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NewBase Energy News 12 April 2019 - Issue No. 1239 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 nuke project wins ISO certification for quality management
FANAR
The Federal Authority for Nuclear Regulation (FANR), the nuclear regulator in the UAE, has been
awarded the ISO 9001:2015 certification for Quality Management System, in the field of the
regulation and management of services related to the country's nuclear sector.
These include licensing, compliance, monitoring for safety, security, safeguards and radiation
protection, and the provision of services related to the radiation protection infrastructure, said a
statement from FANR.
It ensures that an organisation demonstrates its effectiveness and ability to improve services that
meet customer and applicable statutory and regulatory requirements, and aims to enhance
customer satisfaction through the effective application of the system including processes
improvement, it added.
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The Federal Authority built its own Integrated Management System (IMS) based on the International
Atomic Energy Agency (IAEA) safety requirements on Leadership and Management for Safety
which is a dedicated management standard for nuclear organisations.
The certification was awarded at a ceremony in the presence of FANR’s Chairman Abdulla Nasser
Al Suwaidi, British Ambassador Patrick Moody, and members of the Board of Management of the
FANR and representatives of the British Standards institution.
"This is a demonstration of FANR’s efforts towards excellence and quality, which is necessary to
achieve our vision in becoming one of the leading nuclear regulator globally as well as ensuring the
protection of the people and the environment," remarked Christer Viktorsson, FANR Director-
General.
Since its start in 2009, FANR has in place its IMS to document its work streams by detailing all the
processes and procedures, being its core, support, or management processes.
The system has been continuously benchmarked and improved against updates of standards from
the IAEA and other nuclear regulators.
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Jordan eyes oil shale production by 2022, energy minister says
The national + NewBase
Jordan expects to reach financial closure soon on its oil shale programme that could transform the
energy importer into an oil producer for the first time, according to its energy and mineral resources
minister. The kingdom aims to produce 25,000 barrels a day easing the financial burden from
importing most of its energy needs
“With regards to oil shale, we have four companies today working in Jordan. One of them today
reached financial closure and we hope that very soon they will be able to secure the finance and to
start on the ground,” Hala Zawati, told The National on the sidelines of the Berlin Energy Transition
Dialogue.
“And if they do so, the plan is to produce over 25,000 barrels per day and this is huge for Jordan
because we are not an oil producing country and this would be the first time we will be producing
oil,” she added.
Jordan, which imports more than 95 per cent of its energy, has the world's eighth largest reserves
of oil shale, according to the World Energy Council. Oil shale, not to be confused with shale oil, is
formed of organic fine-grained sedimentary rock, from which oil can be extracted through heating.
The kingdom has been looking to shake off the burden of energy imports which continues to widen
its fiscal deficit and led to an increase in public debt. After reaching financing, the development of
the scheme could happen in "three years,” said Ms Zawati.
"I believe they need three years to develop the project and the financial closure depends on the
financiers and we do hope that they will be able to close this year,” she added.
Jordan's oil shale programme has been in the works since 2008, when oil prices reached a record
$147 per barrel in July of that year and prompted the government to accelerate the development of
its reserves with the help of Estonia's company Enefit - the world's largest oil shale producer.
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Last year the energy ministry awarded Amman-based Karak International Oil as well as the Saudi
Arabian Corporation for Oil Shale 40-year rights to exploit two oil shale reserves.
Amman’s energy import bill is around 9 per cent of its gross domestic product, said Ms Zawati, with
efforts underway to integrate more renewables to grid to lower imports.
The country is currently 90 per cent dependent on gas, with half of its consumption met through
imports via pipeline from Egypt The flow of gas from Egypt is intermittent, said Ms Zawati.
“Sometimes we get the [committed volumes] , sometimes it’s zero but on average it will be half of
our consumption in 2019,” she added. Jordan consumes an estimated 350 million cubic feet per
day of gas.
Amman is also pressing onward with plans for a million bpd capacity pipeline from Iraq as well as
plans for a new refinery in the Red Sea port of Aqaba. Jordan plans to turn some of the crude into
white products for exports and is looking to bring in investors willing to back the scheme.
“[The new refinery] is not part of the pipeline project, but we think that it will be tempting for investors
to come in,” said Ms Zawati. An agreement with the Iraqi side on the pipeline is like to happen
“soon” with the construction expected to take three years, she added.
The kingdom is set to add more wind and solar schemes to generate electricity which will derive 16
per cent of its power from renewable sources in 2019. The country last year generated 10 per cent
of its energy needs from renewables.
By 2020, around 20 per cent of the kingdom's power will come from renewables, with 80 per cent
from gas and 15 percent from an oil shale power plant, added the minister.
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Saudi Aramco seals big European crude oil supply deal
Aramco
State oil giant Saudi Aramco said its trading subsidiary, Aramco Trading, has signed an agreement
with Poland’s leading refiner, PKN Orlen for the supply of Arabian Crude Oil in exchange for a similar
volume of high sulphur fuel oil from the Polish refiner.
The agreement demonstrates Saudi Aramco’s strategy to place set volumes of crude oil across
different geographies, maintaining a healthy balance between third party customers and affiliated
outlets.
The agreement was signed by Aramco Trading President and CEO Ibrahim Al Buainain and
Executive Director of Trading Grzegorz Markiewicz from PKN Orlen in the presence of Saudi
Aramco CEO Amin H. Nasser and PKN Orlen CEO Daniel Obajtek at a ceremony hosted by Saudi
Aramco at its Dhahran headquarters.
The agreement paves the way for a further expansion of Saudi Aramco’s well established
partnership and collaboration strategy while diversifying PKN’s crude oil supplies and securing new
outlets for their products, it stated.
The increasing number of strategic partnerships established across refining, chemical and
marketing activities reinforce Saudi Aramco’s downstream growth ambitions and bolsters its
successful efforts to span the length of the value chain.
The increased European presence also positions Saudi Aramco favorably to supply critical
feedstock to the European market. In addition, the agreement consolidates Saudi Aramco’s efforts
to earmark new strategic outlets for crude oil enabling the company to accommodate a range of
future market positions, as well as underpinning an optimal balance of geographic exposure
between Asia, Europe, and North America.
