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NewBase 18 November 2014 - Issue No. 481 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
DEWA Inks Deal With ABB To Develop Solar Power Project
Dubai Electricity and Water Authority (DEWA) announced that it has signed a deal with
energy firm ABB to develop a pilot solar power project which has a grid
connected rooftop 277 kilowatt (kW) photovoltaic (PV) system.
The project will be developed on the premises of ABB and will connect to
DEWA’s grid through a low-voltage distribution board at ABB, DEWA said
in a statement.
The project also supports the Smart Dubai initiative and is part of the utility giant’s efforts to
connect electricity produced from solar power to its grid.DEWA is also planning to use the
pilot project as a learning tool for the deployment of solar PV rooftop installations in Dubai,
the statement added.
The emirate announced last year that it is looking to form regulations that govern energy
generation through rooftop solar panels, which will allow private homeowners to use solar
power to generate electricity.
“DEWA is committed to enhancing partnerships and collaborating with the public and private
sectors and local and international organisations to further improve the services it provides to
the public, as well as its operational processes according to the highest levels of availability,
reliability and efficiency,” said Saeed Mohammed Al Tayer, MD & CEO of DEWA.
“It also demonstrates how government and private organisations can work together to
enhance Dubai’s sustainable development.” Dubai is planning to diversify its energy
generation with plans to produce up to five per cent of its electricity from renewables by 2030.
In line with its energy diversification strategy,
Dubai opened a 13 megawatts (MW) power
plant, which is a part of the massive Dhs12
billion Mohammed bin Rashid Al Maktoum Solar
park, in October last year. Upon completion, the
park is expected to produce 1,000MW of clean
energy using PV and solar thermal technology.
Late last year, consultant Access Advisory
revealed that the emirate could spend around
$100 million to add 50MW of solar-power
capacity by the time it hosts the World Expo 2020.
The new capacity will help Dubai meet its target of generating half the additional power
needed to run the Expo from renewable resources, Stephane Bontemps, managing director of
Access said
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained
in this publication. However, no warranty is given to the accuracy of its content . Page 2
GGC gas shortages and market pricing
Zawya + NewBase
Low gas pricing is limiting foreign investment in the Gulf's upstream gas sector as many
Gulf Arab states struggle to meet growing domestic demand even though the region sits
on ample reserves of the commodity.
Many Gulf Arab states, with the exception of Qatar which is the world's top natural gas exporter,
now import the product as a short-term solution to meet increasing power consumption and
support growth in the industrial sector.
"Price neither properly reflects costs nor rewards sustainable use, and a lack of price benchmark
inhibits policy and investment choices to address the problems this is causing," Chatham House
said in a report.
Natural gas prices in most Gulf countries hover around USD2 per million British thermal units,
compared to the USD 4 per million Btu in North America, around USD 10-12 in Europe and the
USD 15-18 Qatar charges its Asian customers.
The lack of an international, or regional, price has meant that most foreign players are not
participants in natural gas production, even though they are keen to invest in the oil sector.
"While it is difficult to be precise, bad gas pricing is rather like asking someone to define an
elephant. The classic response is 'I can't define one but I know one when I see it'," Chatham
House said.
"The same is true for gas prices and most of the gas pricing in the GCC exemplifies bad pricing."
Saudi Arabia has come under pressure internationally for its subsidized natural gas prices, among
the lowest in the Gulf region at USD 0.75 per million Btu.
According to the International Energy Agency (IEA), these low prices were set when most of Saudi
Arabia's gas production came from inexpensive associated gas, but are not consistent with the
much more expensive high-sulfur gas production coming from offshore fields.
TAPPING RESERVES
The search for gas has become a priority for Saudi Arabia, the world's largest crude oil exporter.
The kingdom is making efforts to tap into its shale gas reserves,
but production is estimated to cost around USD8-9 per million
Btu, which may make it uneconomic.
In 2011, the Saudi government launched an unconventional gas
initiative, which assessed that the country may be sitting on
more than 600 trillion cubic feet of unconventional gas
resources -double that of the country's conventional gas
reserves at 291 trillion cubic feet of reserves.
Oman also is working to tap into natural gas reserves, and has
recruited British oil major BP for a USD 16 billion tight gas
program at Khazzan field. The sultanate hopes to produce around 10bcm of natural gas from the
field by 2018.
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
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The UAE, which holds the world's 7th
largest natural gas reserves, has become a net importer of
gas over the past few years. It has embarked on a number of projects that will likely boost
production, including from high-sulphur reserves. Kuwait is home to 63 trillion cubic feet of natural
gas reserves but contract structures and political uncertainty are major impediments to any rapid
expansion of output.
"Additionally, new natural gas discoveries are geologically more complex, mainly tight and sour
natural gas deposits that require more sophisticated development and have higher capital costs,"
the U.S. Department of Energy notes in its September report on the country.
In June, Kuwait's oil ministry said the Gulf Arab state was considering signing an agreement with
Iran, which holds the world's largest gas reserves, to secure natural gas supplies, in addition to an
existing contract to import liquefied natural gas (LNG) from Qatar to help meet needs to the end of
2014.
POWERING ECONOMIES
Demand in Saudi Arabia for power is rising at 6.5% which was expected to be fuelled by natural
gas rather than the most expensive crude oil, but the industry has struggled. "In Saudi Arabia, oil-
fired generation is forecast to
gain 27% over 2013-19 on the
back of insufficiently growing
gas production and the very
low efficiency of Saudi power
plants," according to the IEA.
The IEA estimates that natural
gas production will need to
rise by 42 billion cubic metres,
which may be tough as the
kingdom's overall production
forecast is expected to grow
by 26 bcm to reach 126bcm
by 2019.
"Burning additional gas is possible, but this requires finding and developing large quantities of
natural gas production," the IEA said. "The issue requires taking into account not only the
production side of natural gas but also the competition from other uses of natural gas, notably in
the petrochemical sector."
Saudi Arabia is keen to keep natural gas prices low as it not only helps its citizens but also its
world-class petrochemicals sector that thrives due to low feedstock costs. But the IEA noted that
the petrochemicals sector contributes around 1% of the kingdom's gross domestic product.
"It is important to note the fact that even though the petrochemical industry benefits from low gas
prices, it has a limited employment effect and a "small" share in the GDP," the IEA said.
