Abu Dhabi National Energy Company, also known as Taqa, on Wednesday said its first-quarter profit before tax fell 68 per cent to Dh445 million due to lower production in the UK North Sea.
Revenues were down six per cent, largely due to a shut-in of Cormorant Alpha in January 2013 during a major inspection, repair and maintenance programme. Stronger North American gas prices were offset by weaker North American oil and liquids prices, the energy company told Abu Dhabi Securities Exchange in a regulatory filing.
Profitability was consequently impacted, although in the comparable period in 2012 profitability was supported by the proceeds of disposals, making direct comparison difficult.
Power and water faced operational challenges due to a number of forced outages at Taqa’s domestic and international plants. Taqa’s organic growth projects are proceeding well, with Jorf Lasfar over 80 per cent complete and Takoradi having broken ground. Taqa also progressing detailed negotiations to enter the Turkish energy market following an agreement between the Turkish and UAE governments.
The energy giant made good progress in other areas of the North Sea, including making a discovery at the Darwin field and, post-period, securing government approval for its plans at the Cladhan field. A strong performance in the Netherlands also positively boosted Taqa’s performance. Taqa commenced operations at its Atrush block in the Kurdistan region of Iraq and is currently drilling its third well.
Taqa reinforced its strong financial position with robust available liquidity of Dh21.8 billion and, post period, Standard & Poor’s announced that it was raising Taqa’s A rating to a positive outlook.
Carl Sheldon, chief executive officer of Taqa, said, “I can take some positives from what was a challenging quarter. Our major construction and development projects in Morocco, Ghana, the Netherlands and Iraq are all progressing very well and will start generating significant revenues in the next two to three years.”
Power and water revenues, excluding supplemental fuel and construction revenues, were flat at Dh1.9 billion. Construction and finance revenues from the Jorf Lasfar and Takoradi 2 expansion projects of Dh517 million were offset by construction costs of Dh381 million, leaving a profit margin of Dh136 million.
Total oil and gas revenues were down 17 per cent at Dh2.4 billion for the first quarter, due to lower production in the UK North Sea, offset by higher production in the Netherlands and stronger gas prices in North America.
Oil and gas expenses rose from Dh812 million in the first quarter 2012 to Dh1.0 billion in the January-March period 2013 due to higher repair and maintenance costs in the UK.