Gulf Oil, not a member of the OPEC, is preparing to issue an Initial Public Offering of its wholly-owned company, Oman Oil Company. Gulf Oil started operations in 1901 and was known for being one of the largest producers back in the 90s; it was also one of the so-called Seven Sisters oil companies.
Oman Oil Company will be looking to sell off 25% of Gulf’s shareholding in it by the end of next year. The oil company is looking to raise capital to counter its shore up budget deficit after the 2014 oil price crash.
In a report by Reuters, Mohammed al Rumhy, Oman’s Oil Minister said last Wednesday that Oman Oil Company selected a team of underwriters for its IPO just a few hours after the closing of Aramco’s successful IPO.
After the 2014-2015 oil price crash, oil-dependent states such as Oman were affected and the recent modest oil price increments haven’t been doing these economies much good, further widening the countries’ budget deficits.
If the IPO hits the market as well as that of its rival company, Aramco, then Oman would use the funds to clear the deficits and possibly, put in place measures to diversify away from oil.
In the October report, S&P Global Ratings said: “Given this high reliance on the hydrocarbon sector, we view Oman’s economy as undiversified and subject to global oil industry dynamics.”
Oman belongs to the non-OPEC partners in OPEC+’s supply cut deal. Al Rumhy said that the company will later this week advise the other OPEC members to extend the supply cuts until the end of next year, perhaps to “spice up” its IPO deal.
OPEC members last Thursday and Friday met in Vienna to discuss a possible rollover of the supply cuts until the end of the first quarter of next year, a decision they passed last week.
The Omani oil minister told Reuters that he remained confident that the verdict of the members in last week’s Vienna meeting is still welcomed, but hopes the cuts can later be extended.