Abu Dhabi National Energy Company (TAQA) is planning for a potential sale of its oil and gas assets, as the UAE state-owned utility company concentrates more on power generation, according to people familiar with the matter.
Currently, TAQA is carrying discussions with potential advisers as it reviews a business that spans across countries including the UK and Canada. TAQA’s oil and gas portfolio could be worth substantially lower than the billions the company spent to build it, the people stated.
TAQA has a monopoly on power and water distribution in Abu Dhabi. The capital city’s government aims to create a regional utility champion out of the company.
Last year, Abu Dhabi mapped out a plan for TAQA to receive assets from government-owned holding company Abu Dhabi Power Corp., known as ADPower, in return for shares. The deal stimulated the state-owned utility firm’s value to surge more than $40 billion and made it one of the largest listed companies in the country.
According to the sources, TAQA has not yet made any final decisions regarding the potential sale. The company didn’t immediately respond to a request for comment.
Last year, TAQA’s oil and gas business was disrupted due to the pandemic-triggered slump in commodity prices. In 2020, it made revenue of $1.1 billion, a 31 percent drop from the previous year. Earnings before interest, tax, depreciation and amortization fell 71 percent to $190 million.
TAQA built its oil and gas unit mostly through acquisitions. In 2007, it bought Calgary-based Northrock Resources for $2 billion and in 2021, acquired BP Plc’s North Sea assets for $1.1 billion. In the UK, the company also operates the Brent System pipeline, which carries about 5 percent of the country’s oil.