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NewBase 31 March 2015 - Issue No. 572 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
SolarImpulse landed in China after an amazing operation http://www.solarimpulse.com/multimedia
On Sunday March 29th, Solar Impulse took off for its fifth flight from Mandalay (Myanmar) at 21:06 UTC,
to Chongqing (China). Bertrand Piccard flew the zero-fuel airplane on 1459 (742NM) for 20 hours and 29
minutes. An amazing opportunity to spread our message in Myanmar and China: Future is Clean.
Schindler is pleased to accompany Solar Impulse in China, presenting the latest clean and green technology
to the public, as well as Chinese developers, architects, urban designers and planners. Si2 landed in China at
17:35 UTC. The landing was challenging and delayed not only because of strong winds but also because of
the intense traffic of Chongqing International Airport.
Upon landing, Bertrand Piccard declared that managing to land in such difficult conditions was extremely
reassuring in view of the numerous more challenges that the pilots will face in the next flights of the Round-
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UAE:Renewable energy development need Forgen & Private actions UN Official + NewBase
Foreign direct investment (FDI) and private public partnerships (PPP) will be “crucial” to transforming the renewable energy sector in emerging markets, a United Nations special representative said in Dubai on Monday. “If you want transformative change you have to look at FDI and PPPs,” said Kandeh Yumkella, UN undersecretary general and special representative
for sustainable energy for all, at the 5th Annual Investment Meeting at the Dubai World Trade Centre.
Governments in emerging markets like Africa and Latin America will struggle to develop renewable energy projects without foreign investment and partnerships with private firms, he said.
In 2013, most of the $214 billion (Dh785.3 billion) invested into the renewable energy sector came from private investors, Yumkella said, of which $93 billion was invested
in developing countries and $122 billion in developed countries.
FDI and PPPs are “more crucial when you look at energy,” Yumkella said. “We are going to need more innovations in risk management. There is a lot of unpredictability in energy markets,” he added, noting the collapse in oil prices last year that saw Brent, the international crude marker, fall from a high of about $115 a barrel in June last year to $45 this past June — a record six year low.
He said the governments should improve legal and economic framework to encourage investment including “partial guarantee schemes”.
Yumkella also said “in some cases” governments will need to offer subsidies, although acknowledging that governments could not be expected to take in losses from the private sector, adding that subsides could be offered on a basis of “around five years”.
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Qatar: Two Qatari Private Firms Plan to Build LNG Storage Facility in China The Peninsula + NewBase
Two Qatari private firms have decided to invest $5 billion in China’s Shandong Dongming Petrochemical Group to develop multiple projects China with primary focus on building an 3 million ton LNG storage facility.
Qatar’s Suhaim Bin Hamad Enterprises Group and Qatar Investment and Development Group (QID) announced a $5bn worth agreement to acquire 49 percent of Chinese petrochemical firm, Qatari newspaper The Peninsula reported Tuesday. Shandong Dongming Petrochemical is China’s largest independent refiner. The deal is likely to be finalised by the fourth quarter of this year,
QID Chief Executive Ibrahim El Tenay told reported in Doha on Monday, The Peninsula reported. The partners agreed to construct 1,000 mixed oil, non-oil and LNG/CNG stations within a 300-km radius of Dongming’s Heze refinery. Parties agreed to build LNG and LPG port and storage facilities in Shandong or Jiangsu province, the newspaper reported.
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Update: $5bn For 49% Shandong Dongming Petchem Stake
The cash will be used to finance a number of projects that Shandong is currently working
Qatra for Investment & Development (QID Group) and Hamad Bin Suhaim Enterprises have signed an initial deal to acquire 49 per cent of China’s Shandong Dongming Petrochemical Group worth $5 billion, executives from the firms said on Monday.
The deal is expected to be finalised by the forth quarter of this year, with the cash used to finance a number of projects that Shandong is currently working on, Ibrahim El-Tinay, chief executive of QID, told reporters at a press conference in Doha.
“These projects will include building 1,000 petrol stations across six provinces in China and a liquefied natural gas (LNG) terminal with a three million tonne per annum capacity in the region of Qinzhou,” he said.
Once the acquisition deal is finalised then completion dates for these projects will be set, El-Tinay added. How the $5 billion investment would be split between the two Qatari investors was not disclosed.
The stations will be built in a 300-kilometre radius of the company’s Heze refinery in Shandong province in eastern China, which would provide a third of its output as supply to the stations, according to a joint statement from the three parties.
