New base energy news november 08 2018 no-1212 by khaled al awadi

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NewBase Energy News 08 November 2018 - Issue No. 1212 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Adnoc’s plan to boost oil output to 4MBPD by 2020
Gulf News - Fareed Rahman, Senior Reporter
The announcement by Abu Dhabi National Oil Company to boost oil production to 4 million barrels
per day by 2020 and five million barrels per day by 2030 will help the company meet rising global
oil demand and balance oil markets, according to analysts.
Abu Dhabi’s Supreme Petroleum Council on Sunday approved Adnoc’s new integrated gas strategy
and plans to increase its oil production capacity to 5 million barrels per day by 2030.
5m bpd
Adnoc’s targeted daily oil production by 2030
An investment outlay of Dh486 billion has also been allocated to meet its five year business plan,
Adnoc said in a statement on Sunday.
“This announcement plays into Adnoc’s underlying strategy of pursuing sustainable value for the
UAE’s growing energy needs in line with the country’s long-term economic aspirations,” said Ehsan
Khoman, Director, Head of MENA Research and Strategy at MUFG Bank in Dubai.
He also said the significant increase in oil production capacity will warrant Adnoc the capability to
respond to adjustments in the global demand-supply oil balance as and when necessary over the
long-term.
Dh486b
investment outlay to help Adnoc meet its five-year plans
The comments come as oil demand set to increase in the coming years due to rapid economic
development.

According to Dr Sultan Ahmad Al Jaber, Minister of State and Adnoc Group CEO, for the first time,
the world is on the verge of consuming 100 million barrels of oil per day, with oil consumption
increasing by an additional 10 million barrels per day by 2040.
Over the same period, demand for natural gas will increase by 40 per cent, while the market for
higher-value polymers and petrochemicals will grow by 60 per cent.
“The incremental increase in our oil production capacity will enable Adnoc to continue to be a reliable
and trusted energy supplier that has the flexibility and capacity to respond and capitalise on the
forecasted growth in demand for crude,” Al Jaber said.
15 trillion
size in standard cubic feet of UAE’s new gas discovery
The UAE is also targeting to become self-sufficient in gas and potentially become a net exporter of
gas in future following new discoveries of gas totalling 15 trillion standard cubic feet.
“The UAE has been targeting higher oil and gas production for some time and the announcement
to raise oil production capacity to 5 million barrels per day and become self-sufficient in gas reflect
a couple of dynamics,” Edward Bell, commodity analyst from Emirates NBD told Gulf News.
“One is that the UAE has to ensure it produces enough oil and gas to remain a reliable supplier of
hydrocarbons to global markets while at the same time meeting rapid domestic demand growth.”
“At current levels of demand intensity, there is a risk that over the next few years the UAE could
consume too much oil domestically and not leave anything available for export.”
Higher oil and gas production from existing fields will support a faster pace of growth in the economy
and investments will lead to a stronger performance next year, he added.
Adnoc announces new discoveries in oil and gas
The development will enable UAE achieve self-sufficiency in gas and potentially a net exporter
His Highness Shaikh Mohammad Bin Zayed Al Nahyan,
Crown Prince of Abu Dhabi and Deputy Supreme
Commander of the UAE Armed Forces, chairs a
Supreme Petroleum Council meeting at Adnoc
headquarters along with Shaikh Hazza Bin Zayed Al
Nahyan, National
Abu Dhabi: Abu Dhabi on Sunday announced the new
discovery of gas totalling 15 trillion standard cubic feet
that is expected to enable the UAE achieve self-
sufficiency in gas and potentially become a net gas
exporter.

