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NewBase Energy News 25 July 2020 - Issue No. 1358 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Abu Dhabi Moves boost Value From Oil With Chemical Venture
Bloomberg + NewBase
Abu Dhabi National Oil Co. formed a venture with a state holding company to boost investment in
petrochemical projects, part of the emirate’s drive to expand beyond raw crude into more valuable
products.
Adnoc and its partner, ADQ, agreed to invest in and manage downstream activities at the planned
Ruwais Derivatives Park, they said in a statement. They will complete a feasibility study this year.
The partners, both based in Abu Dhabi, capital of the United Arab Emirates, didn’t disclose financial
details of the deal. Adnoc will hold 60% of the venture, with ADQ owning the rest.
Adnoc, like other Middle Eastern crude suppliers, faces an uncertain outlook for oil demand. Brent
crude is down 33% this year to around $44 a barrel, hammered by the coronavirus and a gradual
shift toward renewable sources of energy.
Two years ago the state company outlined some $45 billion of investments in refining and chemical
production. Ruwais, on the Persian Gulf coast 140 miles (225 kilometers) west of Abu Dhabi city, is
already the site of Adnoc’s biggest refinery and chemical and manufacturing plants.
ADQ, formerly known as Abu Dhabi Development Holding Co., has assets ranging from power
generation to logistics.
The venture is part of Adnoc’s “unwavering focus on stretching the margin of every barrel of oil
produced,” Chief Executive Officer Sultan Al Jaber said in the statement. It will “kickstart the
development of the UAE’s downstream derivatives sector, support the transformation of Ruwais into
a global hub for industry and attract additional foreign direct investment.”
The International Energy Agency forecasts that chemicals will be one of the fastest-
growing segments of oil demand. Abu Dhabi and other petrostates are looking to turn their
hydrocarbons into plastics and components for consumer goods like cars, mobile phones and
computers.
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Copyright © 2020 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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UAE: Civil works starts at 250MW Dubai hydro power station
https://www.gulfconstructionworldwide.com/stories/source/?url=CONS_370712.html
Dubai Electricity and Water Authority (Dewa) said tunnelling operations have begun at its 250 MW
hydroelectric power station in Hatta, a first-of-its-kind project in the GCC region, being built at an
investment of Dh1.42 billion ($386.5 million).
The construction contract for the pumped-storage hydroelectric power station was awarded to a
consortium led by Austrian construction company Strabag, with key partners Strabag Dubai, Andritz
Hydro and Ozkar, said the statement from Dewa.
Électricité de France (EDF) is the consultant of the project, which is scheduled to be commissioned
by February 2024. The 250 MW station will generate electricity by making use of the water stored
in Hatta Dam. It will have a storage capacity of 1,500 MWh and a life span of 80 years, it stated.
"The hydroelectric power station translates Dewa’s hard work to implement the directives of the
wise leadership to protect natural resources and increase the share of clean and renewable energy,"
remarked Saeed Mohammed Al Tayer, MD and CEO.
"This is what we strive to achieve through the pumped-storage hydroelectric power station, which
is the first of its kind in the Arabian Gulf region. This promotes Dubai’s position as a global hub for
clean energy and green economy," said Al Tayer, after reviewing the work progress of the project.
Al Tayer was accompanied by Nasser Lootah, EVP-Generation at Dewa, Yousef Jebril, EVP-Power
and Water Planning at Dewa, Dr Yousef Al Akraf, EVP-Business Support and HR at Dewa, Mansoor
Alsuwaidi, VP- Projects Generation at Dewa and Khalifa Albedwawi, the project manager.
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During the visit, Al Tayer and his delegation were briefed about the project by Dirk Leitzig from
Strabag AG.
"The tunnelling operations have started at the hydroelectric station. This phase is very critical and
uses the latest and safest drilling technologies to fit Hatta’s geological features while following the
highest international environmental standards," he stated.
Al Tayer said this strategic project would diversify the energy mix and support Hatta’s economic,
social and environmental development. "It will also help achieve the goals of the Dubai Clean
Energy Strategy 2050 to provide 75% of Dubai’s total power output from clean energy by 2050,"
noted the top official.
According to him, the project is part of Dewa’s initiatives to provide leading and innovative job
opportunities for Emirati citizens in Hatta. It will also feature a visitor’s centre and outdoor activities
and tourist facilities that will support the sustainable development of Hatta and enhance its position
as one of most prominent tourist attractions in Dubai, he added.
The 250MW power station will use water in the Hatta Dam and an upper reservoir that will be built
in the mountain, said the statement from Dewa. During off-peak hours, advanced turbines will use
clean solar power from the Mohammed bin Rashid Al Maktoum Solar Park to pump water from the
dam to the upper reservoir, it stated.
Turbines operated by the speed of waterfall from the upper reservoir will be used to generate
electricity through a 1.2 km subterranean water canal, with high efficiency in power generation and
storage, and with a 90-second response to demand for electricity, it added.-TradeArabai News
Service
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Saudis Gains flat in First Month After Ending Oil-Price War
Bloomberg - Abeer Abu Omar
Saudi Arabia gained no financial reward in the first full month after ending its oil-price war with
Russia.
The kingdom earned 23.9 billion riyals ($6.4 billion) from oil exports in May, the Riyadh-based
General Authority for Statistics said Thursday. That was even less than the previous month, when
the price war was at its height, and down more than 60% from last year’s monthly average of $16.8
billion.
The government slashed exports to 6.2 million barrels a day in May from a record 9.3 million in April
as it came under pressure from world leaders, including U.S. President Donald Trump, to change
tack and rebalance an energy market battered by the coronavirus pandemic.
The good news for Saudi Arabia is that revenue from oil, of which it’s the world’s biggest exporter,
probably rose in June and will likely be higher still this month.
That’s because the average price for benchmark Brent crude rose 26% in June to $40.77 a barrel
amid a recovery in energy demand in nations such as the U.S. and China. It has averaged more
than $43 this month.
Another factor is that the kingdom’s export volumes are set to rise from next month as the OPEC+
cartel eases production cuts.
Saudi Arabia Explores Asset Sales, Income Tax to Boost Finances
Saudi Arabia is accelerating plans to sell off state assets and isn’t ruling out introducing income tax
as the kingdom seeks to boost state coffers hit by the slump in oil prices.
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The world’s biggest oil exporter could raise more than 50 billion riyals ($13.3 billion) over the next
four to five years by privatizing assets in the education, health-care and water sectors, Finance
Minister Mohammed Al Jadaan said Wednesday during a virtual forum organized by Bloomberg.
The government is “considering all options” to bolster its finances and while income tax isn’t
“imminent” and “would require a lot of time” to prepare, the kingdom “isn’t ruling anything away for
now,” he said.
The state-run Saudi Press Agency later reported citing an unidentified official source as saying that
income tax had not been discussed in the cabinet or any of the government councils or committees.
