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Enoc reports 10% drop in turnover amid low oil prices

A man works at the Cidade Angra dos Reis offshore platform at the Lula oil field, about 300 km from the coast of Rio de Janeiro
image used for illustrative purpose

A man works at the Cidade Angra dos Reis offshore platform at the Lula oil field, about 300 km from the coast of Rio de Janeiro image used for illustrative purpose

REUTERS/Sergio Moraes

Monday, Feb 06, 2017

Abu Dhabi: Emirates National Oil Company’s (Enoc) reported on Monday a turnover of around $13 billion in 2016, marking a near-10 per cent decline year-on-year on the back of lower oil prices.

Sales volumes of petroleum products in 2016 reached 245 million barrels in 2016, marking a five-year rolling average growth of nine per cent.

“When we look at our core retail businesses — the fuel stations and gasoline sales, which are the core products of the downstream marketing — volumes have clearly continued to grow, which basically implies that population growth has continued here in Dubai. Likewise, Dubai Airport is growing year-on-year…which is great because we are transporting fuel to Dubai Airport,” said Petri Pentti, Enoc’s group chief financial officer.

Speaking to Gulf News, Pentti said Enoc is looking to grow its network across Dubai in 2017, and will be looking at opportunities elsewhere including in the GCC, Africa, and South East Asia. He declined to disclose further details on the company’s plans outside the UAE.

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He added that the company is aiming to invest “a few billion US dollars” in the next three to five years to grow its capacity and develop new projects. He did not rule out any acquisitions by Enoc.

“You basically have two options [for growth]; either you build yourself in an organic fashion, and that normally takes some time, or you potentially acquire some existing business, and we will be considering both avenues for growth,” the group CFO said.

In a statement issued by Enoc, the company said it will focus its efforts and investments on fulfilling Dubai’s energy needs. Enoc said it plans to expand its refinery and service station network, build terminals storage capacity, and increase its market share in the marketing of diesel, jet fuel, and liquefied petroleum gas.

Plans to expand capacity include a 50 per cent capacity increase at Enoc’s Jebel Ali refinery, and the construction of Project Falcon’s 19-kilometre jet fuel pipeline extension to Al Maktoum Airport by end of 2018.

“We will also be investing in non-fuel retail business — Zoom-branded convenient stores including some standalone sites. This is one of the focus areas to grow in line with the market. Likewise, airline fuel sales volumes are expected to continue growing in 2017 as well,” he said.

Pentti said he expected the operating environment to improve in 2017 compared to 2016 as oil prices rise on the back of oil production cuts by oil-producing countries.

Meanwhile, the group’s chief executive officer, Saif Al Falasi, said 2017 will be a year of “strategic responses centred on value-chain integration, ensuring capital discipline and maximising operational efficiency,” amid increasing demand and low oil prices.

He added that Enoc plans to continue to focus on diversifying its revenue streams by “investing in operations that are well-positioned to generate sustainable growth.”

By Sarah Diaa Staff Reporter

Gulf News 2017. All rights reserved.

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