new base special 27 july 2014

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NewBase 27 July 2014 Khaled Al Awadi

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Iraqi Kurdish oil nears Texas port for likely offloading

Reuters + NewBase

A tanker carrying crude oil from Iraqi Kurdistan has neared the Port of Galveston in Texas, according to Reuters ship tracking data and the US Coast Guard, despite Washington's concerns about independent oil sales from the autonomous region.

The Marshall Islands-flagged tanker United Kalavrvta, which left the Turkish port of Ceyhan in




June carrying oil from a new Kurdish pipeline, is slated to approach the Texas port of Galveston on Saturday evening and has issued a notice of pre-arrival to ship traffic managers. But Coast Guard Petty Officer Andy Kendrick said the ship is too large to enter the Galveston port, near Houston. That means it would have to offload its cargo onto smaller ships offshore before the oil is delivered to the US mainland. It could possibly start offloading the oil as soon as Sunday, after Coast Guard officials carry out routine safety inspections of the vessel. Kendrick also said the Coast Guard was in contact with the US State Department, the National Security Council and the Department of Homeland Security about the ship's arrival. Trading sources in Texas, New York, London and Geneva have been unable to identify the buyer of the United Kalavrvta's cargo. The oil could go to any one of the many refineries located along the US Gulf Coast.

The ship carries approximately 1 million barrels of crude, which would fetch more than $100 million at international prices. Any sale of Kurdish crude oil to a US refinery would infuriate Baghdad, which sees such deals as smuggling, raising questions about Washington's commitment to preventing oil sales from the autonomous region. Baghdad has threatened to sue anyone that buys Kurdish oil.

The US government has expressed fears that independent oil sales from Kurdistan could contribute to the break-up of Iraq as the government in Baghdad struggles to contain ultra-hardline Islamic State, a group of Sunni Islamist insurgents who have captured vast areas of the country. But it also has grown frustrated with Iraqi Prime Minister Nuri al-Maliki's handling of the crisis. Washington has pressured companies and governments not to buy crude from the Kurdish Regional Government (KRG), but it has stopped short of banning US firms from buying it outright. The KRG has renewed its push for an independent state amid the latest violence roiling Iraq. Its relationship with Baghdad has deteriorated over what it sees as Maliki's role in stoking the crisis and the long-running dispute over oil sales. On Thursday, Carlos Pascual, head of the US State Department's Energy Bureau, told Reuters that there had been no change of policy in Washington toward Kurdish independent oil sales, but he said he hoped the central government and the region could reach an agreement in time.




KBR wins key Abu Dhabi oil filed contract Source :KBR + NewBase

KBR, a global engineering, construction and services company, has annnounced that has been awarded a contract by Hyundai Heavy Industries to perform engineering design services for the Abu Dhabi Marine Operating Company's Al-Nasr full field development project, located offshore Abu Dhabi.

Under the terms of the contract, KBR will provide engineering design and support services for the entire Al-Nasr Package 2 scope with the services provided by KBR’s office in Singapore and supported by other KBR offices, said a statement. The KBR Singapore office has more than 40 years of experience in providing engineering services for the offshore oil and gas industry worldwide. The Al-Nasr Package 2 facilities consist of a multi-platform super complex that includes central processing facilities, accommodation, utilities, flares, bridges and power distribution. The Al-Nasr offshore oil field is located approximately 80 miles northwest of Abu Dhabi in the Arabian Gulf.

When completed, the super complex will produce an annual average production of 65,000 barrels of crude oil per day. ADMA-OPCO's other stakeholders in the Al-Nasr project are BP, Total and Japan Oil Development Company. “This important award strengthens KBR’s position as an industry leader in providing engineering services for offshore oil and gas processing facilities – and reflects our ongoing commitment to deliver for our customers and industry partners,” said Stuart Bradie, KBR

president and chief executive officer.

“KBR is excited to be working alongside HHI and ADMA-OPCO, two companies with which we have developed excellent business relationships.” Expected revenue from the contract will be included in the third quarter 2014 backlog of unfilled orders for the Hydrocarbons segment, it said.




