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NewBase Energy News 10 October 2019 - Issue No. 1285 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's BPGIC to expand storage capacity, refinery operations
Reuters + NewBase. Rania El Gamal, Reuters News
The United Arab Emirates' Brooge Petroleum and Gas Investment Co (BPGIC) plans to boost crude
oil storage capacity and expand refining facilities after managing to lease additional land in the
bunkering hub of Fujairah, the company said on Thursday.
"BPGIC expects that ... could add storage and services capacity of ... 3.5 million cubic metres," it
said in a statement. That amount is in addition to existing storage capacity of 1 million cubic metres
across about 22 tanks for crude and oil products, BPGIC added.
The company said it aimed to start construction of the new facilities later in 2019, and was in talks
with international oil companies to lease part of its planned crude storage capacity. In September,
BPGIC awarded a contract to Spain's SENER engineering group to build an oil refinery in Fujairah,
located just outside the Strait of Hormuz, a key shipping lane.
The plant will produce bunker fuel that complies with new international laws capping sulphur content
in shipping fuels. The first phase of the planned 250,000-barrels-per-day refinery will be completed
in the first quarter of 2020.
New regulations from the International Maritime Organization will require ships to use fuels with a
sulphur content below 0.5% beginning in 2020. Current shipping fuel is much dirtier, with higher
levels of sulphur.
www.linkedin.com/in/khaled-al-awadi-38b995b
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Earlier this year, BPGIC listed its shares on the Nasdaq stock exchange after merging with U.S.-
based firm Twelve Seas Investment Co. The move was part of the UAE-based oil storage
company's expansion strategy. BPGIC, established in 2013, is one of the largest holders of storage
assets in Fujairah.
About BOGIC:
After three years of extensive market studies BPGIC was incorporated in 2013 in Fujairah’s Free
Zone in UAE. BPGIC’s activities cover: Liquid bulk product storage (Crude oil, Fuel oil, Refined Oil
products, blending components and gas), Building, Managing, Investment in refineries, Extraction
and Exploration of Crude oil.
BPGIC is governed by the Board of Directors , all reputed professionals with extensive track record
in the Oil and Gas Industry. The Board is primarly responsible for setting the strategy of BPGIC and
for the general management and overview of strategic, operational and financial decisions.
The Board has set up an Executive Committee (EXCOM) to monitor the implementation of the
companies Mission and Vision, Company Strategy and Business Development both in the UAE and
globally.
The BPGIC terminal in Fujairah is located within the Fujaiarah Industrial Oil Zone and its current
capacity of 398,600m³ can store Clean Petroleum Products , Middle Distillates and Fuel oil in
dedicated product systems. Construction for an additional 601,600m³ storage capacity on the same
location for Crude oil will be started shortly with completion in Q4 2019.
The terminal location is on prime land and just 500 meters
away from Matrix Manifold 2 allowing for connections to
tanker berths in the Port of Fujairah and neighboring terminals
in Fujairah. will be started shortly with completion in Q4 2019.
Phase II of BPGIC Al-Fujairah Terminal consists of eight
tanks with a total storage capacity of 601,600m³ which brings
the total storage capacity of the terminal to 1,000,200m³.
Phase II tanks are mainly designed for storing crude oil, whilst
flexibility of storing Black products is also considered.
Phase II tank configurations are four of capacity 107,700m³ each and four of capacity 42,700m³ each.
Phase II shall also consists of building associated infrastructures including new pump manifold with high flow
rate pumps meeting FOTT VLCC requirements, additional jetty lines, etc. Common infrastructure built under
Phase I is already designed to cater for the Phase II utilities, fire fighting and power requirements. Completion
of construction of Phase 2 is planned for Q4 2019.
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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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Oman: New hub to unlock potential of $20bn hydrogen economy
Oman Observer -Conrad Prabhu
The Ministry of Oil and Gas has proposed the setting up of a working group to jumpstart the
development of a low-carbon and sustainable hydrogen economy in the Sultanate.
Salim bin Nasser al Aufi, Under-Secretary, said the working group, initially led by the ministry, will
seek to bring together all of the stakeholders — government, academic institutions, R&D
organisations, Oil & Gas operators, industries and petrochemical companies — thereby paving the
way for the creation of a Hydrogen Centre or hub to spearhead the development of a hydrogen
economy for the Sultanate.
The official made the announcement
in closing remarks at the conclusion
of the 1st Oman Hydrogen
Symposium which was held on
Wednesday, October 9, under the
auspices of Dr Ahmed bin
Mohammed al Futaisi, Minister of
Transport and Communications, at
the Halban campus of the German
University of Technology in Oman
(GUtech).
The daylong symposium was
organised as part of the Oman
Hydrogen Initiative — a joint
project of GUtech and Hydrogen
Rise AG of German. The initiative,
first unveiled last year, seeks to
serve as a platform for
engagement between government
and other stakeholders on the
potential for igniting the growth of
a future economy based on the production, storage, distribution and usage of green hydrogen in
the Sultanate.
Part of a rapidly growing multi-trillion-dollar global industry, hydrogen is being increasingly adopted
as fuel in power generation and other heat applications. Furthermore, as an energy carrier in fuel
cells, hydrogen has promising potential for heavy duty transport applications, such as trucks, rail
and ships, as well as industrial applications that require both electricity and heat.
The daylong symposium featured a series of presentations highlighting the exponential growth of
hydrogen around the world as fuel and feedstock. The list of speakers included Prof Dr Michael
Modigell, Rector of GUtech; Dr Bernd Wiemann, CEO — Hydrogen Rise; Thomas Friedrich
Schneider, Ambassador of Germany to the Sultanate; Olav Carlsen, CFO — Hydrogen Rise;
lara Orthofer of the Technical University Munich (TUM); and Dr Abdullah al Abri, Executive Director
of EJAAD Oman. Experts from Germany and Japan also outlined strategies by their respective
nations to decarbonise their economies by switching to renewables and hydrogen.
