New base 04 january 2018 energy news issue 1123 by khaled al awadi

Copyright © 2018 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 Energy News 04 January 2018 - Issue No. 1123 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Dubai’s Dewa and Aramco in strategic co-operation talks
TradeArabia News Service
A senior delegation from oil giant Saudi Aramco visited Dubai Electricity and Water Authority
(Dewa) to discuss closer ties and co-operation in key development projects, mainly in power and
water sector. 10th
The meeting heightened co-operation between the two organisations, with Saudi Aramco able to
review practices and expertise at Dewa, including benchmarking and key performance indicators,
said a statement from Dubai utility firm.
The delegation included Khalid Al
Salouli, the director at Aramco and
head of the Energy Industrial City;
Nabil Chaachou, the project manager
at Aramco Energy Industrial City; Jaap
Kalkman, a partner at Arthur D Little, a
leading management consulting firm,
and global head of its energy and
utilities practice; besides Lukas
Vylupek, the principal at Arthur D Little
responsible for the Energy Industrial
City project, it stated. During the
meeting, Saeed Mohammed Al Tayer,
the managing director and chief
executive of Dewa, Al Tayer explained
the importance of continued
cooperation between the two organisations in electricity and water areas. He reviewed Dewa’s
programmes, plans, and projects to achieve the directives of President His Highness Sheikh
Khalifa bin Zayed Al Nahyan, and the Vice President, Prime Minister and Ruler of Dubai, His
Highness Sheikh Mohammed bin Rashid Al Maktoum, to strengthen the UAE's leadership globally
and improve performance, productivity, and quality of service to customers.
Dewa’s strategy, he stated, was in line with the UAE Centennial 2071, the UAE Vision 2021, and
the Dubai Plan 2021, to secure a happy and sustainable life for future generations, and always
rank first in all areas.
The visiting delegation briefed Al Tayer on Aramco’s Energy Industrial City project, which will be
developed over 50 sq km. The Aramco team expressed its desire to co-operate with Dewa, and
benefit from its expertise in the fields of generation, transmission, and distribution.
The meeting was attended by Waleed Salman, the executive vice-president of business development and
excellence, Rashid bin Humaidan, the executive vice-president of distribution power, Khawla Al Mehairi,
the executive vice-president of strategy and government communications, and Marwan Al Sabbagh, vice-
president of projects and connection services, at Dewa.-

Kuwait Oil Company floats tenders for offshore oil exploration
Reuters + NewBase
Kuwait Oil Company (KOC) in an unprecedented move has floated tenders for offshore oil
explorations, reports Al-Anba daily. The daily quoting informed sources explained that contracts
are expected to be signed in the second half of 2018 for implementation of the project.
He explained the internal tenders committee at KOC went ahead and floated tenders for offshore
oil explorations without resorting to the Central Tenders Committee based on specific conditions
stipulated in the new Tenders Law.
They noted the exploration will begin in six different sites off Kuwaiti Bay before the end of 2018,
and that KOC has invited three specialized international companies in drilling/explorations —
Schlumberger, Baker Hughes and Halliburton, to present their quotations.
KOC is allowing the three companies to seek help from other international companies in terms of
equipment supply, while signing sub-contracts for the execution of relevant tasks.
The source reiterated the new contracts aim to boost the daily oil production by 700,000 barrels
and gas production to one billion cubic feet. Meanwhile, director of Technical Monitoring in the
Ministry of Electricity and Water Engineer Iqbal Al-Tayyar disclosed that the sector has been
communicating with the Public Authority for Housing Welfare (PAHW) concerning the smart and
environment-friendly South Saad Al-Abdullah City, reports Al-Anba daily.

