New base special 01 october 2014

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NewBase 01 October Khaled Al Awadi

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UAE firm in deal to build Egypt coal-fired power plant Reuters + NewBase

An Abu Dhabi-based private firm is leading a consortium to build Egypt's first coal-fired power plant in the Suez area to meet the country's acute power shortage, the chairman of the investing company said. A memorandum of understanding was signed between Hussain Al Nowais, chairman of Al Nowais Investments, and Gabr El-Desouky, chairman of Egypt's state-run power company EEHC. Al Nowais will provide 70 per cent of the capital, he told Reuters by phone. He declined to give an estimated investment value for the plant or funding details saying those details will be finalised shortly. He added there were discussions with investors in Singapore, South Korea, China and Egypt to fund the remaining 30 per cent of the plant, which will be built in Ayoun Moussa in the Suez area with plans to build a jetty for importing coal. There is no timeframe for when the plant will built or become operational. Coal will be sourced from international markets such as South Africa, Indonesia and others. "Egypt has opened the door for private investment in its power sector and we want to be an early investor," Al Nowais said. Private investment is badly needed to upgrade Egypt's dilapidated power grid. Although gas shortages are a large part of the energy crisis, experts and Egyptian energy officials say modernizing the grid should be a priority. The new plant will provide a total of 3,960 MW of electricity. Experts forecast a shortfall of about 4,000 to 5,000 MW ahead of this summer, when blackouts darkened homes and factories

throughout the country of 85 million people. Private investors have been reluctant to build gas-fired plants given the gas shortages that have caused the government to cut feedstock supplies to cement and fertiliser factories. Al Nowais said the consortium aimed to complete a feasibility study by the end of the year. HSBC is the financial advisor for the project and White & Case is the legal advisor. Italy's Technimont is the technical consultant and consultants have been appointed to assess the environmental impact.




IEA official says: GCC region lacks solar conviction The National -Anthony McAuley + NewBase

Sunshine, the Middle East’s other abundant natural resource, could make the region a world leader in solar power by mid-century, but there is currently a lack of political will to achieve even its medium-term goals, the head of renewable energy at the International Energy Agency said yesterday.

“In the longer term, we realise that the Middle East is a very rich solar resource and could provide a huge quantity of the electricity generation mix by 2050, up to 58 per cent for the whole region,” said Paolo Frankl, the head of renewable energy at the IEA, the Paris-based energy think tank for developed economies. “But it would require a very strong political will and a clear roadmap. To be very frank, we see very ambitious targets but still we don’t see these conditions being in place in any country in the region.”

On Monday, new IEA reports laid out how solar could outstrip other sources of electricity generation by 2050, providing 27 per cent of the mix globally, with the Middle East’s potential more than double that.

However, Mr Frankl said the IEA does not expect the region to come close to its medium-term goals for either of the two sources of solar power: the large-scale solar thermal electricity (STE) projects from concentrating solar power, or the more familiar photovoltaic (PV) solar plates, where sunlight is converted directly to electricity.

“On installed PV, which is now 110 megawatts for the region, we estimate the Middle East as a whole will not have installed more than a cumulative 5 gigawatts by 2020,” Mr Frankl said. For STE, he estimates that installed capacity will rise to 1.9GW of capacity by 2020 from 125MW. This compares, for example, to Saudi Arabia’s stated goal to have 24GW of installed solar capacity by 2020.




Meanwhile, China is installing 13GW of PV alone each year and solar has also been growing rapidly in Europe and the United States.

“I have the feeling that people in the Middle East think this transition towards a more sustainable, more diversified energy mix is a good thing, enhancing overall energy security, and for oil-exporting countries enhancing their capability to sell more oil in lucrative international markets,” said Mr Frankl. “But I suspect there are other decision-makers who ultimately think this may hurt the core business, which is oil. The challenge here for decision-makers is how to make sure that the Middle East is a positive participant in this transition and find its place in a new type of world,” Mr Frankl adds.

What is lacking is the will to address thorny issues such as domestic energy subsidies, as well as taking a long-term view on industrial policy.

The IEA executive director, Maria van der Hoeven, noted on Monday that PV has expanded faster than expected because of rapidly falling costs, while STE has been held back because of factors including cheap shale gas. But STE will be the dominant solar technology in future as its technology progresses, which would give the sunny Middle East countries a competitive advantage.

