Muscat – Global credit ratings agency Fitch has affirmed Energy Development Oman’s (EDO) long-term issuer default rating (IDR) at ‘BB’ with a positive outlook.

EDO’s long-term IDR is constrained by the rating of its sole shareholder, the Government of Oman, due to their close links in line with the agency’s government-related entities rating criteria, Fitch stated in a commentary issued on Friday.

EDO, Oman’s national energy company, owns a participating interest in two concessions, accounting for approximately 65% of Oman’s oil and gas production.

Fitch Ratings has revised EDO’s standalone credit profile (SCP) to ‘bbb+’ from ‘bbb’.

‘We have revised EDO’s standalone credit profile due to its growing track record of maintaining a prudent financial profile and successfully managing the size and scale of reserves and production within the current fiscal framework,’ the rating agency said.

According to Fitch, EDO’s SCP remains supported by its large-scale oil and gas operations, and robust and resilient cash flow generation, thanks to contracted sales prices for gas and a flexible royalty framework. Additionally, EDO maintains a flexible dividend policy and has low leverage.

Moreover, the rating agency expects the Omani government to continue providing support to EDO when necessary, given its pivotal role within Oman’s infrastructure and economy.

‘The oil and gas sector represents a significant portion of the Omani economy, with EDO’s Block 6 concessions accounting for a substantial share of the nation’s total oil and gas reserves. ‘Furthermore, EDO is one of the largest corporate employers in Oman. Therefore, we assess the socio-political implications of default as strong,’ Fitch stated.

According to Fitch’s forecast, EDO will maintain a strong financial profile until 2026.