World Bulletin / News Desk
The total earnings of some major oil companies in Europe, Middle East and Africa will fall by 22 percent this year due to low oil prices, Fitch Ratings warned Tuesday.
The ratings agency said Royal Dutch Shell, France's Total, Austria's OMV, Spain's Repsol, Italy's Eni, and Hungary's MOL "will see a significant deterioration in credit metrics as weaker downstream performance adds to the impact of lower oil prices on cash flows."
Total earnings combined at those companies declined 34 percent in 2015, while oil prices are down by approximately 65 percent compared to their mid-2014 levels.
Fitch said it already downgraded the ratings of Shell and Eni, while Total, OMV, Repsol and Shell have negative outlook.
The companies are advices to implement spending plans successfully in order to maintain current ratings, according to Fitch, noting that the firms already had cuts in their capital expenditure and operational expenditure savings.
The agency said the firms' financial priorities also remain a key component to determine ratings.
Fitch anticipates the low oil price cycle to pass by 2018 and believes companies will adjust operations to the current low price environment until then.
The agency forecasts oil prices to average $35 per barrel in 2016, $55 in 2018 and $65 beyond.Güncelleme Tarihi: 20 Nisan 2016, 09:14