Abu Dhabi’s TAQA cuts spending target

State oil explorer and power supplier Abu Dhabi National Energy Co (TAQA) has slashed its proposed capital expenditure for the year after being impacted by low oil prices.

The firm, which is 75 per cent owned by the Abu Dhabi government, said it reduced capex by 52 per cent in 2015 and planned a further 42 per cent cut in 2016 to no more than Dhs 1.8bn ($490m).

TAQA has also reduced its workforce by a quarter since 2014 after cutting around a third of its oil and as jobs and 55 per cent of staff at its headquarters.

“We exceeded all of our internal targets while shifting to a leaner and more efficient organisation worldwide, with significant revisions to our operating model,” chief operating officer Edward Lafehr said in the statement.

The company made a loss of Dhs 1.22bn in the fourth quarter of 2015 compared to a loss of Dhs 3.63bn in Q4 2014. Its net loss for the year totalled Dhs 1.8bn, compared with Dhs 3.01bn in 2014

This followed a near halving of its oil and gas revenue in 2015 from Dhs 12bn to Dhs 6.29bn as oil prices declined.

TAQA also booked a post-tax impairment charge of Dhs 681m.

In a bourse filing, TAQA said it would not pay dividends in 2015, its third successive year without payments to shareholders, according to Reuters.

The company also plans to divest its stakes in Abu Dhabi car rental firm Massar Solutions and the US Lakefield wind power project as part of a strategy to sell non-core assets.
TAQA is selling the Lakefield stake to Qatar’s Nebras Power but there has no news of a buyer for its 40 per cent stake in Massar.

The company is one of a number of global oil firms cutting costs due to a prolonged decline in oil prices from a $115-per-barrel peak in mid-2014 to around $40 this month.

Reports last year suggested the Abu Dhabi government was considering merging TAQA with another state entity, these were later denied by the company.