Abu Dhabi National Energy Company (Taqa), a state-owned oil explorer and power supplier, said its net profit for the first half increased 67.1 per cent year-on-year to hit Dh981 million ($267 million) compared to Dh587 million in 2011. However, the company saw its total revenues drop 6.3 per cent year-on-year to Dh11.8 billion from last year's revenue of Dh12.6 billion mainly due to lower supplemental fuel usage during the period. Taqa said its total oil and gas revenues (including gas storage and other income) decreased from Dh6 billion to Dh5.9 billion for the first half. This was primarily due to the significant fall in natural gas prices in North America and lower production in North America following non-core asset disposals, offset by higher production and realized prices in the UK North Sea, said the company in a statement. Total Power & Water revenues, excluding supplemental fuel income, increased from Dh3.5 billion last year to hit Dh4 billion in the first half of 2012. This 14.1 per cent year-on-year increase was primarily due to the contribution from Shuweihat 2, which became fully operational in the third quarter of 2011, it stated. According to Taqa, the first half witnessed a strong performance by its power & water business, which grew revenues by 14 per cent during the period, largely due to new production coming online at the Shuweihat 2 Independent Water and Power Project (IWPP) in Abu Dhabi. Operations in the UK North Sea also performed strongly, both operationally and financially, benefitting from higher production and oil prices, the company stated. However, the continued weakness of North American gas prices have impacted the overall performance of the oil and gas business, it added. The Abu Dhabi energy giant said it had benefitted from its disposal of non-core assets, such as its holding in Tesla Motors and non-core acreage in North America, which has boosted profitability. Commenting on the results, Taqa CEO Carl Sheldon said, 'We have seen a strong performance by our power and water business with new capacity at Shuweihat 2 coming online and high availability across our portfolio supporting this. We have also seen our UK energy operations boost production and continue to benefit from higher pricing.' 'Particularly, pleasing is that we have passed our 1,000th day as duty holder of our North Sea assets and more than 100 million barrels of oil have now safely passed through the Brent Pipeline System under our operatorship,' noted Sheldon. “However, it is clear that the first half has been a challenging period for the global economy, a fact that can be clearly seen in falling global commodity prices. North American gas prices have continued to weaken with Henry Hub prices reaching a 10-year low in February 2012,' he remarked. 'Prices have since recovered somewhat, but overall gas price weakness has had a significant impact on our North American performance,' he pointed out. 'More positively, we have seen our expansion plans at Jorf Lasfar plant in Morocco continuing on time and on budget, and that combined with the start of construction of Bergermeer Gas Storage, the acquisition of power assets in Iraq and additional acreage in the UK North Sea, we are positioned well for future growth," he added. According to Taqa, the company had strong liquidity with cash and cash equivalents of Dh5.1 billion at the end of the first half. 'We continued our programme of non-core asset disposals, with the sale of our holdings in Tesla Motors for an attractive profit. We have maintained strong liquidity, with cash and undrawn committed credit facilities of nearly Dh20 billion at the end of the period,' said Stephen Kersley, the chief financial officer. 'We also successfully closed a $1.4 billion equivalent, 16-year, multi-currency non-recourse project financing for the expansion of Jorf Lasfar, which further increases our financial flexibility on a group level,' he added. TradeArabia
