Moody’s could drop Chinese oil companies

Moody's Investors Service said it placed the Aa3 ratings of China National Petroleum Corp., China Petrochemical Corp., China Petroleum and Chemical Corp., China National Offshore Oil Corp. and Cnooc Ltd. on review for downgrade.

The agency also placed the ratings of the Chinese national oil companies' rated subsidiaries, including Kunlun Energy Co. Ltd., CNPC Finance (HK) Ltd., CNPC Captive Insurance Co. Ltd., Cnooc Finance Corp. Ltd. and Sinopec Century Bright Capital Investment Ltd. on review for downgrade.

In addition, Moody's affirmed the P-1 ratings for the commercial paper program of CNPC Finance (HK) and Sinopec Century Bright Capital.

The review follows the agency’s global rating actions on many energy companies, reflecting Moody's effort to recalibrate the ratings in the energy portfolio to align with the fundamental shift in the credit conditions of the global energy sector.

Oil prices have deteriorated substantially and have reached nominal price lows not seen in more than a decade. As part of its ongoing assessment of the energy markets, Moody's has drastically lowered its oil price assumptions in light of the ongoing oversupply in the global oil markets and demand growth that remains tepid.

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