Oman said to seek $2 billion bridge loan

Oman is more vulnerable to oil price swings than neighbors. (Shutterstock)
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Updated 04 July 2020

Oman said to seek $2 billion bridge loan

DUBAI: Oman is seeking a $2 billion bridge loan from international and regional banks, a source familiar with the matter said on Friday, confirming a report by LPC, a fixed income news service owned by Refinitiv.

The Gulf state was in talks with banks earlier this year about funding options, including a loan of about $2 billion, but discussions were put on hold due to the coronavirus crisis and plunging oil prices, sources previously said.

Discussions had now resumed, sources said on Friday.

Oman sent a request for proposals to banks in June for a $2 billion loan with a one-year maturity, which would be replaced by a bond issue, one source familiar with the matter said, confirming the LPC report.

Banks were expected to submit proposals this week, the source added.

A second source said that loan talks had resumed without giving details.

Oman’s Finance Ministry did not immediately respond to a Reuters request for comment. 

Oman, a relatively small crude producer and burdened by high levels of debt, is more vulnerable to oil price swings than most of its wealthier Gulf neighbors. 

It was downgraded in June by Moody’s further into junk territory to Ba3 from Ba2, with the ratings agency citing risks related to Oman’s financing needs and its diminishing buffers.

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 09 August 2020

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.