Standard & Poor’s warned today that the six-month collapse in oil prices has undermined the credit ratings of Royal Dutch Shell, BP and Total.
Extract from warning issued by Standard & Poor’s:
We have revised to negative our outlooks on three oil majors, while affirming the credit ratings on these companies to reflect that we will further evaluate management’s actions in reducing negative free cash flow by cutting costs and gradually reducing capital expenditures (capex).
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Extract
S&P revises its outlook to negative for BP, Royal Dutch Shell and Total, as it cites “the dramatic deterioration in the oil price outlook” in forecasting still more negative free cash flow in 2015 extending possibly into 2016, given fairly inflexible capital expenditure and high dividends.
