new base 751 special 20 december 2015r

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NewBase 20 December 2015 - Issue No. 751 Edited & Produced by: Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE

Oman: Orpic inks pacts for $4.5 bn Liwa Plastics Industries Complex Oman Observer

Orpic (Oman Oil Refineries and Petroleum Industries Company SAOC) celebrated the signing of more than 15 agreements to build, operate and finance the Liwa Plastic Industries Complex on Thursday.

Present at the signing ceremony of one of Oman's largest projects financed in the downstream oil and gas industry were government ministers, under-secretaries, members of the Majlis Addawla and Majlis Ash'shura, Orpic's Board of Directors, other high ranking officials and several members of the local community of Sohar and Liwa.

The formal agreements were signed by Sultan bin Salim al Habsi, Chairman and Musab al Mahrouqi, CEO, of Orpic respectively, with senior officials of awarded companies. Moreover, more than 20 local and international bank and financial institutions and export credit agency committed to provide $3.8 billion. In attendance were senior executives of leading export Credit Agencies, banking institutions and contractors. Orpic awarded the following four contracts for Engineering, Procurement and Contracting (EPC) packages worth $4.5 billion linked to the Liwa Plastics Industries Complex (LPIC) Project: EPC 1 (Steam Cracker and Utilities): CB&I and CTCI Corporation Joint Venture EPC 2 (Plastics units): Technimont SpA EPC 3 (NGL Extraction): GS Engineering and Construction and Mitsui & Co Ltd Joint Venture EPC 4 (NGL Pipeline): Punj Lloyd Ltd In his opening speech, Sultan bin Salim al Habsi, Chairman, Orpic, stated, "This project will enhance the In-Country Value of products and will provide the necessary materials to grow a downstream sector in the Sultanate, with a focus on the plastics industry. LPIC will also enhance the contribution of the industrial sector towards domestic production to 9 per cent by 2020 and will create more than 13,000 new employment opportunities for Omanis."




Musab al Mahrouqi, CEO, Orpic, explained that the successful proponents were selected due to the strength of their technical and financial bids. He said, "Today marks an important milestone in the history for Orpic and LPIC with the signing of the EPC contracts and finance agreements to cover majority of the finance required for this project. We are confident that once plant commissioning is completed in 2019, LPIC will change Orpic's product mix by extracting more value from natural gas and crude oil. Being located in Sohar as part of an integrated complex that houses also Sohar Refinery, Aromatics Plant, Polypropylene and Steam Cracker Unit for LPIC, Orpic operations will be one of the most integrated refinery and petrochemical operations in the world and will enable the company to extract the maximum value from Oman's oil and gas." Al Mahrouqi further added, "Market support and confidence in LPIC has been overwhelming -- from the investment support we have received from financial institutions, to the interest we received from EPC contractors which reflects the trust that different stakeholders put on this project and the solid reputation that Orpic enjoys." LPIC plays a strategically important role in the integration of Orpic's refinery and petrochemical operations. LPIC will enable Orpic to utilise the existing products of the refineries and Aromatic plant which are currently being exported as feedstock for LPIC in addition to Natural Gas Liquids leading to producing high value products that will help Orpic double its profits," Al Mahrouqi concluded. LPIC is one of three strategic growth projects being delivered by Orpic namely Sohar Refinery Improvement Project (SRIP), Muscat-Sohar Pipeline (MSPP) and Al Jifnain Terminal. These projects will cement Orpic's position as a market leader in Oman, the Middle East and the international oil and gas sector.




Oman: Kuwaiti firms scoop Duqm Port infrastructure packages Oman Observer By Conrad Prabhu

Multi-million dollar contracts have been awarded to two Kuwait-based construction firms for the implementation of a pair of key infrastructure packages linked to the development of Port of Duqm on Oman’s Wusta coast.

