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NewBase Energy News 13 November 2016 - Issue No. 947 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Saudi energy minister in Algiers for talks - Algerian energy source
Reuters
The Saudi energy minister was visiting Algiers for talks on OPEC policy with his Algerian
counterpart Nouredine Bouterfa, agreeing there should be a new date for technical committee
talks, an energy source told Reuters on Saturday.
The two ministers agreed on sticking to a September Algiers deal on an output cut, the Algerian
energy source said.
"We have also agreed to set a new date for the meeting of the high committee of experts which
was scheduled on November 25. The new date is November 21," said the source, who asked not
to be named.
OPEC members are still in talks on details of the output reduction.
In September, OPEC agreed at a meeting in Algeria on modest preliminary oil output cuts in the
first such deal since 2008, with special conditions given to Libya, Nigeria and Iran, whose output
has been hit by wars and sanctions.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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UAE: French oil giant Total to continue to invest in the UAE
Gulf News + Zawya
French oil giant Total will continue to invest in the UAE for the development of oilfields
and hopes to be part of offshore concessions which will expire in 2018, a top executive
of the company told Gulf News in an interview.
“We will continue to invest in the UAE in the coming years. There are fields to be
developed and there is production to be developed. We will continue to invest and plan
to be part of offshore concessions of Adma-Opco which will expire in 2018,” said
Hatem Nuseibeh, President of Total, exploration and production in the UAE.
The company has 13 per cent share in Abu Dhabi Marine Operating Company (Adma-
Opco) which will be merged with Zakum Development Company by early 2018.
Speaking on the merger, he said it’s a great idea and they are hundred per cent behind
Adnoc in supporting the decision.
“The merger will bring down costs and increase efficiency. We have offered our people
to help Adnoc in making this merger successful and be able to bring out all synergies to
cut costs and make it more efficient.”
Costs
Abu Dhabi National Oil Company (Adnoc) on October 4 announced the integration of
Adma-Opco with Zadco as part of the company’s efforts to consolidate operations to
bring down costs due to low oil prices.
The merger is expected to be completed by early 2018 under a steering committee
formed by Adnoc and its partners including BP, Exxon Mobil, Japan Oil Development
Company and Total.
Total is also involved in the development of Abu Dhabi’s onshore oilfields with a 10 per
cent stake in Abu Dhabi Company for Onshore Oil Operations (Adco) concessions.
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The oil company signed the concession agreement with Adnoc last year and is said to
have paid $2.2 billion as a bonus amount, according to media reports.
“Signing the concession agreement with Adnoc was the right decision,” Nuseibeh said.
“Where else in the world can you get access to quantity of this oil in a safe country with
no technical risks? These reservoirs are enormous and they are going to give you want
you want and production costs are among the lowest in the world.”
“Some companies which did not sign the agreement at the time are regretting that they
did not come with us,” he added.
Expenditure
The current production of Adco is around 1.6 million barrels of oil per day and is
expected to increase to 1.8 million barrels per day from 2017.
With oil prices remaining low, the company plans to cut expenditure in the coming
years.
“When the price of oil was $100 per barrel we were little bit unrealistic, we were
dreaming. Now the price of oil fell, we want to control our expenditure.”
“All the IOCs (International Oil Companies) and NOCs like Adnoc are controlling the
expenditure so that we can survive in the low oil price environment.”
Oil prices lost half of its value in the last two years due more production and less
demand.
From more than $110 per barrel in June 2014, oil prices fell to less than $50 per barrel
in recent times. Total is also investing in Iran with the company signing a $4.8 billion
(Dh17.6 billion) gas deal to develop Phase 11 of the South Pars field under a 20-year
contract, the company announced on Tuesday.
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Iraq: Gas Plus Khalakan spuds fourth production well at
Khalakan field in Kurdistan;; Source: Gas Plus Khalakan
Gas Plus Khalakan ('GPK'), the sole contractor of the Khalakan PSC in the Kurdistan Region of
Iraq, has announced the spud of the fourth production well, Shewashan-4. The well is designed to
test new mapping which places further reserves up dip in the Shewashan Cretaceous reservoir,
as well as testing the deeper Jurassic potential.
The deviated Shewashan-3 well, which spud
on 28 July 2016, continues to progress
towards TD and is currently drilling in the
Cretaceous reservoir. Well completion for
production is expected to occur before the end
of the year, with tie-in to the field’s new
production facilities.
The Shewashan field continues to sell oil
produced from Shewashan-2, which in 2016
has averaged 3,600 bopd. The discovery well
Shewashan-1, which was completed as a
producer, is undergoing production logging
and is expected to be brought back on stream
once a water producing zone is isolated. Oil
continues to be supplied to the local Bazian
refinery with payments received through to the
end of June.
GPK has also completed some seismic
reprocessing and remapping of the
Shewashan field which indicates further attic
oil potential.
GPK has retained DeGolyer & McNaughton to
conduct a revised audit of Shewashan’s reserves and resources. The reserve report will update
the 2015 DeGolyer & McNaughton reserve report and is expected to be published prior to year-
end.
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Iraq: DNO completes first phase of new Tawke drilling campaign
Source: DNO
DNO the Norwegian oil and gas operator, has announced a third consecutive quarter of operating
profits and the completion of the first phase of the 2016-2017 drilling campaign at the Company's
flagship Tawke field in the Kurdistan region of Iraq.
Four new production wells at Tawke, three of which targeted the shallow Jeribe reservoir and one
the deeper Cretaceous reservoir, have added more than 10,000 barrels of oil per day (bopd) of
production at the field. The Jeribe wells were drilled at a combined cost of USD 6 million and the
Cretaceous well cost USD 7 million. Current field production averages just below 120,000 bopd.
