Ratings

/Russian Media Monitoring Agency/

"The rating upgrade is a result of a revised impact that the government produces on state-run companies in Russia and reflects a stronger likelihood that the Russian government will lend greater state support to Rosneft than it was previously allowed. This support, in turn, could be positive for creditors", credit analyst for Standard & Poor's Tatyana Kordyukova said.

At the present time, Rosneft's rating adjusted for the said support stands one step higher than it would be based on its own credit capacity ("BB").

During the last years, the state share is growing considerably in Russia's energy sector, which results in an increased impact of the state on the industry. Rosneft is among the companies profiting from this policy; it is also an instrument for carrying it out. The company conducted an IPO and consolidated its key subsidiaries, thus reducing the state-owned share in Rosneft to 75 percent.

Rosneft has priority access to new strategic oil resources; it enjoys a favorable attitude on the part of state-owned and private financial institutions; its risks of additional tax charges (which could negatively impact the company) is low. All this is taken into account in the new S&P rating. Although the schemes of financial support may be complicated, the Russian government is capable of lending extraordinary support to Rosneft.