RusEnergy

MOSCOW, August 2 (RIA Novosti) - Over the next 25 years, Russia needs to invest around $375 billion in the energy sector, according to report from Fitch Rating Agency on the influence of the energy sector on Russia's credit status. This sum is only 20% of what China intends to invest in energy over the same period, the report said. Insufficient investment in the energy sector is one of the agency's major concerns for Russia. Fitch said that the credit status of Russian energy companies varied widely. Negative factors include low profitability and high capital investment, whereas the large volume of short-term debt makes Russian energy companies subject to refinancing risks. Positive factors include the strong liquidity and stable level of energy sector debt. The Fitch report said that with ongoing reforms in Russia's energy sector creditors needed to pay close attention to the credit status of companies after reorganization, particularly to which companies, after restructuring, were unlikely to have debts, and which would retain existing debt. This factor will have particular importance for the sector as a whole, not only up until 2008, when reforms should be completed, but also for the next decade at least. Fitch said that to reach its economic growth goals, Russia needed to continue reforms in the energy sector. Fitch energy analyst Jeffrey Woodruff said that the government's role in sector reform was very important. The structure of the fuel balance at new power stations will be of key importance for the profitability and credit status of the sector as a whole. Analysts predict that growth level of energy consumption in Russia over the next ten years will exceed the level in more developed countries, he said.