Fitch Affirms JSC Uzbekneftegaz at ‘BB’ with Stable Outlook

Tashkent, Uzbekistan (UzDaily.com) — Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of JSC Uzbekneftegaz (UNG) at ‘BB’ with a stable outlook, as well as the company’s senior unsecured bond rating at the same level. The company’s Recovery Rating (RR) is set at ‘RR4’.

UNG’s rating is aligned with the sovereign rating of Uzbekistan — ‘BB/Stable’ — as the company is fully state-owned and operates as an integrated producer and processor of natural gas and liquid hydrocarbons. The company’s Standalone Credit Profile (SCP) is assessed at ‘b’, with 40 out of 60 possible points reflecting government support, effectively aligning the company’s rating with that of the state.

A significant factor is the potential privatization of the synthetic fuel (GTL) plant, which contributed around 28% of UNG’s EBITDA in 2024 and accounted for half of its gross debt. Fitch notes that the transaction details, revenue structure, and potential deconsolidation of GTL debt could affect the company’s SCP and IDR.

Declining natural gas production remains a risk: in 2024, output totaled 27.1 billion cubic meters compared with 33.9 billion cubic meters in 2021, with a forecast of 25.5 billion cubic meters for 2025. Nevertheless, the operational scale and proven reserves (2.5 billion barrels of oil equivalent) support the company’s SCP.

Fitch highlights the “very strong” state control and historical support, including debt guarantees (covering 37% of consolidated debt as of mid-2025), tax incentives, and regulated gas prices. These factors underpin stability and the company’s ability to service its debt.

Comparable state-integrated companies include NC KMG (Kazakhstan, BBB/Stable, SCP bb) and SOCAR (Azerbaijan, BBB-/Stable, SCP bb-). UNG’s SCP is lower than peers due to lower profitability and higher leverage, though government support mitigates this factor.

Fitch cautions that further privatization of the GTL plant or a reduction of state-guaranteed debt below 25% could have a negative impact on the company’s rating.