MUSCAT, JULY 4 – Oman Oil Company (OOC), the Omani government’s energy investment arm, has confirmed that it is looking to divest part of its stake in Block 61, which hosts the prolific Khazzan and Ghazeer gas developments in the oilfield heartland of the Sultanate.
OOC Chief Executive Officer Eng Isam Saud al Zadjali (pictured) said the Block 61 divestment plan is part of a slew of initiatives for the privatisation of some of the Group’s diverse subsidiaries.
Speaking to journalists at the 1st Media Reception hosted by the company at the Grand Hyatt Muscat yesterday, Al Zadjali said the Group is in the market for a buyer for 10 per cent of its 40 per cent stake in Block 61 — a divestment exercise that is “ongoing”, he noted.
Oman Oil Company Exploration & Production (OOCEP), the wholly owned upstream arm of Oman Oil Company, holds the 40 per cent stake in Block 61. Energy major BP owns the balance 60 per cent and is also the operator of the Block, which came on stream last September with a current output of 1 billion cubic feet of natural gas per day.
The parent company, the CEO said, is also doing the groundwork for the privatisation of Abraj Energy Services, a leading oilfield services firm wholly owned by OOC. “Next year we have one or two more companies that will be studied carefully for privatisation,” he further stated.
Oman Oil Company is also in the market for finance required to fund its existing operations as well as for future projects, notably those that may materialise from its newly forged partnership with energy super-major Shell, according to the CEO.
“We are always in the market for new financing because we never stop coming up with new ideas,” said Al Zadjali. “The Revolving Credit Facility (RCF) that we have will expire in less than two years and we need to go to the market to renew this facility under new terms and conditions. Ultimately, we have to think about new projects. The partnership we may have with Shell will require new financing. So we are excited about concluding existing deals and entering into new projects, and as we are an investment company, obviously everyday financing is the name of the game.”
The CEO credited Oman’s Oil Company’s ongoing success in securing funding for its various projects to the sound fundamentals of the group, as well as the strong credentials of the Omani government. “We are honoured to have successfully completed the financing for multiple projects, namely Salalah Ammonia, Salalah LPG, financing of the pre-export facility of OOCEP, and so on. The completion of the financing, at a level that is satisfactory to us, is a testament to the hard work that the company has put in, and also of the robustness of the Omani economy. It is facts on the ground that lenders and international financial houses take into account when concluding a deal that is both satisfactory to them and to us. Their decisions also rely heavily on the strength of the Omani economy and the effectiveness of the Omani government.”
Al Zadjali also reaffirmed the Group’s strategy to remain a “minority stakeholder” on the upstream side of its business. “That will always be the policy of the company. We bring in and partner with reputable international companies that have the experience and technical know-how and we will partner with them on a minority basis.”
“This minority working interest is so critical to the success of OOC, going forward,” he stressed. “It’s not a secret that the upstream segment presents a substantial size of Oman Oil’s business, and stronger that foundation the better it is for Oman Oil and the country,” he added.