New base 571 special 30 march 2015

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

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NewBase 30 March 2015 - Issue No. 571 Khaled Al Awadi

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

SolarImpulse in way China Chongqing the 5th

destination www.solarimpulse.com/leg-5-from-Mandalay-to-Chongqing

On Sunday March 29th, Solar Impulse took off for its fifth flight from Mandalay (Myanmar) at 21:06 UTC, to Chongqing (China). Bertrand Piccard will fly the zero-fuel airplane on about 1375km (742NM) for an estimated time of 20 hours. An amazing opportunity to spread our message in Myanmar and China: the Future is Clean.

Leading global provider of elevators, escalators and related services, Schindler established China’s first industrial joint venture in 1980 and began operating as a Wholly Owned Foreign Enterprise (WOFE) in 2006. Schindler is pleased to accompany Solar Impulse in China, presenting the latest clean and green technology to the public, as well as Chinese developers, architects, urban designers and planners.

RESTING TIME

00:25 UTC

Bertrand Piccard has now been flying for 3h25 and has been using his oxygen mask for 30 minutes, since 23:56 UTC. He is now going to get some rest and activated the Stabilization Augmentation System (SAS) from Altran. The airplane is flying in daylight, and consequently there is light in the cockpit. Thus, Bertrand amusingly said to the Mission Engineers at the Mission Control Centre that he wished he had curtains. They then suggested that he builds some with paper.




UAE: NDC inaugurates its new jack-up rig, Butinah, built in the UAE WAM + NewBase

National Drilling Company, NDC, has marked the inauguration of its new modern offshore rig, "Butinah", at a ceremony held in the Hamriyah Free Zone in Sharjah. "Butinah" is the sixth rig in a series of eight similar units being acquired by NDC and manufactured in the UAE by Lamprell. Commenting on the inauguration during the ceremony held in the presence of Khamis bin Salem Al Suwaidi, Member of Sharjah Executive Council, Chairman of Department of Suburbs and Villages Affairs, NDC Chief Executive Officer, Abdalla Saeed Al Suwaidi, said, "A reliable,

modern rig fleet is essential to maintain NDC’s sustainable success, therefore, the company launched this strategic Offshore Rigs Acquisition Project to maintain the highest levels of reliability and availability, and ensure complete preparedness to meet the clients’ present needs and future requirements."

Mr. Al Suwaidi added, "This mega project has made success after success not only for the partners involved, but for the UAE in general. NDC's partnership with Lamprell to build offshore jack-up rigs in the UAE has made the country the first and only Middle Eastern country capable of building such critical engineering, high-tech oil and gas rigs.

The NDC CEO remarked that the company has doubled the number of

rigs from 28 to 65 today and recently began construction of 2 additional rigs. This makes a total of 8 offshore jack-up rigs worth AED5 billion, all manufactured in the UAE.

Mr. Al Suwaidi extended his sincere appreciation to ADNOC higher management and the NDC Board of Directors for their guidance and continuous support. He also thanked ADMA-OPCO for their cooperation and trust and Lamprell for their distinguished efforts.

Ali Al Jarwan, Chief Executive Officer of Abu Dhabi Marine Operating Company, ADMA-OPCO, said, "I’d like to congratulate NDC for achieving another milestone in their strategic expansion plans through inaugurating rig Butinah. This state-of-the-art rig, and the previous similar 5 rigs acquired by NDC, will contribute effectively in supporting our growth and helping ADMA-OPCO realise the targeted oil production levels, since we all in ADNOC Group work towards advancing the oil and gas industry in the UAE, sustaining a flourishing and sustainable national economy."

Jim Moffat, Chief Executive Officer of Lamprell, said, "The construction of these offshore rigs in the UAE is a great testament to the skills and abilities that exist in this great country. I thank NDC for their trust and faith in Lamprell in awarding us these projects, and as we deliver this rig to a high standard of quality, on schedule and cost effectively, we look forward to further successful ventures together in the future."




Oman Duqm Oil Terminal to be built in two stages Oman Observer + NewBase

A major Bulk Liquid Berths Terminal planned at the Port of Duqm will now be implemented in two stages, according to the Special Economic Zone Authority at Duqm (SEZAD), which is overseeing the development of a mega industrial and maritime hub on Oman’s Wusta coast. Envisioned in the first stage is a package of works encompassing reclamation and dredging, as well as the construction of the jetty and related marine facilities, to be executed on an engineering, procurement, and construction (EPC) basis.

