(Bloomberg) -- Abu Dhabi National Energy Co., the state-controlled oil and gas producer, is looking again at boosting spending after three years of cutting back, according to Chairman Saeed Mubarak Al-Hajeri.
The company, known as Taqa, had first-quarter net income of 110 million dirhams ($30 million), 42 percent higher than a year earlier, according to a company statement. Revenue rose 5 percent to 4.3 billion dirhams.
“We have moved now from an environment of cost-saving to an environment of investment across the business,” Al-Hajeri said Thursday in a Bloomberg television interview from Abu Dhabi. “Our investment will be focused on growing the existing assets. We don’t have plans to make any acquisitions.”
Taqa is the latest energy company to report higher earnings thanks to a resurgence in the price of oil, with international benchmark Brent crude trading close to a four-year high. During the market downturn over the past three years, the company cut jobs and slashed spending to cope with a decline in the value of oil and gas properties and lower crude prices, helping it to save about $3.6 billion.
Atrush Oil Field
The company’s shares have gained 131 percent this year and were trading at 1.25 dirhams in Abu Dhabi at 1:04 p.m. local time. This “good performance” reflects Taqa’s ability to raise $1.75 billion in a bond issue that was 4.7 times oversubscribed, said Salma Kharbachi, an equities analyst at Alphamena in Tunis.
Aside from power plants in Abu Dhabi, the capital of the United Arab Emirates, Taqa has gas fields in Canada, oil production in the U.K.’s North Sea, a storage facility for natural gas in the Netherlands and a project to pump oil in the Kurdish region of northern Iraq. It is 74 percent owned by the Abu Dhabi government. Taqa’s spending on its properties this year will exceed last year’s $500 million, Al-Hajeri said.
The company is investing in its Atrush oil field in Iraq to boost production to more than 30,000 barrels a day, a target the company is close to reaching, he said. “It’s a good business and we like it," he said. “We’ll invest more to extract more production.” Taqa started pumping at the field in March last year.
The company has covered most of its short-term needs in terms of refinancing, the chairman said. Last month, it issued the $1.75 billion bond to refinance existing debt.
Taqa has no plans to sell any of its oil and gas properties, Al-Hajeri said. “We run the business as if we’re holding them long term.”
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