OQ Exploration and Production (OQEP), Oman’s premier upstream energy company, has formally established a $2 billion international sukuk programme, marking a major step forward in the sultanate’s corporate financing strategy. Announced in mid-October 2026, the framework has already garnered strong validation from international credit markets, securing preliminary investment-grade ‘BBB-’ and regional ‘gcAA-’ ratings from S&P Global Ratings.
While the establishment of the multi-billion-dollar framework represents a significant institutional milestone, corporate leadership has emphasized that the setup is strictly a strategic mechanism rather than an immediate financing drawdown. The programme is specifically designed to expand OQEP’s funding horizons, diversify its capital sources, and optimize its institutional readiness to tap into international debt capital markets whenever favorable market conditions and corporate requirements align.
What OQEP Announced
According to financial disclosures and reporting from Muscat Daily, the newly minted sukuk programme serves as an overarching framework for potential future debt issuances. Company officials noted that any future sukuk instruments issued under this umbrella could potentially be listed on the London Stock Exchange’s International Securities Market (ISM). Such a move would further elevate OQEP’s global visibility and attract a broader pool of international institutional investors, subject to prevailing macroeconomic conditions, precise funding needs, and requisite regulatory approvals.
Importantly, corporate representatives clarified that the creation of the $2 billion framework does not alter OQEP’s pre-approved capital expenditure plans or long-term operational strategy. The company continues to maintain a robust operational footprint across the Sultanate of Oman, managing critical energy assets including Blocks 60, 10, 65, 9, 53, and 61. Backed by these high-yield assets, OQEP’s production volume reached an impressive average of approximately 224,000 barrels of oil equivalent per day by the close of the previous financial year, underscoring its pivotal role in the region’s energy landscape.
How the Sukuk Are Structured
Under the structural mechanics of the programme, any forthcoming issuances will be channeled through OQEP Sukuk Ltd., a specialized issuing vehicle designed for international debt markets. To ensure compliance with Islamic financial principles, the transaction structure incorporates a precise asset-allocation formula. At least 55% of the total proceeds generated from any future issuance will be utilized to purchase tangible assets directly from OQEP pursuant to a formal purchase agreement. Meanwhile, no more than 45% of the proceeds will be allocated toward acquiring a carefully curated portfolio of commodities, commonly known in Islamic finance as murabaha assets.
Financial analysts note that the proceeds harvested from these future issuances are earmarked for a versatile range of corporate objectives, including debt refinancing, vital capital expenditure initiatives, and general corporate purposes. This flexible structural design allows OQEP to navigate shifting global liquidity cycles while maintaining strict adherence to Sharia-compliant financing norms.
Ratings Context From July
The preliminary credit evaluations awarded to the sukuk programme build upon a solid foundation of issuer ratings secured earlier in the year. In July 2026, S&P Global Ratings assigned OQEP a long-term global-scale rating of ‘BBB-’ with a stable outlook, alongside a ‘bbb-’ standalone credit assessment and a robust ‘gcAA-’ GCC regional-scale rating. Concurrently, Fitch Ratings assigned the company an identical long-term global-scale rating of ‘BBB-’ with a stable outlook.
Reflecting on these achievements earlier in the year, Mahmoud bin Abdullah al Hashmi, Chief Executive Officer of OQEP, highlighted the significance of attaining investment-grade status from multiple leading international agencies. He remarked that securing these endorsements represented a watershed moment in the company’s corporate evolution, enhancing its credibility and lowering its cost of capital as it pursues long-term strategic growth. While those earlier evaluations applied directly to the issuer, the new preliminary ratings extend this financial credibility directly to the newly established debt framework.
Nine-Month Results and the OQGN Precedent
The announcement of the sukuk framework coincided with the release of OQEP’s financial performance figures for the nine-month period ending September 30, 2026. The company reported a robust financial standing, highlighted by a 25.1% year-on-year surge in net profit, which reached RO296.3 million. Revenue similarly expanded by 10.5% to touch RO256 million, climbing from RO633.8 million during the corresponding period in the previous year.
Operational efficiency remained a key driver of profitability. OQEP successfully reduced its cost of sales by 1% down to RO434.4 million, while its operating expenditure per barrel remained tightly controlled below the $9 threshold, demonstrating disciplined cost management amid fluctuating global commodity cycles. Although other income experienced a 27.7% decline to RO30.3 million from RO41.8 million, the company’s core upstream operations continued to deliver formidable cash flows.
OQEP is not alone among OQ subsidiaries in pursuing preemptive capital market readiness. Earlier in October, OQ Gas Networks (OQGN), another prominent subsidiary within the wider OQ group, established its own $1 billion sukuk issuance programme. Much like OQEP’s framework, the OQGN initiative was established without an immediate capital drawdown or any alteration to the company’s approved business plan and capital expenditure outlays. Eng Mansoor bin Ali al Abdali, CEO of OQGN, noted at the time that the framework merely enhances the company’s structural agility within international debt markets.
What Happens Next
With the regulatory framework successfully established and preliminary ratings secured from S&P Global Ratings, OQEP retains the strategic flexibility to approach international debt markets whenever conditions prove optimal. Any actual issuance under the $2 billion programme will remain contingent upon comprehensive evaluations of corporate funding requirements, prevailing macroeconomic and market conditions, and the acquisition of all necessary regulatory permissions. As international institutional investors increasingly look toward high-grade regional energy assets, OQEP’s structured approach positions the company to capitalize on favorable liquidity windows while maintaining disciplined financial governance.