GENERAL & ECONOMIC NEWS

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In line with its commitment to ‘Underwrite Oman’s Progress’, the Oman Insurance Association (OIA) — a trade body consisting of Insurance Companies, Insurance Brokers and Loss Adjusters — has elected a new Board of Directors with eminent members from the insurance industry.
Sayyid Nassir al Busaidy, Oman United Insurance Company, is the new Chairman of OIA and Lloyd East (RSA Middle East) and Rawny Khadr (Dhofar Insurance) are the Deputy Chairmen. Srinivasan AR (Falcon Insurance) is the Treasurer and Adil al Lawati (Al Futtaim) is the Secretary of OIA. Other members of the Board include Hasan al Lawati (Marsh) and P K Mohan (RMS).
The new Board met for the first time on April 3 to decide on its agenda for the insurance sector of Oman for 2016.
OIA was established six years ago by Regn No 142 dated on December 18, 2010, issued by the Ministry of Social Development to support the members’ interests and implement the best trade practices and industry benchmarking in Oman.
The OIA has successfully recruited 100 per cent membership amongst insurance companies and also has recruited many of the key brokers in Oman as full members.

Oman Shipping Company’s subsidiary Oman Container Lines has signed an agreement with the Port of Salalah to start a shipping line between the port and Jebel Ali in the United Arab Emirates (UAE).
 
The agreement, which is to operate a new feeder line, will connect ports of Salalah, Duqm, Sohar and Jebel Ali.
 
The shipping service, linking the ports of Salalah, Duqm, Sohar and Jebel Ali, will start operation by the middle of April once in a fortnight, which will be changed to a weekly service later.
 
Dr Ali bin Masoud Al Sunaidi, minister of commerce and industry, recently said that the government discussed with Salalah Port and AP Moller Shipping line to bring some of their international cargo to Iran via Salalah. This can be transported from Salalah to Sohar using the newly planned service and then take it to Iran’s Bander Abbas port through the existing feeder line from Sohar. This is aimed at facilitating enough cargo for the feeder shipping line operating between Sohar and Bander Abbas ports every fortnight. The shipping line complained that it is not getting enough cargo in the sector to make it viable. Sohar-Bander Abbas feeder ship can take 100 containers.
 
Oman is using the service for bringing raw material from Iran for a glass factory in Sohar. “Today, we are also getting some loose materials from Iran to feed our factories in Sohar,” added the minister.
 
Tariq bin Mohammad Al Junaidi, chief executive officer of Oman Shipping Company and David Gledhill, chief executive officer of the Port of Salalah signed the agreement.

Oman will encourage households to generate electricity with solar panels and feed it into the national grid, Qais Al Zakwani, executive director of the Authority for Electricity Regulation, said on Monday.

The policy could put the Sultanate in the forefront of Middle East nations promoting widespread use of solar power. Faced with low crude oil prices, the Omani government is seeking ways to save money, including a cut in electricity subsidies for commercial and industrial users.

Zakwani said the authority aimed to have a mechanism in place by mid-year for households to generate power using solar roofing panels, and provide the power to the grid in exchange for cuts in their electricity tariffs.

Zakwani said the new programme would initially focus on residential units but eventually be extended to commercial entities; "we seek distributed power generation". He said it was too early to estimate the financial size of the programme.

Norwegian oil and gas operator DNO has spudded its first exploration well in Block 36 in the southwestern part of the Sultanate, marking the start of an energetic exploratory effort targeting this promising concession in the prolific Rub Al Khali basin. The Hayah-1 exploration well was spudded last month, the company stated in a report of its financial and operational performance for 2015 covering all its licenses in the Middle East and North Africa region, including Oman. DNO has a 75 per cent participating interest in the 18,000 sq km concession, which it acquired in 2013 via a farm-in agreement concluded with the previous operator, Allied Petroleum. The latter holds the balance 25 per cent.

Attention however has been primarily focused on its flagship Block 8 offshore Musandam Governorate, where the company operates Oman’s only offshore producing fields. Gross production from the Bukha and West Bukha offshore fields totalled 8,193 barrels of oil equivalent per day (boepd) last year, down from 15,678 boepd in 2014. Among the factors blamed for the decline are well-failure and a lack of new drilling activity. Produced volumes from Block 8 in 2015 were 3.0 million barrels of oil equivalent (MMboe). Cumulative field production at end-2015 was 86.8 MMboe. As part of efforts to boost oil and gas production from the West Bukha field, DNO is weighing plans to drill an additional well, the company said.

