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Thu 5 Dec 2019 10:01 AM

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Oman Oil Co to list up to 25% of its shares in 2020 IPO

The move would make Oman Oil Co the second national oil company in the Gulf to raise cash in an IPO, following Saudi Aramco's planned IPO this month

Oman Oil Co to list up to 25% of its shares in 2020 IPO

Omani oil minister Mohammed al-Rumhi said financial advisers for the deal have already been assigned, although he did not disclose their identity.

State-owned Oman Oil Co expects to list between 20 and 25 percent of its shares in an IPO by the end of 2020, Omani oil minister Mohammed al-Rumhi announced on Wednesday.

The move would make Oman Oil Co the second national oil company in the Gulf to raise cash in an IPO, following Saudi Aramco’s planned IPO later this month.

Between January and December, Oman posted a budget deficit of $4 billion, with lower oil prices forcing it to raise funds from asset sales and a steadily increasing debt.

According to Reuters, Rumhi said financial advisers for the deal have already been assigned, although he did not disclose their identity.

Strategic partners

Rumhi added that the sultanate is also mulling inviting strategic partners to invest in the company in addition to the IPO process. Additionally, al-Rumhi said that Oman plans to invest over $20 billion in downstream operations over the next five years.

Zeina Rizk, director of fixed assets at Dubai-based Arqaam Capital was quoted as saying that “privatising helps in reducing the budget deficit without increasing the debt level, but it is not a solution”.

Oman derives approximately 35 percent of its GDP from hydrocarbons, which also constitute 60 percent of its exports and 70 percent of fiscal receipts from hydrocarbon products, according to S&P Global Ratings.

By 2022, Oman’s crude oil production is expected to gradually increase to 1.1 million barrels per day (bpd), up from 0.97 million bpd this year.

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