Dubai: Emirates National Oil Company (Enoc) has ceased its bunkering operations at Fujairah Port, the world's second-largest bunkering port after Singapore, as it could not compete on pricing.
"We have stopped operations since July 1," said Khalid Hadi, Enoc's group brand and marketing manager. He said there were no more details to offer as of now, but the company will issue a statement next week.
Enoc has the ability to blend the fuel necessary for the bunkers, but did not have the barges necessary for transporting it to the large ships that need to be refuelled. This was done through a third party joint venture, which was on the rocks as on late.
Traders said the state oil company is estimated to have lost around $20 million (Dh73 million) from its bunkering operations in Fujairah and had been doing monthly volumes of about 30,000 tonnes prior to its exit.
Volumes have been down from 100,000 tonnes a month last year, and from its peak of 250,000 tonnes the year before.
Sources said Enoc has been winding down the bunkering business as its barging arrangement with a third party was coming to an end on a pricing dispute.
"It obviously will not be making money from this. Whatever they were making from Fujairah was not cost-effective as we saw a decline in volumes," an industry source said, adding that the oil company could not compete in the market with the current pricing on the barging deal.
Enoc resumed supplying bunker fuel for offshore operations at Fujairah Port early last year after closing down in 2007, and also started operating at Jebel Ali Port. Operating under Enoc's International Refining and Marketing division, it has its own refinery and an extensive fleet of supply tankers for product delivery and discharge. Previously, it was also operating onshore bunkering services in UAE.
— With inputs from Reuters
