OQ mulls IPOs of two units this year: Report

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Muscat – Following the successful completion of two initial public offerings (IPOs) of its subsidiaries Abraj Energy Service Company and OQ Gas Networks in 2023, Oman’s globally integrated energy group, OQ, is considering IPOs of two more subsidiary companies this year, according to a Bloomberg report.

‘Oman’s state energy company, OQ, is considering selling shares in two units this year as the country seeks to raise funds and deepen capital markets by listing government-owned businesses across the economy,” the Bloomberg report said on Friday.

OQ is evaluating plans to list its exploration and production business, as well as a methanol and liquefied petroleum gas (LPG) fuels unit, said Ashraf al Mamari, Acting Group CEO of OQ, as reported by Bloomberg.

“It’s still too early to discuss possible valuations,” he noted.

Oman is hoping an influx of capital from state asset sales will boost industries such as energy, transport, and tourism. That’s part of a broader trend of divestments in the energy-rich region as larger neighbors Saudi Arabia and the UAE also look to diversify their economies to prepare for a post-oil age, according to the report.

Earlier this month, Bloomberg reported that OQ had asked banks to pitch for roles in the IPOs of the two units. OQ Exploration & Production may raise about $1bn in an IPO, people familiar with the proposals said at the time.

In March 2023, Oman’s largest oilfield services provider Abraj Energy Services, a subsidiary of OQ Group, raised nearly RO94mn via an IPO that was oversubscribed by 8.7 times after receiving strong demand from local, regional, and international investors. Abraj had offered 49% of its share capital through the IPO.

In October last year, another OQ subsidiary company, OQ Gas Networks, the sole operator of Oman’s gas transportation system, successfully completed its RO288mn IPO, which was oversubscribed nearly 14 times, making it the largest IPO to date in Oman.

OQ Gas Networks had also offered 49% of its total share capital through the IPO. Following the completion of the IPO, OQ Group continues to own 51% of OQ Gas Networks’ share capital.