New base energy news 11 march 2019 issue no 1234 by khaled al awadi

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NewBase Energy News 11 March 2019 - Issue No. 1234 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 in compliance with Opec and non-Opec output curb
THE NATIONAL
The UAE has met, if not "exceeded", its compliance with the Opec and non-Opec production cuts
for February, as it continued to make voluntary output adjustments, the energy minister tweeted
on Sunday.
In line with the OPEC & Non-OPEC agreement, UAE compliance for the month of February 2019
will meet, if not exceed, it's obligations. This will help to bring balance and stability to the global oil
market

"We will continue to deliver on the Opec & non-Opec commitment for voluntary
production adjustments, until the global market is re-balanced," said Suhail Al Mazrouei.
We will continue to deliver on the OPEC & Non-OPEC commitment for voluntary production
adjustments, until the global market is re-balanced. The UAE’s output at the end of January,
according to secondary sources cited by Opec, was 3.078 million barrels per day.
Opec producers led by Saudi Arabia and members outside the alliance led by Russia,
agreed in December to restrict production by 1.2 million bpd for six months starting
January. The curbs were a response to the dramatic fall in oil prices, which had surged
to a three-year high of $86.29 per barrel in October, only to plunge by 40 per cent in
December.
Rising US production and more supply in the markets due to the earlier efforts by Opec
to boost production, pushed the prices lower. Brent crude reached $65.74 per barrel at
the end of last week.
Saudi Energy Minister, Khalid Al Falih, said separately to Reuters on Sunday, the US
and China would continue to lead oil demand globally. It was also "too early" for the
producers undertaking output cuts to reverse policy at Opec's meeting in April, he said.
Global demand would grow by around 1.5 million bpd, said Mr Al Falih. Allocations by
Saudi Aramco, the kingdom's state oil producer, would remain at 9.8 million bpd.
“Aramco is finalising their April allocations today or tomorrow, so we will know more on
Monday. But my expectation is that April is going to be pretty much like March," Mr Al
Falih told Reuters.
The commitments from the Opec producers come amid a continued surge in US
production, which hit a record high of 12 million bpd towards mid-February. The US
Energy Information Administration had forecast last year that US crude will soar past the
12 million bpd-mark in the second quarter of 2019.
Rising US production will run counter to efforts underway by the sovereign producer
alliance to keep prices moderately high, even as the US administration led by President
Donald Trump presses for lower prices.
Mr Trump tweeted end of February asking Opec to “please relax and take it easy” and
Oil prices getting too high. OPEC, please relax and
take it easy. World cannot take a price hike - fragile!
Opec production for February, however, was
down by more than two million bpd relative to
October, noted UBS in a recent report which
cautioned of further tightening of the oil markets over the coming months. "US crude
production is believed to have been stable in recent months and oil demand is improving
on a seasonal basis, all of which lends credence to our forecast that the oil market will
tighten further,” the report said. The Swiss lender maintained its view that benchmark
Brent would move into the range of $70 to $80 per barrel over the coming months, as efforts by
the Opec+ alliance and disruption in production in Opec member Venezuela tighten the market.

Egypt launches licensing round for Red Sea O&G exploratio
The National - Jennifer Gnana
Because Saudi Arabia said last week that it had found "large volumes" of gas offshore, Egypt has
tendered 10 blocks offshore the Red Sea as it looks to duplicate its successes in the Eastern
Mediterranean, which led to a gas bonanza ending the country’s imports for the fuel.
The South Valley Egyptian Petroleum Holding Company (Ganope) invited companies on Sunday to
review and purchase technical data, with August 1 set as the closing date for bids. The
announcement follows Egypt’s successful closing of one it largest ever bid rounds, which saw the
award of 12 licences and marked the
entry of US major Exxon in the search for
the country’s hydrocarbons.
Egypt, the Arab world’s most populous
state struck gold in recent years thanks to
the discovery of the massive Zohr field by
Italian energy major Eni in 2016 in the
Eastern Mediterranean. The find sparked
search for more hydrocarbon resources
along the Nile Delta and western desert
as the North African state looked to
leverage these discoveries to become a
net exporter of gas, particularly to
markets in Europe.
Following the award of exploration
licenses to concessions in the western
and eastern desert regions, the Nile Delta
as well as the Gulf of Suez, Egypt had
announced intention to launch a new
round that included blocks in the Red
Sea.
"Red Sea exploration will be part of a new
bid round, which will be launched very
soon. This year, definitely. It’s ready but
we’ll launch after we announce award
winners for the 2018 bid round,” Abed
Ezz El Regal told The National in an
interview in Cairo.
Egypt will look to incentivise exploration in the Red Sea area, which is expected to include
unconventional resources.
The North African country will this year see production from its Zohr resource increase to more than
3 billion cubic feet per day. The country will also ramp up output from the North Alexandria West
Nile Delta concessions operated by BP in April. Production is expected to reach 700 million cubic
feet per day with the coming on stream of 400 million cubic feet per day, he said.
Saudi Arabia announced last week that it had discovered large quantities of gas in the Red Sea.
The kingdom will conduct an investment feasibility study on the scheme and intensify exploration
over the next two years, according to Saudi energy minister Khaled Al Falih.

