Oman oil-drilling IPO draws Saudi wealth fund as anchor investor

Oman’s OQ SAOC plans to raise as much as $244m from the initial public offering (IPO) of its oil-drilling unit and has brought in Saudi Arabia’s wealth fund as an anchor investor.

Helped by a surge in energy prices, governments across the Gulf have been listing assets to fund the diversification of their economies and open up their stock markets to more international investors.

Three subsidiaries of state-owned energy firm OQ are selling 49 per cent of Abraj Energy Services SAOC — or just over 377 million shares — at 242 baizas to 249 baizas apiece, according to a statement. Retail investors can get a discounted price of 224 baizas.

الهيئة العامة لسوق المال توافق على طرح أكثر من 377 مليون سهم من #أبراج_لخدمات_الطاقة للاكتتاب العام

لقراءة الخبر تفضلوا بزيارة الرابط أدناه:https://t.co/C9ChLHI204 pic.twitter.com/UQVLoFLRS7

— Abraj Energy Services (@abraj_energy) February 11, 2023

Anchor investors will subscribe for 40 per cent of the shares at the maximum price. Saudi Omani Investment Company, a unit of Riyadh’s Public Investment Fund, will buy 20 per cent, while Royal Court Affairs and Schlumberger Oman & Co will each take 10 per cent.

Biggest since 2010

Abraj Energy will be Oman’s largest IPO since 2010, when telecom operator Nawras, now known as Ooredoo Oman, raised $475m, data compiled by Bloomberg show.

Abraj Energy will take orders from institutional investors from February 20 to March 2, while retail buyers may bid until March 1. Final pricing will be announced on March 6, with trading in the shares due to start March 14.

The sultanate is joining the Gulf’s listing boom, which has mainly been confined to Saudi Arabia and the UAE. Last year was a banner 12 months for the Middle East, with IPOs raising almost $23bn.

More Oman sales

The Oman Investment Authority said in December that it plans to raise more than $1.3bn by selling assets in eight sectors this year, including energy, aviation, tourism and communications. OQ is also planning an IPO of its gas pipelines unit and could raise as much as $800m, Bloomberg News reported in September.

Abraj Energy said it intends to pay a dividend this year of 85 per cent of 2022 profit. In 2024 and 2025 it will pay 85 per cent of the previous year’s profit in dividends or increase the payout by 6 per cent, depending on what’s higher.

The sultanate pumps around one million barrels of oil a day. While it’s not a member of the Organization of Petroleum Exporting Countries, it is part of the wider OPEC+ alliance. The country recorded a budget surplus in the first half of 2022 driven by higher oil prices, which have recently eased.

Ahli Bank of Oman, EFG Hermes, National Bank of Oman are global coordinators for the IPO.

Read: Oman oil driller Abraj Energy hires banks for $500m IPO