Moody's Investors Service has affirmed the Aa3 issuer ratings of China Petrochemical Corporation (Sinopec Group) and its key listed subsidiary - China Petroleum and Chemical Corporation (Sinopec Corp) (SNP.NYSE; 00386.HK; 600028.SH).
The rating actions followed the sharp reduction in Moody's oil price assumptions in light of continuing oversupply in the global oil markets. Moody's now assumes the Brent crude, the international benchmark, to average 43 US dollars per barrel and 48 US dollars per barrel in 2016 and 2017 respectively. This marks a 10 US dollars per barrel and 12 US dollars per barrel reduction from its previous assumptions for 2016 and 2017 respectively.
"The affirmation of Sinopec Group's and Sinopec Corp's ratings, despite the low global prices for oil, reflects both entities' diversified business structure, conservative capital spending, and strong access to liquidity," said Chenyi Lu, a Moody's vice president and senior analyst, and the international lead analyst for Sinopec Group and Sinopec Corp.
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