New base energy news 04 febuary 2019 issue no 1229 by khaled al awadi

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NewBase Energy News 04 February 2019 - Issue No. 1229 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Occidental Petroleum shift in production growth to UAE
The National - Jennifer Gnana + NewBase
US energy firm Occidental Petroleum, a big player in the Permian shale basins expects
to see “shift" in more production growth to the Middle East over the coming years, even
as it mulls opportunities downstream in the region.
"While our company is growing with the production right now in the Permian Basin, we
expect that over time that will shift and more growth will come from our operations here
in the Middle East,” Occidental Petroleum chief executive Vicki Hollub told The
National in an interview in Abu Dhabi.
Houston-headquartered Occidental Petroleum is the biggest player in the Permian Basin,
the largest shale basin in in the US where production averaged 3.831 million barrels per
day in January, according to the Energy Information Administration. Occidental, which
has operations in the Middle East and Latin America currently sees less than half of its
production come from international operations.

A new area of interest for the energy firm in the Middle East is the downstream sector,
which has seen multibillion dollar investment commitments from national oil companies
in the UAE and Saudi Arabia. Occidental Petroleum was awarded an onshore block by
the Abu Dhabi National Oil Company on Sunday for a participating fee of Dh893 million
($244m).
The US firm will hold a 100 per cent stake in the onshore Block 3 in the exploration phase
as part of its 35-year concession agreement. Ms Hollub sees possibilities of expansion
in partnership downstream following the recent sale of stakes in Adnoc’s refining units to
existing upstream partners Eni and OMV of Italy and Austria.
"We’re looking at downstream here in the Middle East," she said. "We like the fact that
Dr Sultan [Al Jaber, Adnoc Group chief executive] has a view in Abu Dhabi that he wants
to take all the value chain and convert that into value for the country. We support that.”
Occidental, which also has a significant North American chemicals business in the
polyvinyl chloride (PVC) resins, chlorine and caustic soda segments, which find uses in
the plastics and petrochemicals industries will look at possible synergies in the Middle
East.
“We export products out of the United
States to other markets so we feel like
there’s a possibility that at some point we
could build [that] here in the Middle East,”
said Ms Hollub.
Another opportunity for the North
American company, which has 450,000
bpd export capacity in the US is the
possibility of entering into the trading
business in the Middle East - a segment of
increasing interest for state-backed
energy firms in the region.
Following the sale of stakes in its refining
unit last month, Adnoc invited its
downstream partners Eni and OMV to establish a three-way trading joint venture.
“Exports are being traded both in Asia and in Europe right now. So we’re selling oil in
both places. Marketing here in the Middle East is something that we’ve done in the past
and we’ll figure out the best way to extract value for our products,” said Ms Hollub.
The company is currently in “transition phase” with Qatar Petroleum in exiting the Idd El-
Shargi field, which has been set for October, she said. Occidental remained interested
in “other opportunities” upstream in Abu Dhabi but declined to comment in detail. "We’re
processing some things internally,” she said.
Elsewhere in the Middle East, Occidental will continue to advance development of
exploration in blocks 9, 27 and 30 in Oman following completion of 3D seismic
assessment.