Consultant sought for 500MW Ibri solar power project
Oman Observer - Jomar Mendoza
Oman Power & Water Procurement Company (OPWP) — a member of Nama Group — has invited
suitably qualified companies to submit bids for its contract to provide supervisory services for the
Ibri II IPP, the Sultanate’s first utility-scale solar PV Independent Power Project (IPP).
OPWP – the sole procurer of new electricity generation and related water desalination capacity –
has invited qualified and experienced consultants to submit proposals by April 14 for the supervisory
consultancy services tender linked to the implementation of the 500MW solar PV scheme.
Last November, OPWP confirmed that three groups had submitted proposals for the main developer
contract for the Ibri II Solar IPP. Bids were received from:-
(i) Abu Dhabi Future Energy Company PJSC (Masdar), Total Solar and Jinko Power (HK)
Company Limited;
(ii) (ii) International Company for Water and Power Projects (ACWA Power), Gulf Investment
Corporation (GIC) and Alternative Energy Projects Company; and
(iii) (iii) Marubeni Corporation, Oman Gas Company (OGC), Nebras Power QPSC, and
Bahwan Renewable Energy Company LLC. The 500 MW project is planned to start
operation by 2021. OPWP leads the country’s transition to clean energy based on the use
of renewable and alternative energy sources including solar, wind and municipal waste.

Bahrain's Bapco sees oil trading opportunities as it expands refinery
Reuters - Dahlia Nehme + NewBase
Bahrain plans to commission its expanded oil refinery by early 2023, allowing it to sell and trade
more petroleum products in the Gulf region and Asia, the chief executive of state-owned oil company
Bapco said.
The expansion will boost the capacity of its Sitra oil refinery to 360,000 barrels per day (bpd) from
the current 267,000 bpd, Bapco CEO Pete Bartlett told Reuters.
Bapco currently receives 220,000-230,000 bpd of crude from state oil company Saudi Aramco and
will import the same volume during the refinery’s expansion, with commissioning scheduled for late
2022 or early 2023, Bartlett said.
In October 2018 Aramco and Bapco announced the commissioning of the AB-4, a new phase of the
Saudi-Bahrain crude oil pipeline, capable of transporting up to 350,000 bpd, which would serve
Bahrain’s planned refinery expansion.
“We are on track,” Bartlett said of the expansion.
The small non-OPEC Gulf oil producer, with around 124.6 million barrels of proven reserves, gets
its oil revenue from two fields: the onshore Bahrain field, and the offshore Abu Safah field, which is
shared with Saudi Arabia. The Bahrain field produces around 50,000 bpd.
Bahrain and top oil exporter Saudi Arabia split revenues from the 300,000-bpd Abu Safah field,
where production is overseen by Aramco.
“Aramco and Bapco are strong partners and so our purchases of feedstock are unaffected by what
OPEC is doing in terms of managing its own sales,” Bartlett said when asked whether Saudi exports
to Bahrain would be affected by OPEC-led supply cuts.