Kuwaiti contractor United Gulf Construction Company (UGCC) has been selected to undertake Investment Package 3 (IP3), covering the construction of a network of roads, commercial pre-gates and customs gate houses, inspection zone, and a number of administrative and utility buildings at Oman’s newest maritime gateway. Separately, the Muscat subsidiary of Kuwait-based Combined Group Contracting Company has scooped Investment Package 4 (IP4), covering the construction of roads, infrastructure and buildings at the Government Berths Area within the port. Both contracts, each valued in the tens of millions of dollars, were awarded by the Special Economic Zone (SEZ) Authority at Duqm (SEZAD), which is overseeing the tendering and procurement of all contracts and services linked to the establishment of a mega industrial and economic hub at Duqm. IP3 and IP4 are part of a raft of Investment Packages that are being progressively taken in hand for implementation in the development of a world-class seaport anchoring the Duqm SEZ. As the selected contractor for the IP3 package, UGCC will construct an array of buildings that will serve as the nerve centre of Port of Duqm’s operations. The most notable is a complex of gate houses with in-gate and out-gate booths where freight flowing into and out of the seaport is inspected by the Customs authorities.




There will also be dedicated buildings housing the One-Stop Station, quarantine zones for agriculture and farm products, medical facility operated by the Ministry of Health, and various utilities. A pair of helipads will be built as well.

Infrastructure and utilities make up a sizable component of the package, with the contractor required to build networks for potable water, storm water, sewerage collection and treatment, electricity supply, telecommunications, high mast lighting and fencing.

Established in the late 1970s, UGCC’s area of expertise covers building construction, civil infrastructure, roads and landscaping. In recent years, the company has expanded its geographical footprint, having launched operations in Libya, India and Oman. UGCC is a wholly owned subsidiary of Al Jeeran Holding Company (JHC), a public company listed on the Kuwait Stock Exchange.

Fellow Kuwaiti firm Combined Group Contracting Company (CGCC) is making its maiden foray into Oman with the IP4 contract award. As part of its brief, the contractor will execute the infrastructure facilities envisaged as part of the establishment of a dedicated jetty earmarked exclusively for vessels belonging to various government agencies, including the Royal Oman Police Coast Guard, Sultan’s Armed Forces, Royal Yacht, and National Ferries Company.

Established in 1965, Combined Group Contracting Company is a publicly traded share holding company in Kuwait with branches, subsidiaries and operations in across 14 countries in the Middle East and Asia.




Algeria to Boost 2016 Oil Output, Offer Rights Amid Global Glut Bloomberg - Salah Slimani

Algeria’s state oil producer Sonatrach Group plans to raise crude output by 5 percent next year and offer energy-exploration rights to foreign companies by the end of March, steps that may add barrels to an oversupplied global market.

Algeria, Africa’s biggest natural-gas producer, is seeking to attract international companies to an auction of rights to develop oil and gas fields, including those with hard-to-reach tight deposits, Salah Mekmouche, Sonatrach vice president of exploration and production, said in an interview in Algiers.

State petroleum regulator Alnaft will organize the bidding round, taking into consideration feedback from foreign companies to improve on the results of the country’s last auction in 2014, he said. “We hope that oil prices will rise by then as this will increase the interest of companies in

the bidding round even more,” Mekmouche said.

Sonatrach has struggled to raise production in the aftermath of a corruption probe at the company and an al-Qaeda terrorist attack in 2013 at In Amenas, a gas field that the state company operates with BP Plc and Statoil ASA. Algeria’s oil output has remained at about 1.1 million barrels a day for the last two years. Brent crude has tumbled 35 percent in 2015 amid a worldwide supply glut and was trading at $37.27 a barrel in London at 7:37 a.m. local time. Company Restructured

“We will end the year 2015 with about the same level of output as last year,” Mekmouche said. “For 2016, we expect an increase in production by at least 5 percent compared with 2015,” he said, declining to give figures.

Algeria’s production rose 4.4 percent in 2014 to 200 million metric tons of oil equivalent, the state news agency APS reported in February, citing energy ministry data. Royal Dutch Shell Plc and Repsol SA won licenses in a September 2014 energy auction that awarded rights to only 4 of 31 offered areas. Algeria pumped 1.1 million barrels a day in November, ranking ninth for output among members of the Organization of Petroleum Exporting Countries, data compiled by Bloomberg show.

Sonatrach has reduced costs and spending and curtailed investment as a result of lower oil prices, Mekmouche said. The company has restructured since Amine Mazouzi became chief executive officer in May and delegated greater decision-making powers to its managers, he said.

