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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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Friday, 31 July 15
COAL PRODUCTION IN THE U.S. UP 3.6% FOR THE WEEK ENDING JULY 25
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.8 million shor ...
Friday, 31 July 15
CHINA'S NEW OIL IMPORT RULES HAVE MINIMAL IMPACT ON STATUS QUO - FITCH
Fitch Ratings says that China's looser criteria for crude oil import rights are a positive but modest step towards encouraging private-sector p ...
Thursday, 30 July 15
EFFECTS OF THE CHINESE STOCK MARKET CRISIS - INTERMODAL
All evidence is currently signaling that the Chinese stock market will be the newest hurdle for the global economy. With the world's second lar ...
Wednesday, 29 July 15
Q1'16 FOB INDONESIA COAL SWAP CLOSED HIGHER THAN Q3'15
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and gains week over week, this past week.
The Q3 swap was decl ...
Wednesday, 29 July 15
Q4' 15 FOB RICHARDS BAY COAL SWAPS DECLINE 4.41% TO $56.52 PMT
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 declined month over month and week over week.
The Q3 swap was down US$ ...
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- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Planning Commission, India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
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