Ansaldo Energia Switzerland has been awarded two contracts worth approximately 600 million euros (around $666.71 million) for the supply of major power plant equipment to the Ibri and Sohar III independent power projects.

The 1510MW-Ibri power plant and 1710MW-Sohar III plants are expected to be commissioned in early 2019.

The two combined cycle power projects are developed by the consortium of Mitsui for which the Oman Power and Water Procurement (OPWP) company awarded the contract early this month.

Ansaldo Energia will supply the main power train equipment components, including for each power plant, four of Ansaldo Energia’s newly acquired high-efficiency advanced gas turbines, four heat recovery steam generators, two steam turbines and six turbo generators to SEPCOIII Electric Power Construction Cooperation of China, according to a statement from the company.

The Chinese firm will be responsible for engineering, procurement and construction (EPC) on a turnkey basis.

Ansaldo Energia will also provide field services to the firm under separate contracts during the construction phase and long term maintenance services to the operator after commissioning.

The Sultanate and Germany on Tuesday signed an agreement on mutual visa exemption for the holder of the official biometric passport.

The agreement was inked during a meeting here between HE Yousuf Bin Alawi Bin Abdullah, Minister Responsible for Foreign Affairs and Frank-Walter Steinmeier, German Foreign Minister.

Both the leaders reviewed bilateral cooperation and discussed latest developments in the region. They expressed satisfaction on the level of the bilateral relations, and stressed the importance of following-up and promoting the same in various fields.

Separately, addressing a press conference at the Foreign Ministry on Tuesday, Steinmeier hailed the role played by the Sultanate in maintaining peace in the region and its work to find peaceful solution to conflicts.

Oman Air is set to participate once again at the world’s largest travel fair, ITB Berlin, to be held at Messe Berlin between March 9 and 13. The carrier’s iconic white stand number 202 in Hall 22B will provide an ideal venue for showcasing Oman Air’s award-winning products and services, establishing new partnerships and renewing existing relationships, and announcing latest developments.
Furthermore, the national carrier of the Sultanate of Oman will be signing an agreement with a major service provider, which will add choice, value and convenience to the Oman Air passenger experience. Further details will be announced at the time of the signing.
Oman Air’s participation in this year’s event follows a year in which the airline has increased the size of its fleet to 40 aircraft, grown its network to include 50 exciting destinations and introduced more frequencies on many of its key routes.
Paul Gregorowitsch, Chief Executive Officer of Oman Air, anticipates a highly successful event. He says:
“ITB Berlin is the largest and arguably the most important travel fair in the global calendar. Oman Air has attended for many years and we have always found the event to be impressively organised and highly productive.
“This year, as Oman Air continues its ambitious programme of fleet and network expansion, we look forward to meeting a wide range of important trade partners, industry experts and, of course, individual air travellers. We will be discussing the potential for new destinations, new products and services and new partnerships throughout our growing network.
“And, vitally, we will be raising awareness of both Oman Air’s internationally-acclaimed passenger experience and of Oman’s numerous attractions as a leisure and business destination.
Since Oman Air’s participation in ITB Berlin 2015, the airline has introduced a range of new aircraft to its fleet including Boeing 737s and iconic Boeing 787 Dreamliners. The Dreamliners entered service in October and have been greeted with enthusiasm by customers. The fleet expansion programme will see the addition of more aircraft, including further Dreamliners, between now and 2020, by which time Oman Air will operate 70 airliners.

His Majesty Sultan Qaboos Bin Said on Sunday issued six Royal decrees.

Royal Decree No. 10/2016 promulgates the Land Transport Law, after it had been presented before the Council of Oman.

Article (1) states that the provisions of the Land Transport Law attached to this decree shall be enforced.

Article (2) says that the decree shall be published in the Official Gazette.

Royal Decree No. 11/2016 promulgates the Takaful Insurance Law, after it had been presented before the Council of Oman.

Article (1) enforces the Takaful (Collaborative) Insurance Law.

Article (2) says that the decree shall be published in the Official Gazette.

Royal Decree No. 12/2016 introduces amendments to some of the provisions of the Vehicle Insurance Law, after it had been presented before the Council of Oman.

