New base 19 october 2017 energy news issue 1087 by khaled al awadi

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NewBase Energy News 19 October 2017 - Issue No. 1087 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 Utico unveils innovative $100m rooftop solar programme
UTICO ( Images by NewBase )
Utico, the Middle East’s leading full service private utility, today unveiled a path-breaking solar
investment programme, SolarFree, for homeowners and announced an investment outlay of more
than $100 million for the project.
In a statement, Utico said the innovative scheme will help revolutionise the home rooftop solar
power generation market which has been picking up in Dubai following the launch of the landmark
Shams Dubai solar programme of Dubai Electricity and Water Authority (Dewa).
“We believe that our solar investment proposition which will guarantee the world’s fastest cash
pay back to investors, along with an option to recoup full investment in the project within a
maximum of three years, will be a huge incentive to homeowners to switch to solar power, in turn
promoting green economy,” Richard Menezes, managing director of Utico, said.

He said Utico’s goal was to complete solar installations across 5,000 homes in the next 18 to 24
months. Homeowners can install SolarFree rooftop solar systems without getting into any long-
term liability through power purchase agreements or long term lease as is currently practiced.
“SolarFree, will literally free up the home rooftop investor‘s equity in the project, rather than getting
him into liability and long-term debt. Moreover, the investor will also gain from RoI (return on
investment) through regular and fast cash paybacks based on the solar power generated,”
Menezes said.
He said that an investor can opt to get back investment in the solar installation from Utico within
18, 24 or 36 months. Investors will also have an option to buy the system through an in-house
finance arrangement.
Menezes said Dewa’s Shams Dubai works on a net metering scheme and hence Utico’s offering
offers an incentive almost akin to feed-in tariff giving home owners a classic payback and return
mix.
“Under SolarFree, we will offer the sale of the
system at a fixed price guaranteeing home
owners a return even if the solar system does not
produce any power and an optional programme
that offers the home owner get his investment
back within a period of three years. The time
frame can be shorter even for elite qualified
consumers,” Menezes said, adding that there are
no other hidden costs.
He further said the investment deal is purely
based on green economy principles and the
larger aim was to mitigate climate change by
promoting use of solar power.
“We have always based our business model on innovation and sustainability from inception and
thanks to the encouragement and blessings of the wise leadership of the UAE, we have been able
to make tremendous progress in offering consumer friendly initiatives,” Menezes added.

Scotland: The world's first floating wind farm has begun production
Statoil + CNBC - Anmar Frangoul
UAE renewable energy leader Masdar and Norwegian oil and gas powerhouse Statoil has
announced that Hywind Scotland, the world's first floating wind farm, has started to send electricity
to the Scottish grid. The 30-megawatt project is set to be officially opened by Nicola Sturgeon, the
First Minister of Scotland, later today.
The Hywind project, built by Norwegian oil company Statoil ASA and Masdar Abu Dhabi Future
Energy Co., has five turbines floating 25 kilometers (16 miles) off the coast of Peterhead, near
Aberdeen. The project has a capacity of 30 megawatts and cost about 200 million pounds ($263
million) to construct.
The facility is based 25 kilometers off the coast of Peterhead, Aberdeenshire, and will be able to
power roughly 20,000 households. The wind farm, which can be used at water depths of up to 800
meters, is operated by Statoil in partnership with Masdar.
In a statement Wednesday, Sturgeon said that the opening of Hywind marked an "exciting
development" for renewable energy in Scotland. According to its government, Scotland is home

