edit 27th october 2010
No longer simply scavengers - TAQA are now obtaining North Sea licences in their own right
http://www.taqa.ae/en/index.html
The UK interests here: http://www.taqa.ae/en/uk.html
The Dutch interests here: http://www.taqa.ae/en/netherlands.html
Abu Dhabi National Energy Company (Taqa) will turn its focus back to electricity generation after snapping up oil and gas wells across the world, the company’s chief executive said today.
The new emphasis on acquiring electricity, or “downstream” assets, coincides with the release of a bond prospectus proposing the issuance of up to US$9 billion (Dh33bn) worth of commercial paper, and comes a day after a Taqa official said the firm would enter the Asian power market.
The company has acquired a number of oil and gas assets in the North Sea this year, including exploration blocks and existing wells and pipelines. But Mr Barker Homek said Taqa would now look to bolster its power generation assets, which provide a stable source of revenue for the company.
“We are looking at emphasising downstream development at this point just to get our portfolio back towards our ideal,” he said. “We’re very heavy in upstream in North America, so we’d like to balance back towards the downstream. Similarly in Europe.”
Oops!
TAQA'S CEO, Peter Barker-Homek, ex-BP and the driving force behind its overseas O & G acquisitions in Canada, the North Sea and onshore Holland, has suddenly "stepped down."
Tamsin Carlisle
When Abu Dhabi National Energy Company, also known as Taqa, dropped the Friday night bombshell that its chief executive was stepping down, it did not take long for reporters to ask whether he jumped or was pushed.
Reached on his mobile phone on Sunday, Peter Barker-Homek put on a brave face.
“I’m going into a new career,” he said. “It will be in the oil and gas sector. It’s exciting.”
Mr Barker-Homek denied there was a “disconnect” between himself and the Taqa board. That was soon after Reuters quoted him as saying his decision to resign followed a discussion with the board over the company’s future direction.
The company’s explanation for replacing Mr Barker-Homek with his deputy, Carl Sheldon, was that it was “moving into a new phase of development” and shifting its focus from acquisitions to integrating existing assets. Mr Barker-Homek’s mergers and acquisitions experience “made him ideal to help establish Taqa in its early days”, said Hamad al Suwaidi, the chairman of Taqa.
He's been replaced by his deputy Carl Sheldon, of whom the piece notes:
Nonetheless, the replacement of the free-spending and talkative Mr Barker-Homek by a lawyer speaks volumes. Mr Sheldon, a former partner in the law firm Allen & Overy, has served as Taqa’s general counsel since joining the company in March of last year. His new title of general manager may be a signal that the board plans to be more active in setting the company’s strategic direction than in the days when it had a chief executive.
The article suggests that more overseas acquisitions might be placed on the back burner. Not particularly good news for those interested in Cirrus, with whom TAQA have overlapping interests in the North Sea.
Perhaps I'll have to change the title of the thread....
Man Siarad
Took longer than I thought to realise they bought a few rusty piles of sh## from Shell ;-)
The TAQA Bergermeer deal with Gazprom has been finalised
http://www.taqa.ae/en/news341.html
Bergermeer Gas Storage Consortium and Gazprom export press ahead with final investment
Alkmaar 21 October 2009 – The Bergermeer Gas Storage Consortium and Gazprom export today announced the Final Investment Decision (FID) on the Bergermeer Gas Storage investment programme.
The Bergermeer Gas Storage Consortium will invest EUR 800 million in the construction and design of the gas storage facility between 2009 and 2013. Gazprom export (a subsidiary of the world’s largest gas company JSC Gazprom) will provide a certain amount of cushion gas for injection into the Bergermeer reservoir and will receive working capacity and a participating interest in the technical operatorship of the facility. As operator of the project, TAQA has completed a thorough environmental and safety assessment and expects to receive all necessary permits in 2010. Construction of the Bergermeer Gas Storage facility will start after the necessary permits have been granted allowing commercial operations to commence in 2013.
All of this was well under way before last week's CEO change, of course.
