 
centre 
jersey 
 
50 50
china petroleum petrofac engineering services 
cooperatif ua 
consultancy for petroleum and chemical 
engineering 
netherlands 
 
49 49
professional mechanical repair services company operation of service centre providing 
mechanical services to oil and gas industry 
saudi arabia  50 50
kgnt – petrofac kazakhstan llp dormant kazakhstan  50 –
takatuf petrofac oman llc construction operation and management 
of a training centre 
oman  40 –
joint operations    
petroalfa servicios integrados de energia sapi de cv services to oil and gas industry mexico  
3
50
3
50
petrospm integrated services sa de cv production enhancement for pánuco mexico  
4
50
4
50
petrofacabb lummus jv dormant unincorporated  
6
50
6
50
bechtel petrofac jv feasibility study for a project in uae unincorporated  
6
15
6
15
petrofacdaelim jv epc for a project in oman unincorporated  
6
50
6
50
petrofacbonatti jv epc for a project in algeria unincorporated  
6
70
6
70
ngl 4 jv epc for a project in uae unincorporated  
6
45
6
45
petrofacsamsungcbi cfp epc for a project in kuwait unincorporated  
6
47 –
1 directly held by petrofac limited 
2 companies consolidated as subsidiaries on the basis of control 
3 joint arrangement classified as joint operation on the basis of contractual arrangement whereby the activities of the arrangement are primarily designed for the provision of 
output to the venturers this indicates that the venturers have rights to substantially all the economic benefits of the assets of the arrangement 
4 joint arrangement classified as joint operation on the basis of contractual arrangement between the joint venturers to be jointly and severally liable for performance under 
pánuco isc 
5 joint arrangement classified as joint operation on the basis of contractual arrangement between the joint venturers that gives rights to assets and obligation for liabilities of 
the joint arrangement to the venturers 
6 the unincorporated arrangement between the venturers is a joint arrangement as contractually all the decisions about the relevant activities require unanimous consent 
by the venturers 
the company’s interest in joint ventures is disclosed on page 148  governance
17 1
petrofac 
annual report and accounts 2014
financial statements
strategic report
company ﬁnancial statements
172 company income statement
172 company statement of comprehensive income
173 company statement of ﬁnancial position
174 company statement of cash ﬂows
175 company statement of changes in equity
176 notes to the company ﬁnancial statements
 
186 glossary
188 shareholder information 172
petrofac 
annual report and accounts 2014
company income statement  
for the year ended 31 december 2014 
 
 
 
 
notes  
2014
 usm
2013
 usm
revenue 3  398 398
general and administration expenses 4  13 15
other operating income 5  128 4
other operating expenses 6  277 9
profit before tax and finance costsincome   236 378
finance costs 7  46 23
finance income 7  21 18
profit before tax   211 373
income tax expense   – –
profit for the year   211 373
 
 
 
 
company statement of comprehensive income 
for the year ended 31 december 2014 
 
  
2014
 usm
2013
 usm
profit for the year  211 373
other comprehensive income  – –
total comprehensive income for the year  211 373
the attached notes 1 to 20 form part of these company financial statements 
  173
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
company statement of financial position  
at 31 december 2014 
 
 
 notes  
2014
 usm
2013
 usm
assets    
noncurrent assets   
investments in subsidiaries 9  219 307
investment in associate 10  – 176
availableforsale investment 11  185 –
other noncurrent assets   7 9
   411 492
current assets   
trade and other receivables   36 1
amounts due from subsidiaries 12  1345 1038
warrants on availableforsale investment 11  – 11
cash and shortterm deposits 13  48 140
   1429 1190
total assets   1840 1682
 
equity and liabilities  
equity attributable to petrofac limited shareholders   
share capital 20  7 7
share premium   4 4
capital redemption reserve   11 11
treasury shares 14  101 110
sharebased payments reserve   70 57
retained earnings   387 401
total equity   378 370
 
noncurrent liabilities    
interestbearing loans and borrowings 16  1242 742
longterm employee benefit provisions   1 1
   1243 743
current liabilities   
trade and other payables   1 2
other financial liabilities  17  13 17
amounts due to subsidiaries 12  205 550
   219 569
total liabilities    1462 1312
total equity and liabilities   1840 1682
the financial statements on pages 172 to 185 were approved by the board of directors on 24 february 2015 and signed on its behalf by  
tim weller – chief financial officer 
the attached notes 1 to 20 form part of these company financial statements 
 
 
  17 4
petrofac 
annual report and accounts 2014
company statement of cash flows  
for the year ended 31 december 2014  
 
notes  
2014
 usm
2013
 usm
operating activities    
profit before tax   211 373
   211 373
 
adjustments for   
 net finance expense 7  25 5
 reduction in valuation of share warrants 6  11 1
 gain on disposal – 80 share capital of petrofac fpso holdings limited  5  118 –
 gain on derecognition of investment in an associate  5  9 –
 intercompany loans receivable from subsidiaries written off 6  254 –
 other noncash items net   3 16
operating profit before working capital changes   371 395
 amounts due from subsidiaries   516 99
 trade and other receivables   1 –
 trade and other payables   1 –
 amounts due to subsidiaries   345 530
cash used in operations   492 234
interest paid   45 23
net cash flows used in operating activities   537 257
 
investing activities    
purchase of investment in subsidiary 9  – 138
proceeds from disposal of subsidiary net of transaction costs  5  84 – 
repayment of investment by subsidiaries 9  88 25
interest received   21 18
net cash flows from investing activities   193 95
 
financing activities   
interest bearing loans and borrowings obtained net of debt acquisition cost   498 742
treasury shares purchased 14  25 47
equity dividends paid   221 220
net cash flows from financing activities   252 475
 
net decreaseincrease in cash and cash equivalents   92 123
cash and cash equivalents at 1 january   140 17
cash and cash equivalents at 31 december 13  48 140
 dividend payments have been made by both the company and subsidiary entities 
the attached notes 1 to 20 form part of these company financial statements 
 
