NewBase 610 special 24 May 2015

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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NewBase 24 May 2015 - Issue No. 610 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE renewable energy future programmes in good hands
The National + NewBase
“Nuclear energy is interesting all over the world, and hearing that my country was adopting safe
nuclear energy really made me proud. So I wanted to take part in that initiative,” said the student,
who earlier this year started a two-year masters programme in nuclear engineering and power
plant management at Kings Kepco International Nuclear Graduate School in Seoul.
“I thought coming to Korea would be much more beneficial for my country because we’re trying to
have some kind of mutual understanding and learn from their side, their language, working in their
nuclear power plants.”
The 30-year old headed east in February after completing her bachelor’s degree in biomedical
engineering at Abu Dhabi Higher Colleges of Technology. She is one of many young Emiratis
sponsored by the Emirates Nuclear Energy Corporation (Enec) to study nuclear energy in the
South Korean capital.
“Over the coming years our demand for power will increase, so we have to supply that demand,”
Ms Al Shehhi said. “Nuclear can meet that calculated percentage of energy required for the whole
country and I would like to be involved in the next steps for the UAE’s nuclear programme once I
graduate.”

Students take a variety of courses to help them understand the inner workings of nuclear power
plants, including physics, chemistry, management and mathematics. To fully experience their host
country, they are also taught basic Korean.
Learning about nuclear energy, Ms Al Shehhi said, required dedication. “We’ve had almost 16
subjects in three months,” said the Ras Al Khaimah native who became the university’s first
female student council president.
“It was intense but we made it. They will then give us three paths to follow, including pure
management, technical or design.” Fellow Emirati Omar Al Hashmi is halfway through his four-
year bachelor programme in nuclear engineering at the Korea Advanced Institute of Science and
Technology (Kaist).
“Since I was young, I was really interested in science,” said the 20-year-old. “When I graduated, I
saw the UAE was trying to adopt renewable energy and the programme was interesting so I really
wanted to be one of the first to apply to it.”
Having visited Korea previously, the Dubai native said he was impressed by the country’s
universities. “This pushed me to want to learn from them. My father also encouraged me because
he knows how advanced it is here.”
His aim is to become a nuclear engineer in the UAE. “I want to make my country proud and try to
advance nuclear studies in the UAE. We’re trying to reduce our carbon emissions and this is one
of the best ways to do it.”
Saeed Al Mheiri, another Kaist student,
hoped to be an intern at the Korea
Electric Power Corporation, the
company constructing Abu Dhabi’s
nuclear plant in Barakah, before joining
Enec.
“The country is in great need of nuclear
engineers before the construction of the
nuclear power plant is complete,” he
said. “I understood from Masdar how
important and safe nuclear energy was,
so I’d like to be one of the first pioneers
in this field.”
Hamad AlKaabi, the UAE ambassador to the International Atomic Energy Agency, said
cooperation between the two countries was strong.
“Our regulator works closely with Korean entities to support licensing of the plant and conducts
regular visits to Korea for this purpose. Similarly, Enec has a strong presence in Korea through
their office and permanent staff in Seoul,” he said.
“The objective is to support the smooth implementation of the nuclear project. Emirati staff are
being trained in Korean facilities and students learn nuclear engineering at Korean universities,
which is all part of ongoing cooperation programmes supporting the development of human
resources for the UAE nuclear sector.”

UAE: Adnoc seeks 240,000 tonnes gasoline for delivery in July
Reuters + NewBase
Abu Dhabi National Oil Co (Adnoc) is seeking 240,000 tonnes of gasoline for delivery in July,
adding to an earlier tender seeking cargoes for June, a tender document showed on Friday.
This is expected to further boost Asian gasoline margins, which hit a record high earlier this week
on firm Indonesian and Indian spot demand. Adnoc is seeking eight cargoes of 30,000 tonnes
each of 95-octane gasoline for delivery into Jebel Ali and Ruwais and loading from within the Gulf.
The tender closes on May 26 and is valid until May 31.
Adnoc earlier this week issued a tender to buy two 30,000-tonne cargoes for June 10-12 and June
22-24 arrival, respectively, at any port in the UAE or Ruwais. It is unclear if that tender has been
awarded.
Adnoc’s July requirements indicate that its 127,000 barrels-per-day (bpd) residual fluid catalytic
cracking (RFCC) unit at its expanded Ruwais refinery might still be shut, a Singapore-based trader
said.
The refiner lowered its operating rate at the refinery to about 50 per cent after the unit
encountered start-up problems. Once gasoline production from the RFCC unit is stable, Adnoc will
no longer need to import gasoline and the country might even have small volumes to export,
sources have said .

