Abu Dhabi's TAQA targets North Africa utility needs

Abu Dhabi’s TAQA targets North Africa utility needs

Sees North Africa and Middle East ripe for new power, water projects; CEO says Arab Spring highlights need for reliable utilities; Could do deal in Turkey this year says CEO; Looking for acquisitions in the North Sea

May 26, 2012 9:11 by Reuters

- North Africa and the Middle East are ripe with opportunities for new power and water projects, said the CEO of state-owned utility firm Abu Dhabi National Energy Co (TAQA), which is eyeing expansion across the region after a foray into Turkey.

Last year’s Arab Spring highlighted the region’s urgent need for improved power and water supplies, believes TAQA’s chief executive Carl Sheldon, who expects the company’s future growth to come from building such infrastructure.

“One interpretation of the Arab Spring is that its the manifestation of rising expectations in young, growing populations. Within that bundle of expectations, inescapably, is the expectation of reliable utilities,” Sheldon told Reuters in an interview on Wednesday.

“People want the lights on 24 hours a day and they want water fit to drink, and plenty of it. That plank in the bundle of expectations is something that we can deliver.”

Iraq, Egypt, Libya, Tunisia and Algeria are all on TAQA’s radar as countries offering opportunities, Sheldon said, adding that TAQA could also complete an acquisition in Turkey this year, building on a relationship established with the government on Tuesday.

“That’s a country that does interest us so you might see us do something there,” Sheldon, who trained as a lawyer, said.

TAQA, which has a market capitalisation of around $1.9 billion and is 75-percent owned by the government of Abu Dhabi, hopes to leverage its government connection to do deals.

“We get a different type of access to political decision makers,” Sheldon said.

In addition to its power and water operations, TAQA also has a substantial oil and gas business producing an average 145,000 barrels of oil per day from assets in the North Sea and Canada.

Sheldon said that the company could look to develop oil and gas assets alongside power and water projects in countries in North Africa and the Middle East, but plans are also underway to boost production through acquisitions in the British North Sea.

“We’re buyers in the North Sea. We like it. We make a success out of it. We’ve shown that we can make a business out of taking over late life assets and turning them round,” he said, referring to the company’s main assets there which it bought from Shell and Exxon Mobil in 2009.

Sheldon declined to comment on whether TAQA was bidding for Toronto and London-listed North Sea oil firm Ithaca Energy, after being named by analysts as a potential bidder for the firm.

“We’re not really interested in making acquisitions that are just dollars for barrels because there’s no upside in that,” he added when asked about what sort of deal he would do in the North Sea.

(Reporting by Sarah Young)