MOSCOW, October 13 (RIA Novosti) - Standard & Poor's affirmed its 'BB-' long-term corporate credit rating on Russia-based Sibneft, with a positive outlook, following the upgrade of Russian gas giant Gazprom (BB/Positive/--), which in September announced a $13.1 billion bid for a 73% stake in Sibneft, S&P said Thursday in a press release.
Standard & Poor's affirmed its 'ruAA-' Russia national scale rating on Sibneft.
The rating on Sibneft continues to reflect the company's exposure to oil price fluctuations and the general risks of the Russian oil industry. The company is exposed to a structurally unstable and tightening tax regime that results in lower EBITDA per barrel realizations in comparison with that of its international peers. The rating is supported, however, by the company's high cash-generating capacity, comfortable reserve life, vertical integration into refining and favorable financial position, S&P said.
"The positive outlook continues to reflect the expectation that Gazprom should become Sibneft's 75% shareholder," said Standard & Poor's credit analyst Elena Anankina. "Once that transaction is complete, the rating on Sibneft could be raised by one notch to 'BB', reflecting the perceived diminution of the risk of sovereign interference or country related risk once the Russian state in effect controls Sibneft through Gazprom."
Standard & Poor's will consider the relative status of Sibneft's creditors compared with those of Gazprom and Sibneft's future strategic importance to and integration within the Gazprom group, before it considers equalizing the ratings on the two companies. The outlook on Gazprom is also positive, suggesting an opportunity for an upgrade, likely to 'BB+', meaning it is likely that the rating on Sibneft will remain one notch below that on Gazprom in the medium term, S&P said.
