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Fitch forecasts reduction of prices for Russian gas export to Europe

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fitchFitch Ratings international rating agency has confirmed the long-term rating of default emitent (RDE) of Gasprom in foreign currency at BBB level. The forecast of Negative rating is limited to the forecast of sovereign rating of Russia.

            Agency reported on Tuesday that Gasprom’s ratings reflect Fitch’s forecasts that the company remains the main gas supplier to Europe, despite the competition and political factors.

  In 2013 natural gas production by Gasprom totaled 488 billion cub.m., while its EBITDA totaled $63,187,000,000.

            The authors of the report believe that Gasprom’s ratings reflect a strong operation profile of the company. 15% of world gas production falls to Gasprom and the company satisfies almost one third of gas demand in Europe. Low-cost production and high indexes of repetition factor and replacement of resources are favorable factors for Gasprom’s business.

            “In our model we forecast reduction of prices for gas export to Europe according to our admissions to reduction of Brent oil price to $96.00 per barrel in 2014, $91.00 per barrel in 2015, $85.00 per barrel in 2016 and $80.00 barrels later,” reads the report.

            In 2013 Gasprom’s  sales at the local market dropped to 234 billion cub.m., which is almost 10% of a relatively low level of 2009. The share of local market of Gasprom declines in favor of independent gas companies, such as NOVATEC.

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