PKN Orlen has a pre-existing crude oil supply agreement in place with Aramco Trading’s parent
company, Saudi Aramco, which provides 74 million barrels per day of Arabian Crude Oil to Poland’s
premier refiner
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U.S Tellurian wants for $30bn LNG project in the US ($4/MMBTU)
The National + NewBase
US energy firm Tellurian is looking to partner with investors from the Middle East for its planned $30
billion (Dh110.1bn) Driftwood liquefied natural gas project and aims to finalise its investment
decision by the first half of this year.
“We are looking forward to bringing in partners as shareholders in the project who will then receive
their LNG at the cheapest rates in the world for LNG out of the US," Tellurian senior vice president
for marketing, Amos Hochstein told The National on the sidelines of the Middle East Petroleum &
Gas Conference in Dubai.
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"We are talking to those partners now,” he said, declining to name the potential investors.
Driftwood LNG, owned by Tellurian, is developing an LNG production and export terminal on the
west bank of the Calcasieu River, south of Lake Charles, Louisiana. Once finished, the terminal will
be able to export up to 27.6 million tonnes of LNG per year to customers worldwide.
US regulators in January issued a final environmental impact statement for the Driftwood LNG
export facility, moving the firm closer to a final investment. The company hopes to begin LNG export
operations by 2023 and reach full operations by 2026.
Mr Hochstein said 60 per cent of the project will be held by the company’s partners and
stakeholders, and a $500 million investment would translate to a 3.6 per cent share in the project.
It will allow the stakeholder to lift 1 million tonnes of LNG a year for 15 years at the cost of around
$4 per million BTUs.
The ability to trade cheaper LNG around the world at different times will be the main attraction for
the Middle Eastern investors with the financial capability to invest in the project, he said. “When
you come in as an investor you are both an investor and an off-taker at the same time. For Middle
East countries … that enables them to get the cheapest LNG into their portfolio," he noted.
It is particularly important for the regional investors as they do not have to take that LNG back to
their base and can trade it around the world,” Mr Hochstein said. Abu Dhabi's strategic firm
Mubadala Investment Company's integrated petroleum and petrochemicals unit last year said it is
seeking to position itself as a strong player in the North American natural gas and chemicals
industry.
The company, which is known to have had discussions with Tellurian said it had made “a small
investment in shale or unconventional gas” and “was monitoring that space”.
However, an acceptable Henry Hub price - the benchmark used to price natural gas - and an
acceptable liquefaction cost is needed to make the US a more competitive player in the global gas
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markets, Musabbeh Al Kaabi, who heads Mubadala’s Petroleum and Petrochemicals division, said
at the time.
Mubadala, which invested $3bn after its integration with International Petroleum Investment
Company in 2017, is betting on petrochemicals sector investments.
“Overall in the US, it’s [a] very interesting dynamic, because [of] access to a highly competitive
feedstock thanks to the shale revolution, and that’s why [I] see an almost strategic shift to North
America when it comes to the petrochemicals industries,” Mr Al Kaabi noted in a March 2018
interview.
Mubadala's Petroleum and Petrochemicals platform, which is part of the estimated $225bn state
fund, valued its portfolio at $40bn in 2018, with just over $8bn spent in the last year alone in a raft
of upstream and downstream investments.
Apart from possible interest from investment conglomerates like Mubadala, energy giants such as
Saudi Armaco could be in the race to join the Tellurian project as it would allow the Saudi company
to participate in an international gas project, Siamak Adibi, a principal consultant at FGE energy
consultancy, said.
“Saudi Aramco is the largest oil company in the world but in terms of gas business they are not
really active and would like to be global players on the LNG side,” Mr Adibi said. “The best case
would be the US because they offer flexible projects where the Saudis can take volumes, trade it or
if they need they can use it for their home consumption,” he said.
Earlier in April, French oil and gas major Total signed a non-binding deal, agreeing to invest $500m
in equity in Driftwood Holdings and off-take 2.5 million tonnes per annum of LNG. “We will reach
a final investment decision in 2019, in the summer of 2019 or thereabouts,” Mr Hochstein noted.
Indian gas importer Petronet LNG has also signed an initial agreement with Tellurian to invest in its
proposed Driftwood project.
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Chevron buys Anadarko for $33bn in shale, LNG push
Reuters + NewBas
Chevron Corp doubled down on its bet on surging US oil and gas output on Friday, saying it would
buy shale producer Anadarko Petroleum Corp for $33 billion in cash and stock that will make it the
second-largest crude producer in the world.
The combined company will produce an estimated 3.9 million barrels of oil equivalent per day
(boepd), trailing only Exxon Mobil Corp among publicly traded companies, up from fourth. It expands
Chevron’s reach in two areas where US energy output is breaking records: shale from the Permian
Basin of west Texas and New Mexico, and liquefied natural gas (LNG). These have helped make
the United States one of the world’s largest energy exporters.
“Chevron now joins the ranks of the ‘ultramajors’ — and the big three becomes the big four,” said
Roy Martin, senior analyst at consultants Wood Mackenzie. “The acquisition makes the majors’ peer
group much more polarised. Exxon Mobil, Chevron, Shell and BP are now in a league of their own.”
These companies are turning to shale and its revolutionary techniques of fracking, blasting sand
and water into formations to extract oil. This is cheaper and produces oil more quickly than costlier
offshore and LNG projects that take years to generate cash.
The shale oil-and-gas boom reversed a long decline in US crude production and propelled the
country to a record 12 million barrels a day (bpd), more than Russia and Saudi Arabia. The United
States is also now the third-largest producer of LNG, super-cooled natural gas that enjoys record
demand as a cheaper, cleaner alternative than coal for power generation.
The combined companies are expected to produce more than 1.6 million barrels of oil equivalent
per day (boepd) in the United States this year and 3.9 million boepd globally, according to Wood
Mackenzie.
