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, 31 October 22
U.S. COAL-FIRED GENERATION DECLINING AFTER BRIEF RISE LAST YEAR - EIA
We expect 6% less U.S. coal-fired generation in 2022 than in 2021, according to our latest Short-Term Energy Outlook (STEO). Although coal-fired ge ...
Monday, 31 October 22
CHINA COAL OUTPUT UP 12.3 PCT IN SEPTEMBER - XINHUA
China’s raw coal output posted stable expansion in September, official data showed.
The country produced 390 million tonnes of ...
Wednesday, 26 October 22
BIMCO PUBLISHES UPDATED GENCON CONTRACT
BIMCO has published a revised and updated version GENCON 2022 – one of its flagship contracts within its portfolio of standard contracts for ...
Monday, 24 October 22
KOSPO TO INVITE 400,000 MT OF COAL FOR 3 YEARS
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an international tender for 400,000 MT of 3,800 - 4,400kcal/kg NCV and Sulfur Max 0 ...
Wednesday, 19 October 22
ASIA COULD BE A BRIGHT SPOT AMID GLOBAL DOWNTURN NEXT YEAR, ECONOMISTS SAY - CNBC
Asia — especially Southeast Asia — remains a bright spot, even as the global economy looks set to head into recession next year, econom ...
|
|
|
Showing 201 to 205 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- CNBM International Corporation - China
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
|
| |
| |
|
