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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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Sunday, 25 October 15
ANOTHER DISAPPOINTING WEEK FOR PANAMAX; INDEX FELL 5.4 PERCENT W-W
COALspot.com: The BDI was slightly up by 2.65 pct closing at 774 points mainly because of Cape index which was up by 10.85 pct closing at 1461 poin ...
Sunday, 25 October 15
DRY BULK SHIP OWNERS ARE LOOKING TO CHINA'S POLICIES FOR CUES ON FUTURE MARKET DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China’s hard or softer landing is a thing which has troubled dry bulk shipping for a couple of years now, as owners have been hit by the coun ...
Friday, 23 October 15
WILL INDIAN DOMESTIC COAL PRICES BE ABLE TO COMPETE IMPORTED COAL PRICES IF THE CURRENT TREND CONTINUES?
COALspot.com: The Most of the Indian end-users are waiting for last minute purchase to enjoy every drop in price. Coal procurement managers are als ...
Friday, 23 October 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING OCTOBER 17 DECLINED FOR THE SECOND STRAIGHT WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.6 million shor ...
Wednesday, 21 October 15
RUSSIA'S CARBO ONE COAL SALES TO HIT 50 MLN T/YR - JACQUELINE HOLMES
COALspot.com: Russia's Carbo One has become one of the world's leading physical coal traders with an annual volume approaching 50 million t ...
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- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- The University of Queensland
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
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