newbase 648 special 15 july 2015

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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NewBase 15 July 2015 - Issue No. 648 Senior Editor Eng. Khaled Al Awadi

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

UAE President Khalifa congratulates Iranian President on nuclear agreement

(WAM) -- President His Highness Sheikh Khalifa bin Zayed Al Nahyan has sent a cable to President Hassan Rouhani of the Islamic Republic of Iran, congratulating him on the historic nuclear agreement signed today in Vienna between Iran and the P5+1 group. Sheikh khalifa expressed the hope that the agreement will contribute to regional security and stability.

Vice President and Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, and His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, sent similar cables to the Iranian President.

Iran nuclear deal to turn new page for regional ties, says UAE source:

The nuclear deal with Iran could provide a true opportunity for a new chapter in regional relations and the Iranian role in the region, a UAE official source has said.

"Iran could play a (significant) role in the region if it revises its policy and stops interfering in the internal affairs of countries like Iraq, Syria, Lebanon and Yemen," the official told Agence France Presse (AFP) today.

"The new direction we hope to see accompanying the historic nuclear deal would be for Iran to demonstrate a genuine desire to help extinguish fires devouring the region," the official said. "This would move the region away from the discord of sectarianism, extremism and terrorism," added the official.

President His Highness Sheikh Khalifa bin Zayed Al Nahyan




Saudi Electricity seeks multi-billion-dollar loan Saudi Gazette

Saudi Electricity Co (SEC), the Gulf's largest utility firm, is in talks with local and international banks to raise a multi-billion-dollar loan, according to two sources aware of the matter. The offering, which one source said could be worth between $3 billion and $5 billion in total, will be

split between a dollar-denominated portion and a riyal-denominated tranche, the sources said, speaking on condition of anonymity as the information is not public. The riyal-denominated tranche is expected to be worth around SR5 billion ($1.33 billion), the first source said, adding the transaction would have a three-year lifespan but with an option to extend the maturity beyond that point. "The company is trying to mop up cash it can get at a good price point from the market. They are exploring all options available in the debt market," the first source said. SEC did not respond to emails and calls by Reuters. Chief Executive Ziyad Al-Shiha told Reuters in May the firm was looking for investment opportunities to offset financial pressures on its core electricity business. In April, the company said its net loss for the first quarter of the year more than doubled to 1.94 billion riyals ($517 million). However, SEC's earnings performance fluctuates wildly between seasons, with heavy air-conditioner usage in the summer months driving up demand. Analysts at HSBC and NCB Capital forecast SEC will make a profit of SR2.64 billion and SR1.26 billion respectively in the second quarter. The first source said both portions of the loan would be structured as revolving credit facilities, giving SEC the flexibility to opt when it wants to withdraw the cash. Saudi Arabia’s population has grown from 4 million in 1960 to almost 30 million in 2014. It is is the main electricity producer and consumer in the Gulf states, with 272 billion kWh gross production in 2012 – 150 TWh from oil and 121 TWh from gas. Energy use for electricity and heat production including desalination in 2011 was 28,783 PJ, 57% of it from oil.




It consumes over one-quarter of its oil production, and while energy demand is projected to increase substantially, oil production is not. Generating capacity is over 30 GWe. Demand is growing 8% per year and peak demand is expected to be 70 GWe by 2020 and 120 GWe by 2032. The Ministry of Water & Electricity plans to install 24 GWe of renewable capacity by 2020, and 50 GWe by 2032. The Ministry has plans to install 24 GWe of renewable capacity by 2020, and 50 GWe by 2032, and is looking at the prospects of exporting up to 10 GWe of this to Italy or Spain during winter when much generating capacity is under-utilized (cooling accounts for over half the capacity in summer). The 50 GWe in 2032 was to comprise 25 GWe CSP, 16 GWe solar PV, 4 GWe geothermal and waste (together supplying 150-190 TWh, 23-30% of power), complementing 18 GWe nuclear (supplying 131 TWh/yr, 20% of power), and supplemented by 60.5 GWe hydrocarbon capacity which would be little used (c10 GWe) for half the year. The nuclear target date has now been put back to 2040.




