Abu Dhabi National Energy Company PJSC - qc.cme …qc.cme-mec.ca/download.php?file=gfqvbrtx.pdf ·...

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TAQA

Abu Dhabi National Energy Company PJSC

October 2010

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Abu Dhabi in 1965

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55 Years later…

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What we do

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Agenda

• Corporate Overview

• Business Strategy

• Operational Overview

• Financial Highlights

• Summary

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TAQA – A Global Energy Company

� Abu Dhabi’s national energy champion

� Government’s conduit into the global energy sector

� One of the largest companies listed on the Abu Dhabi Securities Exchange (ADX)

� Equity ownership:

� Indirect Abu Dhabi Government 72.53%

� Publicly held 27.47%

� Essential energy and water provider to the Emirate of Abu Dhabi *

� Provides more than 98% of electricity and water needs

� Substantial international portfolio of producing upstream and midstream assets

� 574 mnboe of proved and probable reserves

� Strong A3 (Stable) corporate credit rating by Moody’s

� Total assets of USD 26 billion as at 30 June 2010

� Abu Dhabi’s national energy champion

� Government’s conduit into the global energy sector

� One of the largest companies listed on the Abu Dhabi Securities Exchange (ADX)

� Equity ownership:

� Indirect Abu Dhabi Government 72.53%

� Publicly held 27.47%

� Essential energy and water provider to the Emirate of Abu Dhabi *

� Provides more than 98% of electricity and water needs

� Substantial international portfolio of producing upstream and midstream assets

� 574 mnboe of proved and probable reserves

� Strong A3 (Stable) corporate credit rating by Moody’s

� Total assets of USD 26 billion as at 30 June 2010

Power and Water

Government of Abu Dhabi

Public Shareholders

27.47%

21.12%

MidstreamUpstream

Farm Owner’s Fund

Abu Dhabi Water and Electricity

Authority(ADWEA)

100%

51.05%

100%

Other Governmental

Entities

0.36%

* As at YE 2009 TAQA owns 54% interest in each plant

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Key Credit Strengths

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Supported by the Financial Strength of Abu Dhabi

Source: Moody’s, The Economist Intelligence Unit, CIA Factbook

Abu Dhabi

Credit RatingsAbu Dhabi

Credit Ratings

� Aa2/Stable/P-1 by Moody’s, AA/Stable/A-1+ by Standard & Poor’s, and AA/Stable/F1+ by Fitch

� Aa2/Stable/P-1 by Moody’s, AA/Stable/A-1+ by Standard & Poor’s, and AA/Stable/F1+ by Fitch

Abu Dhabi

Nominal GDPAbu Dhabi

Nominal GDP

� USD 106.54 billion (2009E)

� 5th highest nominal GDP per capita in the world, at USD 65,600 (2009E)

� USD 106.54 billion (2009E)

� 5th highest nominal GDP per capita in the world, at USD 65,600 (2009E)

Abu Dhabi

Oil & Gas

Reserves and

Production

Abu Dhabi

Oil & Gas

Reserves and

Production

� 6th largest oil reserves and 5th largest gas reserves in the world

� 8% of the world’s 1,204 billion barrels of proved oil reserves

� 3% of the world’s 183.1 trillion standard cubic metres of proved gas reserves

� 2.5 million barrels per day of oil production

� 0.9 million barrels of oil equivalent per day of gas production

� 6th largest oil reserves and 5th largest gas reserves in the world

� 8% of the world’s 1,204 billion barrels of proved oil reserves

� 3% of the world’s 183.1 trillion standard cubic metres of proved gas reserves

� 2.5 million barrels per day of oil production

� 0.9 million barrels of oil equivalent per day of gas production

Government

Balance SheetGovernment

Balance Sheet

� Minimal direct debt of USD 4 billion

� Large fiscal and current account surpluses

� Very large portfolio of financial assets and strategic international investments

� Minimal direct debt of USD 4 billion

� Large fiscal and current account surpluses

� Very large portfolio of financial assets and strategic international investments

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Active Government Involvement Through The Board

H.E. Hamad Al-Hurr Al-Suwaidi - Chairman

Other Responsibilities:� Under-Secretary – Department of Finance� Member of the Executive Council of the Emirate of Abu Dhabi� Chairman – Farmers Fund (FSFOEAD)� Director – Mubadala Development Co.

