new base 825 special 07 april 2016

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NewBase 07 April 2016 - Issue No. 825 Edited & Produced by: Khaled Al Awadi

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UAE: Masdar reaffirms that renewables are here to

stay at New York summit

(WAM) – "Despite low oil prices, the trend toward lower-cost renewable energy will continue in the Middle East and North Africa (MENA) region as business confidence grows in the sector’s potential and countries adopt increasingly favourable regulations," said Bader Al Lamki, Executive Director of Masdar Clean Energy.

Al Lamki comments came during Masdar’s participation in the Bloomberg New Energy Finance "The Future of Energy Summit." The two-day summit, themed ‘The Age of Plenty, the Age of Competition,’ saw over 2000 executives and thought leaders discuss the opportunities and challenges in the energy industry and the current trends that are reshaping the energy-mix across all four corners of the world.

The conference comes on the back of a record year for the

renewable energy industry, which saw over USD 330bn

invested globally.

This year’s summit included a keynote

speech delivered by US Secretary of State John Kerry. In his remarks, Kerry

highlighted how the UAE is committed to diversifying its energy use and "in particular increasing renewable energy in fuel mix at unprecedented rates."

As part of Masdar’s participation at the summit, Al Lamki spoke on the plenary session "After Paris: How will things be different?" to discuss the momentum after Paris climate negotiations in December 2015. The event touched on many of the themes that were debated during Global




Action Day, the first global event post-COP 21 held during Abu Dhabi Sustainability Week in January.

Al Lamki said, "In 2015 we took a big step forward, not least with the way that both the public and private sphere came together for the Paris climate change meetings. The economic and business case for renewables is there, which was in part led by organisations such as Masdar pushing smart collaboration and partnership models."

Al Lamki pointed to the Zayed Future Energy Prize for evidence of how businesses and other organisations can help governments reach the targets set at COP21 and in the UN’s Sustainable Development Goals by providing clean, affordable energy. The prize has been empowering innovators in Africa to develop solutions in clean energy that transform the lives of hard to reach, off-grid communities – improving health, creating jobs and boosting economic growth in the process.

Joining Al Lamki on the COP 21 panel were Delphine Eyraud, Senior Policy Advisor, Climate Negotiations COP 21 Presidency, French Ministry of Environment; Zia Khan, VP for Initiatives and Strategy, the Rockefeller Foundation; and Jeff McDermott, Managing Partner, Greentech Capital Advisors. Moderating the panel was Michael Liebreich, Founder and Advisory Board member of BNEF and Chair of the Advisory Board of WiSER (Women in Sustainability, Environment and Renewable Energy), a UAE-founded initiative between Masdar and the Zayed Future Energy Prize.

Al Lamki further reinforced the potential for growth in the renewables industry across MENA during a Masdar-convened event "Wind and Solar in the Middle East and North Africa." He discussed how the region has experienced record levels of clean energy investment in 2015. Solar investment alone grew from about USD 160 million in 2010 to about USD 3.5 billion in 2015 according to the MESIA Outlook Report 2016.

During the course of the event, panelists and leading experts in their field discussed how wind and solar are becoming increasingly viable and competitive as forms of energy. This surge has been driven by a cost effective investment environment and regulations that are providing the confidence for alignment between businesses and those shaping policy.

Mr Al Lamki continued "The market in the MENA region is maturing, and this is leading to greater business

opportunities. Masdar has been at the forefront of this trend, driving the development and commercialisation of renewable energy and sustainable technologies across the globe."

Masdar has been at the forefront of the UAE’s efforts to deploy clean energy at home and abroad, while driving sustainable economic growth, employment, innovation and prosperity. Masdar has nearly 1.5 GW of renewable energy projects either in operation or under development globally. The portfolio of projects underlines the operational excellence at the heart of Masdar’s experience in the renewable energy industry




Kuwait: Qatargas in four-year deal to supply LNG to Kuwait Gulf Times

Qatargas 2 and Kuwait Petroleum Corporation (KPC) have executed an agreement to supply half a million tonnes of liquefied natural gas (LNG) to Kuwait over the next four years, from March 2016.

