TAQA announces start of production from Kurdistan oil block

TAQA announces start of production from Kurdistan oil block
TAQA has reported total revenues of $2.28bn (AED8.4bn), an increase of 5% from $2.15bn in H1 2016.
Published: 14 August 2017 - 3:21 a.m.
By: Indrajit Sen

The Abu Dhabi National Energy Company PJSC or TAQA has announced the beginning of crude production from its new oil block in the Kurdistan region of Iraq from July.

Production from the Atrush Block in the Kurdistan Region of Iraq is expected to ramp up towards the 30,000 barrel per day project capacity (gross) during the rest of this year, TAQA has affirmed in a press statement, that also details the financial performance of the Abu Dhabi-based company in the first half of 2017.

“A key operational milestone was the achievement of first oil from our Atrush project in the Kurdistan Region of Iraq post period in July. Atrush will be a significant contributor to the Group’s long-term cash flows and net income,” Saeed Hamad Al Dhaheri, acting chief operating officer, was quoted as saying in the press release.

The combined production figure of TAQA, which has operations in 11 countries, stood at 131,086 barrels of oil equivalent per day (boepd) in H1 2017, down by 11% from 147,415 boepd in H1 2016, as a result of capital expenditure reductions.

Operating margins per barrel increased in North America and Europe compared to H1 2016, driven by higher realised prices and sustained cost efficiency, TAQA stated.

With regards to the overall financial performance in H1 2017, TAQA has reported total revenues of $2.28bn (AED8.4bn), an increase of 5% from $2.15bn in H1 2016, driven primarily by the impact of higher realised oil and gas prices. The EBITDA has also witnessed a spike by 15% at $1.27bn from the same period last year, boosted by higher realised commodity prices and sustained cash cost savings.

“TAQA’s results for the first half of 2017, which demonstrated a positive net income for the second consecutive quarter, were driven by strong operational performance, continued efficiency improvements and a focus on core operations,” Al Dhaheri said in comment on the results.

TAQA’s total liquidity remains strong at $3.37bn, including $952.9mn in cash and cash equivalents and $2.42bn of undrawn credit facilities. Total debt was reduced by $462.7mn in H1 2017 while interest paid reduced by $74mn.

“Against the backdrop of a prolonged lower oil and gas price environment, TAQA will continue to concentrate on safe and efficient operations while looking for opportunities to optimise our portfolio,” Al Dhaheri said.

Separately, Reuters has reported, quoting TAQA's acting chief financial officer that the state-owned energy enterpriseplans to approach the market to refinance a $500mn, 10-year bond maturing in October.

Last year TAQA refinanced a $500mn bond which was due to mature in March 2017, Mohammed Al Ahbabi has said according to Reuters.

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