The refinery expansion and resulting production increase may prompt Bapco to focus more on spot
trading, but the company is unlikely to establish its own trading joint venture like other national oil
companies in the Middle East, Bartlett said.
“We will buy more feedstock and will be trading more products,” Bartlett said, adding the company
would continue to look also at trading spot cargoes.
“We will be looking to develop off-take arrangements and sale arrangements further but our core
markets will remain within the greater GCC (Gulf region) and increasingly we will find ourselves
competing for opportunities in Asia.”
Around 88 percent of the crude that Bapco refines comes from neighboring Saudi Arabia, and the
rest from Bahrain’s field. The refinery’s expansion project financing – which is over $4 billion in size
– will be finalised in March, Bartlett said.
“We have been actively working with a number of export credit agencies and commercial banks ...
We’re on the cusp of concluding the financing arrangements.” Bapco had awarded contracts for
the project to a consortium comprising TechnipFMC, Samsung Engineering and Tecnicas
Reunidas.
Bahrain announced last year its largest ever oil discovery, off the coast, estimated to have at least
80 billion barrels of tight oil, and deep gas resources in the region of 10-20 billion cubic feet. It is
talking to U.S. oil companies with shale oil expertise about developing those resources and hopes
to have an interested company by the end of the year, the country’s oil minister told Reuters last
month.

India world biggest Election to Offer a Boost to the Oil Market
Bloomberg - Heesu Lee + Saket Sundria
About 875 million Indians will go to polls over the next three months to elect their leader, dwarfing
the 158 million Americans who registered to vote in the 2016 U.S. presidential elections. Before
they vote, they’ll be courted by a slew of competing political parties -- a process that will boost fuel
use in a nation where oil demand is already growing at the fastest pace in the world.
Growing Rapidly
Indian oil demand growth seen outstripping pace in other nations
International Energy Agency
The lift will be provided by hordes of party faithful, who traverse teeming cities and remote villages
across the world’s seventh-largest country in a campaigning frenzy before what’s expected to be
a closely fought election. Their use of motorcycles and sports utility vehicles at a time when some
refineries are closed for maintenance will support returns from making fuels in Asia over the next
few months, according to a Bloomberg survey of traders who participate in the market.
“The election, which coincides with scheduled maintenance, should see India pull imports of gasoil
and gasoline and this usually adds to bullish sentiment,” said WengInn Chin, a senior oil market
analyst at Facts Global Energy in Singapore. In the lead up to the polls, the increased consumption
is expected to increase gasoline and diesel demand by as much as 80,000 barrels a day, he said.
That will be in addition to the nation’s already growing demand for gasoline and diesel, consumption
of which grew by about 75,000 barrels a day and 100,000 barrels a day, respectively, in January.
Demand for liquefied petroleum gas is also surging, with state refiners seeking to import cargoes of
the cooking fuel as the government tries to keep voter morale high by ensuring rural households
are well supplied.
The profit from turning crude into diesel reached a two-month high late last month, and has climbed
over 25 percent so far this year. Refinery maintenance will keep supplies tight in coming months,
while the International Maritime Organization’s new rules on ship fuel next year will drive the fuel’s
demand in the longer term. That’s set to keep the so-called crack at an average of $14.50 a barrel
this month, according to the Bloomberg survey of traders.

China Oil Use Seen Peaking in 2025 as EVs and Rail Take Over
Bloomberg + Newbase
The country that’s driven global oil demand since the turn of the century may hit the brakes sooner
than expected as travelers shift toward electric cars or even forgo the open road in favor of trains.
China’s oil consumption will peak in 2025, five to eight years earlier than market consensus,
according to Morgan Stanley analysts including Andy Meng. The reversal will be driven by a
transportation model unique to China:
While most countries moving up the economic ladder show continued growth in oil demand from
increased driving, mass-adoption of electric vehicles and high-speed rail in China will drastically
reduce gasoline use, the bank said.
If the theory plays out, it could signal a huge shift for the oil market, which has relied on China for
more than a third of global demand growth since 1999. An expanding body of research is painting
a bleak future for oil, as rapid adoption of electric vehicles could mean global demand peaks by the
2030s, according to Bank of America Corp. and Royal Dutch Shell Plc, a prospect that’s likely to
worry energy executives and investors.
“China will no longer be the growth driver of global crude demand,” Meng said in a March 5 report.
“We believe the refiners and petroleum stations are the largest potential losers, while the battery
companies are likely to become the key winners.”
To be sure, some of the industry’s top prognosticators expect the country’s oil demand to keep
growing for years, albeit at a slower pace. The International Energy Agency sees China crude
consumption expanding through 2040, while the nation’s largest energy producer China National
Petroleum Corp. has forecast that gasoline use will peakfive years before oil demand does in 2030.

