New base 20 may 2018 energy news issue 1171 by khaled al awadi

Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase Energy News 20 May 2018 - Issue No. 1171 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: Adnoc, Ravago discuss chemical project collaboration
Reuters + Arabian Trade
The Abu Dhabi National Oil Company (Adnoc) said it has signed a Memorandum of Understanding
(MoU) with Ravago Group (Ravago), a leading service solutions provider in the global polymers and
chemicals market, to explore opportunities for cooperation at the Ruwais Industrial Complex in the
UAE.
A leading Belgian group, Ravago’s manufacturing segment, operates 24 plants across 4 continents,
producing plastics, rubbers and chemicals, serving the automotive, electronics, and building and
construction industries through the company’s global distribution network.
The companies signed the agreement at Adnoc’s Downstream Investment Forum, where the Abu
Dhabi firm revealed plans to significantly enhance and expand its downstream operations in support
of its ambition to become a leading global downstream player.

As part of Adnoc’s efforts to maximise value across its value chain, the duo will explore ways to
upgrade and commercialise the non-prime product generated at Borouge, the joint venture between
Adnoc and Austria-based Borealis.
This process, known as compounding, would take place at the proposed facility, situated in the
Ruwais Industrial Complex. Borouge is a leading petrochemicals company that provides innovative
plastics solutions for the energy, infrastructure, mobility, packaging, healthcare and agriculture
industries.
With 4.5 million tonnes of annual capacity, Borouge is the world’s largest integrated polyolefin
complex, with the ambition to more than double its current capacity by 2025. The duo said as per
the agreement they will discuss further opportunities to unlock value and growth within the
petrochemical value chain as part of Adnoc’s downstream expansion.
Both companies will also explore potential collaboration opportunities leveraging Ravago’s
strengths across multiple areas to further unlock value within the petrochemical chain.
Abdulaziz Abdulla Alhajri, the director, Downstream Directorate, Adnoc, said: "We seek to create
partnerships with those who can bring additional value to our hydrocarbon resources, downstream
assets and the UAE economy at large."
"This proposed collaboration with Ravago is an excellent example of a partner bringing world-class
technologies and expertise to complement Adnoc’s strengths, unlocking conversion value and
creating efficiencies, for the benefit of both partners," he noted.
Ravago CEO Theo Roussis said this project confirms the group's commitment to the region and its
legacy business, recycling, compounding and distribution. The Ruwais Industrial Complex, where
the new potential venture will be located, is already home to one of the largest downstream sites in
the world, he stated.
Adnoc aims to further develop and expand Ruwais into the world’s largest integrated refining and
petrochemicals complex, that will also include a large-scale, integrated manufacturing ecosystem,
through the creation of new petrochemicals derivatives and conversion parks.

Egypt: SDX Energy confirms significant gas discovery at Ibn
Yunus-1X, South Disouq, … Source: SDX Energy
SDX Energy, the North Africa focused oil and gas company, has announced the positive results of
the well test conducted on the Ibn Yunus-1X well following the recent conventional natural gas
discovery at South Disouq, Egypt (SDX 55% working interest and operator).
The Ibn Yunus 1X well was drilled to a total depth of 9,608ft, and encountered 100.8 ft. of net
conventional natural gas pay in the Abu Madi horizon, which had an average porosity in the pay
section of 28.5%.
Well test operations have now commenced and the well has successfully flowed natural gas at a
stabilised rate of 39.3 MMscf/d on a 32/64” choke. This flow rate exceeded initial expectations and
was limited by the surface facilities put in place to test the well. The well has now been shut in for
an initial build-up after which a series of additional flowing periods will be conducted and fluid
samples taken.
Working with its partners, SDX will now aim to bring the discovery into commercial production prior
to year end 2018.
Paul Welch, President and CEO of SDX, commented:
'The flow test from Ibn Yunus 1X is a very positive outcome which has exceeded our expectations
and is a strong endorsement of the significant potential of the licence. We remain optimistic about
further positive news flow as we move towards delivering first gas from the licence before the end
of 2018. We look forward to updating shareholders on our progress at South Disouq over the coming
months.'

