Taqa has cut its planned 2015 capital expenditure (capex) by 39 per cent to AED3.9bn ($1.1bn) in response to the drop in global oil prices, the Abu-Dhabi-based energy group announced in its annual results.

The company, which last year cut its capex by 23 per cent, reported a net loss of AED3bn in 2014 compared with a loss of $2.5bn last year.

Taqa put the annual loss down to a post-tax, non-cash impairment of AED3.3bn “resulting from a structural change in commodity prices”.

As well as reducing capex, the company is targeting the reduction of cash costs by AED1.5bn over the next two years.

Revenues increased 6.1 per cent to AED27.3bn driven by record oil and gas production and record electricity generation.

“Despite the challenging price environment, we have delivered outstanding operational performance, achieving record production and cash flows,” says Taqa chief operating officer (COO) Edward LaFehr.

“Our improved operational reliability, combined with the success of our ongoing cost-restructuring programme, has helped us to adapt to lower commodity prices and will create a stronger foundation on which to build, when markets recover,” he added.

Taqa, which has oil and gas operations in North America, the UK North Sea, the Netherlands and the Kurdistan region of northern Iraq, increased production by 12 per cent to a record 158.9 million barrels of oil equivalent a day (boe/d) in 2014.

The production growth was mainly driven by assets in the UK North Sea. In Iraqi Kurdistan, Taqa completed drilling five wells on the Atrush development and is progressing construction of the 30,000 boe/d first-phase processing facility.

Drilling operations at Atrush were suspended for 21 days in August 2014 due to precautions about conflict in northern Iraq.

Taqa generated record electricity production of 82,722 gigawatt hours (GWh) driven by the completion of its power plant expansion in Morocco.