Petroleum Development Oman (PDO), acting on behalf of the Government of the Sultanate of Oman, has successfully raised US$4bn from a group of international financial institutions, to support activities including the construction of major new oil and gas facilities
The borrowing will take the form of a five-year pre-export facility which was provided by a syndicate of international banks. HSBC Bank Oman acted as the sole International Financial Advisor.
The loan was priced at 160 basis points over the London Interbank Offered Rate (LIBOR). Throughout the planning and syndication phases, PDO worked closely with Oman’s Ministry of Finance and the Ministry of Oil and Gas.
PDO managing director Raoul Restucci said, “PDO has robust growth plans in place, and we are determined to stay the course and to deliver on our long-term ambitions. The money raised will help us to finance our business plans, as well as create more jobs and training opportunities for Omanis.
“This competitive new source of funding will enable us to reduce reliance on Government funding, so that it can redeploy resources to other areas of the economy.”
PDO plans to invest more than US$20bn over the next five years to sustain the company’s long-term hydrocarbon output. Examples include the Rabab Harweel Integrated Project, PDO’s largest capital project, which will enable the development of 240mn bbl of oil and 100mn bbl of condensate, along with the export of one trillion cubic feet of non-associated sale gas when production starts in 2019.
For its debut international financial market borrowing, PDO initially planned to raise around US$2.5bn in the form of a club deal with a small group of lenders. However, due to strong interest from the wider banking market, the facility was significantly oversubscribed to US$4.3bn. PDO elected to upsize the facility to US$4bn, with the difference being used to scale back banks’ commitments.
Haifa Al Khaifi, PDO’s finance director said, “The positive response we received from the international banking community during our meetings was very pleasing and an endorsement of PDO’s performance, activities and long-term business plans. Against this background and the competitive rate secured, we decided it was appropriate to increase the size of the borrowing.”