"Considering the considerable gas and/or oil requirements in the power sector, it may be
worthwhile for Saudi Arabia's petrochemical industry to consider as well the opportunity to
continue investing in other countries, benefiting from ample resource base. This would free up gas
volumes for the power sector, reduce the call on oil in the power sector and free up this oil for
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained
in this publication. However, no warranty is given to the accuracy of its content . Page 4
Oman's PDO to spend $2b per year on gas explorations
OMAN TIMES + NEWBASE
Majority state-owned Petroleum Development of Oman (PDO) said on Monday that it would spend
between $1.5 billion to $2 billion from next year for the exploration of gas in its fields.
"We are currently producing some 90 million
cubic feet, but from next year we are going to
invest between $1.5 billion to $2 billion for gas
exploration," Raul Restucci, PDO's Managing
Director told Times of Oman.
PDO is the biggest oil producer in Oman but is
also producing crude oil at an average of
550,000 barrels per day. "Oman is faced with
the challenge of tight oil and gas but with new
technology, PDO is accepting the challenge
and we have been very successful at
it," Restucci added.
The Sultanate's national oil company
has recorded an average production
of 1.25 million barrels of oil equivalent
per day in 2013 and added 317 million
barrels of oil reserves. Also, the total
natural gas-developed reserves
increased by 1.3 trillion cubic feet last
year.
The company is heavily spending on
Enhanced Oil Recovery (EOR)
programme to make up for the extra
oil production. PDO's productions in
2013 came from four major EOR
developments at Marmul, Qarn Alam
and Harweel. In addition, the company
has EOR pilots at Fahud, Lekhwair,
Nimr, Al Noor, Marmul, Amin and
Ghubar.
One of its biggest success stories is
the polymer project in Marmul which
has reached the milestone of one
million cubic metres (6.3 million
barrels) of incremental oil recovery
end of last year.
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained
in this publication. However, no warranty is given to the accuracy of its content . Page 5
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained
in this publication. However, no warranty is given to the accuracy of its content . Page 6
Saudi Electric vying for UK nuclear stake
SG/Agencies + NewBase
Saudi Electric is vying to buy a minority stake in Hinkley Point, the ÂŁ24.5 billion nuclear
project in Somerset that is expected to begin generating power in 2023.
Sky News has learnt
that Saudi Electric is
among a small
number of
prospective
investors in
discussions about
ploughing billions of
pounds into the
venture.
A deal has yet to be
finalised with EDF,
the French group
spearheading the
project, but talks with
Saudi Electric are
understood to have
been ongoing for
some time.
EDF, which is one of the UK's biggest residential energy suppliers, will own up to 50 percent of
Hinkley Point, with Areva, a French infrastructure company, holding 10 percent of the shares.
Two state-owned Chinese groups, China General Nuclear Power Corporation and China National
Nuclear Corporation, will collectively own between 30 percent and 40 percent of the
project.Sources said that Saudi Electric could own between 10 percent and 15 percent of the
venture if the talks are successful.
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained
in this publication. However, no warranty is given to the accuracy of its content . Page 7
Eni, Angola's Sonangol Sign Energy Cooperation Deal
Africana News + NewBase
Eni and Angola's Sonangol have signed to cooperate in the field of oil and gas. Under the
agreement, the two companies will set up a joint team
aimed at studying the potential of the non-associated
gas present in the Lower Congo Basin offshore Angola.
The scope of the study is to analyze the different gas
valorization options both internationally and in the
domestic market, where gas will have a crucial role in
order to sustain the local economy, Eni said Monday.
Moreover, the companies will be committed to develop
projects on the mid-downstream business to be carried
out in Angola.
“This agreement will strengthen the prolific cooperation between Eni and Sonangol, confirming
Angola as one of the key countries for the company's organic growth strategy”, Eni CEO Claudio
Descalzi said. "In the coming years, Angola will become one of the most important oil and gas
hubs for the sub-saharian activities of Eni".
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
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in this publication. However, no warranty is given to the accuracy of its content . Page 8
Liberia: NOCAL announces closing of the Liberia Basin bid round 2014
Source: TGS
The National Oil Company of Liberia (NOCAL) has announced the closing of the Liberia
Basin competitive bid round, as of 14 November 2014. The round comprised of four undrilled
offshore petroleum exploration blocks over whichTGS has comprehensive, high quality, data
coverage constituting 2D over Blocks LB-6, LB-7 and 2D/3D over Blocks LB-16 and LB-17.
The bid opening ceremony is taking place on 17 November and winners will be notified after the
completion of bid evaluation, anticipated on 24 November.
'We are extremely pleased with the high level of interest and bid submissions from international
and local oil companies. The success of this licensing round has demonstrated the industry's
demand for exploration opportunities in Liberia.
This demand should be further satisfied with another bid round (focusing on the Harper Basin)
which is planned for next year once the regulatory reform has been completed,' said Althea E.
Sherman, General Counsel/Chief Operating Officer for NOCAL
.
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redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained
in this publication. However, no warranty is given to the accuracy of its content . Page 9
Shell wins top global award for best projects of the year
ABU DHABI, 17th November, 2014 (WAM)
The Association for Project Management, APM, has awarded Shell the top prize for best and
safest projects delivery.
This achievement was attributed to Shell’s project management
excellence, notably in turning a battlefield into an oilfield through
the safe removal of explosive remnants of war (ERW) at the
Majnoon project in Iraq. More than 28 square kilometers of land,
equivalent to 9,000 football pitches, have been cleared of ERW
with around 14,000 items of explosives destroyed, all with a perfect
safety record.
Shell developed a new approach using heavily armored bulldozers
and loaders adapted for the project. Beyond clearing the field of
explosives, Shell safely transported people and material into the
project site, driving two and a half million kilometers, the equivalent
of 62 times around the world, and transported 48,000 tonnes of
material, more than the equivalent weight of six Eiffel Towers. The
project team achieved 10 million man hours without a loss-time
injury (LTI) in September 2013, a record for a project of scale.
Shell’s project team were also recognised for their efforts in achieving top quartile delivery in the
Port Dickson Refinery in Malaysia where the Shell team successfully achieved first commercial
production with no process safety incidents during the refinery’s start up.
Nick Smallwood, Shell’s Chief Project Engineer, said, "This award is true recognition for all those
involved in the development, design and project delivery of Shell’s capital projects. We manage
some of the world’s biggest, most complex projects and a single project's construction can unite
tens of thousands of workers from all corners of the world. Our people work in extreme conditions,
from desert heat to freezing tundra and ocean depths, and it’s thanks to the expertise and skillful
collaboration of dedicated teams that we deliver ground breaking projects in the safest and most
competitive manner."
