New base 485 special 24 november 2014

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NewBase 24 November 2014 - Issue No. 485 Khaled Al Awadi

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

MENA to spend $300b on water desalination projects by ’22 Saudi Gazette + NewBase

Middle East and North African governments are expected to spend an estimated $300 billion on water and desalination projects by 2022, underscoring the importance of January 2015’s International Water Summit (IWS) when more than 70 global experts will address key water sustainability and security challenges in the region.

Hosted by Masdar, IWS is supported by Abu Dhabi Water & Electricity Authority (ADWEA), the Environment Agency of Abu Dhabi, the Regulation and Supervision Bureau (RSB), and Abu Dhabi Sewerage Services Company. The exhibition and conference will take place on Jan. 19-22 during Abu Dhabi Sustainability Week (ADSW), scheduled for Jan. 17-24.

ADSW also features the World Future Energy Summit, EcoWaste and the Zayed Future Energy Prize Awards. Entitled ‘Promoting Water Sustainability in Arid Regions,’ the IWS conference (Jan. 20-22) will examine the water-energy nexus and its long-term implications on regional and global food security. The projected spending is based on data from Research and Markets. “With Abu Dhabi’s population and economy forecast to grow steadily over the coming years, harmonizing strategies that support the sustainable supply of potable water is of key importance to that growth,” said Rashed Al Rashdi, deputy director general at Abu Dhabi’s Regulation and Supervision Bureau, a partner of IWS. “The International Water Summit is a prime opportunity to share global best practices, and promote collaborative efforts towards conserving precious resources for future generations and ensuring water is available to support future economic prosperity and social development.” Al Rashdi added.




Next year marks the end of the UN’s “Decade for Action on Water Scarcity,” an initiative designed to promote efforts to fulfil international commitments – known as the Millennium Declaration – made toward water and water-related issues.

Ahead of the summit Faraj El-Awar, Program Manager of UN Habitat’s Global Water Operators Partnerships Alliance and participant at the IWS conference said: “Water is perhaps the most complex of the three major resource challenges because it is seen as a free resource and declared by the UN General assembly in 2010 as a human right. Yet the reality in arid regions is that it is a scarce and incredibly precious resource. This must be reflected through robust policies, integrated strategies and sustained investment, particularly as populations grow. “The GCC region’s unique climate conditions and resource challenges mean it cannot address its water issues in isolation,” El-Awar further said. “Water’s relationship with energy and food is critical. At a time when action is necessary, the International Water Summit unites leading thinkers, the scientific community and industry players to advance viable solutions.” “Nothing is more important to the region’s social and economic future than securing water resources,” El-Awar, “so demand management must be the main focus of regional and global leaders when they meet in Abu Dhabi.”




Saudi business optimism improves on strong GDP Saudi Gazette + NewBase

Saudi business optimism in both the hydrocarbon and non-hydrocarbon sectors have brightened up in the fourth quarter of 2014 from the previous quarter, fueled, among others, by expectations that the Saudi GDP will grow 4.6 percent this year despite weakening of oil markets since mid-year 2014.

The Saudi Business Optimism Index (BOI) survey for Q4 2014 released on Sunday by the National Commercial Bank (NCB), in association with the Dun & Bradstreet South Asia Middle East Ltd (D&B), showed strengthening of sentiments in the Saudi oil & gas sector, with the composite index pegged at 34 in Q4, 2014, or 9 points higher on a q-o-q basis and 4 points higher on a y-o-y basis. The BOI for selling prices has firmed up by 5 points to reach 18 in Q4, 2014, with 23 percent of the participants expecting an increase, partly to offset higher raw materials prices and partly due to anticipation of new projects. The BOI for net profits has jumped to 68 in Q4, 2014 from 35 in Q3, 2014 and has touched the highest level in the series. Respondents in the oil and gas sector are very optimistic on winning new projects and orders during the fourth quarter. The hiring outlook, however, does not reflect the strength in profitability, the BOI for number of employees has decreased from 40 in Q3, 2014 to 32 in Q4, 2014. Similar to the previous quarter, competition (14%), government rules & regulations (9%) and the lack of skilled labor (7%) remain the topmost concerns of the sector in the current quarter. The non-hydrocarbon sector firms expressed more confidence about the fourth quarter of 2014 compared to the previous quarter, but less optimistic when compared y-o-y. The composite BOI stands at 47 in Q4, 2014, 11 points higher than the index in Q3, 2014, but 7 points lower than in




Q4, 2013. The rise in optimism is due to expectations of getting new projects/contracts and rising demand in the economy. However, employment-wise, the sector lowered its forecast by 6 points to stand at 38 in Q4, 2014.

