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NewBase Energy News 07 October 2019 - Issue No. 1283 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: How Abu Dhabi desert became a world leading solar plant
The National + NewBase
Less than 30 months ago, it was an unremarkable patch of Abu Dhabi desert. Today,
enough power is produced on the eight square kilometre site to power 90,000 homes.
Near the small town of Sweihan, a stone’s throw from the Dubai border, the Noor solar
power plant is officially up and running, with more than 3.2 million solar panels soaking
up the sun.
The largest facility of its kind in the world, it is also playing its part in the battle to reduce
carbon emissions and address climate change, reducing the Emirate’s CO2 emissions
by one million metric tonnes, the equivalent of taking 200,000 cars off the road.
“This is a laboratory for the world,” said Jorge Perea, executive managing director of
Noor Abu Dhabi, who oversaw the US$872 million project, delivering it on schedule and
budget.
The Noor facility is the largest of its kind in the world - but even larger UAE solar plants are on the way
“This country, it is 10 years in front,” he said. “They are investing in the technology and
are hiring the best professionals.”
Mr Perea believes the plant’s beauty is in its simplicity. It is run by a small, multi-cultural
management team of only seven, an Emirati, Pakistani, Irishman, Syrian, Jordanian and
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Filipino. Mr Perea, a black belt in karate, is from Spain. On an average day, only around
70 workers will be on site.
A herd of camels graze close to the sprawling solar park in Sweihan. Courtesy: Noor Abu Dhabi
The technology is developing and the prices are getting lower. It is
right now the cheapest source of energy in the world
He said he has welcomed a string of foreign officials and energy ministers to the facility,
which was connected to the grid last November and was operating commercially by the
summer.
He could have increased efficiency by having rotating solar panels, meaning they were
constantly aimed at the sun. But this would have meant far higher costs and maintenance
requirements, so instead they were installed with a sweeping, curved design to ensure
at least some panels would be exposed to maximum sunlight at any one time.
Lightweight structures ensured less steel was used. Cleaning of the panels is carried out
once a day, by ‘robots’ and without the need for water. Once a day, large brushes
automatically sweep over each panel. In total, the system cleans 800km of panels every
24 hours.
Eight companies submitted proposals for a cleaning solution for the site – essential in a
dusty climate. Two were chosen for extensive testing with the eventual winner, provided
by a Chinese company, found to be most efficient.
The focus on achieving maximum efficiency while keeping to tight budgets has all meant
the energy generated – which is eventually fed to customers by the Emirates Water and
Electricity Company (EWEC) – has meant the cost of the power is at a record low.
Built as a commercial venture and without subsidies, the cost of 2.42 US cents per
kilowatt hour which was described as so low it was “jaw dropping” by industry observers
when it was announced. It remains the lowest price in the world for non-subsidised solar.
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“The plant is nice but it’s a business,” said Mr Perea. “We need to give a return of
investment, and if we introduce a lot of complicated things the cost will go up.
“We have reached this price because of most efficient technology we can use.
Engineering is to do the necessary with the minimum cost. It is not architecture; the
architect is looking for something nice, something beautiful. But I don’t need a gold pen
to write.”
While the solar plant is almost peaceful now, it was not always the case. Almost 3,000
workers helped to build it, laying 7,120km of cables – more than enough to cover the
distance between Abu Dhabi and Manilla if they were all laid out in a straight line.
Drones were used to pinpoint the locations of 616,098 ground screws, with data
transferred to an unmanned machine to drill holes and with near-perfect accuracy. A
worker then inserted the poles, which we then automatically drilled in with precise torque
by another machine, this time manned by a human operator. On one particularly
productive day during the construction 26,000 solar panels were installed in 24 hours.
But it was not all straightforward – a solution had to be found after Dhub lizards – which
have protected status - were found living on the site. Steps were taken to ensure they
were not harmed and visitors to the plant are now warned not to feed or disturb the so-
called ‘little dinosaurs of the desert’, should they encounter one.
The Noor – Arabic for light – plant started running commercially in June and, for now,
remains the largest single-site power plant in the world. A small handful of others, in
China and India, have a higher output than Noor’s 1,177 megawatt capacity but were
built in different stages or operate as ‘solar parks’ with multiple different operators sharing
the same infrastructure.
The Noor operation, meanwhile, is owned 60 per cent by a holding company owned by
the Abu Dhabi government with 40 per cent owned by a foreign holding company, split
equally between a Japanese and Chinese firm.
While Noor produces enough energy for 90,000 UAE homes, that figure would be even
more impressive if not for the high domestic power consumption rates caused mainly by
air conditioners. A plant in Europe producing a similar output could power approximately
150,000 homes, due to their lower average consumption.
A herd of camels graze close to the sprawling solar park in Sweihan. Courtesy: Noor Abu
Dhabi
But even the plant operators admit Noor will not be a record holder for long. Advances
in technology and manufacturing mean the prices of solar energy generation are
tumbling all the time. New projects are being planned all the time, with plans for an even
bigger solar plant in Al Dhafra, Abu Dhabi, well advanced.
Meanwhile, it is hoped that in the decades to come advances in battery technology will
make help solar realise its full potential.
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“Batteries are the next step,” Mr Perea said. “The weakness of this plant is we can
produce when we have sun. But with batteries, we could produce, store it for the night,
and have a more stable grid.
Plants like Noor, it is hoped, will help the UAE hit a 50 per cent clean energy target by
2050. While it is unlikely Noor will be expanded, other major solar plants in the UAE are
inevitable and the country’s first nuclear power plant is expected to begin operating
shortly.
The plant planned plant in Al Dhafra will be even bigger than Noor, producing up to
almost double the power, and cover approximately 20 square km. EWEC recently invited
bids to construct the new plant, which it is hoped will be up and running by 2022.
“Noor is the first project of this size in Abu Dhabi,” said Adel Al Saeedi, director of the
privatisation directorate at EWEC. “We started big and we started right. It was the right
time, the technology became better and more affordable. The technology is developing
and the prices are getting lower, so it’s not only environmentally good but economically
feasible as well. It is right now the cheapest source of energy in the world.”
