UPDATE 3-Petrofac expects further loss on Shetland project

Mon Apr 20, 2015 6:47am EDT
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* Expects to take pretax loss of 130 mln stg

* Still expects to complete project in Q3, 2015

* Shares fall as much as 14 pct (Adds analyst, trader comments, updates shares)

By Abhiram Nandakumar

April 20 (Reuters) - Petrofac Ltd said its loss on the Laggan-Tormore project in the Shetland Islands would now be larger than it expected, highlighting the hostile operating conditions and high costs faced by oil and gas developers in the North Sea.

The oilfield services provider's shares fell as much as 14 percent on Monday on the London Stock Exchange.

The slump in global oil prices over the last 10 months has compounded the impact of high investment costs and the harsh climate in the North Sea region, prompting oil and gas companies to put billions of dollars of assets up for sale.

"Economic conditions are bad enough for North Sea oil and gas explorers and service providers, but the notorious stormy weather has made it worse for Petrofac...," London Capital trader Lewis Sturdy said.

Petrofac, which has also faced delays at the Ithaca Energy-owned Greater Stella Area project in central North Sea, said it still expected to complete Laggan-Tormore in the third quarter, but would need to "expend significantly more man-hours."   Continued...