Commenting on the findings of the survey, Sharihan Almanzalawi, NCB economist, said “reflecting their confidence in the robustness of the Kingdom’s economy, 53% of the companies surveyed in the non-hydrocarbon sector plan on investing in expansionary activities, with the sentiment in the construction sector taking the lead as 63% of the respondents in this sector plan to undertake expansion activities.” Prashant Kumar, Associate Director,

Dun and Bradstreet South Asia Middle East Ltd. added: “Reversing last quarter’s trend, sentiments in both the hydrocarbon and non-hydrocarbon sectors have strengthened. The BOI for the non-hydrocarbon sector has gained 11 points to 47, amid optimism in most of its index constituents, due to expectations of getting new projects/contracts and rising demand in the economy. Meanwhile, the composite BOI of the hydrocarbon sector stands at 34 in Q4, 2014, 9 points higher on a q-o-q basis and 4 points higher on a y-o-y basis. The BOI for the net profit parameter which jumped to 68 in the current quarter from 35 in Q3, 2014, not only backed the main hydrocarbon composite score but was at its highest level in the series.”

Sector-wise, the construction sector has showed a stronger outlook in the current quarter compared to Q3, 2014, with a higher proportion (63%) willing to invest in business expansions compared to 51% in Q3, 2014. Sentiments of the trade and hospitality firms rebounded as the composite BOI gained 25 points to stand at 53 in Q4, 2014. The rise in the overall optimism is reflected in the stronger outlook with respect to the business

environment as 63% of the firms have indicated that they will not face any hindrances to their operations in Q4, 2014 compared to 55% in Q3, 2014. 56% of the firms plan to invest in business expansion in Q4, 2014 compared to 42% in Q3, 2014.




Global development of district cooling tops agenda of 6th IDEA International

District Cooling Conference 2014. Empower.ae + NewBase

Emirates Central Cooling Systems Corporation (Empower) announced today that the future of district cooling sector in the world will top the agenda of the 6th IDEA International District Cooling Conference 2014, by the International District Energy Association (IDEA), under the patronage of H.H Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Supreme Council of Energy and Chairman and Chief Executive Emirates Airline & Group and hosted by Empower.

Ahmad bin Shafar, CEO of Empower said "The international conference will address the ideal environment-friendly cooling solutions, as district cooling was introduced as an alternative to conventional cooling systems that consume more energy resources.

"What is unique about district cooling is that it gives benefit to the end user, society, economy and environment, while providing eco-friendly cooling services with less wastage of natural resources. Empower is at the forefront of district cooling companies in the world in terms of adopting global technology-based optical wire networks to control chilled water and reducing significantly water consumption. We will highlight our expertise in this area before the conferees." The conference will focus on developing solutions related to preserving water resources used in district cooling operations. Empower has made significant strides by adopting treated Sewage Effluent (TSE) technology coupled with the reverse osmosis technology, to be used in cooling stations.

"We work in accordance with the Government of Dubai instructions to phase out the use of potable and fresh water in cooling processes and develop innovative ways to conserve water. We will demonstrate this for other companies of the world during the conference. We believe that we have a global community responsibility, being the largest district cooling company in the world. Hosting this international conference in Dubai is our contribution to developing the sector as a whole around the world." District cooling systems provide more effective and efficient means than traditional air cooling systems. At district cooling water is cooled in the central stations and then distributed through pipelines to customers' premises, which reduces energy consumption and preserves natural resources.

Empower has had a strong reputation in launching green initiatives since the launch of the company in 2003 to promote green economy in the UAE and protect environmental resources.

The conference, and accompanying exhibition, will review effective solutions to enhance the productivity of cooling stations, to achieve positive results for district cooling companies as well as building owners and end-consumers alike.

Earlier this year, Empower revealed a unique global control centre in order to monitor all its 57 plants in Dubai through it. This represents the first investment of its kind in the world by providing more than 1 million parameters tags to track and manage all operational aspects of district cooling services.




