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The Chilean National Petroleum Company (ENAP) invests at home and abroad

by | Sep 10, 2023

The Chilean National Petroleum Company (ENAP) said it obtained a profit of USD 341.3 million in the first half of 2023, with an EBITDA of USD 716.3 million. According to the general manager of ENAP, Julio Friedmann, the result consolidates the future investment plan in Chilean national territory and its operations abroad, mainly Egypt and Ecuador. “In Ecuador, we are already the main oil company that operates,” highlighted Friedmann, who insisted that ENAP will continue with its development and investment in the Coca region and that it will not have problems with the Ecuadorians’ decision to keep the Yasuní National Park oil underground.

Positive results for the Chilean National Petroleum Company

“The results are positive for the company and show the progress of the development and investment plan that we have implemented, aimed at environmental improvement and the modernization of our logistics infrastructure,” Friedmann stressed.

The executive also highlighted the great value of the results in a challenging context, primarily due to the costs of the logistics industry and the weather effects that have impacted its operations.

For his part, the company’s Finance Manager, José Pablo Gómez, stated that both the EBITDA and the profits obtained in the first semester of this year by the Chilean National Petroleum Company represented a decrease compared to the first semester of 2022, of 11.7% and 7.5%, respectively.

EBITDA is a financial indicator that shows profits before subtracting payments and costs such as taxes, interest, depreciation, or amortization.

This reflects the current market context, which has been affected by the higher cost of freight, the increase in fuel prices, adverse weather conditions for loading and unloading crude oil, lower international refining margins, and variations in the price of crude oil.

Given this situation, during the first semester, ENAP made several organizational changes to focus more on using its physical plants, operational excellence, the challenges of the energy transition, and responsible financial management.

“We have a solid alignment between the work we do every day, the five-year business plan, and our long-term strategy, in addition to robust corporate governance,” added Gómez.

Broken down by business lines, the results show that the Refining and Marketing (R&C) unit reported an EBITDA of USD 365.6 million, while international E&P operations reached USD 79 million.

Regarding E&P of Chilean National Petroleum Company Magallanes, in charge of meeting demand in the southern region of Patagonia and its capital, Punta Arenas, pre-tax profits were USD 24.1 million.

A look from the outside

Friedmann announced that ENAP is in talks with the Ministry of Finance to transfer part of last year’s profits (about USD 400 million) to the State, which has yet to happen since 2003.

However, if confirmed in the coming days, neither this decision nor the total debt, worth USD 4.46 million last year, will prevent the Chilean National Petroleum Company from following its current development plan, with an important focus on Egypt and Ecuador.

The strategy also includes greater cooperation with Argentina through the trans-Andean oil pipeline, which, after 16 years inactive, has now become the supplier of 50% of the raw material that reaches the refinery in the central coastal city of Concepción.

Regarding future investment, the manager said that about USD 3.5 billion is estimated, of which about USD 800 million will be allocated to sustainability and projects related to decarbonization and clean energy, including green hydrogen.

Another part, the amount of which should have been indicated, will be invested in maintaining the quality standards of the products, mainly fuel, for which it already has a production capacity of Euro6.

Likewise, they will allocate part of the resources to take care of the reserves to replace 100% of what is being exploited in Chile and abroad.

Finally, they will bet on growing in Ecuador and Egypt, exploring investments in other countries, expanding production and exploration in the southern region of Magallanes, Chile, and developing ports and pipelines for green hydrogen.

ENAP is an integral part of the Chilean Economy

The Chilean National Petroleum Company (ENAP) is indispensable in Chile’s national economy, serving as a critical pillar of energy security and economic stability. ENAP, as the state-owned entity responsible for the exploration, production, and distribution of petroleum and natural gas resources, plays a pivotal role in ensuring a reliable and consistent supply of energy resources for the nation. Its contributions extend beyond mere energy provision, as it generates significant revenue through domestic and international operations, bolstering Chile’s fiscal strength and supporting critical public services and infrastructure projects. Furthermore, ENAP’s strategic investments in research and technology enhance the energy sector’s efficiency and promote sustainable practices and environmental responsibility, aligning with Chile’s commitment to addressing global climate challenges. Thus, the Chilean National Petroleum Company stands as a cornerstone of economic development and energy resilience, underpinning Chile’s continued growth and progress on both regional and global scales.

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