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Oman will sell stakes in state-owned oil and gas downstream companies in a bid to prop up its finances after the oil price crunch from 2014. These plans have been in the making for a few years now, also involving several other state businesses outside the energy industry.
The downstream companies that will see their shares listed are Salalah Methanol Co and an unnamed driller, the sultanate’s Oil and Gas Minister Mohammad bin Hamad al-Rumhy said.
“We are looking at the IPO option because we want to give a boost to the local stock market, and we want to see more foreign direct investments coming to the country,” he said as quoted by Bloomberg.
Bloomberg also reported that Oman Oil Co., the state energy major, is already in talks with several banks on the IPOs and also on the divestment of some assets, which were not identified. The plans will not include state-owned Petroleum Development Oman, however, which pumps over 70 percent of the sultanate crude oil and nearly 100 percent of its natural gas.
The announcement makes Oman the latest in a string of Gulf producers to start overhauling their energy industry as part of efforts to tackle the effects of the oil price rout.
Qatar, for example, is merging its two LNG units to boost efficiency and lower costs, and stepping up gas production to maintain its #1 gas exporter title.
Saudi Arabia, for its part, is preparing for the initial public offering of a minority stake in Aramco, hoping to pocket billions in proceeds, meanwhile expanding its presence in the Asian energy market by investing in downstream projects in Indonesia, Malaysia, and India.
Related: Don't Believe The Hype: Oil Markets Far From Recovery
Kuwait’s emir earlier this month unveiled a comprehensive economic reform program dubbed New Kuwait, which seeks to turn the tiny Gulf producer into a regional financial hub by 2035.
But the poster child for economic reforms in the Gulf is UAE: the IMF reported last year that oil and gas revenues accounted for 32 percent of budget revenues for 2015, thanks to diversification programs and fiscal discipline.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.