Friday, January 20, 2012

Outlook cools for energy heavyweights

Fitch Ratings has sounded a warning on the outlook for the Australian oil and gas industry as sector heavyweights announce falls in their quarterly production results.

Fitch issued a negative credit outlook for the sector this year, saying companies faced rising debt due to the large number of new liquefied natural gas (LNG) projects that were not yet generating revenue.

The agency also has forecast that strong prices for LNG will fall due to competition from North American gas fields.
Fitch Ratings director of energy and utilities Sajal Kishore says skilled labour shortages have contributed to cost blow-outs and project delays.

"What we're seeing more now is that companies are coming out more frequently with announcements of delays, which was not happening two years ago," Mr Kishore said.

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