Currently, Abu Dhabi is home to the largest concentrated solar power (CSP) project in the world: Masdar’s Shams 1 array, with capacity of 100MW. Shams 1 helped to lift the UAE to third among the world’s nations in concentrated solar CSP investment and capacity, said a report by Ren21 in June.

Although Spain and the US are still by far the market leaders in CSP, investment in the technology is growing most rapidly in regions that receive high amounts of daily sunshine.

“China has gone from the largest polluter, with coal, to the world leader in all-clean technologies. They are still the largest polluter, but the transition is clearly going on,” Mr Frankl said. “The Middle East countries – which have the highest per capital CO2 emissions – will have to adapt to this transition or they will find themselves on the wrong side of history. The revolution will happen with or without the Middle East. But solar is a huge opportunity for the region.”

The Dubai Electricity and Water Authority (Dewa) is also developing the Mohammed bin Rashid Al Maktoum Solar Park which is expected to produce 1,000MW by 2030. The first phase of the project, which includes a Dh120 million, 13MW photovoltaic power plant at Seih Al Dahal, 30 kilometres south-east of the city, opened last year and has been connected to the emirate’s power grid.

Mohammed bin Rashid Al Maktoum Solar Park Masdar’s Shams 1 array, with capacity of 100MW




Opec oil output hits highest since 2012 on Libya, Saudi Reuters + NewBase

Opec's oil supply jumped to its highest in almost two years in September due to further recovery in Libya and higher output from Saudi Arabia and other Gulf producers in the face of sub-$100 per barrel oil prices, a report said. Supply from the Organization of the Petroleum Exporting Countries (Opec) averaged 30.96 million barrels per day (bpd) in September, up from 30.15 million bpd in August, according to the Reuters survey based on shipping data and information from sources at oil companies, Opec and consultants.

The lack of any cutbacks underlines the relaxed view of Opec's core Gulf members to oil's slide from $115 in June to $97 on Tuesday - a level they can tolerate, but which puts budgets in producers such as Iran and non-member Russia under pressure. "Libya has increased production massively and if you look forward, Opec is producing more than the (forecast) demand for Opec crude in 2015," said Carsten Fritsch, analyst at Commerzbank. "This puts pressure on Opec ahead of their next meeting." Opec pumps a third of the world's oil and meets next in November. This month, the largest increase has come from Libya, where supply is up by 280,000 bpd despite conflict. Iraq, Nigeria, Angola and Saudi Arabia also boosted output. This month's output is Opec's highest since November 2012 when it pumped 31.06 million bpd, according to Reuters surveys. Involuntary outages, such as in Libya, kept output below Opec's nominal 30 million bpd target in earlier months of the year. Iraq, like Libya, has also managed to increase supplies despite fighting in the country. Oil output rebounded due to higher exports from Iraq's southern terminals and increased output from fields in Kurdistan.




An advance by Islamic State fighters into northern Iraq has not reduced southern exports, but violence has hit supply of Kirkuk crude from the north and shut down the Baiji refinery, keeping crude output below Iraq's potential. Nigerian output, disrupted in earlier months of the year, has climbed in September, and another increase has come from Angola where CLOV, a new crude stream operated by Total , is ramping up exports. Top exporter Saudi Arabia, supported by Kuwait and the United Arab Emirates, has boosted output informally to cover for outages elsewhere in the group. So far, there is no sign of any further trimming, according to the survey. In fact, industry sources in Saudi Arabia have talked of higher demand with the approach of winter and return of refineries from maintenance - factors that would argue against cutting output. Sources in the survey said supply to market had increased this month. Some Opec members have voiced concern over the drop in prices and its meeting on Nov. 27 in Vienna is likely see a debate on whether output needs to be cut. Opec's own forecasts suggest demand for its crude will fall to 29.20 million bpd in 2015 due to rising supply of U.S. shale oil and supplies from other producers outside the group - almost 1.8 million bpd below current output according to this survey. Iran on Friday urged Opec members to make joint efforts to keep the market from falling further, but the Gulf Arab producers remain unruffled according to comments from oil ministers and delegates. Iranian output was steady in September, the survey found. Western sanctions over Iran's nuclear work are restraining its output, although supply has risen since the start of the year following a softening of the measures. Iran's budget needs oil prices well above $100, among the highest in Opec, while the budget of non-member Russia assumes an average of $100 .