Sonatrach’s top three priorities are exploring for oil and gas in areas near existing production facilities, raising output through the use of new technology and overcoming delays to deliver projects on time, Mekmouche said. The company’s upstream unit has changed its name to Exploration & Production and will be in charge of dealing with international companies, he said.




Libya peace agreement won’t be enough to restore oil output Bloomberg + NewBase

Libya’s United-Nations-brokered peace deal may help calm deepening political turmoil, but the North African nation will struggle to restore oil production to levels reached before the Arab Spring five years ago.

Output in the country with Africa’s largest oil reserves has slumped almost 80% since Muammar Gaddafi was toppled. Representatives from the two rival factions that emerged after a 2011 rebellion ended the dictator’s 42-year rule - an Islamist- backed government in Tripoli and an internationally recognized administration operating out of the east - signed a peace deal on Thursday, paving the way for shuttered oil fields and export terminals to be reopened.

While a lasting peace deal would allow the North African country to ramp up its output from below 400,000 bpd last month, the threat from Islamic State in the oil-producing Sirte region means the




situation may get worse in the short term, according to Richard Mallinson, a London-based geopolitical analyst at Energy Aspects Ltd. “There’s no immediate signs that it’s opening up oil facilities,” he said by phone. “The risk is that this expansion of Islamic state into the Sirte basin and some of the producing fields there is a bigger risk than production coming back.”

Italy’s Eni is the biggest international oil investor in the warn-torn country and days before the peace deal was brokered, chief executive officer Claudio Descalzi said his company was talking to all the players in the country. With offshore operations sheltered from the conflict, Eni’s Libyan production, which consists mainly of gas, has increased by about 15% to 300,000 barrels of oil equivalent a day since 2011.

Wintershall Holding GmbH, which operates eight onshore oil fields in the eastern Sirte basin, said it will take “time and patience” for Libya to find stability. “The recent signing of the Libyan political agreement is an important step towards restoring peace and stability for the Libyan people,” Stefan Leunig, a spokesman for Wintershall, said in an e-mail.

The company said onshore production has been halted several times since the summer of 2013 at the request of Libya’s national oil company. Wintershall was forced to suspend oil exports from the As-Sarah field last month because the Zueitina terminal was unable to load cargoes.

“It’s still quite a long way before you can go from an agreement between the two rival governments to a Libyan industry which gets back to full capacity,” Paul Horsnell, head of commodities research at Standard Chartered, said by phone. “There are still splits within the regional governments, there are still insurgent groups within there as well.”

While other attempts to reach a peace deal have failed, the situation might be different this time around as world powers agree on the need to counter the spread of Islamic State, according to Energy Aspects’s Mallinson.

“The renewed willingness of the international community to engage with the people who actually have power on the ground is more likely to break the deadlock,” he said. Italy is drawing up plans to lead a military coalition that would seek to stabilise Libya but have no combat role, according to two Italian officials with knowledge of the matter.

Any additional Libyan output would feed a glut that has seen oil prices slump by more than 65% since June last year, and even the prospect of production coming back could spark further declines, Mallinson said. Still, for now, the outlook for Libyan output is little changed, said Standard Chartered’s Horsnell.

“Does it change an expectation of Libya’s average production for next year? Probably not yet,” he said, adding that if output averaged 500,000 barrels, it would be a “very good outcome compared to where they are at the moment




Turkey: Valeura Energy Reports Two Gas Wells in Thrace Basin Valeura Energy + NewBase

Canada-based Valeura Energy has announced encouraging results from its two gas well in Turkey. The company will commence completion and testing operations on its initial two exploration wells Bati Gurgen-1 and Yayli-1 on its 100% owned and operated Banarli licences in the Thrace Basin of Turkey.

“In anticipation of further positive results, equipment procurement, pipeline right of way agreements and the finalization of gas marketing arrangements have continued to advance targeting first gas sales from Banarli by the end of January 2016. The Energy Market Regulatory Authority in Turkey has also granted the Corporation's Turkish affiliate a natural gas wholesale marketing licence to facilitate sales from Banarli,” the company said in a statement published Thursday.

