Fitch Ratings has revised the Outlooks on PTT Public Company Limited's (PTT) and PTT Exploration and Production Public Company Limited's (PTTEP) Long-Term Issuer Default Ratings (IDRs) to Negative from Stable, and affirmed the IDRs and PTTEP's senior unsecured rating at 'BBB+'.
The Outlook revision on PTT follows our Outlook revision of Thailand's Sovereign rating to Negative from Stable, while affirming at 'BBB+', on 24 September 2025. Our IDR and Outlook on PTT can not be higher than those of the sovereign, under our Government-Related Entities Rating Criteria, given the lack of a mechanism that limits the government to access the cash and assets of PTT. Accordingly, the sovereign Outlook revision has a direct impact on PTT.
The Outlook revision on PTTEP reflects a similar revision on parent PTT, as PTTEP's IDR and Outlook are equalised with those on PTT. This is based on our assessment that PTT has 'High' strategic and operational incentives to support PTTEP under our Parent and Subsidiary Linkage Rating Criteria.
The Outlook on PTT's National Long-Term Rating is not affected, as national ratings are a relative measure of creditworthiness between the sovereign and other issuers within Thailand.
Key Rating Drivers
Government's Incentives to Support PTT: Fitch assesses PTT's role in the preservation of government policy as 'Very Strong' as it plays a key role in the nation's energy security. A default would curtail oil and gas availability in Thailand, affecting electricity generation and weakening energy security. We also assess PTT's contagion risk as 'Very Strong' in the event of a default, as we view PTT as a reference issuer for the state and government-related entities (GREs). A default would have a material financial consequence for the state and GREs.
State Oversight, Support for PTT: We assess the government's decision-making and oversight over PTT as 'Strong', as PTT is 63%-owned directly and indirectly by the state. The state has broad control over the business strategy and key investment decisions but allows PTT to operate as a commercial entity. We assess the precedents of state support as 'Strong'. We believe the government's support to peer GREs in the important power sector indicates support will be available to PTT.
Support Incentives from PTT to PTTEP: Fitch believes PTT has 'High' strategic incentives to support PTTEP, which is the sole and flagship upstream arm of PTT's integrated oil and gas business. This is also underpinned by high contributions from PTTEP's upstream business, accounting for 60% of group EBITDA in 2024. A significant portion of PTT's feedstock for its gas separation plants, as well as gas-fired power plants, is sourced from PTTEP.
High Management, Brand Overlap: We also assess management and brand overlap between PTT and PTTEP as 'High'. There is regular rotation of board members and senior management among PTT's subsidiaries, including PTTEP. Furthermore, PTTEP's strategy is highly integrated with PTT's overall business strategy.
Adequate SCP Headroom for PTTEP: Fitch expects PTTEP's EBITDA net leverage to remain below 0.5x and conservative for its 'bbb' SCP over the next few years. This is notwithstanding a weakening of the financial structure from its current net cash position, as rising capex and lower EBITDA lead to negative free cash flow over 2025-2027.
Superior Margin Stability: PTTEP has greater EBITDA stability and margins than peers with higher exposure to liquids. PTTEP has a high share of gas sales (2024: 71%), with prices linked mostly to the trailing 6-12 months' average crude prices. Low operating costs are also a differentiating factor.
PTT's Healthy SCP Headroom Remains: Fitch expects PTT's financial profile to stay adequate for its 'bbb+' SCP, although headroom is likely to narrow. We forecast EBITDA net leverage to rise to around 1.9x-2.0x in 2025-2026, from 1.6x in 2024, but financial leverage should stay consistent with PTT's current SCP of 'bbb+'. We expect softening EBITDA on a smaller contribution from the upstream business due to lower oil and gas prices, and slow recovery in petrochemicals. PTT should have investment flexibility, though we have not factored this in.
Please see the following Rating Action Commentaries for the issuers' full rating rationales and disclosures:
Fitch Affirms Thailand-Based PTT at 'BBB+'/'AAA(tha)'; Outlook Stable
Fitch Affirms Thailand's PTTEP at 'BBB+'; Outlook Stable
RATING SENSITIVITIES
Rating Sensitivities for PTT
Factors that could, individually or collectively, lead to positive rating action/upgrade:
- The Outlook on the IDR is Negative, and we therefore do not expect a rating upgrade. The Outlook will be revised to Stable if the Outlook on the sovereign is revised back to Stable, provided the likelihood of support from the state remains strong.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
- A downgrade of Thailand's ratings.
Factors that May Lead to a Deterioration in PTT's SCP:
- Large debt-funded investment or weaker operating cash flow, resulting in a sustained deterioration in EBITDA net leverage to over 2.5x.
- Adverse changes to regulations, gas sales contracts or pipeline tariffs.
Rating Sensitivities for PTTEP
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade:
- Negative rating action on PTT;
- PTT's incentives to support PTTEP weaken significantly.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade:
- The Outlook is Negative, and we therefore do not expect a rating upgrade. The Outlook will be revised to Stable if the Outlook on PTT's IDR is revised back to Stable, provided incentives to support PTTEP remain intact.
For the sovereign rating of Thailand, the following sensitivities were outlined by Fitch in its Rating Action Commentary of 24 September 2025:
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
- Public Finances: Reduced confidence in the capacity to stabilise government debt/GDP over the medium term, for instance due to a lack of fiscal deficit reduction.
- Macroeconomic: A deterioration in medium-term growth prospects, for instance from heightened political disruption on a scale sufficient to affect tourism receipts.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
- Public Finances: Increased confidence in the government debt/GDP ratio stabilising over the medium term, for instance due to progress in fiscal consolidation.
- Macroeconomic: Improvement in economic growth prospects without a significant rise in non-financial private-sector debt.