Page 6 - MEOG Week 33 2021
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MEOG FINANCE & INVESTMENT MEOG
EDO raises $2.5bn in debt finance
OMAN
STATE-OWNED Energy Development Oman (EDO) this week announced that it raised $2.5bn worth of debt in its first financing since its estab- lishment last year.
The company will use the funds to cover the state’s funding requirements relating to Petro- leum Development Oman’s (PDO) stake in Block 6 – the Sultanate’s largest concession – which has now been transferred to EDO. Block 6 operations are estimated to cost Muscat $5-6bn per year.
EDO, according to sources spoken to by S&P Global Platts in May, has 100% ownership of the gas in Block 6 and 60% of the oil, in line with the shareholder structure in PDO, with Royal Dutch Shell (34%), TotalEnergies (4%) and Thailand’s PTTEP (2%) holding the remainder.
EDO interim CEO Haifa Al Khaifi said: “The creation of EDO and the progress made since its establishment constitute a historic achieve- ment for Oman, and it will serve as a vehicle for accelerated development and value creation. In particular, the successful execution of the syn- dicated deal is a major milestone for EDO and the country.
With the bond more than 100% oversub- scribed, Al Khaifi added: “The strong partici- pation from local, regional and international
banks is another sign of Oman’s attractiveness for global investors and paves the way for fruitful and sustainable collaboration with international partners”.
The company said that oversubscription was “testament to investors’ confidence” in the com- pany and the Sultanate’s economy.
The Block 6 concession is home to an oil pro- duction capacity of around 650,000 barrels per day (bpd) and more than 75% of the Sultanate’s remaining oil reserves.
EDO’s self-sufficiency and ability to raise cap- ital is believed to be central to Omani efforts to increase capacity to 700,000 bpd by 2024.
EDO was set up with an authorised and issued share capital of the company which is 500,000 rials ($1.3mn), divided into 500,000 shares.
According to Oman’s official gazette, EDO will also develop renewable energy projects in the country in an effort to transition away from reliance on hydrocarbons.
Oman anticipates EDO improving the man- agement of the oil and gas sector, while the gazette noted that PDO’s oil and gas expenses would no longer be included in the ‘general budget’, therefore giving the company financial independence.
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w w w . N E W S B A S E . c o m Week 33 18•August•2021