Iran No Qatar Even With the World’s Second-Biggest Gas Reserves Bloomberg

Natural gas made Qatar’s citizens the richest in the world within a generation. Even with bigger fuel reserves, Iran will struggle to follow its neighbor’s path.

Iran’s own production is consumed by a population of 78 million and an oil industry that injects gas into fields to boost productivity. Qatar, with a population of 2.3 million, now ranks second only to Russia in gas exports, generating about $86 billion last year.

While Iran and world powers Tuesday reached a nuclear deal after almost two years of talks that would ease sanctions and allow more investment, the government in Tehran is contending with domestic gas demand that is doubling every decade. Iran holds 18 percent of the world’s gas and yet accounts for less than 1 percent of trade.

“They have a huge domestic demand,” Jonathan Stern, head of the natural gas program at Oxford Institute of Energy Studies, wrote in an e-mail July 2. “To keep up with this demand, production has to rise at a faster rate.”

Will Iran Overwhelm Gas Export Markets?

Iran has consistently been a net importer of gas for a decade and the development of South Pars, part of the world’s biggest gas field, will probably take longer than expected, according to Moses Rahnama, an analyst at Energy Aspects in London. A “noticeable” increase in output will take at least three years, he said.

The revenue from exporting gas would be lower than what the country gets from injecting the fuel to maintain pressure at oil fields and from feeding its petrochemical industry, Stern said.




Gas accounted for less than 4 percent of Iranian export earnings in 2010, compared with 78 percent for crude and condensates, according to data from the Energy Information Administration.

Wood Mackenzie Ltd. says domestic gas consumption will reach 190 billion cubic meters (6.7 trillion cubic feet) in 2025, from 150 billion in 2015.

Can Iran Help Europe Diversify Supplies?

Iran needs to build gas export pipelines and will probably only be able to increase shipments west of Turkey in the late 2020s, said Stephen O’Rourke, research director for global gas at Wood Mackenzie. About 90 percent of Iran’s exports now go to Turkey.

Iran has planned deals to send gas to Oman, Iraq and Pakistan, reducing the potential for significant volumes for Europe, Chatham House said in a March report.

Will Iran Add to the Global LNG Glut?

Iran doesn’t produce liquefied natural gas and the terminal it is building is only 50 percent complete. The nation had planned to produce its first LNG in 2010. While the project is likely to resume after sanctions are lifted, it probably won’t start before 2018, Rahnama said.

Will Foreign Energy Companies Invest in Iran?

The suspension of sanctions could take several months, said Jamie Ingram, a country risk analyst at IHS Inc. Those imposed by the European Union are likely to go first while some of the U.S. restrictions may not be removed until 2016-17, he said.

Asian energy companies will probably enter Iran first, followed by European ones, Ingram said.

What Will it Cost?

Iran needs $100 billion to rebuild its gas industry, and seeks to boost daily production to 1.2 billion cubic meters in five years, from 800 million now, says Azizollah Ramazani, international affairs director at National Iranian Gas Co.




India : BPCL to invest $4 bn in partly Oman owned Bina oil refinery Written by Oman Observer + NewBase

July 14: Bharat Petroleum Corporation Limited (BPCL), India’s second biggest state refiner, plans to invest around $4 billion in the expansion of Bharat Oman Oil Refineries (BORL), a massive refinery complex located at Bina in the central Indian state of Madhya Pradesh.

Oman Oil Company (OOC), the wholly Omani government owned energy and strategic investment entity, has a 26 per cent stake in BORL, a joint venture that includes BPCL, with a 49 per cent stake, and a number of Indian financial institutions (aggregating 25 per cent).

Indian media quoted BPCL’s Chairman and Managing Director, S Varadarajan, as saying the energy giant will initially invest Rs 3,500 crore (approximately 550 million) in boosting the capacity of the Bina plant from the current 6 million tonnes to 7.8 million tonnes annually by 2018.

A further investment of Rs 18,000-20,000 crore is envisaged in the next phase of its expansion, aimed at raising capacity to 15 million tonnes in the next 5-6 years, Varadarajan said. For the moment, Oman Oil Company (OOC) has no plans to participate in the expansion, he noted.

