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.
|
|
Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
|
|
|
Showing 91 to 95 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
|
| |
| |
|
