S&P stabilizes Gazprom local view

S&P said it revised Gazprom’s outlook to stable from negative and affirmed BBB local-currency rating and BBB- foreign-currency rating.

“Higher oil and gas prices will support an improvement in Gazprom's operating performance in 2021-2022.As European gas prices have improved materially and are more than double our long-term assumption of $5.5 per metric million British thermal unit (/mmBtu) of Dutch TTF gas, Gazprom's cash flow generation should improve as well,” S&P said in a press release.

The agency noted that if there is continued uncertainty over Ukrainian transit, then European demand could drive average prices even higher.

“The stable outlook reflects our expectation of solid headroom in credit metrics, despite potential increases in capital expenditure (capex),” S&P said.

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