The company's ratings have a stable outlook.
"The upgrade reflects an improvement in Rosneft's stand-alone credit quality, thanks to a stronger business profile and credit metrics, and gradually improving liquidity," said Standard & Poor's credit analyst Elena Anankina.
The rating continues to be based on the company's stand-alone credit quality, which the agency assesses at 'BB+', plus a one-notch uplift for extraordinary state support from the Russian government.
"As Rosneft is the major instrument and beneficiary of the Russian government's policy to increase state presence in the strategic hydrocarbon sector, our assessment of its stand-alone credit quality factors in ongoing state support through privileged access to attractive assets and better access to liquidity," the agency said.
Although the Russian government is financially strong, it does not guarantee Rosneft's debt, and recent acquisitions were financed with corporate debt, S&P said.
"We view Rosneft as essentially a commercial entity, less systemically important than some other Russian government-related entities."
Rosneft benefits from vast proven reserves (13.5 billion barrels of oil equivalent at year-end 2007) and large-scale production (2.234 million barrels per day in fourth-quarter 2007).
It is currently the only Russian company with considerable organic production growth (7.8% in 2007) and substantial growth potential.
Rosneft emerged as Russia's largest crude producer after taking over most of the assets of bankrupt oil firm Yukos through liquidation auctions in 2007.
