Taqa platform converted to extend production

Abu Dhabi National Energy Company (Taqa) will transform its Eider platform in the North Sea to a utility platform as part of a bid to extend the life of its fields in the northern segment of the maturing oil and gas basin.

The conversion will involve the platform, which is no longer economically viable as a production platform, providing power, chemical and system support for production from the wider Otter field, the company, listed in Abu Dhabi, said yesterday.

All significant hydrocarbons are due to be removed from the Eider wells by the end of the year.

The company confirmed that the transformation to a utility platform will result in a reduced headcount at the facility.

“The operating model for Eider in its new role is focused on supporting reliable operations at reduced expenditure levels and ultimately on securing a safe and successful future for Taqa’s northern North Sea business,” said Daniel Taylor, Taqa Europe’s managing director.

The crash in oil prices since 2014 has raised questions over the future of the North Sea region as an oil and gas region, as many of its more established fields reach maturity levels.

But the recent uptick in oil prices, together with a sharp fall in costs, has improved the region’s competitiveness.

Royal Dutch Shell earlier this month approved the redevelopment of the Penguins field at the projected cost of over US$1 billion.

The project, to be developed in conjunction with ExxonMobil, is Shell’s first significant North Sea development in over six years.

Taqa’s net loss for the third quarter of last year narrowed to Dh194 million from Dh524m reported for the corresponding period of 2016. Revenues for the period slipped to Dh4.18 billion from Dh4.2bn.

Third-quarter income was pulled down by the unscheduled outage at Oman’s Sohar Aluminum smelter and negative mark-to-market movements at the company’s US power plant tolling agreement during the period.

The company’s nine-month loss shrank to Dh82m from Dh1.72bn reported for the same period of 2016.

Total liquidity remained strong at Dh12.1bn, including Dh2.9bn in cash and cash equivalents and Dh9.2bn of undrawn credit facilities.

The company’s total debt was reduced by Dh2.6bn in the first nine months of last year, while interest paid reduced by Dh286m.