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Copyright © 2018 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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NewBase Energy News June 2019 - Issue No. 1254 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E: Focus on Abu Dhabi’s energy strategy at IEA conference
TradeArabia News Service + NewBase
Abu Dhabi’s comprehensive energy strategy was highlighted to an audience of global leaders at the
fourth annual International Energy Agency (IEA) Global Conference on Energy Efficiency.
The Abu Dhabi Department of Energy (DoE) took part in the conference, which took place on June
24 and 25 in Dublin, Ireland.
Representing DoE, the government entity mandated to
ensure excellence and sustainability in the UAE
capital’s energy sector, was Mohammed bin Jarsh Al
Falasi, DoE Undersecretary, who presented his
department’s analysis and plans for the future of energy
in Abu Dhabi before world leaders and heads of the
international energy sector.
Among those attending were Leo Varadkar, Irish Prime
Minister; Dr Fatih Birol, IEA Executive Director; Mark
Menezes, Undersecretary of Energy, US Department of
Energy; Zhang Yong, Vice-Chairman of China’s National Development and Reform Commission
and Hennadiy Zubko, Ukrainian Vice Prime Minister and Minister for Regional Development,
Construction and Housing.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Taking part in a panel discussion titled ‘Global Policy Insights,’ Al Falasi gave a presentation
spotlighting Abu Dhabi’s energy scene and future trends, and outlined DoE’s roadmap for the energy
sector.
Among the key topics discussed was how DoE was established in March 2018 to be the key policy-
maker and regulator of the Abu Dhabi energy sector during a period of paradigmatic shift away from
fossil fuels towards renewables, a move which aims to reduce emissions and avoid runaway climate
change.
The audience were introduced to Abu Dhabi’s role as a leader in modernising energy systems since
unbundling the sector in 1998, and how over the past three decades the emirate has provided power
and water to approximately two thirds of the UAE, sustaining both itself and other large parts of the
Union.
Additionally, the role of the UAE capital as a prime mover in opening the power sector to private
sector investment, becoming the first entities in the region to initiate tariff reforms for both power
and water – a fundamental shift to promote responsible use of natural resources and cost efficiency.
Al Falasi stated after his presentation: “The fourth IEA Global Conference on Energy Efficiency
represented the perfect platform to show to the world’s most senior policy and decision-makers
exactly how Abu Dhabi is pioneering a new model for energy. It is doing this by leading through
innovation and by promoting a change in behaviour, notably by encouraging consumers to minimise
their energy consumption and reduce emissions.
“Abu Dhabi’s vision and leadership have laid out an ambition to further boost its leading position in
the energy landscape by embracing technology to transition the energy sector towards a long-term
sustainable energy solution. All of this underpins the emirate’s wider economic and social
aspirations under Abu Dhabi Economic Vision 2030.” His Excellency added.
The event was the first international activity DoE had undertaken with IEA since the two bodies
signed a strategic partnership agreement in May this year. Under the terms of the agreement, the
entities will enhance cooperation, promote training and capacity building, exchange knowledge and
develop bilateral scientific, technical, legislative, administrative, and commercial expertise in the
energy sector. The partnership will see DoE participate in the IEA’s programme of expert workshops
and meetings.
The IEA works to ensure reliable, affordable and clean energy for its member countries, focusing
on four main areas: energy security, economic development, environmental awareness and
worldwide engagement. Energy efficiency is a key focus area for the IEA, with the organisation
conducting a range of activities on energy efficiency, including in-depth analyses and capacity
building with policy makers in emerging economies. Its annual Global Conference on Energy
Efficiency draws a large international audience, bringing together dignitaries and senior leaders to
advance global progress on energy efficiency. –
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 3
UAE: Blackrock, KKR close Adnoc pipeline infrastructure deal
The National + NewBase
Abu Dhabi National Oil Company (Adnoc) has announced that it has closed its pipeline infrastructure
investment agreement with top equity fims - BlackRock and KKR. The transaction was originally
announced in February this year when the duo signed an initial investment agreement to pump in
$4 billion into the midstream pipeline assets, said a statement from Adnoc.
Following this announcement the Abu Dhabi Retirement Pensions and Benefits Fund, ADRPBF,
agreed to invest a further $300 million. The ADRPBF investment is due to close in the next quarter,
it stated.
The KKR and BlackRock investment, which was successfully funded through their global
infrastructure funds and financed by a syndicate of international banks, was oversubscribed during
its syndication, said the statement.
The innovative leasing investment structure marks the first time that leading, global and domestic
institutional investors have deployed long-term equity capital into key midstream infrastructure
assets of a national oil company in the UAE, it added.
Under this agreement, BlackRock and KKR will jointly acquire a 40% stake in a newly-formed entity,
Adnoc Oil Pipelines – Sole Proprietorship LLC (‘Adnoc Oil Pipelines’), with ADRPBF acquiring 3%
and Adnoc holding the remaining 57%.
Adnoc Oil Pipelines leases Adnoc’s interest in 18 pipelines, transporting stabilised crude oil and
condensate across Adnoc’s offshore and onshore upstream concessions, for a 23-year period.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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The entity receives a tariff payable by Adnoc, for its share of volume of crude and condensate that
flows through the pipelines, backed by minimum volume commitments. Sovereignty over the
pipelines and management of pipeline operations remain with Adnoc, said the statement.
Commenting on the deal,
Ahmed Jasim Al Zaabi, the
group director for Finance and
Investment at Adnoc, said:
"The successful closing of this
pioneering transaction and the
oversubscribed financing is a
clear vote of confidence by the
global investment and finance
community in both the UAE
and Adnoc as an attractive
investment destination."
"It also highlights the quality of
Adnoc’s midstream pipeline
assets and our innovative approach to structuring value-creating investment opportunities for our
partners and investors," he added.
According to him, the collection of 18 pipelines being leased by Adnoc Oil Pipelines has a total
length of over 750km, and a total aggregate capacity of approximately 13,000 Mbblpd (gross).
These assets represent key midstream infrastructure for Abu Dhabi’s energy ecosystem, allowing
for the vast majority of Abu Dhabi’s crude oil production to be transported from Adnoc’s onshore
and offshore upstream assets, to Abu Dhabi’s key take-away outlets and terminals for conversion
to other high-value products, or on to global energy markets, stated Al Zaabi.