Potential developers were also “excited” by the new project in Al Dhafra, Mr Al Saeedi
said, with bids expected to be formally submitted by the end of this month.
“It will be another good project towards achieving the clean and renewable energy targets
of the UAE,” he added. “Solar is the future of energy, not only in the UAE, but in the
world.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
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Saudi Sipchem seals partnership deal with Hoyer Middle East
Sipchem + NewBase
Sahara International Petrochemical Company (Sipchem), an integrated global leader in the
petrochemical sector and a company listed on the Saudi Stock Exchange, signed a Letter of Intent
(LOI) with Hoyer Middle East to further enhance the reach of its chemical products.
The agreement is in line with Sipchem’s vision to expand to a full-fledged distribution company
capable of delivering products
and services to both large and
small-to-medium businesses
located in the kingdom and
internationally.
Hoyer Middle East is part of the
Hoyer Group, one of the
worldwide market leaders in
moving liquids, including
chemical products, by road, rail
and sea. It has been one of the
world’s leading bulk logistics
providers since 1946. It has
extensive know-how in the
provision of complex services,
and has special customer
proximity.
The signing took place at a recent forum organised by Sipchem, in collaboration with Argus Media,
titled “Sipchem-Argus Petrochemical Forum”, at the Sipchem Technology & Innovation Center
“Manar” in Al Khobar.
The forum was attended by Sipchem CEO Engineer Saleh Bahamdan along with more than 150
experts from various petrochemical companies in the region. Addressing the gathering, Bahamdan
said the deal with Hoyer Middle East was yet another step forward in its growth strategy.
"I believe that this is a major building block that will further strengthen Sipchem’s position as a
leading petrochemical products supplier in the kingdom and internationally. At Sipchem we believe
that the chemical industry’s growth will continue, driven by positive market dynamics," he stated.
He pointed out that the new business venture was in line with Sipchem’s commitment to support
local industries within the kingdom. The agreement will create new opportunities for SMEs within
kingdom and at the same time unlock additional value potential for Sipchem, he added.
During the forum, representatives of both Sipchem and Argus Media discussed the challenges
facing the petrochemical industry in 2020. Bahamdan also provided an update on Sipchem’s
progress following the successful merger of equals between Sipchem and Sahara Petrochemical
Company.
"Sipchem’s growth to date and future expansion plans are in line with the strategic goal of Saudi
Arabia’s Vision 2030 to build national champions with strong local and international reach in a sector
that has been identified as a priority for the future economy of the kingdom," he adde
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
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Norway Oil Coffers About to Get Giant Boost From the North Sea
Bloomberg - Mikael Holter
Equinor ASA has started its Johan Sverdrup oil field, a rare mega-project in the North Sea that’s been a
boon for Norway’s offshore industry and now promises to deliver a huge production boost for the
country.
Discovered in 2010 in an area that had been disregarded by most explorers, the site started production
on Saturday and is set to reach 440,000 barrels a day by next summer. That represents a 33% addition
to Norway’s production in the first half of this year, a spike in output not seen since the 1980s.
It’s hard to overstate the importance of Sverdrup for its owners, the Norwegian state and the country’s
entire oil industry.
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Confidence about the field’s startup was key for state-controlled Equinor’s decision to kick off a long-
awaited $5 billion buyback program in September, and Sverdrup will be a driving force in the
company’s production growth in the next years. It also helped to transform Lundin Petroleum AB --
which made the initial discovery -- and Aker BP ASA into two of the most important companies in
Norway’s oil industry.
“Sverdrup coming on stream is a momentous occasion for Equinor, our partners and suppliers,” the
state-controlled company’s chief executive officer Eldar Saetre said in a statement on Saturday. “At
peak, this field will account for around one third of all oil production in Norway and deliver very
valuable barrels with record low emissions.”
With as much as 3.2 billion barrels in reserves, it’s Norway’s biggest discovery since the 1970s. In an
illustration of how unusually large the field is, Aker BP considered going to court over a few decimals
in ownership.
Equinor expects Sverdrup to contribute about $100 billion to Norway’s state coffers over 50 years. The
field’s timing was also perfect for the Nordic country: green-lighted in 2015, just after a historic collapse
in the crude market, it offered a lifeline to the embattled oil-service industry, even if the market slump
forced suppliers to cut prices.
“It rescued us” from a “mega-crisis,” former Petroleum and Energy Minister Terje Soviknes said last
year.
For Equinor and the other owners, the timing was even better. The discount on services and equipment
allowed Equinor to slash investments by as much as 44% compared to the highest early estimates,
giving the field an overall break-even price of less than $20 a barrel.
Copyright © 2019 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 endeavors have been used to ensure the accuracy of the information contained in this
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Mozambique says Exxon to finalize LNG investment next week
Reuters + NewBase
U.S. energy giant Exxon Mobil will finalize its investment in Mozambique’s lucrative liquefied natural
gas fields in a signing ceremony on Tuesday, the African country’s government said via state
television.
Exxon’s Rovuma LNG project, jointly operated with Italian firm Eni, will produce, liquefy and sell
natural gas from three reservoirs located in the Area 4 block offshore Mozambique’s northern coast.
Exxon estimates the fields, which are due to come on line in 2024, will cost $30 billion to develop.
State television news channel TVM on Sunday said the Ministry of Mineral Resources and Energy
would host a signing ceremony with Exxon and other firms in the capital Maputo on Tuesday.
Exxon has said it expects 17,000 tons of liquefied petroleum gas (LPG) per year during the
production phase, with the signing of an initial investment decision paving the way for the massive
infrastructure project to begin.
The gas fields are located off the coast of the northern Cabo Delgado province, which for the last
two years has seen intensifying attacks on surrounding communities and government buildings by
an extreme Islamist militant group.
In February Texas-based petroleum firm Anadarko said one worker was killed and several others
injured in two related attacks in the Cabo Delgado area where it is building a 17,000-acre
liquefaction complex.
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Gabon: Panoro Energy oil discovery in Hibiscus Updip sidetrack
Source: Panoro Energy
Panoro Energy has reported a positive update on its drilling operation on the Hibiscus Updip well
('DHIBM-1'), located on the Dussafu Marin Permit, offshore Gabon.
