NewBase 608 special 20 may 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, redistributed,

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NewBase 20 May 2015 - Issue No. 608 Khaled Al Awadi

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

UAE: ADNOC to raise investments to Dh120b next year to hit 3.5 MBD

Gulf News + NewBase

The Abu Dhabi National Oil Company (Adnoc) is on track to hit the emirate’s target of raising oil production to 3.5 million barrels per day (bpd) in 2017, with plans to expand refining capacity to 920,000 bpd.

The company is also backing its growth with increased investments next year of Dh120 billion — up from this year’s Dh91 billion, according to Saif Al Gafli, chief executive officer of Al Hosn Gas, a joint venture between Adnoc and Occidental Petroleum.

Adnoc’s plans will see investments of Dh119 billion in 2017, Dh72 billion in 2018 and Dh66 billion in 2019, the CEO said. Speaking at the Al Gharbia Development Forum on Tuesday, Al Gafli said that Abu Dhabi’s Western Region was an important hub for oil, with 90 per cent of the emirate’s oil and gas coming from there.

The Western Region is expected to see significant growth in the next five years, with Adnoc and other companies set to boost their investments there. This will double the region’s gross domestic product from Dh250 billion to Dh500 billion by 2030.

The event saw officials from various public and private entities discuss projects and the need to raise in the Western Region. Mohammad Al Fahim, regional head of global wholesale banking at Abu Dhabi Islamic Bank, said the bank is expected to finance more projects in the region. “We can go into different industries, and [whatever] industries are there,” Al Fahim said. “Oil and gas, real estate, [tourism], we can tap into any of these markets depending on the feasibility of it. We have financed companies in the Western Region, and we have already partnered with some.”

The bank is also looking to finance more small and medium enterprises to boost the sector. Additionally, industry experts discussed improving infrastructure in the Western Region, with the Abu Dhabi Water and Electricity Authority citing Al Mirfa Station, which will have a 1,600 megawatt capacity by July 2017. A Musanada spokesperson added that there were developments on the roads, with the Dh5.3 billion development on Al Mafraq-Ghweifat Road now 76 per cent complete.




UAE: Oil & gas testing center launched in Abu Dhabi Intertek + NewBase Intertek, a leading quality solutions provider to industries worldwide, has opened a new laboratory in Abu Dhabi. The facility is the first of its kind in the region for Intertek and offers integrated oil and gas testing services for its rapidly growing client base.

Addressing increasing challenges in the exploration and production industry, the laboratory provides the testing and expert consultancy services required to help maximize recovery and minimize risks and operational costs. Sheikh Tahnoun Bin Saeed Al Nahyan officially opened the new 15,000 square foot facility in Musaffah, Abu Dhabi, which forms part of Intertek’s global Exploration and Production

Services. The Abu Dhabi Technology Centre will locally conduct reservoir characterization and formation evaluation in the exploration phase of conventional and unconventional reserves, as well as reservoir and production optimization for existing mature concessions.

Hussain Al- Atrakchi, Intertek Regional Managing Director for the Middle East, North Africa and Pakistan, said: “The new Abu Dhabi Technology Centre will bring cutting-edge testing equipment to the doorsteps of our regional clients, here in Abu Dhabi and throughout the Gulf Cooperation Council (GCC) and beyond, offering advanced testing and evaluation for the oil and gas industry.” The laboratory, which forms part of Intertek’s Upstream Services business, consists of three interconnected buildings and houses Intertek’s resident and visiting scientists, engineers, geologists and technicians working with national and multi-national oil companies operating in the region.




Egypt opens new power plant

Reuters + NewBase

Egypt has opened a 750 megawatt power plant in the northern outskirts of Cairo, the cabinet said on Tuesday, as the country tries to stave off power cuts that have plagued Egyptians' lives and businesses in the summer months of the last few years. The $500-million plant in Qaliyubia governorate is part of the state's 2012-2017 plan to provide environmentally-friendly electricity, the cabinet statement said. It added that the facility was a combined cycle gas turbine plant, with 500 megawatts coming from two gas-powered turbines and the remainder from a steam turbine.

