KUALA LUMPUR (Oct 1): Moody’s Ratings has assigned a first-time A3 issuer rating to PETRONAS International Corporation Ltd (PICL), with a stable outlook, citing its strategic importance to parent Petroliam Nasional Bhd (PETRONAS).
In a statement, Moody’s said the rating reflects PICL’s significant contribution to PETRONAS’ production and earnings, close parental oversight, integrated liquidity management and established access to group support.
“It also reflects PICL’s standalone credit strength, which we estimate to be in the mid-to-low Baa range given its international oil and gas operations, scale and cash flow generation capacity,” said Moody’s Ratings vice-president Rachel Chua.
PICL is PETRONAS’ primary vehicle for oil and gas operations outside Malaysia, covering exploration and production as well as liquefied natural gas (LNG) marketing and trading.
PETRONAS makes key strategic decisions for its overseas oil and gas operations, including LNG Canada and its joint venture with Eni SpA (A3 stable), while PICL executes those activities.
PICL accounted for more than 20% of PETRONAS’ production and assets, and over 40% of its reserves in 2025, underscoring its importance to the group.
PICL’s liquidity is supported by PETRONAS’ centralised treasury function, group funding and umbrella credit facility. PETRONAS has also provided equity injections through non-interest-bearing perpetual redeemable preference shares (RPS), shareholder loans and guarantees for most of PICL’s external borrowings, including US$600 million (RM2.45 billion) in senior unsecured notes issued by subsidiary PETRONAS Energy Canada Ltd.
As at December 2025, PICL had US$4.7 billion in shareholder advances and US$20.6 billion in RPS outstanding, with its cash centrally managed by PETRONAS.
Key credit risks
Moody’s said PICL’s key environmental risk stems from carbon transition, as growing pressure to decarbonise the global economy could result in tighter environmental standards and weaken long-term demand for oil and gas.
The company is also exposed to demographic and societal pressures arising from the global shift away from fossil fuels towards cleaner energy sources.
Like other oil and gas producers, PICL faces health, safety and responsible-production risks inherent in its operations.
Its governance risk reflects its close integration with and its reliance on PETRONAS, particularly given the parent’s oversight of funding, financial and risk decisions. The risk also reflects PICL’s concentrated ownership and lower transparency as a privately held company.