Page 10 - MEOG Week 27 2021

MEOG FINANCE & INVESTMENT MEOG

EDO in talks to

raise debt finance

OMAN NEWLY formed state-owned Energy Devel- The Block 6 concession is home to an oil pro-
opment Oman (EDO) is reported to be in dis- duction capacity of around 650,000 barrels per
cussions with banks to raise debt finance in the day (bpd) and more than 75% of the Sultanate’s
Middle East’s first reserves-backed raise. remaining oil reserves.
Speaking to Reuters this week, a source close According to Oman’s official gazette, EDO
to proceedings said that “EDO is looking to raise will carry out oil and gas exploration as well as
around $1.5bn”, adding that the financing could developing renewable energy projects in the
come in the form of a loan. country.
One of the sources said that JPMorgan is It added that the new firm could “borrow or
advising on the plan, adding that UAE-based raise money and/or financing of any nature [and
lenders have expressed an interest in partici- use] defined or identifiable cash flows, revenues,
pating. The move follows comments in May by receivables or assets (including those which are
Minister of Energy and Minerals Mohammed Shariah compliant) to issue securities in one
al-Ruhmy that EDO would seek to raise $3bn. or more tranches to investors in Oman and/or
EDO was set up late last year, taking on the other countries.”
state’s holding in the sultanate’s largest oil and gas EDO has been set up with an authorised and
producer as part of efforts to raise debt to ease the issued share capital of OMR500,000 ($1.3mn),
strain on Muscat amid low oil prices. divided into 500,000 shares.
Royal Decree No. 128/2020 stipulated that Oman anticipates EDO improving the man-
the government’s stake in Block 6, Oman’s larg- agement of the oil and gas sector, while the
est oil and gas concession, would be transferred gazette noted that PDO’s oil and gas expenses
from Petroleum Development Oman (PDO) to would no longer be included in the ‘general
the newly formed Energy Development Oman budget’, therefore giving the company financial
(EDO). The state owns a 60% stake in PDO, with independence.
Royal Dutch Shell (34%), Total (4%) and Partex Meanwhile, Muscat began receiving returns
(2%) holding the remainder. on its new 5% VAT on July 1 and it plans to
The new company is expected to tap global impose a new income tax on the country’s high-
financial markets by way of a bond or an initial est earners from next year as it seeks to improve
public offering (IPO) in order to ease the govern- economic stability and build resilience beyond
ment’s debt burden. its energy sector.™

Block 6

Source: Shell

P10 www. NEWSBASE .com Week 27 07•July•2021