How does the company ensure viable operations through its two business lines: Exploration and Production (E&P); and Refining and Commercialization (R&C)?

ENAP has a business plan aimed at guaranteeing sustainability and financial viability of operations in Chile and abroad which has had an enormous impact on costs and expense containment as well as more efficiency and productivity in each business line. This has enabled the company to achieve a 10% increase in productivity in the areas of R&C, which includes Gas and Energy (G&E), in addition to E&P. The company also maintains an approved investment plan for $2,500 million up to 2023 for its business lines, in order to continue being a relevant stakeholder in each one of the territories where it operates.

What are the company’s ambitions to promote a sustainable energy future for the countries in which it operates?

Even though projections for the industry indicate that in the coming decades oil and gas will still be an important part of the matrix, ENAP has set a purpose to improve its value offer in its traditional business and, in parallel, collaborate to reduce carbon emissions. Thus, without neglecting the core of the business, we are committed to identifying opportunities to boost alternative energy solutions and cleaner fuels.

Can you share with us the latest innovative energy solutions that the company offers?

Currently, the company has a project portfolio for producing cleaner fuels with lower emissions and promoting renewable energy. In this context, ENAP is part of a council driven by the Chilean government to promote the green hydrogen industry, in order to take advantage of the country’s potential of producing fuel, which today appears to be the solution to mitigate the global greenhouse gas emission.

ENAP has started a strong exploratory campaign of new gas reservoirs and established new alliances with other companies in order to diversify its portfolio. Can you elaborate on that?

We seek to maximize our production in compliance with the campaign foreseen for this year for the E&P of wells. We have a challenging program for the company, so we are constantly analyzing new business opportunities in the catchment areas where we have experience and have obtained good results, such as Egypt and Ecuador. In view of this same goal, we have created alliances and collaboration instances, like the ones with YPF in Argentina, or the one we have just materialized in Egypt by signing a Memorandum of Understanding (MoU) with the Egyptian General Petroleum Corporation (EGPC). This agreement aims at exchanging technical knowledge with a special focus on the development of nonconventional resources, in accordance with EGPC’s support for high health, safety, and environment (HSE) standards.

This year, ENAP have sought to identify the company’s core value proposition. How has this enhanced the company’s business plan and the principles that should guide its actions?

ENAP is responsible for producing and distributing 100% of the gasolines consumed in Chile and 60% of diesel, since it is the only company that refines fuels in this market. Additionally, the E&P of hydrocarbons, in Chile and in our international subsidiaries, is a key part of the core of ENAP’s business, so it is in our interest to continue strengthening both areas. To further guarantee this strategic role, the company seeks to be a model of efficiency and productivity in all the markets where it operates by means of an operational, commercial and financial excellence-based management, in addition to full commitment to the safety of the people, the environment and the neighboring communities.

Furthermore, an organization restructure was carried out in Egypt’s branch last summer. How does this reflect the best practices of management and corporate governance?

At the beginning of 2019, after the new government took place in Chile, Enap executed an important organization restructure inside its upstream and downstream business in Chile and Argentina. During July 2019, an organization restructure was carried out in Egypt branch in order to strengthen ENAP position in Egypt.

The new board and administration is determined to grow its operation and investment in Egypt. For that reason, a new General Manager, Roberto McLeod, has joined the branch by the end of August 2019.McLeod has developed most of his career inside ENAP being previously the General Manager in Ecuador and Egypt branches. Due to his large experience in the industry and the country, ENAP expects to fulfill its expectation to grow in Egypt.

ENAP recently signed a memorandum of understanding (MoU) with EGPC) on the sidelines of the Egypt Petroleum Show (EGYPS 2020). How will this technical collaboration enable both companies to contribute to the oil and gas sector?