H.E. Hamad Al-Hurr Al-Suwaidi - Chairman

Other Responsibilities:� Under-Secretary – Department of Finance� Member of the Executive Council of the Emirate of Abu Dhabi� Chairman – Farmers Fund (FSFOEAD)� Director – Mubadala Development Co.

H.E. Ahmed Saif Al-Darmaki - Vice Chairman

Other Responsibilities:� Chairman – Abu Dhabi Water & Electricity Company (ADWEC)� Director, Planning & Development – ADWEA� Office Manager of Chairman – ADWEA

H.E. Ahmed Saif Al-Darmaki - Vice Chairman

Other Responsibilities:� Chairman – Abu Dhabi Water & Electricity Company (ADWEC)� Director, Planning & Development – ADWEA� Office Manager of Chairman – ADWEA

H.E. Abdulla Saif Al-Nuaimi Board Member

Other Responsibilities:

� CEO & MD – TAQA� Director – Privatization

Directorate, ADWEA� Director – ADWEC

H.E. Abdulla Saif Al-Nuaimi Board Member

Other Responsibilities:

� CEO & MD – TAQA� Director – Privatization

Directorate, ADWEA� Director – ADWEC

H.E. Mohammed Foulad Board Member

Other Responsibilities:�Previously Chairman and CEO of Taweelah Power Company

H.E. Mohammed Foulad Board Member

Other Responsibilities:�Previously Chairman and CEO of Taweelah Power Company

H.E. SalemAl-SayaariBoard Member

Other Responsibilities:�Executive Director of Business Support – Abu Dhabi Education Council�Director – Arabian Power Company

H.E. SalemAl-SayaariBoard Member

Other Responsibilities:�Executive Director of Business Support – Abu Dhabi Education Council�Director – Arabian Power Company

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TAQA has a Strong Presence in Key Geographies and Sectors

MoroccoMorocco

� Infrastructure investments

� JV with RBS/Sempra for tolling agreement

� Infrastructure investments

� JV with RBS/Sempra for tolling agreement

United StatesUnited States

Saudi ArabiaSaudi Arabia

� Power generation (250 MW)


United KingdomUnited Kingdom



NetherlandsNetherlands

� Gas exploration and production(9 mboe/d)

� Gas storage(Capacity: 250 bcf)

� Pipelines

� Gas exploration and production(9 mboe/d)


� Pipelines



CanadaCanada

� Oil & gas exploration and production(88 mboe/d)


� Oil & gas exploration and production(88 mboe/d)


UAEUAE

� Power generation(8,775 MW)

� Water desalination(654 MIGD)

� Power generation(8,775 MW)

� Water desalination(654 MIGD)

� Oil & gas exploration and production(35.5 mboe/d)

� Pipelines

� Oil & gas exploration and production(35.5 mboe/d)

� Pipelines

GhanaGhana

IndiaIndia

� Power generation (1,356 MW)

� Power generation (1,356 MW)

� Power Generation(2,288 MW)

� Transmission & distribution

� Power Generation(2,288 MW)

� Transmission & distribution

CaribbeanCaribbean

Existing Operations / Investments

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Asset Base Provides Many Opportunities for Organic Growth

Upstream Midstream Power & Water

UK North SeaDrilling Program

Canadian DrillingProgram

BergermeerGas Storage

Jorf LasfarPower PlantExpansion

GhanaPower PlantExpansion

Fujairah 2 PowerPlant Transfer

Shuweihat 2 Power

Plant Transfer

SoharPlant Transfer

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Agenda

� Corporate Overview

� Business Strategy

� Operational Overview

� Financial Highlights

� Summary

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Shifting Priorities as TAQA Establishes its Global Presence

TAQA founded in 2005

�ADWEA transferred six IWPPs to TAQA

� IPO in 2006

Rapid Expansion

�Upstream� Oil & gas exploration and

production�Midstream

� Pipelines, gas storage�Power and Water

� International power assets

Integration & Optimization

�Organic growth opportunities�Bolt-on acquisitions to

complement portfolio�Operational excellence &

financial performance

2005-2006 2007-2008 2009+

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Three Strategic Pillars

Optimization and integration of

existing portfolio

Optimization and integration of

existing portfolio

� Pursuing a divestment package of 8,100 barrels per day at TAQA North

� Implementing commodity and interest rate hedging strategies

� Pursuing a divestment package of 8,100 barrels per day at TAQA North

� Implementing commodity and interest rate hedging strategies

Prudent Financial Management

Prudent Financial Management

� Capital expenditure program of USD 1.4 billion funded from internally generated cash flows

