Capital spending slashed at Abu Dhabi energy firm
- Taqa records $158m net loss in first three quarters of 2015
- Firm saved $299m by cutting capital expenditure by 43 per cent and reducing number of oil and gas employees by 25 per cent
- Revenues in the first nine months were 29 per cent down on same period in 2014
Abu Dhabi National Energy Company (Taqa) has made a AED581m ($158m) net loss in the first nine months of 2015, compared with a net profit of AED620m in the same period in 2014.
This is despite cutting capital expenditure by 43 per cent. The firm also reduced the number of its oil and gas employees by 25 per cent and the number of employees at its Abu Dhabi head office by 39 per cent. This saved AED1.1bn over the nine months.
Taqas revenues fell 29 per cent from AED20.7bn in the first three quarters of 2014 to AED14.7bn in 2015.
The power generation side of the firm remained solid, but the fall in oil prices from above $100 a barrel to below $50 over the past year has forced the company to transform its oil and gas portfolio.
Taqas oil and gas production in the first nine months of 2015 decreased by 9 per cent to 144,900 barrels of oil equivalent a day (boe/d), from 158,500 boe/d in the same period in 2014. The decrease is partly a result of reduced capital investment.
It plans to continue cutting spending in 2016 to make total savings of AED1.5bn.
Taqa refinanced a $3.1bn loan in August, and now has AED12.2bn in liquid assets to service debts.
The company has AED75.5bn ($20.6bn) in debts, and paid AED1.2bn to finance them in the first half of 2015. Taqa insists its position is strong enough to continue meeting its obligations.
During the first three quarters, we have continued to position Taqa to withstand the current low commodity price environment, said Edward LaFehr, chief operating officer of Taqa. This, combined with our focus on the safety and reliability of our asset base, positions us well to maintain cash flow and strong financial liquidity in the current oil price environment. We have an exceptional power generation business and we are working hard to transform the oil and gas portfolio such that we can take advantage as prices recover.
Taqa expects its Iraqi Kurdistan asset, the Atrush Block, to produce first oil in 2016. The company has resolved its legal disputes with its partners Canadas ShaMaran Petroleum and the US Marathon Oil.
Taqa has signed a contract for a pipeline for the development, due to be completed in mid-2016. The block is expected to produce 30,000 boe/d.
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