The pipelines have underlying long-term minimum volume commitments and are supported by
stable crude oil production from Adnoc Onshore and Adnoc Offshore – the leading onshore and
offshore operating companies in Adnoc with global IOCs as JV partners, each with an average
remaining concession life of over 35 years.
Adnoc said it has, over the last two years, significantly expanded its strategic partnership and co-
investment model and created new investment opportunities in all areas of its value chain, while at
the same time, more proactively managing its portfolio of assets and capital.
This transaction continues this strategy and follows on from several other recent value creation
initiatives including Adnoc’s debut capital markets transaction, the issuance of the Abu Dhabi Crude
Oil Pipeline (ADCOP) bond, the IPO of Adnoc Distribution, the recent strategic equity and
commercial partnerships between Adnoc Drilling and Baker Hughes as well as Adnoc Refining and
Eni and OMV.
Fitch Ratings also recently assigned Adnoc a standalone credit rating of AA+ and a Long-Term
Issuer Default Rating of AA with a Stable Outlook. Both ratings are the highest currently assigned
by Fitch for any oil and gas company, globally
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Egypt: SDX Energy announces oil discovery at West Gharib
Source: SDX Energy
SDX Energy, the North Africa focused oil and gas company, has announced that an oil discovery
has been made at its Rabul-7 development well in the West Gharib Concession in Egypt (SDX 50%
Working Interest & Joint Operator).
The well was drilled to a total depth of 5,323 feet and encountered approx. 134 feet of net heavy oil
pay across the Yusr and Bakr formations, with an average porosity of 18%. The well was completed
as a producer, connected to the central processing facilities at Meseda and brought on-line at an
average stabilised rate over five days of approx. 415 bbl/d (gross).
Mark Reid, CFO and Interim CEO of SDX, commented:
'We are pleased to have made an oil discovery at our Rabul-7 well, in the West Gharib Concession
and to achieve further drilling success in this area of the Concession. The well was brought online
in a timely and cost efficient manner and will
provide further support to our FY 2019
production guidance for this asset of gross
4,000-4,200 bbl/d. Another development
well is planned for the Concession in H2'19.
The final location of this well is dependent on
government approvals and we will update
the market on this in due course.'
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 6
India: ONGC invites offers for enhancing production of O&G
Source: ONGC
ONGC has announced a Notice Inviting Offer (NIO) seeking partners for enhancement of oil and
gas production from its 64 marginal nomination fields with the intention to maximize recovery from
these fields by infusion of new technology.
The offer shall allow interested companies to participate in the International Competitive Bidding
(ICB) process announced for 17 onshore contract areas comprising of 64 oil and gas producing
fieldswith total in-place O+OEG volume of about 300 MMTOE.
Companies, either alone or in
consortium or joint ventures,
may bid for one or more contract
areas. The bidders are required
to fulfil the requisite technical and
financial criteria and the bids
would be evaluated on the basis
of revenue sharing from the
incremental oil and gas
production.
ONGC is inviting the bids
through its e-procurement portal
(https://etender.ongc.co.in). A
pre-bid conference will be held at
ONGC Corporate Office, New
Delhi. Bidders interested in
studying the data can purchase field information dockets and data packages. Interested companies
can access the data viewing facility at Institute of Reservoir Studies (IRS), ONGC, Ahmedabad.
Salient features of the ONGC offering:
 Complete marketing and pricing freedom to sell oil and gas on arm’s length basis through
competitive basis.
 Contractor will be selected on revenue sharing basis. The revenue will be shared on incremental
production over and above the baseline production under Business-As-Usual (BAU) scenario.
 Contract period of 15 years with an option to extend by 5 years.
 Reduction of 10% in the royalty rate for additional production of natural gas over and above BAU
scenario.
 Easy to administer Revenue Sharing model based contract.
 Exploration permitted during the contract period including the right to explore all kinds of hydrocarbon.
 Contractors will not be required to reimburse any expenditure already incurred by ONGC.
 Incentive shall be available for achieving production higher than the committed incremental
production.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 7
Malaysia: PTTEP makes gas discovery offshore Sarawak
Source: The Nation
PTTEP HKO, a wholly-owned subsidiary of PTT Exploration and Production, has made a discovery
of gas at the Lang Lebah-1RDR2, the first exploration well in Sarawak SK410B Projectlocated in
offshore Sarawak, Malaysia.
The company said in a press release that the drilling of Lang Lebah-1RDR2, which began in March
2019, targeted non-associated gas in the primary target of the Middle Miocene cycle IV/V carbonate
reservoir and undertaken to a total depth of 3,810 meters. The well encountered 252 meters of net
gas pay, indicating multi-TCF gas discovery.
The well was tested in carbonate main target reservoir with a completion-constrained (2-7/8” tubing)
rate of 41.3 MMSCFD and 246 barrel of condensate per day (BCPD) through 40/64-inch choke size.
The drilling result of the Lang Lebah-1RDR2 is historically PTTEP’s largest discovery. This affirms
PTTEP’s strategy in organically growing reserves from exploration activities. The discovery will
require further drilling to confirm upside potential.
Sarawak SK410B Project is located in the shallow waters, approx. 90 kms offshore Sarawak, with
the acreages of approx. 1,870 sq kms. The consortium consists of PTTEP HKO (the Operator),
KUFPEC and PETRONAS Carigali with participating interests of 42.5 per cent, 42.5 per cent and
15 per cent respectively.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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U.S. refinery capacity reaches record high at the start of 2019
Source: U.S. Energy Information Administration, Refinery Capacity Report
As of January 1, 2019, U.S. operable atmospheric crude oil distillation capacity was a record-high
18.8 million barrels per calendar day (b/cd), an increase of 1.1% since the beginning of 2018,
according to EIA’s annual Refinery Capacity Report.
The previous high of 18.6 million b/cd was set at the beginning of 1981. U.S. annual operable crude
oil distillation unit (CDU) capacity has increased slightly in six of the past seven years. Operable
capacity includes both idle and operating capacity.
