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NewBase Energy News 06 May 2018 - Issue No. 1168 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: ENOC Group opens third solar-powered service station
WAM/Tariq alfaham
ENOC Group has opened its third solar-powered service station for the year, in Discovery Gardens
a residential community in Dubai as part of its expansion plans aimed at building 54 service stations
by 2020.
Saif Humaid Al Falasi, Group CEO of ENOC, said, "Our new station marks the opening of the UAE’s
third solar-powered service station, which falls in line with our commitment to adopting innovative
practices to enhance operational efficiency. At ENOC, we keep abreast of major technological
developments that can be utilised to drive energy savings, reduce carbon emissions and contribute
to a sustainable future.
"We remain committed to providing our customers with easy access to fuel and other retail
requirements to a growing community while strengthening our local presence."
The new 75,004 sq ft station offers a range of automotive services including a Tasjeel Centre with
three bays for vehicle testing and registration, three Autopro bays, which offer battery and oil change
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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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and all automotive services, three Prowash car wash bays, including manual and auto wash as well
as EV charging stations.
The station has photovoltaic, PV,
solar panels with an on-grid
system installed on the canopy
roof that can produce a peak
capacity of 120 Kilowatt per hour,
kWh, energy on an ideal day
generating approximately 30
percent more than the average
energy required to run the
station. Built in line with the Dubai
Municipality’s Green Build
regulations, the excess power
generated is transmitted back to
DEWA’s main grid through a
Dubai Electricity and Water Authority, DEWA, solar meter that tracks the power injected to the power
grid.
The forecourt is equipped with six dispensers with a multimedia option and a fuel system designed
to cater maximum flow rate as per the National Fire Protection Association, NFPA, safety standards.
To factor in the waiting time inside the service station, dispensers are built with retractable hoses to
enable refuelling of cars from both sides.
The station is also equipped with the Vapour Recovery Systems, VRS, to prevent and control
emissions, full LED lights installed at the site to reduce energy consumption by 50 percent and a
VRF technology for the air conditioning, AC, system, which saves 35 percent compared to
conventional package AC system.
ENOC had previously announced that all future ENOC service stations will be powered by solar
energy to support the UAE’s long-term strategy to target an energy mix that combines renewable,
nuclear and clean energy sources. ENOC estimates more than 23 GWh of solar energy will be
generated to power the new stations by 2020, minimising the load on DEWA’s grid and power
generating stations.
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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 3
Saudi Arabia's Economic Revamp Is Still an Oil Story
Bloomberg - Mohammed Sergie
Saudi Arabia’s efforts to shore up public finances and revive economic growth are still pretty much
dependent on oil prices, even as the kingdom tries to reduce its reliance on revenue from crude
exports.
The world’s biggest oil exporter will need crude prices to average almost $88 a barrel this year to
balance its budget, according to the latest IMF economic outlook released on Wednesday in Dubai.
That compares with $70 in the previous forecast in October. Brent crude, an international
benchmark, is currently trading above $70 a barrel, the highest level since 2014.
The increase in the so-called breakeven price reflects the government’s plan to boost public
spending to a record this year in an attempt to revive economic growth, after gross domestic product
shrank 0.5 percent in 2017. The fund expects the breakeven price to fall to about $80 in 2019.
Below are key takeaways from the IMF outlook for the Middle East and North Africa:
Price Matters
Breakeven oil prices rising for most Middle Eastern energy exporters
Source: The IMF Regional Economic Outlook
The latest IMF data see Saudi Arabia’s economy expanding 1.7 percent in 2018. But the rebound
is mainly driven by higher government spending, the model that sustained the kingdom’s economy
over more than four decades.
“This expected acceleration in growth is not a free lunch –- the government is picking up the bill,”
said Ziad Daoud, chief Middle East economist for Bloomberg Economics. “The old model of an
economy driven by government spending and financed by oil hasn’t really changed.”
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Diversification Deferred
Saudi Arabia's economic reforms didn't boost the non-oil economy as expected in 2017, and the
kingdom's oil industry shrank
Source: The IMF Regional Economic Outlook
Middle Eastern oil exporters had to constrain government spending in recent years after crude
prices slid in 2014, forcing them to slash subsidies and introduce fees and value-added taxation.
Now that oil is trading around $70 a barrel, budget deficits are starting to shrink for most countries.
Cumulative deficits in the Gulf Cooperation Council, the six-country bloc that includes Saudi Arabia,
the United Arab Emirates and Qatar, will fall to about 2 percent of GDP in 2019 from almost 11
percent in 2016, according to the IMF.
Persistent Deficits
Kuwait, Qatar and Iraq are the only countries in the Middle East with projected budget surpluses in
2018
Source: The IMF Regional Economic Outlook
But the non-oil balance, which strips out revenue earned from hydrocarbon exports, gives a better
picture about progress in diversifying government revenue. For Saudi Arabia, the shortfall is
expected to rise to about 39 percent of the non-oil GDP in 2018 compared with 37 percent last year,
IMF data show.
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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 5
Oman Oil Marketing appoints W.P for Duqm Bunker Terminal project
Oman Observer
Oman Oil Marketing Company has announced the appointment of WorleyParsons Engineering
Oman LLC as the project management consultants for the Duqm Bunker Terminal Project. To be
commissioned in early 2021, the terminal is expected to be a major driver in development goals for
the Port of Duqm.
David Kalife, CEO of Oman Oil Marketing Company “We take great pleasure in announcing the
appointment of WorleyParsons as the new project management consultant for our Duqm Bunker
Terminal Project.
We are confident that WorleyParsons, which combine their global resources experts with
management and technical consultants to work towards fully integrated solutions, will ensure that
technically sound and cost-effective infrastructure solutions are implemented.
We are looking forward to work together towards the successful and timely execution of the project.”
