25 years of inspiring energy - Annual Review 2017 - ENOC
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25 years of inspiring energy Annual Review 2017
Contents
Financial and operational highlights 4 Operational review 41
Message from Vice Chairman 6 Energy value chain 42
Board of Directors 8 Exploration and Production (E&P) 44
Executive Management 10 Supply, Trading and Processing (STP) 46
ENOC at a glance 12 Terminals48
Global footprint 14 Marketing50
ENOC’s journey 16 Retail53
– Wider business 54
Business review 21
Message from Group CEO 22 Sustainability review 56
Economic environment 24 Sustainability at our core 58
Strategy26 Energy and resource management 62
Finance28 Corporate social responsibility 64
People 30 Green economy 66
Corporate governance 33
Enterprise risk management 36 ENOC Group legal entities 68
Code of business conduct 39
Annual Review 2017
25 years of
inspiring energy
Download
Annual Review 2017
Annual Review 2017
Operational Review
Strengthening our end-
to-end value chain 150
ENOC’s core energy business comprises exploration and Number of airports covered
across 24 countries by
production, supply trading and processing, storage ENOC’s aviation business
terminals, fuel retail, aviation and specialised products. and supply network
Complementary non-fuel activities include convenience
stores, and automotive and fabrication services.
178
Number of retail
sites by 2020
Message from Vice Chairman Message from Group CEO
52.5%
TRUE TO OUR ROOTS AND SUPPORTING VISION
Refinery expansion project
to expand daily capacity by
52.5 percent
OUR BELIEFS, OUR 2021, AND THE
STRATEGIC DIRECTION NATIONAL OBJECTIVE
FOR THE NEXT FIVE YEARS TO INSTITUTIONALISE
HAS A CLEAR FOCUS ON ENERGY EFFICIENCY,
SUPPORTING THE DUBAI HAS ALWAYS BEEN AN
PLAN 2021 AND THE UAE ENOC PRIORITY.
ENERGY PLAN 2050. Financial and operational highlights Operational Review
Message from Vice Chairman
Energy value chain
For further information,
Board of Directors
Read more.. Read more.. Executive Management
Exploration and Production (E&P)
Supply, Trading and Processing (STP)
ENOC at a glance
Terminals
Global footprint
Marketing – ENOC Aviation
ENOC’s journey
– ENOC Products
Business Review Retail – Wider Business
Message from Group CEO Sustainability Review
Economic environment
Sustainability at our core
Strategy
Energy and resource management
Finance
Corporate social responsibility
People
Green economy
Corporate governance
Enterprise risk management ENOC Group legal entities
Code of business conduct
Download
please visit: www.enoc.com
Annual Review 2017
enoc.com
ENOC is a leading integrated international
energy player, operating across the energy
sector value chain.
As a wholly-owned entity of the Government of
Dubai, ENOC owns and operates assets in the
fields of exploration and production, supply and
operations, terminals, fuel retail, aviation fuel and
petroleum products for commercial and industrial
use – the Group is integral to the Emirate’s success.
ENOC’s general business operations include
automotive services, non-fuel food and beverage
retail, and fabrication services. Servicing thousands
of customers in over 60 markets, the Group
employs a workforce of over 11,000 employees
and is deploying its world-class customer service,
latest innovations and technologies, and best
practices to empower the UAE’s social and
economic development.
ENOC Annual Review 2017 1
H.H. Sheikh Khalifa bin H.H. Sheikh Mohammed bin
Zayed Al Nahyan Rashid Al Maktoum
President of the UAE Vice President and Prime Minister
and Ruler of Abu Dhabi of the UAE and Ruler of Dubai
2
H.H. Sheikh Hamdan bin H.H. Sheikh Hamdan bin
Mohammed bin Rashid Al Maktoum Rashid Al Maktoum
Crown Prince of Dubai Deputy Ruler of Dubai
and UAE Minister of Finance
ENOC Annual Review 2017 3
Financial and operational highlights
83,952
83,952 barrels daily
crude production
224 120m
120 million customers
ZOOM stores
served in 2017
675,000 MT annual
MTBE capacity
11,300
Over 11,300 employees
Enhancing value
Group-wide
Our 2017 results show a positive upward
trend, and demonstrate the value of a
broad-based strategy designed to deliver
value at every touch point of our operation.
4
1,055m 140k
ENOC’s refinery has daily capacity
1,055 million US gallons to process 140,000 barrels of
of jet fuel sales volume refined fuel products
120
Fuel stations
395m 6.6m
Commercial diesel sales volume 6.6 million cubic metres
storage capacity 14
Tasjeel vehicle-testing outlets
FY17 Revenues Sales volume Revenue
US$16,415 million (million barrels) (US$ in millions)
249
20,924
247
222
18,604
16,415
193
14,690
160
13,219
STP 67%
Marketing 15%
Retail 12%
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
E&P 5%
Terminals 1%
ENOC Annual Review 2017 5
Message from Vice Chairman Fulfilling energy needs is a strategic cornerstone for growth TRUE TO OUR ROOTS AND OUR BELIEFS, OUR STRATEGIC DIRECTION FOR THE NEXT FIVE YEARS HAS A CLEAR FOCUS ON SUPPORTING THE DUBAI PLAN 2021 AND THE UAE ENERGY PLAN 2050. 6
ENOC has long played an integral role in Dubai’s success. As we mark
the 25th anniversary of our organisation’s formation, we can look back on
a history that amounts to much more than just supplying fuel.
Above all, for a quarter of a century, we have created value by helping to
power the economy of Dubai and the UAE, supporting communities, and
contributing to the nation’s global image and reputation as a leader on
multiple fronts.
True to our roots and our beliefs, our strategic direction for the next five
years has a clear focus on supporting the Dubai Plan 2021 and the UAE
Energy Plan 2050. This roadmap to the future will guide our efforts to
constantly enhance local energy capacity and supply.
The BP Energy Outlook forecasts a 49 percent increase in the Middle East’s
energy consumption by 2035, and the United Nations projects that by 2030
the UAE’s population alone will rise by 18 percent to more than 11 million.
Responding successfully to such shifts in the socio-economic environment
will demand ingenuity, flexibility, and speed – qualities that ENOC possesses
in full measure. Over the past five years, we have achieved rolling average
growth of 9 percent, and our new strategy seeks not only to maintain this
trend, but also to keep ahead of the demand curve.
Naturally, supplying Dubai’s energy needs is the first priority of the strategy.
Secondly, we will continue to pursue integrated international expansion to
enhance our organisation’s presence in key geographies. The third key focus
is to create added value throughout our entire value chain, from upstream
to finished product and point of sale.
