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NewBase 14 October 2015 - Issue No. 707 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Qatar: Siemens signs turbines maintenance & service Agreement, DEL
Gulf Times
Siemens has signed a long-term service agreement with Dolphin Energy, under which the former
will provide service for nine aero-derivative gas turbines and compressors for gas compression at
the Dolphin Gas Project in Qatar.
The deal facilitates extension of the existing
service agreement for aero-derivative gas
turbine trains operating at the Dolphin Gas
Project for another 18 years.
Under terms of the new agreement, Siemens will
provide service and maintenance for the nine
industrial ‘Trent 60’ aero-derivative gas turbines
with nine Dresser-Rand DATUM centrifugal
compressors operating at Dolphin Energy’s gas
compression and processing plant at Ras
Laffan.
The project was the world`s first Trent gas
turbine mechanical drive installation. The
contract will be managed locally through the Siemens Qatar team both at Dolphin Energy Tower in
Doha and at the main operational site at Ras Laffan Industrial city.
A signing ceremony was held at Dolphin Energy’s headquarters in Abu Dhabi where Adel Ahmed
Albuainain, Dolphin Energy CEO and Fatih Sakiz, Siemens Qatar CEO, signed the contract in the
presence of senior representatives from both the companies.
“This order impressively underscores that we are on the right path with our acquisitions of Rolls-
Royce Energy and Dresser-Rand. And we are gaining speed,” said Lisa Davis, member,
Managing Board of Siemens AG and responsible for the Divisions Power and Gas, Wind Power
and Renewables and Power Generation Services.
Through the acquisitions of Rolls-Royce Energy and Dresser-Rand, Siemens has increased its
installed base six times to more than 120,000 units of gas turbines, steam turbines and
compressors.
“Together, we not only have the biggest installed fleet in the industry worldwide, we are now also
able to offer our customers from oil and gas and industry a unique range of services — which
opens up great opportunities,” Davis said.
The entire global service market for maintenance, repair, and operations of equipment in the oil
and gas sector is continuously growing with an average annual rate of 2%. In 2016, the volume is
Copyright © 2015 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
expected to reach $200bn and in 2019 around $210bn, according to an Industrial Info Resources
projection from May 2015.
Dolphin Energy’s major strategic
initiative, the Dolphin Gas Project,
involves the production and processing
of natural gas from Qatar’s North Field
and transportation of the dry gas by
sub-sea export pipeline from Qatar to
the UAE, which began in July 2007.
Albuainain said, “This long-term service
agreement places our company on an
even stronger footing because it
supports our efforts to ensure the
sustainability, reliability and availability
of natural gas exports to the UAE and
Oman. It also builds on the existing
strong relationship we developed with
Rolls-Royce, which has now transferred to Siemens and continues to provide Dolphin Energy with
direct access to the original equipment manufacturer, thereby providing us the best service
available in the market.”
Thorbj?rn Fors, CEO, Siemens Power Generation Services, Distributed Generation business unit,
said, “The Dolphin Energy Project is vitally important to the Middle East region, and through our
strong local presence there we intend to work very closely with Dolphin Energy to help ensure its
gas compression equipment operates with high levels of efficiency, availability and reliability. We
are committed to maintaining and growing the aero-derivative business by creating value for our
customers through improved offerings and by using the best people, processes and technology
available.”
The Siemens
Industrial Trent is
one of the most
advanced aero-
derivative gas
turbines available
today. The units
powering the Dolphin
Gas Project can
provide up to 50
megawatts (MW) at
42.5% efficiency. The
Industrial Trent,
featuring Rolls-Royce
Aero Engine
technology, is ideally
suited to meet the
higher power,
variable speed demands required by applications like natural gas liquefaction, gas transportation
and gas injection for oil recovery.
Copyright © 2015 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
DEWA selects preferred Bidder for 1st phase of 1,200 MW
Hassyan Clean Coal Power Plant
(WAM) -- Saeed Mohammed Al Tayer, MD and CEO of Dubai Electricity and Water Authority
(DEWA), today announced the ACWA Power and Harbin Electric consortium as the Preferred
Bidder for the first phase of the 1,200 MW Hassyan Clean Coal Power Project.
The consortium bid a Levelised Cost of Electricity (LCOE) of 4.501 cents/KWh based on May
2015 coal prices.
The announcement was made at a press conference held today at Grand Hyatt hotel, Dubai. The
conference was attended by Mohammad Abunayyan, Chairman of ACWA Power, Waleed
Salman, Executive Vice President of Strategy and Business Development at DEWA, Jamal
Alhammadi, VP of Special Projects at DEWA, David Lloyd – EY – Consortium Leader at DEWA’s
financial consultant EY, Margaret Cole from legal consultant White & Case, John Elanjickal from
technical consultant P?yry, and Executive Vice Presidents and Vice Presidents from DEWA,
project’s consultants, energy company representatives, and local and international media.
At the conference, Al Tayer thanked the attendants and commended the companies that sent their
competitive bids for this strategic project.
" This ambitious project supports the vision and directives of Vice President and Prime Minister
and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, the roadmap that
guides our ambitious initiatives and development projects.
It also supports the Dubai Plan 2021 to for Dubai’s environment to be clean, healthy, and
sustainable. Today, DEWA is adding another initiative to diversify Dubai’s energy mix and support
the Dubai Integrated Energy Strategy 2030 developed by the Dubai Supreme Council of Energy to
diversify Dubai’s energy mix to include 71 per cent from gas, 15 per cent from solar power, 7 per
cent from clean coal, and 7 per cent from nuclear power," he said.
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"I would like to thank all the international applicants who submitted their competitive bids to
participate in this leading project. This wide international participation reflects the trust and
confidence of international investors to invest in Dubai Government’s major energy projects," said
Al Tayer.