The project will continue to enhance the Port’s premium service standards, improve cost
effectiveness, and also create efficient fuel supply and delivery to all customers within Duqm. This
in turn will support the growth of the regional economy as part of the company’s commitment to
establishing long-term In-Country Value.
“As demands for Oman’s growing industries develop, we are actively there to meet their needs. As
an early investor in the storage terminal business at the port, we are excited to be a part of the new
business and economic growth that will manifest from the investment.
We strongly support the Government and SEZAD goals for the port of Duqm and wider region. With
increasing requests for bunker services and the expected increase of petroleum trading, the regional
demand for these services is expected to surpass what is currently available. This project is part of
Oman Oil Marketing Management’s long-term strategy to contribute and support our national growth
and development,” said David Kalife, CEO of Oman Oil Marketing Company.
The development in this area will help building the local economy and stimulate economic growth.
The company has provided bunkering services in the Port of Duqm since 2014 continuously and
successfully supplies a wide variety of international marine customers, including commercial ships
and military vessels. In line with its commitment to its customers, Oman Oil Marketing Company
has developed four additional service stations in the Duqm area.
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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 6
Azerbaijan BP, SOCAR Sign PSA for Exploration, Development Offshore
Reuters + NewBase
BP plc and SOCAR have signed a new production sharing agreement (PSA) for the joint exploration
and development of Block D230 in the Azerbaijan sector of the Caspian Sea.
The PSA was signed in London, in the presence of UK Prime Minister Theresa May and Azerbaijan
President Ilham Aliyev, by Rovnag Abdullayev, president of SOCAR, and BP group chief executive
Bob Dudley.
Under the PSA, which is for 25 years, BP will be the operator during the exploration phase holding
a 50 percent interest, while SOCAR will hold the remaining 50 percent interest. The signing of the
PSA follows a memorandum of understanding for exploration of Block D230, which was agreed in
May 2016.
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"This agreement underpins a new joint effort by SOCAR and BP to explore further Caspian
opportunities in support of long-term production in Azerbaijan,” Dudley said in a company statement.
“We have now been operating in the region for more than 25 years and believe there is still
significant oil and gas potential there.
We look forward to continuing to build on our significant business in Azerbaijan, working closely with
SOCAR and others to explore and help secure the Caspian’s future for decades to come,” he added.
Speaking at the signing event, Abdullayev said the agreement would become an important
milestone in the pursuit of “the highest degree of efficiency in the joint development of the natural
resources of Azerbaijan”.
“We have a long tradition of successful cooperation with BP. I believe that the synergies between
modern upstream technology and unique historical experience, embodied in both companies, create
a solid basis for our continued success,” Abdullayev said.
Block D230 lies 135 kilometers north-east of Baku in the Caspian Sea. It covers an area of 3,200
square kilometers and has not previously been explored.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Indonesia: Eni awarded East Ganal Exploration Block
Source: Eni
Eni has been awarded 100% participating interest in the East Ganal deepwater exploration block in
the Kutei Basin, offshore Indonesia.
East Ganal is a new 'gross split' PSC (Production Sharing Contract) covering an area of about 5,100
sq kms and adjoins the Eni operated Muara Bakau and East Sepinggan PSCs, in the Makassar
Strait offshore East Kalimantan.
This award expands Eni’s position and upstream activities in the East Kalimantan’s Kutei Basin,
which is one of the most promising hydrocarbon provinces in Indonesia, and in the continuously
growing gas and LNG market of the Asia Pacific region.
In the Muara Bakau PSC, Eni commenced production from the Jangkik deepwater field in May 2017.
In April 2018, Eni was also granted the approval of the Plan of Development for the Merakes
discovery located in East Sepinggan PSCs. This further development project, using existing
Jangkrik and Bontang facilities, will allow an increase in the availability and flexibility of gas supply
both for the domestic market and for export, as well as strengthening Eni’s position in the LNG
market in Asia.
Eni has been operating in Indonesia since 2001 and now hold working interests in fourteen
exploration and production assets.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 9
US Bakken Shale Getting Profitable as Oil Nearing $70
Bloomberg - Ryan Collins
With breakthroughs in drilling technology reducing costs and crude oil prices near $70 a barrel, wells
in North Dakota are turning into cash cows.
The cost of getting oil and gas to the surface in North Dakota’s Bakken field has fallen, recently
hitting $41 to $50 a barrel for the top-quartile wells in the region, according to a Bloomberg New
Energy Finance report. Challenges still remain in the region, which is plagued by a lack of gas
pipelines to take the fuel to more-promising markets, leading to an increase in flaring, the practice
of burning the gas coming out of oil wells.
Technologies like fracking and horizontal wells, reaching lengths never before seen, have led to big
reductions in costs across shale basins in the U.S. This has helped most average wells in the
Bakken become economical. If West Texas Intermediate oil prices stay above $63 a barrel, all
average wells will be “in-the-money,” BNEF analyst Jacob Fericy said in the report.
“The current upswing in prices we’ve seen, it’s really helped a lot of Bakken producers,” Fericy said
by telephone. “The Bakken is definitely price-sensitive.’ Oil futures in New York zeroed in on $70
a barrel as traders brace for a re-imposition of U.S. sanctions on Iran.
Prices jumped 1.9 percent on Friday to close at the highest level since November 2014. Even though
U.S. President Donald Trump has yet to announce whether he’ll pull out of the 2015 Iranian nuclear
deal as a May 12 deadline nears, American officials already are positioning for post-accord
negotiations. New sanctions could disrupt crude exports from OPEC’s third-largest producer. A rally
in equities also pulled oil higher.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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“It’s a psychological level,” said Michael Wittner, the head of commodities research at Societe
Generale SA in New York. “Geopolitics has been a very key driver in the market and it’s continuing.”
Crude has rallied about 15 percent so far this year as OPEC and allied producers crimp a global
glut and geopolitical risks multiplied in the Mideast region that’s home to almost half the world’s oil.
