Lower crude regime likely to dampen capex plan of upstream companies

A sustained drop in crude oil prices will affect the capital expenditure plans of ONGC and OIL

The drop in international crude prices is seen as a positive for the Indian economy, but cost realisation may badly hit both public and private sector upstream companies. This may also dampen the investments lined up by these companies such as Oil and Natural Gas Corporation (ONGC), Cairn India, and Oil India (OIL). 

“These kind of prices are not sustainable for any company and upstream firms are going to struggle. This will take investments away from oil and gas. For every $1 a barrel decline in prices, our top line will also get affected on the same level,” said a senior