MUSCAT, April 21: Oman is reviving negotiations with foreign banks to raise more than $2 billion in financing for major chemical and industrial projects there were delayed by the US-led war on Iraq, bankers said on Monday.

We see much more interest from foreign banks to finance major projects in Oman now that the war is over, Raj Shekhar Singh, Bank Muscat Head of Project Financing, told Reuters.

The buzz is now on and these projects have the chance to take off, he added.

Oman, an independent oil producer, is trying to wean its economy off oil income by expanding its industrial base, but the war on fellow Gulf state Iraq had put a damper on its 2003 plans.

Oman Methanol Co, which is funded by state-run Oman Oil Co (OOC), Germany’s Ferrostaal and Omani group Omzest, has revived talks with German bank KSW to raise $350 million.

There have been interesting developments since the war has ended and our talks with the German bank are bearing fruits, a project official for Oman Methanol said.

OOC is also seeking to build a polypropylene plant with partners ABB Lummus and South Korean firm LG Engineering.

The plant needs $140 million of financing and OCC is holding talks with institutions including APICORP-Taylor DeJong, ANZ Investment Bank, Gulf International Bank (GIB) and Arab Banking Corp (ABC).

Local company Suhail Bahwan, which is seeking $480 million to build a 3,500- tons-per-day urea project, is due to hold a fresh round of talks with its bankers, BNP Paribas and ANZ Investment Bank, next week.

The war had delayed our project but we are confident of sealing an agreement with our banks soon, Bahwan’s project spokesman said.

The Sohar Refinery, which has a capacity of 75,000 barrels per day, is also expected to meet representatives from foreign financial institutions to finalise a $1 billion loan deal.

International banks are now coming back. They can’t afford to lose lucrative deals backed by the government of Oman, said Nasser al-Mugheiry, a financial analyst at Abu Tamam Auditing.

Foreign firms in the Gulf Arab state say they are now more confident to resume their activities in the sultanate which has suffered from its relative proximity to Iraq. One of the projects likely to get a boost is the $2.5 billion Oman Aluminium, which has been dogged by various snags since its inception in 1997.

The project has received a boost last year when the emirate of Abu Dhabi in the United Arab Emirates joined as a partner.

This is the time to breathe a new life to stalled projects like aluminium since foreign banks are now renewing their interests, said economist Juma’a al-Muttawa. Now that the war is over, Thailand’s PTT Exploration and Production Co. said it would like to expand its activities in the oil-rich state.—Reuters