“The market might be weighing the possibility of Trump not extending, which doesn’t change supply-
demand balances by itself,” said Michael Loewen, a commodities strategist at Scotiabank in
Toronto. “But if new sanctions are created and the U.S. pressures EU nations to follow suit, then
the market could be looking much different in a few short months.”
West Texas Intermediate crude for June delivery advanced $1.29 to settle at $69.72 a barrel on the
New York Mercantile Exchange, after trading just 3 cents below the $70 mark. Total volume traded
was about 1 percent below the 100-day average. Prices are up 2.4 percent this week.
Brent crude for July settlement climbed $1.25 to end the session at $74.87 on the London-based
ICE Futures Europe exchange. The global benchmark crude was at a $5.29 premium to July WTI.
“It’s back to what’s been haunting the market and is going to continue as we move a day closer to
May 12,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. “The
geopolitical jitters are just infecting the market.”
In the U.S., record crude production has been a headwind on the price rally. A dearth of pipeline
capacity in the biggest American oil field -- Permian Basin of West Texas and New Mexico -- has
crushed local prices: some grades of West Texas crude are selling for almost $14 a barrel less than
the U.S. benchmark, the steepest discount since July 2014.
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 May 06 - 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
US crude rises 1.9% to 3½-year high, settling at $69.72,Brent 74.9
Reuters + Bloomberg + NewBase
 Oil prices rose on Friday, extending the previous session's modest gains.
 Iran's foreign minister said on Thursday U.S. demands to change its 2015 nuclear agreement with world
powers were unacceptable.
 Iran resumed its role as a major oil exporter in January 2016 when sanctions against Tehran were lifted.
Oil prices strengthened on Friday as global supplies remained tight and the market awaited news
from Washington on possible new U.S. sanctions against Iran.
U.S. West Texas Intermediate (WTI) crude ended Friday's session up $1.29, or 1.9 percent, at
$69.72 per barrel, the contract's best settle since Nov. 26, 2014. The contract rose to an intraday
high of $69.97, its best level since Nov. 28, 2014.
Brent crude oil futures were at $74.90 per barrel, up $1.28, or 1.7 percent by 2:29 p.m. ET. The
benchmark contract hit a 3-½ year closing high of $75.17 on Monday.
Oil price special
coverage
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ANZ analysts Daniel Hynes and Soni Kumari said Brent could reach $80 a barrel by the end of this
year, attributing recent strength to rising geopolitical risks and tighter global supply. "We expect the
market to tighten even further in second half 2018," they wrote in a note to clients.
Trump has said that unless European allies rectify the "terrible flaws" in the international accord by
May 12, he will refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic. Traders
appear to be taking bullish positions in oil contracts ahead of the weekend, according to John Kilduff,
founding partner at energy hedge fund Again Capital.
"There's a lot of nervousness over the Iran situation. You can't go home short," he said, referring to
short positions, or bets that oil prices will fall.
Iran's foreign minister said on Thursday that U.S. demands to change its 2015 nuclear agreement
with world powers were unacceptable as a deadline set by President Donald Trump for Europeans
to "fix" the deal loomed.
European powers still want to hand Trump a plan to save the Iran nuclear deal next week. But they
have also started work on protecting EU-Iranian business ties if the U.S. president makes good on
a threat to withdraw.
"Expectations that the United States will pull out of the deal and refrain from extending sanctions
relief are keeping both crude markers near three-year peaks ," said Stephen Brennock, analyst at
London brokerage PVM Oil Associates.
Iran resumed its role as a major oil exporter in January 2016 when international sanctions against
Tehran were lifted in return for curbs on Iran's nuclear program. Aside from security concerns,
growing U.S. crude supplies are capping price gains.
Surging production in the Permian shale basin is outpacing pipeline capacity, while local refining
issues have exacerbated oversupply in the region.
West Texas Intermediate crude for delivery in Midland slid for a fourth day on Thursday to hit their
lowest in more than three-and-a-half years. WTI at Midland traded as much as $14 a barrel below
benchmark futures.
Prices were little changed after Baker Hughes reported its weekly count of U.S. oil rigs rose for a
fifth consecutive week. The number of rigs operating in American oil fields rose by 9 in the last week
to a total of 834.
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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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OPEC May Struggle to Cope With New Iran Sanctions
There may not be enough spare capcity to make up for lost Iranian oil exports.
Bloomberg News
After more than a year of assessing how effective OPEC and friends have been at keeping a lid on
supply, it's fair to ask how much more they can produce. This is really a question about spare
production capacity -- and it's an urgent one.
President Donald Trump has to decide by May 12 whether to extend waivers on Iranian sanctions,
and all the indications are that he won't. The drop in supply could easily exceed a million barrels a
day, if the president decides to impose extra-territorial sanctions on anyone doing business with
Iran -- would-be buyers could decide that the safest course is to shun the country's oil.
So is there enough spare capacity to make up the difference? Estimates vary widely -- from 1.96
million barrels a day to 3.41 million -- and the most optimistic of those may be far too high.
On the Bench
Estimates of spare oil production capacity vary widely, with the lowest barely sufficient to cover a
loss of Iranian exports
Sources: Bloomberg, IEA, EIA, JP Morgan
Note: The IEA and EIA do not provide estimates of spare capacity outside OPEC. JP Morgan's
estimates for OPEC cover eight out of the 14 members.
The International Energy Agency defines spare capacity as the volume of oil that can be brought
into production within 90 days and sustained for an extended period. I prefer a slightly more
restrictive definition that takes account of both the technical and the political ability to boost output.
Adding the words "under current political conditions" to the end of the IEA's definition could remove
as much as 800,000 barrels a day from the total.