Article (1) stipulates that the amendments of the Vehicle Insurance Law (Motor Insurance Law) attached to this decree shall be enforced.

Article (2) says that the decree shall be published in the Official Gazette.

Royal Decree No. 13/2016 ratifies the Sultanate of Oman’s joining the International Agreement on the Harmonised Commodity Description and Coding System, after it had been presented before Shura Council.

Article (1) approves the Sultanate’s joining the International Agreement on the Harmonised Commodity Description and Coding System.

Article (2) instructs the authorities concerned to deliver the documents required for joining the said agreement as per its provisions.

Article (3) states that this decree shall be published in the Official Gazette and be enforced on its date of issue.

Royal Decree No. 14/2016 endorses the oil agreement between the Sultanate of Oman and Hydrocarbon Finder E&P LLC for Bloc 7. Article (1) endorses the above-mentioned oil agreement.

Article (2) says that this decree shall be published in the Official Gazette and be enforced on its date of issue.

Royal Decree No. 15/2016 endorses Tethy’s Oil Limited Company’s conceding 100 per cent of its share quota (stake), rights and obligations in the petroleum agreement signed on September 6, 2005 for Bloc 15 to Odin Energy AS, as well as endorsing Odin Energy AS’s conceding 90 per cent of its share quota, rights and obligations in the petroleum agreement signed on September 6, 2005 for Bloc 15 to Hydrocrabon Finder LLC.

Article (1) endorses Tethy’s Oil Limited Company’s conceding 100 per cent of its share quota (stake), rights and obligations in the petroleum agreement signed on September 6, 2005 for Bloc 15 to Odin Energy AS.

Article (2) endorses Odin Energy AS’s conceding 90 per cent of its share quota, rights and obligations in the petroleum agreement signed on September 6, 2005 for Bloc 15 to Hydrocrabon Finder LLC.

Article (3) says that this decree shall be published in the Official Gazette and be enforced on its date of issue.

Oman’s electricity production increased to more than 32.8 thousand GW in 2015, logging a 12.6 per cent increase, compared to 2014 level.

The country`s water production exceeded 308 million cubic metres, an increase of 4.2 per cent, until November 2015, according to the latest statistics released by the National Centre for Statistics and Information (NCSI).

The Sultanate’s total electricity production till the end of December 2015 stood at 32,758.3 GW per hour, compared to 29,094.6 GW per hour in the corresponding period of 2014, constituting a rise of 12.6 per cent.

The Governorates of North and South Al Batinah, as well as the Governorate of A`Dhahirah, recorded the highest rate at the governorates level. Power production in these governorates stood at 16,861.6 GW per hour, accounting for an increase of 7.6 per cent, compared to 15,664.8 GW per hour in the same period last year. The Governorates of North and South A`Sharqiyah recorded the highest growth at 75.8 per cent in the production level, compared to the corresponding period last year. The total production in the two governorates stood at 5,044.4 GW per hour in 2015 compared to 2,868.9 GW per hour during the corresponding period in 2014.

A tender of government treasury bills, issue number 002, was held at the Central Bank of Oman (CBO) on Tuesday.

The total value of the allotted treasury bills amounted to OMR5 million, for a maturity period of 28 days, from March 2 till March 30, 2016.

The average accepted price reached 99.950 for every OMR100 while the minimum accepted price arrived at 99.950 per OMR100. The average discount rate and the average yield reached 0.65179 per cent and 0.65211 per cent respectively.

CORPORATE NEWS

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Port Services Corporation said that the company-led consortium has withdrawn from participating in a tender for managing a dry port in South Al Batinah Logistics Area since the project was not found to be commercially and financially viable.

This was based on an intensive study and a letter of regret was sent to Oman Logistics Company on April 3, the company said in a disclosure statement posted on MSM website. Earlier, Port Services Corporation-led consortium was shortlisted to participate in the tender.

Ominvest, together with its strategic partners Oman Investment Fund (OIF) and Arab Bank (Switzerland) (ABS), has entered into a memorandum of understanding with Oman Arab Bank (OAB) to acquire OAB’s investment banking business (OABINVEST).

The deal is subject to satisfactory due diligence and necessary approvals from the regulators, an Ominvest statement said on Wednesday.

With a successful track record spanning over two decades, OABINVEST is one of the largest asset managers in Oman. It serves leading institutional and ultra high net worth clients and has a healthy pipeline of corporate finance deals involving IPOs, debt placements and advisory mandates.

