Emirate National Oil Company (ENOC) has complained that it has faced heavy losses due to fixed petrol pump prices, which have not been revised in 17 years.
"Our losses last year totaled Dh350 million ($95m)," said CEO Hussain Sultan.
In remarks published by Gulf News on Thursday, the chief executive said that state subsidies are not the answer: "We must levy market prices or, as happens in Oman, the government can sell at a fixed price to the companies, which can then sell at a fixed price at the pumps."
Meanwhile, ENOC hopes to give its proposed joint ventures with Indian Oil Corp (IOC) a fresh impetus, Sultan said. "We already have an agreement in place, and plan to explore further options, both in the UAE as well as in India," he said at a function held to declare the company's extension into retailing, with the scheduled opening today of its first stand-alone convenience store, Aqua SuperMart.
While IOC is a huge entity compared to ENOC, the latter is growing rapidly and is possibly "more aggressive,” he said, suggesting that the two companies would leverage off their respective strengths to find common ground.
A high-level IOC delegation is expected to visit the UAE this month to hold talks with ENOC. The discussions are expected to revolve around trading and distribution, pooling of resources, lube marketing efforts, bunkering operations in the Northern Emirates, and the divestiture programs in India.
The two companies signed an agreement in December 1997 on technical collaboration and personnel secondment, said the paper.
Sultan touched upon various aspects of ENOC’s programs, including its Turkmenistan interests through Dragon Oil, the drag exerted by domestic oil pricing, plans regarding recent group inductee Dugas, expansion into petrol retailing through dedicated ENOC gas stations, and its latest activity, the foray into standalone convenience stores through Aqua.
On expanding its upstream oil interests through Dragon, he said, "At present there are three wells operating in the concession, and up to 18,000 bpd output can be handled. We know output can be stepped up to 90,000 bpd, but this will entail heavy investment in new oil pipelines, separators, tank farms and allied equipment."
He estimated total investment in the venture to date at $50 million. Signaling ENOC’s keenness to develop the field, he declared, "We are serious players, and will do everything necessary to succeed."
Established in April 1993, ENOC aims to promote the interests of its shareholders through the development of further downstream and upstream activities in the oil and gas sector and beyond, and encourage economic diversification in Dubai and the rest of the UAE. It has about 2500 employees – Albawaba.com
© 2001 Al Bawaba (www.albawaba.com)
