Abu Dhabi: Fitch Ratings (Fitch) on Sunday affirmed ADNOC Group a standalone credit rating of ‘AA+’ to reflect the energy giant’s high upstream production and vast oil reserves.
The ratings agency also cited low cost of production, integration into downstream operations, conservative financial policies, high financial flexibility and strong unit profitability.
“These ratings validate the bold ambitions ADNOC has set itself under our progressive and sustainable 2030 growth strategy, underpinned by the recent announcement of an ambitious five-year spending plan for 2021-2025 approved in November 2020 by the Supreme Petroleum Council,” said Ahmed Jasim Al Zaabi, Group Chief Financial Officer at ADNOC, in a statement.
In line with its Government-Related Entities (GRE) Rating Criteria and Parent and Subsidiary Linkage (PSL) Rating Criteria, Fitch also affirmed a Long-Term Issuer Default Rating (IDR) of ‘AA’ with a Stable Outlook to ADNOC, in line with the sovereign rating of Abu Dhabi, reflecting Fitch’s view of the strong links between ADNOC and the Abu Dhabi government.
Fitch also commended ADNOC’s strategy of bringing in minority partners into its operating companies to attract funding pools and improve access to international markets. The state-owned company raised $15.9 billion through a series of large-scale energy infrastructure transactions during 2020, led by a $20.7 billion transaction in select gas pipeline infrastructure assets with a consortium of leading global institutional investors, infrastructure operators and sovereign wealth and pension funds. This deal alone unlocked $10.1 billion in foreign direct investment into the UAE.
Fitch added that ADNOC’s profitability is in line with that of international oil majors and exceeds that of some leading national oil companies, in view of the company’s low production costs, oil-heavy production profile and competitive tax regime.