State-owned Oman Oil Co expects to list 20%-25% of its shares in an initial public offering (IPO) by the end of next year, Oman's Oil Minister Mohammed al-Rumhi said on Wednesday.

It would become the second national oil company in the Gulf to raise cash this way after Saudi Aramco's planned IPO later this month to help diversify the economy away from oil. Oman is trying to raise funds from asset sales because lower oil prices have led it to pile up debt over the past few years.

It posted a budget deficit of 1.545 billion Omani rial ($4 billion) in January to September. Speaking to reporters at an industry event in Dubai, Rumhi said financial advisers for the deal had already been assigned, but he did not name them.

He said Oman could also consider inviting strategic partners to invest in the company alongside the IPO process. He said Oman plans to invest more than $20 billion in downstream operations in the next five years.

"Privatising helps in reducing the budget deficit without increasing the debt level but it is not a solution," said Zeina Rizk, director of fixed income asset management at Dubai's Arqaam Capital, adding that reforms were necessary to put the economy on a sustainable path.

Oman's economy is highly dependent on hydrocarbons - deriving about 35% of its gross domestic product, 60% of exports, and 70% of fiscal receipts from hydrocarbon products, S&P Global Ratings said in a recent report.

From 2020 Oman's crude oil production will gradually increase to hit 1.1 million barrels per day (bpd) by 2022, from about 0.97 million bpd in 2019, S&P said.

Rumhi said he hoped the production cuts agreement between OPEC and its allies would be extended. Asked if deeper cuts would help stabilise the market, Rumhi said "if needed, whatever is needed I am sure they (at OPEC) will make the right decision.