Esso's B/E rating affirmed

 Esso is raisings funds through B/E. Under the programme, the maturity of each series of B/E is no more than 270 days.
 Fitch said in a statement that the rating reflects Esso's complex refinery capacity, cost-effective procurement of raw materials via the sourcing network of its parent - Exxon Mobil Corporation, and its established brand name. It also reflects the benefits of vertical integration between paraxylene (PX) production and its refinery by broadening its product range, optimising its product lines, and reducing the volatility of refining margins.
 The rating also reflects operational and financial support from ExxonMobil group. Esso benefits from its parent's worldwide procurement network for crude oil and refined products, and uses ExxonMobil's technology and engineering services, human resources, and R&D to improve operational efficiency. ExxonMobil group has provided tangible support to Esso, including credit facilities at commercial terms after the 1997 Asian financial crisis and a capital injection in 2007.
 Fitch expects Esso's debt to operating EBITDAR to fall to 3.8 times in 2011 from 6.2 in 2010, and to below 3.25 from 2012 onward. This is due to expected stronger operating cash flows as well as a significant reduction of capital expenditure after the completion of Euro IV's compliance project in 2011.
 Esso's credit profile is tempered by its vulnerability to oil prices, volatile gross refining margins (GRM) and petrochemical product-to-feed margins, which can significantly affect its earnings and cash flow generation. ESSO is also exposed to supply risk - as Thailand is highly dependent on foreign oil supplies - although this is mitigated by ExxonMobil's global network - and single production site risk.
 Sustained low GRM and petrochemical spreads, an increase in debt-funded investments resulting in sustained high leverage, or weaker ownership and support from ExxonMobil group could negatively affect ESSO's rating. Conversely, further improvement in profitability and earnings stability through the cycle and sustained low financial leverage, would be positive for the rating.