In a plan to achieve self-sufficiency, state-owned OQ SAOC reduces its reliance on Oman’s strained finances by selling assets to fund a $7.9 billion spending plan over the next five years.
Oman’s government is looking to shore up its finances after its budget deficit climbed to about 17% of gross domestic product, according to the International Monetary Fund.
After lockdowns and falling oil prices, OQ’s operating losses totaled 1.58 billion riyals ($4.1 billion) in 2020, largely due to a 1.34 billion riyal impairment charge which the company attributed to the impact of the pandemic and low oil prices.
Major impairment losses were registered at two of its biggest companies: a refinery business previously known as Oman Oil Refineries and Petroleum Industries Co. SAOC, or Orpic, and OQ’s upstream unit, formerly known as Oman Oil Co. Exploration & Production.
The government already supported the energy company with $8.6 billion and is not expected to inject any more equity into OQ, according to a bond prospectus seen by Bloomberg News, hence why the state-owned firm is planning to sell assets, issue bonds in the international market to raise at least $500m and refinancing debt.
Earlier this month, reports emerged that the Oman Government is considering ways to shore up its budget, including divesting stake in OQ through an initial public offering (IPO).
