Showing posts with label ENOC. Show all posts
Showing posts with label ENOC. Show all posts

Thursday 5 September 2013

ADNOC Buys Out Emarat Network - Finally

Emarat
(Photo credit: SimonQ錫濛譙)
So it seems that the northern emirates' green gas stations are finally to go blue - ADNOC has announced it has signed an agreement to acquire Emarat's 75 service stations and its Sharjah distribution terminal. The service stations will 'gradually' be rebranded, according to Gulf News today.

This agreement is presumably different in some way to the memorandum of understanding the two signed in May of last year. That was reported at the time to relate to "74 of Emarat's 100 stations in the northern emirates".

I posted about it at the time and thought no more of it, but sure enough there appears to have been a year-long process turning an MoU into an actual deal. Which is not the niftiest piece of M&A work I've seen, I must say. One does wonder what the stumbling blocks were to cause such a hiatus between intent and action.

Just as a reminder, the story's all about the cost of subsidising petrol, because Dubai doesn't have a refinery, its petrol distribution companies have to buy at market rates and then meet a Federally mandated subsidised price point, which loses them significant amounts of money. So both ENOC/EPPCO and Emarat wanted out of the Northern Emirates pronto. Emarat may have negotiated the transition more elegantly. The end result was that most amusing of situations, a petrol shortage in an oil-producing country.

Try as I might, I can't find the story on Gulf News' website. It's not in business, not in oil and gas and doesn't come up in a search of the site. And yet it's front page business in the print edition. I wonder why?

The whole shebang won't really change much for drivers in the north, particularly in Sharjah where queues at the ADNOC stations can get really quite long. The red EPPCO stations have been partly or totally dismantled or just stand idle, as do the light green ENOC ones - unloved, rubbish-strewn and dusty they stand, useless pieces of seemingly unwanted real estate...
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Tuesday 5 February 2013

Will ENOC/EPPCO Stations Reopen In The Northern Emirates?

Old Petrol Pump 1
(Photo credit: Gerry Balding)
The news broke a few days ago. with news outlets all reporting ENOC was seeking 'alternative sources' for condensate to feed its 120,000 barrel-a-day refinery in Jebel Ali. Yesterday, late in the afternoon (too late, for instance, to give pesky local reporters a chance to ask questions) it issued a press release announcing it had closed a deal with Qatar's Tasweeq to secure a supply of 20,000 barrels per day of condensate.

This, according to ENOC, avoids having to import Iranian condensate. To quote the release:
ENOC diligently adheres to all prevailing laws and regulations to ensure that its business is conducted in line with applicable sanctions, and has been continually studying the sourcing of alternative economically viable condensate feedstocks for its refinery in Jebel Ali.  
As a result of various steps implemented by the management, ENOC has imported 20% less Iranian condensate in the second half of 2012 compared with the first six months of the year. One of the challenges in managing the crude imports was the availability of alternate grades in required volumes and prices. 
By exploring partnerships with new suppliers, ENOC is highlighting its commitment to continually optimise its refinery operations, adherence to the highest ethical standards in all operational aspects and creation of long-term value.
Some commentators have inferred this may lead to the shuttered ENOC/EPPCO petrol pumps in the Northern Emirates re-opening, but there's no evidence in here at all of that. ENOC's under pressure to reduce its loss-making refining operations - hence buying crude from Iran in the first place - but has now come under pressure to find alternative sources.

That's not about to make things any better 'oop North' and mean they can start selling profitable petrol from their forecourts. It's more likely to be a 'like for like' pricing deal - and it would have been interested to be a fly on the wall of some of those meetings to see quite who was pulling the strings around here.

Perhaps an answer to that comes in the shape of those recent ENOC comments about alternative sources of supply, which coincided with a visit to the U.A.E. from David Cohen, the U.S. Treasury Department's undersecretary for terrorism and financial intelligence...

Anyway, it doesn't really matter that much. Everyone's got used to there being no EPPCO stations and although the ADNOC stations are busy, the long and ironic queues from the original 'petrol shortage in oil producing country' glee are a thing of the past.
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Tuesday 29 May 2012

ADNOC To The Rescue!

English: Emarat gas station, Masfut just west ...
English: Emarat gas station, Masfut just west of Hatta city, UAE (Photo credit: Wikipedia)
Remember PetrolGate, the amazing story of how an oil-producing nation ran out of petrol? And the embarrassing silence of ENOC/EPPCO regarding the closure of its petrol stations in the Northern Emirates?


It's linked here for your viewing pleasure.

Now there's a new and fascinating twist to the tale. The Abu Dhabi National Oil Company, ADNOC, has signed an MoU with major retailer Emarat to acquire 74 of its 100 petrol stations across the Northern Emirates (Sharjah, Ajman, Umm Al Qawain, Ras Al Khaimah and Fujeirah).

ADNOC is the only fuel company in the UAE to refine its own petroleum, so it can sell petrol profitably at the UAE's subsidised prices, while the others have to buy their petrol on the international market. This means they were actually losing money for every litre of fuel they pumped.