UAE:Dubai home to first solar-powered hydrogen facility in Mena
The National + NewBase
The first solar-driven hydrogen electrolysis facility in the Middle East and North Africa (Mena) region
was inaugurated in Dubai on Sunday.
Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Supreme Council of Energy and
chairman of the Expo 2020 Dubai Higher Committee, broke ground on the project, a collaboration
between Dubai Electricity and Water Authority (Dewa), Expo 2020 Dubai and Siemens.
It will be built at Dewa’s outdoor testing facilities in the Research and Development Centre at the
Mohammed bin Rashid Al Maktoum Solar Park in Dubai, state media agency WAM reported.
Expo 2020 Dubai intends to showcase hydrogen mobility by powering a number of fuel-cell vehicles
with hydrogen generated at the facility, and transport Expo 2020 Dubai visitors to the Mohammed
bin Rashid Al Maktoum Solar Park. Also, real-time data from the green hydrogen electrolysis
production site will be on display at Expo 2020.
The move is the latest involving Siemens in the GCC. Last month The National reported the German
industrial company signed a €200 million contract to supply gas and steam turbines for an integrated
utilities project in the southern Omani port city of Duqm in one of the largest such transactions for
the sultanate.
Also last month, Siemens said it expects growth of around 5 per cent in the oil and gas business in 2019
following momentum seen in the sector due to the pickup in crude prices last year. "We did see an increase
last year in terms of oil and gas spend by customers and in terms of new projects and refurbishing existing
equipment and activities,” Lisa Davis, chief executive, energy and member of the firm's managing board said
in an interview with The National in the capital during Abu Dhabi Sustainability Week.
"We do expect an increase in 2019 as well and probably around 5 per cent, so the business continues to
grow and probably a little bit more than GDP, so that’s encouraging to see it coming back, but coming back
in a cautious way,” she added.

Saudi Acwa Power plans $35bn utility project spend in 5 years
ACWA + Trade Arabia + NewBase
Saudi-based Acwa Power has announced plans to boost its water desalination and power generation
capacity and grow two-fold over the next five years with investments estimated at $35 billion.
Acwa Power is the fastest growing power and water developer in the Middle East & Africa, with operations
in 3 continents, providing reliable power at low cost.
As part of its new growth strategy, the Saudi group is set to enter newer territories, said its top official.
"We have already chalked out our next plan of action which will see Acwa Power enter 25 countries in a big
way by 2025," remarked President and CEO Paddy Padmanathan.
He was speaking at the recent World Future Energy Summit (WFES) held as part of Abu Dhabi Sustainability
Week. During the event, Acwa Power cemented its position as a leading sustainability enabler in the region
by shedding light on solutions to solving the world’s energy and water challenges.
Through its participation at the WFES, Acwa Power engaged with stakeholders in the industry to highlight its
commitment to producing electricity and desalinated water efficiently, reliably, and safely at low cost.
The four-day event, which focused on renewable energy, saw Acwa Power’s participation in a number of
high-profile panel discussions, where conversations around a sustainable financial economy, and strategic
solutions in solving the world’s energy and water challenges were discussed.

Highlighting the world’s underestimation of the paradigm shift that renewable energy is capable of delivering,
Padmanathan said: "Electricity has always been driven by fossil fuels. Although constantly fluctuating, 75 per
cent of the cost of electricity generation is from fossil fuel. For the first time, we have the capacity to use the
power of the sun and wind at no fuel cost and price oscillation."
Therefore, we are able to generate electricity and fix prices for the next 25 to 35 years by spending money
upfront and collecting it back overtime," he stated.
Padmanathan pointed out that fixed costs play an extremely important role in the future of renewable energy
deployment.
Stemming from its commitment to provide power and water to the region, and its contribution towards the
Saudi Vision 2030, Acwa Power also highlighted its growing efforts in the kingdom to utilize renewable energy
as the primary resource to generate power and facilitate the entry of local investors and developers to the
Saudi market to ignite the renewables growth.
"Renewable energy remains the most competitive form of power generation in the GCC due to lower costs;
economic diversification to supply demand; and the region’s commitment to diversify energy sources," he
added.-