'With Tawke, it's not just about field size and production level but about capital efficiency,' said
DNO's Executive Chairman Bijan Mossavar-Rahmani, adding that the field is low cost, quick drill,
high return and flexible. 'We just drilled and completed a shallow well in ten days for less than
USD 2 million that is now producing 3,000 barrels a day worth USD 3 million a month,' he
reported. 'This is one for the Guinness Book of World Records,' he said.
Elsewhere in Kurdistan, the Peshkabir-2 well was spudded in early October to appraise the
Jurassic reservoir and explore the Cretaceous horizon on a previous discovery to the west of the
main Tawke field. The well is currently drilling ahead at 2,000 meters and is expected to reach
target depth of 3,500 meters in January 2017.
'We can't wait to take our foot off the brake at Tawke,' said Mr. Mossavar-Rahmani. The Company
will drill two new Cretaceous wells in the first half of 2017 and plans have been drawn up to
mobilize a third rig and drill additional wells at Tawke and Peshkabir. 'But to proceed with
significant new investments at Tawke, we need regular export payments from the Kurdistan
Regional Government and a firm plan for repayment of the USD 1 billion in arrears to DNO,' he
added.
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While recent payments by the Kurdistan Regional Government for exports have been irregular
and delayed, Tawke payments year-to-date have totaled USD 255 million, of which DNO received
USD 184 million.
DNO reported operating profits of USD 9 million
during the third quarter on revenues of USD 49
million, bringing year-to-date operating profits to
USD 33 million. The Company exited the quarter
with a cash balance of USD 266 million, up from
USD 238 million at 1 January 2016.
DNO also stated that its July 2016 proposal to
acquire Gulf Keystone Petroleum has expired as
certain conditions to the recent financial
restructuring set by Gulf Keystone itself appear not to have been met.
Given the resulting uncertainties about Gulf Keystone's asset, commercial outlook and future
rights and obligations at the Shaikan field, and following a careful review of Gulf Keystone's latest
reserves report, DNO is prepared to consider an all cash transaction but at a meaningful discount
to the previous USD 300 million equivalent cash-and-shares offer.
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Iran Tells OPEC It Raised Supply by Most Since Sanctions
Bloomberg - Grant Smith
Iran, which has said it’s exempt from OPEC’s accord to cut production, told the group it raised
output by the most since international sanctions were lifted. Iraq, unwilling to curb its supplies,
reported a higher level than OPEC’s estimates.
Freed from curbs on its oil trade in January, Iran said it increased output by 210,000 barrels a day
to 3.92 million a day in October from the previous month, according to a report from the
Organization of Petroleum Exporting Countries. That’s 230,000 barrels a day more than estimated
by OPEC itself, whose members are due to finalize how much each will cut when they gather on
Nov. 30. Production from Saudi Arabia, which typically declines at this time of year, remained near
record levels.
Oil prices climbed about 16 percent in the weeks after OPEC’s Sept. 28 meeting in Algiers, where
the group ended a two-year policy of pumping without limits to agree a production cut aimed at
clearing a global surplus. Yet prices have since retreated on doubts the deal can succeed when
key members Iran and Iraq argue they shouldn’t need to cut while recovering from losses to war
and sanctions.
“Estimating a higher domestic number is clearly part of the game they were all very well versed
with,” said Abhishek Deshpande, an analyst at Natixis SA in London. “They will either cut back
based on these higher numbers, or for some countries like Iran and Iraq, they would like to freeze
at those levels.”
OPEC’s monthly report contains two sets of production data: one submitted by individual
members, known as “direct communication,” and another compiled from external sources such as
news agencies and intergovernmental institutions, referred to as “secondary sources.”
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Iraq, Iran and Venezuela have said these externally compiled numbers, which will be used when
allocating production cuts, underestimate their output, and that their own government data should
be used instead.
Trump Wildcard
Iran’s reported production increase of 210,000 barrels in October exceeds the combined gains of
the previous five months, OPEC’s data show. Secondary sources showed a more modest addition
of 27,500 barrels a day for October.
Still, the country may be more willing to agree to a deal following this week’s U.S. election victory
by Donald Trump, who has threatened to scrap the nuclear agreement that brought sanctions
relief, according to RBC Capital Markets LLC.
The report was updated later on Friday to include a submission from Iraq, which didn’t initially
provide an output level. Iraq told the organization that it produced 4.776 million barrels a day in
October, 215,000 barrels a day more than OPEC’s own estimate.
Saudi Arabia, which has said it wants other nations to cooperate in the production rollback,
reported its production was little changed in October at 10.625 million barrels a day, even though
supplies typically ease at this time of year as seasonal domestic demand slackens.
The secondary sources show that OPEC output increased by 236,700 barrels a day to 33.64
million a day in October, as Nigeria and Libya recovered output lost to sabotage, militant attacks
and political conflict.
That means the group would need to cut by 640,000 to 1.1 million barrels a day to comply with the
range it set out in Algiers. The organization estimates an average of 32.7 million barrels a day will
be needed from OPEC next year, about 100,000 more than it forecast last month due to a slightly
weaker outlook for non-OPEC supply.
The organization has sought help in lowering output from non-members such as Russia, which
has indicated it may at least freeze if not cut supplies.
“Adjustments in both OPEC and non-OPEC supply will accelerate the drawdown of the existing
substantial overhang in global oil stocks and help bring forward the rebalancing of the market,” the
report said. Inventories remained more than 300 million barrels above their five-year average in
September, it said.
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Norway: Aker BP announces start-up of production from Viper & Kobra
Source: Aker BP
Aker BP has announced the start-up of production from Viper-Kobra, which is tied back to
the Alvheim FPSO. The project has been developed on time and within budget .
