x Abu Dhabi, UAEWednesday 26 July 2017

Ipic and Oman Oil sign deal

Abu Dhabi's chief foreign energy investment vehicle has agreed to develop refineries and petrochemical plants with an Omani government-owned company, a bid to bring more jobs to the sultanate.

Abu Dhabi's main vehicle for foreign energy investment has signed an agreement with a state-owned Omani company to finance oil and gas projects.

The agreement, signed in Abu Dhabi on Wednesday by top officials of the emirate's International Petroleum Investment Company (Ipic) and Oman Oil, opens a route for building refineries and petrochemical plants, according to the official UAE news agency WAM.

"They've been working on trying to get a larger position in Oman for some time now, Ipic specifically," said Thaddeus Malesa, an independent Gulf energy analyst. "It makes perfect sense as far as their mandate is concerned why they're investing in Oman."

Khadem al Qubaisi, the managing director of Ipic, could not be reached for comment. Nasser al Jashmi, the chairman of Oman Oil and Oman's undersecretary for oil and gas, and Ahmed al Wahaibi, the chief executive of Oman Oil, declined to comment on the deal.

An influx of cash from Ipic would be an extra windfall for Oman, which with Bahrain is to benefit from a US$20 billion (Dh73.45bn) aid package being put together by other GCC states after unrest in both countries spurred in part by high unemployment.

The agreement strengthens the ties between Oman and the UAE, which share a 410km border and are also linked in an ambitious $805 million residential and tourism complex under development by the Dubai company Majid Al Futtaim Holding.

The deal is not Ipic's first involvement in energy in Oman. In 2009, Ipic and Oman Oil agreed to develop a refinery and petrochemical complex in the Omani coastal town of Duqm. A rise in costs has slowed the $5bn project, which will need the Omani government's approval once the results of a second feasibility study are in later this year.

Plans for the Duqm development, which include an airport, fishing harbour and tourism site, were also meant to bring more jobs to Oman, whose hydrocarbon resources are much less than the UAE's.

"We see significant synergistic potential between Ipic and Oman Oil," Mr al Qubaisi said in 2009 when the Duqm agreement was signed. "Our co-operation will be beneficial for both Ipic and [Oman Oil] and create social and economic benefits for UAE and Oman."

ayee@thenational.ae