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Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase 29 March 2016 - Issue No. 818 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Synchronizing with oil prices, Fuel prices increase in April-16 UAE MOE + Gulf News + NewBase
The Ministry of Energy announced new fuel prices for the month of April. Motorists will have to pay more at the petrol stations when compared to March as fuel prices have been increased.
The new fuel prices per litre are Super 98 Dh1.62 up from Dh1.47 in March, Special 95 Dh1.51 up from Dh1.36, E Plus-91-Dh1.44, increased from Dh1.29. Diesel will be sold at Dh1.56 per litre, up from Dh1.40 per liter in March.
The fuel prices, which are linked to global oil prices, have been recovering for the past two months as oil producing countries gear up for the crucial Doha meeting on April 17, which is aimed at reaching an agreement between Opec (Organisation of the Petroleum Exporting Countries) and non-Opec members to freeze production at January levels.
The United Arab Emirates and a number of other oil exporting countries have confirmed their participation at the meeting.
The meeting was necessitated due to record drop in oil prices from more than $110 per barrel in June 2014 to less than $30 per barrel in January this year.
Oil prices have recovered since then. The global benchmark, brent was trading at slightly more than $40 per barrel on Monday.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 2
Tunisia: JV partners serve Cooper Energy with Hammamet Arbitration Request…. Source: Cooper Energy
Cooper Energy has advised that CE Hammamet Ltd, a wholly owned subsidiary
has today been served with aRequest for Arbitration by the remaining joint venture partners in the Hammamet Permit, Tunisia (Medco Ventures
International and DNO Tunisia).
Cooper Energy has previously reported its intention to withdraw from Tunisia and consistent with this CE Hammamet Ltd elected not to participate in the most recent
extension of the Hammamet Permit and issued a notice to withdraw from the joint venture on 16 June 2015, in accordance with the terms of the joint operating
agreement.
The parties hold
differing opinions regarding the
interpretation of the terms of the joint
operating agreement regarding ongoing
liability to pay for work obligations which
may be undertaken during the extension
period of the permit following the
withdrawal.
The remaining joint venture parties are
now seeking security from CE Hammamet Ltd for a 35% share of the cost of drilling a well in the
Hammamet Permit, a share which they assert to be at least $US13.1 million. They also seek an unspecified amount of damages for the claimed breach of the joint
operating agreement. The remaining joint venture parties have invoked the dispute
resolution procedure under the joint operating agreement.
CE Hammamet Ltd believes the claim to be without basis and denies any liability for
activities undertaken during an extension period of the permit in which it has elected not to participate. CE Hammamet Ltd is unaware of firm plans for a well to be drilled
at all.
Accordingly, Cooper Energy considers that it is not obliged to provide the security as requested by the remaining joint venture parties and that it is in shareholders’
interests to defend the claim which it intends to do with vigour.
The company will advise of further developments in accordance with its disclosure obligations.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 3
Jordan: IPG granted concession rights to the Al Risheh gas field
and Al Safawai area in Jordan .. Source: The Jordan Times
IPG, a UK-based company, will spend around $100 million over the next four years exploring for gas and oil in the eastern parts of the Kingdom, Qutaiba Abu Qura, chairman of the National Petroleum Company, said Saturday. Last week, IPG was granted concession rights to explore for gas and oil in Al Risheh gas field and Al Safawai area near the borders with Iraq, Abu Qura told The Jordan Times in an exclusive interview.
IPG is a newly registered company in the UK that is owned by Egyptian investor Yehya Al Koumi. It has recruited 'internationally-renowned' experts in the field of oil and gas, according to energy officials.
'We are expected to sign the production sharing agreement with the company this year after the Cabinet has granted the company the concession rights,' Abu Qura added. Under the deal, IPG will work on increasing output from Al Risheh gas field to reach around 50 million cubic feet per day during the first year of the contract. Currently, gas output from Al Risheh gas field is around 12-13 million cubic feet per day.
'If the company increased the gas production to around 200 million cubic feet per day, there would be discussions about another agreement for development and further production,' said Abu Qura. Jordan needs around 400-450 million cubic feet of gas per day, according to Abu Qura.
