New base 06 january 2020 energy news issue 1397 by khaled al awadi-compressed

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NewBase Energy News 06 January 2021 - Issue No. 1397 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E: SNOC begins gas production at Mahani field in Sharjah
WAM + NewBase
Sharjah National Oil Corporation (SNOC) and its partner Italian oil major Eni have announced the
start-up of Mahani-1 gas well, marking the commencement of gas production from the Mahani Field,
in Sharjah Area B.
The announcement comes within only one year of the discovery of gas in the field, labelled as the
first new onshore discovery in Sharjah for 37 years, reported Emirates news agency Wam.
Despite Covid-19-related challenges, which included the difficulty of importing raw materials during
lockdown, and the laying of a 23,000-metre pipeline in hostile desert conditions during the summer,
the well was completed in a record eight months. It is now connected to the existing pipeline, ready
to safely produce gas and liquids for processing at the Sajaa gas processing plant, owned and
operated by SNOC.

"The commencement of the first gas production from Mahani, less than a year after discovery, is a
tremendous achievement for Sharjah, meeting our commitment to contribute to the efforts of making
reliable gas supplies widely available for the local energy needs of Sharjah and the UAE," said
Sheikh Sultan bin Ahmed Al Qasimi, President of SNOC.
Mahani-1 was drilled to a total measured depth of 14,597 feet and tested gas at flow rates of up to
50 MMSCF per day with associated condensate from the Thamama Formation. The well-
established Sharjah infrastructure, the abundant capacity of the Sajaa gas processing complex, the
available efficient pipeline network, the well-planned project activities and its project management
capabilities have all enabled SNOC to make such an achievement in record time.
"Bringing on production of the first onshore discovery in Sharjah in almost four decades marks the
beginning of an exciting time for SNOC and for Sharjah’s energy sector. This new production follows
just two years after completion of the First Sharjah Licence Round, and we look forward to license
additional areas of Sharjah in line with the Emirate’s strategic plans in the coming years," said Hatem
Al Mosa, CEO of SNOC.
The related field development plan provided for the required surface facilities as well as extended
well testing as part of a long-term programme to further evaluate the size and potential of the field.
In addition to starting production from Mahani, the planned work programme will include further
drilling in order to determine the extent of the structure.
SNOC (the Operator of Area B), and Eni each hold a 50% stake in the Mahani field as part of the
Area B Concession Agreement signed in 2019 following the successful First Sharjah Licence
Round. The two companies are also partners in the onshore Concession Areas A and C, where
exploration is actively in progress, with Eni being the Operator.
In addition to the new Mahani field, SNOC owns and operates over 50 wells, a gas processing
complex and 2 hydrocarbon liquid storage and export terminals. Its Sajaa complex is the hub of gas
pipelines connecting the northern Emirates.

Kuwait makes three new oil and gas discoveries
KUNA + NewBase
Kuwait discovered three new oil and gas fields including one next to the giant Burgan
field, according to the country’s oil minister. Kuwait discovered three new oil and gas
fields including one next to the giant Burgan field, the country’s oil minister said.
State oil firm Kuwait Oil Company (KOC) discovered the new fields in different parts of
the country, which will boost the country's oil reserves and production capacity, the
minister of oil, electricity and water Mohammad Al Faris said in a statement to the Kuwait
News Agency on Monday evening.
The first discovery is in the north-west part of the country with a production capacity of
1,452 barrels per day of light oil, while the second is in Al Qashaniya in northern Kuwait
with a production capacity of 1,819 bpd of light oil and associated gas.
“This discovery has great economic importance as it sheds light on large undiscovered
areas in the western and north-western parts of Kuwait, which will contribute directly to
increasing oil reserves and the production capacity according to KOC’s 2040 strategic
plan,” Mr Al Faris, said.
Kuwait is currently Opec's fourth-largest producer and the two new discoveries in the
northern part of Kuwait are deemed to be of strategic importance as this area has not
been explored before, according to the minister.
A conventional oilfield was also discovered to the north of the Burgan field in south-west
Kuwait, which has a daily production rate of more than 2,000 barrels from several wells
drilled in 2020.

