Moody's assigns Ba1 ratings to SOCAR
Azerbaijan, Baku, Feb. 17 / Trend /
Moody's Investors Service (Moody's) has today assigned Ba1 corporate family (CFR) and Probability of Default (PDR) ratings to the State Oil Company of the Azerbaijan Republic ("SOCAR"). The outlook on the ratings is stable, Moody's reported.
A one-notch downgrade of Azerbaijan's sovereign rating from the current rating of Ba1 would result in one notch downgrade of SOCAR's corporate family rating, assuming unchanged support and dependence factors.
A Baseline Credit Assessment (BCA) -- which measures the company's fundamental credit strength excluding any government support -- of 13 (expressed on a scale of 1 to 21, in which a BCA of 13 corresponds to a Ba3 rating)
To maintain the stable outlook Moody's expects SOCAR to continue to maintain solid financial ratios and credit metrics, with a retained cash flow-to-net debt ratio exceeding 30% and debt/total capitalisation below 30% on an adjusted basis, as well as healthy liquidity profile.
The State Oil Company of the Azerbaijan Republic is the national energy company of Azerbaijan, 100% owned by the government of Azerbaijan. SOCAR is the backbone of Azerbaijan's national economy. It has a monopoly position in the supply of oil and gas products to the domestic market and is an official representative of the State in all oil and gas projects in the territory of Azerbaijan.
The company participates in all international consortia developing new oil and gas projects in Azerbaijan. The largest of these are the BP-operated Azeri Chirag Gunesli (ACG) oil project and the Shah Deniz gas project.
In 2009, SOCAR's oil and gas production have extracted 7.3 million tons of oil and 6.8 billion cubic meters of gas from fields developed by the company. SOCAR's employees exceed 62,000 people.
The international rating agency Fitch Ratings has assigned SOCAR with long-term default rating "BB +" and short-term default rating "B" for the first time in October 2009. The forecast on long-term default rating is "Stable".