Oil & gas producers to gain as crude rises, refiners to be hit

Fitch Ratings says the credit metrics of PSU oil & gas firms could weaken due to large downstream capex and potential consolidation

With the rise in global crude oil prices, analysts expect oil and gas producing entities to gain but refining ones to see tough times.

In sector jargon, these are respectively termed upstream and downstream companies. 

Upstream entities hunt for, find and extract crude oil and natural gas. Examples are GAIL, Reliance Industries (RIL) and Oil & Natural Gas Corporation (ONGC). 

The downstream ones refine and process crude oil or gas. Examples are the government’s three oil marketing companies (OMCs) — Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPC) and Hindustam Petroleum Corporation (HPC). Some are in both; RIL, for instance, is also a