Moody's lifts Gazprom Neft

Moody's Investors Service said it upgraded the senior unsecured ratings of Gazprom Neft JSC, including the rating of Gazprom Neft's senior unsecured $500 million of 10¾% notes due January 2009, to Baa3 from Ba1 with a positive outlook.

As part of the upgrade of the ratings into investment grade, the Ba1 corporate family rating and probability of default rating have been withdrawn, the agency said.

The outlook is stable.

The upgrade of Gazprom Neft is a reflection of (1) its strong financial metrics, high operating and capital efficiency when compared to Russian as well as international peers, (2) minimal reliance on financial support from its main shareholder Gazprom, while benefiting from being part of a larger and powerful group, (3) currently favorable oil price environment that is expected to prevail in the medium term, (4) the company's substantial oil and gas reserves base and its limited exposure to re-investment risks giving high reserves replacement ratio and relatively low 3-year all sources finding & development (F&D) costs, Moody's added.

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