John Hamilton, CEO of Panoro, commented:
'Results of drilling at Hibiscus Updip have significantly exceeded expectations. Both the original
wellbore and sidetrack have encountered oil columns with excellent reservoir properties and our
estimate of gross recoverable oil at Hibiscus Updip is between 40 and 50 million barrels.
Our phase 3 development plans to tie the nearby Ruche and Ruche NE fields back to the Adolo
FPSO are now being expanded to include a possible fast-track development of the discovery.
Additionally, this successful well enables us to further de-risk Gamba prospectivity in the Hibiscus
area where we see significant additional potential. We are extremely pleased with the continued
drilling success at Dussafu, and now look forward to the commencement of the production drilling
phase at Tortue'.
The DHIMB-1 well was initially drilled in 116 metres of water to a vertical depth of 3,538 metres.
On August 30, 2019, Panoro announced an oil discovery in the pre-salt Gamba reservoir with plans
to drill a sidetrack to appraise the extent of the Hibiscus Updip discovery.
The Hibiscus Updip oil discovery has been appraised by drilling a sidetrack (DHIBM-1ST1) to the
northwest to test the lateral extent and structural elevation of the Gamba reservoir. The sidetrack
was drilled to a Total Depth (TD) of 3,500 metres, (3,049 metres True Vertical Depth Subsea
(TVDSS)) approx. 1.1 km from the original wellbore and found a 33 metre oil column with 26 metres
of oil pay in the Gamba reservoir with better reservoir character and a similar fluid level to that
encountered in the vertical well, DHIBM-1.
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Panoro and the operator, BW Energy, estimate the gross recoverable resources discovered to be
in the range of 40 to 50 million barrels of oil. Further upside potential exists in the wider Hibiscus
area which will be the focus of future exploration drilling.
The well will now be plugged and abandoned pending future appraisal and development
activities. The rig will then move to drill the first of four new oil production wells at the Tortue field.
Copyright © 2019 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 October 07 – 2019 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices slow losses as gloom gathers over global economy
Reuters + NewBase
Oil prices fell on Monday, extending last week’s heavy losses, with traders fearing the global
economic slowdown will weigh on future oil demand growth while pegging hopes for a rebound on
progress in talks this week on ending the U.S.-China trade war.
Brent crude futures LCOc1 edged down 4 cents to $58.33 a barrel by 07:10 GMT, while U.S. West
Texas Intermediate (WTI) crude CLc1 was at $52.85, Up 4 cents.
Both contracts ended last week with a more-than-5% decline after dismal manufacturing data from
the United States and China, as the lingering row between the world’s top economies hurts global
growth and raises the risk of recession.
U.S. and Chinese officials will meet in Washington on Oct. 10-11 in the next, much-anticipated fresh
effort to work out a deal.
Oil price special
coverage
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On the supply side, a faster-than-expected resumption in Saudi Arabia’s production after a Sept. 14
attack on key production facilities also exerted downward pressure on oil prices, although the Middle
East remained tense.
“The macro headwinds outweigh supply concerns for oil now, despite tensions in the Middle East
and a reduced spare capacity pillow,” said Stephen Innes, Asia Pacific market strategist at AxiCorp.
In Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries,
deadly anti-government unrest is posing the biggest security and political challenge so far to Prime
Minister Adel Abdul Mahdi’s year-old government.
Iraq’s oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if
instability lasts for weeks, Ayham Kamel, Eurasia Group’s practice head for Middle East and North
Africa, said in a note.
“Any oil production disruption would occur at a time when Saudi Arabia has lost a significant part of
its energy system redundancies (spare capacity),” he said.
“While Saudi oil production is now close to 9.9 million bpd, it is not clear that the capacity is fully
operational at 11.3 million bpd and the (attacked) Abqaiq facility has lost a significant part of its
redundancy.”
Global supply also faces facility repair and maintenance pressures.
The Buzzard oil field in the British North Sea has been shut for pipe repair work, a spokesman from
China’s CNOOC said on Friday. Buzzard is the main contributor to the Forties crude stream, the
largest of the five North Sea oil grades that underpin Brent crude futures.
Meanwhile Libya’s National Oil Corporation (NOC) said on Sunday it will close the Faregh oil field
at Zueitina port for scheduled maintenance from Monday until Oct. 14.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
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US Rig Count Declines by Five
The U.S. shed three oil rigs and two gas rigs to total a net loss of five rigs this week, according to
data from Baker Hughes, a GE Company.
All losses were land rigs. This follows last week’s loss of eight rigs and continues the downward
trend of the nation’s rig demand. Currently, the nation’s total number of active rigs sits at 855, which
is 197 fewer rigs than the count of 1,052 a year ago.
Texas led all states with four rigs lost. Oklahoma lost three rigs and West Virginia lost two rigs. The
following states lost one rig apiece: California, Colorado, Louisiana and Wyoming. Conversely, New
Mexico gained four rigs while Alaska, North Dakota and Utah gained one rig apiece.
Among the major basins, the Cana Woodford, Eagle Ford and Marcellus lost two rigs each, while
the DJ-Niobrara lost one rig. The Williston tacked on two rigs while the Permian added one rig. At
415 active rigs, the Permian accounts for nearly half of the U.S. total number of active rigs.
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NewBase Special Coverage
News Agencies News Release Oct. 07-2019
Three Days in Venezuela's Oil Belt Show the Price of Pillage
Bloomberg - Lucia Kassai and Fabiola Zerpa
Five decades ago, Venezuela pumped 3.7 million barrels of oil a day. Now, it’s only producing a
little over 700,000 barrels a day. Bloomberg’s Jessica Summers and Lucia Kassai discuss the
collapse of the nation’s oil industry, the theft that goes on at Orinoco field, the lack of security and
what it will take for a recovery.
The crumbling of Venezuela’s oil industry after epic mismanagement by presidents Nicolas Maduro
and Hugo Chavez – exacerbated by tough U.S. sanctions -- caused the nation’s broader crisis.
Increasingly, the industry itself has become a victim. Five decades ago, Venezuela churned out 3.7
million barrels daily. Today, it produces only about 712,000, about half what North Dakota pumps.