to 25 percent of European offshore wind resources. There are more than 58,000 jobs in Scotland's
low carbon and renewable energy economy, the government said.
WWF Scotland's acting head of policy
welcomed the facility's opening. "With
around a quarter of Europe's offshore
wind resource in Scotland, it's great to
see the world's first floating windfarm
inaugurated off our coast," Gina
Hanrahan said. "Offshore wind is
already an industrial success story
across the U.K., cutting emissions,
creating jobs and dramatically driving
down costs."
“This marks an exciting development
for renewable energy in Scotland,” said
First Minister Nicola Sturgeon. “Hywind
will provide clean energy to over twenty
thousand homes and will help us meet
our ambitious climate change targets.”
Wind turbines have been installed on
seabeds since the 1990s. Taking them
offshore typically increases wind speeds and reduces complaints from neighbors, but it has also
been limited to relatively shallow seas. Floating turbines are expected to open the industry up to
new markets like Japan, the U.S. west coast and Mediterranean, where seabeds drop off steeply
from the coast.
“Hywind can be used for water depths up to 800 meters, thus opening up areas that so far have
been inaccessible for offshore wind,” said Irene Rummelhoff, executive vice president of the New
Energy Solutions business area at Statoil.
Batteries
Some of the energy generated by the turbines in the sea will be stored in batteries. Statoil has
installed one of its Batwind lithium devices, which can store 1 megawatt-hour of power. This will
help steady the flow of power generated by the wind farm.
The cost of conventional offshore wind farms has been plummeting in recent years. The U.K.’s
latest renewable energy auction saw prices drop to 57.50 pounds per megawatt-hour, less than a
third the cost of new nuclear in the U.K. Rummelhoff expects floating offshore wind to follow a
similar trajectory.
“Statoil has an ambition to reduce the costs of energy from the Hywind floating wind farm to 40 to
60 euros per megawatt-hour by 2030,” she said in a statement. “Knowing that up to 80 percent of
the offshore wind resources are in deep waters where traditional bottom fixed installations are not
suitable, floating offshore wind is expected to play a significant role in the growth of offshore wind
going forward.”
The Hywind project receives government support in the form of renewable obligation certificates. It
gets 3.5 ROCs, which currently adds up to about 140 pounds per megawatt-hour, according to
Statoil spokeswoman Elin Isaksen. This is on top of the U.K.’s wholesale power price which has
averaged 48.75 pounds per megawatt-hour over the past year.

Saudi Arabia’s PIF to save oil with new energy services company
The National - LeAnne Graves
Saudi Arabia’s Public Investment Fund (PIF) has created an energy service company
(esco) that will increase energy efficiency for government and public buildings, the
sovereign wealth fund said on Wednesday.
Super Esco was established to “stimulate the growth of the kingdom’s energy efficiency
industry, in line with the objectives of Vision 2030 to diversify the economy and drive
environmental sustainability”. All government bodies are mandated to contract the new
entity on an exclusive basis as per a royal decree.
PIF said that the company, with a capitalisation of 1.9 billion riyals (Dh1.86bn), will fund
and manage the retrofit of the buildings. These projects represent more than 70 per
cent of the overall projects in the country’s energy efficiency sector.
While this is a collaboration among the energy
and finance ministries, the main body overseeing
the new company will be the Saudi Energy
Efficiency Centre (SEEC). SEEC was established
in 2010 to be the regulatory body over the sector,
granting licences to approved escos.
However, since its inception, only two companies
– Shaker Company and Energy Efficiency Era –
have received esco licences. While PIF said that
Super Esco will create partnerships with the
private sector offering new investment
opportunities, it is unclear if companies will still
need to register under the SEEC to partner with
Super Esco.
The kingdom wants to cut domestic oil usage, a big part of which is used in power
generation. PIF said that the energy efficiency industry had an estimated value
of 42bn riyals, which translates to 3bn riyals a year until 2030.
King Abdullah Petroleum Studies and Research Centre (Kapsarc) released a report
last year that said energy efficiency programmes could reduce electricity consumption
by 30 per cent.
These types of measures would displace the need for new power generation capacity,
saving around US$28bn over a decade. The report said that the implementation of
retrofit programmes will require both innovative financing mechanisms and a push for
institutional capacity building in energy auditing and management.
“If such support programmes are successful, we estimate that implementing the
measures outlined in this paper has the potential to deliver up to an extra 247,000
skilled jobs per year over a 10-year period,” Kapsarc said.

Libya:Financial, security woes put oil recovery on shaky ground
Reuters News
Libya's oil production revival is being undermined by the same financial, economic and security
problems that threaten the promise of stability and a better life for the divided North African nation.
Libya surprised many observers when it managed to raise its output fourfold to around one million
barrels per day (bpd), boosting its only significant source of income.
Continued disruptions by a range of local groups demanding a share of the revenues, as well as a
lack of funds for maintenance and investment, are preventing the National Oil Corporation (NOC)
from consolidating those gains, oil officials, engineers at the major fields and analysts say.
NOC Chairman Mustafa Sanalla said last week that the corporation had only received a quarter of
its 2017 budget, making a previously announced target of 1.25 million bpd by the end of the year
"very difficult" to achieve.
Without sufficient investment, output would dip, he warned. "You can lose production at any time."
One problem is that many of the gains made over the past year were relatively easy and cheap,
said Riccardo Fabiani, a senior analyst at Eurasia Group.
"Now the problem in the east and other parts of the oil infrastructure is that you need more serious
work to repair some of the facilities, so it's more expensive, it's technically more challenging ... and
the additional volumes that will come out of that repair work are going to be more limited," he said.
Fabiani predicted production is likely to hover between 700,000 and one million bpd in the short
term. Shutdowns have been caused mainly by armed groups making demands for their members,

