Page 13 - GLNG Week 17 2021

GLNG MIDDLE EAST GLNG

QP is raising $7-10bn
via its debut dollar-
denominated bond
offering on international
capital markets,
purportedly to partly
finance the $29bn
North Field Expansion.

Oman and Qatar use NOCs

to tap bond markets

INVESTMENT FOLLOWING the recent success of regional would not renew the Qatargas Liquefied Natu-
powerhouses Abu Dhabi National Oil Co. ral Gas Company Ltd (QG1) joint venture (JV)
(ADNOC) and Saudi Aramco in cashing in on when its concession expires at the end of next
investor appetite, Oman and Qatar are set to year, at which point the state-owned firm will
launch bond sales via state energy firms OQ and take full control.
Qatar Petroleum (QP). The current JV arrangement with super-ma-
The two countries are both at the lower end jors Total (10%) and ExxonMobil (10%), as well
of the Middle East oil production spectrum but as Marubeni (7.5%) and Mitsui (7.5%), expires
have different reasons for the bond offerings, on December 31, and QP will assume full own-
with Qatar intending to use the funds raised ership on January 1, 2022, up from its current
to process a giant gas field expansion project, 65% holding.
while Muscat seeks to ease the government’s
debt burden. Oman
For Oman, the move comes as Muscat prepares
Qatar to issue an estimated $3bn worth of bonds
QP is seen raising $7-10bn via its debut dol- through the newly formed Energy Development
lar-denominated bond offering on international Oman (EDO) to which it has transferred Petro-
capital markets, purportedly to partly finance leum Development Oman (PDO’s) majority
the $29bn North Field Expansion (NFE) project shareholding in the massive Block 6 concession,
to solidify Qatar’s position as the world’s largest home to an oil production capacity of around
LNG exporter, according to reports that cited 650,000 barrels per day (bpd) and more than The Qatari
sources close to proceedings. 75% of the Sultanate’s remaining oil reserves.
The world’s largest natural gas exporter has Muscat is understood to have been advised government
reached out to global investment banks to help on the process by JPMorgan Chase & Co. and
arrange the deal. The multi-tranche long-dated EDO is expected to go to market during the next issued a $10bn
bond offering will have maturities of five, 10 and few months with the $3bn target based on the
30 years. reserves held in Block 6, making it the Middle bond a year ago
The company took a final investment deci- East’s first reserves-backed raise. which was four
sion (FID) on the project in early March and has This week an investors’ note showed that
since proceeded to hand out billions of dollars state oil firm OQ, formerly Oman Oil Co., has and a half times
of engineering, procurement and construction hired eight banks to work on a seven-year,
(EPC) contracts for NFE and the subsequent dollar-denominated bond. Calls were due to oversubscribed.
North Field South (NFS) expansion phase. begin shortly after with Citi, HSBC, JPMorgan,
NFE will underpin the expansion of Qatar’s First Abu Dhabi Bank, MUFG, Natixis, SMBC
LNG production capacity from 77mn tonnes Nikko and Societe Generale for a “benchmark”
per year currently to 110mn tpy following the bond issuance, which is expected to be at least
start-up of four new mega-trains with NFS $500mn.
expected to launch in 2027, bringing Qatar’s Following the news, Fitch Ratings has
LNG production capacity to 126mn tpy. assigned the proposed Global Medium Term
The Qatari government issued a $10bn bond Note an unsecured BB-(EXP) rating in line with
a year ago which was four and a half times OQ’s BB- long-term issuer default rating (IDR).
oversubscribed. It added that “the negative outlook on OQ’s
Meanwhile, last month QP announced that it rating mirrors that on Oman’s rating”.™

Week 17 30•April•2021 www. NEWSBASE .com P13