The LNG will be sourced from Qatargas 2, a joint venture among Qatar Petroleum, ExxonMobil and Total which started production in 2009, and will be delivered onboard Q-Flex LNG Vessels, chartered by Qatargas, to KPC’s Mina al-Ahmadi LNG receiving terminal in Kuwait.

Saad Sherida al-Kaabi, Qatargas chairman, said, “The agreement con solidates the position of Qatargas as the LNG partner in the GCC region and the Middle East, and enhances its established global position.”

Al-Kaabi said, “the conclusion of this agreement cements the positive and mutually beneficial trade relations between the Qatari and Kuwaiti energy sectors, and enhances the position of Qatar as a safe and reliable supplier of clean energy to all corners of the world.”

On the agreement, Qatargas chief executive officer Sheikh Khalid bin Khalifa al-Thani said, “The signing of this agreement with KPC is another significant step in demonstrating Qatargas’ capability to reliably and efficiently lead the supply of LNG to the Middle Eastern emerging energy markets. This deal demonstrates the eagerness to strengthen and expand our relationship, and Qatargas’ readiness to meet KPC’s future demand for LNG.”

Kuwait’s LNG delivery season typically would start from March and extend to November of each year to meet the growing demand for power during peak summer months. Qatargas has been supplying Kuwait with the majority of its LNG requirements for the past five years through both direct sales to KPC and through third parties who have made deals with both Qatargas and KPC.

As for other Middle Eastern markets, Qatargas has been supplying LNG to Dubai since 2008 and has delivered a commissioning cargo to Jordan in May last year.

THE LNG TERMINAL OF MINA AL-AHMADI IN KUWAIT




Egypt: EGPC, EGAS, BP Sign Development of Atoll Discovery Egypt oil portal + Ministry of Petroleum, Egypt

The Egyptian General Petroleum Corporation (EGPC), the Egyptian Natural Gas Holding Company (EGAS), and BP signed agreements on Tuesday regarding transportation and processing of natural gas, according to a press release by Egypt’s petroleum ministry. The agreements cover areas of construction, transportation and processing of gas produced from

Atoll field in offshore Damietta concession. An investment of $1 billion is envisioned for this phase of development. Total $3 billion will be allocated towards full development of the discovery.

Petroleum minister Tareq Al-Mulla witnessed the signing of deals. Al Mulla stressed the depth of strategic relations binding Egypt's petroleum sector with its foreign partners is based on credibility and mutual trust and that the ongoing coordination and consultation between both

parties aim at overcoming any obstacles facing work progress and developing discovered fields. The minister also reviewed the development plan and hoped for early production at the Atoll

discovery. The Atoll discovery (BP 100 percent) in the North Damietta offshore concession in the East Nile Delta, offshore Egypt was announced in March 2015. According to BP, full field development of Atoll is expected to consist of two phases. The first phase will consist of two development wells tied back to existing

infrastructure, with production expected to start up in 2018. Success of this first phase is expected to trigger additional investment and further wells to increase production.

Development of Atoll will be executed and operated by Pharaonic Petroleum Co. (PhPC), BP’s joint venture with EGAS and Eni.




Denmark issues 16 oil and gas licences Source: Reuters Denmark on Wednesday issued 16 oil and gas exploration licences in the North Sea, just days after A.P. Moller-Maersk threatened to shut down the country's main gas field. The licences were awarded to Danish and international players including Dong Energy, Hess Denmark, Wintershall Noordzee, Nordsofonden and Edison International, Denmark's Ministry of Energy, Utilities and Climate said.

'With the low oil prices we currently are experiencing it is a great result,' Energy Minister Lars Chr. Lilleholt said in the statement.

The oil subsidiary of Maersk, which was not among the winning bidders, said this week it will shut the Tyra gas field in October 2018 if it cannot find a solution by the end of this year to make the ageing site profitable in the long term.

Denmark's tax proceeds from the North Sea have fallen from 36 billion Danish crowns ($5.5 bln) in 2008. In December the government said it expected tax revenues from oil and gas of just 4 billion crowns this year, but that was based on an oil price of almost $50 per barrel, well above the current $38.60 level for Brent.

Other winners in the biding round for the North Sea exploration licences were PA Resources, Ardent Oil, Dana Petroleum, Danoil Exploration, DEA Deutsche Erdoel, Dyas and Hansa Hydrocarbons, the ministry said.




