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NewBase Energy News 12 May 2016 - Issue No. 849 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Mideast, North Africa need to invest $334b in power: report
AFP + Gulf News
Middle Eastern and North African states will need to invest $334 billion (Dh1.2 trillion) over five
years to meet rising power demand in the Mena region, a development bank said Wednesday.
The Arab Petroleum Investments Corporation (APICORP) said in a report that more than half the
amount, $198 billion, will be needed to add 147 gigawatts (GW) of generating capacity until 2020,
to the existing 315GW capacity.
The rest will go to transmission and distribution networks, said APICORP, the development bank
of the Organization of Arab Petroleum Exporting Countries. Electricity demand in the Mena region
has been growing, driven by population growth, industrialisation and low power prices, the report
said.
Despite projections for lower economic growth for the region, APICORP estimates that Mena
demand for electricity will grow at an average of eight per cent per year through 2020. It
estimated that 96GW of the required additional capacity are already in the execution stage.
The Gulf Cooperation Council (GCC) has 47 per cent, or 148GW, of the Mena power generation
capacity. Still the GCC — Bahrain, Kuwait, Oman, Qatar Saudi Arabia and the UAE — will need
investments worth $136 billion to add a further 69GW until 2020, the report said.
Power production
Saudi Arabia is expected to account for $71 billion of the investments. Non-Arab Iran is estimated
to need $63 billion in investments to boost its power production by 23GW to 93GW over the next
five years, the report said.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Iraq will need to spend $40 billion to double its electricity production to 29GW. Egypt, the most
populous nation in the region, is estimated to need $43 billion investments to raise its power
production to 56GW from 35GW.
APICORP however said several challenges and constraints face power investments in Mena
states. Oil-exporting countries, especially the GCC, are reducing expenditure and shelving capital
investments, including in the power sector, due to the sharp decline in oil revenues, it said.
Financing power projects is becoming more challenging after rating agencies have lowered the
credit worthiness of many Mena countries, APICORP said. Price reforms are also expected to
suppress demand for electricity in many countries.Z
A / C O N T R I B U T O R
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UAE: Dubai Supreme Council of Energy addresses energy
intensity mapping in Dubai… WAM
H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Dubai Supreme Council of Energy
has chaired the 40th meeting of the council at its headquarters. Saeed Mohammed Al Tayer, Vice
Chairman of the Supreme Council of Energy, attended the meeting.
"We support the Dubai Clean
Energy Strategy 2050 launched
by Vice President and Prime
Minister and Ruler of Dubai His
Highness Sheikh Mohammed
bin Rashid Al Maktoum, to make
Dubai a global hub for clean
energy and green economy,
establish a sustainable model in
energy conservation which can
be exported to the whole world,
and drive economic growth
without damaging the
environment and natural
resources. Our goal is to
become the city with the lowest
carbon footprint in the world by
2050. We discussed ENOC’s initiative to use compressed natural gas (CNG) for vehicles as an
alternative fuel. This will support our national economy and protect the environment, achieving
sustainable development, and preserving our resources for generations to come," said Al Tayer.
"We are working to achieve our wise government’s directives, the UAE National Vision 2021, and
the Dubai Plan 2021 to make Dubai a smart, integrated, and connected city that is sustainable
with its resources, improve living standards, and enhance Dubai’s position as an international
model of green economy.
The meeting also addressed and approved Energy Intensity Mapping to unify consumption and
building data to find a method of analysing and monitoring consumption levels. This will find a
solution to limit Dubai’s high levels of energy use and supports the demand side management
strategy to reduce overall demand by 30% by 2030," he added.
"We discussed strategic initiatives and programmes, and reviewed suggestions to develop a
partnership between the public and private sectors, to encourage the private sector’s participation
in infrastructure projects that contribute to the future of Dubai. During the meeting, we also
reviewed the annual financial report of the Dubai Supreme Council of Energy for 2015," said Al
Muhairbi.
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Qatar power sector needs $9bn investment during 2016-20
Gulf Times + AFP + Apicorp
Qatar’s power sector will require $9bn during 2016-20 for generating capacity and transmission
and distribution (T&D), according to Arab Petroleum Investments Corporation (Apicorp). “Our
estimates suggest that Qatar will need to invest around $9bn to add 5.2GW (Giga watt) to meet
rising demand in the medium term: $6bn in generation and $3bn in T&D,” Apicorp said in a
report.
Highlighting that Qatar has not built additional capacity over the past five years because it
already has adequate capacity of 8.8GW; it said with increasing demand and peak load
reaching a record 7.1GW in 2015, the country sanctioned two new projects that will add nearly
4.5GW in the medium term.
The Umm Al Haul power and desalination project with a capacity of 2.5GW and costing $3bn
will be built by K1 Energy and owned by Qatar Electricity and Water Company, K1 Energy,
Qatar Petroleum and the Qatar Foundation.
Another one is the 2GW Ras Lafan D independent water and power project, the planned
investments should keep the country on track to meet demand growth. In the Gulf Cooperation
Council (GCC), the power sector will require a total of $137bn over the next five years for
generation and T&D, the report said.
Highlighting that the GCC represents 47% or 148GW of the current Middle East and North
Africa (Mena) power-generating capacity, it said despite this large capacity, the region would
require $85bn for the addition of 69GW of generating capacity and another $52bn for T&D over
the next five years.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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The GCC governments will continue to cope well with rising demand and energy-price reform
will help temper demand rises, it said.
“Although GCC governments have announced budget deficits and indicated that government
expenditures will be tightened in response to lower oil prices, investments in the power sector
should not be affected and will be given priority,” it added.
Among the GCC countries, Saudi Arabia will require a total of $71bn in the power sector
($43bn for generation and $28bn for T&D); the UAE $34bn ($20bn and $14bn), Kuwait $12bn
($8bn and $4bn), Oman $8bn ($6bn and $2bn) and Bahrain $3bn ($2bn and $1bn).
In Saudi Arabia, whose estimated capacity stood at around 80GW in 2015 with Saudi Electricity
Company representing around 60GW; it said “we estimate that the country will need to invest
$71bn to increase capacity to114GW.”
