Low oil prices and high capex will weaken credit metrics for rated oil & gas firms, says Fitch

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KUALA LUMPUR (Dec 15): Low oil prices and high capex will weaken credit metrics for rated oil and gas companies in south-east Asia, but ratings to remain stable in 2015, according to Fitch Ratings.

In a report released Dec 14, Fitch said South-east Asian oil companies continued to require high capex to maintain and increase their upstream and mid-stream production capacities.

It said low oil prices would reduce their net operating cash generation in 2015, at a time when the capex flexibility of these operators is somewhat limited.

“Energy price reforms to-date in Indonesia, Malaysia and Thailand have been generally neutral to marginally positive for the stand-alone credit profiles of rated state-linked issuers in these countries, although some uncertainties remain with regard to Thailand's energy sector reforms,” it said.