TAQA oils British Energy Sector

In A week of gloomy news for the oil and gas sector, with the trade body Oil and Gas UK warning in its annual economic report of a 50 per cent fall in capital investment in the North Sea, a company that credibly talks about increasing profitable expansion is bound to stand out.

But TAQA Bratani, the European arm of the Abu Dhabi National Energy Company Taqa, had already established itself as an exceptional entity in the Aberdeen oil and gas world in Scotland. At least since July 2008, when TAQA signed its sale and purchase agreement with Shell and Esso acquiring six offshore fields and two subsea tie-backs, the company marches to a tune different from many operating in this famously tough environment.

As Bob Collier, the new chief executive of Aberdeen and Grampian Chamber of Commerce puts it: "TAQA Bratani is in the fortunate position of being able to buy or develop some of the existing fields in the UK continental shelf which are no longer part of the development plans of the existing oil majors. Many of these smaller fields are still highly significant in terms of reserves and are worth billions to the UK economy. TAQA is helping to ensure security of UK energy supply and extend the productive life of the North Sea."

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In TAQA's pristine new office in the Arnhall Business Park in Westhill, a collection of sleek steel and glass commercial palaces incongruously plonked in the middle of rolling Aberdeenshire fields, Leo Koot, TAQA UK's Dutch managing director, explains the strategy: "We are the only North Sea oil company that is capable of being counter-cyclical. We are upgrading our facilities while other companies of similar size to ours - small enough to be flexible but big enough to make an impact - have stopped. Also the majors are pulling back on investment, though like super-tankers they take longer to stop."

The reason that TAQA exists outside the normal cyclical rules is of course because it has in the background by the unfathomably deep pockets of the emirate of Abu Dhabi, the shrewdly strategising and astonishingly ambitious oil-rich capital of the UAE.

TAQA, as Koot is at pains to emphasise does not do things the easy way, by dipping into its vast wells of sovereign wealth, but uses the market-beating A+/A-1 corporate credit ratings that its state-sponsored status give it to raise whatever investment finance its prudent managers require. As Koot puts it: "Because we are backed by the Abu Dhabi government, we are extremely credit-worthy. Even in these times it is it easy to get capital. Sovereign wealth capital is patient capital, and the strategy is of semi-organic growth over the next two to four years, partly through similar acquisitions. There are other sites we are looking at in the North Sea and in the Brae field."

Since its foundation in 2005 (and arrival in the UK in 2007), TAQA, the privatised arm of Abu Dhabi's power and water desalination utility, has pursued a strategic masterplan, investing in over 60 companies worldwide, with operations in Abu Dhabi, Ann Arbor, Aberdeen, Amsterdam, Calgary and The Hague.

On its home ground, TAQA owns majority stakes in assets that provide about 85% of Abu Dhabi's power generation and 90% of its water desalination capacity. The company has built up assets of around $25 billion, and has 30,000 employees of 41 nationalities in nine countries.

Its goal is a diverse portfolio of energy businesses, becoming a global giant worth $40bn to $60bn between 2012 and 2016. Koot admits that the top-end expectations have been somewhat "pulled back" because of the downturn, but it remains a bold vision.