 
 
 
 
  175
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
company statement of changes in equity  
for the year ended 31 december 2014 
 
 
 
  
issued 
share 
capital 
usm 
note 20
share 
premium 
usm
capital 
redemption 
reserve 
usm
treasury 
shares 
usm  
note 14  
reserve for 
sharebased 
payments 
usm  
note 15  
retained 
earnings 
usm
total 
equity
 usm
balance at 1 january 2013  7 4 11 100  53  253 228
net profit for the year  – – – –  –  373 373
other comprehensive income  – – – –  –  – –
total comprehensive income  – – – –    373 373
shares vested during the year  – – – 37  34  3 –
treasury shares purchased note 14  – – – 47  –  – 47
transfer to reserve for sharebased payments  – – – –  38  – 38
dividends note 8  – – – –  –  222 222
balance at 1 january 2014  7 4 11 110  57  401 370
net profit for the year  – – – –  –  211 211
other comprehensive income  – – – –  –  – –
total comprehensive income  – – – –  –  211 211
shares vested during the year  – – – 34  33  1 –
treasury shares purchased note 14  – – – 25  –  – 25
transfer to reserve for sharebased payments  – – – –  46  – 46
dividends note 8  – – – –  –  224 224
balance at 31 december 2014  7 4 11 101  70  387 378
shares held by petrofac employee benefit trust and petrofac joint venture companies employee benefit trust 
the attached notes 1 to 20 form part of these company financial statements 
  17 6
petrofac 
annual report and accounts 2014
notes to the company financial statements 
for the year ended 31 december 2014 
 
1 corporate information 
the financial statements of petrofac limited the ‘company’ referred to 
as the company financial statements for the year ended 31 december 
2014 were authorised for issue in accordance with a resolution of the 
directors on 24 february 2015 
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 and availableforsale 
financial investment 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 
availableforsale afs  
afs financial assets include equity investments equity investments 
classified as afs are those that are neither classified as heldfortrading 
nor designated at fair value through profit or loss 
after initial measurement afs financial assets are subsequently 
measured at fair value with unrealised gains or losses recognised in other 
comprehensive income and credited in the availableforsale reserve until 
the investment is derecognised at which time the cumulative gain or loss 
is recognised in consolidated income statement within other operating 
incomeexpenses or the investment is determined to be impaired 
when the cumulative loss is reclassified from the afs reserve to the 
consolidated income statement in other operating income expenses 
investments in associates 
investments in associates are stated at cost less any provision 
for impairment 
longterm loan receivables from subsidiaries 
longterm loan receivables from subsidiaries are initially stated at fair 
value after initial recognition they are subsequently measured at 
amortised cost using the effective interest rate method 
due fromdue to subsidiaries 
due fromdue to subsidiaries are both interest bearing and  
noninterestbearing shortterm funding to and from subsidiaries 
these are recognised at the fair value of consideration receivedpaid 
less any provision for impairment 
cash and cash equivalents 
cash and cash equivalents consist of cash at bank and in hand 
and shortterm deposits with an original maturity of three months or less 
for the purpose of the cash flow statement cash and cash equivalents 
consists of cash and cash equivalents as defined above net of any 
outstanding bank overdrafts 
interestbearing loans and borrowings 
all interestbearing loans and borrowings are initially recognised at the fair 
value of the consideration received net of issue costs directly attributable 
to the borrowing 
after initial recognition interestbearing loans and borrowings are 
subsequently measured at amortised cost using the effective interest rate 
method amortised cost is calculated by taking into account any issue 
costs and any discount or premium on settlement 
employee benefit trusts 
the petrofac employee benefit trust and the petrofac joint 
venture companies employee benefit trust ebt’s are treated as 
extensions of the activities of the company and accordingly the company 
financial statements include all transactions and balances of the ebt’s 
except for transaction and balances between the company and 
the ebts 
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 24 
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 177
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
  
 
3 revenues 
dividends from subsidiaries are recognised when the right to receive payment is established  
  
2014
 usm
2013
 usm
dividend income from subsidiaries  398 398
4 general and administration expenses 
  
2014
 usm
2013
 usm
staff costs  8 9
other operating expenses  5 6
  13 15
included in other operating expenses above is auditors’ remuneration of us76480 2013 us76480 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 operating income 
  
2014
 usm
2013
 usm
gain on disposal – 80 share capital of petrofac fpso holding limited  118 –
gain on derecognition of investment in an associate  9 –
share based payment credit  1 4
  128 4
 on 13 august 2014 the company sold 80 of the share capital of petrofac fpso holding limited which via its subsidiaries owns interests in 
the fpso berantai fpf3 formerly jasmine venture and fpf5 formerly ocean legend to petrofirst infrastructure holdings limited for an initial 
consideration of us87m the transaction costs were us3m at 31 december 2014 there was a further us34m of deferred consideration payable 
and this together with the initial consideration of us84m net of transaction costs of us3m resulted in the recognition of a total gain on disposal of 
us118m 
 at the time of transfer on carrying out a fair valuation there was a gain of us9m on derecognition of the investment in associate and recognition as 
an availableforsale investment 
6 other operating expenses 
  