He said to achieve DEWA’s vision to become a sustainable world class utility, "we are working to
establish sustainability, which is a roadmap for a brighter and happier future for Dubai, by
launching distinguished world-class initiatives and projects in green development.
The Hassyan clean-coal power plant will use the best available technologies and the highest
global standards in this field. It will use the Ultra-supercritical (USC) technology to reduce any
negative impact on the environment. DEWA has requested that the project meets flue gas
emission limits more stringently than emission limits in the Industrial Emissions Directive (IED) of
the European Union and in the International Finance Corporation (IFC) Guidelines."
All the necessary environmental studies have been carried out. The Hassyan clean coal power
plant project will be implemented using the IPP model on a build, own, operate (BOO) basis and
DEWA will be the major stakeholder with 51% share in the company that will be established. The
project is supported by a 25-year Power Project Agreement (PPA).
The bidder has been required to put in place arrangements for the assured delivery of coal to the
project over the life of the agreement. The first phase of the project comprises two units of 600
MW each and will be operational by March 2020 and March 2021, respectively. DEWA is planning
to launch two additional projects, to bring the total capacity to 3,600 MW.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 5
Morocco: Circle Oil Flows Gas from Morocco Well
Circle Oil + NewBase
Circle Oil on Tuesday announced gas flow from KSR-A well located in Sebou Permit, onshore
Morocco. The primary Main Hoot target interval was perforated from 1,817.9 to 1,826.7 metres
MD and flowed gas at a maximum rate of 8.0MMscf/d on a 24/64" choke, the company said in an
update.
The well will be tied back to the 75 percent owned Circle Oil pipeline from Sebou to the industrial
area of Kenitra ready for production. The well is approx. 680m to the west of KSR-11, for
production line tie-back, and 1.12km west of the Ksiri sub-station. The production concession has
validity through 2024.
The rig has now relocated to drill the Caid El Gaddari-13 (CGD-13) well, the final well of Circle's
current drilling campaign.The Sebou permit is a partnership between Circle Oil Maroc Limited (75
percent) and ONHYM (Office National des Hydrocarbures et des Mines) (25 percent).
About Cebou Permit
Circle Oil Maroc Ltd. (COML), a wholly owned subsidiary of Circle Oil Plc signed an Exploration
and Exploitation Agreement with ONHYM (Office National des Hydrocarbures et des Mines – state
oil company) for the Sebou Concession in June 2006 (Original area 296 km2, now 134 km2 after
relinquishments.) The permit is situated in the Rharb Basin, Morocco. The Exploration Agreement
is for a total period of 8 years with the right of automatic conversion to a 30 year Exploitation
Period for any discovery, this can be extended if production continues.
The Permit shareholding is COML 75% and ONHYM 25%. Four
Exploitation Concession sub-areas have been registered and
recorded in the Official Bulletin to cover the production from 7 of
the 12 discovery wells to date. Three others were included in an
old concession originally operated by ONHYM.
COML signed a similar agreement for this ONHYM operated Oulad N’Zala Concession (25 km2)
which is contiguous with the Sebou Concession. As a pre-existing concession bound by the
previous hydrocarbon code the percentage interests are ONHYM 40% and COML 60% in Oulad
N’Zala. Technically this concession expired in 2014, but negotiations are underway to determine
the feasibility of including any remaining potential in the area in a future Circle operated license.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 6
Sri Lanka to tender new O&G Blocks bids as Cairn exits
Bloomberg + NewBase
Sri Lanka will issue a fresh international tender for offshore oil and gas blocks after billionaire Anil
Agarwal’s Cairn India relinquished its exploration rights in the South Asian island. Cairn will be
“departing in a couple of weeks” after coming to an agreement with the Sri Lankan government,
petroleum minister Chandima Weerakkody said in an interview on Monday. The island nation will
keep Cairn’s seismic study worth about $300mn and won’t charge any penalty for pulling out, he
said.
“We are at an advantage because we
have all the data collected by them,”
Weerakkody said. “Therefore we will go
forward with the next step. We are going
to expedite the international tender
process.” Sri Lanka, which doesn’t
produce any oil or gas and imports all its
needs from nations including Saudi
Arabia, will hold an international
roadshow this year to promote blocks on
Sri Lanka’s western coast of Mannar. The
island nation, where a three-decade civil
war ended in 2009, is looking for
technology to unlock the potential of the
area neighbouring India, where
companies including Reliance Industries
and BP are present.
Cairn India’s exit followed a one-time,
non-cash impairment charge on
acquisition goodwill for the SL 2007-01-
001 block, which covers approximately
3,000 square kilometres (1,158 square
miles), in the quarter ended March. The
charge was triggered by the fall in crude
oil prices, which declined 43% in the past
year making the discoveries unviable. The
company increased focus on producing
more from fields in Rajasthan state in
north India, while cutting overall capital
expenditure. Shares of the company, India’s biggest onshore oil driller, fell 1.4% to Rs165 at the
close in Mumbai. The company was the second-worst performer on the S&P BSE India Oil & Gas
Index, which declined 0.6%.
Sri Lanka’s cabinet in July approved inviting new international bids for commercial development of
natural gas deposits found in the Mannar basin block. “All the top oil companies believe that Sri
Lanka is blessed with gas and oil,” Weerakkody said, adding that the government hadn’t
considered offering incentives for exploration. Total SA, Europe’s third-largest explorer, is seeking
a joint study in two blocks on Sri Lanka’s eastern front, Weerakkody said. Two other companies
are also interested in conducting seismic studies in the island’s northern belt, he said without
naming them.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 7
NewBase 14 October - 2015 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Crude oil treads water as oversupply, China economy concerns persist
Reuters + NewBase
Crude oil futures traded largely unchanged on Wednesday after falling by just over one percent in
the previous session on an International Energy Agency report that said the market would remain
oversupplied for at least another year.
