OQ to list oil production arm in largest Omani IPO 

Eric Le Galliot/MPS

• Sale of 25% of OQEP subsidiary
• Target of $2bn
• Listing scheduled for October

Oman’s state energy company, OQ, is planning to sell up to a quarter of its exploration and production arm, OQEP, through an initial public offering, in what will be the largest IPO in the country’s history.

The subscription period is expected to commence this month, while the listing is scheduled for October on the Muscat Stock Exchange.

HSBC, Natixis, OIB and Sohar International have been appointed joint global coordinators, and Sohar International will act as the issue manager. 

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The IPO is expected to be the sultanate’s first listing of 2024, with OQ aiming to raise about $2 billion from the 25 percent stake. 

The deal would value all of OQ’s exploration and production at about $8 billion, according to Bloomberg.

The company announced it will pay out $600 million in annual dividends each year between 2024 and 2026. It will also pay a performance-linked dividend equal to 90 percent of the expected free cashflow after investments.

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• European regulator approves Oman’s $1.6bn LNG project

• Oman’s OQ seeks bookrunners for gas pipelines $500m IPO

OQ, formerly known as the Oman Oil Co, said earlier this year it was considering listing its methanol and liquefied petroleum gas fuel unit.

Last year, the company floated its gas pipelines business in a $749 million IPO, and 49 percent of its oil-drilling unit Abraj Energy Services.

OQ is engaged in a privatisation programme, as Oman seeks to raise capital by divesting from government-owned businesses across the economy.

Its GCC neighbours the UAE and Saudi Arabia have also sold energy assets as part of a larger trend to diversify Gulf economies and prepare for a post-oil era.

Oman’s part-privatisation is also aimed at gaining the country an entry into MSCI’s emerging market index. To be eligible, a country must have at least three stocks that meet certain thresholds in terms of size and stock liquidity.

IPOs in the GCC raised $3.6 billion through 23 offerings in the first half of this year. This was a fall in value of almost a third compared with the same period of 2023, where a total of $5.3 billion was raised through 21 offerings, according to a report in July by the Kuwait-based asset management company Markaz.