Oman State Energy Firm OQ May Sell Drilling Business
DUBAI (Reuters) — Oman state energy company OQ is considering selling its drilling unit Abraj Energy Services, sources said, as the Gulf nation seeks to shore up its finances that have been hit by the coronavirus pandemic and last year's oil price plunge.
The potential sale of the midstream firm is part of a broader divestment plan by OQ, three sources familiar with the matter said, declining to be named as the matter is not public.
Deliberations were at an early stage and OQ could decide to make only a partial exit by floating the company on the Omani stock exchange, one of the sources said.
OQ did not immediately respond to a request for comment.
Abraj, which was originally slated in 2015 for a partial divestment via an initial public offering (IPO), also did not respond to a request for comment.
Oman, rated sub-investment grade by all major credit rating agencies, has struggled in recent years to tame widening deficits and faces large debt maturities in the next few years.
Last year it launched a new fiscal plan to wean itself off its dependence on revenues from crude.
Abraj had an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of around $90 million, according to information on OQ's bond prospectus in April, which identified Abraj as a non-core asset.
OQ plans to raise capital by selling equity stakes, IPOs or selling off entire units to investors.
The strategy aims to reduce the group's net debt to EBITDA ratio to less than 3.0 by early 2023, the prospectus said.
State-controlled energy companies in the Gulf have embarked on a flurry of privatizations to extract value from their assets amid an accelerating global shift away from fossil fuels.
Abu Dhabi National Oil Company (ADNOC), which supplies nearly 3% of global oil demand, is planning an IPO of its drilling business and could raise at least $1 billion from the share sale, sources have previously said.
U.S.-based EIG Global Energy Partners in June said a consortium it led closed a deal to buy 49% of Saudi oil producer Aramco's pipelines business for $12.4 billion.
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Texas Oil Company Challenges $250 Million Insurance Collateral Demand for Pipeline, Offshore Operations
Comments