The rating on Russian OJSC Oil Co. Rosneft reflects its stand-alone credit profile (SACP), which Standard & Poor's Ratings Services assesses at 'bbb-'. Rosneft's "satisfactory" business risk profile is supported by the company's vast proven reserves, large-scale and low-cost production, and its privileged access to attractive assets in Russia. Russian oil taxes are high, but they are linked to the oil price, which makes Rosneft's profits more stable. Being a vertically integrated company, Rosneft currently benefits from Russia's tax system favoring refined product exports over crude exports. The key constraint on Rosneft's business profile is the company's high and growing capital-expenditure needs to support oil production and modernize refineries that we expect to be free operating cash flow (FOCF) neutral...
Companies mentioned in this report are: OJSC Oil Co. Rosneft
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