New base 739 special 30 november 2015

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NewBase 30 November 2015 - Issue No. 739 Edited & Produced by: Khaled Al Awadi

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UAE: Emirates Nuclear ENEC ANNOUNCES COMPLETION OF MAJOR CONSTRUCTION MILESTONE

WAM + Gulf News ( Images NewBase )

The Emirates Nuclear Energy Corporation, Enec, today announced the completion of several major construction milestones on Unit 2 of the Barakah Nuclear Power Plant for the UAE’s peaceful nuclear energy programme.

These include the completion of the 2,000 tonne containment liner plate for the Reactor Containment Building (RCB) including placement of the upper dome, lifting the pressuriser into place and lifting the roof frame for the Unit 2 main control room.

According to Enec, the successful completion of these milestones continues their progress toward the safe and quality-driven delivery of the project to build four nuclear energy units in the Western Region of Abu Dhabi by 2020.




Senegal: Cairn JV receives presidential decree confirming Senegal PSC extension Source: FAR

JV partner FAR reports that the Cairn Energy-operated Senegal Joint Venture has received a presidential decree extending the current Petroleum Sharing Contract (PSC) by the requested three years starting from 6 February, 2016. The extension allows the Joint Venture time to appraise the world class SNE and FAN oil discoveries made in 2014 and to evaluate the considerable exploration potential which remains within the PSC area.

The first phase of the Joint Venture’s planned appraisal and exploration program has already begun and consists of three new wells SNE-2, SNE-3 and BEL-1 that are to be drilled back to back and are expected to be completed by mid 2016 (refer ASX release 05/11/2015). The SNE-2 appraisal well spudded offshore Senegal in the Sangomar Deep Offshore Block on 4 November. This is to be followed by the SNE-3 appraisal well and the BEL-1 exploration well in the yet to be drilled Buried Hills Play. Drilling and coring of the SNE-2 well is currently progressing as prognosed. After this a logging and flow testing program will be completed. On completion of the operations

on SNE-2, SNE-3 will be re-entered and drilling and evaluation (coring and flow testing) will be carried out on SNE-3 before commencement of the BEL-1 well. Further appraisal and exploration work including drilling will be contingent on the overall results from the three wells. Senegal Joint Venture partners are: Cairn Energy (operator) 40%, ConocoPhillips 35%, FAR 15% and Petrosen 10%. Completion of 3D seismic survey over Djiffere Block, Senegal FAR has completed the 3D seismic survey over the Djiffere Block offshore Senegal (refer Fig 1), required under the terms of the agreement with Trace Atlantic Oil and partners to secure an option over farming into the block (refer ASX release 24/09/2015). Under the agreement, FAR has an exclusive right until October 2016 to farm into the Djiffere Block for no additional cost and become operator with 75% equity in the permit. FAR has mapped the prospectivity of the Djiffere Block using existing 2D seismic data. Following the SNE discovery the prospectivity of the Djiffere Block appears promising. Processing the new 3D seismic data is expected to take approx. 8 months.




OPEC members Need Price Jump to Balance Budget: OPEC Reality Check Bloomberg + Angelina Rascouet

If the Organization of Petroleum Exporting Countries keeps its policy of favoring market share

over prices when it meets Dec. 4, most members will probably find themselves unable to balance

their budgets.

Oil futures have tumbled more than 25 percent since OPEC’s last meeting in June, yet the group

will keep pumping to batter rival producers, according to 30 analysts and traders surveyed by

Bloomberg. With Brent crude forecast to average about $57.50 a barrel next year, only Qatar

would be able to keep its finances in check.

Following are the latest comments from OPEC members and analysts. The respective shares of

supply are based on October levels. The estimates for the price that each member needs to

balance its budget are from the International Monetary Fund unless stated otherwise.

ALGERIA

• Price needed: $96 • Share of OPEC production: 3.4 percent • Algeria’s efforts to organize an emergency OPEC meeting in August failed to bear fruit

while its calls for non-OPEC members to cut output weren’t heeded. Algeria has backed Venezuela’s motion to hold a summit of OPEC and non-OPEC producers to boost prices.

ANGOLA

• Price needed: $90 (ING Bank data) • Share of OPEC production: 5.6 percent • Angola’s oil exports are heavily dependent on China. The African nation became China’s

second-biggest crude supplier in October, according to customs data. Any slowdown in the Chinese economy could make the outlook for Angola’s exports more uncertain.




