S&P affirms Medco Energi

Standard & Poor's said it affirmed its B+ corporate credit rating on PT Medco Energi Internasional Tbk.

The outlook is stable.

S&P noted the rating on Medco is constrained by the cyclical nature of the industry, its short proved reserves life, large capital expenditure requirements, concentration risks and the company's very aggressive financial policy.

Nevertheless, the agency added these weaknesses are partially offset by the company's favorable cost structure and some degree of insulation from currency instability and sovereign debt risk.

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