Mazin Al-Lamki

In just three years, EDO has evolved into a mature operational entity, implementing strategic reforms, collaborations, and innovative financial management strategies to sustain an investment-grade credit rating.

EDO was established by royal decree in 2020 with the purpose of managing the country’s largest oil and gas assets. From where did that need arise?

It was driven by the need to realize efficiencies and unlock growth opportunities in Oman’s energy sector, including oil and gas as well as new energies. This strategic redirection toward a market-driven management approach is in harmony with Oman’s Vision 2040, which emphasizes sustainability and economic diversification. Enhanced governance, rigorous oversight, specialized industry focus, and agility in commercial operations, coupled with a commitment to legal and financial soundness, are the cornerstones of this new approach. Under EDO’s stewardship, strategic asset management, initiatives for cost efficiency, and the adoption of industry best practices are instrumental in fostering financial stability, securing energy supply, amplifying revenue, and reducing production costs. Adopting this model would strengthen Oman’s resilience against the uncertainties of market fluctuations and the challenges of the energy transition. It also enables the government to refocus its attention on its intended role of policymaking and being a regulator. Furthermore, EDO’s proactive measures to diversify financing methods, sustain an investment-grade credit rating, and reform governance protocols substantially boost the operational effectiveness and financial robustness of the nation’s energy sector, thereby ensuring its long-term sustainability, and significant contribution to the nation’s economic diversification efforts.

Three years on, what has been EDO’s impact on Oman’s energy sector?

Reflecting on EDO’s journey over the past three years, the organization has evolved from start-up phase to become a mature operational entity. In the initial phase, our focus was on establishing the necessary infrastructure and capabilities to effectively manage our most strategic assets in Block 6. The journey has been challenging, though we have made significant progress, particularly in identifying strategic opportunities and formulating our asset strategy for Block 6 after completing thorough assessments. Ambitious objectives were embraced, including strengthening our core business, enhancing resilience against market volatility, and implementing procurement and governance enhancements. Led by a dedicated team of Omani talent, strategic governance reforms were also initiated, alongside the launch of Hydrom and EDO Gas entities. In alignment with Oman’s green energy objectives, EDO, through its subsidiary Hydrom, successfully executed block auctions and established strategic consortiums with international investors and developers. Collaborations with entities such as Hyport Duqm, Green Energy Oman (GEO), BP, and the SalalaH2 consortium for green hydrogen production in the Duqm region. Financially, EDO’s journey toward financial independence has been marked by fiscal discipline and strategic capital management. The securing of substantial capital for Block 6, innovative asset-backed financing, and fiscal negotiations have been instrumental in executing Oman’s financial strategies. Notably, achieving a USD1 billion sukuk deal and generating over USD100 million in savings, only made possible by EDO’s in-house innovative capital management. EDO’s journey is just beginning, and while we have achieved significant milestones, we recognize that there is still much work to be done as we are still laying the foundation for the future.

How did EDO raise its credit rating beyond that of Oman’s?

From the outset, we have focused on safeguarding our assets against market fluctuations, particularly within Block 6, ensuring budgetary stability even during economic downturns. therefore, our strategy has been clear: cut inefficiencies and attract investments that boost the country’s finances and growth. The approach is straightforward—stop value leakage and boost revenues through smart investments. Following a careful review of the asset’s financial framework, in relation to the volatility of the oil markets, EDO developed strategies to minimize the impact of market downturns, protecting the nation’s finances and its credit standing. We have designed our financial management approach to absorb volatility shocks, safeguard government revenues, and maintain a robust profile with credit agencies, therefore mitigating risks, preserving the government’s revenue, and maintaining a solid credit reputation.