India pays final tranche of oil dues to Iran Reuters+ NewBase

India paid a third and final instalment of $550 million to Iran on Thursday, three industry sources said, part of the frozen funds released to Tehran in the interim deal with world powers.

Under a pact reached in November, Iran won access to $4.2 billion in oil revenues held by its buyers, to be paid out in eight money transfers through July. The payments were linked to Iran carrying continuous reduction in its nuclear activities. Iran and six world powers have now agreed to extend the November deal another four months, after failing to reach a final agreement before a July 20 deadline. The extension allows Tehran access to another $2.8 billion in frozen oil monies.

Five Indian refiners - Mangalore Refinery and Petrochemicals Ltd, Essar Oil, Indian Oil Corp, Hindustan Petroleum Corp and HPCL-Mittal Energy Ltd (HMEL) - have partly paid money owed for crude imports in the previous two instalments. Of the total of about $4.6 billion the refiners owe Iran as of May 31, they have paid $1.65 billion by taking the last three of the eight payment slots scheduled in the November deal. In the latest round of payments, HMEL, part owned by steel tycoon LN Mittal, did not make its payment due to exchange rate fluctuations, the sources said. That lead to a higher payout by the other four. "HMEL shall not be participating in this payment process whereby exchange losses are being imposed upon HMEL contrary to commercial understanding," the company said to the oil ministry earlier this month in a letter seen by Reuters. HMEL as a policy does not comment on its crude sourcing or matters associated with it, a spokeswoman for the company said, replying to an email seeking comments. Essar Oil cleared dues of $240 million, followed by $236 million by MRPL, $67 million by IOC and $7 million by HPCL, which also has a stake in HMEL, the sources said. HMEL was due to pay money owed for four million barrels of oil imported from Iran in 2012. Since then, however, the Indian rupee has weakened, and the fluctuation would increase its cost by about 10 per cent, the company said in the letter. India, which imports a total of four million barrels per day of oil, has been steadily reducing its dependence on Iran. Over the last five years to the fiscal year ended this past March 31, Iran's share of India's crude imports has fallen by two-thirds to 5.8 per cent. However, in the January-June period for this year its crude imports from Iran rose by a third compared to a year ago, data from trade sources showed. China and India both started raising their oil imports from Iran after the interim deal was reach in November.




International Finance Corporation to Invest $27.5 mn in Pakistan LNG Project Press release + NewBase

The International Finance Corporation (IFC) will invest $27.5 million in the construction of LNG terminal at Karachi’s Port Qasim, according to Pakistani newspaper Dawn. IFC will pump in $7.5m in the form of equity for 20 per cent shareholding, and a loan of $20m that will assist the project in securing long term debt financing from other foreign and local lenders, the newspaper reported.

The terminal, to be completed by early 2015, will be the first LNG import facility in Pakistan. According to Dawn, the project involves use of a floating storage and regasification unit which will store the imported LNG and regasify it before transporting the gas through a 24km pipeline to the existing SSGC gas network near Port Qasim.

The LNG branch jetty will be built near the existing chemicals import and handling terminal operated by another subsidiary of Engro Corp. The major portion of the pipeline will be built inside the port industry zone.

Following a public tendering process in 2013, Engro Elengy Terminal (ETPL), a fully owned subsidiary of Engro Corporation, signed a 15-year LNG service agreement with the Sui Southern Gas Company (SSGC), Dawn said.




Euphoria over shale gas ‘surge’ pointless Saudi Gazette - Syed Rashid Husain + NewBase

While euphoria over the ongoing shale revolution and the energy independence of the Americas continue, yet, there are people - cautioning and asserting - the phenomenon is short-lived and the world would continue to be dependent on the energy- rich Middle East in medium to long term. At the recently held EIA Energy Conference in Washington - while some heavyweights were heard urging Washington to capitalize on the moment and use the newly found asset base to advance its political and foreign policy objectives, an influential dissenting voice was that of Maria van der Hooven, the IEA Executive Director, asserting the US energy security “Golden Age” is an illusion.