'IPG will increase gas output as it will work on drilling new wells, rehabilitating existing wells, conducting maintenance for equipment if necessary and exploring for oil and gas in new areas… This is very good news for Jordan that we have the expertise of very prominent experts in the industry. This is promising,' Abu Qura added.
Early in 2014, Prime Minister Abdullah Ensour announced that British Petroleum (BP) ended its oil drilling operation in Jordan after unsatisfactory results on its second well in the country. Following that, the government floated several tenders to attract companies to explore for oil and gas in Al Risheh gas field and Al Safawi area.
Jordan, which imports about 97 per cent of its energy needs annually, incurred losses worth billions of dinars due to repeated cuts in natural gas supplies from Egypt. In mid-2015, Jordan opened a terminal for liquefied natural gas (LNG), which enabled the country to import LNG,
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 4
Cyprus announces third offshore licensing round Source: Ministry of Energy, Commerce, Industry and Tourism, Cyprus / energy-pedia
Cyprus on March 24 announced the third offshore licensing round for Blocks 6, 8 & 10. Applications may be submitted within 120 days of the date of publication of the notice in the Official Journal of the European Union. Among the numerous plays defined in Offshore Cyprus, two have been successfully tested with large accumulations of biogenic gas. The Lower Miocene sands are the gas reservoir in the Aphrodite field discovered by Noble Energy in Block 12 East of Eratosthenes.
The trap is an asymmetric inversion anticline, SW-NE oriented, bounded by a reverse fault to the NW. It was formed in Lower Miocene time after the sand reservoir deposition. In Block 6, there is a Lower Miocene anticline of the same type, SW-NE oriented, with a closure of more than 15 x 25 km at the level of the Lower Miocene. It is another very large target for Lower Miocene sands with biogenic gas. It is illustrated in the PGS PSTM 2D section below.
The carbonate build ups, sealed by the Messinian Evaporites at the edge of Eratosthenes carbonate platforms, have been successfully tested by ENI immediately south of Block 11 in the Egyptian Exclusive Economic Zone, with more than 600 m of gas pay in porous reefal carbonates. Same type of traps exists in Block 10 and is illustrated in the following 2D PSDM seismic
section. Carbonate build ups of the same type exist also along the Levant Basin edge of the Eratosthenes Carbonate Platform. They extend in SE Block 8.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 5
India: ONGC Approves $5 bn in KG Basin Investment Plan ONGC + NewBase
Indian state-owned energy firm ONGC on Monday announced $5.07 billion investment in its KG basin oil and gas block.
Board of Directors of ONGC approved the Field Development Plan (FDP) for the development of fields falling under Cluster 2 of the Deep-water NELP Block KG-DWN-98/2, ONGC said in a statement.
Cluster 2 of the block has been divided into two parts (i) Cluster 2A which has estimated In-place reserves of 94.26 MMt of crude oil and 21.75 BCM of associated; and (ii) Cluster 2B which has estimated In-place reserves of free gas of 51.98 BCM.
Production is envisaged at a peak oil rate of 77,305 bopd and 3.81 MMSCMD of associated gas through 15 producer wells along with 12 water injection wells with a peak water injection rate of 9,400 m3/d from Cluster 2A oil fields.
Peak production rate of free gas is envisaged at 12.75 MMSCMD from 8 wells of Cluster-2B free gas fields. Total oil and gas production envisaged is 23.526 MMt and 50.706 BCM respectively during the project life from the Cluster 2.
However, delay on government's part in approving a higher gas price for difficult areas would mean the output would be delayed by one year to 2019-20, Press Trust of India reported. ONGC had in 2014 announced plans to start gas production from 2018 and oil by 2019 but a final investment decision was made contingent upon government approving a remunerative price for the deepsea block as the current rate of $3.8 per million British thermal unit was uneconomical, the news agency added.
