Abu Dhabi's Taqa Spends $1billion on UK shopping spree
Abu Dhabi National Energy Company (Taqa) said on Wednesday it has agreed to buy from BP oil and natural gas assets in the UK North Sea worth more than $1 billion.
“The total consideration for the transaction is $1,058 million, plus certain potential contingent payments. The transaction is being funded from existing operating cash flow and credit lines,” Taqa said in a statement to the Abu Dhabi Securities Exchange where its shares are listed. Taqa’s shares closed unchanged at Dh1.30 yesterday.
“The acquisition is subject the satisfaction of pre-emption rights as well as government and certain third party approvals. It is expected to complete in Q2 2013,” said Taqa.
The acquisition consists of interests in the Harding (70 per cent), Maclure (37.03 per cent), and Devenick (88.7 per cent) fields in the Central North Sea. Taqa will also increase its non-operated interests in the Brae area and associated transport infrastructure including the SAGE system, Forties-Brae and Forties-Braemar pipelines.
On completion, the acquisition is expected to increase Taqa’s net production by approximately 21,000 barrels of oil equivalent per day and will add a second major development hub to Taqa’s UK North Sea business, which is currently centred around the Northern sector.
“This investment is a great strategic fit for Taqa, ensuring growth for our UK business and establishes Taqa as a leading operator in the UK North Sea,” said Carl Sheldon, chief executive officer of Taqa.
Taqa said their investment “follows a constructive dialogue between the oil and gas industry and the UK Treasury, that resulted in changes to the tax treatment of North Sea assets.”
Welcoming the announcement, British Prime Minister David Cameron said: “I’m delighted that following my recent visit to Abu Dhabi to spearhead greater commercial ties, Taqa have decided to invest in their North Sea operations. This is a vote of confidence in the UK economy and once again, highlights the North Sea’s position as a global energy hub.”
He added: “We’re committed to making Britain the investment destination of choice and today’s announcement shows how recent changes to the North Sea tax regime are helping to create and sustain thousands of jobs in Scotland and across the rest of the UK, ensuring we thrive in the global race.”
Evercore Partners acted as financial adviser to Taqa in relation to this transaction.
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