Fitch: Outlook stable for Latin American oil/gas companies

Fitch Ratings said the credit profiles of Latin American oil and gas companies will remain stable in 2012 despite ambitious investment programs.

The agency said its rated oil and gas issuers benefit from strong cash positions, buffered by higher oil prices and conservative debt structures with long-term maturity profiles. The companies are positioned favorably to withstand difficult market conditions over the next 12 months, Fitch said.

Fitch expects regional national oil companies will take on additional leverage in 2012 to fund aggressive investment programs, with total capital expenditures expected to total $84 billion for the year. The availability and cost of funding is a concern due to the sector's medium-term capital needs, the agency said. Fitch anticipates regional governments will provide ongoing liquidity support through state-owned banks.

Rising fixed costs including escalation in labor and energy costs will cause a rise in production expenses, the agency predicted.

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