That our interests are so intertwined with those of Dubai gives a very sound
footing for achieving our goals. The Emirate’s economy is the most diverse
in the region and is expected to maintain healthy growth over the next few
years. ENOC is perfectly placed to benefit from the many opportunities that
our home market will undoubtedly generate.
We have always received unwavering support from the Dubai and UAE
governments, and we look forward to reciprocating in kind as our industry
and our Group pass through a time of unprecedented transition.
H.E. Saeed Mohammed Al Tayer
Vice Chairman
ENOC Annual Review 2017 7
Board of Directors
H.H. Sheikh Hamdan Bin Rashid Al Maktoum
Deputy Ruler of Dubai and UAE Minister of Finance
Chairman
As Minister of Finance, H.H. Sheikh Hamdan Bin Rashid
Al Maktoum has overseen much of the economic and
infrastructural development of Dubai and the UAE.
Sheikh Hamdan has been in charge of an array of key
governmental industrial enterprises, including Dubai Natural
Gas Company (DUGAS) and Dubai Cable Company (DUCAB).
His Highness is also the benefactor and patron of the Sheikh
Hamdan Bin Rashid Al Maktoum Award for Medical Excellence,
instituted to reward achievement in medical sciences.
Under the guidance and oversight of its Board, and under the
Chairmanship of Sheikh Hamdan, ENOC has grown to become
a leading integrated global oil and gas player, making significant
contributions to Dubai’s continued drive towards economic
diversification and sustainable development. Sheikh Hamdan
received his early education in the UAE, completing his higher
studies at the Bell School of Languages in Cambridge, UK.
1 H.E. Saeed Mohammed Al Tayer 2 H.E. Abdulrahman Al Saleh 3 Hussain Hassan Mirza Al Sayegh
Vice Chairman Board Member Board Member
Member of the Investment Chairman of the Audit Committee
and Finance Committee
H.E. Saeed Mohammed Ahmed Al Tayer H.E. Abdulrahman Al Saleh is Director General Mr Hussain Al Sayegh heads the investment
has over 31 years of experience in the fields of the Department of Finance of the Emirate affairs of the Office of H.H. Sheikh Hamdan
of telecommunications, energy, water, of Dubai. He is also a member of the Executive Bin Rashid Al Maktoum, and has more than
infrastructure, oil, gas and industry. Council of Dubai; the Strategic Affairs Council of 40 years of local and international experience
Dubai; Dubai’s Supreme Fiscal Committee; and in diverse sectors, primarily key diplomatic
Under his leadership since 1992, Dubai Electricity a Board member of Dubai World, and Federal positions. Companies under his charge cover
and Water Authority (DEWA) has achieved Tax Authority. He is also the Chairman of Dubai a wide spectrum of commercial, educational,
unprecedented success, becoming a world-class Financial Support Fund (DFSF). leisure and charitable organisations.
utility company. Through his own initiatives, he
has established several successful companies Before joining the Department of Finance, His He currently serves on the boards of Emirates
including Emirates Central Cooling Systems Excellency Al Saleh spent four years as Senior NBD, National Bank of Fujairah, and Mawarid
Corporation (EMPOWER), among many others. Executive Director for Corporate Affairs at Dubai Finance. He is also Chairman of Jotun UAE
Customs. He has also held many finance and and Jotun Powder Coatings UAE, and Deputy
His Excellency Al Tayer is a member of the Dubai accounting positions in government departments Chairman of Oilfields Supply Center and Al-Nasr
Executive Council and Strategic Affairs Council. at local and federal levels, chairing or sitting on Leisureland. Previous appointments include being
He is Vice Chairman of the Dubai Supreme the board of various bodies such as the Executive a Board member of Emirates Financial Services,
Council of Energy (DSCE), Chairman of the Dubai Credit Policy Committee, the Task Force for Dubai Islamic Bank, and Deyaar Development.
Smart City Office, Vice Chairman of Emirates Indirect Taxation, and the High Committee for
Global Aluminium (EGA), Vice Chairman of the Regulation of the Audit Profession in the UAE. Mr Al Sayegh holds a Master’s degree in
Emirates National Oil Company (ENOC), Vice International Relations from the University
Chairman of Dragon Oil Company, Chairman of H.E. Al Saleh is a Fellow of the Chartered Institute of Southern California (UK Programme).
the UAE Water Aid (SUQIA) Board of Trustees, of Management Accountants (CIMA) in the UK,
and Chairman of the World Green Economy and holds an Executive MBA from the American
Organization (WGEO). In addition, he is a University of Sharjah.
member, vice chairman, or chairman of various
high-level committees and councils in the
Emirate of Dubai.
81 2 3
4 5 6
4 Ahmad Sharaf 5 Dr Abdulrahman A. Al Awar 6 Ahmad Al Muhairbi
Board Member Board Member Board Member
Chairman of the Investment and Chairman of the Nomination Member of the Nomination and Remuneration
Finance Committee and member and Remuneration Committee Committee and member of the Investment and
of the Audit Committee Finance Committee
Mr Ahmad Sharaf has extensive experience in Dr Al Awar has a PhD in Geology and Geological Mr Ahmad Al Muhairbi has been Secretary
the upstream oil and gas industry, having spent Engineering from the Colorado School of Mines, General of the Dubai Supreme Council of Energy
15 years with ConocoPhillips in a number of USA. He started his career in Dubai Petroleum since 2012. He is also a member of the Dubai
international operations as General Manager Company in 1996. Regulatory and Supervisory Bureau for Electricity
and Director, Business Development, Middle East. and Water, and a board member of the Etihad
He has over 20 years of experience in executive Energy Services Company, a fully owned subsidiary
He is Chairman of Dubai Mercantile Exchange roles in public and private sectors, and across of DEWA. As a board member of the World Green
and Chief Executive of Dutco Energy, a privately various industries spanning oil and gas, as well as Economy Organization (WGEO), he is an advocate
held exploration and production company with banking. He served previously as Executive Vice for energy diversification and a low-carbon
operating interests across North America. He was President of Business Development – New growth path for Dubai and the wider region.
previously Chief Executive of Tatweer, and Chief Smelters in Dubai Aluminium Company (DUBAL).
Strategy Officer at Dubai Holding. His membership The Business Development division was With more than 25 years of experience in the
of non-profit boards includes the Board of Visitors responsible for developing multi-billion-dollar oil and gas industry, Mr Al Muhairbi has held
at Duke University’s Fuqua School of Business smelter projects in the UAE and the region. In senior positions with Abu Dhabi National Oil
in the USA. addition, he held senior positions in Mubadala, Company (ADNOC), ARCO Dubai, Margham
Dolphin Energy, HSBC and Dubai Petroleum Dubai Establishment and Dubai Supply Authority.
