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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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Wednesday, 21 October 15
MARKET INSIGHT - TIMOS PAPADIMITRIOU
In today’s dry bulk market, both freight rates and asset prices are creating mixed feelings to seasoned ship owners, who tend to instinctivel ...
Wednesday, 21 October 15
INDONESIAN COAL MINER BUKIT ASAM POSTS POSITIVE PERFORMANCE DURING FIRST THREE QUARTERS OF 2015
COALspot.com: Indonesian publicly listed and state controlled coal miner PT. Bukit Asam has announced that, the company’s coal sales up 8 per ...
Wednesday, 21 October 15
LOWER DEMAND HIT Q1' 16 INDONESIA COAL SWAPS
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 1.88 (-4.71%) per t ...
Tuesday, 20 October 15
SHIPBROKER SEES CAPESIZE RATES EASILY REACHING $25,000/DAY BY YEAR-END : NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The future course of the dry bulk market has been troubling market participants for quite some time now, as the “elusive” freight rate ...
Tuesday, 20 October 15
FOB RICHARDS BAY COAL SWAPS SINK INTO RED THIS PAST WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 declined week over week and month over month.
The Q4 swap was down US$ ...
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- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Planning Commission, India
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
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