National oil company KAZAKHOIL comments increase of the rating from fitch

/IRBIS, Oct 15, 01/ - Press service of Kazakhoil (Astana) in a special report, that IRBIS owns, has commented on today's raise of credit rating of national oil company Kazakhoil to "BB" from "BB-" with a "stable" forecast (short-term rating was confirmed on the level "B"). According to the opinion stated in a press release, the rating of NOC Kazakhoil includes steady progress of the company in exploration operations, the end of development of program of Atyrau oil refinery modernization; expected stable levels of ratio of investing of capital in securities with fixed and non-fixed returns. An increase of the rating reflects continued level of government support. The Government of Kazakhstan offered state guarantees of a large investing program of the company - modernization of Atyrau oil refinery. The increase in the company's rating is said to be appropriate, since the company is going to increase borrowing for financing its further development. Particularly, it was said recently that approximately in November Kazakhoil is going to float its first issue of euronotes in the amount of $100 million. Permanent dependence of Kazakhstani economy on oil and gas production underlies a possibility of future influence of low prices. Nevertheless, the ratings are reinforced by obligations of the Government to support the company and also by strategic importance of the company for Kazakhstani economy, is said in the press release of Kazakhoil. In its conclusion Fitch notes that recent transfer of remaining 20% in the biggest project Tengizchevroil (TCO), like the last contradictions concerning division of Caspian shelf among coastal countries, didn't have actual influence on ratings of Kazakhoil. Fitch excluded the share of company in TCO under original rating, thereby it foresaw the decision of the state in August, 2001 concerning the transfer of share to the Government of Kazakhstan. It was also mentioned that Kazakhoil is little influenced by regional political events, accompanying the division of Caspian Sea, because all exploration is done presently on land and a significant part of transition is also on land. Last world events are not also considered increased risks for independent ratings of Kazakhstan and its largest corporations.