ASTANA, Kazakhstan, December 14. Moody's Investors Service (Moody's) has affirmed the Baa2 long-term issuer and senior unsecured ratings of KazMunayGas JSC (KMG, Kazakhstan's national oil and gas company), Trend reports.
In addition, Moody's also affirmed the (P)Baa2 senior unsecured rating on the medium-term note program of KMG and the (P)Baa2 backed senior unsecured rating on the medium-term note program of KazMunayGas Finance Sub B.V. In addition, Moody's changed the outlook for all entities to positive from stable.
Thus, the rating action reflects the improvement of KMG's standalone assessment, which Moody's considers to have the characteristics of a strong Ba profile.
"The rating action also factors in KMG's robust credit metrics in 2022-23. Alongside the significant rebound in hydrocarbon prices, a persistently weak tenge, and the gradual easing in OPEC+ oil production restrictions, the strong recovery in KMG's financial profile after the severe market downturn in 2020 was backed by the execution of KMG's call option to acquire a 50-percent stake in KMG Kashagan B.V. (KBV) from Sovereign Wealth Fund Samruk-Kazyna JSC (Samruk-Kazyna, Baa2 positive) in October 2022," said the report.
The acquisition enhanced the company's hydrocarbon output, asset base, EBITDA and cash generation capacity, which fully offset the respective increase in the company's debt.
The positive outlook on KMG's rating is in line with the positive outlook on Kazakhstan's sovereign rating and the rating of Samruk-Kazyna, and reflects Moody's view that the company's specific credit factors, including operating and financial performance, credit metrics, market position and liquidity, will remain commensurate with its current rating on a sustainable basis; and there will be no weakening in the likelihood of support from Samruk-Kazyna and the government in the event of financial distress.
KazMunayGas is Kazakhstan's national oil and gas company, with the mandate to protect the state's interests in the sector. The company is one of the largest producers of crude oil in Kazakhstan and also controls the country's downstream and oil midstream sector. KMG is 97 percent owned by the Kazakh government via Samruk-Kazyna, the Ministry of Finance and the National Bank of Kazakhstan.
In the 12 months that ended 30 September 2023, KMG produced 23.5 million tons (mt) of oil and 9.3 billion cubic meters (bcm) of gas, and generated Moody's-adjusted EBITDA of 2.3 trillion tenge (about $5.06 billion).