Front-month Brent for November delivery rose 10 cents or 0.2 percent to $49.34 a barrel as of
0254 GMT after it ended at $49.24 per barrel, down 1.24 percent, or 62 cents on Tuesday. U.S.
crude edged up 19 cents, or 0.41 percent, to $46.85 a barrel after settling 0.93 percent, or 44
cents, lower at $46.66 a barrel.
Crude futures rose 15 percent in early October but have since fallen back by almost 10 percent as
global production continues to outpace demand and concerns over China's slowing economy
prevail despite strong import figures released this week.
On Wednesday, data from China which showed consumer inflation had eased more than
expected in September while producer prices fell for the 43rd straight month, adding to concerns
over growing deflationary pressures in the world's second-largest economy.
Oil price special
coverage
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"Prices should remain low...the main reason for that is because global supply and demand for
crude did not change much over the past few weeks or even months. We are still in oversupply,"
Daniel Ang, an investment analyst at Phillip Futures Pte Ltd.
"Considering that you know we are looking for possible worsening oversupply coming from
Iran..this puts the whole situation a lot more bearish."
ANZ also said in a morning note: "Commodity prices were weaker overnight. Base metals, iron ore
and crude oil all fell as the impact of the relief rally starts to wane."
A global oil supply glut will persist through 2016 as demand growth slows from a five-year high
and key OPEC members maintain near-record output, said the International Energy Agency, even
as low prices curb supply outside the producer group.
U.S. shale production is expected to fall the most on record in November, extending a nationwide
output decline into its seventh consecutive month, according to a forecast on Tuesday from the
U.S. Energy Information Administration.
The number of North Dakota oil wells that have been drilled but not fracked rose to an all-time
high in August of almost 1,000, as producers delayed bringing them online as long as possible in
hopes that crude would rebound.
Global offshore oil production in ageing fields will fall by 10 percent next year as producers
abandon field upgrades at the fastest rate in 30 years, in the first clear sign of output cuts outside
the U.S. shale industry, exclusive data shows.
As the oil market remains over supplied, Saudi Arabia failed to attract offers for additional oil
cargoes for loading in October, industry sources said.
Venezuelan Oil Minister Eulogio del Pino said on Tuesday that eight non-OPEC countries have
been invited to an Oct. 21 technical meeting of oil experts from the Organization of Petroleum
Exporting Countries and non-OPEC countries in Vienna.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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A $70 oil floor? Fat chance, but OPEC price plan may be first step
REUTERS
The safe money for oil traders is betting that Venezuela's plan to resurrect OPEC's old price band
mechanism, attempting to set a $70 floor for the battered market, will be doomed from the start.
Saudi Arabia, the group's de facto leader, has shown zero interest in returning to a strategy of
supporting prices; big producers outside the Organization of Petroleum Exporting Countries,
namely Russia, have essentially ruled out cuts. And most analysts say attempting to set a price
range is futile, or that the $70 price is unsustainably high, or both.
Yet a handful of experts and observers say the proposal - articulated by former oil minister Rafael
Ramirez in an interview with Reuters - may be a catalyst for moving away from OPEC's laissez
faire approach to collapsing oil prices, which throttled investment, shredded budgets and left some
economies, such as Venezuela's, teetering on the brink.
Even if the idea fails to advance, it could represent the first meaningful step in months toward
finding common ground that could help stabilize the oil market.
The plan, to be discussed at an Oct. 21 meeting of technical experts in Vienna, seems simple:
progressive production cuts to control prices, with a "first floor" of $70 per barrel and a later target
of $100 per barrel, Ramirez explained.
His comments come after months of presidential visits and vague statements by President Nicolas
Maduro, most of which has been dismissed as a desperate effort by a precarious leader with little
history of petro-diplomacy.
Ramirez, by contrast, was the public face of Venezuela's oil policy for over a decade, working
closely and often with Saudi Oil Minister Ali al-Naimi - one of the only remaining OPEC ministers
from the previous decade, among the group’s most cohesive periods - as oil prices raced from
$20 a barrel to nearly $150 and back down again after the financial crisis.
"I think this one might have more substance," said Paul Horsnell, head of Commodities Research
from Standard Chartered, who has been writing about oil markets and OPEC for two decades.
"Signing up to a $70-$100 band doesn't seem too difficult for anyone," he said. "As long as there
is no automatic mechanism linking the band to output, it seems a very low cost way of expressing
solidarity with the aspirations of other members."
Eight non-OPEC countries were invited: Azerbaijan, Brazil, Colombia, Kazakhstan, Norway,
Mexico, Oman and Russia, according to Venezuela's oil minister Eulogio Del Pino.
SEEKING AN ANCHOR
The price band formula has been used before as a way out of crisis. After the late 1990s collapse
in prices to $10 a barrel, the group set a band of $22 to $28 a barrel. It was abandoned in 2005 as
soaring demand caused prices to race higher, and the group has never formally set any target or
range since then.
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Attempts by Venezuela in past years to make OPEC go back to the band system have failed. This
year prices are lower, but big producers - including Saudi Arabia and Kuwait - are reluctant to
sacrifice again their market share to revive them.
Yet there are other signs that nearly a year of depressed prices, and deep uncertainty over how
long sub-$50 a barrel oil may last, is wearing thin.
Russian Energy Minister Alexander Novak met with Naimi last week in Istanbul, and has said
Russia is ready to meet with OPEC and non-OPEC producers. In a speech in Kuwait, senior
Saudi energy advisor Ibrahim al-Muhanna bemoaned the lack of an "anchor" in the oil market, the
absence of which fueled volatility and depressed investment.
"This is an unnatural situation and it is difficult to see it continuing," Muhanna said, but offered no
firm ideas on what might be done to remedy the situation.
A source close to
Venezuela's OPEC
delegation said it will be
almost impossible to make
Saudi Arabia and Russia
sit at the same table to
negotiate a cut given past
acrimony over Moscow's
failed promises to curb
output, but to start with a
floor price discussion at a
technical level may help
toward that goal.
