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Middle East: Oman state-owned petrochemical companies' shareholdings to change

The ownership profile of Oman Refineries and Petrochemicals Company, Oman Polypropylene and Aromatics Oman is set to undergo a major change in the next few weeks, sources close to the three companies said this week.

This follows the formation of a new government-owned company called Oman Oil Refineries and Petroleum Industries, or ORPI, announced earlier this week.

"The shares of the three petrochemical and refining entities are to be distributed equally between the government, Oman Oil Company, or OOC, and a private company. All the three companies will function under the umbrella of ORPI under one central management," a source close to the matter said.

"The step has been taken to ensure similar decisions are taken for all the petrochemical entities depending on the market conditions," another source explained. The sources declined to comment on when they expect the new ownership profile to be announced, but said it would happen soon.

The three companies currently have a complex, interwoven shareholding pattern. OOC, a fully owned government subsidiary owns 79% of Aromatics Oman, whereas ORPC holds a 20% stake in the company. The remaining 1% is held by South Korea's LGI Corporation. Oman's Ministry of Finance owns 40% of Oman Polypropylene while OOC and LGI hold 40% and 20% respectively. The government of Oman, represented by the Ministry of Finance, owns 75% of ORPC's shares, while the OOC owns 25%. "There will be a uniform distribution of the shares in all the three companies after restructuring," a source said.

Earlier Oman's Oil and Gas Minister Mohammed bin Hamad al Rumhy, told the Oman News Agency that the adoption of an integrated approach to manage the plants run by these companies will "unify direction, follow strategic and financial planning and utilize assets and resources in order to achieve higher returns to the overall group."

In 2007, the government had merged Mina al Fahal refinery and Sohar refinery to form the ORPC. The Mina Al Fahal refinery has been operating since 1982 and its present refining capacity is 106,000 b/d. The Sohar refinery started operation in 2007, and its capacity is now 116,400 b/d. Commissioned in February 2010, Aromatics Oman has a nameplate capacity to produce 818,000 mt/year of paraxylene and 198,000 mt/year of benzene. Oman Polypropylene has a nameplate capacity of 340,000 mt/year of polypropylene.