New base 528 special 28 january 2015

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NewBase 28 January 2015 - Issue No. 528 Khaled Al Awadi

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

UAE oil and gas sector feels jobs pinch Anthony McAuley The National + NewBase

The UAE’s oil and gas sector is feeling the squeeze from the record drop in oil prices in recent months, according to a new survey by one of the country’s largest employment consultants.

The weak jobs market in the hydrocarbon sector runs counter to the broader trend in the survey, which was conducted by Abu Dhabi-based Reach Employment, a division of the private equity firm Gulf Capital.

It found the vast majority of the 200 companies it polled were expecting to add jobs in 2015. Financial services, retail, tourism and health care were the hottest sectors and 91 per cent of those polled said they expected to hire new staff.

“However, within the oil and gas sector, the market has certainly softened,” said Andrew Croft, Reach Employment’s deputy chief executive. “In the last six months, with the reduction in oil prices and revenues and the headwinds the sector has faced, we estimate that hiring for non-critical roles is down by about 30 per cent.”

The “non-critical” roles would include head office support jobs, such as human resources and general administration. The market for “mission critical” jobs, such as onsite health and safety managers, engineers, project managers and drilling operators, has also softened, but only by about 5 per cent, Mr Croft reckons.




There is little likelihood that the sector will also contract sharply.

The Minister of Energy Suhail Al Mazrouei has repeatedly said that despite the 60 per cent drop in oil prices, the UAE will forge ahead with a large number of oil and gas projects aimed at boosting oil production capacity from a current level of just under 3 million barrels per day to 3.5 million bpd

by 2017, while also improving the country’s ability to be self-sufficient in natural gas.

The UAE is also expanding its refining capacity. The US$10 billion expansion of the government-owned refining company Takreer’s plant at Ruwais, located about 240 kilometres west of Abu Dhabi, is aimed at doubling capacity to more than 820,000 bpd. It is expected to deliver its first refined products in March.

Abu Dhabi’s International Petroleum Investment Company, or Ipic, is slated to add a refinery at the Indian Ocean port city of Fujairah, with capacity of 200,000 bpd. Engineering and construction tenders for the plant are due at the end of March.

Still, companies in the sector are looking to tighten their belts while facing oil prices that may not recover for some time. A noticeable trend in cost-cutting is outsourcing, according to Mr Croft.

“Companies don’t want to take on additional headcount and some have headcount freezes in place, so they are looking to outsourcing companies to provide staff,” he said. The experience at individual companies depends on their projects.

Those that were part of the consortium whose onshore concession expired at the end of 2013 – the Adco companies, BP, ExxonMobil, Royal Dutch/Shell and Total – all had their staff numbers in the UAE contract, although they may have compensated for it since.

BP, for example, has its staff levels back to where they were before the concession expired because of expansion of its work with Adma-Opco, the offshore operator in Abu Dhabi, according to Reem Mohammed, a spokesperson for BP in Abu Dhabi.

The new Adco concession has still not been awarded, more than a year after expiry of the previous one, and whichever companies are finally tapped will be expanding their operations staff.




Qafac to launch world’s largest CO2 capture facility on Feb.2015 Gulf Times + NewBase

Qatar Fuel Additives Company (Qafac) will formally launch the world’s largest commercial-scale carbon dioxide (CO2) capture facility on February 9. The state-of-the-art plant in Mesaieed is capable of recovering and reprocessing about 500 tonnes of carbon dioxide a day, which will be a major “environmental achievement” for Qatar’s energy sector.

The facility will capture carbon dioxide from combustion exhaust gas emitted from the methanol reformer process, and inject it into its existing methanol plant to enhance the production capacity. As a result, the plant will reprocess the equivalent of CO2 emitted from 32,000 cars a year, on a daily basis. HE the Minister of Energy and Industry, Dr Mohamed bin Saleh al-Sada, and Qafac chairman Hamad Rashid al-Mohannadi will be among the dignitaries who will attend the celebrations marking the formal launch of the Qafac facility at Katara Village on February 9.

On the significant milestone, Qafac chief executive officer Nasser Jeham al-Kuwari said: “We remain steadfast in achieving the sustainable development goals as outlined in the Qatar’s National Vision 2030 (QNV 2030) and Qatar’s National Development Strategy.

“Through pursuit of excellence in technology and innovation, we are proud to launch our state-of-the-art carbon dioxide recovery plant. This achievement will advance the country’s development in the energy sector while providing a sustainable environment for future generations to thrive.”

Established in 1991, Qafac continues to “uphold its mission” to be an international producer of methanol, its high-value derivatives and butane sub-products, in a “safe and environmentally friendly” manner.

Qafac is a joint venture among Industries Qatar, OPIC Middle East Corporation, International Octane and LCY Middle East Corporation. The Qafac plant is designed to produce 982,350tonnes per year of methanol and 610,000tpy of Methyl tertiary butyl ether (MTBE).




Kenya Could Delay Signing LNG Import Deal With Qatar Kenya Business Daily + NewBase

Kenya will most likely delay signing LNG import deal with Qatar following the discovery of gas in the country, reported Business Daily, a local newspaper.