The UAE needs to invest $34bn to meet the 17GW capacity addition needed over the medium
term, it said, adding the country experiences periodic blackouts and hopes to alleviate this by
integrating the seven emirates’ natural gas-distribution networks.
Observing that Kuwait’s estimated capacity in 2015 was around 16GW but will need to reach
22GW by 2020, requiring $12bn of investment; Apicorp said in the medium term, the country
has five power projects in the pipeline, which will add 5.8GW of capacity.
In Oman, rising demand will require generation capacity to grow at an annual rate of 9.6% and
the country will need to add 4.8GW in the medium term, involving investment of $8bn, it said.
Finding that in Bahrain, capacity will need to grow at 6% per annum; it said while this is a high
growth rate, it is nevertheless one of the lowest by Mena standards.
“As a result, we anticipate that $3bn needs to be invested over the next five years to meet
capacity additions of 1.4GW, bringing the total to 5.6GW by 2020,” it said.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 6
Oman marks maiden export of crude from Musandam Terminal
Oman Observer
Oman Oil Company Exploration & Production LLC (OOCEP), a subsidiary of Oman Oil Company
SAOC (OOC), has announced the successful completion of the loading of the first shipment of
crude oil that was fully processed at Musandam Gas Plant.
The tanker, VLCC Tsuruga, safely lifted approximately 300,000 barrels of crude from the
Musandam Terminal for crude oil export. The tanker departed the Single Point Mooring upon the
successful completion of the loading operation which marked a major achievement for OOCEP
and for Oman as a whole.
Commenting on the successful shipment of the crude oil, Khalifa al Makhmari (pictured), the
Musandam Gas Plant Project Director said:
“The achievement of this very significant
event marks the MGP Terminal as the second
Omani crude export terminal after Mina Al
Fahal on the international crude oil trade
routes.
We expect Musandam Gas Plant with its wide
range of oil and gas processing and export
capabilities to be a major contributor to the
economic prosperity of the Musandam
Governorate as well as to the national
economy.”
Musandam Gas Plant processes production
fluids from the nearby offshore Bukha A and
West Bukha fields and has a processing
capacity of up to 20,000 barrels of crude; 45
million cubic feet of gas and 75 tonnes of LPG per
day.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Madagascar: Pura Vida Holds 100% Interest in Madagascar's
Offshore Ambilobe Block… Pura Vida Enenrgy NL
Pura Vida Energy NL (Pura Vida or Company) reported Tuesday that it has increased its equity to
100 percent and has taken Operatorship of, the Ambilobe block, offshore Madagascar following
the withdrawal of Sterling Energy (UK) Limited, increasing from its previous 50 percent non-
operator interest. All regulatory and other approvals for the transfer of the interest and
Operatorship to Pura Vida have been obtained and the transfer is complete.
Securing 100 percent interest and Operatorship is important in opening up additional strategic
options and provides Pura Vida with maximum flexibility in how it progresses the Ambilobe block.
This announcement outlines the renegotiated terms of the work commitments under the
Production Sharing Contract (PSC) as the Company progresses towards the drilling phase and
provides an overview of the prospectivity of the block based on the preliminary interpretation of
the newly acquired 3D seismic data. Pura Vida anticipates a further review of prospectivity,
including resource estimates, following completion of final processing and interpretation.
Renegotiated PSC Terms
Pura Vida has recently renegotiated the terms of the PSC and has entered into an Assignment
Deed giving effect to those changes. The Deed is conditional only upon ratification of the
Presidential Decree.
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The Ambilobe block is currently in Phase 2 of the PSC which has been extended to January 2017.
All work commitments for Phase 2 have been completed. Pura Vida has the election to enter into
Phase 3 prior to the expiry of Phase 2.
The work commitments for Phase 3 include drilling one exploration well (to be funded by a future
farminee) prior to the expiry of Phase 3 which may be extended, at Pura Vida’s option, to January
2021.
With the 3D seismic processing nearing completion, there is no other extant work or material
financial commitments associated with the block other than the ongoing interpretation being
undertaken by Pura Vida.
The forward work commitments for the Ambilobe block to be undertaken by Pura Vida includes
the completion of processing and interpretation by year end. A competitive farmout process will be
commenced to fund the drilling of the well following completion of the seismic interpretation.
Overview of Preliminary Interpretation
The newly acquired 3D seismic pre-stack depth migrated data will be integrated with existing 2D
seismic data. The new data is of good quality, especially in the southern region of the survey area,
however, further improvements can be made in the north where better imaging results can be
expected that will enhance confidence and allow prospect maturation.
Early interpretation of the southern area has revealed a broad structurally controlled fairway where
multiple faulted anticlines exist.
These traps all have independent four way dip closures and trap size varies in area from 7.7
square miles (20 square kilometers) to 25 square miles (65 square kilometers) and have robust
closures with up to 2,133 feet (650 meters) vertical relief. Good seismic imaging within these
culminations shows stratigraphic complexity, cyclicity and stacking patterns that bodes well for the
presence of reservoirs and seals.
Work going forward will focus on defining leads and prospects in the southern part of the survey
area and building a portfolio whilst continuing processing, which is expected to take a further three
to four months to complete. The aim will be to mature all prospects in the portfolio and to promote
drill ready candidates ahead of the farmout campaign.
Managing Director, Damon Neaves, said:
“We are pleased to acquire 100 percent of the project and take over Operatorship. The additional
interest together with the new PSC te rms opens up the potential to significantly enhance the
value of the block to Pura Vida.”
Pura Vida Energy NL (ASX:PVD) is an
Australian-based African oil explorer
building a portfolio of high quality assets.
Pura Vida currently has operations
offshore Morocco, Gabon and
Madagascar with significant resource
potential and a fully funded high-impact
drilling program.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 9
Energy majors to take part in EIC 2016 Connect Middle East
http://www.the-eic.com/EICConnect/MiddleEast/AbouttheEvent.aspx
Abu Dhabi National Oil Company (Adnoc), Emirates Nuclear Energy Corporation (Enec), Shell
and BP are among many leading energy companies taking part in this year’s EIC Connect Middle
East event on May 17 at St. Regis Hotel and Resort on Saadiyat Island, Abu Dhabi.
