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Oman’s OQ posts net profit of $777m in H1 2021
Strong growth: Buoyant oil prices, higher export earnings on chemicals and petrochemicals boost revenues
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Muscat: OQ Group, the global integrated energy group wholly owned by the Omani government, posted a net profit of $777 million for the first half of 2021. This compares with a net loss of $1.183 billion for the corresponding period of 2020, the company announced in its maiden mid-year report of its business performance.

Total revenues surged to $10.043 billion during H1 2021, up from $7.195 billion for H1 2020, the company – part of Oman Investment Authority (OIA) - stated. The increase was fueled by, among other factors, resurgent prices of Oman Export Blend (OEB) crude, as well as an uptick in production activities across the group’s upstream and downstream businesses. Export earnings on a range of petrochemicals and other downstream commodities were also significantly higher.

OQ Group, with assets totaling $27.6 billion as of June 30, 2021, owns and operates businesses across the Oil & Gas value chain. Included in its vast portfolio are equity interests in a sizable number of operated and non-operated oil and gas fields in the Sultanate of Oman and abroad, refining and petrochemicals plants, specialty chemical projects overseas, and the country’s gas transportation network.

Commenting on the Group’s overall performance for the first half of the year, OQ Group Chairman Mulham Basheer al Jarf said: “We are confident that our Group efforts coupled with rapid growth in global energy demand and increase in oil prices will play an important role in reviving the national economy. At OQ, we will continue our efforts to translate government directives on economic diversification and improve Oman’s investment climate- especially in value added projects in the energy sector. We also aspire to boost Omani petrochemical exports, enhance In-Country Value, augment social investments and embrace innovation.”

Underscoring OQ’s strong performance during the first half of 2021 was its Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), which soared to $1.635 billion, up from $0.615 billion a year earlier. The improvement was attributable to a positive change in the fair value of investment in H1 2021, which was negative in H1 2020, and net gains from divestment of assets this year, among other factors.

A significant 47 per cent of EBITDA contribution came from the Group’s Upstream businesses. Output of crude oil and condensate (corresponding to its working interest) from operated and non-operated oilfields in its portfolio averaged around 100,000 barrels per day (bpd), while natural gas production totalled 384.1 million standard cubic feet per day. Its share of 2P reserves (proved and probable) in these fields is estimated at 951 million barrels of oil equivalent (corresponding to its working interests).

The Downstream and Commercial Businesses accounted for a 35 per cent share of EBITDA, while the remaining 18 per cent came from its other businesses, the report added.

Earlier this year, OQ announced the successful execution of its inaugural bond issuance which helped raise $750 million from international debt capital markets. It bond issuance attracted the participation of investors and financial institutions from around the world.

OQ officials have also been quoted in various media as saying that the Group is weighing a number of options to help meet its funding requirements over the coming years, including new debt issuances, listing of some of its assets on the local stock market, and even divestment of service-related assets in its upstream portfolio.

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