Poor credit outlook by fitch for oil and gas

Posted By: Religare
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Poor credit outlook by fitch for oil and gas
Australia could have rich resources but Fitch ratings agency has given the oil and gas sector a negative credit outlook this year.

According to the reports, companies running big liquefied natural gas projects were too burdened with debt. Fitch report also said that it expected the free cash flow of upstream gas companies to remain negative as they committed to new gas projects and faced challenges with regard to project execution.

It is the second time in seven months that Fitch has produced a negative report card for the gas sector, despite soaring demand and a predicted ''golden age'' for liquefied natural gas which is expected to suit Australia, with its massive reserves.

Australia is the world's second biggest exporter after Qatar.

Fitch argues that the large suite of liquefied natural gas projects is pushing the industry beyond capacity in light of cost blowouts and delays already announced by companies such as Woodside Petroleum.

Dion Global Solutions Ltd

Read more about: oil and gas, credit, fitch
Story first published: Friday, January 20, 2012, 13:30 [IST]
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