Egypt's power shortages are a part of a broader energy crisis triggered by high energy consumption and low production. The government has tried to tackle that by cutting subsidies, importing natural gas, and boosting its power output. Power cuts usually peak in the summer, when more air conditioners are used to deal with high temperatures. Popular anger over power shortages contributed to summer 2013 protests that led to the army's removal of elected president Mohamed Mursi. In addition to investing in new plants, Egypt has secured a floating liquefied natural gas (LNG) import terminal and signed LNG import agreements with Russia's Gazprom, Trafigura, Vitol, Noble, and Algeria's Sonatrach. The government has also approved the use of coal as a power source for some industries, despite environmental concerns. The new power plant was funded by the Abu Dhabi Fund for Development, the Arab Fund for Economic and Social Development, the Islamic Development Bank, the Kuwaiti Fund for Arab Economic Development, the Opec Fund for International Development and the Saudi Fund for Development, the statement said. Cairo's Gulf Arab allies have poured billions of dollars in investments and aid into Egypt since the removal of Mursi, who was from the Muslim Brotherhood.




Pakistan: MOL Makes Gas Discovery in Khyber Pakhtunkhwa Province MOL + NewBase

MOL Group has announced a new commercial natural gas discovery from Mardan Khel-1 in

the TAL block in northern Pakistan.

Mardan Khel-1 was drilled as an exploration well in TAL block, located in the Khyber Pakhtunkhwa province. It was spudded on September 17, 2014 and the well reached target depth of 4,912 meters on February 17, 2015. The well tested four formations and all flowed with high volumes of gas and condensate.

The current total production capacity of the facilities in the TAL block is 80 kboepd gas and 37 kboepd of liquids per day, MOL said in a statement Tuesday. The company intends to carry out an appraisal plan including additional wells on the eastern and western parts of the structure.

Meanwhile the company also announced that it has signed a farm-in agreement for the DG Khan block in Pakistan. MOL is acquiring a 30 percent non-operating interest from Pakistan Oil Fields Limited (POL) in the block.




Niger Savannah Petroleum To Explore 14 Drill-Ready Sites

Savannah Petroleum has said that it has discovered 14 drill-ready exploration sites with prospective oil resources of 215 million barrels in Niger.

According to a report by Rigzone, the prospects were found following detailed 3D seismic mapping over a 260-square mile area in the R1/R2 permit region, which is situated in the Agadem Rift Basin of southeast Niger, adding that an additional 37 leads have been mapped by Savannah along the northwest and northeast areas of the R1/R2 license, noting that a structure with a potential closure size of up to 15 square miles was found extending throughout the western section of R2 at the upper cretaceous and deeper horizons.

CEO of Savannah Petroleum, Andrew Knott, was quoted to have said in a company statement: “This update reflects the culmination of over nine months of technical work, with Savannah having had the equivalent of a team of six senior geologists and geophysicists working full time on this project. I look forward with confidence to the next phase of our analysis of the subsurface, as we move towards further seismic acquisition and the commencement of our drilling campaign on R1/R2.”

The report noted that full-year results for 2014 showed that Savannah had no debt at the end of December after having raised a total of $72 million in equity during two funding rounds last year. The results, it said, also revealed the firm made an operating loss of $6.8 million.

Savannah Petroleum Chairman, Steve Jenkins, said in the company’ results statement: “Savannah Petroleum has made very solid progress in its first nine months as a public company. We are working closely with our hosts within the government of Niger as we look to continue to explore and evaluate R1/R2, located in the proven hydrocarbon fairways of the Agadem Rift Basin where over 1 billion barrels of oil have been discovered to date.

Our team is highly focused on operational delivery and I do not believe any other company could have achieved more than we have to date, and that energy and drive is very much a mark of our future intent.”




