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S&P Affirmed JSC Gazprom Neft 'BBB-' Rating; Outlook Stable

On Oct. 24, 2008, Standard & Poor's Ratings Services affirmed 'BBB-' long-term corporate credit rating and 'ruAA+' Russia national scale rating on JSC Gazprom Neft. The outlook is stable.

The rating on Gazprom Neft continues to be based on a bottom-up approach, with a one-notch uplift for potential support from OAO Gazprom, - the "S&P" statement says.

Under S&P release, the rating differential to Gazprom reflects Gazprom Neft's operating and financial autonomy relative to the Gazprom group, as well as the absence of parental guarantees on Gazprom Neft's debt.

The stable outlook reflects the agency's expectation that even if the rating on Gazprom were to be lowered by one notch, the rating on Gazprom Neft would likely be affirmed, in line with our bottom-up approach, the statement says.

"We expect Gazprom Neft to maintain financial metrics well in line with the rating, with funds from operations to adjusted debt of more than 90% in 2008, even if the NIS purchase is closed and if Brent oil prices drop to $59 per barrel," – Mrs Elena Anankina, "S&P" oil and gas analyst commented.