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in this publication. However, no warranty is given to the accuracy of its content . Page 10
UK: Xcite Energy announces MOU with COSL for Bentley field jack-up drilling rig
Source: Xcite Energy
Xcite Energy has announced that its 100% subsidiary, Xcite Energy Resources (XER), has
entered into a Memorandum of Understanding (MOU) with China Oilfield Services Limited
(COSL), which sets out the principles for the provision of a new-build Keppel FELS N Class Plus,
harsh environment jack-up drilling rig, together with equipment and personnel for the Bentley
field. Final specifications of the rig are currently being agreed in order for construction to begin at
the Keppel FELS yard in Singapore.
COSL will work in a collaborative manner with all the key stakeholders to develop innovative,
field specific rig and drilling services for Bentley, to maximise the economic recovery from the
field and the economic return for all stakeholders.
Rupert Cole, CEO of Xcite Energy, commented:
'We are very pleased that COSL has joined the Bentley development team and this marks the
last of the key development group roles to be filled. COSL has considerable experience in
drilling operations and we believe they possess the skills and expertise to work alongside our
other partners in our collaborative and innovative model. Selecting this ultra-high specification
drilling rig, and constructing it at the Keppel FELS yard in Singapore, is an important part of
securing both the future schedule and drilling efficiency of the Bentley project.'
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in this publication. However, no warranty is given to the accuracy of its content . Page 11
Us: oil and condensate production at highest volume since 1986
Source: U.S. Energy Information Administration, DrillingInfo,
Crude oil and lease condensate production in the United States exceeded 8.6 million barrels per
day (bbl/d) in August, a production volume not observed since July 1986, according to EIA's
latest Petroleum Supply Monthly.
More than half of total U.S. production was accounted for by record production from three basins
in three states. Production from the Permian Basin in Texas and New Mexico accounted for 1.66
million bbl/d, while the Eagle Ford Shale in the Western Gulf Basin, also located in Texas,
produced 1.57 million bbl/d. The Bakken Shale in North Dakota's Williston Basin accounted for
1.13 million bbl/d.
Domestic production has increased dramatically over the past four years, increasing from 5.4
million bbl/d in January 2010 to its current level, driven by increasing production from shale and
other tight formations. During 2014 alone, 10 states (the three states previously mentioned in
addition to Oklahoma, Colorado, Wyoming, Utah, Ohio, West Virginia, and Pennsylvania) have set
monthly production records since 1995, and accounted for more than 64% of total U.S. production
during August.
Although down from 2,031 rigs in 2008, U.S. oil and natural gas rig counts have been increasing
over the past two years. A total of 1,904 rigs were actively drilling during August, 1,578 of which
were targeting liquids. Notably, once production starts, three-fifths of all the wells produce both oil
and natural gas. Of the 1,904 active rigs, 62 rigs were operating offshore while the remaining
1,842 rigs were drilling onshore.
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Source: U.S. Energy Information Administration, Petroleum Supply Monthly
Now typical of the industry, horizontal rigs represent the most common rig type with 1,330 active
drilling operations in August, while 374 vertical and 210 directional drilling rigs were operational,
respectively. Higher rig counts, along withimprovements in drilling productivity, are expected to
increase U.S. liquids production to nearly 9.7 million bbl/d by December 2015.
U.S. oil production has been increasing monthly at an average of 62,000 bbl/d since 2010. EIA
forecasts that previous production highs set in the 1970s will be surpassed before the end of
2015. This is especially notable as Alaska production provided up to 2 million bbl/d of total U.S.
production volumes during high production years in the 1980s.
Decreases in Alaska production are related to natural reservoir decline and reduced exploration
along the North Slope; however, discoveries in southern portions of Alaska's Cook Inlet are adding
new production capacity.
Production gains have been observed across the Lower 48, with particular increases in crude oil
and lease condensate production from shale and tight formations. Production estimates from
EIA's Drilling Productivity Reportconfirm that many top-producing reservoirs include production
involving horizontally drilled wells, hydraulic fracturing reservoir stimulation, and multi-well pad
drilling.
The highest-ranked tight producing reservoirs in 2014 include Texas's Eagle Ford and Wolfcamp
formations, North Dakota's Bakken-Three Forks formations, New Mexico's top Spraberry and
Bone Springs formations, Oklahoma's Woodford Shale formations, Colorado's Niobrara formation,
Utah's Green River formations, Ohio's Utica and Point Pleasant formations, and the Marcellus
Shale formations in West Virginia and Pennsylvania.
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained
in this publication. However, no warranty is given to the accuracy of its content . Page 13
US: Freeport LNG granted Non-FTA export permission by DOE
www.FreeportLNG.com + NewBAse
The Energy Department has issued two final authorizations for Freeport LNG to export
domestically produced liquefied natural gas to countries that do not have a Free Trade Agreement
with the United States.
The Freeport LNG terminal in Quintana Island, Texas is authorized to export LNG up to the
equivalent of 1.4 billion standard cubic feet per day of natural gas and 0.4 Bcf/d, for a total
authorized volume of 1.8 Bcf/d, for a period of 20 years. Following the recent announcement of
the procedural change, the Department evaluated the two Freeport applications after they
completed the environmental review required by the National Environmental Policy Act (NEPA).
The development of U.S. natural gas resources is having a transformative impact on the U.S.
energy landscape, helping to improve the country’s energy security while spurring economic
development and job creation around. This increase in domestic natural gas production is
expected to continue, with the Energy Information Administration forecasting a record production
rate of 75.05 Bcf/d in 2014.
The Energy Department said it has conducted an extensive, careful review of the Freeport LNG
applications. Among other factors, the Department considered the economic, energy security,
and environmental impacts and determined that exports at a rate of up to 1.4 Bcf/d and 0.4 Bcf/d
for a period of 20 years was not inconsistent with the public interest.
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in this publication. However, no warranty is given to the accuracy of its content . Page 14
Oil Price Drop Special Coverage
‘No direct impact on Saudi 2014/15 budget from oil decline’
Reuters + NewBase
The recent plunge in oil prices will not have a direct impact on Saudi Arabia’s budget as the
kingdom takes precautions to handle all possibilities when planning its finances, Finance Minister
Ibrahim Alassaf (pictured) was quoted as saying.
