They have part of the mainland, the Kazakh Peninsula, yet even that is wasteland. They have three options if they wanted to expand (though I think distance from capital also prevents it from being feasible): Into Nivemus, into Westmoor, or into Perdan.
OI has the misfortune of all of their territories being Wastelands.
Yeah, it would be extremely tough for them to hold onto Nivemus lands. The Omsk Bay kind of makes that a very difficult task.
Personally, I think OI should give Perdan Bastad Island and put militia down in Chaos Stronghold. Consolidate their territory. Then think about moving more onto the mainland.