BPCL also operates a 12 million tonnes a year refinery at Mumbai and 9.5 million tonnes Kochi unit. It also has majority stakes in the 3 million tonnes Numaligarh refinery in Assam. He said BPCL is expanding and upgrading its Kochi refinery in Kerala to process high sulphur crudes by 2016.

Crude grades with a high sulphur content are cheaper, and refineries that have installed speciality secondary units to process them can lower feed costs and increase their margins, said the Press Trust of India (PTI) in a report.




Greece says it receives three bids for deep sea oil and gas drilling Source: Reuters + NewBase

Greece said on Tuesday that it had received three bids for deep sea oil and gas drilling in the west of the

country and south of the island of Crete, the latest phase of an ambitious attempt to develop untapped oil

potential. The names of the bidders will not be disclosed until tender documents are unsealed, the Energy

Ministry said.

Greece, which clinched a deal with its

international creditors on Monday to avoid

bankruptcy, has made several fruitless

attempts over the last 50 years to find big

oil and gas reserves. Its debt crisis

prompted the country to step up those

efforts to boost revenue.

It invited investors last year to bid for test

drilling in 20 offshore blocks stretching

over more than 200,000 sq kms in the

Ionian Sea and south of Crete. In March

this year the new left-wing government

extended the deadline for the submission of

bids by two months to July 14 in an effort

to attract more interest in the tender. In

April it invited Chinese oil firms to bid for

the tender and has also said that it expected

Russian companies to show interest.

The fact that three bids were submitted was a 'positive step, taking into account difficult conditions

presently prevailing in the oil and gas market', the Energy Ministry said. 'It is assessed as a positive step in

the country's attempts to utilise its subsea wealth,' it said.

The plan was code-named 'Greece MegaProject' by Petroleum Geo-Services, the Oslo-based firm which

conducted seismic tests.

Athens has already awarded the first

drilling licences for three onshore and

offshore blocks in western Greece last year

to Hellenic Petroleum - in a venture with

Italy's Edison and Ireland's Petroceltic -

and the country's sole oil producer

Energean Oil & Gas, which is 45 percent

owned by hedge fund Third Point.

Hellenic Petroleum and Energean were

also the only two Greek firms which bid

for onshore test drilling in western Greece

in February.




Vietnam: Petrovietnam boosts cooperation with Murphy Oil and ExxonMobil. Source: vietnamnet

The Viet Nam National Oil and Gas Group (Petrovietnam) and Murphy Oil Corp signed a memorandum

of understanding (MoU) on July 8 to boost cooperation in oil and gas projects. The MoU was signed

by Petrovietnam Chairman Nguyen Xuan Son and the President and CEO of Murphy Oil Corp,

Roger W. Jenkins, in the presence of General

Secretary Nguyen Phu Trong, who is on a visit to the

United States.

Murphy has financial potential, expertise and the

technology for exploring, surveying and exploiting oil

and gas, especially in new areas and on deep-sea sites.

The corporation sees the Vietnamese market as an area

with long-term development potential and values

Petrovietnam as a dynamic and effective partner. It is

especially interested in participating in the development

of the Block B gas project, the Malay-Tho Chu basin in

Viet Nam and a number of blocks in Cuu Long basin.

The corporation has invited Petrovietnam to take part in its projects in Mexico Bay.

Son and his entourage also met the Vice Chairman of ExxonMobil for the Asia-Pacific region, Raymond E.

Jones, and other senior officials at the Washington Hilton on the same day. During the meeting, Jones

greatly appreciated Petrovietnam’s efforts, along with ExxonMobil, to advance the Ca Voi Xanh (Blue

Whale) project, located off the coast of Viet Nam. He spoke of the project’s progress so far and about

preparations to draw up plans for the gas field in future.

Son affirmed that a cooperation agreement and contracts signed with ExxonMobil would be implemented

with the aim of the two companies sharing and creating the most favourable conditions to develop together.

He urged ExxonMobil to use advanced technologies to exploit the gas field in the most effective way,

minimising spending and lowering costs. He said the two

sides should work together to find answers to issues such as

gas consumption, the price of gas and commercial

conditions. It is necessary to take the initiative to find gas

consumers who can use the gas most economically, he said.

