Expect pickup of upstream oil producers’ profitability in FY22: Ind-Ra

Profitability of upstream oil producers is expected to pick up in FY22, led by rising oil and gas prices along with higher production, ratings agency India Ratings and Research said.

It maintained a ‘Stable’ rating outlook for upstream oil companies and oil marketing companies for FY22, driven by their strategic importance to the Centre, and for city gas distribution entities due to their growth prospects.

“Although upstream companies have large capex plans and they continue to pay high dividends, Ind-Ra expects their credit metrics to remain strong in FY22 led by their scale and nature of operations, and strong liquidity, backed by the availability of liquid investments, sufficient banking lines and access to capital markets,” Ind-Ra said.