Credit Views on the Oil and Gas Sector: Recent Rating Actions Explained

Presented by

Victor Vallance and Ravi Rai

About this talk

The global spread of Coronavirus Disease (COVID-19) had a significant negative impact on crude oil markets and refined product margins. In late March 2020, DBRS Morningstar placed all its rated oil and gas issuers Under Review with Negative Implications in response to the extreme decline in prices and the heightened volatility in crude oil markets largely caused by the rapid spread of coronavirus and the concurrent crude oil price war between OPEC (led by Saudi Arabia) and Russia. In mid-May, with volatility subsiding and market visibility improving, DBRS Morningstar revised its commodity price assumptions to factor in (1) the impact of the coronavirus pandemic on crude oil demand as lockdowns ease, (2) the significant buildup in global oil inventories, and (3) the impact of production cuts implemented by OPEC+. Because of these revised commodity price assumptions, combined with measures taken by companies to navigate through the very weak price environment, DBRS Morningstar has now resolved all the oil and gas rated issuers that were Under Review with Negative Implications and has taken a number of negative rating actions. Hear about the process and the reasons behind the rating actions taken by DBRS Morningstar during our 25-minute webinar, which will be followed by an interactive Q&A session with the viewers.

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On July 2, 2019, Morningstar, Inc. completed its acquisition of DBRS. Combining DBRS' strong market presence in Canada, Europe, and the U.S. with Morningstar Credit Ratings' U.S. footprint has expanded global asset class coverage and provided investors with an enhanced platform featuring thought leadership, analysis and research. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry. Together as DBRS Morningstar, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 3,000 issuers and 60,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. Visit us at learn/dbrsmorningstar.