Fitch Ratings has affirmed SOCAR’s (State Oil Company of Azerbaijan Republic) long-term issuer default rating (IDR) at ‘BBB-‘, short-term IDR at ‘F3’ and senior unsecured rating at ‘BBB-‘.The outlook on the long-term IDR is Stable, according to a message from Fitch.
“The ratings of SOCAR, a wholly state-owned national oil company of Azerbaijan (BBB-/Stable), are aligned with the sovereign’s.
SOCAR is a mid-size integrated oil company with 2013 hydrocarbon production of 255,000 barrels of oil equivalent per day (mboepd) and a number of assets in midstream, downstream, chemicals and retail,” Fitch said.
SOCAR controls Petkim, the only chemical company in Turkey, and is building Star oil refinery with the capacity of 10 million tons a year in Turkey. SOCAR is also involved in the production sharing agreements (PSA) in Azerbaijan and receives free oil, natural gas and gas condensate.
According to Fitch forecasts, net leverage of funds from the financial operations (FFO) will increased from 1.5x in 2012 to 1.9x in 2016 and security of interest payments of FFO will go down to 9.6x in 2016 from almost 16.8x in 2012 without sale of any assets.
“SOCAR’s rating is aligned with the sovereign’s, because the company represents interests of the state in the strategically important oil and gas industry.
SOCAR maintains close ties with the government and the State Oil Fund of Azerbaijan (SOFAZ) while making main financial and investment decisions,” reported Fitch.
