* Oil services firm teams up with investment firm First
* PetroFirst JV buys Petrofac assets for $450 million
(Recasts with details and quotes, adds dateline)
By Ron Bousso
LONDON, June 26 Petrofac and private
equity firm First Reserve on Thursday formed a $1.25 billion
investment joint venture in a deal including the sale of some
assets of the British oil services company.
The PetroFirst joint venture will involve investment firm
First Reserve taking an 80 percent stake and Petrofac the
remaining 20 percent, the FTSE 100 company said in a statement
First Reserve will invest $1 billion and Petrofac some $250
As part of the deal, PetroFirst will buy assets from
Petrofac's Integrated Energy Services (IES) arm, where the
company has invested in oil production alongside oil companies.
The division, which was created in 2011, has been under
internal review in recent months after a string of disappointing
investments and project delays.
First Reserve will also acquire three of Petrofac's deployed
and contracted floating production facilities in Malaysia and
Thailand for $450 million.
"We have re-focused our IES business development plans and
this innovative venture reinforces the positioning of IES as an
enabler for the Petrofac group," Petrofac Chief Executive
Officer Ayman Asfari said.
"The one and a quarter billion (dollars) in equity does
create the opportunity to invest in several billions dollars
worth of infrastructure... It's a vehicle that has significant
financial fire power," Tim Weller, chief financial officer, told
The deal was expected to reduce Petrofac's $1.3 billion debt
by around $450 million, he said.
Petrofac shares were up 1.6 percent at 1,218 pence at 1333
GMT on the London Stock Exchange.
Petrofac last month cut its 2014 profit forecast by 11
percent and said it would cut IES expenditure after completing a
review of the division.
(Additional reporting by Karen Rebelo in Bangalore; editing by
Sriraj Kalluvila and Jason Neely)