Emirates National Oil Company (ENOC) is close to securing a USD1.5 billion loan from a consortium of seven banks that will partly fund its expansion plans outside of Dubai.

ENOC is owned by the sovereign fund Investment Corporation of Dubai, and operates service stations, fuel terminals and oil tankers in the Gulf. The objective to expand is to improve the company’s profitability as its local market has subsidized rate.

The company recently hired a five-person team to work on mergers and acquisitions. It bought a major stake in 1998 in Dragon Oil plc, an independent international oil and gas exploration, development and production business, based in Dubai and listed on the Irish Stock Exchange.

The state-owned company has experienced turbulence since its last major acquisition, in which it bought a 48% stake in Dragon Oil for USD1.9 billion in 2009. In 2011, it withdrew from operating filling stations in the northern emirates, saying that it planned to spend USD735 million on subsidised rates in the UAE. Between 2011 and 2013, its profitability improved 39%.

The desire to expand coincides with the low oil prices, which makes the market extremely attractive for buyers.

The loan would be a USD1.5 billion loan with a nine-year amortising structure, meaning the borrower would repay parts of the loan during the duration. The loan would officially be for business purposes, but two banking sources have said that it could be used for acquisitions.