S&P affirms Sibneft at BB-

Standard & Poor's said it affirmed its BB- long-term corporate credit rating on Russia-based OAO Siberian Oil Co. (Sibneft), following the upgrade of Russian gas giant OAO Gazprom (BB/Positive/--), which announced in September a $13.1 billion bid for a 73% stake in Sibneft. The outlook remains positive.

S&P also said it affirmed its ruAA- Russia national scale rating on Sibneft.

The rating continues to reflect the company's exposure to oil price fluctuations and the general risks of the Russian oil industry S&P said.

The company is exposed to a structurally unstable and tightening tax regime that results in lower EBITDA per barrel realizations in comparison with that of international peers, S&P said.

The rating is supported, however, by the company's high cash-generating capacity, comfortable reserve life, vertical integration into refining and favorable financial position, S&P said.

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