Disruptive Force
China’s electric vehicle penetration will reach 6.4 percent by the end of the decade and keep rising
to 80 percent by 2040, according to Morgan Stanley, adding that an aggressive push by local battery
companies into technology innovation may speed up that timeline.
Meanwhile the country is seeing solid growth in high-speed rail ridership, driven by a well-developed
network and severe traffic congestion. Highways’ share of passenger turnover fell to 27 percent last
year from 55 percent in 2012. In the U.S., the figure was 87 percent last year, according to Morgan
Stanley.
Electric vehicles and high-speed rail are “a disruptive force on China oil demand,” the analysts said.
“This pattern has been ignored by most investors in developed markets as there is no such
experience from any precedent.”
pproximately 375,000 electric vehicles (EVs) were manufactured by Chinese OEMs in 2016—an
impressive 43 percent of EV production worldwide. That’s no fluke; Chinese OEMs achieved a 40
percent global share in 2015. OEMs from around the world (Chinese manufacturers among them)
also produced approximately 332,000 EVs within China in 2016, and the country now has the largest
number of EVs on the road—overtaking, for the first time, the number of EVs in the United States.
The performance of Chinese EV manufacturers and suppliers, and the favorable conditions for EVs within
the country itself, are reflected in China’s strong position on the McKinsey Electric Vehicle Index, or EVI
(exhibit). Since 2010, our EVI has analyzed the overall state of play for EV producers and national markets
across two equally weighted dimensions: supply and demand. Supply indicators address the industry side,
that is, OEMs and suppliers within each country; we consider factors such as current and projected EV
production and the manufacture of key components, including e-motors and batteries.

NewBase 11 March 2019 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil gains as Saudi stands by OPEC supply cuts, U.S. rig activity drops
Reuters + NewBase + Bloomberg
Oil prices rose on Monday, lifted by comments from Saudi oil minister Khalid al-Falih that an end to
OPEC-led supply cuts was unlikely before June and a report showing a fall U.S. drilling activity.
Brent crude futures were at $66.39 per barrel, up 65 cents, or 0.99 percent. U.S. West Texas
Intermediate (WTI) crude oil futures were at $56.60 per barrel at 08:38 GMT GMT, up 53 cents, or
0.9 percent from their last close.
Despite the gains, markets were somewhat held back after U.S. employment data raised concerns
that an economic slowdown in Asia and Europe was spilling into the United States, where growth
has so far still been healthy.
“Downward revisions in global growth forecasts by OECD and ECB have capped bullish gains,” said
Benjamin Lu of Singapore-based brokerage Phillip Futures.
Oil price special
coverage

In a further sign of a slowdown, China’s auto sales fell 14 percent in February from the same month
a year earlier, the country’s biggest auto industry association said on Monday, the eighth straight
monthly drop in the world’s largest car market.
New energy vehicle sales, in contrast, rose 54 percent year-on-year in February, the report said.
Despite this, oil markets have generally been supported this year by ongoing supply cuts led by the
Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated allies like
Russia - known as the OPEC+ alliance. OPEC+ has pledged to cut 1.2 million barrels per day (bpd)
in crude supply since the start of the year to tighten markets and prop up prices.
The group will meet in Vienna on April 17-18, with another gathering scheduled for June 25-26, to
discuss supply policy. Saudi oil minister Khalid al-Falih told Reuters on Sunday it would be too early
to change OPEC+ output policy at the group’s meeting in April.
“We will see what happens by April, if there is any unforeseen disruption somewhere else, but
barring this I think we will just be kicking the can forward,” Falih said.
Prices were also supported by U.S. energy services firm Baker Hughes’ latest weekly report
showing the number of rigs drilling for new oil production in the United States fell by nine to 834.