Egypt to Floats $3 bn LNG Purchase Tender in June
Reuters + NewBase
Egypt plans to issue tender in June to buy LNG shipments worth $3 billion for supply during 2016
and 2017, reported news agency Reuters Friday.
"We aim to issue a tender to issue LNG shipments during the first half of June... The tender aims
to provide the needs for the new import terminal," Khalid Abdel-Badee, EGAS chairman, told the
news agency.
Earlier this month, Cairo floated tender to lease a second LNG import terminal. Recently Hoegh
Gallant floating storage and regasification unit (FSRU) from Norway's Hoegh LNG commenced
commercial operations. The FSRU arrived in Egypt on the Gulf of Suez in early April. In November
last year, Hoegh LNG finalised a five year deal with EGAS to supply FSRU by the end of first
quarter of 2015.
Egypt has become a net importer of oil and gas on the back of lower production amid higher
demand. Abdel-Badee said that the amount of shipments have not yet been decided and no final
date for procurement has been set, Through the first LNG tender, Cairo secured LNG supplies
from multiple entities.
Global LNG suppliers, already stung by weak demand and spot prices at four-year lows, are
seizing on any new business opportunities. A sharp year-long decline in spot LNG prices has seen
new buyers launch major procurement tenders, including Jordan which this week came out with a
supply tender for as many as 36 cargoes over 2016/2017.
The switch marks a reversal from when LNG was seen as near unaffordable for less developed
economies. The winners of Egypt’s previous tender were Trafigura, Vitol and Noble Group. EGAS
also signed deals to import 35 LNG cargoes from Gazprom Marketing & Trading and 6 from
Algeria’s Sonatrach. It was also nearing a deal to import 21 cargoes from BP.

Jordan:Questerre Energy to help Jordan develop oil shale
Source: NYC Today
Canada-based energy giant Questerre Energy Corp will help Jordan in developing oil shale as
the cabinet of Jordan government has approved the signing of a contract with the Canadian
company.
Jordan's cabinet has approved the signing of an agreement with a Canadian energy company to
develop oil shale, the state-run Petra news agency reported on Monday. The council of ministers
said the Canadian company Questerre Energy Corp expressed willingness to invest around $1.4
billion in the project, the report said.
The approval is part of the government's efforts to rely on local resources and utilize oil shale
reserves. As part of the deal, the company will conduct studies in two areas in the south of
Jordan to develop oil from oil shale. The firm will start conducting initial technical and geological
studies to come up with a feasibility study.
Jordan, which has over 40 billion tons of oil shale in reserves, imports currently about 96 percent
of its energy at a cost of $2.8 billion annually, or 21 percent of its gross domestic product. The
country is implementing a strategy to increase self-produced energy to meet 60 percent of its
consumption by 2020.