Currently, Abu Dhabi is tapping sour gas through the Shah gas project in the Western region of Abu
Dhabi. The project reached its full production capacity of one billion cubic feet per day and there are
plans to increase the capacity further. The UAE also imports gas from its neighbouring countries to
meet the demand through Dolphin gas project.
“The gas strategy will sustain LNG production to 2040 and allow Adnoc to seize incremental LNG
and gas-to-chemicals growth opportunities, where they arise, from the UAE’s dynamic demand or
supply position and evolving energy mix,” Abu Dhabi National Oil Company (Adnoc) said in a
statement on Sunday.
Under the new gas strategy, Adnoc will develop the Hail, Ghasha and Dalma project that taps into
Abu Dhabi’s Arab formation, which is estimated to hold multiple trillions of cubic feet of recoverable
gas. The project is expected to produce more than 1.5 billion cubic feet of gas per day.
Adnoc will also unlock other sources of gas, which include Abu Dhabi’s gas caps and
unconventional gas reserves, as well as new natural gas accumulations, which will continue to be
appraised and developed as the company pursues its exploration activities.
“The incremental increase in our oil production capacity will enable Adnoc to continue to be a reliable
and trusted energy supplier that has the flexibility and capacity to respond and capitalise on the
forecasted growth in demand for crude,” said Dr Sultan Ahmad Al Jaber, Minister of State and Adnoc
Group CEO.
“At the same time, the substantial investments we will make, in the development of new and
undeveloped reservoirs, gas caps and unconventional resources, will ensure we can competitively
meet the UAE’s growing demand for power generation and industrial use.”
“While responding to domestic demand, we will maintain our international commercial commitments
and seize incremental LNG and gas-to-chemicals growth opportunities.” He also said the world is
on the verge of consuming 100 million barrels of oil per day, with oil consumption increasing by an
additional 10 million barrels per day by 2040.
Over the same period, demand for natural gas will increase by 40 per cent, while the market for
higher-value polymers and petrochemicals will grow by 60 per cent.
According to Adnoc, one of the challenges in developing parts of gas resources has been the
‘sourness’ of parts of Abu Dhabi’s gas. However, a number of factors, including the gas pricing
reforms introduced in 2016, enabling more market-based pricing, the availability of more advanced
technology and Adnoc’s growing and industry-leading experience in developing sour gas reservoirs
are making it possible for the company to unlock more gas resources and increasing value
extraction.
Competitive bidding
Earlier this year, the Abu Dhabi Government announced the decision to open six geographical oil and gas
blocks that hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas for competitive
bidding. The first exploration and production licences are expected to be awarded in the first quarter of
2019.
Adnoc also announced new oil discoveries of one billion barrels as the company tries to boost production
capacity to 4 million barrels per day by 2020 and five million barrels per day by 2030.

UAE's Adnoc takes Middle East lead in fracking for gas
The Abu Dhabi National Oil Company stepped up the use of hydraulic fracturing technology in
October, putting the UAE at the forefront in the Middle East in terms of exploring for gas onshore
via "fracking", as it seeks to achieve gas self-sufficiency.
The state-owned energy producer carried
out a new phase of fracking activity at wells
in the western, Al Dhafra region of the
emirate. A number of wells were drilled by
Adnoc Drilling in the Jurassic Diyab
formation and the hydraulic fracturing to
complete them was carried out by Baker
Hughes. Tight organic-rich carbonate rock is
typical of what is found in the UAE.
“We are doing the first fracture job [of this
new phase] in the Diyab formation in the
Ruwais area on a gas well using Baker
Hughes. We are not talking about something
in the distant future, we have already engaged [in stepping up activity],” said Abdulmunim Al Kindy,
head of upstream at Adnoc.
A number of wells were drilled by Adnoc Drilling in the Jurassic Diyab formation and the hydraulic
fracturing to complete them was carried out by Baker Hughes. Khushnum Bhandari / The National
The company began its initial fracking activity in the Diyab formation in 2016 and is now confident
it has removed sufficient risk to increase the further application of the technology.
A new appraisal of potential gas production levels for the Ruwais wells is expected by the end of
next month, which will further confirm if the availability is in commercial quantities.
In the United States, the technique - which involves injecting water and solid materials at high-
pressure to open up very dense rocks - has made producing "tight" oil and gas derived from shale
rock viable. The method sparked a drilling boom
that enabled the US to drastically reduce its
need for imports, allowing it to export crude and
reduce the price of petrol at the pumps.
Fracturing jobs are typically conducted in
separate stages over several weeks - about 20
stages – and the process includes microseismic
monitoring to identify the sweet spots to
maximise production potential.
An appraisal of potential gas production levels
for the Ruwais wells is expected by the end of
next month, which will confirm if the availability
is in commercial quantities.
Fracking activity is part of an unconventional oil
and gas exploration and appraisal programme
that Adnoc announced a year ago, and should
reach full momentum by 2021 in terms of
efficiency and the fracking learning curve. The

