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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, 28 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP ROSE 2.73 PER CENT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery moved upward US$ 1.45 (3.04 %) per ton month over month.
A commodity ...
Sunday, 27 September 15
THE PANAMAX INDEX FELL 1.19 PCT WEEK OVER WEEK
COALspot.com: The BDI closed Friday (25/09/2015) at 943 points, down by 17 points compared to previous Friday closing (18/09/2015). The BDI wa ...
Friday, 25 September 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING SEPTEMBER 19 ROSE 2.5% PER CENT W-W
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.8 million shor ...
Wednesday, 23 September 15
CAPESIZE: SPOT RATES HAVE INCREASED MORE THAN 70 PER CENT DURING LAST WEEK
Dry Bulk owners, always look at September as the time that the market “signals” what lies ahead for the remainder of the year. The Chin ...
Wednesday, 23 September 15
INDONESIA: NEW REGULATION APPLIES FINAL INCOME TAX TO MINERAL AND COAL SALES - FLORENCE GRACIA SANTOSO
To increase state revenue from the mining sector, the Government of Indonesia has imposed a new final income tax on any sale of mineral and coal, a ...
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- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- London Commodity Brokers - England
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- The University of Queensland
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Planning Commission, India
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
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