DUBAI, Sept 9 (Askume) – Oman’s OQ could raise up to $2 billion by selling a 25% stake in its OQEP exploration and production business, people familiar with the matter said, in what would be the Gulf’s biggest initial public offering (IPO) so far this year.
OQEP’s planned initial public offering announced on Monday is part of a plan to privatise the state-owned energy group that is helping Oman diversify its economy and cut debt.
Oman, a small non-OPEC oil producer, is following the lead of neighbouring Saudi Arabia and the United Arab Emirates (UAE) in pushing for state-led listings, including of energy assets.
The OQEP IPO is expected to be Oman’s 2024 IPO and would be the largest in the Gulf after the UAE’s ADNOC Gas (ADNOCGAS.AD) last year , with all proceeds going to OQ, which will hold at least 75% of shares.
It follows the 2023 IPOs of the OQ pipeline business and oil and gas drilling business Abraaj Energy Services (ABRJ.OM) , which raised $771 million and $244 million, respectively.
Reforms, including a privatisation strategy and fiscal discipline, have helped Oman turn large fiscal deficits in recent years into a surplus from 2022 onwards.
These changes were driven by Sultan Haitham bin Tariq Al Said, who succeeded Sultan Qaboos in 2020 following the death of Sultan Qaboos, who reigned for nearly 50 years.
Logistics company Asyad Group is also planning an IPO of its subsidiary Asyad Shipping before the end of 2024 and has chosen EFG Hermes and Jefferies as advisers, Askume reported in July, citing sources.
OQEP CEO Ahmed Al-Azkawi told reporters that OQEP was founded in 2009 and has about 15 assets in Oman, nine of which are focused on production and the rest are in the exploration stage.
OQEP, whose partners include Shell (SHEL.L) and BP (BP.L) , said in a statement that average daily production has increased nearly 14-fold since its inception and will reach an average of 249,000 barrels per day of oil equivalent (BOED) by 2023.
Azkawi said the company’s “most attractive growth area” was to continue investing in Oman “in the short term”, adding that it could explore overseas deals in the future.
OQEP said it plans to pay a base annual dividend of $600 million in 2025 and 2026, adding that it will also distribute performance-linked dividends.
HSBC, Natixis, Oman Investment Bank and Sohar International have been appointed as joint global coordinators of the IPO, with the subscription period expected to begin this month and trading on the Muscat Stock Exchange scheduled to begin in October.
(1 USD = 0.3850 Omani Rial)
