Moody’s Investors Service on Thursday said ratings of state-owned Oil and Natural Gas Corp and Oil India ltd may come under pressure if oil prices fall more sharply than expected and companies carry on with their growth and expansion plans aggressively. “Oil prices have dropped substantially, reflecting continued oversupply in the global oil markets, very high inventory levels and additional Iranian oil exports coming on line,” it said.
Expecting a slow recovery in oil prices over the next several years, the report said the drop in oil prices and weak natural gas prices have caused a fundamental change in the energy industry, and the sector's ability to generate cash flow has fallen substantially.