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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, 28 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP ROSE 2.73 PER CENT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery moved upward US$ 1.45 (3.04 %) per ton month over month.
A commodity ...
Sunday, 27 September 15
THE PANAMAX INDEX FELL 1.19 PCT WEEK OVER WEEK
COALspot.com: The BDI closed Friday (25/09/2015) at 943 points, down by 17 points compared to previous Friday closing (18/09/2015). The BDI wa ...
Friday, 25 September 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING SEPTEMBER 19 ROSE 2.5% PER CENT W-W
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.8 million shor ...
Wednesday, 23 September 15
CAPESIZE: SPOT RATES HAVE INCREASED MORE THAN 70 PER CENT DURING LAST WEEK
Dry Bulk owners, always look at September as the time that the market “signals” what lies ahead for the remainder of the year. The Chin ...
Wednesday, 23 September 15
INDONESIA: NEW REGULATION APPLIES FINAL INCOME TAX TO MINERAL AND COAL SALES - FLORENCE GRACIA SANTOSO
To increase state revenue from the mining sector, the Government of Indonesia has imposed a new final income tax on any sale of mineral and coal, a ...
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- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Central Electricity Authority - India
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
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