process aims to ensure the company can competitively meet the UAE’s growing demand for gas.
The unconventional activities complement existing gas production and new resources, including
sour gas and gas cap development.
This week, Abu Dhabi’s Supreme Petroleum Council announced new discoveries of gas, totalling
15 trillion standard cubic feet, which adds 7.1 per cent to the emirate’s total proved reserves.
Other countries in the region, including Saudi Arabia and Bahrain, have made progress in tapping
unconventional resources of oil and gas but are reportedly yet to move beyond studying or limited
testing of the potential for fracking. Bahrain’s discovery earlier this year of at least 80 billion barrels
of tight oil was offshore.
US oil services provider Baker Hughes, which bought a $550 million (Dh2.02 billion) 5 per cent stake
in Adnoc’s drilling subsidiary last month, should be able to fast track Abu Dhabi’s fracking
capabilities and give a boost to the commercial potential of these unconventional resources by
reducing costs. The Diyab fracture job was awarded to Baker Hughes separate to, and before, the
conclusion of the Adnoc Drilling partnership deal.

Oman Gas secures $1.1 billion funding for network expansion
05/11/2018 Oman Observer
Oman Gas Company (OGC) — Oman Oil Company’s energy infrastructure vertical — inked an
agreement with seven international and local financial institutions to secure funding for the capital
expenditure requirements under new business model for its gas network.
The signing ceremony took place yesterday under the auspices of Salim bin Nasser al Aufi, the
Under-Secretary of Ministry of Oil and Gas and was attended by key OOC group representatives,

Governmental representatives from Ministry of Oil and Gas, Ministry of Finance, and
representatives from the signing banks.
Given the mandate to develop and invest in the sustainable growth of the national energy
infrastructure, OGC invests heavily in domestic gas, power and oil infrastructure projects to support
the growing domestic energy demand and maximising the value of Oman’s hydrocarbon resources.
In order for OGC to (eventually) be financially independent and be able to finance the acquisition of
government asset and expand its network, it needs to reform the means by which its revenues are
determined.
A new framework was agreed with government (based on a Regulatory Asset Base).
RAB is a system of long-term tariff design aimed primarily at encouraging investments in the
expansion and modernisation of infrastructures, such as gas networks. The new Regulatory Asset
Base (RAB) will help OGC to successfully refinance the bank bridge through the Debt Capital
Markets resulting in implementation of a longer-term capital structure. A total of $1.1bn of financial
efforts have been adopted to build the Bridge to Bond Financing Strategy.
“As the Sultanate’s investment arm in the energy and related sectors; Oman Oil Company is playing
a pivotal role in driving the country’s economic diversification and growth to maximise the value of
local natural resources. This initiative is a major milestone for us as a group of companies.
By adopting this new structure, we are reflecting the actual cost of transmission and allowing for
more transparency in pricing, as well as easing the process of expansion and funding. This will in
turn help OGC become more financially independent, which is the direction that we are all heading
towards,” stated Isam al Zadjali, OOC CEO.

