...Comparative Approach: Fitch Ratings ranks companies in the oil and gas sector in terms of operating metrics such as scale, production costs and investment, and the ratings it assigns tend to follow a similar pattern, with some exceptions that are outlined in this report. Efficiency Over Scale: Increasing upstream production and the scale of operations was the main strategy of oil and gas (O&G) companies while oil was trading around USD100/bbl. This has been replaced with a focus on efficiency including capex and opex cuts, as well as the cancellation of investment projects once considered crucial to future development but now considered too costly, such as Shell's Alaska exploration and Canadian oil sands Carmon Creek project. Protecting balance sheets during a time of lower oil prices and keeping costs down will be crucial for credit profiles of rated issuers in the medium term. Lifting and Production Costs: Eni and Total have outperformed Shell a on a three-year mean basis in terms of...
