S&P ups Empresa Nacional de Petroleo view to stable

Standard & Poor's said it revised its outlook on the ratings on Empresa Nacional de Petroleo (ENAP) to stable from negative.

The A long-term corporate credit rating was affirmed.

S&P said the outlook change reflects the increasing importance of ENAP as a public policy instrument for the Chilean government, which tightens the relationship between the credit quality of the company and that of the Sovereign.

The ratings for Chilean oil and gas company ENAP reflect 100% ownership by the Republic of Chile, its increasing importance as a public policy entity, the company's strong position in its core business as the only Chilean domestic oil refiner supplying about 86% of local market needs and a relatively adequate financial profile, the agency noted.

These factors are partly offset by the volatility and cyclicality of international refining margins, increasing use of financial debt and the challenges of expanding in the capital-intensive upstream segment with limited internally generated free cash flow, S&P added.

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