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Chevron Chief Executive Officer Mike Wirth said the deal offers a “compelling and unique fit”
because the companies operate in similar areas, both with holdings in shale, offshore, and LNG
projects. Chevron also expects shale to generate profits for its pipeline, trading and refining units.
“We are the best company to combine with Anadarko and Anadarko is the best company to combine
with us,” Wirth said.
Chevron’s pledge to restrain expenditures has made it a favourite among energy stocks, with its
shares up 13.8 per cent this year. It plans to sell some $15 billion in assets over time to offset the
Anadarko deal.
Chevron shares fell 4.9 per cent to $119.76 on Friday. Anadarko shares jumped 32 per cent,
reflecting the offer’s 39 per cent premium over Thursday’s close. Before the deal, Chevron shares
had gained 25 per cent over the last two years, while Anadarko had dropped 23 per cent. In that
time, US crude oil prices have risen 20 per cent.
It is the oil industry’s largest deal since Royal Dutch Shell bought BG Group in 2016, and it sparked
speculation that other shale producers are in play. Shares of Noble Energy rose 7 per cent, while
Pioneer Natural Resources Co jumped more than 11 per cent.
Chevron, Exxon, Royal Dutch Shell Plc and BP Plc largely missed out on the first phase of the shale
bonanza, when more nimble independent producers such as Anadarko pioneered shale drilling
technology and leased Permian acreage on the cheap.
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Analysts predict further consolidation as the smaller companies that revolutionised the industry
through advances in horizontal drilling and hydraulic fracking have seen their stock prices languish
and have curtailed spending due weak returns.
Chevron, which already has 2.3 million acres in the Permian Basin, said the combined company
would have a 75-mile (120-km)-wide corridor across the Permian’s Delaware basin, on the Texas-
New Mexico border.
“We will now see Chevron emerging as the clear leader among all Permian players, both in terms
of production growth and as a cost leader,” said Rystad Energy head of analysis Per Magnus
Nysveen, noting that Anadarko’s acreage is in the “sweetest spot” of the Delaware Basin.
Chevron also owns mineral rights under some of the Anadarko Permian properties, saving royalties
others would have to pay, said Drillinginfo analyst Andrew Dittmar. He estimated Chevron is paying
about $50,000 an acre for Anadarko’s west Texas holdings.
The Permian produces about 4 million barrels per day, and is expected to hit 5.4 million bpd by
2023, according to IHS Markit, more than the total production of any Opec country other than Saudi
Arabia.
Anadarko also has a Mozambique LNG project, part of one of the industry’s largest planned current
investments, which Wirth said he still expects to move to final approval “sooner rather than later”
this year. Expenses from that project are expected to reach $4 billion over several years.
The tie-up with Anadarko adds to Chevron’s deepwater investments in the Gulf of Mexico and gives
it a stake in growing production in the US Rocky Mountains in Colorado.
The $65-per-share offer was structured as 75 per cent stock and 25 per cent cash, and the company
will also take on $15 billion of Anadarko’s debt. “This deal seems perfect. Oil is on a rebound yet
Anadarko’s stock price has been stagnant,” said Chris Widell, CEO of Sponte Resources, a Dallas,
Texas-based private exploration and production company.
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Iraq: Gazprom Neft expands oil production in the Kurdistan
Source: Gazprom Neft
Gazprom Neft subsidiary Gazprom Neft Middle East has commissioned a third production well
at its Sarqala field in the Kurdistan Region of Iraq (KRI)
Potential production at the new well is estimated at 12,000 barrels per day. Cumulative daily oil
production at the field following the commissioning of the Sarqala-3 well has increased
by 25 percent reaching 35,000 barrels.
The well runs to a total depth of 3,291 metres, with drilling having been undertaken under the
challenging geological conditions of the Sarqala field - anomalously high pressure and reservoir
temperature having demanded the use of a selection of 11 technological solutions.
The construction of the Sarqala-3 well has, as a result, involved the use of large-diameter casing
pipes with ultra-strong thread connections, weighted drilling mud for bottom-hole flushing, and
cement incorporating mineral-based and iron-oxide additives.
Drilling the well has involved an international team, with members from 20 countries. The project
was implemented by Gazprom Neft Middle East, with technical support from the Gazprom Neft
Science and Technology Centre.
Vadim Yakovlev, First Deputy CEO, Gazprom Neft, commented:
'The Middle East remains an area of strategic interest to Gazprom Neft, being a region with a rich resource
base, and a demonstrable willingness to allow access to investors. Experience in implementing projects from
scratch - both in exploration and production - is important to us. We are continuing to evaluate opportunities
for the further development of our business in the Middle East - independently and in partnership with other
companies - both using the synergies offered by existing project infrastructure, as well as at other assets.'
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NewBase 14 April 2019 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil rises 1 % on tightening crude supply, upbeat economic data
Reuters + NewBase
Oil prices rose 1 percent on Friday as involuntary supply cuts from Venezuela and Iran plus conflict
in Libya supported perceptions of a tightening crude market, while upbeat Chinese economic data
eased concerns about waning crude demand.
Brent crude oil futures rose 72 cents, or 1.02 percent, to settle at $71.55 a barrel. U.S. West Texas
Intermediate (WTI) crude futures ended the session up 31 cents, or 0.5 percent, at $63.89 a barrel.
Both benchmarks notched a weekly gain of about 1 percent, which was Brent’s third consecutive
week of gains and the sixth straight rise for WTI.
The oil market also followed global stock markets higher after strong earnings at JPMorgan Chase
& Co. The dollar index slipped to its lowest against the euro in more than two weeks, making crude
cheaper for non-U.S. buyers.
Oil price special
coverage
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“Equities are getting off to a good start with earnings season and the dollar index being weaker
helps reaffirm confidence in the oil market,” said Phil Streible, senior commodities strategist at RJO
Futures in Chicago.
Oil markets have been lifted by more than 30 percent this year by supply cuts led by the Organization
of the Petroleum Exporting Countries and U.S. sanctions on oil exporters Iran and Venezuela, plus
escalating conflict in OPEC member Libya.
