The credit rating of PJSC TATNEFT n.a. V.D. Shashin (hereinafter, the Company, or the Group) is based on the strong market position, very strong business assessment, high assessments of geography, corporate governance and profitability, very strong assessments of debt service and liquidity, the large size of business, very low leverage, as well as the strong assessment of cash flow.
PJSC TATNEFT n.a. V.D. Shashin is the head company of the Tatneft Group. The Group is the fifth largest vertically integrated oil and gas company in Russia by volume of production and processing. The Company produced 27.28 mln tons of crude oil, extracted 871 mln cubic meters of gas, and produced more than 18 mln tons of oil and gas products in 2024. The Group’s areas of business include oil and gas production, oil processing, petrochemicals, tire production, a chain of gas stations, a composite cluster, electric power industry, development and production of equipment for the oil and gas industry, as well as a block of service companies. When assigning the credit rating, ACRA used the consolidated IFRS financial reporting of Tatneft Group, excluding the results of the financial services segment.
KEY ASSESSMENT FACTORS
The very strong business assessment stems from the effective management and control of the Company’s expenses, very high hydrocarbon reserves, very high volume and depth of processing, as well as the high diversification of assets, sales channels and markets.
The high corporate governance assessment takes into account the very high assessments of the management strategy, management structure, and financial transparency. The scope of the Group’s business determines the specific nature of its structure.
High business profitability is ensured by a number of factors, the key ones being high operational efficiency and effective monetization channels, as well as the significant share of oil refining and high quality of refining facilities.
Very low leverage and very high debt service assessment. The Company traditionally demonstrates a commitment to conservative financial policy, the Group’s total debt is near zero, and net debt is negative. The Agency expects the Company’s capex to start growing in 2026; a significant portion of investments will be made in the frames of preferential financing. At the same time, the total debt to FFO before net interest payments will remain significantly below 1.0x and the weighted average FFO before net interest payments to interest payments will be well above 8.0x in the medium term.
Very strong liquidity and strong cash flow assessment. Taking into account the Company’s free cash flow before dividend payments forecast by ACRA for 2025 to 2028, the significant amount of accumulated cash, as well as the Group’s broad opportunities to attract financing, the Agency assesses its liquidity as very strong. The strong cash flow estimate takes into account the preservation of a significant volume of dividend payments in accordance with the Company’s dividend policy in the forecast period of 2026–2028.
KEY ASSUMPTIONS
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Average annual Urals oil price at 56.8 USD/bbl in 2025 and ranging from 50 to 60 USD/bbl in 2026 and 2028.
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Average annual USD/RUB exchange rate at RUB 83.8 in 2025 and ranging from RUB 94.5 to 103.7 in 2026–2028.
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Growing volumes of extraction and processing in 2026–2028 in line with the growth rate of OPEC+ production quotas.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A negative rating action may be prompted by:
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Weighted average ratio of total debt to FFO before net interest payments exceeding 1.0x coupled with the weighted average ratio of FFO before net interest payments to interest payments falling below 8.0x;
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Significant changes to the sector’s tax burden;
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Substantial restriction of exports due to pressure from sanctions.
rating components
Standalone creditworthiness assessment (SCA): aaa.
Support: none.
ISSUE RATINGS
There are no outstanding issues.
REGULATORY DISCLOSURE
The credit rating has been assigned to PJSC TATNEFT n.a. V.D. Shashin based on the following methodologies: the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of PJSC TATNEFT n.a. V.D. Shashin under the national scale for the Russian Federation; the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions.
The credit rating of PJSC TATNEFT n.a. V.D. Shashin under the national scale for the Russian Federation was published by ACRA for the first time on December 5, 2024.
The credit rating and its outlook are expected to be revised within one year.
The credit rating is assigned based on data provided by PJSC TATNEFT n.a. V.D. Shashin, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS financial statements of PJSC TATNEFT n.a. V.D. Shashin as of December 31, 2024.
The credit rating is solicited and PJSC TATNEFT n.a. V.D. Shashin participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to PJSC TATNEFT n.a. V.D. Shashin during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
