Abu Dhabi National Energy Company (Taqa) expects to increase capital spending to between $2.0 billion to $2.2 billion this year as it pushes ahead with expansion plans.

Taqa, which is 75-per cent owned by the government of Abu Dhabi, spent $1.9 billion in 2011, Chief Executive Carl Sheldon said in a conference call on Wednesday, adding this year's spending would mainly go towards five long-term projects.

'This year it (capex) runs in the order of $2 to $2.2 billion in long range projects,' Sheldon said.

Taqa plans to spend on oil and gas drilling in western Canada and the North Sea, as well as in expansion programmes in Morocco, Ghana and the Bergermeer gas project in the Netherlands, he said.

The firm made a fourth-quarter loss of Dh1.048 billion ($285 million) according to Reuters calculations, compared with a Dh261 million profit in the same period of 2010.

The loss was mainly due to an impairment charge on gas producing assets in Canada, Sheldon said.

Taqa, which sold a 650 million Malaysian ringgit denominated Islamic bond or sukuk last month, will go to the bond market on an opportunistic basis, he said.

The sukuk was part of the firm's 3.5 billion Malaysian ringgit sukuk programme, which was established late last year.

'There is no pressure to go to the market and our capex is funded from our operations,' Stephen Kersley, chief financial officer, said.

Taqa's total outstanding debt at the end of 2011 was Dh72.1 billion of which nearly half is project debt and the remainder corporate debt, Kersley said. 

The firm which is a low bidder in Dubai's Hassyan 1 power project, may consider bidding for Dubai's mega solar power project, said Sheldon, adding Taqa may also bid for renewable energy projects in Morocco.

Taqa shares were up 3.2 percent on the Abu Dhabi bourse Wednesday. They have risen 5 percent so far this year.

“Despite a strong operational performance, the impact of both the impairment in North America and increased taxes in the UK North Sea can be seen in our net financial result,' Kersley added.

Total revenues for 2011 grew by 13 per cent to Dh24.2 billion ($6.58 billion) as against total revenues of Dh21.4 billion in 2010.

There was growth in both the Power & Water and Oil & Gas divisions, from new generating capacity and higher production in the UK North Sea. However, while high oil prices buoyed performance, this was offset by weakening North American gas prices.

Total assets of the company fell 1 per cent to Dh114.7 billion compared to Dh116.059 billion in 2010, while the net profits after minority interests showed a decline of 27 per cent to Dh744 million as against the net profit of Dh1.019 billion in 2010.

The decline in total assets and net profit was principally due to the lower gas price environment in North America, which led to a one-off impairment following the annual revaluation of Taqa’s portfolio, a statement said.

The net impairment of Dh470 million reflected an impairment of Dh616 million, offset by a deferred tax benefit of Dh146 million.

In addition, increased taxes on oil and gas production in the UK North Sea led to a higher effective tax rate which depressed Taqa’s net result.

During the year, Taqa maintained a strong level of liquidity. In December, Taqa successfully issued $1.5 billion in 5 and 10-year bonds at extremely attractive prices, taking advantage of strong market conditions to pre-finance maturities due in the fourth quarter of 2012.

As a result of this positive performance and given its confidence in Taqa’s position, the Board of Directors is proposing a dividend of Dh0.10 per share, subject to approval at the Annual General Meeting on April 17. – Reuters and TradeArabia News Service