Oman’s state energy company OQ is reportedly planning to launch an IPO for its exploration and production division, OQ Exploration & Production (OQEP), to raise approximately $2bn (OR760m).
This move is anticipated to be the largest IPO in the Gulf region for the year 2024.
OQ has announced its intention to sell a 25% stake in OQEP, which is estimated to value the entire business at around $8bn, reported Bloomberg News citing two people with knowledge of the matter.
OQEP’s announcement forms part of Oman’s broader privatisation efforts aimed at diversifying the economy and reducing national debt.
To attract investors, OQEP has pledged an annual dividend payout of $600m from 2024 to 2026.
Additionally, a performance-linked dividend, equating to 90% of the cash flow post-investments, is planned for 2025 and 2026.
The proceeds from the OQEP’s IPO will be directed to OQ, which will retain a minimum 75% stake post-offering.
OQEP CEO Ahmed Al-Azkawi was cited by Reuters as saying that OQEP, established in 2009, holds approximately 15 assets in Oman. Of these nine assets are in production and the rest in the exploration phase.
Al-Azkawi was quoted by ZAWYA as saying: “Our strategic goals, aligned with Oman’s Vision 2040, focus on monetising the country’s hydrocarbon resources while supporting the energy transition.
“Additionally, stimulating the local economy is central to our sustainability initiatives, which includes developing local talent and supporting our CSI projects to increase our contributions to In-Country Value.”
This IPO follows successful listings of OQ’s pipeline business and Abraj Energy Services in 2023, which raised $771m and $244m respectively.