UAE serious about green economy, says UN official The National + NewBase ABU DHABI // The UAE is taking seriously the transition to a greener economy by setting targets to increase the use of renewable energy, said a spokesperson for the United Nations Development Programme.

Helen Clark, a UN undersecretary general and administrator for UNDP, said the UAE had made great progress in this area, including having sustainable plans for Expo2020 and the building of

Masdar City.

“We have been associated with the Green

Economy Conference in Dubai, the Carbon Centre of

Excellence, Carbon

Ambassadors, and many other initiatives, and I hope we can keep the strong

collaboration going,” she said in an interview with state news

agency Wam on Sunday, on the eve of the publication of the UAE State of Energy Report.

“I really welcome the fact that the World Energy Congress will be held here in five years’ time.

“I think it is also a chance for the UAE to demonstrate again its interest in a wide range of energy sources,” said Ms Clark. As for the global situation, she said the overall objective for the UN was to pass the new climate-change deal in Paris at the end of next year.

“The goal is to try to reach an agreement which would stop global warming going over 2°C,” she said. The UN Environment Programme has just published its analysis of how to achieve this.

“The analysis does not include the recent announcement by China and the United States in addressing their greenhouse gas emissions over the coming decades, which is significant, but there is still the need to raise ambitions on lowering the greenhouse gas footprint,” said Ms Clark.

An agreement was made at the recent G20 Summit in Brisbane to reduce emissions in the coming years. Ms Clark said the G20 economies needed to move decisively. “The announcements by president Barack Obama and Chinese president Xi Jinping are very significant because they say that these two great countries are not in denial about climate change.

“They are saying we recognise the significance of this challenge and we want our countries to play their part in tackling it.”




Saudi petrochem projects worth $60b in the pipeline The Middle East Business Intelligence, lists 26 projects worth $15 billion underway in the Saudi petrochemical sector, while another $46 billion worth projects are under planning stage. The plastic industry, on the other hand, is being developed to support economic diversification away from hydrocarbons. To complement the ongoing development, Saudi Plastics and Petrochem 2015, the 12th International Plastics and Petrochemicals Trade Fair, offers a perfect platform to plastic and petrochemical industries to showcase the latest technologies, products and services to a dynamic local, regional and international audience. The Western Region is home to almost one-third of country’s plastic and petrochemical industries and boast of more than 50 per cent of both sectors’ production in addition to being the most populated region in the country with major ports and commercial centers. With such in-depth economic viability, Riyadh Exhibitions Company organizes Saudi Plastics and Petrochem 2015 for the first time in Jeddah to offer a deeper insight about the state-of-the-art plastics and petrochemical machinery and solutions, learn about the current industry trends and developments, and network with industry professionals. To be held on March 1 to 3, 2015 at the Jeddah Center for Forum and Events, Saudi Plastics and Petrochem 2015 will be held concurrently with Saudi Print and Pack 2015, the 12th International Trade Exhibition for Printing and Packaging Technologies, to facilitate the outstanding growth witnessed by the western region in the industrial sector. Furthermore, organizers have confirmed the participation of Petro Rabigh as a Golden Sponsor. During its last edition, Saudi Plastics & Petrochem and Saudi Print & Pack hosted over 512 exhibitors from 26 countries with 10 international pavilions and showcased innovative products and solutions over sqm 15,000 of exhibition space. The show recorded a footfall of more than 21,000 visitors who immensely benefitted from the trade fair.




EIA releases new online tool to track crude oil imports

Source: U.S. Energy Information Administration

EIA's recently released U.S. Crude Oil Import Tracking Tool, designed to analyze crude oil imports in response to growing domestic production, allows users to sort and display imports by month or year, density (i.e., light, medium, heavy), country of origin, port of entry, processing company, processing refinery, and more. The tool features graphing and mapping capabilities and a built-in help function.

Recent and anticipated increases in domestic crude production have sparked discussion about how rising crude oil volumes will be absorbed. To date, increased production has displaced some imported crude oil, which has fallen from 8.9 million barrels per day (bbl/d) in 2011 to 7.5 million bbl/d in August 2014. EIA's import tool sheds light on the changes to imports in

response to growing production of crude oil within the United States. The new tool was launched on EIA's beta site to solicit customer feedback, which will be incorporated into the final release.

