Emirates National Oil Company (Enoc), the state-owned energy firm, is considering an expansion of its Jebel Ali refinery to increase income, its chief financial officer said yesterday.
It is evaluating the expansion of the 140,000 barrels per day refinery in Jebel Ali by adding capacity of 75,000 bpd.
“The UAE is a growing economy and right now there is not enough [refining] capacity,” said Petri Pentti in an interview last week. “We are also importing a lot of finished products like gasoline, diesel, jet fuel.”
The Dubai government-owned company, which last year secured a US$1.5 billion syndicated loan, expects to borrow from banks to help fund the expansion of the refinery, which could start operations by 2020.
Mr Pentti said Enoc could also issue an Islamic bond or sukuk in the next two to three years to help fund its operations and diversify funding sources, on top of acquiring bank loans.
Enoc’s consolidated revenue last year fell to $15bn, down 28.6 per cent from $21bn a year earlier, and could drop further this year owing to the lower oil prices.
But the company’s diversified portfolio, which includes oil trading, refining and oil storage, has helped the company to be profitable.
“$15bn is a baseline figure for 2015 and it could be lower than that [this year] even if volumes are going up,” said Mr Pentti.
“What is important is the margin. Generally it is well known in the industry, that in 2015 for downstream operations, it was reasonably good and that has been the case for Enoc as well.”
Enoc’s sales of crude and petroleum products rose by 16 per cent last year to a record 220 million barrels. The company’s sales figures included oil traded out of its offices in London, Singapore and Dubai.
“Volumes [this year] are good and as long as this is the case I am optimistic of continued good performance overall,” said Mr Pentti, declining to give figures.
Armed with a healthy cash flow, Enoc is seeking assets to expand its business portfolio, which includes upstream, midstream and downstream operations.
Last year, Enoc acquired Dragon Oil for £1.7bn (Dh8.83bn), ending a six-year battle to purchase the remaining 46 per cent it did not already own in the energy company. The acquisition means Enoc has assets capable of producing 100,000 barrels of oil per day.
“We are very selective and very careful, but we could see that acquisitions are very much part of Enoc strategy going forward,” said Mr Pentti.
“Right now, because oil prices are low, it is widely expected there are quite a few opportunities out there. For the time being we have a diversified portfolio, a profitable portfolio of business that is creating sufficient cash flows to finance our businesses as well as potential acquisitions.”
The company is looking at downstream, upstream and midstream assets in the Arabian Gulf region, South East Asia and Africa, he said.
Enoc Retail will also increase its number of petrol stations by 40 per cent between this year and 2020 in Dubai and the Northern Emirates.
With 112 stations in the UAE, Enoc will renovate two stations and build 54 more as part of the expansion plan. In Saudi Arabia, the company plans to add 11 stations this year to the current three.
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