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.
|
|
Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
|
|
|
Showing 111 to 115 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- The University of Queensland
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Bangladesh Power Developement Board
|
| |
| |
|