The event, which has already attracted over 300 delegates from leading UK energy service
companies, is designed to increase foreign investment in the Emirates’ energy sector and bilateral
trade between the UAE and the UK through a day of conferences, vendor briefings, energy project
updates, exhibitions and one-to-one meetings between UAE and UK energy companies.
The fifth EIC Connect Middle East event to take place in Abu Dhabi, organised by the Energy
Industries Council (EIC), will be opened by Ali Al Jarwan, CEO of Abu Dhabi Marine Operating
Company (an Adnoc subsidiary), and the UK’s Ambassador to the UAE Philip Parham.
The keynote speakers will provide an overview on the benefits of doing business in the Emirates
and stress the importance of this event, the only one of its type in the UAE, in reinforcing the long
standing business relationship between the UAE and the UK, and supporting the objective of
increasing bilateral trade to £25 billion ($36 billion) by 2020.
Two conference sessions will take place during the day, with speakers coming from major regional
operators Adnoc, Enec, Shell, BP, Kentz, Atkins, and Endress+Hauser.
These sessions will focus on current and future energy projects in the UAE and the Middle East,
and the opportunities for UK companies to support these developments, which will help to meet
the growing energy demand in the region, and add value to the local supply chain, said the
statement.
Reflecting the increasingly diverse energy mix in the region, Enec will provide an update on the
Barakah project, the Emirates’ first nuclear power station, and provide information on how UK
companies can support this project to provide clean, safe and reliable energy to the country.
One of the key features of this event is its one-to-one sessions which bring together
representatives from the major energy companies in the region, such as Adnoc and many of its
subsidiaries, Enec, Amec Foster Wheeler, Petrofrac, McDermott and Flour with potential new UK
partners, providing these with information and advice on registration processes and their specific
project requirements.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 10
US: Is the American dream of energy independence dead?
CNBC - Holly Ellyatt | @HollyEllyatt
Low oil prices since mid-2014 have claimed many victims in the oil industry with oil workers' jobs
lost, rigs closed and exploration projects shelved. And no more so than in the U.S., a country
which had hoped that its shale oil and gas "revolution" could lead to U.S. energy independence by
2020.
Things have changed dramatically in global oil markets since the shale oil boom around 2010,
however, making those expectations more dream than reality for now. "I don't know if it's
physically possible for us to ever get to a point where we don't need to import certain types of
crude," Suzanne Minter, Oil & Natural Gas analyst at Platts Analytics, told CNBC.
"You look at our crude imports and it's about quality. We have displaced our light, sweet (crude)
imports but the barrels we bring in we need to run through our refineries and to blend with the
product we make."
Oil prices having fallen since mid-2014 on a glut in global supply -- caused in no small part by the
rise in U.S. oil output which was consumed domestically, reducing the need for crude imports, and
the refusal of oil group OPEC to cut production itself -- and failure of demand to keep pace, largely
down to an economic slowdown, particularly in China.
Oil prices fell from a high of $114 in June 2014 to the low point of around $26 in early 2016 but
have recovered slightly since then with a barrel of benchmark Brent crude currently trading at
$45.11 while U.S. West Texas Intermediate (WTI) is trading at $44.16.
Some analysts had forecast ahead of the decline in oil prices that shale oil and gas could enable
the U.S. to be energy independent by 2020 but that is looking more of a pipe dream for now.
While the U.S. produces around 9.2 million barrels a day of oil, according to government data from
February, its net imports still totaled 7.3 million barrels in the same month.
Shale oil resilient?
Despite OPEC's decision in late 2014 to maintain production in order to retain its market share in
the face of rival shale oil "newcomers," the shale oil industry in the
U.S. was nothing new. The industry had operated in the country for decades although it
accelerated in the early 2000s following a government-led shale oil development program.
But with declining oil prices over the last few years, U.S. producers found it hard to break even.
According to the last weekly rotary rig count by Baker Hughes in the week of May 6, 479 oil rigs
had closed from the same period last year, leaving 451 rotary rigs in action. Showing how fortunes
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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have changed in a short period of time, in 2011, Baker Hughes data shows that there were over
2,000 rigs in action in the U.S.
Platts' Minter said that OPEC had underestimated the resilience of shale oil producers, however.
"Shale has proved itself to be much more long-lived than people had thought originally," Minter
noted. "People assumed that (U.S. shale oil) wells had 12-24 months of decline curves and would
then go away."
"What's so different about U.S. production compared to anywhere else in the globe is that there
are 9,000 of us (producers) so as prices fell, if the individual producer could make it work for them,
they kept making it work – and I think that was what was not expected (by other non-U.S.
producers)."
In late 2015, the U.S. decided to lift a 40-year old ban on crude oil exports partly, at least, to help
shale oil producers. Minter thought it could give U.S. producers more access to trade.
"I do think, though, that now that you've got this export ban lifted out of the U.S., it flattens the
playing field once again to where I have something that somebody else might want so it's not a
one-way street anymore."
With oil prices starting to rise slowly, oil market analysts expect that a rebalancing of supply and
demand in the market is starting to take effect. Minter believed that in the next three to five years,
oil prices could recover to around $70 a barrel. "This is a blip in time so everybody should enjoy it.
But once we get rid of the backlog of wells we're going to move on and we're going to need higher
prices to keep on drilling."
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 12
NewBase 12 May 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices, Brent=47.6 & WTI=46.2 as Canadian oil sands fields
gradually return
Oil prices slightly fell early on Today 12/05/2016, weighed by the gradual return of Canadian oil
sands production, reversing a sharp rise the previous day when the U.S. government detailed an
unexpected fall in crude inventories.
International Brent crude futures were trading at $47.60 per barrel at 0143 GMT on Thursday,
down 47 cents, or 1 percent, from their last settlement. U.S. West Texas Intermediate (WTI) crude
futures were down 38 cents or 0.8 percent at $46.20
"A lot of people think that yesterday's jump was a bit over the top, so they've taken the profit while
they could this morning," said one oil trader.
The U.S. Energy Information Administration (EIA) said on Wednesday that U.S. crude inventories
fell 3.4 million barrels to 540 million barrels last week, compared with analysts' expectations for an
increase of 714,000 barrels and the American Petroleum Institute's (API) reported build of 3.5
million barrels in preliminary data issued on Tuesday.