sometimes claiming to act on behalf of local communities seeking jobs and public services, but
also by peaceful civic groups protesting economic hardships since the 2011 overthrow of
Muammar Gaddafi.
SHARARA
Sanalla has said repeatedly he will not negotiate with blockaders and has threatened to prosecute
them, although the NOC also tries to support communities near oil facilities and develop
relationships with them.
Limited resources and persistent lawlessness in a country split between rival political factions
mean the NOC struggles to meet expectations, however. "The National Oil Corporation is keen to
preserve production but at the same time it's a part of the problem," said Ghaith Salem al-Rooq, a
negotiator from Zintan who took part in talks to reopen blockaded pipelines near the western town.
"They have been making promises to those who shut down the fields, but never fulfilled their promises."
Production at the southwestern Sharara field, which can pump up to 280,000 bpd, or more than a quarter
of the country's total output, is a frequent target of blockades.
In the most recent incident, an armed group forced a two-day shutdown at Sharara in early October to
demand salary payments, fuel supplies and the release of members that it said had been detained.
A new group called "Enough Silence", made up of young people from six districts in southern Libya, has
said it will peacefully blockade supply roads to Sharara to lobby for oil revenues to be spent on the
neglected south.

"The problems are endless," a spokesman for the movement, Mohamed Hamouzi, told Reuters by phone.
"We are talking about severe lack of medical, educational, and security services. There's no liquidity at all,"
he said, referring to severe cash shortages in banks across Libya.
"If our demands for solving these problems are not met we are going to shut down Sharara within two
weeks."
On Wednesday, a group of Gaddafi loyalists posted a video of four men standing over a pipeline at an
unnamed desert location, threatening to cut supplies of oil and gas to terminals in the Zawiya refinery and
Mellitah complex on Libya's northern coast within 72 hours if one of their leaders was not released from jail
in Tripoli.
MISSING BUDGET
With the largest proven oil reserves in Africa, pumping more than 1.6 million bpd before 2011,
Libya's production is closely watched. Along with Nigeria, it has been exempted from OPEC-led
production cuts. Adding to uncertainty are political divisions that the United Nations is trying to
mend.
A current U.N.-backed government in Tripoli has been eroded by internal splits, lack of technical
capacity and rejection by factions that control the eastern part of the country. It has also not been
able to reverse a sharp decline in living standards or disband the many locally-rooted armed
groups that hold sway in western Libya.
The World Bank projects a budget deficit this year of 22 percent, despite oil exports rising to an
average of 6.2 million bpd in from January to July. Almost all public spending goes on state
salaries and subsidising basic products including imported fuel, more than 30 percent of which is
smuggled back out of the country, according to NOC estimates.
Even without the disruptions, oil revenues would still not be high enough to resolve the economic
troubles that many blockaders say they are protesting over. "I think the fundamental dynamic,
which is if you want your voice to be heard politically stage one is to have an armed group and
stage two is to control critical infrastructure, doesn't appear to be going away," said Richard
Mallinson, an analyst for Energy Aspects consultancy.

US Crude oil and petroleum product exports reach record levels
in the first half of 2017…Source: U.S. Energy Information Administration, Petroleum Supply Monthly
Crude oil exports in the first half of 2017 increased by more than 300,000 barrels per day (b/d)
from the first half of 2016, reaching a record high of 0.9 million b/d. Petroleum product
exports also grew over the same period with propane and distillate exports reaching record highs
of 0.9 million b/d and 1.3 million b/d, respectively.
Following the removal of restrictions on exporting U.S. crude oil in December 2015, total volumes
of crude oil exports and the number of destinations for those exports both increased. The United
States exported crude oil to 26 countries in the first half of 2017 compared with 17 countries in the
first half of 2016.
Canada remained the largest recipient of U.S. crude oil exports at 248,000 b/d in the first half of
2017 but imported an average of 46,000 b/d fewer than in the first half of 2016. China increased
its crude oil imports from the United States by 154,000 b/d and became the second-largest
importer of U.S. crude oil, averaging 163,000 b/d in the first half of the year.
Distillate exports in the first half of 2017 were 14% higher than in the first half of 2016, with exports
to South and Central America accounting for most of this growth. The share of distillate exports to
Central and South America increased slightly to 56%, while the share of distillate exports to
Western Europe fell to 19%. Mexico remained the largest single destination for U.S. distillate,
averaging 17% of total exports (223,000 b/d), followed by Brazil and the Netherlands.
In the first half of 2017, despite consistently strong domestic demand, U.S. exports of total motor
gasoline averaged a record high of 756,000 b/d, a 3% increase from the first half of 2016. High
levels of domestic production of gasoline contributed to this record-high export level.