Engineer Al-Tayyar noted the Korean company that will be executing the project is fully involved in
the coordination. She affirmed that ministry officials recently held a meeting with officials of PAHW
and Korean experts to deliberate on the aspect of electricity and water supply to the city.
She said the ministry has been exerting concerted efforts to ensure the team forms the right
synergy for achievement, indicating the focus is now on establishing three centers for power and
water, and prepaid system for consumer affairs.
She reiterated the current stage is for data gathering in preparation for the project’s housing units,
the number of beneficiaries, and electricity and water needs of each unit, after which the team will
move to the next stage of infrastructure execution.
Challenges
KOC has set very challenging and ambitious objectives for the Exploration Group as part of the
2030 strategy.
The search for gas and light oil in the Jurassic and Permian plays is taking us into unconventional
reservoirs with increased drilling risk through
higher temperatures and pressures and the
complexities of fractured carbonates. All of
these projects will present us with new and
complex technical, logistical and management
challenges. We believe KOC can achieve
extraordinary efficiencies when all disciplines
are fully involved and informed throughout the
exploration cycle.
The accurate mapping of the intra reservoirs
within Cretaceous formations and their lateral
extensions, as well as the identification and
mapping of stratigraphic traps are recognized as
an interpretation challenges. The imaging and
mapping of the Jurassic fractured reservoirs and the deep prospects represent a challenge for
light oil and gas exploration. Deep, sour and HTHP drilling conditions within the Jurassic section
and deeper present very challenging drilling conditions in the industry.
Currently KOC is evaluating several emerging technologies which might help understanding and
solving part or all of these challenges, this includes:
• High-resolution and wide-azimuth seismic surveys.
• Utilizing the highest channel count in seismic acquisition systems
• Direct Hydrocarbon indicators and reservoir property measurements.
• Fracture detection and mapping.
• Pore pressure prediction.
• Multi-component seismic surveys.
• Full field 4D seismic surveys.

Iraq Ships Near-Record Amount of Oil From South
Bloomberg - Anthony Dipaola
Iraq exported near-record levels of oil from the south in December as the federal government
seeks to make up for production disruptions after territorial disputes in the country’s north.
Southern exports at record levels in November and December again call into question Iraq’s ability
to meet its commitment to cut output as part of the OPEC-led drive to curb a global oil glut. The
producers’ group is seeking to bolster prices by keeping excess crude off the market. Iraq’s
burgeoning southern sales contrast Saudi Arabia’s efforts to buttress the group’s action by cutting
more than its share of production.
Iraq, the second-largest oil producer in the Organization of Petroleum Exporting Countries,
shipped 3.46 million barrels of crude a day from its southern port of Basra last month, according to
tanker tracking data compiled by Bloomberg. That’s slightly down from November, when the
country exported a record 3.51 million barrels a day from the south.
The tanker tracking figures are slightly lower than Oil Ministry figures released on Wednesday,
which showed December crude sales excluding northern flows reaching a record 3.535 million
barrels a day.

Iraq is boosting southern output to offset a decline in exports from the country’s north. The semi-
autonomous Kurdistan Regional Government ships crude it produces via pipeline to Turkey’s
Ceyhan port. Sales from the neighboring Kirkuk region halted in October after the central
government retook fields there from the Kurds amid a territorial dispute.
Total exports -- from both north and south -- slipped about 22,000 barrels a day in December, to
3.78 million barrels a day, according to tanker-tracking and port agent data compiled by
Bloomberg. Sales from the north alone rose 10 percent to 319,000 barrels a day in December,
according to tanker tracking. While that increase helped to regain some of the sales lost since
October, exports are still only about 60 percent of their level prior to the dispute.
Iraq pumped 4.39 million barrels a day in November, exceeding its OPEC quota of 4.35 million
barrels daily, according to data compiled by Bloomberg. The country met its commitment to the
group for the first time last year only in October, when output slumped amid the output disruptions,
also according to Bloomberg-compiled data. OPEC secondary-source figures put production
a little above that level even in October.
Exports from Saudi Arabia, OPEC’s biggest producer, fell in December to the second-lowest level
in the year, according to Bloomberg tanker tracking. The Saudis cut sales to China to the lowest in
2017.