EIA also released a report containing sample applications of the new tool. The sample applications were selected to illustrate the tool's capabilities to access information from EIA's monthly company-level import database for different time periods, regions, companies, and crude oil qualities. Selected insights include changes in the following trends:

- Volume and quality of U.S. crude oil imports. U.S. crude oil imports have declined since 2010, with nearly the entire decline occurring in light sweet grades. Through August 2014, U.S. light crude imports have fallen 71% compared to the level in 2010.

- Source of U.S. crude oil imports. Imports of light crude from Africa, particularly from Nigeria and Algeria, have declined by 93% since 2010.

- Light crude oil imports by region. The largest decline in crude oil imports occurred on the Gulf Coast (Petroleum Administration for Defense District, or PADD, 3), which were down 94% since 2010. Light crude oil imports by East Coast (PADD 1) refiners were down 69%, reflecting both their increased use of domestic crudes and modestly lower refinery runs.

- Refinery-level trends in light crude imports. Imports by the 10 largest refineries using imported light crude in 2013 accounted for 55% of total U.S. light crude imports, with the remaining 45% distributed among more than 100 other refineries. The largest source for light crude imports among this group of 10 refineries was Canada, followed by Nigeria and Mexico.

- Refinery-level trends in imports other than light sweet crude. There is evidence that some refineries have recently reduced imports of medium and heavy grades of crude oil to increasing production of domestic light oil. Other refiners have made changes in processing equipment to accommodate heavier crudes and have increased their imports of heavier crudes.




ExxonMobil in talks over Ivory Coast offshore blocks Reuters + NewBase

Ivory Coast is working to wrap up Production Sharing Contracts for two offshore blocks with the U.S. oil company Exxon Mobil.

According to Reuters, the West African country’s energy ministry official said that the two PSCs for the blocks in the Gulf of Guinea are expected to be agreed upon in January 2015.

Ibrahima Diaby, director of hydrocarbons at the country’s energy ministry told Reuters: “A memorandum of understanding was signed for the two ultra-deep blocks and negotiations for the production sharing agreements are very advanced.”

The nation, a modest oil producer, is hoping to unlock and develop its offshore oil and gas reserves, in an aim to reduce its dependence on a single commodity, cocoa, and boost its oil production.

According to the Extractive Industries Transparency Initiative (EITI) cocoa in 2012 accounted for 28.5 % of total exports

In Ivory Coast the state participates in the oil industry and supervises it through the state-owned company Petroci and its partly privately owned subsidiaries. The country produces 38,560 barrels of oil per day, according to data from 2012.




Nigeria: Russia's Lukoil to invest in Nigerian project with Chevron Source: Reuters + NewBase

Russia's second-largest oil company, privately controlled Lukoil, said on Friday it planned to invest in Nigeria with U.S. oil major Chevron Corp; part of its push to seek opportunities away from Russia's state-dominated oil sector. 'We have decided to enter a joint block with Chevron in a project in Nigeria, which we consider to be promising,' Chief Executive Vagit Alekperov told reporters in Moscow. He declined to name the project and provided no detail.

According to Chevron's website, the Aparo field and the third-party-owned Bonga SW field in Nigeria share a common geologic structure. It plans joint development for both.

Lukoil, controlled by Alekperov and his deputy, Leonid Fedun, has been expanding its operations overseas. Making that harder, however, the United States put Lukoil and some other Russian oil firms on a sanctions list in September, over Russia's role in the Ukraine crisis. That effectively froze access to foreign technology and banned Western firms from cooperating in the Arctic, shale or deep-water drilling.

Lukoil hopes to double its oil output outside of Russia thanks to its most ambitious project, West Qurna-2, in Iraq. It also works in Western Africa. Alekperov also said Lukoil expects dividend payments next year to be at the same level as in 2014, while its investment programme will be cut by $2 billion to $14 billion. Major oil companies have trimmed spending as oil prices drop.




Oil Price Drop Special Coverage

Opec divided on oil output before crucial meeting AFP + Gulf News + NewBase

London: The Opec oil producers cartel will hold one of its toughest and most significant meetings in recent years as, faced with sliding prices, its members must contemplate whether to cut output.

Ahead of Thursday’s meeting of the Organisation of Petroleum Exporting Countries in Vienna, home to the cartel’s headquarters, its dozen member countries are split on what direction to take after a 30 per cent drop in crude prices since June has slashed revenues.