The construction of topside facilities, including the installation of product storage tanks, dry bulk facilities, pipelines, buildings, road and other infrastructure, will be covered in the second stage, due to be tendered out later in the year. Accordingly, a tender notice inviting technically competent international engineering contractors to prequalify for the Duqm Liquid Berths Terminal Project has been revised by SEZAD. An earlier ‘Invitation to Prequalify’, issued by SEZAD in February, had envisaged the implementation of the entire liquid berths terminal project as one EPC package. Announcing the revised approach to the project, the Authority said: “The works shall be split into two packages: Package 1 for Dredging & Reclamation and Marine/Jetty structure; Package 2 for Topside Facilities including Tanks.” It further added: “The Special Economic Zone Authority at Duqm (SEZAD) is now seeking to engage an Engineering, Procurement and Construction (EPC) contractor for the first EPC package to carry out the detailed design (based on owner-provided front-end engineering design), procurement and construction of dredging, reclamation and jetty works for the new Bulk Liquid Berths Terminal in the Port of Duqm.




A second EPC Package for Topside Facilities is to be tendered separately by Duqm Petroleum Terminal Company (DPTC) in due course.” Bulk liquid terminaling and storage is a key component of the infrastructure being developed at Duqm Port to support the growth of a major liquids hub as part of the SEZ’s logistics offerings. A giant refinery and downstream petrochemicals cluster, coupled with a world-scale crude oil park planned at Ras Markaz just south of the SEZ, are part of the wider jigsaw underpinning the vision of a future liquids hub at Duqm. A dedicated area along the Northern Lee Breakwater has been earmarked for the development of a number of terminals designed to the handle the SEZ’s substantial component of liquid cargoes. International engineering consultancy services firm WorleyParsons is currently undertaking the front-end engineering design (FEED) of the Bulk Liquid Berths project, at the heart of which is a refinery products terminal with six liquid berths, and a Pet Coke berth. The first of these terminals will be built on behalf of Duqm Petroleum Terminal Company (DPTC), which is a partnership of Oman Oil Company (90 per cent) and Port of Duqm (10 per cent). DPTC’s facilities will handle all of the volumes flowing into and out of the refinery, as well as other related petrochemical investments at the SEZ. The company intends to build a 1 million cubic metres tank storage terminal to support the jetty’s operations at the Port of Duqm. SEZAD has set May 4, 2015 as the deadline for the submission of prequalification criteria by interested contractors interested in bidding for the Package 1 works. An Invitation to Tender (ITT) will be issued to the prequalified bidders in Q3 2015, with a contract slated for award before the end of the year. Package 1 works are planned for completion in Q3 2018, ahead of the scheduled start-up of Duqm Refinery in 2019.




Kuwait Allocates More Than $3 Bn for LNG Project KUNA + NewBase

The Kuwait National Petroleum Company (KNPC) has sanctioned one billion Kuwaiti Dinar ($3.3

bn) for a LNG project, Kuwait News Agency (KUNA) reported Sunday. Implementation of the project is to start by end of 2015, Hatem Al-Awadi, Deputy CEO for Projects at the KNPC, told reporters on the sidelines of Kuwait's Third Enterprise Risk Management conference. According to EIA, Kuwait has increased the share of natural gas in its primary energy consumption from 34 percent in 2009 to 42 percent in 2012, while the remaining share, consisting solely of petroleum and other liquids, has declined. Kuwait began importing LNG in 2009 through a floating terminal at Mina al-Ahmadi, to meet rising gas demand, mostly for power and water desalination.

According to KNPC website, it plans to provide long term facilities such as LNG receiving, re-gassation and storage tanks for receiving supplies of the fuel to supply feed to the power generation plants in the country during period of peak electricity demand.

Last year in March, Foster Wheeler AG was awarded the pre-front-end engineering design and the front-end engineering design contract by KNPC for a new onshore LNG import and regasification terminal.

The new terminal will have a design send-out capacity of approximately 1,500 million standard cubic feet per day (MMscf/d) of gas, with four full-containment LNG storage tanks, each of 180,000 cubic meters. The design will also allow for future expansion(s) up to 3,000 MMscf/d and the installation of a further four LNG storage tanks of the same capacity as the initial four tanks.

KNPC plans to start commercial operation of the terminal in 2020, Foster Wheeler said last year.




US: Shell moves rigs to Alaska ahead of possible drilling permit Source: Reuters

Royal Dutch Shell is moving oil rigs to Alaska ahead of the possible resumption of controversial drilling activities as the oil major awaits the green light from U.S. authorities. The Anglo-Dutch oil major hopes to revive its Arctic drilling programme two years after the

grounding of a rig in Alaska that led to a huge uproar from environmental groups. But even before getting the go-ahead from the U.S. interior secretary, Shell is moving the drilling rigs Noble Discoverer and Polar Pioneer to the area in anticipation of the short operations window in summer.

