Oman Is Said to Study Strategic Options for Energy Firm OQ

(Bloomberg) -- Oman is studying options for state energy company OQ SAOC, including a potential initial public offering, as the Persian Gulf sultanate seeks to shore up its finances, people with knowledge of the matter said.

The Omani government has been speaking with potential advisers as it considers alternatives for OQ, which could also include selling a stake in the business or one of its subsidiaries, according to the people. OQ could be valued in the billions of dollars if it decides to pursue a listing, the people said, asking not to be identified because the information is private.

OQ is an integrated energy company with oil and gas exploration and production operations, refineries, a retail network and a large petrochemical business. It was formed through the merger of Oman Oil Co. with several companies including state-owned Oman Gas Co., refining group Orpic and chemical producer Oxea.

Slashing Jobs

The government has been seeking ways to tame its budget deficit and steady an economy reeling from last year’s decline in oil prices and the coronavirus pandemic. It has pushed through reforms including cutting spending, slashing government jobs and introducing plans for an income tax.

Oman is the largest Middle Eastern crude exporter outside of OPEC, pumping around 700,000 barrels a day.

The nation previously discussed a listing of Oman Oil in 2019. Deliberations are at an early stage, and Oman could elect to keep OQ’s current structure, the people said. Representatives for Oman’s energy ministry and OQ didn’t immediately respond to requests for comment.

Oman is also seeking to raise money from another state-controlled energy company. The sultanate may issue around $3 billion of bonds this year through Energy Development Oman, Bloomberg News has reported. EDO holds the government’s 60% stake in Block 6, one of the largest oil deposits in the Middle East. JPMorgan Chase & Co. is advising the government on its options for EDO, a person with knowledge of the matter has said.

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