Many analysts said
targeting a notional price
without any real
commitments to
production constraints
would be a largely
meaningless gesture, but
others said it could help
ease a jittery market and potentially soften the stance of some in OPEC."Countries can use the
band as a broad reference," said Alvaro Silva, who served as OPEC's general secretary in 2002
and 2003, when the first price band was in effect.
"It worked fine in the past to give the market a price reference and avoid large price oscillations."
Apart from the mechanism itself, it is an open question whether producers would agree that $70 is
the right goal. While several members including Iraq and Angola suggested in June that $75 to
$80 a barrel was a reasonable area, core Gulf members may worry about losing too much market
share at that level.
At that price, U.S. shale oil production would likely come roaring back, according to one veteran
analyst. "But set the floor $10 lower and it could work."
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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NewBase Special Coverage
News Agencies News Release 14 Oct.. 2015
Only 33% of GCC family businesses have governance systems in place
Saudi Gazette
The inaugural GCC Family Business survey revealed that 44 percent of family businesses have
an employment policy in place for next generation from the family. Nonetheless, only 17 percent of
businesses have an effective assessment method in place to identify roles and responsibility for
the next generation.
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A development plan for the next generation and a clear business integration policy would ease the
transition of leadership and set a reference to manage conflict. The study recommends that the
‘rules of the game’ should be clearly stated to the next generation as early as possible to allow for
effective succession planning and transition of leadership.
Two other key findings of the study were related to corporate governance and the businesses’
philanthropic efforts. The newly rebranded Gulf Family Business Council (GFBC), the regional
association of Family Business Network International (FBN), and McKinsey & Company, unveiled
findings of a GCC family business study.
While family businesses have made significant progress in putting corporate governance systems
in place, few have been successful in completing end-to-end effective implementation. Of the
businesses researched, over 66 percent of participants reported that they have started to put the
building blocks in place. However, only around 33 percent reported that the practices are fully
adopted and are working effectively.
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The study also showed that ensuring successful implementation requires the engagement of the
broader family, not just those who are in positions of authority or involved in the business. This is
required to ensure wide buy-in and commitment among family members.
Ahmed Youssef, Partner at McKinsey & Company, said: “The inaugural GCC Family Business
survey gives us a baseline against which future progress can be tracked. The study assessed
current GCC family business practices and benchmarked them against five dimensions that are
critical for the longevity of any family business – family, ownership, business, philanthropy, and
wealth management.”
Youssef also mentioned “while all families are involved in some form of charitable giving, very few
have developed organized philanthropic efforts: Only 36% of the sample group had defined a
clear strategy for their giving; 20% had established a robust governance structure to oversee their
giving; and, 16% were clear about how they would evaluate the impact of their efforts. Given the
general desire of many families in the region to engage in philanthropy and give back to society,
as well as the role philanthropy can play in galvanizing family members around a common set of
values, many families would benefit from being more systematic about their philanthropic efforts.”
“Looking forward, we are optimistic about the pace of change, especially given the surge in
awareness among family businesses on the need to change. We are also conscious that the real
test is yet to come,” added Youssef. “Our survey participants are amongst the largest family
businesses in the GCC region and they have a responsibility to serve as pioneers and role models
for their peers, who could learn from their achievements to date.”
GFBC’s core mandate has been to facilitate the continuity of GCC family businesses over
generations. The organization has delivered unique content and programs since its launch in
2012.
Chairman of GFBC Abdulaziz Abdullah Al Ghurair said: “The study strengthens our understanding
of GCC family businesses and enlightens our actionable agenda, based on the areas where family
businesses struggle the most. The findings of this study validate the direction of some of the
Council’s existing initiatives designed to facilitate successful transition for GCC families while
addressing both the external and internal factors impacting family businesses.”
Last April, GFBC released a legal white paper on succession planning, discussing challenges.
GFBC chairman disclosed a legal initiative launched with policy makers to develop legal structures
that consider family business challenges in the region.
IEA releases Oil Market Report for October
IEA
Global demand growth is expected to slow from its five-year high of 1.8 mb/d in 2015 to 1.2 million
barrels per day (mb/d) in 2016 – closer towards its long-term trend as previous price support is
likely to wane, the IEA Oil Market Report for October informed subscribers. Recent downgrades to
the macroeconomic outlook are also filtering through.
World oil supply held steady near 96.6 mb/d in September, as lower non-OPEC production was
offset by a slight increase in OPEC crude. Non-OPEC accounted for just under 40% of the 1.8
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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mb/d annual increase in total oil output. Lower oil prices and steep spending curbs are expected
to cut non-OPEC output by nearly 0.5 mb/d in 2016.
OPEC crude supply rose by 90 0000 barrels per day (90 kb/d) in September to 31.72 mb/d as
record Iraqi output more than offset a dip in Saudi supply. A slowdown in forecast demand growth
and slightly higher non-OPEC supply lowers the 2016 “call” on OPEC by 0.2 mb/d from last
month’s Oil Market Report to 31.1 mb/d.
OECD commercial inventories extended recent gains and rose by 28.8 mb in August to stand at 2
943 mb by end-month. Since this was nearly double the 15.0 mb five-year average build for the
month, inventories’ surplus to average levels widened to 204 mb.
The onset of seasonal turnarounds in the OECD and the Former Soviet Union is estimated to
have curbed global refinery runs by 1.9 mb/d in September to 79.4 mb/d. Runs remained
remarkably strong, particularly in Asia and the Middle East, leaving global throughputs up nearly 2
mb/d from a year ago.
The October Oil Market Report also features an in-depth look at the market's focus on Iran and
Iraq as well as a feature on the fallout on oil demand forecasts from the International Monetary
Fund's downward revision to its global economic growth estimate for 2015-16. A third article
available to OMR subscribers looks at implications of the recent "volatility smile" for options in oil
markets.
