Moody's downgrades ONGC to Baa2; outlook remains negative

Oil and Natural Gas Corporation Ltd.: Update to credit analysis - Credit Opinion – 2021/01/15 – US$ 250.00 – ...Oil and Natural Gas Corporation Ltd.'s (ONGC) Baa3 local- and foreign-currency issuer rating is primarily driven by its baa3 Baseline Credit Assessment (BCA), which reflects the company's position as the largest integrated oil and gas company in India, with significant reserves, production volume and crude distillation capacity. We assume ONGC has a high likelihood of extraordinary support from and very high dependence on the Government of India (Baa3 negative). However, this assumption does not result in any rating uplift because the sovereign rating is at the same level as ONGC's BCA. Our support assessment reflects ONGC's position as the country's largest integrated oil and gas company, its strategic role in the development of oil and gas reserves in India, and the government's strong influence on the company's financial and business policies through its majority ownership. ONGC's final rating also reflects our view that its BCA is constrained by India's sovereign rating because of the...

Oil and Natural Gas Corporation Ltd.: Improving oil prices support earnings growth, but full recovery will take longer - Issuer Comment – 2020/11/17 – US$ 200.00 – ...On 13 November, Oil and Natural Gas Corporation Ltd. (ONGC, Baa3 negative) reported a 76% increase in its consolidated EBITDA for the quarter ended 30 September 2020 compared with the preceding quarter. The increase in EBITDA was attributable to the recovery in crude oil prices during the quarter from the low levels seen earlier in 2020. Increase in earnings is credit positive and in line with our expectation. However, EBITDA for the first half ended 30 September 2020 (excluding earnings from HPCL- Mittal Energy Limited, Ba2 negative) was still around 30% lower than same period last year....

Oil and Natural Gas Corporation Ltd.: Impairment loss and low crude oil price weakens fiscal 2020 earnings - Issuer Comment – 2020/07/03 – US$ 200.00 – ...MMBTU: Million British Thermal Units Sources: Ministry of Petroleum and Natural Gas and Government of India...

Oil and Natural Gas Corporation Ltd.: Update following downgrade to Baa3 - Credit Opinion – 2020/06/10 – US$ 250.00 – ...Oil and Natural Gas Corporation Limited's (ONGC) Baa3 local and foreign currency issuer ratings are primarily driven by its baa3 Baseline Credit Assessment (BCA), which reflects the company's position as the largest integrated oil and gas company in India with significant reserves, production volume and crude distillation capacity. We assume a high likelihood of extraordinary support from and very high dependence on the Indian government (Baa3 negative). However, this assumption does not result in any rating uplift, because the sovereign rating is the same ONGC's BCA. Our support assessment reflects ONGC's importance as the country's largest integrated oil and gas company, its strategic role in the development of oil and gas reserves in India, and the government's strong influence on the company's financial and business policies through its majority ownership. The recent downgrade of ONGC's baseline credit assessment (BCA) and issuer ratings to Baa3 followed the downgrade of India's sovereign...

Oil and Natural Gas Corporation Ltd.: Update following downgrade to Baa2 - Credit Opinion – 2020/03/30 – US$ 250.00 – ...On 24 March we downgraded Oil and Natural Gas Corporation Ltd.'s (ONGC) local and foreign currency issuer rating to Baa2 from Baa1 as well as its Baseline Credit Assessment (BCA) to baa2 from baa1. The outlook on the rating remains negative. The downgrade reflects our expectation that ONGC's credit profile will be insufficient to remain above India's Baa2 sovereign rating given the increasingly uncertain oil price environment, ONGC's depleted cash reserves and government guidelines that constrain the ability of the company to lower its dividend. The downgrade further reflects that ONGC's credit metrics will weaken beyond the tolerance level for its ratings if oil prices remain low for a prolonged period. ONGC Baa2 issuer ratings are primarily driven by its baa2 BCA, which reflects the company's position as the largest integrated oil and gas company in India with significant reserves, production volume and crude distillation capacity. We assume a high likelihood of extraordinary support...

Moody's assigns Baa1 to ONGC's proposed senior unsecured notes - Rating Action – 2019/11/20 – US$ 180.00 – ...MOODY'S CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS OR MOODY'S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All information contained...

Oil and Natural Gas Corporation Ltd.: Update following outlook change to negative - Credit Opinion – 2019/11/18 – US$ 250.00 – ...On 8 November we affirmed Oil and Natural Gas Corporation Ltd.'s (ONGC) Baa1 local and foreign currency issuer rating as well as its baa1 Baseline Credit Assessment (BCA) and changed the outlook to negative from stable. The change in outlook on ONGC followed the change in outlook on India's Baa2 sovereign rating to negative from stable. ONGC's Baa1 ratings are constrained ...

Oil and Natural Gas Corporation Ltd.: Indias natural gas price decrease is credit negative for ONGC - Issuer Comment – 2019/10/03 – US$ 200.00 – ...On 30 September 2019, the Government of India (Baa2 stable) announced a 12.5% reduction in domestic natural gas prices to $3.23 per million British thermal units (mmbtu) from $3.69/mmbtu (on a gross calorific value basis). This is the first reduction in gas prices in India since April 2017. The price decrease is credit negative for Oil and Natural Gas Corporation Ltd. (ONGC, Baa1 stable) because its revenue and earnings from the gas business will fall by around INR14.6 billion ($207 million). The decline is equal to 0.3% of the company's expected consolidated revenue and around 2% of consolidated EBITDA for fiscal 2020, which ends on 31 March 2020. Still, the decline in natural gas revenue and earnings will have a limited effect on ONGC's metrics for fiscal 2020 because its gas business is small compared with its total upstream business. For the year ended March 2019, ONGC derived only about 17% of its revenue (excluding downstream operations) from gas, with most of its revenue coming from...

Moody's assigns (P)Baa1 to ONGC's MTN program - Rating Action – 2019/08/30 – US$ 180.00 – ...MOODY'S CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS OR MOODY'S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All information contained...

Oil and Natural Gas Corporation Ltd.: Update to credit analysis - Credit Opinion – 2019/07/19 – US$ 250.00 – ...Oil and Natural Gas Corporation Ltd.'s (ONGC) Baa1 issuer ratings are primarily driven by its standalone credit profile, as captured in its baa1 Baseline Credit Assessment (BCA), which reflects the company's (1) position as the largest integrated oil and gas company in India, with significant reserves, production volume and crude distillation capacity; (2) substantial operating cash flow generation capacity; and (3) credit metrics, which have improved, although they will remain constrained by volatile, but range-bound, oil prices and high shareholder returns. At the same time, the BCA incorporates our expectation that the company will not be asked to share fuel subsidies as long as oil prices remain below $70 per barrel. The rating also incorporates our expectation that ONGC will continue to pursue shareholder- friendly policies, such as high dividend payments and share buybacks. These policies are largely driven by the Government of India (Baa2 stable), which continues to expect high dividends...