Refinery capacity is measured in two ways: barrels per calendar day and barrels per stream day.
Barrels per calendar day reflect the input that a distillation unit can process in a 24-hour period
under usual operating conditions, taking into account both planned and unplanned maintenance.
Barrels per stream day reflect the maximum number of barrels of input that a distillation facility can
process within a 24-hour period when running at full capacity under optimal crude oil and product
slate conditions with no allowance for downtime. Stream day capacity is typically about 6% higher
than calendar day capacity.
EIA’s Refinery Capacity Report also includes information about secondary refining units—
downstream refinery units that process the products coming from the atmospheric crude oil
distillation unit into ultra-low sulfur diesel, gasoline, and other petroleum products. Secondary
refining capacity, including thermal cracking (coking), catalytic hydrocracking, and hydrotreating and
desulfurization, increased by less than 1% from year-ago levels.
The number of operable refineries remained at 135 on January 1, 2019; however, similar to last
year’s report, four refineries previously considered separate in survey data were merged into two.
Tesoro Refining & Marketing’s Carson and Wilmington plants (now owned by Marathon) in
California combined operations, and the Par Hawaii and Island Energy Services plants in Kapolei,
Hawaii, also merged.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Targa Resources started up a new condensate splitter in Channelview, Texas, in 2019 that was idle
at the start of the year but began operating during the first quarter. Suncor Energy split its reporting
of the Commerce City East and West plants in Colorado.
Marathon Petroleum Corporation acquired 10 refineries from Andeavor in 2018, making it the largest
refiner in the United States. Marathon’s refineries collectively have an operable capacity of slightly
more than 3.0 million b/cd, 16% of total U.S. refining capacity and about 800,000 b/cd more capacity
than the second-largest refiner, Valero Energy Corporation.
Refinery runs and crude oil production both continued at record levels in the United States in 2018.
U.S. crude oil production, which averaged 11.0 million barrels per day (b/d) in 2018, has more than
doubled since 2009. Crude oil inputs to refineries averaged 17.0 million b/d in 2018 compared with
14.3 million b/d in 2009.
Since 2009, operable refinery crude oil distillation capacity increased 1.2 million b/cd, and utilization
rose from 83% in 2009 to 93% in 2018, resulting in the 2.6 million b/d increase in crude oil inputs.
During the same period, U.S. crude oil imports decreased by 1.3 million b/d, and U.S. crude oil
exports increased by 2.0 million b/d, leading to an overall decrease in net imports of 3.3 million b/d.
Source: U.S. Energy Information Administration, Refinery Capacity Report
Note: Differences between crude oil inputs and the sum of production and net imports reflect inventory
changes and unaccounted for crude oil.
EIA’s Refinery Capacity Report also includes information on capacity expansions planned for 2019.
Based on information reported to EIA in the most recent update, U.S. refining capacity will not
expand significantly during 2019. A June 21 fire at the 335,000 b/cd capacity Philadelphia Energy
Solutions refinery complex, the largest refinery on the East Coast, has resulted in its announced
closure.
Further investment in U.S. refinery expansion projects depends on expectations about crude oil
price spreads, the characteristics of the crude oils produced, product specifications, and the relative
economic advantage of the U.S. refining fleet compared with refineries in the rest of the world.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 10
NewBase June 12 – 2019 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices fall, as U.S Crude Oil production passes 12 MBPD
Reuters + NewBase
Oil prices fell on Friday but posted their second straight week of gains ahead of trade talks between
the U.S. and Chinese presidents this weekend, and on widely expected production cuts from OPEC
on Monday.
The most active September Brent crude futures LCOU9 fell 93 cents to settle at $64.74 a barrel.
Brent August crude futures settled unchanged at $66.55 a barrel. U.S. West Texas Intermediate
(WTI) crude CLc1 futures lost 96 cents to settle at $58.47 a barrel.
Brent posted a gain of more than 20% in the first half of 2019, while WTI marked a gain of more
than 25%. Both contracts also notched their second straight weekly gain.
Oil futures fell just ahead of settlement as investors sized up positions before meetings this weekend
and next week that could lend direction for the market.
Oil price special
coverage
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most
anticipated meeting is between U.S. President Donald Trump and Chinese President Xi Jinping on
Saturday.
A trade war between the world’s two biggest economies has weighed on prices, fanning fears that
slowing economic growth could dent demand for oil. Trump said he hoped for productive talks with
the Chinese president, but said he had not made any promises about a reprieve from escalating
tariffs.
The Organization of the Petroleum Exporting Countries and some non-members including Russia,
known as OPEC+, will hold meetings on July 1-2 in Vienna to decide whether to extend their supply
cuts.
“You had a wave of selling come in advance of the OPEC and non-OPEC meeting on Monday,
where it’s fully expected that they’re going to rollover production cuts,” said Andrew Lipow of Lipow
Oil Associates in Houston.
“But ironically they’re doing that because they’re seeing the oil demand growth forecast get revised
downward and that’s contributing to a sense that we remain oversupplied.” Russia is cutting its oil
output in June by slightly more than envisaged in the OPEC+ deal, RIA news agency cited Russian
Energy Minister Alexander Novak as saying.
OPEC+ members agreed to curb oil output by 1.2 million barrels per day from Jan. 1.
Oil prices could stall as a slowing global economy squeezes demand and U.S. crude floods the
market, a Reuters poll of analysts found, despite an expected extension by OPEC and its allies of
their output-cutting pact.
The survey of 42 economists and analysts forecast Brent crude would average $67.59 a barrel in
2019, down from the $68.84 estimate in May. Tensions between the United Sates and Iran have
also been keeping markets on edge.
A week after Trump called off air strikes on Iran at the last minute, the prospect that Tehran could
soon violate its nuclear commitments has created additional diplomatic urgency to find a way out of
the crisis.
Record U.S. crude production has also capped oil prices. U.S. crude output in April rose to a fresh
monthly record, surpassing 12 million barrels per day, according to a government report on Friday.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 12
U.S. energy firms this week increased the number of oil rigs operating for a second week in a row,
bringing the total count to 793, General Electric Co’s (GE.N) Baker Hughes energy services firm
said in its closely followed report.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Russia agrees with Saudi to extend OPEC deal by 6-9 months:
Russia has agreed with Saudi Arabia to extend by six to nine months a deal with OPEC on reducing
oil production, Russian President Vladimir Putin said. Putin, speaking after talks with Saudi Crown
Prince Mohammed bin Salman, told a news conference the deal would be extended in its current
form and with the same volumes.