Norway: OMV announces successful drilling and testing of the Wisting Central II appraisal well, offshore Norway..Source: OMV

OMV has successfully completed drilling and testing of theWisting Central II appraisal well. The horizontal well was drilled in the Wisting field in the Barents Sea, about 310 km north of Hammerfest. The Wisting field is the northernmost oil discovery in Norway. Wisting Central II is the fifth well in the production license PL537, which was awarded in the 20th licensing round in 2009.

The well objectives were to confirm the potential of the discovery by proving the presence of hydrocarbons in the undrilled Wisting Central South and Central West segments, and to prove the technical concept of long-reach horizontal wells in a shallow reservoir, about 250 meters below seabed. The possibility to drill such wells is needed to establish the basis for a viable development of the Wisting discovery. A well test was performed and flow rates reached just above 5,000 boe/d.

The well results are expected to provide an increase of in-place volumes in the Central South and Central West segments, and further reduce the overall uncertainty of contingent resources in PL537.

The Wisting Central II well is the first horizontal appraisal well in the Barents Sea and sets a new drilling record; it is the shallowest horizontal offshore well drilled from a floating drilling facility. Water depth at Wisting is 402 meters. The well started vertically and was successfully steered into a horizontal orientation within a 250 meters depth interval. The total well length is 2,354 meters and the horizontal section measures 1,402 meters. Advanced data collection and geo-steering was conducted through the entire horizontal phase.

The well was spudded on January 15, 2016, by the semisubmersible rig Transocean Spitsbergen. The well test was finalized end of March and the well will now be permanently plugged and abandoned.

'OMV is very satisfied with the well test results, which are promising. This well is an important milestone towards a future field development on Wisting' said Johann Pleininger, OMV Executive Board member responsible for Upstream. OMV (Norge) as operator has 25% share in the PL537 license. Joint venture partners are Petoro (20%), Idemitsu (20%), Tullow(20%) and Statoil (15%).




UK: Coryton oil storage terminal opens in UK as glut grows Source: Reuters The Thames Oil port terminal near London opened on Wednesday after nearly four years of development, at a time when a global oil glut and a collapse in fuel prices are making storage an attractive investment. A first tanker, the Seaconger, carrying 21,000 tonnes of diesel was discharging at the terminal, built on the site of the Coryton refinery whose owner Petroplus went bankrupt in 2012, operatorGreenergy said.

The terminal is due to be filled to its current capacity of 176,000 cubic metres with fuel, predominantly to serve the London region and southeast England, Thames Oilport said in a statement.

Thames Oilport is operated and partly owned by Britain's largest oil storage company, Greenergy, while Royal Dutch Shell owns a third.

The companies plan to add 64,000 cubic metres of capacity by the end of September this year and while the terminal will initially be used to hold diesel, other fuels will be added.

'Significant progress has been made over recent months, both on site and in the planning process, and we now have a route map to turn Thames Oilport into a fully-fledged import terminal,' Greenergy Chief Executive Andrew Owens said.




US: Gas Drillers Go Rigless as Price Collapse Heralds Austerity Era Blooomberg - Christine Buurma

Explorers have idled drilling equipment at historic rates -- a drop in prices has resulted in the fewest rigs in at least three decades searching for new output. Southwestern Energy Co., the third-largest U.S. gas producer, has stopped drilling altogether, while Chesapeake Energy Corp. has no rigs in the gas-rich U.S. East, down from an average of about 13 in 2014.

It’s part of a broader cost-cutting effort as companies aim to weather the downswing, betting that a price recovery will begin this year. While some unfinished wells can be used to keep up output, the industry is facing a sharp drop in future production without new drilling investment. The lack of exploration is particularly troublesome given that output from gas wells tends to decline sharply from initial production rates.

“Companies that do absolutely nothing are going to lose a quarter of their production this year,” said Neal Dingmann, managing director for equity research at SunTrust Robinson Humphrey Inc. in Houston. “How is that going to look for them in 2017?”

Rigless drillers are the companies hardest-hit by the crash in oil and gas prices. They borrowed heavily at the height of the shale boom to snap up assets, only to see futures tumble. Since October 2014, when Southwestern agreed to buy wells and drilling rights from Chesapeake for $5.4 billion, gas prices have dropped almost 50 percent to below $2 per million British thermal units. Oil is down 54 percent.

