Moody’s names SOCAR among six “rising stars” in oil, gas sector

Azerbaijan’s state oil company SOCAR has been recognised as one of six “rising stars” in the global oil and gas sector in 2025, having received an investment-grade rating from Moody’s.

According to Moody’s latest report, six oil and gas firms attained investment-grade status last year, while only one company lost it, earning the label of a “fallen angel.”

TechnipFMC plc saw its rating upgraded to Baa2 with a stable outlook in September 2025, following an earlier increase to Baa3 with a positive outlook in January. The agency cited debt reduction, simplified capital structure, and rising free cash flow as key drivers.

Expand Energy Corporation’s rating was raised to Baa3 with a stable outlook, reflecting substantial debt reduction and a commitment to conservative financial policies. DT Midstream and Vallourec also received upgrades to Baa3, with Moody’s highlighting business growth and stronger credit metrics. EnLink Midstream LLC’s rating improved after its acquisition by ONEOK, rated Baa2 with a stable outlook.

SOCAR itself was upgraded to Baa3 with a stable outlook, in line with the sovereign rating upgrade of Azerbaijan to Baa3.

Conversely, SK Innovation saw its rating cut to Ba1 with a negative outlook in March 2025, reflecting persistently high debt levels and ongoing losses in its battery division. Permian Resources Operating, LLC emerged as a potential “rising star” entering 2026, after Moody’s revised its outlook to positive in November 2025.

Moody’s noted that upgrades continued to outnumber downgrades in the oil and gas sector for the fifth consecutive year, although the gap narrowed due to weaker oil prices reducing the free cash flow available for debt repayment. After several years of active debt reduction, management's focus has shifted towards increasing shareholder returns.

“Our negative outlook for the global energy sector suggests that rating downgrades are likely to rise gradually in 2026 from relatively low levels,” Moody’s said.

“Nevertheless, the sector remains well-positioned to withstand potential oil price declines. In 2025, we upgraded 43 oil and gas companies worldwide and downgraded 21. While the number of upgrades fell 9% compared with 2024, downgrades increased by 50%.”

By Aghakazim Guliyev