• Home
• /
• World
• /
• Business

Oman's main oil producer to borrow finance abroad

Muscat - The PDO, Oman's top oil and gas exploration and production company, accounts for over 70 per cent of the country's crude oil production and nearly all of its natural gas supply.

 State-owned Petroleum Development Oman (PDO) will in future borrow abroad if it needs to finance projects rather than ask for more funds from its shareholders, Minister of Oil and Gas Mohammad bin Hamad Al Rumhy told reporters on Monday.
The PDO, Oman's top oil and gas exploration and production company, accounts for over 70 per cent of the country's crude oil production and nearly all of its natural gas supply.
The company is owned 60 per cent by the government of Oman, 34 per cent by Royal Dutch Shell, four per cent by Total and two per cent by Partex Oil and Gas, according to its website.
Al Rumhy's comment underlined the financial pressures faced by Oman because of low oil prices. The reduction in the government's oil revenues has pushed it into deficit, and its domestic borrowing has started to strain liquidity in the local banking system.
That means the government and state-owned firms will increasingly have to borrow abroad to finance themselves. The government plans to borrow between $5 billion and $10 billion abroad, central bank executive president Hamood Sangour Al Zadjali said last week.
Al Rumhy, also chairman of PDO, said the company had not postponed any projects despite low oil and gas prices.
"The only project that got delayed due to the need for further study and the current situation is the pilot project for the Habhab field," he said, referring to a potential oilfield.
Al Rumhy also said the engineering, procurement and construction contract for a subsea Iran-Oman gas pipeline was expected to be awarded before the end of this year.