Asked by Saudi newspaper Okaz if cheaper oil could have a
direct impact on next year’s budget or government spending,
Alassaf replied, according to the newspaper’s Monday edition:
“The global oil situation usually in one way or another affects
countries’ revenues and debts, but the kingdom has always
been keen on building its budgets on estimates that take all
possibilities into consideration.” He did not elaborate.
With the price of Brent crude oil now below $80 a barrel, down from around $115 in June, the
Saudi government may post a budget deficit next year. The oil price which the government needs
to balance its budget rose to $89 a barrel in 2013, the International Monetary Fund has estimated.
However, economists believe the country’s huge fiscal and foreign reserves - the central bank’s
net foreign assets exceed $700bn - mean financing that deficit will be easy, and the kingdom will
be able to avoid any sharp cutback in spending if it chooses to do so.
The country’s 2015 budget plan is expected to be announced in late December. Its original 2014
budget projected spending would rise a modest 4.3% from the 2013 plan to 855bn riyals ($228bn),
the slowest rate in a decade, suggesting the kingdom was already starting to curb expenditure
after years of huge increases.
The 2014 budget conservatively projected state finances would exactly break even this year. The
ministry did not specify the average oil price on which that calculation was based, but since the
average price so far this year is above $100, Saudi Arabia still looks likely to post a budget surplus
for 2014.
Japan’s economy slips into recession
Reuters + NewBase
Japan’s economy unexpectedly slipped into recession in the third quarter, setting the stage for
Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election two years
before he has to go to the polls.
The recession comes nearly two years after Abe returned to power promising to revive the
economy with his “Abenomics” mix of massive monetary stimulus, spending and reforms, and is
unwelcome news for an already shaky global economy.
Gross domestic product (GDP) shrank by an annualised 1.6 percent in July-September, after
plunging 7.3 percent in the second quarter following a rise in the national sales tax, which
clobbered consumer spending.
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The world’s third-largest economy had been forecast to rebound by 2.1 percent, but consumption
and exports remained weak, saddling companies with huge inventories to work off. Abe had said
he would look at the data when deciding whether to press ahead with a second increase in the
sales tax to 10 percent in October next year, as part of a plan
to curb Japan’s huge public debt, the worst among advanced
nations.
“GDP figures for July-September turned out not so
encouraging,” Abe said at a reception after returning from a
weeklong overseas tour. “We are seizing a chance to exit
long-lasting deflation and we cannot miss that chance,”
adding he wanted to analyse the situation and make a
decision on the tax.
Media had already said Abe could announce his decision to delay the hike for 18 months as early
as today and state his intention to call an election for parliament’s lower house. Ruling party
lawmakers expect the poll to be held on December 14.
An adviser to Abe termed the economic slide “shocking,” and urged the government to take steps
to support the economy. “This is absolutely not a situation in which we should be debating an
increase in the consumption tax,” Etsuro Honda, one of the architects of Abe’s reflationary
policies, said.
Economy Minister Akira Amari said some economic stimulus was likely, but added it would be
hard to craft an exceptionally big package because of the need for fiscal discipline.
No election for the lower house need be held until late 2016. A senior LDP lawmaker said he
expected the premier to delay the tax hike and call a snap poll, arguing that his “Abenomics”
strategy to re-energise the economy was working but needed more time.
But he added it was vital to recommit to a firm date for the rise in the levy, or risk upsetting
investors worried about Japan’s debt, already more than twice the size of its economy. The yen
slipped on the poor GDP reading, with the dollar briefly pushing to a seven-year high above 117
yen. The Nikkei stock average fell 3 percent.
Sluggish growth and easing price pressures due to sliding global oil prices prompted the Bank of
Japan to unexpectedly expand its massive monetary stimulus last month. Abe inherited the sales
tax plan when he took power in December 2012. The LDP, its smaller ally and the then-ruling
Democratic Party enacted the legislation requiring the tax to be raised unless economic conditions
were judged too weak.
The GDP data showed the April hike to 8 percent from 5 percent had made it harder than
anticipated for the public to shake off their deflationary mindset, Amari said, although he noted
one bright spot in strong corporate profits.
On a quarterly basis, the economy shrank 0.4 percent in the third quarter after a revised 1.9
percent decrease in April-June. Economists had expected growth of 0.5 percent.
Private consumption, accounting for about 60 percent of the economy, rose 0.4 percent from the
previous quarter, half as much as expected. Wage growth has not kept pace with price rises, so a
key mechanism of Abenomics is not working yet. Some economists said growth could improve in
the October-December quarter.
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NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Your partner in Energy Services
Khaled Malallah Al Awadi,
Energy Consultant
MSc. & BSc. Mechanical Engineering (HON), USA
ASME member since 1995
Emarat member since 1990
Mobile : +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with aKhaled Al Awadi is a UAE National with aKhaled Al Awadi is a UAE National with aKhaled Al Awadi is a UAE National with a
total of 24 yearstotal of 24 yearstotal of 24 yearstotal of 24 years of experience in theof experience in theof experience in theof experience in the Oil &Oil &Oil &Oil &
Gas sector. Currently workinGas sector. Currently workinGas sector. Currently workinGas sector. Currently working as Technical Affairs Specialistg as Technical Affairs Specialistg as Technical Affairs Specialistg as Technical Affairs Specialist
for Emirates General Petroleum Corp. “Emarat“ withfor Emirates General Petroleum Corp. “Emarat“ withfor Emirates General Petroleum Corp. “Emarat“ withfor Emirates General Petroleum Corp. “Emarat“ with
external voluntary Energy consultation for the GCC area viaexternal voluntary Energy consultation for the GCC area viaexternal voluntary Energy consultation for the GCC area viaexternal voluntary Energy consultation for the GCC area via
Hawk Energy Service as a UAE operations base , Most ofHawk Energy Service as a UAE operations base , Most ofHawk Energy Service as a UAE operations base , Most ofHawk Energy Service as a UAE operations base , Most of
the experience were spent as the Gas Operations Mathe experience were spent as the Gas Operations Mathe experience were spent as the Gas Operations Mathe experience were spent as the Gas Operations Managernagernagernager
