Moody’s confirms ratings of 6 oil companies including PTT

The others are Petroliam Nasional (Petronas), Pertamina (Persero), Oil and Natural Gas Corporation and Oil India.
These actions conclude the rating reviews started on January 22.
Oil prices have dropped substantially, reflecting continued oversupply in the global oil markets, very high inventory levels and additional Iranian oil exports coming on line.
Moody’s lowered its oil-price estimates on January 21 and expects a slow recovery for oil prices over the next several years. The drop in oil prices and weak natural-gas prices have caused a fundamental change in the energy industry, and its ability to generate cash flows has fallen substantially.
This situation is expected to persist over several years, so Moody’s is recalibrating the ratings of many energy companies to reflect this industry shift.
The drop in energy prices and corresponding capital-market concerns will also raise financing costs and increase refinancing risks for exploration and production companies.
However, the impact of the drop in oil prices and low natural-gas prices will vary substantially from issuer to issuer depending on its production mix between oil and natural gas, the extent of contractual protection in the selling price of natural gas, the ability to reduce lifting cost and operating expenditure, the flexibility to reduce capital expenditures without affecting production levels, reserve replenishment needs and the expected deterioration of the company’s financial profile relative to its rating.
The national oil companies in South and Southeast Asia went into the downturn with relatively low leverage and continue to maintain strong liquidity levels and access to capital markets.
Despite a weakening in the credit metrics for these companies, they will remain appropriately positioned for their ratings, Moody’s says.
The outlooks on all six national oil companies are also stable.