Mr Sharaf holds BSc and MSc degrees in Petroleum Company. He has also served as Director General He has comprehensive knowledge of well
Engineering from the Colorado School of Mines, of the National Human Resource Development technology, specialising in operational and
USA. He also has an MBA from Duke University’s and Employment Authority (TANMIA). technical recommendations for field
Fuqua School of Business. development and drilling plans. He also has
Dr Al Awar is the Director General of the Federal extensive experience in the management
Authority for Government Human Resources of gas storage for power generation.
(FAHR). He also serves as a Board member of
Emirates National Oil Company (ENOC) and Mr Al Muhairbi is a graduate of the University
Dragon Oil (Holding) Limited. He is Chairman of of Texas in Austin, USA. He holds a BSc in
the Nomination and Remuneration Committee; Petroleum Engineering.
and a member of the Investment and Finance
and Audit committees. In addition, he is a
board member of the University of Dubai, the
Mohammed Bin Rashid School of Government,
the National Defence College Supreme Council,
and the UAE Gender Balance Council.
ENOC Annual Review 2017 9Executive Management
1 2
6 7
1 H.E. Saif Humaid Al Falasi Mr Al-Jarwan has a Bachelor of Science degree 5
Zaid Alqufaidi
Group Chief Executive Officer in Petroleum Engineering from the University Managing Director, ENOC Retail
of Oklahoma in the USA. He is an associate of
H.E. Saif Humaid Al Falasi spearheads ENOC’s Cranfield School of Management in the UK, and In his current role, Mr Zaid Alqufaidi is responsible
strategy and operational excellence locally and the International Institute for Management for the strategic development of ENOC Group’s
internationally, in alignment with the vision and Development (IMD) in Switzerland. retail business stream. A veteran of the Group
plans of the Government of Dubai. A veteran and a seasoned oil and gas industry professional,
of the energy industry with over 35 years of 3 Tayyeb Al Mulla he comes to this role with extensive experience
expertise, his wealth of experience and industry across the energy value chain in marketing,
Managing Director, Supply,
knowledge span a wide range of specialties aviation, terminal operations and supply.
Trading and Processing
including project management and petroleum
asset evaluation operations. Mr Alqufaidi has held numerous managerial
Mr Tayyeb Al Mulla is an oil industry veteran,
positions and has played an instrumental role in
having spent 35 years in a diverse array of roles.
He joined ENOC in 2008 as Group General the development of Emirates Petroleum Products
His experience includes refining, trading, supply
Manager. In 2011, he was appointed Executive Company (EPPCO)’s retail network. He has also
and logistics; sourcing of feedstock; sales and
Director for Environment, Health, Safety and contributed immensely to bridging the gap
marketing of aviation fuel, lubes, and chemicals;
Quality (EHSQ) and the Corporate Affairs between the ENOC and EPPCO brands during the
administration; and general management.
Directorate. Prior to that, he worked with Abu formation of the Group’s identity as ENOC Group.
Dhabi National Oil Company (ADNOC) for 25 He began his career in 1980 with Abu Dhabi Some of Mr Alqufaidi’s notable achievements
years, and was a board member of National National Oil Company (ADNOC); moved to include overseeing the construction of 70 EPPCO
Marine Services. Emirates Petroleum Products Company (EPPCO) gas stations, oil terminal storage facilities, and
in Dubai; and became Chief Executive of the establishment of Tasjeel, during his tenure as
His Excellency Al Falasi is Chairman of Gulf Energy Commercial Marketing Manager – a position he
International Refining and Marketing at Emirates
Maritime and a board member of the Supreme assumed in 1998.
National Oil Company (ENOC) in 1992. He has
Council of Energy and the Green Energy Council.
been a Director at Gulf Energy Maritime since
Prior to his current role, he held the position of
He holds a BSc in Petroleum Engineering from 2008 and serves on the board of 19 companies
Managing Director of ENOC Marketing. He was
Louisiana Tech University, USA. In 2014, he was in the ENOC Group.
also Chief Executive Officer for EPPCO Group of
awarded a Fellowship of the UK Energy Institute, Companies in 2010, and Manager of Terminals,
Mr Al Mulla graduated from Valparaiso
recognising his leadership of the ENOC Energy Distribution and Aviation Operations in 2000.
University in the US with a Bachelor’s degree
and Resource Management Programme.
in Business Administration.
Mr Alqufaidi started his career at EPPCO in 1989
2
Ali Rashid Al-Jarwan as an engineer with the Operations Department.
4
Yusr Hussain Sultan Al Junaidy He was then promoted to Operations and Supply
Managing Director, Exploration and
Managing Director, Horizon Terminals Coordinator in 1992. He is an Engineering
Production and CEO of Dragon Oil
graduate from the University of Central Florida
Mr Yusr Hussain Sultan Al Junaidy played an
Mr Ali Al-Jarwan has more than 37 years of in the USA.
instrumental role in establishing Horizon
experience in oil exploration and production, and
Terminals as the organisation’s first Managing
has held a number of senior management roles 6
Burhan Al Hashemi
Director in 2003, and he has overseen extensive
in the Abu Dhabi National Oil Company Managing Director, ENOC Marketing
organic growth of this ENOC subsidiary over
(ADNOC) group of companies – Abu Dhabi
the years. He has more than two decades of
Company for Onshore Oil Operations (ADCO), as Mr Burhan Al Hashemi is responsible for the
experience with ENOC Group, working across
well as Abu Dhabi Marine Operating Company management and operation of petroleum
various divisions including planning, business
(ADMA-OPCO) and Zakum Development products within ENOC’s marketing business
development, shipping, gas, and terminals.
Company (ZADCO). Mr Al-Jarwan served as CEO segment, including aviation fuel, gas marketing,
of Abu Dhabi Marine Operating Company A graduate of Ottawa University in Canada with industrial fuel and lubricants. He is an actively
(ADMA-OPCO) from 2006 to 2016. a Bachelor of Science in Biochemistry and a involved board member for Emirates Petroleum
Bachelor of Arts in Economics, Mr Al Junaidy also Products Company (EPPCO) Aviation, EPPCO
He has received several industry honours, Projects, United Gulf Aircraft Fuelling Company
holds an MBA from Boston University’s Graduate
including the Society of Petroleum Engineers (UGAFCO) in the Kingdom of Saudi Arabia, and
School of Management.