'The Viper-Kobra project is developed on time, on budget and is a small, but important project for
Aker BP. Viper-Kobra leverages on the existing infrastructure in the Alvheim area, thus ensuring
maximum utilization of the adjacent resources and will contribute to maintain the Alvheim
production at a high level', says Geir Solli, SVP Operation at Aker BP.
The development costs for Viper-Kobra are approx. NOK 1.8 billion, including the drilling of two
wells, subsea installations, pipelines and hook-up. Viper-Kobra consists of two separate
discoveries - Kobra, discovered in 1997, and Viper, discovered in 2009. Viper-Kobra is not a
separate field, but constitutes part of the Alvheim field. Thus, the development is included in the
PDO for Alvheim, as are the other structures in the area.
The development comprises of a new subsea installation with a pipeline tied into the Volund
manifold. The four well slots are designated for one well from Viper and one from Kobra, in
addition to two well slots intended for potential future wells in the area.
The two reservoirs contain approx. 4 million barrels of recoverable oil each. Including some gas,
total recoverable reserves are estimated at 9 million barrels of oil equivalents. The estimated
output of the two wells
is planned to an
average initial daily rate
of 15,000 barrels of oil
equivalents.
The distribution of
ownership interests
corresponds to that of
the Alvheim
licence; Aker BP,
operator, 65 per
cent, ConocoPhillips 20
per cent and Lundin
Norway with a 15 per
cent interest.
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Indonesia: KrisEnergy farms out Block A Aceh working interest
to fund gas development capital expenditure..Source: KrisEnergy
KrisEnergy has reduced its working interest in the Block A Aceh production sharing contract to
15% in alignment with its revised business plan to reduce future capital expenditure while
maintaining exposure to a high-value gas development in Indonesia. Proceeds from the
transaction will be applied towards funding KrisEnergy’s share of the capital expenditure for
the Block A Aceh gas development.
The operator of Block A Aceh, Medco E&P Malaka, has acquired 26.6666% of KrisEnergy’s
working interest and increased its holding to 85%. The transaction is pending approvals from the
Government of Indonesia and the Government of Aceh.
Jeffrey S. MacDonald, KrisEnergy’s Interim Chief Executive Officer, commented:
'This farm-out is in line with our recently announced revised business plan to reduce exposure to
contract areas where we have a high working interest in order to mitigate risk and reduce future
capital expenditure commitments given the continued volatility in oil and gas markets. However,
we remain a partner in Block A Aceh and will benefit from long-term revenues and cash flow once
the gas fields are developed and on stream.'
Block A Aceh covers 1,680 sq km and is located onshore Sumatra in the semi-autonomous region
of Aceh. It contains several gas condensate discoveries including the Alur Rambong, Alur Siwah
and Julu Rayeu fields, which were approved for development in 2007. A gas sales agreement was
signed in January 2015 for a daily contracted quantity of 58 billion British thermal units.
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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
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NewBase 13 November 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil Falls to Eight-Week Low as OPEC Output Gain Threatens Accord
Bloonberg + NewBase
Oil dropped to the lowest in almost two months in New York on rising OPEC output after a volatile
week driven by uncertainty about the group’s intentions and the surprise election of Donald
Trump.
Futures fell 2.8 percent Friday. Iran and Iraq, which want exemptions from an Organization of
Petroleum Exporting Countries accord to cut production, told the group they raised output last
month, while Saudi Arabia pumped near record levels. Oil has dropped about 15 percent from its
October high on growing doubts that OPEC will be able to finalize the Algiers accord at its Nov. 30
summit amid a refusal to cut output from almost a third of its members.
"Oil is falling today because of OPEC’s self-inflicted wounds," said John Kilduff, a partner at Again
Capital LLC, a New York-based hedge fund that focuses on energy. "OPEC members are
confessing to large increases in production that might make achieving their Algiers deal an
impossibility."
The International Energy Agency, the Paris-based adviser to some of the world’s biggest
economies, said it’s waiting to see whether President-elect Trump’s rhetoric on Iran hardens into
action before revising its market forecasts. While investors took comfort from Trump’s conciliatory
Oil price special
coverage
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acceptance speech on Wednesday, rising U.S. crude supplies served as a reminder of the
inventory overhang.
West Texas Intermediate for December delivery dropped $1.25 to $43.41 a barrel on the New
York Mercantile Exchange. It’s the lowest close since Sept. 19. The contract declined 1.5 percent
this week. Total volume traded was about 9 percent above the 100-day average.
Exchange Records
WTI open interest on Nymex passed 2 million contracts for the first time ever Thursday, according
to data on the CME website. Aggregate volume slipped from a record set on Wednesday, with
1.34 million contracts changing hands.
Brent for January settlement fell $1.09, or 2.4 percent, to $44.75 a barrel on the London-based
ICE Futures Europe exchange. It’s the lowest close since Aug. 10. Prices slipped 1.8 percent this
week. The global benchmark ended the session at a 60-cent premium to January WTI.
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose to the
highest since February. A stronger U.S. currency usually reduces the appeal of dollar-
denominated raw materials as an investment. The Bloomberg Commodity Index fell to the lowest
since Sept. 1.
"We have too much oil, something the IEA report yesterday and OPEC today makes clear," said
Stephen Schork, president of the Schork Group Inc., a consulting company in Villanova,
Pennsylvania. "The dollar’s rocketed, which is putting downward pressure on commodities."
Iran, Iraq
Iran, freed from curbs on its oil trade in January, said it increased output by 210,000 barrels a day
to 3.92 million a day in October from the previous month, according to a monthly report from
OPEC. Secondary sources showed a more modest addition of 27,500 barrels a day for October.
The report was updated later on Friday to include a submission from Iraq, which didn’t initially
provide an output level. Iraq told the organization that it produced 4.776 million barrels a day in
October, 215,000 barrels a day more than OPEC’s own estimate.