According to Al Aufi, hydrogen has the potential to be a game-changer for the Sultanate with
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beneficial ramifications similar to
hydrocarbons, albeit minus the
environmental impacts.
“If we go by how solar and wind energy
have progressed over the last few years, I
think (the adoption of hydrogen) will be
much faster.
There is huge demand, based on the
realisation globally that the only way we can
meet the Paris Agreement on climate
change is that we must decarbonise on an
industrial scale. And to do that, hydrogen is
probably at the centre of these efforts.”
The opportunity to create a new ecosystem in Oman around hydrogen was very exciting, the official
noted. In this regard, he called on all the stakeholders to collaborate in this strategic endeavour.
He challenged the key players, including R&D institutions, Oil & Gas operators and industries to
study the feasibility of using hydrogen as an alternative to natural gas as fuel and feedstock.
Success on this front will address the ministry’s biggest challenge: allocating gas to new applicants.
In attendance at the symposium were high-level officials representing Oman Oil and Orpic Group
(the Sultanate’s integrated energy flagship), leading Oil & Gas operators, the Authority for Electricity
Regulation Oman, Oman Power and Water Procurement Company (OPWP), Sultan Qaboos
University (SQU), The Research Council, EJAAD, and a host of organisations from the academic,
industrial and energy domains.
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South Sudan to launch auction of licenses for eight oilfields
Reuters +NewBase
South Sudan will kick-start an auction of licenses to develop eight oilfields around the country later
this month, an oil ministry official said on Wednesday.
South Sudan’s oil production has reached 178,000 barrels per day (bpd) and the country aims for
output to reach 200,000 bpd within the next two years, the official said at an oil and power
conference.
“We are working on increasing the production of oil,” said Arkangelo Okwang Oler, director-general
for planning, training and research at South Sudan’s oil ministry, speaking at an oil conference in
Cape Town.
Long-term, South Sudan aims to ramp up production
to 350,000 bpd, Oler added, without specifying a
time frame. That level was South Sudan’s peak
production before 2012, when a five-year civil war
brought the young country’s oil industry to a virtual
standstill.
“I am optimistic that we are moving toward a stable
government,” Oler said.
South Sudan’s President Salva Kiir and rebel leader
Riek Machar have agreed to form a transitional
government by the middle of November, the
information minister said last month. South Sudan
made a small oil discovery in Northern Upper Nile State in August, its first since independence in
2011. Oler said oil minister Awow Daniel Chuang would officially launch the tender for the licenses
at a conference in the capital Juba on Oct. 29-30, and that South Sudan would declare the results
in the first quarter of 2020.
“We are inviting companies to come and impart your technologies based on the best international
practices,” Oler said. “South Sudan is the current destination for investment.”
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Japan: Total launches construction of its 3rd solar power plant
Source: Total
Total Solar International, a wholly owned Total subsidiary dedicated to utility-scale solar plants, has
announced the start of the construction of Miyagi Osato Solar Park, a large-scale solar plant of 52
megawatt-peak (MWp) located in Osato, Miyagi prefecture, Japan.
The project, which has achieved financial close, is expected to start up in 2021 and will provide
clean and reliable electricity to Japanese households.
'The Miyagi Osato Solar Park is
Total’s third and biggest solar plant
in Japan, which will allow us to
reach a cumulated capacity of over
100 MWp in the country.
This project is in line with Total’s
commitment to develop renewable
production capacities worldwide
and in particular in the Japanese
market, where we actively pursue
our development', said Julien
Pouget, Senior Vice-President
Renewables at Total.
The plant is designed to fully meet
Japan’s stringent earthquake-
resistant building standards. The
facility will be equipped with around
116,000 SunPower® Maxeon®
high efficiency solar panels that
deliver reliable performance
throughout the entire life of every
installation.
The plant will be operated by Miyagi Osato Solar Park G.K., a special purpose company, majority-
owned by Total Solar International (90%), alongside SB Energy Corp (10%), a Japanese subsidiary
of SoftBank Group.
The launch the construction of Miyagi Osato Solar Park follows the beginning of the operation of
two other large-scale solar plants of Total Solar International in Japan: Miyako Solar Park (25 MWp,
2019) and Nanao Power Plant (27 MWp, 2017). This rapid growth (over 100 MWp of cumulative
capacity achieved in 2 years) sets Total as one of the most dynamic players in the Japanese solar
market.
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U.S:Recent decrease in crude oil production was geographically
isolated, likely temporary …Source: U.S. EIA, Petroleum Supply Monthly and Short-Term Energy Outlook
Monthly U.S. crude oil production fell by 276,000 barrels per day (b/d) in July 2019, based on the
latest data in the U.S. Energy Information Administration’s (EIA) Petroleum Supply Monthly. This
hurricane-related decrease was the largest decline in monthly crude oil production in more than a
decade.
The decline was temporary and geographically isolated to the Federal Offshore Gulf of Mexico. EIA
expects that U.S. crude oil production will continue to increase through the remainder of 2019.
Crude oil production in the Federal Offshore Gulf of Mexico fell by 332,000 b/d in July when some
production platforms were evacuated in anticipation of Hurricane Barry.
According to information from the U.S. Department of the Interior’s Bureau of Safety and
Environmental Enforcement (BSEE), 283 offshore oil and gas platforms in the Gulf of Mexico (about
42% of the regional total) were evacuated in mid-July as Barry approached.
BSEE estimated that about 70% of Gulf of Mexico crude oil production was shut in (i.e., not
operating) at the peak of the disruption as a result of the evacuation.
Excluding the Federal Offshore Gulf of Mexico, U.S. crude oil production in the rest of the United
States rose by a combined 56,000 b/d in July, partially mitigating the disruption.
Historically, many of the largest monthly declines in U.S. crude oil production were the result of
hurricanes. Hurricanes Gustav and Ike led to crude oil production falling by more than 1 million
barrels per day in September 2008. Hurricanes Katrina and Rita led to a similar month-on-month
decline in September 2005.