Saudi Arabia has been taking steps to shore up its economy from the double whammy of the
coronavirus and lower crude prices. The economy is set to shrink 6.8% this year, according to the
International Monetary Fund, in what would be the deepest contraction in over 30 years.
The government has already taken unprecedented measures to support its finances, including
tripling value-added tax, increasing import fees, and canceling some benefits for government
workers. The kingdom has traditionally been tax-free for individuals, with oil revenue supporting a
wide range of subsidies and benefits for citizens.
‘Not Austerity’
“Saudi Arabia is not in austerity and we are not getting into an austerity phase,” Al Jadaan said.
While the government has “re-allocated some spending,” total spending in 2020 is likely to be more
than a trillion riyals, as planned.
The kingdom is also likely to have to borrow about 100 billion riyals more than planned this year
and plans to tap the global debt market at least one more time in 2020 after so far selling $12 billion
in international bonds in 2020, Al Jadaan said.
As well as raising debt, the kingdom has already been selling state assets as part of efforts to
diversify its economy away from oil after a slow start. In December, the government sold a $29
billion holding in energy giant Saudi Aramco through the largest initial public offering in history. It
also recently sold a stake in two grain mills for $740 million.
Despite its efforts to contain costs, the government also transferred $40 billion from reserves held
by the central bank to boost the financial firepower of its sovereign wealth fund for deals. The Public
Investment Fund has already acquired stakes in companies including Citigroup Inc., Facebook Inc.
and concert promoter Live Nation Entertainment Inc.
Copyright © 2020 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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Oman: Bids invited for Oman’s biggest solar power scheme
Oman observer - Conrad Prabhu
A Request for Proposals (RfP) has gone out to international consortiums and developers that have
been prequalified by Oman’s authorities to compete for contract awards to build the country’s
biggest solar photovoltaic (PV) based scheme at Manah in Al Dakhiliyah Governorate.
The landmark scheme consists of two co-located Independent Power Projects (IPPs) each of a
minimum installed capacity of 500 megawatts-peak (MWp). Dubbed ‘Manah Solar I IPP’ and
‘Manah Solar II IPP’, they will offer an aggregate capacity of around 1 gigwatt (GW), effectively
making the combined scheme the largest renewable energy venture of its kind when it comes into
operation during the summer of 2023.
On Monday, the Oman Power and Water Procurement Company (OPWP) – the sole procurer of
new power generation and water desalination capacity under the sector law – issued RfPs to nine
developers and groups that have been prequalified to participate in a competitive tender for the pair
of IPPs.
They comprise: (1) Abu Dhabi Future Energy Company PJSC – Masdar (UAE) and EDF
Renewables SA (EDF); (2) ENI SPA and SB Energy Holding Limited; (3) International Company for
Water & Power Projects (ACWA Power); (4) Jinko Power (HK) Company Limited (5) Korea Western
Power Company Limited; Hanyang Corporation; Solar Reserve Limited and Nafath Renewable
Energy LLC (6) Marubeni Corporation (7) Power Construction Corporation of China Limited (8) Tag
Energy SA and Al Shanfari Group, and (9) Total Solar International.
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The scope of each project covers the development, financing, design, engineering, construction,
ownership, operation and maintenance of a solar PV power plant and associated facilities. An area
of over 1,200 hectares has been earmarked in the Wilayat of Manah for the implementation of the
two IPPs.
Significantly, given the size of the combined scheme, an award for their implementation will go to
two separate bidders, according to OPWP. “Each bidder is required to submit one id for each of the
two Projects. Each project will have a separate ranking list of Preferred Bidders based on the
primary evaluation criteria. The first-ranked bidder for each project would be determined based on
a combination that leads to the lowest economic obligation for OPWP across both projects, subject
to the evaluation criteria specified in the RFP and also subject to the requirement that a single bidder
cannot be awarded both the projects,” the procurer explained.
Advising OPWP in the procurement of the giant scheme is a consortium of consultants comprising
Synergy Consulting (Financial Advisory Services), Fichtner (Technical) and DLA Piper (Legal).
Meanwhile, the construction of Oman’s first large-scale grid-connected solar PV based renewable
energy project is well underway at Ibri in Dhahirah Governorate. Shams Ad-Dhahira Generating
Company SAOC (SAGC), a consortium led by Saudi-based ACWA Power, is developing a 500
MWp project with an investment of around $400 million. Slated to come into operation in the summer
of 2021, the Ibri-II solar IPP will sell its clean energy output to state-owned OPWP under a 15-year
contract.
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U.S: EIA now estimates biodiesel production and consumption by state
Source: U.S. Energy Information Administration, State Energy Data System
The U.S. Energy Information Administration (EIA) recently released new biodiesel estimates in
the State Energy Data System (SEDS), EIA’s comprehensive source for annual state energy
statistics. Previously, EIA published national-level biodiesel data as well as state- and plant-
level biodiesel plant production capacity. New SEDS estimates include annual biodiesel production
and consumption data by state for 2001 through 2018.
Biodiesel is a liquid biofuel used as an additive or substitute for petroleum-based diesel fuel in
vehicles, and it is typically made from vegetable oils—such as soybean, corn, and canola oil—
animal fats, or recycled restaurant grease feedstocks.
It does not include renewable diesel, which is processed differently in order to create a fuel that is
chemically identical to petroleum-based diesel. Biodiesel produces fewer air pollutants than
petroleum diesel fuel and can benefit engines by providing additional lubrication and increasing
performance.
A common blend of diesel and biodiesel fuel sold at the pump is B20, which is 20% biodiesel. SEDS
data reflect an assumption that all biodiesel is used in the transportation sector, although it can also
be used as heating oil and for electricity generation.
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Source: U.S. Energy Information Administration, State Energy Data System
U.S. biodiesel production and consumption have increased substantially since 2001. However, U.S.
biodiesel production decreased by 49% from 2008 to 2010 as a result of a number of factors. These
factors include overproduction in earlier years, European trade policies, and reduced overall
demand for transportation fuels driven by the 2008–2009 global recession.
However, production has since increased, despite biodiesel tax credits that expired in 2016. Since
2016, U.S. biodiesel production has increased significantly to meet domestic demand and to offset
lower biodiesel imports. In 2018, the United States produced 44 million barrels and consumed 45
million barrels of biodiesel.
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Iowa, a top corn and soybean producer, has been the state with the most biodiesel production in
the nation every year on record since 2001. A total of 8.7 million barrels (or 365 million gallons) of
biodiesel was produced in Iowa in 2018, or 20% of U.S. total biodiesel production.
Iowa has the largest biodiesel plant production capacity in the nation at nearly 10.6 million barrels
(445 million gallons) per year in 2019, about 17% of the nation’s total capacity. Texas has been the
second-largest producing state for biodiesel since 2016, when it surpassed Illinois and Missouri.
The Port Neches biodiesel plant near Beaumont, Texas, has the largest production capacity in the
nation at 178 million gallons per year.