China set to top Japan as world's biggest natural gas importer
Reuters + NewBase
Beijing's crackdown on pollution has put China on track to overtake Japan this year as the world's
biggest importer of natural gas, used to replace dirtier coal.
China — already the biggest importer of oil and coal — is the world's third biggest user of natural
gas behind the United States and Russia, but has to import around 40 percent of its total needs as
domestic production can't keep up with demand.
Data compiled from the Thomson Reuters Eikon terminal indicates China's 2017 imports of
pipeline gas and liquefied natural gas (LNG) will top 67 million tonnes, up by more than a quarter
from a year earlier. LNG imports alone surged more than 50 percent.
The data, which includes LNG tanker arrivals to China and pipeline monthly import flow estimates,
is preliminary as December figures are not yet available.
China still lags Japan, with gas annual imports of around 83.5 million tonnes, all as LNG, but its
overall gas imports topped Japan's in September and again in November, government data and
shipping flows show.
Analysts say the trend is set and China should top Japan for the full year in 2018.
"Both LNG and pipeline imports will continue to increase in the next few years. We expect China
to overtake Japan as the world's largest gas importer in 2018," said Miaoru Huang, Asia gas and
LNG senior manager at energy consultancy Wood Mackenzie.
"But Japan will remain as the No.1 LNG importer till around 2028," she added.
China last year started to move millions of households and many industrial facilities from coal to
gas as part of efforts to clean its skies, sparking an unprecedented rally in overseas import orders.
China's three biggest LNG suppliers are Australia, Qatar and Malaysia, while pipeline imports
come from Central Asia and Myanmar. A pipeline connecting China to Russia is under
construction.
Unlike established LNG importers which import the bulk of their cargoes under long-term contracts
with fixed monthly volumes and a link to the oil market, many Chinese utilities buy LNG in the spot
market when they need it at short notice, such as the current peak demand winter season.
As a result, Asian spot LNG prices have more than doubled since June to $11.20 per million
British thermal units (mmBtu), their highest since November 2014, making LNG one of 2017's
strongest performing commodities. China's surging demand already pushed it past South Korea in
2017 as the world's number 2 LNG importer.

World Energy commodity prices increased in the 2nd half of 2017
Source: S&P Dow Jones Indices, as compiled by Bloomberg L.P.
After decreasing nearly 20% in the first half of 2017, the spot energy index in the Standard and
Poor's (S&P) Goldman Sachs Commodity Index (GSCI) ended 2017 16% higher than the
beginning of the year. Higher crude oil and petroleum product prices in the second half of 2017
were responsible for the increase in the S&P GSCI energy index.
Note: S&P GSCI indices shown in the chart are spot return indices, which only reflect levels of futures
contracts included in the index.
West Texas Intermediate (WTI) and Brent, two major crude oil benchmarks, account for 70% of
the weighting in the S&P GSCI energy index. As a result, the energy index tends to follow major
price movements in the crude oil market.
The weights associated with individual commodities within the S&P GSCI index are updated every
year in response to changes in global commodity production quantities and futures contract
trading volumes.
Although still lower than in 2011 through 2014, crude oil prices rose for the second straight year
after a crude oil production-cut agreement was executed among the Organization of the
Petroleum Exporting Countries (OPEC) and some non-OPEC countries, which partially
constrained global crude oil production.
The agreement came into effect in January 2017 and will continue through the end of 2018. In
addition to supply-side factors, strong economic growth in both developed and emerging markets
has led to higher oil demand.

Petroleum-based products such as reformulated gasoline blendstock for oxygenate blending
(RBOB), ultra-low sulfur diesel (ULSD), and gasoil together accounted for 24% of the S&P GSCI
energy index. ULSD had the largest price increase among energy commodities. Increased global
trade and accelerating global manufacturing activity have resulted in relatively high global distillate
consumption.
Gasoline prices did not increase as much as distillate and crude oil prices. U.S. gasoline
consumption growth slowed from 2016 to 2017, compared with the prior two years when sharp
declines in gasoline prices, among other factors, contributed to strong gasoline consumption
growth.
Natural gas accounts for the remaining 6% of the S&P GSCI energy index and is the only energy
commodity price that declined in 2017. After ending 2016 at the highest point in two years, Henry
Hub natural gas prices dropped in the first few months of 2017 because of warmer
weather and higher-than-average inventory levels at the end of the winter heating season. Natural
gas prices then stayed relatively flat for most of the second half of 2017. Less natural gas was
used in U.S. electricity generation during the summer of 2017 compared with 2016. However, U.S.
exports of natural gas reached a record high in 2017, with Mexico as the largest recipient.
The spot S&P GSCI industrial metals index rose the most among all the S&P GSCI indices,
increasing 32% in 2017, with aluminum, zinc, and copper having the largest price increases. The
S&P GSCI precious metals and livestock indices rose 12% and 9%, respectively, while the spot
S&P GSCI agriculture index declined 4%, led by declines in sugar and cocoa prices.