“Geopolitically infused rallies could shoot prices toward or even past the $80 per barrel mark for
intermittent periods this summer,” RBC Capital Markets said in a note. The head of Libya’s National
Oil Corporation warned on Friday that renewed fighting could wipe out crude production in the
country.
Bombing by a warplane occurred on Friday near the Mellitah oil and gas plant, jointly operated by
Italy’s ENI and Libyan state oil firm NOC, a Libyan National Army (LNA) military source and
residents said. The plant supplies Italy with gas through the Greenstream pipeline.
OPEC and its allies meet in June to decide whether to continue withholding supply. Though OPEC’s
de facto leader, Saudi Arabia, is considered keen to keep cutting, sources within the group said it
could raise output from July if disruptions continue elsewhere.
The producer group’s supply cuts have been aimed largely at offsetting record crude production in
the United States.
U.S. energy companies this week increased the number of oil rigs operating for a second week in
a row, bringing the total count to 833, General Electric Co’s Baker Hughes energy services firm said
in its closely followed report on Friday.
The rig count fell for the past four months as independent exploration and production companies
cut spending on new drilling to focus on earnings growth instead of increased output. On the
demand side, Chinese data showed exports rebounded last month, driving U.S. and euro zone bond
yields to three-week highs and helping offset weaker imports and reports of another cut in German
growth forecasts. “While macro fears of an economic hard landing may be overblown, the
concentration risk of global oil demand (in Asia) remains under appreciated,” RBC Capital Markets
said.
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NewBase Special Coverage
News Agencies News Release 14 April 2019
IEA Says Oil Market Tightening, But Global Demand May Falter
Bloomberg + IEA + NewBase
Global oil markets are tightening as OPEC supply falls, the International Energy Agency said, while
warning it could lower demand forecasts because of economic threats.
Crude inventories are set to decline for the rest of the year as Saudi Arabia and its partners curb
production, while exports from Venezuela and Iran are squeezed by economic and political crises,
the agency said in its monthly report. But it cautioned that threats in the world economy, from Europe
to emerging markets, could take a toll on fuel consumption.
“The oil market shows signs of tightening as we move into the second quarter of 2019, but we see
mixed signals in terms of the outlook for demand,” said the Paris-based agency, which advises most
major economies. Risks to demand are “currently to the downside.”
Crude prices have rallied more than 30 percent in London this year and are trading above $71 a
barrel as Saudi Arabia spearheads output cutbacks by the Organization of Petroleum Exporting
Countries and its allies. Yet the gains have been capped by fears about global economic growth,
which the International Monetary Fund predicts will this year be the weakest since the financial crisis
a decade ago.
Global oil supplies declined last month amid another steep drop in OPEC output, as the Saudis cut
more production than promised and Venezuela’s unintended losses swelled. Supply growth outside
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OPEC also slowed sharply as Canada pared output and the North Sea suffered declines, the IEA
said.
As a result of OPEC’s restraint, inventories in developed nations are below their five-year average
in terms of the amount needed to cover projected demand, having fallen in February for the first
time in four months.
The agency noted that crude-oil inventories will decline by more than 2 million barrels a day in the
third quarter, the biggest drop since 2011. There was a similar, though smaller, reduction in the
same period a year earlier as refiners processed more crude to build up stockpiles of fuels ahead
of the winter.
Demand Risks
Nonetheless, the IEA warned that clouds are gathering over the outlook for demand. While the
agency kept its estimates for 2019 global consumption growth unchanged, predicting an expansion
of 1.4 million barrels a day, or 1.4 percent, it highlighted a number of dangers.
Consumption in developed nations fell in the fourth quarter for the first time since 2014. In addition,
concerns persist over the trade dispute between the U.S. and China, the demand recovery in the
Middle East remains “modest,” and weakness in European countries could be exacerbated if the
U.K.’s exit from the European Union is “disorderly,” the IEA said.
Further headwinds could also come from the rally in prices, which at $70 a barrel “are less
comfortable for consumers than they were at the start of the year,” it added.
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“Although the main sources of growth are doing well, there are mixed signals from elsewhere,” the
IEA said.
Highlights
 Our global demand growth estimates for 2018 and 2019 are again unchanged
at 1.3 mb/d and 1.4 mb/d, respectively. After a slow start to the year, OECD growth
will be 0.3 mb/d, with non-OECD growing by 1.1 mb/d.
 Demand in China, India and the US is estimated to have grown by 1 mb/d in Jan-Feb
2019. OECD demand fell in 4Q18 for the first time since end-2014 and also in 1Q19, mainly
on weaker European numbers, but it will recover, led by the US.
 Global oil supply dropped 340 kb/d in March, as OPEC+ cuts deepened and Venezuelan
output fell sharply. At 99.2 mb/d, it was 3.1 mb/d below November 2018 and up 530 kb/d y-
o-y. In 2019, non-OPEC production will grow 1.7 mb/d versus 2.8 mb/d last year.
 OPEC crude oil production tumbled 550 kb/d in March, to 30.1 mb/d, on further cuts from
Saudi Arabia and steep losses in Venezuela. Saudi output dropped to its lowest in over two
years, boosting compliance with supply cuts to 153%. The call on OPEC rises to 30.9 mb/d
in 2Q19.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 18
 Global refining throughput fell by 2.5 mb/d in March as unplanned outages and accidents
hindered the US in particular. Our 2019 growth estimate is revised down to 0.7 mb/d on
tighter crude market fundamentals: 3Q19 could see the largest draws since 2011.
 OECD oil stocks fell by 21.7 mb on the month in February after three months of
increases. The decrease was more than the five-year average of 5.1 mb due to larger
gasoline draws and a lower crude build. March preliminary data show a significant crude
build in Europe.
 ICE Brent reached a five-month high above $71/bbl in early April on supply concerns. New
infrastructure capacity in the US helped WTI to narrow its discount to Brent to $7/bbl.
Gasoline markets continued to rally, while cracks for most other refined products fell in March.