Texas has had the most biodiesel consumption of any state since 2013, and it consumed nearly 8
million barrels in 2018, about 17% of the nation’s total. Texas has the most distillate fuel oil (diesel)
consumption of any state by a wide margin and has the second-most vehicle miles traveled in the
nation after California.
Texas also requires alternative vehicle use in government fleets and offers a number of biodiesel-
related incentives. California, which has many biodiesel-related laws and incentives, surpassed
Illinois with the second-most biodiesel consumption in 2018.
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U.S.: Bounceback in shale oil output is unlikely to last the summer
Reuters
A reopening of some major economies locked down due to the coronavirus has lifted global oil
prices and encouraged U.S. shale producers to return at least a third of the 2 million barrels per day
(bpd) curtailed since April.
But that bump in output is unlikely to be sustained as shale wells lose up to half their initial output
after the first year, and require constant drilling to maintain and increase production. With most new
drilling halted and OPEC relaxing curbs that have underpinned the oil-price recovery, shale output
will slide again in autumn, said oil executives and analysts.
Shale output falls off faster than at conventional oil wells, a factor that will lead to output declining
by September. Average U.S. daily oil output will fall below 2019’s record 12.2 million barrels per day
(bpd) for the next two to three years, analysts said.
The decline means further economic damage from an industry that contributed nearly 1 percentage
point to U.S. GDP early last decade. U.S. pipeline and oil export-terminal projects have been
delayed or canceled as shale production forecasts have been cut.
“You shut down like this, reduce activity like this, and it is going to be felt for a while,” David
Dell’Osso, chief operating officer of shale producer Parsley Energy (PE.N) said in an interview.
LAG EFFECT
Parsley Energy’s plans mirror that of many shale rivals that have begun reopening existing wells
but tightly restricting new activity. It had planned to operate 15 drilling rigs this year, but halted work
in the spring as oil demand shrank on pandemic-related business closings.
This month, the company restarted drilling with two rigs, not enough to maintain existing production
levels. Keeping output flat would take four to five rigs, which it may edge toward later this year,
Dell’Osso said.
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Diamondback Energy (FANG.O), one of the top U.S. shale producers, reopened most of its curtailed
wells this month. It expects to pump about 180,000 bpd this year, down from 188,000 bpd last year.
The reason: its rig count fell from 20 at the end of March to just seven by mid July, and is expected
to be six by the end of the month.
Much of the shale production curtailments came from shale wells that were choked back but not
shut-in completely, several shale company executives said.
The Organization of the Petroleum Exporting Countries and its allies’ decision to return 2 million
bpd to global markets beginning next month will likely keep a lid on prices and leave less room for
shale. The group known as OPEC+ agreed to production cuts of 7.7 million bpd through December.
However, OPEC+ cautioned that a second wave of COVID-19 infections could halt its plan to further
ease constraints next year, officials said. The cuts since May have more than doubled benchmark
Brent crude LCOc1 to about $44 a barrel, from $20 in April. OPEC’s ability to add more oil to global
markets “is why we’re not reactivating at nearly the level before,” Parsley’s Dell’Osso said.
SPENDING ON NEW WELLS
This year’s oil price collapse led the 25 largest public U.S. producers to cut capital spending plans
by 47%, and idle more than 75% of U.S. drilling rigs since last year, according to data firm Enverus.
As rig counts continue to slide to all-time lows, a return to record high levels of output is likely to
take years due to the sharp, natural decline rates of shale wells. Some analysts refer to it as the
treadmill effect, meaning producers must keep drilling just to remain in place.
“If you don’t continue to bring new wells onstream, you will fly off the back of this treadmill,” said
Raoul LeBlanc, vice president for North American unconventionals at data provider IHS Markit. In
June, just 155 rigs were working in the top four shale basins, and so far in July, that number is down
to 145, said petroleum geologist and consultant Art Berman.
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“That is well below the approximately 600 required to sustain production from those fields at the
2019 average level of 6.8 million bpd, which corresponds to 12.2 million bpd average U.S. crude +
condensate production in 2019,” Berman said.
The outlook for new drilling, even with oil prices now double that of April, remains bleak with oilfield
companies slashing their staff and budgets. This month, BJ Services and Hi-Crush, two of the
largest fracking and frac-sand suppliers, filed for protection from creditors.
In Texas, new drilling permits fell 69% in June from a year earlier. North Dakota last month reported
405,000 bpd of production shut-ins. Wyoming, the eighth-largest U.S. oil producing state, in late
June reported no rigs at work, the first time since at least 1992.
“No one is going to have the staff or the rigs over the next year to increase production,” said Ryan
Sitton, commissioner with Texas’s oil and gas regulator. “We’ve never had this few rigs running.”
Outside of shale fields, U.S. oil output also has dropped as higher-cost, older wells shut. An
estimated 200,000 bpd from these so-called stripper wells was halted as prices crashed and an
undetermined amount will never return to production, said analysts.
These aging wells are costly to maintain and face technical challenges to resume production, unlike
shale wells which have little impact by being curtailed for short periods, said Bernadette Johnson,
vice president at data firm Enverus.
“The shut-ins have been dramatic, and some may be permanent,” said Patrick Montalban, a
Montana producer and treasurer of the National Stripper Well Association, which represents owners
of these aged wells.
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NewBase July 24-2020 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil up on strong economic data, U.S.-China tensions cap gains
Reuters + NewBase
Oil prices rose on Friday, lifted by some supportive economic data, but tensions between the United
States and China limited gains.
Brent crude futures LCOc1 rose 3 cents to settle at $43.34 a barrel. U.S. West Texas Intermediate
(WTI) crude CLc1 futures rose 27 cents to settle at $41.34 a barrel. For the week, Brent rose 0.5%,
while U.S. crude rose 1.7%.
Ahead of the weekend, market participants had their eye on Tropical Storm Hanna, forecast to cross
to Baffin Bay, 46 miles (74 km) south of Corpus Christi, Texas, on Saturday afternoon or evening.
So far, energy companies said there have been no evacuations of workers or shutdowns of
production from offshore platforms in the northern Gulf of Mexico.
Oil price special
coverage
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Lifting market sentiment, Euro zone business activity grew in July for the first time since the
coronavirus pandemic hit, according to IHS Markit’s flash Composite Purchasing Managers’ Index
(PMI). The index is seen as a good indicator of the bloc’s economic health.
“The economic data in Europe was much better than anticipated, which would suggest that demand
destruction in recent months because of COVID-19 may not have been as bad as people thought,”
said Phil Flynn, senior analyst at Price Futures group in Chicago.
Meanwhile, U.S. business activity increased to a six-month high in July. U.S. companies, however,
reported a drop in new orders as new COVID-19 cases spiked. The resurgent pandemic has
darkened the U.S. economic outlook. Some states have reinstated restrictions, which should reduce
fuel consumption.
The number of Americans filing for unemployment benefits hit 1.416 million last week, unexpectedly
rising for the first time in nearly four months. Oil prices could see a near-term correction if a recovery
in fuel demand slows further, especially in the United States, Barclays Commodities Research said.
