Details added (first version posted at 15:31)
BAKU, Azerbaijan, Sept.5. Moody's Investors Service (Moody's) has upgraded the Baseline Credit Assessment (BCA) of State Oil Company of the Azerbaijan Republic (SOCAR) to ba2 from ba3, Trend reports.
Concurrently, Moody's has affirmed SOCAR's corporate family rating (CFR) at Ba1. The outlook remains stable.
Concurrently, Moody's has affirmed SOCAR's corporate family rating (CFR) at Ba1. The outlook remains stable.
Today's rating action, including the upgrade of the BCA, reflects the improvement in SOCAR's financial performance and credit metrics amid supportive oil and gas market environment; the company's strategic importance for the government of Azerbaijan; and a recent track record of more discipline in strategic and shareholder decisions, investment spending and shareholder distributions which translate into positive cash generation and good liquidity.
Because SOCAR is 100% state owned, Moody's applies the Government-Related Issuers (GRI) methodology to determine the company's CFR. SOCAR's Ba1 CFR incorporates (1) the company's BCA of ba2, which measures its standalone credit strength, excluding any extraordinary government support; (2) the Ba1 foreign currency issuer rating of the Government of Azerbaijan, with a stable outlook; (3) the very high default dependence between the state and the company; and (4) the high probability of the government providing support to the company in the event of financial distress.
SOCAR is engaged in exploration of oil and gas fields, the production, processing and transportation of oil, gas and gas condensate, the sale of oil and petrochemicals in the domestic and international markets, the supply of natural gas to industrial enterprises and the population of Azerbaijan, as well as Europe.
The company conducts various activities in countries such as Türkiye, Georgia, Romania, Switzerland, Germany and Ukraine, including trading activities mainly in Switzerland, Singapore and Nigeria.
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