New base energy news issue 902 dated 08 august 2016

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NewBase Energy News 08 August 2016 - Issue No. 902 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: DEWA launches annual peak load reduction
campaign and organises of (WETEX 2016),
(WAM) -- Dubai Electricity and Water Authority, DEWA, has launched its annual Peak Load
campaign, to raise awareness about adopting a more sustainable lifestyle, and rationing electricity
and water use to conserve natural resources, protect the environment, and reduce Dubai’s carbon
footprint.
The campaign encourages the public to cut down on using energy during the peak load period of
12 noon to 6 pm in the summer. The campaign also encourages people to reduce their use of
electrical appliances that consume large amounts of energy, such as washing machines, hair
dryers, kettles, and electric stoves. These appliances should be used outside of peak load hours
to reduce pressure on the electric grid.
Through this campaign,
DEWA strives to
familiarise customers
with methods that
contribute to reducing
the load on the power
grid, such as using their
appliances outside of
peak load hours. Of
note, air-conditioning
accounts for about 60
per cent of peak load
usage. By raising the
temperature of air-co
nditioning systems even
slig htly, it is possible for
consumers to lower
their electricity bills and
increase the overall
reliability and efficiency
of their electrical
system.
"DEWA is working to
implement the Demand
Side Management strategy in its projects. The strategy aims to reduce energy demand by 30 per
cent by 2030, and reduce carbon emissions to 16 per cent by 2020. The annual campaign
supports DEWA’s continuous efforts to enhance sustainability and support the process of
sustainable development in the Emirate through the rationing of electricity, water, and natural

resources, while encouraging the community to adopt a rational lifestyle, to ensure the
sustainability of these resources for generations to come," said Saeed Mohammed Al Tayer, MD
and CEO of DEWA
WETEX 2016 sees high participation from green technologies
Dubai Electricity and Water Authority (DEWA), organiser of Water, Energy, Technology and
Environment Exhibition (WETEX 2016), has announced that the show is attracting significant
interest from government and private organisations operating in the fields of environment, green
technologies and solutions to participate in the 18th edition of WETEX, open from 4-6 October
2016 at Dubai International Convention and Exhibition Centre.
The exhibition will be held under
the directives of Vice President
and Prime Minister and Ruler of
Dubai, His Highness Sheikh
Mohammed bin Rashid Al
Maktoum, and under the
patronage of H.H. Sheikh Hamdan
bin Rashid Al Maktoum, Deputy
Ruler of Dubai, Minister of
Finance and President of DEWA.
WETEX 2016 is expected to draw
a large number of visitors, as it
coincides with the first Dubai Solar
Show, a leading platform to
address the latest solar energy
solutions for building, operations,
distribution, storage, and solar energy management technologies.
The exhibition focuses on attracting modern technologies, and it brings together solution
providers, investors, decision makers in government departments, consumers, and business
partners from private and public sectors. WETEX 2016 offers an ideal platform to discuss all
topics focused on sustainability, the environment and preservation of natural resources.
"Through WETEX, we aim to support the long-term national Green Economy for Sustainable
Development initiative launched by HH Sheikh Mohammed bin Rashid Al Maktoum to build a
green economy in the UAE, under the slogan 'green economy for sustainable development'.
We will do this by displaying the country's efforts to preserve the environment, boost partnerships
with the private sector, and discussions about green technologies in all its forms," said Saeed
Mohammed Al Tayer, MD and CEO of Dubai Electricity and Water Authority (DEWA), Founder
and Chairman of WETEX.
"The UAE leadership places great importance on environmental and sustainable issues that
contribute to boost the sustainable development of the UAE and preserve natural resources for
generations to come. In our turn, we work through the WETEX platform to forge agreements and
build foundations for relationships that support achieving the UAE Vision 2021 to make the UAE
among the best countries in the world by 2021 and achieve sustainable development, water
security, and enhancing energy consumption efficiency," added Al Tayer.

