share this article!

3 Minutes Read by, DUBAI, United Arab Emirates (Reuters) – Oman’s state energy company, OQ, is considering selling its drilling unit, Abraj Energy Services, according to sources, as the Gulf country tries to recover from the coronavirus outbreak and last year’s oil price drop. Three persons familiar with the situation declined to be identified because the topic is private. The proposed sale of the midstream firm is part of OQ’s broader divestment plan, according to three sources familiar with the matter. According to one of the individuals, discussions are still in the early stages, and OQ may decide to just make a partial exit by floating the firm on the Omani stock exchange. A request for comment from OQ was not immediately returned. Abraj did not react to a request for comment, despite the fact that company was set for a partial divestiture via an initial public offering (IPO) in 2015. Oman, which is rated sub-investment grade by all major credit rating agencies, has struggled to control rising deficits in recent years and faces huge debt maturities in the coming years. It announced a new budgetary plan last year to wean itself off its reliance on crude oil earnings. According to statistics on OQ’s bond prospectus in April, Abraj had adjusted profits before interest, taxes, depreciation, and amortization (EBITDA) of roughly $90 million. Abraj was listed as a non-core asset. OQ intends to raise funds through selling equity holdings, issuing initial public offerings (IPOs), or selling off full units to investors. According to the prospectus, the strategy seeks to lower the group’s net debt to EBITDA ratio to less than 3.0 by early 2023. In response to an accelerated worldwide shift away from fossil fuels, state-controlled energy companies in the Gulf have started on a flurry of privatizations to extract value from their assets. According to prior reports, Abu Dhabi National Oil Company (ADNOC), which supplies over 3% of world oil consumption, is contemplating an IPO of its drilling division that may garner at least $1 billion. EIG Global Energy Partners, located in the United States, announced in June that a consortium it led had completed a deal to buy 49 percent of Saudi oil producer Aramco’s pipelines business for $12.4 billion. Hadeel Al Sayegh contributed reporting, and Edmund Blair edited the piece./nRead More

share this article!