Still, the bank lowered its oil market surplus forecast for 2020 to an average of 2.5 million barrels
per day (bpd) from 3.5 million bpd previously.
The U.S. oil and gas rig count, a indicator of future output, fell by two to an all-time low of 251 in the
week to July 24, according to data from energy services firm Baker Hughes Co (BKR.N). However,
energy firms added one oil rig in the first weekly increase since March.
Meanwhile, money managers raised their net long U.S. crude futures and options positions in the
week to July 21 by 5,430 contracts to 375,193, the U.S. Commodity Futures Trading Commission
(CFTC) said on Friday.
Weighing on prices, China ordered the United States to close its consulate in the city of Chengdu,
responding to a U.S. demand this week that China close its Houston consulate. Renewed tensions
between the world’s top two oil consumers further stoked worries about fuel demand.
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“Smooth international trade relations are needed for oil demand to remain uninterrupted on the long
term and tensions between the U.S. and China are never a good sign,” said Bjornar Tonhaugen,
head of oil markets at Rystad Energy.
U.S. oil rig count rises for first week since March: Baker Hughes
U.S. energy firms cut the number of oil and natural gas rigs operating to a record low for a 12th
week in a row, although they added one oil rig in the first weekly increase since March as a recovery
in crude prices tempt some producers back to the well pad.
The U.S. oil and gas rig count, an early indicator of future output, fell by two to an all-time low of
251 in the week to July 24, according to data on Friday from energy services firm Baker Hughes Co
going back to 1940.
That was 695 rigs, or 73%, below this time last year.
U.S. oil rigs rose to 181, while gas rigs fell three to 68, their lowest on record according to Baker
Hughes data going back to 1987.
Even though U.S. oil prices are still down about 33% since the start of the year due to coronavirus
demand destruction, crude futures have jumped 118% over the past three months to around $41 a
barrel on Friday on hopes global economies will snap back as governments lift lockdowns. [O/R]
Analysts said higher oil prices will encourage energy firms to slow rig count reductions and possibly
start adding some units later this year.
“Rig activity is near the bottom unless there is a substantial drop in prices,” said James Williams of
WTRG Economics in Arkansas, noting “The shut-in wells are already coming back online.”
Analysts at Tudor, Pickering, Holt & Co said the rig count will “to find a bottom soon, with incremental
rig adds beginning to materialize towards the back half of the third quarter.”
Copyright © 2020 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 endeavors have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 17
NewBase Special Coverage
The Energy world - Special 25- July -2020
Iraq's Energy Sector: A Roadmap to a Brighter Future
IEA : World Energy Outlook special report
Despite the extraordinary challenges of war in recent years, Iraq has made impressive gains,
nearly doubling the country’s oil production over the past decade. But the turmoil has also
undermined the country’s ability to maintain and invest in its power infrastructure.
This report maps out immediate practical actions and medium-term measures to tackle the most
pressing problems in Iraq’s electricity sector. It also takes a detailed look at the country’s oil and
gas sector, projecting that Iraq’s oil production will grow by 1.3 million barrels a day by 2030,
becoming the world’s fourth-largest oil producer behind the United States, Saudi Arabia and
Russia.
Iraq remains central to future global oil supply
The increase in Iraqi oil production capacity over the last decade has been impressive, yet there
are a number of challenges facing the sector going forward.
One impeding barrier is the availability of water, as planned oil production will require a level
of water production above what has been achieved so far. Assuming an increase in water
availability, Iraq’s production to 2030 grows by around 1.3 mb/d, making it the third largest
contributor to global oil supply in that time.
Copyright © 2020 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 endeavors 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 18
Significant potential for natural gas
As oil production has soared, so has the amount of associated gas produced alongside. However
the capacity to capture and process this gas has not kept pace. The inability to utilise its gas
riches means that the country's gas deficit has grown, and Iraq now relies on imports from Iran
to meet increasing demand.
This has introduced a number of vulnerabilities to Iraq’s energy system. For example, payment
issues last summer led to Iran cutting exports, significantly exacerbating electricity shortages
in Iraq during peak seasonal demand.
Iraq’s power sector faces significant challenges
Power outages in Iraq remain a daily occurrence for most households, as increasing generating
capacity has been outrun by the increasing demand for electricity, spurred by greater cooling
needs in the peak summer months. Over the past five years, the size of the gap between peak
Copyright © 2020 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 endeavors 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 19
electricity demand and maximum grid supply of power has expanded, despite available supply
increasing by one-third.
Alleviating the power shortages at the height of summer remains one of the most important priorities
of the Iraqi government. Here, there is room for cautious optimism, as a number of options are
available to help remedy the immediate shortfalls.
For example, consumers should be encouraged to shift non-essential demand away from peak
hours, enabling more households to have cooling during the hottest parts of the day.
Improving networks could also provide immediate gains. This would involve identifying the weakest
parts of the grid, and concentrating efforts on improving the state of the distribution network. The
losses in the Iraqi system are around 40 TWh, four times the total neighbourhood generation in Iraq
– addressing this could boost supply quickly.
There are also options with increase available capacity by increasing the number of small
generators and larger mobile generators (both oil-based) that can be put in place quickly and can
help alleviate the most intense shorages.
Copyright © 2020 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 endeavors 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 20
Technology options to improve electricity supply by development time in Iraq, 2019
There are a number of pathways available for the future of electricity supply in Iraq but the most
affordable, reliable and sustainable path requires cutting network losses by half at least,
strengthening regional interconnections, putting captured gas to use in efficient power plants, and
increasing the share of renewables in the mix. In the long term, all options are available to improve
the situation in the power sector.
Where measures are taken to
both curb demand and
increase available capacity,
Iraq could establish a capacity
margin by 2030 (where
available capacity exceeds
peak demand). At that point,
grid supply would be available
to most consumers 24 hours
per day.
Copyright © 2020 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 endeavors 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 21
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 Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: https://secure.terrapinn.com/V5/step1.aspx?E=6180Khaled Malallah Al Awadi, Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 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 the UAE operations base. Khaled is the Founder
of NewBase Energy, and an international consultant, advisor, ecopreneur and
journalist with expertise in Gas & Oil pipeline Networks, waste management, waste-
to-energy, renewable energy, environment protection and sustainable development.
His geographical areas of focus include Middle East, Africa and Asia. Khaled has
successfully accomplished a wide range of projects in the areas of Gas & Oil with
extensive works on Gas Pipeline Network Facilities & gas compressor stations.
Executed projects in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of gas/oil supply routes. Has drafted & finalized many
contracts/agreements in products sale, transportation, operation & maintenance agreements. Along with
many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass energy,
biogas, waste-to-energy, recycling and waste management. He has participated in numerous conferences
and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-in-Chief of
NewBase Energy News and is a professional environmental writer with more than 1400 popular articles to
his credit. He is proactively engaged in creating mass awareness on renewable energy, waste management
and environmental sustainability in different parts of the world. Khaled has become a reference for many of
the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC leading
satellite Channels. Khaled can be reached at any time, see contact details above.
NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE
NewBase 2020 K. Al Awadi
Copyright © 2020 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 endeavors 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 22
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Abu Dhabi boosts petrochemicals with new venture

  • 1. Copyright © 2020 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 endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 1 NewBase Energy News 25 July 2020 - Issue No. 1358 Senior Editor Eng. Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE Abu Dhabi Moves boost Value From Oil With Chemical Venture Bloomberg + NewBase Abu Dhabi National Oil Co. formed a venture with a state holding company to boost investment in petrochemical projects, part of the emirate’s drive to expand beyond raw crude into more valuable products. Adnoc and its partner, ADQ, agreed to invest in and manage downstream activities at the planned Ruwais Derivatives Park, they said in a statement. They will complete a feasibility study this year. The partners, both based in Abu Dhabi, capital of the United Arab Emirates, didn’t disclose financial details of the deal. Adnoc will hold 60% of the venture, with ADQ owning the rest. Adnoc, like other Middle Eastern crude suppliers, faces an uncertain outlook for oil demand. Brent crude is down 33% this year to around $44 a barrel, hammered by the coronavirus and a gradual shift toward renewable sources of energy. Two years ago the state company outlined some $45 billion of investments in refining and chemical production. Ruwais, on the Persian Gulf coast 140 miles (225 kilometers) west of Abu Dhabi city, is already the site of Adnoc’s biggest refinery and chemical and manufacturing plants. ADQ, formerly known as Abu Dhabi Development Holding Co., has assets ranging from power generation to logistics. The venture is part of Adnoc’s “unwavering focus on stretching the margin of every barrel of oil produced,” Chief Executive Officer Sultan Al Jaber said in the statement. It will “kickstart the development of the UAE’s downstream derivatives sector, support the transformation of Ruwais into a global hub for industry and attract additional foreign direct investment.” The International Energy Agency forecasts that chemicals will be one of the fastest- growing segments of oil demand. Abu Dhabi and other petrostates are looking to turn their hydrocarbons into plastics and components for consumer goods like cars, mobile phones and computers. www.linkedin.com/in/khaled-al-awadi-38b995b
  • 2. Copyright © 2020 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 endeavors 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 UAE: Civil works starts at 250MW Dubai hydro power station https://www.gulfconstructionworldwide.com/stories/source/?url=CONS_370712.html Dubai Electricity and Water Authority (Dewa) said tunnelling operations have begun at its 250 MW hydroelectric power station in Hatta, a first-of-its-kind project in the GCC region, being built at an investment of Dh1.42 billion ($386.5 million). The construction contract for the pumped-storage hydroelectric power station was awarded to a consortium led by Austrian construction company Strabag, with key partners Strabag Dubai, Andritz Hydro and Ozkar, said the statement from Dewa. Électricité de France (EDF) is the consultant of the project, which is scheduled to be commissioned by February 2024. The 250 MW station will generate electricity by making use of the water stored in Hatta Dam. It will have a storage capacity of 1,500 MWh and a life span of 80 years, it stated. "The hydroelectric power station translates Dewa’s hard work to implement the directives of the wise leadership to protect natural resources and increase the share of clean and renewable energy," remarked Saeed Mohammed Al Tayer, MD and CEO. "This is what we strive to achieve through the pumped-storage hydroelectric power station, which is the first of its kind in the Arabian Gulf region. This promotes Dubai’s position as a global hub for clean energy and green economy," said Al Tayer, after reviewing the work progress of the project. Al Tayer was accompanied by Nasser Lootah, EVP-Generation at Dewa, Yousef Jebril, EVP-Power and Water Planning at Dewa, Dr Yousef Al Akraf, EVP-Business Support and HR at Dewa, Mansoor Alsuwaidi, VP- Projects Generation at Dewa and Khalifa Albedwawi, the project manager.
  • 3. Copyright © 2020 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 endeavors 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 During the visit, Al Tayer and his delegation were briefed about the project by Dirk Leitzig from Strabag AG. "The tunnelling operations have started at the hydroelectric station. This phase is very critical and uses the latest and safest drilling technologies to fit Hatta’s geological features while following the highest international environmental standards," he stated. Al Tayer said this strategic project would diversify the energy mix and support Hatta’s economic, social and environmental development. "It will also help achieve the goals of the Dubai Clean Energy Strategy 2050 to provide 75% of Dubai’s total power output from clean energy by 2050," noted the top official. According to him, the project is part of Dewa’s initiatives to provide leading and innovative job opportunities for Emirati citizens in Hatta. It will also feature a visitor’s centre and outdoor activities and tourist facilities that will support the sustainable development of Hatta and enhance its position as one of most prominent tourist attractions in Dubai, he added. The 250MW power station will use water in the Hatta Dam and an upper reservoir that will be built in the mountain, said the statement from Dewa. During off-peak hours, advanced turbines will use clean solar power from the Mohammed bin Rashid Al Maktoum Solar Park to pump water from the dam to the upper reservoir, it stated. Turbines operated by the speed of waterfall from the upper reservoir will be used to generate electricity through a 1.2 km subterranean water canal, with high efficiency in power generation and storage, and with a 90-second response to demand for electricity, it added.-TradeArabai News Service
  • 4. Copyright © 2020 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 endeavors 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 Saudis Gains flat in First Month After Ending Oil-Price War Bloomberg - Abeer Abu Omar Saudi Arabia gained no financial reward in the first full month after ending its oil-price war with Russia. The kingdom earned 23.9 billion riyals ($6.4 billion) from oil exports in May, the Riyadh-based General Authority for Statistics said Thursday. That was even less than the previous month, when the price war was at its height, and down more than 60% from last year’s monthly average of $16.8 billion. The government slashed exports to 6.2 million barrels a day in May from a record 9.3 million in April as it came under pressure from world leaders, including U.S. President Donald Trump, to change tack and rebalance an energy market battered by the coronavirus pandemic. The good news for Saudi Arabia is that revenue from oil, of which it’s the world’s biggest exporter, probably rose in June and will likely be higher still this month. That’s because the average price for benchmark Brent crude rose 26% in June to $40.77 a barrel amid a recovery in energy demand in nations such as the U.S. and China. It has averaged more than $43 this month. Another factor is that the kingdom’s export volumes are set to rise from next month as the OPEC+ cartel eases production cuts. Saudi Arabia Explores Asset Sales, Income Tax to Boost Finances Saudi Arabia is accelerating plans to sell off state assets and isn’t ruling out introducing income tax as the kingdom seeks to boost state coffers hit by the slump in oil prices.