Thoughts:
1. Where are they going to get all the gas from? Will they be looking to buy more NS reserves?
2. Having ventured into one major gas storage scheme in Holland, might the TAQA bratani subsidiary be looking at UK options?
Man Siarad
Oops! It sounds as though the acquisitions of the last three years (costing US $ 24 billion) were too far, too fast.
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20091111/BUSINESS/711119884/1005
Tamsin Carlisle
The Abu Dhabi National Energy Company, or Taqa, announced a major change in strategy yesterday as profits disappointed investors just weeks after the company replaced its most senior executive.
Having spent three years on a US$24 billion (Dh88.15bn) global spending spree, the government-controlled company will now concentrate on existing operations and reduce debt.
“We will shift our focus from growth by step-out M and A [mergers and acquisitions] to organic growth from our existing assets,” Carl Sheldon, the newly appointed general manager of Taqa, said yesterday, laying out his plan to turn the company around. “We’ve now got a suite of internal investment opportunities that will allow us to grow the business without further acquisitions.”
The about-face came as Taqa posted an 88 per cent decline in profits for the third quarter, which was attributed to lower oil prices and higher costs. Net earnings for the three months that ended on September 30 this year were Dh90 million compared with Dh723m for the same period a year ago.
A morsel of hope for those who would like to see TAQA picking up more assets in the North Sea
Mr Sheldon described the change in corporate strategy as “evolutionary” rather than an abrupt about-face. He also said the company might continue to make modest acquisitions that fit its existing portfolio.
I wouldn't hold my breath, though.
Man Siarad
In reply to ManSiarad (post #5)
No surprise at the change in strategy. This was made pretty clear when the CEO was replaced. If one makes some chunky acquisitions through a period of major market turmoil then it is always likely that things won't be run quite as tightly as one might, in retrospect, have wished.
ee
TAQA's results out - profits down 90 per cent
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100214/BUSINESS/702149922/1005/business
Net profits at Abu Dhabi National Energy (Taqa) fell 90 per cent last year as a result of lower oil and gas prices and the firm’s efforts to reduce its debt burden.
The company registered a net loss in the fourth quarter.
After two years of buying power stations and oil and gas assets under its former chief executive, Taqa is now focused on reducing its debt and integrating its portfolio on four continents, said Carl Sheldon, the general manager. “We shifted into a new phase of our growth strategy, evolving from an acquisitive company into one focused on organic growth and asset optimisation,” he said. “We have substantial opportunity to drive organic growth within our business.”
Net profits fell to Dh183 million (US$49.8m) from Dh1.83 billion in 2008, according to preliminary data released yesterday, even as total revenues rose 0.8 per cent to Dh16.9bn. The company posted a net loss in the fourth quarter of Dh83m after registering a profit of Dh266m for the first three quarters of the year. Taqa’s steady income from its power stations in the UAE was offset by lower prices for its oil and gas production in North Africa, Europe and Canada.
So I don't think we'll be seeing any more acquisitions from them in a hurry.
Full company statement here:
http://www.taqa.ae/en/news349.html
from which I note this:
I am pleased to report that we continue to make good progress towards our key long-term target of 70% debt to capital. During 2009, this ratio was reduced from a high of 88% at the end of 2008 to 82% at the end of 2009.
Still a way to go, then.
Man Siarad
It looks as though TAQA may be about to start spending again - cautiously, of course, and mainly related to developing their existing interests.
This from Abu Dhabi's The National yesterday:
The Abu Dhabi National Energy Company (Taqa), with assets as diverse as oilfields in the North Sea and a power station in New Jersey, has turned its focus to integrating investments after a 64 per cent decline in net profits.
The new strategy set by Carl Sheldon, the general manager, contrasts markedly with that of the former chief executive Peter Barker-Homek, who looked to buy energy assets whenever he saw a good deal...
The company will spend US$1.4 billion (Dh5.14bn) on new drilling and expansion of plants, and is looking to integrate its far-flung marketing and fuel-purchasing operations under one umbrella, Mr Sheldon said yesterday.
..
Taqa will increase drilling for oil and gas on its tracts in Canada and the northern North Sea, expand its gas storage facility in the Netherlands and expand power plants in Morocco and Ghana, Mr Sheldon said.