Iraq oil revenue deal with Kurdish Regional Government expected soon
The National + NewBase
A comprehensive deal over how Iraq’s oil output and revenue is managed – a crucial step to make
progress on the political front – should be settled in a matter of weeks, according to Iraq’s deputy
prime minister in charge of energy.
“We need a few weeks to work on it in council, then we will
send it to the parliament for a vote,” said Baha Al Araji,
Iraq’s deputy prime minister, on the sidelines of the
World Economic Forum on the Middle East and North
Africa gathering in Jordan. “We have three problems to
solve, but they are not technical – they’re political with
Kurdistan. In a few weeks a draft will be ready.”
The main dispute centres around the details of how the
Kurdish Regional Government handles its exports and how
the central government in Baghdad distributes money back to the KRG. There was a deal in place
in December, in which the KRG committed to handing over 550,000 barrels of oil per day from
areas under its control to Iraq’s state oil marketing organisation.
In return, the federal government in Baghdad agreed to allocate 17 per cent of Iraq’s national
budget to the Kurdish region, which translated into about US$1 billion per month. But the deal
broke down as the parties accused each other of violating the terms of the agreement.
The argument has been both arcane and unnecessary, said Rowsch Nuri Shaways, a Kurd and
the deputy prime minister of Iraq, who was also attending the WEF meeting.
“The constitution had become mere ink on paper because we failed to enforce many of its
provisions. Had it been implemented the way it should be we would have been able to do away
with one key problem” standing in the way of making progress on both the political and security
front, Mr Shaways said.
The dispute that arose in the early part of the year seems to have been about the timing of
payments as the KRG funded an upgrade of a pipeline that would handle both 250,000 bpd of
crude oil from its region and an additional 300,000 bpd from the Kirkuk field, control over which is
disputed between the KRG and central government.
Mr Shaways said the KRG was withholding oil promised to the central government because it had
not received payments for building the pipeline, while the central government had paid only
around a third of the share of federal money it promised to the KRG saying it had not received the
promised oil.
“This has taken us steps backward and created new tensions that were pointless,” Mr Shaways
said. UAE companies operating in Iraq were hopeful that the impasse could be broken but also
remained sceptical.
“I hope they can reach a deal, but the two sides have seemed to be very far apart on the main
issue of dispute,” said Patrick Allman-Ward, the chief executive of Dana Gas, which runs one of
the main gas projects in the Kurdish region of Iraq.
Dana Gas has been in its own dispute with the KRG over the terms of its contract.

“The main challenge in Iraq now is a financial one,” said Majid Jafar, the chief executive of
Crescent Petroleum, the Sharjah-based company that has a share in Dana Gas’s project, plus a
power station project in the south of Iraq. “They have a huge draw on the government budget
because of the war with [ISIL] combined with the economic challenges.”
Iraq and Syria dominated the WEF meeting at the Dead Sea because of the security threat to the
region from the extremists running rampant across large swathes of the countries. The militants
have directly threatened Iraq’s oil infrastructure on the eastern borders of the Kurdish region,
disrupting the country’s main oil refinery at Baiji as well as the Kirkuk field.
But while the security issue dominates headlines, senior Iraqi and international figures at the WEF
agreed that economic issues were more pressing.
“One of the main obstacles to progress is the absence of facilitating regulation to attract
investment,” said Ryan Crocker, the former US ambassador to Iraq. “What investors would like to
see is an overhaul of the Iraqi financial system to bring it into the 21st century. It’s something all
sects and ethnicities should be able to agree on, and you would see a great deal of private capital
come into the country – even with the security situation the way it is now.”

Iran likely to abolish fuel subsidies - government adviser
Reuters + NewBase
May 23 Iran is likely to abolish subsidised fuel allowances for motorists, an Oil Ministry adviser
said on Saturday, in a move that will cut state spending but could also drive inflation and cause
protests.
The government is trying to curb subsidies that have led
to profligate energy consumption and put a strain on
public finances, already squeezed by international
sanctions and last year's drop in oil prices.
"The issue of fuel rations has not yet been decided, but it
is very likely that no ration will be set and private cars from
now on will get fuel at market rates," Akbar Naematollahi
was quoted as saying by the Tasnim news agency.
Eligible drivers currently receive 60 litres of petrol a month at a heavy discount to market prices.
The introduction of the allowance in 2007 led to rioting among motorists who could previously buy
unlimited quantities of cheap fuel.
President Hassan Rouhani, elected in 2013 on a platform of better economic management, has
championed efforts to rationalise prices and pushed through a modest increase in fuel prices last
year.
But the drive to lift subsidies threatens to undo efforts to curb inflation, which the government has
brought down to about 15 percent from highs of 35 percent under Rouhani's predecessor
Mahmoud Ahmadinejad. Naematollahi said the move was intended to stop illegal fuel trading and
smuggling, adding a final decision would likely be taken in the coming days.

