(Adds details, analyst comment, updates shares)
* Petrofac says COO sup ended, resigns from board
* Move relates to SFO investigation into Unaoil
* Petrofac shares fall 29 pct
* CEO Asfari stays on but removed from dealing with
By Rahul B and Karolin Schaps
May 25 Oilfield services provider Petrofac
has suspended its chief operating officer in response to
the UK Serious Fraud Office's investigation into Monaco-based
Unaoil, another setback for the company that has been hit by the
oil market downturn.
Petrofac's shares slumped as much as 29 percent, wiping more
than half a billion pounds off its market capitalisation, after
the company said in a statement on Thursday that COO Marwan
Chedid had been suspended and had resigned from the board.
Investors feared the SFO investigation and Chedid's
suspension could hurt the company's ability to win work.
Petrofac said on May 12 that CEO Ayman Asfari and COO Chedid
had been questioned under caution by the SFO in connection with
a global investigation into oil and gas services firm Unaoil.
Asfari will continue as chief executive officer, but will
not be involved in any matters connected to the investigation,
Petrofac said in its statement.
"The board is today announcing a number of decisions to
ensure Petrofac can retain its focus on its operations and
clients, whilst also ensuring the company is able to continue to
engage with the SFO's investigation," Petrofac said.
The SFO launched a criminal investigation last July into
Unaoil, its officers, employees and agents in connection with
suspected bribery, corruption and money laundering.
The investigation is now threatening to embroil other
British oil services companies after another British oil
services company, Wood Group, said this week it was
carrying out its own investigation into dealings with Unaoil.
Last month, Wood Group acquisition target Amec Foster
Wheeler was also required by the SFO to disclose
information on its relationship with Unaoil and Amec said it
expects this "may well" develop into an investigation.
Petrofac has said it engaged Unaoil primarily in Kazakhstan
to provide local consultancy services between 2002 and 2009.
Last year, the company commissioned law firm Freshfields
Bruckhaus Deringer and accountants KPMG to carry out an
investigation into its dealings with Unaoil in Kazakhstan after
media allegations of misconduct, but said the investigation
found no evidence to support the allegations.
On Thursday, Petrofac said it had set up a committee
responsible for responding to the investigation, comprising its
chairman, chief financial officer and independent non-executive
directors, and would also hire an senior external specialist to
review its compliance processes, given the scale of the
"We are concerned that (Chedid's) departure may have a
knock-on effect on Petrofac's operational oversight and ability
to secure new work," Morgan Stanley analyst Robert Pulleyn said.
The company had $617 million in debt at the end of last
year, according to its financial results published in February.
Analysts at Bernstein estimated that, if found guilty, the
company could face a potential SFO fine of $150 million-200
It based its estimate on its assessment of Petrofac's
profits in Kazakhstan and on previous fines the SFO has handed
out to companies in similar cases.
A spokesman for Petrofac declined to comment.
(Reporting by Rahul B in Bengaluru and Karolin Schaps in
London; Additional reporting by Arathy Nair and Tenzin Pema in
Bengaluru; Editing by David Clarke and Susan Fenton)