2014
 usm
2013
 usm
decrease in seven energy warrant valuation  note 11  11 1
revolving credit facility senior notes and term loan acquisition cost amortisation  4 3
exchange loss  5 2
intercompany loans receivable from subsidiaries written off  254 –
others  3 3
  277 9
intercompany loans written off during the year mainly comprise of us207m relating to petrofac gsa limited and us15m relating to petrofac fpf004 
limited which are in relation to impairments made to ies assets see note 5 to the group’s consolidated financial statements 
7 finance costsincome 
  
2014
 usm
2013
 usm
finance costs  
longterm borrowings  45 22
on amounts due to subsidiaries  1 1
total finance costs  46 23
finance income  
on amounts due from subsidiaries  21 18
total finance income  21 18
  178
petrofac 
annual report and accounts 2014
notes to the company financial statements continued 
 
 
8 dividends paid and proposed 
  
2014
 usm
2013
 usm
declared and paid during the year  
equity dividends on ordinary shares  
final dividend for 2012 4300 cents per share   147
interim dividend 2013 2200 cents per share   – 75
final dividend for 2013 4380 cents per share   149 –
interim dividend 2014 2200 cents per share   75 –
  224 222
 
  
2014
 usm
2013
 usm
proposed for approval at agm not recognised as a liability as at 31 december  
equity dividends on ordinary shares  
final dividend for 2014 4380 cents per share 2013 4380 cents per share  152 152
9 investments in subsidiaries 
  
2014
 usm
2013
 usm
at 1 january  307 194
investment repaid bymade in petrofac uk holdings limited  88 138
investment repaid by pedil  – 25
invested bonus in deferred bonus share plan dbsp charged to subsidiaries  25 22
receipt of invested bonus in dbsp from subsidiaries  25 22
share based payment amounts receivable from subsidiaries  22 15
transferred to due from subsidiaries  22 15
as at 31 december  219 307
at 31 december 2014 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  2014  2013
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 energy developments west africa limited jersey  100  100
petrofac facilities management international limited jersey  100  100
petrofac integrated energy services limited jersey  100  100
petrofac training international limited jersey  100  100
petroleum facilities e  c limited jersey  100  100
petrofac south east asia pte limited singapore  99  99
petrofac inc usa  100  100
petrofac services inc usa  100  100
 
   179
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
  
 
 
10 investment in associate 
  
2014
 usm
2013
 usm
at 1 january  176 176
gain on derecognition of investment in an associate note 5  9 –
transfer to availableforsale investment note 11  185 –
at 31 december  – 176
11 availableforsale investment 
  
2014
 usm
2013
 usm
at 1 january  – –
transfer from investment in associate note 10  185 –
at 31 december  185 –
on 15 april 2014 seven energy secured additional equity capital that resulted in dilution of the company’s interest in seven energy from 235 to 
154 following the dilution of ownership interest the group does not exercise significant influence over the activities of seven energy and as result 
has transferred the investment of us185m from investment in associate to availableforsale investment note 10 
the group continues to have 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 however at 31 december 2014 the residual fair 
value of these warrants was assessed as nil resulting in an income statement charge for the year of us11m note 6  
12 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 
13 cash and shortterm deposits 
  
2014
 usm
2013
 usm
cash at bank and in hand  48 53
shortterm deposits  – 87
total cash and bank balances   48 140
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 us48m 2013 us140m  
   180
petrofac 
annual report and accounts 2014
notes to the company financial statements continued 
 
 
14 treasury shares 
for the purpose of making awards under the group’s employee share schemes shares in the company are purchased and 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 
2014  2013 
number usm  number usm
at 1 january 5672691 110  5466213 100
acquired during the year 1000000 25  2300000 47
vested during the year 1686754 34  2093522 37
at 31 december 4985937 101  5672691 110
15 sharebased payments chargereserve 
share based payment charge 
sharebased payment plan information is disclosed in note 24 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 2013 41568  175933 5585
granted during the year 15362  9791 –
transferred to subsidiaries 370  – –
vested during the year 17052  75210 5585
forfeited during the year 4754  18409 –
outstanding at 1 january 2014 34754  92105 –
granted during the year 23238  7918 –
transferred from subsidiaries 3070  – –
vested during the year 24256  6764 – 
forfeited during the year 8654  53620 –
outstanding but not exercisable at 31 december 2014 28152  39639 –
 
deferred 
bonus share 
plan number  
performance 
share plan 
number
restricted 
share plan 
number
made up of following awards   
2012 2846  28324 –
2013 7730  6292 –
2014 17576  5023 –
 28152  39639 –
sharebased payments reserve 
the transfer during the year into sharebased payments reserve disclosed in the statement of changes in equity of us46m 2013 us38m 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 
 
   181
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
  
 
 
16 interestbearing loans and borrowings 
the company had the following interestbearing loans and borrowings outstanding 
  
31 december 2014 
actual interest rate 
31 december 2013 
actual interest rate 
effective interest 
rate  maturity  
2014
usm
2013
usm
noncurrent    
senior notes  i 340 340 368 4 years  750 750
term loan  ii us libor  085 na us libor
 085
2 years 
 
500 –
    1250 750
less 
debt acquisition costs net of 
accumulated amortisation and effective 
interest rate adjustments   
 