The surprise draw in crude inventories was offset on Thursday by an expected increase in
Canadian oil sand crude production following disruptions to over 1 million barrels of daily
production capacity due to wildfire. "We were not totally surprised with the draw after the shut-in in
Canadian production," said Tariq Zahir, managing partner at Tyche Capital Advisors in New York.
Oil price special
coverage
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NewBase Special Coverage
News Agencies News Release 01 May 2016
CASPIAN OVERVIEW: AZERBAIJAN EYES 50BN M³/YR
EXPORTS BY 2050. By:Ilham Shaban is Natural Gas Europe's expert
While the development of the further stage of the Shah Deniz gas field and Southern Gas Corridor
(SGC) is reportedly continuing according to plan, Azerbaijan announced on May 5 that it is
preparing to export 50bn m3
/yr of natural gas in 2050, about 7 times more than the current level.
The state producer Socar and its partners aim to export initially 16bn m3
/yr of gas from Shah
Deniz stage 2 (SD2), now two-thirds complete, to Turkey and EU.
SD3, the biggest layer of Shah
Deniz with 500bn m3
of reserves, is
projected to become operational in
2032. Azerbaijan also plans to
operate the Shefeg-Asiman,
Naxchivan, Araz-Alov-Sharg,
Absheron, Umid and Babek gas
fields by 2030.
The country exported 2.458bn
m3
in the first quarter of 2016,
according to the state custom
committee's latest report, while
Socar head, Rovnag Abdullaev,
said May 11 that Baku has put
forward a proposal to Russian giant Gazprom to import 3-5bn m3
/yr, mostly to allow associated
gas to be re-injected into the Azeri-Chirag-Guneshli oil block to maintain the production level.
Coming to the TransAnatolian Pipeline (Tanap) project, its general manager Saltuk Duzyol told
Anadolu Agency on May 5 that the slump in global oil prices and low commodity prices allowed
the operator to cut its budget by a fifth. "Initially, the investment budget for Tanap was estimated
as $11.7bn, Thanks to low oil prices, we reduced our budget to $9.2bn."
Duzyol also noted that $4.5bn worth of tenders have been completed and their contracts
signed. The total capacity of the 1800-km Tanap is planned to rise to 23bn m3
/yr by 2023 and to
31bn m3
/yr by 2026.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Vagif Aliev, head of Socar's investments department, told NGE on May 1 that the length of
produced pipes for Tanap stood at 1088 km as of April 25, of which 893 km are positioned on the
route from the Georgia-Turkey border to Eskishekhir. He added that about 475 km of these pipes
were welded, and of those, 20 km had been laid in the trench.
Coming to TAP, the consortium has already kicked off tender issuing and selecting contractors.
The latest event was winning of a joint venture between Italy’s Renco and Greece’s Terna in the
engineering, procurement and construction (EPC) contract for two compressor stations and a
metering station for TAP.
Azerbaijan's energy minister Natig Aliev said last week that with the start of construction of TAP,
no obstacles stand in the way of SGC. Coming to the upstream sector of SD2, operated by BP, it
will add a further 16bn m3
/yr of gas production to the 9bn m3
/yr produced by SD1.
Around $28bn in capital investment will be required to produce the gas and transport it to the
Georgia-Turkey border (SCPX). Shah Deniz gas will travel 3,500 kilometres, to elevations of over
2,500 metres, and over 800 metres below the sea.
Work is ongoing at the Sangachal reception terminal, the Amec/Tekfen/Azfen) yard near Baku, the
Baku deepwater jackets factory and along the pipeline route. In the fourth quarter, the hull strips of
the Subsea Construction Vessel Khankendi completed their journey from Singapore through the
Volga-Don canal and arrived safely in Baku to join the bow section, which has now been
completed at the Baku Shipyard.
Once completed, this new vessel will be deployed to the SD2 area for the construction of the
subsea structures. Another major milestone was the delivery of the first two subsea christmas
trees that were delivered to Baku from Leeds, UK, following completion of their UK testing scope.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 15
AZERBAIJAN AIMS FOR 50BN M³/YR BY 2050
Azerbaijan can boost annual gas exports to 50bn m3
by 2050, deputy energy minister Natig
Abbasov said recently.
Abbasov said that Azerbaijan's main goal is to increase the volume of production and natural gas
export. "The works done in the country to increase gas production and implement the Southern
Gas Corridor (SGC) allow an increase in the volume of Azerbaijani gas export to 50bn m3
/yr by
2050," the ministry’s press office quoted him on May 5 as having said during a meeting with Otto
Wolf of the Institute of Mining and Energy Law at Germany's University of the Ruhr at Bochum.
The deputy minister reminded his audience that Azerbaijani gas exports to the European market
will start in 2019-2020 with gas to Turkey.
Azerbaijan currently produces about 29bn m3
/yr of gas – including gas re-injected to produce oil –
of which Shah Deniz Stage 1 (SD1) produces about 35%. The country is preparing to inaugurate
SD2 with 400bn m3
reserves and 16bn m3
/yr output capacity by 2018.
SD3, the biggest layer of Shah Deniz with 500bn m3
of reserves, is projected to become
operational in 2032. Azerbaijan also plans to operate Shefeg-Asiman, Naxchivan, Araz-Alov-
Sharg, Absheron, Umid and Babek gas fields by 2030.
At the meeting, Abbasov also mentioned the Azerbaijan-Georgia-Romania-Interconnection (Agri)
project, a decade-old conceptual plan for exporting Azeri gas as LNG across the Black Sea to
Europe. “As gas exports via the gas pipelines is much cheaper, the implementation of the Agri
project is planned as a future element of the SGC,” he noted.
Agri shareholders are Azerbaijan's state Socar, Georgia's COGC, Romanian state Romgaz and
Hungarian state utility MVM, which in January 2011 established Agri LNG, with each owning a
quarter-stake. Socar, whose gas would be marketed, chairs the board.
