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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, 05 October 15
Q1' 16 CFR SOUTH CHINA COAL SWAP CLOSED US$ 48.05 PER TON
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery down US$ 0.47 (0.96 %) per ton month over month.
A commodity swap is ...
Monday, 05 October 15
SMALL DECLINE IN 2014 SHIP OPERATING COSTS - MOORE STEPHENS
Total annual operating costs in the shipping industry fell by an average of 0.8% in 2014. This compares with the 0.3% average fall in costs recorde ...
Sunday, 04 October 15
THE INDO-INDIA FREIGHT MARKET REMAINS UNDER PRESSURE
COALspot.com: The BDI closed on Friday (2 Oct 2015) at 889 points, down by 54 points compared to previous Friday's closing ( 24 Sept 2015) of 9 ...
Friday, 02 October 15
COAL PRODUCTION IN THE UNITED STATES DECREASED THIS WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.5 million shor ...
Thursday, 01 October 15
SOUTH KOREA'S KOMIPO SEEKS SPOT BITUMINOUS COAL SUPPLIES
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 265,000 Metric Tons (MT) of minimum 4,600 kcal ...
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- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Planning Commission, India
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
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