ANKARA
Decline in oil prices, western sanctions, capital outflow, the falling value of the Russian ruble have constituted the main factors posing risks and difficulties for the Russian economy, experts said Tuesday at the Second Russian Energy Forum: Finance and Investment in London.
Speaking at the event organized by Eurasian Dynamics and sponsored by Turkey's Anadolu Agency, Alex Griffiths, head of Natural Resources and Commodities at Fitch Ratings for Europe, the Middle East and Africa, spoke about risks and opportunities of Russian energy firms' financial access.
He stated there were still factors that could lower Russia's rating, saying: "A prolonged decline in oil prices or the continuation of recession, consumption of foreign reserves faster than expectations and new western sanctions could trigger negative activities."
Stating that the global credit ratings organization Fitch Ratings continues to rate Russia BBB-, Griffiths said: "Russia's rating is still at a level making investments possible. The country still has relatively low public debt and high foreign reserves."
Noting that Russian companies were careful about foreign borrowing, he said: "Gazprom's liquidity level and balance sheet are strong. We do not project a fall in Russian firms' rating directly linked to weak oil prices. Big Russian companies will continue to roll their debts over Russian banks, which need government support to obtain financing."
Louis Skyner, head of Russian and CIS Oil and Gas Practice at the London-based international law firm Clifford Chance, also talked about difficulties surrounding Russia.
"Capital outflow, falling oil prices, sanctions and decline in the value of ruble have led to structural slowdown in Russia. The oil price slump caused a 6 percent fall in exports of oil and refined products," he explained.
Stating that western sanctions on Russia were extremely critical for energy companies' new investments, Skyner said: "Sanctions make it harder to access investments that would increase the production capacity in the country."
