Fitch upgrades Omani energy entities EDO and OQ to investment-grade ‘BBB-’

CONRAD PRABHU
MUSCAT, DEC 16
Following the landmark upgrade of Oman’s sovereign credit rating to investment-grade ‘BBB-’ earlier this month, international ratings agency Fitch Ratings has carried out similar rating actions on two key state-owned energy sector entities — Energy Development Oman SAOC (EDO) and OQ SAOC.
In separate but concurrent actions on December 15, 2025, Fitch upgraded the Long-Term Issuer Default Ratings (IDRs) of both EDO and OQ to ‘BBB-’ from ‘BB+’, while affirming a Stable Outlook for each entity.
Earlier this month, Fitch upgraded Oman’s sovereign rating to investment grade, citing the Sultanate of Oman’s strengthened public finances, lower government debt ratios and an improved external position. The agency highlighted sustained fiscal discipline, a significant reduction in government debt to around 36% of GDP, and prudent macroeconomic management as key drivers underpinning the upgrade and reinforcing investor confidence in Oman’s economic resilience and long-term stability.
Both EDO and OQ — the subject of Fitch’s rating actions on Monday — are cornerstone entities in Oman’s economy, underpinning revenue generation, value creation, GDP growth and long-term economic development.
EDO, affiliated with the Ministry of Finance, owns 60% of the Block 6 petroleum concession operated by Petroleum Development Oman (PDO), 100% of Block 6’s non-associated gas concession and 100% of Hydrogen Oman (Hydrom), the master planner of the Sultanate of Oman’s green hydrogen industry.
Fitch said its rating assessment of EDO is driven primarily by its very strong linkages to the Omani sovereign, which constrain the company’s rating and underpin a high Government-Related Entity (GRE) support score of 55 out of 60. EDO benefits from very strong government decision-making and oversight, reflecting full state ownership, government-appointed directors, regulated gas pricing and the strategic importance of its Block 6 concessions to the domestic economy.
“EDO is the largest oil and gas producer in Oman through its interest in Petroleum Development Oman (PDO). PDO operates the onshore Block 6 oil and gas concessions, which comprise over 24% of Oman’s land acreage and have more than 50 years of production history. This slightly mitigates EDO’s focus on a single country of operations. We expect average output of over 800 thousand barrels of oil equivalent per day (kboe/d) until 2028 in our rating case”, Fitch noted.
OQ SAOC, meanwhile, is fully owned by the state through the Oman Investment Authority (OIA) and mandated to strengthen and centralise the country’s oil and gas sector.
OQ’s strategic importance, Fitch said, stems from its role as Oman’s main downstream company, the owner of all domestic refining assets, the exclusive operator of the country’s natural gas transportation infrastructure and the national champion for renewable energy. While leverage fell to near zero in 2024 following IPO proceeds and debt repayments, Fitch expects gearing to rise gradually as OQ invests in upstream growth, gas networks, decarbonisation and an expanding clean energy and green hydrogen pipeline.
The agency highlighted the role of wholly owned subsidiary OQ Alternative Energy (OQAE) as the national champion for clean energy and green hydrogen; and the main developer of Oman’s alternative energy projects. OQAE has established a renewable energy pipeline of up to 7 GW across the Sultanate of Oman, including wind and solar projects; and is currently advancing five wind and two solar projects totalling 1.8 GW, Fitch added.