“The results give KOC access to easy and low-cost reserves, which supports the
company’s efforts to maintain its competitive advantage between countries and oil
companies,” the minister said. The company will drill new wells in the discovered fields
to increase production, he added.
Kuwait, like other Opec members, is currently curtailing its oil production to ensure a
better balance between oil supply and demand. The country’s oil production reached
2.291million barrels per day in November, according to Opec’s monthly oil market report
based on secondary sources.
Kuwait had 101.5 billion barrels in proven oil reserves at the end of 2019, which account
for 5.9 per cent of the world's total, according to BP's 2020 Statistical Review of World
Energy.
Other GCC countries including the UAE and Saudi Arabia also announced new oil and
gas discoveries recently.
Saudi Arabia, the world's largest exporter of crude, last month discovered four new oil
and gas fields in different locations, the kingdom's minister of energy Prince Abdulaziz
bin Salman said.
In February, the UAE discovered 80 trillion cubic feet of shallow gas reserves in an area
straddling the emirates of Abu Dhabi and Dubai, the biggest find in 15 years.

Egypt: Total, Egas sign exploration deal for offshore block
TradeArabia News Service + NewBase
An international consortium led by Total (Total 35% Operator, Shell 30%, KUFPEC 25%, Tharwa
10%) and the Egyptian Natural Gas Holding company (Egas) have signed an exploration and
production agreement for the North Ras Kanayis Offshore block located in the Herodotus Basin,
offshore Egypt in the Mediterranean Sea.
This exploration block covers an area of 4,550 sq km, extending from 5 to 150 km from the shore,
with water depths ranging from 50 to 3,200 metres. The Herodotus Basin is an underexplored area
and the agreement includes a 3D seismic campaign during the first three years.
“Total is pleased to further strengthen its Eastern Mediterranean position as an operator of this
exploration and production agreement’,” commented Kevin McLachlan, Senior Vice President
Exploration at Total.
“We are excited by the exploration potential of the North Ras Kanayis Offshore block. It reinforces
our presence in Egypt, following a gas discovery made in July 2020 with the Bashrush well on the
North El Hammad license, to be developed through a tie-in to nearby existing infrastructure.”
Total holds a working interest of 25% in the North El Hammad license, alongside operator ENI
(37.5%) and BP (37.5%). –

Egypt: United Spuds ASH-3 Well in Abu Sennan License
Petroleum Africa + NewBase
United Oil & Gas PLC announced the spudding of the ASH-3 well in the Abu Sennan License (the License), Egypt
on January 4. United holds a 22% working interest in the License, which is operated by Kuwait Energy Egypt.
ASH-3 is a vertical well targeting the producing Alam El Bueib (“AEB”) reservoirs at a depth of 3,600 to 3,950m in
an area of the ASH field, up-dip of the ASH-2 production well. The ASH-2 well came onstream at the beginning of
2020 and has produced in excess of 1 million barrels to date (gross) with current rates of c. 4,500 barrels of oil
per day on a 48/64″ choke (gross).
The ASH-3 well will be drilled by the EDC-50 rig, which has a history of drilling in the Western Desert. It is
anticipated that the ASH-3 well will take up to 60 days to drill and test.
The ASH-3 development well is the first to be drilled in the 2021 campaign and is to be funded from operational
cashflow. The second well in the drilling schedule will be the ASD-1X exploration well, targeting the Abu Roash
reservoirs in the 4-way dip-closed Prospect D structure in the north of the License, close to the producing Al
Jahraa field and if successful is capable of being brought into production quickly. The historic drilling success rate
on the License is c. 80%.
United’s Chief Executive Officer, Brian Larkin commented: “We are delighted that the ASH-3 well has been
spudded and look forward to updating the market in due course, once the well has reached the target reservoirs.
There is clearly great potential in the ASH Field, and if the outstanding success that was achieved in the ASH-2
well can be replicated here, it will be a fantastic result for the joint venture partners.
“It is equally pleasing for the joint venture to be back drilling in Egypt again, after the deferral of the majority of the
2020 drilling program due to the low oil price environment, and we look forward to the drilling of further wells as
part of our 2021 campaign, including the ASD-1X exploration well, that will follow after completion of ASH-3.”