Oman Contracts signed for $480m Duqm Power and Water Project
Oman Observer + NewBase
Duqm Power Company, a joint venture between the Central Utilities Company (Marafiq), which
forms part of the Energy Infrastructure pillar of Oman Oil Company, and Gulf Pacific Holding
Company signed five agreements linked to the implementation of an integrated power and water
project in Duqm. Total investment is estimated at $480 million with an initial phase expected to come
on stream in Q3 2020.
Also at the signing, a usufruct agreement was signed granting a plot of land for the development of
the project within the Duqm Special Economic Zone (SEZ) for a period of 25 years. The land use
agreement was signed by Yahya bin Saeed al Jabri, Chairman of the Board of the Duqm SEZ
Authority (SEZAD) and Duqm Power Company, represented by Eng Isam bin Saud al Zadjali, CEO
of Oman Oil Company.
On behalf of the company, Sultan bin Hamad al Burtamani, CEO of Oman Gas Company, and Eng
Abdullah bin Mohammed al Hashemi, General Manager of Mafteeq Company, signed a long-term
service agreement with Siemens for the maintenance of industrial turbines for a period of 25 years.
Several EPC contracts were also initialled during the ceremony. It includes a contract for the
engineering, procurement and construction (EPC) of the integrated power and water plant, along
with associated utilities, with a consortium of companies composed of Al-Ghanim International
Kuwait, Cobra Group (Spain), Tadagua (Spain) and Sojitz (Japan).
The Duqm Integrated Power and Water Project will come up on a 45-hectare site located adjacent
to Duqm Refinery and Petrochemical Industries Complex. It is the first project of its kind by Oman
Oil Company in the energy infrastructure sector and will support the Group’s strategic vision to play
a major role in the development of convention and renewable power generation facilities in the
Sultanate. The EPC contractors will design, supply, construct, test and operate a 326 MW combined
cycle and gas-fuelled electricity generation plant.

NewBase 04 February 2019 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices hit 2019 highs as sanctions against Venezuela, OPEC cuts bite
Reuters + Bloomberg + NewBase
Oil prices rose to their highest so far this year on Monday as OPEC-led supply cuts and U.S.
sanctions against Venezuela’s petroleum industry tightened markets.
International Brent crude oil futures climbed to a 2019 high of $63.37 per barrel around 0800 GMT
after already rising by 3 percent the previous session. U.S. West Texas Intermediate (WTI) futures
hit a 2019 high of $55.68 per barrel around the same after already gaining 2.73 percent in the last
session.
Higher crude oil prices helped drag Asian refinery margins to their lowest levels since 2010 on
Monday, Refinitiv data showed.
Oil price special
coverage

Output declines from the Organization of the Petroleum Exporting Countries (OPEC) as they make
good on their pact to curb a supply overhang were compounded by falling U.S. oil rig counts and
sanctions on Venezuelan oil sales.

“While Venezuela’s output reportedly rose last month, fresh U.S. sanctions on the country could see
0.5 to 1 percent of global supply curtailed,” Vivek Dhar, commodities analyst for Commonwealth
Bank of Australia, said in a note on Monday.
The sanctions will sharply limit oil transactions between Venezuela and other countries and are
similar to those imposed on Iran last year, experts said after examining details posted by the
Treasury Department. OPEC oil supply fell in January by the largest amount in two years despite
sluggish production declines from Russia, according to a Reuters survey.
Russian oil output in January missed the target for the output cuts, Energy Ministry data showed on
Saturday. Production last month declined to 11.38 million barrels per day (bpd), but that was only
down by 35,000 bpd from its October 2018 level that is the baseline for the pact.
Russian Energy Minister Alexander Novak has said the country’s overall cuts from the October
baseline would total 50,000 bpd in January. Russia has pledged to reduce oil output by 230,000
bpd from October.
U.S. energy firms last week cut the number of oil rigs operating to their lowest in eight months, to
847, as some drillers followed through on plans to spend less on new wells this year. “The collapse
in oil prices late last year has resulted in more cautious spending by U.S. oil explorers,” said Dhar.
U.S. President Donald Trump last week said he would meet with Chinese President Xi Jinping in
the coming weeks to try settle the disputes, and there are hopes that the two sides will come to an
agreement.
Fitch Solutions said on Monday that oil markets overall had a “fundamentally bullish outlook due
mainly to the supply cuts led by OPEC as well as increasing oil demand despite the slowdown in
economic growth”.
Oil Holds Gains on Signs of Shale Slowdown as OPEC Output Falls
Oil held gains near a two-month high after data showed U.S. production growth slowing at a time
when OPEC cuts and American sanctions on Venezuela have already eased concerns over a
supply glut.
Futures in New York edged lower after rising 2.7 percent on Friday. The number of active oil rigs in
the U.S. dropped to the lowest level in almost nine months, data released Friday by oilfield-services
provider Baker Hughes show. Crude output from the Organization of Petroleum Exporting
Countries fell the most in two years in January, according to a Bloomberg survey of officials,
analysts and ship-tracking data.