Agri envisages export of up to 8bn m3
/yr, the first stage being 2bn m3
/yr and the second and third
stages doubling it each time. The export terminal will be at Kulevi on the Georgian Black Sea
coast, where Socar already operates an oil export terminal, and the import terminal at Constanta
in Romania.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 16
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 25 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years, he has developed great
experiences in the designing & constructing of gas pipelines, gas metering & regulating stations
and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 12 May 2016 K. Al Awadi
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 17

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New base energy news issue 849 dated 12 may 2016

  • 1. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 1 NewBase Energy News 12 May 2016 - Issue No. 849 Edited & Produced by: Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE Mideast, North Africa need to invest $334b in power: report AFP + Gulf News Middle Eastern and North African states will need to invest $334 billion (Dh1.2 trillion) over five years to meet rising power demand in the Mena region, a development bank said Wednesday. The Arab Petroleum Investments Corporation (APICORP) said in a report that more than half the amount, $198 billion, will be needed to add 147 gigawatts (GW) of generating capacity until 2020, to the existing 315GW capacity. The rest will go to transmission and distribution networks, said APICORP, the development bank of the Organization of Arab Petroleum Exporting Countries. Electricity demand in the Mena region has been growing, driven by population growth, industrialisation and low power prices, the report said. Despite projections for lower economic growth for the region, APICORP estimates that Mena demand for electricity will grow at an average of eight per cent per year through 2020. It estimated that 96GW of the required additional capacity are already in the execution stage. The Gulf Cooperation Council (GCC) has 47 per cent, or 148GW, of the Mena power generation capacity. Still the GCC — Bahrain, Kuwait, Oman, Qatar Saudi Arabia and the UAE — will need investments worth $136 billion to add a further 69GW until 2020, the report said. Power production Saudi Arabia is expected to account for $71 billion of the investments. Non-Arab Iran is estimated to need $63 billion in investments to boost its power production by 23GW to 93GW over the next five years, the report said.
  • 2. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 2 Iraq will need to spend $40 billion to double its electricity production to 29GW. Egypt, the most populous nation in the region, is estimated to need $43 billion investments to raise its power production to 56GW from 35GW. APICORP however said several challenges and constraints face power investments in Mena states. Oil-exporting countries, especially the GCC, are reducing expenditure and shelving capital investments, including in the power sector, due to the sharp decline in oil revenues, it said. Financing power projects is becoming more challenging after rating agencies have lowered the credit worthiness of many Mena countries, APICORP said. Price reforms are also expected to suppress demand for electricity in many countries.Z A / C O N T R I B U T O R
  • 3. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 3 UAE: Dubai Supreme Council of Energy addresses energy intensity mapping in Dubai… WAM H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Dubai Supreme Council of Energy has chaired the 40th meeting of the council at its headquarters. Saeed Mohammed Al Tayer, Vice Chairman of the Supreme Council of Energy, attended the meeting. "We support the Dubai Clean Energy Strategy 2050 launched by Vice President and Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, to make Dubai a global hub for clean energy and green economy, establish a sustainable model in energy conservation which can be exported to the whole world, and drive economic growth without damaging the environment and natural resources. Our goal is to become the city with the lowest carbon footprint in the world by 2050. We discussed ENOC’s initiative to use compressed natural gas (CNG) for vehicles as an alternative fuel. This will support our national economy and protect the environment, achieving sustainable development, and preserving our resources for generations to come," said Al Tayer. "We are working to achieve our wise government’s directives, the UAE National Vision 2021, and the Dubai Plan 2021 to make Dubai a smart, integrated, and connected city that is sustainable with its resources, improve living standards, and enhance Dubai’s position as an international model of green economy. The meeting also addressed and approved Energy Intensity Mapping to unify consumption and building data to find a method of analysing and monitoring consumption levels. This will find a solution to limit Dubai’s high levels of energy use and supports the demand side management strategy to reduce overall demand by 30% by 2030," he added. "We discussed strategic initiatives and programmes, and reviewed suggestions to develop a partnership between the public and private sectors, to encourage the private sector’s participation in infrastructure projects that contribute to the future of Dubai. During the meeting, we also reviewed the annual financial report of the Dubai Supreme Council of Energy for 2015," said Al Muhairbi.
  • 4. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 4 Qatar power sector needs $9bn investment during 2016-20 Gulf Times + AFP + Apicorp Qatar’s power sector will require $9bn during 2016-20 for generating capacity and transmission and distribution (T&D), according to Arab Petroleum Investments Corporation (Apicorp). “Our estimates suggest that Qatar will need to invest around $9bn to add 5.2GW (Giga watt) to meet rising demand in the medium term: $6bn in generation and $3bn in T&D,” Apicorp said in a report. Highlighting that Qatar has not built additional capacity over the past five years because it already has adequate capacity of 8.8GW; it said with increasing demand and peak load reaching a record 7.1GW in 2015, the country sanctioned two new projects that will add nearly 4.5GW in the medium term. The Umm Al Haul power and desalination project with a capacity of 2.5GW and costing $3bn will be built by K1 Energy and owned by Qatar Electricity and Water Company, K1 Energy, Qatar Petroleum and the Qatar Foundation. Another one is the 2GW Ras Lafan D independent water and power project, the planned investments should keep the country on track to meet demand growth. In the Gulf Cooperation Council (GCC), the power sector will require a total of $137bn over the next five years for generation and T&D, the report said. Highlighting that the GCC represents 47% or 148GW of the current Middle East and North Africa (Mena) power-generating capacity, it said despite this large capacity, the region would require $85bn for the addition of 69GW of generating capacity and another $52bn for T&D over the next five years.
  • 5. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 5 The GCC governments will continue to cope well with rising demand and energy-price reform will help temper demand rises, it said. “Although GCC governments have announced budget deficits and indicated that government expenditures will be tightened in response to lower oil prices, investments in the power sector should not be affected and will be given priority,” it added. Among the GCC countries, Saudi Arabia will require a total of $71bn in the power sector ($43bn for generation and $28bn for T&D); the UAE $34bn ($20bn and $14bn), Kuwait $12bn ($8bn and $4bn), Oman $8bn ($6bn and $2bn) and Bahrain $3bn ($2bn and $1bn). In Saudi Arabia, whose estimated capacity stood at around 80GW in 2015 with Saudi Electricity Company representing around 60GW; it said “we estimate that the country will need to invest $71bn to increase capacity to114GW.” The UAE needs to invest $34bn to meet the 17GW capacity addition needed over the medium term, it said, adding the country experiences periodic blackouts and hopes to alleviate this by integrating the seven emirates’ natural gas-distribution networks. Observing that Kuwait’s estimated capacity in 2015 was around 16GW but will need to reach 22GW by 2020, requiring $12bn of investment; Apicorp said in the medium term, the country has five power projects in the pipeline, which will add 5.8GW of capacity. In Oman, rising demand will require generation capacity to grow at an annual rate of 9.6% and the country will need to add 4.8GW in the medium term, involving investment of $8bn, it said. Finding that in Bahrain, capacity will need to grow at 6% per annum; it said while this is a high growth rate, it is nevertheless one of the lowest by Mena standards. “As a result, we anticipate that $3bn needs to be invested over the next five years to meet capacity additions of 1.4GW, bringing the total to 5.6GW by 2020,” it said.