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 19
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk
Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 28 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 2019 K. Al Awadi
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 20
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 21
Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 22

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New base energy news 14 april 2019 issue no 1239 by khaled al awadi

  • 1. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 1 NewBase Energy News 12 April 2019 - Issue No. 1239 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 nuke project wins ISO certification for quality management FANAR The Federal Authority for Nuclear Regulation (FANR), the nuclear regulator in the UAE, has been awarded the ISO 9001:2015 certification for Quality Management System, in the field of the regulation and management of services related to the country's nuclear sector. These include licensing, compliance, monitoring for safety, security, safeguards and radiation protection, and the provision of services related to the radiation protection infrastructure, said a statement from FANR. It ensures that an organisation demonstrates its effectiveness and ability to improve services that meet customer and applicable statutory and regulatory requirements, and aims to enhance customer satisfaction through the effective application of the system including processes improvement, it added.
  • 2. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 2 The Federal Authority built its own Integrated Management System (IMS) based on the International Atomic Energy Agency (IAEA) safety requirements on Leadership and Management for Safety which is a dedicated management standard for nuclear organisations. The certification was awarded at a ceremony in the presence of FANR’s Chairman Abdulla Nasser Al Suwaidi, British Ambassador Patrick Moody, and members of the Board of Management of the FANR and representatives of the British Standards institution. "This is a demonstration of FANR’s efforts towards excellence and quality, which is necessary to achieve our vision in becoming one of the leading nuclear regulator globally as well as ensuring the protection of the people and the environment," remarked Christer Viktorsson, FANR Director- General. Since its start in 2009, FANR has in place its IMS to document its work streams by detailing all the processes and procedures, being its core, support, or management processes. The system has been continuously benchmarked and improved against updates of standards from the IAEA and other nuclear regulators.
  • 3. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 3 Jordan eyes oil shale production by 2022, energy minister says The national + NewBase Jordan expects to reach financial closure soon on its oil shale programme that could transform the energy importer into an oil producer for the first time, according to its energy and mineral resources minister. The kingdom aims to produce 25,000 barrels a day easing the financial burden from importing most of its energy needs “With regards to oil shale, we have four companies today working in Jordan. One of them today reached financial closure and we hope that very soon they will be able to secure the finance and to start on the ground,” Hala Zawati, told The National on the sidelines of the Berlin Energy Transition Dialogue. “And if they do so, the plan is to produce over 25,000 barrels per day and this is huge for Jordan because we are not an oil producing country and this would be the first time we will be producing oil,” she added. Jordan, which imports more than 95 per cent of its energy, has the world's eighth largest reserves of oil shale, according to the World Energy Council. Oil shale, not to be confused with shale oil, is formed of organic fine-grained sedimentary rock, from which oil can be extracted through heating. The kingdom has been looking to shake off the burden of energy imports which continues to widen its fiscal deficit and led to an increase in public debt. After reaching financing, the development of the scheme could happen in "three years,” said Ms Zawati. "I believe they need three years to develop the project and the financial closure depends on the financiers and we do hope that they will be able to close this year,” she added. Jordan's oil shale programme has been in the works since 2008, when oil prices reached a record $147 per barrel in July of that year and prompted the government to accelerate the development of its reserves with the help of Estonia's company Enefit - the world's largest oil shale producer.
  • 4. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 4 Last year the energy ministry awarded Amman-based Karak International Oil as well as the Saudi Arabian Corporation for Oil Shale 40-year rights to exploit two oil shale reserves. Amman’s energy import bill is around 9 per cent of its gross domestic product, said Ms Zawati, with efforts underway to integrate more renewables to grid to lower imports. The country is currently 90 per cent dependent on gas, with half of its consumption met through imports via pipeline from Egypt The flow of gas from Egypt is intermittent, said Ms Zawati. “Sometimes we get the [committed volumes] , sometimes it’s zero but on average it will be half of our consumption in 2019,” she added. Jordan consumes an estimated 350 million cubic feet per day of gas. Amman is also pressing onward with plans for a million bpd capacity pipeline from Iraq as well as plans for a new refinery in the Red Sea port of Aqaba. Jordan plans to turn some of the crude into white products for exports and is looking to bring in investors willing to back the scheme. “[The new refinery] is not part of the pipeline project, but we think that it will be tempting for investors to come in,” said Ms Zawati. An agreement with the Iraqi side on the pipeline is like to happen “soon” with the construction expected to take three years, she added. The kingdom is set to add more wind and solar schemes to generate electricity which will derive 16 per cent of its power from renewable sources in 2019. The country last year generated 10 per cent of its energy needs from renewables. By 2020, around 20 per cent of the kingdom's power will come from renewables, with 80 per cent from gas and 15 percent from an oil shale power plant, added the minister.
  • 5. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 5 Saudi Aramco seals big European crude oil supply deal Aramco State oil giant Saudi Aramco said its trading subsidiary, Aramco Trading, has signed an agreement with Poland’s leading refiner, PKN Orlen for the supply of Arabian Crude Oil in exchange for a similar volume of high sulphur fuel oil from the Polish refiner. The agreement demonstrates Saudi Aramco’s strategy to place set volumes of crude oil across different geographies, maintaining a healthy balance between third party customers and affiliated outlets. The agreement was signed by Aramco Trading President and CEO Ibrahim Al Buainain and Executive Director of Trading Grzegorz Markiewicz from PKN Orlen in the presence of Saudi Aramco CEO Amin H. Nasser and PKN Orlen CEO Daniel Obajtek at a ceremony hosted by Saudi Aramco at its Dhahran headquarters. The agreement paves the way for a further expansion of Saudi Aramco’s well established partnership and collaboration strategy while diversifying PKN’s crude oil supplies and securing new outlets for their products, it stated. The increasing number of strategic partnerships established across refining, chemical and marketing activities reinforce Saudi Aramco’s downstream growth ambitions and bolsters its successful efforts to span the length of the value chain. The increased European presence also positions Saudi Aramco favorably to supply critical feedstock to the European market. In addition, the agreement consolidates Saudi Aramco’s efforts to earmark new strategic outlets for crude oil enabling the company to accommodate a range of future market positions, as well as underpinning an optimal balance of geographic exposure between Asia, Europe, and North America. PKN Orlen has a pre-existing crude oil supply agreement in place with Aramco Trading’s parent company, Saudi Aramco, which provides 74 million barrels per day of Arabian Crude Oil to Poland’s premier refiner
  • 6. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 6 U.S Tellurian wants for $30bn LNG project in the US ($4/MMBTU) The National + NewBase US energy firm Tellurian is looking to partner with investors from the Middle East for its planned $30 billion (Dh110.1bn) Driftwood liquefied natural gas project and aims to finalise its investment decision by the first half of this year. “We are looking forward to bringing in partners as shareholders in the project who will then receive their LNG at the cheapest rates in the world for LNG out of the US," Tellurian senior vice president for marketing, Amos Hochstein told The National on the sidelines of the Middle East Petroleum & Gas Conference in Dubai.