The Organization of Petroleum Exporting
Countries, Russia and other producers, an
alliance known as OPEC+, meet on July 1-2
to discuss the deal that involves curbing oil
output by 1.2 million barrels per day (bpd).
The pact expires after June 30.
“We will support the extension, both Russia
and Saudi Arabia. As far as the length of the
extension is concerned, we have yet to
decide whether it will be six or nine months.
Maybe it will be nine months,” said Putin
said, who met the crown prince on the
sidelines of a G20 summit in Japan..
A nine-month extension would mean the deal runs out in March 2020.
Kirill Dmitriev, the chief executive of Russian Direct Investment Fund who helped design the OPEC-
Russia deal, said the pact in place since 2017 has already lifted Russian budget revenues by more
than 7 trillion roubles ($110 billion).
“The strategic
partnership within
OPEC+ has led to
the stabilisation of
oil markets and
allows both to
reduce and increase
production
depending on the
market demand
conditions, which
contributes to the
predictability and
growth of
investments in the
industry,” Dmitriev
said.
Benchmark Brent
has climbed more
than 25 percent since the start of the 2019. But prices could stall as a slowing global economy
squeezes demand and U.S. crude floods the market, a Reuters poll of analysts found
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 14
NewBase Special Coverage
News Agencies News Release June 30-2019
Oil to trade in current range or higher this summer as US-Iran
tensions simmer — CNBC survey
CNBC Patti Domm@PATTIDOMM
Oil experts surveyed by CNBC do not expect the U.S. to have any meaningful discussions with Iran
until at least six months, and more than half see either no direct military confrontation or just minor
skirmishes.
Fifty-nine per cent of the 22 respondents said they expect it could take six months or longer before
the U.S. and Iran enter discussions, while 23% see negotiations starting within three to six
months. President Donald Trump said earlier this week that the U.S. would be willing to
negotiate with Iran, with no preconditions, just days after he called off a retaliatory strike on Iran
following the downing of a U.S. military drone.
About 36% of the respondents do not expect a military confrontation between the U.S. and Iran,
and 18% expect minor skirmishes on the water, but with no injuries. Another 23% expect limited
missile strikes. Just 9% expect extended missile strikes or major conflicts on the water.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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The participants, polled between last Friday and Wednesday, mostly see oil prices trading in the
current range or higher, at the end of the summer, and 95% expect OPEC and Russia to agree to
extend an agreement to cut production by 1.2 million barrels a day when they meet next week.
“U.S. shale remains the overhang. When oil barely budges when tankers are literally exploding in
the Persian Gulf, then the market clearly thinks we are amply supplied,” wrote Dan Pickering of
Tudor, Pickering, Holt.
U.S.-Iran tensions are an important factor for the market, but just 14% saw geopolitics as the biggest
driver of oil prices. Instead demand issues were the factor for 41%, while 18% cited trade disputes,
seen by many in the market as a reason for weak demand.
CNBC Oil Survey KEY POINT S
 It could take six months or longer before the U.S. and Iran begin negotiations, according to
respondents to CNBC’s Oil Survey.
 More than half the respondents expect either no direct military confrontation or just minor
skirmishes between the U.S. and Iran, but 23% expect to see limited missile strikes.
 Nearly all participants expect OPEC and Russia to extend their production agreement when
OPEC and other producers meet next week.
 Oil is expected to trade in its current range or slightly higher this summer, with demand —
not geopolitics — seen as the biggest driver of prices.
“We believe the weak demand outlook, primarily due to escalating trade tensions, warrants
continued production restraint from the Declaration of Cooperation members to keep the oil markets
balanced in the second half,” wrote Amarpreet Singh, energy analyst at Barclays.
Many participants see oil trading somewhat higher or in a current range by the end of August. They
expect to see a bigger rise in U.S. oil prices this summer, with 50 percent expecting West Texas
Intermediate to trade at $60 to $70 per barrel at the end of August. That’s above the current price
of WTI futures of just under $60. But 41% said WTI could stay in the current $50 to $60 range.
Fifty-two percent expect the international benchmark Brent crude to trade at $60 to $70 per barrel.
Brent was in the middle of that range, at $65.43 per barrel, on Thursday. Another 38% see prices
rising above $70 but trading below $80 per barrel by the end of August.
Copyright © 2018 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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U.S. oil production is expected to continue to rise, with production averaging 12.5 million barrels a
day at the end of the year. About 37% expect the U.S. to be producing 12.3 million to 12.5 million
barrels a day by the end of the year.
Just one participant said the U.S. would produce less than 12 million barrels, while 13.5% expect
the U.S. to produce 13 million barrels a day or more. Last week, the U.S. produced 12.1 million
barrels a day, but production has hit 12.3 million barrels a day recently.
Nearly two-thirds expect Russia to comply with the joint production agreement with OPEC, and the
same amount expect Russia and OPEC to move toward a more formal agreement. Another 18%
believe Russia will end its agreement with OPEC within the year.
OPEC was viewed by 73% of the respondents as “very important” to oil prices, but 59% said OPEC
will be less relevant in five years.
About 68% of participants expect fuel prices to rise toward the end of the year as the shipping
industry transitions to a new lower-sulfur fuel.
The required transition to lower-sulfur marine fuel for the shipping industry at the start of next year
is expected to drive fuel prices higher, according to 68%. About 41% expect the gains in fuel to be
between 5% and 10%, but another 18% expected gains between 10% and 15%.
“The narrative in oil has changed. Last fall, all anyone wanted to talk about was the supply-side of
the equation, especially as it applied to the looming reinstatement of sanctions on Iran, along with
sanctions on Venezuela and civil unrest in Libya,” said Stephen Schork of the Schork Report. “Today
it is all about the demand side, such as the deleterious impact on the Chinese and U.S. economies
from the extant trade war and the inversion in the U.S. yield curve.”