China looks to secure first US LNG supplies by 2020 Reuters + NewBase

Chinese buyers are eyeing long-term supplies of liquefied natural gas (LNG) from US company Cheniere Energy, an official from the firm said yesterday, in what would be the first LNG deal

between the world’s two biggest energy users. Cheniere Energy is set to become the first US LNG exporter, with shipments to start by the end of this year. However, no Chinese companies have signed up for any US LNG cargoes so far. That could change soon: “There’s a lot of interest from Chinese buyers for long-term LNG volume, especially for 2020 onwards,” said Nicolas Zanen, vice president for Asia at Cheniere Marketing Pte Ltd, a wholly-owned subsidiary of Cheniere Energy. Zanen said that some Chinese buyers had already begun moving to secure supplies, although without providing any details. “The Chinese market is a very interesting market for us. I wouldn’t be surprised if in the future we are delivering LNG to China. And not necessarily small buyers, big buyers as well,” said Zanen on the sidelines of the Asia Oil and Gas Conference in Kuala Lumpur, declining to give more information. Zanen made the comments following recent controversy in the US about American companies contracting to ship LNG supplies to China. The US, which is seeing demand for new exports despite an emerging glut, is set to become the world’s third biggest exporter of LNG by 2020, behind Qatar and Australia. Australia’s LNG export capacity is set to more than triple to 86mn tonnes a year before 2020, compared to Qatar’s annual 77mn tonnes and US expectations of selling 61.5mn tonnes per year by 2020. Due to soaring output and cheaper oil, Asia’s spot LNG prices have fallen by almost two-thirds since February of last year.




US: Shell vows to explore Arctic despite Seattle protests Reuters + NewBase

Royal Dutch Shell will press on with a campaign to explore the Arctic for oil this summer despite protests in the port city of Seattle, chief executive officer Ben van Beurden said on Tuesday. Hundreds of environmental activists have fanned out across the Seattle Bay in recent days to disrupt the Anglo-Dutch company's rigs from entering the port en route to the Chukchi Sea off Alaska, saying drilling in the remote Arctic waters could lead to an ecological catastrophe.

Van Beurden however dismissed claims that Shell's was using Seattle's port illegally. 'The contract that we have with Fos, the maritime contractor that we have there, the lease that they have in terminal 5 we think they are legally valid and indeed have tested it and are ready to move ahead with putting the Polar Pioneer (rig) there, loading it out so it is ready for its journey to Alaska,' van Beurden told investors during Shell's annual general meeting in The Hague, Netherlands. 'We have not seen, apart from the protests, any legal obstacles for us to do that.'

Environmental groups contend harsh and shifting weather conditions make it impossible to drill in the Arctic, a region with a fragile environment that helps regulate the global climate because of its vast layers of sea ice.

Van Beurden nevertheless sought to assuage investor concerns over Alaska by saying that any decision to invest there 'is many years if not a decade away'. 'We will only proceed with the real development of anything offshore Alaska if again we can find that we can do it responsibly, economically sensibly and commercially sensibly.'

Shell requires further permits to get the final green light before resuming fossil fuel exploration in the Arctic, which was suspended after a mishap-filled 2012 season. Shell's AGM was dominated by questions and comments over Shell's environmental track record as well as the oil and gas giant's efforts to curb carbon emissions.

Van Beurden lambasted calls by environmental activists to reduce investment in new oil production in order to reduce carbon emissions to prevent global warming. 'The theory also ignores the reality of our industry and as a matter of fact it actually risks distraction from the real issues around energy transition needs,'




Germany:Coal row may damage Germany's green image Reuters + NewBase

Germany's clean energy drive earned it a reputation as a green leader but a domestic row over coal has highlighted the challenge of balancing economic and environmental demands and threatens its ability to lead by example.

Angela Merkel, once dubbed the "climate chancellor", hopes to encourage the Group of Seven industrial nations to commit to tough goals to cut greenhouse gases at a June 7-8 summit in Bavaria before a larger year-end United Nations climate meeting in Paris.