Saudi Arabia’s Surprise Supply Cut Ripples Through Oil Markets
Bloomberg - Andres Guerra Luz
Saudi Arabia shocked investors on Tuesday with a decision to slice crude output in February and
March as part of an OPEC+ supply agreement. The optimism around tightening global supply
permeated through the oil market, pushing benchmark crude futures to the highest levels in months
and causing swings in calendar spreads and options. While spreads rallied and options turned less
bearish, technical indicators warned crude’s rally may be overdone.
Here are four charts showing how the supply declaration from the world’s key crude producers,
including Saudi Arabia and Russia, rippled across the deepest corners of the oil market.
Surging Spreads
Timespreads -- where traders bet on the price of oil for different months -- showed some of the most
marked improvements during Tuesday’s session. Brent’s front-month contract surged to a 17-cent
premium versus the contract three months out, pointing to expectations for tighter supplies after
trading in a bearish contango structure the last few sessions.
Saudi Arabia’s pledge to cut an extra 1 million barrels a day for February and March sets up for a
tighter market than traders were initially anticipating after OPEC+ decided last year to loosen the
taps in January.
Deferred Rally
It’s not just nearby futures contracts that are gaining. West Texas Intermediate crude for the rest of
2021 neared $50 a barrel on Tuesday, the highest in 10 months. That offers added incentive for oil
producers to ramp up their hedging levels for the rest of the year. T
hose volumes won’t only come from U.S. producers, but also West Africa and the North Sea. It’s a
move that also shows up in timespreads further along the curve, with WTI for December 2021 more

than $2 above the same contract a year later. That spread has been a hot coronavirus vaccine trade
in recent weeks.
Barely Bearish Options
With the outlook for crude supply suddenly looking tighter, oil options markets have grown less
bearish. The so-called put skew -- how much more traders are willing to pay for bearish put options
over bullish calls -- is now near its smallest level since February. That’s a sign that traders are less
geared up for price drops.

Technical Warning
Despite recent gains, technical indicators suggest oil may have rallied too far too fast. WTI crude
futures settled above the upper Bollinger
Band on Tuesday in a sign that the market
is overbought. Meanwhile, Brent’s 14-day
Relative Strength Index touched 70,
another warning that the market may be due
for a pullback.
“The fundamentals are still pretty bearish,”
said Bob Yawger, head of the futures
division at Mizuho Securities. “Year-on-year
storage is way above last year still. That
does not justify a big move to the upside
here, but that’s the trajectory we’re heading
in.”

Asia witnessed highest crude refinery maintenance
Trade Arabia + NewBase
Asia had the highest crude oil refinery capacity under maintenance (both planned and unplanned)
globally in 2020. The region had a refining capacity of 11,524 thousand barrels per day (mbd) under
both planned and unplanned maintenance in 2020, according to GlobalData, a leading data and
analytics company.
The company’s report: ‘Global Crude Oil Refinery Maintenance Review, 2020 – Asia and North
America Witness the Highest Maintenance in the Year’ reveals that Asia had 11,319 mbd of refining
capacity under planned maintenance and 205 mbd of refining capacity under unplanned
maintenance in the year.
Haseeb Ahmed, Oil and Gas Analyst at GlobalData, comments: “In Asia, Ulsan and Yeosu in South
Korea and Jamnagar II in India were the key refineries under both planned and unplanned
maintenance in 2020. Ulsan and Yeosu have refining capacities of 840 mbd and 800 mbd,
respectively, while Jamnagar II has 707 mbd.”
GlobalData identifies North America as the second highest region with 11,183 mbd of crude oil
refining capacity under both planned and unplanned maintenance in 2020. The Port Arthur II
refinery in the US had the highest refinery capacity of 635 mbd under planned maintenance in 2020.
The Port Arthur I refinery, also in the US, had the highest refinery capacity of 790 mbd under
unplanned maintenance in the year.
Europe occupied the third position globally with 5,358 mbd of refining capacity under planned and
unplanned maintenance in 2020. The Pernis refinery in the Netherlands had the highest capacity
under planned maintenance with 405 mbd, while the Plock refinery in Poland and Rheinland in
Germany followed with capacities of 327 mbd and 325 mbd respectively. There is no unplanned
maintenance in Europe for the year 2020.