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 17
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk
Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 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.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 18
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase June 2019 K. Al Awadi
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 19
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New base energy news 30 june 2019 issue no 1256 by khaled al awadi

  • 1. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 1 NewBase Energy News June 2019 - Issue No. 1254 Senior Editor Eng. Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE U.A.E: Focus on Abu Dhabi’s energy strategy at IEA conference TradeArabia News Service + NewBase Abu Dhabi’s comprehensive energy strategy was highlighted to an audience of global leaders at the fourth annual International Energy Agency (IEA) Global Conference on Energy Efficiency. The Abu Dhabi Department of Energy (DoE) took part in the conference, which took place on June 24 and 25 in Dublin, Ireland. Representing DoE, the government entity mandated to ensure excellence and sustainability in the UAE capital’s energy sector, was Mohammed bin Jarsh Al Falasi, DoE Undersecretary, who presented his department’s analysis and plans for the future of energy in Abu Dhabi before world leaders and heads of the international energy sector. Among those attending were Leo Varadkar, Irish Prime Minister; Dr Fatih Birol, IEA Executive Director; Mark Menezes, Undersecretary of Energy, US Department of Energy; Zhang Yong, Vice-Chairman of China’s National Development and Reform Commission and Hennadiy Zubko, Ukrainian Vice Prime Minister and Minister for Regional Development, Construction and Housing.
  • 2. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 2 Taking part in a panel discussion titled ‘Global Policy Insights,’ Al Falasi gave a presentation spotlighting Abu Dhabi’s energy scene and future trends, and outlined DoE’s roadmap for the energy sector. Among the key topics discussed was how DoE was established in March 2018 to be the key policy- maker and regulator of the Abu Dhabi energy sector during a period of paradigmatic shift away from fossil fuels towards renewables, a move which aims to reduce emissions and avoid runaway climate change. The audience were introduced to Abu Dhabi’s role as a leader in modernising energy systems since unbundling the sector in 1998, and how over the past three decades the emirate has provided power and water to approximately two thirds of the UAE, sustaining both itself and other large parts of the Union. Additionally, the role of the UAE capital as a prime mover in opening the power sector to private sector investment, becoming the first entities in the region to initiate tariff reforms for both power and water – a fundamental shift to promote responsible use of natural resources and cost efficiency. Al Falasi stated after his presentation: “The fourth IEA Global Conference on Energy Efficiency represented the perfect platform to show to the world’s most senior policy and decision-makers exactly how Abu Dhabi is pioneering a new model for energy. It is doing this by leading through innovation and by promoting a change in behaviour, notably by encouraging consumers to minimise their energy consumption and reduce emissions. “Abu Dhabi’s vision and leadership have laid out an ambition to further boost its leading position in the energy landscape by embracing technology to transition the energy sector towards a long-term sustainable energy solution. All of this underpins the emirate’s wider economic and social aspirations under Abu Dhabi Economic Vision 2030.” His Excellency added. The event was the first international activity DoE had undertaken with IEA since the two bodies signed a strategic partnership agreement in May this year. Under the terms of the agreement, the entities will enhance cooperation, promote training and capacity building, exchange knowledge and develop bilateral scientific, technical, legislative, administrative, and commercial expertise in the energy sector. The partnership will see DoE participate in the IEA’s programme of expert workshops and meetings. The IEA works to ensure reliable, affordable and clean energy for its member countries, focusing on four main areas: energy security, economic development, environmental awareness and worldwide engagement. Energy efficiency is a key focus area for the IEA, with the organisation conducting a range of activities on energy efficiency, including in-depth analyses and capacity building with policy makers in emerging economies. Its annual Global Conference on Energy Efficiency draws a large international audience, bringing together dignitaries and senior leaders to advance global progress on energy efficiency. –
  • 3. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 3 UAE: Blackrock, KKR close Adnoc pipeline infrastructure deal The National + NewBase Abu Dhabi National Oil Company (Adnoc) has announced that it has closed its pipeline infrastructure investment agreement with top equity fims - BlackRock and KKR. The transaction was originally announced in February this year when the duo signed an initial investment agreement to pump in $4 billion into the midstream pipeline assets, said a statement from Adnoc. Following this announcement the Abu Dhabi Retirement Pensions and Benefits Fund, ADRPBF, agreed to invest a further $300 million. The ADRPBF investment is due to close in the next quarter, it stated. The KKR and BlackRock investment, which was successfully funded through their global infrastructure funds and financed by a syndicate of international banks, was oversubscribed during its syndication, said the statement. The innovative leasing investment structure marks the first time that leading, global and domestic institutional investors have deployed long-term equity capital into key midstream infrastructure assets of a national oil company in the UAE, it added. Under this agreement, BlackRock and KKR will jointly acquire a 40% stake in a newly-formed entity, Adnoc Oil Pipelines – Sole Proprietorship LLC (‘Adnoc Oil Pipelines’), with ADRPBF acquiring 3% and Adnoc holding the remaining 57%. Adnoc Oil Pipelines leases Adnoc’s interest in 18 pipelines, transporting stabilised crude oil and condensate across Adnoc’s offshore and onshore upstream concessions, for a 23-year period.
