Emirates National Oil (ENOC) has announced its first foray into the international aviation services and supply market via a new joint venture with Saudi Arabia's Arabian Aircraft Services (Arabasco).
From 1 February 2004, the new company, United Gulf Aircraft Fuelling (UGAFCO), will offer refuelling services at the King AbdulAziz International Airport in Jeddah.
UGAFCO will compete with five other fuel suppliers in Jeddah, the Gulf's second busiest airport. It is aiming to supply a fuel volume of between eight million and ten million gallons (36 million to 45 million litres) within its first year of operations, says Hussain Sultan, group chief executive and board member, ENOC.
Total annual consumption at the airport is 325 million gallons.
Arabasco has a 51% share in UGAFCO, with ENOC owning the remaining 49%. It will be headquartered in Jeddah, with a board of directors comprising both parties' representatives. ENOC will provide the company with technical know-how along with handling marketing activities.
Mohammed Al Shablan, president and chief executive of Arabasco, says: "ENOC's valuable aircraft fuelling operations expertise has opened up a new opportunity for ARABASCO and one which we will actively pursue.
"This joint venture will assist us in achieving our aim of becoming the region's full spectrum aircraft services provider."
The venture is the initial move in ENOC's planned international expansion of ENOC (Stand W610).
Says Sultan: "This is the first step in realising our international aviation ambitions of becoming a global energy partner of choice."
He says ENOC is also pursuing other opportunities in Saudi Arabia along with international opportunities throughout the Middle East, Africa and the Mediterranean.
He adds that although the US and Europe are very competitive markets ENOC would pursue any opportunities that presented themselves.
Sultan says a key factor in ENOC's international aviation expansion will be human resources.
"We've been headhunting the best aviation guys we can. Although we have a strong base here, we have a lot of people here, but we can't stretch them because the market is growing."
In terms of income, the aviation sector accounts for roughly 5% of ENOC's business. However this 27th subsidiary will help raise the sector's value to ENOC, Sultan says.
ENOC also hopes to invest heavily in UAE airports to meet the growing demand from airlines, particularly Emirates. ENOC currently accounts for 22% of fuelling volumes at Dubai airport. It also supplies fuel at Sharjah and Fujairah airports.
Source: Flight Daily News