OQEP lowers capex for 2026 but targets buyouts

• OQEP’s 2026 capex $900m
• $200m lower than 2025
• Planning Mena expansion

Omani state-run oil and gas company OQ Exploration & Production (OQEP) has lowered its capital spend but plans to acquire new assets in 2026.

OQEP has set its capex at $800-900 million, which is lower than in 2025 by around $200 million (OMR 76 million), CEO Mahmoud Al Hashmi said during an analyst call on Tuesday. 

The lower capex is due to drilling performance in Block 60, its flagship upstream oil and gas concession, which has led to shorter drilling times and a shift in oil well types.

In addition, the projects not related to oil and gas production have been deferred, the CEO said.

OQEP is seeking to maximise domestic growth opportunities this year and plans to expand across the Middle East and North Africa. 

Al Hashmi said the company will focus on both international and local mergers and acquisitions

“We are having very clear screening criteria when it comes to the selection of the assets,” he said, without giving details. 

Al Hashmi said that OQEP, like other oil companies, is monitoring the regional conflict and is working closely with the government. 

“We are hoping for a de-escalation of the situation,” he said. 

The CEO disclosed that the Strait of Hormuz closure has no impact on its production, as most of it comes from Mina Al Fahal and Duqm, which are outside the Strait of Hormuz. 

“We have a business continuity team that’s working 24/7,” he said.

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Under its 2030 growth strategy, the company aims to achieve 300,000 barrels of oil equivalent per day and maintain its reserves ratio at 100 percent. 

The OQ Group unit intends to maintain and increase its dividend through 2027, paying 25-35 percent of cash flow from operations.

Earlier this month, OQEP announced a fourth-quarter dividend, estimated at OMR58 million.

The company’s top line declined 7 percent year on year to OMR1.2 billion in 2025, as average oil prices fell 12.5 percent or $10.10 per barrel.

Net profit fell 15 percent to OMR278 million last year, from OMR327 million in 2024.

OQ Group, a subsidiary of the Oman Investment Authority, owns 75 percent of OQEP.