The Oil Market Report (OMR) is a monthly International Energy Agency publication which
provides a view of the state of the international oil market and projections for oil supply and
demand 12-18 months ahead.
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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 25 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 14 Octopber 2015 K. Al Awadi
Copyright © 2015 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

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New base 707 special 14 october 2015

  • 1. Copyright © 2015 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 14 October 2015 - Issue No. 707 Senior Editor Eng. Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE Qatar: Siemens signs turbines maintenance & service Agreement, DEL Gulf Times Siemens has signed a long-term service agreement with Dolphin Energy, under which the former will provide service for nine aero-derivative gas turbines and compressors for gas compression at the Dolphin Gas Project in Qatar. The deal facilitates extension of the existing service agreement for aero-derivative gas turbine trains operating at the Dolphin Gas Project for another 18 years. Under terms of the new agreement, Siemens will provide service and maintenance for the nine industrial ‘Trent 60’ aero-derivative gas turbines with nine Dresser-Rand DATUM centrifugal compressors operating at Dolphin Energy’s gas compression and processing plant at Ras Laffan. The project was the world`s first Trent gas turbine mechanical drive installation. The contract will be managed locally through the Siemens Qatar team both at Dolphin Energy Tower in Doha and at the main operational site at Ras Laffan Industrial city. A signing ceremony was held at Dolphin Energy’s headquarters in Abu Dhabi where Adel Ahmed Albuainain, Dolphin Energy CEO and Fatih Sakiz, Siemens Qatar CEO, signed the contract in the presence of senior representatives from both the companies. “This order impressively underscores that we are on the right path with our acquisitions of Rolls- Royce Energy and Dresser-Rand. And we are gaining speed,” said Lisa Davis, member, Managing Board of Siemens AG and responsible for the Divisions Power and Gas, Wind Power and Renewables and Power Generation Services. Through the acquisitions of Rolls-Royce Energy and Dresser-Rand, Siemens has increased its installed base six times to more than 120,000 units of gas turbines, steam turbines and compressors. “Together, we not only have the biggest installed fleet in the industry worldwide, we are now also able to offer our customers from oil and gas and industry a unique range of services — which opens up great opportunities,” Davis said. The entire global service market for maintenance, repair, and operations of equipment in the oil and gas sector is continuously growing with an average annual rate of 2%. In 2016, the volume is
  • 2. Copyright © 2015 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 expected to reach $200bn and in 2019 around $210bn, according to an Industrial Info Resources projection from May 2015. Dolphin Energy’s major strategic initiative, the Dolphin Gas Project, involves the production and processing of natural gas from Qatar’s North Field and transportation of the dry gas by sub-sea export pipeline from Qatar to the UAE, which began in July 2007. Albuainain said, “This long-term service agreement places our company on an even stronger footing because it supports our efforts to ensure the sustainability, reliability and availability of natural gas exports to the UAE and Oman. It also builds on the existing strong relationship we developed with Rolls-Royce, which has now transferred to Siemens and continues to provide Dolphin Energy with direct access to the original equipment manufacturer, thereby providing us the best service available in the market.” Thorbj?rn Fors, CEO, Siemens Power Generation Services, Distributed Generation business unit, said, “The Dolphin Energy Project is vitally important to the Middle East region, and through our strong local presence there we intend to work very closely with Dolphin Energy to help ensure its gas compression equipment operates with high levels of efficiency, availability and reliability. We are committed to maintaining and growing the aero-derivative business by creating value for our customers through improved offerings and by using the best people, processes and technology available.” The Siemens Industrial Trent is one of the most advanced aero- derivative gas turbines available today. The units powering the Dolphin Gas Project can provide up to 50 megawatts (MW) at 42.5% efficiency. The Industrial Trent, featuring Rolls-Royce Aero Engine technology, is ideally suited to meet the higher power, variable speed demands required by applications like natural gas liquefaction, gas transportation and gas injection for oil recovery.
  • 3. Copyright © 2015 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 DEWA selects preferred Bidder for 1st phase of 1,200 MW Hassyan Clean Coal Power Plant (WAM) -- Saeed Mohammed Al Tayer, MD and CEO of Dubai Electricity and Water Authority (DEWA), today announced the ACWA Power and Harbin Electric consortium as the Preferred Bidder for the first phase of the 1,200 MW Hassyan Clean Coal Power Project. The consortium bid a Levelised Cost of Electricity (LCOE) of 4.501 cents/KWh based on May 2015 coal prices. The announcement was made at a press conference held today at Grand Hyatt hotel, Dubai. The conference was attended by Mohammad Abunayyan, Chairman of ACWA Power, Waleed Salman, Executive Vice President of Strategy and Business Development at DEWA, Jamal Alhammadi, VP of Special Projects at DEWA, David Lloyd – EY – Consortium Leader at DEWA’s financial consultant EY, Margaret Cole from legal consultant White & Case, John Elanjickal from technical consultant P?yry, and Executive Vice Presidents and Vice Presidents from DEWA, project’s consultants, energy company representatives, and local and international media. At the conference, Al Tayer thanked the attendants and commended the companies that sent their competitive bids for this strategic project. " This ambitious project supports the vision and directives of Vice President and Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, the roadmap that guides our ambitious initiatives and development projects. It also supports the Dubai Plan 2021 to for Dubai’s environment to be clean, healthy, and sustainable. Today, DEWA is adding another initiative to diversify Dubai’s energy mix and support the Dubai Integrated Energy Strategy 2030 developed by the Dubai Supreme Council of Energy to diversify Dubai’s energy mix to include 71 per cent from gas, 15 per cent from solar power, 7 per cent from clean coal, and 7 per cent from nuclear power," he said.
