MEED 100 Sector analysis: Oil & Gas

31 March 2010

Iran’s Isfahan joins Taqa as the only listed oil and gas firms to make the MEED 100. Dana fails to return

Abu Dhabi National Energy Company (Taqa) is joined by another regional energy major in the MEED 100 this year. Isfahan Oil Refinery Company – the fourth largest publicly listed company in Iran – has made it into the ranking at 97.

Oil and gas
Rank 2010Rank 2009CompanyExchangeMarket Cap ($m)Share price ($)
9587Abu Dhabi National Energy Company (Taqa) Abu Dhabi2,0000.32
97naIsfahan Oil Refinery CompanyTehran1,9740.54
Sources: Thomson Reuters; Tehran Stock Exchange

The lack of other companies on the list can largely be explained by a combination of the regional dominance of unlisted national oil companies (NOCs) in the Middle East energy sector and the continued status of technology-rich international oil companies (IOCs) as their partners of choice on major projects.

The UAE’s Dana Gas dropped out of the ranking in 2009, and despite positive financial results and a new gas discovery in Egypt, the company is still absent this year.

State backing

Taqa is an Abu Dhabi state-run investment vehicle. It concentrates on developing overseas exploration and production, and mid-stream activities, mainly gas storage in Europe, as well as pursuing power and desalination projects. The firm runs six independent water and power plants in the UAE and says it handles 98 per cent of Abu Dhabi’s water and electricity.

Tehran has implemented a five-year programme to increase investment in the mining sector

Taqa has not been immune to the effects of the global financial crisis of 2008-09 on oil and gas prices and it has dropped eight places to 95 this year. In 2008, it was ranked at 68.

Taqa says it made an average of $58.51 a barrel from oil in the US and $45.01 a barrel in Europe during the third quarter of 2009, compared to the $103.38 a barrel it made in the US and $104.62 in Europe it made in the same period of 2008. Its gas prices fared even worse, and the company earned an average of $2.95 a thousand cubic feet (tcf) of natural gas sold in the third quarter in the US, $4.93 a tcf in the UK and $6.70 a tcf in the Netherlands. The company made $9.03 a tcf in the US and $10.54 a tcf in the UK and the Netherlands in 2008.

Barclays Capital, the investment arm of UK lender Barclays, forecasts average prices of $85 a barrel for oil and $5.05 a tcf feet of natural gas in the US in 2010 suggesting a better year for the company.

A combination of aggressive expansion in 2008 and 2009 through acquisitions and upstream developments, alongside forecast higher oil prices in 2010 should see Taqa keep its place as one of the biggest energy companies in the region.

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