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By comparison, Hurricane Barry’s disruption occurred relatively early in the hurricane season and
had less of an effect on total U.S. crude oil production. As onshore U.S. crude oil production has
grown, the Gulf of Mexico’s share of the national total has fallen from a high of 29% in 2009 to 16%
in 2018.
In developing crude oil production forecasts for each month’s Short-Term Energy Outlook, EIA uses
the latest data from the Petroleum Supply Monthly and Weekly Petroleum Status Report, among
other sources. As a result, EIA had already accounted for estimates of Hurricane Barry’s effect on
crude oil production in the Gulf of Mexico in the August edition of the STEO.
In the October STEO, released earlier this week, EIA expects that U.S. crude oil production will
increase in each remaining month of 2019, and ultimately reach 13.0 million b/d in December 2019.
EIA expects U.S. crude oil production to average 12.3 million b/d in 2019 and 13.2 million b/d in
2020.
U.S. crude oil exports continued to grow in the first half of 2019
U.S. exports of crude oil rose to average 2.9 million barrels per day (b/d) in the first half of 2019, an
increase of 966,000 b/d from the first half of 2018. U.S. crude oil exports also set a record-high
monthly average in June 2019 at 3.2 million b/d.
The United States is still one of the world’s largest importers of crude oil: in the first half of 2019,
U.S. imports of crude oil less exports (net imports) averaged 4.2 million b/d compared with 6.1
million b/d in the first half of 2018. Increases in U.S. domestic crude oil production have resulted in
reduced imports and increased exports.
Canada remained the top destination for U.S. crude oil exports, but volumes exported to Canada
did not change much between the first halves of 2018 and 2019. By contrast, U.S. crude oil exports
to most other major destinations have increased.
The top regional destination for U.S. crude oil exports was Asia and Oceania at 1.3 million b/d in
the first half of 2019. U.S. crude oil exports to these countries collectively increased by 472,000 b/d
(58%) compared with the same period in 2018, and exports to countries such as South Korea, India,
and Taiwan more than doubled. China has been an exception to this regional trend: U.S. crude oil
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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exports to China in the first half of 2019 averaged 248,000 b/d, or 64% less than the same period
last year.
U.S. crude oil exports to Western European destinations averaged 824,000 b/d in the first half of
2019, or 66% more than in the first half of 2019. First-half 2019 exports to the Netherlands increased
173,000 b/d (192%) and exports to the United Kingdom increased 74,000 b/d (53%) compared with
the first half of 2018.
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 10 – 2019 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices dip on wilting hopes for U.S.-China trade deal
Reuters + Bloomberg + NewBase
Oil prices eased on Thursday on the expectations that the resumption of U.S.-China talks will not
end the trade war between the world’s two largest oil consumers, exacerbating anxiety over the
global economy and fuel demand.
China, the world’s biggest oil importer, has lowered expectations of a deal from the talks on
Thursday and Friday to head off U.S. President Donald Trump’s proposed increase to the tariff rate
on about $250 billion of Chinese goods to 30% from 25% on Oct. 15 if there are no signs of progress.
The dispute has disrupted global supply chains and slowed growth in the world’s two largest
economies, curbing fuel consumption in both.
Global benchmark Brent crude futures LCOc1 fell 25 cents, or 0.43%, to $58.07 a barrel by 0858
GMT. U.S. West Texas Intermediate (WTI) futures CLc1 were down 25 cents, or 0.2%, at $52.47.
Both benchmarks are down more than 20% from April peaks.
Oil price special
coverage
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The front-month spread between November and December U.S. crude futures CLc1-CLc2 traded
at a discount of 2 cents a barrel on Thursday. The spread had slipped into contango - where future
prices are higher than nearby prices - on Wednesday for the first time since Sept. 19.
“Should U.S.-China trade negotiations take a turn for the worse, market pessimism will impose sharp
negative pressures on oil prices, said Benjamin Lu, commodities analyst at Phillip Futures in
Singapore.
Prices were also weighed down by a report of rising stockpiles in the United States, currently the
world’s biggest oil producer.
U.S. crude stocks rose by 2.9 million barrels in the week to Oct. 4, the Energy Information
Administration (EIA) said on Wednesday, more than double analyst expectations of a 1.4 million
barrel increase.
Additionally, the Organization of the Petroleum Exporting Countries (OPEC) quietly adjusted its
production pact to allow Nigeria to raise its output, adding more supply.
OPEC member Venezuela will also increase its exports despite U.S. economic sanctions that have
curtailed shipments. Indian refiner Reliance Industries plans to start loading Venezuelan crude after
a four-month pause, in a further sign of expanding crude supply to the market.
World’s Top Oil Traders See 2020 WTI Prices Stuck in the $50s
As the oil industry’s top executives gathered in London for one of the most important events of the
year their view on crude prices was clear: they’ll struggle next year.
Vitol SA Chief Executive Officer Russel Hardy told the Oil & Money conference on Wednesday that
the ongoing U.S.-China trade dispute was curbing the outlook for crude prices which would be stuck
in the $50s a year from now. The bosses of fellow commodity traders Trafigura Group
Ltd. and Gunvor Group Ltd. agreed, at least in the short term.
“Without some resolution to the trade wars then we’ll remain a little bearish,” said Hardy.
For months, the oil market has been focused on a worsening demand outlook and trade tensions
between the world’s two biggest economies with the bearish mood only briefly pierced by attacks
on Saudi Arabia’s energy infrastructure.
Trafigura CEO Jeremy Weir said the trading house expects a slight recovery in the fourth quarter of
2019 with prices “maybe slightly lower from where we are now” in a year’s time. “Particularly with
the current trade environment and a strong U.S. dollar, I would say there’s further downside in the
short term,” said Weir.
Gunvor CEO Torbjorn Toernqvist said he also sees oil at current levels, of under $60 a barrel, a
year from now and that next year the market would “test OPEC’s resolve” on its commitment to
coordinated output cuts. The current production cuts deal, agreed by the Organization of Petroleum
Exporting Countries and its allies, is due to expire in March 2020.
