Omani oil majors seek combined loans worth $4.35bn
While PDO is seeking a $2.5bn loan to fund its projects, the Oman Oil Company has contacted banks about amending the terms of an existing $1.85bn loan
Two major Omani state-owned oil companies are in negotiations regarding loan facilities worth a combined $4.35bn, Reuters quoted its sources as saying on Sunday, as the duo turn to bank markets for finance in the wake of lower oil prices.
Petroleum Development Oman (PDO), majority-owned by Oman but with stakes held by Royal Dutch Shell, Total and Partex Oil and Gas, is seeking a $2.5bn loan to fund its projects, two sources aware of the matter told Reuters.
Meanwhile, state energy investment firm Oman Oil Company has contacted banks about amending the terms of an existing $1.85bn loan originally signed in September 2014, primarily aimed at increasing the length of the facility, according to one of the two sources, plus two further sources.
The continuation of the lower oil prices environment is stretching state finances in Gulf countries, with Oman in particular feeling the squeeze as it lacks the huge fiscal reserves of some of its neighbours.
In the year to November 2015, Oman's budget deficit was OMR4.07bn ($10.57bn), compared with a OMR233.4mn ($606.51mn) surplus a year earlier, according to the latest official data.
This situation is forcing state-owned companies, which had traditionally relied on the Omani government for funding, to turn to international markets.
Minister of Oil and Gas Mohammad bin Hamad al-Rumhy told reporters in February that PDO will in future borrow abroad if it needs to finance projects rather than ask for more funds from its shareholders.
Meanwhile, Oman Oil is already speaking with banks about raising a $1bn loan for its exploration and production subsidiary, its chief executive told Reuters last month.
The $1.85bn loan which Oman Oil is seeking to revise was its first borrowing from international loan markets and was supported by 16 banks, according to a statement at the time.