Oman Sets up Upstream Investment Vehicle

Oman's finance ministry has established a new upstream vehicle called Energy Development Oman (EDO) that will have a shareholding in national oil company Petroleum Development Oman (PDO), while also managing the state's interest in the Block 6 oil and gas concession, government-run Oman News Agency reported on December 6.

EDO will collect oil and gas revenues and pay capital and operating costs of production, excluding PDO's oil and expenditures from the state budget, and therefore giving the company financial independence.

In its Official Gazette, the government also said EDO would "borrow or raise money and/or financing of any nature" and use "defined or identifiable cash flows, revenues, receivables or assets (including those which are Shariah compliant) to issue securities in one or more tranches to investors in Oman and/or other countries." The company's authorised and issued share capital is rials 500,000 ($1.3mn), divided among 500,000 shares.

Bloomberg reported in November that cash-strapped Oman wanted to transfer its 60% position at Block 6 from PDO to a new company, which would attempt to raise $3bn from a bond issue in the first half of 2021.

Block 6, spanning most of the Oman Mountain Foldbelt and Rub al Khali basins, contains over 75% of Oman's remaining oil reserves, according to Wood Mackenzie, and is capable of flowing 650,000 barrels/day of crude. It also holds considerable gas resources. Shell has a 34% interest in the concession, while France's Total has 4% and Thai-owned Partex Oil & Gas has 2%.