6 5
discount on senior notes issuance    2 3
total interestbearing loans     1242 742
details of the company’s interestbearing loans and borrowings are as follows 
i senior notes 
petrofac has an outstanding aggregate principal amount of us750m senior notes due in 2018 notes the company pays interest on the notes at 
an annual rate equal to 340 of the outstanding principal amount interest on the notes is payable semiannually in arrears in april and october each 
year the notes are senior unsecured obligations of the company and will rank equally in right of payment with the company’s other existing and 
future unsecured and unsubordinated indebtedness petrofac international ltd and petrofac international uae llc irrevocably and unconditionally 
guarantee jointly and severally the due and prompt payment of all amounts at any time becoming due and payable in respect of the notes the 
guarantees are senior unsecured obligations of each guarantor and will rank equally in right of payment with all existing and future senior unsecured 
and unsubordinated obligations of each guarantor  
ii term loan 
on 31 august 2014 petrofac entered into a us 500m 2 year term loan facility with a syndicate of 5 international banks the facility which matures on 
31 august 2016 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 2014 the loan was fully drawn as of 31 december 2014 2013 nil 
interest is payable on the facility at libor  085 
17 other financial liabilities 
  
2014
 usm
2013
 usm
forward currency contracts – undesignated  6 11
interest payable  7 6
  13 17
   182
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annual report and accounts 2014
notes to the company financial statements continued 
 
 
18 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 availableforsale investment cash and short
term deposits and interestbearing loans and borrowings 
the company’s activities expose it to various financial risks particularly associated with interest rate risks on its external variable rate loans and 
borrowings the company has a policy not to enter into speculative trading of financial derivatives 
the other main risks besides interest rate are foreign currency risk credit risk and liquidity risk and the policies relating to these risks are discussed 
in detail below 
interest rate risk 
interest rate risk arises from the possibility that changes in interest rates will affect the value of the company’s interestbearing financial liabilities and 
assets the company does not hedge its exposure on its interestbearing funding tofrom subsidiaries  
interest rate sensitivity analysis 
the impact on the company’s pretax profit and equity due to a reasonably possible change in interest rates is demonstrated in the table below 
the analysis assumes that all other variables remain constant 
  pretax profit  equity 
  
100 basis 
point 
increase 
usm
100 basis 
point 
decrease 
usm  
100 basis 
point 
increase 
usm
100 basis 
point 
decrease 
usm
31 december 2014  1 1  – –
31 december 2013  16 16  – –
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 2014 
  
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  – 500 – – –  – 500
amount due to subsidiaries interestbearing  201 – – – –  – 201
  201 500 – – –  – 701
financial assets    
floating rates  
cash and shortterm deposits note 13  48 – – – –  – 48
amount due from subsidiaries  
interestbearing  562 – – – –  – 562
  610 – – – –  – 610
 
   183
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annual report and accounts 2014
governance
financial statements
strategic report
  
 
 
 
year ended 31 december 2013 
  
within 1 
year 
usm
1–2 
years 
usm
2–3 
years 
usm
3–4  
years  
usm  
4–5  
years  
usm  
more than 
5 years 
usm
total 
usm
financial liabilities      
amount due to subsidiaries interestbearing  550 – – –  –  – 550
  550 – – –  –  – 550
financial assets      
floating rates  
cash and shortterm deposits note 13  140 – – –  –  – 140
amount due from subsidiaries  
interestbearing  915 – – –  –  – 915
  1055 – – –  –  – 1055
financial liabilities in the above table are disclosed gross of debt acquisition costs and effective interest rate adjustments of 2m 2013 8m 
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 2014 is 
limited to sterling £315m with an equivalent value of us487m 2013 sterling £46m equivalent us76m 
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 2014 49 49  – –
31 december 2013 9 9  – –
at 31 december 2014 the company had foreign exchange forward contracts as follows 
contract value  fair value undesignated 
2014  
usm  
2013  
usm  
2014
usm
2013
usm
sterling sales 491  403  – 11
euro purchases 94  4  6 –
     6 11
the above foreign exchange contracts mature and will effect income between january 2015 and july 2016 2013 between january 2014 and 
february 2014 
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 
   184
petrofac 
annual report and accounts 2014
notes to the company financial statements continued 
 
 
18 risk management and financial instruments continued 
the maturity profiles of the company’s financial liabilities at 31 december 2014 are as follows 
year ended 31 december 2014 
  
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  – – 500 750 –  1250 1242
trade and other payables  1 – – – –  1 1
amounts due to subsidiaries  – 205 – – –  205 205
interest payments  18 18 35 48 –  119 119
derivatives  2 2 2 – –  6 6
  21 225 537 798 –  1581 1573
year ended 31 december 2013 
  
6 months 
or less 
usm
6–12 
months 
usm
1–2 
years
 usm
2–5 
years 
usm
more than  
5 years 
usm  
contractual 
undiscounted 
cash flows 
usm
carrying 
amount 
usm
financial liabilities    
interestbearing loans and borrowings  – – 750 –  750 742
trade and other payables  2 – – – –  2 2
amounts due to subsidiaries  – 550 – – –  550 550
interest payments  13 13 26 76 –  128 128
derivatives  11––––  1111
  26 563 26 826 –  1441 1433
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 
  
2014
 usm
2013
 usm
cash and shortterm deposits note 13  48 140
interestbearing loans and borrowings a note 16  1242 742
net debt b  1194 602
total equity c  378 370
gross gearing ratio ac  3286 2005
net gearing ratio bc  3159 1627
   185
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
  
 
 