� Rigorous cost control

� Moving towards debt to capital ratio of 70% (currently stands at 80%)

� Capital expenditure program of USD 1.4 billion funded from internally generated cash flows

� Rigorous cost control

� Moving towards debt to capital ratio of 70% (currently stands at 80%)

Development of organic growth

opportunities

Development of organic growth

opportunities

� Jorf Lasfar expansion

� Ghana expansion

� Bergermeer Gas Storage project

� UK North Sea drilling program

� Canadian drilling program

� Jorf Lasfar expansion

� Ghana expansion

� Bergermeer Gas Storage project

� UK North Sea drilling program

� Canadian drilling program

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Power and Water Opportunities

Achieving scale via regional expansion

Fujairah 2Fujairah 2

� TAQA interest: 54% (following the transfer from ADWEA)

� Plant capacity: Power Generation - 2,000 MW, Water Desalination - 130 MIGD

� Expected completion: mid -2010

� Equity amount to be paid by TAQA: USD 200-300 million



� Expected completion: mid -2010

� Equity amount to be paid by TAQA: USD 200-300 million

Shuweihat 2Shuweihat 2



� Expected completion: end of 2011



� Expected completion: end of 2011

Jorf Lasfar Expansion ProjectJorf Lasfar Expansion Project

� TAQA interest: 100%

� Expected to expand capacity by 700 MW from current capacity of 1,350 MW

� MOU signed with Moroccan regulator regarding terms for power purchase agreement on new units

� Preferred EPC contractor appointed

� Financial advisor selected

� Expected completion: 2013/2014


� Expected to expand capacity by 700 MW from current capacity of 1,350 MW

� MOU signed with Moroccan regulator regarding terms for power purchase agreement on new units

� Preferred EPC contractor appointed

� Financial advisor selected

� Expected completion: 2013/2014

Takoradi ExpansionTakoradi Expansion


� Expect to expand capacity by 110 MW to 330 MW

� Currently supply approx 90% of the power for the country of Ghana

� MOU signed with the Ghanaian government in Q2 2010


� Expect to expand capacity by 110 MW to 330 MW

� Currently supply approx 90% of the power for the country of Ghana

� MOU signed with the Ghanaian government in Q2 2010

SoharSohar

� Agreement with ADWEA for the transfer to TAQA of a 40% stake in Sohar Aluminium Company (SAC)

� SAC operates a state of the art 1,000 MW combined cycle captive power plant

� Purchase price of approximately US$400 million

� Agreement with ADWEA for the transfer to TAQA of a 40% stake in Sohar Aluminium Company (SAC)

� SAC operates a state of the art 1,000 MW combined cycle captive power plant

� Purchase price of approximately US$400 million

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Midstream Opportunity

Invest and grow diversified midstream assets, while reducing costs through focused operational centers of excellence

Bergermeer Gas StorageBergermeer Gas Storage

� TAQA interest:60% (operator)

� North west Europe’s largest commercial underground gas storage when complete

� Planned initial phase storage capacity 145 bcf

� Gazprom to provide cushion gas in exchange for working capacity

� Consortium and Gazprom confirmed the final investment decision on the project in 2009

� Netherland’s Ministry of Economic Affairs has issued a State Permitting Plan, taking the project to the final stage in the permitting process

� Estimated project cost: €800 million

� TAQA interest:60% (operator)

� North west Europe’s largest commercial underground gas storage when complete

� Planned initial phase storage capacity 145 bcf

� Gazprom to provide cushion gas in exchange for working capacity

� Consortium and Gazprom confirmed the final investment decision on the project in 2009

� Netherland’s Ministry of Economic Affairs has issued a State Permitting Plan, taking the project to the final stage in the permitting process

� Estimated project cost: €800 million

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Upstream Opportunities

Focused on growing production organically through the drill bit and through selective acquisitions in core areas

• Acquired a portion of Suncor Energy Oil and Gas Partnership (Suncor) interests in West Central Alberta

• Production of 6,100 barrels of oil equivalent per day (boep/d) of liquid rich natural gas