Analysts at the conference echoed the view of trading houses, saying they saw the oil market
remaining amply supplied next year.
Jeffrey Currie, head of commodities research at Goldman Sach Group Inc., sees Brent crude at $60
over the next two years. The market is pricing in plenty of supply and demand is a concern, Jan
Stuart, global energy economist at Cornerstone Macro LLC added.
Missing Geopolitical Risk
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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Royal Dutch Shell Plc boss Ben van Beurden however said he was surprised prices weren’t higher
than current levels, following the worst-ever attack on Saudi Arabia’s energy infrastructure last
month.
“It’s a but puzzling in a way but shows how good the response of Saudi Aramco has been,” van
Beurden told Bloomberg TV on Wednesday. “The market is a little bit anesthetized by trade wars
and the glut of shale to the point where it has become blase about geopolitical risk. I think it’s not
representative of the real picture.”
Gunvor’s Toernqvist agreed, adding that it seems that there is currently no risk premium on oil
prices. “It’s amazing that prices are at low-end of where they were before attack,” Toernqvist said.
Saudi Aramco CEO Amin Nasser said the kingdom may beat its end-of-November target to restore
output capacity to 12 million barrels a day, having already reached pre-attack production levels. The
company is targeting production of around 9.9 million barrels a day for October.
“We made sure customers received shipments even during the attacks,” Nasser said.
“Five years ago the market reaction would’ve been bigger,” Shell’s van Beurden said in the
Bloomberg TV interview. “The geopolitical risk premium is low in market now. “The unthinkable may
happen again and we should factor that in.”
Underinvestment
But over the longer-term, oil executives see crude prices rising because of a lack of investment now
in new projects. Gunvor’s CEO said prices could reach between $70-$80 a barrel in five years
without the right investment.
“If we do not invest today, prices could go there. It is cyclical. Prices will respond to the level of
investment over time. Putting off long-term investment is a concern,” Tornqvist said.
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NewBase Special Coverage
News Agencies News Release Oct. 03-2019
How carbon taxes can boost state coffers and clean the environment
The National - Dr Nasser Saidi chair of the Mena Clean Energy Business Council and founder
Given the GCC's high carbon footprint, the introduction of a tax would generate substantial revenues
for the governments.
Cooling towers of a coal-fired power station near Selby, northern England. The European Union has called for
individual governments to introduce carbon taxes to drive down emissions. AFP.
Last year, global energy-related carbon dioxide emissions rose by 1.7 per cent to the highest level
since 2013, according to the International Energy Administration, with this year estimated to be
steeper.
While the sharp decline in cost of renewables (90 per cent for solar) has led to the rapid growth of
its dissemination, it has not been enough to offset the increased use of fossil fuels. The growing
existential threat of climate change necessitates quicker and sustained policy action.
The Middle East is particularly vulnerable. The region's share of global emissions reached a record
6.3 per cent in 2018, nearly double its 3.3 per cent share of world GDP. Some Arab countries fall
among the top nations when it comes to emissions per capita.
Reducing greenhouse gas emissions requires deploying low-carbon energy in addition to improving
the efficiency of energy consumption (see my previous column). The announced renewable energy
policies of GCC nations are a step in the right direction.
They aim to shift preferences, consumer and producer choices towards renewables and away from
fossil fuel activities and production. But there is room for more to be done.
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Government policies can be augmented by a determined carbon pricing that increases the relative
cost of fossil fuel generated energy compared to that produced by renewables. Carbon pricing is
the most effective and cost-efficient means to reduce emissions.
It forces producers and users of carbon fuels to internalise external costs of their emissions and ties
them to sources through a price on carbon (the polluter pays principle).
There are two efficient options:
emissions trading systems, or cap-and-
trade as implemented in the EU and
carbon taxes. Carbon taxes are more
comprehensive since they apply to
all CO2 emissions from the combustion
or consumption of fuels (coal, oil, gas)
to limit emissions.
The tax is applied at the point of
production, including a border
adjustment on imports of energy-
intensive products to shield domestic
manufacturers from international
competitors that do not face a similar
tax.
A carbon tax sends a clear price signal
to polluters to discontinue their polluting
activity, or bear the cost for emissions.
The carbon price also encourages clean
technology and market innovation,
fuelling new, low-carbon drivers of
economic growth and decarbonisation.
Introducing a tax in the GCC would
result in structural change for local
economies. The challenge for
policymakers is that the high energy-
intensive sectors such as
petrochemicals, aluminium, aviation and
shipping have been the basis of
economic diversification strategies.
They would be the most directly impacted by carbon taxes. Fossil fuel assets can be sold (as in the
Saudi Aramco planned IPO), while capital stock would need to be written down, phased out or
destroyed to be replaced by "green assets & capital". The policy choice is between starting on the
energy transition path now, or later facing the dismal alternative of massive adjustment and stranded
assets.
Iata has adopted the Carbon Offsetting and Reduction Scheme for International Aviation and the
International Maritime Organisation is considering measures to decarbonise maritime transport by
2035.
Similarly, a record 515 institutional investors managing $35 trillion (Dh128tn) in assets (nearly half
the world’s invested capital) last week urged governments worldwide to step up action to tackle
climate change and achieve the Paris Agreement’s goals.
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Central bankers are also going green: extreme-climate scenarios will be introduced into financial
stress tests, given the sector’s exposure to climate-related risks and the writedown in the value of
fossil fuel assets.
Given the GCC's high carbon footprint, the introduction of a carbon tax would generate substantial
revenues for the governments. Revenues could range between $5.5bn to $19.4bn for a carbon tax
ranging from $20 to $70 per tonne of CO2 in the UAE to $11.4bn to $40bn in Saudi Arabia.
It’s worth noting that a carbon tax is cheaper to collect and brings substantially more revenue than
the amounts being raised by the VAT (in 2018, UAE and Saudi Arabia collected $7.35bn and
$12.5bn, respectively).
