Fitch: APAC Oil & Gas Under Pressure but NOC Ratings Intact

(The following statement was released by the rating agency)Link to Fitch Ratings' Report: APAC Oil Companies’ Standalone Credit Profiles Under Pressure, but NOC Ratings Intacthttps://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=877455SYDNEY/SINGAPORE, February 04 (Fitch) The credit metrics of most rated upstream and integrated national oil companies (NOCs) in Asia will deteriorate in 2016 to levels that are weak for, or leave little headroom under, their stand-alone credit profiles, says Fitch Ratings. But state links will buffer their ratings. In contrast, non-state-linked upstream companies face higher risk to their ratings this year. Negative rating actions in APAC since oil prices started the rapid decline in 2H14 have been largely limited to small upstream companies and independent oilfield services companies. These companies face profound challenges on capital access and liquidity when oil prices are low.We expect companies to seek further capex and opex cuts as they revise their budgets for 2016, and to update guidance along with their 2015 results announcements. But capex flexibility varies depending on each company's oil and gas reserves profile - where some companies are more constrained than others. We expect broadly flat upstream production in 2016 for most companies due to reduced investments. Lower upstream capex to preserve cash can also lead to medium-term challenges for operators with weak reserve lives.Our report published today, "APAC Oil Companies' Financial Profiles Under Pressure, but NOC Ratings Intact", details the stand-alone credit profiles of NOCs - including the headroom for their stand-alone credit assessments. The report also details the headroom for the Issuer Default Ratings of 11 rated companies in Asia-Pacific with large upstream exposures. Our forecasts are based on our updated oil price assumptions and on guidance rated companies have provided to date on capex, dividends and other measures to support the quality of their balance sheets. The report is available to subscribers through the link above or at www.fitchratings.com.Contacts:Sajal KishoreDirector+612 8256 0321Fitch Australia Pty Ltd., Level 15, 77 King Street, Sydney NSW 2000Renee LamDirector+852 2263 9971Fitch (Hong Kong) Limited19/F Man Yee Building68 Des Voeux Road Central, Hong KongJustin Patrie, CFASenior DirectorFitch Wire+65 6796 7232Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com.The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.