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Emirates National Oil Company (ENOC)

Emirates National Oil Company (ENOC)

Industry: 
Energy
Country: 
United Arab Emirates
Contact Information: 
Sources: 

"Meanwhile, close U.S. ally Dubai, long a major user of Iranian light oil known as condensate, continues to process tens of thousands of barrels a day at an Emirates National Oil Company (ENOC) refinery, according to oil industry sources and shipping data. ENOC then pumps the resulting fuel to Dubai airport, the world's second busiest. ENOC's chief executive declined to comment this week on how much Iranian oil the company was still importing and ENOC media relations did not respond to repeated requests for comment... ENOC says it is the largest provider of jet fuel at Dubai International Airport (DXB) and that its portfolio boasts a growing number of military customers... 'DLA Energy does contract with ENOC International Sales, LLC to supply jet fuel to Al Minhad Air Base,' a spokesman for the U.S. Department of Defense said. 'The contract was let in August 2011. This contract expires in August 2013.' It is not clear whether or not some of the fuel ENOC supplies under contract to the DLA come from ENOC's Jebel Ali refinery near Dubai. A western government source said ENOC also buys some fuel produced in refineries in Bahrain and Kuwait. ENOC did not comment on whether some or all the fuel it supplies to the DLA is produced at Jebel Ali. But ENOC's website says most of the jet fuel it supplies to the airport is pumped through a 60,000 barrel per day (bpd) pipeline from the refinery, and demand at the world's fastest growing airport is rising so much that it is laying a second pipeline... ENOC was the biggest buyer of Iranian condensate in 2012, when its imports rose to an average of 127,000 bpd, according to analysts' estimates... ENOC announced in February it had secured about 20,000 bpd of condensate from Qatar to feed its 120,000 bpd refinery and said it was working to find more alternatives... With shrinking export options, traders say Iran is likely to be selling its condensate fairly cheaply, helping ENOC offset multi-million dollar loses it has to take because it is obliged under UAE law to sell gasoline at a subsidised rate... Unless ENOC can find another 100,000 barrels per day of alternative supplies at competitive prices, the opening of a second pipeline due later this year could take more fuel made from Iranian oil into the tanks of international airlines... ENOC is not the only jet fuel supplier, because its refinery and existing pipeline are not big enough to meet demand at DXB, where an average of around 470 flights a day took off in 2012... Some U.S. and European airlines said they do not use ENOC when they call at Dubai, with some having global purchase deals with other suppliers. But for many of the 130 airlines flying into Dubai, the fuel derived from Iranian oil that ENOC offers is indispensable." (Reuters, "Dubai flights rely on fuel refined from Iranian oil," 4/23/2013)

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"Iran is 'still the major supplier,' Saeed Khoory, chief executive officer of Emirates National Oil Co., said today in an interview in Dubai. 'We are trying to find other sources.' ENOC, as the refiner is known, wants new suppliers of condensate because U.S. sanctions threaten financial penalties for companies that trade with Iran. ENOC said in February it had signed a contract with the Gulf sheikhdom of Qatar for a year’s supply of condensate. ENOC operates a 120,000 barrel-a-day condensate refinery that splits the light crude into oil products such as naphtha, reformate, jet fuel and diesel...  The term contract with Qatar will allow ENOC to buy more fuel than it can secure under spot purchases and guarantee more reliable supply, Khoory said. ENOC agreed to buy 20,000 barrels a day of Qatari condensate annually. That would mean ENOC is still buying as much as 100,000 barrels a day from Iran. When asked about that figure, Khoory said: “It depends.” The company can buy less of the fuel from Iran once it lines up other suppliers, he said, without specifying whether ENOC was trying to cut purchases of Iranian condensate to zero. 'We are trying to reduce our supply from Iran,' Khoory said when asked whether ENOC would eliminate Iranian condensate imports. 'You always have to diversify.' ENOC said in February it had bought 20 percent less condensate from Iran in the second half of 2012 than in the first six months of that year." (Bloomberg, "Dubai to Curb Reliance on Iranian Condensate, ENOC’s CEO Says," 4/15/2013)

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"Dubai's national oil company may have to stop importing condensate from Iran unless Washington grants it an exemption or temporary exception from this week's tightening of U.S. sanctions, diplomatic and industry sources said.

U.S. State Department officials said that financial transactions that facilitate the import of Iranian condensate are liable to a new round of measures effective June 28 that aim to cut Iran's oil revenues and force Tehran to drop its disputed nuclear program.

The fresh sanctions target condensate, produced in association with gas, which is Tehran's second-biggest source of export revenue after crude and refined products, which were targeted in earlier sanctions.

Officials at Dubai-government-owned Emirates National Oil Company (ENOC) declined to comment.

But two Gulf-based sources close to the company said ENOC had already applied for an exception. The U.S. State Department declined to confirm or deny this…Dubai uses Iranian condensate at ENOC's 120,000 barrels per day (bpd) Jebel Ali refinery that services its domestic fuel market…Dubai accounts for at least half of Iran's condensate exports, which averaged 220,000 barrels per day in the first four months of the year, shipping data shows." (Reuters, "U.S. sanctions may stop UAE from importing Iranian condensates," 6/29/2012)

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"Open sources reported that Emirates National Oil Company sold gasoline to Iran in 2010." (U.S. Government Accountability Office, Report: "Firms Reported in Open Sources to Have Sold Iran Refined Petroleum Products between January 1, 2009 and June," September 3, 2010)

 

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