OQ to offer 25% stake in OQEP subsidiary via IPO
Published: 02:09 PM,Sep 09,2024 | EDITED : 05:09 PM,Sep 09,2024
High-level officials of OQ Group addressing a media briefing on OQEP’s upcoming IPO.
MUSCAT, SEPT 9
OQ Exploration and Production (OQEP), the government-owned upstream oil and gas operator – part of OQ Group - plans to proceed with an initial public offering (IPO) and list its shares on the Muscat Stock Exchange (MSX). The IPO, offering up to 25 per cent of OQEP's shares, is expected to begin in September 2024, pending regulatory approval, with the listing anticipated in October 2024.
The Offering gives investors access to a leading oil and gas producer in Oman, with significant reserves and a 14-fold increase in daily production since 2009. OQEP’s successful joint ventures and strategic location—along with Oman’s developed sector, stable environment, and supportive government policies—make it a key player in the hydrocarbon industry.
Ashraf Hamed al Mamari, Group CEO of OQ, emphasized that the plan to float OQ Exploration and Production is a key move to enhance OQ’s portfolio through strategic divestments. He highlighted the commitment to creating new growth opportunities and boosting Oman's economic stability. Al Mamari also noted the focus on sustainable development and local value creation, including support for local communities and small and medium-sized enterprises.
In a video presentation at the event, Ahmed al Azkawi, Chief Executive Officer of OQEP, highlighted that OQ’s strategic goals align with Oman Vision 2040. The company is committed to transforming hydrocarbon resources into clean energy and supporting the shift to renewable sources.
The Offering will be divided into two parts. The first part, known as the Category I (Institutional Tranche), will make up 60 per cent of the total Offering and will be available to eligible investors in Oman and institutional investors in other countries, allocated on a pro-rata basis. The second part, the Category II (Retail Tranche), will account for 40 per cent of the Offering and will be offered to retail investors in Oman. Shares in this tranche will be divided between large and small retail investors based on their subscription amounts. If the demand from retail investors is less than 40 per cent of the Offering, any remaining shares will be allocated to institutional investors if there is oversubscription in that category.
Al-Azkawi underscored OQ’s dedication to sustainability in key energy sectors, noting that the company has achieved a reduction of fifteen kilograms of CO2 equivalent per barrel, one of the lowest rates globally. He highlighted a 21 per cent reduction in emissions as a significant milestone, reflecting OQ’s steady progress towards reaching net-zero emissions by 2050. Al-Azkawi noted that enhancing the local economy is a core component of their sustainability initiatives, including promoting Omani balance and supporting social projects to strengthen their regional impact.
As OQ continues to explore and pursue sustainable growth opportunities, Al-Azkawi reaffirmed the company's dedication to supporting local communities and collaborating with companies and stakeholders. OQ is committed to transparency, credibility, and effective partnerships to uncover new opportunities and boost investment.
Al-Azkawi also mentioned that OQ is keen on expanding its production sector in Oman, where it stands as the only fully national company operating in this field.
The Company has adopted a quarterly dividend policy and plans to distribute dividends following the Offering. It aims to return most of its distributable free cash flow, after investments and growth opportunities. The first dividend, about RO 57.7 million (US$150 million), is expected in December 2024 for Q3 2024, with another similar payment in March 2025 for Q4 2024. Annually, this totals approximately RO 230.7 million (US$600 million).
For the following two years, dividends will include a base amount of RO 230.7 million per year, plus a performance-linked dividend of 90 per cent of free cash flow and net proceeds from asset sales, minus the base dividend. The first performance-linked dividend is anticipated in September 2025 and December 2025. A pre-IPO dividend of US$300 million for the first half of 2024 will also be paid. The dividend policy reflects strong cash flow expectations while retaining capital for growth and operational needs.
The Offering and Listing of the shares on the MSX are anticipated to be completed in October 2024, pending market conditions and necessary regulatory approvals in the Sultanate of Oman.
OQ Exploration and Production (OQEP), the government-owned upstream oil and gas operator – part of OQ Group - plans to proceed with an initial public offering (IPO) and list its shares on the Muscat Stock Exchange (MSX). The IPO, offering up to 25 per cent of OQEP's shares, is expected to begin in September 2024, pending regulatory approval, with the listing anticipated in October 2024.
The Offering gives investors access to a leading oil and gas producer in Oman, with significant reserves and a 14-fold increase in daily production since 2009. OQEP’s successful joint ventures and strategic location—along with Oman’s developed sector, stable environment, and supportive government policies—make it a key player in the hydrocarbon industry.
Ashraf Hamed al Mamari, Group CEO of OQ, emphasized that the plan to float OQ Exploration and Production is a key move to enhance OQ’s portfolio through strategic divestments. He highlighted the commitment to creating new growth opportunities and boosting Oman's economic stability. Al Mamari also noted the focus on sustainable development and local value creation, including support for local communities and small and medium-sized enterprises.
In a video presentation at the event, Ahmed al Azkawi, Chief Executive Officer of OQEP, highlighted that OQ’s strategic goals align with Oman Vision 2040. The company is committed to transforming hydrocarbon resources into clean energy and supporting the shift to renewable sources.
The Offering will be divided into two parts. The first part, known as the Category I (Institutional Tranche), will make up 60 per cent of the total Offering and will be available to eligible investors in Oman and institutional investors in other countries, allocated on a pro-rata basis. The second part, the Category II (Retail Tranche), will account for 40 per cent of the Offering and will be offered to retail investors in Oman. Shares in this tranche will be divided between large and small retail investors based on their subscription amounts. If the demand from retail investors is less than 40 per cent of the Offering, any remaining shares will be allocated to institutional investors if there is oversubscription in that category.
Al-Azkawi underscored OQ’s dedication to sustainability in key energy sectors, noting that the company has achieved a reduction of fifteen kilograms of CO2 equivalent per barrel, one of the lowest rates globally. He highlighted a 21 per cent reduction in emissions as a significant milestone, reflecting OQ’s steady progress towards reaching net-zero emissions by 2050. Al-Azkawi noted that enhancing the local economy is a core component of their sustainability initiatives, including promoting Omani balance and supporting social projects to strengthen their regional impact.
As OQ continues to explore and pursue sustainable growth opportunities, Al-Azkawi reaffirmed the company's dedication to supporting local communities and collaborating with companies and stakeholders. OQ is committed to transparency, credibility, and effective partnerships to uncover new opportunities and boost investment.
Al-Azkawi also mentioned that OQ is keen on expanding its production sector in Oman, where it stands as the only fully national company operating in this field.
The Company has adopted a quarterly dividend policy and plans to distribute dividends following the Offering. It aims to return most of its distributable free cash flow, after investments and growth opportunities. The first dividend, about RO 57.7 million (US$150 million), is expected in December 2024 for Q3 2024, with another similar payment in March 2025 for Q4 2024. Annually, this totals approximately RO 230.7 million (US$600 million).
For the following two years, dividends will include a base amount of RO 230.7 million per year, plus a performance-linked dividend of 90 per cent of free cash flow and net proceeds from asset sales, minus the base dividend. The first performance-linked dividend is anticipated in September 2025 and December 2025. A pre-IPO dividend of US$300 million for the first half of 2024 will also be paid. The dividend policy reflects strong cash flow expectations while retaining capital for growth and operational needs.
The Offering and Listing of the shares on the MSX are anticipated to be completed in October 2024, pending market conditions and necessary regulatory approvals in the Sultanate of Oman.