Oman has established a new state-owned oil and gas company to implement global standards in the management of state assets and resources in the sector, the country’s news agency ONA said on Sunday.
The company, named Energy Development Oman (EDO), will receive oil and gas revenues to settle annual capital and operational costs of production, ONA said, citing the Oman finance ministry.
The company will own a shareholding in the state-owned Petroleum Development Oman LLC as well as a share in Block 6, the country’s largest oil block, according to a government publication on Sunday.
The company will be authorized “to undertake hydrocarbon exploration and production operations” and to borrow money “in any manner,” according to the publication.
Energy Development Oman will also be able to make international investments, including in renewable energy products.
Oman has struggled to fund a growing budget deficit, preparing to move its 60% stake in Block 6 from Petroleum Production Oman to a new company that will attempt to issue approximately $3 billion in bonds in the first half of 2021.
With a production potential of 650,000 barrels a day, Block 6 is one of the largest crude deposits in the Middle East and has Royal Dutch Shell Plc, Total SE and Partex Oil & Gas as shareholders.
According to ONA, the company will also develop and expand the sector and pump more investment to increase the country's financial and economic returns, thus holding PDO oil and gas expenditures out of the general budget to allow the company to enjoy financial independence.
The company can fund its own development projects and carry out investment projects without dependence on the state budget, the agency said.
By Sibel Morrow