International rating agency Fitch has affirmed the issuer default rating (IDR) of Romanian state-controlled natural gas group Romgaz (BVB: SNG) at BBB-/negative, in line with the country’s sovereign, the highest rating the agency could have assigned to the company.
However, Romgaz’s BBB- rating benefits from a one-notch uplift from its bb+ Standalone Credit Profile (SCP) for state support, under the Government-Related Entities Rating Criteria.
The Negative Outlook reflects the Outlook on Romania’s sovereign rating, and a downgrade of Romania would be mirrored in Romgaz’s IDR.
Fitch views the Neptun Deep offshore gas project, where Romgaz is a 50:50 partner with OMV Petrom, as a transformational project for the Romanian gas company.
The rating agency expects the project to allow Romgaz to increase its natural gas production to around 150 thousand barrels of oil equivalent per day (kboe/d) from 87 kboe/d in 1H25. The project will also secure Romania’s energy independence and position the country as the EU’s largest natural gas producer from domestic resources.
“We view execution risk as manageable, given the partner’s experience in oil and gas project development,” the rating agency noted.
Romgaz reached a market capitalisation of RON 37.6 billion (EUR 7 billion) after the price of its shares rose by 77% y/y.
The company unveiled last week a decarbonization strategy that commits the state-owned company to investments of EUR 2.5 billion by 2050, to achieve the goal of zero net emissions, according to a press release published on the Bucharest Stock Exchange (BVB) website.
The company’s efforts will focus primarily on reducing carbon emissions resulting from its core activities, namely the exploration and production of natural gas, as well as on green projects in the field of renewable energy production (solar and wind), green hydrogen and biomethane, as well as in the field of CO2 capture and storage.
“This net zero trajectory that the company proposes is an aspirational, conditional direction, with benchmarks that will be reevaluated periodically depending on technological progress, the availability of financing sources, and regulatory clarity,” the company stated.
iulian@romania-insider.com
(Photo source: Inquam Photos/Adel-Al Haddad)
Leave a Reply