Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of State Oil Company of the Azerbaijan Republic and other ratings that are associated with the same analytical unit, Report says, citing Moody's.
The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology (ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely shortly.
State Oil Company of the Azerbaijan Republic's (SOCAR) Ba2 corporate family rating is on par with Azerbaijan's Ba2 sovereign rating.
SOCAR's baseline credit assessment (BCA), which measures the company's standalone credit strength, excluding any extraordinary government support, within the framework of Moody's Government-Related Issuers rating methodology, is b1.
SOCAR's BCA factors in the company's key role in the oil and gas sector of Azerbaijan, close links with Azerbaijan's government and healthy liquidity. The BCA also takes into account the company's exposure to the volatile oil prices and local currency exchange rate, potential challenges in maintaining stable production over the longer term, and sizeable trading operations.
Ibrahim Ahmadov, deputy head of the public relations and events department at Azerbaijan's State Oil Company SOCAR, said that they are expecting SOCAR's independent rating to be improved because the company successfully completed large-scale projects inside the country and abroad in the previous years.
"These projects don't require costs while they required funds previously. The projects such as SOCAR Polymer, SOCAR Carbamide, TANAP, STAR Refinery are already under operation and bring funds. SOCAR also managed to stabilize the level of oil and gas production in recent years. Therefore, SOCAR's total debt, as planned, is decreasing, and this tendency will continue in the next years."