The government earlier this month announced a new pricing formula for difficult areas that would at current prices give developers just over $7 per mmBtu price.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 6
Pakistan: Five small hydropower projects initiated in K-P Published in The Express Tribune + NewBase
At least five 214 megawatt (MW) hydropower projects have been initiated in the province while three 56MW hydropower projects will be completed this year. This was stated in a handout issued by Pakhtunkhwa Energy Development Organization on Sunday. These decisions were taken during the 12th PEDO meeting held the same day.
“The provincial government is taking effective measures to accelerate the pace of generating electricity to pull the country out of the energy crisis,” stated the document. During the meeting, participants decided Munda Dam and other projects will be included in the China-Pakistan Economic Corridor.
“The Asian Development Bank (ADB) will assist in developing 1,000 mini-micro hydropower stations in areas where people have been deprived of electricity,” the handout read. Participants also discussed steps that were being taken for the welfare of PEDO employees. PEDO CEO Akbar Ayub Khan briefed participants about ongoing hydropower projects in the province.
“Three energy projects will be completed this year which would generate 56MW of electricity,” the handout quoted him as saying. “Meanwhile, work on five more hydropower projects had been initiated that would produce 214MW of electricity.” He added the provincial government initiated work on 356 mini-micro hydel stations and the number of projects will increase to 1,000 with the financial support of the ADB.
Meanwhile, Shakeel Durrani, chairman of the organisation, said PEDO is an autonomous organisation and there was no political pressure on it. He added all decisions would be taken on merit and in the best interest of the province. Durrani added the provincial government was carrying out efforts to induct the proposed Munda Dam and other projects in CPEC.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 7
Tansania: Dodsal says Tanzanian gas holdings much bigger than previously expected….Dodsal + Gulf News + NewBase
Dodsal Group has announced that its first gas exploration project is likely to reap much more revenue than initially estimated.
The company said that the first two of its three onshore gas fields explored – in the Mambakofi and Mtini regions – are likely to contain 2.7 trillion cubic feet of gas, versus the 2.17 trillion cubic feet (tcf) that had been announced by the Tanzanian government in February.
Dodsal said that based on current agreements between Tanzania and other small producers, in which the former buys gas at a price of $3 per 1,000 cubic feet, the two fields should be worth $8bn in revenue.
Further, it said there was a “potential upside" for the fields to produce up to 3.8tcf, which would be worth about $11bn. Any
profit after production costs would then be split on a 50/50 basis with Dodsal’s state-owned partner, Tanzania Petroleum Development Corporation.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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publication. However, no warranty is given to the accuracy of its content. Page 8
Dodsal’s chairman and president, Rajen Kilachand, said that on top of this a third gas column has been found on the western side of its 7,500 square kilometre licence area, which is estimated to contain up to 5.9tcf of gas, although the company said that studies were still ongoing in this area.
“We are kicking off a programme for an early production system to bring this gas to market, and simultaneously continuing exploration activities in the rest of the territorial block," Mr Kilachand said.
Dodsal has spent more than $200 million on exploration activities since it commenced drilling in Tanzania in 2009 and now expects to invest a further $500m on an early recovery system to extract the gas. It is looking to raise about $250m of this through bank debt, and is in talks with banks in both the UAE and London to secure this “we hope by June or July", said Mr Kilachand.
Dodsal is a privately-owned, UAE-based company with operations in several GCC countries, as well as Tanzania, Algeria and India. It employs about 10,000 people and its main source of work has been as an EPC contractor on other oil & gas and industrial projects.
Mr Kilachand said that it intends to carry out the work to build the Tanzanian plants itself. “We do this for a living," he said.
He expects the first gas to be produced from its Tanzanian fields by the first quarter of 2018 and says the Tanzanian government will initially be its sole customer. In the longer term, there is potential for export, but Mr Kilachand said this “depends on the final quantities and our discussions with the government".
“Our first priority is to ensure there is sufficient gas for the Republic of Tanzania over the next two decades."
Salam Awawdeh, a partner and Middle East energy and resources leader with Deloitte, said that the gas discovered to date in Tanzania since 2004 has largely been used to generate electricity and for industrial customers within Tanzania.
