Investment Thesis
Oman’s energy sector presents a dual investment opportunity: monetising remaining hydrocarbons (with PDO and OQEP as direct vehicles) while participating in the energy transition (green hydrogen, renewable energy, LNG optimisation as gas displaces oil).
Key Investment Vehicles
Public equities:
- OQEP (OQ Exploration and Production) — MSX listed, 25% float, upstream exposure
- OQ Group entities — if additional IPOs proceed
- Oman LNG — potential future listing
Private/project finance:
- Green hydrogen projects (Hyport Duqm, ACME Group) — seeking equity partners and debt finance
- Solar IPPs (Manah Solar, further procurement rounds) — contracted revenue with OPWP off-take
- IWP desalination — contracted water purchase agreements
Infrastructure:
- Port of Duqm expansion — logistics for green hydrogen and refinery
- Green ammonia storage and shipping infrastructure
Risk Framework
Green hydrogen commercial risk: Off-take contracts are not yet binding at scale. Project finance for multi-billion green hydrogen projects requires binding 20+ year purchase agreements — currently not available.
OPEC+ production constraint: Limits OQEP’s near-term production growth and revenue upside.
Oil price sensitivity: All Omani energy investment carries oil price sensitivity — the fiscal and economic environment depends on oil above ~$75/barrel.
Return Profile
- Solar IPPs: Predictable contracted returns (estimated 8-12% equity IRR in regional benchmarks), lower risk
- Green hydrogen equity: Higher risk/return — dependent on commercial market development
- OQEP equity: Commodity-linked returns with moderate growth potential
Recommended Entry Points
Solar IPP procurement rounds (OPWP tender participation or secondary acquisition), OQEP equity on MSX (with oil price view), and green hydrogen early-stage equity (for patient capital with high-risk appetite).