(SPE) distinguished membership; two innovation is Chairman of Horn Fuel Trading Limited (HFTL).
awards from BP Middle East; ADNOC’s 2010
Health, Safety and Environment Man of the Year Mr Al Hashemi has 30 years of experience in
Award; and several SPE recognition awards – the business management and operations, with 20
latest being Honourable Member. of these years in the oil and gas industry.
103 4 5
8 9
He joined EPPCO as an Assistant Lubricants Plant 8
Dr Eng. Waddah Ghanem Al Hashmi 9
Hesham Ali Mustafa
Manager in 1999, and subsequently became Executive Director, EHSSQ Executive Director, Shared Services Centre,
Sales and Marketing Manager, after which he and Corporate Affairs Group HR and New Business Development
was promoted to General Manager of EPPCO
Lubricants. Rising through the ranks, he was Dr Waddah Ghanem Al Hashmi is a highly Mr Hesham Ali Mustafa is responsible for running
appointed Chief Operating Officer of Retail, experienced engineering professional with ENOC Group’s core multi-functional Segment
then Managing Director of ENOC Retail in 2011, in-depth expertise in Environment, Health and through strategic management and operational
before assuming his current position as Safety (EHS), risk management and sustainability development, delivering significant value to
Managing Director of ENOC Marketing in 2016. matters. He is responsible for overseeing the ENOC Group and internal customers through
Prior to ENOC, Mr Al Hashemi also held multiple development and implementation of best skilled governance, service excellence and cost
positions at Dubai Aluminium Company practices and standards for EHS Assurance, control measures, while spearheading the Group’s
(DUBAL), where he worked for over 10 years. Business Excellence and Quality, Sustainability, New Business Development role.
Security and Risk Management, Wellness and
A graduate in Electrical and Electronics His role is to ensure business partner satisfaction
Social Affairs, as well as Legal Affairs.
Engineering from Huddersfield University in the through sustained continuous improvement
UK, Mr Al Hashemi also holds a Master of Over the past 18 years, he has advanced from measures, and to apply innovative approaches whilst
Business Administration degree from Bradford EHS Supervisor at ENOC Group’s refinery in Jebel directing ENOC’s core support and governance
University in the UK. He completed an Advanced Ali, to Assistant EHS Advisor, then to an EHS functions, which encompass Group Human
Management and Leadership Programme at Compliance function before becoming Director of Resources, Information Technology, Procurement,
the University of Oxford, and became a member EHSQ Compliance for the Group in January 2010. Financial Services, Engineering and Project
of the Board Directors Institute (BDI) after In 2015, he was appointed Executive Director, Management, Corporate Real Estate and New
successfully completing the Institute Board of EHSSQ and Corporate Affairs of ENOC Group. Business Development, to benefit the bottom line.
Directors Course. Mr Mustafa is a Civil Engineer with over 19 years
Dr Al Hashmi is the Vice-Chairman of the Board
of Directors of Dubai Carbon. He is also the of experience in the energy sector, 17 years of
7 Mohammad Sharaf Chairman of the ENOC Wellness and Social which have been in the Oil and Gas industry within
Group Chief Financial Officer Activities Programme Committee for the Group. multiple functions, with varied responsibilities
In addition to these leadership roles, he also spanning project management, plant operations,
In his capacity as Group Chief Financial Officer, EHS, marketing and sales, business development,
chairs and is a member of various organisational
Mr Mohammad Sharaf spearheads the Group’s international business, corporate strategy, as well
committees such as the Energy and Resource
Strategy and Finance functions through key as finance and investments.
Management Technical Committee and the
departments including Strategic Planning and
Marine EHS Committee. He began his career with Dubai Electricity and
Portfolio Management, Economics and Research,
Investment and Corporate Solutions, Financial He graduated with Honours from the University Water Authority (DEWA) in 1997, then joined
System and Governance, Management Reporting of Wales College Cardiff’s School of Engineering ENOC Processing Company Ltd. (EPCL) in 2001 as
and Financial Planning, External Reporting and with a Bachelor of Engineering in Environmental Project Manager. After this he moved to manage
Taxation, as well as Treasury and Insurance. Engineering. He holds two Diplomas in ENOC’s gas business and international business
Environmental Management and Safety development, before successfully steering ENOC’s
A senior financial executive with more than Group Strategy and New Business Development
Management from the UK; an MSc in
27 years of experience, in his previous roles segment as the Executive Director. His forte is
Environmental Sciences from the UAE University;
Mr Sharaf led the finance functions in Emirates enhancing growth through implementation of
and an Executive MBA from the University of
Aluminium Company (EMAL), a company of innovative business development initiatives and
Bradford in the UK. He also completed his doctoral
Emirates Global Aluminium (EGA), and Thuraya, process improvement ideas while setting a culture
research through the University of Bradford,
a US $1.3 billion satellite telecommunications of excellence.
focusing on Corporate Governance and Leadership.
company operating in Europe, Africa, Middle
East, Asia and Australia. Earlier in his career, he He is a Fellow of the Energy Institute (FEI), Mr Mustafa’s latest achievements include
served in Dubai Police’s finance affairs division. an Associate Fellow of the UK Institution of development of the 2017-21 ENOC Group
Chemical Engineers, a member of the American Strategy, which included new Vision and Mission
During his tenure with EMAL, Mr Sharaf played statements, Group and Segment strategic
Society of Safety Engineers (ASSE), and a
an instrumental role in managing the financial goals, and the five-year growth strategy targets.
member of the UK Institute of Directors (IoD).
aspects of key projects including EMAL Phase II, This was followed by implementation of new
Al Taweelah Alumina and Guinea Alumina. initiatives such as the Integrated Strategy,
He also implemented additional performance Planning and Budgeting Process, Portfolio
measurement and management tools to Management, and the improved Performance
maintain EMAL’s positive financial performance. Management System, ensuring organisational
alignment, effective strategy execution and
Mr Sharaf holds a Bachelor’s degree in Accounting proactive performance monitoring.
from the United Arab Emirates University.
ENOC Annual Review 2017 11ENOC at a glance
Integrated
energy partner
Over the past 30 years, ENOC Group has Beyond oil and gas operations, ENOC has Providing world-class customer service,
evolved from a local oil and gas player to established a solid presence in related implementing the latest innovations and
a diversified and integrated international fields and subsidiary enterprises. Current technologies, and consistently applying
operator with industry-leading operations activities include convenience store best practice are key strands in ENOC’s
across all major aspects of the energy franchises, added value services, and commitment to the UAE’s social and
sector value chain. automotive and fabrication services. economic development. Since its
inception, ENOC has made a significant
The Group operates two business arms In total, the Group has more than 30
contribution to Dubai’s continued drive
– energy operations and general services. related subsidiaries involved in refining,
towards economic diversification and
The energy business comprises lubricant blending, storage, aviation, and
sustainable development.
