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Oman is studying options for privatising parts of the state-owned energy infrastructure, its oil minister said, as the sultanate looks to diversify the economy and raise money amid the sustained slump in crude prices.

At an industry event in Abu Dhabi, Mohammed al-Rumhy said Oman was studying proposals to sell off some downstream assets, including Salalah Methanol Company and a drilling firm.

The sultanate, hit hard by low oil prices, would look at selling some assets in smaller companies operating in sectors such as petrochemicals, but he ruled out selling off upstream assets, in a differing approach to Saudi Arabia, which is planning the world’s largest IPO by floating a stake in the state energy producer Saudi Aramco.

But the bold Saudi decision to sell a stake in the kingdom’s most valuable asset appears to be encouraging Saudi Arabia’s neighbours to accelerate their own privatisation and diversification programmes.

When asked why the government was looking to sell energy assets, he said: “How about getting some cash.”

Oman, along with Bahrain, are the two members of the Gulf Cooperation Council hardest hit by the sustained slump in oil prices.

Facing deep budget deficits of around 17 per cent of gross domestic product over the past two years, Oman has been forced to borrow from local and international markets, including $5bn in bond issuance this year.

Moody’s forecasts that debt will rise to 40 per cent of GDP by 2018, up from less than five per cent before the oil shock struck in 2014.

Real GDP growth is expected to remain subdued at 2.1 per cent a year on average through 2020, below the 3.8 per cent average between 2011 and 2015.

Oman has responded to the crisis by cutting spending, by as much as eight per cent of GDP last year, raising taxes and lowering fuel subsidies. It is also investing in diversification programmes seeking to boost the non-oil sector.

Launching a sale of energy assets could help revive the sultanate’s flagging – and poorly defined – privatisation programme, and boost moribund local markets.

While officials have said the stake sales would unfold over the coming years, it has yet to begin.

The government has previously mooted privatising state assets such as utilities and refineries. Other partially-owned state assets are also planning IPOs this year, including mining firms.

In 2014, two utilities firms in which the state pension fund owned a 10 per cent stake launched IPOs on the Muscat stock exchange.

Declining confidence since the oil price collapse in 2014 has dissuaded many firms from launching IPOs.

In 2016, the GCC saw only four market flotations, the smallest number since 2010, according to a report by consultants PwC.

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