RAM Ratings is of the view that the current crisis in Iraq will not have a bearing on the AA1/Stable rating of Abu Dhabi National Energy Company PJSC's (TAQA or the Group) Sukuk Murabahah Programme of up to RM3.5 billion in nominal value (2012/2032). Our belief stems from the relative calm and stability in the Kurdistan region of Iraq, an autonomous region of northern Iraq, as well as the small volume of assets that the Group holds in this region.
TAQA has an interest in the Atrush oil field in Iraqi Kurdistan. The acquisition of the interest had cost AED2.2 billion (2.7% of the value of TAQA's property, plant and equipment (PPE) as at end-March 2014) while the development of the field has entailed a further AED1.1 billion of capex to date. The field's first oil production is expected in 2015. Revenue from the Atrush oil field is expected to make up less than 5% of TAQA's top line over the medium term. Meanwhile, the Group is in the midst of acquiring an independent power producer (IPP) in Sulaymaniyah, also in Iraqi Kurdistan. The acquisition, which is pending third-party and regulatory approvals, is expected to cost AED2.02 billion (2.5% of the value of TAQA's PPE as at end-March 2014).
The current crisis in Iraq flared up when the militant group, Islamic State in Syria and Iraq, or ISIS, took over the northern Iraqi city of Mosul in early June and signalled its intent to advance into Baghdad. In contrast, news reports indicate that the armed forces of Iraqi Kurdistan are holding together the region's borders against the militants while refugees from fighting elsewhere in Iraq are seeking a safe haven in the region.
Media contact
Carol Pang
(603) 7628 1076
carol@ram.com.my
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© Press Release 2014
