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AFX Europe (Focus): Australia’s Woodside rated ‘BBB+’, outlook stable – Fitch Ratings

Published: Jul 17, 2006

SYDNEY (XFN-ASIA) – Fitch Ratings said its has assigned Australia’s Woodside Petroleum Ltd a long-term foreign currency issuer default rating (IDR) and foreign currency senior unsecured debt rating of “BBB+” with a stable outlook.

The ratings agency said it has also assigned a short-term foreign currency rating of “F2” to the company which is 34 pct owned by the Royal Dutch Shell group.

Fitch said the ratings reflect Woodside’s cash flow stability, which is supported by long-term contracts for liquefied natural gas produced by its one-sixth owned North West Shelf project.

The ratings agency said the 14 bln aud project, on the north-west Australian coast and operated by Woodside, has superior economics because of its size.

Fitch said the ratings also reflect the quality of the company’s reserves due to their geographic position in relation to markets and the maturity and life of production.

It said Woodside’s financial flexibility is further enhanced by its operator status on the majority of the company’s projects and solid interest coverage ratios as it maintains low levels of debt.

Fitch said the stable outlook reflects Fitch’s expectations that Woodside will maintain credit ratios commensurate with the current rating category despite its large capital expenditure program.

It said a key credit concern for Woodside is the increasing pressure on operational costs and capital expenditure as production capacity is ramped up over coming years.

It said risks are also increasing as Woodside moves to producing in riskier environments, both politically and technically, from its home market of Australia.

(1 usd = 1.33 aud)

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