Oil has rebounded this year as OPEC’s production cuts have taken effect, clawing back more than
half of its 40 percent slump last quarter. The rally has seen hedge funds slash bearish bets on crude,
although gains are being capped by slowing global growth and uncertainty over the U.S.-China
trade war. Venezuela has become the wildcard in the supply-demand equation as its deepening
political crisis threatens to weigh further on production.
“Rigs won’t dramatically increase if crude prices continue to be in the $50s without a clear direction,”
said Jun Inoue, a senior economist at Mizuho Research Institute Ltd., in Tokyo. While U.S. sanctions
on Venezuela “could support crude prices in the short run, supply from others may be able to
compensate for the loss in the long term,” he said.
Traders are watching how much Venezuelan production -- at 1.27 million barrels a day in January,
according to data compiled by Bloomberg -- will be removed from the market after the U.S.
announced sanctions on the nation’s state oil company last week. The U.S. penalties could cut
Venezuelan output by nearly 1 million barrels a day, Citigroup Inc. said in a Jan. 31 note.
West Texas Intermediate crude for March delivery fell 10 cents to $55.16 on the New York
Mercantile Exchange at 12:52 p.m. in Tokyo. The contract increased $1.47 to $55.26 on Friday.
Brent for April settlement declined 10 cents to $62.65 a barrel on the London-based ICE Futures
Europe exchange. The contract advanced $1.91 to $62.75 on Friday. The global benchmark crude
was at a $7.19 premium to WTI for the same month.

Output from OPEC’s 14 current members fell by 930,000 barrels a day last month to 31.02 million,
according to the Bloomberg survey. Top exporter Saudi Arabia cut deeper than pledged, while its
close allies the United Arab Emirates and Kuwait also made sizable reductions.
In the U.S., working rigs drilling for oil fell by 15 to 847, the least since May, Baker Hughes said.
The data showed the biggest drop in rigs among major U.S. shale plays came from the Permian
Basin of West Texas and New Mexico, where the count dropped by three to 481.
The Trump administration moved to block Petroleos de Venezuela SA and its customers from using
the U.S. financial system in updated guidance on its sanctions. Any transactions with PDVSA, or
any entity in which it has a controlling stake, involving U.S. citizens, or passing through the country’s
financial system, must be wound down by April 28, the Treasury said.

NewBase Special Coverage
News Agencies News Release 04 February 2019
The Curious Case of Norway's 60 Million Barrels of Missing Oil
By Mikael Holter
Norway has built a reputation as one of the calmest and most predictable corners of the global oil
industry, but lately it’s been full
of surprises.
During the worst downturn in a
generation, from 2014 to 2016,
companies would
regularly exceed official
forecasts as oil production rose
in defiance of falling prices.
More recently, with crude
surging back to multiyear
highs, they’ve run into trouble.
From Better to Worse
After beating forecasts during the market slump, Norway's oil output has slowed
Source: calculations based on figures from the Norwegian Petroleum Directorate
Note: production beat/miss calculated based on Jan. forecast made in the same year; 2019 figure
shows change in production forecast from Jan. 2018 to Jan. 2019