Gabon: BW Energy to drill additional well at Dussafu, offshore
Source: Panoro Energy
JV partner Panoro Energy has announced that together with BW Energy, the operator of
the Dussafu Marin Production Sharing Contract ('Dussafu PSC'), a decision has been made to drill
an additional well to test one of several robust prospects that have been mapped in the Ruche area
of the Dussafu Exclusive Exploitation Authorisation (“EEA”), offshore Gabon.
Panoro anticipates commencement of
drilling of the Ruche North East
prospect (previously shown as Prospect
6 in earlier corporate presentations) in
mid-2018, following completion of the
second production well DTM 3-H at the
Tortue field, also located in the Dussafu
PSC. The decision to drill this additional
well was supported by taking into account
the availability of the Borr Norve rig, the
cost-savings due to spreading of
mobilisation costs across additional wells,
the existing 2016 site survey at the Ruche
North East location, the proximity to the
Ruche discovery, and the good chance of
success.
The estimated cost of this well is projected
to be less than $20 million gross (approx.
$1.6 million net to Panoro) and will be
funded from Panoro’s existing financial
resources. The cost of the well will be
added to the existing cost pool of the
Dussafu PSC, and therefore fully
recoverable through the Dussafu PSC cost oil mechanism.
The prospect is located approx. 3 kms from the existing Ruche discovery wells and is mapped as a
4-way structure in the Gamba reservoir, with potential in the deeper Dentale formation. The size of
the Ruche North East structure, and the targeted resource volumes, are comparable to the Ruche
field.
The objective of the well is to prove up additional resources in the greater Ruche area, to be
aggregated with the existing Ruche field (which was discovered by Panoro in 2011) to form the
basis of future development phases.
In addition to the drilling of the Ruche North East prospect well, Panoro is pleased that advanced
planning is already underway for the Phase 2 development at Tortue.
John Hamilton, Chief Executive Officer Panoro Energy said:
'While Panoro, along with its operating partner BW Energy, remains fully focussed on Phases 1 and
2 of the Tortue development, we are excited with the decision to drill this new well in order to
continue unlocking the considerable exploration potential at Dussafu. Ruche North East represents
a low cost and attractive risk-reward drilling opportunity to develop Ruche as a second production
hub at Dussafu.'

Nigeria:Eland Oil & Gas signs rig contract for Ubima-1 workover
Source: Eland Oil & Gas
AIM-listed Eland Oil & Gas, an oil and gas production and development company operating in West
Africa with an initial focus on Nigeria, has signed a rig contract with KCA Deutag for the T-57 land
rig to workover the Ubima-1 well. Ubima-1 is located on the Ubima field, onshore Niger Delta in the
Northern part of Rivers State, in which Eland has a 40% interest.
The Deutag T-57 land-rig is currently being mobilised and prepared and is expected on site in early
June. Eland therefore expects to re-enter Ubima-1 before the end of June. The Ubima-1 re-entry
well is the first to be worked on in the licence by Eland and its partner. A dual string completion is
planned for the well, which will target oil within four reservoirs, namely the D1000, E1000, E2000
and F7000.
A CPR published in April 2016 by AGR TRACS ascribes gross 2P reserves of 2.4 million barrels of
oil to the Ubima-1. On a full field development (FFD) basis, the CPR carries contingent resources
of 20.6 million barrels (1C), 31.1 million barrels (2C) and 66.0 million barrels (3C). Success with the
well test will lead us into the FFD phase where we will be targeting this material upside.
George Maxwell, CEO of Eland, commented:
'This is a very exciting milestone for the Company. Not only do we have ground breaking activity in
Ubima, with the first rig activity in decades, but we are also moving to a multiple rig operation for
Eland. The underlines the importance of diversification of our production base. The Ubima-1 re-
entry will be completed in four reservoirs, appraising the field in advance of full field development
and moving the material volumes of Contingent Resources into Reserves.'
Ubima field
Eland has a 40% interest in the Ubima field licence. The onshore area covers 65km2 in the northern
part of Rivers State and has been carved out of OML 17, which itself is operated by Shell Petroleum
Development Company. Eland plans to workover Ubima-1 and initiate an Early Production System
in 2018.

