Fitch Ratings announced Monday that itrevised the outlook on global energy giant British Petroleum's (BP) long-term issuer default rating from stable to negativeand affirmed it at 'A'.
Theglobal credit ratings organization said in a statement on its website thatit expects BP to have cash outflows due tothe company's Macondo oil spill incident in 2010, which may cause BP to pay an additional $13.7 billion.
BP said earlier thatthe total cumulative pre-tax charges for the Gulf of Mexico oil spill was $43.8 billion as atthe end of the first quarter of 2015.
The Macondo oil spill, also referred to as Deepwater Horizon blowout orthe Gulf of Mexico oil disaster, began inApril 20, 2010 and lasted untilJuly 15. It became known as thebiggestoffshore oil spill inU.S. historyafter theBP-operatedDeepwater Horizon rigin the Gulf of Mexicoblew out andtook the lives of11 workers.
In addition, Fitch Ratings saidlow oil prices and BP'sfalling proved reserveshave also contributed to the negative outlook.
BP announced on April 28 thatits profits were down around 18 percent in the first quarter of 2015 compared to the same period last year.
The underlying replacement cost profitfor the firstquarter of 2015 was $2.6 billion;an 18.75 percent fallcompared with the$3.2 billion for the same period in 2014.BP stressed that oil and gas prices in that period wereconsiderable lowcompared toa year earlier.
Notingthat BP announceda reduction in its2015 capital expenditure to $20 billioninFebruary, from $24-$26 billion in BP's previous estimation, Fitch stressed that it expectsBP's operating cash flows to decrease significantly this year.
However, the 'A' ratingreflects BP'sstrong business profile and sufficient liquidity accumulated to handle Macondo-related cash outflows, Fitch noted.
Theglobal rating agency also added that the 'A' rating is a result of the well-diversified reserve base of BP, which produced1.93 million barrels of oil equivalent per day in 2014, underlying that BP remains asa leading global integrated oil and gas company.
(Anadolu Agency)