18 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 
2014 
 usm  
2013 
 usm  
2014
 usm
2013
 usm
financial assets       
warrants on investment in an associate note 11 –  11  – 11
availableforsale investment note 11 185  –  185 –
cash and shortterm deposits note 13 48  140  48 140
 
financial liabilities     
  
interestbearing loans and borrowings note 16 1242  742  1250 750
forward currency contracts – undesignated 6  11  6 11
the fair values of longterm interestbearing loans and borrowings and longterm receivable from a subsidiary are equivalent to amortised costs 
determined as the present value of discounted future cash flows using the effective interest rate the company considers that the carrying amounts 
of trade and other receivables amounts due fromdue to subsidiaries trade and other payables and other current financial liabilities approximate their 
fair values and are therefore excluded from the above table 
fair value hierarchy 
the following financial instruments are measured at fair value using the hierarchy below for determination and disclosure of their respective fair values 
level 1  unadjusted quoted prices in active markets for identical financial assets or liabilities 
level 2  other valuation techniques where the inputs are based on significant observation factors 
level 3  other valuation techniques where the inputs are based on significant unobservable market data 
 
year ended 31 december 2014 
  
tier 2
 usm
tier 3
 usm
financial assets  
availableforsale investment  – 185
 
financial liabilities 
 
forward currency contracts – undesignated  6–
year ended 31 december 2013 
  
tier 2
 usm
tier 3
 usm
financial assets  
seven energy warrants  – 11
 
financial liabilities 
 
forward currency contracts – undesignated  11 –
the assumptions about unobservable inputs relating to availableforsale investment and the impact on the fair values of the availableforsale 
investment as a result of changes to these inputs are disclosed in note 32 to the group’s consolidated financial statement 
19 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 remuneration paid by the company to its nonexecutive directors was 1m 2013 us1m the company is also recharged 
a portion of the key management personnel cost by one of its subsidiaries the amount recharged during the year was us1m 2013 us1m 
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 11 the company is listed as a guarantor of the revolving credit facility obtained 
by a wholly owned subsidiary 
20 share capital 
the movements in share capital are disclosed in note 22 to the consolidated financial statements of the group 
  186
petrofac 
annual report and accounts 2014
a
agm
annual general meeting
airb
asset integrity review board
appraisal well 
a well drilled into a discovered accumulation to provide data 
necessary to deﬁne a field development plan for the accumulation
b
backlog
backlog consists of the estimated revenue attributable to the 
uncompleted portion of lumpsum engineering procurement 
and construction contracts and variation orders plus with regard 
to engineering operations maintenance and integrated energy 
services contracts the estimated revenue attributable to the lesser 
of the remaining term of the contract and ﬁve years backlog will 
not be booked on integrated energy services contracts where 
the group has entitlement to reserves the group uses this key 
performance indicator as a measure of the visibility of future 
earnings backlog is not an audited measure
barrel 
a unit of volume measurement used for petroleum
bbl
one barrel of oil
block 
a subdivision of an underground petroleum reservoir by a resource 
owner for the purposes of licensing and administering exploration 
appraisal and production of resources by oil and gas companies 
boe
barrel of oil equivalent
bpd
barrel per day
brownﬁeld development
further investment in a mature ﬁeld to enhance its production 
capacity thereby increasing recovery and extending ﬁeld life
c
capex 
capital expenditure
cis
commonwealth of independent states
cost plus kpis
a reimbursable contract which includes an incentive income linked 
to the successful delivery of key performance indicators kpis
cpecc
china petroleum engineering  construction corporation
cppes
china petroleum petrofac engineering services
cr
corporate responsibility
d
dbsp
deferred bonus share plan
decc
department of energy and climate change uk
decommissioning 
the reuse recycling and disposal of redundant oil and gas facilities
downstream
the downstream sector commonly refers to the reﬁning of petroleum 
crude oil and the processing and purifying of raw natural gas as well 
as the marketing and distribution of products derived from crude oil 
and natural gas
duty holder 
a contracting model under which petrofac provides a complete 
managed service covering production and maintenance work 
both offshore and onshore to reduce the costs of operating 
and to extend the life of the facilities
e
ebitda 
calculated as proﬁt before tax and net ﬁnance income but after 
our share of losses from associates as per the consolidated income 
statement adjusted to add back charges for depreciation and 
amortisation as per note 3 to the ﬁnancial statements
ebt
employee beneﬁt trust
ecs
engineering  consulting services this service line is petrofac’s 
centre of technical engineering excellence delivering earlystage 
engineering studies including conceptual and frontend engineering 
and design work across onshore and offshore oil and gas ﬁelds
ecom 
engineering construction operations  maintenance one of 
two divisions which designs and builds oil and gas facilities 
and operates manages and maintains them on behalf of 
petrofac’s customers
epc 
engineering procurement and construction
epcic
engineering procurement construction installation 
and commissioning
epci
engineering procurement construction and installation
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
glossary 187
petrofac 
annual report and accounts 2014
governance
financial statements
strategic report
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 188
petrofac 
annual report and accounts 2014
shareholder information
at 31 december 2014
registrar
capita registrars jersey limited 
12 castle street 
st helier 
jersey je2 3rt
corporate brokers
goldman sachs  
peterborough court 
133 fleet street 
london ec4a 2bb
jp morgan cazenove 
25 bank street 
canary wharf 
london e14 5jp
legal advisers to the company 
freshﬁelds bruckhaus deringer llp 
65 fleet street 
london ec4y 1hs
company secretary and registered ofﬁce
elian corporate services jersey limited 
44 esplanade 
st helier 
jersey je4 9wg
auditors
ernst  young llp 
1 more london place 
london se1 2af
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
14 may 2015 annual general meeting
22 may 2015 final dividend payment
25 august 2015 half year results announcement
october 2015 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 design and production by radley yeldar wwwrycom
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with this production the printers are fsc and iso 14001 certiﬁed with strict procedures in place to safeguard the 
environment throughout all their processes they have also registered with and have had audits carried out by the 
carbon trust to reduce their carbon footprint petrofac services limited  
117 jermyn street  
london sw1y 6hh  
united kingdom  
t 44 20 7811 4900  
f 44 20 7811 4901
wwwpetrofaccom


