If oil prices were to stay at the current level, ONGC may stare at losses after having been the country's most profitable company for several years until 2013-14.

"We have to factor in the new price realities," said Narendra Verma, managing director of ONGC Videsh, the overseas arm that owns mostly minority stakes in 36 oil and gas assets in 17 countries. "Our ability to acquire depends on the health of the parent (ONGC), and if it deteriorates, it will definitely impact us," he said.

ONGC Videsh depends on the parent's balance sheet to raise funds for acquisition or finance its capital expenditure. If prices were to stay at the current level, Verma said, ONGC Videsh may not report profit for the current fiscal. Its planned capex for 2015-16 has been cut about 20 per cent, in line with the plans of larger partners in overseas projects, another executive said. Oil firms across the globe have slashed capex or shelved projects to deal with low prices.

Nonetheless, with a market value of $28 billion (about Rs 1,87,600 crore), a debt-free balance sheet and state backing, ONGC can raise a few billion dollars without much difficulty if it were to stumble upon an opportunity. "But there is a limit to the debt you can raise. And if most of that debt were to be used up in domestic projects, naturally very little will be left for us," said Verma. This is a big shift from Verma's stance in April 2015, when he said, "There is no cap on investment. It all depends on the opportunity."

But that was when oil was at $55 a barrel. The price has dropped to $31 now. ONGC plans to make a capital spending of Rs 29,000 crore in 2016-17. This doesn't include its key deep-water project in KG Basin off the eastern coast that will require an estimated $6 billion (about Rs 40,000 crore) over the next few years.

And with immense pressure from the government to boost exploration and production at home, it is unlikely that ONGC's overseas projects will receive capital preference. "Everyone is scared, bankers are also scared. The cost of capital will increase and remuneration will go down," said Verma.