Oil and Natural Gas Corporation Ltd.: Update following change in outlook to stable - Moody's Global Credit Research

Oil and Natural Gas Corporation Ltd.: Update following change in outlook to stable

Oil and Natural Gas Corporation Ltd.: Update following change in outlook to stable - Moody's Global Credit Research
Oil and Natural Gas Corporation Ltd.: Update following change in outlook to stable
Published Oct 20, 2021
10 pages (5988 words) — Published Oct 20, 2021
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Brief Excerpt:

...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. ONGC's final rating also reflects our view that its BCA is constrained by India's sovereign rating because of the current links between the company and the government. We assume ONGC has a high likelihood of extraordinary support from and very high dependence on the Government of India (Baa3 stable). 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...

  
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Credit Opinion

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Oil and Natural Gas Corporation Ltd.
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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...

More from Moody's Global Credit Research

Moody's Global Credit Research—Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.

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MLA:
Moody's Global Credit Research. "Oil and Natural Gas Corporation Ltd.: Update following change in outlook to stable" Oct 20, 2021. Alacra Store. Nov 30, 2021. <http://www.alacrastore.com/moodys-credit-research/Oil-and-Natural-Gas-Corporation-Ltd-Update-following-change-in-outlook-to-stable-PBC_1306403>
  
APA:
Moody's Global Credit Research. (). Oil and Natural Gas Corporation Ltd.: Update following change in outlook to stable Oct 20, 2021. New York, NY: Alacra Store. Retrieved Nov 30, 2021 from <http://www.alacrastore.com/moodys-credit-research/Oil-and-Natural-Gas-Corporation-Ltd-Update-following-change-in-outlook-to-stable-PBC_1306403>
  
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