S&P boosts Polish Oil

Standard & Poor's said it raised its long-term corporate credit rating on Polish Oil and Gas Co. (also known as Polskie Gornictwo Naftowe i Gazownictwo SA) to BBB+ from BBB.

The outlook is stable.

The ratings were initially placed on Credit Watch with positive implications on Sept. 21, S&P said, noting that the upgrade reflects the company's strong balance sheet and liquidity and increased financial flexibility.

The ratings are supported by the company's favorable earnings outlook mainly driven by healthy growth in its exploration and production operations as well as an increased share of domestic natural gas production, which is expected to reduce its payments for expensive imports, the agency noted.

These strengths are offset by concerns about a less supportive regulatory environment, which could lead to cost pass-through delays, increasing supply risk of gas deliveries through Russia, Ukraine and Belarus and the expected transfer of its stable transmission assets to state ownership, S&P said.

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