EU: No End in Sight for European Gas Rally as Oil Hits $80
Bloomberg - Anna Shiryaevskaya
At least that’s what traders were saying this week in Amsterdam at the Flame conference, the
region’s biggest annual gas gathering. Rising prices for energy commodities led by oil and the need
to refill depleted storage sites after the coldest winter since 2012 will see European gas consolidate
its rare rally during the summer, when lower heating demand usually damps prices.
The increase is reversing trends seen just a few years ago, when a looming oversupply of the fuel,
warmer winters and sluggish demand in power generation made it look like gas was only going to
get cheaper and cheaper. While the role of crude in pricing European gas has diminished, it
continues to be a key driver, according to RWE AG.
“We experienced a trend in the last two to three years where the prices were going one way --
down,” Simone Turri, head of origination for Central Europe and Italy at Zug, Switzerland-based
trader MET International AG, said in an interview at Flame. “Now is the time for the prices to go one
way -- up.”
Energy costs are rising across Europe, putting the region at an economic disadvantage to American
industry, which has access to cheaper natural gas produced alongside oil. In Britain, front-month
gas has risen 50 percent from a year ago to more than $7.50 a million British thermal units -- more
than double the level of $2.80 prevailing in the U.S.
Brent crude has advanced to the highest level since end-2014 and prices for coal, which competes
with gas in power generation, touched record levels. Next-month gas in the Netherlands has jumped
23 percent since the summer season started in April, the biggest gain for the period since 2010, as
the storage needs meet lackluster imports of liquefied natural gas and curbs to output from the
Dutch Groningen field.

‘Pretty Steep’
“If there is no big fundamental change like more LNG imports or some production increase, I don’t
see a big movement coming” as long as oil continues its trend, Turri said. “I will expect this situation
to stay for a while.”
Norway and Russia, Europe’s two biggest foreign suppliers, are already pumping gas by pipelines
in “exceptionally high” volumes, according to Andree Stracke, chief commercial officer at German
utility RWE’s supply and trading unit. The need for more gas than usual to refill storage sites means
prices “are pretty steep,” he said.
Equinor ASA sees the depleted inventories as the main reason behind the current gas price rally,
Peder Bjorland, vice president for marketing and supply at the Norwegian energy giant formerly
known as Statoil ASA, said in an interview.
LNG Imports
While some see Europe’s LNG imports picking up from this summer, demand in Asia remains high.
That means the “wave” of LNG debated for years is still not coming, Stracke said on a panel at
Flame.
Spot volumes of the superchilled gas are coming to Europe because traders prefer their price,
flexibility and diversion opportunities to offtaking volumes under long-term contracts, Turri said. That
makes it hard to forecast imports into Europe, he said.
A cold snap propelled prompt gas prices to record levels in the U.K. and the Netherlands on March
1. The outlook for the coming heating season will depend on temperatures, said Turri.“If the winter
is particularly cold, the situation could be potentially worse than last year,” he said.

Russia-Germany gas pipeline raises intelligence concerns: US
Reuters + The national + NewBase
State Department diplomat Sandra Oudkirk says the United States opposes the Nord Stream 2 gas
pipeline because it could increase Russia's "malign influence" in Europe. Stefan Sauer/dpa via AP
The planned Nord Stream 2 gas pipeline from Russia to Germany raises US intelligence and military
concerns since it would allow Moscow to place new listening and monitoring technology in the Baltic
Sea, a senior US official said on Thursday.
Sandra Oudkirk, deputy assistant secretary of state for energy diplomacy, said in Berlin she would
meet German officials to voice Washington’s concerns about the subsea project. A consortium of
western companies and Russia’s Gazprom said this week it was starting preparatory work off
Germany’s Baltic coast.
Ms Oudkirk told reporters the US Congress had given the president new authority to impose
sanctions against a variety of Russian pipeline projects.
Any companies involved were in “an elevated position of sanctions risk”, she said. However, she
added that Washington was focused on using diplomatic means to halt Nord Stream 2, one of
several Russian projects to export gas to western Europe via routes avoiding Ukraine, with which
Moscow is involved in a series of disputes.
The US push came a day before chancellor Angela Merkel travels to Sochi to meet Russian
president Vladimir Putin for talks that will touch on Nord Stream 2, as well as the US decision to
withdraw from the Iran nuclear deal.

