Falling crude prices won’t drag down Asia’s oil/gas sector: S&P

HONG KONG - Asia-Pacific's healthy economic growth will likely underpin the performance of the region's oil and gas sector, despite weaker oil prices, according to ratings agency Standard & Poor's.

"Asia-Pacific's national oil and gas companies (NOCs) can absorb the impact of a decline in crude oil prices without losing their profitability and credit quality," said S&P credit analyst, Lawrence Lu. "That's because the companies have a strong financial position thanks to several years of high prices."

Asia-Pacific's higher economic growth compared with global averages has boosted energy consumption. In addition, ongoing energy price liberalisation in China and India - the region's two biggest energy consumers - should continue to support healthy energy demand, S&P says.

Also, most exploration and production companies in Asia-Pacific can cut capital expenditure to maintain credit quality, should prices drop below S&P’s crude oil price assumptions of US$90 per barrel for Brent from 2015
onward. www.standardandpoors.com (ATI).