Oil Price Drop Special Coverage
Brent crude oil holding , $66 before long US weekend
Oil prices fell on Friday as worries over the impact of war in the Middle East on crude supplies
were outweighed by reports of profit-taking ahead of a long weekend. Monday, May 25 is
Memorial Day in the United States and a public holiday in much of Europe, leaving many markets
closed.
"No one wants to hold open positions ahead of a long weekend so books are being squared,
bringing some consolidation," said Carsten Fritsch, senior oil and commodities analyst at
Commerzbank in Frankfurt.
July Brent crude was down 80 cents at $65.74 a barrel by 1240 GMT after closing up 2.3 per cent
on Thursday.
US crude futures are experiencing their longest winning streak since records began in 1983,
helped by a drop in US crude and product stockpiles last week, reflecting better demand in the
world's largest oil consumer.
US crude for July was down 60 cents at $60.12 a barrel, but poised to post gains for the 10th
week in a row. Data from the US Energy Information Administration this week showed a big
decline in US oil product stockpiles, suggesting end-user demand has been strong.
"With US travel expected to reach a 10-year high over Memorial Day, according to AAA (American
Automobile Association), product inventory is expected to decline even further over coming
weeks," ANZ analysts said in a report.
Violence in the Middle East has increased worries over the security of oil supply from the region.
A suicide bomber blew himself up at a Shi'ite mosque in eastern Saudi Arabia during Friday
prayers, residents said, and up to 30 people were reported to have been killed or wounded.

Traders watch the falling price of oil storage: Kemp
Reuters + NewBase
Futures prices indicate the physical market is easily absorbing the large volume of crude being
supplied and global rebalancing is well underway. The price for storing a barrel of Brent for six
months has fallen from more than $1.23 per month at the start of 2015 to just 37 cents per month
on May 21.
U.S. crude inventories are still more than 95 million barrels above the level at the end of 2014 and
115 million barrels higher than normal at this time of year. There are also reports of a build up in
stocks in China, either crude oil or refined products, some of which may have been put into long-
term strategic storage.
According to most estimates, the global market has been oversupplied by between 1.5 million and
2.5 million barrels per day since the start of the year.
Yet the price for storing crude has fallen by two-thirds in the space of just four months, which
indicates there is no shortage of space in tank farms and the supply-demand surplus may be
being overestimated.
Strong growth in demand is helping the market absorb record crude supplies from Saudi Arabia
and the U.S. shale fields.
“Markets around the world have surprised on the upside. Demand has definitely surprised on the
upside in refined products,” an executive for Vitol, the world’s largest oil trader, told a conference
(“Oil market buoyed by product demand” May 20).
SPREAD WATCHING
Casual observers focus on spot prices but physical traders are more likely to concentrate on
differences between futures prices in adjacent months as an indicator of tightness or slack in the
market.
Differences between the first-to-deliver futures contract and the sixth provide a good indication of
expected demand for storage and by extension the direction of inventories in the short term. The
price gap hit as much as $7.40 contango in early January as traders anticipated the enormous
build up in reported crude stocks during the first four months of the year.
But this week it has narrowed to $2.20 contango or less, suggesting traders expect far less
demand for storage than previously. There are a number of reasons to think the spread between
nearby futures contracts is a fair indicator of near term trends in the oil market.
The first-to-sixth month spread has been closely correlated with shifts in the balance between
supply and demand. It tracked the build up and drawdown of inventories during the “missing
barrels” episode in the late 1990s following the Asian financial crisis.