Ever since generating bold headlines globally when Fatih Birol, chief economist and director of Global Energy Economics at the International Energy Agency in Paris, pointed out while presenting the IEA World Energy Outlook 2012, that the US was on its way to overtake Saudi Arabia in crude output, the agency has been attempting to tame expectations. A year later, unveiling the WEO-2013 last

November in London, Birol insisted on terming the US shale “a surge, rather than revolution.” “I think not only in the United States, but also in Europe, many people believe that after the shale revolution, the importance of the Middle East is diminishing,” Birol told Houston Chronicle earlier this year. “I think this is not only wrong from an economic point of view, but also from a policy point of view. It is misleading.” The result of downplaying the significance of the Middle East could be substantial, he underlined. “There is one major resource base in the world which could meet the growth in the global oil demand, which is the Middle East,” he said. “Without the Middle East, we will not be able to meet the growth, specifically in Asia.” The shale boom has made the United States less dependent on imported crude, but oil




produced from Middle East still plays a fundamental role in meeting energy demand, Andrew Lipow, president of Houston-based consulting firm Lipow Oil Associates too was quoted as saying. Jim Burkhard, head of global oil market research at HIS, too agreed. The role of Middle East oil has not declined as a result of growing production in the United States. “What's happened in the US and North America overall is vitally important to the world oil market, but that doesn't mean that the Middle East is suddenly irrelevant,” he told the newspaper. There are also questions about the sustainability of the shale revolution. North Dakota is an example. It produced 30 million barrels of oil in April - as much as it had in all of 2004. That kind of growth is nearly unprecedented in the modern oil industry. But it’s also unsustainable, argues Ben Casselman. There’s little doubt that the Bakken Shale, North Dakota’s main oil-producing reservoir, contains billions of barrels of crude. The question is about getting it out. Wells drilled into shale rock like the Bakken decline especially fast, as much as 70 percent in the first year. That means oil production is a treadmill: The more they produce, the more they have to drill to keep up. There are signs now North Dakota may already be struggling to stay on the drilling treadmill, Casselman writes. The number of drilling rigs operating in the state peaked in 2012 and has been trending down. So far, that decline has been offset by two other trends: Drilling is getting faster, meaning each rig can drill more wells, and drilling techniques are improving, meaning the wells themselves are getting better. Taken together, the trends add up to big gains in productivity. Yet there’s a practical limit to how long those gains can continue. Morten Frisch of the UK-based MF Consultancy too has been suggesting to lower

expectations, pointing to the falling rail shipments of Bakken crude. And though he concedes it is difficult to conclude at the moment if this drop has been caused by rail safety issues or a sharp fall in oil production, yet this is a development that needs to be watched. Logistics is another major impediment to shale growth. There are already indications that rail transportation of the very light, high volatility and high vapor pressure Bakken crude oil could be running

into difficulties. When a senior North Dakota Republican (Robert Harms) feels oil production developments are going too fast, production activities in the state could be slowed down for safety reasons, deduces Frisch. A number of variables continue to impact the industry. The US undoubtedly has huge shale reserves, but it is impossible to be sure about their size. For example, in 2011 the Department of Energy claimed the Monterey Shale deposits in California harbored 15 billion barrel recoverable oil. However, a few weeks ago, the technically recoverable reserves from the deposit had to be reduced to a mere 600 million barrels. Much also depends upon the prevalent crude market prices. Strong market prices support fracking. But if the price were to fall below $90, fracking may prove too expensive.




And in order to maintain output, producers would need to keep adding wells on a regular basis. This is because a shale well has a limited lifespan of around seven or eight years. Its output plummets after the first three years, deteriorating steadily thereafter. By contrast a conventional oilfield produces crude at a level that wanes slowly over the course of decades. Saudi Arabia's massive Ghawar field, for example, began production in 1951 and is still pumping out around 5 million barrels a day. The IEA points out that the US shale industry will need to bring 2,500 wells into service every year to sustain the output of 1 million barrels a day of one of its main oil reserves in North Dakota. Some of these wells may require more investment than their predecessors, “a rising percentage of supplies...require a higher breakeven price,” the IEA points out. Shale revolution needs to be on a regular watch. Unjust euphoria would only hurt investments in other energy-rich regions - including the strategically important Middle East.




