S&P Global Upgrades Georgian Oil and Gas Corporation's IDR to 'BB-'/Stable

16 October, 2019
The International credit rating agency S&P Global has raised JSC Georgian Oil and Gas Corporation's (GOGC) Long-Term Issuer Default Rating (IDR) to 'BB-' from 'B+'. The Outlook is Stable.

S&P Global published GOGC’s rating on October 15.

GOGC is viewed by the government of Georgia as critical to its national energy policy. GOGC is a key government vehicle for ensuring the reliability of gas supplies. GOGC is also a Government representative in major oil and gas transit projects and a National Oil Company representing the State’s interests in production sharing agreements. GOGC is actively pursuing diversification of its business activities through constructing and operating gas-fired thermal power plants.

S&P Global underlines the importance of Gardabani-II thermal power plant project, which is scheduled to be launched in 4Q19. The plant will significantly improve financial condition of GOGC and increase energy security of the country.

Profitability of GOGC will be significantly improved by increase of gas transit through South Caucasus Pipeline triggered by the development of the second phase of Shah-deniz field development and associated growth of gas purchases.

S&P Global expects a temporary deterioration in credit metrics of GOGC in 2019 due to higher gas purchasing costs and a peak in capex and improvement in subsequent years due to finalization of the Gardabani-II power plant, which will contribute about GEL 70 mln to GOGC’s EBITDA starting from 2020.