High drilling activity last year resulted in a more than 2 million bpd rise in production, to 12.1 million
bpd reached this February, making the United States the world’s biggest producer of crude oil ahead
of Russia and Saudi Arabia, with some 3.6 million bpd being exported in February.
The slowdown in drilling points to more timid output growth going forward, but because the overall
drilling level remains relatively high despite the recent decline, many analysts still expect U.S. crude
output to rise above 13 million bpd soon.
“This is the third straight week of decline...after a number of oil producers trimmed their spending
outlooks for 2019,” ANZ bank said on Monday.

NewBase Special Coverage
News Agencies News Release 11 March 2019
OPEC Will Be Squeezed by U.S. Shale Until Mid-2020s, IEA Says
Bloomberg - Grant Smith
OPEC’s loss of market power to what was once its biggest customer will continue until the middle
of the next decade as U.S. shale oil thrives.
By 2024, the Organization of Petroleum Exporting Countries’ capacity to pump crude will actually
shrink because of declines in Iran and Venezuela, according to the International Energy Agency.
As rivals grow, the amount of crude the world needs from the cartel each year won’t recover to pre-
2016 levels -- before OPEC started cutting production -- throughout the period.
American Decade
U.S. shale oil will dominate non-OPEC supply growth until the mid-2020s
Source: International Energy Agency
The report may be sobering reading for OPEC, which has capped its production for the past two
years to stave off a global glut that would depress prices. Although its cutbacks have mostly
achieved those aims, they’ve also invigorated the shale-oil boom in the U.S., helping the country
become the world’s biggest crude producer.
America’s energy expansion will proceed, accounting for 70 percent of the growth in global
production capacity through to 2024, the Paris-based IEA said in its medium-term report. By that

time, the nation could be able to export 9 million barrels a day, exceeding the export capabilities of
Russia and coming close to those of Saudi Arabia, the agency said.
“The United States continues to dominate supply growth in the medium term,” said the IEA, which
advises most of the world’s major economies on energy policy.
With American supply growth to be supplemented by Brazil, Norway and Guyana, the IEA
substantially raised forecasts for new crude supplies outside OPEC, by as much as 3.3 million
barrels a day by 2024.
Down in the Hole
Demand for OPEC crude will remain below the pre-cuts output until at least 2024
Note: Figures for 2017 and 2018 reflect actual OPEC production, 2019 and beyond show estimates
of global demand for OPEC crude
As a result, estimates for the crude needed from OPEC’s 14 members were slashed. By 2024, the
world will still need less crude from the group than it was pumping before production cuts started.
That suggests that the group will need to persist with its current output restraints into the next
decade, the IEA said.
The amount of crude OPEC is capable of pumping is also set to deteriorate, declining by 380,000
barrels a day by 2024 to 34.53 million. U.S. sanctions will hem in Iran’s oil industry and economic
turmoil will take its toll on Venezuela’s, the agency said.

Assuming American restrictions remain in place on Iran, the Islamic Republic’s production capacity
will sink by 1.2 million barrels a day to 2.65 million in 2024, and Venezuela’s by 56,000 a day to
750,000.
Squeezed by Sanctions
OPEC's overall production capacity is seen dropping by 2024
Note: Figures show the change in production capacity for each nation from 2018 to 2024
Among OPEC nations, only Iraq and the United Arab Emirates are set to implement significant
additions to its production capacity, the IEA forecasts. Iraq will add 900,000 barrels a day to 2024
to reach 5.8 million a day, while the U.A.E will boost by 500,000 to reach 3.85 million a day. If the
sanctions on Iran are removed, OPEC’s collective capacity will expand by 820,000 barrels a day.
The agency kept its view on the rate of growth in global oil demand steady, projecting an annual
increase of 1.2 million barrels a day, or 1.1 percent, through to 2024.

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
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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
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Khaled Al Awadi is a UAE National with a total of 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE operations
base , Most of the experience were spent as the Gas Operations Manager in
Emarat , responsible for Emarat Gas Pipeline Network Facility & gas
compressor stations . Through the years, he has developed great experiences
in the designing & constructing of gas pipelines, gas metering & regulating
stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 2019 K. Al Awadi

New base energy news 11 march 2019 issue no 1234 by khaled al awadi

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New base energy news 11 march 2019 issue no 1234 by khaled al awadi