"In our rated universe of south and southeast Asian producers, those with a larger proportion of liquids to natural gas production in FY2013 are most vulnerable to the crude price decline," Moody's vice president and senior credit officer Vikas Halan said.
"Although Oil and Natural Gas Corporation and Oil India have the highest proportion of liquids production among regional rated oil and gas companies, the negative impact of lower oil prices on their revenues and earnings will be cushioned by a corresponding decline in fuel subsidies."
The company believes the price drop will be cushioned by the reduction of fuel subsidies in India, meaning that the net realisation for companies like ONGC and Oil India would be around the same as what was being achieved in the fiscal year ended March 2014.
The Indian government's decision to raise the price of domestic gas us also expected to have a positive effect on revenues.
In the broader Asian sector, companies with a higher proportion of domestic gas sales are expected to be less impacted because the commodity is usually sold at fixed prices.
"We also note that the recovery in margins for refiners in the region - as exemplified by the Singapore complex gross refining margin [GRM] - has largely been on the back of lower crude prices and strong seasonal demand across the barrel," Halan said.
"We expect refiners will benefit from the stronger margins in Q4 but will, at the same time, record inventory losses, given the decline in oil prices during the quarter.
"We expect the regional GRM to remain weak in 2015, but largely flat against 2014 levels of around $6 per barrel as capacity additions will continue to outpace demand growth."
Indonesian state-owned Pertamina and Thailand's PTTEP were seen to be more on the side of domestic gas production then crude, however, Pertamina's high dependence on its upstream business was regarded as a liability to the hip pocket.
"Earnings for Pertamina … are largely derived from its upstream business. Therefore, despite a lower proportion of liquids production, its earnings will be significantly impacted by the decline in crude oil prices," Halan said.
"Such a decline will put further pressure on Pertamina's credit metrics, which have already been deteriorating over the last 2 years as the company has embarked upon debt funded investments."
Companies like Asian-focused junior Nido petroleum are looking forward to the potential fall-out of the oil price crunch, with Nido's managing director Phil Byrne anticipating a buyer's market later in the year.
"Indonesia is one of several countries that we are looking at. Any discussions that we are having are confidential at the moment," he said.
"During the first half, companies will be assessing their options in the current low oil price environment.
"It will take time for the full impact of depressed pricing to wash through the market. However, later in the year I expect distressed assets/corporates to be available for those with capital."
