new base 980 special 28 december 2016 energy news

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 28 December 2016 - Issue No. 980 Senior Editor Eng. Khaled Al Awadi

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

Saudi Arabia said to mull further rises in retail fuel prices http://www.arabianbusiness.com/saudi-arabia-said-mull-further-rises-in-retail-fuel-prices-in-2017-657208.html

Rise in domestic fuel prices is expected to be announced before the end of the year amid oil price crunch. Saudi Arabia is reportedly mulling plans to raise retail gasoline and diesel prices in 2017 for the second year in a row.

The rise in domestic fuel prices is expected to be announced before the end of the year, Bloomberg reported citing a source close to the matter.

It added that the Saudi government is looking into either linking local fuel prices to benchmark oil prices or to the average of gasoline and diesel fuel prices on the international market.

Bloomberg said media officials at the energy ministry in Riyadh weren’t immediately available for comment

The fuel plan comes as Saudi Arabia's 2017 state budget is likely to show Riyadh has shrunk a huge deficit caused by cheap oil faster than expected.

This year has been one of the most painful for the Saudi economy in decades. Growth slowed sharply and speculators bet against the Saudi currency as the government fought to curb a deficit that totalled a record SR367 billion ($98 billion) in 2015.

Saudi Arabia last year took the unprecedented step of reducing fuel subsidies and raising retail gasoline prices by about 50 percent.

On December 28, 2015, Saudi Arabia announced that it raised retail gasoline prices while also increasing diesel, natural gas, ethane, diesel, kerosene, electricity and water prices as part of the government’s five-year plan to reduce subsidies.




UAE an active key player in shaping the future through accelerators, innovation, says DEWA CEO

(WAM) -- The UAE is an active key player in shaping the future through accelerators, innovation and adoption of scientific and modern technologies, said Saeed Mohammed Al Tayer, CEO and Managing Director of Dubai Electricity and Water Authority, DEWA.

''The UAE’s leaders give high priority to efforts to anticipate and shape the future,'' he said in his keynote speech on Tuesday at the Dubai Future Accelerators workshop, organised by Dubai Government Excellence Programme.

"We are carrying out the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum to implement the objectives set by the Dubai Future Agenda and launch Dubai Future Foundation. The foundation will oversee the implementation of the Dubai Future Agenda to shape the future of the strategic sectors in the UAE, especially in Dubai.

DEWA is actively supporting the Dubai Future Agenda to establish the largest government accelerators in the world, and adheres to a clear and integrated strategy based on innovation and anticipating the future, and works to further implement new initiatives while continuously supporting research and development (R&D) to cope with rapid technological development,'' Al Tayer said.

''Our mission is to bring happiness to the society by adopting technological innovations, thus ensuring quality of life in Dubai and an enhanced, efficient, smooth and safe experience for citizens, residents and visitors. We appreciate the initiative of His Highness Sheikh Mohammed bin Rashid Al Maktoum to allocate AED1 billion to invest in Dubai Future Accelerators projects and companies.

This international initiative will advance R&D and entrepreneurship in the UAE’s key sectors. I would like to recall here the words of His Highness who once observed: Shaping the future and making it is no longer a theoretical concept but a key factor for countries to achieve competitiveness in the global arena," he added.




"By participating in the Government Accelerators, we work to achieve fast and tangible results that support our policies and programmes, and accelerate government services to advanced levels by adopting a mechanism that focusses on results through enabling joint government teams, and designing intensive programmes and implementing them in short periods of time, in addition to adopting innovative and leading approaches and methodologies.

Our work focusses on the Sustainable Environment and Infrastructure theme, which includes 11 indicators in the National Agenda of the UAE Vision 2021," he said.

Speaking about the importance of innovation, Al Tayer said, "We have incorporated innovation in DEWA’s vision and created strategic innovation to raise its importance as a theme to encompass 40 percent of the DEWA 2021 strategy.

We have developed a comprehensive strategy to drive organisational innovation and empower DEWA to achieve its vision to become a sustainable, innovative world-class utility. DEWA strives to implement the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum to keep up with the fast-paced developments brought forth by the Fourth Industrial Revolution, and enhance the government’s readiness to anticipate the rapid technological changes in the world.