  • 7. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 7 "We are talking to those partners now,” he said, declining to name the potential investors. Driftwood LNG, owned by Tellurian, is developing an LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles, Louisiana. Once finished, the terminal will be able to export up to 27.6 million tonnes of LNG per year to customers worldwide. US regulators in January issued a final environmental impact statement for the Driftwood LNG export facility, moving the firm closer to a final investment. The company hopes to begin LNG export operations by 2023 and reach full operations by 2026. Mr Hochstein said 60 per cent of the project will be held by the company’s partners and stakeholders, and a $500 million investment would translate to a 3.6 per cent share in the project. It will allow the stakeholder to lift 1 million tonnes of LNG a year for 15 years at the cost of around $4 per million BTUs. The ability to trade cheaper LNG around the world at different times will be the main attraction for the Middle Eastern investors with the financial capability to invest in the project, he said. “When you come in as an investor you are both an investor and an off-taker at the same time. For Middle East countries … that enables them to get the cheapest LNG into their portfolio," he noted. It is particularly important for the regional investors as they do not have to take that LNG back to their base and can trade it around the world,” Mr Hochstein said. Abu Dhabi's strategic firm Mubadala Investment Company's integrated petroleum and petrochemicals unit last year said it is seeking to position itself as a strong player in the North American natural gas and chemicals industry. The company, which is known to have had discussions with Tellurian said it had made “a small investment in shale or unconventional gas” and “was monitoring that space”. However, an acceptable Henry Hub price - the benchmark used to price natural gas - and an acceptable liquefaction cost is needed to make the US a more competitive player in the global gas
  • 8. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 8 markets, Musabbeh Al Kaabi, who heads Mubadala’s Petroleum and Petrochemicals division, said at the time. Mubadala, which invested $3bn after its integration with International Petroleum Investment Company in 2017, is betting on petrochemicals sector investments. “Overall in the US, it’s [a] very interesting dynamic, because [of] access to a highly competitive feedstock thanks to the shale revolution, and that’s why [I] see an almost strategic shift to North America when it comes to the petrochemicals industries,” Mr Al Kaabi noted in a March 2018 interview. Mubadala's Petroleum and Petrochemicals platform, which is part of the estimated $225bn state fund, valued its portfolio at $40bn in 2018, with just over $8bn spent in the last year alone in a raft of upstream and downstream investments. Apart from possible interest from investment conglomerates like Mubadala, energy giants such as Saudi Armaco could be in the race to join the Tellurian project as it would allow the Saudi company to participate in an international gas project, Siamak Adibi, a principal consultant at FGE energy consultancy, said. “Saudi Aramco is the largest oil company in the world but in terms of gas business they are not really active and would like to be global players on the LNG side,” Mr Adibi said. “The best case would be the US because they offer flexible projects where the Saudis can take volumes, trade it or if they need they can use it for their home consumption,” he said. Earlier in April, French oil and gas major Total signed a non-binding deal, agreeing to invest $500m in equity in Driftwood Holdings and off-take 2.5 million tonnes per annum of LNG. “We will reach a final investment decision in 2019, in the summer of 2019 or thereabouts,” Mr Hochstein noted. Indian gas importer Petronet LNG has also signed an initial agreement with Tellurian to invest in its proposed Driftwood project.
  • 9. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 9 Chevron buys Anadarko for $33bn in shale, LNG push Reuters + NewBas Chevron Corp doubled down on its bet on surging US oil and gas output on Friday, saying it would buy shale producer Anadarko Petroleum Corp for $33 billion in cash and stock that will make it the second-largest crude producer in the world. The combined company will produce an estimated 3.9 million barrels of oil equivalent per day (boepd), trailing only Exxon Mobil Corp among publicly traded companies, up from fourth. It expands Chevron’s reach in two areas where US energy output is breaking records: shale from the Permian Basin of west Texas and New Mexico, and liquefied natural gas (LNG). These have helped make the United States one of the world’s largest energy exporters. “Chevron now joins the ranks of the ‘ultramajors’ — and the big three becomes the big four,” said Roy Martin, senior analyst at consultants Wood Mackenzie. “The acquisition makes the majors’ peer group much more polarised. Exxon Mobil, Chevron, Shell and BP are now in a league of their own.” These companies are turning to shale and its revolutionary techniques of fracking, blasting sand and water into formations to extract oil. This is cheaper and produces oil more quickly than costlier offshore and LNG projects that take years to generate cash. The shale oil-and-gas boom reversed a long decline in US crude production and propelled the country to a record 12 million barrels a day (bpd), more than Russia and Saudi Arabia. The United States is also now the third-largest producer of LNG, super-cooled natural gas that enjoys record demand as a cheaper, cleaner alternative than coal for power generation. The combined companies are expected to produce more than 1.6 million barrels of oil equivalent per day (boepd) in the United States this year and 3.9 million boepd globally, according to Wood Mackenzie.