The vessel are 'heading to North America ahead of a potential 2015 drilling season,' a Shell spokeswoman told Reuters. 'Any final decision to go forward with a 2015 season will depend on successful permitting, clearing any legal obstacles and our own assessment that we are prepared to explore safely and successfully. This is a multi-year program, and every step we take will be contingent on meeting all the conditions necessary to

proceed safely and responsibly,' the spokeswoman added.

Shell Chief Executive Ben van Beurden said in January he wanted to return to the Arctic this summer after Shell had already spent $1 billion on preparations. Maintaining equipment and staff in the region costs Shell several hundred million dollars a year even without progressing with drilling, Chief Financial Officer Simon Henry said. Environmental organisations have fiercely opposed drilling in the area.

Polar Pioneer (Transocean)




U.S. offshore rig count heading down

Baker Hughes has reported in its Weekly Rig Count reports that, after a significant drop last week, the U.S. offshore rig count is still heading down.

The U.S. Offshore rig count is 34, down 3 rigs from last week, and down 16 rigs year over year.

U.S. Rig Count is down 21 rigs from last week to 1048, with oil rigs down 12 to 813, gas rigs down 9 to 233, and miscellaneous rigs unchanged at 2.

U.S. Rig Count is down 761 rigs from last year at 1809, with oil rigs down 674, gas rigs down 85, and miscellaneous rigs down 2.

BHI Rig Count: Canada -20 to 120 rigs

Canadian Rig Count is down 20 rigs from last week to 120, with oil rigs down 12 to 18, and gas

rigs down 8 to 102. Canadian Rig Count is down 178 rigs from last year at 298, with oil rigs down 137, and gas rigs down.




Oil Price Drop Special Coverage

Oil prices fall as Iran, world powers seek nuke deal Reuters + NewBase

Oil prices fell today Monday, extending steep losses from the previous session, as Iran and six world powers tried to reach a deal that could add oil to the market if sanctions against Tehran are lifted. The two sides tried to break an impasse in nuclear negotiations on Sunday ahead of a deadline to find a preliminary agreement by Tuesday, exploring compromises in a number of areas. Benchmark Brent crude futures had dropped to $56.04 by 0320 GMT, down 37 cents after falling 5 per cent on Friday as the market began to price in the possibility of a deal with Iran. Front-month US West Texas Intermediate (WTI) futures were down 76 cents to $48.11 a barrel. "Any relaxation of Iran oil sanctions could see increased exports adding to swelling global supplies and further pressuring prices," ANZ bank said on Monday. Singapore-based brokerage Phillip Futures said that it expected oil prices to fall further in the second quarter, which begins in April. "We expect Brent and WTI to bottom out at $50-53 and $46-48 respectively," it said, adding that strong US output, a return of Libyan production and weak economic data, especially from Japan and China, could further delay rising prices.




Morgan Stanley said that the crude demand outlook would also be dented via the refinery sector, where production tends to fall towards the middle of the year. "By summer, high (refinery) runs and seasonally weak product demand could lift product stocks and weigh on demand and prices," it said In the United states, the oil rig count continued to fall as producers adjust to lower prices, although analysts said that lower drilling activity would only affect oil production later this year. "The current rig count is pointing to US production declining slightly sequentially in 2Q15 and 3Q15," Goldman Sachs said. Yet Goldman said that drilling could bounce back in 2016. "US producers are preparing to ramp up activity later this year by successfully raising equity and building an uncompleted well war chest. Coupled with the large availability of external capital, this leaves risk to our $65 per barrel 2016 forecast skewed to the downside as these assets will quickly be deployed in a lower cost environment," the bank said. Energy consultancy Wood Mackenzie said exploration costs were set to fall by a third and that 2016 could see drilling activity bounce back to 2014 levels.




Crazy world of oil fall theories where studying the problem can alter its outcome Robin Mills ,Head of Consulting at Manaar Energy

)

“Your theory is crazy, but not crazy enough to be true”, as quantum physicist Niels Bohr said. The fall in oil prices has spawned numerous theories, some crazier than others, about how US shale oil will react and what, if anything, Opec should do in response.

One school of thought is that lower prices are already having an effect on shale oil production in the United States, and that production will begin to fall, perhaps by the end of the year. Evidence includes the bankruptcy of companies such as producer Quicksilver Resources last Tuesday, and the continuing fall in US drilling rig counts, now down 761 from last year’s 1809 rigs.

On what happens beyond this point, opinions diverge. Long-term shale pessimists believe the bubble has now burst. An overleveraged sector will collapse and prices will rise much higher – the oft-foretold oil crisis just deferred by shale, not put off forever.

Others, perhaps more numerous, have their crazy theory. They think this is the dawn of an entirely new era for oil prices: where shale oil production can be turned on or off in a matter of months, depending on prices. Shale oil wells can be drilled and completed quickly, but their production also declines fast, so continuous drilling is necessary to maintain output.