Summary:
 group chief executive’s strategic review
2014 was a tough year for petrofac and the oil and gas industry as a whole
we ﬁnished the year with a record backlog which gives us very 
good visibility of future revenues nonetheless our 2014 ﬁnancial 
performance fell short of everyone’s initial expectations and our 
reputation for operational excellence has been dented we also 
recognise that some investors are deeply concerned by our 
sector’s exposure to lower oil prices
in 2015 and beyond we aim to set the record straight by delivering 
to the highest standards on all our projects coping with the 
challenges of a lower price environment and positioning the 
group to beneﬁt from the projected longterm growth in global 
energy demand
before i talk about prospects for the future i would like to reﬂect 
candidly on our 2014 performance and the lessons learned
reﬂecting on the challenges of 2014 
across the majority of our operations projects and assets 2014 
was a good year for petrofac from a business development 
perspective it was our best year ever enabling us to build up a 
record backlog however as we fell short on the delivery of some 
of our operational objectives our record for excellence in project 
execution was compromised 
we have always assured all our stakeholders that as we enter 
new geographies and take on new disciplines we are more than 
capable of understanding and mitigating the associated risks 
however as the year unfolded and for three projects in particular 
it became clear that our performance was falling short of the high 
standards we expect of ourselves 
on the greater stella area project the original project scope 
lacked deﬁnition when we entered into the project and many 
changes in scope ensued the interfaces between ithaca  
as operator integrated energy services ies as partner and 
offshore projects  operations opo as contractor were not 
welldeﬁned and we did not coordinate ourselves internally  
or manage our fabrication subcontractors effectively to ensure  
our respective interests were fully aligned 
on the laggantormore project we failed to stresstest 
adequately our assessment of the risks of operating in a wholly 
new geography for the onshore engineering  construction oec 
business our ability to deliver on schedule was further impacted 
directly by challenging weather conditions affecting the shetland 
islands furthermore our construction contractors failed to deliver 
their agreed scope and though we had a lack of experience  
in managing direct construction we had little choice but to take 
on more direct construction activity on a day rate basis 
the third project is the ticleni production enhancement 
contract in romania here despite effective project execution 
enabling us to increase production in 2011 2012 and 2013 
it became apparent from new seismic data obtained in 2014 
at a glance
 while our overall portfolio is in good shape we have 
recently fallen short of the high execution standards 
we set for ourselves
 we have faced these challenges and we are taking robust 
action to address them
 irrespective of lower oil prices petrofac is well positioned 
to return to growth and deliver differentiated margins
 we will pursue the clear synergies between ies and 
ecom – and demonstrate to clients the considerable 
beneﬁts of our unique combined offer
fundamental to our success  
is petrofac’s distinctive  
deliveryfocused culture and  
the six values that sustain 
it safe ethical innovative 
responsive quality and cost 
conscious and driven to deliver
ayman asfari
group chief executive
11
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements that the subsurface had previously been poorly deﬁned 
consequently some of our investment did not yield sufﬁcient 
production improvement and we do not anticipate being able 
to create shareholder value from continued investment in the 
contract we have therefore decided to exit from the project 
and will be discussing exit options with omv petrom
as the signiﬁcance and the cumulative effect of the laggan
tormore and greater stella area projects in particular became 
apparent we were compelled to update our investors and 
inevitably the reaction from the markets was damning 
the situation was then compounded by the tumbling oil price 
which meant our sector fell even further from favour
for a company like petrofac the position in which we found 
ourselves in late 2014 was unprecedented and uncomfortable 
in equal measure 
as a signiﬁcant shareholder in my own right i certainly shared 
the concern of fellow investors quickly and purposefully we 
moved to resolve these executional issues we have identiﬁed 
the root causes and are taking steps to ensure such mistakes will 
not be repeated irrespective of lower oil prices i am conﬁdent 
petrofac is well positioned to return to growth and deliver 
differentiated margins
acknowledging the successes of 2014
whilst i do not intend to downplay the challenges of 2014 and  
will come on to explain how we are addressing them i do believe 
it is important to recognise the year’s successes
maintaining a sectorleading safety record 
safety is our ﬁrst and our most important value and a key 
component of operational excellence 
with no fatalities in 2014 and a lost time incident lti frequency 
rate of 0044 per 200000 manhours our performance indicators 
are better than industry norms and we did more to ensure that 
everyone who works for and with petrofac understands and 
abides by our safety ethos whilst i am pleased with our 2014 
safety record there can be no room for complacency and we will 
continue to keep safety paramount in our daily actions individually 
and collectively 
making good progress on challenging projects
across the bulk of the portfolio our record for operational 
excellence continued unabated we have approximately 50 
signiﬁcant projects currently in execution nine of them more 
than us1 billion in value 
where we did face execution issues we also moved to resolve 
them at the laggantormore shetland gas plant for example 
we have now completed most of the construction work agreed 
a commercial settlement with total and expect to complete the 
project in the third quarter of 2015
on the fpf1 modiﬁcation works for the greater stella area 
project progress has been slower than expected over the winter 
while the unit is in an advanced state mechanical completion 
is now expected in the third quarter of 2015 we have good 
visibility on the scope and the required resources are in place to 
complete the upgrade and modiﬁcation given the lower oil price 
environment we are prioritising cost optimisation certainty of 
delivery and completion of all works prior to sailaway ahead of 
the timing of ﬁrst production sailaway is now expected in early 
2016 following the winter weather window with ﬁrst production 
scheduled for mid2016 petrofac as modiﬁcations contractor 
has made a number of variation requests and other claims on the 
ﬁeld owners and we are continuing to discuss these with them
buildingup a record backlog
with a record yearend backlog of us189 billion 2014 was  
our best ever year for new business even after oil prices began 
to fall a respectable deal ﬂow continued along with sustainable 
bidding behaviour from our competitors in january 2015 we 
secured the lower fars heavy oil project in kuwait adding around 
us3 billion to our backlog with the softness in the market we 
are well positioned with a strong backlog and with execution 
risk reduced in a deﬂationary environment for procurement and 
subcontractor services
this brings excellent revenue visibility for 2015 and beyond 
further diversifying the ecom business
during 2014 our engineering construction operations and 
maintenance ecom business continued with its geographic 
and business model diversiﬁcation 
until recently for example opo was a ukcentric business 
it now secures more than 50 of its earnings from outside of 
the ukcs and made important entries into algeria iraq and 
uae at the same time engineering  consulting services ecs 
secured its ﬁrst major engineering procurement and construction 
management epcm contract at rabab harweel in oman which 
enables it to deliver project execution services on a reimbursable 
basis we also moved further downstream making progress on 
our ﬁrst major reﬁnery project located in oman and securing a 