More in state revenues mean it can be used to finance decarbonisation and make the energy
transition smooth: by investing in climate-resilient infrastructure; retrofitting buildings and structures;
subsidising renewable investments by the private sector and in vulnerable industries such as
transport.
Part of the revenue can be apportioned to national funds backing research and development and
develop the domestic clean technology and renewables sectors, including desalination. Carbon tax
revenues would finance clean economic diversification and investment-led green economy growth
for the GCC. It is a win-win.
Potential revenue generated from carbon taxes
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
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 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 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 19
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New base 10 october 2019 energy news issue 1285 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 10 October 2019 - Issue No. 1285 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's BPGIC to expand storage capacity, refinery operations Reuters + NewBase. Rania El Gamal, Reuters News The United Arab Emirates' Brooge Petroleum and Gas Investment Co (BPGIC) plans to boost crude oil storage capacity and expand refining facilities after managing to lease additional land in the bunkering hub of Fujairah, the company said on Thursday. "BPGIC expects that ... could add storage and services capacity of ... 3.5 million cubic metres," it said in a statement. That amount is in addition to existing storage capacity of 1 million cubic metres across about 22 tanks for crude and oil products, BPGIC added. The company said it aimed to start construction of the new facilities later in 2019, and was in talks with international oil companies to lease part of its planned crude storage capacity. In September, BPGIC awarded a contract to Spain's SENER engineering group to build an oil refinery in Fujairah, located just outside the Strait of Hormuz, a key shipping lane. The plant will produce bunker fuel that complies with new international laws capping sulphur content in shipping fuels. The first phase of the planned 250,000-barrels-per-day refinery will be completed in the first quarter of 2020. New regulations from the International Maritime Organization will require ships to use fuels with a sulphur content below 0.5% beginning in 2020. Current shipping fuel is much dirtier, with higher levels of sulphur. 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 Earlier this year, BPGIC listed its shares on the Nasdaq stock exchange after merging with U.S.- based firm Twelve Seas Investment Co. The move was part of the UAE-based oil storage company's expansion strategy. BPGIC, established in 2013, is one of the largest holders of storage assets in Fujairah. About BOGIC: After three years of extensive market studies BPGIC was incorporated in 2013 in Fujairah’s Free Zone in UAE. BPGIC’s activities cover: Liquid bulk product storage (Crude oil, Fuel oil, Refined Oil products, blending components and gas), Building, Managing, Investment in refineries, Extraction and Exploration of Crude oil. BPGIC is governed by the Board of Directors , all reputed professionals with extensive track record in the Oil and Gas Industry. The Board is primarly responsible for setting the strategy of BPGIC and for the general management and overview of strategic, operational and financial decisions. The Board has set up an Executive Committee (EXCOM) to monitor the implementation of the companies Mission and Vision, Company Strategy and Business Development both in the UAE and globally. The BPGIC terminal in Fujairah is located within the Fujaiarah Industrial Oil Zone and its current capacity of 398,600m³ can store Clean Petroleum Products , Middle Distillates and Fuel oil in dedicated product systems. Construction for an additional 601,600m³ storage capacity on the same location for Crude oil will be started shortly with completion in Q4 2019. The terminal location is on prime land and just 500 meters away from Matrix Manifold 2 allowing for connections to tanker berths in the Port of Fujairah and neighboring terminals in Fujairah. will be started shortly with completion in Q4 2019. Phase II of BPGIC Al-Fujairah Terminal consists of eight tanks with a total storage capacity of 601,600m³ which brings the total storage capacity of the terminal to 1,000,200m³. Phase II tanks are mainly designed for storing crude oil, whilst flexibility of storing Black products is also considered. Phase II tank configurations are four of capacity 107,700m³ each and four of capacity 42,700m³ each. Phase II shall also consists of building associated infrastructures including new pump manifold with high flow rate pumps meeting FOTT VLCC requirements, additional jetty lines, etc. Common infrastructure built under Phase I is already designed to cater for the Phase II utilities, fire fighting and power requirements. Completion of construction of Phase 2 is planned for Q4 2019.
  • 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 Oman: New hub to unlock potential of $20bn hydrogen economy Oman Observer -Conrad Prabhu The Ministry of Oil and Gas has proposed the setting up of a working group to jumpstart the development of a low-carbon and sustainable hydrogen economy in the Sultanate. Salim bin Nasser al Aufi, Under-Secretary, said the working group, initially led by the ministry, will seek to bring together all of the stakeholders — government, academic institutions, R&D organisations, Oil & Gas operators, industries and petrochemical companies — thereby paving the way for the creation of a Hydrogen Centre or hub to spearhead the development of a hydrogen economy for the Sultanate. The official made the announcement in closing remarks at the conclusion of the 1st Oman Hydrogen Symposium which was held on Wednesday, October 9, under the auspices of Dr Ahmed bin Mohammed al Futaisi, Minister of Transport and Communications, at the Halban campus of the German University of Technology in Oman (GUtech). The daylong symposium was organised as part of the Oman Hydrogen Initiative — a joint project of GUtech and Hydrogen Rise AG of German. The initiative, first unveiled last year, seeks to serve as a platform for engagement between government and other stakeholders on the potential for igniting the growth of a future economy based on the production, storage, distribution and usage of green hydrogen in the Sultanate. Part of a rapidly growing multi-trillion-dollar global industry, hydrogen is being increasingly adopted as fuel in power generation and other heat applications. Furthermore, as an energy carrier in fuel cells, hydrogen has promising potential for heavy duty transport applications, such as trucks, rail and ships, as well as industrial applications that require both electricity and heat. The daylong symposium featured a series of presentations highlighting the exponential growth of hydrogen around the world as fuel and feedstock. The list of speakers included Prof Dr Michael Modigell, Rector of GUtech; Dr Bernd Wiemann, CEO — Hydrogen Rise; Thomas Friedrich Schneider, Ambassador of Germany to the Sultanate; Olav Carlsen, CFO — Hydrogen Rise; lara Orthofer of the Technical University Munich (TUM); and Dr Abdullah al Abri, Executive Director of EJAAD Oman. Experts from Germany and Japan also outlined strategies by their respective nations to decarbonise their economies by switching to renewables and hydrogen. According to Al Aufi, hydrogen has the potential to be a game-changer for the Sultanate with
  • 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 beneficial ramifications similar to hydrocarbons, albeit minus the environmental impacts. “If we go by how solar and wind energy have progressed over the last few years, I think (the adoption of hydrogen) will be much faster. There is huge demand, based on the realisation globally that the only way we can meet the Paris Agreement on climate change is that we must decarbonise on an industrial scale. And to do that, hydrogen is probably at the centre of these efforts.” The opportunity to create a new ecosystem in Oman around hydrogen was very exciting, the official noted. In this regard, he called on all the stakeholders to collaborate in this strategic endeavour. He challenged the key players, including R&D institutions, Oil & Gas operators and industries to study the feasibility of using hydrogen as an alternative to natural gas as fuel and feedstock. Success on this front will address the ministry’s biggest challenge: allocating gas to new applicants. In attendance at the symposium were high-level officials representing Oman Oil and Orpic Group (the Sultanate’s integrated energy flagship), leading Oil & Gas operators, the Authority for Electricity Regulation Oman, Oman Power and Water Procurement Company (OPWP), Sultan Qaboos University (SQU), The Research Council, EJAAD, and a host of organisations from the academic, industrial and energy domains.
