Oil & Gas divestments to generate half of $5bn proceeds from OIA’s 5-year exit plan

A divestment programme unveiled recently by Oman Investment Authority – the integrated sovereign wealth fund of the Sultanate of Oman – is anticipated to garner around $5 billion in proceeds, around half of which is expected to come from Oil & Gas assets slated for privatization over the next five years.

An overview of the Authority’s five-year exit plan – spanning the 2021 – 2025 timeframe – was shared by Omani officials taking part in a key investment forum held in London, UK recently.

“The main sector to be privatized is Oil & Gas due to its maturity, with total expected proceeds exceeding $2.5 billion; the total proceeds of privatization are estimated above $5 billion in the next five years,” it was revealed at the event.

Earlier, in June this year, OIA disclosed that its privatisation plan envisions divestments from over 30 assets over the five-year timeframe. The plan begins with exits from six investments in the sectors of energy, manufacturing, tourism, and logistics. Three of these assets will be considered for initial public offerings in MSX; a manufacturing project owned by OIA directly and two OQ projects. Additionally, OIA will partially and fully exit two Asyad Group projects and fully exit several OMRAN hotels and resorts.

OIA’s 5-Year Privatization Plan focuses on privatising government-owned entities affiliated to sectors contributing to economic diversification in line with Oman Vision 2040. “As an owner, the Authority endeavours to promote liquidity and enhance capitalization of the market; hence, privatization of government entities through IPOs at MSX is prioritized over other exit methods,” it noted.

Of the roughly $5 billion estimated in proceeds from OIA privatisations, the contribution of Oil & Gas is pegged at $2.555 billion. This is followed by Electricity & Water with a share of $1.186 billion, Logistics ($702 million), Technology ($397 million), Food ($156 million) and Fisheries ($96 million).

Significantly, the pipeline of planned divestments is expected to yield $2.592 billion in proceeds during 2022, followed by $841 million in 2023. It rises again to $1.427 billion in 2024, with a modest $223 million generated at the tail-end of the programme in 2025.

Earlier this week, Omani oilfield services firm Abraj Energy Services – a subsidiary of OQ Group – announced that it is “currently reviewing the possibility of gaining a listing on the MSX, the timing and size of the potential transaction are under consideration and subject to necessary regulatory approvals”.