(AFX UK Focus) 2005-04-26 17:34 GMT:
Lukoil ratings raised to Ba1 from Ba2, outlook stable - Moody's
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LONDON (AFX) - Moody's Investors Service said it has upgraded the senior implied
rating of Lukoil to Ba1 from Ba2, with a stable outlook.
Moody's said the upgrade primarily reflects the Russian oil giant's "solid
underlying performance", along with "visible improvements in corporate
governance" since ConocoPhillips acquired a 7.6 pct stake last September --
raised to 10 pct in January -- and gradual improvements in Lukoil's operational
performance and efficiency.
The company also also benefited from the current high oil price, the ratings
agency noted.
However, it noted that Lukoil's ratings remain constrained by its "substantial
investment needs" to support its ambitious plans of achieving 2.8-2.9 mln boepd
(from currently 1.9 mln) production by 2014 and its ongoing focus to expand its
global downstream presence.
Moody's also noted that ongoing investigations by Russian tax authorities for
back-dated tax claims add some considerable uncertainty to the sector's
operating environment.
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