OREANDA-NEWS. December 16, 2015. Fitch Ratings says that its rating outlook for EMEA energy infrastructure projects is stable despite challenging market and regulatory conditions for the oil and gas and renewables sectors, respectively.

Fitch expects that the oil price cyclical downturn will not negatively affect the credit profiles of the oil and gas projects it rates. Low break-even prices and a firm base of long-term, take-or-pay offtake contracts support the credit profiles of these projects. Further declines in oil prices and a more imbalanced liquefied natural gas market could put pressure on the sector's economics, particularly on newer, higher-cost producers.

The cost competitiveness of renewable energy sources continues to improve and their contribution to power generation is expected to increase in most European countries. However, Fitch maintains a negative outlook on the sector to reflect the uncertain investment environment. Constantly evolving regulations require the industry to adapt to less favourable economic incentives and operating requirements.

We expect the credit profile of UK offshore transmission operators (OFTOs) to remain stable. These projects exhibit solid availability in excess of 99%. A general decrease in insurance premia has resulted in operating costs being lower than projected initially by Fitch. We upgraded several OFTOs this year primarily due to strong rating case DSCRs and high breakeven metrics relative to their cost risk assessment as per Fitch's revised 'Rating Criteria for Availability-Based Projects'.