Abu Dhabi shopping spree: Taqa bags another Canadian firm for $5 billion
By Karen Remo-Listana
Posted: 01 October 2007
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The Abu Dhabi National Energy (Taqa) has purchased two Canadian firms for over $5.5 billion last month; deals which observers say are over-priced.
Taqa agreed to buy Canada 's Primewest Energy Trust for C$5 billion ($4.99 billion) in cash and Pioneer Canada for $540 million. Primewest is the company’s biggest acquisition to date and its third Canadian purchase in four months. It is also Taqa’s sixth overseas acquisition since November 2006.
 This acquisition, according to Taqa CEO, is a step towards achieving its strategy to grow its Canadian assets to C$20 billion ($19.96 billion).
“This acquisition makes Taqa North one of the top 14 producers in Canada, while at the same time providing us with a high quality asset base, more world-class executives and a great workforce that will continue to work on the company’s large portfolio of development opportunities,” Peter Barker Homek, said.
The Primewest acquisition is slated to close in November this year. By that time, the company will have gone from having no Canadian assets or oil and gas output to producing 111,000 barrels a day from assets worth $7.5 billion.
The PrimeWest transaction will provide Taqa with an additional 285 million barrels (gross) WI P+P reserves; current production in excess of 61,000 barrels of oil equivalent per day; a large, strategic undeveloped land base of over 1.1 million net acres which will be complementary to Taqa North’s existing land base; and a large tax pool position of approximately C$2.7 billion ($2.69 billion).
“This transaction is further evidence of our long-term commitment to Canada , which is a key focus for our international expansion, and we’re very confident this transaction will represent a net benefit for all parties,” he added.
The Pioneer deal, on the other hand, is set to p rovide Taqa with 50 million barrels of oil equivalent of proved reserves and nine million barrels of oil equivalent of probable reserves when finalised.
Pioneer’s Canadian assets, which are almost entirely natural gas, produced 54.2 million cubic feet per day of gas in the second quarter. Its liquids production in Canada averaged 750 barrels per day in that period.
The Pioneer transaction is also expected to close during the fourth quarter of 2007. Barker-Homek said the acquisition adds 27% to daily production, increasing reserves by 35% and providing a reserve life index in excess of 17 years.
Pioneer’s assets like that of the recently acquired Northrock Resources are centered in the natural gas-rich Western Canadian Sedimentary Basin .
Canada 's political and fiscal stability and access to the US market have attracted the company, Barker-Homek said.
Taqa has begun operating Northrock Resources in August after buying the company for $2 billion. The new entity, Taqa North, is set to provide Taqa with another 142 million barrels of proven oil and gas reserves, more than 37,000 boepd (gross).
Taqa has global operations in power generation, desalination, renewables, upstream oil and gas, pipelines, gas storage and LNG regas.
Barker-Homek said Taqa has plans to billions of dollars in new energy acquisitions over the next year."We are looking at opportunities in Algeria , Libya , Tunisia , Norway , The Netherlands, UK , Canada and possibly, the US ," he said.
At present, Taqa has investments, assets and operations in 10 countries – the UAE, Canada , Ghana , India , Morocco , The Netherlands, Russia , Saudi Arabia , the UK and the United States .
Taqa, 75% owned by the Abu Dhabi government, plans to quadruple its assets to $60 billion in five years, and expects $20 billion of that to be in Canada . The Gulf state looks to use its oil revenue to diversify its holdings and Taqa plans more deals in Canada , Europe and elsewhere. |