OPEC’s poorer members, led by Venezuela and Ecuador, have called publicly for a cut in output, while Iran has hinted at a need to reduce production. But the cartel’s Gulf members, led by kingpin Saudi Arabia, are rejecting calls to pump out less oil unless they are guaranteed market share in the highly competitive arena, according to analysts.

Separately, Russia — which is not a member of Opec but is nevertheless a major crude producer — declared Friday that it was considering cutting its oil production in a bid to revive falling prices.Opec produces about one third of global crude at more than 30 million barrels per day.

According to the International Energy Agency, which advises on energy policy, Opec pumped out 30.6 million barrels per day in October — above its 30 million bpd target.

“The next meeting of the Organisation of Petroleum Exporting Countries ... should be the most interesting since the change from individual quotas to a group target in early 2012,” said Tom Pugh, an analyst at Capital Economics research group.

“The key driver [behind tumbling prices] has been increasing supply, although other triggers for Brent’s slump from $115 in June have included weak demand, particularly from Europe and China, and the strength of the US dollar. The decline has probably also been compounded by panic selling by producers and investors.”

On Friday, the price of benchmark Brent North crude oil traded at $79.56 a barrel. Rather than cut its official output ceiling, Opec could decide to reduce the amount it is overproducing. “The minimum consensus that appears likely to be reached at OPEC’s meeting is a commitment to better comply with the official production target of 30 million barrels per day,” Commerzbank analysts said in a note to clients.

Increasing competition

Ahead of the meeting, the world’s top oil producer Saudi Arabia has cut what it charges US customers, in a move seen aimed at maintaining its market share as it is faced with increasing competition from oil extracted from shale rock in the United States.

Pugh said that “any cut in the cartel’s production target will simply be as a response to lower demand for its oil, rather than a concerted attempt to push up prices”.

Faced with surging US output — crude production in the world’s biggest economy is set to hit a 45-year high of 9.5 million barrels a day in 2015 — Venezuela has called for a meeting of Opec and non-OPEC countries to address the slide in oil prices.




Venezuela depends on crude exports for 96 per cent of its foreign currency, and the price crunch has added to the headaches of a government struggling to halt rampant inflation and ease severe shortages of food and medicine.

“What is for certain is that the price is currently trying to find a new equilibrium after a number of years with crude oil trading above 100 dollars,” said Saxo Bank analyst Ole Hansen.

“High prices were primarily driven by a rapid increase in demand from emerging economies and as a result of high prices we saw the emergence of new sources of supply, not least shale oil.”

OPEC panel reviews oil outlook in a start to talks on oversupply Source: Reuters

A panel of national representatives reviewedOPEC's oil market outlook for 2015 last week, OPEC sources said, preparing the ground for a policy-setting meeting this week that will decide how to address a looming oversupply of crude.

The Economic Commission Board concluded a two-day meeting in Vienna on Friday ahead of the gathering of the group's oil ministers on Nov. 27. It does not recommend policy to the ministers. The panel reviewed the supply and demand forecasts published in the oil exporter group's monthly market report, which predicted lower demand for OPEC crude in 2015 and oversupply in the market if OPEC maintains its current output. 'It was a general discussion on the 2015 outlook,' one of the OPEC sources said.

Oil prices have fallen by 30 percent since June to around $80 a barrel, alarming some OPEC members. But an agreement on a cut in the group's output at next week's meeting is by no means certain, not least because top exporter Saudi Arabia has yet to say whether it supports one. Delegates expect a difficult meeting, and analysts are split over the outcome. 'This meeting will be probably one of the toughest ever,' one delegate said.

OPEC's latest oil market report, published on Nov. 12, forecast that demand for OPEC crude next year would fall far below its current output because of the U.S. shale boom. It pointed to a supply surplus of 1.8 million barrels per day (bpd) in the first half of 2015 if OPEC keeps output at the October rate of 30.25 million bpd. It estimated demand for OPEC crude averaging 28.45 million bpd. Two OPEC officials, Libya's OPEC governor and another delegate who declined to be named, earlier told Reuters the 2015 outlook indicates OPEC needs to cut output, giving figures between 500,000 bpd and 1 million bpd.





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Khaled Malallah Al Awadi, Energy Consultant MSc. & BSc. Mechanical Engineering (HON), USA ASME member since 1995 Emarat member since 1990

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 24 November 2014 K. Al Awadi




Economy & Finance

New base 485 special 24 november 2014