Bloomberg reporters in September drove more than 640 kilometers (400 miles) on a three-day tour
of the Orinoco field, spoke with employees of state oil giant PDVSA and examined internal reports
to understand how the nation with the world’s largest proven reserves could have fallen so far.
The journey, whose legs were timed to avoid heavily armed military patrols and checkpoints,
showed that the nation’s industrial and economic engine has been stripped of equipment and
neglected to the point of collapse.
Facilities in the Orinoco Belt, which produces more than 90% of Venezuela’s dwindling flow, look
like graveyards for million-dollar equipment: abandoned rigs, empty tanks, disemboweled
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generators, gutted power panels, stripped cables among pools of spilled crude oil and encroaching
vegetation.
The ravage of the industry extends throughout a society that came to depend on it. Near the Dacion
oil fields, bony dogs played with scrawny, barefoot children. A man on the roadside said he hadn’t
eaten since the previous night, 17 hours earlier.
“What you see in Venezuela today, the collapse of their oil fields and the oil industry in general, is
worse than what you see in some war zones,'' said Fernando Ferreira, director for geopolitical risk
service at Rapidan Energy Group, a consultancy in the Washington area. “Venezuelan oil
production was wrecked by 20 years of asset seizures, widespread corruption and sanctions.''
The nation could increase production to about 2 million barrels a day in five years at a cost of as
much as $30 billion. “The recovery depends in large part on who is going to replace Maduro,''
Ferreira said.
Full recovery from the pillage could take decades.
Luis Pacheco, president of a PDVSA board named by opposition leader Juan Guaido, said the
extent of damage to the system is a matter of conjecture: The board controls only PDVSA assets
outside Venezuela. It predicts a cost of $120 billion to restore the domestic industry, he said.
“That level of investment must come mostly from private investors," Pacheco said. That would
challenge decades of zealous state control of Venezuela’s mainstay asset.
The nation had only 23 oil rigs functioning in August, down from 48 two years ago and from 119 in
1997, according to Houston oil-service company Baker Hughes. By comparison, the Permian field
that straddles Texas and New Mexico had 436 rigs working in August.
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The trip through the Orinoco Belt showed that even those rigs that remain are endangered. Theft is
increasing as facilities sit idle due to power outages, an exodus of workers and lack of working gear.
Most fields, accessible only by gravel trails alongside bumpy, muddy roads, are unmanned. A
supervisor might stop by twice a day for 15 minutes. PDVSA security and rig operators refuse to
travel deep into oil fields for repairs or patrols out of fear of being kidnapped or robbed. That makes
easy targets of copper-filled, diesel-powered, iron-rich equipment surrounded by nothing except
scattered cattle operations and small farms.
“The dismantling at oil rigs, tug boats, industrial units, vehicles and now areas at the upgraders is
massive,” said union leader Jose Bodas. Knowing exactly how much equipment is missing is almost
impossible because PDVSA stopped publishing reports that covered security in 2014.
Little investment and the U.S. sanctions, which limit imports, mean pieces and parts are often taken
from one machine to patch up another.
At the Petromonagas upgrader, a joint venture with Russia’s state oil company Rosneft in
Anzoategui state, burners and valves from sulfur extractors are constantly switched from one unit
to another as technicians resort to mechanical cannibalism, according to an internal PDVSA report.
Piston rods and other parts are reported lost and replacements are ordered. Later, the old
components reappear and the new ones are apparently sold on the black market.
At one site at the Oritupano oil field, two out of seven wells were operating. About 40 kilometers
away, at the Leona field, one of three. At another nearby, all five were down. An oil storage facility
at the Karina field burned down three months ago. Spilled oil was contained in an open-air pool and
its smell was nauseating. Because of the fire, PDVSA had to shut a nearby oilfield whose production
was stored at the site.
In Puerto La Cruz, which until recently was responsible for 15% of the country's oil exports, viewing
the ruin requires a motorboat. Of seven berths there, only one was occupied with by a ship unloading
gasoline on a calm sea under a bright sun.
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Near the coast floated two unused monobuoys, transfer points for crude that are about the size of
a city bus. They were commissioned when Venezuela had plans to increase exports to 3 million
barrels a day. The yellow monobuoys, whose price on the international market can top $30 million,
are dead in the water literally and metaphorically: Because of the sanctions, they are almost
impossible to sell.
About 30 kilometers west, about 10 ships were moored at the Jose terminal, which accounts for
more than 80% of exports. Sanctions mean that Venezuela can’t easily move oil to market, and
there is little available tank space on dry land, so many of the vessels function as expensive, floating
storage units. The ships Rio Caroni, Rio Apure, Rio Orinoco and the Ayacucho hold 5 million barrels
going nowhere soon.
The motorboat passed the Inciarte, a PDVSA tanker standing in Venezuelan waters more than two
years. There’s no way to board, but a recent photo obtained by Bloomberg shows an interior in
shambles. Ceiling tiles have been torn off and are hanging. Chairs and broken furniture are
scattered among torn books. Rubble is everywhere and a Venezuelan flag lies amid it.
At the coastal Jose Anzoategui complex are four upgraders that operate intermittently. When they
function, the plants spit fire and black smoke into the air. In a village 5 kilometers away, a thin layer
of soot covers houses and businesses.
Inland, at a power plant that should have provided electricity to the entire Melones field, even the
light bulbs were gone. Weeds were growing between control panels. In a trailer where oilfield
workers used to live was a red safety helmet with a faded PDVSA logo and a white ceramic saucer
without a cup.
An oil field near San Tome looks good at first glance. From a distance, you can see pretreatment
and storage tanks. There are pipes, towers -- everything an oil field should have. Get closer and the
illusion fades. There is no movement and the only noise comes from birds. The tanks are rusty and
pipes connect nothing. The equipment is cold. Knock on a tank and it rings hollow, empty.