OPEC, led by Saudi Arabia, decided in November 2014 against curtailing production to support oil
prices and instead to pump at capacity to increase market share. This drove crude to a 12-year
low in January this year and pushed high-cost U.S. production down. Following more than two
years of low prices, OPEC reversed its policy in September, saying it would cut production for the
first time in eight years.
"In this year of outlier outcomes it’s not out of the question that the Saudis will decide to change
course and pump all they can since everyone else is," Kilduff said.
December gasoline futures fell 2.4 percent to $1.3053 a gallon. Diesel for December delivery
declined 2.5 percent to $1.4012, the lowest settlement since Sept. 19.
In other oil-market news:
• Rigs targeting crude in the U.S. rose by 2 to 452, the highest level since February, Baker
Hughes Inc. said on its website Friday.
• Rosneft PJSC, Russia’s biggest oil producer, said third-quarter profit dropped 77 percent
as a decline in export duties lagged behind slumping crude prices.
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Oil Tankers Used to Store Millions of Barrels as Land Sites Fill
Bloomberg - Alex Longley alexlongley1
Oil companies booked tankers to store as many as 9 million barrels of crude in northwest Europe
amid signs that space in on-land depots is filling up, a ship-operator said. The glut could get
bigger still, given the region is scheduled to load the most cargoes in 4 1/2 years next month.
There are 14 to 16 Aframax-class tankers now storing crude in the region, Jonathan Lee, chief
executive officer of Tankers International, operator of the world’s biggest pool of supertankers,
said by phone Friday. Standard cargoes are normally almost 600,000 barrels. Lack of on-land
capacity to hold the oil is the most likely cause of the buildup, he said.
North Sea producers are among a long list of suppliers adding barrels just as OPEC prepares to
try and eliminate a surplus. Pressure on the exporter club is piling up because its own members
are pumping like never before while nations outside the group including Brazil, Kazakhstan,
Canada and Russia are producing more than ever or pumping from new fields.
Traders began looking for profit at sea again earlier this month, according to a Bloomberg survey,
with Tankers International saying at the time that between five and 10 ships had been chartered to
hold oil near Singapore, most likely to profit from weak crude prices.
Doing the Contango
Those ships are the industry’s biggest supertankers, holding 2 million barrels a piece. The vessels
in the North Sea would normally carry about 70 percent less oil.
Oversupply in the oil market has caused a key oil-price spread that denotes the scale of any
surplus to balloon. The difference in the price of January and February Brent contracts rose to
$1.18 a barrel this week, the widest since April 2015, excluding days when the price expires.
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When the month-on-month discount gets deep enough -- something called contango -- it
sometimes rewards traders to hire ships, keep hold of the oil, and sell it at the later price, because
the gap more than covers the cost of booking a vessel. Other times, there just isn’t space to
unload, forcing vessels to wait. Inventories in Amsterdam, Rotterdam and Antwerp are the highest
for the time of year since at least 2013, according to data from Genscape Inc.
“The big question is whether it’s contango or whether it’s a lack of physical land-based storage”
that’s caused the storage buildup in Northwest Europe, London-based Lee said. “It seems to be
the latter at the moment.”
The Brent price spreads collapsed because supplies are being pushed onto the market that were
previously unavailable.
Libya shipped the most oil since late 2014 in October, while Nigeria’s petroleum minister said the
nation is now pumping more than 2 million barrels a day for the first time since the start of the
year. That is in addition to new supply from Kazakhstan’s Kashagan oil field and Russian output at
a post-Soviet record.
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NewBase Special Coverage
News Agencies News Release 13 November 2016
Bloomberg
IEA Raises Forecast for Non-OPEC Oil Output Growth Next Year
Bloomberg - Rakteem Katakey rakteem
The International Energy Agency increased its estimate of oil production from countries outside
OPEC next year, citing an improved outlook for Russia.
Supply growth from nations outside the Organization of Petroleum Exporting Countries will be “just
shy” of 500,000 barrels a day, an increase of 110,000 from the agency’s forecast last month, it
said Thursday. Russian production is likely to grow by 190,000 barrels a day, building on a
230,000-barrel increase in 2016.
Swelling output from non-OPEC countries including Russia, Brazil and Kazakhstan presents a
challenge for the 14-member exporters’ group, which meets at the end of November to hammer
out the details of a production cut to buoy prices. While Russia has said it will consider joining an
OPEC agreement, its own output has climbed to a post-Soviet record.
Brazil is set to increase production by 280,000 barrels a day next year, while Canadian output will
rise by 225,000 barrels and Kazakh supply by 160,000, the Paris-based IEA forecast in its
monthly report. Non-OPEC supply will total 57.2 million barrels a day.
“This means that 2017 could be another year of relentless global supply growth similar to that
seen in 2016,” IEA said.
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While non-OPEC production is likely to drop by 900,000 barrels a day this year, it rose by almost
500,000 a day last month as new fields started, according to the agency. Maintenance and
unscheduled shutdowns, especially in the North Sea, had curbed production in September.
Kazakhstan’s giant Kashagan field boosted output in October after coming online the previous
month, and oil-loading schedules suggest North Sea production also rebounded.
OPEC, led by Saudi Arabia, decided in November 2014 against curtailing production to support oil
prices and instead pump at capacity to increase market share. This drove crude to a 12-year low
in January this year and pushed high-cost U.S. production down. Following more than two years
of low prices, OPEC reversed its policy in September, saying it would cut production for the first
time in eight years.
The consequent rally in prices brought back some U.S. drilling. In October, 14 out of a total 25 oil
rigs returning to service were added in the Permian shale basin, where production rates are
beating expectations, the IEA said. Output in the Bakken and Eagle Ford shales isn’t as strong,
and the IEA sees U.S. crude supply declining “modestly” in 2017.