''We do this by adopting new initiatives, strategies and technologies to promote DEWA’s leadership in implementing disruptive technologies to guarantee uninterrupted production, transmission and distribution of electricity and water, and provide world-class services to enhance quality of life for citizens and residents while promoting sustainability of resources," he explained.

"To support this ambitious national programme, DEWA signed Memorandums of Understanding, MoUs, and piloted projects with three start-ups that use advanced technologies based on artificial intelligence, and leverage solar energy and other technologies for experiments and research on energy consumption reduction and increased cooling efficiency, which are part of our scope of work," Al Tayer said.




''We strive to achieve the Dubai Clean Energy Strategy 2050 to diversify the energy mix, so that clean energy will generate seven percent of Dubai’s total power output by 2020, 25 percent by 2030 and 75 percent by 2050, to transform Dubai into a global hub for green economy and clean energy. This will make Dubai the city with the lowest carbon footprint in the world by 2050.

This supports our strategic vision, including building smart electricity and water networks. DEWA conducts research to study and develop models for smart grid technologies and systems, in addition to studying loads and monitoring energy consumption trends. The smart grids support our goal to reduce energy demand by 30 percent by 2030," he added.

"To achieve these goals, we adopt the best international practices in innovation and R&D in operating systems, mobile computing, cloud computing, virtualisation, distribution systems, software engineering, the Internet of Things, robots, Open Data and Big Data, customer behaviour study, renewable energy resources, energy storage technologies, infrastructure for electric vehicles, 3D printing and use of drones in the energy and water sectors," Al Tayer said in conclusion.




Kuwait diesel gensets market likely to grow The construction industry in Kuwait is booming with a series of new projects to be completed during the forecast period. As a result, demand for diesel gensets is likely to rise in the near future. Apart from being a reliable source for standby power, diesel gensets are also used to provide continuous power during working and completion of large construction projects. According to the ‘Government of Kuwait’s five-year development plan (2015–2020), several large-scale construction projects are to be completed during the forecast period. This development plan will majorly drive investments in the Kuwait diesel gensets market within the forecast period. The oil industry is the economic backbone of Kuwait and uninterrupted power supply is critical to ensure upstream and downstream operations can be carried out efficiently and without interruption. The price of diesel in Kuwait is also significantly low as compared to the global

average, thereby resulting in faster adoption of diesel fuel for the purpose of power generation. While smaller variants of diesel gensets are preferred for prime power purposes, higher capacity diesel gensets may also be utilized in large facilities for backup power. Though numerous power projects are in development stages, the country’s reliance on diesel gensets for power supply is likely to remain high until these are commissioned. The diesel gensets market in

Kuwait is categorized into two basic segments: rental diesel gensets and new diesel gensets. Rental gensets are majorly used during construction activities for continuous power generation. On the other hand, new diesel gensets are usually installed for back-up power generation during emergency situations. The construction and infrastructure industries in Kuwait are the major consumer segments for rental diesel gensets. With many public private partnership projects planned by the government of Kuwait, the market for rental diesel gensets is anticipated to grow at a substantial pace in the near future. The monthly rent for a genset generally encompasses various services including generator repairs, and filter and oil changes. Rental contracts are generally done on a monthly basis, and comprise numerous services. which trumps purchasing new generators owing to the convenience offered. Rental contracts significantly reduce the responsibilities of the contractor. For projects spanning durations well over five years, it might be justified to purchase a new genset upfront instead of renting. For government projects ranging between 15 to 20 years, the general preference is to purchase gensets rather than rent. Facilities such as large commercial complexes and hospitals purchase diesel gensets for backup power purposes. The Kuwait diesel gensets market is also segmented on the basis of capacity as: 0–75 kVA, 75–500 kVA, 500–2000 kVA, and above 2000 kVA. The 0–75 kVA segment of diesel gensets is the most lucrative one in the new diesel gensets market for Kuwait, in terms of units installed. This category of diesel gensets is preferred by both renters as well as purchasers of new diesel




