Oman’s OQ Group posts revenues of $19 bn in 2019

OQ, the Sultanate’s global integrated energy group, garnered consolidated revenues totalling $19.036 billion during 2019, which was lower by 17 per cent compared with the previous year’s total of $23.026 billion. Net profit too dipped to $597 million last year, down from $649 million in 2018 — an 8 per cent decline attributable to “unfavourable market conditions for downstream and trading that pulled profits down through lower product prices”, the wholly government-owned energy conglomerate said in its newly published 2019 Sustainability Report.

Commenting on the group’s financial performance, Musab Abdullah al Mahruqi, Group CEO, said: “On the financial side, and despite all the transformational changes in 2019, OQ continued its profitable operations, and closed the year with an EBITDA of $2.299 bn, and a net profit of $597 million. With many different projects currently at various stages of completion, we will continue to expand and develop our upstream and downstream portfolios, which will increase our production and open new markets to OQ. These efforts will be supplemented by a well-developed employment plan which will ensure a strong culture across OQ — a culture that is open, transparent and value oriented.” Late last year, OQ — formerly Oman Oil & Orpic Group — announced the successful completion of a multi-year integration exercise, dubbed ‘Nakhla’, that saw nine legacy companies coalesce into one consolidated entity valued at over $28 billion.

In its Sustainability Report, OQ ascribed the drop in revenue earnings to a combination of factors. It said: “The oil and gas industry has endured several years of weak demand and low prices, with the average crude oil price declining in 2019 by around 9 per cent when compared to 2018. Nonetheless, other unfavourable downstream market factors created pressure on our financial performance, resulting in lower realised revenues for 2019 when compared to the preceding year.” Consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) declined to $2.299 billion in 2019, down from RO 2.338 billion in 2018. This was driven, on the one hand, by a $66 million drop in the EBITDA contribution of OQ’s refineries and trading businesses, and on the other, lower contributions from OQ Chemicals (formerly OXEA) and Salalah Methanol Company. However, positive contributions by OQ’s E&P and gas networks buoyed EBITDA by around $140 million, it noted.

At the end of 2019, OQ Group’s consolidated assets were valued at $29.487 billion, roughly on par with the previous year’s figure. Consolidated outstanding debt amounted to $12.881 billion last year, which was also roughly in trend with the previous year’s total of $12.853 billion. Future principal and interest payments will be met by internally generated cash, as well as OQ’s Priority Funding Strategies, it said.

Muscat-headquartered OQ has a presence in around 13 countries around the world with operations spanning the entire hydrocarbon value chain from exploration and production to marketing and distribution of end-user products. OQ’s wide range of fuels and chemicals are sold in more than 60 countries globally.