Mexico was the destination of more than half (53%) of total U.S. gasoline exports in the first half of
2017. Recent market reforms in Mexico, which allow entities other than state-owned Pemex to
import petroleum products, may have contributed to the recent growth in Mexico’s gasoline
imports from the United States. Although Mexico produces large amounts of crude oil, Mexico’s
refinery output of products such as gasoline has been declining since 2015.
In the first half of 2017, Mexico experienced unexpected refinery outages that reduced production
of gasoline and distillates even further, and U.S. exports of gasoline to Mexico increased by
27,000 b/d compared with the first half of 2016.
U.S. propane exports reached a record high of 913,000 b/d in the first half of 2017, up from
793,000 b/d in the first half of 2016. Most of this increase is from U.S. exports to Asian markets,
which accounted for 76% of the growth since the first half of 2016, and most of the destination
countries for U.S. propane exports are Asian markets.

NewBase October 19 - 2017 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil markets firm on tighter US market, extension of OPEC supply cuts
Reuters + NewBase
Oil prices were firm on Thursday, supported by ongoing supply cuts led by OPEC, tensions in the
Middle East and lower production in the United States as a result of hurricane-enforced closures.
Brent crude futures, the international benchmark for oil prices, were at $58.25 at 0029 GMT, up 10
cents, or 0.2 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $52.11 per barrel, up 7 cents, or 0.1
percent. The U.S. Energy Information Administration (EIA) said late on Wednesday that crude
inventories fell by 5.7 million barrels in the week to Oct. 13, to 456.49 million barrels.
Oil price special
coverage

U.S. output slumped by 11 percent from the previous week to 8.4 million barrels per day (bpd), its
lowest level since June 2014 as numerous rigs had to be shut because of Hurricane Nate, which
hit the U.S. Gulf coast earlier in October.
Beyond the drop in U.S. production and tensions in Iraq and between the United States and Iran,
analysts expect markets to further tighten as the Organization of the Petroleum Exporting
Countries (OPEC) and partners, including Russia, are expected to extend a deal to curb
production beyond its expiry date at the end of March 2018.
"OPEC is desperate to bring the market into equilibrium and mop up as much of the excess
stockpiles, which was caused as a result of the free for all production approach over the last few
years. I am expecting OPEC and Russia to agree on a further 9-month extension to production
cuts," said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.
Political risk consultancy Eurasia Group said Saudi Arabia's plans to list state-owned oil
giant Aramco also favored extended production cuts in order to prop up oil prices.
"Saudi Arabia will seek a production sharing agreement extension ... as an IPO (of Saudi Aramco)
remains part of the long-term plan ... price stability will remain a core part of the strategy ... The
government still needs higher oil revenue to support its spending needs and reform program," it
said.
Crude Oil Price Forecast October 19, 2017, Technical Analysis
WTI Crude Oil
The WTI Crude Oil market went sideways, and then shot back and forth as inventory numbers
came out more bullish than anticipated in America. The $52.50 level above is massively resistive,
and I think it’s going to continue to offer a lot of negativity, and of course volatility. However, if we
continue to see bullish pressure, the market could break out to the upside.
If we do breakout above that level, the market should then go to the $55 level above. That is a
very bullish sign, and if it happens I believe that money will continue to flow into the market.
Alternately, if we do pull back from here, I think we could go looking for support near the $51.25
level. The volatility continues, and I believe that in the short term the buyers should continue to
jump into the market.
Brent
Brent markets went sideways initially during the day, but then rallied a bit to reach towards the
$58.50 level. We pull back from there, but then started to find buyers again near the $58 handle.
The hammer is that formed on the hourly chart suggestive are going to continue to find buyers,
and perhaps try to reach towards the $60 level above.
It’s difficult to imagine that we will break through there easily, and I think that if we do, the buyers
will flood into the marketplace. In the meantime, I think it’s a “buy on the dips” type of situation, for
short-term traders. I think that the gap below from a couple of days ago had been filled, and it
shows a lot of support. Because of this, I think that eventually the buyers may win, but it’s going to
be very noisy between now and then.