US sets anti-dumping duties on solar imports from China, Taiwan Rueters + NewBase

The US on Friday set new import duties on solar products from China and Taiwan after the Commerce Department found that the solar panels and cells are being sold too cheaply on the US market.

Preliminary anti-dumping duties as high as 165.04% for Chinese goods would come on top of anti-subsidy levies imposed last month, as the US arm of German solar manufacturer SolarWorld seeks to close a loophole allowing Chinese producers to sidestep duties imposed in 2012.

China’s Trina Solar faces total import duties of nearly 30% and Suntech Power nearly 50% as a result of Friday’s decision. Taiwanese producers face anti-dumping duties of up to 44.18%, with the highest rate applying to Motech Industries, Commerce said. There will

be no doubling-up of duties with those from the 2012 case.

The new duties, which must still be confirmed, are likely to inflame US-China tensions already exacerbated by recent accusations that Chinese military officers were cyber-spying on US companies involved in trade disputes, including SolarWorld.

SolarWorld said the new duties would average 47% for most companies, compared with 31% in the 2012 case. The company, which makes crystalline silicon solar panels in Oregon, complained that Chinese manufacturers dodged those duties by shifting production of the cells used to make their panels to Taiwan.

“Today’s actions should help the US solar manufacturing industry to expand and innovate,” said SolarWorld Industries America President Mukesh Dulani. “We should not have to compete with dumped imports or the Chinese government.”




The solar industry has been battered over the last four years by a glut of products from China, falling prices and a withdrawal of consumer subsidies in Europe, which has pressured solar companies’ margins and sparked a rash of trade cases.

India has slapped levies on panels from the US and China. The European Union also has targeted Chinese panels and China has moved against imports of US polysilicon, solar’s key raw material. Meanwhile, the US is challenging India’s solar program at the World Trade Organization. The

WTO found irregularities in the previous US-China anti-subsidy case.

SolarWorld has said it has the support of other US solar manufacturers in pushing for a broadening of the duties. But the Coalition for Affordable Solar Energy, which represents about 90 companies that mainly focus on installation, has criticized the case and said installers would suffer if there was another jump in the cost of modules.

US imports of solar products from China were worth $1.5bn in 2013, half the level of 2011, while imports from Taiwan more than doubled to $657mn over the period, according to Commerce data. Commerce will make its final decision by December 15. The US International Trade Commission is due to make a decision on whether the imports pose or threaten injury to US producers by January 29.




Japanese PM opens LatAm tour with Mexico energy deals AFP + Newbase

MEXICO CITY: Japanese Prime Minister Shinzo Abe struck a series of energy deals on Friday with Mexican President Enrique Pena Nieto at the start of a five-country Latin American tour.

Abe, whose visit to the region comes on the heels of Chinese President Xi Jinping’s, met Pena Nieto at the presidential palace for talks that ended with the signing of a raft of deals. The new agreements included one between Mexican state oil firm Pemex and Japan’s development bank, and another between Pemex and the Japan Oil, Gas and Metals National Corporation.

With Japan on the lookout for new power sources after the Fukushima disaster forced the shutdown of its nuclear reactors, energy is high on the prime minister’s agenda for the trip. Mexico is undergoing sweeping changes in its energy sector, with Congress poised to end struggling Pemex’s 75-year monopoly and open up the oil and gas sectors to foreign investment. The two leaders, both elected in 2012, took turns praising each other for the reforms they have implemented. Pena Nieto hailed the “bold transformations” of Abe’s fiscal stimulus and monetary easing programs, while Abe drew parallels between their leadership styles, saying both saw reform as a growth strategy. Travelling with a delegation of Japanese executives and his wife Akie, Abe received a red-carpet greeting at Mexico City airport from Foreign Minister Jose Antonio Meade. Pena Nieto and first lady Angelica Rivera then threw a welcome ceremony for them at the presidential palace. Kenko Sone, an official traveling with Abe, mentioned the “special interest” of Japanese companies in Mexico’s shale gas, though he said there were no firm investment plans yet.