gensets. The 0–75 kVA class of diesel gensets are also frequently used in commercial establishments such as malls, building complexes, and hospitals. The telecommunication industry is also a major consumer segment of this category of gensets. On the basis of revenue, the 500–2000 kVA class of diesel gensets is a major segment of the new diesel gensets market in Kuwait. The large petrochemical projects and port expansion projects to be constructed during the forecast period will further enhance investments in this class of diesel gensets. The rental market for diesel gensets in the over 2000 kVA category is non-existent. The over 2000 kVA market for diesel gensets in Kuwait exists only for new generator purchases. Large refineries complexes and other major establishments such as airports and commercial complexes are likely to be the primary consumers of this segment of diesel gensets. The Kuwait diesel gensets market is majorly dominated by the top five market players operating in this industry. The market share of the major players such as Caterpillar, Inc., FG Wilson, and Cummins, Inc. is based on the performance of their regional distribution companies. Though the rental gensets market in Kuwait accounts for the major market share in terms of revenue, all the major players do not have rental divisions. The distribution companies that have rental divisions enjoy an additional advantage over their rivals. Rapid development of the infrastructure sector in Kuwait is also attracting many Chinese and Indian companies to focus on the Kuwait diesel gensets market.




China could derail OPEC’s effort to balance oil markets this year Tom DiChristopher | @tdichristopher

OPEC's effort to balance an oversupplied oil market could have the unintended consequence of crimping crude demand from China, said Matt Smith, head of commodities research at shipment-tracking firm ClipperData.

Falling demand from China, the world's second largest oil consumer, would hurt OPEC's current strategy. The Organization of the Petroleum Exporting Countries, along with nonmembers, is cutting production in a bid to reduce huge stockpiles of oil that have built up during more than two years of weak oil prices.




But cutting production has boosted prices, and that could result in less strategic buying from China, according to Smith. "Emerging market demand, and specifically from China, has been really strong in 2016," he told CNBC's "Squawk Box" on Tuesday.

"However, they've been on these sort of bouts of bargain hunting and opportunistic purchases to essentially fill their stockpiles, their strategic reserves. And so, as prices rise, and as they've risen recently, we're likely to see less of that bargain hunting next year," he said.

Oil prices are up about 20 percent since OPEC — followed by other producers — reached a deal to reduce output. They rose on Tuesday as traders awaited the Jan. 1 start of OPEC's program to cut oil output.

The "Goldilocks scenario" for traders betting the deal will work is a high degree of compliance among OPEC members, Smith said. Members have a history of cheating their quotas.

If Chinese oil demand falls in the face of rising prices, it would make it harder to reduce crude inventories.

China's huge appetite for oil gives it tremendous power to dictate prices at a time when producers are trying to offset low prices by attracting more business. The Asian powerhouse has used its influence to play producers against one another in a race to the bottom this year, analysts told CNBC last month.

The effect can be seen in flows of oil to China from OPEC's three largest producers, Saudi Arabia, Iraq and Iran. The shipments have varied considerably from month to month as China seeks discounts from a wide range of oil exporters.

Tom DiChristopherEnergy Repor




NewBase 28 December - 2016 Khaled Al Awadi

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

Oil prices edge down ahead of OPEC, non-OPEC production cuts Oil prices edged down on Wednesday in quiet early Asian trading as the market waits to see how OPEC and non-OPEC members carry through on planned supply cuts in the new year.

International Brent crude futures were trading down 13 cents, or 0.2 percent, at $55.96 a barrel at 0312 GMT after closing the previous session up 93 cents. U.S. benchmark West Texas Intermediate crude oil prices were down 7 cents at $53.83 per barrel after settling up 88 cents at $53.90 a barrel in the previous session.

Trading is expected to remain thin this week ahead of the New Year holiday.

The market is taking a wait-and-see approach on the official start of the landmark deal reached by the Organization of the Petroleum Exporting Countries (OPEC) and several non-OPEC members to reduce their output. The deal is set to kick in from Jan. 1.

OPEC and non-OPEC producers are expected to lower production by almost 1.8 million barrels per day (bpd), with Saudi Arabia, OPEC's largest producer, agreeing to bear the lion's share of the cuts.

"There are mixed expectations of the cuts, trading is thin so the first two weeks of January would be critical to watch," said Michael McCarthy, chief market strategist at Sydney's CMC Markets.

