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Oman, a Persian Gulf producer with 1 million bpd of oil production and not a member of OPEC, is integrating two of its government-owned companies to create one large refining and trading firm.
Oman Oil Company and Oman Refineries and Petroleum Industries Company (ORPIC) are integrating their downstream businesses as phase one of their merger plan, ORPIC said on Monday. The boards of directors of the two companies appointed Musab Al Mahruqi as the Group chief executive officer, effective December 2, 2018.
The integration of the two companies will take place in several stages, taking into account the specifics of each business, ORPIC said.
ORPIC has two refineries, a polypropylene plant, and an aromatics plant in Oman. The two refineries, Mina Al Fahal and Suhar, have a combined production capacity of 222,000 bpd.
Oman Oil plans to build a refinery in Duqm, in which Oman is joined by Kuwait in the project. Oman Oil also has a 26-percent stake in Bharat Oman Refineries Limited (BORL), the company that owns and operates the Bina refinery in India with capacity of 120,000 bpd, and 7 percent in Hungary’s oil producer and refiner MOL Group. Oman Oil is also the majority owner of Oman Trading International, which trades crude oil, petroleum products, petrochemicals, and liquefied natural gas (LNG).
According to Bloomberg estimates, the Oman Oil-ORPIC merged company will hold a combined 1.1 million bpd of refining capacity in Oman, India, and Hungary and oil and gas production in Oman.
Oman is not part of OPEC, but it is a part of the non-OPEC group of countries that cooperate with the cartel in the production cut deal.
Oman—like other Persian Gulf producers and Saudi Aramco and ADNOC for example—is increasingly betting on downstream businesses to take advantage of its own cheap crude oil and sell higher-value oil products and petrochemicals and secure new markets.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.