Pact inked for 100 MW solar-based IPP project
Oman Observer
Petroleum Development Oman (PDO) yesterday said its world-first solar photovoltaic Independent
Power Producer (IPP) project marked a step change for renewable energy in the Sultanate.
PDO will buy electricity for its Interior operations from the installation at Amin in southern Oman at
one of the lowest tariffs in the world.
The Company said the rate showed
the “huge potential” for the country to
produce solar energy at commercially
attractive prices.
PDO has awarded the contract to build
and operate the plant to the Marubeni
Consortium, consisting of Japanese
company the Marubeni Corporation,
the Oman Gas Company SAOC,
Bahwan Renewable Energy Company
LLC and Modern Channels Services LLC.
The desert facility will be the first of its
type in Oman and will also be the world’s first utility-scale solar project to have an oil and gas
company as the sole wholesale buyer of electricity. Construction will start in January 2019 and the
site will span 4 km2, the size of 480 football pitches. The installation will consist of more than
335,000 solar PV panels, producing enough energy to power 15,000 homes.
The project will be structured as an IPP under the terms of the power purchase agreement for a
period of 23 years from the scheduled commercial operation date, which is planned for May 2020.
The consortium will build, own and operate the facility and then transfer it back to PDO.
The plant is expected to introduce an equivalent fuel saving of 70.5 million m3 of gas annually,
resulting in a total saving of $17 million a year through the use of solar power as an alternative to
natural gas. It will also reduce overall carbon dioxide (CO2) emissions by around 137,121 tonnes
annually, the equivalent of taking 23,000 large cars off the road.
Speaking at the formal contract award ceremony at Mina Al Fahal, PDO Managing Director Raoul
Restucci said: “We are delighted to sign this contract which marks a significant step in our transition
to a fully-fledged energy company with a greater emphasis on renewables.
“The tender for the IPP was released in February this year and we
received competitive bids from highly reputed developers in the
renewable energy industry, testament to the credibility of PDO’s
commitment to the renewable energy sector and the huge potential
of this sustainable use of natural resources for power generation in
Oman.
“The proposed tariff is one of the lowest in the history of solar IPPs
worldwide so far and underlines the significant opportunity for Oman
to produce low-cost energy using solar. “The electrical power
produced will feed into our transmission system and contribute to
off-setting the use of natural gas for power generation and reduce
greenhouse gas emissions.”

South Sudan Oil Outlook Hinges on Shaky Peace Deal, WoodMac Says ,
Bloomberg - Paul Burkhardt
South Sudan’s optimism about restoring oil output to 350,000 barrels a day depends on the success
of a recent peace deal and both are unlikely, according to Wood Mackenzie Ltd.
Crude production fell by about two-thirds to 130,000 barrels per day as blocks were shut-in during
a conflict that erupted in late 2013, after a dispute between President Salva Kiir and his former
deputy, Riek Machar. The two sides agreed in August to end fighting that claimed tens of thousands
of lives.
“We think that the power-sharing accord agreed in August is unlikely to lead to long-term political
stability,” Aislinn Clarke, a WoodMac research analyst for sub-Saharan Africa, said in a report. “We
do not see a return to pre-2011 production levels without a more realistic and concrete peace deal
between the government and rebels.”
The full extent of damage to field infrastructure as a result of the conflict is unknown, as well as the
performance of reservoirs that were closed, she said. China National Petroleum Corp., Oil & Natural
Gas Corp. of India and Petronas Bhd of Malaysia are the main operators of South Sudan’s oil blocks.
Cash Flow
Two of South Sudan’s production areas yield Nile Blend, a light, sweet crude that could meet
demand from Indian and European refiners as Iranian volumes decline. The government, which
said last year it wants to restore output to 350,000 barrels per day, began restoring production in
August.
South Sudan oil-output forecasts: Wood Mackenzie Ltd. Wood Mackenzie Ltd.

WoodMac expects South Sudan production to increase to more than 170,000 barrels per day by
2020. Production could reach 230,000 barrels a day in the same period if a lasting peace is
sustained, generating more than $3 billion of revenue for the government, it said.
“After five years of war, both sides are in desperate need of funds and know that oil production is
the only way to claw some of this back,” Clarke wrote in the report. “Hard cash flow may be a
motivation for peace, but with oil flowing again it could just as easily become an enabler for further
conflict.”

U.S. monthly crude oil production exceeds 11 MBPD in August
Source: U.S. Energy Information Administration, Petroleum Supply Monthly
U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to
EIA’s latest Petroleum Supply Monthly, up from 10.9 million b/d in July. This is the first time that
monthly U.S. production levels surpassed 11 million b/d. U.S. crude oil production exceeded the
Russian Ministry of Energy’s estimated August production of 11.2 million b/d, making the United
States the leading crude oil producer in the world.
Monthly crude oil production reached a record high in several states. Texas had the highest record
level at 4.6 million b/d, followed by North Dakota at 1.3 million b/d. Other states that had record-
high production levels were New Mexico, Oklahoma, Colorado, and West Virginia. Production in the
Federal Offshore Gulf of Mexico also hit a record high of 1.9 million b/d.
The Permian region, which is located in western Texas and eastern New Mexico, accounts for about
63% of total Texas crude oil production and 95% of total New Mexico crude oil production. From
January 2018 to August 2018, Texas crude oil production increased by 683,000 b/d (15%) and New
Mexico production increased by 182,000 b/d (25%).
The growth in Texas and New Mexico since the start of 2018 surpassed EIA’s previous
expectations, which assumed that pipeline capacity constraints in the Permian region would
dampen production growth in response to the increased differential between the West Texas
Intermediate (WTI) crude oil price at Cushing, Oklahoma, and the WTI price at Midland, Texas.
In August 2018, this differential had grown to more than $16 per barrel (b), up from $0.43/b in
January. However, industry efficiencies in pipeline utilization and increased trucking and rail
transport in the region have allowed crude oil production to continue to grow at a higher rate than
EIA expected.

