Qatari oil companies downgraded in international ratings

CAIRO – 10 July 2017: Qatari oil companies and the country’s economy have been facing a downfall since the eruption of the crisis on June 5, when four Arab countries – Saudi Arabia, Egypt, the United Arab Emirates and Bahrain – decided to cut diplomatic ties with the Gulf state for fostering terrorism.

The oil and gas sector in Qatar lost a big portion of its profits in the wake of the crisis, and its expansive plans have been crippled.

Moody’s Investor Service, a global agency for bond credit ratings, downgraded on Saturday the ranking of Qatar for the second time in one week. On Wednesday, Moody’s lowered Qatar’s ranking to Aa3.

Moody’s changed the ratings of four Qatari gas companies from positive to negative. It also indicated that it may lower the ratings of Qatari petroleum in case the sovereign rating of Qatar falls.

Moody’s explained that the downgrading occurred because these are state-owned companies, which are less likely to receive financing necessary to pay back debts.

In its report, the agency speculated that the crisis may be escalating until 2018, which makes speculations for the Qatari economy to be negative rather than stable.

Qatari gas exports have been facing obstacles, as maritime, air and urban transport from and to Qatar have been banned through its neighboring countries’ territories.

Economic experts estimate that Qatari losses may be summing up to $75 billion since the eruption of the crisis, according to Reuters.

Qatar announced a plan on Tuesday to raise output of liquefied natural gas (LNG) by 30 percent.