in Emarat , responsible for Emarat Gas Pipeline Networkin Emarat , responsible for Emarat Gas Pipeline Networkin Emarat , responsible for Emarat Gas Pipeline Networkin Emarat , responsible for Emarat Gas Pipeline Network
Facility & gas compressor stations . Through the years , heFacility & gas compressor stations . Through the years , heFacility & gas compressor stations . Through the years , heFacility & gas compressor stations . Through the years , he
has developed great experiences in the designing &has developed great experiences in the designing &has developed great experiences in the designing &has developed great experiences in the designing &
constructingconstructingconstructingconstructing of gas pipelines, gas metering & regulatingof gas pipelines, gas metering & regulatingof gas pipelines, gas metering & regulatingof gas pipelines, gas metering & regulating
stations and in the engstations and in the engstations and in the engstations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation &ineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation &ineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation &ineering 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 &maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil &maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil &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 UAEGas Conferences held in the UAEGas Conferences held in the UAEGas Conferences held in the UAE andandandand Energy program broadcasted internationally , via GCC leading satellite Channels .Energy program broadcasted internationally , via GCC leading satellite Channels .Energy program broadcasted internationally , via GCC leading satellite Channels .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 18 November 2014 K. Al Awadi
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained
in this publication. However, no warranty is given to the accuracy of its content . Page 17

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New base 481 special 18 november 2014

  • 1. Copyright © 2014 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 18 November 2014 - Issue No. 481 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE DEWA Inks Deal With ABB To Develop Solar Power Project Dubai Electricity and Water Authority (DEWA) announced that it has signed a deal with energy firm ABB to develop a pilot solar power project which has a grid connected rooftop 277 kilowatt (kW) photovoltaic (PV) system. The project will be developed on the premises of ABB and will connect to DEWA’s grid through a low-voltage distribution board at ABB, DEWA said in a statement. The project also supports the Smart Dubai initiative and is part of the utility giant’s efforts to connect electricity produced from solar power to its grid.DEWA is also planning to use the pilot project as a learning tool for the deployment of solar PV rooftop installations in Dubai, the statement added. The emirate announced last year that it is looking to form regulations that govern energy generation through rooftop solar panels, which will allow private homeowners to use solar power to generate electricity. “DEWA is committed to enhancing partnerships and collaborating with the public and private sectors and local and international organisations to further improve the services it provides to the public, as well as its operational processes according to the highest levels of availability, reliability and efficiency,” said Saeed Mohammed Al Tayer, MD & CEO of DEWA. “It also demonstrates how government and private organisations can work together to enhance Dubai’s sustainable development.” Dubai is planning to diversify its energy generation with plans to produce up to five per cent of its electricity from renewables by 2030. In line with its energy diversification strategy, Dubai opened a 13 megawatts (MW) power plant, which is a part of the massive Dhs12 billion Mohammed bin Rashid Al Maktoum Solar park, in October last year. Upon completion, the park is expected to produce 1,000MW of clean energy using PV and solar thermal technology. Late last year, consultant Access Advisory revealed that the emirate could spend around $100 million to add 50MW of solar-power capacity by the time it hosts the World Expo 2020. The new capacity will help Dubai meet its target of generating half the additional power needed to run the Expo from renewable resources, Stephane Bontemps, managing director of Access said
  • 2. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 2 GGC gas shortages and market pricing Zawya + NewBase Low gas pricing is limiting foreign investment in the Gulf's upstream gas sector as many Gulf Arab states struggle to meet growing domestic demand even though the region sits on ample reserves of the commodity. Many Gulf Arab states, with the exception of Qatar which is the world's top natural gas exporter, now import the product as a short-term solution to meet increasing power consumption and support growth in the industrial sector. "Price neither properly reflects costs nor rewards sustainable use, and a lack of price benchmark inhibits policy and investment choices to address the problems this is causing," Chatham House said in a report. Natural gas prices in most Gulf countries hover around USD2 per million British thermal units, compared to the USD 4 per million Btu in North America, around USD 10-12 in Europe and the USD 15-18 Qatar charges its Asian customers. The lack of an international, or regional, price has meant that most foreign players are not participants in natural gas production, even though they are keen to invest in the oil sector. "While it is difficult to be precise, bad gas pricing is rather like asking someone to define an elephant. The classic response is 'I can't define one but I know one when I see it'," Chatham House said. "The same is true for gas prices and most of the gas pricing in the GCC exemplifies bad pricing." Saudi Arabia has come under pressure internationally for its subsidized natural gas prices, among the lowest in the Gulf region at USD 0.75 per million Btu. According to the International Energy Agency (IEA), these low prices were set when most of Saudi Arabia's gas production came from inexpensive associated gas, but are not consistent with the much more expensive high-sulfur gas production coming from offshore fields. TAPPING RESERVES The search for gas has become a priority for Saudi Arabia, the world's largest crude oil exporter. The kingdom is making efforts to tap into its shale gas reserves, but production is estimated to cost around USD8-9 per million Btu, which may make it uneconomic. In 2011, the Saudi government launched an unconventional gas initiative, which assessed that the country may be sitting on more than 600 trillion cubic feet of unconventional gas resources -double that of the country's conventional gas reserves at 291 trillion cubic feet of reserves. Oman also is working to tap into natural gas reserves, and has recruited British oil major BP for a USD 16 billion tight gas program at Khazzan field. The sultanate hopes to produce around 10bcm of natural gas from the field by 2018.
