We explore the performance of the companies’ bonds, and how they reflect differing issuance patterns, sovereign risk, and political dynamics. This is important in the context of the NOCs future capital expenditure plans, which may require tapping international bond markets.
We find that while Petronas’ bonds continue to outperform thanks to strong financials and disciplined leverage, Pertamina faces headwinds from governance concerns while PTT may face ratings downgrade. Across all three NOCs, escalating break-even costs for oil and gas production and geopolitical volatility threaten to erode their financial positions.
At the same time, the three companies are investing in renewables. However, the level of ambition – and degree of integration with core business strategy – varies widely. This creates an opening for investors to influence capital allocation toward lower-carbon business models, perhaps through potential future labelled debt issuances.