Valeura will provide further operational update will be provided in early January. The estimated final cost of $5.5 million for this initial two well exploration drilling, completion, testing and tie-in program at Banarli is being fully funded from cash on hand and operating cash flow, the company said, The Bati Gurgen-1 exploration well was spudded on November 10, 2015. The completion and flow testing program for the well commenced on December 9 and will initially include further cased-hole evaluation of the tight gas potential in the Mezardere formation followed by the main completion of shallower, conventional stacked sands in the Osmancik formation.

The Yayli-1 exploration well was spudded on December 1, 2015. Completion and testing of the well is expected to commence in early January following release of the service rig from the Bati Gurgen-1 well.




Indonesia seeking more investors for its energy sector Gulf Times - By Arno Maierbrugger

As Indonesia re-joined the Organisation of Petroleum Exporting Countries (Opec) this month, the nation continues to lure foreign investors for its oil and gas industry, particularly from the Middle East where Saudi Arabia and Iran are currently showing most of the interest.

However, not just oil and gas are on the table, but also investments into other energy sectors such as coal and geothermal, as well as in power plants and energy infrastructure.

Saudi Arabia, top Opec producer and a country which defines Opec policies to a large extent, has already announced its plans to invest in Indonesia and is currently taking part in an open tender held by Indonesia’s state-owned oil and gas company Pertamina for the development of a greenfield refinery project in East Java.

The bidding started after another deal between Saudi Aramco and Pertamina was closed to jointly upgrade the capacity of the country’s existing, largest refinery in Central Java with an estimated investment of $5.5bn.

This collaboration would also include an agreement that would enable Saudi Aramco to export its crude oil to the refinery. In the refinery projects, the Saudis ousted Kuwait after Indonesia broke off talks over building two refineries with Kuwait Petroleum as a partner in 2014 due to a disagreement over taxes and fiscal terms.

Iran, in turn, is also interested in setting up joint ventures with private national firms to build refinery capacity, but Indonesia wants to offer investors more wide-ranging cooperation in the electricity sector. According to Energy and Mineral Resources Minister Sudirman Said, discussions could start “as soon as the international sanctions are being lifted from Iran.”




Another player in the Indonesian hydrocarbon and energy market could be Qatar. As reported by Gulf Times on December 8, Indonesia’s ambassador to Qatar, Deddy Saiful Hadi, invited companies like Qatar Petroleum or RasGas to explore and develop potential oil or natural gas fields under a production contract sharing scheme.

In any case, it makes sense for Opec members to invest in Indonesia from a long-term perspective. The country’s demand for energy is growing fast as its economy is in a sustainable upswing and an expanding industry and growing middle class are getting increasingly power-hungry.

Indonesia’s oil demand is now 1.6mn barrels per day while only around half of that is produced domestically. Adding to that, refinery developments have been delayed in the past because they were considered unprofitable and foreign oil and gas firms have been hesitant to invest in the country, deterred by an uncertain business environment, lack of legal certainty, too much bureaucracy and embezzlement scandals involving senior energy officials.

As a result of falling domestic production, Indonesia was forced to turn to expensive imports of oil and petroleum products to meet domestic demand which makes it now, ironically, the only Opec member being happy about low oil prices.

But the current government of President Joko Widodo is working hard to revive the ailing energy sector which still suffers from mismanagement and corruption. In the largest step to get things going, Indonesia will now offer 21 oil and gas blocks through an open tender in 2016.

However, it is important to note that investors in Indonesia’s energy sector also need to be ready to take certain risks they might not face elsewhere. At times, oil exploration and other energy projects in parts of Indonesia can be very challenging due to extreme topography and inadequate supporting infrastructure, which normally requires more investment and time to finalise individual projects.




UK: Arenite Petroleum grows acreage portfolio and natural gas inventory with the award of two blocks in the UK 14th Onshore Licensing Round. Source: Arenite Petroleum

Arenite Petroleum has provisionally been awarded a new licence covering two onshore blocks in the UK 14th Onshore Licensing Round, as announced by the Energy Minister on 17th December 2015. The new licence is located in North Yorkshire and covers National Grid blocks SE99a & TA09 to the north-west of Scarborough. This new licence is a strategic add to the Company’s asset base, in an area the company has targeted during previous offshore licence rounds.

