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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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Monday, 12 October 15
BDI WEIGHED DOWN BY CAPE
COALspot.com: The BDI (Baltic Dry Index) has come back down again this week. The BDI is a benchmark index used to assess the overall cost of moving ...
Sunday, 11 October 15
TANKER SHIPPING: MORE OPTIMISM IN SIGHT FOR TANKERS IN THE WINTER SEASON - BIMCO
Demand:
2015 has been the year of the tanker. The fundamental improvements with slow supply-side growth for some years coupled with low oil pri ...
Friday, 09 October 15
US WEEKLY COAL OUTPUT UP 1.2 PERCENT TO 17.7 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.7 million shor ...
Thursday, 08 October 15
CAPESIZE: MOST PEOPLE AGREE A SPIKE IN RATES WILL HAPPEN; WHEN, HOW LONG AND HOW SUBSTANTIAL? - FEARNLEYS
Cape
Depressives start of the fourth quarter, with c3 approaching USD 12 pmt and c5 presently in the mind 5's. According to Fearnleys ship br ...
Wednesday, 07 October 15
U.S. COAL EXPORTS FOR THE FIRST SEVEN MONTHS DOWN 21 PER CENT COMPARED WITH THE SAME PERIOD IN 2014 - EIA
Coal Supply
Lower U.S.’s domestic coal consumption and reduced exports contribute to a forecast decline of 89 million short tons (M ...
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- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- The University of Queensland
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Economic Council, Georgia
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
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