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Almost all of the 200,000 to 310,000 daily barrels of spare capacity in Iraq reflects production in the
north of the country that has been shut in as a result of the ongoing dispute between the federal
government in Baghdad and the Kurdish Regional Government. A further 500,000 barrels a day of
combined Saudi and Kuwaiti idle capacity lies in the fields of the divided Neutral Zone, which Saudi
Arabia closed on environmental grounds in 2015 and shows no enthusiasm to restart.
Take those two figures off the U.S. Energy Information Administration’s assessment of the 1.96
million barrels of total available spare capacity and you get very close to the volume of Iranian
exports hit by sanctions last time around. So the amount might just be enough to offset a repeat of
the 2012 sanctions on Iran -- if the holders can be persuaded to use it. That doesn't look likely.
So where is the usable spare capacity? The consensus is that it is predominantly in the Middle East
-- in fact, only the IEA sees any significant spare capacity outside that region. Within the Middle
East it is Saudi Arabia that dominates.
Crown Prince Mohammed bin Salman told Bloomberg in April 2016 that his country could raise
output to 11.5 million barrels a day immediately; lifting it to 12.5 million barrels would take six to nine
months. There is no reason to believe that those figures have changed much in the past two years,
but that ability hasn't ever been tested.
The kingdom has never produced more than the 10.63 million barrels a day that it pumped in the
third quarter of 2016 -- in the run-up to agreement on the current output restrictions. The
infrastructure to pump, store and export a higher volume of oil is untested. So, too, is the willingness
of Saudi Arabia to boost flows.
Near the Top
Saudi Arabia's oil production has never exceeded the 10.6 million barrels a day it produced in
September 2016
Sources: Bloomberg CGES
Rather than make up for the unexpectedly large drops in production from Venezuela and
Angola that allowed the OPEC+ group to claim record compliance with their output cuts in March,
Saudi Arabia has preferred to keep cutting its own supply by more than it promised, reaping the
benefits of the higher prices that followed.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Curbs on Iran's exports through the re-imposition of sanctions may tighten the market too much
even for Saudi Arabia to ignore. If sanctions are snapped back, don't be surprised to see more oil
coming from the kingdom and any other member of the OPEC+ group that still retains the capacity
to raise production.
Making Up
Restoring OPEC+ output cuts where possible might just offset the loss of Iranian exports, provide
this is no bigger then under previous sanctions
Source: Bloomberg
Note: Assumes return to average 3Q16 production level where possible
The tighter market that would result from the loss of a significant part of Iran's exports ought to be
enough to persuade Saudi Arabia at least to restore output to its pre-cuts level. The rest of the group
would follow suit, but it might still not be enough to fill the gap entirely.
The path of oil prices over the rest of 2018 may have a lot to do with how Trump handles his
loathing of the Iran nuclear deal and what assurances of additional supply, if any, his new Secretary
of State received on his recent visit to Riyadh.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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NewBase Special Coverage
News Agencies News Release May 06-2018
Tesla Musk hints at 1 GW battery in Tesla solar power
JOHN WEAVER
The company’s energy generation and storage division set a record of $410 million in
revenue during Q1, but solar power fell to 2013 deployment levels.
Tesla has continued to grow its energy
storage business, but is also seeing a
continued slide in slow solar power
deployments per its First Quarter 2018
update.
The company appears to be on target to
triple its 2017 energy storage deployment
volume of 410 MW. The company is also
optimistic about its solar business, and the
company’s quarterly letter to shareholders
says that Tesla expects to
“experience mild growth for another
quarter or two before our revised sales
strategy starts to show its full impact in final
deployments”.
At one point in yesterday’s investor call, Elon Musk also suggested that a gigawatt sized energy
storage system will be announced within the next few months.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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But despite Tesla’s rosy view, we’re still seeing solar power deployments fall. The 76 MW installed
in Q1 is Tesla/SolarCity’s lowest level since the 78 MW deployed in Q3 2013. The last twelve months
saw approximately 448 MW of solar power installed – also a low since 2014, when 429 MW was
deployed.
The Buffalo Gigafactory was not mentioned, nor were Solar Roofs talked about on the investor call,
as most attention was on the Model 3 ramp. The investor letter does, multiple times, reference the
second half of 2018 being an important time for solar power to scale.
The company noted that a ‘significant part’ of its customer base is holding off on installing their
residential solar power systems, until they can install a PowerWall alongside their solar. This aligns
with market research suggesting 74% of solar power customers are interested in energy
storage, but also Tesla’s emphasis on energy storage.
Tesla has also continued to push away from the solar leasing business, with cash and loan system
sales making up 66% of residential deployments in the quarter, an increase from 31% in Q1 2017
and 9% in Q1 2016. Those percentages mean cash and loan sales were 50 MW of total solar,
leaving under 26 MW of solar leasing in the quarter.
But in contrast with the lull in solar deployment, energy storage is on a definite upswing.
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First quarter volume was boosted by the huge Australia 100 MW/129 MWh being officially applied
to the books. The quarter recognized 373 MWh deployed – just short of 2017’s total volume
deployed of approximately 410 MWh. The first quarter numbers were a 161% increase over the Q4
2017, and 621% larger than Q1 2017.
The company said it has a significant backlog of PowerWall orders, and on the conference call
suggested that product demand wasn’t the issue.
This was right around when Elon suggested that a 1 GW energy storage system may be announced
sometime in the coming months. As there have been no official announcements of a 1 GW energy
storage system, this would be the first. There have been 1 GW+ energy storage bids, but no projects
this large awarded to date.
Total revenue for the energy generation and storage division was up significantly, despite the fall in
solar deployment. And despite the increase in direct sales versus third party solar, profit margins in
the division are tight. This may reflect slim profitability in company’s energy storage sales.
With the company hoping to triple its 410 MWh of battery storage deployed in 2017, and being on
pace with a great first quarter, there is some energy storage light at the end of the tunnel clearly
visible.