Copyright © 2019 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 endeavors 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
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
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 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 2019 K. Al Awadi
Copyright © 2019 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 endeavors 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
Copyright © 2019 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 endeavors 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
Copyright © 2019 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 endeavors have been used to ensure the accuracy of the information contained in this
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New base 07 october 2019 energy news issue 1284 by khaled al awadi (1)

  • 1. Copyright © 2019 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 endeavors 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 07 October 2019 - Issue No. 1283 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: How Abu Dhabi desert became a world leading solar plant The National + NewBase Less than 30 months ago, it was an unremarkable patch of Abu Dhabi desert. Today, enough power is produced on the eight square kilometre site to power 90,000 homes. Near the small town of Sweihan, a stone’s throw from the Dubai border, the Noor solar power plant is officially up and running, with more than 3.2 million solar panels soaking up the sun. The largest facility of its kind in the world, it is also playing its part in the battle to reduce carbon emissions and address climate change, reducing the Emirate’s CO2 emissions by one million metric tonnes, the equivalent of taking 200,000 cars off the road. “This is a laboratory for the world,” said Jorge Perea, executive managing director of Noor Abu Dhabi, who oversaw the US$872 million project, delivering it on schedule and budget. The Noor facility is the largest of its kind in the world - but even larger UAE solar plants are on the way “This country, it is 10 years in front,” he said. “They are investing in the technology and are hiring the best professionals.” Mr Perea believes the plant’s beauty is in its simplicity. It is run by a small, multi-cultural management team of only seven, an Emirati, Pakistani, Irishman, Syrian, Jordanian and www.linkedin.com/in/khaled-al-awadi-38b995b
  • 2. Copyright © 2019 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 endeavors 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 Filipino. Mr Perea, a black belt in karate, is from Spain. On an average day, only around 70 workers will be on site. A herd of camels graze close to the sprawling solar park in Sweihan. Courtesy: Noor Abu Dhabi The technology is developing and the prices are getting lower. It is right now the cheapest source of energy in the world He said he has welcomed a string of foreign officials and energy ministers to the facility, which was connected to the grid last November and was operating commercially by the summer. He could have increased efficiency by having rotating solar panels, meaning they were constantly aimed at the sun. But this would have meant far higher costs and maintenance requirements, so instead they were installed with a sweeping, curved design to ensure at least some panels would be exposed to maximum sunlight at any one time. Lightweight structures ensured less steel was used. Cleaning of the panels is carried out once a day, by ‘robots’ and without the need for water. Once a day, large brushes automatically sweep over each panel. In total, the system cleans 800km of panels every 24 hours. Eight companies submitted proposals for a cleaning solution for the site – essential in a dusty climate. Two were chosen for extensive testing with the eventual winner, provided by a Chinese company, found to be most efficient. The focus on achieving maximum efficiency while keeping to tight budgets has all meant the energy generated – which is eventually fed to customers by the Emirates Water and Electricity Company (EWEC) – has meant the cost of the power is at a record low. Built as a commercial venture and without subsidies, the cost of 2.42 US cents per kilowatt hour which was described as so low it was “jaw dropping” by industry observers when it was announced. It remains the lowest price in the world for non-subsidised solar.
  • 3. Copyright © 2019 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 endeavors 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 “The plant is nice but it’s a business,” said Mr Perea. “We need to give a return of investment, and if we introduce a lot of complicated things the cost will go up. “We have reached this price because of most efficient technology we can use. Engineering is to do the necessary with the minimum cost. It is not architecture; the architect is looking for something nice, something beautiful. But I don’t need a gold pen to write.” While the solar plant is almost peaceful now, it was not always the case. Almost 3,000 workers helped to build it, laying 7,120km of cables – more than enough to cover the distance between Abu Dhabi and Manilla if they were all laid out in a straight line. Drones were used to pinpoint the locations of 616,098 ground screws, with data transferred to an unmanned machine to drill holes and with near-perfect accuracy. A worker then inserted the poles, which we then automatically drilled in with precise torque by another machine, this time manned by a human operator. On one particularly productive day during the construction 26,000 solar panels were installed in 24 hours. But it was not all straightforward – a solution had to be found after Dhub lizards – which have protected status - were found living on the site. Steps were taken to ensure they were not harmed and visitors to the plant are now warned not to feed or disturb the so- called ‘little dinosaurs of the desert’, should they encounter one. The Noor – Arabic for light – plant started running commercially in June and, for now, remains the largest single-site power plant in the world. A small handful of others, in China and India, have a higher output than Noor’s 1,177 megawatt capacity but were built in different stages or operate as ‘solar parks’ with multiple different operators sharing the same infrastructure. The Noor operation, meanwhile, is owned 60 per cent by a holding company owned by the Abu Dhabi government with 40 per cent owned by a foreign holding company, split equally between a Japanese and Chinese firm. While Noor produces enough energy for 90,000 UAE homes, that figure would be even more impressive if not for the high domestic power consumption rates caused mainly by air conditioners. A plant in Europe producing a similar output could power approximately 150,000 homes, due to their lower average consumption. A herd of camels graze close to the sprawling solar park in Sweihan. Courtesy: Noor Abu Dhabi But even the plant operators admit Noor will not be a record holder for long. Advances in technology and manufacturing mean the prices of solar energy generation are tumbling all the time. New projects are being planned all the time, with plans for an even bigger solar plant in Al Dhafra, Abu Dhabi, well advanced. Meanwhile, it is hoped that in the decades to come advances in battery technology will make help solar realise its full potential.
  • 4. Copyright © 2019 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 endeavors 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 “Batteries are the next step,” Mr Perea said. “The weakness of this plant is we can produce when we have sun. But with batteries, we could produce, store it for the night, and have a more stable grid. Plants like Noor, it is hoped, will help the UAE hit a 50 per cent clean energy target by 2050. While it is unlikely Noor will be expanded, other major solar plants in the UAE are inevitable and the country’s first nuclear power plant is expected to begin operating shortly. The plant planned plant in Al Dhafra will be even bigger than Noor, producing up to almost double the power, and cover approximately 20 square km. EWEC recently invited bids to construct the new plant, which it is hoped will be up and running by 2022. “Noor is the first project of this size in Abu Dhabi,” said Adel Al Saeedi, director of the privatisation directorate at EWEC. “We started big and we started right. It was the right time, the technology became better and more affordable. The technology is developing and the prices are getting lower, so it’s not only environmentally good but economically feasible as well. It is right now the cheapest source of energy in the world.” Potential developers were also “excited” by the new project in Al Dhafra, Mr Al Saeedi said, with bids expected to be formally submitted by the end of this month. “It will be another good project towards achieving the clean and renewable energy targets of the UAE,” he added. “Solar is the future of energy, not only in the UAE, but in the world.
