BAKU, Azerbaijan, May 10. PetroChina is expected to maintain a strong credit profile in FY22 with strong oil and gas sales in the upstream segment, continued deleveraging efforts and ongoing support from the Chinese government, which could help offset the short-term headwinds from COVID disruptions, Trend reports with reference to CreditSights.
“We think that the COVID outbreaks and lockdown measures in China could weigh on demand for PetroChinaʼs refined oil products such as gasoline, diesel and jet fuels. Its natural gas marketing segment could also face some short- term headwinds from higher imported gas prices and lower realized city gate gas prices given off-season pricing/demand,” reads the report released by CreditSights.
The company affirms its market perform recommendation on CNPC and prefer bonds with tenor of 5 years or less.
“We think that the Russian sanction spillover risk is manageable as of now given the Chinese national oil companies, including PetroChina is refraining from taking up Russian assets. However, sanction risks and Chinaʼs growth slowdown would remain an overhang on the companyʼs $ bonds, in our view,” reads the report.
PetroChina has no plan to acquire discounted Russian oil and gas aside from honouring the existing long-term contracts with Russian O&G companies, according to the companyʼs management. Management also remains upbeat on the companyʼs outlook and expects oil and gas prices to stay at elevated levels in 2022.
Follow the author on Twitter: @Lyaman_Zeyn