  • 5. Copyright © 2020 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 endeavors 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 The world’s biggest oil exporter could raise more than 50 billion riyals ($13.3 billion) over the next four to five years by privatizing assets in the education, health-care and water sectors, Finance Minister Mohammed Al Jadaan said Wednesday during a virtual forum organized by Bloomberg. The government is “considering all options” to bolster its finances and while income tax isn’t “imminent” and “would require a lot of time” to prepare, the kingdom “isn’t ruling anything away for now,” he said. The state-run Saudi Press Agency later reported citing an unidentified official source as saying that income tax had not been discussed in the cabinet or any of the government councils or committees. Saudi Arabia has been taking steps to shore up its economy from the double whammy of the coronavirus and lower crude prices. The economy is set to shrink 6.8% this year, according to the International Monetary Fund, in what would be the deepest contraction in over 30 years. The government has already taken unprecedented measures to support its finances, including tripling value-added tax, increasing import fees, and canceling some benefits for government workers. The kingdom has traditionally been tax-free for individuals, with oil revenue supporting a wide range of subsidies and benefits for citizens. ‘Not Austerity’ “Saudi Arabia is not in austerity and we are not getting into an austerity phase,” Al Jadaan said. While the government has “re-allocated some spending,” total spending in 2020 is likely to be more than a trillion riyals, as planned. The kingdom is also likely to have to borrow about 100 billion riyals more than planned this year and plans to tap the global debt market at least one more time in 2020 after so far selling $12 billion in international bonds in 2020, Al Jadaan said. As well as raising debt, the kingdom has already been selling state assets as part of efforts to diversify its economy away from oil after a slow start. In December, the government sold a $29 billion holding in energy giant Saudi Aramco through the largest initial public offering in history. It also recently sold a stake in two grain mills for $740 million. Despite its efforts to contain costs, the government also transferred $40 billion from reserves held by the central bank to boost the financial firepower of its sovereign wealth fund for deals. The Public Investment Fund has already acquired stakes in companies including Citigroup Inc., Facebook Inc. and concert promoter Live Nation Entertainment Inc.
  • 6. Copyright © 2020 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 endeavors 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 Oman: Bids invited for Oman’s biggest solar power scheme Oman observer - Conrad Prabhu A Request for Proposals (RfP) has gone out to international consortiums and developers that have been prequalified by Oman’s authorities to compete for contract awards to build the country’s biggest solar photovoltaic (PV) based scheme at Manah in Al Dakhiliyah Governorate. The landmark scheme consists of two co-located Independent Power Projects (IPPs) each of a minimum installed capacity of 500 megawatts-peak (MWp). Dubbed ‘Manah Solar I IPP’ and ‘Manah Solar II IPP’, they will offer an aggregate capacity of around 1 gigwatt (GW), effectively making the combined scheme the largest renewable energy venture of its kind when it comes into operation during the summer of 2023. On Monday, the Oman Power and Water Procurement Company (OPWP) – the sole procurer of new power generation and water desalination capacity under the sector law – issued RfPs to nine developers and groups that have been prequalified to participate in a competitive tender for the pair of IPPs. They comprise: (1) Abu Dhabi Future Energy Company PJSC – Masdar (UAE) and EDF Renewables SA (EDF); (2) ENI SPA and SB Energy Holding Limited; (3) International Company for Water & Power Projects (ACWA Power); (4) Jinko Power (HK) Company Limited (5) Korea Western Power Company Limited; Hanyang Corporation; Solar Reserve Limited and Nafath Renewable Energy LLC (6) Marubeni Corporation (7) Power Construction Corporation of China Limited (8) Tag Energy SA and Al Shanfari Group, and (9) Total Solar International.
  • 7. Copyright © 2020 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 endeavors 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 The scope of each project covers the development, financing, design, engineering, construction, ownership, operation and maintenance of a solar PV power plant and associated facilities. An area of over 1,200 hectares has been earmarked in the Wilayat of Manah for the implementation of the two IPPs. Significantly, given the size of the combined scheme, an award for their implementation will go to two separate bidders, according to OPWP. “Each bidder is required to submit one id for each of the two Projects. Each project will have a separate ranking list of Preferred Bidders based on the primary evaluation criteria. The first-ranked bidder for each project would be determined based on a combination that leads to the lowest economic obligation for OPWP across both projects, subject to the evaluation criteria specified in the RFP and also subject to the requirement that a single bidder cannot be awarded both the projects,” the procurer explained. Advising OPWP in the procurement of the giant scheme is a consortium of consultants comprising Synergy Consulting (Financial Advisory Services), Fichtner (Technical) and DLA Piper (Legal). Meanwhile, the construction of Oman’s first large-scale grid-connected solar PV based renewable energy project is well underway at Ibri in Dhahirah Governorate. Shams Ad-Dhahira Generating Company SAOC (SAGC), a consortium led by Saudi-based ACWA Power, is developing a 500 MWp project with an investment of around $400 million. Slated to come into operation in the summer of 2021, the Ibri-II solar IPP will sell its clean energy output to state-owned OPWP under a 15-year contract.
  • 8. Copyright © 2020 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 endeavors 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 U.S: EIA now estimates biodiesel production and consumption by state Source: U.S. Energy Information Administration, State Energy Data System The U.S. Energy Information Administration (EIA) recently released new biodiesel estimates in the State Energy Data System (SEDS), EIA’s comprehensive source for annual state energy statistics. Previously, EIA published national-level biodiesel data as well as state- and plant- level biodiesel plant production capacity. New SEDS estimates include annual biodiesel production and consumption data by state for 2001 through 2018. Biodiesel is a liquid biofuel used as an additive or substitute for petroleum-based diesel fuel in vehicles, and it is typically made from vegetable oils—such as soybean, corn, and canola oil— animal fats, or recycled restaurant grease feedstocks. It does not include renewable diesel, which is processed differently in order to create a fuel that is chemically identical to petroleum-based diesel. Biodiesel produces fewer air pollutants than petroleum diesel fuel and can benefit engines by providing additional lubrication and increasing performance. A common blend of diesel and biodiesel fuel sold at the pump is B20, which is 20% biodiesel. SEDS data reflect an assumption that all biodiesel is used in the transportation sector, although it can also be used as heating oil and for electricity generation.
  • 9. Copyright © 2020 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 endeavors 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 Source: U.S. Energy Information Administration, State Energy Data System U.S. biodiesel production and consumption have increased substantially since 2001. However, U.S. biodiesel production decreased by 49% from 2008 to 2010 as a result of a number of factors. These factors include overproduction in earlier years, European trade policies, and reduced overall demand for transportation fuels driven by the 2008–2009 global recession. However, production has since increased, despite biodiesel tax credits that expired in 2016. Since 2016, U.S. biodiesel production has increased significantly to meet domestic demand and to offset lower biodiesel imports. In 2018, the United States produced 44 million barrels and consumed 45 million barrels of biodiesel.
