Oman is looking at several options to plug the holes in its budget, according to anonymous sources that disclosed the information to Bloomberg—and it’s taking a hard look at state-energy company OQ to do that.
Some of the options that the government of Oman is looking at is selling a stake in OQ, going the popular IPO route, or ditching some of the company’s subsidiaries.
State-energy firm OQ is a global integrated energy group that posted total revenues of nearly $20 billion in 2019. Its consoliated assets as of the end of 2019 were almost $30 billion.
OQ operates in 13 different countries and has its hands into oil exploration and production as well as fuels and petrochemicals. For now, it is wholly owned by the government of Oman.
Non-OPEC oil producer Oman has struggled under a hefty budget deficit thanks to the sharp drop in crude oil prices and plummeting demand. It is tried its hand at bond issuing, which received lackluster results. It is even considering levying an income tax on its citizenry—a rarity for countries in that region, particularly the ones that rely heavily on the usually lucrative crude business. It has cut government jobs, and trimmed spending. It has also reshuffled some oil assets—including Block 6—to better position itself to raise debt from that asset.
Oman began to get into serious hot water when Saudi Arabia and Russia engaged in the oil price war in early 2020, shortly before the pandemic took the legs out from underneath oil demand.
It has yet to recover. Oman’s oil exports, however, did rebound from a 19-month low in February to 776,000 barrels per day in March, according to Argus media. It is the largest month-on-month increase in oil exports since June 2020.