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Tuesday, 03 November 15
EU OIL MAJORS FACE FURTHER EARNINGS DECLINE IN Q415 - FITCH RATINGS
 The sharp drop in major European oil companies' third-quarter profits is likely to be extended in the fourth quarter as refining margins, which had cushioned some of the blow from low oil prices, have fallen steeply, Fitch Ratings says.
According to Fitch, with little prospect of a near-term oil-price recovery and refining margins likely to remain thin, companies' ability to stabilize or even grow profits in 2016 will depend on how quickly cost-cutting measures and cost deflation in the supply chain feed through to the bottom line.
Royal Dutch Shell, Total, BP, Eni and BG all reported 3Q15 results last week. On average, their 3Q15 EBITDA fell by 26% compared with 2Q15, and cash flow from operations by 30%. The main reason was lower oil prices as Brent slid 19% from an average USD63/bbl in 2Q15 to USD51/bbl in 3Q15. The majors' 9M15 EBITDA dropped 39%, and cash from operations fell 38%, as Brent plummeted by 48%, from an average of USD107/bbl in 9M14 to USD56 in 9M15.
4Q15 may be even more painful for integrated companies as refining margins have fallen since the middle of the third quarter, which is likely to drag on profits in their downstream operations. In October, Brent Crack Rotterdam Refinery Margin, as calculated by Thomson Reuters, averaged USD4.0/bbl, compared with USD7.9 in 3Q15 and USD8.1 in 2Q15.
Part of this decline is likely to be a seasonal effect from the end of the main driving season in the northern hemisphere. But we also expect an underlying correction in margins due to overcapacity in European refining and strong competition from Middle Eastern, Russian and US refineries, which generally have access to cheaper feedstock and lower energy costs, says Fitch. BG may be the only exception. We expect its earnings to rise in 4Q15 vs 3Q15 provided oil prices do not fall. This is because BG has no exposure to refining and its production is rising due to operations ramping up in Australia and Brazil.
Apart from oil prices, majors' upstream profits will be increasingly affected by the scale of cost deflation. Oil majors are reducing costs and in some parts of the value chain, the fall has already been substantial. For example, in the offshore drilling industry the cost of hiring a rig has fallen by 30%-40% yoy, according to various sources. According to Total, rates for many other services, including marine logistics and well services, are down up to 20%. Overall, however, industry deflation is still insufficient to materially affect profits, as negotiating new contracts may take some time. We expect the impact to be more pronounced in 2016 as oil majors are now re-negotiating prices with their contractors and are aiming to reduce staff costs and streamline operations.
To balance their cash flows, oil majors are reducing capex and continuing divestments. Majors' ability to keep these commitments without jeopardizing the level and quality of reserves and production will drive their ratings in the next one or two years. For example, BP said its 2015-2017 capex will be USD17bn-19bn a year, compared with the original 2015 guidance of USD24bn-26bn announced a year ago. Total's guidance for 2015 is unchanged at USD23bn-24bn, but the company said capex will go down to USD20bn-21bn in 2016 and USD17bn-19bn a year in 2017-2019. Shell said it will prioritize debt reduction over dividends and capex.
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Sunday, 25 October 15
ANOTHER DISAPPOINTING WEEK FOR PANAMAX; INDEX FELL 5.4 PERCENT W-W
COALspot.com: The BDI was slightly up by 2.65 pct closing at 774 points mainly because of Cape index which was up by 10.85 pct closing at 1461 poin ...
Sunday, 25 October 15
DRY BULK SHIP OWNERS ARE LOOKING TO CHINA'S POLICIES FOR CUES ON FUTURE MARKET DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China’s hard or softer landing is a thing which has troubled dry bulk shipping for a couple of years now, as owners have been hit by the coun ...
Friday, 23 October 15
WILL INDIAN DOMESTIC COAL PRICES BE ABLE TO COMPETE IMPORTED COAL PRICES IF THE CURRENT TREND CONTINUES?
COALspot.com: The Most of the Indian end-users are waiting for last minute purchase to enjoy every drop in price. Coal procurement managers are als ...
Friday, 23 October 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING OCTOBER 17 DECLINED FOR THE SECOND STRAIGHT WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.6 million shor ...
Wednesday, 21 October 15
RUSSIA'S CARBO ONE COAL SALES TO HIT 50 MLN T/YR - JACQUELINE HOLMES
COALspot.com: Russia's Carbo One has become one of the world's leading physical coal traders with an annual volume approaching 50 million t ...
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- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- CNBM International Corporation - China
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- PTC India Limited - India
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Australian Coal Association
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
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