BAKU, Azerbaijan, May 20
By Leman Zeynalova – Trend:
The capital expenditure of Azerbaijan’s state oil company SOCAR is expected to moderate with two large projects coming on stream, Trend reports with reference to Fitch Ratings.
“We expect SOCAR's capex to moderate given the SGC and the STAR refinery in Turkey, SOCAR's two large projects developed together with partners and not consolidated on the company's balance sheet, have been brought on stream and should not require material additional capital injections.
However, we have limited visibility over possible cash outflows related to its other projects, such as its upstream projects and modernisation of the Heydar Aliyev refinery. Given this limited transparency we put more emphasis on SOCAR's historical performance when assessing its credit profile,” said the agency.
Fitch Ratings has revised the Outlook on State Oil Company of the Azerbaijan Republic's (SOCAR) Long-Term Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDR and senior unsecured rating at 'BB+'. The Recovery Rating is 'RR4'.
The rating actions follow the revision of the Outlook on the sovereign rating of Azerbaijan (BB+/Stable). SOCAR is fully owned by the state and its rating is equalised with that of Azerbaijan under Fitch's Government-Related Entities (GRE) Rating Criteria. This is underpinned by state support provided to the company in the form of financial guarantees, cash contributions and equity injections, as well as SOCAR's social functions and its importance as a state vehicle for the development of oil and gas projects.
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