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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, 03 August 15
NEWCASTLE COAL SWAPS DECLINE FURTHER THIS PAST WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery down $ 1.92 per MT (-4.22%) month over month to US$ 43.58 per mt. The swap ...
Monday, 03 August 15
CFR SOUTH CHINA COAL SWAPS SLIDE THIS WEEK
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined US$ 1.64 (3.14%) per MT month over month.
A commodity swap ...
Sunday, 02 August 15
CAPESIZE RATES PUSH BDI UPWARD
COALspot.com: The freight market was buoyant this week as BDI rose 4.14 pct to 1131 points. The cape index was also increased 16.50 pct 2209 points ...
Saturday, 01 August 15
DRY BULK MARKET KEEPS ITS MOMENTUM, AS OUTLOOK IMPROVES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Although conditions remain more than challenging, especially from an economic point of view (aka China’s stock worries), the dry bulk market ...
Friday, 31 July 15
CAPE'S PAPER MARKET REMAINS FIRM - INTERMODAL
COALspot.com: The positive sentiment that the Dry Bulk market has been enjoying as of the previous month, was carried through last week as well, bu ...
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- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Marubeni Corporation - India
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Australian Coal Association
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- The University of Queensland
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Parliament of New Zealand
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
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