Total U.S. oil and natural-gas liquids production will shrink by 465,000 barrels a day this year to
12.5 million barrels, and stay around this level in 2017, the agency forecasts.
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
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 26 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years, he has developed great
experiences in the designing & constructing of gas pipelines, gas metering & regulating stations
and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 13 November 2016 K. Al Awadi
Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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

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New base energy news issue 947 dated 13 november 2016

  • 1. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 13 November 2016 - Issue No. 947 Edited & Produced by: Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE Saudi energy minister in Algiers for talks - Algerian energy source Reuters The Saudi energy minister was visiting Algiers for talks on OPEC policy with his Algerian counterpart Nouredine Bouterfa, agreeing there should be a new date for technical committee talks, an energy source told Reuters on Saturday. The two ministers agreed on sticking to a September Algiers deal on an output cut, the Algerian energy source said. "We have also agreed to set a new date for the meeting of the high committee of experts which was scheduled on November 25. The new date is November 21," said the source, who asked not to be named. OPEC members are still in talks on details of the output reduction. In September, OPEC agreed at a meeting in Algeria on modest preliminary oil output cuts in the first such deal since 2008, with special conditions given to Libya, Nigeria and Iran, whose output has been hit by wars and sanctions.
  • 2. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 UAE: French oil giant Total to continue to invest in the UAE Gulf News + Zawya French oil giant Total will continue to invest in the UAE for the development of oilfields and hopes to be part of offshore concessions which will expire in 2018, a top executive of the company told Gulf News in an interview. “We will continue to invest in the UAE in the coming years. There are fields to be developed and there is production to be developed. We will continue to invest and plan to be part of offshore concessions of Adma-Opco which will expire in 2018,” said Hatem Nuseibeh, President of Total, exploration and production in the UAE. The company has 13 per cent share in Abu Dhabi Marine Operating Company (Adma- Opco) which will be merged with Zakum Development Company by early 2018. Speaking on the merger, he said it’s a great idea and they are hundred per cent behind Adnoc in supporting the decision. “The merger will bring down costs and increase efficiency. We have offered our people to help Adnoc in making this merger successful and be able to bring out all synergies to cut costs and make it more efficient.” Costs Abu Dhabi National Oil Company (Adnoc) on October 4 announced the integration of Adma-Opco with Zadco as part of the company’s efforts to consolidate operations to bring down costs due to low oil prices. The merger is expected to be completed by early 2018 under a steering committee formed by Adnoc and its partners including BP, Exxon Mobil, Japan Oil Development Company and Total. Total is also involved in the development of Abu Dhabi’s onshore oilfields with a 10 per cent stake in Abu Dhabi Company for Onshore Oil Operations (Adco) concessions.
  • 3. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 The oil company signed the concession agreement with Adnoc last year and is said to have paid $2.2 billion as a bonus amount, according to media reports. “Signing the concession agreement with Adnoc was the right decision,” Nuseibeh said. “Where else in the world can you get access to quantity of this oil in a safe country with no technical risks? These reservoirs are enormous and they are going to give you want you want and production costs are among the lowest in the world.” “Some companies which did not sign the agreement at the time are regretting that they did not come with us,” he added. Expenditure The current production of Adco is around 1.6 million barrels of oil per day and is expected to increase to 1.8 million barrels per day from 2017. With oil prices remaining low, the company plans to cut expenditure in the coming years. “When the price of oil was $100 per barrel we were little bit unrealistic, we were dreaming. Now the price of oil fell, we want to control our expenditure.” “All the IOCs (International Oil Companies) and NOCs like Adnoc are controlling the expenditure so that we can survive in the low oil price environment.” Oil prices lost half of its value in the last two years due more production and less demand. From more than $110 per barrel in June 2014, oil prices fell to less than $50 per barrel in recent times. Total is also investing in Iran with the company signing a $4.8 billion (Dh17.6 billion) gas deal to develop Phase 11 of the South Pars field under a 20-year contract, the company announced on Tuesday.
  • 4. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 Iraq: Gas Plus Khalakan spuds fourth production well at Khalakan field in Kurdistan;; Source: Gas Plus Khalakan Gas Plus Khalakan ('GPK'), the sole contractor of the Khalakan PSC in the Kurdistan Region of Iraq, has announced the spud of the fourth production well, Shewashan-4. The well is designed to test new mapping which places further reserves up dip in the Shewashan Cretaceous reservoir, as well as testing the deeper Jurassic potential. The deviated Shewashan-3 well, which spud on 28 July 2016, continues to progress towards TD and is currently drilling in the Cretaceous reservoir. Well completion for production is expected to occur before the end of the year, with tie-in to the field’s new production facilities. The Shewashan field continues to sell oil produced from Shewashan-2, which in 2016 has averaged 3,600 bopd. The discovery well Shewashan-1, which was completed as a producer, is undergoing production logging and is expected to be brought back on stream once a water producing zone is isolated. Oil continues to be supplied to the local Bazian refinery with payments received through to the end of June. GPK has also completed some seismic reprocessing and remapping of the Shewashan field which indicates further attic oil potential. GPK has retained DeGolyer & McNaughton to conduct a revised audit of Shewashan’s reserves and resources. The reserve report will update the 2015 DeGolyer & McNaughton reserve report and is expected to be published prior to year- end.
