Moody’s could lower Origin Energy

Moody's Investors Service said it placed Origin Energy Ltd.’s Baa2 issuer and senior unsecured ratings and P-2 short-term issuer rating on review for downgrade.

The agency also placed Origin Energy Finance Ltd.’s Baa2/provisional Baa2 senior unsecured and Ba1 preference stock ratings on review for downgrade.

Origin has a 37.5% interest in Aplng, which is developing a two-train liquefied natural gas (LNG) project in Queensland that has the capacity to produce up to 9 million tons of liquefied natural gas upon completion. The remaining equity interests in the project are held by ConocoPhillips (37.5%, A1 stable) and China Petroleum and Chemical Corp. (Sinopec, 25%, Aa3 stable).

"The rating action primarily reflects the sustained decline in oil prices and Moody's recent revision of its oil price base case assumptions," Moody's vice president and senior analyst Spencer Ng said in a news release. "The weak oil price environment will lead to lower cash flows that we expect Origin to receive when the large LNG project (Aplng) commences production later this year."

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