The German government’s point man for Russia, Dirk Wiese, said it would continue to look for
“islands of cooperation” with Russia, including a continued commitment to the Iranian nuclear
accord, despite differences over Ukraine and EU sanctions.
He said Germany viewed Nord Stream 2 as primarily a commercial project but saw the need to
consider the interests of Ukraine as a gas transit country, and of countries in Central and Eastern
Europe.
Ms Oudkirk said Washington’s objections included past Russian moves to turn off gas supplies to
Ukraine and other countries, adding that it would perpetuate “vulnerabilities” in Russian-European
ties for another 30 to 40 years.
The United States also opposes the TurkStream land pipeline that would run through Turkey for the
same reasons, she said.
She said the Baltic was a congested, sensitive military area. “When we look at the ability of
governments and companies to use infrastructure deployments as a means to convey devices and
technologies that can listen and follow and monitor, that is a concern with regard to this particular
undersea pipeline project in the Baltic Sea,” she added.
“The new project would permit new technologies to be placed along the pipeline route and that is a
threat.” Ms Oudkirk rejected suggestions that Washington is opposing the pipeline to help US
liquefied natural gas exports.
The Nord Stream 2 project has said it will tap banks for financing in the fourth quarter of 2018 or
early next year. Denmark must still rule on whether the pipeline can be built near its coast, and other
routine permission-granting processes are still under way in Sweden and Russia.
Ms Oudkirk said Washington supported the planned Danish-Polish Baltic Pipe because it would
diversify sources and routes. The pipeline, to be built by 2022, is aimed at reducing reliance on
Russian gas.
Significance
Nord Stream 2 is a new export gas pipeline running from Russia to Europe across the Baltic Sea.
The decision to build Nord Steam 2 is based on the successful experience in building and operating
the Nord Stream gas pipeline. The new pipeline, similar to the one in operation, will establish a direct
link between Gazprom and the European consumers. It will also ensure a highly reliable supply
of Russian gas to Europe.
This is particularly important now when
Europe sees a decline in domestic gas
production and an increasing demand for
imported gas.
Project company
The Nord Stream 2 project is implemented
by the Nord Stream 2 AG project company,
where Gazprom is the sole shareholder..
The entry point of the Nord Stream 2 gas
pipeline into the Baltic Sea will be the Ust-
Luga area of the Leningrad Region. Then

the pipeline will stretch across the Baltic Sea. Its exit point in Germany will be in the Greifswald area
close to the exit point of Nord Stream.
The route covers over 1,200 kilometers.
Capacity
The total capacity of two strings of Nord Stream 2 is 55 billion cubic meters of gas per year. The
aggregated design capacity of Nord Stream and Nord Stream 2 is therefore 110 billion cubic
meters of gas per year.
Project timeframe
Nord Stream 2 will be put into operation before late 2019.
Project history
In October 2012, the Nord Stream shareholders examined preliminary results of the feasibility study
for the third and fourth strings of the gas pipeline and came to the conclusion that their construction
was economically and technically feasible. Later on, the construction project for the third and fourth
strings came to be known as Nord Stream 2.
In April 2017, Nord Stream 2 AG signed the financing agreements for the Nord Stream 2 gas
pipeline project with ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall. These five European
energy companies will provide long-term financing for 50 per cent of the total cost of the project.
Maarten Wetselaar, Klaus Schaefer, Mario Mehren, Alexey Miller, Gerhard Schroeder, Isabelle
Kocher, Gerard Mestrallet, Rainer Seele, and Matthias Warnig after signing of financing agreements
for Nord Stream 2 gas pipeline project on April 24, 2017

