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, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
|
|
|
Showing 16 to 20 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Australian Coal Association
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
|
| |
| |
|
