ASTANA, Kazakhstan, June 25. Fitch Ratings has affirmed KazTransOil's (KTO, Kazakhstan's national operator of the main oil pipeline) Long-Term Issuer Default Rating (IDR) at 'BBB' with a stable outlook, Trend reports.
As Fitch noted, KTO is rated at the same level as its immediate parent, KazMunayGas (KMG, Kazakhstan's national oil and gas company; BBB/Stable), based on KTO's Standalone Credit Profile (SCP) of 'bbb', in line with Fitch's Parent and Subsidiary Linkage (PSL) Rating Criteria.
According to Fitch, KTO dominates the Kazakh oil transportation sector, which is important for the national economy. As a national operator, KTO holds a monopolistic position in domestic oil transportation. In 2023, it transported around 50 percent of the crude oil produced in Kazakhstan.
The rating agency assumes KTO's export volumes will remain broadly stable in 2024–2027, although marginal declines are possible due to depletion at some fields in the central part of Kazakhstan and rising production at Kashagan, the country's largest greenfield, which uses an alternative route for crude oil exports (Caspian Pipeline Consortium (CPC)).
According to Fitch, export volumes can also be affected by Kazakhstan's OPEC+ quotas. Separately, KTO should continue to benefit from its arrangements to transit Russian crude to China and Uzbekistan through Kazakhstan.
At the same time, Fitch assumes that Kazakhstan will continue to be able to export oil through Russia, including through KTO's Atyrau - Samara main export route.
Fitch noted that KTO's debt is represented by a Halyk Bank loan (outstanding amount at end-2023: 47 billion tenge or about $100 million) and a 70 billion tenge (about $150 million) bond held by KMG, both with staggered repayment scheduled over eight years starting in 2025. At the end of 2023, KTO had a cash balance of 77 billion tenge (about $177 million).
The rating agency projects KTO's free cash flow to be broadly neutral to moderately negative in 2024–2027.
Meanwhile, KazTransOil transported 11.379 million tons of oil separately through its main oil pipeline system from January through March 2024. Compared to the same period in 2023, the volume of oil transportation increased by 1.03 million tons.
Furthermore, the consolidated revenue of KazTransOil in 2023 amounted to 290.4 billion tenge (about $650 million), which is 14 percent higher than the same figure for 2022.
The consolidated net profit of the company at the end of 2023 amounted to 32.8 billion tenge (about $73.8 million). This is 66 percent higher than in 2022.