Chilean oil company ENAP presents the largest investment plan in its history

On the occasion of the ordinary shareholders’ meeting of Chilean petroleum company Empresa Nacional del Petróleo (ENAP), the Las Condes-based group presented the largest investment plan in the group’s history.

ENAP is one of the largest companies in Latin America regarding sales.

Accordingly, this provides for around US$3.5 billion over the next five years.

The meeting, held at the offices of ENAP, was attended by the Ministers of Finance, Mario Marcel, and Energy, Diego Pardow, on behalf of the President of the Republic, Gabriel Boric.

In his presentation to the shareholders, the CEO of ENAP, Julio Friedmann, explained the business plan that the company intends to implement in the next five years, addressing at the same time three shortcomings of ENAP.

“The financial debt, the integrity of our assets, and the need to protect the environment and communities. In this way, ENAP’s financial debt will be reduced to about US$3 billion by 2027,” the state-owned oil company’s statement to the media reads.

ENAP CEO Gloria Maldonado said that ENAP’s results in 2022 were “very positive, and the planned investment plan is ambitious and challenging.

She added, “ENAP is a strategic company for Chile, and we are sure that our investment plan will pave the way for a sustainable energy future for the state-owned company.”

Based on a joint effort involving all company levels, the investment plan allows ENAP to project itself into the future and consists of three main axes: environment, territory, and internal.

Finance Minister Mario Marcel explained that “the agreement with ENAP is to keep 100% of the surplus in the company over the next five years, which corresponds to an estimated capitalization of US$2.288 billion, to be used to improve the financial situation, maintain production and maintain its position as the fourth largest wholesaler of liquefied petroleum gas.”

“These funds will allow ENAP to make important investments, which include diversification into cleaner energies such as green and blue hydrogen, ammonia fuel, and sustainable aviation fuel,” he added.

Energy Minister Diego Pardow commented:

“We appreciate the historic investment plan announced by ENAP, which focuses on the company’s outlook for a more sustainable future.”

“This announcement, as well as the plan to reinvest Codelco’s profits or the transfer of lithium resources to support research and development plans, is in line with our government’s commitments to create a green economy.”

“ENAP should play a leading role in the development of new industries, such as green hydrogen, both because of its infrastructure and the technical expertise of its employees.”

BALANCE SHEET 2022

Regarding the results achieved by ENAP in the fiscal year 2022, it was highlighted that the company’s performance resulted in EBITDA of US$1.379 billion, US$577 million more than in 2021.

This figure is based on historical pre-tax income of US$761 million, US$544 million more than in 2021, thanks to international margins in refining, higher crude oil and gas prices, and the cost and expense control implementation plan.

Profit after tax reached US$575 million, up US$434 million from 2021, bringing ENAP’s equity to US$1.624 Billion at year-end 2022, US$606 million more than in the previous period.

In financial terms, the coverage of financial expenses reached 5.8 times (from 3.7), and the EBITDA debt ratio reached 2.9 times (from 5.2 in 2021).