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Livermore
Master |
21-Aug-2006 16:42
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Yes oil refinires are coming online soon. The demand for oil products is increasing yearly too |
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shplayer
Elite |
21-Aug-2006 16:15
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Livermore, Two Indian refineries coming on stream soon:
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Livermore
Master |
17-Aug-2006 22:23
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I cannot comment further for some reasons. But just look at SPC p/e ratio |
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Livermore
Master |
17-Aug-2006 22:19
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Hi Shplayer, Yes, you are right about Shell and Exxon Mobil's project. But as long as crude oil stays above US$50/barrel, that's not much to fear for refineries. I just think it will stay well above that number for some time. I just think the increase in oil every year for the next 4 years should offset the built up in refineries. I read a comment from what the boss of Chevron said some time back on the built up in refineries. He said even with the built up in refineries, the demand for oil products will still be strong. Well we will see. But I am quite confident for the this year and next year, SPC will do well in profits. The refining squeeze was in 2004 but from what I have read, most companies adopted a "wait and see" attitude. Profit margins was poor in late 90s to early 2000. Companies did not just "jump" into investments" straight away. From design to build, it is not possible to build a refinery in 2 years. |
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shplayer
Elite |
17-Aug-2006 22:08
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To add to my earlier thread, I also agree that SPC should remain profitable. However, besides seasonal and opportunistic (other refineries shutdown) factors, the near term growth will remain flat until the upstream production (from Oyang and later Jeruk) comes on stream. But please be reminded, 3rd and 4th Q results may be down YoY and even Q o Q due to a scheduled plant shutdown in sept/oct. |
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shplayer
Elite |
17-Aug-2006 20:54
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Livermore, Yes, I totally agree that it takes about 3-5 years to build a refinery from ground up. If you look back, the refinery squeeze started in begining 2004. That prompted the initiation of refinery building projects. By now, about 2.5 years have lapsed and as far as I am aware, in Asia, there are 2 large refineries being built in China and India. The additional capacity that will come on stream will probably be in excess of 1 mill bbl/day.....and this will be completed in 1-3 years from now. The kick start for new refineries is not beginning today so your estimate of 2010 for new capacities to come on stream is too conservative. The additional investment by Shell (recently announced) is for an ethylene cracker....albeit the existing refining capacity will also be upgraded and integrated to the petrochemical plant. The new Mobil project is for a polyethylene and a propylene plant. These should not be mistaken for a oil refinery. |
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Livermore
Master |
17-Aug-2006 19:48
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I am confident SPC will be profitable for the next 4 years. It takes 3-4 years to build a refinery so new refineries are unlikely in the near future. As long as crude oil is above US$50/barrel in 2010 when new refineries come online, refineries in the world don't have much to worry. Shell has just given the green light for a new US$3 billion new plant in Bukom and Exxom Mobil will unveil its new plans next year. I am sure Shell and Exxon Mobil expect return on their investment. Although new refiners will come online in 2010, demand for oil increases about 1% yearly. This should offset the built-up of refineries. I feel that come 2010, crude oil will be above US$50/barrel |
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shplayer
Elite |
17-Aug-2006 18:34
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scotty, SPC is a subsidiary of Keppel Corp and is one of its main income earner wacko111, SPC's refining business seems to have peaked. Their retail business (SPC stations) is also flat. The convertible bond issued in 2004 have all been converted to shares and diluted earnings by about 15% (don't quote me on this figure as it is from memory). At the moment, refining capacity worldwide is still tight and SPC can benefit for unscheduled shutdowns (re Katrina in 2005). However, as with other refineries, it is also at risk for unscheduled shutdowns and new refinery capacities (currently under construction in India and China) should be coming on stream in 1 to 3 years time.When this happens, it will depend on supply and demand at that time. What it has going for growth is expansion of its upstrean business (oil exploration and production) Currently, only their Kakap field is producing oil (2,600bbl/day). This part of their business has been abit disappointing. Their Oyang field was supposed to have started producing since mid 2005 but the latest is it has been delayed to mid 2007. Their Jeruk field has had their recoverable reserves downgraded. Production from this field is still a few years down the road. My take is, under the current situation, one has to be prepared to be patient with this counter. But then again, another Kartina will see opportunities for SPC......and this is the hurricane season. |
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scotty
Senior |
17-Aug-2006 17:55
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This one is GLC rite? should be good in long run I guess... |
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wacko111
Member |
16-Aug-2006 21:57
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What are you people's take on SPC in the long run? |
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