  • 10. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 10 Chevron Chief Executive Officer Mike Wirth said the deal offers a “compelling and unique fit” because the companies operate in similar areas, both with holdings in shale, offshore, and LNG projects. Chevron also expects shale to generate profits for its pipeline, trading and refining units. “We are the best company to combine with Anadarko and Anadarko is the best company to combine with us,” Wirth said. Chevron’s pledge to restrain expenditures has made it a favourite among energy stocks, with its shares up 13.8 per cent this year. It plans to sell some $15 billion in assets over time to offset the Anadarko deal. Chevron shares fell 4.9 per cent to $119.76 on Friday. Anadarko shares jumped 32 per cent, reflecting the offer’s 39 per cent premium over Thursday’s close. Before the deal, Chevron shares had gained 25 per cent over the last two years, while Anadarko had dropped 23 per cent. In that time, US crude oil prices have risen 20 per cent. It is the oil industry’s largest deal since Royal Dutch Shell bought BG Group in 2016, and it sparked speculation that other shale producers are in play. Shares of Noble Energy rose 7 per cent, while Pioneer Natural Resources Co jumped more than 11 per cent. Chevron, Exxon, Royal Dutch Shell Plc and BP Plc largely missed out on the first phase of the shale bonanza, when more nimble independent producers such as Anadarko pioneered shale drilling technology and leased Permian acreage on the cheap.
  • 11. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 11 Analysts predict further consolidation as the smaller companies that revolutionised the industry through advances in horizontal drilling and hydraulic fracking have seen their stock prices languish and have curtailed spending due weak returns. Chevron, which already has 2.3 million acres in the Permian Basin, said the combined company would have a 75-mile (120-km)-wide corridor across the Permian’s Delaware basin, on the Texas- New Mexico border. “We will now see Chevron emerging as the clear leader among all Permian players, both in terms of production growth and as a cost leader,” said Rystad Energy head of analysis Per Magnus Nysveen, noting that Anadarko’s acreage is in the “sweetest spot” of the Delaware Basin. Chevron also owns mineral rights under some of the Anadarko Permian properties, saving royalties others would have to pay, said Drillinginfo analyst Andrew Dittmar. He estimated Chevron is paying about $50,000 an acre for Anadarko’s west Texas holdings. The Permian produces about 4 million barrels per day, and is expected to hit 5.4 million bpd by 2023, according to IHS Markit, more than the total production of any Opec country other than Saudi Arabia. Anadarko also has a Mozambique LNG project, part of one of the industry’s largest planned current investments, which Wirth said he still expects to move to final approval “sooner rather than later” this year. Expenses from that project are expected to reach $4 billion over several years. The tie-up with Anadarko adds to Chevron’s deepwater investments in the Gulf of Mexico and gives it a stake in growing production in the US Rocky Mountains in Colorado. The $65-per-share offer was structured as 75 per cent stock and 25 per cent cash, and the company will also take on $15 billion of Anadarko’s debt. “This deal seems perfect. Oil is on a rebound yet Anadarko’s stock price has been stagnant,” said Chris Widell, CEO of Sponte Resources, a Dallas, Texas-based private exploration and production company.
  • 12. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 12 Iraq: Gazprom Neft expands oil production in the Kurdistan Source: Gazprom Neft Gazprom Neft subsidiary Gazprom Neft Middle East has commissioned a third production well at its Sarqala field in the Kurdistan Region of Iraq (KRI) Potential production at the new well is estimated at 12,000 barrels per day. Cumulative daily oil production at the field following the commissioning of the Sarqala-3 well has increased by 25 percent reaching 35,000 barrels. The well runs to a total depth of 3,291 metres, with drilling having been undertaken under the challenging geological conditions of the Sarqala field - anomalously high pressure and reservoir temperature having demanded the use of a selection of 11 technological solutions. The construction of the Sarqala-3 well has, as a result, involved the use of large-diameter casing pipes with ultra-strong thread connections, weighted drilling mud for bottom-hole flushing, and cement incorporating mineral-based and iron-oxide additives. Drilling the well has involved an international team, with members from 20 countries. The project was implemented by Gazprom Neft Middle East, with technical support from the Gazprom Neft Science and Technology Centre. Vadim Yakovlev, First Deputy CEO, Gazprom Neft, commented: 'The Middle East remains an area of strategic interest to Gazprom Neft, being a region with a rich resource base, and a demonstrable willingness to allow access to investors. Experience in implementing projects from scratch - both in exploration and production - is important to us. We are continuing to evaluate opportunities for the further development of our business in the Middle East - independently and in partnership with other companies - both using the synergies offered by existing project infrastructure, as well as at other assets.'
  • 13. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 13 NewBase 14 April 2019 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Oil rises 1 % on tightening crude supply, upbeat economic data Reuters + NewBase Oil prices rose 1 percent on Friday as involuntary supply cuts from Venezuela and Iran plus conflict in Libya supported perceptions of a tightening crude market, while upbeat Chinese economic data eased concerns about waning crude demand. Brent crude oil futures rose 72 cents, or 1.02 percent, to settle at $71.55 a barrel. U.S. West Texas Intermediate (WTI) crude futures ended the session up 31 cents, or 0.5 percent, at $63.89 a barrel. Both benchmarks notched a weekly gain of about 1 percent, which was Brent’s third consecutive week of gains and the sixth straight rise for WTI. The oil market also followed global stock markets higher after strong earnings at JPMorgan Chase & Co. The dollar index slipped to its lowest against the euro in more than two weeks, making crude cheaper for non-U.S. buyers. Oil price special coverage
  • 14. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 14 “Equities are getting off to a good start with earnings season and the dollar index being weaker helps reaffirm confidence in the oil market,” said Phil Streible, senior commodities strategist at RJO Futures in Chicago. Oil markets have been lifted by more than 30 percent this year by supply cuts led by the Organization of the Petroleum Exporting Countries and U.S. sanctions on oil exporters Iran and Venezuela, plus escalating conflict in OPEC member Libya. “Geopolitically infused rallies could shoot prices toward or even past the $80 per barrel mark for intermittent periods this summer,” RBC Capital Markets said in a note. The head of Libya’s National Oil Corporation warned on Friday that renewed fighting could wipe out crude production in the country. Bombing by a warplane occurred on Friday near the Mellitah oil and gas plant, jointly operated by Italy’s ENI and Libyan state oil firm NOC, a Libyan National Army (LNA) military source and residents said. The plant supplies Italy with gas through the Greenstream pipeline. OPEC and its allies meet in June to decide whether to continue withholding supply. Though OPEC’s de facto leader, Saudi Arabia, is considered keen to keep cutting, sources within the group said it could raise output from July if disruptions continue elsewhere. The producer group’s supply cuts have been aimed largely at offsetting record crude production in the United States. U.S. energy companies this week increased the number of oil rigs operating for a second week in a row, bringing the total count to 833, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. The rig count fell for the past four months as independent exploration and production companies cut spending on new drilling to focus on earnings growth instead of increased output. On the demand side, Chinese data showed exports rebounded last month, driving U.S. and euro zone bond yields to three-week highs and helping offset weaker imports and reports of another cut in German growth forecasts. “While macro fears of an economic hard landing may be overblown, the concentration risk of global oil demand (in Asia) remains under appreciated,” RBC Capital Markets said.
