Oman Oil Co sets sights on IPO in 2020

Strategic partners might be invited to invest alongside a public offering, oil minister says

Oman Oil, the state-owned oil company, has announced that it plans to list between 20 per cent and 25 per cent of its shares in an initial public offering (IPO) next year.

Oil Minister Mohammed al-Rumhi said the listing was planned to take place before the end of 2020, according to a news report by Reuters news agency. The sale would raise funds to help with outstanding national debt.

The announcement was made as he left the OPEC headquarters in Vienna, Austria.

If the IPO is successful, Oman will be the second national oil company in the Gulf to raise cash this way. Saudi Aramco is also planning to list its shares in an IPO later this month in a bid to diversify the Saudi economy away from oil.

Saudi Arabia plans to sell a 1.5 per cent stake in Saudi Aramco which could raise up to $25.6 bn (£23.1 bn, €19.6 billion) at the top end of estimates. This would make it an even bigger share sale than that of Alibaba Group in 2014, currently the largest IPO in history, according to Bloomberg data.

Oman is trying to raise funds from asset sales because lower oil prices have led it to pile up debt over the past few years, Reuters said. It posted a budget deficit of 1.545 billion Omani rial (€3.5 billion, £3 billion, $3.9 billion) in January to September 2019.

While financial advisers for the deal have been brought on board already, it is possible that strategic partners might also be invited to invest in the company alongside the IPO process, Mohammed al-Rumhi said.

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The Organization of the Petroleum Exporting Countries (OPEC) has lowered its forecast for global oil demand growth, admitting in its annual World Oil Outlook that the past year had been “challenging” for energy markets.

An organisation comprising fourteen oil producing nations ranging from Saudi Arabia and Iran to Venezuela and Nigeria, OPEC collaborates to coordinate oil production in an effort to affect the global price of oil.

The group expects its own production of crude oil and other liquids to decline in the next five years, falling to 32.8 million barrels a day in 2024 from its current 35 million.

FURTHER READING: OPEC lowers forecast for global oil demand

FURTHER READING: Oil price predictions for 2020 and beyond

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