Oman's OQ Group secures first-ever S&P ‘BBB-' rating
International ratings agency S&P Global Ratings has assigned a 'BBB-' global scale issuer credit rating and a 'gcAA-' Gulf Cooperation Council (GCC) regional scale rating to OQ SAOC, the wholly government-owned integrated energy group operating under the umbrella of Oman Investment Authority (OIA).
This marks the first time OQ Group has received a public rating from S&P. Commenting on the announcement in a post on Thursday, July 31, 2025, the Group stated that the rating affirms 'OQ's position as a national energy leader committed to long-term resilience and value creation.'
'The assessment highlights OQ's strong liquidity position, disciplined capital structure, and key role in supporting Oman's economic diversification and energy transition under Vision 2040,' the company added.
S&P said its assessment of OQ's business risk profile reflects its vertically integrated operations across the hydrocarbon value chain, with efforts to diversify and enhance its asset base. In 2024, upstream accounted for 60% of reported EBITDA, downstream 37%, and other segments—including alternative energy, marketing, manufacturing, and corporate functions—3%.
The agency noted that most of OQ's assets are located within Oman (rated BBB-/Stable/A-3), benefiting from the country's robust energy infrastructure. This provides feedstock security, particularly for its refining and petrochemical operations. A well-established trading arm supports both upstream and downstream segments by off-taking production and sourcing feedstock, enhancing operational flexibility.
OQ's downstream capacity was significantly boosted following the final completion of the 230,000-barrel-per-day Duqm (OQ8) refinery in April 2025. Developed as a 50:50 joint venture with Kuwait Petroleum (Europe), the refinery represents a major strategic milestone for the group.
S&P further highlighted OQ's government-backed mandate to promote economic diversification and investment in Oman. Through its subsidiary, OQ Alternative Energy, the company is investing in renewable energy projects, many of which are expected to be developed in partnership with private players, with OQ retaining up to 50% ownership. Final investment decisions on several of these initiatives are expected in 2025 and 2026.
Since 2021, OQ has significantly improved its balance sheet, reducing gross debt by over 45%—from RO 5.3 billion to RO 2.9 billion by end-2024. This deleveraging, supported by strong operating cash flows and nearly RO 2 billion in IPO and divestment proceeds over 2022–2024, underpins its robust credit profile, even amid expectations of a weaker market in 2025–2026. S&P expects funds from operations (FFO) to debt to remain solid at 50%–53% in 2025 and 54%–57% in 2026.
Despite planned capital expenditure of RO 700–800 million annually in 2025 and 2026, including investments in maintenance and alternative energy projects, OQ is projected to generate positive free operating cash flow (FOCF) of RO 125–175 million in 2025 and RO 150–200 million in 2026. This is supported by its strong liquidity, including RO 3 billion in cash and cash equivalents, largely placed in interest-bearing short-term deposits, the agency noted.
OQ maintains a conservative financial policy, targeting net debt to EBITDA of 2.0x–2.5x and keeping Funds from Operations (FFO) to debt above 55%. Annual dividends are set at RO 289 million, with additional payouts dependent on divestment proceeds. Distributions from 2026 onward are expected to remain balanced with performance, leverage, and investment priorities, S&P added.
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