ECUADOR

• Price needed: $120 (ING) • Share of OPEC production: 1.7 percent • President Rafael Correa has suggested that cutting OPEC’s annual output by 1.6 percent

would be enough to boost prices “significantly.” Ecuador became the first OPEC member to admit it was pumping at a loss in August. The country will send new Oil Minister Carlos Pareja, who previously worked at state-owned EP Petroecuador, to the Vienna meeting.

IRAN

• Price needed: $87 • Share of OPEC production: 8.4 percent • Iran, OPEC’s second-biggest producer before sanctions were tightened in 2012, plans to

raise output by 1 million barrels a day within six months of the curbs being lifted. The country, which now ranks as the fifth-largest producer, has said OPEC should make room for that increase within its ceiling of 30 million barrels a day.

IRAQ

• Price needed: $81 • Share of OPEC production: 13 percent • Iraq pumped a record 4.4 million barrels a day in June and its daily production has

surpassed 4 million barrels for the past five months. Together with the U.S., it’s responsible for most of the global surplus this year. That’s unlikely to persist in 2016, according to industry forecasters: Iraq is struggling with prices below $50 and is embroiled in a “costly battle” with Islamic State militants, the International Energy Agency said this month. Even its oil minister expects production growth to slow next year.

KUWAIT

• Price needed: $67 • Share of OPEC production: 8.7 percent • Kuwait is in the strongest position to weather a prolonged period of low oil prices thanks to

its current-account surplus, according to Capital Economics Ltd. The country, along with other Persian Gulf members of OPEC, opposed Venezuela’s proposal for an oil-price summit with non-OPEC producers, the Wall Street Journal reported.

LIBYA

• Price needed: $269 • Share of OPEC production: 1.3 percent • OPEC’s smallest producer, Libya has been unable to restore output to the 1.6 million

barrel-a-day level it reached before the Arab Spring in 2011. Production has swung between 250,000 and 850,000 barrels a day in the past year amid an escalating conflict between the divided country’s rival governments. Libya is one of OPEC’s “Fragile Five” nations that face greater risk of significant instability and output disruptions in the current oil market, according to RBC Capital Markets Ltd.

NIGERIA

• Price needed: $120 (ING) • Share of OPEC production: 6.3 percent




• Nigeria’s Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu has said oil at $40 isn’t acceptable and OPEC needs to do more to enforce production quotas. The country would consider $60 a barrel more “tolerable,” he said Nov. 21.

QATAR

• Price needed: $55.50 • Share of OPEC production: 2 percent • Among OPEC, Qatar boasts the lowest fiscal break-even oil price to balance its budget.

That’s still about $10 above current prices. Energy Minister Mohammed Al Sada has said there are signs of a market recovery next year as non-OPEC supply growth is set to slow.

SAUDI ARABIA

• Price needed: $106 • Share of OPEC production: 32 percent • Saudi Arabia has boosted output in eight of the past 10 months as OPEC’s biggest

producer keeps its strategy of defending market share. The nation pumped a record 10.6 million barrels a day in July. Yet it’s not immune to the slump in prices. Despite having a war chest of $647 billion of foreign-exchange reserves, its credit rating was cut by Standard & Poor’s last month on concern the country’s reliance on energy exports for 80 percent of revenue will drive up the budget deficit.

UNITED ARAB EMIRATES

• Price needed: $73 • Share of OPEC production: 9.2 percent • The U.A.E.’s oil minister, Suhail Al Mazrouei, said Nov. 18 that OPEC shouldn’t be

considered a swing producer but rather a steady, low-cost supplier. Mazrouei also said this month he expects a “gradual correction” in prices next year.

VENEZUELA

• Price needed: $125 (ING) • Share of OPEC production: 7.8 percent • Venezuelan Oil Minister Eulogio del Pino has urged OPEC to adopt an “equilibrium price”

of $88 a barrel that covers the cost of new investment in production capacity, or risk prices dropping to the mid-$20s. Venezuela depends on crude for 95 percent of its export revenue, which is why its bond traders keep a close eye on oil prices.




