Page 15 - LatAmOil Week 11 2021

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The primary purpose of this MOU is to enhance expense by over 3.0x through the rating hori- natural gas field in Peru, which is estimated to
cooperation between API and the Centre on zon. Therefore, per Fitch’s “Non-Financial Cor- contribute nearly 9% of its EBITDA in 2021,
several fronts, including: Expand training and porates Exceeding the Country Ceiling Rating provides stable and predictable cash flows far
implementation of API Specifications Q1 and Criteria,” Tecpint’s ratings are not capped by a beyond the maturities of the company’s debt
Q2, which are industry-leading quality manage- country ceiling. Fitch estimates the company’s obligations. Fitch forecasts Camisea’s contribu-
ment systems. Share information and expand production size will average 150,000 barrels of tion to Tecpint’s EBITDA will alone be more than
training related to health, safety, security and oil equivalent per day (boepd) through 2024 adequate to cover interest expense, on average
the environment (HSSE). Develop API-U with a 1P reserve life of at least 10 years. Fitch 3.1x, in 2021. Camisea’s reserve life is estimated
courses and instructor-led training for Guya- estimates total debt to EBITDA to be below 1.0x to extend for more than 25 years, although the
nese companies. Implement the API Individual over the rated horizon and total debt to 1P is license agreements for Camisea’s two blocks, 88
Certification Programme in Guyana. Train local $0.95boe. and 56, expire in 2040 and 2044, respectively.
businesses on API’s 2D standard series, Training The Outlook revision to Stable from Nega- Strong Production Profile and Hydrocarbon
for Offshore Pedestal-Mounted Crane Riggers, tive reflects a stabilisation in the ratings of the Reserve Life: Tecpint’s ratings reflect the com-
Operators and Inspectors. Provide updates on operating environments, which previously had pany’s medium production size, consistent with
regulation affecting the oil industry in Guyana. Negative Outlooks, specifically Ecuador (B-/ the low BBB rated category, and relatively strong
Offshore oil production began in Guyana Stable) and Bolivia (B/Stable). Argentina’s CCC reserve life of approximately 13.1 years com-
in 2019. Continued development of massive rating is not expected to impact the rating under pared with peers. In 2020, Tecpint’s total owned
reserves off Guyana’s coast is poised to make its current cash flow generation profile. Further, production is expected to average 150,000 boepd
the country an energy leader in the region. during 2020, Tecpint repaid $293mn of debt, and (58.0mn boe per year) of which 85% is gas, and
Reflecting this development, the country’s GDP Fitch estimates that between cash on hand and the remainder is liquids. As of YE 2020, Tecpint
grew by 26% in 2020, despite the pandemic and cash flows in 2021 and 2022, the company could had proved reserves of 761mn boe (75% gas and
COVID-19 restrictions. Most of this growth was comfortably repay its $500mn senior unsecured 25% liquids). Argentina has the largest percent-
attributed to the country’s energy industry, with note due in November 2022. age by country at 65% followed by Peru (21%),
the International Monetary Fund projecting the Key Rating Drivers, Diversified Asset Base: Bolivia (5%) and Ecuador (5%).
GDP to grow 8% in 2021. Fitch views Tecpint’s diversified asset base as a Strong Financial Profile: Fitch estimates
The Centre is Guyana’s leading source for oil credit positive. Tecpint has oil and gas explora- Tecpint’s EBITDA was $940mn in 2020, down
and natural gas business and industry informa- tion and production operations in six countries 13% compared to 2019, mostly due to a decrease
tion, professional development and networking, across Latin America (Argentina, Peru, Ecua- in gas production in Argentina; the company
and policy advocacy. The Centre has trained dor, Mexico, Colombia and Bolivia) as well as EBITDA margin, however, remains strong,
hundreds of Guyanese businesses and assisted gas transportation and distribution in Argen- estimated at 66% in 2020, slightly higher than
in the buildout of an oil and natural gas sector in tina and Mexico, and electricity generation in 61% in 2019. Fitch estimates EBITDA margin
Guyana. One of Centre’s focuses is assisting Guy- Mexico. The company’s principal reserves are in will return to 70% by 2022. FCF for 2020 is esti-
anese companies to develop HSSE management Peru (21%), Bolivia (5%), Colombia (3%), Mex- mated at positive $441mn, and Fitch’s base case
systems. The Centre’s implementing partner is ico (1%) Ecuador (5%), and Argentina (65%). reflects positive FCF through the rating horizon.
DAI Global and it receives support from Exxon- Approximately 70% of E&P revenues come from Total debt to 1P reserves is $0.95 per barrel of
Mobil, Hess and CNOCC Ltd. sales of oil and gas and services from Argentina. oil equivalent, the lowest amongst peers in the
API, March 16 2021 Camisea Stake: Tecpint’s 10% ownership region.
stake in blocks 88 and 56 within the Camisea Fitch Ratings, March 11 2021

FINANCE
Fitch Affirms Tecpetrol

Internacional’s IDR at BB

Fitch Ratings has affirmed Tecpetrol Internac-
ional (Tecpint)’s Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at BB.
The Rating Outlooks have been revised to Stable
from Negative.
Tecpint’s ratings reflect its strong business
position, large reserve base, low leverage, strong
and predictable cash flow profile supported
by contracted volumes and prices in Peru and
Argentina, and operating profile. Fitch esti-
mates nearly 90% of Tecpint’s EBITDA comes
from B-rated or below operating environments,
mostly in Argentina, which represents 80%.
The company’s ratings are not capped by a
country ceiling, as EBITDA from its Peruvian
operations alone has covered, and is expected
to cover, hard-currency consolidated interest

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