Just in case readers living elsewhere in the world are interested, we currently pay Dhs 1.72 per litre or $0.47 or, if you prefer, £0.30. It's why I like chatting to London cabbies about how much it costs me to fill a Shogun (the Pajero is called a Shogun in Europe, one suspects because of a little Spanish accident). They're always cheery souls and it does them good to hear me chat about filling a 4WD for under twenty quid.

ENOC found it preferable to close its 51 petrol stations in the Northern Emirates rather than go on selling motion lotion at a loss. That loss cost the Government of Dubai (which owns ENOC) a cool $1.5 billion up to the end of last year.

ENOC's handling of the whole thing eventually led to the Government of Sharjah taking the unusual step of closing down all of ENOC/EPPCOs retail operations in the Emirate.

Amusingly, The National reports the news on the front page of its business section today, adding the detail,

"Like Emarat, Enoc has responded to losses by cutting its exposure in the Northern Emirates. It handed over its petrol stations outside Dubai to Adnoc last July."

This news was actually 'categorically denied' by ENOC last year when Gulf News originally ran the story of ENOC's Northern Emirates stations being taken over by ADNOC. The categorical denial was unusual, coming from a company that had maintained a policy of mendacity followed by radio silence.

Meanwhile, ADNOC will now operate a total of 224 petrol stations throughout the UAE. Profitably.

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Sunday 16 October 2011

ENOC: It's About Time

PARIS - OCTOBER 18:  Nozzles of a petrol pump ...Image by Getty Images via @daylifeThe Emirates National Oil Company, or ENOC as it's popularly known, has issued a statement to local media that claims it will lose Dhs 2.7 billion this year because of the cost its is having to bear to sell fuel at the subsidised oil prices currently mandated in the UAE.

You may recall, this is the petrol company that stopped supplying petrol, a slightly ironic situation given it is located in one of the world's richest oil producing nations. I posted about it all at some length, particularly with the PR mismanagement case study aspects of the story in mind: ENOC's spokesperson chose to be mildly mendacious regarding the reason why its stations had stopped pumping fuel and the company then clammed up like Sammy the Slamshut Clam in response to a constant slew of media and widespread public inconvenience.

ENOC is also, just in case you're interested, the proud owner of a deeply woeful website - including a media news section last updated in 2006, which gives you an idea of just how important the company considers its media relations to be.

The newspapers have slavishly covered yesterday's statement, despite the fact it contains no element of news whatsoever. Even the figure of a Dhs 2.7 billion projected loss isn't news, it was contained in the company's statement following its board meeting in May of this year

It's also oddly timed. The National ran a story three weeks ago quoting a top ENOC official in which the Dhs 2.7 billion figure and the tale of woe about subsidies was highlighted - in fact, the National's story actually contains a great deal more information than the statement GN and KT have so obligingly covered today. Even enfant terrible 7Days ran with the statement. Quite why the company has broken its silence now remains to be explained, but one is left with the strong feeling that there's something behind the timing of it. I suppose we could ask ENOC, couldn't we?

Or perhaps not. Gulf News' piece contains the amusing snippet: "A spokesman for Enoc declined to elaborate on the company statement when reached by Gulf News."

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Sunday 4 September 2011

Trapped

Container of GasolineImage via Wikipedia
We are blessed in Northern Sharjah in that we are surrounded by ADNOC and Emarat petrol stations - the closure of every EPPCO and ENOC station in the Northern Emirates has hitherto had no practical affect on our lives.

Until I left Dubai yesterday with no petrol. I didn't realise until we'd hit 'murder mile', the road that links Dubai to Sharjah. We had travelled 30km with the petrol light on (I always zero the trip when it comes on so I know I've got 30km to get petrol in), which was not good news. I have once travelled 32km without petrol but I'm far too scared of running out to ever push it further than that.

There are two reasons why running out of petrol is a major fear factor. My first, and principle, reason is that I could never live with myself for running out of petrol whilst driving in one of the world's major oil producing countries. The second is that running out of petrol means getting a taxi and then finding an open petrol station. Now, in the UK I know they all sell nice red fuel cans. I have never seen one on sale here and don't know where I'd get a suitable container from. I've seen petrol sloshed into all manner of odd containers at petrol stations, but I've never seen an actual petrol container used. The prospect of having to dance around trying to find a spare container at least marginally fit for purpose doesn't fill my heart with stuff.

I have only run out petrol once before in my life, and that was on purpose. The publishing company I worked for in the mid-eighties had gone bust following an acrimonious boardroom putsch and The Evil Receivers had demanded the prompt return of my company car. They got it too - empty from driving around the building and coasted nicely to its parking spot after the engine had died. (I still have the cheque for 67p from them in settlement of hundreds of pounds of outstanding expenses).

Of course, southern Sharjah is the land of EPPCO and ENOC. Driving around, pricked by increasing desperation I started to realise just how this whole closure thing must be hacking a load of people off - the odometer kept ticking as we tried to head towards where we knew there was an Emarat station (but which I had no hope of reaching before the inevitable cough of a dying Pajero was heard). 34km, 40km and by now my hands were sweating. I have never seen so many EPPCO and ENOC stations in my life. They seemed to be around every street corner. And then, at last, at 43km, an Emarat station hoved into view, with cars cascading down onto the street as they queued and jostled for fuel.

It did rather leave me wishing fervently that ADNOC would hurry up and take 'em all over...

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