TAQA posts $810mn loss on plunging oil prices
Abu Dhabi National Energy Co sees deeper red ink in 2014 despite record output.
Abu Dhabi National Energy Company (TAQA) clocked up a huge loss in 2014 after oil prices tumbled during the year.
The company booked a deficit of AED 3bn ($810mn) for the 12 months to 31 December compared to AED 2.52bn a year earlier.
This was despite underlying revenue rising by 8.6% to AED 23bn and record oil production of 158.9 thousand barrels of oil equivalent per day (mboed).
TAQA generated record electricity production of 82,722 GWh following completion of its power plant expansion in Morocco, combined with strong technical availability of 91.2% across the fleet.
Long-standing power demand growth in Abu Dhabi continued in 2014, with TAQA’s domestic assets generating a total of 58,941 GWh and desalinating a total of 260,100 million imperial gallons (MIG) of water. Technical availability was 91.8%, in line with top international standards.
The expansion of the reverse osmosis water desalination facilities at Fujairah 1 is now more than 85% complete. The expansion will boost the plant’s water desalination capacity from 100 MIGD to 130 MIGD, of which 70 MIGD will be produced using reverse osmosis, making the plant one of the largest reverse osmosis desalination facilities in the Middle East.
TAQA’s international power portfolio, consisting of assets in Morocco, Ghana, Saudi Arabia, India and the United States, generated a total of 23,723 GWh with a technical availability of 88.2%.
The key development in 2014 was the successful delivery of the 700 MW expansion of the Jorf Lasfar power plant in Morocco. Jorf Lasfar is now the largest coal-fired power plant in the MENA region and generates over 50% of Morocco’s total electricity requirements.
The commissioning of TAQA’s power plant in Takoradi, Ghana is expected in 2015. This will increase its net generating capacity from 220 MW to approximately 330 MW, with no increase in fuel consumption or emissions.
The construction of TAQA’s 100 MW hydro-electric project at Sorang in northern India is progressing well and is expected to be commissioned in the second quarter of 2015.
In response the drop in oil prices and to preserve cash, TAQA reduced its capital expenditure for 2014 by 23% compared to 2013 and by another 39% (AED 2.5bn) for 2015. The company has also initiated a reduction in total cash costs of AED 1.5bn over the next two years.
“Despite the challenging price environment, we have delivered outstanding operational performance, achieving record production and cashflows, while enhancing the safety and reliability of our assets,” said Edward LaFehr, CEO of TAQA.
“We also successfully delivered two major projects safely, on time and within budget, and made significant progress at our third major project in the Kurdistan Region of Iraq.”
“Our improved operational reliability, combined with the success of our ongoing cost restructuring programme, has helped us to adapt to lower commodity prices and will create a stronger foundation on which to build, when markets recover.”