Oman's OQ could raise $2 bln from exploration, production IPO, source says (updated)
09/09/2024 09:20
(Recasts with deal size, details and background throughout)
By Federico Maccioni
DUBAI, Sept 9 (Reuters) - Oman's OQ could raise $2
billion from the sale of a 25% stake in its OQEP exploration and
production business, a source with knowledge of the matter said,
in what would be the Gulf region's biggest initial public
offering (IPO) so far this year.
The IPO plans, which OQEP announced on Monday, are part of a
privatisation programme by the state-owned energy group which is
helping Oman to diversify its economy and cut its debt.
Oman, a small non-OPEC oil producer, is following
neighbouring Saudi Arabia and the United Arab Emirates (UAE) in
pushing state-led listing programmes, including energy assets.
All proceeds from the OQEP IPO, which is set to be Oman's
first of 2024 and the biggest in the Gulf region since UAE's
ADNOC Gas ADNOCGAS.AD last year, will be distributed to OQ,
which will keep a stake of at least 75%.
It follows 2023's IPOs of OQ's pipeline business, which
raised $771 million, and oil and gas drilling business Abraj
Energy Services ABRJ.OM , which raised $244 million.
The privatisation strategy, along with reforms that include
fiscal discipline, has helped Oman to turn its large fiscal
deficit of recent years into a surplus since 2022.
These changes are being driven by Sultan Haitham bin Tariq
al-Said, who took the throne in 2020 after the death of Sultan
Qaboos, who ruled for nearly 50 years.
Logistics company Asyad Group is also planning an IPO of its
Asyad Shipping subsidiary by the end of 2024 and chose EFG
Hermes and Jefferies and as advisers, Reuters reported in July
citing sources.
Founded in 2009, OQEP holds about 15 assets in Oman, nine of
which are focused on production, with the remainder in the
exploration phase, OQEP CEO Ahmed Al-Azkawi told reporters.
OQEP, whose partners include Shell SHEL.L and BP BP.L ,
said in a statement that average daily production had grown
nearly 14 times since its foundation to an average 249,000
barrels of oil equivalent per day (BOED) by 2023.
The firm "most attractive area" of growth is to keep
investing in Oman "in the immediate term", Al-Azkawi said,
adding it could pursue deals abroad in the future.
OQEP said it plans to pay a base annual dividend of $600
million for 2025 and 2026, adding it would also distribute a
performance linked dividend.
HSBC, Natixis, Oman Investment Bank and Sohar International
were appointed as joint global coordinators for the IPO, whose
subscription period is expected to start this month, with
trading on the Muscat stock market slated to begin in October.
($1 = 0.3850 Omani rials)
(Reporting by Ahmed Elimam and Federico Maccioni; Editing by
Louise Heavens, David Goodman and Alexander Smith)
((Federico.maccioni@thomsonreuters.com; +971 527370852;))