In charge of Europe's largest economy but also its biggest emitter of CO2, she wants to promote the 'Energiewende', a policy that backs cleaner energy and a move away from fossil fuels and nuclear power.

But stalled projects, including her government's attempt to impose penalties on old, highly polluting coal plants, have put Germany's 2020 goal of cutting greenhouse gas emissions by 40 percent compared to 1990 at risk.

"Germany cannot get around the truth that in order not to fail its climate commitments it has to reduce its emissions from its enormous fleet of lignite coal technology," said Kumi Naidoo, executive director of Greenpeace International.

Aware it was on course to miss the 2020 target, the government approved a climate package last December to put it back on track. This included plans to force coal operators to slash their emissions by at least 22 million tonnes by 2020, equivalent to shutting about eight coal plants.

But a coal levy aimed at achieving those cuts, proposed by Sigmar Gabriel, economy minister and leader of Merkel's junior coalition partner, the Social Democrats (SPD), led to protests by coal miners last month and a backlash from the industry.




Union IG BCE says it could put up to 100,000 jobs at risk while Germany's second biggest utility RWE said the levy would mean immediate closure for the majority of its lignite mines and lignite-fired power stations.

Bowing to those industry concerns, the economy ministry is now proposing softening the CO2 emissions cuts for coal-fired power plants to 16 million tonnes, according to a ministry document seen by Reuters. A final decision has been delayed until the summer, and risks undermining Merkel's efforts to convince others that it is possible to cut CO2 emissions and grow the economy.

Only a third of experts from 35 countries surveyed by the World Energy Council believe the 'Energiewende' could serve as a blueprint for the world. In addition, three-quarters think the transition away from nuclear and fossil fuels will weaken Germany's economy in the short-term.

Germany generated more than a quarter of its electricity from renewable sources - such as wind and solar power - last year. But at the same time the phase-out of nuclear power has increased its reliance on brown coal, the dirtiest of all energy sources, which is cheaper than low-emission gas-powered plants.

Its brown coal addiction meant CO2 emissions actually rose slightly in 2012 and 2013 and Germany still emits more CO2 per capita than the European Union average.

"If Merkel and Gabriel aren't able to repair the market, reduce the share of coal and therefore emissions, the credibility for other nations to be convinced to go for stronger climate targets will be very low," said Claudia Kemfert, energy economist at the DIW in Berlin.

CAR CHANCELLOR

Merkel, who has made climate a key issue of her G7 presidency this year, has remained conspicuously silent in the coal debate so far, leaving the SPD, who hold both the energy and environment portfolios, to deal with the opposition.

A scientist by training, she reversed course on nuclear power after the 2011 Fukushima disaster in Japan. As environment minister in the mid-1990s, she pushed for a precursor to the Kyoto Protocol on cutting CO2 emissions.




A decade later, she used her clout as leader of Europe's largest economy to seal a 2007 European Union commitment on reducing greenhouse gases and boosting energy efficiency and renewables.

Then, at her last outing as host to the world's leading industrial nations, in 2007, Merkel convinced former U.S. President George W. Bush to make a firm pledge to tackle climate change.

But when the financial crisis struck in 2008, she prioritised the economy. Some climate activists in Berlin and Brussels called Merkel the 'car chancellor' after she lobbied to scrap an EU cap on car emissions over fears it could hit jobs at big German automakers.

The latest row over coal again underscores the dilemma of whether to stick to climate commitments while safeguarding the energy supply and protecting industry.

"The economy ministry's proposals are eroding fair competition in Europe's electricity market at the expense of German coal-powered stations," said Eric Schweitzer, president of Germany's DIHK Chambers of Commerce.

"The inevitable increase in electricity prices will place an additional burden on the German economy and stunt the competitiveness of many companies."