NewBase Special Coverage
News Agencies News Release October 19-2017
In charts: has the US shale drilling revolution peaked?
CNBC - Ed Crooks
In the outlook for crude prices, a crucial factor is how far US shale oil production can grow. The
shale revolution has transformed global oil markets over the past decade, reversing the long
decline in US output, challenging Opec's influence, and helping to trigger the plunge in prices that
began in 2014. It has meant windfalls for oil consumers, and some painful adjustments for
producers.
The leap forward that made
shale oil commercially viable
for the first time was a
revolution in productivity. EOG
Resources and other
pioneering companies worked
out how to get oil to flow from
wells at much higher rates
than in the past, thanks to the
application of improved
techniques for horizontal
drilling and hydraulic
fracturing, and those
productivity gains continued
after the first breakthroughs.
Exploration and production
companies have been able to
drill wells faster, and squeeze
more oil out of them by
targeting the right rocks more
precisely and fracturing them
more effectively. The outlook
for the industry depends on
how far those gains can be
sustained and extended.
The track of the number of
active rigs and oil production
shows the huge productivity
gains that have been made. A
rush to drill in shale formations
such as the Eagle Ford in
Texas and the Bakken in North
Dakota was followed by a flood
of production, which mostly
held up even after most rigs stopped running in 2014-16.

Over the past year, however, the productivity gains seemed to have slowed considerably,
suggesting that the revolutionary era for progress in shale is over. In the Eagle Ford shale,
productivity — as measured by production from new wells per active rig — has been falling.
Those productivity data from the Energy Information Administration are an imperfect measure,
however. For a start, they do not take into account the extent to which companies are drilling wells
and then deliberately not bringing them into production as they wait for higher prices.
(These are known as DUCs, or Drilled but UnCompleted wells.) So what can we say about the
true picture of productivity in shale?
One issue is the time it takes to drill the wells. The recorded efficiency of rigs improved
dramatically over 2013-16, in part because of the spread of pad drilling: running multiple horizontal
wells off from a single site, or pad, to cut down the time spent moving the rigs.
Recently, however, the rate of improvement appears to have slowed, especially in the Eagle Ford
shale and the Williston Basin, which includes the Bakken formation. Wells are generally getting
longer, so companies may still be going faster in terms of feet per day, even if they take the same
time to drill each well. But it does look as though that particular source of productivity gains is not
what it was.

Another factor is the shift from vertical to horizontal wells. A well running horizontally through a
layer of oil-bearing rock is typically much more productive than a vertical one that just punches
through a section of that layer.
Seven years ago, the numbers of wells drilling horizontal and vertical wells in the US were about
equal, but since then the vertical rig has just about disappeared. Some, at least, of the reported
rise in rig productivity since 2011 was simply a result of that shift to horizontal rigs, which has now
largely run its course.

One of the other big changes in recent years has been in hydraulic fracturing: pumping water,
sand and chemicals into the well at high pressure to crack it, allowing the oil and gas to flow out.
Companies have been using "bigger" fracks, with higher volumes of sand, and the result has often
been higher production. But there is some evidence that that process may also be hitting its limits.
A good way to assess underlying productivity is to look at production per well, adjusted for the
total depth and length of that well.
Kayrros, a Paris-based energy research firm, has done that exercise for the Permian Basin of
west Texas, the hottest area for investment in the US oil industry recently. Its conclusion is that
productivity adjusted for well length stopped growing last year, and may even have fallen a little in
2017.
As the industry has recovered since last year, companies have moved from drilling in only the
most productive "sweet spots" and started to produce from more difficult rocks, creating a natural
drag on productivity. Improvements in production techniques have to fight against that drag, and it
seems that in the Permian recently they have been losing.

Throughout its existence, the shale oil industry has consumed cash. Companies have been
unable to cover their drilling costs from their incomes, and have needed constant infusions of debt
and equity financing.
They have had little difficulty in raising that money, in part because investors wanted to share in
the productivity miracle that the companies represented. If the miraculous days are over, and a
more humdrum reality is setting in, will investors still be prepared to back the industry so willingly?
Already equity raising by US exploration and production companies has slowed sharply this year.
Plenty of attractive investment opportunities still exist in shale: internal rates of return of 30 per
cent and higher are available in the Permian Basin, according to S&P Global Platts Well Economic
Analyzer.
Will there be enough of those attractive opportunities to keep US oil production rising, as the
government's Energy Information Administration and others expect? The industry says yes, but
the drilling and productivity numbers will be worth watching closely over the months to come.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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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 27 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 October 2017 K. Al Awadi

New base 19 october 2017 energy news issue 1087 by khaled al awadi

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New base 19 october 2017 energy news issue 1087 by khaled al awadi