From May through August, production in the Gulf of Mexico grew by an average of 130,000 b/d
every month, a significant increase from the growth rate in the first four months of the year. This
increase was primarily the result of a number of fields returning to full production after several
months of maintenance and other infrastructure issues that arose from Hurricanes Harvey and Nate
in 2017.
U.S. crude oil production has increased significantly during the past ten years, driven mainly by
production from tight oil formations using horizontal drilling and hydraulic fracturing. EIA estimates
of crude oil production from tight formations in August 2018 reached 6.2 million b/d, or 55% of the
national total.
WTI-Cushing spot prices averaged about $68/b in August, down from the July average of $71/b.
EIA’s Short-Term Energy Outlook forecasts the average spot price for WTI to remain near that level
in the fourth quarter of 2018. The higher crude oil prices at the end of 2018 and throughout 2019
will likely support increased U.S. crude oil production. EIA forecasts U.S. crude oil production to
increase by 1.0 million b/d in 2019.

NewBase 08 November 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil dips as soaring U.S. production outweighs talk of OPEC output cuts
Reuters + Bloomberg + NewBase
Oil prices dipped on Thursday as record U.S. crude output heightened concerns of a return of global
oversupply, stoking talk from within OPEC that production curbs may become necessary once again
to prevent a glut.
Front-month Brent crude oil futures were at $71.93 a barrel at 00301 GMT, down 14 cents from their
last close. U.S. West Texas Intermediate (WTI) crude futures were at $61.68 per barrel, virtually flat
from their last settlement.
Benjamin Lu of brokerage Phillip Futures in Singapore said that overall, “Oil prices continue to
demonstrate...bearish influences amidst market concerns of rising global inventories... (and as)
increasing output levels threaten to upset supply fundamentals in Q4 2018.”
A group of producers around the Middle East-dominated Organization of the Petroleum Exporting
Countries (OPEC) as well as Russia decided last June to relax output curbs in place since 2017,
Oil price special
coverage

after pressure from U.S. President Donald Trump to reduce oil prices and make up for supply losses
from Iran.
But with Iran sanctions now in place and oil still in ample availability, OPEC-led production cuts next
year cannot be ruled out, two OPEC sources said on Wednesday.
“OPEC and Russia may use cuts to support $70 per barrel,” said Ole Hansen, head of commodity
strategy at Saxo Bank.
“The introduction of U.S. sanctions earlier this week against Iran failed to lift the market given the
announcement that eight countries, including three of the world’s biggest importers, would receive
waivers to carry on buying Iranian crude for up to six months,” Hansen said.
THE ONLY WAY IS UP?
At the heart of rising global output has been a relentless increase in U.S. crude production, which
hit a record 11.6 million barrels per day (bpd) in the week ending Nov. 2, according to Energy
Information Administration (EIA) data released on Wednesday.
That’s a threefold increase from the U.S. low reached a decade ago, and a 22.2 percent rise just
this year. It makes the United States the world’s biggest producer of crude oil.
More U.S. oil will likely come. The EIA expects output to break through 12 million bpd by mid-2019,
thanks largely to a surge in shale oil production.
Meanwhile, U.S. crude inventories rose by 5.8 million barrels in the week ending Nov. 2, to 431.79
million barrels, the EIA said. Crude stocks moved back above their five-year average levels in
October.
Production has not just risen in the United States, but also in many other countries, including Russia,
Saudi Arabia, Iraq and Brazil, stoking producer concerns of a return of oversupply that depressed
oil prices between 2014 and 2017.
“Producers are concerned about the potential oversupply ... after EIA reported that crude inventories
rose by 5.8 million barrels,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage
Oanda in Singapore
Oil Set for Longest Losing Run Since 2014 as Supply Fears Ease
Crude’s poised for the longest losing streak since 2014 as concerns of a supply crunch eased on a
forecast for rising U.S. production and waivers for eight countries allowing temporary import of
Iranian oil.
Futures in New York fell as much as 0.9 percent and headed for an 8.4 percent drop in eight straight
sessions. The U.S. government forecast the nation’s oil output will increase at a record pace this
year, while industry data signaled American crude inventories rose last week. Meanwhile,
the waivers will allow Iran to continue some exports to its top customers for another six months.