Exploration and Production, Supply retail. It serves tens of thousands of
Trading and Processing (STP), Terminals, customers across 60 markets, with a
Fuel Retail, Aviation, and Products. workforce of over 11,300 employees.
Vision Mission
To be an innovative energy We deliver world-class sustainable and integrated energy
partner, delivering sustainable solutions. We do so by striving for excellence in operations,
value and industry-leading innovation and happiness of our employees, customers,
performance. and partners.
Strategic goals
Serve the growing Build world-class Foster operational Develop the ‘One Maximise
energy needs capabilities to excellence, ENOC’ culture: happiness and
of Dubai and profitably and governance and integrated as one value delivered
contribute to the sustainably grow world-class team along to employees,
achievement of domestically and EHS standards. the value chain. customers
Dubai Plan 2021. internationally. and partners.
30+
More than 30 related
subsidiaries involved
in refining, lubricant
blending, storage,
aviation, and retail.
12ENOC Group
Business Segments Corporate Segments
Exploration & Production Refinery Group Strategy & Finance
(Dragon Oil)
Trading
STP
Petrochemicals processing
EHSSQ & CA
Storage
Terminals (HTL)
Distribution Shared Services, GHR & NBD
Lubricants
Directorate of Internal Audit & Business Ethics
Aviation
Marketing
Gas (EMGAS)
EIPM Management & Regulatory Affairs
Fuel Retail
Automotive
Retail C-Store (ZOOM)
F&B
Property Rental
60+
Presence in more
than 60 countries.
100%
ENOC is the national oil
company of the Emirate of
Dubai. Effectively 100 percent
owned by the Government of
Dubai through Investment
Corporation of Dubai (ICD).
ENOC Annual Review 2017 13Global footprint
United Kingdom Iraq Saudi Arabia
United Kingdom
Iraq
Tunisia Afghanistan
Saudi Arabia
Morocco
Egypt
Morocco
Turkmenistan
Algeria United Arab Emirates
Somalia
Algeria Djibouti
Tunisia Egypt Djibouti
14Turkmenistan
Afghanistan United Arab Emirates
Malaysia
Achieving sustainable
development
ENOC HAS ON-THE-GROUND xploration & Production
E
Supply, Trading & Processing
OPERATIONS IN OVER 10 Terminals
Singapore
COUNTRIES AND AN EXTENDED Marketing
Retail
PRESENCE IN 60+ COUNTRIES
ACROSS THE GLOBE.
Somalia Singapore Malaysia
ENOC Annual Review 2017 15ENOC’s journey Focusing on delivering value throughout our entire value chain Over the past 30 years, ENOC has evolved from a local oil and gas player to a global operator across various aspects of the energy sector value chain. Now serving thousands of customers across 60 markets, ENOC is deploying talent and technology to diversify its offerings to achieve sustainable development. 16
ENOC’s journey continued
1980
DUGAS begins
commercial production
of LPG and condensate.
Emirates Bunkering and
Bitumen Company 1989
(EBBCO) is established.
1971
1976 1984 DUGAS’ Margham-
Jebel Ali pipeline
Oliver Prospecting is completed.
and Mining Company
(now Dragon Oil) Emirates Terminals is
DUGAS’ second onshore
is established. formed to establish a
gas plant is completed with
a capacity of 135 MMscfd. chemical storage
terminal in Jebel Ali.
The DUGAS-DEWA 24-inch
pipeline is completed, and
CYLINGAS, the first the 12-inch fuel gas
LPG cylinder factory in pipeline from Jebel Ali to
the GCC region, begins the Fateh Field is
its operations. commissioned.
CALGAS Bottling DUGAS (Dubai Natural CALGAS becomes
Company is established. Gas Company) is wholly-owned by the
established and begins Government of Dubai,
Dubai Shipping Company construction of a 100 and is renamed
begins transporting LPG MMscfd gas plant. Emirates Gas (EMGAS).
to Bahrain.
EBBCO is renamed
Emirates Petroleum
Products Company
(EPPCO).
1977
1974
1981 1988
172002
1991
ENOC acquires a
35 percent stake in
ENOC’s Retail
Arabtank Terminals
segment launches
with a capacity of
convenience stores,
19,300 m3 (now
later branded
‘ZOOM’. 1998 288,000 m3).
2000
ENOC acquires 46
percent of Dragon Oil.
1996 DUGAS ownership is
ENOC’s Snake Pipeline is transferred to ENOC
1993 inaugurated, supplying by the Government
of Dubai.
aviation fuel to Dubai
EPPCO International International Terminal.
becomes an ENOC ENOC Singapore and
joint venture with ENOC UK are
ENOC is formed established.
through the transfer Chevron and its
of four wholly or storage terminal at The ENOC fuel retail
majority-owned Jebel Ali is established. network is launched.
Government of
ENOC enters the
Dubai companies.
aviation fuel market.
DUGAS’ 500,000 MT ENOC’s shareholding in ENOC Marketing
methyl tertiary butyl Dragon Oil increases to (previously known as
ether (MTBE) facility 69.4 percent and the ENOC International Sales)
becomes operational. organisation’s is formed to take over
headquarters are moved aviation fuel marketing
to Dubai. from EPPCO Projects.
ENOC becomes the first ENOC Supply and Trading
Middle Eastern oil Vopak Horizon Fujairah’s is incorporated to handle
company to establish an terminal is established, the group’s supply
international presence, a joint venture between requirements and for
EPPCO Projects
starting trading ENOC, Vopak, IPG, commodity oil trading.
begins marketing
operations in Singapore. and the Government
ENOC and Caltex
of Fujairah.
branded lubricants. ENOC Processing
1995 Emirates Terminals Company’s petroleum Tasjeel is established, a
(now known as refinery (120,000 barrels joint venture between 2001
per stream day) is EPPCO and Dubai Police
Horizon Jebel Ali ENOC incorporates
commissioned. for vehicle registration
Terminals) is Horizon Terminals
and testing.
acquired by ENOC. to consolidate all
Dragon Oil signs a terminal assets.
Production Sharing
Agreement with the
1997 Government of
Turkmenistan to
redevelop the Cheleken
2003
Contract Area in the
Caspian Sea.
