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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, 06 September 15
AUTOMATION AND TECHNOLOGY IS CERTAINLY PART OF THE SOLUTION FOR IMPROVING PERFORMANCE AND EFFICIENCY TO MAKE THE MINE OPERATIONS MORE PROFITABLE, HOWEVER............ - LUKE JALSEVAC
"The Technology and Innovation in Mining 2015" production team at Information Exchange Group interviewed Luke Jalsevac, Director, Busines ...
Sunday, 06 September 15
THE CAPE SIZE INDEX ROSE 10.83 PER CENT WEEK OVER WEEK
COALspot.com: The BDI, the Baltic exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, declined o ...
Saturday, 05 September 15
DRY BULK MARKET MAY SUFFER NOW, BUT IS BOUND FOR A RECOVERY THANKS TO A LIMITED FUTURE FLEET GROWTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The slow increase of dry bulk tonnage growth this year could turn into a solid indicator of the market’s future prospects. According to a rec ...
Friday, 04 September 15
U.S. COAL PRODUCTION FOR THE W/E AUGUST 29, UP SLIGHTLY; FALL 4.5 PERCENT Y-Y: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.7 million shor ...
Friday, 04 September 15
GOVERNORS WILL HAVE THE POWER TO REVOKE MINERS' PERMITS: ENERGY MINISTRY - JG
Starting Oct. 1, Indonesia's governors will lawfully become "executors" in revoking the licenses of miners that fail to secure a &quo ...
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- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- VISA Power Limited - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
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