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OQ’s methanol unit is latest in Oman’s privatisation push

By Matt Smith
Investors check prices at Oman's stock exchange. OQ Base Industries is due to list in December Alamy/Christine Osborne via Reuters
Investors check prices at Oman's stock exchange. OQ Base Industries is due to list in December
  • OQ Base Industries set for IPO
  • Fourth flotation of an OQ unit
  • Muscat aims to diversify bourse

OQ Base Industries is to sell up to 49 percent of its shares through an initial public offering in Oman – the fourth flotation of an OQ subsidiary since March 2023.

The Omani state oil company raised OR748.8 million ($1.94 billion) in October by offloading a 25 percent stake in its upstream subsidiary OQ Exploration and Production. The IPO was Oman’s largest so far

OQ Gas Networks and another OQ unit, Abraj Energy Services, raised $749 million and $244 million respectively through IPOs last year. 

OQ Base Industries announced on Monday that it will be the next subsidiary to be part-privatised. Its IPO is set to begin in November pending regulatory approvals, although the company has not specified an exact start date. 

The stock will list on Muscat’s bourse in December, it said.

The Oman Investment Authority, the sultanate’s sovereign wealth fund, owns OQ. In 2022, the OIA pledged to privatise at least 30 companies by 2025. 

The sale of stakes in OQ units boosts government coffers, diversifies Muscat’s bourse and furthers Oman’s ambition to join the MSCI and FTSE emerging market indexes.

Bank Muscat, Bank Dhofar and Morgan Stanley will act as joint global coordinators on the OQ Base Industries flotation. OQ is selling the shares and will receive all sales proceeds.

OQ Base Industries’ annual revenue was $510 million in 2023. It expects to pay a dividend of $85 million for the 2024 financial year and pledges to increase its annual dividend by at least 5 percent in 2025 and 2026.

The company makes methanol, ammonia and other liquefied petroleum gas products including propane, butane and cooking gas. Its three Omani plants have a combined capacity of 1,816 ktpa (kilo-tonnes per annum): 1,095 ktpa methanol, 365 ktpa ammonia and 356 ktpa LPG products.

There have been 30 IPOs across the GCC in the first nine months of 2024. They have raised a combined $5.2 billion, which is 24 percent down on the same period in 2023, according to Kuwaiti asset manager Markaz.

However, a flurry of fourth-quarter flotations should enable the 2024 totals to equal or eclipse the 2023 figures.

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