1999
182013 2015
2010
Fujairah Distribution ENOC acquires the
Terminal is completed with remaining 46 percent
ENOC’s refining unit a capacity of 246,000 m3. of Dragon Oil.
2004 upgrade project is
ENOC’s lubricant blending ENOC purchases a
completed, with the
plant is expanded to a lube blending facility
installation of a
capacity of 147,000 MT. (annual capacity
hydrotreater and
Major shipping 250 MT) in Jebel Ali.
reformer unit. ENOC acquires
assets are transferred
to Gulf Energy ENOC’s Retail two medium-range
Maritime (GEM). segment opens the Panamax vessels.
2007 first ‘green’ gas ENOC Retail enters the 2016
station in the Saudi fuel retail market.
Middle East.
Dragon Oil wins
ENOC’s Snake Pipeline the East Zeit Bay Horizon divests its interest
2005 (supplying aviation fuel exploration block in the in Horizon Taeyoung Korea
Gulf of Suez, Egypt.
to Dubai International
Terminal) undergoes a
2011 Terminals.
major upgrade. ENOC’s Jebel Ali refinery
ENOC acquires announces an expansion
remaining shares in valued at more than
Dragon Oil signs a US $1 billion.
EPPCO from Chevron. farm-in agreement for
the Bargou Exploration Upon completion in 2019, the
Permit, offshore Tunisia. refinery will produce 210,000
barrels per day.
Horizon Singapore Terminals ENOC Lubricants and Construction of the Jebel Ali ENOC launches Biodiesel5
is commissioned, with a Grease Manufacturing facility is completed, in the UAE.
capacity of 573,000 m3 Plant begins operations. comprising 141,000 m3
(now 1,243,000 m3). of Jet A1 tankage capacity ENOC announces Dragon
and a 60 km pipeline Oil new Board of Directors.
Horizon Djibouti Terminals connecting Jebel Ali to
is commissioned, with a ENOC publishes
Dubai International Airport. first Sustainability
capacity of 271,000 m3
(now 371,000 m3). Horizon commissions The debottlenecking project Performance Report.
a new terminal in Tangier, at DUGAS is completed. ENOC opens 6th service
Horizon Taeyoung Korea Morocco with a capacity
Terminal is acquired, with Dragon Oil wins station in KSA.
of 533,000 m3.
a capacity of 99,000 m3 two perimeters in Algeria ENOC Group announces
(now 232,000 m3). Vopak Horizon Fujairah and makes two oil plans to power all future
terminal is expanded. discoveries in Iraq. service stations in UAE
Dragon Oil, in a with solar energy.
consortium of companies,
wins new exploration
2006 blocks in Iraq and
2014
Afghanistan.
2017
2012
2009
ENOC Annual Review 2017 1972m
vehicles refuelled
83%
customer satisfaction
achieved in 2017
2084,000
barrels of oil
produced per day
20m
net financial gain of
US $20 million in five years
Business review
A record year,
financially and
operationally
In 2017, we created enhanced value across the Group, with
an increase in revenues, fuel and sales volumes, as well as
customer satisfaction.
ENOC Annual Review 2017 21Message from Group CEO
Record-breaking year
sets new goals
There is much cause for satisfaction with While we derive significant satisfaction Given the integral role women play in the
our performance in 2017 – financially, from the achievements of 2017, we are UAE’s workforce, we have instituted the
operationally, and strategically. Revenue very conscious of being in an era of great ‘Women in Energy Award’ to celebrate the
reached US $16.41 billion, up 24.3 change – the fourth industrial revolution – achievements of women in the UAE’s
percent from 2016 despite depressed which is radically altering the way we energy sector. The award will recognise
global oil prices, although there were produce and consume energy. We female role models in the sector who have
signs of a recovery towards the end of therefore see enormous value in improving demonstrated exceptional leadership, and
the year. the technological efficiency of every link proven their capability as catalysts for
in our energy value chain. change through transformational
Group fuel sales volume of 249 million
contributions to the industry.
barrels was also a new high, maintaining Supporting Vision 2021, and the national
our five-year compound annual growth objective to institutionalise energy In closing, I extend sincere gratitude to
of more than 9.25 percent. Growth in efficiency, has always been an ENOC ENOC Group’s Chairman and Board of
third-party trading volume followed the priority. This commitment has been our Directors for their support and guidance
same trend, reaching 170 million barrels, driving force to rationalise consumption throughout the year. I would also like to
yet another annual record. Upstream within our operations, concentrating extend my appreciation to all my
operations produced 84,000 barrels of oil on our ability to drive innovative best colleagues throughout the Group for all
per day, and we began work on the 16.2 practices and build a culture of superior their hard work and dedication in making
km Falcon pipeline expansion from Jebel energy performance. 2017 such a memorable year.
Ali to Al Maktoum International Airport
ENOC has a proud record of global
in Dubai South that will carry close to
leadership in promoting sustainability.
20 million litres of fuel every day when H.E. Saif Humaid Al Falasi
Since 2014, we have invested about
completed in 2020.
US $6.8 million in sustainability initiatives, Group Chief Executive Officer
Rapid expansion of our retail network is with payback achieved within 2.5 years.
continuing, and we are on course to Already, innovation has generated net
achieve our target of 178 stations by financial gain of more than US $20 million
2020, up from 111 in 2016. The network over the past five years.
sold close to 3.1 billion litres in 2017,
Central to all our goals are our employees
refuelling more than 72 million vehicles,
and their exceptional skills, knowledge and
while our convenience stores had more
passion. Human capital is vital to our
than 45 million customer visits.
efforts in meeting the UAE’s energy needs
Our survey of customer satisfaction also and sustaining economic growth. Our goal
reached new heights, rising to 83 percent is to achieve 50 percent Emiratisation by
from last year’s 81 percent. Since 2012, 2021, supported by major national
we have improved customer satisfaction development programmes that range
by seven percentage points, an from graduate level to work placement.
encouraging indicator for us all.
22SUPPORTING VISION
2021, AND THE
NATIONAL OBJECTIVE
TO INSTITUTIONALISE
ENERGY EFFICIENCY,
HAS ALWAYS BEEN AN
ENOC PRIORITY.
24.3%
Revenue reached US $16.41 billion,
up 24.3 percent from 2016, despite
depressed global oil prices.
ENOC Annual Review 2017 23Business review continued
Economic environment
The International Monetary Fund (IMF) This was part of a broader trend across India’s economy is expected to achieve
sums up 2017 as a tumultuous year global financial markets, where low interest strong growth of almost 7.5 percent
marked by natural disasters, geopolitical rates, an improved economic outlook, and next year, as economic reforms attract
tensions, and deep political divisions increased risk appetite boosted asset foreign investment.
within and among many countries. prices and suppressed volatility.