  • 4. Copyright © 2015 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 "I would like to thank all the international applicants who submitted their competitive bids to participate in this leading project. This wide international participation reflects the trust and confidence of international investors to invest in Dubai Government’s major energy projects," said Al Tayer. He said to achieve DEWA’s vision to become a sustainable world class utility, "we are working to establish sustainability, which is a roadmap for a brighter and happier future for Dubai, by launching distinguished world-class initiatives and projects in green development. The Hassyan clean-coal power plant will use the best available technologies and the highest global standards in this field. It will use the Ultra-supercritical (USC) technology to reduce any negative impact on the environment. DEWA has requested that the project meets flue gas emission limits more stringently than emission limits in the Industrial Emissions Directive (IED) of the European Union and in the International Finance Corporation (IFC) Guidelines." All the necessary environmental studies have been carried out. The Hassyan clean coal power plant project will be implemented using the IPP model on a build, own, operate (BOO) basis and DEWA will be the major stakeholder with 51% share in the company that will be established. The project is supported by a 25-year Power Project Agreement (PPA). The bidder has been required to put in place arrangements for the assured delivery of coal to the project over the life of the agreement. The first phase of the project comprises two units of 600 MW each and will be operational by March 2020 and March 2021, respectively. DEWA is planning to launch two additional projects, to bring the total capacity to 3,600 MW.
  • 5. Copyright © 2015 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 Morocco: Circle Oil Flows Gas from Morocco Well Circle Oil + NewBase Circle Oil on Tuesday announced gas flow from KSR-A well located in Sebou Permit, onshore Morocco. The primary Main Hoot target interval was perforated from 1,817.9 to 1,826.7 metres MD and flowed gas at a maximum rate of 8.0MMscf/d on a 24/64" choke, the company said in an update. The well will be tied back to the 75 percent owned Circle Oil pipeline from Sebou to the industrial area of Kenitra ready for production. The well is approx. 680m to the west of KSR-11, for production line tie-back, and 1.12km west of the Ksiri sub-station. The production concession has validity through 2024. The rig has now relocated to drill the Caid El Gaddari-13 (CGD-13) well, the final well of Circle's current drilling campaign.The Sebou permit is a partnership between Circle Oil Maroc Limited (75 percent) and ONHYM (Office National des Hydrocarbures et des Mines) (25 percent). About Cebou Permit Circle Oil Maroc Ltd. (COML), a wholly owned subsidiary of Circle Oil Plc signed an Exploration and Exploitation Agreement with ONHYM (Office National des Hydrocarbures et des Mines – state oil company) for the Sebou Concession in June 2006 (Original area 296 km2, now 134 km2 after relinquishments.) The permit is situated in the Rharb Basin, Morocco. The Exploration Agreement is for a total period of 8 years with the right of automatic conversion to a 30 year Exploitation Period for any discovery, this can be extended if production continues. The Permit shareholding is COML 75% and ONHYM 25%. Four Exploitation Concession sub-areas have been registered and recorded in the Official Bulletin to cover the production from 7 of the 12 discovery wells to date. Three others were included in an old concession originally operated by ONHYM. COML signed a similar agreement for this ONHYM operated Oulad N’Zala Concession (25 km2) which is contiguous with the Sebou Concession. As a pre-existing concession bound by the previous hydrocarbon code the percentage interests are ONHYM 40% and COML 60% in Oulad N’Zala. Technically this concession expired in 2014, but negotiations are underway to determine the feasibility of including any remaining potential in the area in a future Circle operated license.
  • 6. Copyright © 2015 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 Sri Lanka to tender new O&G Blocks bids as Cairn exits Bloomberg + NewBase Sri Lanka will issue a fresh international tender for offshore oil and gas blocks after billionaire Anil Agarwal’s Cairn India relinquished its exploration rights in the South Asian island. Cairn will be “departing in a couple of weeks” after coming to an agreement with the Sri Lankan government, petroleum minister Chandima Weerakkody said in an interview on Monday. The island nation will keep Cairn’s seismic study worth about $300mn and won’t charge any penalty for pulling out, he said. “We are at an advantage because we have all the data collected by them,” Weerakkody said. “Therefore we will go forward with the next step. We are going to expedite the international tender process.” Sri Lanka, which doesn’t produce any oil or gas and imports all its needs from nations including Saudi Arabia, will hold an international roadshow this year to promote blocks on Sri Lanka’s western coast of Mannar. The island nation, where a three-decade civil war ended in 2009, is looking for technology to unlock the potential of the area neighbouring India, where companies including Reliance Industries and BP are present. Cairn India’s exit followed a one-time, non-cash impairment charge on acquisition goodwill for the SL 2007-01- 001 block, which covers approximately 3,000 square kilometres (1,158 square miles), in the quarter ended March. The charge was triggered by the fall in crude oil prices, which declined 43% in the past year making the discoveries unviable. The company increased focus on producing more from fields in Rajasthan state in north India, while cutting overall capital expenditure. Shares of the company, India’s biggest onshore oil driller, fell 1.4% to Rs165 at the close in Mumbai. The company was the second-worst performer on the S&P BSE India Oil & Gas Index, which declined 0.6%. Sri Lanka’s cabinet in July approved inviting new international bids for commercial development of natural gas deposits found in the Mannar basin block. “All the top oil companies believe that Sri Lanka is blessed with gas and oil,” Weerakkody said, adding that the government hadn’t considered offering incentives for exploration. Total SA, Europe’s third-largest explorer, is seeking a joint study in two blocks on Sri Lanka’s eastern front, Weerakkody said. Two other companies are also interested in conducting seismic studies in the island’s northern belt, he said without naming them.