Supply concerns that drove crude to a four-year high last month faded on speculation the U.S. would
soften the blow of its sanctions on Iran to lower pump prices at home. The Organization of Petroleum
Exporting Countries also pledged to offset any supply gaps. The group led by Saudi Arabia
will gather in Abu Dhabi this weekend as they face a fresh surge of U.S. shale oil threatening to
unleash a new surplus in 2019.
“The focus for now remains on the waivers issued to eight countries, allowing them to continue the
purchase of Iranian barrels temporarily,” said Stephen Innes, Singapore-based head of trading for
Asia Pacific at Oanda Corp. “There were more bearish overtones in terms of supply with the
American crude output seen rising this year by the most ever, coupled with the call on OPEC to
ramp up even higher.”
West Texas Intermediate crude for December delivery dropped as much 54 cents to $61.67 a barrel
on the New York Mercantile Exchange and traded at $61.92 on the New York Mercantile Exchange
at 12:16 p.m. in Singapore. Total volume traded was almost double the 100-day average.
Biggest Yearly Gain
Brent futures for January settlement slid 11 cents to $72.02 on the London-based ICE Futures
Europe exchange. The contract fell 1.4 percent to close at $72.13 on Tuesday. The global
benchmark crude traded at a $9.95 premium to WTI for the same month.
In the U.S., the government is estimating the biggest yearly increase in domestic crude production.
The output will average 10.9 million barrels a day this year, up from 9.35 million in 2017, the biggest
gain on record, according to the Energy Information Administration.
At the same time, industry data was said to show that nationwide oil inventories rose by 7.83 million
barrels last week, while a median estimate in a Bloomberg survey of analysts expected a 2-million-
barrel increase ahead of government data Wednesday.

U.S. crude inventories increase, diesel stocks down
U.S. crude inventories rose last week, boosted by another jump in production to a new record, while
gasoline stocks increased and distillate inventories fell, the Energy Information Administration said
on Wednesday.
Oil prices fell after the EIA reported that crude inventories rose by 5.8 million barrels in the week to
Nov. 2, more than double analysts’ expectations for an increase of 2.4 million barrels. Overall
production rose to 11.6 million barrels a day, a new weekly record, although analysts rely more on
monthly figures, which are published with a lag.
“It is a bearish report, with the further rise in overall crude oil inventories of 5 million barrels and the
large rise in inventories at the Cushing delivery hub of over 2 million barrels,” said John Kilduff, a
partner at Again Capital Management in New York.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.4 million barrels, EIA said.
Refinery crude runs fell by 9,000 barrels per day, EIA data showed. Refinery utilization rates rose
by 0.6 percentage points.
Gasoline stocks rose by 1.9 million barrels, compared with analysts expectations in a Reuters poll
for a 2.3 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 3.5 million barrels, versus
expectations for a 2.6 million-barrel drop, the EIA data showed.
Net U.S. crude imports rose last week by 275,000 barrels per day.