Libya Starts Work at Biggest Oil Port in Step to Increase Output
Bloomberg Hatem Mohareb Salma El Wardany
Libya has started maintenance work at Es Sider port, the nation’s largest oil export terminal, as
part of plans to increase output from Africa’s biggest holder of crude reserves.
Exports should resume in a month once official orders are received to reopen the port, Galal
Mohamed, head of operations at Waha Oil Co. , said in a phone interview Sunday from Libya’s
eastern city of Ras Lanuf. Es Sider, operated by Waha Oil, has been closed since December
2014 when armed groups attacked the port.
“We haven’t received official orders to reopen the port and resume exports, but there were
intensive meetings with the National Oil Corp. officials last week to discuss this,” Mohamed said.
Six of the port’s 19 storage tanks are damaged from fighting over the last two years, he said.
Libya is seeking to boost crude production after rival leaders agreed last month to unify the state
National Oil Corp. under a single management. The bulk of the country’s oil infrastructure is

either damaged or straddles disputed territory as armed factions fought for control of producing
fields. The nation pumped 300,000 barrels a day of oil in July, compared with as much as 1.78
million a day in 2008, three years before a revolt led to the overthrow of the regime of Moammar
al Qaddafi, according to data compiled by Bloomberg.
Oil Ports
Waha Oil will be able to produce 75,000 barrels a day in the first six months after resuming
operations, Mohamed said. Waha fields stopped producing in 2014 after the Es Sider oil port was
halted. Es Sider has export capacity of 340,000 barrels a day.
Libya’s unity government announced July 28 an agreement to pay salaries to Petroleum
Facilities Guard members in exchange for reopening the ports of Es Sider, Ras Lanuf and
Zueitina.
The NOC said the resumption of
exports from the ports and the
release of budget money to the
company would help boost
production by more than
900,000 barrels a day by the
end of the year. NOC is working
to overcome “difficulties and
technical problems in the entire
oil fields,” it said in a statement
on its website Sunday.

Indonesia: BP Plans to Acquire More Oil, Gas Blocks in Indonesia
Natural Gas Asia + NewBase
UK major’s Indonesia unit head Dharmawan Syamsu said the company is conducting a study to
determine which oil and gas block has the most potential to be developed, Katadata, a local news
outlet, reported on Friday.
One of the blocks BP is looking at is located in Indonesia’s central and eastern region. “It’s an
offshore (block) located in the eastern region and central to eastern region (of Indonesia),” he
told Katada.
Earlier this week, BP and Indonesian regulator SKKMigas signed a loan agreement worth $3.74
billion with a consortium of international and local banks to fund the expansion of BP’s Tangguh
LNG plant in West Papua.
In July, BP and its partners approved the final investment decision (FDI) pertaining to expansion
of Tangguh LNG project. The expansion project will add a third LNG process train (Train 3) and
3.8 million tonne per annum (mtpa) of production capacity to the existing facility, bringing total
plant capacity to 11.4 mtpa.
The project also includes two offshore platforms, 13 new production wells, an expanded LNG
loading facility, and supporting infrastructure, BP said. Sources said that with falling costs in the
industry the project was now put at the lower end of the $8bn-$10bn range.
BP said about 75 percent of the Train 3 annual LNG production has been sold to the Indonesian
state electricity company PT. PLN (Persero). The remaining volumes are under contract to Kansai
Electric Power Company in Japan, the other foundation buyer for Train 3.
Awards for the project’s key engineering, procurement and construction (EPC) contracts are
expected in the third quarter of 2016 with construction to begin thereafter. Operation is expected
in 2020.