Arenite was awarded the adjacent offshore Block 41/24 in the Cleveland Basin on the 27th July 2015. Arenite acts as technical operator for this Promote Licence in a 50%:50% joint venture with Europa Oil and Gas.

Arenite recognises that advances in drilling and well completion technologies could unlock the gas from the reservoir section encountered in the Cloughton-1 exploration well, drilled by Bow Valley in 1986 and could produce gas at commercial flow rates. The 4,000ft thick interval of interbedded Namurian organic-rich gas-mature shales and tight 10-70ft thick naturally fractured sandstones are proven in the well and previously flowed gas, albeit at non-commercial flow rates, some 29 years ago.

Mike Cooper, CEO, commented:

'Since the company’s formation in early 2014 we have been targeting the award of this acreage as we recognise huge reserves potential with proven gas and condensate in Triassic, Zechstein & Carboniferous strata on this onshore and the adjacent offshore acreage.

Arenite identified the opportunity and operated the licence application on behalf of a consortium, alongside Europa Oil & Gas & Shale Petroleum. This bidding group subsequently joined forces with Third Energy, Egdon Resources and Petrochor to further strengthen the licence application.

From the outset we recognised the need to align with established onshore E&P companies whilst bringing the learnings from North American operating companies. We are delighted Third Energy are the operator as they have a proven track record of undertaking UK drilling and production operations with a safe and environmentally-responsible track record.

Now that the company has the assets we high-graded over the last two years through two licence round awards (offshore and then onshore) the Company will shortly be seeking the backing of new investors looking to be a part of Arenite’s growth story'.

Gas has been discovered in three separate horizons within Arenite’s Cleveland Basin licence blocks.

Onshore: Blocks SE99a & TA09

The onshore Carboniferous gas discovery was proven by the Cloughton-1 well drilled by Bow Valley (1986). This discovery pre-dates the first producing Carboniferous gasfield in the Southern North Sea and a lot has been learned of these strata in the last 30 years. Indeed the O&G industry has developed numerous technologies to extract gas from tight low porosity sandstone formations such as those found in the Carboniferous. With over twenty stacked gas-bearing sands ranging in thickness from 10 to 70+ feet, over a 4,000+ foot thick sand & shale interbedded interval, there is potential for a commercial development, once a commercial flow rate is established.




Offshore: Block 41/24

The Maxwell gasfield was discovered in Permian Zechstein carbonates by Total with the drilling of offshore well 41/24a-1 in 1969. Two follow-up appraisal wells (41/24a-2 Total, 1981 and 41/24-3 Conoco, 1992) were drilled into this fractured Zechstein carbonate reservoir. The maximum flow rate achieved on test was 34 million cubic feet of gas per day and 1280 barrels of condensate per day. A new fault-compartmentalised interpretation of the reservoir based on reprocessed seismic coupled with advances in drilling and completion techniques in the last 23 years point to potential gas reserves which Arenite hope to confirm with an appraisal well, following a successful farmout process.

Well 41/24-3 also encountered nitrogen-rich heavy-gas in the Triassic Bunter Sandstone. New seismic will be required to delineate this accumulation and there may be potential synergies with fertiliser producers in the Cleveland area. Further appraisal drilling will be required to test the feasibility of commercialising the Bunter gas accumulation. All future wells targeting deeper Zechstein & Carboniferous gas would penetrate the shallower Bunter interval.

The composition of the onshore Joint Venture is: Third Energy UK Gas Limited 20.0% (Operator); Egdon Resources U.K. Limited 15.0%; Petrochor Energy UK Limited 15.0%; Europa Oil & Gas Limited 17.5%; Shale Petroleum (UK) Limited 17.5%; Arenite Petroleum Limited 5.0%.




