Abu Dhabi: The government-owned Abu Dhabi National Energy Company, Taqa, recorded a loss of Dh165 million in the first half of this year and cut jobs by 22 per cent as oil prices plunge due to weak demand and oversupply.

The company, headquartered in Abu Dhabi, and with projects in a number of countries, said that its total revenues declined by 29 per cent to Dh9.8 billion.

The company reduced its capital expenditure by Dh1.05 billion during the first six months and is on track to deliver on its previously announced Dh2.5 billion or 40 per cent reduction from last year, it said in a statement.

Taqa said it has reduced its oil and gas headcount by 22 per cent since July 1 last year and by 32 per cent in its Abu Dhabi headquarters, while maintaining its commitment to increasing Emiratisation rates.

More than 52 per cent of its senior management positions in Abu Dhabi are now held by UAE nationals, a 100 per cent increase compared to a year ago.

“While the current commodity price environment has impacted the whole industry, our results show that we are delivering on our accelerated cost transformation programme,” said Edward LaFehr, Taqa Chief Operating Officer.

“This combined with our drive to improve safety, reliability and operating performance is helping us offset some of the effects of lower prices on our bottom line.”

“We are well positioned to achieve our targeted Dh1.5 billion of annual savings by the end of 2016, and now have the organizational structure and momentum to deliver,” said LaFehr.

Taqa started full commercial operations at its Gas Storage Bergermeer project in April, providing 4.1 billion cubic meters of gas storage capacity, enough to supply 2.5 million Dutch households for a year.

Projects

It has completed construction and is now commissioning three additional projects including in Ghana, India and a desalination facility at its Fujairah 2 plant in the UAE.

Despite significantly lower capital expenditure and reducing its oil and gas unit operating costs by 19 per cent, oil and gas production only decreased 5 per cent to 150,000 barrels of oil equivalent per day, compared to the same period last year, the company said.

On August 12, the company refinanced $3.1 billion (Dh11.4 billion) of existing revolving credit facilities at improved terms, thereby reducing funding costs.

The company’s available liquidity stood at Dh13.9 billion at the end of the period, including Dh3.6 billion of cash and cash equivalents.

Richard Mallinson, an oil analyst at London based Energy Aspects told Gulf News that oil and gas producers are struggling due to low oil prices.

“As Brent prices go down, we see more pain for oil producers. There will be job losses as companies try to reduce costs. This is a trend happening all across the industry.”

He said there will be a change in the long term strategies of the companies to cope up with lower prices. The international benchmark, Brent is currently trading at around $50 per barrel.

Ole Hansen, Head of Commodity Strategy at Saxo Bank said as long as Opec (Organisation of Petroleum Exporting Countries) continues its policy of oversupplying, the market and US producers remain resilient.

Iran

“Demand growth is strong but so is supply and according to the IEA we may have to wait until the end of 2016 before the market begins to balance. Not least considering the potential of additional oil beginning to flow from Iran early next year.”

Last month, another Abu Dhabi company International Petroleum Investment Company (Ipic) said its revenue for the year 2014 fell to Dh188 billion compared to Dh194 billion in 2013, a decline of Dh6 billion largely due to fall in crude in oil prices offset by new acquisitions made by the group in 2014.