Nevertheless, the green lobby is hoping that Merkel will push for a pledge to phase out fossil fuels by the middle of this century ahead of the Paris meeting, which aims to agree on a successor to the Kyoto Protocol.

"Like it or not, if we were to single out one leader in the world we have the greatest hope in, it would be Chancellor Merkel," said Greenpeace's Naidoo.




EIA launches redesigned International Energy Portal Source: U.S. Energy Information Administration, International Energy Portal

On May 18, EIA launched a beta version of a redesigned International Energy Portal designed to help users access international energy data and to provide new and expanded tools and capabilities to examine trends in global energy markets.

Increased access to data. The International Energy Portal includes a powerful data browser that provides country-level energy data; many countries have at least 30 years of historical data. The data browser provides users the ability to view and download complete datasets for consumption, production, trade, reserves, and carbon dioxide emissions for different fuels and energy sources.

New user-driven customization. The portal's data browser, as one example, provides users with the ability to convert between U.S. and European common units of measurement for energy. Users can also compare data across different energy sources by converting to British thermal units, terajoules, and tons of oil equivalent. The portal also provides users with the ability to choose specific countries, regions, and data series for review and comparison. New data visualization features. These features include summary graphics of the world's top producers and consumers of all fuel types, including oil, natural gas, coal, and electricity. Users can plot their own data visualizations by energy source and series. This feature enables users to quickly see how energy production, consumption, reserves, imports, and exports have changed over time. An example of the new data visualization can be seen below, showing global carbon dioxide emissions over a 20-year period.




Source: U.S. Energy Information Administration, International Energy Portal

Improved access to international analysis. The International Energy Portal links to international forecasts and projections such as EIA's Short-Term Energy Outlook and International Energy Outlook. It also provides access to EIA's entire library of international reports and analyses. These reports include analytical documents such as Country Analysis Briefs and Country Analysis Notes that contain detailed information on more than 100 countries significant to world energy markets as well as on critical issues in global energy trade, such as world oil transit chokepoints and OPEC (the Organization of the Petroleum Exporting Countries) revenues. Enhanced data downloads. The International Energy Portal incorporates a complete application programming interface (API) that provides access to EIA's historical international data. Users can retrieve international datasets as they are updated, or use the EIA Excel Data Add-In tool to download the data directly into spreadsheets.




Oil Price Drop Special Coverage

Oil prices rise on strong Japan, Australia economic data Reuters + NewBase

Crude oil prices bounced back on Wednesday from steep falls in the previous session as strong Japanese economic growth surprised markets and the consumer outlook in Australia seemed to brighten, stoking producer hopes of increased demand.

Japan's economy, the world's third largest, expanded at an annualised rate of 2.4 percent in the first three months of this year, above a median market forecast for a 1.5 percent rise and following a revised 1.1 percent expansion in October-December, official data showed.

"Japan is one of the major importers of crude oil and growth in this region would definitely be favourable for crude demand," Singapore-based brokerage Phillip Futures said.

Brent futures rose as high as $64.75 a barrel in early trading before retreating to $64.40 at 0651 GMT, still up 38 cents. U.S. crude prices were up 33 cents at $58.32 a barrel.

The price rises came after a session on Tuesday that saw oil slide over 3 percent on a dollar rally and concerns of a building glut, which Goldman Sachs said would lead to a return of 2015 lows.

Japan's weekly crude runs were at 3.02 million barrels per day for the week to May 16, official data showed Wednesday, up 0.12 percent from this time last year, although 0.17 percentage points below the previous week.

The country's refinery utilization rate stood at 77.1 percent, up 3.5 percentage points from last year, but still 4.4 percentage points below the previous week.

In Australia, an important commodity employer and exporter, consumer sentiment surged in May as people's outlook on the economy brightened following this month's interest rate cut and after the government unveiled a budget that included a surprise tax break for small businesses




.




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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 20 May 2015 K. Al Awadi




Economy & Finance

NewBase 608 special 20 may 2015