TEXT-S&P: foreign investment credit neutral to N. American oil, gas
Oct 19 - Foreign investors, notably Asian government-owned national oil companies (NOCs), are showing increasing interest in a number of North America's oil and gas resources. Before 2008, Asian government-owned NOCs' investment in Canadian and U.S. oil and gas companies was negligible. Since then, increasing concerns about the access and adequacy of energy supplies have been the primary motivation behind these nations' international investments. The foreign NOCs, which we categorize as government-related entities, focus on securing access to long-term resource supplies and have accelerated their pace of acquisitions and joint venture (JV) activity in North America. In a report released today, Standard & Poor's Ratings Services said that so far, it has viewed the near-term effect on the credit quality of the North American acquisition targets and JV partners as neutral to positive. "However, in our view, the long-term credit implications of these investment arrangements will depend on their effect on operating efficiency and profitability, as well as the degree of ongoing financial support provided by their respective parent companies," said Standard & Poor's credit analyst Michelle Dathorne in the report, entitled "Has Foreign Investment Helped North American Oil And Gas Companies' Credit? Well, It Hasn't Hurt So Far." In addition, foreign government fiscal policies could also factor into our assessment of the foreign NOCs' ongoing commitment to fund development of their international oil and gas assets. "Although growth in Asia's largest economies is slowing, we believe foreign NOCs' interest and investments in Canadian and U.S. oil and gas assets will likely continue," Ms. Dathorne added. The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to email@example.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com.