The liquidation of Oman International Petrochemical Industries Company (OMPET), set up more than a decade ago to produce polymer-based plastics at Sohar Industrial Port, has been completed, according to OQ Group, a key stakeholder in the proposed venture.

The development, coming nearly five years after the formal scrapping of the project, was announced by OQ – the global integrated energy group of the Sultanate of Oman - in its 2023 financial results released last week.

OMPET was established in 2012 as a joint venture of Oman Oil Company (as OQ was known then), LG Corporation and Takamul Investment Co (also a subsidiary of OQ Group). Production capacity was envisaged at 1.1-million tonnes/year of Purified Terephthalic Acid (PTA), the main raw material for polyethylene terephthalate (PET), a polymer used extensively in the global packaging industry.

The project, estimated to cost around $600 million at the time, was proposed to be built adjacent to the aromatics plant of OQ Refineries and Petroleum Industries (OQ - RPI), the paraxylene output of which would serve as feedstock for the OMPET venture.

In an update on the abortive venture, OQ said: “The Group owned 20% of the share capital of OMPET. This company was incorporated in 2013 and engaged in manufacturing PTA and PET products. As at 31 December 2019, the Board of OQ SAOC (parent company) reviewed the project status for OMPET and decided to withdraw this project, since the project was not economically viable. Based on the Board decision, the liquidation process of OMPET was completed during 2023.” Significantly, the OMPET liquidation was one of several structural changes reported by OQ Group across its expansive portfolio of wholly-owned companies, joint ventures, associate companies and subsidiaries during 2023.

Notable was the partial divestment by OQ Exploration & Production (EP), the upstream energy arm of OQ Group, in two onshore hydrocarbon blocks during the year. Following a farm-out agreement, OQ EP divested 40% of its working interest in the producing Block 60 to Medco Energi Oman Block 60 Limited, Oman Branch and Medco Daya Oman Block 60 Pte Ltd, Oman Branch for a consideration of RO 400.8 million.

OQ EP reached a similar farm-out deal with MedcoEnergi Oman Block 48 Limited, Oman Branch and Medco Daya Oman Block 48 Pte Ltd, Oman Branch, covering 40% of its working interest in Block 48 for a consideration of RO 11.5 million.

Also during the year, OQ Group sold a 49% stake in Abraj Energy Services, a leading drilling services contractor, as part of the latter’s public listing. Abraj was formally listed on the Muscat Stock Exchange (MSX) on March 14, 2023 with total issued share capital of 377.4 million shares representing 49% shares from the share capital. OQ Group retains the balance 51%.

Likewise, OQ Group sold a 49% stake in OQ Gas Networks as part of an IPO that resulted in the formal listing of the latter on the MSX on October 24, 2023, with total issued share capital of 2,122 million shares representing 49% shares of the share capital.

Earlier in the year, OQ Group’s investment in Vale Pelletizing Company LLC, which operates a major iron ore pelletising plant at Sohar Port, was disposed of by exercising the put option for a consideration of RO 48.138 million.

Additionally, in 2023, OQ Group sold its 30.4% investment in Gulf Energy Maritime PJSC (GEM), a maritime transportation company, for RO 23.5 million.