The LNG terminal will be built in the municipal region of Qinzhou in southern China and will include the construction of a terminal, jetty, regasification facilities and storage. “Following the construction of this terminal, we hope that Qatar will have the priority in providing it with supplies,” El-Tinay added.
China’s natural gas demand grew by 5.6 per cent last year to 178.6 billion cubic metres (bcm). Of that demand, 127.9 bcm was supplied by domestic sources, while 57.8 bcm was imported by pipeline or as LNG.
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Algeria has valuable opportunity to end dependency on hydrocarbons APS + Newbase
Prime Minister Abdelmalek Sellal said Monday that a "valuable opportunity" is offered to Algeria to end dependency on hydrocarbons and diversify its economy and its exports.
"The international economic environment marked by a sharp decline in oil prices represents for Algeria, a valuable opportunity to review the situation of its trade to radically and progressively end dependence on hydrocarbons, by diversifying export and the national economy, "said Prime Minister at the opening of the National Conference on External Trade, held Monday and Tuesday at the Palais des Nations (Algiers).
"Algeria is urged to have long-term perspective towards an emerging economy which is based on national entrepreneurship and support to the national productive, wealth and job generating companies, in partnership with foreign operator, without undermining the achievements and the social interests of Algerians," he said.
He explained that "in spite of the impact of oil price fall, the macro-economic balances remain stable and maintained in a position that allows accompanying this approach," noting that "the government has taken into account the possibility concerning the volatility of oil prices."
"The banks' liquidity, currently estimated at DZD2, 324 billion allows us to continue to financing invests," Sellal added, stressing that "accurate instructions have been given to further boost credits to the economy."
He underlined the need for "recovering the non-banking liquidity, amounted to DZD3, 700 billion, in the benefit of the national economy." Sellal has urged banks to "fully assume their role" in the reframing and the promotion of foreign trade by financing productive investment and boosting import financing control mechanisms.
"The openness of Algeria to the international trade is irreversible," Sellal said, noting that "the pace to adopt to materialize this option remains conditioned by the country's socio-economic interests, notably the control of imports.
In this regard, he recalled the significant increase in the value of imports which reached $ 58.3 billion in 2014 against 62.96 billion dollars of exports. This increase has driven a $ 4 billion decline in trade balance.
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Yemen: Total evacuates expatriate staff Source: Reuters + NewBase
French oil major Total said it had evacuated all expatriate staff from Saana and Kharir in Yemen, although the sites have not been hit by an overnight military raid by Saudi-led forces against Houthi forces. 'All necessary measures are in place in order to ensure maximum security conditions for the people remaining,' a spokeswoman said in an email to Reuters on Monday.
Total said operations on Yemen's Block 10 have been reduced, with gas production maintained only for local power generation and to supply neighboring communities. Technical support is provided to the site from Dubai, she added. 'As a shareholder of YLNG (Yemen LNG), we know that the staff number on site (local and expatriate) has been reduced to the minimum necessary and the security measures continue to be maintained at maximum level,' the spokeswoman said.
Sources told Reuters on Sunday that exports of liquefied natural gas (LNG) from the 6.7 million-tonnes-a-year Yemen LNG plant operated by Total were running as normal. The plant in Balhaf lies about 400 kms east along the coast from Aden.
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Tanzania: Statoil hits more gas offshore Statoil
Norway’s Statoil said that the Mdalasini-1 exploration well has resulted in a new natural
gas discovery offshore Tanzania, increasing prospects of the Tanzania LNG project.
The discovery of an additional 1.0-1.8 trillion cubic feet of natural gas in place in the Mdalasini-1 well, brings the total of in-place volumes up to approximately 22 tcf in Block 2, the company said
in a statement.
The Mdalasini-1 discovery is located at a 2,296-metre water depth at the southernmost edge of the block. The new gas discovery has been made in Tertiary and Cretaceous sandstones.
“The Mdalasini-1 discovery marks the completion of the first phase of an efficient and successful multi-well exploration programme offshore Tanzania,” says Nick Maden, senior vice president for Statoil’s exploration activities in the Western Hemisphere.
He added that, since the start of the programme in February 2012, 13 wells have been drilled and eight discoveries
made, including Mdalasini-1.
“We still see prospectivity in the area, but after appraising the Tangawizi-1 high-impact discovery, which was made in March 2013, there will be a pause in the drilling to evaluate the next steps and to mature new prospects,” adds Maden.
Statoil has drilled the Mdalasini-1 well with a 100% working interest. Previously Statoil and co-venturer ExxonMobil have made seven discoveries in Block 2, including the five high-impact gas discoveries Zafarani-1, Lavani-1, Tangawizi-1, Mronge-1 and Piri-1, as well as the discoveries in Lavani-2 and Gilligiliani-1.
