Fitch Ratings upgraded Russia's major state-owned energy company Gazprom and its subsidiary Gazprom Neft's long-term foreign currency issuer default ratings (IDR) to 'BBB' from 'BBB-' following a similar rating measure on the Russian sovereign late Thursday.
Fitch said that Gazprom's IDR is constrained by the Russian state, the energy company's controlling shareholder, based on Fitch's Government-Related Entities (GRE) Rating Criteria and Parent and Subsidiary Rating Linkage Criteria.
"We assess the standalone credit profile of Gazprom at 'a-', taking into account its strong operational and financial profiles as well as country-specific and corporate governance risks. As Gazprom's long-term IDR is constrained by the sovereign's, Gazprom's short-term IDR is also at the same level as the sovereign's under Fitch's Short-Term Ratings Criteria," explained Fitch.
Gazprom is engaged in natural gas production, transportation and distribution, as well as oil production and refining, heat and electricity generation.
"We believe Gazprom will remain the largest gas supplier to Europe, its key market, and that it would be able to defend its market share given low production costs," Fitch noted.
By Murat Temizer