TEXT-Fitch: Latin American oil, gas cos stable on liquidity cushions

Dec 12 - For Latin American oil and gas companies, healthy liquidity and
proved access to financing sources balance out high capital expenditures and
increased production cost, leading to a stable outlook for 2013, according to
Fitch Ratings.

'Strong underlying assets and adequate capital structures and liquidity profiles
provide the foundation for a stable 2013 Latin American oil and gas outlook,'
says Ana Paula Ares, Senior Director. 'Close legal, operational, and strategic
ties between the National Oil Companies (NOCs) and their sovereigns provide a
degree of comfort during the execution of an estimated USD85 billion of
investments expected for 2013.'

The regional refining businesses remain exposed to constrained retail prices.
NOC's refining businesses reported aggregate losses (USD 30 billion in 2011)
through the last 12 months ended September 2012. Political willingness to
increase prices is key is reversing losses going forward.

Current oil prices remain well above Fitch's long-term mid cycle levels. While
prices could rise higher due to reasons beyond demand fundamentals, Fitch
believes that there are significant downside risks. Lower oil prices would
result in less cash flow and a higher dependence upon debt to fund expansion
programs.

Production costs are expected to be affected by rising fixed costs, including
escalating costs for labor and energy. The anticipated increase in drilling and
exploration activities in technologically challenging areas might also pressure
costs.

The full report, titled '2013 Outlook: Latin America Oil & Gas', is available on
the Fitch Ratings web site at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: 2013 Outlook: Latin America Oil and
Gas