  • 4. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 4 The entity receives a tariff payable by Adnoc, for its share of volume of crude and condensate that flows through the pipelines, backed by minimum volume commitments. Sovereignty over the pipelines and management of pipeline operations remain with Adnoc, said the statement. Commenting on the deal, Ahmed Jasim Al Zaabi, the group director for Finance and Investment at Adnoc, said: "The successful closing of this pioneering transaction and the oversubscribed financing is a clear vote of confidence by the global investment and finance community in both the UAE and Adnoc as an attractive investment destination." "It also highlights the quality of Adnoc’s midstream pipeline assets and our innovative approach to structuring value-creating investment opportunities for our partners and investors," he added. According to him, the collection of 18 pipelines being leased by Adnoc Oil Pipelines has a total length of over 750km, and a total aggregate capacity of approximately 13,000 Mbblpd (gross). These assets represent key midstream infrastructure for Abu Dhabi’s energy ecosystem, allowing for the vast majority of Abu Dhabi’s crude oil production to be transported from Adnoc’s onshore and offshore upstream assets, to Abu Dhabi’s key take-away outlets and terminals for conversion to other high-value products, or on to global energy markets, stated Al Zaabi. The pipelines have underlying long-term minimum volume commitments and are supported by stable crude oil production from Adnoc Onshore and Adnoc Offshore – the leading onshore and offshore operating companies in Adnoc with global IOCs as JV partners, each with an average remaining concession life of over 35 years. Adnoc said it has, over the last two years, significantly expanded its strategic partnership and co- investment model and created new investment opportunities in all areas of its value chain, while at the same time, more proactively managing its portfolio of assets and capital. This transaction continues this strategy and follows on from several other recent value creation initiatives including Adnoc’s debut capital markets transaction, the issuance of the Abu Dhabi Crude Oil Pipeline (ADCOP) bond, the IPO of Adnoc Distribution, the recent strategic equity and commercial partnerships between Adnoc Drilling and Baker Hughes as well as Adnoc Refining and Eni and OMV. Fitch Ratings also recently assigned Adnoc a standalone credit rating of AA+ and a Long-Term Issuer Default Rating of AA with a Stable Outlook. Both ratings are the highest currently assigned by Fitch for any oil and gas company, globally
  • 5. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 5 Egypt: SDX Energy announces oil discovery at West Gharib Source: SDX Energy SDX Energy, the North Africa focused oil and gas company, has announced that an oil discovery has been made at its Rabul-7 development well in the West Gharib Concession in Egypt (SDX 50% Working Interest & Joint Operator). The well was drilled to a total depth of 5,323 feet and encountered approx. 134 feet of net heavy oil pay across the Yusr and Bakr formations, with an average porosity of 18%. The well was completed as a producer, connected to the central processing facilities at Meseda and brought on-line at an average stabilised rate over five days of approx. 415 bbl/d (gross). Mark Reid, CFO and Interim CEO of SDX, commented: 'We are pleased to have made an oil discovery at our Rabul-7 well, in the West Gharib Concession and to achieve further drilling success in this area of the Concession. The well was brought online in a timely and cost efficient manner and will provide further support to our FY 2019 production guidance for this asset of gross 4,000-4,200 bbl/d. Another development well is planned for the Concession in H2'19. The final location of this well is dependent on government approvals and we will update the market on this in due course.'
  • 6. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 6 India: ONGC invites offers for enhancing production of O&G Source: ONGC ONGC has announced a Notice Inviting Offer (NIO) seeking partners for enhancement of oil and gas production from its 64 marginal nomination fields with the intention to maximize recovery from these fields by infusion of new technology. The offer shall allow interested companies to participate in the International Competitive Bidding (ICB) process announced for 17 onshore contract areas comprising of 64 oil and gas producing fieldswith total in-place O+OEG volume of about 300 MMTOE. Companies, either alone or in consortium or joint ventures, may bid for one or more contract areas. The bidders are required to fulfil the requisite technical and financial criteria and the bids would be evaluated on the basis of revenue sharing from the incremental oil and gas production. ONGC is inviting the bids through its e-procurement portal (https://etender.ongc.co.in). A pre-bid conference will be held at ONGC Corporate Office, New Delhi. Bidders interested in studying the data can purchase field information dockets and data packages. Interested companies can access the data viewing facility at Institute of Reservoir Studies (IRS), ONGC, Ahmedabad. Salient features of the ONGC offering:  Complete marketing and pricing freedom to sell oil and gas on arm’s length basis through competitive basis.  Contractor will be selected on revenue sharing basis. The revenue will be shared on incremental production over and above the baseline production under Business-As-Usual (BAU) scenario.  Contract period of 15 years with an option to extend by 5 years.  Reduction of 10% in the royalty rate for additional production of natural gas over and above BAU scenario.  Easy to administer Revenue Sharing model based contract.  Exploration permitted during the contract period including the right to explore all kinds of hydrocarbon.  Contractors will not be required to reimburse any expenditure already incurred by ONGC.  Incentive shall be available for achieving production higher than the committed incremental production.
  • 7. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 7 Malaysia: PTTEP makes gas discovery offshore Sarawak Source: The Nation PTTEP HKO, a wholly-owned subsidiary of PTT Exploration and Production, has made a discovery of gas at the Lang Lebah-1RDR2, the first exploration well in Sarawak SK410B Projectlocated in offshore Sarawak, Malaysia. The company said in a press release that the drilling of Lang Lebah-1RDR2, which began in March 2019, targeted non-associated gas in the primary target of the Middle Miocene cycle IV/V carbonate reservoir and undertaken to a total depth of 3,810 meters. The well encountered 252 meters of net gas pay, indicating multi-TCF gas discovery. The well was tested in carbonate main target reservoir with a completion-constrained (2-7/8” tubing) rate of 41.3 MMSCFD and 246 barrel of condensate per day (BCPD) through 40/64-inch choke size. The drilling result of the Lang Lebah-1RDR2 is historically PTTEP’s largest discovery. This affirms PTTEP’s strategy in organically growing reserves from exploration activities. The discovery will require further drilling to confirm upside potential. Sarawak SK410B Project is located in the shallow waters, approx. 90 kms offshore Sarawak, with the acreages of approx. 1,870 sq kms. The consortium consists of PTTEP HKO (the Operator), KUFPEC and PETRONAS Carigali with participating interests of 42.5 per cent, 42.5 per cent and 15 per cent respectively.