package for the new clean fuels project in kuwait 
ensuring the strength and depth of our leadership
our continuing success depends on the quality and attitude  
of our people and in particular our leadership 
building our capability and reinforcing our values has always been 
important in 2014 we put more rigour behind our people strategy 
– with a particular emphasis on effective talent management 
and succession planning across our top 200 employees – which 
continues to be supported through the appointment of a new 
group director of human resources
group chief executive’s strategic review continued
12
petrofac
annual report and accounts 2014 building strong differentiating corporate  
responsibility credentials
another asset which we believe sets petrofac apart from many 
of our peers is our corporate responsibility cr commitment and 
capability this helps us to build productive relationships bid for 
challenging projects develop trust manage risk and improve our 
performance during 2014 we brought yet more discipline to our 
cr programmes thereby helping us to understand and live up  
to changing client and investor expectations
while we understand the gravity and impact of the challenges we 
faced in 2014 we are determined not to let them overshadow the 
progress made across the group as a whole
recommitting to our business strategy
our strategy is intended to maximise the opportunities available to 
us by using the breadth and depth of our services and capabilities 
to deliver excellent outcomes for our clients and create value for 
our colleagues and investors
fundamental to our success is petrofac’s distinctive delivery
focused culture and the six values that sustain it safe ethical 
innovative responsive quality and cost conscious and driven 
to deliver
our strategic intent is to build progressively on our core business 
which in turn enables us to achieve a more balanced geographic 
and business model mix and to work across the entire life cycle 
of our clients’ assets from early development right through to 
decommissioning in our core business our focus remains on 
delivering our backlog through a relentless focus on ﬁrst class 
project execution cost control and effective risk management 
building on our track record in core markets and further cementing 
our foothold in geographies where we are newer players
through most of 2014 the market conditions did nothing to deﬂect 
us from this strategy nonetheless towards the end of the year we 
found ourselves adapting to new market conditions as a result of 
lower oil prices 
having begun to refocus the ies business early in 2014 we then 
considered carefully how to derisk the delivery of our deepwater 
capabilities we also introduced several new commitments to 
ensure that we avoid unacceptable executional risks 
with regards to ies
the original strategic rationale was for ies to bring value to the 
wider petrofac group and offer another route to market for 
our full range of services in refocusing the business we are 
recommitting to this original purpose and we will focus on projects 
that play to our existing strengths to be successful in this we will 
work across the group together from the business development 
stage agreeing on the target and developing a robust pursuit and 
execution strategy along with clear accountabilities for delivery 
from the outset
we are therefore building on the successes of ies to date it has 
for example successfully established our position in the shallow 
water offshore market and taken us into several new geographies 
such as algeria malaysia and mexico it has also added 
signiﬁcantly to our wider capabilities
at the same time we are slowing down the pace of capital 
deployment reducing capital intensity where it makes sense 
to do so and looking at ways we can tap into thirdparty capital 
the creation of petrofirst infrastructure partners being a prime 
example and not committing signiﬁcant new capital until we have 
extracted the right value from the existing portfolio
the overall emphasis however is to pursue the clear synergies 
between ies and ecom – and demonstrate to clients the 
considerable beneﬁts of our unique combined offer
with regards to our deepwater ambitions
ultimately the scale of the deepwater market will be determined 
by the movements in the oil price however there are certainly 
opportunities out there and from speaking to clients competitors 
and potential partners alike i know that the market is impressed 
by the unique conﬁguration and capabilities of the petrofac 
jsd6000 – our new installation vessel which is currently under 
construction and due for delivery in 2017 
during 2015 we will monitor the market opportunities for use  
of the vessel and will manage its construction programme in  
the context of the prospects available for its use 
with regards to our focus on delivery excellence
simply put the challenges of 2014 can be traced back to a failure 
to appreciate fully the risks we faced as we worked in unfamiliar 
geographies and with untested partners and in areas where we 
strayed outside of our core competencies to ensure this does 
not happen again we have made a series of commitments
 with lumpsum contracts we will be more risk averse we will no 
longer take construction risk on large lumpsum projects within 
the uk and elsewhere we will scrutinise our assumptions with 
regard to workforce productivity
 wherever we work and on whatever basis we will ensure that 
we have robust contractual protection on both the time and cost 
associated with severe weather disruption
 with ﬂoating infrastructure upgrades we will also ensure that 
the interests of our fabrication partners are closely aligned with 
our own
 we will only undertake production enhancement contracts 
where the value is primarily driven by our core competencies 
rather than reservoir performance
yes this does reduce our ﬂexibility however we can satisfy 
ourselves that the right mix of risk and reward can be established 
for every project
13
petrofac 
annual report and accounts 2014
strategic report
governance
financial statements group chief executive’s strategic review continued
well positioned to capitalise on a low 
price environment
i acknowledge that for many investors the prospect of a 
sustained period of low oil prices is an abiding concern i would 
like to assure you that petrofac is well positioned to cope with 
these market challenges and capitalise on the opportunities that  
i believe will present themselves in this environment
the strength of our backlog means our revenue visibility is better 
than it has been at any other point in our 34year history
secondly petrofac is strongest in those market segments 
that are least vulnerable to lower oil prices primarily we work 
with national oil companies many of whom have signalled an 
intention to keep on investing although we work globally our 
operations tend to be concentrated in the middle east and north 
africa a region that enjoys the world’s lowest marginal production 
costs and despite the market conditions we continue to see an 
attractive pipeline of bidding opportunities in our core markets
we do have operations in the ukcs where the picture is very 
different here our business beneﬁts from our clients’ operating 
expenditure rather than capital spending and we have already 
been working with clients to improve cost effectiveness 
ultimately our prospects in this region will depend on structural 
and ﬁscal considerations as well as changes in the oil price 
even if production has to be reined in clients will be looking for 
new models to run mature and extramature assets and we are 
well placed to compete for a substantial decommissioning market
with a weaker global economy and reduced demand for 
hitherto scarce skills the prospect of a deﬂationary environment 
should help to derisk the delivery of our record backlog through 
procurement cost savings
finally in these market conditions the core petrofac offer 
becomes more compelling with centres of excellence in 
the middle east and india our cost structure is competitive 
meanwhile our focus on operational excellence and our 
willingness to share project risk with our clients ensures alignment 
of our respective interests
weighing up these circumstances we expect to deliver 
around us460 million of net income in 2015 in line with 
our previous guidance
1