Visit OPEC http://www.opec.org/opec_web/en/publications/338.htm




GE, Energas to Build Small Scale LNG Infrastructure in China GE oil & Gas + NewBase

GE Oil & Gas and Dalian Energas Gas-System Co., (Energas) last week signed a strategic Memorandum of Understanding (MoU) to build LNG infrastructure in China. According to the MoU, GE, through enCryo, a GE O&G and Maison joint venture in China, will build one small-scale LNG plant with a daily production capacity of 50,000 cubic meter in Xinjiang, China.

Over the next three years, the companies will work together to build up to eight similarly sized plants in the region, GE said. “This agreement is part of a strategic relationship between GE Oil & Gas, enCryo and Energas to support the development and use of unconventional gas sources in China and provide a cleaner-burning source of fuel,” GE added.

GE stated that its small scale LNG plants are well-suited for processing and liquefying gas in remote areas to help complement limited gas pipeline networks and improve the efficiency of gas usage. China’s unconventional natural gas sources are relatively small and scattered, and the country’s limited gas pipeline network leaves much of its natural gas resources untapped and stranded.

“China has abundant resources in natural gas, coal seam gas and shale gas. Using these resources efficiently will reduce CO2 emissions and help address the increasingly hazardous environmental issues we face in China.

By implementing GE’s Small-scale LNG solutions, we hope to ultimately enable highly-secure utilization of flare gas associated with oilfield drilling in Xinjiang. The LNG we provide will also contribute to China’s clean energy initiatives by replacing diesel as a cleaner-burning fuel for long-haul buses and heavy-duty trucking,” Xie Bing, Chairman of Energas said,




Algeria awards 4 out of 31 oil, gas blocks on offer Reuters + NewBase

Algeria awarded four of 31 oil and gas field blocks on offer to foreign consortiums on Tuesday in its first attempt since a disappointing 2011 bid to draw investors to help offset its stagnate production.

Spain's Repsol in partnership with Royal Dutch Shell won the Boughezoul area in the north of the country, while Shell and Norway's Statoil won the Timissit area in the east. A consortium of Enel and Dragon Oil won the Tinrhert and Msari Akabli areas.

Algerian energy officials described the result as acceptable, but analysts said the North African OPEC member needed to do more to improve conditions and draw more foreign oil operators to the energy sector.

Algeria supplies a fifth of Europe's gas needs, but it relies on mature fields for most of its energy output and looks to foreign explorers to help develop new reserves and increase flagging production.

"These are acceptable results, and we will continue with our energy sector development," said Sid Ali Betata, head hydrocarbons agency ALNAFT which oversaw the bidding. "This is a consolidation of our partnership."




Foreign oil executives have in the past complained about Algeria's tough contract terms, often difficult business environment and security worries, especially after a 2013 attack on the Amenas gas plant killed 39 foreign contractors.

Officials were optimistic before the bids, having delayed the auction twice after foreign players asked for more time to study the fields. They reported initial interest from 50 companies and cited incentives under a new oil law, improvements in security and the potential of the fields on offer.

The 2011 auction secured bids for just two fields out of 10, one from Spain's Cepsa and the other from Algerian state energy company Sonatrach. But the new hydrocarbons law passed in 2013 offers tax and contractual incentives and benefits for unconventional energy investments.

Three of the fields auctioned on Tuesday were crude oil areas, while Msari Akabli is a mainly a gas block.

"These results show partners are still not satisfied with the terms. I think they need improvement, and Algeria has to opt for more steps to attract more investment," one Algerian energy expert said.

STAGNATING PRODUCTION

An increase in output is vital for a government that relies heavily on energy exports for state income and to pay for social programmes, including food and fuel subsidies that have helped keep it stable amid turbulent times in North Africa.

Analysts say rising domestic energy consumption will also be a concern should Algeria fail to draw the kind of investment required to bolster its production. Oil output last year was 1.2 million barrels per day, about the same as in 2012.

Some of the 2014 gas blocks offered were from Algeria's unconventional shale reserves, which are among the world's largest and are largely unexplored. None was awarded in this round.

