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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, 17 August 15
CFR SOUTH CHINA COAL SWAPS CONTINUE TO HEAD SOUTH
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US cents 40 (1.05%) per MT month over month.
A commodi ...
Sunday, 16 August 15
INDONESIA TO INDIA FREIGHT RATES ARE EXPECTED TO STEADY NEXT WEEK
COALspot.com: The BDI softened 12.08 per cent to 1055 points this week due to weakening of cape index which was fell 25 per cent week over week to ...
Friday, 14 August 15
FOB INDONESIA COAL SWAP SHOWING NO MOVEMENT THIS PAST WEEK
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week, this past week.
The 4Q swap was declined $ ...
Friday, 14 August 15
U.S. COAL PRODUCTION UP 2.9 PER CENT THIS WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.2 million shor ...
Friday, 14 August 15
CONDITIONS AND COMPLEXITIES IN A TRIPARTITE AGREEMENT: BE SPECIFIC! - INCE & CO
KNOWLEDGE TO ELEVATE
A tripartite agreement reached between the Owners, the Shippers and the Receivers provided that demurrage be paid to the ...
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- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- The Treasury - Australian Government
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
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