Moody's rates Cnooc notes Aa3

Moody's Investor Service said it assigned an Aa3 senior rating to the proposed notes to be issued by Cnooc Finance (2015) Australia Pty. Ltd. and Cnooc Finance (2015) U.S.A. LLC and guaranteed by Cnooc Ltd. (Aa3). The outlook is stable.

Proceeds will be used for general corporate purposes.

The agency said Cnooc’s Aa3 rating incorporates its standalone credit strength and a two-notch uplift for expected support from its parent, China National Offshore Oil Corp. (Aa3/stable) given Cnooc’s significant contribution to its parent's assets and earnings as well as its critical role in Chinese oil and gas sector.

Cnooc’s standalone credit strength is supported by its dominant position in the Chinese offshore oil and gas sector, its substantial reserves, its proven exploration and production track record and its considerable financial flexibility, Moody’s said.

Nevertheless, the standalone credit strength is constrained by the company’s large exposure to volatile crude oil prices and execution risks from its overseas projects, the agency added.

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