The global rating agency Moody's Investor Service announced Wednesday that it confirmed Azeri state-owned oil company Socar's rating at 'Ba1' with a negative outlook.
Moody's said in a statement that Socars 'Ba1' corporate family rating, which is a long-term rating that reflects a corporate family’s debt and debt-like obligations, was confirmed due to 'the company's high level of vertical integration into refining and trading operations, allowing it to maintain adequate credit metrics for its rating category in a 'lower-for-longer' oil price environment.'
'SOCAR's rating also benefits from continued strong support from the government of Azerbaijan as the country's largest employer and tax contributor,' said Denis Perevezentsev, Moody's vice president and senior credit officer, in the statement.
In addition, Moody's said the negative outlook was 'in line with [Azerbaijan's] sovereign rating,' and warned 'a potential further downgrade of Azerbaijan's sovereign rating may lead to a downgrade of the company's rating.'
Moody's had lowered Azerbaijan's credit rating to 'Ba1' from 'Baa3' on Feb. 5, 2016 due to the country's high dependency on oil revenues and low oil prices.
The rating agency noted Wednesday that a total of 32 oil-dependent countries in Europe, the Middle East and Africa have been on review since Jan. 22 this year due to sustained low oil prices.
Moody's forecasts the international benchmark Brent crude to average $33 per barrel this year, and $38 a barrel next year.
By Ovunc Kutlu in New York