NewBase 30 November - 2015 Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE

Oil prices rise slightly, investors eye OPEC meeting Reuters + NewBase

Crude oil prices rose in early Asian trade on Monday, although gains were limited as investors look ahead to an OPEC meeting where ministers from the oil producing group will set policy in the face of a market still in glut. Oil prices are heading for declines of as much as 10 percent this month as optimistic assessments that the overhang in the market would ease have proved wrong. U.S. crude was up 18 cents at $41.88 a barrel at 0047 GMT after falling more than 3 percent on Friday. The contract is heading for a 10 percent fall in November. Brent crude was up 4 cents at $44.90 a barrel following a decline of 1.3 percent on Friday. The global benchmark is on track for a 9.4 percent decline this month.

OPEC officials have called into question an upbeat forecast from the group's researchers last week before the gathering of oil ministers on Dec. 4, with some skeptical there will be a quick easing of the supply glut in 2016.

Oil price special

coverage




The research team expects higher demand for OPEC oil next year as supply from producers such as the United States declines, potentially reducing the glut, with world oil demand seen rising by 1.25 million barrels a day. Prices have slumped by more than half since the middle of last year because of the overhang. OPEC last year made a historic decision to refuse to prop up prices by cutting supply and focused on defending market share. The shift was led by Saudi Arabia, supported by other Gulf OPEC members, but doubts about the policy among less wealthy members are growing.




Gulf Countries is seen unwilling to tighten oil taps alone

AFP + NewBase

Saudi-led Gulf Opec members will reject pressure to shoulder the cost of cutting oil production alone despite warnings that prices risk sliding further, officials and analysts say.

Saudi Arabia, Kuwait, the UAE and Qatar, which pump more than half of Opec’s 32mn barrels of daily output, want a solid commitment from all other producers, especially non-Opec member Russia, to agree to production cuts across the board.

“Gulf states will not undertake a unilateral output cut. They need strong cooperation from other producers, mainly Russia, to cut,” Kuwaiti oil analyst Kamel al-Harami told AFP.

The Organisation of the Petroleum Exporting Countries is to hold a crucial meeting on December 4 to study prices, which have fallen around 60% since mid-2014.

An informal meeting to be attended by some non-Opec producers will be held the day before. “Gulf producers are not inclined to change their policy of defending market share rather than price despite heavy income losses,” Saudi economist Abdulwahab Abu-Dahesh said.

“They realise they will be asked to bear the bulk of any cuts,” as none of the other Opec members are financially in a position to do so and non-Opec Russia has so far said it will not, Abu-Dahesh told AFP. A senior Gulf oil official said nothing has changed to alter Gulf states’ oil policy.

“No indicators or changes have happened to convince Gulf states to change their policy and cut output,” the official told AFP, requesting anonymity. But another Gulf official hinted at some flexibility in case of co-operation.

“It’s too early to say if Opec would maintain its production policy,” said the official, who also wished to remain anonymous. Opec heavyweight Saudi Arabia said last week it was ready to cooperate with other producers to stabilise the oil market and support prices.

The Opec meeting comes at a time of a massive production glut, with oversupply continuing and inventories at almost record levels of more than 3.0bn barrels, triple the normal rate. Opec member Venezuela and some international economic reports have warned that the oil price could slide to the range of $20-$30 a barrel from around $42 now if output is not trimmed.

Abu-Dahesh said Gulf states are betting on developments indicating a balanced oil market next year after Opec’s strategy knocked out some high-cost production, such as some US shale oil.




Opec secretary general Abdullah El-Badri said in October he was confident the oil market will pick up in 2016 due to a growth in demand and a drop in non-Opec output. He said the glut was caused by a 6mn bpd increase from non-Opec members over the past five years and that this has started to contract.

Saudi Oil Minister Ali al-Naimi told an energy conference in Bahrain on November 19 that, despite oversupply, the world still needs 5.0mn bpd of new output, 4mn of that due to natural decline.

Bassam Fattouh, director of the Oxford Institute for Energy Studies, told the same conference the market rebalancing process has started but the effect on prices will be slow. The International Energy Agency said this month that growth in demand for crude is set to slow next year as the allure of cheap oil fades.

The IEA expects demand to grow by 1.2mn bpd in 2016, down from 1.8mn bpd this year. Al-Harami believes oil prices will remain low for at least the next two years until the global economy picks up.