  • 5. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 Iraq: DNO completes first phase of new Tawke drilling campaign Source: DNO DNO the Norwegian oil and gas operator, has announced a third consecutive quarter of operating profits and the completion of the first phase of the 2016-2017 drilling campaign at the Company's flagship Tawke field in the Kurdistan region of Iraq. Four new production wells at Tawke, three of which targeted the shallow Jeribe reservoir and one the deeper Cretaceous reservoir, have added more than 10,000 barrels of oil per day (bopd) of production at the field. The Jeribe wells were drilled at a combined cost of USD 6 million and the Cretaceous well cost USD 7 million. Current field production averages just below 120,000 bopd. 'With Tawke, it's not just about field size and production level but about capital efficiency,' said DNO's Executive Chairman Bijan Mossavar-Rahmani, adding that the field is low cost, quick drill, high return and flexible. 'We just drilled and completed a shallow well in ten days for less than USD 2 million that is now producing 3,000 barrels a day worth USD 3 million a month,' he reported. 'This is one for the Guinness Book of World Records,' he said. Elsewhere in Kurdistan, the Peshkabir-2 well was spudded in early October to appraise the Jurassic reservoir and explore the Cretaceous horizon on a previous discovery to the west of the main Tawke field. The well is currently drilling ahead at 2,000 meters and is expected to reach target depth of 3,500 meters in January 2017. 'We can't wait to take our foot off the brake at Tawke,' said Mr. Mossavar-Rahmani. The Company will drill two new Cretaceous wells in the first half of 2017 and plans have been drawn up to mobilize a third rig and drill additional wells at Tawke and Peshkabir. 'But to proceed with significant new investments at Tawke, we need regular export payments from the Kurdistan Regional Government and a firm plan for repayment of the USD 1 billion in arrears to DNO,' he added.
  • 6. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 While recent payments by the Kurdistan Regional Government for exports have been irregular and delayed, Tawke payments year-to-date have totaled USD 255 million, of which DNO received USD 184 million. DNO reported operating profits of USD 9 million during the third quarter on revenues of USD 49 million, bringing year-to-date operating profits to USD 33 million. The Company exited the quarter with a cash balance of USD 266 million, up from USD 238 million at 1 January 2016. DNO also stated that its July 2016 proposal to acquire Gulf Keystone Petroleum has expired as certain conditions to the recent financial restructuring set by Gulf Keystone itself appear not to have been met. Given the resulting uncertainties about Gulf Keystone's asset, commercial outlook and future rights and obligations at the Shaikan field, and following a careful review of Gulf Keystone's latest reserves report, DNO is prepared to consider an all cash transaction but at a meaningful discount to the previous USD 300 million equivalent cash-and-shares offer.
  • 7. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 Iran Tells OPEC It Raised Supply by Most Since Sanctions Bloomberg - Grant Smith Iran, which has said it’s exempt from OPEC’s accord to cut production, told the group it raised output by the most since international sanctions were lifted. Iraq, unwilling to curb its supplies, reported a higher level than OPEC’s estimates. Freed from curbs on its oil trade in January, Iran said it increased output by 210,000 barrels a day to 3.92 million a day in October from the previous month, according to a report from the Organization of Petroleum Exporting Countries. That’s 230,000 barrels a day more than estimated by OPEC itself, whose members are due to finalize how much each will cut when they gather on Nov. 30. Production from Saudi Arabia, which typically declines at this time of year, remained near record levels. Oil prices climbed about 16 percent in the weeks after OPEC’s Sept. 28 meeting in Algiers, where the group ended a two-year policy of pumping without limits to agree a production cut aimed at clearing a global surplus. Yet prices have since retreated on doubts the deal can succeed when key members Iran and Iraq argue they shouldn’t need to cut while recovering from losses to war and sanctions. “Estimating a higher domestic number is clearly part of the game they were all very well versed with,” said Abhishek Deshpande, an analyst at Natixis SA in London. “They will either cut back based on these higher numbers, or for some countries like Iran and Iraq, they would like to freeze at those levels.” OPEC’s monthly report contains two sets of production data: one submitted by individual members, known as “direct communication,” and another compiled from external sources such as news agencies and intergovernmental institutions, referred to as “secondary sources.”
  • 8. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 Iraq, Iran and Venezuela have said these externally compiled numbers, which will be used when allocating production cuts, underestimate their output, and that their own government data should be used instead. Trump Wildcard Iran’s reported production increase of 210,000 barrels in October exceeds the combined gains of the previous five months, OPEC’s data show. Secondary sources showed a more modest addition of 27,500 barrels a day for October. Still, the country may be more willing to agree to a deal following this week’s U.S. election victory by Donald Trump, who has threatened to scrap the nuclear agreement that brought sanctions relief, according to RBC Capital Markets LLC. The report was updated later on Friday to include a submission from Iraq, which didn’t initially provide an output level. Iraq told the organization that it produced 4.776 million barrels a day in October, 215,000 barrels a day more than OPEC’s own estimate. Saudi Arabia, which has said it wants other nations to cooperate in the production rollback, reported its production was little changed in October at 10.625 million barrels a day, even though supplies typically ease at this time of year as seasonal domestic demand slackens. The secondary sources show that OPEC output increased by 236,700 barrels a day to 33.64 million a day in October, as Nigeria and Libya recovered output lost to sabotage, militant attacks and political conflict. That means the group would need to cut by 640,000 to 1.1 million barrels a day to comply with the range it set out in Algiers. The organization estimates an average of 32.7 million barrels a day will be needed from OPEC next year, about 100,000 more than it forecast last month due to a slightly weaker outlook for non-OPEC supply. The organization has sought help in lowering output from non-members such as Russia, which has indicated it may at least freeze if not cut supplies. “Adjustments in both OPEC and non-OPEC supply will accelerate the drawdown of the existing substantial overhang in global oil stocks and help bring forward the rebalancing of the market,” the report said. Inventories remained more than 300 million barrels above their five-year average in September, it said.