The company was not looking to make major acquisitions or sell assets this year, he said, and aimed to reduce its debt ratio to 70 per cent in two years, from 81 per cent last year.
As it develops the gas storage facility, known as Bergemeer, over the next four years the company has an opportunity to connect its North Sea gas wells with pipelines and power stations, he said, offering the prospect of an integrated value chain.
I wonder whether that North Sea / Holland focus means it might think of a few add-on acquisitions?
Man Siarad
Another interview with the TAQA CEO today - he's clearly keen to reassure the local market, at least.
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100326/BUSINESS/703259893/1005
Of which this is perhaps of some relevance to the North Sea
Taqa’s oil and gas business suffered last year and the company was forced to book Dh228 million of “impairment charges”. It posted a profit for the year of just Dh183m on Dh16.94bn revenue.
But Mr Sheldon planned to retain the oil and gas operations, along with Taqa’s other new business of “midstream” gas services such as gas processing and storage.
In the short-term, he will try to make the parts work more smoothly together, not necessarily through physical connection. More often this will involve “understanding how commodities markets work”, so the company can capture arbitrage opportunities.
Physical connections will be key in north-western Europe, where the company has North Sea oil and gas production, the beginnings of a network of offshore and onshore gas pipelines, and gas storage facilities.
Anchoring Taqa’s growth aspirations in continental Europe is its lead position in the Bergermeer project to establish a huge gas trading and storage hub in the Netherlands. By the time Bergermeer is completed, in 2013 or 2014, Taqa’s European pipeline system will be connected to Norwegian and Russian supplies, and to coastal facilities for importing liquefied natural gas. That should stimulate further gas infrastructure development around the pipelines.
“Our idea is to have a centre of excellence for oil in Aberdeen and for gas in the Netherlands,” Mr Sheldon added.
Although he will not sell any of Taqa’s assets for the moment, a longer-term strategic change will be to draw the company’s regional focus closer to home.
Man Siarad
Thanks for that Man Siarad
You do have to wonder if they will look to cement their position in Holland via a deal to take out Cirrus, who they already have a JV with, now that their shares (Cirrus) have come under pressure for delays... Would be very logical - probably too logical.
Lots of North Sea assets coming on to the market at the moment as well. Seems to be mainly gas though.
"Logic", Darron - "logic" ?
Though presumably TAQA could afford to take out Cirrus without too much difficulty - certainly something they OUGHT to be considering before the Bergermeer project is completed.
I see from a press release last August
http://www.taqa.ae/en/news325.html
that there a decent overlap (TAQA have now bought DSM Energie, of course)
Abu Dhabi / The Hague, 4 August 2009 – The Abu Dhabi National Energy Company PJSC (TAQA) today announced that it’s wholly owned subsidiary, TAQA Energy B.V. (TAQA Energy), has acquired a 15% interest in North Sea assets from the L11b Group, comprising Chevron Exploration and Production Netherlands B.V, DSM Energie B.V. and EBN for an undisclosed amount. The deal is part of a transaction between the L11b Group and the L8-D Field Group, comprising TAQA Energy, Cirrus Energy Nederland B.V., DSM Energie B.V., Energy06 Investments B.V., EWE AG and EBN.
The acquisition consists of a 15% interest in the L8-D Unit, L11b-A production platform which services the L8-D gas field, and a pipeline connection to the Noordgastransport (NGT) pipeline. The remaining 85% interest was acquired by the other members of the L8-D Field Group.
Following the acquisition, the L8-D Field Group has appointed TAQA Energy as operator to the L11b-A production platform with effect from 1 August 2009. Cirrus Energy Nederland B.V. is the L11b licence operator. First production is expected to begin before the end of the year.
And they haven't been averse, in the past, to picking up small stakes - like this 10% share of a Dutch gas field from EnCore for a mere US $ 5.5 million
http://www.taqa.ae/en/news203.html
A summary of their Dutch interests (including offshore) here
http://www.taqa.ae/en/ExplorationAndProduction.html
and of their UK interests here
Presumably in most cases they have got significant partners (particularly in the non-operated assets). Are any of these partners firms who have indicated that they're prepared to sell?
