LANDMARK MOVE: New Omani joint stock company to acquire shareholding in PDO as well as own an interest in Block 6 licence, which contributes the bulk of the country’s hydrocarbon production
The Omani government has announced the formal establishment of a new corporate entity with a mandate to invest in conventional as well as renewable and alternative energy resources within the Sultanate’s borders and beyond.
Energy Development Oman SAOC (EDO), set up by Royal Decree 128/2020 published in the Official Gazette on Sunday, is envisioned as an Omani joint stock company that will, among other things, acquire a shareholding in majority government-owned Petroleum Development Oman (PDO), presently the largest producer of crude oil and natural gas in the Sultanate.
Significantly, EDO will also own an interest in the prolific Block 6 licence currently held by PDO and which contributes the bulk of the country’s hydrocarbon production.
Thus in addition to engaging in hydrocarbon exploration and production activities in the Sultanate, the new entity will also invest in commercial activities across the upstream and midstream segments of the hydrocarbon value chain.
Crucially, a key part of EDO’s remit centres on renewables, alternative energy resources and related trends and technologies.
According to Article 4 of the Royal Decree, the new entity is authorised to “undertake any projects, operations, activities directly or indirectly, related to renewable energy in Oman, and all activities which are necessary or incidental to or which may be conducive to any of the foregoing, including but not limited to the purchase of, or otherwise acquire, or import, procure, manufacture, produce, store, transport, trade in, distribute, sell, supply, market, export or deal in renewable energy products and technologies, including without limitation, solar panels and electric vehicle charging facilities”.
Commenting on the significance of the announcement, a market expert who did not wish to be identified said: “This announcement has been in the works for some time. In essence, EDO will be positioned as a holding company of Petroleum Development Oman (PDO) with a primary focus on renewables and alternative energy resources and non-core hydrocarbon activities.
“It is expected that PDO’s ambitions to invest in large-scale renewables, particularly green hydrogen projects, will now form part of the remit of EDO.
Likewise, the new company will look to monetise and market PDO’s considerable experience across a number of oilfield-related areas, notably in Enhanced Oil Recovery, low carbon technologies, solar thermal energy, production water management, and so on.”
Energy Development Oman will be administered by a five-member Board of Directors appointed by Royal Decree. The Board will appoint a Chief Executive Officer, among other high-level executives to manage the company.
Earlier this year, in a briefing to company employees, PDO Managing Director Raoul Restucci outlined the vision behind the establishment of Energy Development Oman (EDO).
“What that means is twofold: One, EDO will be a holding company of PDO and a number of investments. For PDO, it will enable us to corporatise the entity and thus enable us to secure the funding and resources which the government at the moment is securing for us at very high cost. We will be able to deconsolidate that debt and secure it at substantially more attractive terms; Second, EDO is also about energy transition as well. We have a number of businesses, a number of investments that are very keen to partner with us,” he had stated then.