We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Thursday, 15 January 15
LOW CASH COSTS, GOOD LIQUIDITY HELP ASIAN OIL COMPANIES IN PRICE ROUT - FITCH
 Fitch Ratings says that rated oil and gas production companies in Asia can comfortably operate under low oil prices for some time given their generally low cash production costs and strong liquidity. Fitch expects companies to further reduce capex if oil prices remain at current levels for a longer period.
Fitch further noted that, the fall of oil prices below USD50 per barrel is hurting cash generation and affecting investment decisions of companies in the sector. However, the impact on operating cash generation varies across Fitch-rated companies. South-east Asian companies, such as PTT Public Company Limited that produce more gas (60% or more of total production), will be less affected immediately compared with their north and south Asian counterparts that are more liquids-heavy. Liquids at companies like Petrochina, CNOOC, Sinopec, Oil India Ltd and MIE Holdings Corporation account for over 70% of total production in barrels of oil equivalent (boe) terms. Companies that hedged the prices of part of their oil production benefited from the protection in 2014, but they are likely to be exposed to market prices in 2015 because these types of hedges typically do not cover long periods.
Low cash production costs and the largely conventional upstream projects of the rated Asian oil companies provide them with additional flexibility in today's low oil price environment, said Fitch. While all-in costs (cash production costs plus depreciation, depletion and amortisation, or DD&A) are important in the long run, the relatively longer production lives of conventional oil and gas wells provide additional capex flexibility during periods of low hydrocarbon prices. Lifting costs in US dollars per boe are typically in the teens for the rated companies in Asia. Lower production tax requirements stemming from low realised prices, especially in China, also reduce the net impact of the oil price rout on operating cash generation. Companies are also looking to reduce opex, which can squeeze margins of oil field services companies.
Over the longer term though, with all-in costs exceeding USD35/boe for the rated Asian names, the economic viability of projects will be impaired if there is no meaningful increase in oil prices. At current prices, we expect certain high-cost projects to be delayed. These could include ventures in the Canadian oil sands and certain enhanced oil recovery projects on mature-depleting fields in Asia. Sponsor companies could also delay final investment decisions on some large projects with long lead times, such as some green field LNG projects, to preserve cash reserves.
Capex flexibility also varies across the rated companies. CNOOC and PTT have relatively low developed reserve lives of around four years, which gives them less flexibility to curtail development capex for a long period. The state-owned companies are unlikely to cut domestic capex drastically because they are mandated by states to raise production to supply their growing economies. In addition, PTT has lagged considerably behind its Asian peers in reserve replacement, with several large acquisitions not yet adding to proved reserves. For most of the other rated oil producers, though, reserve replacement has been robust (near 100% or above) in recent years, adding further to their flexibility. We also see the prospect of reserve write-downs for some companies if oil prices do not meaningfully improve by the time reserve reports are updated over the next few months.
Rated Asian oil companies, especially the state-owned ones, have very strong balance sheets, with low financial leverage and substantial cash balances. We expect these companies to have good financial flexibility arising from their good liquidity (large cash balances and strong access to capital). In India, we expect the government to reduce the substantial discounts (USD56/barrel) the two state-controlled upstream companies, Oil India and ONGC, have to provide to refiners, improving their cash margins under low oil prices. Malaysia's PETRONAS has a very strong balance sheet. However, the high dividends required by the Malaysian government remains a challenge, although the company is pushing to lower this burden.
According to Fitch, Fitch is also expect cash-rich companies to take advantage of attractive M&A opportunities, although their approach is likely to be measured to ensure their cash balances remain strong to deal with the uncertain oil price outlook. Asian companies are likely to focus on mid-sized assets that are producing or close to production that put less stress on their balance sheets.
Smaller companies like MIE of China have less financial flexibility. While MIE's lifting costs of around USD10/boe are low, it has relatively weaker access to funding than its larger peers, especially when oil prices are low. However, MIE's cash on hand at end-September 2014 (plus expected proceeds in 4Q14 from some asset disposals) and unutilised credit lines provide adequate short-term liquidity, while its major debt maturities are several years away.
Our approach with oil and gas companies is to rate through the cycle, Fitch says in its latest analysis report. While strong production, weak demand growth and high inventory levels put significant near-term pressure on oil prices, high global marginal production costs and capex cuts leading to reduced production should over time result in a more balanced market that supports higher prices for oil. While low oil prices and high capex requirements will dent the credit metrics of Asian oil producers, ratings of many of these companies, especially the state-owned companies whose ratings benefit from state linkages, remain resilient.
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
Tuesday, 22 August 23
CHINA'S COAL PRODUCTION LOGS STEADY GROWTH IN JANUARY-JULY: XINHUA
China’s output of raw coal went up 3.6 percent year on year in the first seven months of this year, official data showed.
The ...
Sunday, 13 August 23
THE COMMODITIES FEED: LNG SUPPLY RISKS LINGER - ING
Energy – OPEC sees deficit over remainder of 2023
Oil prices came under some pressure yesterday with ICE Brent settling a litt ...
Wednesday, 09 August 23
COAL TRADE TO RETURN TO 2019 LEVELS - BALTIC EXCHANGE
The International Energy Agency’s mid-year Coal Market Update for 2023 brings both positive and concerning news for the global coal industry. ...
Sunday, 23 July 23
ANALYSIS-INDIA'S COAL MINING BET STUMBLES AS WARY BANKS WEIGH RISING RISKS - REUTERS
India’s drive to ramp up coal output to meet growing energy demand is faltering due to banks’ reluctance to finance newly auctioned min ...
|
|
|
Showing 86 to 90 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Minerals Council of Australia
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Aditya Birla Group - India
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
|
| |
| |
|