Ominvest group CEO AbdulAziz al Balushi said the new shareholding structure of OABINVEST will comprise: Ominvest 36 per cent, ABS 34 per cent and OIF 30 per cent. “Oman’s evolving economy presents significant opportunities for high-quality investment banking services and products. There has been an acute need for a larger local player with top-tier capabilities to effectively serve public- and private-sector clients.

Balushi said a deal is a major step towards building fee-based income sources for Ominvest and further diversifying its revenue streams.

“In the midst of a challenging economic situation and difficult market conditions normally arise attractive business and investment opportunities. This deal illustrates that a like-minded group of long-term value investors is capitalising on such opportunities and seizing the chance to buy and build profitable and durable businesses in keys sectors of the economy. Prospective shareholders of OABINVEST intend to further grow this platform to create employment opportunities for Omani nationals, help finance new ventures and create value for their stakeholders,” Balushi added.

It’s an encouraging development that foreign investors are demonstrating serious interest in buying Oman-based businesses, underpinning their confidence in the potential of the Omani market and commitment to partner with local institutional investors.

ABS chief executive Nasri Malhamé, said his company is pleased to join hands with Ominvest and OIF to acquire OABINVEST. He added that ABS will provide strategic support to OABINVEST in building a multi-asset operation covering international markets by scaling up OABINVEST’s resource base in regional and international set up.

OIF, a major shareholder in Ominvest, is co-investing in the transaction. Sheikh Hassan al Nabhani, CEO of OIF, said the acquisition is a major step towards realising the vision of creating a premier asset management company out of Oman – with global reach and capabilities.

Amin al Husseini, CEO, OAB, emphasised that the sale will boost OAB’s equity capital, significantly strengthen its financial position and help finance strategic initiatives related to digital banking and electronic delivery channels.

The sale encompasses the entire OABINVEST platform, including its systems, human resource, licences and assets.

Oman Oil Refineries and Petroleum Industries Company (Orpic) said its Sohar Refinery and polypropylene plant is currently undergoing a major planned turnaround and maintenance activity.

This planned turnaround is undertaken every three years to carry out normal equipment cleaning and inspection and also to carry out major modifications to key items of equipment.

“This time the scope is larger as Orpic wants to make modifications to the existing plant to allow a full integration of the new units, being constructed under the Sohar Refinery Improvement Project (SRIP), due for commissioning later in the year,” said a company release.

Explaining the need for the planned shutdown, Ralph Clim, acting COO, Orpic, stated, “Sohar Refinery maintains Orpic’s daily production reliably as it produces approximately 60 per cent of our requirements. This is very crucial for us as in the near future it will be linked to SRIP as part of our expansion plans. This shutdown is being used to execute a number of maintenance activities in order to improve the operational performance of Orpic’s plants. It is by far the most complex one undertaken yet, but we are happy with the progress and hope to deliver on time, on budget and as promised.”

A majority of leasing and hire purchase companies in the country have reached the minimum capital requirement stipulated by the Central Bank of Oman (CBO) at OMR25 million, well ahead of its deadline by the year-end.

A few other companies have structured their bond conversion plans in such a way so as to touch the paid-up capital at OMR25 million before the end of this year.

The CBO, a few years ago, had asked leasing and hire purchase companies to raise minimum capital to OMR25 million by the end of 2016 from OMR20 million in 2012 in a phased manner — OMR1 million each year starting from 2012.

“Our present paid-up capital is OMR26.32 million. It was raised by way of issuing bonus shares from retained earnings and rights issue. We had a OMR7.5 million rights issue in 2012,” Robert Pancras, chief executive officer (CEO) of the National Finance Company, told ‘Times of Oman’.

Oman Drydock Co (ODC) and Babcock International Group (BIG), the leading UK engineering services company, signed a memorandum of understanding (MoU) to jointly develop a naval capability in Duqm.

The signing of the MoU followed a period of concentrated efforts to bring together ODC’s well-established commercial shipyard and Babcock’s international naval support expertise, with a vision to create a joint venture (JV) capable of providing local and international navies with world-class engineering services in such a strategic location.

In a press release, ODC chairman Dr Abdulmalik al Hinai said, “We are glad with the growing demand on the maritime services provided by our company to its clients from different countries.”

“This agreement is an affirmation of our commitment to continue in achieving more excellence in meeting the market needs with the expectations of customers,” Hinai added.