NewBase January 06-2020 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil Steadies Near $50 After Surging on Surprise Saudi Output Cut
Bloomberg
Oil steadied in Asia after surging to a 10-month high on Saudi Arabia’s pledge to cut an extra 1
million barrels a day of crude output in February and March as a rampant coronavirus leads to more
lockdowns.
Futures in New York traded near $50 a barrel after jumping 4.9% on Tuesday. OPEC+ reached a
deal following two days of talks to curb supply over the next two months. The move by Saudi Arabia,
the group’s de-facto leader, paved the way for other producers to keep supplies steady and for
Russia and Kazakhstan to lift output by a combined 75,000 barrels a day in both February and
March.
The kingdom’s pledge, which Russia’s deputy prime minister called a “new year gift” to the oil
market, comes amid more stay-at-home orders and travel restrictions to rein in a surge of virus
infections. Germany extended its lockdown, Japan reported a record number of daily cases and
Dalian in China asked people more vulnerable to Covid-19 to leave the city amid an outbreak.
Oil price special
coverage

OPEC+ faces a complex demand outlook as it decides how to move forward with its output plan
month by month. There are indications that parts of the global economy are staging a comeback,
with a gauge of U.S. manufacturing expanding last month at the fastest pace since 2018, but other
areas that seemed to be recovering are wavering. Goldman Sachs Group Inc. said the Saudi move
likely reflects expectations for oil demand to weaken further.
“The 1 million barrel per day reduction is nothing to scoff at and it will tip the market back into a
supply deficit for the first quarter at least, even if demand is set to dip slightly on the new virus
strain,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “The message is now
loud and clear that Saudi Arabia is there to guard the fragile equilibrium in this market.”
PRICES
West Texas Intermediate for February delivery added 0.1% to $50.53 a barrel on the
New York Mercantile Exchange as of 11:48 a.m. in London Brent for March settlement
rose 1.85% to $54.59 on the ICE Futures Europe exchange after closing up 4.9% on
Tuesday.
The Saudi decision and the rally in prices may give the U.S. shale industry some room to begin
snapping up market share, though financial hardships from the pandemic and investor expectations
remain obstacles. It’s an especially sweet gift for U.S. shale drillers, said Helima Croft, chief
commodities strategist at RBC Capital Markets. Shale stocks subsequently surged.
The American Petroleum Institute reported that U.S. crude inventories fell by 1.66 million barrels
last week, according to people familiar with the data, which would be the fourth straight weekly drop

if confirmed by official figures due Wednesday. The API reported sharp jumps in gasoline and
distillates stockpiles, however, a sign the virus is damping demand for fuel.
The oil futures curve reacted to the Saudi move. Brent’s prompt timespread was 13 cents in
backwardation -- where near-dated prices are more expensive than later-dated ones -- compared
with a 7-cent contango on Monday. That’s a bullish signal that the market is comfortable with the
supply-demand outlook.
Saudis Take Charge of Oil Market With Surprise Output Cut
Saudi Arabia surprised the market with a large cut in crude production, an assertion of primacy over
the global oil industry that came directly from the kingdom’s de-facto ruler.
The move papered over cracks in the OPEC+ coalition and was a U-turn from some recent Saudi
oil-policy priorities, but those things paled in comparison next to the global impact of the decision.
Crude prices jumped to a 10-month high and shares of energy giants in London and shale drillers
in Texas surged.
Since the start of the week, the oil market has been focused on the meeting between the
Organization of Petroleum Exporting Countries and its allies. Since late December, Russia had been
pushing for a supply hike of about 500,000 barrels a day for February, and there was reason to think
it would prevail.
Saudi Arabia shattered those assumptions, pledging an additional unilateral cut of 1 million barrels
a day in February and March, while most of the rest of the group kept output steady. Russia and
Kazakhstan were permitted to add a combined 75,000 barrels a day of supply in each of those
months, a token increase that Iranian Oil Minister Bijan Namdar Zanganeh said would barely register
on the market.

NewBase Special Coverage
The Energy world – Jan. 06 -2020
Winter Is Colder This Year and That’s Good for Energy Prices
Bloomberg News
Freezing weather that’s gripped large parts of the northern hemisphere is delivering a winter
blessing for oil, gas and coal prices as suppliers meet a surge in heating demand.
Temperatures across much of Europe and Asia are well below normal and forecasters expect them
to stay there for most of January. The chill is supporting oil prices, which are holding above $50 a
barrel, while the profit from turning crude into diesel climbed in Europe to the most since August in
recent weeks as consumers -- many stuck working from home because of a resurgent virus -- burn
more heating fuel.
The weather is especially severe in northeast Asia. In Japan, a major refiner said December demand
was expected to be 7% ahead of last year, and South Korea last week considered a plan to tap
state reserves to meet soaring consumption. In China, heating demand has so stretched power
supply, factories have bought diesel generators to keep the lights on.
Beyond oil, colder temperatures in Asia have depleted natural gas inventories, resulting in a spot
deal above benchmark records this week, and thermal coal in China has also surged as the cold
snap has intensified an existing power crunch.
“Winter weather is going to provide a huge boost to heating demand in the residential and
commercial sectors,” said Edmund Siau, a Singapore-based analyst at energy consultant FGE.
It’s a very different picture to a year ago, when Europe had its hottest winter on record and North
Asia enjoyed milder temperatures. By some estimates that shaved 800,000 barrels a day, or almost
1%, from global oil demand last January, a month when Asian liquefied natural gas prices slumped.

