ERHC Energy Inc (ERHE)

[arnim-v-b]

,,Cepsa continues to explore acquisition opportunities and development projects.

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http://cincodias.com/cincodias/2015/03/04/empresas/1425495386_693967.html

In line with other major oil companies, Cepsa has decided to reduce its investments by almost 30% to "adapt to the new reality of low oil prices," which have led, in turn, a significant decrease of cash flow the company. Cepsa, owned by the Abu Dhabi sovereign fund, IPIC, held yesterday board of directors to approve the accounts for 2014, which will be announced today or tomorrow. The drop in operating cash flow, such as the oil sector, are under severe taxation is higher than the net profit.

According to sources close to the company is not so much of a cut as a postponement of these investments, except in the case of projects whose development definitely not profitable at current prices. The measure would affect all group activities and is linked to a cost adjustment of 3%, except for maintenance. The company has already accumulated 20% efficiency.

Also its first competitor in Spain, Repsol, has announced a rebate of 35% of their investments (in this case in the areas of exploration and production) of 3,300 million to 2,400 million euros. Part of this cut, more than billion, assume the subsidiary companies.




Canary Islands

Remains paralyzed Cepsa refinery in Tenerife (not, the terminal) for economic reasons and environmental regulations of the Canary Government. However, the company says bet on the archipelago which has 70 stations (with Chevron-Texaco), 16% of the market.
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Since the takeover of Cepsa by IPIC and France's Total output of capital, the company has experienced strong growth in the business of exploration and production. Thus develops upstream activities in countries like Algeria; Colombia; Peru; Brazil; Surinam; Thailand and Malaysia, Kenya and Liberia, along with Abu Dhabi and Spain.

However, despite the situation of falling prices, Cepsa continues to explore acquisition opportunities and development projects. Late last year was about to acquire the oil Salamander Energy, based in London, but decided to withdraw its bid in mid-November (about 500 million euros, according to the Salamander revealed itself). In the long run, this operation has been successful frustrated for Cepsa since the price situation has lowered the value of that company to half of what the Spanish oil offered by it.

Cepsa has completed one of its flagship projects: a petrochemical plant in Shanghai, with which will become the world's second largest producer of phenol and acetone and which has invested 300 million euros. The plant, the first step to position in Asian markets, will open at the end of next April. Have an annual output of 250,000 tons of phenol and 150,000 tons of acetone, and will be located at strategic location for access to China.

It also follows up with an investment of 350 million euros, the joint venture signed last July with Golden Agri Resources (GAR) for the development, design, production, sale and distribution of industrial alcohols of vegetable origin (oil palm) globally. The company, based in Singapore and called Sinarmas Pte Cepsa, is 50% owned by both companies.

With an estimated $ 70 a barrel (Brent yesterday closed at $ 59.880), the company that runs Pedro Miras believes that this year the biggest uncertainties focus on refining business whose margins (so far "at reasonable levels") could fall. Meanwhile, no surprises in the petrochemical division, which accounts for a third of the profit of the company, nor in the exploration and production are expected. The area of ??marketing and marketing, which comes from a collapse in demand (30% since 2008), and although this is recovering, also offer great joys.