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Does another high-profile share sell-off at Petrofac spell trouble for the oil services firm?

by Tom Sieber

Ayman Asfari, chief executive of oil service firm Petrofac, has sold off 5.5 million shares – pocketing £34 million in the process. The sale means Asfari has now outdone Maroun Semaan, who heads up the company’s engineering and construction division and is seen as an ‘unofficial number two’. Seeman featured in these pages two weeks ago after selling three million shares in the company.

Both men declined to comment on their reasons for selling, and both retain large residual holdings: Semaan still has 8.7% of the company and Asfari has 18.46%.

Asfari, 49, joined Petrofac in 1991 to establish Petrofac International. He has more than 25 years’ experience in the oil & gas industry and served as CEO of Petrofac International until his appointment as group chief executive in January 2002. He previously worked as the managing director of a major civil and mechanical construction business based in Oman and currently serves as a member of the board of trustees of the American University in Beirut.

In the main, analysts remain believers in the Petrofac story and are not encouraging investors to follow Semaan’s and Asfari’s lead.

The group was boosted earlier this month after agreeing a $477 million lump-sum contract from Petro-Canada to build a gas treatment plant for the Ebla project in Syria.

‘This is good news for the company,’ says Seymour Pierce analyst Peter Hitchens, who has an outperform recommendation on the stock. ‘However, we are concerned over the group wanting to take a 10% in the project. The management wants to build up the energy development business by bringing its engineering skills to progress upstream projects. However, we are concerned whether this will add much shareholder value, given that the company will only be a minority partner in this project.’