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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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Tuesday, 23 May 23
INDIA: COAL OUTPUT UP 8.9%, SUPPLY RISES 11.7% IN APRIL - FINANCIAL EXPRESS
India’s coal production jumped 8.85% to 73.14 million tonne (MT) in April 2023 and the total coal despatch during the month went up 11.66% to ...
Tuesday, 23 May 23
CHINA COAL OUTPUT UP 4.5 PCT IN APRIL - XINHUA
China’s raw coal output posted stable expansion in April, official data showed.
The country produced 380 million tonnes of raw ...
Saturday, 20 May 23
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
In 2022, non-OPEC supply is estimated to have increased by 1.9 mb/d y-o-y. Out of this, US liquids production increased by 1.2 mb/d, mainly on the ...
Saturday, 20 May 23
GLOBAL COAL TRADE HAS REALLY PICKED UP PACE IN RECENT MONTHS, NOW FULLY BACK TO PRE-COVID LEVELS - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels. In Jan-Apr 2023, total global seaborne coa ...
Saturday, 20 May 23
MARKET INSIGHT - INTERMODAL
India is one of the world's largest coal producers and one of the world's largest importers of coal. The country uses coal mainly for power ...
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Showing 101 to 105 news of total 6871 |
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- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
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