Moody's Investors Service has confirmed the A3 debt rating of Oman LNG. The outlook on the rating is stable. The action concludes the review initiated on November 26, 2002, and incorporates the renewal of the company's insurance policies on broadly similar terms to the expired policies, in particular relating to terrorism and sabotage.
The stable outlook reflects the lack of an immediate identified threat specifically against the project, notwithstanding the increased likelihood of conflict in the region. The project has a concentration of physical assets on a single site, and also has a high profile in the host country of Oman. On January 15, 2003, the company entered into new insurance policies. These policies provide broadly similar coverage to the expired policies.
In particular, the level of property terrorism cover has been maintained. This cover, together with available liquidity, should cover the estimated maximum loss including the impact of business interruption.
Moody's notes, however, that the estimated maximum loss scenarios are not based on the use of weapons of mass destruction, and that the terrorism policies include standard terms that exclude cover for the use of nuclear, biological or chemical weapons. At the same time, Moody's notes that the project has comprehensive security arrangements in place, in co-ordination with the host government which is also the majority shareholder.
The project's operational performance remains strong, with strong cashflow benefiting from the high oil price and high volumes shipped including spot sales. Oman LNG is 51 percent owned by the Government of Oman, and 30 percent owned by Shell. In 2001 it reported revenues of $1.18 billion. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