  • 7. Copyright © 2015 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 NewBase 14 October - 2015 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Crude oil treads water as oversupply, China economy concerns persist Reuters + NewBase Crude oil futures traded largely unchanged on Wednesday after falling by just over one percent in the previous session on an International Energy Agency report that said the market would remain oversupplied for at least another year. Front-month Brent for November delivery rose 10 cents or 0.2 percent to $49.34 a barrel as of 0254 GMT after it ended at $49.24 per barrel, down 1.24 percent, or 62 cents on Tuesday. U.S. crude edged up 19 cents, or 0.41 percent, to $46.85 a barrel after settling 0.93 percent, or 44 cents, lower at $46.66 a barrel. Crude futures rose 15 percent in early October but have since fallen back by almost 10 percent as global production continues to outpace demand and concerns over China's slowing economy prevail despite strong import figures released this week. On Wednesday, data from China which showed consumer inflation had eased more than expected in September while producer prices fell for the 43rd straight month, adding to concerns over growing deflationary pressures in the world's second-largest economy. Oil price special coverage
  • 8. Copyright © 2015 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 "Prices should remain low...the main reason for that is because global supply and demand for crude did not change much over the past few weeks or even months. We are still in oversupply," Daniel Ang, an investment analyst at Phillip Futures Pte Ltd. "Considering that you know we are looking for possible worsening oversupply coming from Iran..this puts the whole situation a lot more bearish." ANZ also said in a morning note: "Commodity prices were weaker overnight. Base metals, iron ore and crude oil all fell as the impact of the relief rally starts to wane." A global oil supply glut will persist through 2016 as demand growth slows from a five-year high and key OPEC members maintain near-record output, said the International Energy Agency, even as low prices curb supply outside the producer group. U.S. shale production is expected to fall the most on record in November, extending a nationwide output decline into its seventh consecutive month, according to a forecast on Tuesday from the U.S. Energy Information Administration. The number of North Dakota oil wells that have been drilled but not fracked rose to an all-time high in August of almost 1,000, as producers delayed bringing them online as long as possible in hopes that crude would rebound. Global offshore oil production in ageing fields will fall by 10 percent next year as producers abandon field upgrades at the fastest rate in 30 years, in the first clear sign of output cuts outside the U.S. shale industry, exclusive data shows. As the oil market remains over supplied, Saudi Arabia failed to attract offers for additional oil cargoes for loading in October, industry sources said. Venezuelan Oil Minister Eulogio del Pino said on Tuesday that eight non-OPEC countries have been invited to an Oct. 21 technical meeting of oil experts from the Organization of Petroleum Exporting Countries and non-OPEC countries in Vienna.
  • 9. Copyright © 2015 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 A $70 oil floor? Fat chance, but OPEC price plan may be first step REUTERS The safe money for oil traders is betting that Venezuela's plan to resurrect OPEC's old price band mechanism, attempting to set a $70 floor for the battered market, will be doomed from the start. Saudi Arabia, the group's de facto leader, has shown zero interest in returning to a strategy of supporting prices; big producers outside the Organization of Petroleum Exporting Countries, namely Russia, have essentially ruled out cuts. And most analysts say attempting to set a price range is futile, or that the $70 price is unsustainably high, or both. Yet a handful of experts and observers say the proposal - articulated by former oil minister Rafael Ramirez in an interview with Reuters - may be a catalyst for moving away from OPEC's laissez faire approach to collapsing oil prices, which throttled investment, shredded budgets and left some economies, such as Venezuela's, teetering on the brink. Even if the idea fails to advance, it could represent the first meaningful step in months toward finding common ground that could help stabilize the oil market. The plan, to be discussed at an Oct. 21 meeting of technical experts in Vienna, seems simple: progressive production cuts to control prices, with a "first floor" of $70 per barrel and a later target of $100 per barrel, Ramirez explained. His comments come after months of presidential visits and vague statements by President Nicolas Maduro, most of which has been dismissed as a desperate effort by a precarious leader with little history of petro-diplomacy. Ramirez, by contrast, was the public face of Venezuela's oil policy for over a decade, working closely and often with Saudi Oil Minister Ali al-Naimi - one of the only remaining OPEC ministers from the previous decade, among the group’s most cohesive periods - as oil prices raced from $20 a barrel to nearly $150 and back down again after the financial crisis. "I think this one might have more substance," said Paul Horsnell, head of Commodities Research from Standard Chartered, who has been writing about oil markets and OPEC for two decades. "Signing up to a $70-$100 band doesn't seem too difficult for anyone," he said. "As long as there is no automatic mechanism linking the band to output, it seems a very low cost way of expressing solidarity with the aspirations of other members." Eight non-OPEC countries were invited: Azerbaijan, Brazil, Colombia, Kazakhstan, Norway, Mexico, Oman and Russia, according to Venezuela's oil minister Eulogio Del Pino. SEEKING AN ANCHOR The price band formula has been used before as a way out of crisis. After the late 1990s collapse in prices to $10 a barrel, the group set a band of $22 to $28 a barrel. It was abandoned in 2005 as soaring demand caused prices to race higher, and the group has never formally set any target or range since then.
  • 10. Copyright © 2015 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 Attempts by Venezuela in past years to make OPEC go back to the band system have failed. This year prices are lower, but big producers - including Saudi Arabia and Kuwait - are reluctant to sacrifice again their market share to revive them. Yet there are other signs that nearly a year of depressed prices, and deep uncertainty over how long sub-$50 a barrel oil may last, is wearing thin. Russian Energy Minister Alexander Novak met with Naimi last week in Istanbul, and has said Russia is ready to meet with OPEC and non-OPEC producers. In a speech in Kuwait, senior Saudi energy advisor Ibrahim al-Muhanna bemoaned the lack of an "anchor" in the oil market, the absence of which fueled volatility and depressed investment. "This is an unnatural situation and it is difficult to see it continuing," Muhanna said, but offered no firm ideas on what might be done to remedy the situation. A source close to Venezuela's OPEC delegation said it will be almost impossible to make Saudi Arabia and Russia sit at the same table to negotiate a cut given past acrimony over Moscow's failed promises to curb output, but to start with a floor price discussion at a technical level may help toward that goal. Many analysts said targeting a notional price without any real commitments to production constraints would be a largely meaningless gesture, but others said it could help ease a jittery market and potentially soften the stance of some in OPEC."Countries can use the band as a broad reference," said Alvaro Silva, who served as OPEC's general secretary in 2002 and 2003, when the first price band was in effect. "It worked fine in the past to give the market a price reference and avoid large price oscillations." Apart from the mechanism itself, it is an open question whether producers would agree that $70 is the right goal. While several members including Iraq and Angola suggested in June that $75 to $80 a barrel was a reasonable area, core Gulf members may worry about losing too much market share at that level. At that price, U.S. shale oil production would likely come roaring back, according to one veteran analyst. "But set the floor $10 lower and it could work."