  • 6. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 6 Oman marks maiden export of crude from Musandam Terminal Oman Observer Oman Oil Company Exploration & Production LLC (OOCEP), a subsidiary of Oman Oil Company SAOC (OOC), has announced the successful completion of the loading of the first shipment of crude oil that was fully processed at Musandam Gas Plant. The tanker, VLCC Tsuruga, safely lifted approximately 300,000 barrels of crude from the Musandam Terminal for crude oil export. The tanker departed the Single Point Mooring upon the successful completion of the loading operation which marked a major achievement for OOCEP and for Oman as a whole. Commenting on the successful shipment of the crude oil, Khalifa al Makhmari (pictured), the Musandam Gas Plant Project Director said: “The achievement of this very significant event marks the MGP Terminal as the second Omani crude export terminal after Mina Al Fahal on the international crude oil trade routes. We expect Musandam Gas Plant with its wide range of oil and gas processing and export capabilities to be a major contributor to the economic prosperity of the Musandam Governorate as well as to the national economy.” Musandam Gas Plant processes production fluids from the nearby offshore Bukha A and West Bukha fields and has a processing capacity of up to 20,000 barrels of crude; 45 million cubic feet of gas and 75 tonnes of LPG per day.
  • 7. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 7 Madagascar: Pura Vida Holds 100% Interest in Madagascar's Offshore Ambilobe Block… Pura Vida Enenrgy NL Pura Vida Energy NL (Pura Vida or Company) reported Tuesday that it has increased its equity to 100 percent and has taken Operatorship of, the Ambilobe block, offshore Madagascar following the withdrawal of Sterling Energy (UK) Limited, increasing from its previous 50 percent non- operator interest. All regulatory and other approvals for the transfer of the interest and Operatorship to Pura Vida have been obtained and the transfer is complete. Securing 100 percent interest and Operatorship is important in opening up additional strategic options and provides Pura Vida with maximum flexibility in how it progresses the Ambilobe block. This announcement outlines the renegotiated terms of the work commitments under the Production Sharing Contract (PSC) as the Company progresses towards the drilling phase and provides an overview of the prospectivity of the block based on the preliminary interpretation of the newly acquired 3D seismic data. Pura Vida anticipates a further review of prospectivity, including resource estimates, following completion of final processing and interpretation. Renegotiated PSC Terms Pura Vida has recently renegotiated the terms of the PSC and has entered into an Assignment Deed giving effect to those changes. The Deed is conditional only upon ratification of the Presidential Decree.
  • 8. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 8 The Ambilobe block is currently in Phase 2 of the PSC which has been extended to January 2017. All work commitments for Phase 2 have been completed. Pura Vida has the election to enter into Phase 3 prior to the expiry of Phase 2. The work commitments for Phase 3 include drilling one exploration well (to be funded by a future farminee) prior to the expiry of Phase 3 which may be extended, at Pura Vida’s option, to January 2021. With the 3D seismic processing nearing completion, there is no other extant work or material financial commitments associated with the block other than the ongoing interpretation being undertaken by Pura Vida. The forward work commitments for the Ambilobe block to be undertaken by Pura Vida includes the completion of processing and interpretation by year end. A competitive farmout process will be commenced to fund the drilling of the well following completion of the seismic interpretation. Overview of Preliminary Interpretation The newly acquired 3D seismic pre-stack depth migrated data will be integrated with existing 2D seismic data. The new data is of good quality, especially in the southern region of the survey area, however, further improvements can be made in the north where better imaging results can be expected that will enhance confidence and allow prospect maturation. Early interpretation of the southern area has revealed a broad structurally controlled fairway where multiple faulted anticlines exist. These traps all have independent four way dip closures and trap size varies in area from 7.7 square miles (20 square kilometers) to 25 square miles (65 square kilometers) and have robust closures with up to 2,133 feet (650 meters) vertical relief. Good seismic imaging within these culminations shows stratigraphic complexity, cyclicity and stacking patterns that bodes well for the presence of reservoirs and seals. Work going forward will focus on defining leads and prospects in the southern part of the survey area and building a portfolio whilst continuing processing, which is expected to take a further three to four months to complete. The aim will be to mature all prospects in the portfolio and to promote drill ready candidates ahead of the farmout campaign. Managing Director, Damon Neaves, said: “We are pleased to acquire 100 percent of the project and take over Operatorship. The additional interest together with the new PSC te rms opens up the potential to significantly enhance the value of the block to Pura Vida.” Pura Vida Energy NL (ASX:PVD) is an Australian-based African oil explorer building a portfolio of high quality assets. Pura Vida currently has operations offshore Morocco, Gabon and Madagascar with significant resource potential and a fully funded high-impact drilling program.
