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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.
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Monday, 09 February 15
Q2' CFR SOUTH CHINA COAL SWAP DECLINED 3.28% TO $ 56.92 W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 1.93 (-3.28%) per MT month over month and US$ 0.10 (-0 ...
Sunday, 08 February 15
BDI FELL CONTINUOUSLY HIT A THREE DECADES LOW
COALspot.com: This week Baltic Exchange Dry Freight Index (BDI) fell continuously hit a three decades low.
The BDI continuously fell and was d ...
Friday, 06 February 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 1.1% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 20.1 million short tons (mmst) of coal ...
Friday, 06 February 15
SHIP DAMAGED BY FIRE CAUSED BY PIRATES FOUND TO BE CONSTRUCTIVE TOTAL LOSS - TAYLOR WESSING
KNOWLEDGE TO ELEVATE
The High Court was asked to determine a number of preliminary issues, including whether a vessel was a constructive total ...
Thursday, 05 February 15
BDI HAS NOW FALLEN A LEVEL CLOSE TO THE INDEX'S HISTORIC LOW - INTERMODAL
They say a picture is worth a thousand words and in this instance just one look at the tables above is enough to understand the great pressure the ...
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Showing 3211 to 3215 news of total 6871 |
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- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Planning Commission, India
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Central Electricity Authority - India
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- The University of Queensland
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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