Abu Dhabi National Energy Co., the government-owned utility known as Taqa, posted a second consecutive annual loss in 2014 as tumbling crude oil and natural gas prices forced it to take a one-time charge.
Taqa’s loss grew to 3 billion dirhams ($817 million) from 2.52 billion dirhams in 2013, the company said in a statement to the Abu Dhabi stock exchange.
Taqa won’t pay a dividend on 2014 results after taking a 3.3 billion-dirham impairment charge due to “the rapid reduction in oil and gas prices in the second half of 2014,” it said.
“The lower commodity prices have reduced price expectations in mid- and long-term, which has had a profound implication for the entire oil and gas industry,” Taqa said in the statement.
Brent crude, the global oil benchmark, fell 49% during the second half of last year as new production in areas like North America and Russia and the decision by the Organization of Petroleum Exporting Countries not to cut its own output created a supply glut that outweighed demand.
Oil has declined 4.1% this year.
Taqa produces power, oil and gas from Canada to North Africa and helps generate most of the electricity sold in the United Arab Emirates, of which Abu Dhabi is the biggest sheikhdom.
Sales rose to 27.3 billion dirhams from 25.8 billion in 2013 as oil and gas production increased to 158,900 barrels of oil equivalent a day.
Output averaged 142,300 barrels a day in 2013, according to the company’s annual report for that year.
Taqa said it will cut its 2015 capital expenditure budget by 2.5 billion dirhams, a reduction of about 39 percent from last year.
The company plans to reduce operating expenditure by 1.5 billion dirhams over two years, it said, without specifying current spending.
The company also took an unusual impairment charge in 2013, mostly because of reserve revisions and lower output expected in North America.
Taqa said in November it was cutting 2014 capital expenditure to 6.8 billion dirhams, down 2 billion dirhams from 2013, after oil prices fell.
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