  • 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 South Sudan to launch auction of licenses for eight oilfields Reuters +NewBase South Sudan will kick-start an auction of licenses to develop eight oilfields around the country later this month, an oil ministry official said on Wednesday. South Sudan’s oil production has reached 178,000 barrels per day (bpd) and the country aims for output to reach 200,000 bpd within the next two years, the official said at an oil and power conference. “We are working on increasing the production of oil,” said Arkangelo Okwang Oler, director-general for planning, training and research at South Sudan’s oil ministry, speaking at an oil conference in Cape Town. Long-term, South Sudan aims to ramp up production to 350,000 bpd, Oler added, without specifying a time frame. That level was South Sudan’s peak production before 2012, when a five-year civil war brought the young country’s oil industry to a virtual standstill. “I am optimistic that we are moving toward a stable government,” Oler said. South Sudan’s President Salva Kiir and rebel leader Riek Machar have agreed to form a transitional government by the middle of November, the information minister said last month. South Sudan made a small oil discovery in Northern Upper Nile State in August, its first since independence in 2011. Oler said oil minister Awow Daniel Chuang would officially launch the tender for the licenses at a conference in the capital Juba on Oct. 29-30, and that South Sudan would declare the results in the first quarter of 2020. “We are inviting companies to come and impart your technologies based on the best international practices,” Oler said. “South Sudan is the current destination for investment.”
  • 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 Japan: Total launches construction of its 3rd solar power plant Source: Total Total Solar International, a wholly owned Total subsidiary dedicated to utility-scale solar plants, has announced the start of the construction of Miyagi Osato Solar Park, a large-scale solar plant of 52 megawatt-peak (MWp) located in Osato, Miyagi prefecture, Japan. The project, which has achieved financial close, is expected to start up in 2021 and will provide clean and reliable electricity to Japanese households. 'The Miyagi Osato Solar Park is Total’s third and biggest solar plant in Japan, which will allow us to reach a cumulated capacity of over 100 MWp in the country. This project is in line with Total’s commitment to develop renewable production capacities worldwide and in particular in the Japanese market, where we actively pursue our development', said Julien Pouget, Senior Vice-President Renewables at Total. The plant is designed to fully meet Japan’s stringent earthquake- resistant building standards. The facility will be equipped with around 116,000 SunPower® Maxeon® high efficiency solar panels that deliver reliable performance throughout the entire life of every installation. The plant will be operated by Miyagi Osato Solar Park G.K., a special purpose company, majority- owned by Total Solar International (90%), alongside SB Energy Corp (10%), a Japanese subsidiary of SoftBank Group. The launch the construction of Miyagi Osato Solar Park follows the beginning of the operation of two other large-scale solar plants of Total Solar International in Japan: Miyako Solar Park (25 MWp, 2019) and Nanao Power Plant (27 MWp, 2017). This rapid growth (over 100 MWp of cumulative capacity achieved in 2 years) sets Total as one of the most dynamic players in the Japanese solar market.
  • 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 U.S:Recent decrease in crude oil production was geographically isolated, likely temporary …Source: U.S. EIA, Petroleum Supply Monthly and Short-Term Energy Outlook Monthly U.S. crude oil production fell by 276,000 barrels per day (b/d) in July 2019, based on the latest data in the U.S. Energy Information Administration’s (EIA) Petroleum Supply Monthly. This hurricane-related decrease was the largest decline in monthly crude oil production in more than a decade. The decline was temporary and geographically isolated to the Federal Offshore Gulf of Mexico. EIA expects that U.S. crude oil production will continue to increase through the remainder of 2019. Crude oil production in the Federal Offshore Gulf of Mexico fell by 332,000 b/d in July when some production platforms were evacuated in anticipation of Hurricane Barry. According to information from the U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE), 283 offshore oil and gas platforms in the Gulf of Mexico (about 42% of the regional total) were evacuated in mid-July as Barry approached. BSEE estimated that about 70% of Gulf of Mexico crude oil production was shut in (i.e., not operating) at the peak of the disruption as a result of the evacuation. Excluding the Federal Offshore Gulf of Mexico, U.S. crude oil production in the rest of the United States rose by a combined 56,000 b/d in July, partially mitigating the disruption. Historically, many of the largest monthly declines in U.S. crude oil production were the result of hurricanes. Hurricanes Gustav and Ike led to crude oil production falling by more than 1 million barrels per day in September 2008. Hurricanes Katrina and Rita led to a similar month-on-month decline in September 2005.
