Oman energy firm to take advantage of oil bloc with $1 billion bond sale

Energy Development Oman, the state-backed company that controls one of the largest oil blocs in the Middle East, plans to sell at least $1 billion in Islamic bonds, according to people with knowledge of the matter, as the Sultanate is taking advantage of rising energy prices to strengthen its finances.

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Energy Development Oman, the state-backed company that controls one of the largest oil blocs in the Middle East, plans to sell at least $1 billion in Islamic bonds, according to people with knowledge of the matter, as the Sultanate is taking advantage of rising energy prices to strengthen its finances.

EDO, as the company is known, will use funds from the Ijara sukuk for business purposes and the bonds will be backed by gas concession assets, the sources said, asking not to be identified as the matter is private . Standard Chartered Plc is helping arrange the sale, they said.

Oman, whose public finances have long been among the weakest in the Gulf region, is benefiting from its energy assets as its economy benefits from soaring oil prices. Since coming to power in January 2020 following the death of his longtime predecessor, Sultan Haitham bin Tariq had taken dramatic steps to help balance Oman’s finances which have been hit hard during the pandemic.

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EDO owns the country’s 60% stake in Block 6, which has a production capacity of 650,000 barrels per day. Royal Dutch Shell Plc owns 34%, while Total SE owns 4%.

Oman transfers stake in biggest oil bloc to new energy company

EDO did not immediately respond to an email seeking comment. A Standard Chartered representative declined to comment.

If the sale takes place, EDO would be one of the few Gulf borrowers to tap into the global bond market as sales slow. Governments and companies in the region have raised $35 billion by selling bonds and sukuk securities this year through Aug. 3, compared with about $114 billion for all of 2021, according to data compiled by Bloomberg. .

Many companies and issuers around the world are delaying bond sales or exploring lending options as major central bank policy tightening and Russia’s invasion of Ukraine fuel rising interest rates and cash outflows.

In August 2021, EDO secured a $2.5 billion loan. At the time, Ibrahim al-Waili, head of corporate planning, said the company could once again approach the debt market.