  • 10. Copyright © 2020 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 endeavors 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 Iowa, a top corn and soybean producer, has been the state with the most biodiesel production in the nation every year on record since 2001. A total of 8.7 million barrels (or 365 million gallons) of biodiesel was produced in Iowa in 2018, or 20% of U.S. total biodiesel production. Iowa has the largest biodiesel plant production capacity in the nation at nearly 10.6 million barrels (445 million gallons) per year in 2019, about 17% of the nation’s total capacity. Texas has been the second-largest producing state for biodiesel since 2016, when it surpassed Illinois and Missouri. The Port Neches biodiesel plant near Beaumont, Texas, has the largest production capacity in the nation at 178 million gallons per year. Texas has had the most biodiesel consumption of any state since 2013, and it consumed nearly 8 million barrels in 2018, about 17% of the nation’s total. Texas has the most distillate fuel oil (diesel) consumption of any state by a wide margin and has the second-most vehicle miles traveled in the nation after California. Texas also requires alternative vehicle use in government fleets and offers a number of biodiesel- related incentives. California, which has many biodiesel-related laws and incentives, surpassed Illinois with the second-most biodiesel consumption in 2018.
  • 11. Copyright © 2020 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 endeavors 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 U.S.: Bounceback in shale oil output is unlikely to last the summer Reuters A reopening of some major economies locked down due to the coronavirus has lifted global oil prices and encouraged U.S. shale producers to return at least a third of the 2 million barrels per day (bpd) curtailed since April. But that bump in output is unlikely to be sustained as shale wells lose up to half their initial output after the first year, and require constant drilling to maintain and increase production. With most new drilling halted and OPEC relaxing curbs that have underpinned the oil-price recovery, shale output will slide again in autumn, said oil executives and analysts. Shale output falls off faster than at conventional oil wells, a factor that will lead to output declining by September. Average U.S. daily oil output will fall below 2019’s record 12.2 million barrels per day (bpd) for the next two to three years, analysts said. The decline means further economic damage from an industry that contributed nearly 1 percentage point to U.S. GDP early last decade. U.S. pipeline and oil export-terminal projects have been delayed or canceled as shale production forecasts have been cut. “You shut down like this, reduce activity like this, and it is going to be felt for a while,” David Dell’Osso, chief operating officer of shale producer Parsley Energy (PE.N) said in an interview. LAG EFFECT Parsley Energy’s plans mirror that of many shale rivals that have begun reopening existing wells but tightly restricting new activity. It had planned to operate 15 drilling rigs this year, but halted work in the spring as oil demand shrank on pandemic-related business closings. This month, the company restarted drilling with two rigs, not enough to maintain existing production levels. Keeping output flat would take four to five rigs, which it may edge toward later this year, Dell’Osso said.
  • 12. Copyright © 2020 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 endeavors 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 Diamondback Energy (FANG.O), one of the top U.S. shale producers, reopened most of its curtailed wells this month. It expects to pump about 180,000 bpd this year, down from 188,000 bpd last year. The reason: its rig count fell from 20 at the end of March to just seven by mid July, and is expected to be six by the end of the month. Much of the shale production curtailments came from shale wells that were choked back but not shut-in completely, several shale company executives said. The Organization of the Petroleum Exporting Countries and its allies’ decision to return 2 million bpd to global markets beginning next month will likely keep a lid on prices and leave less room for shale. The group known as OPEC+ agreed to production cuts of 7.7 million bpd through December. However, OPEC+ cautioned that a second wave of COVID-19 infections could halt its plan to further ease constraints next year, officials said. The cuts since May have more than doubled benchmark Brent crude LCOc1 to about $44 a barrel, from $20 in April. OPEC’s ability to add more oil to global markets “is why we’re not reactivating at nearly the level before,” Parsley’s Dell’Osso said. SPENDING ON NEW WELLS This year’s oil price collapse led the 25 largest public U.S. producers to cut capital spending plans by 47%, and idle more than 75% of U.S. drilling rigs since last year, according to data firm Enverus. As rig counts continue to slide to all-time lows, a return to record high levels of output is likely to take years due to the sharp, natural decline rates of shale wells. Some analysts refer to it as the treadmill effect, meaning producers must keep drilling just to remain in place. “If you don’t continue to bring new wells onstream, you will fly off the back of this treadmill,” said Raoul LeBlanc, vice president for North American unconventionals at data provider IHS Markit. In June, just 155 rigs were working in the top four shale basins, and so far in July, that number is down to 145, said petroleum geologist and consultant Art Berman.
  • 13. Copyright © 2020 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 endeavors 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 “That is well below the approximately 600 required to sustain production from those fields at the 2019 average level of 6.8 million bpd, which corresponds to 12.2 million bpd average U.S. crude + condensate production in 2019,” Berman said. The outlook for new drilling, even with oil prices now double that of April, remains bleak with oilfield companies slashing their staff and budgets. This month, BJ Services and Hi-Crush, two of the largest fracking and frac-sand suppliers, filed for protection from creditors. In Texas, new drilling permits fell 69% in June from a year earlier. North Dakota last month reported 405,000 bpd of production shut-ins. Wyoming, the eighth-largest U.S. oil producing state, in late June reported no rigs at work, the first time since at least 1992. “No one is going to have the staff or the rigs over the next year to increase production,” said Ryan Sitton, commissioner with Texas’s oil and gas regulator. “We’ve never had this few rigs running.” Outside of shale fields, U.S. oil output also has dropped as higher-cost, older wells shut. An estimated 200,000 bpd from these so-called stripper wells was halted as prices crashed and an undetermined amount will never return to production, said analysts. These aging wells are costly to maintain and face technical challenges to resume production, unlike shale wells which have little impact by being curtailed for short periods, said Bernadette Johnson, vice president at data firm Enverus. “The shut-ins have been dramatic, and some may be permanent,” said Patrick Montalban, a Montana producer and treasurer of the National Stripper Well Association, which represents owners of these aged wells.
  • 14. Copyright © 2020 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 endeavors 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 NewBase July 24-2020 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Oil up on strong economic data, U.S.-China tensions cap gains Reuters + NewBase Oil prices rose on Friday, lifted by some supportive economic data, but tensions between the United States and China limited gains. Brent crude futures LCOc1 rose 3 cents to settle at $43.34 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 27 cents to settle at $41.34 a barrel. For the week, Brent rose 0.5%, while U.S. crude rose 1.7%. Ahead of the weekend, market participants had their eye on Tropical Storm Hanna, forecast to cross to Baffin Bay, 46 miles (74 km) south of Corpus Christi, Texas, on Saturday afternoon or evening. So far, energy companies said there have been no evacuations of workers or shutdowns of production from offshore platforms in the northern Gulf of Mexico. Oil price special coverage
  • 15. Copyright © 2020 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 endeavors 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 Lifting market sentiment, Euro zone business activity grew in July for the first time since the coronavirus pandemic hit, according to IHS Markit’s flash Composite Purchasing Managers’ Index (PMI). The index is seen as a good indicator of the bloc’s economic health. “The economic data in Europe was much better than anticipated, which would suggest that demand destruction in recent months because of COVID-19 may not have been as bad as people thought,” said Phil Flynn, senior analyst at Price Futures group in Chicago. Meanwhile, U.S. business activity increased to a six-month high in July. U.S. companies, however, reported a drop in new orders as new COVID-19 cases spiked. The resurgent pandemic has darkened the U.S. economic outlook. Some states have reinstated restrictions, which should reduce fuel consumption. The number of Americans filing for unemployment benefits hit 1.416 million last week, unexpectedly rising for the first time in nearly four months. Oil prices could see a near-term correction if a recovery in fuel demand slows further, especially in the United States, Barclays Commodities Research said. Still, the bank lowered its oil market surplus forecast for 2020 to an average of 2.5 million barrels per day (bpd) from 3.5 million bpd previously. The U.S. oil and gas rig count, a indicator of future output, fell by two to an all-time low of 251 in the week to July 24, according to data from energy services firm Baker Hughes Co (BKR.N). However, energy firms added one oil rig in the first weekly increase since March. Meanwhile, money managers raised their net long U.S. crude futures and options positions in the week to July 21 by 5,430 contracts to 375,193, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Weighing on prices, China ordered the United States to close its consulate in the city of Chengdu, responding to a U.S. demand this week that China close its Houston consulate. Renewed tensions between the world’s top two oil consumers further stoked worries about fuel demand.