  • 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 By comparison, Hurricane Barry’s disruption occurred relatively early in the hurricane season and had less of an effect on total U.S. crude oil production. As onshore U.S. crude oil production has grown, the Gulf of Mexico’s share of the national total has fallen from a high of 29% in 2009 to 16% in 2018. In developing crude oil production forecasts for each month’s Short-Term Energy Outlook, EIA uses the latest data from the Petroleum Supply Monthly and Weekly Petroleum Status Report, among other sources. As a result, EIA had already accounted for estimates of Hurricane Barry’s effect on crude oil production in the Gulf of Mexico in the August edition of the STEO. In the October STEO, released earlier this week, EIA expects that U.S. crude oil production will increase in each remaining month of 2019, and ultimately reach 13.0 million b/d in December 2019. EIA expects U.S. crude oil production to average 12.3 million b/d in 2019 and 13.2 million b/d in 2020. U.S. crude oil exports continued to grow in the first half of 2019 U.S. exports of crude oil rose to average 2.9 million barrels per day (b/d) in the first half of 2019, an increase of 966,000 b/d from the first half of 2018. U.S. crude oil exports also set a record-high monthly average in June 2019 at 3.2 million b/d. The United States is still one of the world’s largest importers of crude oil: in the first half of 2019, U.S. imports of crude oil less exports (net imports) averaged 4.2 million b/d compared with 6.1 million b/d in the first half of 2018. Increases in U.S. domestic crude oil production have resulted in reduced imports and increased exports. Canada remained the top destination for U.S. crude oil exports, but volumes exported to Canada did not change much between the first halves of 2018 and 2019. By contrast, U.S. crude oil exports to most other major destinations have increased. The top regional destination for U.S. crude oil exports was Asia and Oceania at 1.3 million b/d in the first half of 2019. U.S. crude oil exports to these countries collectively increased by 472,000 b/d (58%) compared with the same period in 2018, and exports to countries such as South Korea, India, and Taiwan more than doubled. China has been an exception to this regional trend: U.S. crude oil
  • 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 exports to China in the first half of 2019 averaged 248,000 b/d, or 64% less than the same period last year. U.S. crude oil exports to Western European destinations averaged 824,000 b/d in the first half of 2019, or 66% more than in the first half of 2019. First-half 2019 exports to the Netherlands increased 173,000 b/d (192%) and exports to the United Kingdom increased 74,000 b/d (53%) compared with the first half of 2018.
  • 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 NewBase October 10 – 2019 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Oil prices dip on wilting hopes for U.S.-China trade deal Reuters + Bloomberg + NewBase Oil prices eased on Thursday on the expectations that the resumption of U.S.-China talks will not end the trade war between the world’s two largest oil consumers, exacerbating anxiety over the global economy and fuel demand. China, the world’s biggest oil importer, has lowered expectations of a deal from the talks on Thursday and Friday to head off U.S. President Donald Trump’s proposed increase to the tariff rate on about $250 billion of Chinese goods to 30% from 25% on Oct. 15 if there are no signs of progress. The dispute has disrupted global supply chains and slowed growth in the world’s two largest economies, curbing fuel consumption in both. Global benchmark Brent crude futures LCOc1 fell 25 cents, or 0.43%, to $58.07 a barrel by 0858 GMT. U.S. West Texas Intermediate (WTI) futures CLc1 were down 25 cents, or 0.2%, at $52.47. Both benchmarks are down more than 20% from April peaks. Oil price special coverage
  • 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 The front-month spread between November and December U.S. crude futures CLc1-CLc2 traded at a discount of 2 cents a barrel on Thursday. The spread had slipped into contango - where future prices are higher than nearby prices - on Wednesday for the first time since Sept. 19. “Should U.S.-China trade negotiations take a turn for the worse, market pessimism will impose sharp negative pressures on oil prices, said Benjamin Lu, commodities analyst at Phillip Futures in Singapore. Prices were also weighed down by a report of rising stockpiles in the United States, currently the world’s biggest oil producer. U.S. crude stocks rose by 2.9 million barrels in the week to Oct. 4, the Energy Information Administration (EIA) said on Wednesday, more than double analyst expectations of a 1.4 million barrel increase. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) quietly adjusted its production pact to allow Nigeria to raise its output, adding more supply. OPEC member Venezuela will also increase its exports despite U.S. economic sanctions that have curtailed shipments. Indian refiner Reliance Industries plans to start loading Venezuelan crude after a four-month pause, in a further sign of expanding crude supply to the market. World’s Top Oil Traders See 2020 WTI Prices Stuck in the $50s As the oil industry’s top executives gathered in London for one of the most important events of the year their view on crude prices was clear: they’ll struggle next year. Vitol SA Chief Executive Officer Russel Hardy told the Oil & Money conference on Wednesday that the ongoing U.S.-China trade dispute was curbing the outlook for crude prices which would be stuck in the $50s a year from now. The bosses of fellow commodity traders Trafigura Group Ltd. and Gunvor Group Ltd. agreed, at least in the short term. “Without some resolution to the trade wars then we’ll remain a little bearish,” said Hardy. For months, the oil market has been focused on a worsening demand outlook and trade tensions between the world’s two biggest economies with the bearish mood only briefly pierced by attacks on Saudi Arabia’s energy infrastructure. Trafigura CEO Jeremy Weir said the trading house expects a slight recovery in the fourth quarter of 2019 with prices “maybe slightly lower from where we are now” in a year’s time. “Particularly with the current trade environment and a strong U.S. dollar, I would say there’s further downside in the short term,” said Weir. Gunvor CEO Torbjorn Toernqvist said he also sees oil at current levels, of under $60 a barrel, a year from now and that next year the market would “test OPEC’s resolve” on its commitment to coordinated output cuts. The current production cuts deal, agreed by the Organization of Petroleum Exporting Countries and its allies, is due to expire in March 2020. Analysts at the conference echoed the view of trading houses, saying they saw the oil market remaining amply supplied next year. Jeffrey Currie, head of commodities research at Goldman Sach Group Inc., sees Brent crude at $60 over the next two years. The market is pricing in plenty of supply and demand is a concern, Jan Stuart, global energy economist at Cornerstone Macro LLC added. Missing Geopolitical Risk
  • 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 Royal Dutch Shell Plc boss Ben van Beurden however said he was surprised prices weren’t higher than current levels, following the worst-ever attack on Saudi Arabia’s energy infrastructure last month. “It’s a but puzzling in a way but shows how good the response of Saudi Aramco has been,” van Beurden told Bloomberg TV on Wednesday. “The market is a little bit anesthetized by trade wars and the glut of shale to the point where it has become blase about geopolitical risk. I think it’s not representative of the real picture.” Gunvor’s Toernqvist agreed, adding that it seems that there is currently no risk premium on oil prices. “It’s amazing that prices are at low-end of where they were before attack,” Toernqvist said. Saudi Aramco CEO Amin Nasser said the kingdom may beat its end-of-November target to restore output capacity to 12 million barrels a day, having already reached pre-attack production levels. The company is targeting production of around 9.9 million barrels a day for October. “We made sure customers received shipments even during the attacks,” Nasser said. “Five years ago the market reaction would’ve been bigger,” Shell’s van Beurden said in the Bloomberg TV interview. “The geopolitical risk premium is low in market now. “The unthinkable may happen again and we should factor that in.” Underinvestment But over the longer-term, oil executives see crude prices rising because of a lack of investment now in new projects. Gunvor’s CEO said prices could reach between $70-$80 a barrel in five years without the right investment. “If we do not invest today, prices could go there. It is cyclical. Prices will respond to the level of investment over time. Putting off long-term investment is a concern,” Tornqvist said.
