Dubai: Emirates National Oil Company (Enoc), the Dubai government-owned oil and gas company, is planning to take its petroleum-retailing business to Kingdom of Saudi Arabia with a total investment of Dh400 million, the company announced on Tuesday.
Enoc has signed a joint venture agreement with Aldrees Petroleum & Transport Services Company (Aldrees), one of Saudi Arabia’s largest petroleum retailers and commodity hauling companies, to set up over 40 service stations in different locations across the kingdom.
With a 50:50 joint venture, the project will start with initial investment capital of Dh45 million to cover four service stations, according to the first phase of the strategic plan.
Pointing to the importance of the Saudi market, Burhan Al Hashemi, Managing Director of Retail at Enoc, said: “Saudi Arabia is a strategic market that offers perfect market synergies for our growth.”
He also said that Enoc’s entrance into the Saudi market will make good revenue from returns on fuel and retail.
“Since Saudi Oil is subsidised by Aramco and with joint venture terms of an equal 50 per cent, revenues to both parties for both fuel and non-fuel return will produce significant profits,” Al Hashemi said.
He said Enoc sites will be similar to the Enoc stations in the UAE.
“It will be significant to share our expertise by reaching out to a wider audience in the GCC and targeting two more destinations - and one internationally - in the near future. The investment is in accordance with our expansion plan,” he said, adding that the addition of several lifestyle brands as well as specialised automobile-related retail services has further underlined the company’s credentials in value-added offerings.
“This joint venture will also create new jobs for young Saudis and we will focus on strengthening their job competencies through our training programmes, thus serving as an effective partner in the Kingdom’s Vision.”
Abdulelah Sa’ad Al Drees, CEO of Aldrees said: “With a network of more than 450 service stations in the Kingdom, Aldrees is an industry leader in petroleum retailing in Saudi Arabia. In line with our commitment to add value to our stakeholders, we are continuously exploring expansion opportunities that bring clear differentials to the market.
“Enoc has a tremendous breadth of retailing experience that is a perfect fit for our core strengths. We are confident that the joint venture will create a new history in petroleum retailing in the GCC region and offer enhanced services for the convenience of our customers. The stations will also be of immense value to travellers, especially during the Hajj season.”
Al Hashemi added: “The success of our retailing operations is led by a commitment to offer our customers value added and superior lifestyle experiences. In addition to operating convenience stores that meet the varied needs of our customers, we will continue to expand our portfolio of world-class cafes and dining concepts across the region.”
“Our partnership with Aldrees marks a milestone in the operations of Enoc Retail. This is a perfect example of two organisations drawing on their strengths to offer value to customers,” he said.
With more than 70 million customer transactions annually, Enoc Retail has over 4,000 employees who spearhead the retailing of fuel, petroleum products and an array of products and services, most of them targeted at the everyday requirements of motorists. The retail business also has many brands in the food & beverage sector, providing management services and franchising the brands across the Middle East and North Africa region.