The ability of oil services firm Petrofac (PFC) to secure lots of fresh work despite being under the cloud of a fraud investigation is impressive with order intake of $1.8bn in the year to date.

However, investors appear to be somewhat concerned by a creeping increase in net debt from $0.6bn at the start of 2017 to $0.9bn and the shares are broadly flat at 534.2p.

There are several other bright spots in the first half update, with $20bn of bid opportunities due for award in the second half and the company reporting early signs of recovery in the North Sea.

Petrofac enjoyed a strong start to life as a public company after listing in 2005 but by 2014 had hit a rough patch as many of its efforts to diversify away from a core engineering and construction business in the Middle East proved unsuccessful.

FRAUD INVESTIGATION CONTINUES

More recently, the Serious Fraud Office has been investigating Petrofac and members of its senior management team as part of a wider look into the activities of Monaco-based Unaoil. Reportedly the focus is on the provision of consultancy services and securing of contracts in countries including Syria and Kazakhstan.

In May 2017, as part of the probe, chief executive Ayman Asfari and then chief operating officer Marwan Chedid were arrested and questioned under caution. Both were later released without charge. Chedid has subsequently left the company.

This process remains a key uncertainty for investors in the company, although the fact it is still winning new business suggests the industry at least sees it as a viable partner in the long run.

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Issue Date: 26 Jun 2018