Low oil prices, high capex to impact Asean O&G firms: Fitch
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Fitch Ratings expects low oil prices and high capital expenditure (capex) will weaken credit metrics for rated oil and gas companies in Southeast Asia, but the agency expects ratings to remain stable in 2015.
The ratings agency said on Monday that Southeast Asian oil companies continue to require high capex to maintain and increase their upstream and mid-stream production capacities.
“Low oil prices will reduce their net operating cash generation in 2015, at a time when the capex flexibility of these operators is somewhat limited,” it pointed out.
Fitch said energy price reforms to-date in Indonesia, Malaysia and Thailand have been generally neutral to marginally positive for the stand-alone credit profiles of rated state-linked issuers in these countries, although some uncertainties remain with regard to Thailand's energy sector reforms.