  • 3. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 3 The UAE, which holds the world's 7th largest natural gas reserves, has become a net importer of gas over the past few years. It has embarked on a number of projects that will likely boost production, including from high-sulphur reserves. Kuwait is home to 63 trillion cubic feet of natural gas reserves but contract structures and political uncertainty are major impediments to any rapid expansion of output. "Additionally, new natural gas discoveries are geologically more complex, mainly tight and sour natural gas deposits that require more sophisticated development and have higher capital costs," the U.S. Department of Energy notes in its September report on the country. In June, Kuwait's oil ministry said the Gulf Arab state was considering signing an agreement with Iran, which holds the world's largest gas reserves, to secure natural gas supplies, in addition to an existing contract to import liquefied natural gas (LNG) from Qatar to help meet needs to the end of 2014. POWERING ECONOMIES Demand in Saudi Arabia for power is rising at 6.5% which was expected to be fuelled by natural gas rather than the most expensive crude oil, but the industry has struggled. "In Saudi Arabia, oil- fired generation is forecast to gain 27% over 2013-19 on the back of insufficiently growing gas production and the very low efficiency of Saudi power plants," according to the IEA. The IEA estimates that natural gas production will need to rise by 42 billion cubic metres, which may be tough as the kingdom's overall production forecast is expected to grow by 26 bcm to reach 126bcm by 2019. "Burning additional gas is possible, but this requires finding and developing large quantities of natural gas production," the IEA said. "The issue requires taking into account not only the production side of natural gas but also the competition from other uses of natural gas, notably in the petrochemical sector." Saudi Arabia is keen to keep natural gas prices low as it not only helps its citizens but also its world-class petrochemicals sector that thrives due to low feedstock costs. But the IEA noted that the petrochemicals sector contributes around 1% of the kingdom's gross domestic product. "It is important to note the fact that even though the petrochemical industry benefits from low gas prices, it has a limited employment effect and a "small" share in the GDP," the IEA said. "Considering the considerable gas and/or oil requirements in the power sector, it may be worthwhile for Saudi Arabia's petrochemical industry to consider as well the opportunity to continue investing in other countries, benefiting from ample resource base. This would free up gas volumes for the power sector, reduce the call on oil in the power sector and free up this oil for
  • 4. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 4 Oman's PDO to spend $2b per year on gas explorations OMAN TIMES + NEWBASE Majority state-owned Petroleum Development of Oman (PDO) said on Monday that it would spend between $1.5 billion to $2 billion from next year for the exploration of gas in its fields. "We are currently producing some 90 million cubic feet, but from next year we are going to invest between $1.5 billion to $2 billion for gas exploration," Raul Restucci, PDO's Managing Director told Times of Oman. PDO is the biggest oil producer in Oman but is also producing crude oil at an average of 550,000 barrels per day. "Oman is faced with the challenge of tight oil and gas but with new technology, PDO is accepting the challenge and we have been very successful at it," Restucci added. The Sultanate's national oil company has recorded an average production of 1.25 million barrels of oil equivalent per day in 2013 and added 317 million barrels of oil reserves. Also, the total natural gas-developed reserves increased by 1.3 trillion cubic feet last year. The company is heavily spending on Enhanced Oil Recovery (EOR) programme to make up for the extra oil production. PDO's productions in 2013 came from four major EOR developments at Marmul, Qarn Alam and Harweel. In addition, the company has EOR pilots at Fahud, Lekhwair, Nimr, Al Noor, Marmul, Amin and Ghubar. One of its biggest success stories is the polymer project in Marmul which has reached the milestone of one million cubic metres (6.3 million barrels) of incremental oil recovery end of last year.
  • 5. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 5
  • 6. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 6 Saudi Electric vying for UK nuclear stake SG/Agencies + NewBase Saudi Electric is vying to buy a minority stake in Hinkley Point, the ÂŁ24.5 billion nuclear project in Somerset that is expected to begin generating power in 2023. Sky News has learnt that Saudi Electric is among a small number of prospective investors in discussions about ploughing billions of pounds into the venture. A deal has yet to be finalised with EDF, the French group spearheading the project, but talks with Saudi Electric are understood to have been ongoing for some time. EDF, which is one of the UK's biggest residential energy suppliers, will own up to 50 percent of Hinkley Point, with Areva, a French infrastructure company, holding 10 percent of the shares. Two state-owned Chinese groups, China General Nuclear Power Corporation and China National Nuclear Corporation, will collectively own between 30 percent and 40 percent of the project.Sources said that Saudi Electric could own between 10 percent and 15 percent of the venture if the talks are successful.
  • 7. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 7 Eni, Angola's Sonangol Sign Energy Cooperation Deal Africana News + NewBase Eni and Angola's Sonangol have signed to cooperate in the field of oil and gas. Under the agreement, the two companies will set up a joint team aimed at studying the potential of the non-associated gas present in the Lower Congo Basin offshore Angola. The scope of the study is to analyze the different gas valorization options both internationally and in the domestic market, where gas will have a crucial role in order to sustain the local economy, Eni said Monday. Moreover, the companies will be committed to develop projects on the mid-downstream business to be carried out in Angola. “This agreement will strengthen the prolific cooperation between Eni and Sonangol, confirming Angola as one of the key countries for the company's organic growth strategy”, Eni CEO Claudio Descalzi said. "In the coming years, Angola will become one of the most important oil and gas hubs for the sub-saharian activities of Eni".
  • 8. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 8 Liberia: NOCAL announces closing of the Liberia Basin bid round 2014 Source: TGS The National Oil Company of Liberia (NOCAL) has announced the closing of the Liberia Basin competitive bid round, as of 14 November 2014. The round comprised of four undrilled offshore petroleum exploration blocks over whichTGS has comprehensive, high quality, data coverage constituting 2D over Blocks LB-6, LB-7 and 2D/3D over Blocks LB-16 and LB-17. The bid opening ceremony is taking place on 17 November and winners will be notified after the completion of bid evaluation, anticipated on 24 November. 'We are extremely pleased with the high level of interest and bid submissions from international and local oil companies. The success of this licensing round has demonstrated the industry's demand for exploration opportunities in Liberia. This demand should be further satisfied with another bid round (focusing on the Harper Basin) which is planned for next year once the regulatory reform has been completed,' said Althea E. Sherman, General Counsel/Chief Operating Officer for NOCAL .
  • 9. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 9 Shell wins top global award for best projects of the year ABU DHABI, 17th November, 2014 (WAM) The Association for Project Management, APM, has awarded Shell the top prize for best and safest projects delivery. This achievement was attributed to Shell’s project management excellence, notably in turning a battlefield into an oilfield through the safe removal of explosive remnants of war (ERW) at the Majnoon project in Iraq. More than 28 square kilometers of land, equivalent to 9,000 football pitches, have been cleared of ERW with around 14,000 items of explosives destroyed, all with a perfect safety record. Shell developed a new approach using heavily armored bulldozers and loaders adapted for the project. Beyond clearing the field of explosives, Shell safely transported people and material into the project site, driving two and a half million kilometers, the equivalent of 62 times around the world, and transported 48,000 tonnes of material, more than the equivalent weight of six Eiffel Towers. The project team achieved 10 million man hours without a loss-time injury (LTI) in September 2013, a record for a project of scale. Shell’s project team were also recognised for their efforts in achieving top quartile delivery in the Port Dickson Refinery in Malaysia where the Shell team successfully achieved first commercial production with no process safety incidents during the refinery’s start up. Nick Smallwood, Shell’s Chief Project Engineer, said, "This award is true recognition for all those involved in the development, design and project delivery of Shell’s capital projects. We manage some of the world’s biggest, most complex projects and a single project's construction can unite tens of thousands of workers from all corners of the world. Our people work in extreme conditions, from desert heat to freezing tundra and ocean depths, and it’s thanks to the expertise and skillful collaboration of dedicated teams that we deliver ground breaking projects in the safest and most competitive manner."