• Interests in land and infrastructure directly adjacent to TAQA’s footprint

• Total consideration of CDN $285 million





SuncorSuncor

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Suncor




• Consolidates our position in west central Alberta

• Synergies with TAQA’s Caroline and Sundreproperties

• Adds to TAQA’s potential drilling locations in the area


Sohar

• Agreement with ADWEA for the transfer to TAQA of a 40% stake in Sohar Aluminium Company (SAC)

• SAC produces 360,000 tonnes of aluminium per annum

• SAC operates a state of the art 1,000 MW combined cycle captive power plant

• High quality operation accretive to TAQA’s earnings and cash flow

• Purchase price of approximately US$400 million

• Financed by a non-interest bearing loan from ADWEA (equity treatment)

• Joint venture partners Oman Oil Company and Rio Tinto Alcan

Latest Transactions

Otter

• Signed SPA for 81% equity stake in production licences for two blocks in the Otter Field Development Area

• Average daily production year to date approximately 8,000 boe.

• Adjacent to TAQA Bratani’s existing North Sea interests, purchased in 2008

• Sub-sea tieback to the TAQA Bratani operated Eider Platform

• Sale subject to regulatory approval and third party consents

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Agenda





� Summary

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Power & Water Performance

• TAQA’s global power generation reached 15,125 GWh during Q2 2010

• 12% year-on-year increase in power generation reflecting the full effect of Taweelah A1 facility

• Technical availability at domestic power generation subsidiaries in Q2 2010 averaged 97.1%

• Average domestic availability of 98.8%

• Average international availability of 89.9%

• Q2 2010 power & water revenue of AED 1.6 billion comprised 44% of total revenue (excludes fuel revenue)

Electricity Generation

Gw

hM

IG

Water Desalination

3%

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Upstream & Midstream Performance

• Q2 2010 revenue of AED 2.0 billion (including gas storage and other revenues) representing 56% of total revenue (excluding fuel income)

• Revenues increased due to stronger oil and gas pricing environment

• Actual production rates within 2010 guidance; TAQA Bratani lower as a result of planned maintenance work

TAQA North

TAQA Bratani

TAQA Energy

US

$/b

oe

Operating Netback by Business Unit

(mboe/day)

H1 2010 Actual

Production

2010 Production Guidance

TAQA North 87.9 77-82

TAQA Bratani 35.5 40-45

TAQA Energy 8.7 9-11

Average Realized Prices

US

$/b

oe

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Agenda





� Summary

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Q2 2010 Financial Comparison

Total revenues on upward trend since end 2009 as more positive commodity pricing environment was felt

Revenue Breakdown

Significant improvement to net profit after minority interests over the twelve month period

*excludes fuel income

**After minority interests (AED million)

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First Half 2010 Financial Comparison

Total revenues & EBITDA increased year-on-year reflecting positive commodity pricing environment and greater operational efficiency

Revenue Breakdown

Net profit shows year-on-year improvement

*excludes fuel income

**After minority interests (AED million)

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Agenda





� Summary

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Summary

� Global business operations with a balanced mix of energy assets between developed and emerging markets

� Experienced management team and influential board members

� Positive underlying credit metrics given TAQA’s and Abu Dhabi’s strong credit ratings

� Renewal of Canadian revolving credit facility complete

� Sovereign support given by its intrinsic value to Abu Dhabi and its indirect Abu Dhabi Government equity ownership of 72.1%

� Considerable organic growth opportunities and robust performance within its power & water, midstream and upstream operations

� Continued strong financial performance having diversified and expanded revenue streams in Power and Water assets offsetting lower commodity prices

� Actively managed debt maturity profile with manageable refinancing risk

� Global business operations with a balanced mix of energy assets between developed and emerging markets

� Experienced management team and influential board members

� Positive underlying credit metrics given TAQA’s and Abu Dhabi’s strong credit ratings

� Renewal of Canadian revolving credit facility complete

� Sovereign support given by its intrinsic value to Abu Dhabi and its indirect Abu Dhabi Government equity ownership of 72.1%

� Considerable organic growth opportunities and robust performance within its power & water, midstream and upstream operations

� Continued strong financial performance having diversified and expanded revenue streams in Power and Water assets offsetting lower commodity prices

� Actively managed debt maturity profile with manageable refinancing risk

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Questions & Answers

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