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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 19
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 May 2018 K. 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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Your Energy Consultant for the GCC area
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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New base 06 may 2018 energy news issue 1168 by khaled al awadi

  • 1. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 1 NewBase Energy News 06 May 2018 - Issue No. 1168 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: ENOC Group opens third solar-powered service station WAM/Tariq alfaham ENOC Group has opened its third solar-powered service station for the year, in Discovery Gardens a residential community in Dubai as part of its expansion plans aimed at building 54 service stations by 2020. Saif Humaid Al Falasi, Group CEO of ENOC, said, "Our new station marks the opening of the UAE’s third solar-powered service station, which falls in line with our commitment to adopting innovative practices to enhance operational efficiency. At ENOC, we keep abreast of major technological developments that can be utilised to drive energy savings, reduce carbon emissions and contribute to a sustainable future. "We remain committed to providing our customers with easy access to fuel and other retail requirements to a growing community while strengthening our local presence." The new 75,004 sq ft station offers a range of automotive services including a Tasjeel Centre with three bays for vehicle testing and registration, three Autopro bays, which offer battery and oil change
  • 2. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 2 and all automotive services, three Prowash car wash bays, including manual and auto wash as well as EV charging stations. The station has photovoltaic, PV, solar panels with an on-grid system installed on the canopy roof that can produce a peak capacity of 120 Kilowatt per hour, kWh, energy on an ideal day generating approximately 30 percent more than the average energy required to run the station. Built in line with the Dubai Municipality’s Green Build regulations, the excess power generated is transmitted back to DEWA’s main grid through a Dubai Electricity and Water Authority, DEWA, solar meter that tracks the power injected to the power grid. The forecourt is equipped with six dispensers with a multimedia option and a fuel system designed to cater maximum flow rate as per the National Fire Protection Association, NFPA, safety standards. To factor in the waiting time inside the service station, dispensers are built with retractable hoses to enable refuelling of cars from both sides. The station is also equipped with the Vapour Recovery Systems, VRS, to prevent and control emissions, full LED lights installed at the site to reduce energy consumption by 50 percent and a VRF technology for the air conditioning, AC, system, which saves 35 percent compared to conventional package AC system. ENOC had previously announced that all future ENOC service stations will be powered by solar energy to support the UAE’s long-term strategy to target an energy mix that combines renewable, nuclear and clean energy sources. ENOC estimates more than 23 GWh of solar energy will be generated to power the new stations by 2020, minimising the load on DEWA’s grid and power generating stations.
  • 3. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 3 Saudi Arabia's Economic Revamp Is Still an Oil Story Bloomberg - Mohammed Sergie Saudi Arabia’s efforts to shore up public finances and revive economic growth are still pretty much dependent on oil prices, even as the kingdom tries to reduce its reliance on revenue from crude exports. The world’s biggest oil exporter will need crude prices to average almost $88 a barrel this year to balance its budget, according to the latest IMF economic outlook released on Wednesday in Dubai. That compares with $70 in the previous forecast in October. Brent crude, an international benchmark, is currently trading above $70 a barrel, the highest level since 2014. The increase in the so-called breakeven price reflects the government’s plan to boost public spending to a record this year in an attempt to revive economic growth, after gross domestic product shrank 0.5 percent in 2017. The fund expects the breakeven price to fall to about $80 in 2019. Below are key takeaways from the IMF outlook for the Middle East and North Africa: Price Matters Breakeven oil prices rising for most Middle Eastern energy exporters Source: The IMF Regional Economic Outlook The latest IMF data see Saudi Arabia’s economy expanding 1.7 percent in 2018. But the rebound is mainly driven by higher government spending, the model that sustained the kingdom’s economy over more than four decades. “This expected acceleration in growth is not a free lunch –- the government is picking up the bill,” said Ziad Daoud, chief Middle East economist for Bloomberg Economics. “The old model of an economy driven by government spending and financed by oil hasn’t really changed.”
  • 4. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 4 Diversification Deferred Saudi Arabia's economic reforms didn't boost the non-oil economy as expected in 2017, and the kingdom's oil industry shrank Source: The IMF Regional Economic Outlook Middle Eastern oil exporters had to constrain government spending in recent years after crude prices slid in 2014, forcing them to slash subsidies and introduce fees and value-added taxation. Now that oil is trading around $70 a barrel, budget deficits are starting to shrink for most countries. Cumulative deficits in the Gulf Cooperation Council, the six-country bloc that includes Saudi Arabia, the United Arab Emirates and Qatar, will fall to about 2 percent of GDP in 2019 from almost 11 percent in 2016, according to the IMF. Persistent Deficits Kuwait, Qatar and Iraq are the only countries in the Middle East with projected budget surpluses in 2018 Source: The IMF Regional Economic Outlook But the non-oil balance, which strips out revenue earned from hydrocarbon exports, gives a better picture about progress in diversifying government revenue. For Saudi Arabia, the shortfall is expected to rise to about 39 percent of the non-oil GDP in 2018 compared with 37 percent last year, IMF data show.
