The SOE Landscape
Oman’s state-owned enterprise sector is extensive, spanning energy (OQ Group, Oman LNG), telecommunications (Omantel), utilities (Nama Group), logistics (Asyad Group), mining (Minerals Development Oman), finance (Bank Muscat government shareholding), and numerous smaller entities. The Oman Investment Authority (OIA), created in 2020 by merging the State General Reserve Fund and the Oman Investment Fund, serves as the primary holding entity. SOEs collectively represent a significant share of GDP, employment, and government revenue through dividends and tax payments.
Reform Objectives
SOE reform serves multiple objectives under Vision 2040: improving operational efficiency and corporate governance; generating revenue through IPOs and partial privatisations; reducing the fiscal burden of underperforming entities; attracting private investment and expertise; developing the Muscat Securities Exchange; and creating models of professional management that the broader economy can emulate. The reform agenda is ambitious and politically sensitive, as SOEs provide significant employment and are intertwined with national identity (particularly in the energy sector).
Progress to Date
Meaningful progress has been achieved since 2019. The OIA consolidation improved oversight and strategic coherence. The successful IPOs of OQ Gas Networks (2021), Abraj Energy Services, and the increased Omantel free float demonstrated market appetite and government commitment. Asyad Group’s consolidation of logistics entities (Oman Shipping, port operations, logistics services) created a more commercially focused national logistics champion. Corporate governance improvements, including board professionalisation and transparency requirements, have been implemented across major SOEs.
Remaining Challenges
Significant challenges persist: some SOEs remain overstaffed with limited commercial discipline; cross-subsidisation between profitable and loss-making entities obscures true performance; the pipeline of IPO-ready companies is limited; and political resistance to privatisation of entities perceived as national assets is real. The Muscat Stock Exchange’s limited liquidity constrains the size of possible IPOs. International investor participation requires continued improvements in disclosure standards, regulatory predictability, and market infrastructure. The reform journey is years from completion.