Nigeria: Shell could face 'tens of billions in damages' over spills Court rules Royal Dutch Shell can be held liable for oil spills at its subsidiary in Nigeria By Reuters

A Dutch appeals court has ruled that Royal Dutch Shell can be held liable for oil spills at its subsidiary in Nigeria, potentially opening the way for other compensation claims against the multinational. Judges in The Hague ordered Shell to make available to the court documents that might shed light on the cause of the oil spills and whether leading managers were aware of them.

A lower Dutch court in 2013 had found that Shell's Dutch-based parent company could not be held liable for leakages of oil at its Nigerian subsidiary. The legal dispute dates back to 2008 when four Nigerian farmers and campaign group Friends of the Earth filed suit against the oil company in the Netherlands, where its global headquarters is based.

"Shell can be taken to court in the Netherlands for the effects of the oil spills," the court ruling stated. "Shell is also ordered to provide access to documents that could shed more light on the cause of the leaks." The case will continue to be heard in March 2016.

Judge Hans van der Klooster said the court had also found that it "has jurisdiction in the case against Shell and its subsidiary in Nigeria". Shell's Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Ltd (SPDC), said: "We are disappointed the Dutch court has determined it should assume international jurisdiction over SPDC.

"We believe allegations concerning Nigerian plaintiffs in dispute with a Nigerian company, over issues which took place within Nigeria, should be heard in Nigeria." Shell has always blamed sabotage for the leaks, which under Nigerian law would mean it is not liable to pay compensation. But the Dutch court said: "It is too early to assume that the leaks were caused by sabotage."

In January 2013, the district court in The Hague ruled that one of the farmers in the original suit was eligible for compensation from Shell's Nigerian division for spills on his land in the Niger Delta, the heart of the country's oil industry.

Friends of the Earth Netherlands director Geert Ritsema said Friday's ruling meant the three other farmers could proceed with claims for compensation for lost income resulting from spills. "There are 6,000km of Shell pipelines and thousands of people living along them in the Niger Delta," he said. "Other people in Nigeria can bring cases and that could be tens of billions of euros in damages."

In a separate case, Shell agreed in January to pay £55m in an out-of-court compensation for two oil spills in Nigeria in 2008 after agreeing a settlement with the affected community in the Delta.




NewBase 20 December - 2015 Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE

Oil ends down for third week as U.S. rig count rises Reuters + Newbse

Oil prices fell about half a percent on Friday after the U.S. oil rig count unexpectedly rose for the first time in five weeks, pressuring a market already at seven-year lows.

Global oil benchmark Brent and U.S. crude's West Texas Intermediate (WTI) futures settled down for a third straight week. With two weeks to the year-end, both were slated to finish 2015 down about 35 percent on a rout driven by oil oversupplies.

Despite the severity of the decline, data from oil services company Baker Hughes Inc showed U.S. energy firms added to the number of oil rigs in operation this week, indicating more supply to come. The closely watched report showed 17 new rigs that brought the total to 541.

"The rig count increase was a bit of a surprise," said Peter Donovan, broker at Liquidity Energy in New York. "I don't think it was a coincidence that the market fell after the report."

WTI hit $34.29 a barrel, the lowest since February 2009, after the release of the Baker Hughes' report. It settled the day down 22 cents, or 0.6 percent, at $34.73. For the week, WTI lost 2.5 percent.

Brent LCOc1 finished the session down 18 cents, or 0.5 percent, at $36.88. Its session low was $36.41, just 21 cents above a 2004 bottom. Brent lost 3 percent on the week. Some oil bears said they were actually counting on a price rebound that would let them make a bigger profit selling the market down.

"I'm quietly waiting for a bigger covering bounce that will presage the next leg lower in WTI," said Tariq Zahir, a trader in crude oil spreads at New York's Tyche Capital Advisors who was betting on a price of $30 or lower.

Hedge fund manager Pierre Andurand estimated $25 or less by first quarter.