  • 16. Copyright © 2020 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 endeavors 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 “Smooth international trade relations are needed for oil demand to remain uninterrupted on the long term and tensions between the U.S. and China are never a good sign,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. U.S. oil rig count rises for first week since March: Baker Hughes U.S. energy firms cut the number of oil and natural gas rigs operating to a record low for a 12th week in a row, although they added one oil rig in the first weekly increase since March as a recovery in crude prices tempt some producers back to the well pad. The U.S. oil and gas rig count, an early indicator of future output, fell by two to an all-time low of 251 in the week to July 24, according to data on Friday from energy services firm Baker Hughes Co going back to 1940. That was 695 rigs, or 73%, below this time last year. U.S. oil rigs rose to 181, while gas rigs fell three to 68, their lowest on record according to Baker Hughes data going back to 1987. Even though U.S. oil prices are still down about 33% since the start of the year due to coronavirus demand destruction, crude futures have jumped 118% over the past three months to around $41 a barrel on Friday on hopes global economies will snap back as governments lift lockdowns. [O/R] Analysts said higher oil prices will encourage energy firms to slow rig count reductions and possibly start adding some units later this year. “Rig activity is near the bottom unless there is a substantial drop in prices,” said James Williams of WTRG Economics in Arkansas, noting “The shut-in wells are already coming back online.” Analysts at Tudor, Pickering, Holt & Co said the rig count will “to find a bottom soon, with incremental rig adds beginning to materialize towards the back half of the third quarter.”
  • 17. Copyright © 2020 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 endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 17 NewBase Special Coverage The Energy world - Special 25- July -2020 Iraq's Energy Sector: A Roadmap to a Brighter Future IEA : World Energy Outlook special report Despite the extraordinary challenges of war in recent years, Iraq has made impressive gains, nearly doubling the country’s oil production over the past decade. But the turmoil has also undermined the country’s ability to maintain and invest in its power infrastructure. This report maps out immediate practical actions and medium-term measures to tackle the most pressing problems in Iraq’s electricity sector. It also takes a detailed look at the country’s oil and gas sector, projecting that Iraq’s oil production will grow by 1.3 million barrels a day by 2030, becoming the world’s fourth-largest oil producer behind the United States, Saudi Arabia and Russia. Iraq remains central to future global oil supply The increase in Iraqi oil production capacity over the last decade has been impressive, yet there are a number of challenges facing the sector going forward. One impeding barrier is the availability of water, as planned oil production will require a level of water production above what has been achieved so far. Assuming an increase in water availability, Iraq’s production to 2030 grows by around 1.3 mb/d, making it the third largest contributor to global oil supply in that time.
  • 18. Copyright © 2020 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 endeavors 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 18 Significant potential for natural gas As oil production has soared, so has the amount of associated gas produced alongside. However the capacity to capture and process this gas has not kept pace. The inability to utilise its gas riches means that the country's gas deficit has grown, and Iraq now relies on imports from Iran to meet increasing demand. This has introduced a number of vulnerabilities to Iraq’s energy system. For example, payment issues last summer led to Iran cutting exports, significantly exacerbating electricity shortages in Iraq during peak seasonal demand. Iraq’s power sector faces significant challenges Power outages in Iraq remain a daily occurrence for most households, as increasing generating capacity has been outrun by the increasing demand for electricity, spurred by greater cooling needs in the peak summer months. Over the past five years, the size of the gap between peak
  • 19. Copyright © 2020 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 endeavors 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 19 electricity demand and maximum grid supply of power has expanded, despite available supply increasing by one-third. Alleviating the power shortages at the height of summer remains one of the most important priorities of the Iraqi government. Here, there is room for cautious optimism, as a number of options are available to help remedy the immediate shortfalls. For example, consumers should be encouraged to shift non-essential demand away from peak hours, enabling more households to have cooling during the hottest parts of the day. Improving networks could also provide immediate gains. This would involve identifying the weakest parts of the grid, and concentrating efforts on improving the state of the distribution network. The losses in the Iraqi system are around 40 TWh, four times the total neighbourhood generation in Iraq – addressing this could boost supply quickly. There are also options with increase available capacity by increasing the number of small generators and larger mobile generators (both oil-based) that can be put in place quickly and can help alleviate the most intense shorages.
  • 20. Copyright © 2020 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 endeavors 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 20 Technology options to improve electricity supply by development time in Iraq, 2019 There are a number of pathways available for the future of electricity supply in Iraq but the most affordable, reliable and sustainable path requires cutting network losses by half at least, strengthening regional interconnections, putting captured gas to use in efficient power plants, and increasing the share of renewables in the mix. In the long term, all options are available to improve the situation in the power sector. Where measures are taken to both curb demand and increase available capacity, Iraq could establish a capacity margin by 2030 (where available capacity exceeds peak demand). At that point, grid supply would be available to most consumers 24 hours per day.
  • 21. Copyright © 2020 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 endeavors 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 21 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 Twice a week and sponsored by Hawk Energy Service – Dubai, UAE. For additional free subscriptions, please email us. About: https://secure.terrapinn.com/V5/step1.aspx?E=6180Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010 www.linkedin.com/in/khaled-al-awadi-38b995b Mobile: +971504822502 khdmohd@hawkenergy.net or khdmohd@hotmail.com Khaled Al Awadi is a UAE National with over 30 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 the UAE operations base. Khaled is the Founder of NewBase Energy, and an international consultant, advisor, ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste management, waste- to-energy, renewable energy, environment protection and sustainable development. His geographical areas of focus include Middle East, Africa and Asia. Khaled has successfully accomplished a wide range of projects in the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas compressor stations. Executed projects in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted & finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements. Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with more than 1400 popular articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste management and environmental sustainability in different parts of the world. Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see contact details above. NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE NewBase 2020 K. Al Awadi
  • 22. Copyright © 2020 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 endeavors 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 22 For Your Recruitments needs and Top Talents, please seek our approved agents below