This is quite different from traditional fields, such as in the Middle East or North Sea, which take years to develop but have low operating costs and continue cranking out barrels even when prices collapse. In this theory, the US has replaced Saudi Arabia as the “swing producer”, able to vary production within months to rebalance the market.

Of course, this is not intentional but the accidental effect of thousands of companies responding individually to the dictates of the market. In this view, the oil market would come to behave more like the US gas market, with prices oscillating on a timescale of a few months, rather than years, around some moderate equilibrium level.

It is hard to say what that equilibrium is – a range of $60 to $80 per barrel might appear reasonable, with oil services companies surveyed by Nomura expecting prices at $75 per barrel by March next year. At that price, global oil demand would rise moderately, shale oil production would grow at a more measured pace, and there would be room for Opec output also to rise.

But this opens proponents to Mr Bohr’s accusation that, “You’re not thinking, you’re just being logical”. Another school of thought, for example Ed Morse’s at Citigroup, suggests that US prices could go as low as $20 per barrel, as storage fills to the brim. The US’s ban on most crude oil exports leads to a growing divergence with international prices. on Friday, the US’s West Texas Intermediate was at $48.87 per barrel, the North Sea’s Brent at $56.41.

Oil service costs have already fallen 20 to 25 per cent, drilling efficiency continues to increase, much basic infrastructure such as pipelines is already built, decline rates have been slowed by new technology, and a backlog of new wells are just waiting for higher prices to be hooked up. Shales that needed $80 per barrel prices last year may now be viable at $60 or less.

Private equity giants such as Blackstone, KKR, Carlyle and Apollo are raising billions of dollars to invest in distressed oil company debt and equity. Companies such as Encana and Noble Energy raised $8 billion of new equity in the first quarter of this year, to fund continued drilling or the acquisition of weaker competitors.

So the world of shale oil may obey one of the principles of quantum physics – the mere act of observing it changes the situation. If companies and investors believe oil prices are going higher, they can raise money to continue drilling – and thereby prolong the price slump.

With oil prices low, Advanced drillships a burden for owners Reuters + NewBase

Not so long ago, advanced drillships costing more than half a billion dollars each and capable of operating in ever-deeper waters practically guaranteed big profits for oil-rig operators. Now, with oil prices down by half since June, many have become a burden on their owners as drilling activity slows.

Drillship operators face a more brutal hit to margins than they did after the oil-price crash of 2008 because of the huge cost of maintaining the more than $10 billion worth of state-of-the-art vessels that have been idled at sea, analysts say.

Noble Corporation, Ensco and Transocean are among companies that have invested in advanced rigs which,




unlike older jack-up rigs that attach to the ocean floor, rely on dynamic positioning systems using thrusters to keep them in position.

And it's these thrusters that are the problem. They need to be removed to allow the rig to be parked in the shallower waters of most harbours - a costly and difficult process. This means that in most cases, owners need to keep rigs at sea with a crew and the thrusters running even when there's no work.

Maintaining an idle dynamic-positioning rig costs up to $200,000 a day at sea, compared with less than $100,000 for older rigs that can be towed to port, according to industry estimates.

Noble has retired one rig with a dynamic positioning system, which was built in 1981 and last upgraded in 2006. The cost of repairs and maintenance "did not make sense," spokesman John Breed said, citing the rig's age and limited technology.

As overhead costs rise and work becomes scarce, margins are shrinking.

Diamond Offshore's net margins, for example, are expected to shrink to 8.6 per cent this year and 4.8 percent in 2016, according to Deutsche Bank. That compares with about 37 per cent in 2008 and 2009.

The drop could be just as dramatic for Noble, Transocean and Atwood Oceanics, according to Reuters

calculations. Atwood, though, could be better positioned than its rivals, and may be the only major offshore driller to post a higher net profit this year, according to Thomson Reuters.

With more than half its drillships built in the last five years, the company has one of the most efficient fleets in the industry. Still, Atwood has delayed the delivery of two rigs because it is cheaper to pay parking fees at shipyards than to pay for maintenance on uncontracted rigs.

The company will pay between $15,000 and $50,000 per day to maintain these rigs, chief financial officer Mark Mey said. Currently, 192 rigs around the world are equipped with dynamic positioning systems, compared with 71 at the start of 2009, according to Evercore ISI analyst James West.

Of these, about 26 have been idled at sea or shut down altogether. Eight are owned by Transocean and five by Ensco, while Diamond Offshore Drilling and Noble each have two out of work. "Expect more delays in rig deliveries and continued rig stacking, compounding already falling margins," said David Zusman, chief investment officer at Talara Capital Management.




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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.

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

NewBase 30 March 2015 K. Al Awadi







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New base 571 special 30 march 2015