CHICAGO--(BUSINESS WIRE)--Latin American oil and gas companies enter 2014 with a stable outlook, supported by strong underlying assets, and adequate capital structures and liquidity profiles, according to a new Fitch Ratings report.
'National oil companies are forecasted to spend USD100 billion in 2014 on new investments, generating negative free cash flow and increased leverage. This trend is mitigated by current cash balances, which provide strong liquidity and access to external financing,' said Lucas Aristizabal, Director at Fitch.
'Fitch anticipates the rate of growth in demand for oil, and oil products, will probably slow in 2014 for both developed and emerging markets.'
National oil companies seek to aggressively increase production but face challenges in achieving targeted production volumes, including higher cost technology to increase exploration in nontraditional areas, a shortage of offshore drilling equipment, and a tight labor market.
Refining remains exposed to constrained retail prices, with recent reported losses expected to continue in the short term.
Regulation, key to attracting private investment, is varied. Colombia's solid regulatory framework entices private investment, while Argentina and Venezuela are heavily hampered by their relationship with their governments. In Mexico, private investment stands to benefit significantly from the passing of the energy reform, and in Brazil, increasing government regulation might marginally curb private investors' appetite.
For more information, a special report titled '2014 Outlook: Latin America Oil and Gas Sector' is available on the Fitch Ratings web site at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: 2014 Outlook: Latin America Oil and Gas (Healthy Liquidity Cushions Robust Investments)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726618
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.