Afaq for Energy (MANE): Oil and gas

THE COMPANY: Afaq for Energy (MANE) was estab-lished in August 2008 and listed on the Amman Stock Exchange (ASE) in December of the same year. It cur-rently has a paid-up capital of JD110m ($154.7m). The emergence of MANE coincided with a strong pri-vatisation programme and the opening-up of Jordan’s economy, including the previously government-con-trolled energy sector. The government’s push has been, and remains, based on Jordan’s limited local energy sources and, consequently, the need to diver-sify its energy production mix and improve its deliv-ery and marketing systems. MANE was set up to invest in the energy sector in general and currently does so through a subsidiary that operates 25 petrol stations in Jordan. The sub-sidiary, which began as a partnership before it became fully owned by MANE in 2009, is licensed to operate petrol stations, transport oil derivatives by land, import and export crude oil and its derivatives, and sell motor oil and tyres. It is also a distributor of motor oil in Iraq. In 2012 MANE established a new export, import and general trade subsidiary. Over the past few years, MANE has been consol-idating its position in the petrol stations and fuel dis-tribution sectors. In 2011 MANE opened four new stations. The petrol stations, which are operated under the Manaseer trade mark, are state-of-the-art petrol stations that utilise modern pumps and include mini-markets, car wash stations and gener-al light vehicle service stations for oil changing and tyre replacement and fixing. The Manaseer station-s’ technology and feel is matched only by the sta-tions operated by France’s Total Group. Manaseer aims to increase its market share in the petrol sta-tion sector and is thus introducing new services, including the e-fill card, a pre-paid card that gives customers more control of their fuel consumption. In 2012 the government of Jordan, represented by the Ministry of Energy and Mineral Resources, broke the Jordan Petroleum Refinery’s (JPR) monopoly on the fuel distribution sector, and Manaseer and Total became the second and third authorised fuel dis-tributors in the country.

Under the newly introduced market structure, no one distributor can control more than 40% of the market by volume and all quantities distributed must come from JPR as long as it can meet the market’s demand. The new structure is expected to become operational this year and is governed by a six-year agreement that should run through 2019. The most recent available data show that Manaseer will dis-tribute fuel to 141 of Jordan’s 436 petrol stations compared to 149 for Total and 146 for JPR.

COMPANY DEVELOPMENT: The Jordanian energy sector is a very interesting market. The lack of local energy resources is pushing the government to seek alternatives in renewable energy and nuclear pow-er in addition to increasing the country’s ability to handle and store gas. Jordan’s consumption of ener-gy increased from 4.891m tonnes equivalent of oil (toe) in 2005 to 5.967m toe in 2011, while the local production dropped from 187 toe to 135 toe. This means that Jordan imports 98% of its energy in the form of crude oil, oil derivatives and gas.

This push has opened the door for possible proj-ects in solar and wind farms, oil shale, gas and nuclear power generation, which presents many possibilities for companies such as MANE. The opportunities also include an expansion and modernisation of the sole refinery in the kingdom, building more power plants, and increasing the fuel and gas storage capacity. Most recently, Jordan signed a memorandum of understanding with Iraq to construct an oil pipeline from Iraq to the port of Aqaba in Jordan, which could result in Jordan accessing Iraqi oil supplies at cheap-er prices. MANE now has more energy fields, so it is able to participate in either directly, such as in the case of the distribution sector or it can venture into sectors like fuel importing and storing and the production and distribution of renewable energy.