OOC signed with Gulf Investment Corporation for a 20% Share of Oman Polypropylene Company

Source: www.gulfoilandgas.com 12/20/2004, Location: Middle East

Muscat, Oman, - Oman Oil Company S.A.O.C. (OOC) signed an agreement for the sale of a 20% interest in the US$ 313 million Oman Polypropylene LLC (OPP) to Gulf Investment Corporation (GIC), following the ‘in principle agreement’ reached between the companies as per the announcement made in June 2004.

The agreement was signed on behalf of OOC by H.E. Maqbool Ali Sultan, Minister of Commerce and Industry and Chairman of OOC and Mr. Hisham Al Razzuqi, the Chief Executive Officer on behalf of GIC.

OPP is a joint venture between OOC and LG International of Korea with 80% and 20% stakes respectively. The share of GIC will be carved out from OOC’s 80% ownership in the Company and will entitle GIC for a seat on the Board of Directors of OPP.

H.E. Maqbool Ali Sultan, Minister of Commerce & Industry and OOC’s Chairman stated that the addition of GIC as an investor in OPP will further enhance the company’s shareholding. The Minister further said that GIC’s investment in OPP comes in line with Oman Oil Company investment guidelines and ambition by facilitating foreign investment in the Sultanate.

The Chief Executive Officer of GIC, Mr. Hisham Al-Razzuqi also stated that on this occasion GIC is very pleased to be partners with Oman Oil Company in this important project. They are optimistic of OPP’s future and will continue to seek feasible investment opportunities that add value to Oman’s economy, and therefore enhance growth prospects. He also added that this fits perfectly with GIC’s mandate to support the development of private enterprise and economic growth in the GCC region.

OPP was established to construct and operate a polypropylene plant in Sohar Industrial Area with a capacity to produce 340,000 tonnes per annum of polypropylene product. The project, which is started as part of Sohar refinery complex, aims to add value to the “propylene” stream to produce a product that can be used in a large array of downstream industries.

Oman Oil Company signed with Gulf Investment Corporation for a 20% Share of Oman Polypropylene Company

The plant is being constructed on EPC basis by a consortium of LG International Cooperation and LG Engineering & Construction Corporation. The plant is expected to directly employ 160 people at operation with tens of other jobs indirectly in activities outsourced to supporting contractors.

Oman Polypropylene will market production in the Indian subcontinent, Iran, Middle East and east and southern Africa and LG International will be the marketer in the rest of international markets. Initially, ninety per cent of the production will be exported and the remaining 10 per cent will meet the existing domestic requirements. However, OPP hopes to encourage the domestic utilization in the downstream sector and to increase its allocation for the domestic use beyond the presently envisaged ratio of 10%.

The plant will commence commercial production in the third quarter of 2006



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