Specifically, India's national oil companies (NOCs)—Oil and Natural Gas Corporation Ltd. (ONGC, FC:Baa2 stable, LC: Baa1 stable), Oil India Limited (OIL, Baa2 stable), Indian Oil Corporation Ltd (IOC, Baa3 positive), and Bharat Petroleum Corporation Limited (BPCL, Baa3 positive)—signed agreements with OJSC Oil Company Rosneft (Rosneft, Ba1 negative) to acquire upstream oil and gas assets in Russia.
The Indian NOCs have announced four deals, which together will result in the NOCs owning a 49.9 per cent stake in Rosneft's Vankor field, and a 29.9 per cent stake in Rosneft's Tass-Yuryakh field. Moody's estimates that the combined value of the deals will total about $5.5 billion, based on recently concluded transactions for the same fields.
The assets can potentially provide the NOCs with an additional crude oil production of 225-250 thousand barrels per day (kbpd), which would be equivalent to about 34-38 per cent of India's total domestic oil production of 664 kbpd for the fiscal year ended March 2016 (fiscal 2016). The acquisitions will more than double India's overseas oil & gas production of 194 kbpd reported in fiscal 2016.
According to the report, India's relaxation of foreign investment rules is credit positive. It also says that consolidation of public sector banks will face challenges under current conditions.
The analysis says that when it comes to securitization, new regulations will pave the way for the market's transformation and improve creditor rights while the new bankruptcy code will boost bargaining power of creditors. (SH)
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