Oman has established a new energy company as it seeks to leverage its biggest oil block to raise $3 billion of bonds.

The new company, Energy Development Oman, will be a shareholder in Petroleum Development Oman LLC as well as own an interest in Block 6. The company will also be able to invest abroad and deal with renewable energy products.

It should be noted that Oman has been struggling to finance a soaring budget deficit. The country was planning to transfer its 60% stake in Block 6 from Petroleum Development Oman to a new company that would try to issue around $3 billion of bonds in H1 2021. Block 6 is considered one of the biggest crude deposits in the Middle East with a production capacity of 650,000 barrels per day (bbl/d).

Oman’s proposal could set an example for other Middle East governments seeking to raise cash without stretching their balance sheets.