Algeria also has no experience of developing shale gas, which involves technologies such as hydraulic fracturing and horizontal drilling. Some analysts have questioned how the country will develop the infrastructure needed for shale.

Security has been a concern since the 2013 Amenas attack, which prompted BP and Norway's Statoil to pull workers out. The kidnapping and beheading of a French tourist was a reminder of risks in the North African country, which fought a war against Islamist extremists in the 1990s.

Still, Statoil this month said the Amenas plant, which produced 11.5 percent of Algeria's gas output before the attack, was due to return to full production soon after improvements in security.

"Security for employees is our top priority," said Statoil's Bjorn Kare Viken, a senior vice president for development and production. "Ensuring security is the job of the Algerian authorities."




Statoil, Shell to Assess Algerian Shale Source: Statoil

Statoil and Shell were on Tuesday awarded the Timissit Permit Licence in the Illizi-Ghadames Basin onshore Algeria. “The award represents an opportunity to test a potentially large shale resource play,” Statoil said in a statement Tuesday.

The licence is located in southeastern Algeria and covers an area of 2730 square kilometres. The Norwegian firm will be the operator with 30% equity, Shell will hold 19% equity and the remaining 51% will be held by Sonatrach.

“Statoil is entering this shale play to test the prospectivity and commerciality through a step-wise approach. The first exploration phase is expected to last up to 2017 and include the drilling of two wells and seismic acquisition,” said Nick Maden, senior vice president for Statoil's exploration activities in the Western Hemisphere.

The award is part of the Algerian Ministry of Energy and Mines, National Agency for Hydrocarbon Resources Valorisation’s (ALNAFT) Fourth International Bid Round, which was launched in January 2014.

At estimated 700 trillion cubic feet (TCF), Algeria hold world’s third largest technically recoverable shale gas reserves in its seven shale basin, according the International Energy Agency (IEA)




PNG: InterOil announces update on Papua New Guinea drilling Source: InterOil Corp

InterOil has provided an update on the drilling of its Raptor-1 (PPL 475) and Bobcat-1 (PPL 476) exploration wells in Papua New Guinea.

InterOil is preparing to set seven-inch casing in the Raptor-1 well in PPL 475in the Gulf Province of Papua New Guinea. The casing point is slightly above the Kapau Limestone target zone, and is in line with the well program. At this stage, calcimetry, temperature and background hydrocarbon concentrations are similar to those experienced before InterOil entered the Antelope reservoir. The significance of these preliminary indications can be determined only by further drilling and logging. Raptor-1 is about 12km west of InterOil’s multi-trillion cubic feet Elk-Antelope gas field. InterOilholds a 65.208174% interest in Raptor-1 and is operator. Pacific Rubiales Energy Corp has a 12.903226% interest in the well and minority interests hold 21.8886%. The Bobcat-1 well in PPL 476 in Papua New Guinea continues to drill in the Orubadi shale, towards the Kapau Limestone target zone. Bobcat-1 is about 30 km northwest of InterOil’s multi-trillion cubic feet Elk-Antelope gas field.InterOil holds a 78.1114% interest in the well and is operator. The remaining 21.8886% interest in the well is held by minority parties.




Tunisia: Dualex Energy mobilises rig for BHN-1 recompletion in the Bouhajla Permit Source: Dualex Energy

DualEx Energy International has announced that mobilisation of a rig to the BHN-1 wellsitehas begun with recompletion activities scheduled to commence once the rig is operational.

As previously announced, the BHN-1 re-completion will involve pulling the existing production tubing from the wellbore and re-perforating the Abiod formation using a casing gun and deep penetrating charges, followed by acidization of the perforated intervals. It is expected that the recompletion operation will take approx. two weeks to complete.

Bouhajla Block (DualEx 52.5%)

135,000 gross acres in the western

Pelagian Basin of northeast Tunisia.

Initial three year initial term

commencing April 30, 2010 has been

extended until April 29, 2014, during

which time DualEx is to record 55 km2

of 3D seismic (completed) and drill one

exploration well to test the Abiod

formation in the Bouhajla North area,

and record a minimum of 47 km2 of 3D

seismic in the Ktittir area.

