Fitch Ratings has revised the outlooks for three major Omani companies — Oman's OQ, Energy Development Oman SAOC (EDO) and Omantel — to BB/Positive. The revision of the outlooks for these companies reflected the revision of the outlook on Oman's 'BB' sovereign rating in April 2023.
The upgrade in outlook also reflects Fitch's confidence in the companies' ability to navigate the challenging economic environment and manage their debt obligations effectively.
Fitch Ratings is a global credit rating agency that provides credit opinions, research and data to investors worldwide. The agency assesses the creditworthiness of companies and countries based on their financial strength and ability to meet their debt obligations.
OQ SAOC is an integrated energy company that operates in the upstream and downstream sectors of the oil and gas industry in Oman. It is fully-owned by the Omani government via Oman Investment Authority and was established to strengthen and centralise the country’s oil and gas industry. The company's revised outlook reflects Fitch's expectation that OQ will maintain its strong liquidity position and continue to generate positive free cash flow.
EDO is a wholly state-owned Omani company works on the development of energy and alternative energy sector in line with Oman Vision 2040. It owns 60% of Block 6 oil concession, 100% of Block 6 non-associated gas concession, and 100% of Hydrogen Oman LLC. Fitch's revision of EDO's outlook to BB/Positive reflects the agency's expectation that the company will benefit from the strong support of its shareholders, as well as its diversified project portfolio and strong financial position.
Omantel is a leading telecommunications company in Oman that provides a range of services including fixed-line, mobile, broadband and data services. The company is 51% owned by the government, through wholly-owned investment funds, with the balance held by Omani pension funds and free float. The company's revised outlook reflects Fitch's expectation that Omantel will continue to maintain its leading market position in Oman, supported by its strong brand recognition and diverse revenue streams.
Fitch Ratings' revision of the outlooks for these companies to BB/Positive indicates that they have a stable outlook with positive potential for future upgrades. This is a positive development for these companies as it reflects their strong financial position and ability to meet their debt obligations.
In August 2022, Fitch Ratings upgraded Oman's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB' from 'BB-' with a stable outlook. This upgrade was based on Oman's improving fiscal position due to higher oil prices and fiscal consolidation measures implemented by the government.
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