Oil price special

coverage




"If there's any misstep or any indication of disagreement to (the deal), we would see crude prices dropping," he said.

In a sign that the world's oil major producers may abide by their agreement, OPEC member Venezuela said it will cut 95,000 bpd of oil production in the New Year.

Russian oil producer Gazprom Neft said it planned to boost oil output by 4.5 percent to 5 percent next year, less than it had intended before Russia, one of the non-OPEC member countries, joined a deal to reduce a global supply overhang.

Oil could reach $60 in '17 pushing market rebalancing Santhosh V. Perumal

Speculations are rife that oil price could reach $60 per barrel in 2017 and $70 in the subsequent year but price of more than $50 would trigger additional output from US shale producers, pushing market "rebalancing" to late 2017, according to a study.

According to the two output cut agreements within the Organisation of the Petroleum Exporting Countries (Opec) and with non-Opec members, a total of 1.8mn barrels per day (mbpd) of crude oil has been decided to be curtailed, starting next month.

"An oil price of over $50 would trigger additional output from US shale producers as seen in the past few weeks of rising rig count and would partly offset the expected impact of the Opec agreement," a Kamco research said, adding this would push market rebalancing to late 2017 as against more optimistic forecast from some agencies.

Opec had said that the oil market would not rebalance until the second half of 2017 as a result of a decline in oil inventories after the production agreement, but International Energy Agency’s (IEA) latest expectations were relatively more optimistic as it now expects a supply shortfall during the first half (H1) 2017.

Finding that crude oil price surged more than 17% since the end of November on optimism related to lower production, speculations are that oil price could reach $60 in 2017 and $70 in the




following year, Kamco, however said, "we see a price range of $55-65 over the next couple of years as opposite forces of shale vs Opec keep prices within this tight range."

Meanwhile, a strengthening US dollar had a "negative" impact on oil prices over the past few months, partly offsetting the optimism on the expected reduction in output, it said adding the Greenback reached a 14-year high level after the US Federal Reserve recently raised benchmark interest rates by 25 basis points.

A new record Opec output in November 2016 limited the oil price growth in December. Besides, the US shale output continues to rise in view of rising oil prices. US oil rig count is now close to 500, after it surged the most in 31 months and increased by 21 to a 10-month high level of 498, as per the latest weekly update from Baker Hughes. Nevertheless, rig count remains far away from historical high levels.

On the consumption front, IEA raised its oil demand forecast with it expecting oil demand growth of 1.4 mbpd for 2016.

For 2017, oil demand is expected to grow at a slightly lower pace of 1.15 mbpd, in line with Opec’s previous month’s expectations, and average at 95.56 mbpd. The growth would primarily come from Latin America and the Middle East as the economic growth improves, while in the Organisation for Economic Cooperation and Development, Americas is also expected to see higher oil demand partially offset by flat demand in Europe and a weakness in Asia Pacific.

Non-Opec supply expectations for 2016 was kept unchanged by the Opec and is expected to contract by 0.78 mbpd to reach year-end supply of 56.2 mbpd. On the other hand, supply growth expectations for 2017 is expected to grow by 0.3 mbpd to average at 56.5 mbpd.




NewBase Special Coverage

News Agencies News Release 28 Dec. 2016

Shale Specter Haunts OPEC as Oil Seen Rallying Into 2017 Bloomberg - by Grant Smith and Alex Longley

After pulling off the biggest oil-market deal in a decade, OPEC faces a new balancing act in 2017: boosting prices without igniting shale. The first shale boom spurred a global supply glut that started prices sliding in mid-2014, and was amplified that November by a pump-at-will OPEC strategy aimed at market dominance. During the ensuing rout, prices in New York fell from more than $100 a barrel to $26.05 in February, straining the budgets of companies and countries alike. Now, the Organization of Petroleum Exporting Countries has a new plan for 2017: Trim output, boost prices and better exploit the world’s most significant natural resource. With the cuts, prices could average $58 a barrel, according to the median of 24 analyst estimates compiled by Bloomberg. While that 29 percent gain on this year’s average will aid OPEC members, it could also spur U.S. drillers to add rigs. “OPEC is aiming for a much-needed lift to the oil price, given the stretched fiscal balance sheets of every producing nation,” said Ed Morse, head of commodities research at Citigroup. “The question really should be what happens afterwards -- how fast is U.S. shale going to come back?” At 8.8 million barrels a day, the U.S. is already pumping almost as much crude as two years ago, with just a third of the rigs it operated at the peak, data from Baker Hughes Inc. and the Energy Information Administration show. Since May, drillers have added about 200 rigs, taking advantage of rising prices as talk of an OPEC supply cut circulated.




