Fitch affirms ETAP

Fitch Ratings said it affirmed Entreprise Tunisienne d'Activites Petroliere's (ETAP) national long-term rating at AA+(tun) and short-term rating at F1+(tun).

The outlook remains Stable.

The agency said the ratings reflect ETAP's unique position in the Tunisian hydrocarbon sector: being entitled to participate in local concessions, ETAP enjoys a guaranteed income. Additionally, the company has a privileged relationship with Tunisia and has the strategic role of covering national needs in oil, gas and oil finished products and trades these goods on behalf of the government. Fitch said ETAP also has strong financial fundamentals including sustained sound operating profitability, low leverage and comfortable liquidity.

The ratings are, however, constrained by oil price volatility, the company's dividend distribution policy and the drawback of the state-owned status in terms of management, Fitch said, adding that while the company has not yet decided how it will proceed to develop its activities overseas, such an ambitious strategic move might alter its risk profile and increase its operating costs.

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