Pride In Your Work

What are some of the major expansion projects that have been undertaken by Orpic in the past 12 months, and how will they contribute to current and future operations?

To achieve Orpic’s vision of building an Omani integrated refining and petrochemical business that we are proud of, we must support opportunities to grow our people, grow our business, and grow our capacity to meet the needs of Oman and the international markets. Our strategic growth projects are in line with our plans to add value to the oil and gas molecules produced in Oman, operate to high HSE standards, and focus on a higher standard of efficiency, lower costs, and serving the Sultanate with pride. The company’s current growth projects, including Sohar Refinery Improvement Project, Muscat Sohar Product Pipeline, and the Liwa Plastics Industries Complex are not only expected to generate significant financial returns to our shareholders but will further diversify Orpic’s product mix and intensify its downstream business operations.

What challenges have been faced in the market over the past year, and how will Orpic look to mitigate these concerns?

Like any industry, challenges and changing market conditions have the ability to impact all businesses small and large, including impacts on margins and pressure on costs. However Orpic, as the sole supplier of the nation’s fuel, has an ongoing commitment to operate the refinery to meet market needs, regardless of any challenges or industry changes. To minimize the effect of changing market conditions, Orpic has implemented a number of short- and long-term initiatives to improve performance and financial results, which is already yielding positive outcomes.

The natural gas market in Oman has a lot of potential. How can Orpic contribute to the development of this segment?

Currently, one of the major usages of Oman’s natural gas is to produce energy. To obtain maximum benefits from this natural resource, Orpic is delivering a major strategic growth project known as the Liwa Plastics Industries Complex (LPIC). In addition to burning lean gas for energy, LPIC will extract C2+ molecules from natural gas and use it to produce polyolefins, which will increase the value gained from natural gas. The LPIC project will enable downstream investment, such as the plastic conversion industry, and further enhance the socio-economic impact of Orpic across the Sultanate. Through future business relations with major plastic converters in the industry, involving both large businesses and SMEs, LPIC has the potential to be a facilitator of the establishment and growth of a plastic manufacturing industry in Oman.

Polyethylene is to be produced in Oman for the first time. How important is this both for Orpic and the petrochemical sector?

Upon the commissioning of the LPIC project, Oman will be a producer of polyethylene, along with extra quantity of polypropylene. This is a significant strategy for Orpic and the petrochemical sector in Oman, as this will allow Orpic to increase its range of polymer products, and tap new markets both in Oman and abroad. With a forecast to produce around one million tons of polymers annually, Orpic will be in a strong position to compete in the international polymer market, and at the same time improve value optimization within Oman, by converting the natural gas to plastics.

How does Orpic currently manage its relationship with banks, both in Oman and the GCC?

Orpic has longstanding positive relations with both local and GCC banks, and we view this as a vital element to Orpic’s continued growth. Our institutional stakeholders have demonstrated a strong level of commitment and support to Orpic, both at an operational level as well as at a project level, making us a preferred partner. In May this year, Orpic successfully achieved an $908.86 million corporate loan through a syndicated facility. This was the first corporate debt raising activity undertaken by Orpic, which was met with overwhelming confidence and support from local banks. This is a powerful indication of Orpic’s financial strength and the certainty we have been able to generate in the market as a credit-worthy entity. We intend to further strengthen our relationship with banking institutions with the upcoming financing of LPIC project, which will give local and GCC banks an opportunity to be part of this integral development.

There has been talk regarding privatizing certain areas of Orpic’s business. What impact will this have on current operations?

We view our shareholder’s consideration to part privatize Orpic sometime in the future as a natural progression to their investment management. Orpic is an independent entity that runs on a commercial basis and has a governance structure that supports this. Any such action by our shareholders will further embolden Orpic’s commercial standing.