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Slump in O&G Market : Right Moment for Investment with Charter Rates Coming Down

News

With the sharp cut in investments by global oil majors leaving drilling rigs with no business, state-run Oil and Natural Gas Corp (ONGC) has been swamped with offers in a tender it floated for hiring five deep sea rigs for its KG-basin gas block campaign.

Source:  ET

SNP Insights

With almost 60% decline in Oil price, global investment in O&G exploration , has come down, leaving machinery & charters idle. Hence there is a cheap availability of equipments in the global market, that Up stream players need to leverage, for capacity expansion purpose. Cheap machinery can bring down Capex & cheap labour availabilty also can trim down Opex , hence making the projects more viable & Company can turn profitable.

Source: SNP Infra Research