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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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Monday, 05 October 15
Q1' 16 CFR SOUTH CHINA COAL SWAP CLOSED US$ 48.05 PER TON
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery down US$ 0.47 (0.96 %) per ton month over month.
A commodity swap is ...
Monday, 05 October 15
SMALL DECLINE IN 2014 SHIP OPERATING COSTS - MOORE STEPHENS
Total annual operating costs in the shipping industry fell by an average of 0.8% in 2014. This compares with the 0.3% average fall in costs recorde ...
Sunday, 04 October 15
THE INDO-INDIA FREIGHT MARKET REMAINS UNDER PRESSURE
COALspot.com: The BDI closed on Friday (2 Oct 2015) at 889 points, down by 54 points compared to previous Friday's closing ( 24 Sept 2015) of 9 ...
Friday, 02 October 15
COAL PRODUCTION IN THE UNITED STATES DECREASED THIS WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.5 million shor ...
Thursday, 01 October 15
SOUTH KOREA'S KOMIPO SEEKS SPOT BITUMINOUS COAL SUPPLIES
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 265,000 Metric Tons (MT) of minimum 4,600 kcal ...
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- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Minerals Council of Australia
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Planning Commission, India
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
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