  • 9. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 Norway: Aker BP announces start-up of production from Viper & Kobra Source: Aker BP Aker BP has announced the start-up of production from Viper-Kobra, which is tied back to the Alvheim FPSO. The project has been developed on time and within budget . 'The Viper-Kobra project is developed on time, on budget and is a small, but important project for Aker BP. Viper-Kobra leverages on the existing infrastructure in the Alvheim area, thus ensuring maximum utilization of the adjacent resources and will contribute to maintain the Alvheim production at a high level', says Geir Solli, SVP Operation at Aker BP. The development costs for Viper-Kobra are approx. NOK 1.8 billion, including the drilling of two wells, subsea installations, pipelines and hook-up. Viper-Kobra consists of two separate discoveries - Kobra, discovered in 1997, and Viper, discovered in 2009. Viper-Kobra is not a separate field, but constitutes part of the Alvheim field. Thus, the development is included in the PDO for Alvheim, as are the other structures in the area. The development comprises of a new subsea installation with a pipeline tied into the Volund manifold. The four well slots are designated for one well from Viper and one from Kobra, in addition to two well slots intended for potential future wells in the area. The two reservoirs contain approx. 4 million barrels of recoverable oil each. Including some gas, total recoverable reserves are estimated at 9 million barrels of oil equivalents. The estimated output of the two wells is planned to an average initial daily rate of 15,000 barrels of oil equivalents. The distribution of ownership interests corresponds to that of the Alvheim licence; Aker BP, operator, 65 per cent, ConocoPhillips 20 per cent and Lundin Norway with a 15 per cent interest.
  • 10. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 Indonesia: KrisEnergy farms out Block A Aceh working interest to fund gas development capital expenditure..Source: KrisEnergy KrisEnergy has reduced its working interest in the Block A Aceh production sharing contract to 15% in alignment with its revised business plan to reduce future capital expenditure while maintaining exposure to a high-value gas development in Indonesia. Proceeds from the transaction will be applied towards funding KrisEnergy’s share of the capital expenditure for the Block A Aceh gas development. The operator of Block A Aceh, Medco E&P Malaka, has acquired 26.6666% of KrisEnergy’s working interest and increased its holding to 85%. The transaction is pending approvals from the Government of Indonesia and the Government of Aceh. Jeffrey S. MacDonald, KrisEnergy’s Interim Chief Executive Officer, commented: 'This farm-out is in line with our recently announced revised business plan to reduce exposure to contract areas where we have a high working interest in order to mitigate risk and reduce future capital expenditure commitments given the continued volatility in oil and gas markets. However, we remain a partner in Block A Aceh and will benefit from long-term revenues and cash flow once the gas fields are developed and on stream.' Block A Aceh covers 1,680 sq km and is located onshore Sumatra in the semi-autonomous region of Aceh. It contains several gas condensate discoveries including the Alur Rambong, Alur Siwah and Julu Rayeu fields, which were approved for development in 2007. A gas sales agreement was signed in January 2015 for a daily contracted quantity of 58 billion British thermal units.
  • 11. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 NewBase 13 November 2016 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Oil Falls to Eight-Week Low as OPEC Output Gain Threatens Accord Bloonberg + NewBase Oil dropped to the lowest in almost two months in New York on rising OPEC output after a volatile week driven by uncertainty about the group’s intentions and the surprise election of Donald Trump. Futures fell 2.8 percent Friday. Iran and Iraq, which want exemptions from an Organization of Petroleum Exporting Countries accord to cut production, told the group they raised output last month, while Saudi Arabia pumped near record levels. Oil has dropped about 15 percent from its October high on growing doubts that OPEC will be able to finalize the Algiers accord at its Nov. 30 summit amid a refusal to cut output from almost a third of its members. "Oil is falling today because of OPEC’s self-inflicted wounds," said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. "OPEC members are confessing to large increases in production that might make achieving their Algiers deal an impossibility." The International Energy Agency, the Paris-based adviser to some of the world’s biggest economies, said it’s waiting to see whether President-elect Trump’s rhetoric on Iran hardens into action before revising its market forecasts. While investors took comfort from Trump’s conciliatory Oil price special coverage
  • 12. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 acceptance speech on Wednesday, rising U.S. crude supplies served as a reminder of the inventory overhang. West Texas Intermediate for December delivery dropped $1.25 to $43.41 a barrel on the New York Mercantile Exchange. It’s the lowest close since Sept. 19. The contract declined 1.5 percent this week. Total volume traded was about 9 percent above the 100-day average. Exchange Records WTI open interest on Nymex passed 2 million contracts for the first time ever Thursday, according to data on the CME website. Aggregate volume slipped from a record set on Wednesday, with 1.34 million contracts changing hands. Brent for January settlement fell $1.09, or 2.4 percent, to $44.75 a barrel on the London-based ICE Futures Europe exchange. It’s the lowest close since Aug. 10. Prices slipped 1.8 percent this week. The global benchmark ended the session at a 60-cent premium to January WTI. The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose to the highest since February. A stronger U.S. currency usually reduces the appeal of dollar- denominated raw materials as an investment. The Bloomberg Commodity Index fell to the lowest since Sept. 1. "We have too much oil, something the IEA report yesterday and OPEC today makes clear," said Stephen Schork, president of the Schork Group Inc., a consulting company in Villanova, Pennsylvania. "The dollar’s rocketed, which is putting downward pressure on commodities." Iran, Iraq Iran, freed from curbs on its oil trade in January, said it increased output by 210,000 barrels a day to 3.92 million a day in October from the previous month, according to a monthly report from OPEC. Secondary sources showed a more modest addition of 27,500 barrels a day for October. The report was updated later on Friday to include a submission from Iraq, which didn’t initially provide an output level. Iraq told the organization that it produced 4.776 million barrels a day in October, 215,000 barrels a day more than OPEC’s own estimate. OPEC, led by Saudi Arabia, decided in November 2014 against curtailing production to support oil prices and instead to pump at capacity to increase market share. This drove crude to a 12-year low in January this year and pushed high-cost U.S. production down. Following more than two years of low prices, OPEC reversed its policy in September, saying it would cut production for the first time in eight years. "In this year of outlier outcomes it’s not out of the question that the Saudis will decide to change course and pump all they can since everyone else is," Kilduff said. December gasoline futures fell 2.4 percent to $1.3053 a gallon. Diesel for December delivery declined 2.5 percent to $1.4012, the lowest settlement since Sept. 19. In other oil-market news: • Rigs targeting crude in the U.S. rose by 2 to 452, the highest level since February, Baker Hughes Inc. said on its website Friday. • Rosneft PJSC, Russia’s biggest oil producer, said third-quarter profit dropped 77 percent as a decline in export duties lagged behind slumping crude prices.
