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Our Retail Business supporting our global energy network
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The strategic drivers for OQ investment in retail are mainly utilising fuel and non-fuel retail margins, reducing group volatility in earnings, offering branding opportunity and getting closer to end users.
The focus of OQ retail business for the coming ten years is to enhance operational efficiency of its current market and diversify revenues through expanding NFR, navigating near markets, and exploring new domestic and international investments.
Our retail and commercial fuel network, including related product distribution, spans 12 countries and supports 345 retail outlets. Two of our major fuel supply investments include OOMCO (Oman Oil Marketing Company) – which sources all of its fuel from OQ refineries via a long-term agreement serving its 225+ outlets, and HASS Petroleum – that represents nine East African countries with 120 outlets.
Our Retail Domestic Footprint
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As part of our domestic market in Oman, there are more than 220 petrol stations comprising our retail network with Oman Oil Marketing Company (OOMCO). OOMCO sources all of its fuel from OQ refineries via a long-term agreement serving its service stations. It serves an average of 155,000 average daily motorists. Managing those fuel stations, OOMCO holds over 35% of the market share in Oman. Capitalising on OQ's 49% stake in OOMCO, we are aiming to increase its position by focusing on expanding both its market share and Non-Fuel Revenue (NFR).
OOMCO sources all of its fuel from OQ refineries via a long-term agreement serving its service stations. It serves an average of 155,000 average daily motorists.
Subsequent to the OQ 2030 Group Strategy, retail has been identified as one of the three strategic initiatives for OQ growth. A long-term Retail Strategy has been developed to grow in the marketing and retail business and further support OQ margins' stabilisation.
As part of the retail strategy, OQ plans to expand its network by acquiring fuel retailers to reach around 2,500 stations with more than 134 kbd of retail volumes with an investment of $1.5 b by 2030.
Our International Retail Network
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OQ's international retail footprint spreads across 12 countries, including Oman, and around 345 retail outlets. As an integral part of OQ's growth strategy, retail offers access to significant margins, supports the placement of products, and direct access to international end-users.
We've bolstered OQ's international presence via our investment in Hass Petroleum in Africa. The 40% share has given access to OQ in 9 new markets in Africa and 121 retail fuel stations with more than 1 million metric tons of turnover.
Hass is involved in fuel retail, transportation, storage, distribution, and marketing of diesel fuel, automotive gasoline, kerosene, jet fuel, Liquefied Petroleum Gas (LPG), lubricants for industrial and automotive systems. It operates 2 terminals, 5 depots, 4 LPG plants with ~1,200 employees. It is headquartered in Kenya, and currently operate 121 stations across East Africa.
Its network is spread across 9 countries, including Uganda, Kenya, Tanzania and Somalia & Somaliland. Currently, Hass operates 44 stations in Uganda which is the 5th largest player with 4% market share. Hass operates two terminals and 4 LPG plants across east Africa. It also has a storage capacity of around 82 million liters. Hass also operate in 3 airports including Kenya, South Sudan and Somalia.
These retail stations source all their fuel from OQ refineries via a long-term supply agreement with more than 1 million liters per annum. Both OOMCO and HASS represent a good platform for OQ to leverage in the fuel retail business locally and internationally.
Our experience and understanding of oil markets enable us to implement structured transactions on the business' financial side to support our customers in an extremely volatile environment.
Storage and Inbound Logistics
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The storage will work as an enabler to the Retail business. We will grow organically in Oman and through acquisition of potential targets abroad to support retail business. The plan is to maximise the commercial use of the existing tank storage in the main hubs across the country (Duqm / Ras Markaz, Salalah port, and Sohar port) and evaluating the potential growth of commercial tankage; and other market opportunities to be captured via acquisitions abroad.
Our Future Growth Plans
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OQ's strategic investments in OOMCO and Hass both represent a good platform for OQ to leverage from in the fuel retail business locally and internationally. They play a role in elevating our company as we aim to become a significant player on the global stage.
We aspire to see a growth in the number of our network of petrol stations from the current 345 stations to 2,500 stations by 2030 with more than 134 kbd of retail volumes with an investment of $1.5b by 2030.
The implementation of the retail strategy will contribute to the retail presence and contribution to the overall OQ portfolio. A significant part of the road map to success will be adapting to emerging trends through increased digitalisation and advanced mobilities. In addition, storage and logistics will play an important enabler to the retail network expansion in the targeted market.