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Skip Navigation LinksHome > English > News > Press Releases > PDO Successfully Raises US$ 4.00 Bln Funding
PDO Successfully Raises US$ 4.00 Bln Funding
Petroleum Development Oman (PDO), acting on behalf of the Government of the Sultanate of Oman, has successfully raised US$ 4.00 billion from a group of international financial institutions. In an environment of continued low global oil prices, the financing will be used to support the Company’s activities which include the construction of major new oil and gas facilities providing long-term economic benefits for the Sultanate.
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.
Today (Wednesday) the signing ceremony took place with His Excellency Dr Mohammed bin Hamad Al Rumhy, Oman’s Minister of Oil and Gas and PDO Chairman as the guest of honour. His Excellency was joined by HE Nasser bin Khamis Al Jashmi, Undersecretary at the Ministry of Finance and PDO Deputy Chairman along with senior executives from PDO and HSBC.
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,” he added.
PDO plans to invest more than US$ 20 billion over the next 5 years to sustain the Company’s long-term hydrocarbon output. Examples include the Rabab Harweel Integrated Project which is the Company’s largest capital project and will enable the development of 240 million barrels of oil and 100 million barrels of condensate along with the export of one trillion cubic feet of non-associated sale gas when production starts in 2019.
By ‘staying the course,’ PDO will also be able to sustain its commitment to creating jobs and training positions for Omanis through its National Objectives programme.
For its debut visit to the international financial markets PDO initially planned to raise around US$ 2.5 billion 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$ 4.3 bln. PDO elected to upsize the facility to US$4.00 bln 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.”
Andrew Long, CEO of HSBC Bank Oman commented: “We are delighted that the full resources of the HSBC Group have been brought to bear in bringing PDO to the market for the first time. This reflects our ability to assist the Sultanate of Oman in raising further its exposure in the international markets. Having been present in the Sultanate for around 68 years, we have been able to link our local market knowledge and our strong relationship with PDO with the broad technical capabilities that HSBC Group has in financing and advising the oil and gas sector.”
The senior phase for the five-year pre-export facility comprised of Bank of China, HSBC Bank, ING Bank, Intesa Sanpaolo, JPMorgan, National Bank of Abu Dhabi, Natixis, Société Générale, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation before the transaction went out to general syndication