Cause for optimism remains; however, UAE economic outlook
particularly on the economic front, with Global economic outlook An improved UAE economic outlook is
GDP continuing to accelerate over much Global GDP growth in 2018 is expected to expected next year, with economic growth
of the world in the broadest cyclical increase to 3.9 percent from 3.7 percent forecast to more than double in 2018
upswing since the start of the decade. in 2017, aided by robust US market – from 1.3 percent to 3.4 percent – due
growth, as well as by surprise upside to benefits from an expected recovery in
Faster growth is reaching roughly two- growth in Europe and Asia. Factors oil exports. Factors underpinning the
thirds of the world’s population, although supporting growth in the US, which is improved forecast include the sustained
incomes declined in about a quarter expected to exceed 2.5 percent next year, increase in crude oil prices, the effect of
of emerging markets and developing include falling unemployment, increased the acceleration of world trade on the
economies. Boosted by a recovery consumer spending, business confidence, diversified UAE economy, tourism receipts,
in investment, global trade growth and the macroeconomic effect of and increased investment ahead of
rebounded from its slowest pace since reducing corporate taxes. Expo 2020.
2001, other than during the recession
of 2009. Weak capital spending in the Despite tensions over 2017 arising from One of the key challenges in 2018 will be
energy sector had been an important Brexit and Catalonia, Eurozone growth is the effect on household incomes of the
contributor to the weakness in global expected to maintain momentum due to GCC-wide 5 percent Value-Added Tax
investment in 2016. Metal and fuel prices increasing domestic demand as well as (VAT). The implementation of VAT is
were supported by stronger momentum in robust external demand, and is projected expected to feed into higher inflation
global demand, as well as supply restraints to reach 2.2 percent in 2018. Brazil and across the region, with UAE inflation next
in the energy sector, including hurricane- Russia are expected to continue their year forecast to rise to around 4.0 percent
related stoppages in the United States, emergence from recessions in 2016 and from approximately 2.5 percent in 2017.
financial disruptions in Venezuela, and post growth of slightly under 2.0 percent. In terms of major risks, the UAE’s large
security problems in regions of Iraq. reserves and strong regional competitive
The Asia-Pacific region leads all regions
position are expected to insulate the
Equity valuations continued their ascent at approximately 5.5 percent growth
country against major economic impacts
to near-record highs, as central banks projected for 2018, despite a slight
from external events, but a scenario
maintained accommodative monetary deceleration in economic growth in China
involving the escalation of regional
policy settings amid weak inflation. (6.6 percent in 2018 versus 6.8 percent this
tensions could hinder investment and
year), as tightening financial conditions
economic growth.
lead to a correction in real estate markets.
GDP dynamics Inflation dynamics
UAE nominal GDP (US$bn) UAE inflation (% yearly average)
UAE real GDP % growth
4.1 4.2
3.8
2.5 2.5 2.4
3.2 3.1 3.1 2.0 2.0 2.0
3.0 3.0 3.0
1.6
515
412 469 491
428 447
358 349 377
1.9
0.5
2015 2016 2017 2018 2019 2020 2021 2022 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: IMF
243.7%
The implementation of VAT is expected
to feed into higher inflation across the
region, with UAE inflation next year
forecast to rise to around 4.0 percent
Global GDP growth in 2018 is from approximately 2.5 percent in 2017.
expected to increase to 3.9 percent
from 3.7 percent in 2017.
Crude oil outlook Supply-side considerations potentially Refiners’ margins in the US are expected
Crude oil markets strengthened exerting downwards pressure on price to remain supported by product export
considerably as a result of declining stocks, would include: the agility and ability of opportunities into Latin America;
favourable global economic conditions, the US shale industry to increase supply European margins are buoyed by
perceived geopolitical risks to supply, and at attractive prices; compliance with tightening fuel oil supply; and margins in
supportive financial conditions. The production cuts slipping among OPEC Asia will be sustained by strong product
outlook for 2018 expects a continuation producers while Brent remains above US demand growth.
of positive global economic conditions, a $60/bbl; and additional non-OPEC supply
The addition of new refining capacities
steady increase in world liquids demand, momentum from Canada and Brazil,
east of Suez may put pressure on Middle
and tightening supply-demand balance. among others.
East refining margins to some extent in
Global oil demand growth is expected to 2018, and margins are expected to be
increase from 1.8 million bpd in 2017 to Refined products outlook
While global refining margins were slightly lower than in 2017.
approximately 1.9 million bpd in 2018.
Significant demand growth contributions buoyed as a result of the refining capacity
are now coming from the Organisation for temporarily taken offline by hurricanes
Economic Co-operation and Development and other events in 2017, margins next
(OECD), which is adding to typical rapid year are expected to temper somewhat
growth in developing country from current levels as increasing product
consumption. The Organization of the demand is offset by moderate inventory
levels and capacity additions in the Global oil demand growth
Petroleum Exporting Countries (OPEC)
Middle East and Far East. is expected to increase
decision, to extend market intervention
from 1.8 million bpd in
to the end of 2018, will be a key factor
2017 to approximately
supporting oil prices next year.
1.9 million bpd in 2018.
ENOC Annual Review 2017 25Business review continued
Strategy
Growth, knowledge, innovation,
and sustainability
Vision, mission and goals
Vision
To be an innovative energy partner, delivering sustainable
value and industry-leading performance.
Mission
We deliver world-class sustainable and integrated energy
solutions. We do so by striving for excellence in operations,
innovation, and happiness of our employees, customers,
and partners.
During 2017, our strategic focus concentrated on:
Serving the growing Building world-class Fostering operational Developing the Maximising happiness
energy needs of Dubai capabilities to excellence, governance, ‘One ENOC’ culture – and value delivered to
and contributing to the grow profitably and and world-class integrating our employees, customers
achievement of Dubai sustainably both EHS standards employees as one and partners
Plan 2021 domestically and team along the
internationally value chain
26The strategic vision is for continuous
strengthening of ENOC’s role as an
innovative and integrated energy
partner across the value chain –
delivering sustainable value and
industry-leading performance.
