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Oman continues economic reforms by listing drilling company on stock exchange

Oman’s fiscal performance has improved in the last year, and the country wants to produce more alternative forms of energy, such as hydrogen.
Oman's Minister of Oil and Gas Mohammed bin Hamad al-Rumhy.

Oman announced Sunday it will sell a major stake in its state-owned drilling company. 

Abraj Energy Services will list 49% of the company on the Muscat Stock Exchange via an initial public offering in March. The offering will be available to investors in Oman and internationally, with the exception of the United States, the official Oman News Agency reported. 

Abraj is fully owned by Oman’s state oil and gas company, OQ. 

The inability of US investors to buy Abraj is likely due to the sale not being registered in the United States. Abraj’s website simply cited “applicable legal restrictions” on the matter. 

Why it matters: Abraj is the largest drilling company in Oman with a 30% share of the market, according to Reuters. 

The move comes at an important time for Oman’s energy sector. Like other Gulf states, Oman is seeking to reduce its dependence on oil and gas. Energy Minister Salim Al Aufi told Al-Monitor this month that Oman plans to export green hydrogen and ammonia in the near future. 

The listing of Abraj also fits with recent economic reforms in Oman. The sultanate introduced sweeping reforms in 2020 to reduce the country’s massive budget deficits. High oil prices in 2022 helped Oman buy back some of its debt. The overall economic situation is “fragile,” however, as Oman’s diversification plans have yet to come to fruition, Sebastian Castelier wrote for Al-Monitor Pro this month. 

Oman had a budget surplus last year — the first one since 2013. The credit rating agencies Fitch and S&P both upgraded Oman late last year due to improved fiscal performance. The sale of Abraj could further help Oman increase government revenue. 

Know more: Gulf states are committed to oil and gas for at least the near term, even as the world seeks to transition toward renewable energy. Saudi and Qatari officials told the World Economic Forum in Davos last week that oil and gas still require significant investment. 

Fitch released a report last month saying natural gas exports from the Middle East and North Africa will experience “strong growth over the coming decade.” 

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