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Tuesday, 03 November 15
EU OIL MAJORS FACE FURTHER EARNINGS DECLINE IN Q415 - FITCH RATINGS
 The sharp drop in major European oil companies' third-quarter profits is likely to be extended in the fourth quarter as refining margins, which had cushioned some of the blow from low oil prices, have fallen steeply, Fitch Ratings says.
According to Fitch, with little prospect of a near-term oil-price recovery and refining margins likely to remain thin, companies' ability to stabilize or even grow profits in 2016 will depend on how quickly cost-cutting measures and cost deflation in the supply chain feed through to the bottom line.
Royal Dutch Shell, Total, BP, Eni and BG all reported 3Q15 results last week. On average, their 3Q15 EBITDA fell by 26% compared with 2Q15, and cash flow from operations by 30%. The main reason was lower oil prices as Brent slid 19% from an average USD63/bbl in 2Q15 to USD51/bbl in 3Q15. The majors' 9M15 EBITDA dropped 39%, and cash from operations fell 38%, as Brent plummeted by 48%, from an average of USD107/bbl in 9M14 to USD56 in 9M15.
4Q15 may be even more painful for integrated companies as refining margins have fallen since the middle of the third quarter, which is likely to drag on profits in their downstream operations. In October, Brent Crack Rotterdam Refinery Margin, as calculated by Thomson Reuters, averaged USD4.0/bbl, compared with USD7.9 in 3Q15 and USD8.1 in 2Q15.
Part of this decline is likely to be a seasonal effect from the end of the main driving season in the northern hemisphere. But we also expect an underlying correction in margins due to overcapacity in European refining and strong competition from Middle Eastern, Russian and US refineries, which generally have access to cheaper feedstock and lower energy costs, says Fitch. BG may be the only exception. We expect its earnings to rise in 4Q15 vs 3Q15 provided oil prices do not fall. This is because BG has no exposure to refining and its production is rising due to operations ramping up in Australia and Brazil.
Apart from oil prices, majors' upstream profits will be increasingly affected by the scale of cost deflation. Oil majors are reducing costs and in some parts of the value chain, the fall has already been substantial. For example, in the offshore drilling industry the cost of hiring a rig has fallen by 30%-40% yoy, according to various sources. According to Total, rates for many other services, including marine logistics and well services, are down up to 20%. Overall, however, industry deflation is still insufficient to materially affect profits, as negotiating new contracts may take some time. We expect the impact to be more pronounced in 2016 as oil majors are now re-negotiating prices with their contractors and are aiming to reduce staff costs and streamline operations.
To balance their cash flows, oil majors are reducing capex and continuing divestments. Majors' ability to keep these commitments without jeopardizing the level and quality of reserves and production will drive their ratings in the next one or two years. For example, BP said its 2015-2017 capex will be USD17bn-19bn a year, compared with the original 2015 guidance of USD24bn-26bn announced a year ago. Total's guidance for 2015 is unchanged at USD23bn-24bn, but the company said capex will go down to USD20bn-21bn in 2016 and USD17bn-19bn a year in 2017-2019. Shell said it will prioritize debt reduction over dividends and capex.
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Tuesday, 03 November 15
API 5 FOB NEWCASTLE COAL SWAPS DECLINE CONTINUES
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery slid $1.84 per ton (4.34%) month over month to US$ 40.54 per ton. The swap ...
Monday, 02 November 15
DESPITE CHALLENGING MARKET CONDITIONS, ADARO LOWERS COSTS, DEBT AND DELIVERS STRONG FREE CASH FLOW
COALspot.com: Despite challenging market conditions, Adaro lowers costs, lowers debt and delivers strong free cash flow.
The Indonesia’s ...
Monday, 02 November 15
CFR SOUTH CHINA COAL SWAPS CLOSED ON A WEAK NOTE
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined US$ 1.81(3.71 %) per ton month over month.
A commodity swap ...
Sunday, 01 November 15
THE FREIGHT MARKET SENTIMENT REMAINS WEAK
This week’s freight market sentiment remains weak compared to last week.
The Baltic Dry Index (BDI), an economic indicator issued daily ...
Saturday, 31 October 15
ADARO ENERGY'S CORE EARNINGS DECLINE 21 PER CENT FOR THE NINE MONTHS PERIOD TO SEPTEMBER 2015
COALspot.com: Adaro Energy's core earnings decline 21% to US$228 Million for first 9months of this year compared to the same period last year. ...
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- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Economic Council, Georgia
- The University of Queensland
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- White Energy Company Limited
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
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