The Dubai oil company will sign a preliminary agreement to explore the development of an LPG terminal in Bangladesh before year-end
Exclusive: Enoc eyes up to $2bn in investment after refinery expansion
Emirates National Oil Company is looking to invest up to $2 billion next year as it explores potential to develop a liquefied petroleum gas terminal in Bangladesh this year, its chief executive said.
After expansion of its refinery in Jebel Ali, Enoc is targeting $1 to $2bn in investments, Saif Al Falasi told The National. The outlay excludes investments by its exploration and production subsidiary Dragon Oil.
“Dragon Oil has $14bn [planned investment] because they have existing oilfields and they have to continue spending on the oilfields and they have to continue spending to produce oil,” said Mr Al Falasi.
“In Egypt we have concessions, it depends on going there and drilling and recovering. [We're also moving] into jet fuel expansion."
The Dubai energy company, which has the largest refinery in the emirate, has been eyeing new opportunities to trade products in Africa as well as entering the fuel retail business in Saudi Arabia.
Enoc bought Dragon Oil in 2015 for about $2.6bn in a bid to diversify its income and expand into energy production. The company, which operates petrol service stations, is also involved in energy trading.
In the UAE, which accounts for 4.2 per cent of global crude output, Dragon Oil is still considering its domestic options as licensing rounds begin in Abu Dhabi, Sharjah and Ras Al Khaimah
“Dragon Oil has done a study on concessions in the UAE but it is too early to take a judgment whether we’re interested or not, but [we’re] is still interested in studying,” said Mr Al Falasi.
Enoc is also expanding its remit with an eye on an LPG project in Bangladesh and the expansion of its jet fuel business into Nigeria and Egypt.
“We’re still in discussions with the government [in Bangladesh], we have agreed to study the business, we will sign the [preliminary agreement] to study the project, the area and the plan for [the] terminal,” said Mr Al Falasi.
"It’s a potential business for Bangladesh and depends on the size of the terminal. It will be signed even before the end of this year."
Enoc, which is undertaking an upgrade of its condensate refinery at Jebel Ali to 210,000 barrels per day from 140,000 bpd, will complete the project by the end of the year, he added.
“We have a big volume of trading [of] $250 million, [and] with the expansion of the refinery we will have an increase [in capacity]," said Mr Al Falasi.
While declining to be specific on offtake agreements Enoc was considering, Mr Al Falasi said that much of the company’s trading came from the Far East.
Enoc is also involved in jet fuel trading and it signed with the Egyptian General Petroleum Corporation a commercial agreement last month enabling the Dubai operator to enter this segment in the North African state. The company also signed an agreement in July to boost jet fuel supply in Nigeria. Geographical expansion of its jet fuel business is a priority, said Mr Al Falasi.
“We have almost 140 countries to provide jet fuel and we still have some potential to grow in Africa,” he said.
In Saudi Arabia, where the company is undertaking refurbishment of fuel service stations, Enoc is close to completing its planned 15 retail units.
"Now we’re looking at things much faster, to retrofit stations but for 2018, we would have completed the 15 stations. We have an agreement with a retailer in Saudi Arabia to franchise our brand,” said Mr Al Falasi.