  • 10. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 10 UK: Xcite Energy announces MOU with COSL for Bentley field jack-up drilling rig Source: Xcite Energy Xcite Energy has announced that its 100% subsidiary, Xcite Energy Resources (XER), has entered into a Memorandum of Understanding (MOU) with China Oilfield Services Limited (COSL), which sets out the principles for the provision of a new-build Keppel FELS N Class Plus, harsh environment jack-up drilling rig, together with equipment and personnel for the Bentley field. Final specifications of the rig are currently being agreed in order for construction to begin at the Keppel FELS yard in Singapore. COSL will work in a collaborative manner with all the key stakeholders to develop innovative, field specific rig and drilling services for Bentley, to maximise the economic recovery from the field and the economic return for all stakeholders. Rupert Cole, CEO of Xcite Energy, commented: 'We are very pleased that COSL has joined the Bentley development team and this marks the last of the key development group roles to be filled. COSL has considerable experience in drilling operations and we believe they possess the skills and expertise to work alongside our other partners in our collaborative and innovative model. Selecting this ultra-high specification drilling rig, and constructing it at the Keppel FELS yard in Singapore, is an important part of securing both the future schedule and drilling efficiency of the Bentley project.'
  • 11. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 11 Us: oil and condensate production at highest volume since 1986 Source: U.S. Energy Information Administration, DrillingInfo, Crude oil and lease condensate production in the United States exceeded 8.6 million barrels per day (bbl/d) in August, a production volume not observed since July 1986, according to EIA's latest Petroleum Supply Monthly. More than half of total U.S. production was accounted for by record production from three basins in three states. Production from the Permian Basin in Texas and New Mexico accounted for 1.66 million bbl/d, while the Eagle Ford Shale in the Western Gulf Basin, also located in Texas, produced 1.57 million bbl/d. The Bakken Shale in North Dakota's Williston Basin accounted for 1.13 million bbl/d. Domestic production has increased dramatically over the past four years, increasing from 5.4 million bbl/d in January 2010 to its current level, driven by increasing production from shale and other tight formations. During 2014 alone, 10 states (the three states previously mentioned in addition to Oklahoma, Colorado, Wyoming, Utah, Ohio, West Virginia, and Pennsylvania) have set monthly production records since 1995, and accounted for more than 64% of total U.S. production during August. Although down from 2,031 rigs in 2008, U.S. oil and natural gas rig counts have been increasing over the past two years. A total of 1,904 rigs were actively drilling during August, 1,578 of which were targeting liquids. Notably, once production starts, three-fifths of all the wells produce both oil and natural gas. Of the 1,904 active rigs, 62 rigs were operating offshore while the remaining 1,842 rigs were drilling onshore.
  • 12. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 12 Source: U.S. Energy Information Administration, Petroleum Supply Monthly Now typical of the industry, horizontal rigs represent the most common rig type with 1,330 active drilling operations in August, while 374 vertical and 210 directional drilling rigs were operational, respectively. Higher rig counts, along withimprovements in drilling productivity, are expected to increase U.S. liquids production to nearly 9.7 million bbl/d by December 2015. U.S. oil production has been increasing monthly at an average of 62,000 bbl/d since 2010. EIA forecasts that previous production highs set in the 1970s will be surpassed before the end of 2015. This is especially notable as Alaska production provided up to 2 million bbl/d of total U.S. production volumes during high production years in the 1980s. Decreases in Alaska production are related to natural reservoir decline and reduced exploration along the North Slope; however, discoveries in southern portions of Alaska's Cook Inlet are adding new production capacity. Production gains have been observed across the Lower 48, with particular increases in crude oil and lease condensate production from shale and tight formations. Production estimates from EIA's Drilling Productivity Reportconfirm that many top-producing reservoirs include production involving horizontally drilled wells, hydraulic fracturing reservoir stimulation, and multi-well pad drilling. The highest-ranked tight producing reservoirs in 2014 include Texas's Eagle Ford and Wolfcamp formations, North Dakota's Bakken-Three Forks formations, New Mexico's top Spraberry and Bone Springs formations, Oklahoma's Woodford Shale formations, Colorado's Niobrara formation, Utah's Green River formations, Ohio's Utica and Point Pleasant formations, and the Marcellus Shale formations in West Virginia and Pennsylvania.
  • 13. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 13 US: Freeport LNG granted Non-FTA export permission by DOE www.FreeportLNG.com + NewBAse The Energy Department has issued two final authorizations for Freeport LNG to export domestically produced liquefied natural gas to countries that do not have a Free Trade Agreement with the United States. The Freeport LNG terminal in Quintana Island, Texas is authorized to export LNG up to the equivalent of 1.4 billion standard cubic feet per day of natural gas and 0.4 Bcf/d, for a total authorized volume of 1.8 Bcf/d, for a period of 20 years. Following the recent announcement of the procedural change, the Department evaluated the two Freeport applications after they completed the environmental review required by the National Environmental Policy Act (NEPA). The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve the country’s energy security while spurring economic development and job creation around. This increase in domestic natural gas production is expected to continue, with the Energy Information Administration forecasting a record production rate of 75.05 Bcf/d in 2014. The Energy Department said it has conducted an extensive, careful review of the Freeport LNG applications. Among other factors, the Department considered the economic, energy security, and environmental impacts and determined that exports at a rate of up to 1.4 Bcf/d and 0.4 Bcf/d for a period of 20 years was not inconsistent with the public interest.