With OPEC’s oil revenues slumping to $518 billion last year from $956 billion in 2014, the group may have had little choice on the cutbacks. Even Saudi Arabia, the group’s biggest producer, has found itself burning through billions in cash reserves, slashing public-sector wages and tapping bond markets to plug a budget deficit. The analysts predicting that Brent will average $58 a barrel next year expect $53 in the first quarter and $56 in the second. West Texas Intermediate will be about $1.40 cheaper than Brent in 2017, the estimates show. WTI traded at $53.12 at 12:08 p.m. Singapore time. Not Enough Even $58 oil wouldn’t eliminate budget deficits for eight OPEC members assessed recently by the International Monetary Fund. To erase their shortfalls, crude would need to average at least $62 in 2017, according to the IMF. With the cuts, “OPEC stands to gain a great deal, in terms of revenue enhancement,” said Jan Stuart, global energy economist at Credit Suisse Securities LLC in New York. Challenges remain. For one thing, compliance with the output agreement. The group’s members “tend to cheat,” former Saudi oil minister Ali Al-Naimi said in a Dec. 2 speech, before the agreement between OPEC and non-members was finalized. He also expressed skepticism that Russia, considered a wildcard during talks, would follow through on its promise to reduce its output by 300,000 barrels a day. "Will Russia cut?" Al-Naimi asked. "I don’t know. In the past, they didn’t." Internal Threat The biggest threat to OPEC’s plan could come from within. Nigeria and Libya got exemptions because conflicts in both countries damaged their output. If each nation reached its potential next year, then their additional barrels would almost wipe out the producer group’s supply cuts. Iran too didn’t have to make cuts from the same starting point as other OPEC countries. Several years of sanctions lowered its production and revenues from exports and the country argued that it needed the right to make up for that period. Another challenge could come from the dozens of U.S. drillers who survived the rout by becoming leaner and more efficient. After three years of turmoil, there are already signs of a rebirth in America’s shale fields as prices have risen and stabilized at around $50. If they jump by another $10, shale output that’s now at 4.5 million barrels a day could quickly rise by 500,000 barrels, Citigroup’s Morse wrote in a Dec. 22 research note. A bigger boost in prices could mean a million-barrel shale surge from the U.S., Macquarie Research analysts Vikas Dwivedi and Walt Chancellor noted in a Dec. 12 report to clients. That would all but obliterate the cuts OPEC agreed to in November. Companies such as Continental Resources Inc. and Whiting Petroleum Corp. have already been rewarded by investors, with Continental’s shares more than doubling this year and Whiting’s shares climbing by about 30 percent. U.S. producers are already buying hedging contracts locking




in higher prices for next year, according to the Macquarie note, giving them the financial flexibility to grow.

Still, OPEC could have some time to adjust, according to Mike Wittner, head of commodities research at Societe Generale SA in New York. As prices rise, costs may rebound as oilfield service companies seek to rebuild in better times. The result: OPEC’s biggest rivals could struggle to revive output quickly enough to disrupt the re-balancing of the oil market, according to Wittner. “It’s going to take them a while to gear up,” Wittner said. “The investment’s got to gather pace, the drillers and the fracking contractors also need time. It’s a gradual process.” Which suggests 2017 may not be the crunch time many expect. That could come in 2018, according to estimates from Oslo-based consultant Rystad Energy. While output including crude, condensate and natural gas liquids will increase by 93,000 barrels a day next year despite the promised cuts, it could jump by almost 10 times that in 2018, and then register similar rates growth through the end of the decade, Rystad estimates show.




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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

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new base 980 special 28 december 2016 energy news

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