State reputation riskier than sanctions for Russia’s oil and gas companies
The Russian government’s reputation is a greater threat to the cred it worthiness of the country’s energy companies than the sanctions levied against the sector by the US and Europe, according to a report released yesterday.
Credit ratings agency Standard and Poor’s (S&P) argued in research yesterday that sovereign risk is the largest factor weighing against the country’s oil and gas firms’ credit quality.
The authors argued that poor access to capital markets “owing to reputational risks”
“The direct impact of the sanctions will likely hurt Russian oil companies only gradually and to a relatively limited degree… these companies will likely feel the more indirect negative effects of Russia’s weakening economy and factors such as reputational risk,” the researchers added.