39174
3 Oil Majors Have Ratings Cut by Moody's
Energy

3 Oil Majors Have Ratings Cut by Moody's

Three of the world’s largest energy companies had their credit ratings lowered by Moody’s Investors Service on the expectation that oil prices will stay low for longer and cause leverage concerns.
Chevron Corp. and Royal Dutch Shell Plc had their ratings reduced by one level, while Total SA’s was cut two steps, according to statements by the New York-based rating company on Friday. Chevron will generate negative cash flow amid rising debt for at least the next two years, while Shell will have elevated leverage following its acquisition of BG Group Plc, Moody’s said. Prices are expected to stay low through this year and next and continue to pressure Total’s operating cash flows and credit metrics, Moody’s said.
Oil companies big and small are having their credit ratings cut as the collapse in crude prices reduces cash flows and limits their ability to sustain debt payments. Prices in New York are down by more than 60 percent from a mid-2014 peak, Bloomberg reported.  Chevron and Shell’s ratings were lowered to Aa2, the third-highest grade, from Aa1. Total’s rating was brought down to Aa3, from Aa1. BP Plc’s rating was confirmed at A2, as its credit metrics and business profile compare favorably with its major oil peers and the July 2015 settlement over the Macondo spill reduced legal uncertainties and gave clarity on its business, Moody’s said.
The actions conclude reviews started in January and February by Moody’s, which expects that global oil prices will remain weak over the medium term. The world is “awash in oil” and high inventories and production are declining slowly, Moody’s analysts led by Terry Marshall said in a March 30 report.
If US crude rises above $50 a barrel, investment by lower-cost, short-cycle producers will undercut the effort by Organization of Petroleum Exporting Countries to bring down the global glut, the analysts said.

 

Short URL : http://goo.gl/Bg4RT0
  1. http://goo.gl/fpD0NC
  • http://goo.gl/YlICg1
  • http://goo.gl/76fv8O
  • http://goo.gl/Ebxr8X
  • http://goo.gl/WOpLda

You can also read ...

Thermal Power Plants Capacity at 62,000 MW
Thermal power plants running on fossil fuels to generate power...
Nigeria will be able to participate in cuts when its output stabilizes at 1.8m bpd.
OPEC’s commitment to cutting production to clear a global glut...
Dana Energy Co. Signs Deal to Study Two Oilfields
Tehran-based Dana Energy Company has signed a memorandum of...
National Tanker Company Receives 2 Int'l Certificates
The National Iranian Tanker Company has been accredited with a...
Total Sets Oil Growth Target
French oil and gas major Total extended its oil production...
Oil Hits Eight-Month High
Oil prices rose on Monday to their highest in eight months...

Trending

Googleplus