A NETWORK OF POWER: GAS PIPELINES OF THE EUROPEAN CONTINENT (INFOGRAPHICS)
Natural gas has limited and expensive transport options. As a result, natural gas pipelines are
constantly used as tool of the political pressure and bargaining. One of the most notable battlefields
is the European continent, where Russia has exerted its influence through an intricate network of
pipelines. Find the text with an additional information about the pipelines below the
graphics.
NORD STREAM 1
Capacity: 55 bilion cubic meters per year. Partners: Gazprom, Wintershall, E.ON, Gasunie, Engie.
The Nord Stream pipeline became operational in 2011. First proposed in 1997, disputes between
Kiev and Moscow in 2006 and 2009 prompted Russia to stop natural gas flows through Ukraine,
depriving Europe of natural gas and accelerating Nord Stream construction. The pipeline enables
Russia to deliver energy directly to Germany and parts of Central Europe.

India’s power plants resume coal imports amid domestic shortages
Reuters
State-run thermal power plants in India’s coastal states have again begun buying overseas coal due
to domestic coal shortages, government and utility officials said, in a setback for the country’s long-
term plans to eliminate imports.
After no significant imports in 2017, government utilities in the states of Tamil Nadu and Andhra
Pradesh have ordered several cargoes of coal since the beginning of this year, two officials said.
Andhra Pradesh, a state on India’s east coast, has imported 200,000 tonnes of coal so far this year
and could import as much as 1 million tonnes in 2018, said Ajay Jain, a senior official in the state
energy department. “Coal has been a real problem. If we had depended only on coal, it would have
been a disaster,” Jain said.
Tamil Nadu Generation and Distribution Corp, a government utility in the southwestern India state,
has imported about 1.4 million tonnes of coal this year, after going a year without imports starting
at the end of 2016, according to Vikram Kapoor, the chairman of the utility.
An increase in coal imports by state-owned power utilities undermines a pledge by Indian Prime

Minister Narendra Modi’s government to cut thermal coal imports to zero by March 2018.
But state-owned Coal India Ltd, the world’s second-biggest coal miner by production, is grappling
with a shortage of trains to carry the fuel from its mines to the country’s power plants. Both Andhra
Pradesh and Tamil Nadu are waiting for the wind energy season to start in June, when they expect
dependence on coal to ease, Jain and Kapoor both said.
Domestic logistic bottlenecks, regulatory changes and surging power demand will likely increase
2018 thermal coal imports after two years of declines, Reuters reported in February. Imports rose
over 15 per cent in the first quarter of 2018.
State-run utilities could add up to 5 million tonnes to India’s coal imports in 2018 because of the
Coal India shortages, a senior executive from Adani Enterprises, India’s biggest coal trader said in
February.
Coal generates over 75% of India’s electricity and is among the cheapest energy sources available.
But its main advantage over other feasible alternatives is that it is largely immune to interference
from nature – quakes, floods, droughts – economic vagaries and artificial accidents.
3. Low coal: This scenario assumes a partial improvement in supply quality with imports in the same
proportion as in FY 2014-'15, and pegs the requirement at 1,139 MT.
Source: Brookings India