China’s cold wave saw the December average temperature fall to the lowest since 2013, and the
country’s Meteorological Administration has warned of a further sharp drop in eastern areas in
coming days. European capitals are also shivering, with temperatures in London more than 5
degrees Celsius below average, and 6 degrees below the 30-year normal in Madrid, according to
Maxar.
Power consumption in China -- where the economy has roared back from the coronavirus pandemic
-- increased by 11% in December, more than double the growth in the same month a year earlier,
according to the National Development and Reform Commission.
LNG is selling near record levels in North Asia as the rising demand outstrips available supplies,
while deliveries of the fuel to Asia jumped by almost 9% in December compared to last year,
according to ship-tracking data compiled by Bloomberg. Last month, China’s largest importers of
the fuel sent notices to customers warning of tightening supplies amid record-setting withdrawals
from gas storage sites.
“Colder temperatures are proving supportive for LNG prices in Asia, at a time when prices have
already trended higher next to a global oil price rebound and tight supplies,” said Peter Lee, a senior
oil and gas analyst at Fitch Solutions. While prices will retreat as seasonal demand eases, there’s
a bullish outlook through 2021 on a post-pandemic recovery and as green energy policies improve
adoption of the fuel across industries, he said.
European gas prices jumped to the highest level since January 2019 earlier this week and the fuel
is being taken from storage facilities at a faster pace, according to data from Gas Infrastructure
Europe. Storage levels in Germany, Europe’s biggest gas consumer, slipped to the lowest since the
winter of 2016-17 and will likely mean there’s also higher demand in the northern summer to
replenish the stocks.
Higher power demand in China, coupled with safety problems in mining regions and import curbs,
has also seen thermal coal prices surge to record highs, while some factory owners have turned to

diesel generators after grid operators rationed electricity to industrial and commercial users to
ensure sufficient supplies for homes. Chinese wholesale diesel prices rose late last month to the
highest level since April, according to data from the country’s National Bureau of Statistics.
In Japan, spot power prices hit a historic high for the fifth straight day Wednesday amid strong
demand and as utilities were forced to curb generation at gas-fired power plants due to lower-than-
normal inventories.
Bigger-than-anticipated gas demand has forced Asia’s biggest top buyers, including Korea Gas
Corp. and Japan’s Jera Co., to seek prompt supplies.
Japan’s biggest refiner ENEOS, last month said demand for kerosene -- a major home heating fuel
in some parts of Asia -- would jump as a direct result of the colder-than-normal weather. Kerosene
is very similar to jet fuel, providing a salve to a corner of the oil market most affected by the virus:
commercial aviation.
To be sure, there’s a different outlook in the U.S., where current mild weather across the northeast,
which accounts for the vast majority of the nation’s heating oil consumption, is limiting demand.
Supply is also being swelled as refiners put jet fuel into the distillates pool.
U.S. natural gas prices have plunged about 20% since peaking on Oct. 30, making the fuel the worst
performer among major commodities as hopes for a frigid winter faded. Heating demand has trailed
long-term averages in eight of the past 10 weeks, according to data published by the National
Oceanic and Atmospheric Administration’s National Weather Service, leading traders to slash their
bullish gas bets on the New York Mercantile Exchange.

NewBase Energy News 08 January 2020 - Issue No. 1397 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. 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 the UAE operations base. Khaled is the Founder
of NewBase Energy news articles issues, an international consultant, advisor,
ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste
management, waste-to-energy, renewable energy, environment protection and
sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities &
gas compressor stations. Executed projects in the designing & constructing of gas
pipelines, gas metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted &
finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements.
Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass
energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous
conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-
in-Chief of NewBase Energy News and is a professional environmental writer with more than 1400 popular
articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste
management and environmental sustainability in different parts of the world. Khaled has become a reference
for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC
leading satellite Channels. Khaled can be reached at any time, see contact details above.
NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE
NewBase 2020 K. Al Awadi

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