MUSCAT: OQ, the wholly Omani government-owned integrated global energy group, says it aims to wrap up the execution of a transaction linked to the sale of a 40 per cent stake in its flagship upstream asset, Block 60, as well as its exploration license, Block 48, before the end of 2023.
It follows a significant decision by the OQ Board and shareholders granting approval for the partial divestment of a 40 per cent interest in the wholly-owned and operated Blocks. The transaction, stemming from a sale-purchase agreement signed on August 22, 2023, is currently awaiting approval from the regulatory authorities, OQ announced recently in a report of its fiscal performance for H1 2023.
“The total sale consideration is RO 548 million, subject to adjustment for the period between the effective date (1 January 2023) and the date of the Royal Decree. Management anticipates executing the transaction before the end of 2023,” it further added.
It’s the latest in a series of divestments planned by OQ Group, among other affiliates of its parent holding company Oman Investment Authority (OIA), in line with the latter’s commitment to mobilise financial resources to bolster the government’s annual state budget. The most recent divestment in support of this goal was the partial privatization of OQ-owned Abraj Energy Services via a public subscription on Muscat Stock Exchange (MSX). Likewise, OQ Gas Networks – the national gas transporter - is also preparing to go public with a 49 per cent divestment of its share capital in the coming weeks.
Block 60, the acquisition of which in 2011 heralded the launch of OQ’s Exploration & Production (E&P) arm (then known as Oman Oil Company E&P), is presently the most prolific of the Group’s operated upstream assets.
Last November, OQ E&P celebrated the commissioning of its third crude processing plant at the Bisat oilfield in Block 60, helping unlock a further 60,000 barrels per day (bpd) of production from the field. As a result of these new flows from the Block, OQ Group now ranks among the largest hydrocarbon producers in the Sultanate of Oman with a combined contribution of 219,000 barrels of oil equivalent per day (boepd), representing 12.6 per cent of the country’s total hydrocarbon output.
Block 48, on the other hand, is a roughly 3,000 sq km exploration license straddling the boundary between Al Dakhiliyah and Al Wusta governorates. Wholly owned and operated by OQ E&P, the Block’s hydrocarbon potential is currently being evaluated via 2D and 3D seismic, with the drilling of an exploration well.
OQ E&P currently has interests in a total of 11 upstream assets distributed across Oman.
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