  • 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 NewBase Special Coverage News Agencies News Release Oct. 03-2019 How carbon taxes can boost state coffers and clean the environment The National - Dr Nasser Saidi chair of the Mena Clean Energy Business Council and founder Given the GCC's high carbon footprint, the introduction of a tax would generate substantial revenues for the governments. Cooling towers of a coal-fired power station near Selby, northern England. The European Union has called for individual governments to introduce carbon taxes to drive down emissions. AFP. Last year, global energy-related carbon dioxide emissions rose by 1.7 per cent to the highest level since 2013, according to the International Energy Administration, with this year estimated to be steeper. While the sharp decline in cost of renewables (90 per cent for solar) has led to the rapid growth of its dissemination, it has not been enough to offset the increased use of fossil fuels. The growing existential threat of climate change necessitates quicker and sustained policy action. The Middle East is particularly vulnerable. The region's share of global emissions reached a record 6.3 per cent in 2018, nearly double its 3.3 per cent share of world GDP. Some Arab countries fall among the top nations when it comes to emissions per capita. Reducing greenhouse gas emissions requires deploying low-carbon energy in addition to improving the efficiency of energy consumption (see my previous column). The announced renewable energy policies of GCC nations are a step in the right direction. They aim to shift preferences, consumer and producer choices towards renewables and away from fossil fuel activities and production. But there is room for more to be done.
  • 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 Government policies can be augmented by a determined carbon pricing that increases the relative cost of fossil fuel generated energy compared to that produced by renewables. Carbon pricing is the most effective and cost-efficient means to reduce emissions. It forces producers and users of carbon fuels to internalise external costs of their emissions and ties them to sources through a price on carbon (the polluter pays principle). There are two efficient options: emissions trading systems, or cap-and- trade as implemented in the EU and carbon taxes. Carbon taxes are more comprehensive since they apply to all CO2 emissions from the combustion or consumption of fuels (coal, oil, gas) to limit emissions. The tax is applied at the point of production, including a border adjustment on imports of energy- intensive products to shield domestic manufacturers from international competitors that do not face a similar tax. A carbon tax sends a clear price signal to polluters to discontinue their polluting activity, or bear the cost for emissions. The carbon price also encourages clean technology and market innovation, fuelling new, low-carbon drivers of economic growth and decarbonisation. Introducing a tax in the GCC would result in structural change for local economies. The challenge for policymakers is that the high energy- intensive sectors such as petrochemicals, aluminium, aviation and shipping have been the basis of economic diversification strategies. They would be the most directly impacted by carbon taxes. Fossil fuel assets can be sold (as in the Saudi Aramco planned IPO), while capital stock would need to be written down, phased out or destroyed to be replaced by "green assets & capital". The policy choice is between starting on the energy transition path now, or later facing the dismal alternative of massive adjustment and stranded assets. Iata has adopted the Carbon Offsetting and Reduction Scheme for International Aviation and the International Maritime Organisation is considering measures to decarbonise maritime transport by 2035. Similarly, a record 515 institutional investors managing $35 trillion (Dh128tn) in assets (nearly half the world’s invested capital) last week urged governments worldwide to step up action to tackle climate change and achieve the Paris Agreement’s goals.
  • 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 Central bankers are also going green: extreme-climate scenarios will be introduced into financial stress tests, given the sector’s exposure to climate-related risks and the writedown in the value of fossil fuel assets. Given the GCC's high carbon footprint, the introduction of a carbon tax would generate substantial revenues for the governments. Revenues could range between $5.5bn to $19.4bn for a carbon tax ranging from $20 to $70 per tonne of CO2 in the UAE to $11.4bn to $40bn in Saudi Arabia. It’s worth noting that a carbon tax is cheaper to collect and brings substantially more revenue than the amounts being raised by the VAT (in 2018, UAE and Saudi Arabia collected $7.35bn and $12.5bn, respectively). More in state revenues mean it can be used to finance decarbonisation and make the energy transition smooth: by investing in climate-resilient infrastructure; retrofitting buildings and structures; subsidising renewable investments by the private sector and in vulnerable industries such as transport. Part of the revenue can be apportioned to national funds backing research and development and develop the domestic clean technology and renewables sectors, including desalination. Carbon tax revenues would finance clean economic diversification and investment-led green economy growth for the GCC. It is a win-win. Potential revenue generated from carbon taxes
  • 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 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
  • 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
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  • 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 For Your Recruitments needs and Top Talents, please seek our approved agents below