Fitch affirms OQ at ‘BB+', outlook positive
According to Fitch, the rating mirrors OQ's continued close alignment with Oman's sovereign credit profile (also rated 'BB+' with a Positive Outlook), given its ownership by the Oman Investment Authority (OIA) and its central role in the country's oil, gas and renewable energy infrastructure.
'OQ accounts for a substantial portion of assets transferred to OIA from the Ministry of Finance in 2020. The government exercises strong influence over OQ's business and funding strategy through OIA. The state has no plans for the privatisation of OQ, but we expect the disposal of minority stakes in its subsidiaries, including core operating companies, to continue,' the ratings agency stated.
OQ's Standalone Credit Profile (SCP) was assessed at 'bbb-', underscoring its low leverage, strong operational performance and a conservative financial policy. These strengths provide the company with sufficient financial flexibility to pursue expansion projects, even as its operations remain primarily concentrated in Oman, said Fitch.
The ratings agency also referenced the successful IPO of two subsidiaries — OQ Exploration & Production (OQEP) and OQ Base Industries (OQBI) in 2024, which raised $2.5 billion. The proceeds helped significantly reduce OQ's debt by $1.7 billion, nearly wiping out net leverage.
'We expect leverage to gradually increase to about 1.5x by 2028 as the company invests in growth and Fitch-adjusted EBITDA normalises at about $2 billion on moderating oil prices and weaker refining margins. Major expansion initiatives are focused on the upstream business, including Marsa LNG project, the expansion of gas networks and decarbonisation,' Fitch stated.
The agency also underlined the 'very strong' incentive for government support, highlighting OQ's status as a strategic state asset. The company operates all of Oman's domestic refining assets, manages the entire natural gas transportation infrastructure and is a key national developer of clean energy projects.
This deep integration into Oman's critical infrastructure means a default by OQ would significantly impact the country's access to foreign financing — especially as the company is one of the largest non-sovereign borrowers in Oman, with a Fitch-adjusted gross debt of $7.7 billion at end-2024.
A significant aspect of OQ's future growth is its green transition. Through its subsidiary, OQ Alternative Energy, the company has been designated as Oman's national champion for clean energy and green hydrogen development. Its pipeline now includes up to 7 GW of clean energy projects, with a first wave of five wind and two solar projects slated for tender in 2025.
Substantial capital expenditures are expected over the next five years, especially following the final investment decisions on these clean energy initiatives. Capex is projected to average RO 600 million per year during 2025–2028.
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