Gordon Pennoyer, a spokesman for Chesapeake, and Christina Fowler, a spokeswoman for Southwestern, declined to comment. Drilling has plunged in the Marcellus formation in the eastern U.S., the country’s biggest shale gas region. While production costs there are among the lowest, a shortage of pipeline capacity has trapped supplies there, sending prices plummeting.




Producers need gas prices to rebound and fast. Credit rating downgrades to junk status mean these companies will have limited access to bank financing, and loan agreements reached before the plunge are set to expire. Southwestern, which plans to curtail spending by 80 percent this year, has more than $1.7 billion of debt coming due in 2018. ‘Leverage Metrics’

“They’ve all gotten annihilated, and there’s going to be a lot of companies that end up in bankruptcy," said Gabriele Sorbara, an analyst at Topeka Capital Markets Inc. in New York. “It all comes down to leverage metrics at the end of the day."

So far, a sustained energy rally has proven elusive. Producers have become more efficient at using a technique known as hydraulic fracturing to extract gas from deeply buried rock formations, prolonging a supply glut. Output reached a fifth annual record last year, even as the number of rigs drilling for the fuel dropped to the lowest in data going back to 1987. There are now 88 gas rigs in the U.S., down from more than 1,600 in 2008.

“It’s hard to believe how low it is,” David Beard, managing principal at Coker & Palmer Inc. in Sag Harbor, New York, said of the rig count. “Nobody really wants to drill at $2 gas.” Some Options

Rigless drillers do have a few options to shore up their balance sheets. Some are eyeing asset sales to help pay down debt, with Chesapeake announcing in February that it plans to offload another $500 million to $1 billion in properties this year. Cash-starved companies are also turning to private equity for funding, and some producers may be acquisition targets.

Another factor delaying a rebound is the “fracklog.” While the rig count is down, the number of wells waiting to be hydraulically fractured has grown as producers wait for prices to climb. That means output can expand even as explorers cut back on drilling, limiting price gains.

There are 3,870 idled oil and gas wells in the U.S., data from Bloomberg Intelligence show.“These drilled but uncompleted wells do give producers a little bit of a buffer,” said Dingmann of SunTrust. “It buys them some time.”




NewBase 07 April 2016 Khaled Al Awadi

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

Oil prices up on US inventory draw, but traders warn on premature rally

Crude futures were lifted by a raft of supportive indicators in early trading on Thursday, although some traders warned that physical supply and demand fundamentals did not warrant a strong price recovery at this stage.

International Brent futures traded above $40 per barrel in early trading and stood at $40.07 at 0038 GMT, up 23 cents from the last close and almost 8 percent above lows reached earlier this week.

Front month U.S. West Texas Intermediate (WTI) crude futures were trading at $38.09 per barrel, up 34 cents from their last close and 8 percent above their April lows. U.S. crude prices were supported by an unexpected fall in crude inventories, albeit from all-time record highs, last week as refineries continued to hike output and imports fell.

"Oil prices spiked after the EIA data release," ANZ bank said in a morning note on Thursday.

U.S. crude inventories fell 4.9 million barrels in the week to April 1, compared with analysts' expectations for an increase of 3.2 million barrels, according to data from the Energy Information Administration on Wednesday.

In Europe, North Sea oil field maintenance expected next month lent support to Brent futures, which are priced off North Sea supplies. And on the demand side, manufacturing seems to be recovering from recent weakness, analysts said.

Oil price special

coverage




"Global manufacturing PMIs (Purchasing Managers' Index) saw their strongest MoM (month-on-month) recovery in two and half years in March, according to our calculations," Macquarie bank said.

Yet some traders warned that the rise in futures prices might be premature and not supported by physical market fundamentals.

A planned meeting of major oil producers on April 17 to freeze output around current levels, which in most cases remains at or near record highs, would do little to reduce an overhang in production with at least a million barrels of crude pumped every day in excess of demand.

"Absent a tightening in global oil fundamentals we reiterate our recommendation to go long put spread," BNP Paribas said. A put is a financial instrument that gives a trader the option right to sell an asset like crude futures.




