The Dubai government-run energy company, Emirates National Oil Co. (ENOC), announced it is expanding its trading activities to include agricultural commodities in an attempt to offset losses stemming from retail fuel sales.
The new trading unit will deal mainly in wheat and rice according to chief executive officer, Saif Al Falasi, and will be granted two years within which to turn a profit.
Built on a foundation of trade and transportation, Dubai has rapidly become a regional trading hub, but UAE oil companies have been losing money due to gasoline subsidies. Although the volume of operations of the new agricultural unit, or how long it has been trading were not specified, Al Falasi noted that the group decided to open the unit “when we were losing a lot of money to the subsidies.”
ENOC controls a refinery in the Jebel Ali Port in Dubai and a chain of retail gasoline stations, and trades refined, gasoline, diesel and aviation fuel. The opening of the agricultural unit distinguishes ENOC in the Persian Gulf where countries will be seeking to purchase commodities for processing into value added products or domestic consumption.
Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at email@example.com.