Saudi petrochemical industry margins benefit from oil
Combined net profits of the kingdom’s 14 listed petrochemical firms fall by a fifth from a year earlier to 6.8b
riyals in the April-June period
Reuters + Gulf News + NewBase
Second-quarter earnings in Saudi Arabia’s petrochemical industry beat expectations as producers
reaped the benefits of volatile oil prices, but companies look unlikely to be as lucky in the second
half of this year.
Combined net profits of the kingdom’s 14 listed petrochemical firms, announced over the past
couple of weeks, fell by a fifth from a year earlier to 6.8 billion riyals (Dh6.6 billion, $1.8 billion) in
the April-June period, but they beat the forecasts of analysts, who had on average expected a 40
per cent plunge.
Two firms posted profits while analysts had predicted losses. Saudi Kayan, an affiliate of Saudi
Basic Industries (SABIC), swung to a net profit of 91.0 million riyals ($24.3 million), ending a run of
five straight quarterly losses and exceeding analysts’ average estimate of a loss of 184.2 million
riyals.
That was good news for Saudi Arabia’s stock market, where petrochemical firms account for
about a quarter of the bourse’s capitalisation of $385 billion.
To a large degree, however, profit margins were inflated by fortunate timing in the way oil and
feedstock prices moved during the period — a pattern which may not be repeated.
“Higher spreads pushed up margins, which exceeded expectations, but this is not sustainable as
oil prices have started to decline,” said Mohammad Al Shammasi, chief investment officer of
Riyadh-based Derayah Financial.
Weak prices
Saudi Arabia’s petrochemical sector is under pressure from two sides. In foreign markets, it faces
weak petrochemical prices and competition; combined revenues dropped 16 per cent in the
second quarter, in line with analysts’ forecasts.
Meanwhile, costs are rising at home after the government, grappling with a huge budget deficit
due to low oil prices, cut feedstock, fuel and electric power subsidies in its 2016 budget.
More subsidy cuts are expected in coming years, further reducing Saudi firms’ cost advantage
over foreign rivals.
So far, however, oil price moves have worked to the firms’ advantage. In the first quarter of 2016,
when many companies bought feedstock, Brent crude oil was around $30-35 a barrel, keeping
feedstock prices low.

A rebound of oil prices, to a range of $40-50 in the second quarter, let firms sell products made
with this feedstock at fat profit margins.
National Industrialization Co swung to a quarterly profit after five straight quarters of losses
because of high spreads across propane-derived products. Saudi propane prices rose 7.4 per
cent in the second quarter compared to the first quarter but prices of polypropylene, the end-
product, increased about 13.5 per cent, Aljazira Capital said.
Favourable spreads
The biggest firm, SABIC, reported a 23.2 per cent drop in second-quarter profit to 4.74 billion
riyals, but came ahead of analysts’ forecast of 3.92 billion riyals.
Producers took advantage of favourable spreads by operating their facilities close to, and in some
cases beyond, full capacity in the second quarter, said Jasem Al Jubran, analyst at Aljazira
Capital.
But the profitable divergence between feedstock and petrochemical product prices will only
continue if oil prices keep rising steadily in the months to come.
Analysts said such an uptrend looked unlikely in the coming months. In fact, Brent has been
trending lower since early June, and now stands at around $45 compared to $50 at midyear.
“A stabilisation in oil prices will adjust margins and bring them back down again,” said Iyad
Ghulam, head of research at NCB Capital.
Santhosh Balakrishnan, equity analyst at Riyad Capital, said: “Barring any event that will swing oil
violently in either direction, I think petrochemical earnings are set to fall for full-year 2016,” though
he added the drop was unlikely to be as sharp as the fall of three-fifths seen in 2015.

Pakistan Has Imported 33 LNG Cargoes in Last 12 Months
Daily Times +NewBase
Pakistan has imported 33 LNG cargoes carrying around 103,864,259mmbtu of chilled fuel since
July 2015, an official in the oil ministry told Daily Times on Sunday.
The LNG has been imported by state owned Pakistan State Oil through short and long term
contracts. The south Asia nation signed its first long term deal earlier this year with Qatar. As per
the deal signed in February, Qatargas will supply fuel to Pakistan State Oil from 2016-2031.
The price for each LNG cargo in a particular month has been agreed at 13.37 percent of Brent
where Brent value is average of the preceding three months. Qatargas will supply 3.75 million
tonne per annum (MTPA) of LNG to PSO.
The 15-year long term deal is the largest deal of first quarter 2016, a report by GlobalData
suggests. The deal has been estimated to be worth $16 billion.
The government is looking to further enhance supply of gas in the domestic market as it continues
to work towards building LNG infrastructure. A deal has been signed to build second floating LNG
import terminal.
Pakistan’s first LNG import terminal has been functioning since last March. Engro Corp currently
operates Pakistan’s first FSRU through Engro Elengy Terminal Private Limited (EETPL).
The LNG terminal, utilising Excelerate's technology, is first of its type for the country and has been
built at a cost of $125 million. The terminal has peak capacity for regasification of up to 690 mmcfd
of LNG which provides for surplus capacity setup. The terminal received its first shipment in March
2015.
Gas plays a major role in Pakistan’s economy. Natural gas accounts for 35% of all power
generation, 23.8% of industrial use, 15.6% fertilizer, 5.4% CNG and 18.1% for households,
according to Daily Times.