The Norwegian Petroleum Directorate now expects output to fall to a 31-year low in 2019, with
production expected to be almost 60 million barrels short of its previous forecast for this year and in
2018. That’s 80,000 barrels a day less than expected.
1. Maintenance Backlog
One of the most frequently cited reasons for oil
production missing forecasts in the NPD’s monthly
updates through 2018 was maintenance shutdowns.
Back in 2016, when output surpassed forecasts by 6
percent, oil companies cut maintenance outages.
They insisted back then that the reductions were due
to efficiency gains and weren’t creating a backlog.
“Maybe they’ve stretched it too far in terms of avoiding
maintenance,” said Simon Sjothun, an analyst at
consulting firm Rystad Energy AS. “It works in the first
couple of years,” but it’s a “very realistic hypothesis”
that they’re now picking up the slack, he said.
2. Glitches and Delays
Technical challenges on platforms or under the
seabed, and delayed output last year will also impact
2019, the NPD’s Director General Bente Nyland said
in an interview.
Wintershall AG’s Maria is one example of a field that
hasn’t performed as expected, while Equinor ASA’s
Gina Krog, which also started up in 2017, is “probably
on the list,” Nyland said.
The NPD declined to provide more details on individual fields before a broad resource update in
February or March. Alv Bjorn Solheim, a vice president at Wintershall’s Norway unit, confirmed
Maria had produced less than planned, but declined to say how much. Equinor declined to comment
on Gina Krog.
Postponed startups include Equinor’s Oseberg Vestflanken, which came online in October last year
instead of a planned startup in the second quarter. After taking over the Martin Linge project from
Total SA, Equinor also pushed back startup to the beginning of 2020.
3. Hubris and Tiny Fields
Both authorities and companies might have been too optimistic in their assumptions about reserves
and production rates for certain fields, said Nyland. She declined to mention any examples, but the
NPD recently said that Spirit Energy Ltd had cut the oil-reserves estimate for its Oda field, due to
start producing by March, by about 30 percent to 33 million barrels.
Pressured to improve profitability after crude prices fell in 2014, oil companies turned over every
stone to cut costs and pick solutions that raised the resource count for their projects. That could
have led some to take an excessively optimistic view on how many barrels they would be able to
squeeze out, said Sjothun.
Oda is also a typical example of smaller developments, which make up an increasing part of the
project pipeline in Norway as the North Sea becomes a more mature oil basin and exploration in

the Arctic Barents Sea continues to disappoint. The trouble with small fields is that the operator
often has less data about the reservoir under the seabed, because a project of a smaller size doesn’t
warrant drilling numerous wells, Nyland said.
Shrinking Bounty
The average size of oil and gas finds has dropped as the North Sea matures
Source: Norwegian Petroleum Directorate
Note: boe = barrels of oil equivalent
“Small fields are the most difficult to
forecast,” she said. “On bigger fields
you’ll have more wells before you
make a final decision. On a small
field, you think that one well might
be OK, and all of a sudden it doesn’t
deliver.”
A Brighter Future
To be sure, the abrupt slump in
Norway’s oil production is
temporary. The Nordic country will enjoy a spectacular bump in oil production in 2020 thanks to
Equinor’s Johan Sverdrup field, which is scheduled to start production in November this year.
A Bump on the Road
Norway's oil output is set for a major boost after falling to a 31-year low this year
Source: Norwegian Petroleum Directorate
Note: mcm oe = million cubic meters of oil equivalent
With as much as 3.2 billion barrels in oil reserves and production of as much as 440,000 barrels a
day in its first phase, the giant North Sea field should in 2020 contribute to the biggest year-on-year
increase in Norway’s output since the 1980s.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
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Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE operations
base , Most of the experience were spent as the Gas Operations Manager in
Emarat , responsible for Emarat Gas Pipeline Network Facility & gas
compressor stations . Through the years, he has developed great experiences
in the designing & constructing of gas pipelines, gas metering & regulating
stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase Feb. 2019 K. Al Awadi

New base energy news 04 febuary 2019 issue no 1229 by khaled al awadi

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