Moody's Investors Service (Moody's) placed the ratings of Oil and Natural Gas Corporation (ONGC) and Oil India on review for downgrade. "However, The principal methodologies used in rating Oil and Natural Gas Corporation (ONGC) and Oil India were global independent exploration and production industry published in December 2011, and government-related issuers published in October 2014."

The oil prices have deteriorated substantially in the past few weeks and have reached nominal price lows not seen in more than a decade.

Moody's has adjusted its view downward for the likely range of prices. We see a substantial risk that prices may recover much more slowly over the medium term than many companies expect, as well as a risk that prices might fall further.

The rating agency said, "Even under a scenario with a modest recovery from current prices, producing companies and the drillers and service companies that support them will experience rising financial stress with much lower cash flows."

Moody's further said, "Today's review for downgrade considers that much weaker industry fundamentals have potential to warrant rating changes for all companies covered in this press release. While this review focuses on companies rated in the range from A1 to B3, Moody's is also reevaluating higher and lower rated companies in the context of industry conditions. The higher rated companies on average are somewhat more resilient to low oil prices and Moody's has recently downgraded many of the lower rated companies."

As part of its ongoing assessment of energy markets, Moody's sharply reduced its oil price assumptions on January 21 in light of continuing oversupply in the global oil markets and demand growth that remains tepid. Iran is poised to add more than 500,000 barrels per day to global supply while OPEC and many non-OPEC oil producers continue to produce without restraint as they battle for market share.

"The addition of Iranian oil to the market this year will offset or exceed expected declines in US production of about 500,000 barrels per day. Increased production vastly exceeds growth in oil consumption, given modest growth in consumption from major consumers such as China, India and the US. Production now exceeds demand by about 2 million barrels per day, adding to already high global oil stocks," it added.