  • 5. Copyright © 2019 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 endeavors 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 Saudi Sipchem seals partnership deal with Hoyer Middle East Sipchem + NewBase Sahara International Petrochemical Company (Sipchem), an integrated global leader in the petrochemical sector and a company listed on the Saudi Stock Exchange, signed a Letter of Intent (LOI) with Hoyer Middle East to further enhance the reach of its chemical products. The agreement is in line with Sipchem’s vision to expand to a full-fledged distribution company capable of delivering products and services to both large and small-to-medium businesses located in the kingdom and internationally. Hoyer Middle East is part of the Hoyer Group, one of the worldwide market leaders in moving liquids, including chemical products, by road, rail and sea. It has been one of the world’s leading bulk logistics providers since 1946. It has extensive know-how in the provision of complex services, and has special customer proximity. The signing took place at a recent forum organised by Sipchem, in collaboration with Argus Media, titled “Sipchem-Argus Petrochemical Forum”, at the Sipchem Technology & Innovation Center “Manar” in Al Khobar. The forum was attended by Sipchem CEO Engineer Saleh Bahamdan along with more than 150 experts from various petrochemical companies in the region. Addressing the gathering, Bahamdan said the deal with Hoyer Middle East was yet another step forward in its growth strategy. "I believe that this is a major building block that will further strengthen Sipchem’s position as a leading petrochemical products supplier in the kingdom and internationally. At Sipchem we believe that the chemical industry’s growth will continue, driven by positive market dynamics," he stated. He pointed out that the new business venture was in line with Sipchem’s commitment to support local industries within the kingdom. The agreement will create new opportunities for SMEs within kingdom and at the same time unlock additional value potential for Sipchem, he added. During the forum, representatives of both Sipchem and Argus Media discussed the challenges facing the petrochemical industry in 2020. Bahamdan also provided an update on Sipchem’s progress following the successful merger of equals between Sipchem and Sahara Petrochemical Company. "Sipchem’s growth to date and future expansion plans are in line with the strategic goal of Saudi Arabia’s Vision 2030 to build national champions with strong local and international reach in a sector that has been identified as a priority for the future economy of the kingdom," he adde
  • 6. Copyright © 2019 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 endeavors 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 Norway Oil Coffers About to Get Giant Boost From the North Sea Bloomberg - Mikael Holter Equinor ASA has started its Johan Sverdrup oil field, a rare mega-project in the North Sea that’s been a boon for Norway’s offshore industry and now promises to deliver a huge production boost for the country. Discovered in 2010 in an area that had been disregarded by most explorers, the site started production on Saturday and is set to reach 440,000 barrels a day by next summer. That represents a 33% addition to Norway’s production in the first half of this year, a spike in output not seen since the 1980s. It’s hard to overstate the importance of Sverdrup for its owners, the Norwegian state and the country’s entire oil industry.
  • 7. Copyright © 2019 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 endeavors 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 Confidence about the field’s startup was key for state-controlled Equinor’s decision to kick off a long- awaited $5 billion buyback program in September, and Sverdrup will be a driving force in the company’s production growth in the next years. It also helped to transform Lundin Petroleum AB -- which made the initial discovery -- and Aker BP ASA into two of the most important companies in Norway’s oil industry. “Sverdrup coming on stream is a momentous occasion for Equinor, our partners and suppliers,” the state-controlled company’s chief executive officer Eldar Saetre said in a statement on Saturday. “At peak, this field will account for around one third of all oil production in Norway and deliver very valuable barrels with record low emissions.” With as much as 3.2 billion barrels in reserves, it’s Norway’s biggest discovery since the 1970s. In an illustration of how unusually large the field is, Aker BP considered going to court over a few decimals in ownership. Equinor expects Sverdrup to contribute about $100 billion to Norway’s state coffers over 50 years. The field’s timing was also perfect for the Nordic country: green-lighted in 2015, just after a historic collapse in the crude market, it offered a lifeline to the embattled oil-service industry, even if the market slump forced suppliers to cut prices. “It rescued us” from a “mega-crisis,” former Petroleum and Energy Minister Terje Soviknes said last year. For Equinor and the other owners, the timing was even better. The discount on services and equipment allowed Equinor to slash investments by as much as 44% compared to the highest early estimates, giving the field an overall break-even price of less than $20 a barrel.
  • 8. Copyright © 2019 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 endeavors 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 Mozambique says Exxon to finalize LNG investment next week Reuters + NewBase U.S. energy giant Exxon Mobil will finalize its investment in Mozambique’s lucrative liquefied natural gas fields in a signing ceremony on Tuesday, the African country’s government said via state television. Exxon’s Rovuma LNG project, jointly operated with Italian firm Eni, will produce, liquefy and sell natural gas from three reservoirs located in the Area 4 block offshore Mozambique’s northern coast. Exxon estimates the fields, which are due to come on line in 2024, will cost $30 billion to develop. State television news channel TVM on Sunday said the Ministry of Mineral Resources and Energy would host a signing ceremony with Exxon and other firms in the capital Maputo on Tuesday. Exxon has said it expects 17,000 tons of liquefied petroleum gas (LPG) per year during the production phase, with the signing of an initial investment decision paving the way for the massive infrastructure project to begin. The gas fields are located off the coast of the northern Cabo Delgado province, which for the last two years has seen intensifying attacks on surrounding communities and government buildings by an extreme Islamist militant group. In February Texas-based petroleum firm Anadarko said one worker was killed and several others injured in two related attacks in the Cabo Delgado area where it is building a 17,000-acre liquefaction complex.