“Exploration success since 2010 has raised Tanzania’s profile as a potential supplier of LNG to Asian markets, along with its neighbour, Mozambique," he added. “East Africa has recently witnessed increasing gas reserve discoveries in Tanzania and Mozambique, and if recent discoveries are confirmed, Tanzania would be in a leading reserves position."
If that were the case, East African producers would find willing buyers in India, according to a recent BMI report. It said that India’s net imports of liquefied natural gas are likely to double over the next 10 years, driven by a combination of increasing demand and flat domestic production.
“Our data shows that the country will require about 24.9 billion cubic metres [880 billion cubic feet] of imports in 2016, which will subsequently climb to 56bn cubic metres [1.98 trillion cubic feet] by 2025."
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 9
United Kingdom increases oil production in 2015, but new field development declines Source: U.S. Energy Information Administration, Short-Term Energy Outlook
After many years of decline, production of petroleum and other liquids in the United Kingdom (U.K.) increased by about 100,000 barrels per day (b/d) in 2015. The largest contribution to this increase came from fields that were brought online in the second half of 2014.
Significant increases also came from fields that came online in 2015, and from improved performance of the U.K.'s largest producing field, the offshore Buzzard field. A similar year-over-year increase in production volumes hasn't occurred since 1998, when petroleum and other liquids production grew by slightly more than 100,000 b/d.
The U.K. is the second-largest liquids producer in Europe (after Norway), producing one million b/d in 2015. This amount is large among European countries but small in the global market, and the U.K. remains a net importer of petroleum and other liquids.
More than 97% of its liquids production in 2015 came from offshore fields, where petroleum development projects have long lead times. The majority of the offshore crude and condensate fields that began production in 2015 were approved in 2012 or earlier when oil prices were much higher.
In response to current low oil prices, U.K. producers have begun to slow plans for new development. Given the long lead times associated with offshore production, this will likely have ramifications in the two-to-five year timeframe (2018-21). In the U.K., project developers must receive governmental approval of their field development plans (FDP) prior to developing a field.
The number of FDPs approved in 2015 was less than half the number approved in 2013 or 2014. Additionally, although the number of FDPs approved in 2014 was similar to the number approved in 2013, the investment associated with the fields approved in 2014 was much lower.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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Source: U.S. Energy Information Administration, based on United Kingdom Oil and Gas Authority
The current lull in both new field approvals and incremental development approvals could lead to significant production declines in the United Kingdom in 2018 and beyond. However, in 2016 and 2017, several already-approved fields where investment is already committed are expected to begin production, at least partially offsetting production declines from existing fields.
Source: U.S. Energy Information Administration, based on United Kingdom Oil and Gas Authority
For more analysis of the U.K.'s energy sector, see EIA's recently released Country Analysis Brief on the United Kingdom.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 11
Cameroon: Dana Petroleum and SDX complete Manatee-1 exploration well on Bakassi West, Cameroon.. Source: SDX Energy
SDX Energy has announced that drilling operations have been completed on the Manatee-
1 exploration well in Cameroon. The well is operated by Dana Petroleum and SDX holds
35% working interest (38.89% paying interest) in the concession.
The Manatee-1
well, which is located in shallow
water in the prolific Niger
Delta Basin, offshore
Cameroon , was spud on 2nd of
March using the
Paragon M825 jack-up rig,
reached TD of 1,447 meters on
27th of March.
The well
intersected 26 metres of gas
bearing section of varying quality throughout the wellbore. Wellbore conditions did not permit the acquisition of a full suite of logging tools in the deeper sections of the
hole which makes the analyses of these lower intervals inconclusive at this time.
Additional technical work will be completed with the samples and material collected
from the well to improve the understanding of their quality in a post well analyses. The operation was conducted safely and within the anticipated pre-well budget
estimate.
Commenting on the results, CEO Paul Welch said:
'Whilst we are disappointed not to have made an oil discovery, we recognized the risks associated with exploration wells of this kind. The secondary objective was to see whether we could make a commercially viable gas discovery.
At this stage it is too early to quantify the Manateee-1 gas potential and our technical team will be working closely with our partners to evaluate the well results to determine if the gas volumes on the block have commercial potential. Positively, the Block contains a further 12 prospects and leads which have been significantly de-risked by the Manatee-1 well results.
