government uprisings should have limited impact on current credit ratings of oil and gas companies operating in the Middle East and North Africa, Moody's Investors Service said Thursday. That could change, however, if the situation worsens in individual countries, the ratings agency said. The loss of production in countries like Libya should be more than offset in the near term by rising oil prices, said Francois Lauras, a vice president in Moody's EMEA Corporate Finance Group. But international oil companies "could potentially face greater long-term credit implications as a result of the imposition of economic sanctions on Libya, the deteriorating security environment in the event of a prolonged civil war and the introduction of tougher terms for foreign producers," he said in a credit report. Libya's leader Muammar Gaddafi vowed to launch a final assault on the opposition's capital Benghazi and crush the rebellion that began in mid-February. The uprising shut down Libya's oil production, which was about 2 percent of the world's crude. Oil prices rose on concerns that unrest would spread. Moody's said it expects Libya to work rapidly to restore its oil production because the country is heavily reliant on revenue from oil exports. Moody's said Eni, OMV and Marathon Oil Corp. have the largest exposure in terms of their overall production. Italy's Eni has an Aa3 rating and stable outlook; Austria's OMV is A3/stable and Houston's Marathon Oil Corp. has a Baa1 rating, which is on review for a possible downgrade, Moody's said. Other companies operating in the region that have less exposure include Hess Corp., with a Baa2 rating and stable outlook; Suncor Energy Inc., Baa2/stable and Spain's Repsol YPF, which has a Baa1 rating and a negative outlook. Exposure is minimal for producers such as ConocoPhillips, A1/stable, and Occidental Petroleum Corp., A2/stable. All of the ratings are investment grade.
