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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, 20 September 15
BALTIC CAPE INDEX ROSE 66.52 PER CENT AND STAND NOW AT 1995 POINTS
COALspot.com: The BDI (Baltic Dry Index) rose 17.35 per cent week over week to 960 points on Friday mainly driven by the Capesize segment. The Cape ...
Friday, 18 September 15
SHIPPING AND THE FED RATE DECISION: FINANCING COSTS COULD RISE EVEN HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Regardless of the FED’s decision to raise rates, shipping stands to be influenced by the decision. Shipbroker Allied Shipbroking noted this w ...
Friday, 18 September 15
U.S. COAL PRODUCTION DECLINED 6.7 PER CENT W-W: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.4 million shor ...
Thursday, 17 September 15
COALSPOT HAS LAUNCHED NEW THERMAL COAL INDICES FOR INDONESIAN COAL
COALspot.com has today launched real-time CS (i) Coal Indices.
The Indices represents 3800 kcal/kg GAR, 4200 kcal/kg GAR, 5000 kcal/kg GAR a ...
Thursday, 17 September 15
LOW DEMAND PUSH COAL SWAP DOWN
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and gain week over week.
The 4Q swap declined $ 1.77 (-4.17%) ...
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- Planning Commission, India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Central Electricity Authority - India
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
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