ENAP and EGPC are both state oil companies, nonetheless, ENAP has extensive experience in the exploration, appraisal and development of petroleum and gas reservoirs both in Chile and abroad, in addition to refining, transporting and commercializing hydrocarbons, liquefied natural gas (LNG), liquefied petroleum gas (LPG,) and wind-power projects in Chile. Accordingly, the current MoU has two main focuses; the first one is to introduce EGPC personnel to the application of ENAP operational standards related to the different stages of the oil and gas industry with a special focus in E&P, plus providing EGPC insights on ENAP´s corporate HSE high standards and programs. And the second focus is exchange of information and operational experience on unconventional reservoirs based on ENAP´s activities in tight gas plays since ENAP has successfully developed a tight gas field in Southern Chile with huge improvements in terms of decreasing the costs and increasing productivity, which are the main challenges in these types of reservoirs.

Since Egypt has started exploring and producing gas from unconventional plays (Obaiyed, Apollonia) and would probably face very similar challenges in order to develop its own gas resources, the transition from conventional to unconventional can rejuvenate mature basins and provide amount of new resources. However, to be economically successful, this will require a lot of effort and help. Hence, to strengthen the traditional diplomatic relation between the two countries and to promote the exchange of scientific knowledge, technical assistance and cooperation in the different segments of the oil and gas industry. Therefore, ENAP initiated this MoU and it was welcomed and appreciated by all Eng. Abed Ezz El Regal, EGPC CEO and his excellency Eng. Tarek El Molla, Minister of Petroleum and Mineral Resources.

What are the company’s latest developments in East Ras Qattara concession in the Western Desert?

ERQ concession in the Western Desert was acquired by Enap as an operator in 2004 with 50.5% participation interest with Kuwait Energy Egypt, who holds 49.5%. As a result of the effective cooperation and constant support from both the Ministry of Petroleum and Mineral Resources, in addition to EGPC, Enap, through its Joint Venture (JV), PetroShahd, resumed its drilling activities in 2018 by executing intensive development and exploration programs in East Ras Qattara concession to maximize production and add more reserves. During 2019, PetroShahd putting seven development wells on stream, which boosted the daily production by more than 3,000 barrels per day (b/d) and identified the unseen potential by adding new reservoir targets to ERQ drilling inventory.

Additionally, such drilling results has driven ENAP to consider acquiring new seismic with the top-notch technology available in the market over the main development leases to unlock all potential that is currently under evaluation like the Jurassic Gas Condensate potentiality and the Turonian reservoir.

Also, it is worth mentioning that in 2016 we have constructed a crude oil main pipeline at the length of 87 kilometers (km) to transport crude oil produced from East Ras Qattara Concession to PetroShahd receiving facilities at Qarun area. The pipeline was constructed as an alternative to trucking operations and contributed significantly in eliminating the risk of trucking operations and HSE hazards.

How is the company planning to further grow its operations and investments in Egypt?

As I said before, we want to grow in Egypt because this is a country that we trust and we have had a very successful history here. Egypt has stable institutions and Egypt’s economy is becoming stronger. Actually, we are looking forward for more cooperation between both countries, especially after the meetings held in the last week of February in Cairo with President Abdel Fattah El Sisi, the Egyptian Prime Minister Moustafa Madbouly, and Head of Chilean Parliament, Ivan Flores, and his delegation where El Sisi expressed Egypt’s aspiration to develop more relations with Chile, highlighting the historical relationship between the two countries, as the diplomatic relationship goes back to 90 years of cooperation.

Accordingly, we want to be part of the cooperation that exist between both countries. For that reason, we have chosen Egypt as one of the countries where we will increase our upstream portfolio.

What are the company’s future plans to expand its global position?

The company’s main purpose is to be profitable and efficient by maximizing production and leveraging all business opportunities to improve its competitive position. Therefore, the strategic plan’s top priority is to continue strengthening the upstream business, both in Egypt and Ecuador; two countries where ENAP has obtained very good results and where the institutional and economic guarantees to grow are met. Likewise, if any opportunity is spotted within Latin America enabling us to apply our technical knowledge, we will assess that as well.