Abu Dhabi National Energy Co., the government-run company known as Taqa, is generating cash from overseas oil and natural gas operations and wants to sell some higher-cost wells in North America after reporting a record $5.2 billion loss last year.
After a two-year program to cut costs, Taqa’s oil and gas businesses in North America and Europe are “cash-flow positive,” Saeed Hamad Al Dhaheri, acting chief operating officer, said in an emailed response to questions. Taqa plans to invest more in the hydrocarbon business in Canada’s Alberta province, he said.
Taqa has written off assets, sold businesses and cut jobs and spending after losing money due to acquisitions and lower crude prices over the past two years. The company earlier this month reported a loss of 19 billion dirhams on one-time impairments for 2016. It lost 1.8 billion dirhams the previous year. Taqa currently has a market capitalization of 3.4 billion dirhams.
Abu Dhabi, with about 6 percent of the world’s crude reserves, is merging government-owned companies to cut costs and help weather the slide in oil prices from more than $115 a barrel in 2014. The capital of the United Arab Emirates has combined its largest banks as well as two sovereign investment funds. Benchmark Brent crude now trades at about $55 a barrel.
Taqa isn’t planning to delist its stock from the Abu Dhabi exchange, nor is management studying possible mergers, Al Dhaheri said.
“There are no current plans to sell any of our assets or exit from any of our existing markets,” he said in the email. Taqa “will continue to review our assets in order to evaluate options to optimize the portfolio,” and it may sell some oil and gas assets in the U.S. and in Canada outside of central Alberta, Al Dhaheri said.
“We are looking to sell some wells and deploy that capital to core assets, and we are still committed to our core business in North America,” he said later, after the company’s annual general meeting in Abu Dhabi.
The company, with power plants in Abu Dhabi, gas fields in Canada and a project pumping oil in northern Iraq, pared costs by 4.5 billion dirhams ($1.2 billion) over the past two years and reduced capital spending by almost double that amount, Al Dhaheri said at the annual meeting. Taqa will invest about 1.8 billion dirhams this year, he said, up from 1.1 billion dirhams in 2016.