Thus their acquisition of a package of interests from Talisman a few years ago
http://www.ameinfo.com/107937.html
included the following net interests:
• 18% interest in the South, North, Central and West Brae fields
• 18% interest in the Beinn field
• 16.9% interest in the East Brae field
• 13% interest in the Braemar field
• 18% interest in the Brae to Forties oil export line
• 9% interest in the SAGE pipeline and onshore terminal
• 9% interest in the Brae-Miller Linkline
• Various exploration interests
• Transportation and processing revenues from third party fields
So plenty of scope there for increasing the TAQA stake
Any little companies in these fields who might prove attractive or who might need to sell some assets to raise cash?
Man Siarad
Taqa splashing some dosh...
Suncor (SU CN,O,TP: $41.00) announced that is has agreed to sell certain West Central Alberta natural gas assets, including properties known as Bearberry and Ricinus (near Sundre) to TAQA North, a subsidiary of Abu Dhabi National Energy Company, for approximately $285 MM. Deal metrics work out to ~$46,700 per Boe/d. No reserve information was disclosed in the press release. The deal is expected to close in the third quarter, subject to typical conditions and approvals. Announced upstream asset divestitures to date total roughly $2.4 billion, at an average metric of ~$45,000 per Boe/d.
Now, will they go ahead and mop up Cirrus, which is languishing after a few disappointments of late? Certainly its priced way below the multiple that Dana just paid for its Dutch acquisition.
TAQA's Q2 and 1st half 2010 results out today
http://www.taqa.ae/en/news370.html
and a Bloomberg link here
Leaving on one side the UAE-related interests, the following points seem of interest
H.E. Abdulla Saif Al-Nuaimi, CEO & MD of TAQA, said:
“The quarter under review demonstrates the progress we are making in delivering against our strategic objectives. The balance of our portfolio of assets worldwide has once again produced robust financial performance. Total revenues have continued the upward trend which commenced at the end of 2009, benefiting from a more positive commodity pricing environment. This context, combined with incremental earnings from the Sohar acquisition, resulted in a significant improvement to net profit over the period; a positive progression that creates further value for our stakeholders.
While asset optimization and organic growth form the cornerstones of our strategy, we remain opportunistic and open to bolt-on acquisitions which consolidate our geographic footprint, fit naturally with our core competencies and offer the potential to increase our financial returns. Two acquisitions made during the second quarter 2010 - a portion of Suncor Energy’s assets in Alberta, Canada, and the transfer of ADWEA’s holding in Sohar Aluminium Company - are an excellent fit”
...
TAQA NORTH acquired a portion of Suncor Energy Oil and Gas Partnership’s interests in West Central Alberta for a total consideration of CDN $285 million. The acquisition will enhance TAQA NORTH’s production by approximately 6,100 boe/day of liquid rich natural gas. This transaction is expected to close in the third quarter of 2010.
Production volumes at TAQA Bratani were 31,600 boe/day in the second quarter, down 21% from the first quarter of 2010 due primarily to a 28-day planned shutdown at the Tern Alpha platform. Additionally, TAQA experienced water injection issues at the Cormorant Alpha and North Cormorant platforms which have since been resolved.
The North Cormorant drilling campaign has been completed and drilling on the Pelican field continued throughout the quarter with two wells now complete. The tie-in of the first well is expected in the third quarter.
At TAQA Energy, the Bergermeer Gas Storage project was granted approval in July to increase the reservoir pressure from 35 bars to 80 bars, thus increasing the allowable volume of cushion gas in the facility. The project is waiting for final permitting before commencing the construction phase.
The Rijn Oil project, in which TAQA holds a 38.3% interest, is on track for first oil in September. This project is expected to add approximately 2,500 bbl/day of gross production (950 bbl/day net).
The Rijn interest was part of the package of BP assets bought by TAQA a few years ago. A quick Google search has failed to turn up the other companies with a stake. Anyone got any ideas?
Man Siarad
