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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, 20 September 15
BALTIC CAPE INDEX ROSE 66.52 PER CENT AND STAND NOW AT 1995 POINTS
COALspot.com: The BDI (Baltic Dry Index) rose 17.35 per cent week over week to 960 points on Friday mainly driven by the Capesize segment. The Cape ...
Friday, 18 September 15
SHIPPING AND THE FED RATE DECISION: FINANCING COSTS COULD RISE EVEN HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Regardless of the FED’s decision to raise rates, shipping stands to be influenced by the decision. Shipbroker Allied Shipbroking noted this w ...
Friday, 18 September 15
U.S. COAL PRODUCTION DECLINED 6.7 PER CENT W-W: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.4 million shor ...
Thursday, 17 September 15
COALSPOT HAS LAUNCHED NEW THERMAL COAL INDICES FOR INDONESIAN COAL
COALspot.com has today launched real-time CS (i) Coal Indices.
The Indices represents 3800 kcal/kg GAR, 4200 kcal/kg GAR, 5000 kcal/kg GAR a ...
Thursday, 17 September 15
LOW DEMAND PUSH COAL SWAP DOWN
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and gain week over week.
The 4Q swap declined $ 1.77 (-4.17%) ...
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- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- The University of Queensland
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
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