Ambitious targets?
Today, about 45 MT of India’s coal production (7.4% of coal production of India in FY 2014-'15)
comes from private miners. Achieving the government target of 500 MT by 2020 would require an
unprecedented 11 times growth or a compounded annual growth rate of 61% in the private sector.
If Coal India Ltd and the other mining public sector units are to reach the 1-billion-tonne target, they
will need to grow at an aggregated 12% compounded annual growth rate. If the growth target is
limited to just Coal India Ltd then the company’s compounded annual growth rate will stand at 15%.
The report notes that although Coal India Ltd did achieve 8.5% year-on-year growth in FY 2015-'16
– its best ever – it still missed its target by 12 MT, settling for 538 MT in the last fiscal.
Source: Brookings India
The 12% growth for CIL then seems unlikely, especially in the future over a larger base. A 12%
growth on a 500 base (production around 500 MT mark) – CIL produced 538 MT in 2015-'16 – is
easier than on an 800 base (production around 800 MT), which means CIL must produce more than
800 million tonnes in the future.
Target will require over Rs 10 lakh crore in investment
The Indian government’s coal-production target requires more than Rs 10 lakh crore ($149 billion)
in coal mining and allied sectors like power, steel, cement, infrastructure for logistics, and coal
washeries, said the PwC report.
The report observed that India would need to reform land acquisition, ensure enough water,
augment logistics infrastructures, develop coal washeries and train workers to create an
environment that would ensure the 1.5-billion-tonne target.

Maldives: Sea waves energy pilot project launched
MALDIVES, 2 days ago
The world’s first pilot project to harness electricity from powerful surf waves was officially launched
at Holiday Inn Resort Kandooma Maldives recently.
The project is the brainchild of Professor Tsumoru Shintake of The Okinawa Institute of Science
and Technology Graduate University (OIST), the Ministry of Environment and Energy (MEE) of the
Republic of Maldives and Kokyo Tatemono Company Limited (Kokyo) of Tokyo, Japan. The project
involves testing prototypes of the Wave Energy Converter units (WEC-units) in the Maldives with
the aim of supplying sustainable energy and reducing carbon emissions.
Professor Shintake, leader of the Quantum Wave Microscopy Unit, OIST, and his colleagues
designed special WEC-units which can capture energy from surf waves along the shore-line and
convert it into usable electricity as part of the wave energy project which was launched in 2013.
Professor Shintake’s WEC-units have been carefully designed, taking inspiration from nature: the
blade design and materials are inspired by dolphin fins and the flexible posts resemble flower stems.
One of the principal features of the WEC-units is that the generating turbines are designed to be
located at the mean sea level to harness the wave energy most effectively.
Wave energy is the most suitable form of renewable energy for the Maldives. The fact that wave
power provides a continuous stream of energy gives it a major advantage over other types of
renewable energy, such as solar panels which cannot generate electricity at night. This reduces the
requirement for energy storage systems which can be large and expensive to develop. This is
particularly important in a location like the Maldives that has many hotels and remote villages.
AY 16, 2018

NewBase May 20 - 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices stady near records with set for sixth week of gains
Reuters + NewBase
Oil prices fell on Friday, but Brent crude was on track for a sixth straight week of gains, boosted by
plummeting Venezuelan production, strong global demand and looming U.S. sanctions on Iran.
Brent futures LCOc1 for July delivery fell 26 cents, 0.3 percent, to $79.04 a barrel, by 1:08 p.m. EDT
(1708 GMT). The global benchmark on Thursday broke through $80 for the first time since
November 2014, and investors anticipate more gains due to supply concerns, at least in the short-
term. Brent has gained about 20 percent since the start of the year.
U.S. West Texas Intermediate (WTI) crude futures CLc1 for June delivery dropped 21 cents to
$71.28 a barrel, a 0.3 percent loss. The contract was on track for a third straight week of gains.
“Oil prices are in overbought territory, which has prompted some profit taking in today’s trading
session ahead of the weekend,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s
Global Gas Analytics in London.
Traders were looking ahead to Venezuela’s election on Sunday, which could then trigger additional
U.S. sanctions if President Nicolas Maduro is re-elected for a six-year term, though the opposition
party has largely boycotted and two of his most popular opponents have been banned from running.
The process has been has been criticized by the United States, the European Union and major
Latin America countries.
Further sanctions could hurt Venezuelan oil supply further, already reeling from lack of maintenance
and state-run PDVSA’s inability to pay its bills. Most recently, the company elected to close its
Oil price special
coverage

