Market round-up: Coal India’s targets for FY18 unlikely to be met
In other news, South Asia becomes global LNG hotspot; oil firms making more cash at $50, says Goldman Sachs
Coal India Ltd’s (CIL) production for the first four months this financial year declined 4.3% from a year earlier. In comparison, offtake (or sales volume) increased 4% for the same period. Numbers released so far indicate that meeting Coal India’s targets for financial year 2018 will be challenging. Analysts from Nomura Research point out, as regards CIL’s targets (600 million tonnes) for FY18, the implied run-rate over the next eight months to meet CIL’s production/offtake targets is 1.83mt and 1.72mt, respectively, implying 13.5%/13.5% year-on-year growth. Nomura believes CIL’s output targets of 600mt for FY18 are unlikely to be met.
South Asia becomes global LNG hotspot
South Asia, long a backwater for energy markets, is emerging as a hotspot for liquefied natural gas (LNG), with Pakistan and Bangladesh set to join India as major consumers, helping ease global oversupply that has dogged this market for years.
Only India and Pakistan currently import LNG in South Asia, taking in a combined 25 million tonnes, or 8% of global demand last year. But with a fast growing population, strong economic growth and soaring energy demand, more import projects are being developed, led by Pakistan and Bangladesh.
Pakistan only started importing its first LNG in 2015, and surprised some in the industry by developing its first terminal within schedule and budget. A second is about to become operational and a third is expected to be completed next year.
With Bangladesh set to join the club of importers next year, the region could import 80-100 million tonnes a year by the mid 2020s, analysts said, making it the world’s second biggest import region, ahead of Europe. Reuters
Oil firms making more cash at $50, Goldman Sachs says
Oil majors are raking in more cash now than they did in the heyday of $100 oil, according to Goldman Sachs Group Inc.
Integrated giants like BP Plc and Royal Dutch Shell Plc have adapted to lower prices by cutting costs and improving operations, analysts at the bank including Michele Della Vigna said in a research note on Wednesday. European majors made more cash during the first half of this year, when Brent averaged $52 a barrel, than they did in the first half of 2014 when prices were $109.
Back then, high oil prices had caused executives to overreach on projects, leading to delays, cost overruns and inefficiency, Goldman said. Those projects are coming online now, producing more revenue, while companies have tightened their belts and divested some assets to reduce debt burdens. Bloomberg
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