Wonder how Russia’s oil and gas companies are doing in the current oil price climate? Rather well as it transpires, thanks to favourable oil prices, rouble weakness and a supportive tax regime put in place by the Kremlin to underpin their strong performance.
That’s the verdict of a new report by Moody’s, which concludes that the credit quality of such companies will stay “steady in 2019.”
The rating agency also notes that Russian integrated oil and gas companies will record strong profitability in 2019, after significantly growing earnings and shrinking leverage last year.
Moody's said companies like Gazprom (currently rated by Moody’s as ‘Baa2 stable’), Rosneft (rated ‘Baa3 stable’), Lukoil (rated ‘Baa2 stable’), Gazprom Neft (rated ‘Baa2 stable’) and Tatneft (rated ‘Baa2 stable’), would be primary beneficiaries of the current climate and the Kremlin’s benign taxation approach.
"Profitability will stay strong despite ongoing production constraints to comply with the OPEC+ agreement and potentially lower downstream margins on the back of Russian tax changes that came into effect this year," said Denis Perevezentsev, Vice President and Senior Credit Officer, as Moody’s.
Rated Russian integrated oil and gas companies' credit quality will remain broadly similar in 2019 to the prior year, he added.
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