Moody’s Investors Service has upgraded Rosneft’s Issuer rating to Baa1 from Baa2 and assigned a provisional Baa1 rating to the Company’s proposed unsecured Loan Participation Notes Programme.

According to Moody’s, the upgrade follows an upgrade of the Baseline Credit Assessment to 11 (equivalent to Ba1) from 13 (equivalent to Ba3) on a scale of 1 to 21. Moody’s believes the purchase of refining assets largely accomplishes the Company’s medium-term strategic objective by redressing the significant imbalance between Rosneft’s upstream and downstream businesses and the lower level of integration compared to Russian peers. In the agency’s opinion, the acquisition has strengthened the Company’s business profile and will lead to a greater diversification of product and revenue stream, higher netbacks and stronger cash flow generation going forward.

The BCA upgrade is also supported by Rosneft’s on-going improvements to operational and production efficiency illustrated by an exceptionally high reserve replacement ratio, low lifting costs and improved well performance, Russia’s largest oil resource base and continued efforts to improve transparency and corporate governance.