NewBase Special Coverage
News Agencies News Release 08 November - 2018
How Buyers Are Lining Up After U.S. Exemptions of sanctions
©2018 Bloomberg L.P. Heesu Lee
Armed with waivers to keep importing Iranian oil without running afoul of U.S. sanctions, some of
the Islamic Republic’s top customers are preparing to buy.
The exemptions mean at least some supplies from OPEC’s third-biggest producer will keep flowing
into international markets, after its exports plunged almost 40 percent since April -- the month before
Washington announced the curbs. In a bid to keep customers, the state-run National Iranian Oil Co.
has been offering record discounts on its crude.
A summary of plans by some of Iran’s biggest oil customers and what they may buy under the
waivers is set out below. This story will be updated as new information becomes available. The
exemptions have been granted for 180 days, and will be reviewed toward the end of the period.
South Korea
Waiver: Up to 200,000 barrels a day of condensate
Purchases before sanctions: 300,000 barrels a day (condensate) in 2017
While the Asian country was the third-biggest importer of Iranian oil, it was the first major buyer
to cut purchases to zero as the U.S. prepared to impose sanctions. It’s now allowed to buy as much
as 200,000 barrels a day, though actual imports may not be that high.
Purchases must be limited to cargoes of condensate, a type of ultra-light oil that’s critical for South
Korea because many of the nation’s plants are geared to process it. The country bought about
300,000 barrels a day of South Pars condensate from Iran in 2017.

The government is said to be in discussion with companies to decide how to split the import volume.
They’ll maintain a won-based payment system with Iran, making deposits into local escrow accounts
in Industrial Bank of Korea and Woori Bank. The money won’t directly go to Iran, which can only
use it to buy food, medicine or other non-sanctioned goods from its customers.
India
Waiver: Up to 300,000 b/d
Purchases before sanctions: 560,000 b/d in Jan.-Oct. 2018
The South Asian nation was one of the most vocal negotiators for an exemption from the U.S., as
the government faced protests over rising fuel costs before national elections next year.
Under the exemptions, it will be allowed to import as much as 300,000 barrels a day. That’s under
Iran’s average daily exports to the nation of about 560,000 barrels this year, and almost 450,000
barrels in 2017, shipping data compiled by Bloomberg show.
Indian refiners are expected to buy about 9 million barrels of oil for loading in November from Iran.
They too will make payments into a local escrow account for the crude supply.
China
Waiver: 360,000 b/d
Purchases before sanctions: 658,000 b/d in Jan.-Sept. 2018
The biggest buyer of Iran’s crude is allowed to import 360,000 barrels a day under the exemptions,
according to people with knowledge of the matter. That doesn’t include oil produced by projects in
the Islamic Republic in which Chinese companies have equity.

While China had bought about 658,000 barrels a day over the first nine months of this year, the
government was said to have told at least two state oil companies to avoid purchasing the
producer’s oil before the sanctions went into effect. That decision preceded an upcoming meeting
between President Xi Jinping and U.S. counterpart Donald Trump and coincided with flaring trade
tensions between the countries. Chinese ship owners had also stopped hauling Iranian oil.
Japan
Waiver: TBC
Purchases before sanctions: About 160,000 b/d in Jan.-Sept. 2018
The nation’s refiners are likely to restart imports of Iranian oil now that it’s one of the eight recipients
of exemptions, Minister of Economy, Trade and Industry Hiroshige Seko told reporters on Tuesday.
While JXTG Holdings Inc., the country’s biggest refiner, echoed that view, it’s still considering
whether to resume purchases from the Persian Gulf state, according to Senior Vice President
Yasushi Onoda. If the company decides to import, oil will arrive in Japan as early as January, after
it makes nominations in December or the following month, he said.
Japanese processors halted purchases of Iranian crude in October under U.S. pressure. The Asian
nation cut shipments in order to get the waiver, Finance Minister Taro Aso said on Tuesday.
Taiwan
Waiver: TBC
Purchases before sanctions: About 16,000 b/d in Jan.-Aug. 2018

The chairman of Formosa Petrochemical Corp., Taiwan’s only publicly traded oil refiner, didn’t seem
in too much of a rush to buy Iranian oil even though the island got a waiver.
“We don’t dare to sign any more contracts to buy Iranian crude oil after President Trump’s threat,”
Chen Bao-lang said on Tuesday. “But it’s not an issue for us, whether Taiwan got an exemption or
not. It’s very easy to find alternatives.”
Taiwan has been weaning itself off the Islamic Republic’s crude for the past 10 years. In 2003, Iran’s
share of imports peaked at around 18 percent. So far this year, the Persian Gulf state made up just
under 2 percent.

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Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
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

New base energy news november 08 2018 no-1212 by khaled al awadi

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