Statoil operates the licence on Block 2 on behalf of Tanzania Petroleum Development Corporation (TPDC) and has a 65% working interest.
ExxonMobil Exploration and Production Tanzania holds the remaining 35%. TPDC has the right to a 10% working interest in case of a development phase.
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Total sheds onshore block in Nigeria. Focus on Egina project Source Total + NewBase
French oil company Total has sold its share in onshore Oil Mining Lease (OML) 29 in Nigeria to Aiteo Eastern E&P, a Nigerian company, for $569 million. Together with the recently completed divestments of OML 24 and OML 18, Total’s share of sale proceeds from these three onshore Nigerian blocks amounts to over $1 billion.
“The sale of these non-operated onshore blocks in Nigeria is yet another example of our strategy of dynamic portfolio management, achieved at attractive valuations,” said Patrick de La Chevardière, Chief Financial Officer at Total. “These transactions also reduce our exposure to non-operated blocks onshore Nigeria, and allow us to focus on our core, operated developments, such as the Egina project.”
The Egina field (OML 130) development plan calls for 44 wells connected to a 330 meter-long floating production, storage and offloading (FPSO) vessel with a storage capacity of 2.3 million barrels. The design of the FPSO includes capacity for future developments of nearby discoveries. First oil is expected end-2017, with output reaching 200,000 barrels of oil per day at plateau.
As for Total’s remaining onshore acreage in Nigeria, the company holds a 10% stake in several onshore blocks in Nigeria via the Shell Petroleum Development Company (SPDC) Joint Venture alongside the
Nigerian National Petroleum Corporation (55%), SPDC (30%, operator) and Nigerian Agip Oil Company Limited (5%).
Since 2010, Total has divested its interests in eleven onshore blocks to Nigerian companies, in line with the Federal Government of Nigeria’s aim of developing Nigerian companies in the sector.
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Thailand: KrisEnergy announces successful Rossukon-2ST sidetrack in G6/48 Source: Krisenergy
KrisEnergy has provided an update on the drilling of the Rossukon-2STsidetrack exploration well in G6/48 in the Gulf of Thailand, which was drilled following the announcement on 24 March 2015 of the Rossukon-2 oil and gas discovery.
Rossukon-2ST was drilled to a total depth of 7,270 feet (2,216 metres) measured depth (-5,263 feet true vertical depth subsea) at a deviation of 57 degrees. KrisEnergy’s interpretation of preliminary well logs indicates that the well intersected approx. 40 feet true vertical depth ('TVD') of net oil-bearing sandstones and 100 feet TVD of net gas-bearing sandstones, over several reservoir intervals.
Chris Gibson-Robinson, Director Exploration & Production, commented:
'The Rossukon-2ST exploration sidetrack has encountered the highest net pay of the three discovery wells drilled so far within the Rossukon area and also extends the area over which hydrocarbon bearing reservoirs are present some 1.8 km northwest of the original 2009 Rossukon-1 discovery well. The results are encouraging and we are in discussion with our partners about the next steps to fully determine hydrocarbon volumes in the Rossukon area.'
G6/48 covers 566 sq km over the Karawake Basin and lies to the north of the G10/48 licence, where KrisEnergy is developing the Wassana oil field. The Company took over operatorship of G6/48 in May 2014. It holds a 30% working interest in the concession and is partnered by Northern Gulf Petroleum Pte Ltd with 40% and Mubadala Petroleum with 30%. The Key Gibraltar jack-up rig, which drilled the Rossukon-2ST well, is owned by Shelf Drilling (Southeast Asia) Limited. KrisEnergy has contracted the rig for a firm six months for its Thai drilling program, which includes the Rossukon series of wells in G6/48 and 15 development wells in the Wassana oil field.
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U.S;oil production growth in 2014 was largest in more than 100 years Source: U.S. Energy Information Administration, Petroleum Supply Monthly
U.S. crude oil production (including lease co ndensate) increased during 2014 by 1.2 million barrels per day (bbl/d) to 8.7 million bbl/d, the largest volume increase since recordkeeping began in 1900.