NewBase January 04 - 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil at highest since mid-2015 amid Iran tensions, tighter market
Reuters + Bloomberg + NewBase
Oil prices on Thursday hit their highest in more than two and a half years, touching levels not seen
since before a slump in commodity markets in 2014/15, boosted by tensions in key producer Iran
and by ongoing OPEC-led output cuts.
Prices were also buoyed by Asia’s stock markets, which flirted with 10-year highs on Thursday
amid strong data from leading economies including the United States, Japan and Germany.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $62.16 a barrel at 0752 GMT, up
53 cents, or 0.9 percent, from their last close. They touched $62.21 shortly before, their highest
level since May 2015.
Brent crude futures LCOc1 - the international benchmark for oil prices - were at $68.23 a barrel,
up 39 cents, or 0.9 percent, after revisiting a May 2015 high of $68.27 shortly before.
Beyond a brief intraday spike in May, 2015, these were the highest crude price levels since
December, 2014, at the start of the oil price downturn. Freezing weather in the United States has
also spurred short-term demand, especially for heating oil.
“The market is clearly getting more bullish on oil as inventory levels get closer to the five-year
average. Geopolitical uncertainty in Iran, OPEC’s third largest producer, is also helping to support
the price as citizens are again protesting the government,” said by William O‘Loughlin, investment
analyst at Australia’ Rivkin Securities.
Oil price special
coverage

Iran’s elite Revolutionary Guards have deployed forces to three provinces to put down anti-
government unrest that has been ongoing for a week, their commander said on Wednesday. The
unrest in Iran has not affected the country’s oil output, however.
“The continued Iranian protests have triggered off a ‘what if’ reaction in an already extremely
skittish oil market,” said Sukrit Vijayakar, director at energy consultancy Trifecta. He added that
beyond potential strikes by Iranian oil workers, the risk of supply disruptions was low as ”Iran’s oil
resources are not near any of the major population centres or sites where the protests are playing
out.
In the United States, crude oil inventories fell by 5 million barrels in the week to Dec. 29 to 427.8
million barrels, industry group the American Petroleum Institute said on Wednesday. Potentially
undermining the trend toward tighter market conditions is U.S. oil production C-OUT-T-EIA, which
has risen by almost 16 percent since mid-2016, hitting 9.75 million barrels per day (bpd) at the
end of last year.
WTI Gains From 3-Year High on Signs U.S. Stockpiles Fell
Oil extended gains from the highest close in three years as U.S. industry data showed crude
stockpiles continued to decline and as OPEC production held steady last month.
Futures rose 0.8 percent to above $62 a barrel in New York after adding 2.1 percent on
Wednesday. Inventories slid by 4.99 million barrels last week, the American Petroleum Institute
was said to report. Government data Thursday is forecast to show supplies fell by 4.7 million
barrels, which will be a seventh weekly decrease. OPEC’s output was unchanged in December as
the group approached a fresh year of curbs, a Bloomberg survey shows.
Oil is extending gains after climbing more than 12 percent last year as the Organization of
Petroleum Exporting Countries and its allies cut output to trim a global glut. However, the recent
surge in New York crude may lead to growth in U.S. drilling and supply. The rig count

