By Saeed Azhar
DUBAI, July 5 (Reuters) - Energy Development Oman (EDO), a relatively new state company, is in talks with banks to raise $1.5 billion in debt financing, two sources said.
EDO was established late last year to take ownership of Oman's largest oil block called Block 6 and to help raise debt.
"EDO is looking to raise around $1.5 billion," one of the sources close to the matter told Reuters. The source said the financing could be in the form of a loan.
The financing is to help fund capital expenditure, a second source familiar with the plan said.
Block 6 is Oman's largest oil and gas operation, according to energy consulting firm Wood Mackenzie.
The company is working with JPMorgan on its financing plan the sources said, adding that there is strong interest from lenders in the United Arab Emirates $(UAE)$ to be part of the deal.
EDO could not be reached for comment. JPMorgan declined to comment.
In May, Minister of Energy and Minerals Mohammed al-Rumhy told Oman's WAF news website that EDO will officially launch an international campaign to raise $3 billion to finance its operations.
EDO will work on oil and gas exploration as well as on renewable energy projects in Oman, the government said last year.
Oman recently raised $1.75 billion in nine-year sukuk after bumper investor demand for the issue, helped by a rise in oil prices over the last year and a fiscal consolidation plan. [nL3N2NR297}
Rated sub-investment grade by all major credit rating agencies, the Gulf state faces large debt maturities in the coming few years.
(Reporting by Saeed Azhar; Editing by Kirsten Donovan)
((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))
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