We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Wednesday, 06 May 20
COST CHALLENGES IN A US$20/BBL WORLD - WOOD MACKENZIE
 A new approach is needed to ensure supply sector resilience
How will US$20/bbl affect the oil and gas supply chain?
It’s going to get tough, very tough.
The service sector is already on the ropes but will be first port of call when operators look to save money. IOCs and NOCs need to recognise they’ll want a functioning, reliable service sector when things pick up, as they will. I talked it all through with Andy Tidey, Head of our Performance Improvement team.
Covid-19 has already disrupted the supply chain. The ability of service companies to manufacture and deliver equipment and supply personnel to industry sites is seriously compromised by restrictions on travel and movement of people.
Last downturn, the service sector did its bit in getting costs down. The Majors reduced unit development costs by 55% between 2014 and 2019; our Upstream Cost Survey shows that almost half was rate cuts by suppliers.
It’s taken its toll on service sector finances. Margins for five leading service companies fell by an average of 65% between 2014 and 2019. EBITDA margins (earnings before interest, tax, depreciation and amortisation) for the wider sector have shrunk close to zero.
IOCs will look to cut more to get their own finances on an even keel and reassure shareholders. Cash flow breakevens for the Majors averaged US$55/bbl pre-crisis. BP said this week it aims to reduce underlying breakeven to below US$35/bbl in 2021, and others are heading in the same direction. The primary lever is to cut investment – discretionary spend by IOCs will all but dry up in 2020.
Operators are signalling cuts of up to 50% to expenditure in the US Lower 48. Only a handful of the 53 conventional pre-FID projects we expected to get sanctioned in 2020 will get the green light. These cuts make up a big chunk of the 20% to 25% reduction in spend the Majors have announced.
What drives NOC decisions isn’t quite so straightforward. Their stakeholder is the government, and the NOC may be central to their national economy – big employer, investor and a source of revenue through dividends and taxation. US$20/bbl oil isn’t just a problem for the NOC, it’s a national problem. We estimate that, pre-crisis, Angola needed US$75/bbl to fund its 2020 budget, Saudi Arabia US$85/bbl and Nigeria US$131/bbl – prices of a long-gone era.
Overall cuts in spend by NOCs so far are more muted, averaging 10% to 15%. Chinese NOCs are prioritising domestic investment to maintain production and employment. In the Middle East, ADNOC and Qatar Petroleum will likely proceed with big new gas projects where the scale and economics will win investment from the big IOCs. There have been concerns about market tightness in certain segments in the Middle East.
Many others face an investment drought. Ten higher cost projects at pre-sanction stage in Nigeria, Mexico, Libya and Angola won’t get the support they need from IOC partners. Combined spend will be pushed out indefinitely into the future along with 0.4 million boe/d of new production.
NOCs have to perform a tricky balancing act. To keep investment moving, costs need to come down. The service sector is the easy target; but the service companies are sizeable employers, too. They may be bound into the domestic economy through local obligation requirements and, in certain cases, may even be government-owned.
So, where do NOCs go from here? The adversarial approach between operator and suppliers is counterproductive and could end badly – for both sides. What’s needed is a change in relationship, built on openness, transparency and trust. We are starting to see alliances and partnerships emerging between mid-sized operators and service companies. That could be the template for a win-win – more competitive prices for the operator, and acceptable returns for the supplier. It’s a model NOCs need to consider if they are to foster and preserve a strong supply chain through the coming challenges.
NOCs need to take a strategic view of how they address the cost challenge of US$20/bbl oil. As operator and “national champion”, many NOCs can shape the service sector, in ways not open to the IOCs. There are opportunities to change the commercial model with individual suppliers and bring in practices from other sectors, such as true open-book pricing. Many NOCs could also act as an aggregator of plans, providing the service sector with an aggregated demand profile.
Simon Flowers
Chairman, Chief Analyst and author of The Edge
Source: Wood Mackenzie
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 04 May 20
U.S. ESTIMATED COAL PRODUCTION FALL 39.4% YEAR ON YEAR IN THE WEEK ENDED APRIL 25 - EIA
Estimated U.S. coal production totaled about 8.6 million short tons (MMst) For the week ended April 25, 2020, says EIA in its latest report.
E ...
Saturday, 02 May 20
SUPRAMAX: ASIA, STRONGER NUMBERS - A 55.000-DWT WAS FIXED FROM INDONESIA TO CHINA IN THE MID $6,000S - BALTIC BRIEFING
Capesize
A tepid week for the big ships, as macro concerns continued to weigh heavily on the index. All of the major voyage routes lost value, ...
Friday, 01 May 20
KOSPO INVITED OFFER FOR 5600 NCV COAL FOR Q3 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 260,000 Metric Tons (MT) steam coal for Boryeong Power ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY ABOUT 8% IN 2020,THE LARGEST DROP SINCE WORLD WAR II - IEA
We expect global coal demand to fall by about 8% in 2020, the largest drop since World War II, with coal use declining in virtually every sector of ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY 8% IN Q1 2020 RELATIVE TO Q1 2019 - IEA
We expect global coal demand to fall by 8% in Q1 2020 relative to Q1 2019. This significant drop was driven by lower demand in the electricity sect ...
|
|
|
Showing 991 to 995 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Minerals Council of Australia
- The Treasury - Australian Government
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- MS Steel International - UAE
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Deloitte Consulting - India
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
|
| |
| |
|