We will use the information obtained from this well to improve our understanding of the Bakassi West Block so that we can sit down with our partners and the relevant authorities to discuss the next steps.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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NewBase 29 March 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices fall as concerns rise over rally petering out Reuters + NewBase
Oil prices fell in early Asian trade on Tuesday as concerns mount that a rally since January is fizzling out, while analysts forecast another rise to record levels for U.S. crude stockpiles. U.S. oil was down 13 cents at $39.26 a barrel at 0211 GMT, after finishing down 7 cents at $39.39, the previous session. Brent fell 16 cents to $40.11. On Monday it settled down 17 cents at $40.27 a barrel. U.S. commercial crude oil stockpiles were expected to have reached record highs for a seventh straight week, while refined product inventories likely fell, a preliminary Reuters survey showed late on Monday.
The poll of eight analysts, taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) and the U.S. Department of Energy's Energy Information Administration (EIA), estimated, on average, that crude stocks rose 3.2 million barrels in the week ended March 25. The API will release its data on Tuesday at 2030 GMT, while the EIA will publish its data on Wednesday at 1430 GMT. Both oil benchmarks are up about 50 percent from 12-year lows hit in mid-February but the oil market has taken on a weaker tone in the past week, along with other commodities.
Oil price special
coverage
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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"The recent rally appears to be running out of steam as investors pull back on bullish positions," ANZ said in a morning note on Tuesday. "This will remain the case without continued improvement in fundamentals." With oil prices rising strongly since January, most analysts are predicting the end of the year-and-a-half long slump, but also betting that there is little upside in the near future.Barclays said net flows into commodities totaled more than $20 billion in January-February, the strongest start to a year since 2011, and prices could fall 20 to 25 percent if that were reversed. "Were such a scenario to unfold, the price of oil could fall back to the low $30s," it said on Monday.
Oil Drops a 4th Day as U.S. Crude Stockpiles Seen Expanding Glut Bloomberg - Ben Sharples BenSharps
Oil declined for a fourth day before weekly U.S. government data forecast to show increasing crude stockpiles kept supplies at the highest level in more than eight decades.
Futures lost as much as 0.7 percent in New York after slipping 0.2 percent Monday. Inventories probably increased by 3 million barrels last week, a Bloomberg survey shows before an Energy Information Administration report Wednesday. That would be a seventh weekly gain. Indonesia will attend a meeting of major oil exporters in Doha next month to consider an output freeze, according to Energy and Mineral Resources Minister Sudirman Said.
“The size of the crude inventories combined with the fact we’ve seen a significant rally in prices is going to limit gains,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “Oil is in a short-term downtrend.”
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Oil tumbled to a 12-year low this year before rebounding on speculation the global surplus will ease as U.S. output declines. Saudi Arabia, Russia, Qatar and Venezuela agreed last month they would cap production at January levels if other producers followed suit to tackle a global oversupply.
West Texas Intermediate for May delivery fell as much as 29 cents to $39.10 a barrel on the New York Mercantile Exchange and was at $39.16 at 11:43 a.m. Hong Kong time. The contract lost 7 cents to close at $39.39 Monday. A fourth day of declines would be the longest run of losses since Feb. 11. Total volume traded was about 56 percent below the 100-day average. U.S. Stockpiles
Brent for May settlement slid as much as 29 cents, or 0.7 percent, to $39.98 a barrel on the London-based ICE Futures Europe exchange. The contract fell 17 cents to $40.27 Monday, the lowest close since March 15. The global benchmark crude was at a premium of 87 cents to WTI.
U.S. crude inventories increased to 532.5 million barrels through March 18, according to data from the EIA. Gasoline stockpiles probably dropped by 2.5 million barrels last week, according to the median estimate in the Bloomberg survey. That would be a sixth weekly decline.
Output freeze and oil market news:
• Prices need to be at a sustainable level that is attractive for producers without creating pressures, Indonesia’s Said told reporters in Jakarta.