  • 11. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 11 NewBase Special Coverage News Agencies News Release 14 Oct.. 2015 Only 33% of GCC family businesses have governance systems in place Saudi Gazette The inaugural GCC Family Business survey revealed that 44 percent of family businesses have an employment policy in place for next generation from the family. Nonetheless, only 17 percent of businesses have an effective assessment method in place to identify roles and responsibility for the next generation.
  • 12. Copyright © 2015 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 A development plan for the next generation and a clear business integration policy would ease the transition of leadership and set a reference to manage conflict. The study recommends that the ‘rules of the game’ should be clearly stated to the next generation as early as possible to allow for effective succession planning and transition of leadership. Two other key findings of the study were related to corporate governance and the businesses’ philanthropic efforts. The newly rebranded Gulf Family Business Council (GFBC), the regional association of Family Business Network International (FBN), and McKinsey & Company, unveiled findings of a GCC family business study. While family businesses have made significant progress in putting corporate governance systems in place, few have been successful in completing end-to-end effective implementation. Of the businesses researched, over 66 percent of participants reported that they have started to put the building blocks in place. However, only around 33 percent reported that the practices are fully adopted and are working effectively.
  • 13. Copyright © 2015 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 The study also showed that ensuring successful implementation requires the engagement of the broader family, not just those who are in positions of authority or involved in the business. This is required to ensure wide buy-in and commitment among family members. Ahmed Youssef, Partner at McKinsey & Company, said: “The inaugural GCC Family Business survey gives us a baseline against which future progress can be tracked. The study assessed current GCC family business practices and benchmarked them against five dimensions that are critical for the longevity of any family business – family, ownership, business, philanthropy, and wealth management.” Youssef also mentioned “while all families are involved in some form of charitable giving, very few have developed organized philanthropic efforts: Only 36% of the sample group had defined a clear strategy for their giving; 20% had established a robust governance structure to oversee their giving; and, 16% were clear about how they would evaluate the impact of their efforts. Given the general desire of many families in the region to engage in philanthropy and give back to society, as well as the role philanthropy can play in galvanizing family members around a common set of values, many families would benefit from being more systematic about their philanthropic efforts.” “Looking forward, we are optimistic about the pace of change, especially given the surge in awareness among family businesses on the need to change. We are also conscious that the real test is yet to come,” added Youssef. “Our survey participants are amongst the largest family businesses in the GCC region and they have a responsibility to serve as pioneers and role models for their peers, who could learn from their achievements to date.” GFBC’s core mandate has been to facilitate the continuity of GCC family businesses over generations. The organization has delivered unique content and programs since its launch in 2012. Chairman of GFBC Abdulaziz Abdullah Al Ghurair said: “The study strengthens our understanding of GCC family businesses and enlightens our actionable agenda, based on the areas where family businesses struggle the most. The findings of this study validate the direction of some of the Council’s existing initiatives designed to facilitate successful transition for GCC families while addressing both the external and internal factors impacting family businesses.” Last April, GFBC released a legal white paper on succession planning, discussing challenges. GFBC chairman disclosed a legal initiative launched with policy makers to develop legal structures that consider family business challenges in the region. IEA releases Oil Market Report for October IEA Global demand growth is expected to slow from its five-year high of 1.8 mb/d in 2015 to 1.2 million barrels per day (mb/d) in 2016 – closer towards its long-term trend as previous price support is likely to wane, the IEA Oil Market Report for October informed subscribers. Recent downgrades to the macroeconomic outlook are also filtering through. World oil supply held steady near 96.6 mb/d in September, as lower non-OPEC production was offset by a slight increase in OPEC crude. Non-OPEC accounted for just under 40% of the 1.8
  • 14. Copyright © 2015 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 mb/d annual increase in total oil output. Lower oil prices and steep spending curbs are expected to cut non-OPEC output by nearly 0.5 mb/d in 2016. OPEC crude supply rose by 90 0000 barrels per day (90 kb/d) in September to 31.72 mb/d as record Iraqi output more than offset a dip in Saudi supply. A slowdown in forecast demand growth and slightly higher non-OPEC supply lowers the 2016 “call” on OPEC by 0.2 mb/d from last month’s Oil Market Report to 31.1 mb/d. OECD commercial inventories extended recent gains and rose by 28.8 mb in August to stand at 2 943 mb by end-month. Since this was nearly double the 15.0 mb five-year average build for the month, inventories’ surplus to average levels widened to 204 mb. The onset of seasonal turnarounds in the OECD and the Former Soviet Union is estimated to have curbed global refinery runs by 1.9 mb/d in September to 79.4 mb/d. Runs remained remarkably strong, particularly in Asia and the Middle East, leaving global throughputs up nearly 2 mb/d from a year ago. The October Oil Market Report also features an in-depth look at the market's focus on Iran and Iraq as well as a feature on the fallout on oil demand forecasts from the International Monetary Fund's downward revision to its global economic growth estimate for 2015-16. A third article available to OMR subscribers looks at implications of the recent "volatility smile" for options in oil markets. The Oil Market Report (OMR) is a monthly International Energy Agency publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead.
  • 15. Copyright © 2015 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 NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE 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 25 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 14 Octopber 2015 K. Al Awadi
  • 16. Copyright © 2015 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