refinery in Curacao after ConocoPhillips has seized oil as it seeks to collect on a $2 billion court
award.
Barclays said output from Venezuela could fall below 1 million barrels per day. The country
produced around 1.4 million bpd in April, according to OPEC secondary sources. PRODN-VE
OPEC leading producer Saudi Arabia said on Thursday it would make sure the world is adequately
supplied with oil just as major consumer India expressed frustration with rising prices.
Saudi Energy Minister Khalid al-Falih called India’s Petroleum Minister Dharmendra Pradhan to
assure him that supporting global economic growth was “one of the kingdom’s key goals,” the Saudi
Energy Ministry said.
Crude prices have received broad support from voluntary supply cuts led by the Organization of the
Petroleum Exporting Countries. Oil has also been buoyed by this month’s announcement by the
United States that it would withdraw from the 2015 Iran nuclear arms treaty and renew sanctions
against the OPEC member.
U.S. oil rig count holds steady after six weeks of gains: Baker Hughes
The U.S. oil rig count held steady this week after rising for six weeks in a row even as crude prices
soar to multi-year highs, prompting drillers to extract record amounts of oil, especially from shale.
The total oil rig count held at 844 in the week to May 18, General Electric Co’s Baker Hughes energy
services firm said in its closely followed report on Friday.
More than half the total oil rigs are in Permian basin in west Texas and eastern New Mexico, the
nation’s biggest shale oil field. Active units there increased by four this week to 467, the most since
January 2015.
The U.S. rig count, an early indicator of future output, is much higher than a year ago when 720 rigs
were active as energy companies have been ramping up production in tandem with OPEC’s efforts
to cut global output in a bid to take advantage of rising prices.

U.S. crude futures traded over $72 a barrel this week on concerns that Iranian exports could fall
because of renewed U.S. sanctions, their highest since November 2014. Looking ahead, crude
futures were trading around $70 for the balance of 2018 and $66 for calendar 2019. [O/R]
Shale production is expected rise to a record high 7.2 million barrels per day (bpd) in June, with the
majority of the increase from the Permian where output is forecast to climb to a fresh high of 3.3
million bpd, the Energy Information Administration (EIA) this week projected.
Earlier this month, the EIA forecast average annual U.S. production would rise to a record high 10.7
million bpd in 2018 and 11.9 million bpd in 2019 from 9.4 million bpd in 2017. [EIA/M]
In anticipation of higher prices, U.S. financial services firm Cowen & Co this week said the
exploration and production (E&P) companies they track have provided guidance indicating a 13
percent increase this year in planned capital spending.
Cowen said those E&Ps expect to spend a total of $81.2 billion in 2018, up from an estimated $72.1
billion in 2017.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week
forecast average total oil and natural gas rig count would rise to 1,020 in 2018 and 1,125 in 2019.
That is a bit lower than the firm’s projections last week of 1,020 in 2018 and 1,135 in 2019.
So far this year, the total number of oil and gas rigs active in the United States has averaged 987,
up sharply from 2017’s average of 876. That keeps the rig count on track to be the highest since
2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.

NewBase Special Coverage
News Agencies News Release May 20-2018
U.S. Gulf Coast port limitations impose additional costs on rising
U.S. crude oil exports … U.S. EIA, Weekly Petroleum Status Report
U.S. crude oil exports averaged 1.1 million barrels per day (b/d) in 2017 and 1.6 million b/d so far in
2018, up from less than 0.5 million b/d in 2016. This growth in U.S. crude oil exports happened
despite the fact that U.S. Gulf Coast onshore ports cannot fully load Very Large Crude Carriers
(VLCC), the largest and most economic vessels used for crude oil transportation. Instead, export
growth was achieved using smaller and less cost-effective ships.
Each VLCC is designed to carry approximately 2 million barrels of crude oil. Because of their large
size, VLCCs require ports with waterways of sufficient width and depth for safe navigation. All
onshore U.S. ports in the Gulf Coast that actively trade petroleum are located in inland harbors and
are connected to the open ocean through shipping channels or navigable rivers.
Although these channels and rivers are regularly dredged to maintain depth and enable safe
navigation for most ships, they are not deep enough for deep-draft vessels such as fully loaded
VLCCs.
To circumvent depth restrictions, VLCCs transporting crude oil to or from the U.S. Gulf Coast have
typically used partial loadings and ship-to-ship transfers. The ship-to-ship transfer process known
as lightering refers to a larger vessel partially unloading onto a smaller vessel. Reverse lightering
occurs when smaller vessels load onto a larger vessel.