• Crude at $45 to $50 a barrel is enough to encourage India’s own exploration without squeezing fuel consumers, Oil Minister Dharmendra Pradhan said in an interview Monday.
• Commodities including oil and copper are at risk of steep declines as recent advances aren’t fully grounded in improved fundamentals, according to a report from Barclays Plc.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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NewBase Special Coverage
News Agencies News Release 29 March 2016
Oil at $45-$50 Is a Fair Price for World's 4th-Biggest Buyer Bloomberg - Debjit Chakraborty JournoDebjit
Crude at $45 to $50 a barrel is enough to encourage India’s own exploration without squeezing
fuel consumers, according to the oil minister of the world’s fourth-largest user.
While the collapse in prices has created a buyers’ market and boosted India’s bargaining power amid an oversupply, low crude is “challenging” for the nation’s own oil fields, Dharmendra Pradhan said in an interview in New Delhi on Monday. The government’s priority is to protect the interest of consumers and simultaneously attract investments in domestic production activity, he said.
“Pricing affects the Indian market in both ways, because India meets 30 percent of its own capacity from its own oilfields,” Pradhan said. “Around $45-$50 is a very reasonable price where the exploration and production activities will not be affected and also will not pinch the common consumers in India.”
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Oil is trading near $40 a barrel, more than 50 percent lower from 2014 levels, after the U.S. shale boom led to a global glut that was exacerbated by OPEC’s strategy to maintain production and defend market share.
While the rout has reduced fuel prices in emerging economies such as India, it’s also driven companies from Chevron Corp. to BP Plc to cancel more than $100 billion in investments that the International Energy Agency says increases the possibility of oil-security surprises in the future. New Normal
Brent crude, the benchmark for more than half the world’s oil, traded at $40.08 a barrel by 10:40 a.m. Singapore time on the London-based ICE Futures Europe exchange. Front-month prices were at more than $115 a barrel in mid-2014.
“I’m appreciating that a new normal has arrived, these are rational prices,” Pradhan said. “Gradually there is a basic paradigm shift. It’s now a buyer’s market, so I have a much more bargaining power in a country like India, which is a huge emerging market.”
India is replacing China as the center of the world’s oil demand growth as its economy expands faster than any other major country and a growing middle class has more money to spend. The nation’s consumption grew by 300,000 barrels a day last year, double the average rate in the previous decade, according to a report by The Oxford Institute for Energy Studies this month.
India’s economy is estimated to grow 7.6 percent in the year ending this month, the highest among emerging markets. The Paris-based IEA estimates it will consume 4.2 million barrels a day of oil this year, surpassing Japan’s 4.1 million barrels. The South Asian nation briefly overtook Japan as the world’s third-biggest oil consumer in the second quarter of last year. Energy Investments
“We want to be self-sufficient and our Prime Minister has given us a target to reduce our oil-import dependency by 10 percent by 2022,” Pradhan said. “For more exploration activities, companies should get a reasonable price.”
India total domestic crude production in the 11 months from April 2015 to February this year was at about 30 million metric tons, the oil ministry’s Petroleum Planning and Analysis Cell said in areport last month. The nation depends on imports for more than 75 percent of its requirements.
On Monday, Indian Prime Minister Narendra Modi offered a wide-ranging rebuttal to critics who say he’s gotten lucky with low oil prices. Loan growth has picked up, corporate rating upgrades are now outpacing downgrades, foreign direct investment hit a record last year and some key manufacturing sectors such as carmakers are growing rapidly, Modi said at an event organized by Bloomberg LP in New Delhi. The focus is now on clean energy, farm incomes and creating jobs, he said.
Earlier in March, India announced steps to attract investment in the nation’s energy industry to help meet Modi’s goal of cutting dependence on imports. The measures will help unlock stranded resources worth $40 billion, Pradhan said.
“This kind of strategy will augment our existing production,” he said. “That will be sufficient and can reduce our import dependence by a sizable number in next five-six years.”
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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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
Mobile: +97150-4822502 [email protected] [email protected]
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 29 March 2016 K. Al Awadi
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 18
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 19