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Thursday, 15 January 15
LOW CASH COSTS, GOOD LIQUIDITY HELP ASIAN OIL COMPANIES IN PRICE ROUT - FITCH
 Fitch Ratings says that rated oil and gas production companies in Asia can comfortably operate under low oil prices for some time given their generally low cash production costs and strong liquidity. Fitch expects companies to further reduce capex if oil prices remain at current levels for a longer period.
Fitch further noted that, the fall of oil prices below USD50 per barrel is hurting cash generation and affecting investment decisions of companies in the sector. However, the impact on operating cash generation varies across Fitch-rated companies. South-east Asian companies, such as PTT Public Company Limited that produce more gas (60% or more of total production), will be less affected immediately compared with their north and south Asian counterparts that are more liquids-heavy. Liquids at companies like Petrochina, CNOOC, Sinopec, Oil India Ltd and MIE Holdings Corporation account for over 70% of total production in barrels of oil equivalent (boe) terms. Companies that hedged the prices of part of their oil production benefited from the protection in 2014, but they are likely to be exposed to market prices in 2015 because these types of hedges typically do not cover long periods.
Low cash production costs and the largely conventional upstream projects of the rated Asian oil companies provide them with additional flexibility in today's low oil price environment, said Fitch. While all-in costs (cash production costs plus depreciation, depletion and amortisation, or DD&A) are important in the long run, the relatively longer production lives of conventional oil and gas wells provide additional capex flexibility during periods of low hydrocarbon prices. Lifting costs in US dollars per boe are typically in the teens for the rated companies in Asia. Lower production tax requirements stemming from low realised prices, especially in China, also reduce the net impact of the oil price rout on operating cash generation. Companies are also looking to reduce opex, which can squeeze margins of oil field services companies.
Over the longer term though, with all-in costs exceeding USD35/boe for the rated Asian names, the economic viability of projects will be impaired if there is no meaningful increase in oil prices. At current prices, we expect certain high-cost projects to be delayed. These could include ventures in the Canadian oil sands and certain enhanced oil recovery projects on mature-depleting fields in Asia. Sponsor companies could also delay final investment decisions on some large projects with long lead times, such as some green field LNG projects, to preserve cash reserves.
Capex flexibility also varies across the rated companies. CNOOC and PTT have relatively low developed reserve lives of around four years, which gives them less flexibility to curtail development capex for a long period. The state-owned companies are unlikely to cut domestic capex drastically because they are mandated by states to raise production to supply their growing economies. In addition, PTT has lagged considerably behind its Asian peers in reserve replacement, with several large acquisitions not yet adding to proved reserves. For most of the other rated oil producers, though, reserve replacement has been robust (near 100% or above) in recent years, adding further to their flexibility. We also see the prospect of reserve write-downs for some companies if oil prices do not meaningfully improve by the time reserve reports are updated over the next few months.
Rated Asian oil companies, especially the state-owned ones, have very strong balance sheets, with low financial leverage and substantial cash balances. We expect these companies to have good financial flexibility arising from their good liquidity (large cash balances and strong access to capital). In India, we expect the government to reduce the substantial discounts (USD56/barrel) the two state-controlled upstream companies, Oil India and ONGC, have to provide to refiners, improving their cash margins under low oil prices. Malaysia's PETRONAS has a very strong balance sheet. However, the high dividends required by the Malaysian government remains a challenge, although the company is pushing to lower this burden.
According to Fitch, Fitch is also expect cash-rich companies to take advantage of attractive M&A opportunities, although their approach is likely to be measured to ensure their cash balances remain strong to deal with the uncertain oil price outlook. Asian companies are likely to focus on mid-sized assets that are producing or close to production that put less stress on their balance sheets.
Smaller companies like MIE of China have less financial flexibility. While MIE's lifting costs of around USD10/boe are low, it has relatively weaker access to funding than its larger peers, especially when oil prices are low. However, MIE's cash on hand at end-September 2014 (plus expected proceeds in 4Q14 from some asset disposals) and unutilised credit lines provide adequate short-term liquidity, while its major debt maturities are several years away.
Our approach with oil and gas companies is to rate through the cycle, Fitch says in its latest analysis report. While strong production, weak demand growth and high inventory levels put significant near-term pressure on oil prices, high global marginal production costs and capex cuts leading to reduced production should over time result in a more balanced market that supports higher prices for oil. While low oil prices and high capex requirements will dent the credit metrics of Asian oil producers, ratings of many of these companies, especially the state-owned companies whose ratings benefit from state linkages, remain resilient.
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Wednesday, 22 November 23
INDIA: GOVERNMENT PLANS 1.4 BILLION TONNE COAL OUTPUT BY 2027 - LIVEMINT
The Union coal ministry on Monday announced plans to increase India’s coal production to 1.404 billion tonne by 2027, with an eye to further ...
Wednesday, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
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- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- MS Steel International - UAE
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Carbofer General Trading SA - India
- White Energy Company Limited
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
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