Fitch raises Saudi Aramco’s long-term rating on strong business profile

Fitch raises Saudi Aramco’s long-term rating on strong business profile

RIYADH: Fitch Ratings upgraded Saudi Aramco’s long-term foreign and local currency Issuer Default Ratings thanks to the company’s strong business profile and solid ambitions to deliver a sustainable and progressive dividend.

The rating agency upgraded the global energy giant’s rating to ‘A+’ from ‘A’, with a stable outlook.

Saudi Aramco is the world’s largest oil producer and the national oil corporation of Saudi Arabia. It has a significant pre-dividend free cash flow generation, safe financial strategies and a net cash position.

Its business profile is characterized by large-scale production, massive reserves, low output costs, and development into downstream and petrochemicals.

Its upstream operations are focused on a single country, and its operations are oriented toward crude oil production when compared to global oil and gas companies.

“We assess status, ownership, and control, and support track record as ‘strong’ as Saudi Aramco is majority-owned by the government of Saudi Arabia,” Fitch Ratings said.

“We view the socio-political or financial implications of the company’s default as ‘very strong’ due to Saudi Aramco’s key role in the Saudi Arabian economy as a key purveyor of feedstock to the country’s power generation fleet and other key end-markets,” the rating agency continued.

Saudi Aramco’s annual capital expenditure grew to $38 billion last