will “substantially increase” with crude prices between $61 and $65 a barrel, according to 42
percent of industry executives surveyed by the Dallas Federal Reserve last month.
“We may soon see an end to the rally because prices at this level will only make U.S. drillers
boost production,” said Will Yun, a commodities analyst at Hyundai Futures Corp. “Supply
disruptions in the North Sea and Libya, falling U.S. stockpiles, and conflict in Iran have
underpinned the momentum.”
West Texas Intermediate for February delivery was at $62.10 a barrel on the New York Mercantile
Exchange, up 47 cents, at 1:46 p.m. in Hong Kong. Total volume traded was about 39 percent
above the 100-day average. Prices closed at $61.63 on Wednesday, the highest level since
December 2014.
Brent for March settlement added 29 cents to $68.13 a barrel on the London-based ICE Futures
Europe exchange after climbing 1.9 percent Wednesday to the highest close since December
2014. The global benchmark crude traded at a premium of $6.17 to March WTI.
OPEC’s 14 members pumped 32.47 million barrels a day in December, according to a Bloomberg
survey of analysts, oil companies and ship-tracking data. Libya saw a 30,000-barrel-a-day decline
to 970,000 a day following a pipeline blast, which was offset by an increase from Nigeria.

NewBase Special Coverage
News Agencies News Release January 06-2017
Crude oil prices increased in 2017, and Brent-WTI spread
widened
Source: U.S. Energy Information Administration, based on Thomson Reuters
Crude oil prices ended 2017 at $60/barrel (b), the highest end-of-year price since 2013. West
Texas Intermediate (WTI) crude oil prices averaged $51/b in 2017, up $7/b from the 2016
average, and ended the year $6/b higher than at the end of 2016. Brent prices have moved up
$10/b since the end of 2016 and ended the year at $65/b, widening the Brent-WTI spread to $5/b
at the end of the year, the largest difference since 2013.
Despite relatively high U.S. crude oil production, curtailments in production by members of the
Organization of the Petroleum Exporting Countries (OPEC) and robust global demand supported
crude oil price increases in 2017. The OPEC agreement to curtail crude oil production in 2017 and
subsequent extension of that agreement through 2018 tightened crude oil supplies, which put
upward pressure on crude oil prices.
The price spread between Brent and WTI was significantly greater in 2017 than in 2016. Lower
domestic crude oil prices made U.S. crude oil more competitive in international markets and
supported record U.S. crude oil exports. Domestic demand was also higher: U.S. product supplied
for crude oil and petroleum products was the highest level since 2007.

Source: U.S. Energy Information Administration, Short-Term Energy Outlook, December 2017
U.S. highlights
• U.S. crude oil production increased in 2017 by more than 384,000 barrels per day (b/d) to
9.2 million b/d, based on data through September and estimates from the December Short-
Term Energy Outlook (STEO) for the remainder of 2017. The increase was driven by Lower
48 onshore production (especially in the Permian Basin area) with an estimated increase of
nearly 330,000 b/d from 2016 to 2017.
• The Brent-WTI price spread averaged more than $3.33/b in 2017. In 2016, the average
price difference was less than $1/b.
• Crude oil export volumes and the number of destinations for those exports continued to
increase. U.S. exports of crude oil averaged 1.0 million b/d through October 2017, on pace
for a record high and an increase of 445,000 b/d from the 2016 average.
• Based on data through October 2017, average U.S. imports of crude oil increased by more
than 103,000 b/d from the 2016 level to nearly 8.0 million b/d in 2017, the highest level
since 2012. Canada, Saudi Arabia, and Venezuela were the largest foreign suppliers of
crude oil to the United States.

• The average volume of U.S. product supplied for crude oil and petroleum products was
19.8 million b/d through October, the highest level since 2007.
• On August 25, 2017, Hurricane Harvey made landfall in the U.S. Gulf Coast, disrupting
refinery and port operations and resulting in a steep decrease in refinery operations.
• International highlights
• EIA estimates OPEC crude oil production averaged 32.5 million b/d in 2017, a 0.2 million
b/d decrease from the 2016 levels.
• OPEC and the non-OPEC countries that agreed to crude oil production cuts in 2017 also
agreed to continue limiting output through the end of 2018. Saudi Arabia and Russia will
co-chair a monitoring committee designed to assess the group’s adherence to the
production targets. The group plans to reassess target production levels at its June 2018
meeting in the context of market conditions at that time.
• A pipeline outage in the North Sea contributed to higher Brent crude oil prices in
December, further widening the Brent-WTI spread.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk Energy
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
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 28 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 January 2018 K. Al Awadi

New base 04 january 2018 energy news issue 1123 by khaled al awadi

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