NewBase Special Coverage

News Agencies News Release 07 April 2016

Wind and Solar Are Crushing Fossil Fuel Bloomberg - Tom Randall

Wind and solar have grown seemingly unstoppable. While two years of crashing prices for oil, natural gas, and coal triggered dramatic downsizing in those industries, renewables have been thriving. Clean energy investment broke new records in 2015 and is now seeing twice as much global funding as fossil fuels.

One reason is that renewable energy is becoming ever cheaper to produce. Recent solar and wind auctions in Mexico and Morocco ended with winning bids from companies that promised to produce electricity at the cheapest rate, from any source, anywhere in the world, said Michael Liebreich, chairman of the advisory board for Bloomberg New Energy Finance (BNEF).

"We're in a low-cost-of-oil environment for the foreseeable future," Liebreich said during his keynote address at the BNEF Summit in New York on Tuesday. "Did that stop renewable energy investment? Not at all."

Here's what's shaping power markets, in six charts from BNEF:

Renewables are beating fossil fuels 2 to 1

Investment in Power Capacity, 2008-2015 Government subsidies have helped wind and solar get a foothold in global power markets, but economies of scale are the true driver of falling prices: The cost of solar power has fallen to 1/150th of its level in the 1970s, while the total amount of installed solar has soared 115,000-fold.




As solar prices fall, installations boom

The reason solar-power generation will increasingly dominate: It’s a technology, not a fuel. As such, efficiency increases and prices fall as time goes on. What's more, the price of batteries to store solar power when the sun isn't shining is falling in a similarly stunning arc. Just since 2000, the amount of global electricity produced by solar power has doubled seven times over. Even wind power, which was already established, doubled four times over the same period. For the first time, the two forms of renewable energy are beginning to compete head-to-head on price and annual investment.

An industry that keeps doubling in size

Renewables’ share of power generation. Scale is shown in doublings.




Meanwhile, fossil fuels have been getting killed by falling prices and, more recently, declining investment. It started with coal—it used to be that lower prices increased demand for fossil fuels, but coal prices apparently can't fall fast enough.

Richer OECD (Organisation for Economic Co-operation and Development) countries have been reducing demand for almost a decade. In China, coal power has also flattened. Only developing countries with rapidly expanding energy demands are still adding coal, though at a slowing rate.

Coal phases out in wealthier countries first

What does that look like on a country-level basis? The world's first coal superpower, the U.K., now produces less power from coal than it has since at least 1850.

Canary in the coal mine: U.K.




More recently it's the oil and gas industry that's been under attack. Prices have tumbled and investments have started drying up. The number of oil rigs active in the U.S. fell last month to the lowest since records began in the 1940s. Producers—from tiny frontier drillers to massive petrol-producing nation-states—are creeping ever closer to insolvency.

"What we're talking about is miscalculation of risk," said BNEF's Liebreich. "We're talking about a business model that is predicated on never-ending growth, a business model that is predicated on being able to find unlimited supplies of capital."

The chart below shows independent oil producers and their ability to pay their debt.1 The pink quadrant at the bottom right represents the greatest threat to a company's solvency. By 2015, that quadrant starts to fill up, and Liebreich warned, "It's going to get uglier."

U.S. oil patch heads to the insolvency zone

Oil and gas woes are driven less by renewables than by a mismatch of too much supply and too little demand. But with renewable energy expanding at record rates and with more efficient cars—including all-electric vehicles—siphoning off oil profits at the margins, the fossil-fuel insolvency zone is only going to get more crowded, according to BNEF. Natural gas will still be needed for when the sun isn't shining and the wind isn't blowing, but even that will change as utility-scale batteries grow cheaper.

The best minds in energy keep underestimating what solar and wind can do. Since 2000, the International Energy Agency has raised its long-term solar forecast 14 times and its wind forecast five times. Every time global wind power doubles, there's a 19 percent drop in cost, according to BNEF, and every time solar poer doubles, costs fall 24 percent.

And while BNEF says the shift to renewable energy isn't happening fast enough to avoid the catastrophic legacy of fossil-fuel dependence—climate change—it's definitely happening.




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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

Mobile: +97150-4822502 [email protected] [email protected]

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 07 April 2016 K. Al Awadi

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