  • 5. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 5 Oman Oil Marketing appoints W.P for Duqm Bunker Terminal project Oman Observer Oman Oil Marketing Company has announced the appointment of WorleyParsons Engineering Oman LLC as the project management consultants for the Duqm Bunker Terminal Project. To be commissioned in early 2021, the terminal is expected to be a major driver in development goals for the Port of Duqm. David Kalife, CEO of Oman Oil Marketing Company “We take great pleasure in announcing the appointment of WorleyParsons as the new project management consultant for our Duqm Bunker Terminal Project. We are confident that WorleyParsons, which combine their global resources experts with management and technical consultants to work towards fully integrated solutions, will ensure that technically sound and cost-effective infrastructure solutions are implemented. We are looking forward to work together towards the successful and timely execution of the project.” The project will continue to enhance the Port’s premium service standards, improve cost effectiveness, and also create efficient fuel supply and delivery to all customers within Duqm. This in turn will support the growth of the regional economy as part of the company’s commitment to establishing long-term In-Country Value. “As demands for Oman’s growing industries develop, we are actively there to meet their needs. As an early investor in the storage terminal business at the port, we are excited to be a part of the new business and economic growth that will manifest from the investment. We strongly support the Government and SEZAD goals for the port of Duqm and wider region. With increasing requests for bunker services and the expected increase of petroleum trading, the regional demand for these services is expected to surpass what is currently available. This project is part of Oman Oil Marketing Management’s long-term strategy to contribute and support our national growth and development,” said David Kalife, CEO of Oman Oil Marketing Company. The development in this area will help building the local economy and stimulate economic growth. The company has provided bunkering services in the Port of Duqm since 2014 continuously and successfully supplies a wide variety of international marine customers, including commercial ships and military vessels. In line with its commitment to its customers, Oman Oil Marketing Company has developed four additional service stations in the Duqm area.
  • 6. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 6 Azerbaijan BP, SOCAR Sign PSA for Exploration, Development Offshore Reuters + NewBase BP plc and SOCAR have signed a new production sharing agreement (PSA) for the joint exploration and development of Block D230 in the Azerbaijan sector of the Caspian Sea. The PSA was signed in London, in the presence of UK Prime Minister Theresa May and Azerbaijan President Ilham Aliyev, by Rovnag Abdullayev, president of SOCAR, and BP group chief executive Bob Dudley. Under the PSA, which is for 25 years, BP will be the operator during the exploration phase holding a 50 percent interest, while SOCAR will hold the remaining 50 percent interest. The signing of the PSA follows a memorandum of understanding for exploration of Block D230, which was agreed in May 2016.
  • 7. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 7 "This agreement underpins a new joint effort by SOCAR and BP to explore further Caspian opportunities in support of long-term production in Azerbaijan,” Dudley said in a company statement. “We have now been operating in the region for more than 25 years and believe there is still significant oil and gas potential there. We look forward to continuing to build on our significant business in Azerbaijan, working closely with SOCAR and others to explore and help secure the Caspian’s future for decades to come,” he added. Speaking at the signing event, Abdullayev said the agreement would become an important milestone in the pursuit of “the highest degree of efficiency in the joint development of the natural resources of Azerbaijan”. “We have a long tradition of successful cooperation with BP. I believe that the synergies between modern upstream technology and unique historical experience, embodied in both companies, create a solid basis for our continued success,” Abdullayev said. Block D230 lies 135 kilometers north-east of Baku in the Caspian Sea. It covers an area of 3,200 square kilometers and has not previously been explored.
  • 8. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 8 Indonesia: Eni awarded East Ganal Exploration Block Source: Eni Eni has been awarded 100% participating interest in the East Ganal deepwater exploration block in the Kutei Basin, offshore Indonesia. East Ganal is a new 'gross split' PSC (Production Sharing Contract) covering an area of about 5,100 sq kms and adjoins the Eni operated Muara Bakau and East Sepinggan PSCs, in the Makassar Strait offshore East Kalimantan. This award expands Eni’s position and upstream activities in the East Kalimantan’s Kutei Basin, which is one of the most promising hydrocarbon provinces in Indonesia, and in the continuously growing gas and LNG market of the Asia Pacific region. In the Muara Bakau PSC, Eni commenced production from the Jangkik deepwater field in May 2017. In April 2018, Eni was also granted the approval of the Plan of Development for the Merakes discovery located in East Sepinggan PSCs. This further development project, using existing Jangkrik and Bontang facilities, will allow an increase in the availability and flexibility of gas supply both for the domestic market and for export, as well as strengthening Eni’s position in the LNG market in Asia. Eni has been operating in Indonesia since 2001 and now hold working interests in fourteen exploration and production assets.
  • 9. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 9 US Bakken Shale Getting Profitable as Oil Nearing $70 Bloomberg - Ryan Collins With breakthroughs in drilling technology reducing costs and crude oil prices near $70 a barrel, wells in North Dakota are turning into cash cows. The cost of getting oil and gas to the surface in North Dakota’s Bakken field has fallen, recently hitting $41 to $50 a barrel for the top-quartile wells in the region, according to a Bloomberg New Energy Finance report. Challenges still remain in the region, which is plagued by a lack of gas pipelines to take the fuel to more-promising markets, leading to an increase in flaring, the practice of burning the gas coming out of oil wells. Technologies like fracking and horizontal wells, reaching lengths never before seen, have led to big reductions in costs across shale basins in the U.S. This has helped most average wells in the Bakken become economical. If West Texas Intermediate oil prices stay above $63 a barrel, all average wells will be “in-the-money,” BNEF analyst Jacob Fericy said in the report. “The current upswing in prices we’ve seen, it’s really helped a lot of Bakken producers,” Fericy said by telephone. “The Bakken is definitely price-sensitive.’ Oil futures in New York zeroed in on $70 a barrel as traders brace for a re-imposition of U.S. sanctions on Iran. Prices jumped 1.9 percent on Friday to close at the highest level since November 2014. Even though U.S. President Donald Trump has yet to announce whether he’ll pull out of the 2015 Iranian nuclear deal as a May 12 deadline nears, American officials already are positioning for post-accord negotiations. New sanctions could disrupt crude exports from OPEC’s third-largest producer. A rally in equities also pulled oil higher.