US: Oil and natural gas production jobs in May were 26% lower
than in October 2014,,: U.S. Bureau of Labor Statistics, Current Employment Statistics and Baker Hughes
Despite increases in crude oil prices since the start of the year, employment in oil and natural gas
extraction and support activities continued declining from levels reached in the fall of 2014, just
before the onset of falling oil prices.
The total rig count (including both oil-directed and natural gas-directed rigs) has declined even
more sharply, from nearly 1,800 rigs in the fall of 2014 to a weekly low of 404 rigs in May 2016.
Crude oil production has also declined, but to a much lesser extent than either employment or rig
counts, while natural gas production has leveled off.
Employment in oil and natural gas production reached a high of 538,000 jobs in October 2014.
Since then, oil and natural gas production employment declined 26%, a loss of more than 142,000
jobs through May 2016, based on the latest jobs data available.
The total decrease in production jobs is nearly three times the 51,000 jobs lost over a 13-month
period during the 2008–09 recession. Not all production jobs are directly related to drilling—the
majority of the jobs are actually for extraction or support activities, which include the operations of
drilled wells, exploration, excavation, well surveying, casing work, and well construction. This also
includes the maintenance of already producing wells.
The effects of the reduction in drilling and employment in crude oil and natural gas production
have been relatively modest, with production levels in May down 6% and 1%, respectively, relative
to their level in May 2015. Compared to October 2014, the peak month for employment in the
sector, May 2016 crude oil production was 2% lower, while natural gas production was flat.

The divergence between trends in rig counts and employment on the one hand and oil and the
trends of natural gas production on the other are attributable to increases in production per new
well in key regions, driven in part by advances in siting and drilling technology.
For instance, new-well oil production per rig so far in 2016 has been more than twice its 2013
level in areas such as the Bakken, Eagle Ford, and Permian. Growing offshore crude oil
production in the Gulf of Mexico has also helped to offset declines in Lower 48 onshore
production.

NewBase 08 August 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices rise on renewed output freeze talks
Reuters + NewBase
Oil prices rose in early trading on Monday, lifted by reports of renewed talks by some members of
the Organization of the Petroleum Exporting Countries (OPEC) to restrain output. U.S. West
Texas Intermediate (WTI) crude oil futures were at $42.01 per barrel at 0022 GMT, up 21 cents, or
0.5 percent, from their last close.
Brent crude futures were trading at $44.40 per barrel, up 13 cents, or 0.29 percent.
Analysts said that the price rise came on the back of renewed calls by some OPEC members to
freeze production in a bid to rein in output consistently outpacing demand.
"OPEC members including Venezuela, Ecuador and Kuwait are said to be behind this latest
reincarnation. But just like previous endeavours, it seems doomed to fail, given key OPEC
members (think: Saudi Arabia, Iraq, and Iran) persist in their battle for market share, ramping up
exports apace," said Matt Smith of U.S.-based ClipperData in a note.
Yet in the absence of an agreement, a fight for market share via high output and price discounts is
still weighing on oil markets.
Iraq has dropped the September official selling price (OSP) for Basra Light crude to Asia by $1.00
to minus $2.30 a barrel against the average of Oman/Dubai quotes from the previous month, the
State Oil Marketing Organization (SOMO) said on Monday, making it the latest exporter to drop its
prices.
Oil price special
coverage