On a percentage basis, output in 2014 increased by 16.2%, the highest growth rate since 1940. Most of the increase during 2014 came from tight oil plays in North Dakota, Texas, and New Mexico where hydraulic fracturing and horizontal drilling were used to produce oil from shale formations. In percentage terms, the 2014 increase is the largest in more than six decades. Annual increases in crude oil production regularly surpassed 15% in the first half of the 20th century, but those changes were relatively less in absolute terms because production levels were much lower than they are now. Crude oil production in the United States has increased in each of the previous six years. This trend follows a period from 1985 to 2008 in which crude oil production fell in every year (except one). Although oil production is expected to rise in 2015 and again in 2016, the growth is not expected to be as strong as in 2014. Since mid-2014, the price of crude oil has fallen about 50%, which has slowed production in marginal drilling areas and focused investment in the more developed areas of tight oil plays.
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Annual crude oil production is expected to grow at a slower rate, 8.1% this year and 1.5% next year, according to EIA's latest Short-Term Energy Outlook (STEO). The slowdown in growth is more evident when looking at production between December 2014 and December 2015, which is forecast to rise by just 200,000 bbl/d.
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Oil Price Drop Special Coverage
Oil extends losses over Iran supply fears Reuters + NeewBase
Oil futures extended losses on Tuesday, as Iran and six world powers ramped up the pace of negotiations to reach a preliminary deal that could ease sanctions and allow more Iranian crude onto world markets. With a deadline less than 24 hours away, United States, Britain, France, Germany, Russia and China were trying to break an impasse in negotiations aimed at stopping Iran from having the capacity to develop a nuclear bomb, in exchange for an easing of international sanctions. Officials said talks on a framework accord, which is intended as a prelude to a comprehensive agreement by the end of June, could yet fall apart over disagreements on enrichment research and the pace of lifting sanctions. "Iran has built up significant oil inventories and could immediately increase exports if sanctions are lifted," analysts at ANZ said in a note. Shipping sources say Iran is storing at least 30 million barrels of oil on its fleet of supertankers, as Western sanctions keep a lid on sales.
Brent oil was 35 cents lower at $55.94 a barrel by 0244 GMT. The contract had settled down 12 cents on Monday. US crude was down 56 cents at $48.12 a barrel, after closing 19 cents lower. A stronger US dollar also weighed on oil prices. A firm greenback makes dollar-denominated commodities costlier for holders of other currencies.
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IRAN OIL PRODUCTION Iran could increase oil production by some 500,000 barrel a per day (bpd) in three to six months if sanctions are removed, and by an additional 700,000 bpd within another year, according to estimates by Facts Global Energy. "Iran will be very reluctant to accept a lower quota given that it has given up so much production due to sanctions," the consultancy said in a note. Hedge funds, however, increased their bets on rising Brent prices last week to their highest since July 2014, exchange data showed. This was probably due to spread plays between the North Sea contract and its US rival, traders said. Short positions in US crude have risen to a record high as traders bet record crude stocks in the United States will keep it under pressure relative to Brent. US commercial crude oil stocks are likely to have risen by 4.2 million barrels last week to a record high for a 12th week, a preliminary Reuters poll showed ahead of weekly data by the American Petroleum Institute later in the day.
Oil market weighs Yemen vs Iran risks
The world oil market has been rattled in the past week by regional political developments, although prices have been pulled sharply in different directions as perceptions of their likely impact has shifted. Benchmark North Sea Brent surged 7 per cent in the middle of last week, closing at US$59.19 a barrel on Thursday, as the civil war in Yemen became a full-blown proxy war between Iranian-backed Houthi rebels and the government of Abdrabbu Mansour Hadi, backed by a Saudi Arabian-led coalition of countries including the UAE.
The coalition bombed rebel positions, while at the weekend its leaders at an Arab League summit in Sharm El Sheikh called for a joint Arab military force to deal with the regional threats.
For the oil market, however, the ratcheting up of regional conflict was balanced by apparent progress toward a deal between Iran and international negotiators over its nuclear ambitions. This development could lead to a lifting of sanctions that have kept about 700,000 barrels per day of Iranian oil off the markets for the past four years.
The movement on talks over Iran plus further bearish news in the United States, where oil inventories reached a new record last week, helped to push oil prices down by 5 per cent on Friday, to leave Brent at $56.41. Prices continued to fall yesterday, with Brent down 62 cents at $55.79 late in the day UAE time.
“I think it is a pretty big downward risk to the market more than anything,” said Tom Pugh, a commodities analyst at Capital Economics. “I can’t see Yemen escalating too much,” he added. “Iran doesn’t want to do anything that would put the talks in jeopardy.” After the initial surge, the oil market seemed to concur that more Iranian oil supply was the bigger risk.
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NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
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Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010
Khaled Al Awadi is a UAE National with a total of 25 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed great
experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally , via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
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