  • 10. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 10 “It’s a psychological level,” said Michael Wittner, the head of commodities research at Societe Generale SA in New York. “Geopolitics has been a very key driver in the market and it’s continuing.” Crude has rallied about 15 percent so far this year as OPEC and allied producers crimp a global glut and geopolitical risks multiplied in the Mideast region that’s home to almost half the world’s oil. “The market might be weighing the possibility of Trump not extending, which doesn’t change supply- demand balances by itself,” said Michael Loewen, a commodities strategist at Scotiabank in Toronto. “But if new sanctions are created and the U.S. pressures EU nations to follow suit, then the market could be looking much different in a few short months.” West Texas Intermediate crude for June delivery advanced $1.29 to settle at $69.72 a barrel on the New York Mercantile Exchange, after trading just 3 cents below the $70 mark. Total volume traded was about 1 percent below the 100-day average. Prices are up 2.4 percent this week. Brent crude for July settlement climbed $1.25 to end the session at $74.87 on the London-based ICE Futures Europe exchange. The global benchmark crude was at a $5.29 premium to July WTI. “It’s back to what’s been haunting the market and is going to continue as we move a day closer to May 12,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. “The geopolitical jitters are just infecting the market.” In the U.S., record crude production has been a headwind on the price rally. A dearth of pipeline capacity in the biggest American oil field -- Permian Basin of West Texas and New Mexico -- has crushed local prices: some grades of West Texas crude are selling for almost $14 a barrel less than the U.S. benchmark, the steepest discount since July 2014.
  • 11. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 11 NewBase May 06 - 2018 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE US crude rises 1.9% to 3½-year high, settling at $69.72,Brent 74.9 Reuters + Bloomberg + NewBase  Oil prices rose on Friday, extending the previous session's modest gains.  Iran's foreign minister said on Thursday U.S. demands to change its 2015 nuclear agreement with world powers were unacceptable.  Iran resumed its role as a major oil exporter in January 2016 when sanctions against Tehran were lifted. Oil prices strengthened on Friday as global supplies remained tight and the market awaited news from Washington on possible new U.S. sanctions against Iran. U.S. West Texas Intermediate (WTI) crude ended Friday's session up $1.29, or 1.9 percent, at $69.72 per barrel, the contract's best settle since Nov. 26, 2014. The contract rose to an intraday high of $69.97, its best level since Nov. 28, 2014. Brent crude oil futures were at $74.90 per barrel, up $1.28, or 1.7 percent by 2:29 p.m. ET. The benchmark contract hit a 3-½ year closing high of $75.17 on Monday. Oil price special coverage
  • 12. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 12 ANZ analysts Daniel Hynes and Soni Kumari said Brent could reach $80 a barrel by the end of this year, attributing recent strength to rising geopolitical risks and tighter global supply. "We expect the market to tighten even further in second half 2018," they wrote in a note to clients. Trump has said that unless European allies rectify the "terrible flaws" in the international accord by May 12, he will refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic. Traders appear to be taking bullish positions in oil contracts ahead of the weekend, according to John Kilduff, founding partner at energy hedge fund Again Capital. "There's a lot of nervousness over the Iran situation. You can't go home short," he said, referring to short positions, or bets that oil prices will fall. Iran's foreign minister said on Thursday that U.S. demands to change its 2015 nuclear agreement with world powers were unacceptable as a deadline set by President Donald Trump for Europeans to "fix" the deal loomed. European powers still want to hand Trump a plan to save the Iran nuclear deal next week. But they have also started work on protecting EU-Iranian business ties if the U.S. president makes good on a threat to withdraw. "Expectations that the United States will pull out of the deal and refrain from extending sanctions relief are keeping both crude markers near three-year peaks ," said Stephen Brennock, analyst at London brokerage PVM Oil Associates. Iran resumed its role as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran's nuclear program. Aside from security concerns, growing U.S. crude supplies are capping price gains. Surging production in the Permian shale basin is outpacing pipeline capacity, while local refining issues have exacerbated oversupply in the region. West Texas Intermediate crude for delivery in Midland slid for a fourth day on Thursday to hit their lowest in more than three-and-a-half years. WTI at Midland traded as much as $14 a barrel below benchmark futures. Prices were little changed after Baker Hughes reported its weekly count of U.S. oil rigs rose for a fifth consecutive week. The number of rigs operating in American oil fields rose by 9 in the last week to a total of 834.
  • 13. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 13 OPEC May Struggle to Cope With New Iran Sanctions There may not be enough spare capcity to make up for lost Iranian oil exports. Bloomberg News After more than a year of assessing how effective OPEC and friends have been at keeping a lid on supply, it's fair to ask how much more they can produce. This is really a question about spare production capacity -- and it's an urgent one. President Donald Trump has to decide by May 12 whether to extend waivers on Iranian sanctions, and all the indications are that he won't. The drop in supply could easily exceed a million barrels a day, if the president decides to impose extra-territorial sanctions on anyone doing business with Iran -- would-be buyers could decide that the safest course is to shun the country's oil. So is there enough spare capacity to make up the difference? Estimates vary widely -- from 1.96 million barrels a day to 3.41 million -- and the most optimistic of those may be far too high. On the Bench Estimates of spare oil production capacity vary widely, with the lowest barely sufficient to cover a loss of Iranian exports Sources: Bloomberg, IEA, EIA, JP Morgan Note: The IEA and EIA do not provide estimates of spare capacity outside OPEC. JP Morgan's estimates for OPEC cover eight out of the 14 members. The International Energy Agency defines spare capacity as the volume of oil that can be brought into production within 90 days and sustained for an extended period. I prefer a slightly more restrictive definition that takes account of both the technical and the political ability to boost output. Adding the words "under current political conditions" to the end of the IEA's definition could remove as much as 800,000 barrels a day from the total.
