OIL services giant Petrofac, which is a significant employer in Scotland, has stepped up its cost-cutting drive as it underlined how tough conditions are in the sector amid the fallout from the coronavirus.

Petrofac said yesterday it aims to cut running costs by $125 million (£100m) this year.

That compares with $100m in April when the company launched an initiative that it is thought has put around 200 jobs in Scotland under threat.

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Chief executive Ayman Asfari said yesterday that Petrofac was taking swift and decisive action to significantly its reduce costs, maintain its competitiveness and the strength of its balance sheet amid the unprecedented challenges posed by the coronavirus.

Petrofac, which helps oil and gas firms develop and operate facilities, said the resulting collapse in crude prices has prompted clients to put plans to develop new facilities on hold.

“Whilst our bidding pipeline remains healthy …we are now prudently anticipating that the majority of 2020 tenders will be delayed until 2021,” the company said.

There have been material delays on some existing projects due to stringent health protocols, supply chain disruption, travel restrictions and Government-enforced lockdowns associated with the coronavirus.

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It is understood the additional $25m cost-saving measures will not impact on Petrofac's North Sea operations.

Petrofac said it expects to cut costs by up to $200m in 2021, in line with the target set in April.

The company is thought to employ around 900 people in Aberdeen and a further 2,000 offshore in the North Sea.