OREANDA-NEWS. Fitch Ratings has affirmed Russia-based PJSC Tatneft's Long- and Short-Term Issuer Default Ratings (IDR) at 'BBB-' and 'F3', respectively. The Outlook is Negative.

The ratings are capped by Russia's rating (BBB-/Negative), due to the company's asset concentration in the country and the influence the state exercises on the oil and gas sector through taxes and regulation.

The affirmation reflects Tatneft's sound business and financial profile following the commissioning and subsequent development of the AO Taneco refinery complex. The company's credit profile is supported by low leverage with funds from operations (FFO) adjusted gross leverage of 0.1x at end-2015, the lowest among Fitch-rated Russian oil and gas peers.

Tatneft is continuing the project to increase the capacity of Taneco to 14mtpa from the current 8.5 mtpa and improve the refinery's complexity. Projected spending will total RUB105bn in 2016-2019. In light of the currently less favourable tax treatment of dark fuel products, Tatneft plans to commission the expanded plant once completed, rather than in stages as it did with the first phase of the refinery construction. The company expects that initial processing units of the expanded plant will be technically completed in 2018, but production will likely commence later once Taneco's refining complexity allows for profitable production after additional investments are made. Our forecasts assume this will take place in 2020.