The reduction rate of the ruble and Progressive taxation is required to smooth the impact of not less than low oil prices on the profitability of Russian oil organizations, But their financial leverage may moderately increase due to application of payment in hard currency, according to rating Agency Fitch.

Like all exporters, Russian oil organization benefit from not less than the low exchange rate of the national currency. And at the same time, the decrease of oil prices in the last few months has a negative impact on dollar-denominated revenues, costs, organizations must decrease as a result of the devaluation, which will reduce the impact of low oil prices on our cash flows.

" No less important is the impact of taxation. Progressive taxation in the Russian Federation means that the effective tax rate for the Russian oil decreases with falling oil prices, and Vice versa ", - emphasized in the Agency.
Fitch estimates that at stabilization of the ruble and maintaining oil prices at $ 85 per barrel in the coming year, the average oil Company in 2015 will receive ruble operating profit broadly in line with 2013, when oil prices were Usually equal to 109 USD per barrel.

in the considered scenario the financial leverage of the Russian oil organizations may slightly increase, most of those organizations that are particularly heavily relied on international funding, because that will increase the value of their debt denominated in hard currency.

" Given the fact that all the oil organization, which Fitch ratings, such As LUKOIL, Gazprom Neft and Tatneft, have low leverage for their current rating levels, this development provisions may not result in any rating actions ", - reported in the report of the Agency.

However, a further decline in oil prices, As the restoration of the rouble, the persistence of low oil prices, have the opportunity to have a negative impact on operating profit organizations, add in the Agency.

the vast number of Russian oil organizations have good liquidity and can comfortably do without new borrowing, at least in the next one to two years. At the same time they may need to revise its payment model, if access to international debt markets will remain closed for a long time because of the punishment and the overall uncertainty on the issue of the Ukrainian fall.

anyway, their fundamentals are still strong, and we expect Russian oil organizations will maintain a constant level of oil production and to generate stable cash flows, at least in the next 3 or four years, even when not less than low oil prices.

sections: Politics