  • 9. Copyright © 2019 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 endeavors 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 Gabon: Panoro Energy oil discovery in Hibiscus Updip sidetrack Source: Panoro Energy Panoro Energy has reported a positive update on its drilling operation on the Hibiscus Updip well ('DHIBM-1'), located on the Dussafu Marin Permit, offshore Gabon. John Hamilton, CEO of Panoro, commented: 'Results of drilling at Hibiscus Updip have significantly exceeded expectations. Both the original wellbore and sidetrack have encountered oil columns with excellent reservoir properties and our estimate of gross recoverable oil at Hibiscus Updip is between 40 and 50 million barrels. Our phase 3 development plans to tie the nearby Ruche and Ruche NE fields back to the Adolo FPSO are now being expanded to include a possible fast-track development of the discovery. Additionally, this successful well enables us to further de-risk Gamba prospectivity in the Hibiscus area where we see significant additional potential. We are extremely pleased with the continued drilling success at Dussafu, and now look forward to the commencement of the production drilling phase at Tortue'. The DHIMB-1 well was initially drilled in 116 metres of water to a vertical depth of 3,538 metres. On August 30, 2019, Panoro announced an oil discovery in the pre-salt Gamba reservoir with plans to drill a sidetrack to appraise the extent of the Hibiscus Updip discovery. The Hibiscus Updip oil discovery has been appraised by drilling a sidetrack (DHIBM-1ST1) to the northwest to test the lateral extent and structural elevation of the Gamba reservoir. The sidetrack was drilled to a Total Depth (TD) of 3,500 metres, (3,049 metres True Vertical Depth Subsea (TVDSS)) approx. 1.1 km from the original wellbore and found a 33 metre oil column with 26 metres of oil pay in the Gamba reservoir with better reservoir character and a similar fluid level to that encountered in the vertical well, DHIBM-1.
  • 10. Copyright © 2019 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 endeavors 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 Panoro and the operator, BW Energy, estimate the gross recoverable resources discovered to be in the range of 40 to 50 million barrels of oil. Further upside potential exists in the wider Hibiscus area which will be the focus of future exploration drilling. The well will now be plugged and abandoned pending future appraisal and development activities. The rig will then move to drill the first of four new oil production wells at the Tortue field.
  • 11. Copyright © 2019 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 endeavors 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 October 07 – 2019 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Oil prices slow losses as gloom gathers over global economy Reuters + NewBase Oil prices fell on Monday, extending last week’s heavy losses, with traders fearing the global economic slowdown will weigh on future oil demand growth while pegging hopes for a rebound on progress in talks this week on ending the U.S.-China trade war. Brent crude futures LCOc1 edged down 4 cents to $58.33 a barrel by 07:10 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 was at $52.85, Up 4 cents. Both contracts ended last week with a more-than-5% decline after dismal manufacturing data from the United States and China, as the lingering row between the world’s top economies hurts global growth and raises the risk of recession. U.S. and Chinese officials will meet in Washington on Oct. 10-11 in the next, much-anticipated fresh effort to work out a deal. Oil price special coverage
  • 12. Copyright © 2019 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 endeavors 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 On the supply side, a faster-than-expected resumption in Saudi Arabia’s production after a Sept. 14 attack on key production facilities also exerted downward pressure on oil prices, although the Middle East remained tense. “The macro headwinds outweigh supply concerns for oil now, despite tensions in the Middle East and a reduced spare capacity pillow,” said Stephen Innes, Asia Pacific market strategist at AxiCorp. In Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries, deadly anti-government unrest is posing the biggest security and political challenge so far to Prime Minister Adel Abdul Mahdi’s year-old government. Iraq’s oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for weeks, Ayham Kamel, Eurasia Group’s practice head for Middle East and North Africa, said in a note. “Any oil production disruption would occur at a time when Saudi Arabia has lost a significant part of its energy system redundancies (spare capacity),” he said. “While Saudi oil production is now close to 9.9 million bpd, it is not clear that the capacity is fully operational at 11.3 million bpd and the (attacked) Abqaiq facility has lost a significant part of its redundancy.” Global supply also faces facility repair and maintenance pressures. The Buzzard oil field in the British North Sea has been shut for pipe repair work, a spokesman from China’s CNOOC said on Friday. Buzzard is the main contributor to the Forties crude stream, the largest of the five North Sea oil grades that underpin Brent crude futures. Meanwhile Libya’s National Oil Corporation (NOC) said on Sunday it will close the Faregh oil field at Zueitina port for scheduled maintenance from Monday until Oct. 14.
  • 13. Copyright © 2019 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 endeavors 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 US Rig Count Declines by Five The U.S. shed three oil rigs and two gas rigs to total a net loss of five rigs this week, according to data from Baker Hughes, a GE Company. All losses were land rigs. This follows last week’s loss of eight rigs and continues the downward trend of the nation’s rig demand. Currently, the nation’s total number of active rigs sits at 855, which is 197 fewer rigs than the count of 1,052 a year ago. Texas led all states with four rigs lost. Oklahoma lost three rigs and West Virginia lost two rigs. The following states lost one rig apiece: California, Colorado, Louisiana and Wyoming. Conversely, New Mexico gained four rigs while Alaska, North Dakota and Utah gained one rig apiece. Among the major basins, the Cana Woodford, Eagle Ford and Marcellus lost two rigs each, while the DJ-Niobrara lost one rig. The Williston tacked on two rigs while the Permian added one rig. At 415 active rigs, the Permian accounts for nearly half of the U.S. total number of active rigs.