  • 9. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 9 Energy majors to take part in EIC 2016 Connect Middle East http://www.the-eic.com/EICConnect/MiddleEast/AbouttheEvent.aspx Abu Dhabi National Oil Company (Adnoc), Emirates Nuclear Energy Corporation (Enec), Shell and BP are among many leading energy companies taking part in this year’s EIC Connect Middle East event on May 17 at St. Regis Hotel and Resort on Saadiyat Island, Abu Dhabi. The event, which has already attracted over 300 delegates from leading UK energy service companies, is designed to increase foreign investment in the Emirates’ energy sector and bilateral trade between the UAE and the UK through a day of conferences, vendor briefings, energy project updates, exhibitions and one-to-one meetings between UAE and UK energy companies. The fifth EIC Connect Middle East event to take place in Abu Dhabi, organised by the Energy Industries Council (EIC), will be opened by Ali Al Jarwan, CEO of Abu Dhabi Marine Operating Company (an Adnoc subsidiary), and the UK’s Ambassador to the UAE Philip Parham. The keynote speakers will provide an overview on the benefits of doing business in the Emirates and stress the importance of this event, the only one of its type in the UAE, in reinforcing the long standing business relationship between the UAE and the UK, and supporting the objective of increasing bilateral trade to £25 billion ($36 billion) by 2020. Two conference sessions will take place during the day, with speakers coming from major regional operators Adnoc, Enec, Shell, BP, Kentz, Atkins, and Endress+Hauser. These sessions will focus on current and future energy projects in the UAE and the Middle East, and the opportunities for UK companies to support these developments, which will help to meet the growing energy demand in the region, and add value to the local supply chain, said the statement. Reflecting the increasingly diverse energy mix in the region, Enec will provide an update on the Barakah project, the Emirates’ first nuclear power station, and provide information on how UK companies can support this project to provide clean, safe and reliable energy to the country. One of the key features of this event is its one-to-one sessions which bring together representatives from the major energy companies in the region, such as Adnoc and many of its subsidiaries, Enec, Amec Foster Wheeler, Petrofrac, McDermott and Flour with potential new UK partners, providing these with information and advice on registration processes and their specific project requirements.
  • 10. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 10 US: Is the American dream of energy independence dead? CNBC - Holly Ellyatt | @HollyEllyatt Low oil prices since mid-2014 have claimed many victims in the oil industry with oil workers' jobs lost, rigs closed and exploration projects shelved. And no more so than in the U.S., a country which had hoped that its shale oil and gas "revolution" could lead to U.S. energy independence by 2020. Things have changed dramatically in global oil markets since the shale oil boom around 2010, however, making those expectations more dream than reality for now. "I don't know if it's physically possible for us to ever get to a point where we don't need to import certain types of crude," Suzanne Minter, Oil & Natural Gas analyst at Platts Analytics, told CNBC. "You look at our crude imports and it's about quality. We have displaced our light, sweet (crude) imports but the barrels we bring in we need to run through our refineries and to blend with the product we make." Oil prices having fallen since mid-2014 on a glut in global supply -- caused in no small part by the rise in U.S. oil output which was consumed domestically, reducing the need for crude imports, and the refusal of oil group OPEC to cut production itself -- and failure of demand to keep pace, largely down to an economic slowdown, particularly in China. Oil prices fell from a high of $114 in June 2014 to the low point of around $26 in early 2016 but have recovered slightly since then with a barrel of benchmark Brent crude currently trading at $45.11 while U.S. West Texas Intermediate (WTI) is trading at $44.16. Some analysts had forecast ahead of the decline in oil prices that shale oil and gas could enable the U.S. to be energy independent by 2020 but that is looking more of a pipe dream for now. While the U.S. produces around 9.2 million barrels a day of oil, according to government data from February, its net imports still totaled 7.3 million barrels in the same month. Shale oil resilient? Despite OPEC's decision in late 2014 to maintain production in order to retain its market share in the face of rival shale oil "newcomers," the shale oil industry in the U.S. was nothing new. The industry had operated in the country for decades although it accelerated in the early 2000s following a government-led shale oil development program. But with declining oil prices over the last few years, U.S. producers found it hard to break even. According to the last weekly rotary rig count by Baker Hughes in the week of May 6, 479 oil rigs had closed from the same period last year, leaving 451 rotary rigs in action. Showing how fortunes
  • 11. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 11 have changed in a short period of time, in 2011, Baker Hughes data shows that there were over 2,000 rigs in action in the U.S. Platts' Minter said that OPEC had underestimated the resilience of shale oil producers, however. "Shale has proved itself to be much more long-lived than people had thought originally," Minter noted. "People assumed that (U.S. shale oil) wells had 12-24 months of decline curves and would then go away." "What's so different about U.S. production compared to anywhere else in the globe is that there are 9,000 of us (producers) so as prices fell, if the individual producer could make it work for them, they kept making it work – and I think that was what was not expected (by other non-U.S. producers)." In late 2015, the U.S. decided to lift a 40-year old ban on crude oil exports partly, at least, to help shale oil producers. Minter thought it could give U.S. producers more access to trade. "I do think, though, that now that you've got this export ban lifted out of the U.S., it flattens the playing field once again to where I have something that somebody else might want so it's not a one-way street anymore." With oil prices starting to rise slowly, oil market analysts expect that a rebalancing of supply and demand in the market is starting to take effect. Minter believed that in the next three to five years, oil prices could recover to around $70 a barrel. "This is a blip in time so everybody should enjoy it. But once we get rid of the backlog of wells we're going to move on and we're going to need higher prices to keep on drilling."