  • 14. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 14 Almost all of the 200,000 to 310,000 daily barrels of spare capacity in Iraq reflects production in the north of the country that has been shut in as a result of the ongoing dispute between the federal government in Baghdad and the Kurdish Regional Government. A further 500,000 barrels a day of combined Saudi and Kuwaiti idle capacity lies in the fields of the divided Neutral Zone, which Saudi Arabia closed on environmental grounds in 2015 and shows no enthusiasm to restart. Take those two figures off the U.S. Energy Information Administration’s assessment of the 1.96 million barrels of total available spare capacity and you get very close to the volume of Iranian exports hit by sanctions last time around. So the amount might just be enough to offset a repeat of the 2012 sanctions on Iran -- if the holders can be persuaded to use it. That doesn't look likely. So where is the usable spare capacity? The consensus is that it is predominantly in the Middle East -- in fact, only the IEA sees any significant spare capacity outside that region. Within the Middle East it is Saudi Arabia that dominates. Crown Prince Mohammed bin Salman told Bloomberg in April 2016 that his country could raise output to 11.5 million barrels a day immediately; lifting it to 12.5 million barrels would take six to nine months. There is no reason to believe that those figures have changed much in the past two years, but that ability hasn't ever been tested. The kingdom has never produced more than the 10.63 million barrels a day that it pumped in the third quarter of 2016 -- in the run-up to agreement on the current output restrictions. The infrastructure to pump, store and export a higher volume of oil is untested. So, too, is the willingness of Saudi Arabia to boost flows. Near the Top Saudi Arabia's oil production has never exceeded the 10.6 million barrels a day it produced in September 2016 Sources: Bloomberg CGES Rather than make up for the unexpectedly large drops in production from Venezuela and Angola that allowed the OPEC+ group to claim record compliance with their output cuts in March, Saudi Arabia has preferred to keep cutting its own supply by more than it promised, reaping the benefits of the higher prices that followed.
  • 15. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 15 Curbs on Iran's exports through the re-imposition of sanctions may tighten the market too much even for Saudi Arabia to ignore. If sanctions are snapped back, don't be surprised to see more oil coming from the kingdom and any other member of the OPEC+ group that still retains the capacity to raise production. Making Up Restoring OPEC+ output cuts where possible might just offset the loss of Iranian exports, provide this is no bigger then under previous sanctions Source: Bloomberg Note: Assumes return to average 3Q16 production level where possible The tighter market that would result from the loss of a significant part of Iran's exports ought to be enough to persuade Saudi Arabia at least to restore output to its pre-cuts level. The rest of the group would follow suit, but it might still not be enough to fill the gap entirely. The path of oil prices over the rest of 2018 may have a lot to do with how Trump handles his loathing of the Iran nuclear deal and what assurances of additional supply, if any, his new Secretary of State received on his recent visit to Riyadh.
  • 16. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 16 NewBase Special Coverage News Agencies News Release May 06-2018 Tesla Musk hints at 1 GW battery in Tesla solar power JOHN WEAVER The company’s energy generation and storage division set a record of $410 million in revenue during Q1, but solar power fell to 2013 deployment levels. Tesla has continued to grow its energy storage business, but is also seeing a continued slide in slow solar power deployments per its First Quarter 2018 update. The company appears to be on target to triple its 2017 energy storage deployment volume of 410 MW. The company is also optimistic about its solar business, and the company’s quarterly letter to shareholders says that Tesla expects to “experience mild growth for another quarter or two before our revised sales strategy starts to show its full impact in final deployments”. At one point in yesterday’s investor call, Elon Musk also suggested that a gigawatt sized energy storage system will be announced within the next few months.
  • 17. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 17 But despite Tesla’s rosy view, we’re still seeing solar power deployments fall. The 76 MW installed in Q1 is Tesla/SolarCity’s lowest level since the 78 MW deployed in Q3 2013. The last twelve months saw approximately 448 MW of solar power installed – also a low since 2014, when 429 MW was deployed. The Buffalo Gigafactory was not mentioned, nor were Solar Roofs talked about on the investor call, as most attention was on the Model 3 ramp. The investor letter does, multiple times, reference the second half of 2018 being an important time for solar power to scale. The company noted that a ‘significant part’ of its customer base is holding off on installing their residential solar power systems, until they can install a PowerWall alongside their solar. This aligns with market research suggesting 74% of solar power customers are interested in energy storage, but also Tesla’s emphasis on energy storage. Tesla has also continued to push away from the solar leasing business, with cash and loan system sales making up 66% of residential deployments in the quarter, an increase from 31% in Q1 2017 and 9% in Q1 2016. Those percentages mean cash and loan sales were 50 MW of total solar, leaving under 26 MW of solar leasing in the quarter. But in contrast with the lull in solar deployment, energy storage is on a definite upswing.
  • 18. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 18 First quarter volume was boosted by the huge Australia 100 MW/129 MWh being officially applied to the books. The quarter recognized 373 MWh deployed – just short of 2017’s total volume deployed of approximately 410 MWh. The first quarter numbers were a 161% increase over the Q4 2017, and 621% larger than Q1 2017. The company said it has a significant backlog of PowerWall orders, and on the conference call suggested that product demand wasn’t the issue. This was right around when Elon suggested that a 1 GW energy storage system may be announced sometime in the coming months. As there have been no official announcements of a 1 GW energy storage system, this would be the first. There have been 1 GW+ energy storage bids, but no projects this large awarded to date. Total revenue for the energy generation and storage division was up significantly, despite the fall in solar deployment. And despite the increase in direct sales versus third party solar, profit margins in the division are tight. This may reflect slim profitability in company’s energy storage sales. With the company hoping to triple its 410 MWh of battery storage deployed in 2017, and being on pace with a great first quarter, there is some energy storage light at the end of the tunnel clearly visible.
  • 19. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 19 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 May 2018 K. Al Awadi
  • 20. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 20 Thank you for sharing with us your comments and thoughts on the above issue, similarly we would like to share with our daily publications on Energy news via own NewBase Energy News – https://www.slideshare.net/khdmohd/ne-base-27-april-2018-energy-news-issue-1165-by-khaled-al-awadi Call us for details khdmohd@hawkenergy.net Your Energy Consultant for the GCC area Khaled Al Awadi
  • 21. 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, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 21 For Your Recruitments needs and Top Talents, please seek our approved agents below