  • 8. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 8 U.S. refinery capacity reaches record high at the start of 2019 Source: U.S. Energy Information Administration, Refinery Capacity Report As of January 1, 2019, U.S. operable atmospheric crude oil distillation capacity was a record-high 18.8 million barrels per calendar day (b/cd), an increase of 1.1% since the beginning of 2018, according to EIA’s annual Refinery Capacity Report. The previous high of 18.6 million b/cd was set at the beginning of 1981. U.S. annual operable crude oil distillation unit (CDU) capacity has increased slightly in six of the past seven years. Operable capacity includes both idle and operating capacity. Refinery capacity is measured in two ways: barrels per calendar day and barrels per stream day. Barrels per calendar day reflect the input that a distillation unit can process in a 24-hour period under usual operating conditions, taking into account both planned and unplanned maintenance. Barrels per stream day reflect the maximum number of barrels of input that a distillation facility can process within a 24-hour period when running at full capacity under optimal crude oil and product slate conditions with no allowance for downtime. Stream day capacity is typically about 6% higher than calendar day capacity. EIA’s Refinery Capacity Report also includes information about secondary refining units— downstream refinery units that process the products coming from the atmospheric crude oil distillation unit into ultra-low sulfur diesel, gasoline, and other petroleum products. Secondary refining capacity, including thermal cracking (coking), catalytic hydrocracking, and hydrotreating and desulfurization, increased by less than 1% from year-ago levels. The number of operable refineries remained at 135 on January 1, 2019; however, similar to last year’s report, four refineries previously considered separate in survey data were merged into two. Tesoro Refining & Marketing’s Carson and Wilmington plants (now owned by Marathon) in California combined operations, and the Par Hawaii and Island Energy Services plants in Kapolei, Hawaii, also merged.
  • 9. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 9 Targa Resources started up a new condensate splitter in Channelview, Texas, in 2019 that was idle at the start of the year but began operating during the first quarter. Suncor Energy split its reporting of the Commerce City East and West plants in Colorado. Marathon Petroleum Corporation acquired 10 refineries from Andeavor in 2018, making it the largest refiner in the United States. Marathon’s refineries collectively have an operable capacity of slightly more than 3.0 million b/cd, 16% of total U.S. refining capacity and about 800,000 b/cd more capacity than the second-largest refiner, Valero Energy Corporation. Refinery runs and crude oil production both continued at record levels in the United States in 2018. U.S. crude oil production, which averaged 11.0 million barrels per day (b/d) in 2018, has more than doubled since 2009. Crude oil inputs to refineries averaged 17.0 million b/d in 2018 compared with 14.3 million b/d in 2009. Since 2009, operable refinery crude oil distillation capacity increased 1.2 million b/cd, and utilization rose from 83% in 2009 to 93% in 2018, resulting in the 2.6 million b/d increase in crude oil inputs. During the same period, U.S. crude oil imports decreased by 1.3 million b/d, and U.S. crude oil exports increased by 2.0 million b/d, leading to an overall decrease in net imports of 3.3 million b/d. Source: U.S. Energy Information Administration, Refinery Capacity Report Note: Differences between crude oil inputs and the sum of production and net imports reflect inventory changes and unaccounted for crude oil. EIA’s Refinery Capacity Report also includes information on capacity expansions planned for 2019. Based on information reported to EIA in the most recent update, U.S. refining capacity will not expand significantly during 2019. A June 21 fire at the 335,000 b/cd capacity Philadelphia Energy Solutions refinery complex, the largest refinery on the East Coast, has resulted in its announced closure. Further investment in U.S. refinery expansion projects depends on expectations about crude oil price spreads, the characteristics of the crude oils produced, product specifications, and the relative economic advantage of the U.S. refining fleet compared with refineries in the rest of the world.
  • 10. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 10 NewBase June 12 – 2019 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Oil prices fall, as U.S Crude Oil production passes 12 MBPD Reuters + NewBase Oil prices fell on Friday but posted their second straight week of gains ahead of trade talks between the U.S. and Chinese presidents this weekend, and on widely expected production cuts from OPEC on Monday. The most active September Brent crude futures LCOU9 fell 93 cents to settle at $64.74 a barrel. Brent August crude futures settled unchanged at $66.55 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures lost 96 cents to settle at $58.47 a barrel. Brent posted a gain of more than 20% in the first half of 2019, while WTI marked a gain of more than 25%. Both contracts also notched their second straight weekly gain. Oil futures fell just ahead of settlement as investors sized up positions before meetings this weekend and next week that could lend direction for the market. Oil price special coverage
  • 11. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 11 The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most anticipated meeting is between U.S. President Donald Trump and Chinese President Xi Jinping on Saturday. A trade war between the world’s two biggest economies has weighed on prices, fanning fears that slowing economic growth could dent demand for oil. Trump said he hoped for productive talks with the Chinese president, but said he had not made any promises about a reprieve from escalating tariffs. The Organization of the Petroleum Exporting Countries and some non-members including Russia, known as OPEC+, will hold meetings on July 1-2 in Vienna to decide whether to extend their supply cuts. “You had a wave of selling come in advance of the OPEC and non-OPEC meeting on Monday, where it’s fully expected that they’re going to rollover production cuts,” said Andrew Lipow of Lipow Oil Associates in Houston. “But ironically they’re doing that because they’re seeing the oil demand growth forecast get revised downward and that’s contributing to a sense that we remain oversupplied.” Russia is cutting its oil output in June by slightly more than envisaged in the OPEC+ deal, RIA news agency cited Russian Energy Minister Alexander Novak as saying. OPEC+ members agreed to curb oil output by 1.2 million barrels per day from Jan. 1. Oil prices could stall as a slowing global economy squeezes demand and U.S. crude floods the market, a Reuters poll of analysts found, despite an expected extension by OPEC and its allies of their output-cutting pact. The survey of 42 economists and analysts forecast Brent crude would average $67.59 a barrel in 2019, down from the $68.84 estimate in May. Tensions between the United Sates and Iran have also been keeping markets on edge. A week after Trump called off air strikes on Iran at the last minute, the prospect that Tehran could soon violate its nuclear commitments has created additional diplomatic urgency to find a way out of the crisis. Record U.S. crude production has also capped oil prices. U.S. crude output in April rose to a fresh monthly record, surpassing 12 million barrels per day, according to a government report on Friday.
  • 12. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 12 U.S. energy firms this week increased the number of oil rigs operating for a second week in a row, bringing the total count to 793, General Electric Co’s (GE.N) Baker Hughes energy services firm said in its closely followed report.
