WASHINGTON Aug 26 Producers, pipeline and
storage operators, and oilfield service companies will get a
credit ratings boost if the United States lifts its ban on most
crude oil exports, the ratings agency Standard & Poor's said on
Ratings for oil refiners, who have enjoyed the ample
supplies of crude flowing from the U.S. shale oil boom, might
suffer slightly if the ban is scrapped, the agency added.
S&P said the companies that likely get the biggest boost
will be exploration and production operations that benefit from
a probable bump in the price of U.S. benchmark West Texas
Intermediate (WTI) crude relative to the international Brent
"Overall, we believe producers should reap the benefits as
their markets expand and realized prices improve, but any credit
improvements will depend on how much incremental debt companies
incur for new drilling," the report said.
The decades-old U.S. law bars exports of domestically
produced crude, but shipments to Canada are broadly allowed, as
are re-exports of foreign oil.
A growing excess, particularly of light crude, has prompted
companies to find ways around the ban, including by processing a
super-light form of oil known as condensate to the point where
it is considered a refined product.
While many U.S. companies will benefit from the narrower
spread, S&P said producers in Texas' Eagle Ford region, which is
awash in light crude and condensates, will be the biggest
beneficiaries since that oil sells at a discount to WTI and is
located near Gulf of Mexico ports.
Among the larger producers in the Eagle Ford are EOG
Resources Inc, Pioneer Natural Resources Co,
Penn Virginia Corp and Marathon Oil Corp.
Oilfield services and pipeline companies will also see a
credit rating boost as WTI prices and drilling increases, S&P
Unsurprisingly, the report found that refiners will suffer
if the law changes because they will no longer be shielded from
However, S&P said refining companies have enough of a
cushion in their ratings that the impact of lifting the ban will
While the report says coastal refiners will face "headwinds"
if the export law is changed, some will be less affected because
the discounted crude price from North Dakota's Bakken region has
more to do with infrastructure constraints than the supply glut
along the coasts.
S&P said that, if coastal refiners cut back, there could be
a squeeze on refined products, potentially raising gasoline
prices in the Northeast United States - a political concern for
those who favor keeping the ban.
(Reporting by Valerie Volcovici. Editing by Ros Krasny and