  • 13. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 Oil Tankers Used to Store Millions of Barrels as Land Sites Fill Bloomberg - Alex Longley alexlongley1 Oil companies booked tankers to store as many as 9 million barrels of crude in northwest Europe amid signs that space in on-land depots is filling up, a ship-operator said. The glut could get bigger still, given the region is scheduled to load the most cargoes in 4 1/2 years next month. There are 14 to 16 Aframax-class tankers now storing crude in the region, Jonathan Lee, chief executive officer of Tankers International, operator of the world’s biggest pool of supertankers, said by phone Friday. Standard cargoes are normally almost 600,000 barrels. Lack of on-land capacity to hold the oil is the most likely cause of the buildup, he said. North Sea producers are among a long list of suppliers adding barrels just as OPEC prepares to try and eliminate a surplus. Pressure on the exporter club is piling up because its own members are pumping like never before while nations outside the group including Brazil, Kazakhstan, Canada and Russia are producing more than ever or pumping from new fields. Traders began looking for profit at sea again earlier this month, according to a Bloomberg survey, with Tankers International saying at the time that between five and 10 ships had been chartered to hold oil near Singapore, most likely to profit from weak crude prices. Doing the Contango Those ships are the industry’s biggest supertankers, holding 2 million barrels a piece. The vessels in the North Sea would normally carry about 70 percent less oil. Oversupply in the oil market has caused a key oil-price spread that denotes the scale of any surplus to balloon. The difference in the price of January and February Brent contracts rose to $1.18 a barrel this week, the widest since April 2015, excluding days when the price expires.
  • 14. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 When the month-on-month discount gets deep enough -- something called contango -- it sometimes rewards traders to hire ships, keep hold of the oil, and sell it at the later price, because the gap more than covers the cost of booking a vessel. Other times, there just isn’t space to unload, forcing vessels to wait. Inventories in Amsterdam, Rotterdam and Antwerp are the highest for the time of year since at least 2013, according to data from Genscape Inc. “The big question is whether it’s contango or whether it’s a lack of physical land-based storage” that’s caused the storage buildup in Northwest Europe, London-based Lee said. “It seems to be the latter at the moment.” The Brent price spreads collapsed because supplies are being pushed onto the market that were previously unavailable. Libya shipped the most oil since late 2014 in October, while Nigeria’s petroleum minister said the nation is now pumping more than 2 million barrels a day for the first time since the start of the year. That is in addition to new supply from Kazakhstan’s Kashagan oil field and Russian output at a post-Soviet record.
  • 15. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 13 November 2016 Bloomberg IEA Raises Forecast for Non-OPEC Oil Output Growth Next Year Bloomberg - Rakteem Katakey rakteem The International Energy Agency increased its estimate of oil production from countries outside OPEC next year, citing an improved outlook for Russia. Supply growth from nations outside the Organization of Petroleum Exporting Countries will be “just shy” of 500,000 barrels a day, an increase of 110,000 from the agency’s forecast last month, it said Thursday. Russian production is likely to grow by 190,000 barrels a day, building on a 230,000-barrel increase in 2016. Swelling output from non-OPEC countries including Russia, Brazil and Kazakhstan presents a challenge for the 14-member exporters’ group, which meets at the end of November to hammer out the details of a production cut to buoy prices. While Russia has said it will consider joining an OPEC agreement, its own output has climbed to a post-Soviet record. Brazil is set to increase production by 280,000 barrels a day next year, while Canadian output will rise by 225,000 barrels and Kazakh supply by 160,000, the Paris-based IEA forecast in its monthly report. Non-OPEC supply will total 57.2 million barrels a day. “This means that 2017 could be another year of relentless global supply growth similar to that seen in 2016,” IEA said.
  • 16. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 While non-OPEC production is likely to drop by 900,000 barrels a day this year, it rose by almost 500,000 a day last month as new fields started, according to the agency. Maintenance and unscheduled shutdowns, especially in the North Sea, had curbed production in September. Kazakhstan’s giant Kashagan field boosted output in October after coming online the previous month, and oil-loading schedules suggest North Sea production also rebounded. OPEC, led by Saudi Arabia, decided in November 2014 against curtailing production to support oil prices and instead pump at capacity to increase market share. This drove crude to a 12-year low in January this year and pushed high-cost U.S. production down. Following more than two years of low prices, OPEC reversed its policy in September, saying it would cut production for the first time in eight years. The consequent rally in prices brought back some U.S. drilling. In October, 14 out of a total 25 oil rigs returning to service were added in the Permian shale basin, where production rates are beating expectations, the IEA said. Output in the Bakken and Eagle Ford shales isn’t as strong, and the IEA sees U.S. crude supply declining “modestly” in 2017. Total U.S. oil and natural-gas liquids production will shrink by 465,000 barrels a day this year to 12.5 million barrels, and stay around this level in 2017, the agency forecasts.
  • 17. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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 NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE Your partner in Energy Services NewBase energy news is produced daily (Sunday to Thursday) and 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 26 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels. NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE NewBase 13 November 2016 K. Al Awadi
  • 18. Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, 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