Bearish signal on daily chart
Environment, Sustainability and Governance (ESG) - a new road block ?
Furthermore, in global capital markets more and more fund houses and investors are employing the Environment, Sustainability and Governance (ESG) criteria in making investment decisions. This is an area of action for most E&P players as even to support a very modest level of demand growth, capital requirements for the sector are substantial. BlackRock, the world’s largest fund manager, recently announced sustainability and climate-risk will be important parameters for deciding all future investments in energy domain, effectively pressuring companies in carbon-intensive businesses to double down on emissions
Price realization trends
Crude Oil price of the Indian basket averaged USD 60.47 per barrel (` 4,286 per barrel) during FY’20 compared to USD 69.88 per barrel (` 4,884 per barrel) in the previous fiscal (FY’19). The intra-year drop in crude prices – from USD 71/bbl in April 2019 to USD 33.36/bbl in March 2020 – on the back of COVID-19 is steeper than that in FY’15 in percentage terms.
Higher dependency on government
In light of this distressing business scenario, your Company is pursuing with the Government for possible remedies by way of cess and royalty exemptions/concessions/rationalizations, which if agreed upon, will ease the impending liquidity pain to a large extent.