  • 13. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 13 Russia agrees with Saudi to extend OPEC deal by 6-9 months: Russia has agreed with Saudi Arabia to extend by six to nine months a deal with OPEC on reducing oil production, Russian President Vladimir Putin said. Putin, speaking after talks with Saudi Crown Prince Mohammed bin Salman, told a news conference the deal would be extended in its current form and with the same volumes. The Organization of Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, meet on July 1-2 to discuss the deal that involves curbing oil output by 1.2 million barrels per day (bpd). The pact expires after June 30. “We will support the extension, both Russia and Saudi Arabia. As far as the length of the extension is concerned, we have yet to decide whether it will be six or nine months. Maybe it will be nine months,” said Putin said, who met the crown prince on the sidelines of a G20 summit in Japan.. A nine-month extension would mean the deal runs out in March 2020. Kirill Dmitriev, the chief executive of Russian Direct Investment Fund who helped design the OPEC- Russia deal, said the pact in place since 2017 has already lifted Russian budget revenues by more than 7 trillion roubles ($110 billion). “The strategic partnership within OPEC+ has led to the stabilisation of oil markets and allows both to reduce and increase production depending on the market demand conditions, which contributes to the predictability and growth of investments in the industry,” Dmitriev said. Benchmark Brent has climbed more than 25 percent since the start of the 2019. But prices could stall as a slowing global economy squeezes demand and U.S. crude floods the market, a Reuters poll of analysts found
  • 14. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 14 NewBase Special Coverage News Agencies News Release June 30-2019 Oil to trade in current range or higher this summer as US-Iran tensions simmer — CNBC survey CNBC Patti Domm@PATTIDOMM Oil experts surveyed by CNBC do not expect the U.S. to have any meaningful discussions with Iran until at least six months, and more than half see either no direct military confrontation or just minor skirmishes. Fifty-nine per cent of the 22 respondents said they expect it could take six months or longer before the U.S. and Iran enter discussions, while 23% see negotiations starting within three to six months. President Donald Trump said earlier this week that the U.S. would be willing to negotiate with Iran, with no preconditions, just days after he called off a retaliatory strike on Iran following the downing of a U.S. military drone. About 36% of the respondents do not expect a military confrontation between the U.S. and Iran, and 18% expect minor skirmishes on the water, but with no injuries. Another 23% expect limited missile strikes. Just 9% expect extended missile strikes or major conflicts on the water.
  • 15. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 15 The participants, polled between last Friday and Wednesday, mostly see oil prices trading in the current range or higher, at the end of the summer, and 95% expect OPEC and Russia to agree to extend an agreement to cut production by 1.2 million barrels a day when they meet next week. “U.S. shale remains the overhang. When oil barely budges when tankers are literally exploding in the Persian Gulf, then the market clearly thinks we are amply supplied,” wrote Dan Pickering of Tudor, Pickering, Holt. U.S.-Iran tensions are an important factor for the market, but just 14% saw geopolitics as the biggest driver of oil prices. Instead demand issues were the factor for 41%, while 18% cited trade disputes, seen by many in the market as a reason for weak demand. CNBC Oil Survey KEY POINT S  It could take six months or longer before the U.S. and Iran begin negotiations, according to respondents to CNBC’s Oil Survey.  More than half the respondents expect either no direct military confrontation or just minor skirmishes between the U.S. and Iran, but 23% expect to see limited missile strikes.  Nearly all participants expect OPEC and Russia to extend their production agreement when OPEC and other producers meet next week.  Oil is expected to trade in its current range or slightly higher this summer, with demand — not geopolitics — seen as the biggest driver of prices. “We believe the weak demand outlook, primarily due to escalating trade tensions, warrants continued production restraint from the Declaration of Cooperation members to keep the oil markets balanced in the second half,” wrote Amarpreet Singh, energy analyst at Barclays. Many participants see oil trading somewhat higher or in a current range by the end of August. They expect to see a bigger rise in U.S. oil prices this summer, with 50 percent expecting West Texas Intermediate to trade at $60 to $70 per barrel at the end of August. That’s above the current price of WTI futures of just under $60. But 41% said WTI could stay in the current $50 to $60 range. Fifty-two percent expect the international benchmark Brent crude to trade at $60 to $70 per barrel. Brent was in the middle of that range, at $65.43 per barrel, on Thursday. Another 38% see prices rising above $70 but trading below $80 per barrel by the end of August.
  • 16. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 16 U.S. oil production is expected to continue to rise, with production averaging 12.5 million barrels a day at the end of the year. About 37% expect the U.S. to be producing 12.3 million to 12.5 million barrels a day by the end of the year. Just one participant said the U.S. would produce less than 12 million barrels, while 13.5% expect the U.S. to produce 13 million barrels a day or more. Last week, the U.S. produced 12.1 million barrels a day, but production has hit 12.3 million barrels a day recently. Nearly two-thirds expect Russia to comply with the joint production agreement with OPEC, and the same amount expect Russia and OPEC to move toward a more formal agreement. Another 18% believe Russia will end its agreement with OPEC within the year. OPEC was viewed by 73% of the respondents as “very important” to oil prices, but 59% said OPEC will be less relevant in five years. About 68% of participants expect fuel prices to rise toward the end of the year as the shipping industry transitions to a new lower-sulfur fuel. The required transition to lower-sulfur marine fuel for the shipping industry at the start of next year is expected to drive fuel prices higher, according to 68%. About 41% expect the gains in fuel to be between 5% and 10%, but another 18% expected gains between 10% and 15%. “The narrative in oil has changed. Last fall, all anyone wanted to talk about was the supply-side of the equation, especially as it applied to the looming reinstatement of sanctions on Iran, along with sanctions on Venezuela and civil unrest in Libya,” said Stephen Schork of the Schork Report. “Today it is all about the demand side, such as the deleterious impact on the Chinese and U.S. economies from the extant trade war and the inversion in the U.S. yield curve.”
  • 17. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 17 NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE The Editor :”Khaled Al Awadi” Your partner in Energy Services NewBase energy news is produced daily (Sunday to Thursday) and sponsored by Hawk Energy Service – Dubai, UAE. For additional free subscription emails please contact Hawk Energy Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010 Mobile: +97150-4822502 khdmohd@hawkenergy.net khdmohd@hotmail.com Khaled Al Awadi is a UAE National with a total of 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.
  • 18. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 18 NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE NewBase June 2019 K. Al Awadi
  • 19. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 19 For Your Recruitments needs and Top Talents, please seek our approved agents below