  • 12. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 12 NewBase 12 May 2016 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Oil prices, Brent=47.6 & WTI=46.2 as Canadian oil sands fields gradually return Oil prices slightly fell early on Today 12/05/2016, weighed by the gradual return of Canadian oil sands production, reversing a sharp rise the previous day when the U.S. government detailed an unexpected fall in crude inventories. International Brent crude futures were trading at $47.60 per barrel at 0143 GMT on Thursday, down 47 cents, or 1 percent, from their last settlement. U.S. West Texas Intermediate (WTI) crude futures were down 38 cents or 0.8 percent at $46.20 "A lot of people think that yesterday's jump was a bit over the top, so they've taken the profit while they could this morning," said one oil trader. The U.S. Energy Information Administration (EIA) said on Wednesday that U.S. crude inventories fell 3.4 million barrels to 540 million barrels last week, compared with analysts' expectations for an increase of 714,000 barrels and the American Petroleum Institute's (API) reported build of 3.5 million barrels in preliminary data issued on Tuesday. The surprise draw in crude inventories was offset on Thursday by an expected increase in Canadian oil sand crude production following disruptions to over 1 million barrels of daily production capacity due to wildfire. "We were not totally surprised with the draw after the shut-in in Canadian production," said Tariq Zahir, managing partner at Tyche Capital Advisors in New York. Oil price special coverage
  • 13. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 13 NewBase Special Coverage News Agencies News Release 01 May 2016 CASPIAN OVERVIEW: AZERBAIJAN EYES 50BN M³/YR EXPORTS BY 2050. By:Ilham Shaban is Natural Gas Europe's expert While the development of the further stage of the Shah Deniz gas field and Southern Gas Corridor (SGC) is reportedly continuing according to plan, Azerbaijan announced on May 5 that it is preparing to export 50bn m3 /yr of natural gas in 2050, about 7 times more than the current level. The state producer Socar and its partners aim to export initially 16bn m3 /yr of gas from Shah Deniz stage 2 (SD2), now two-thirds complete, to Turkey and EU. SD3, the biggest layer of Shah Deniz with 500bn m3 of reserves, is projected to become operational in 2032. Azerbaijan also plans to operate the Shefeg-Asiman, Naxchivan, Araz-Alov-Sharg, Absheron, Umid and Babek gas fields by 2030. The country exported 2.458bn m3 in the first quarter of 2016, according to the state custom committee's latest report, while Socar head, Rovnag Abdullaev, said May 11 that Baku has put forward a proposal to Russian giant Gazprom to import 3-5bn m3 /yr, mostly to allow associated gas to be re-injected into the Azeri-Chirag-Guneshli oil block to maintain the production level. Coming to the TransAnatolian Pipeline (Tanap) project, its general manager Saltuk Duzyol told Anadolu Agency on May 5 that the slump in global oil prices and low commodity prices allowed the operator to cut its budget by a fifth. "Initially, the investment budget for Tanap was estimated as $11.7bn, Thanks to low oil prices, we reduced our budget to $9.2bn." Duzyol also noted that $4.5bn worth of tenders have been completed and their contracts signed. The total capacity of the 1800-km Tanap is planned to rise to 23bn m3 /yr by 2023 and to 31bn m3 /yr by 2026.
  • 14. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 14 Vagif Aliev, head of Socar's investments department, told NGE on May 1 that the length of produced pipes for Tanap stood at 1088 km as of April 25, of which 893 km are positioned on the route from the Georgia-Turkey border to Eskishekhir. He added that about 475 km of these pipes were welded, and of those, 20 km had been laid in the trench. Coming to TAP, the consortium has already kicked off tender issuing and selecting contractors. The latest event was winning of a joint venture between Italy’s Renco and Greece’s Terna in the engineering, procurement and construction (EPC) contract for two compressor stations and a metering station for TAP. Azerbaijan's energy minister Natig Aliev said last week that with the start of construction of TAP, no obstacles stand in the way of SGC. Coming to the upstream sector of SD2, operated by BP, it will add a further 16bn m3 /yr of gas production to the 9bn m3 /yr produced by SD1. Around $28bn in capital investment will be required to produce the gas and transport it to the Georgia-Turkey border (SCPX). Shah Deniz gas will travel 3,500 kilometres, to elevations of over 2,500 metres, and over 800 metres below the sea. Work is ongoing at the Sangachal reception terminal, the Amec/Tekfen/Azfen) yard near Baku, the Baku deepwater jackets factory and along the pipeline route. In the fourth quarter, the hull strips of the Subsea Construction Vessel Khankendi completed their journey from Singapore through the Volga-Don canal and arrived safely in Baku to join the bow section, which has now been completed at the Baku Shipyard. Once completed, this new vessel will be deployed to the SD2 area for the construction of the subsea structures. Another major milestone was the delivery of the first two subsea christmas trees that were delivered to Baku from Leeds, UK, following completion of their UK testing scope.
  • 15. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 15 AZERBAIJAN AIMS FOR 50BN M³/YR BY 2050 Azerbaijan can boost annual gas exports to 50bn m3 by 2050, deputy energy minister Natig Abbasov said recently. Abbasov said that Azerbaijan's main goal is to increase the volume of production and natural gas export. "The works done in the country to increase gas production and implement the Southern Gas Corridor (SGC) allow an increase in the volume of Azerbaijani gas export to 50bn m3 /yr by 2050," the ministry’s press office quoted him on May 5 as having said during a meeting with Otto Wolf of the Institute of Mining and Energy Law at Germany's University of the Ruhr at Bochum. The deputy minister reminded his audience that Azerbaijani gas exports to the European market will start in 2019-2020 with gas to Turkey. Azerbaijan currently produces about 29bn m3 /yr of gas – including gas re-injected to produce oil – of which Shah Deniz Stage 1 (SD1) produces about 35%. The country is preparing to inaugurate SD2 with 400bn m3 reserves and 16bn m3 /yr output capacity by 2018. SD3, the biggest layer of Shah Deniz with 500bn m3 of reserves, is projected to become operational in 2032. Azerbaijan also plans to operate Shefeg-Asiman, Naxchivan, Araz-Alov- Sharg, Absheron, Umid and Babek gas fields by 2030. At the meeting, Abbasov also mentioned the Azerbaijan-Georgia-Romania-Interconnection (Agri) project, a decade-old conceptual plan for exporting Azeri gas as LNG across the Black Sea to Europe. “As gas exports via the gas pipelines is much cheaper, the implementation of the Agri project is planned as a future element of the SGC,” he noted. Agri shareholders are Azerbaijan's state Socar, Georgia's COGC, Romanian state Romgaz and Hungarian state utility MVM, which in January 2011 established Agri LNG, with each owning a quarter-stake. Socar, whose gas would be marketed, chairs the board. Agri envisages export of up to 8bn m3 /yr, the first stage being 2bn m3 /yr and the second and third stages doubling it each time. The export terminal will be at Kulevi on the Georgian Black Sea coast, where Socar already operates an oil export terminal, and the import terminal at Constanta in Romania.
  • 16. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 16 NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE Your partner in Energy Services NewBase energy news is produced daily (Sunday to Thursday) and sponsored by Hawk Energy Service – Dubai, UAE. For additional free subscription emails please contact Hawk Energy Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010 Mobile: +97150-4822502 khdmohd@hawkenergy.net khdmohd@hotmail.com Khaled Al Awadi is a UAE National with a total of 25 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels. NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE NewBase 12 May 2016 K. Al Awadi
  • 17. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 17