ABU Dhabi National Oil Company for Distribution (Adnoc) has signed an MoU to begin the gradual takeover of oil-retailer Emarat’s 75 petrol stations and its oil terminal at Port Khalid.

Adnoc Distribution’s landmark deal with Emirates General Petroleum Corporation or Emarat will give access to the petrol stations in the Northern Emirates, giving it a wider geographical footprint in two years.

The takeover plan was announced in September 2012, while at the beginning of 2013, Adnoc Distribution started supplying its products to the Emarat service stations through Sharjah Terminal.

Emarat’s role is to distribute the petroleum products to all the service stations and provide the essential operational services, until taking over of the Sharjah Terminal.

The move means that Abu Dhabi, which until September last year had been providing indirect financial assistance to Emarat, through the federal government to bridge its up to Dh80 million ($21.77 million) losses every month, will take over the business directly with a strong presence in Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah, according to an oil expert with deep insights into the UAE’s retail oil business.

Emarat had been incurring losses on account of its procurement of petroleum products from international market on Dh3.2 per litre against a retail price of Dh1.7 per litre. Emarat had been borrowing from local banks to make its procurements on federal guarantees.

Since the announcement of the deal, Emarat’s losses has been shifted, says the expert.

Under the deal, Adnoc Distribution will take-over 31 petrol stations in Sharjah, 16 in Ras Al Khaimah, 12 in Fujairah, 10 in Ajman, and six in Umm Al Quwain.

On the occasion of signing the agreement, Abdulla Al Dhaheri, Adnoc Distribution CEO said: “We are moving ahead to cooperate and coordinate for the acquisition mechanism of transferring the 75 service stations.”

He also added that the agreement will enhance the cooperation and relations between the two, which stressed the importance of the transition in line with maintaining the quality of the provided services, to the customer during this stage.

Adnoc Distribution harnesses all its possibilities to enhance the retail sector and strive to meet the needs of its customers. With regard to re-branding the service stations, Al Dhaheri said he plans to start implementing the changes immediately to the interior and exterior of the service stations.

The first phase of the re-branding will commence with two pilot service stations – ‘Al Madar’ service station in Sharjah and ‘Al Nadya’ service station in RAK, by placing Adnoc logo and adding the distinguished design of Adnoc service stations, which are expected to be completed within this year.

“Furthermore, the re-branding of the other service stations is expected to span 24 months or to a maximum of five years until completion after acquiring the service stations as agreed,” he said.

For customer convenience, coordination with Emarat will be underway to facilitate the placement of Adnoc Distribution pole sign at the entrance of each service station. The pole sign will carry the Adnoc brand, along with a description of all the offered services and activities at the service stations,” he added.

The existing workforce will, however, be retained. “We are committed to continue the implementation of our strategic plans in terms of expansion projects,” Al Dhaheri said.