Credit rating’s agency Moody’s has switched its outlook for Shell to stable from negative, while also delivering a boost to BP.
Moody’s said Shell’s $30billion divestment programme, aimed at rebalancing the books following its takeover of BG Group, was one of the main reasons for its optimism.
The oil major announced the sale of a package of North Sea assets to Chrysaor for $3.8billion earlier this year and is understood to be more than two-thirds of the way to reaching its target by the end of 2018.
The agency also said it was heartened by the steps Shell has taken to enhance cash flow generation, namely, delivering on growth projects, reducing the level of capital investment and operating costs, and selling off assets.
Elena Nadtotchi, vice president at Moody’s, said: “We stabilised the outlook on Shell’s Aa2 rating on expectations that its financial profile will improve into 2019 on the back of ongoing earnings and cash flow recovery and accelerated post-acquisition de-leveraging, funded by $30billion of planned asset sales.”
And Moody’s upgraded BP’s rating to A1, basing its decision on “reduced uncertainty” about the future impact of liabilities related to the Deepwater Horizon spill.
The outlook for BP is positive, Moody’s said.
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