Petrovietnam would ask the Vietnamese Government to

find ways to build gas-fired power plants in the central

region, as well as draw up policies to help gas consumers

develop their operations in the region, he said. It would also

propose investment incentives to develop the project, he

added.

In 2013, an agreement on the Ca Voi Xanh platform

development project was signed between the two

companies in Washington D.C., with the aim of creating a

schedule, a strategy and an overall plan for the project. The

project is scheduled to begin supplying gas and power by 2021.




Oil Price Drop Special Coverage

Oil prices edge up after yesterday’s drop as Iranian exports to take time to ramp up post-deal. REUTERS + NEWBASE

Oil prices rose on Wednesday as traders expect a delay in Iranian crude supplies returning to the market after Tehran and six world powers reached a nuclear compromise, but analysts said prices would still remain low due to oversupply.

Under the agreement, sanctions imposed by the United States, the European Union and the United Nations are to be lifted in exchange for curbs on Iran's nuclear programme. Iran's huge oil reserves will take years to return to their potential, analysts said.

"New oil will not flow from Iran until 2016 and there will probably be less of it than optimists predict," said Richard Nephew, Program Director for Economic Statecraft, Sanctions and Energy Markets at the U.S. Center on Global Energy Policy. "I estimate 300,000 – 500,000 new barrels of oil on the market within 6-12 months after a deal begins to be implemented," he said.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC) has some of the world's biggest oil reserves. It exported almost 3 million barrels per day (bpd) of crude at its peak, before Western sanctions over its alleged ambitions to build a nuclear bomb saw shipments collapse to about a million bpd over the last 2-1/2 years.

Because of the expected delay of Iranian oil returning to the market, Barclays said that its impact would put pressure on forward oil prices for delivery in 2016 or later. In the prompt market, front-month U.S. crude futures CLc1 were trading at $53.23 per barrel at 0054 GMT, up 19 cents from their last settlement. Front-month Brent crude LCOc1 was up 16 cents at $58.67 a barrel.

Despite the price rises, analysts said that the general outlook for oil markets was for low prices.

"Given the current macroeconomic environment and unbalanced fundamentals we have revised our central oil prices down once again," investment bank Natixis said. "For Brent we expect 2015Q3 and 2015Q4 to average $60/barrel and $59/barrel respectively and 2016Q1 to average $57/barrel. Average for 2015 and 2016 will be $59.2/barrel and $62.3/barrel respectively."




Big volume of Iran oil unlikely to hit markets in 2015 despite nuke deal Aygun Badalova is Trend Agency’s

The nuclear deal that has been reached today between Iran and the West should, eventually, allow Iranian oil exports to return to their previous levels, however there is unlikely to be much additional Iranian oil hitting the market this year, Tom Pugh from Capital Economics believes.

“Once sanctions have been lifted there could well be a surge in exports in the first few months as Iran sells its stores of oil, but ramping production up to previous levels is likely to take considerably longer,” Pugh said in a report obtained by Trend.

Iran and the P5+1 have reached a nuclear deal after more than a decade of on-off negotiation, granting Tehran sanctions relief in exchange for curbs on its nuclear program.

The agreement aims to limit Iran's nuclear work for more than a decade in exchange for the gradual suspension of sanctions that have slashed Iran 's oil exports and crippled its economy.

Capital Economics’ analyst mentioned in the report that Iranian oil production has fallen dramatically since the imposition of the latest round of sanctions in early 2012. Once sanctions have been lifted, the Iranian authorities assert that the country could double exports within two months. This would be an increase of over 1 million barrels per day (bpd) to an already oversupplied market, the report said.

“Indeed, Iran has considerable quantities of crude oil in storage, both on land and at sea, which could be sold as soon as sanctions are lifted. But little is known about how large these stockpiles actually are - estimates range from 7 million to 35 million barrels,” Pugh said.

Iran’s plans to increase production to 4 million bpd within about three months are likely to prove too ambitious, according to the economist. He said many of the country’s oil fields are aging and will require a significant amount of time and money to bring back into full production.

Without a marked increase in production it will prove extremely difficult to maintain higher exports beyond a few months, even if stockpiles prove to be at the higher end of estimates, Pugh believes.




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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.

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

NewBase 15 July 2015 K. Al Awadi

newbase 648 special 15 july 2015

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