These transfers take place in designated lightering zones and points that exist outside many of the
largest U.S. petroleum ports.
Source: U.S. Energy Information Administration
Data from the U.S. Maritime Administration (MARAD) for 2015, the latest year for which data are
available, indicate that the two largest ports of call for tankers carrying crude oil and petroleum
products in the United States are lightering zones. The South Sabine Point and Southtex lightering
zones each had nearly 250 million deadweight tons of tanker traffic volume in 2015. Deadweight
tons are a measure of a vessel’s capacity to carry cargo by weight. The number of barrels per ton
varies based on the density of the petroleum product or crude oil cargo.

Currently, most U.S. Gulf Coast petroleum ports are capable of accepting vessels with capacities
of approximately 500,000 barrels of crude oil (AFRAMAX). The number of ports that can accept
vessels with capacities of approximately 900,000–1,000,000 barrels (SUEZMAX) is relatively
limited. Four AFRAMAX-sized vessels or two SUEZMAX-sized vessels are required to carry the
same amount of crude oil as a single VLCC.
The inability to fully load larger and more cost-effective vessels has pricing implications for U.S.
crude oil exports. Using a number of smaller ships requires a wider price spread between U.S. crude
oil and international crude oil prices to compensate for the lower economies of scale and costs
associated with reverse lightering and partial loadings.
The costs associated with using smaller vessels are less of a factor for exports over shorter
distances. However, as exports to Asia are a growing share of total U.S. crude oil exports, these
costs will become more important.
By comparison, other nations that export large volumes of
crude oil generally have deeper and wider navigable
waterways that are not located in inland/onshore harbors.
For example, in Yanbu, Saudi Arabia, located along the
Red Sea, the crude oil export facility uses a jetty trestle that
extends out to berths in water deep enough to fully load
VLCCs.
The Louisiana Offshore Oil Port (LOOP), located offshore
southern Louisiana in the Gulf of Mexico, is currently the
only U.S. facility able to accommodate a fully loaded
VLCC. LOOP, which has storage, undersea pipelines, and
single-point mooring facilities in deep water, was
exclusively used as an import facility until it was modified
to allow exports earlier this year.
Weekly U.S. exports of crude oil have surpassed 2 million b/d four times so far in 2018, and trade
press reports indicate two of those instances—the weeks of February 16 and March 30—
corresponded with weeks in which LOOP loaded a VLCC for export.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk
Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE operations
base , Most of the experience were spent as the Gas Operations Manager in
Emarat , responsible for Emarat Gas Pipeline Network Facility & gas
compressor stations . Through the years, he has developed great experiences
in the designing & constructing of gas pipelines, gas metering & regulating
stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase May 2018 K. Al Awadi

Thank you for sharing with us your comments and thoughts on the above issue, similarly we would like to
share with our daily publications on Energy news via own NewBase Energy News –
.
Call us for details khdmohd@hawkenergy.net
Your Energy Consultant for the GCC area
Khaled Al Awadi

For Your Recruitments needs and Top Talents, please seek our approved agents below

New base 20 may 2018 energy news issue 1171 by khaled al awadi

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to New base 20 may 2018 energy news issue 1171 by khaled al awadi

Similar to New base 20 may 2018 energy news issue 1171 by khaled al awadi (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (20)

Recently uploaded

Recently uploaded (20)

New base 20 may 2018 energy news issue 1171 by khaled al awadi