Meanwhile, oil drilling in the In the United States keeps increasing. "Another increase in the rig
count in the U.S. also weighed on sentiment. The Baker Hughes data show rigs operating in the
U.S. are the highest since March (at 381)," ANZ bank said on Monday.
On the demand side, analysts at AB Bernstein said that oil demand growth had been strong in
2015 and the first half of this year, at 2.0 and 1.5 percent respectively, but that the outlook was
weakening.
"In July following the UK Brexit vote, the IMF downgraded global growth by 10 basis points (bp) in
2016 and 20 bp in 2017. This has negative implications for (oil) demand," the analysts said.
"We expect that demand growth could slow in the second half of 2016 to around 1.1 percent and
slow further in 2017 to a below consensus 1.0 percent on the current global growth outlook," AB
Bernstein added.

NewBase Special Coverage
News Agencies News Release 08 August 2016
If Iran Opens Its Oil Sector, Is Saudi Arabia Next?
Bloomberg - Julian Lee
Iran has taken a big step toward bringing foreign investors back into its oil and gas sector.
The experience of neighboring Iraq shows it still has a long road to walk, though -- if successful --
there may well be a lesson here for Saudi Arabia on opening up to outside help.
Iran has restored most of the production it lost because of sanctions imposed in 2012,
confounding analysts with its speed of recovery. Crude exports are back at 2 million barrels a day
and the country is slowly re-establishing itself in European markets.
Sanctions Effect
Iran has restored most of its sanctions-hit production - now it looks ahead to growth
But the next step -- taking output back to levels last seen before the 1979 revolution -- needs the
assistance of foreign oil companies. And that's much more complicated.
LONG-TERM GOAL
Last week, Iran's cabinet approved the general terms of a contract model that will govern foreign
oil and gas investments. In doing so, it overcame months of hostility from hardliners in Tehran,
who oppose the concessions made to get sanctions lifted. The resolution now has to be endorsed
by parliament, where it also faces opposition.
Assuming it makes it through, the model looks promising enough. It reaffirms that oil and gas
reserves will remain under sovereign ownership, so no surprise there. But it opens the way for
foreign involvement in three types of project:

1. Exploration - leading, if successful, to development and production;
2. Development of already discovered, but undeveloped, reserves;
3. Using enhanced oil recovery techniques to raise output from mature fields.
Contracts will be valid for up to 20 years from the start of development, with an extra exploration
period if appropriate. Enhanced oil recovery projects may be extended for another five years
beyond that. Payment to foreign investors will be in cash or as a share of output at the discretion
of the National Iranian Oil Company.
Investors are also being offered protection from any future OPEC output reductions, remote as
that possibility may seem today. The resolution states that non-technical production cuts will fall
on fields with no repayment commitments -- effectively, those without external partners.
Iraq's experience shows that even with an agreed model, things may move slowly. Baghdad
approved its oil law in March 2007, four years after the U.S.-led invasion that toppled Saddam
Hussein. Yet the first contract wasn't awarded for another two and a half years, after an
initial bidding round in which no would-be investor proposed an acceptable fee. For Iran, too, the
payment requested by foreign bidders will be the big factor in determining winners.
Iraq's Slow Burn
Iraq has added 2.5 million barrels a day of production in 13 years since the U.S.-led invasion
Once implemented, though, the Iraq contracts helped it boost production by 2 million barrels a
day, or 80 percent, within about six years. Plus investors in Iran won't face the same sort of
security and stability problems as in Iraq, meaning they may be willing to pay more from the start.
That said, uncertainty over any potential snap-back of sanctions, or reluctance by Western banks
to lend to projects in Iran could bring their own delays.
As I noted a couple of months ago, if Iran is successful it will leave Saudi Arabia and Kuwait as
the only oil producers determined to go it alone, as former champions of oil nationalism have, one
by one, embraced foreign investment. Will a partial privatization of Saudi Aramco increase
pressure for the kingdom to follow suit? It ought to.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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NewBase energy news is produced daily (Sunday to Thursday) and
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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 26 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 08 August 2016 K. Al Awadi

New base energy news issue 902 dated 08 august 2016

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New base energy news issue 902 dated 08 august 2016