Proposed merger between Oman Oil and Orpic could result in $3bn gain
The proposed merger between two of the largest energy sector firms in the sultanate – Oman Oil Co (OOC) and Oman Oil Refineries and Petroleum Industries Co (Orpic) – could result in an integrated gain of US$3bn due to improvement in efficiency and synergy between the two organisations, a senior government official told media-persons on Tuesday.
H E Nasser bin Khamis al Jashmi, Undersecretary of the Ministry of Finance said there could be many benefits, which would be realised in due course of time, from the implementation of the proposed merger between the two companies. H E Jashmi was speaking to reporters on the sidelines of the First Sustainability Conference organised by Oman Centre for Governance and Sustainability on Tuesday at the Oman Convention and Exhibition Centre. He said, “We are expecting gains to the tune of US$3bn from integrating downstream projects of OOC and Orpic, and bring synergies between them.” H E Jashmi is a board member at both companies.
The government recently announced its plan to merge OOC and Orpic’s downstream businesses and appointed a new group CEO as part of the plans to integrate the two companies. Musab Abdullah al Mahruqi was appointed as new group CEO.
The merged entity will have a combined refined capacity of around 1.1mn barrels per day including through joint-venture projects in countries such as India and Hungary.
H E Jashmi also informed that the ministry has roped in a global consultant to evaluate the benefits of the merger, and the consultant is expected to make suggestions about the integration of assets, projects and resources. The consultant is expected to give its recommendations by the second quarter of 2019, he said.
While speaking at the conference, H E Jashmi stressed on the need for diversification to create jobs for youths in Oman. He also pointed out that the diversification of economy is still a distant dream as revenues from crude still accounts for 70-80 per cent of Oman’s total revenues.
The conference was attended by a number of senior officials from various ministries along with representatives of the private sector. The Capital Market Authority’s executive president H E Abdullah bin Salim al Salmi and H E Talal al Rahbi, deputy secretary general of Supreme Council for Planning also participated in the event.