A big oil prices has put oil exploration and production (E&P) companies and integrated oil companies world-over in a tight spot.

Moody's in a statement said the review for downgrade considers that much weaker industry fundamentals have potential to warrant rating changes.

While this review focuses on companies rated in the range from A1 to B3, Moody's is also re-evaluating higher and lower rated companies in the context of industry conditions.

The ratings placed for downgrade are Oil and Natural Gas Corporation's (ONGC) Local Currency Rating - Baa1 and Foreign Currency Rating - Baa2; ONGC Videsh Ltd Unsecured bonds - Baa2; and Oil India Ltd's issuer rating and unsecured bonds - - Baa2.

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.

Lower oil prices will further weaken cash flows for E&P companies and the upstream portion of integrated oil and gas companies.

This will cause further deterioration in financial ratios, including deeper negative free cash flow. Most companies are unable to internally fund sustaining levels of capital spending at current market prices.

Moody's said current industry conditions also reduce the value of assets offered for sale and have made accessing capital markets more expensive for some companies and unavailable for others.

While integrated oil and gas companies benefit from the profitability of their downstream operations, the upstream operations represent a much larger part of the capital employed and cash flow for most of these companies.

Oil prices have deteriorated substantially in the past few weeks and have reached nominal price lows not seen in more than a decade. The agency 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," Moody's 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, it added.