  • 14. Copyright © 2019 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 endeavors 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 NewBase Special Coverage News Agencies News Release Oct. 07-2019 Three Days in Venezuela's Oil Belt Show the Price of Pillage Bloomberg - Lucia Kassai and Fabiola Zerpa Five decades ago, Venezuela pumped 3.7 million barrels of oil a day. Now, it’s only producing a little over 700,000 barrels a day. Bloomberg’s Jessica Summers and Lucia Kassai discuss the collapse of the nation’s oil industry, the theft that goes on at Orinoco field, the lack of security and what it will take for a recovery. The crumbling of Venezuela’s oil industry after epic mismanagement by presidents Nicolas Maduro and Hugo Chavez – exacerbated by tough U.S. sanctions -- caused the nation’s broader crisis. Increasingly, the industry itself has become a victim. Five decades ago, Venezuela churned out 3.7 million barrels daily. Today, it produces only about 712,000, about half what North Dakota pumps. Bloomberg reporters in September drove more than 640 kilometers (400 miles) on a three-day tour of the Orinoco field, spoke with employees of state oil giant PDVSA and examined internal reports to understand how the nation with the world’s largest proven reserves could have fallen so far. The journey, whose legs were timed to avoid heavily armed military patrols and checkpoints, showed that the nation’s industrial and economic engine has been stripped of equipment and neglected to the point of collapse. Facilities in the Orinoco Belt, which produces more than 90% of Venezuela’s dwindling flow, look like graveyards for million-dollar equipment: abandoned rigs, empty tanks, disemboweled
  • 15. Copyright © 2019 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 endeavors 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 generators, gutted power panels, stripped cables among pools of spilled crude oil and encroaching vegetation. The ravage of the industry extends throughout a society that came to depend on it. Near the Dacion oil fields, bony dogs played with scrawny, barefoot children. A man on the roadside said he hadn’t eaten since the previous night, 17 hours earlier. “What you see in Venezuela today, the collapse of their oil fields and the oil industry in general, is worse than what you see in some war zones,'' said Fernando Ferreira, director for geopolitical risk service at Rapidan Energy Group, a consultancy in the Washington area. “Venezuelan oil production was wrecked by 20 years of asset seizures, widespread corruption and sanctions.'' The nation could increase production to about 2 million barrels a day in five years at a cost of as much as $30 billion. “The recovery depends in large part on who is going to replace Maduro,'' Ferreira said. Full recovery from the pillage could take decades. Luis Pacheco, president of a PDVSA board named by opposition leader Juan Guaido, said the extent of damage to the system is a matter of conjecture: The board controls only PDVSA assets outside Venezuela. It predicts a cost of $120 billion to restore the domestic industry, he said. “That level of investment must come mostly from private investors," Pacheco said. That would challenge decades of zealous state control of Venezuela’s mainstay asset. The nation had only 23 oil rigs functioning in August, down from 48 two years ago and from 119 in 1997, according to Houston oil-service company Baker Hughes. By comparison, the Permian field that straddles Texas and New Mexico had 436 rigs working in August.
  • 16. Copyright © 2019 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 endeavors 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 The trip through the Orinoco Belt showed that even those rigs that remain are endangered. Theft is increasing as facilities sit idle due to power outages, an exodus of workers and lack of working gear. Most fields, accessible only by gravel trails alongside bumpy, muddy roads, are unmanned. A supervisor might stop by twice a day for 15 minutes. PDVSA security and rig operators refuse to travel deep into oil fields for repairs or patrols out of fear of being kidnapped or robbed. That makes easy targets of copper-filled, diesel-powered, iron-rich equipment surrounded by nothing except scattered cattle operations and small farms. “The dismantling at oil rigs, tug boats, industrial units, vehicles and now areas at the upgraders is massive,” said union leader Jose Bodas. Knowing exactly how much equipment is missing is almost impossible because PDVSA stopped publishing reports that covered security in 2014. Little investment and the U.S. sanctions, which limit imports, mean pieces and parts are often taken from one machine to patch up another. At the Petromonagas upgrader, a joint venture with Russia’s state oil company Rosneft in Anzoategui state, burners and valves from sulfur extractors are constantly switched from one unit to another as technicians resort to mechanical cannibalism, according to an internal PDVSA report. Piston rods and other parts are reported lost and replacements are ordered. Later, the old components reappear and the new ones are apparently sold on the black market. At one site at the Oritupano oil field, two out of seven wells were operating. About 40 kilometers away, at the Leona field, one of three. At another nearby, all five were down. An oil storage facility at the Karina field burned down three months ago. Spilled oil was contained in an open-air pool and its smell was nauseating. Because of the fire, PDVSA had to shut a nearby oilfield whose production was stored at the site. In Puerto La Cruz, which until recently was responsible for 15% of the country's oil exports, viewing the ruin requires a motorboat. Of seven berths there, only one was occupied with by a ship unloading gasoline on a calm sea under a bright sun.
  • 17. Copyright © 2019 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 endeavors 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 Near the coast floated two unused monobuoys, transfer points for crude that are about the size of a city bus. They were commissioned when Venezuela had plans to increase exports to 3 million barrels a day. The yellow monobuoys, whose price on the international market can top $30 million, are dead in the water literally and metaphorically: Because of the sanctions, they are almost impossible to sell. About 30 kilometers west, about 10 ships were moored at the Jose terminal, which accounts for more than 80% of exports. Sanctions mean that Venezuela can’t easily move oil to market, and there is little available tank space on dry land, so many of the vessels function as expensive, floating storage units. The ships Rio Caroni, Rio Apure, Rio Orinoco and the Ayacucho hold 5 million barrels going nowhere soon. The motorboat passed the Inciarte, a PDVSA tanker standing in Venezuelan waters more than two years. There’s no way to board, but a recent photo obtained by Bloomberg shows an interior in shambles. Ceiling tiles have been torn off and are hanging. Chairs and broken furniture are scattered among torn books. Rubble is everywhere and a Venezuelan flag lies amid it. At the coastal Jose Anzoategui complex are four upgraders that operate intermittently. When they function, the plants spit fire and black smoke into the air. In a village 5 kilometers away, a thin layer of soot covers houses and businesses. Inland, at a power plant that should have provided electricity to the entire Melones field, even the light bulbs were gone. Weeds were growing between control panels. In a trailer where oilfield workers used to live was a red safety helmet with a faded PDVSA logo and a white ceramic saucer without a cup. An oil field near San Tome looks good at first glance. From a distance, you can see pretreatment and storage tanks. There are pipes, towers -- everything an oil field should have. Get closer and the illusion fades. There is no movement and the only noise comes from birds. The tanks are rusty and pipes connect nothing. The equipment is cold. Knock on a tank and it rings hollow, empty.
  • 18. Copyright © 2019 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 endeavors 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 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 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 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 2019 K. Al Awadi
  • 19. Copyright © 2019 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 endeavors 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
  • 20. Copyright © 2019 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 endeavors 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
  • 21. Copyright © 2019 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 endeavors 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