Babcock’s warship support director Mike Whalley said, “We are delighted to be ODC’s chosen partner to establish this joint naval capability.” Whalley said, “The achievement of this first milestone is an important positive step towards our common goal. We are fully committed to continue to develop this initiative, hand in hand with ODC, into future operational and growth phases”.


Dr Rashid bin Salim Al Masrouri, chairman of Oman Food Investment Holding Company said it is implementing four major ventures at a cost of OMR270 million. The ventures are expected to improve food security and economic diversification in the Sultanate.

In a statement, he said that that the four projects will start production in the next three years, one by one. The major investors in these ventures are investment and pension funds.

Mazoon Dairy and A’Namma Poultry Company were recently established, in addition to a project to collect and manufacture dairy products in the Governorate of Dhofar. A project for red meat is expected to be unveiled soon.

He said that Oman Food Investment has promoted Mazoon Dairy to undertake the flagship dairy project for Oman. The project, which will be set up in the wilayat of Al Sanina in the Governorate of Al Buraimi, has a capital outlay of OMR100 million with a debt equity mix of 50:50. Oman Food Investment’s contribution in the equity is 20 per cent.

The farm will start with 4,000 cows in 2017, which will grow to a herd size of 25,000 in 2026. The project is expected to commence in 2015 with commercial production expected in 2017.The company will produce approximately 202 million litres in 2026 and 985 million litres in 2040. This, along with an increase in existing production and the new milk collection scheme being promoted, will reduce the import dependency from 69 per cent in 2014 to 13 per cent in 2026.

Net Imports (Imports-Exports) could be negative in 2040 allowing Oman to become a net exporter of dairy products.

“Oman Food Investment has also promoted A’Namma Poultry project with a capital outlay of OMR100 million. The debt equity mix in the project is 50:50 and OFIC’s contribution is 20 per cent of equity. The project would be state-of-the-art using the latest technology and imported equipment and processes creating a benchmark for other players to follow. This is expected to improve the overall technology, and efficiency levels in the poultry industry in Oman,” he said.

The Muscat National Development and Investment Company (ASAAS) has announced that the sultanate’s first budget airline will fly under the name Salam Air.

The name, derived from the Arabic greeting, is a tribute to Oman’s deeply-rooted culture and long-standing history as an ambassador of peace. It was chosen after a nationwide poll conducted on social networking platforms, Twitter and ASAAS’ corporate website. “From the get-go, we were adamant about involving the general public in the process,” said Eng Khalid bin Hilal al Yahmadi, CEO, ASAAS.

Oman Telecommunications Company (Omantel) has signed a formal memorandum of understand (MOU) with Ericsson to enhance network capabilities and services according to the company’s new transformation strategy. Talal Al Mamari, CEO of Omantel said, “At Omantel, we see ourselves as innovators and early adopters of new technology. So it is vital that we partner with companies, who can work with us symbiotically, to deliver new services and innovations for the continued evolution of the Omantel 3.0 transformation strategy. This agreement with Ericsson comes as a part of our objective to deploy new digital smart home, innovative business and eGovernment services.

Punj Lloyd Ltd, an Indian engineering and construction major, has received oil and gas engineering, procurement and construction (EPC) orders worth US$304mn from Oman Oil Refineries and Petroleum Industries Co (Orpic) and Oman Gas Co (OGC).

The scope of work for the contracts includes the construction of a 14” diameter, 300km natural gas liquid (NGL) pipeline and a 32” diameter, 301km gas pipeline and construction of block valve and pigging stations, Punj Lloyd said in a filing with India`s National Stock Exchange (NSE). Both pipelines need to be completed within 38 and 35 months, respectively.

A major tourism complex with an investment of OMR283 million is taking shape in Duqm. An agreement granting land usufruct for building the tourism complex was signed by Special Economic Zone Authority in Duqm (Sezad) on Monday with Marina Duqm Company of the Golden group.

“This will include hotels, a mall, residential complexes, entertainment centre, water theme park and a number of other tourist services and facilities,” said the press statement.

The tourist façade project includes three five, four and three-star hotels, a four-star hotel suite and residential complexes comprising villas and apartments. The project also includes the construction of a mall with a range of restaurants, cafes, stores, water amusement park, a variety of different beach games, a mosque, a cultural and entertainment center, gardens, and public services and utilities.