Abu Dhabi National Oil Company (Adnoc) plans to open service stations in Saudi Arabia as early as next year.
“We have ambitious plans to be outside the boundaries of the UAE. The first country we are eyeing and watching is Saudi Arabia,” Abdulla Salem Al Dhaheri, the chief executive of Adnoc Distribution, Adnoc’s fuel retailing arm, said yesterday.
“We are in the final stage of finalising the contractual obligation with one of the operators in Saudi Arabia. Hopefully you will see us operational by mid-2014,” Mr Al Dhaheri said.
The price of petrol is subsidised in the UAE, and petroleum companies are looking to generate better profit margins from other businesses such as retail, and food and beverage.
Mr Al Dhaheri said the kingdom wanted to upgrade its service stations, with 15 licences for 15 different operators up for grabs.
He said Adnoc Distribution was also looking at opportunities in Iraq, Libya and North Africa because of the demand.
“We are talking to the Gulf and beyond,” said Mr Dhaheri. “They are building up their facilities. They are expanding. They are introducing new services for consumers.”
Adnoc would be opening 10 new service stations in Dubai next year, Mr Al Dhaheri said.
“We are about to finalise six out of 10 service stations. They will be on all major highways,” he said.
On the topic of jet fuel prices, Mr Al Dhaheri said despite UAE carriers’ recent massive orders for aircraft, the profit margin for the domestic jet fuel market was minimal.
At the Dubai Airshow on Sunday, Emirates Airline ordered US$99 billion worth of airplanes, while its sister carrier flydubai made a $11.4bn order. Etihad Airways placed aircraft orders worth more than $67bn.
“I believe that profitability will always be squeezed within the local market,” Mr Al Dhaheri said.