The energy ministry says the July discovery of commercially viable gas in Wajir has slowed down the deal with Qatar for the supply of one million metric tonnes per annum of LNG to power a 700-megawatt gas plant in Mombasa, the newspaper added. Last April the Kenya Pipeline Company signed a non-disclosure agreement with Qatar Gas for supply of fuel.

“We have to be careful not to rush. You don’t want to commit yourself say for 10 years and find you have your own gas which you can’t find market for,” Energy secretary Davis Chirchir told the Business Daily. East Africa focused Canadian firm Africa Oil Corp. made a gas discovery in Block 9 onshore Kenya in July last year.




Ghana:Eni, Vitol, GNPC Sign Oil, Gas Project Deal Eni + NewBase

Eni, Vitol and Ghana National Petroleum Corporation (GNPC) have signed with government of Ghana an agreement to proceed with the OCTP integrated oil and gas project.

First oil from the project is expected in 2017, first gas in 2018 and the peak production will be 80,000 boed in 2019, Eni said in a statement Tuesday.

The OCTP integrated project is a deep offshore development located approx. 60 km from the Ghanaian Western Region’s coast. It comprises oil and non-associated gas fields and will access around 41 billion cubic meters (1.45 Tcf) of gas and 500 million barrels of oil in place.

The OCTP fields will continuously supply Ghana’s thermal power system, from 2018 to 2036. The supply will be secured thanks to long term contracts with the government of Ghana.

Eni, through its own subsidiary Eni Ghana, is block OCTP’s operator with a 47,22% stake. Vitolhas a 37,77% stake and GNPC owns 15% interest.

Ghana oil & Gas profile

Ghana's energy sector has expanded considerably after the discovery of the Jubilee oil field in 2007. The field came online in 2010, and production in Ghana has since increased from 7,000 barrels per day (bbl/d) in 2009 to 99,000 bbl/d in 2013. Tullow Oil, the operator of the Jubilee field, is also developing the offshore Tweneboa, Enyenra, and Ntomm (TEN) project. The TEN project is expected to come online in mid-2016 and eventually reach a peak output of 80,000 bbl/d of crude oil and 50 million cubic feet per day (MMcf/d) of natural gas. • Ghana has one oil refinery, the Tema refinery with a design capacity of 45,000 bbl/d,

according to the Oil & Gas Journal. Operations at the refinery have been repeatedly halted over the past few years because of old equipment and the lack of funds to purchase crude oil for processing. Ghana hopes to recuperate operations at the Tema refinery and has announced intentions to sign a joint venture deal with PetroSaudi International, although it’s unclear if this will materialize.




• Ghana plans to start commercializing the natural gas that is associated with oil production at the Jubilee field, which has the potential to produce 150 MMcf/d of natural gas. The gas commercialization project, which is mostly being financed by the Chinese Development Bank, entails building the Atuabo gas processing facility and an offshore pipeline that will transport gas from the Jubilee field to Atuabo. The natural gas will be used for power generation and possibly fertilizer production in the future. The project also includes a natural gas liquids exporting system. The project has run years behind schedule because of payment delays to contractors, equipment lost at sea, and a labor strike. It is expected to come online in late 2014.

Ghana is also planning to expand its natural gas production with the start of the TEN associated gas project and ENI’s Sankofa and Gye Nyame non-associated gas fields. Ghana imported 22 Bcf of dry natural gas in 2012. Ghana imports natural gas via the West African Gas Pipeline (WAGP), which runs east to west from Nigeria to Ghana. WAGP was shut down from August 2012 to July 2013 for repairs following damage to the Togolese section of the pipeline. Gas flows through the pipeline have decreased since 2011 and remain unreliable, forcing Ghana to use heavy oil to supply its dual-fuelled power plants. Ghana’s energy ministry is considering plans to build a regasification terminal to import liquefied natural gas (LNG) in case imports from WAGP and domestic gas production is not enough to meet power generation demand in the medium to long term. According to Ecobank, Ghana will need more than 800 MMcf/d of natural gas by 2017 for power generation and reinjection into wells to enhance oil production. Ghana has an installed electricity capacity of almost 2.3 megawatts, as of the end of 2012, according to Ghana’s national energy statistics. Ghana generated 12 billion kilowatthours (kWh) of power in 2012, of which 67% was from hydroelectricity and the remainder from fossil-fuel generation. Ghana is a net exporter of electricity, exporting almost 0.7 billion kWh and importing more than 0.1 billion kWh in 2012. Ghana must expand its installed electricity capacity and distribution system to provide electricity to almost 30% of its population that does not have access to electricity, according to the latest World Bank data. Many Ghanaians, particularly in rural areas, rely on traditional biomass and waste, particularly firewood, for household cooking and heating. Firewood accounts for slightly more than 40% of Ghana’s total primary energy consumption, according to Ghana’s national energy statistics.




