Dubai-based state-owned Emirates National Oil Company (ENOC) has reported a nearly 10-percent year-on-year drop in turnover as a result of depressed oil prices, the company told reporters Monday.
Driven largely by its trading arm, which sold record volumes of petroleum products last year, ENOC recorded a turnover around US$13 billion in 2016.
"While about 45 million to 50 million barrels of sales were accounted for by its physical operations, the bulk of its sales volume - nearly 200 million barrels of oil equivalent - was accounted for by its trading arm, which operates out of offices in Dubai, Singapore and London, and trades derivatives, such as 'paper barrels' and oil futures, as well as physical oil," Gulfnews cited Petri Pentti, Enoc's chief financial officer, as saying.
For ENOC, Pentti said that while trading is a significant part of the business, it's margins are fairly small.
ENOC's five-year average growth rate is about 9 percent, with sales volumes reaching 245 million barrels of petroleum products in 2016.
Pentti said he expected the operating environment to improve this year in comparison to 2016 as oil prices rise due to oil production cuts agreed to by OPEC and non-OPEC countries in November.
Related: UAE Starts Execution Of $163 Billion Energy Transformation Program
The announcement comes at the same time that ENOC reveals it's plans to invest several billion dollars in the development of capacities and projects over the next three to five years. This will include the expansion of ENOC's network across Dubai in 2017, as well as the pinpointing of potential opportunities in neighboring Gulf countries, Africa and Southeast Asia.
In addition, ENOC is seeking to expand its refinery and build up its terminal storage capacity, along with its network of petrol service stations. ENOC's Jebel Ali refinery is expected to get a 50-percent capacity boost. The state-owned integrated company is also working to build a 19-kilometer extension to its jet fuel pipeline to Al Maktoum Airport by the end of next year. This project would boost the capacity of the Jebel Ali plant to 210,000 barrels per day by 2020.
Also on the books is an expansion of ENOC's market share for diesel, jet fuel and liquefied petroleum gas (LPG).
By Charles Kennedy for Oilprice.com
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