Primary objectives are the Cretaceous

Abiod fractured chalky limestone

formation, and the shallower El Gueria

limestone formation. Five

prospects/leads have been identified to

date, with drilling of the first well,

BHN-1, on the Bouhajla North prospect

in Q2, 2013.

Producing analogue at Sidi el Kilani

field (produced ~48 million barrels of

light oil since 1993) lies 7 km due east

of the Bouhajla permit.

Bouhajla North Resource Assessment




Israel's Leviathan gas field group submits $6.5 bln development plan Source: Reuters

The partners in Leviathan, Israel's largest natural gas field, have submitted their initial development plan to Israeli authorities, which one source said on Tuesday envisages producing 16 billion cubic metres (bcm) of gas a year.

The group, led by Texas-based Noble Energy and Israel's Delek Group, handed in its proposal after months of trying to determine the best way to develop the Mediterranean field, which lies in about 1500 metres of water about 80 miles (130 kms) off Israel's coast. Talks to bring in Australia'sWoodside Petroleum, a liquefied natural gas (LNG) specialist, fell through in March.

With estimated reserves of 622 bcm, Leviathan is one of the world's largest offshore discoveries of the past decade. A spokeswoman for Israel's Energy Ministry, which must now approve the plan, confirmed it had been received, but disclosed no details.

An industry source said the first stage will see a floating production storage and offloading (FPSO) unit passing 16 bcm of gas a year via pipelines to Israel, the Palestinian Authority and other neighbours that decide to buy the gas. Production is expected to begin by 2018 and initial investment could reach $6.5 billion, the source said, which was in line with previous forecasts.

The Leviathan partners are in talks with Britain's BG Group, which wants to bring gas in to feed its Egyptian LNG export plant, and with Jordan's national electricity company. Later development plans were not included in the proposal, and could include direct LNG exports to more distant markets, officials have said.




Kenya: Rift Energy enters into next exploration phase and seeks partner Source: Rift Energy Corp

Rift Energy has announced it is entering into the first additional two-year exploration program on Block L19 in Kenya after meeting or exceeding all contractual requirements of the initial two-year exploration program. Rift Energy is now obligated to either acquire 500 KM of 3D seismic or drill an exploration well during the next two years.

The initial two-year exploration program required Rift Energy to acquire at least 1,000 KM of gravity and magnetic data, shoot at least 500 KM of 2D seismic data and to spend at least US$100,000 on community projects. A summary of Rift Energy’s activity for the initial two year exploration program follows:

• 7,064 KM of gravity and magnetic data was acquired. The data was the basis for a map that identified multiple geological features of interest and was used to guide the 2D seismic program.

• A geochemical survey with 640 samples taken was completed over prospective areas and integrated into the 2D seismic data.




• A 724 KM 2D seismic program was completed. Results indicate numerous leads and prospects at various depths that correlate to the results of the geochemical survey.

• Community development expenditures exceeded US$100,000 and included building six school rooms and four water development projects within Block L19.

• In accordance with the terms of the PSC, Rift Energy relinquished 25% of Block L19. The relinquished area included the northernmost section of the block, which had previously been determined to not be prospective.

Farm-out of Block L19:

Rift Energy is now considering farming out a portion of its interest to further fund and accelerate its exploration program within Block L19. The data acquired from the 724 KM seismic program has been processed and interpreted. The results have yielded numerous leads and prospects at various depths. A data room is now available for interested parties.

About Block L19, Kenya Block L19 now encompasses approx. 9,000 KM2 (2.2 million acres) onshore in southeast Kenya, where Rift Energy is the operator and owns a 100% participating interest. There has been only one well drilled on Block L19 to date, the Ria Kalui 1 well, which was drilled off structure to a depth of 1,538 meters in 1962 and was plugged after encountering oil shows in the Karoo formation.




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

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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 Khaled Al Awadi is a UAE National with a total Khaled Al Awadi is a UAE National with a total Khaled Al Awadi is a UAE National with a total

of 24 yearsof 24 yearsof 24 yearsof 24 years of experience in theof experience in theof experience in theof experience in the Oil & Gas Oil & Gas Oil & Gas Oil & Gas

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NewBase 01 October 2014 K. Al Awadi

Economy & Finance

New base special 01 october 2014