Oil Price Drop Special Coverage

Oil price ‘too low’: Saudi Aramco chief AFP

RIYADH: World oil prices have fallen too far, the president of state-owned energy giant Saudi Aramco said on Tuesday, stressing it was for the market not Opec producers to shore them up.

“It’s too low for everybody,” Khalid Al Falih told a conference. “I think even consumers start to suffer in the long term.” Al Falih also said American shale oil production is important for the world’s long-term energy future and Saudi Aramco has marked an additional $7 billion for its own shale projects. Saudi Aramco is the world’s largest oil company in terms of crude production and exports. The kingdom is the leading exporter and top producer in the Organization of the Petroleum Exporting Countries (Opec). In November, the cartel decided to maintain its output ceiling at 30 million barrels per day, deepening the global price drop which began in June.

Oil was then trading at more than $100 a barrel but on Tuesday international benchmark Brent crude for March delivery was fetching just $48.28 in Asian trade. Saudi Oil Minister Ali Al Naimi has been quoted as saying it is unfair to expect the cartel to reduce output if non-members, who account for most of the world’s crude production, do not.

Al Falih reiterated that policy, saying: “Saudi Arabia will not single-handedly balance the market on a downturn.” The company’s production has been steady over the past few years, while domestic demand rose and exports gradually declined, he said.

“So the reason for the imbalance in the market absolutely has nothing to do with Saudi Arabia,” Al Falih told the Global Competitiveness Forum .The annual event, organised by the kingdom, brings together senior Saudi officials and world business leaders.

Al Falih said “it will take time” for the current excess supply to be removed. He declined to speculate on the price at which the market will ultimately settle. “It will be the price that will balance supply and demand. I think we’re going to just wait for the forces of supply and demand,” he said.

Saudi Arabia, the only producer with significant spare capacity, had traditionally acted to stabilise the market by adjusting output.




Technological innovations have unlocked shale resources in North America and raised US oil output by more than 40 per cent since 2006, but at a production cost which can be three or four times that of extracting Middle Eastern oil.

In an increasingly competitive market, analysts have said the kingdom is content to see shale oil producers suffer from low prices. But Al Falih said: “US shale is needed, is welcome, on the global scene,” because the world will require more energy resources for a growing population.

The economy is still going to be driven by oil and gas for generations, he said. Al Falih added that US shale innovation had led the way for Saudi Arabia to pursue similar techniques.

“Saudi Aramco has invested already $3 billion in developing our unconventional gas. We just earmarked an additional seven (billion). This is the first time I share this publicly,” he told the forum.

“Saudi Arabia will be the next frontier after the US where shale and unconventional will make a contribution to our energy mix, especially gas.”

Opec's Al Badri says oil may have hit floor, warns of future spike Reuters + NewBase Oil prices at current levels may have reached a floor and could move higher very soon, the Organization of the Petroleum Exporting Countries (Opec's) secretary-general said, his first public comment that oil's second-biggest decline on record may have run its course. Abdulla Al Badri also warned of a risk of a future price spike to $200 a barrel if investment in new supply capacity is too low. "Now the prices are around $45-$50 and I think maybe they reached the bottom and will see some rebound very soon," Al Badri told Reuters on the sidelines of a conference at Chatham House.




The 12-member Opec pumps about a third of the world's oil and until last year had a policy of adjusting its supply to support prices. Oil prices have fallen almost 60 per cent since June to below $49 a barrel on global oversupply. Prices kept falling after Opec's surprise refusal in November to cut its output to retain market share against rival suppliers. Defending Opec's decision, Al Badri warned that any oil supply cut would lead to spare production capacity, a lack of investment and an eventual shortage and price spike that could exceed that of 2008, when oil hit its record high above $147 a barrel. "Suppose we cut production, and then we'll have spare capacity," he said. "Producers, when they have excess capacity, they will not invest. "If they do not invest there will be no more supply, if there is no more supply there will be a shortage in the market after three-four years and the price will go up and we'll see a repetition of 2008." "Maybe we will go to $200 if there is a real shortage of supply because of the lack of investment," Al Badri said. Oil's decline in 2014 was its second-biggest ever, after the collapse in 2008 which followed the record high. NON-OPEC HELP? Some Opec members, including Venezuela, have continued to call for output cuts. Its President Nicolas Maduro earlier this month visited several Opec countries, and non-member Russia. While praising Maduro's efforts, Al Badri said there was no imminent prospect of Opec and non-Opec producers sitting down to discuss cutbacks. "It will take some time," he said. "It will take another four-five months and we will not see some concrete efforts before the end of the first half of the year due to the reason that we will see how the market behaves at the end of the first half of 2015." Al Badri further defended Opec's decision in November to leave its output target unchanged. "It was a collective decision," he said. "Everybody participated in the decision, there are some remarks and some reservations but at the end of the day all the ministers agreed to this." Asked about the prospect of a change in oil policy in top Opec producer Saudi Arabia under its new king, Al Badri said: "Saudi Arabia is a stable country, is a stable government, and I think things will be normal."





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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 28 January 2015 K. Al Awadi




Economy & Finance

New base 528 special 28 january 2015