Abu Dhabi National Energy Company, better known as Taqa, is selling its stake in the Atrush oilfield in the Iraqi Kurdish region.
The company, through its wholly owned subsidiary Taqa International, has entered into a definitive agreement with General Exploration Partners to sell all of its interest in the oilfield, Taqa said on Monday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.
It did not provide further details but said the transaction remains subject to third-party approvals.
The company bought a 53.2 per cent operating interest in the oilfield for $600 million from General Exploration Partners in January 2013.
Currently, it holds a 47.4 per cent interest in the field, with the Iraqi Kurdish region's government and General Exploration Partners holding stakes of 25 per cent and 27.6 per cent, respectively, according to its website.
The field, located near Erbil, produced about 50,000 barrels of oil equivalent per day by the end of 2019.
“Taqa continuously reviews its strategy and portfolio to ensure we remain competitive and deliver the best possible services and solutions for our partners and customers,” a company representative told The National, without disclosing the value of the latest transaction.
Taqa is one of the largest integrated utilities in the Europe, Middle East and Africa region, with operations in a number of countries, including the UAE, India, the UK, Oman, Morocco and Saudi Arabia.
It has significant investments in water desalination and power generation, transmission and distribution assets, as well as upstream and midstream oil and gas operations.
Last year, the company revised its growth targets to boost the size of its assets base, as it committed Dh75 billion ($20.4 billion) in infrastructure investments amid healthy earnings growth.
It is aiming for 150 gigawatts of gross power generation by 2030 and plans to have a larger share of renewables within its portfolio by 2030.
The company signed several new deals recently as it continued to boost its portfolio.
Earlier this month, a consortium consisting of Taqa, Vision Invest and the Gulf Investment Corporation won a bid to develop a Dh1.5 billion water reservoir project in Saudi Arabia’s Makkah region.
Taqa is also exploring a stake in a $2.1 billion subsea cable project connecting Greece and Cyprus, it said last month.
The deal comes after Taqa invested £25 million ($31.72 million) in British start-up Xlinks, which plans to build the world's longest high-voltage direct current subsea power cable between Morocco and the UK.
In May, Taqa also signed agreements with Uzbekistan to explore investment options in the Central Asian country’s power sector that could be worth more than $3 billion.
In 2022, Taqa said it planned to sell its upstream oil and gas assets in the Netherlands to Waldorf Energy amid a focus on the renewable energy sector.
It also completed a deal to become a stakeholder in Abu Dhabi's clean energy company Masdar.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Oman v Namibia - abandoned
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