By then, falls in high-cost oil production will make way for Opec crude, al-Harami said. Massive cuts in oil investments will also help slow production, he said.

Saudi Arabia said this month that more than $200bn worth of energy projects worldwide had been cancelled this year and more cancellations were expected in 2016. Despite economic woes and major revenue losses due to low oil prices, the Gulf states have a huge fiscal cushion to rely on.

“Gulf states can bear the downturn for another three years enough for their oil policy to achieve targets,” Abu-Dahesh said.




NewBase Special Coverage

News Agencies News Release 30 Nov.. 2015

The Russia-Iran-Turkey energy triangle – old enemies locked in a power embrace . By: Robin Mills

Iran and Russia may be confronting Turkish-backed groups in Syria’s civil war, with Turkey’s downing of a Russian jet last Tuesday the latest twist. But the three countries are locked in an embrace over energy, while Tehran and Moscow eye each other suspiciously over oil, gas and historical rivalries.

Turkish-Russian relations have deteriorated sharply over the aircraft incident. Vladimir Putin claimed: “We have long been recording the movement of a large amount of oil and petroleum products to Turkey from ISIL-occupied territories”, and said that the plane’s shooting down was to protect the smugglers.

An investigation by Al Araby Al Jadeed has recently detailed the shadowy ISIL oil trade through the south-eastern Turkish town of Silopi, brokered by the mysterious Uncle Farid, although this is nowhere near where the plane was shot down.

Turkey has to tread carefully. It gets 56 per cent of its gas from Russia, and its shaky economy can little afford an interruption, especially as winter sets in. Iran provides another 18 per cent, and is essential to supply parts of eastern Anatolia.

Russia has various options for retaliation, such as supporting the Kurdish PKK group in attacks on pipelines with Turkey carrying oil and gas from Iran, Iraq and Azerbaijan. Mr Putin’s allegations about ISIL may be intended to bolster western doubts about whose side the Nato member Turkey is really on in the Syrian bloodbath.

But Russia and Iran also need Turkey. After the European Union forced the cancellation of its South Stream gas pipeline project, Moscow turned to Ankara, planning to reroute its exports that currently pass through Ukraine.

Turkey was interested, as part of its plan to become an “energy hub”, an ambitious-sounding if vaguely defined concept, but it now seems doubtful that the president Recep Tayyan Erdogan will support the project.

Meanwhile, Turkey is Iran’s only significant gas export market, the essential route if it wants to sell gas to Europe after sanctions are lifted, and the only non-Asian country currently able to buy Iranian oil.

Iran and Russia have, of course, cooperated on numerous fronts in recent years, both backing the Assad regime in Syria. Russia’s Atomstroyexport built the long-delayed Bushehr nuclear power plant, the two countries have repeatedly announced a US$70 billion economic agreement, and




Russian companies have discussed developing Iranian oilfields. Both countries are under western economic sanctions targeting their energy sectors, their perceived Achilles heel.

But their closeness should not be exaggerated, as the Tabnak article suggests. By the 1828 Treaty of Turkmenchay, Iran surrendered Armenia and Azerbaijan to the Russian empire, a territorial loss still not forgotten in Tehran.

The two countries are energy rivals. With oil prices plumbing new lows, the return of full Iranian exports next year will put further stress on the Russian economy. While Russia may sign some oilfield deals, Tehran will prefer the technology of western companies and the market access brought by Asian firms.

The grand “oil barter” deal, intended to bypass the sanctions constricting both parties by swapping 500,000 barrels per day of Iranian oil for Russian goods, has not made evident progress, and logistically always looked implausible.

Most of all, in gas, Russia has attempted to block Iranian exports, or at least divert them towards south Asia and away from its plum European customers. A much more diverse and well-supplied global gas market gives both parties little room for geopolitical games.

All three countries have more to gain by cooperation than confrontation. But when the successors of the shahs, sultans and tsars find themselves in opposition, mutual suspicions and rivalries count for more than the smooth flow of oil and gas.

Robin Mills is head of consulting at Manaar Energy, and author of The Myth of the Oil Crisis.




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Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010

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Khaled Al Awadi is a UAE National with a total of 25 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great experiences in the designing & constructing of gas pipelines, gas metering &

regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels.

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NewBase 30 November 2015 K. Al Awadi







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New base 739 special 30 november 2015