[ET Net News Agency, 9 February 2021] S&P Global Ratings placed the long-term issuer
credit ratings on China Petrochemical Corp. (Sinopec Group) and its rated subsidiaries on
CreditWatch with negative implications on 26 January 2021, after revising its risk
assessment for the exploration and production industry to moderately high from
intermediate. It believes energy transition, price volatility, and weaker profitability
are increasing risks for oil and gas producers.
However, the credit rating agency believes Chinese national oil companies (NOCs),
including Sinopec Group, are better positioned to withstand industry adversities than
their international peers due to their policy role in China's oil and gas industry and
strong state support, oil and gas consumption growth, and their integrated operations.
S&P affirmed its 'A+' long-term issuer credit ratings on Sinopec Group, China Petroleum
& Chemical Corp. (Sinopec Corp.)(00386), and Sinopec Insurance Ltd. It also affirmed its
'A-1' short-term issuer credit rating on Sinopec Group and its 'A+' long-term issue rating
on the U.S. dollar-denominated senior unsecured notes that Sinopec Group guarantees.
In addition, it affirmed the 'A/A-1' issuer credit ratings on Sinopec Century Bright
Capital Investment Ltd. (SCB), which S&P continues to assess as a highly strategic
subsidiary of Sinopec Group. All ratings have been removed from CreditWatch with negative
implications.
The stable outlook on Sinopec Group and its rated subsidiaries reflects the outlook on
the sovereign credit rating on China. It also reflects S&P's expectation that Sinopec
Group will maintain its dominant position in China's oil refining and marketing, and
chemical segments at least in the next 24 months. (KL)