Some did not think the higher rig count would have much impact on prices."Rig activity still remains at very depressed levels and a slight uptick in the data point isn't going to change that," said Chris Jarvis of oil consultancy Caprock Risk Management in Frederick,

Oil price special

coverage




NewBase Special Coverage

News Agencies News Release 20 Dec.. 2015

IMF seeks tax regime overhaul in GCC The Peninsula

The International Monetary Fund (IMF), in its latest round of discussions with the GCC’s finance ministers and central bank governors in Doha, has stressed the need to revive their strategies for reform of domestic taxation system. Tax reforms can help put in place modern and efficient tax systems that will increase revenue collections from the non-oil economy while also enabling the streamlining or elimination of the inefficient fees and duties currently in place. As well as raising revenues in line with, the countries need to address current fiscal pressures. These reforms will also begin to put in place the tax system that will be needed to ensure government service provision when hydrocarbon resources are depleted, a policy document released by the Fund the other day as a follow up to the annual meeting of ministers of finance and central bank governors held in Doha last month, said.

Raising more from domestic taxes and relying less on oil revenues will enhance the GCC governments’ accountability to the population given the more direct link that will be established between revenues and service provision. The Fund suggested GCC countries could choose a combination of modern tax options to meet their revenue needs. These include: a low rate broad-based VAT together with selected excises, a tax on profits of incorporated and unincorporated enterprises, and a recurrent property tax. A combination of these taxes can ensure efficient and progressive tax systems in the region. Taxes should start at low rates with limited exemptions. Such a system will be easier to administer and will have little or no efficiency costs to the economy.




Tax reforms will take time to implement as the institutional capacity needs to be developed. Efforts will require communication strategies at the national and regional levels to explain why taxation is needed and important with the aim to overcome ongoing scepticism about the usefulness of establishing modern taxation systems in oil-rich countries. With regard to the VAT, the Fund noted it is important that the GCC countries announce the broad principles of the VAT framework they have agreed. Individual countries should then move forward with designing their own VAT law. International experience suggests it will take 18-24 months to introduce a VAT once agreement has been reached. Rather, individual countries should move ahead with their own reforms and implementation strategies when ready, and this may provide a demonstration effect to other countries. The choice of the VAT threshold is crucial for the successful introduction of VAT. The simple rule of thumb is that the largest 10 percent of tax payers account for about 90 percent of total tax payments. The Fund advised the region to limit exemptions to the extent possible to basic social services and hard to tax outputs such as financial services. Experience shows that support for granting exemptions begins to wane only after a few years of VAT implementation. From the outset, countries have a tendency to grant exemptions across different sectors on grounds of efficiency, equity, or difficulty in identifying the taxable base. These exemptions generally lead to increasingly adverse effects.




EIA’s newly designed coal web pages provide easier access to coal data Source: U.S. Energy Information Administration

The U.S. Energy Information Administration (EIA) redesigned the weekly Coal Production report and combined two price reports into a single Coal Markets product to improve access to EIA's coal data. Users can now access weekly coal production and prices and new monthly export data from a single place.

Prices. Contract prices for four coal futures and options are available based on data from the New York Mercantile Exchange (Nymex). Prices represent an agreed-upon price for coal delivered in the next quarter for a specified quantity, quality (including heat content and sulfur content), and transportation.

Although delivery mode is specified, prices are free-on-board (FOB) at the rail or barge origin point. Weekly commodity spot price data are available for the five major U.S. coal production areas. Quality characteristics including heat content and sulfur are specified, as those characteristics affect the value of coal to consumers. Prices are FOB origin, indicating ownership and liability transfer to the seller before the coals are transported. Therefore, spot prices don't include transportation, insurance, or taxes. Prices are also shown on a dollar per million British thermal unit ($/MMBtu) basis.

Production. The redesigned product also includes weekly coal production estimates at a national, regional, and state level. Coal production data are available quarterly from the Mine Safety and Health Administration (MSHA), an agency of the U.S. Department of Labor. EIA uses quarterly data from MSHA, combined with Association of American Railroad weekly coal car loadings data, to estimate state, regional, and national weekly coal production. EIA publishes original and revised estimates as quarterly data are released.

Exports. New from EIA are monthly exports of coal and coke. They are shown in physical quantities (short tons). Quarterly and annual detailed trade data showing export destinations and average prices are also available in the Coal Data Browser.

Information provided in these new products complements existing data tools such as EIA's Coal Data Browser, which provides information on aggregate production by coal mine, mine-level data, and other coal mining series.




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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

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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.

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NewBase 20 December 2015 K. Al Awadi

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