Petrofac resumes production in Tunisia

Tunis - Embattled British energy firm Petrofac has re­sumed production at its gas plant in Tunisia after a stoppage that lasted several months, the company and a trade union said.
The positive news is likely very welcome by the beleaguered en­ergy firm, which is under inves­tigation by British authorities for alleged corruption, bribery and money laundering.
Abdelhadi Ben Jemaa, secretary-general of the Tunisian General Labour Union (UGTT) trade union in Sfax, told Agence France-Presse that, as of May 26, gas was flowing by pipeline to Sfax from the Cher­gui field operated by Petrofac.
The company confirmed that work had resumed at the Chergui gas field concession on the Kerken­nah Islands in south-eastern Tuni­sia.
In September, Tunisia’s govern­ment said Petrofac was pulling out of the North African country be­cause of a labour dispute that had paralysed its operations since the start of 2016.
Days later the government said a deal had been worked out but at the end of 2016 the company de­clared its “technical shutdown,” following further protests by dem­onstrators calling for permanent jobs. The protesters, who also de­manded development projects for the region, blocked roads used by company trucks.
The unrest began at the start of 2016 after the end of a programme, largely financed by Petrofac, that was created after Tunisia’s 2011 up­rising to get unemployed graduates into work, although often without permanent contracts or benefits.
Petrofac said it could no longer fund the programme and called on Tunisian officials to take over.
Ben Jemaa said Petrofac re­sumed operations after work was undertaken to develop the small port of Sidi Fraj in Kerkennah. That would allow trucks to avoid the Sidi Youssef port, which was on the road that protesters had previously blocked.
“It is too soon to say if this new solution (will work)… but it is posi­tive,” he added.
Petrofac has a 45% stake in the Chergui facility, with Tunisia’s national oil company holding the rest.
Tunisia’s revenues from oil and gas extraction have been stead­ily shrinking, with social unrest and technical failures limiting the country’s energy output. A Feb­ruary report by Tunisia’s central bank stated that production from the oil and gas extraction sector decreased 10.1% in 2016 compared to the previous year.
Taken on its own, gas produc­tion dropped 11% during the same period (down from a 3.9% fall off in 2015 and an 8.5% reduction in 2014). Crude oil production for 2016 fell 6.2% after declines of 9.6% in 2015 and 10.6% in 2014.
The resumption of production at Kerkennah should come as some comfort to the Tunisian govern­ment, which recently deployed the army to safeguard the country’s in­dustrial sites disrupted by general strikes and protests over poverty.
News of resumption of produc­tion at Kerkennah will also pro­vide Petrofac with a sorely needed boost after its share price crashed following the release of details of a fraud investigation into its interna­tional operations.
The company has confirmed that Chief Operations Officer Marwan Chedid and CEO Ayman Asfari had been questioned under caution by Britain’s Serious Fraud Office re­garding allegations of bribery, cor­ruption and money laundering.
Chedid has since been suspend­ed and resigned from the board. Asfari is to continue as CEO but has recused himself from matters re­lating to the investigation.
Shares slumped as much as 29%, wiping more than $640 million off the company’s market capitalisa­tion. The British newspaper the Daily Telegraph reported that the company could lose as much as $2.56 billion in market value and faces a possible $800 million fine because of the scandal.