  • 14. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 14 Oil Price Drop Special Coverage ‘No direct impact on Saudi 2014/15 budget from oil decline’ Reuters + NewBase The recent plunge in oil prices will not have a direct impact on Saudi Arabia’s budget as the kingdom takes precautions to handle all possibilities when planning its finances, Finance Minister Ibrahim Alassaf (pictured) was quoted as saying. Asked by Saudi newspaper Okaz if cheaper oil could have a direct impact on next year’s budget or government spending, Alassaf replied, according to the newspaper’s Monday edition: “The global oil situation usually in one way or another affects countries’ revenues and debts, but the kingdom has always been keen on building its budgets on estimates that take all possibilities into consideration.” He did not elaborate. With the price of Brent crude oil now below $80 a barrel, down from around $115 in June, the Saudi government may post a budget deficit next year. The oil price which the government needs to balance its budget rose to $89 a barrel in 2013, the International Monetary Fund has estimated. However, economists believe the country’s huge fiscal and foreign reserves - the central bank’s net foreign assets exceed $700bn - mean financing that deficit will be easy, and the kingdom will be able to avoid any sharp cutback in spending if it chooses to do so. The country’s 2015 budget plan is expected to be announced in late December. Its original 2014 budget projected spending would rise a modest 4.3% from the 2013 plan to 855bn riyals ($228bn), the slowest rate in a decade, suggesting the kingdom was already starting to curb expenditure after years of huge increases. The 2014 budget conservatively projected state finances would exactly break even this year. The ministry did not specify the average oil price on which that calculation was based, but since the average price so far this year is above $100, Saudi Arabia still looks likely to post a budget surplus for 2014. Japan’s economy slips into recession Reuters + NewBase Japan’s economy unexpectedly slipped into recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election two years before he has to go to the polls. The recession comes nearly two years after Abe returned to power promising to revive the economy with his “Abenomics” mix of massive monetary stimulus, spending and reforms, and is unwelcome news for an already shaky global economy. Gross domestic product (GDP) shrank by an annualised 1.6 percent in July-September, after plunging 7.3 percent in the second quarter following a rise in the national sales tax, which clobbered consumer spending.
  • 15. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 15 The world’s third-largest economy had been forecast to rebound by 2.1 percent, but consumption and exports remained weak, saddling companies with huge inventories to work off. Abe had said he would look at the data when deciding whether to press ahead with a second increase in the sales tax to 10 percent in October next year, as part of a plan to curb Japan’s huge public debt, the worst among advanced nations. “GDP figures for July-September turned out not so encouraging,” Abe said at a reception after returning from a weeklong overseas tour. “We are seizing a chance to exit long-lasting deflation and we cannot miss that chance,” adding he wanted to analyse the situation and make a decision on the tax. Media had already said Abe could announce his decision to delay the hike for 18 months as early as today and state his intention to call an election for parliament’s lower house. Ruling party lawmakers expect the poll to be held on December 14. An adviser to Abe termed the economic slide “shocking,” and urged the government to take steps to support the economy. “This is absolutely not a situation in which we should be debating an increase in the consumption tax,” Etsuro Honda, one of the architects of Abe’s reflationary policies, said. Economy Minister Akira Amari said some economic stimulus was likely, but added it would be hard to craft an exceptionally big package because of the need for fiscal discipline. No election for the lower house need be held until late 2016. A senior LDP lawmaker said he expected the premier to delay the tax hike and call a snap poll, arguing that his “Abenomics” strategy to re-energise the economy was working but needed more time. But he added it was vital to recommit to a firm date for the rise in the levy, or risk upsetting investors worried about Japan’s debt, already more than twice the size of its economy. The yen slipped on the poor GDP reading, with the dollar briefly pushing to a seven-year high above 117 yen. The Nikkei stock average fell 3 percent. Sluggish growth and easing price pressures due to sliding global oil prices prompted the Bank of Japan to unexpectedly expand its massive monetary stimulus last month. Abe inherited the sales tax plan when he took power in December 2012. The LDP, its smaller ally and the then-ruling Democratic Party enacted the legislation requiring the tax to be raised unless economic conditions were judged too weak. The GDP data showed the April hike to 8 percent from 5 percent had made it harder than anticipated for the public to shake off their deflationary mindset, Amari said, although he noted one bright spot in strong corporate profits. On a quarterly basis, the economy shrank 0.4 percent in the third quarter after a revised 1.9 percent decrease in April-June. Economists had expected growth of 0.5 percent. Private consumption, accounting for about 60 percent of the economy, rose 0.4 percent from the previous quarter, half as much as expected. Wage growth has not kept pace with price rises, so a key mechanism of Abenomics is not working yet. Some economists said growth could improve in the October-December quarter.
  • 16. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 16 NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Your partner in Energy Services Khaled Malallah Al Awadi, Energy Consultant MSc. & BSc. Mechanical Engineering (HON), USA ASME member since 1995 Emarat member since 1990 Mobile : +97150-4822502 khdmohd@hawkenergy.net khdmohd@hotmail.com Khaled Al Awadi is a UAE National with aKhaled Al Awadi is a UAE National with aKhaled Al Awadi is a UAE National with aKhaled Al Awadi is a UAE National with a total of 24 yearstotal of 24 yearstotal of 24 yearstotal of 24 years of experience in theof experience in theof experience in theof experience in the Oil &Oil &Oil &Oil & Gas sector. Currently workinGas sector. Currently workinGas sector. Currently workinGas sector. Currently working as Technical Affairs Specialistg as Technical Affairs Specialistg as Technical Affairs Specialistg as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ withfor Emirates General Petroleum Corp. “Emarat“ withfor Emirates General Petroleum Corp. “Emarat“ withfor Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area viaexternal voluntary Energy consultation for the GCC area viaexternal voluntary Energy consultation for the GCC area viaexternal voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most ofHawk Energy Service as a UAE operations base , Most ofHawk Energy Service as a UAE operations base , Most ofHawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Mathe experience were spent as the Gas Operations Mathe experience were spent as the Gas Operations Mathe experience were spent as the Gas Operations Managernagernagernager in Emarat , responsible for Emarat Gas Pipeline Networkin Emarat , responsible for Emarat Gas Pipeline Networkin Emarat , responsible for Emarat Gas Pipeline Networkin Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heFacility & gas compressor stations . Through the years , heFacility & gas compressor stations . Through the years , heFacility & gas compressor stations . Through the years , he has developed great experiences in the designing &has developed great experiences in the designing &has developed great experiences in the designing &has developed great experiences in the designing & constructingconstructingconstructingconstructing of gas pipelines, gas metering & regulatingof gas pipelines, gas metering & regulatingof gas pipelines, gas metering & regulatingof gas pipelines, gas metering & regulating stations and in the engstations and in the engstations and in the engstations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation &ineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation &ineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation &ineering 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 &maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil &maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil &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 UAEGas Conferences held in the UAEGas Conferences held in the UAEGas Conferences held in the UAE andandandand Energy program broadcasted internationally , via GCC leading satellite Channels .Energy program broadcasted internationally , via GCC leading satellite Channels .Energy program broadcasted internationally , via GCC leading satellite Channels .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 18 November 2014 K. Al Awadi
  • 17. Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 17