Fitch affirms SOCAR at 'BB+'


February 15, Fineko/ Fitch Ratings has affirmed State Oil Company of Azerbaijan (SOCAR) Long-Term Issuer Default Rating (IDR) at 'BB+'.

The Agency reports that the Outlook is Stable and Short-Term IDR was affirmed at 'B'. SOCAR's rating is aligned with the rating of Azerbaijan (BB+/Stable).

“Lower oil prices, high capex and trading business expansion led to negative free cash flow (FCF). Following the completion of large pipeline projects and the STAR refinery in 2018, we expect the company's capex to decrease to around AZN2 billion in 2019-2020 from AZN4.3 billion in 2017. Under Fitch oil price assumptions, SOCAR's net leverage will remain above 5.0x until 2020, which continues to constrain SOCAR's SCP,” Fitch said.

The extension of the production-sharing agreement (PSA) for the Azeri-Chirag-Gunashli (ACG) field until 2049 is considered positive for both Azerbaijan and SOCAR.


Keywords: SOCAR Fitch