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Fitch Revises Russia’s 2017 Oil-Gas Sector Outlook to Stable From Negative

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Fitch Ratings - Sputnik International
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The 2017 outlook for Russia’s oil and gas sector is better than previously projected despite the continued low global price of oil, Fitch Ratings said in a press release on Tuesday.

WASHINGTON (Sputnik) — The ratings firm said the 2017 tax burden on the oil and gas sector should be in line with 2016 levels, although a future tax increase cannot be ruled out.

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"Russia's oil and gas (O&G) companies will continue to benefit from the weak rouble while avoiding a major tax hike in 2017," Fitch stated. "This will help the companies to balance cash inflows and outflows amid low oil prices, leading Fitch to revise the sector outlook to stable from negative."

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Furthermore, US and EU sanctions should not have a major impact on the oil and gas producers’ credit profile.

Companies subjected to international sanctions can receive cash inflows from Russian and Chinese banks, while non-sanctioned companies such as Gazprom and Lukoil can access the Eurobond market, Fitch explained.

Additionally, Russia’s oilfield services companies are likely to remain stable as drilling volumes are set to remain at current levels or even rise.

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