1 on 24 november 2014 we guided to net proﬁt in 2015 of around 
us500 million based on the then prevailing average 2015 forward oil price  
of around us82 per barrel and stated that a further increasedecrease of 
us1 in the price of oil would impact net earnings by around us2 million 
based on the current average 2015 forward oil price of around us60 per 
barrel we therefore currently expect net earnings to be around us460 million 
other than the movement in the oil price the group continues to perform in 
line with management expectations at the time of the november announcement
acknowledging our strongest asset – the skills 
and ethos of our people
i would like to pay tribute to our people who help make petrofac 
such a unique company and who are working together through 
these challenging times
i want to thank each and every one of them for their efforts in 2014 
and i look forward to working together during what i am conﬁdent 
will be a successful 2015
one person who deserves special recognition is norman murray 
who due to personal reasons stepped down as chairman of the 
board in mid2014 we were extremely sorry to see norman go 
and sympathise deeply with his situation he made a special and 
signiﬁcant contribution to petrofac’s success and the seamless 
transition to his successor rijnhard van tets is testament 
to norman’s outstanding professionalism i look forward to 
continuing to work with rijnhard and the rest of our board 
who have also been very supportive as we continue to deliver 
our agenda
strong foundations for longterm growth
over the longer term we anticipate increased demand for energy 
fuelled by a growing appetite for hydrocarbons and ongoing 
capital spending by resource holders the strength of our 
backlog underpinned by our competitive cost structure relentless 
focus on execution and our ﬂexibility to adapt our offering to client 
and market demands ensures petrofac and our shareholders 
will be well positioned to beneﬁt from these conditions over the 
longer term
14
petrofac
annual report and accounts 2014  as a business with a  
strong entrepreneurial heritage 
we are always looking for  
new ways to bring value to  
our clients – understanding  
their needs drawing on our 
resources and relationships 
and adapting our offer 
accordingly
extracting client value 
in mexico
our performance in mexico characterises 
this approach
back in 2011 we won two integrated services 
contracts to develop the magallanes and 
santuario blocks in southcentral mexico 
and were then awarded two more production 
enhancement contracts – for pánuco 
and arenque
since taking over we have boosted 
production increased drilling efﬁciency 
and pushed up the known resource base
in santuario for example our teams 
were convinced they could ﬁnd additional 
reserves in untapped adjacent blocks 
bringing together many different inhouse 
disciplines they argued their case 
proposed an effective drilling strategy 
and successfully made a new discovery 
of commercial proportions
meanwhile to add to our capability and 
drive new costefﬁciencies we partnered 
with the mexican conglomerate group alfa 
to create a new service company petroalfa 
quickly growing to more than 80 employees 
it now provides petrofac and the wider oil 
and gas industry with a growing range of 
engineering procurement drilling and 
maintenance services
design build manage and maintain train
financial statements
governance
strategic report
petrofac 
annual report and accounts 2014 15