ENOC’s growth strategy for 2017-21 is based on three key priorities:
Focus efforts and investments on Integrated international expansion, Value-chain integration, creating
Dubai across all business to execute developing capabilities to compete in synergies across upstream, midstream
the plans efficiently cross-segment plays with selected pilots and downstream businesses
This entails completion of the asset A three-point plan envisages the Upstream, the key priority is to generate
expansion programme – refinery, service development of one or two integrated value by creating synergies with
station network and storage capacity; downstream value-chain plays to build downstream businesses, then exploring
increasing market share of diesel, jet fuel, capabilities for future growth in response additional upstream growth to balance
LPG, and other petroleum products – and to possible saturation of the Dubai the value chain and capture opportunities
ensuring high profitability due to ENOC’s market; make integrated rather than solo in the low-price market environment.
privileged position in the local market. investments to extract maximum Beyond 2021, our growth strategy will
value-chain synergies; and explore continue to reinforce ENOC’s position in
opportunistic investments by segment – Dubai, our international expansion, and
should the opportunity be attractive and the expansion of our upstream portfolio.
funding available.
2017 developments
The Group is currently undertaking a ‘Mobility’ covers significant future The strategic vision is for continuous
strategy revision exercise to prepare for influences such as electric, self-driving, strengthening of ENOC’s role as an
future challenges and to further align and autonomous vehicles with on- innovative and integrated energy partner
itself with the long-term vision of Dubai. demand availability; ‘renewables’ provides across the value chain – delivering
Although still at the preparatory stage, for issues such as global warming, climate sustainable value and industry-leading
core principles of the long-term plan were change, regulation, and resource performance. It is a vision that clearly
defined during 2017. These are: mobility, availability; while ‘technology’ takes highlights the need to continue fostering
renewables, technology, and Dubai’s account of big data, Blockchain, artificial the culture of innovation and adopt
long-term vision. intelligence, and cybersecurity. sustainable business practices to achieve
higher performance.
Aligning with Dubai’s long-term vision links
ENOC to Dubai Plan 2021, Dubai 2030 In recent times, ENOC’s key markets have
Industrial Strategy, Dubai Clean Energy seen significant macroeconomic and
Strategy 2050, and RTA Mobility Plan. geopolitical changes, such as lower oil
ENOC’s flexible and forward-looking prices and rising energy demand. These
approach establishes the Group’s core factors alone have prompted a renewed
purpose – not just a supplier of products focus on long-term growth strategy,
and services, but an energy partner ensuring the Group’s goals and aspirations
committed to long-term sustainability. comprehensively support Dubai’s
ambitious and innovative roadmap for
At the same time, it crystallises our core
years to come.
remit: to create value for ourselves, for
shareholders, and for those who work
with us. The commitment to industry-
leading performance reflects growth
ambitions, inspiration in delivery, and
being competitive and best-in-class.
ENOC Annual Review 2017 27Business review continued
Finance
Revenues up by 24 percent
as oil demand grows
The oil industry has endured several A weak MTBE market impacted the In response to the UAE’s drive towards
years of weak demand and low prices. profitability of the MTBE plant. The clean energy, ENOC Group embarked on
However, during 2017 the average crude refinery achieved one of its highest-ever its Jebel Ali refinery expansion project.
oil price rose from US $45 to US $55 throughputs due to plant utilisation of Expected to be completed by 2019, the
per barrel, after the market turned to more than 100 percent, while progressing project involves adding a new condensate
deficit following OPEC and non-OPEC our largest-ever facility expansion project. processing train to the existing facility,
cooperation to reduce production. expanding daily capacity from 140,000
In the Group’s storage business, capacity
Meanwhile, oil demand growth was barrels to 210,000. This will ensure that
utilisation remained under pressure in
healthier thanks to an improvement in the revamped refinery’s production, which
Singapore and Fujairah, due to increased
the global economy and low oil retail will include gasoline, jet fuel and diesel,
competition, weak contango, and general
prices, which helped boost consumption. not only meets the stringent Euro 5
economic slowdown.
standards in the local and international
ENOC’s continuous focus on customer
Higher volumes were achieved by ENOC’s markets, but also meets expanding
service and supply chain strengths,
gas marketing and aviation businesses. domestic demand while maintaining
coupled with sustained domestic demand,
Margin management and costs were flexibility to tap into international
has translated into a modest increase in
constantly monitored during the year and market opportunities.
fuel product sales volume during the year.
the segment was able to retain and grow
Revenues reached US $16,415 million, On December 31, 2017, the Group’s cash
our customer base through efficient client
up 24 percent from 2016. Most of our and bank balances were sufficient to meet
management. Our focus remained on
segments managed to maintain its current and future requirements and
volume growth – both in local and
performance and preserve profitability contractual obligations.
international markets – and effective
after adjusting for non-recurring gains.
credit management. Outlook
The average gross field production from Middle East economies, particularly those
The retail business witnessed another
our Exploration and Production (E&P) in the GCC region, are transitioning
year of increased fuel volumes. Providing
segment for 2017 was 83,952 bopd towards a ‘new normal’, and 2018 will
a high-quality customer experience is
(2016: 90,301 bopd). Production mark some interesting milestones.
fundamental to the ENOC culture, and our
decreased by about 7 percent, due to
differentiated customer value proposition Households and firms will need to adapt
challenges in the field. During the year,
resulted in strong brand recognition. to the implementation of value-added tax
the E&P segment entered into a
marketing arrangement for a significant Cash flow, financing, and (VAT) as part of a more widespread trend
proportion of its entitlement export capital expenditure towards increasing government revenues
production to be marketed through Baku, from sources other than fuels. On the other
Liquidity management across major lines
Azerbaijan, and Makhachkala, Russia. hand, the rally in oil prices is supporting
of business has remained robust. Cash
The segment’s contribution to Group economic recovery among oil-exporting
generation during the year enabled the
profit was lower than the previous year – countries. As higher oil prices improve
Group to undertake various capital
primarily due to a one-off share of confidence and financial conditions, the
expenditure projects and the payment of
abandonment and decommissioning UAE economy should grow. The non-oil
dividends to our shareholder. The Group
funds presented under ‘other income’ sector will also benefit from capital
commands strong debt servicing capacity,
in 2016. spending on the Dubai 2020 World Expo.
while the optimisation between short and
Trading reported strong volume and long-term debt has continued. The average
margin growth in a challenging and cost of debt also remains very competitive.
overcrowded oil market with relatively low
Major capital expenditure undertaken
volatility, few arbitrage opportunities, and
includes completion of 17 wells in the
thinning margins.
Dzheitune (Lam) and Dzhygalybeg
(Zhdanov) fields by our upstream
segment, completion of the crude oil
tank-farm terminal and Lam E platform,
and upgrade of berths to increase the
loading capacity at Aladja Jetty.
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