Oman Investment Authority (OIA), the integrated sovereign wealth fund of the Sultanate of Oman, says it has green-lighted an “exit plan” submitted by wholly-owned energy and petrochemicals subsidiary OQ Group envisioning divestments totalling between RO 1.5 billion and RO 2 billion.
OIA made the revelation in its maiden annual report, covering its financial and operational performance over the June 2020 – December 2021 period, and published earlier this week.
“(The Authority) approved an exit plan valued between RO 1.5 billion and RO 2 billion through selling some shares to the private sector or offering them for subscription in the public capital market and attracting strategic partners to benefit from their knowledge and improve performance,” it stated.
No details were shared about the OQ-owned or affiliated assets that have been lined up for full or partial divestment. But in a statement issued last month, OIA revealed that it was prepping two OQ projects, among other ventures from across the Authority’s sizable portfolio, for listing on the Muscat Stock Exchange (MSX) via Initial Public Offerings (IPO).
Recent divestments undertaken by OQ over the period under review include its stakes in India-based Bharat Oman Refineries Limited (BORL) and Portuguese energy sector Redes Energéticas Nacionais (REN).
In other key financial and operational highlights of the past year, OQ transferred its shareholding in Oman Shipping Company to Oman Investment Authority. OQ also issued bonds valued at RO 288 million in the “international capital markets at a competitive price, with significant participation of major investors and financial institutions,” OIA stated in its annual report.
Developments in the renewables and green hydrogen space have also been significant, according to the report. In addition to launching an Alternative Energy Department focused on supporting green hydrogen and ammonia initiatives, OQ also signed a number of agreements with international companies to develop green energy projects in Duqm SEZ and Dhofar Governorate.
Another key highlight of the year has been the successful conclusion of a number of agreements with the Ministry of Energy and Minerals, Oman Shell and TotalEnergies linked to the development of gas and condensate reserves in Block 10 in central Oman. The output, which will begin flowing from mid-2023, will eventually be channelled to Marsa LNG, a new green LNG project due to come up at Sohar Port to provide LNG as bunker fuel for maritime shipping. Marsa LNG is a joint venture between TotalEnergies and OQ.
In Block 60, wholly owned and operated by OQ’s Upstream unit, the company recently reported a five-fold increase in output from the Bisat field. Furthermore, the successful completion of the Bisat B Project has also enabled the doubling of production well above capacity, it said.
Earlier this week, international ratings agency Fitch Ratings Fitch Ratings affirmed OQ’s Long-Term Issuer Default Rating (IDR) at 'BB-' with Stable Outlook.
Fitch also revised up OQ's Standalone Credit Profile (SCP) to 'b+' from 'b' to “reflect successful project execution in both the upstream and downstream segments, alongside stronger financial performance on higher oil and gas prices as well as refining and petrochemical margin leading to lower net leverage expectations. OQ's SCP also reflects its solid business profile with integrated operations spanning exploration and production (E&P), refining, marketing, chemical and petrochemical segments,” the ratings agency added.
OQ Group, with assets totalling $27.6 billion as of June 30, 2021, owns and operates businesses across the Oil & Gas value chain. OQ posted a profit of RO 701.664 million for the year ended December 31, 2021 after recording a loss RO 1,716.944 million during the previous year. Total revenue surged to RO 8.768 billion in 2021, up from RO 5.393 billion in 2020. Operating profit climbed to RO 958.791 million versus an operating loss of RO 1.575 billion in 2020.
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