  • 15. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 15 NewBase Special Coverage News Agencies News Release 14 April 2019 IEA Says Oil Market Tightening, But Global Demand May Falter Bloomberg + IEA + NewBase Global oil markets are tightening as OPEC supply falls, the International Energy Agency said, while warning it could lower demand forecasts because of economic threats. Crude inventories are set to decline for the rest of the year as Saudi Arabia and its partners curb production, while exports from Venezuela and Iran are squeezed by economic and political crises, the agency said in its monthly report. But it cautioned that threats in the world economy, from Europe to emerging markets, could take a toll on fuel consumption. “The oil market shows signs of tightening as we move into the second quarter of 2019, but we see mixed signals in terms of the outlook for demand,” said the Paris-based agency, which advises most major economies. Risks to demand are “currently to the downside.” Crude prices have rallied more than 30 percent in London this year and are trading above $71 a barrel as Saudi Arabia spearheads output cutbacks by the Organization of Petroleum Exporting Countries and its allies. Yet the gains have been capped by fears about global economic growth, which the International Monetary Fund predicts will this year be the weakest since the financial crisis a decade ago. Global oil supplies declined last month amid another steep drop in OPEC output, as the Saudis cut more production than promised and Venezuela’s unintended losses swelled. Supply growth outside
  • 16. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 16 OPEC also slowed sharply as Canada pared output and the North Sea suffered declines, the IEA said. As a result of OPEC’s restraint, inventories in developed nations are below their five-year average in terms of the amount needed to cover projected demand, having fallen in February for the first time in four months. The agency noted that crude-oil inventories will decline by more than 2 million barrels a day in the third quarter, the biggest drop since 2011. There was a similar, though smaller, reduction in the same period a year earlier as refiners processed more crude to build up stockpiles of fuels ahead of the winter. Demand Risks Nonetheless, the IEA warned that clouds are gathering over the outlook for demand. While the agency kept its estimates for 2019 global consumption growth unchanged, predicting an expansion of 1.4 million barrels a day, or 1.4 percent, it highlighted a number of dangers. Consumption in developed nations fell in the fourth quarter for the first time since 2014. In addition, concerns persist over the trade dispute between the U.S. and China, the demand recovery in the Middle East remains “modest,” and weakness in European countries could be exacerbated if the U.K.’s exit from the European Union is “disorderly,” the IEA said. Further headwinds could also come from the rally in prices, which at $70 a barrel “are less comfortable for consumers than they were at the start of the year,” it added.
  • 17. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 17 “Although the main sources of growth are doing well, there are mixed signals from elsewhere,” the IEA said. Highlights  Our global demand growth estimates for 2018 and 2019 are again unchanged at 1.3 mb/d and 1.4 mb/d, respectively. After a slow start to the year, OECD growth will be 0.3 mb/d, with non-OECD growing by 1.1 mb/d.  Demand in China, India and the US is estimated to have grown by 1 mb/d in Jan-Feb 2019. OECD demand fell in 4Q18 for the first time since end-2014 and also in 1Q19, mainly on weaker European numbers, but it will recover, led by the US.  Global oil supply dropped 340 kb/d in March, as OPEC+ cuts deepened and Venezuelan output fell sharply. At 99.2 mb/d, it was 3.1 mb/d below November 2018 and up 530 kb/d y- o-y. In 2019, non-OPEC production will grow 1.7 mb/d versus 2.8 mb/d last year.  OPEC crude oil production tumbled 550 kb/d in March, to 30.1 mb/d, on further cuts from Saudi Arabia and steep losses in Venezuela. Saudi output dropped to its lowest in over two years, boosting compliance with supply cuts to 153%. The call on OPEC rises to 30.9 mb/d in 2Q19.
  • 18. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 18  Global refining throughput fell by 2.5 mb/d in March as unplanned outages and accidents hindered the US in particular. Our 2019 growth estimate is revised down to 0.7 mb/d on tighter crude market fundamentals: 3Q19 could see the largest draws since 2011.  OECD oil stocks fell by 21.7 mb on the month in February after three months of increases. The decrease was more than the five-year average of 5.1 mb due to larger gasoline draws and a lower crude build. March preliminary data show a significant crude build in Europe.  ICE Brent reached a five-month high above $71/bbl in early April on supply concerns. New infrastructure capacity in the US helped WTI to narrow its discount to Brent to $7/bbl. Gasoline markets continued to rally, while cracks for most other refined products fell in March.
  • 19. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 19 NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE The Editor :”Khaled Al Awadi” Your partner in Energy Services NewBase energy news is produced daily (Sunday to Thursday) and sponsored by Hawk Energy Service – Dubai, UAE. For additional free subscription emails please contact Hawk Energy Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010 Mobile: +97150-4822502 khdmohd@hawkenergy.net khdmohd@hotmail.com Khaled Al Awadi is a UAE National with a total of 28 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 2019 K. Al Awadi
  • 20. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 20
  • 21. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 21
  • 22. Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 22