It also tracked the tightening of the physical oil market in the run up to prices spiking in mid-2008
as well as the subsequent surplus and return to balance during the recession of 2008-2010. And it
tracked the oversupply and enormous stock build between the middle of 2014 and early 2015.
The first-to-sixth month spread is closely correlated with the rise and fall in spot prices and there is
some evidence that movements in the spread anticipate movements in the spot prices by some
weeks or months (link.reuters.com/tuw74w).
Unlike the spot market for “flat prices” which attracts a large share of financial investors and may
be subject to a lot of noise, the market for “spreads” is dominated by relatively well informed
insiders from oil companies, trading houses and the largest hedge funds, so it may provide a
better signal about market conditions.
In the 1998 and 1999, the shift from contango to backwardation coincided with the return of the
“missing barrels” to the market as the supply-demand balance tightened. At the current contango
of just 40 cents per month there are no strong incentives to store excess oil and any hidden
inventories are likely to return to the market.
Most oil analysts are still bearish about the outlook for oil prices over the remainder of 2015 and
into the early part of 2016.
Major bears like Goldman Sachs are concerned that the market is still heavily oversupplied and
carrying an abnormally high level of inventories while the resurgence in prices will slow down the
needed adjustment.
But the spreads tell a different story, and given their track record, it is not one which should be
dismissed too quickly. The market could be wrong and the recent tightening of the spreads could
prove to be a false rally that gives way to renewed weakness later in the year.
The spreads are, however, consistent with reports from market participants, including Vitol and
Saudi Aramco, as well as the U.S. Energy Information Administration, all of which have pointed to
the strength of fuel demand.

‘Preserving oil market share top priority for Gulf’: Pundits
AFP + SG + NewBase
Gulf oil producers will resist attempts to cut output at an OPEC meeting next month as preserving
market share remains their top priority, industry analysts said.A decision by the 12-member
Organization of Petroleum Exporting Countries not to cut production in November sent prices
crashing 60 percent before a partial recovery in recent weeks.
Gulf and other OPEC members said they wanted to safeguard their share of a market that has
faced a supply glut as a result of sharp increases in the production of shale and sand crudes.
"Preserving market share still remains a top priority for Gulf states," Saudi economist Abdulwahab
Abu-Dahesh said.
"This time they are even encouraged by signs their November strategy is working after a drop in
US shale oil production and in the number of rigs," Abu-Dahesh told AFP. In the face of the sharp
drop in their earnings, some OPEC members, led by Iran and Venezuela, have publicly called for
the cartel to cut production to support prices.
"I don't thing that any change will happen at OPEC's meeting," a former member of Kuwait's
Supreme Petroleum Council, Musa Maarafi, said.
"Gulf states will continue to defend their market share and it is their right to do so," Maarafi told
AFP. "They will not accept to cut output at their own expense unless an agreement is reached with
non-OPEC producers."
The burden of any cut in OPEC output would likely fall on the Gulf members whose production
has risen by around 3.5 million barrels per day since 2011. Currently, they pump 16.8 million bpd,

or 55 percent of OPEC's total, with Saudi Arabia accounting for 10.3 million bpd. They export
around 12.5 million, almost two-thirds of the cartel's total.
Head of marketing at national oil conglomerate Kuwait Petroleum Corp. (KPC) Jamal Al-Loughani
told a symposium last week that a change in the global energy map has made market share a
highly sensitive issue. He said the sharp rise in US production to 9.4 million bpd had allowed
Washington to stop light crude imports from Africa.
It also cut imports of heavy oil from Latin America, substituting it with Canadian sand oil. "That led
African and Latin American exporters to seek new markets in the east," said Loughani, adding that
more than 3.0 million bpd of additional high good quality crudes are being pumped into these
markets in competition with Gulf exports.
"That places additional pressure on OPEC members, especially Gulf exporters, to cooperate to
maintain market share and even ensure new takers for additional quantities in the future," he said.
A relative rebound in prices and a drop in US shale oil output is likely to convince OPEC to
continue with its strategy. Data from the US Department of Energy showed US crude production
dropping 112,000 bpd to 9.26 million bpd in early May.
"Prices are improving, growth in supplies from outside OPEC – especially shale oil – is lower than
before and demand is recovering," Kuwait's governor at OPEC Nawal Al-Fuzai told reporters last
week.

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
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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 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 03 May 2015 K. Al Awadi

NewBase 610 special 24 May 2015

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