Taqa narrows 2015 loss on capex cuts

ABU DHABI — The Abu Dhabi National Energy Company, or Taqa, has taken a post-tax impairment charge of Dh681 million for 2015, which led to an annual net loss of Dh1.8 billion. In 2014, the energy company recorded a net loss of Dh3 billion.

Despite strong production volumes, the halving of market commodity prices in 2015 reduced revenues to Dh19.3 billion compared to Dh27.3 billion for the full year 2014. Cash flow and liquidity remained strong.

Chief operating officer Edward LaFehr said Taqa focused on maintaining a strong liquidity position in 2015.

He said: “We reduced our capital investment and cash costs by 52 per cent and 21 per cent respectively compared to 2014. This yielded a Dh5 billion cost structure improvement to significantly offset the lower oil and gas price impact.”

During 2015, Taqa reduced global operational expenditure and G&A costs by 21 per cent or Dh1.6 billion, already exceeding the 2016 run-rate savings target of Dh1.5 billion.

Taqa reduced its 2015 capital expenditure by 52 per cent, or Dh3.3 billion, compared to 2014. Planned 2016 capital expenditure of Dh1.8 billion, represents a 42 per cent reduction compared to 2015. These reductions have resulted from cancelling or deferring most discretionary oil and gas investment.

Taqa has reduced over 900 po- sitions, or around 25 per cent of its global workforce, since 2014. The reduction resulted in the elimination of 32 per cent of its oil and gas jobs and 55 per cent of its headquarters workforce.

In line with the company’s strategy of selling non-core assets, Taqa plans to divest its stakes in Abu Dhabi-based Massar Solutions and the Lakefield wind power project in the United States.

Despite a 58 per cent reduction in oil and gas capital expenditure relative to 2013, 2015 production remained robust at 145,000 million barrels of oil equivalent per day (mboepd), down 8.6 per cent from 158,000 mboepd in 2014.

Taqa produced an average of 79.5 mboepd in North America, 56.6 mboepd in the UK North Sea and 9.1 mboed in the Netherlands.

During the year, Taqa started full commercial operations at the Bergermeer gas storage facility in the Netherlands and achieved first oil at the Cladhan field in the UK North Sea.

Significant advancements were made at the Atrush project in the Kurdistan region of Iraq. The 30 mboepd phase one development is expected to come on stream in the second half of 2016.