Taqa mystery deepens

After big North American buy in, Abu Dhabi National Energy Co. has not been active; in 2013 cut capital spend, employee levels

GARY PARK

For Petroleum News

From the outset it was a puzzle. Eight years later it is even more confusing.

There has seldom been a more aggressive expansion plan by a new arrival in the North American oil and gas industry.

Equally, there has seldom been a company to withdraw so fast into the shadows.

But that has been the short history of Taqa, officially known as the Abu Dhabi National Energy Co. based in the United Arab Emirates.

When Taqa made its grand entry into North America, declared it was ready to invest US$3 billion and went on a shopping spree in Canada, there was a lot of head scratching.

To most analysts there was no logic behind a state-controlled company from one of the cheapest, most prolific oil-producing countries in the world wanting to establish a base in Canada’s high-cost upstream sector.

After all, Abu Dhabi, with only 420,000 residents, held 8 percent of the world’s proved oil reserves at the time and pumped out about 3 million barrels per day.

But there was little time to speculate in 2007 when Taqa, having been approached by an “array” of Canadian and U.S. companies eager to do business with a company whose pockets were bulging, took advantage of a market meltdown to buy Northrock Resources for US$2 billion and the Canadian unit of Pioneer Resources for US$540 million.

Those deals gave Taqa a strong presence in Canada’s conventional oil and gas exploration and production businesses, along with its investments in U.S. power generation through a gas-fired power station in New Jersey and a wind farm in Minnesota.

Its Calgary-based oil and gas business, according to the company’s website, has proved plus probable reserves of 363.2 million barrels of oil equivalent, with total average daily output of 89,500 boe per day.

Taqa’s E&P rights include 1.22 million net acres of producing land, 1.62 million acres of non-producing land and a strategic plan to realize the full potential of that base which are divided among Alberta-Saskatchewan, West Central Alberta and Southern Alberta and South West Saskatchewan, stretching into Montana, North Dakota and Wyoming.

Details spotty

That accompanied company plans to reduce its capital spending in 2013 to US$500 million from US$750 million.

Taqa had earlier hinted at a waning of its interest in North America by targeting expansion in the Middle East, Asia and Africa, but not North America and certainly not the Alberta oil sands.

“Our aspirations for growth (in North America) will be focused on what we’re already good at and where we have critical mass,” said David Cook, head of global upstream operations before being named chief executive officer of Dong Energy at the end of 2014. “If you look at the oil sands and where Taqa is today, it’s not a natural fit.”

The same apparently could now be said of its other North American activities.

But Taqa flatly rejects speculation that it is pondering a merger with another government entity at a time when its share values have slipped to a near all-time low.

“Taqa confirms it is not engaged in merger discussions with any government or other entity,” it said in a report to the Abu Dhabi securities exchange.

However, the rumor mill has persisted with reports of a possible takeover by ADWEA, which already holds 53.4 percent of Taqa, and Mubadala Petroleum.

Taqa has about 100,000 private United Arab Emirates shareholders, but remains 74 percent owned by the government.

Outside of North America, it also has assets in the North Sea, the Netherlands and the Kurdistan region, with overall production of 158,900 boe per day and proved plus probable reserves of 522.3 million boe.