Sone said that it would be cheaper for Japan to import gas from Mexico than from the United states. The American gas Japan currently buys comes from the eastern United States, and must be shipped through the busy Panama Canal. Japan is Mexico’s fourth trade partner, with total trade of $19.3bn last year. There are some 800 Japanese companies that have investments in Mexico, especially automobile giants like Nissan, Mazda and Honda.

Abe is the first Japanese leader to visit Mexico since Prime Minister Junichiro Koizumi in 2004. Abe’s nine-day trip — which will also take him to Trinidad and Tobago, Colombia, Chile and Brazil comes two days after China’s Xi wrapped up his own four-country tour.




Brent climbs above $108 a barrel on US-Russian tensions, supply fears Reuters + NewBase

New York: Brent oil prices reversed early losses to climb more than $1 a barrel on Friday, as fighting in Ukraine and deteriorating relations between Russia and the United States ignited new fears of supply disruptions in the market.

A Russian security official said that up to 40 shells fired on Friday by Ukrainian forces fell on the Russian province of Rostov, near the border with eastern Ukraine where Kiev is fighting pro-Russian separatists.

Brent crude led a mid-morning spike in prices shortly after Reuters reported that EU sources said European Council leader Herman van Rompuy

has written to EU leaders saying any restrictions the bloc agrees on Russian access to sensitive technology should exclude natural gas.

“The escalation of hostilities is stoking supply fears, as the energy card is waiting to be played by Russia and the West as a way to inflict economic harm on each other,” said John Kilduff, a partner at Again Capital LLC in New York.

Brent crude for September delivery rose $1.32 to settle at $108.39 a barrel, the highest settlement since July 10. Friday’s rally pared a series of recent losses, with Brent ending almost 1 percent higher from the beginning of the week.

US crude for September delivery gained 2 cents to settle at $102.09 a barrel, after falling as low as $101 a barrel earlier in the session. It ended the week 1 percent lower.

International opinion The spread between the two benchmarks widened to close at $6.30. Russian Foreign Ministry said the United States was trying to influence international opinion through unfounded insinuations over the crisis in Ukraine. “If the US makes the case that Russia is actually firing Ukrainian planes, that is a game-changer,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “It will put further pressure on the European Union to impose significant sanctions on Russia.” Continued violence in Libya and Israel provided further support for oil prices.

In Libya, oil production has risen to 500,000 barrels per day, but there was no progress on reopening its Brega oil port after an agreement to end a protest there. Authorities in Gaza said Israeli forces shelled a shelter at a UN-run school on Thursday, killing at least 15 people as the Palestinian death toll in the conflict rises.




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Your partner in Energy Services

Khaled Malallah Al Awadi, MSc. & BSc. Mechanical Engineering (HON), USA ASME member since 1995 Emarat member since 1990

Energy Services & Consultants Mobile : +97150-4822502

[email protected] [email protected] Khaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 years of of of of

experience in theexperience in theexperience in theexperience in the Oil &Oil &Oil &Oil & Gas sector. Currently working as Gas sector. Currently working as Gas sector. Currently working as Gas sector. Currently working as

Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for 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 sthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were sthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were sthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in pent as the Gas Operations Manager in pent as the Gas Operations Manager in pent as the Gas Operations Manager in

Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has develoEmarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has develoEmarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has develoEmarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed great ped great ped great ped great

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Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for the local the local the local the local

authorities. He has become a reference for many of the Oil & Gasauthorities. He has become a reference for many of the Oil & Gasauthorities. He has become a reference for many of the Oil & Gasauthorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andConferences held in the UAE andConferences held in the UAE andConferences held in the UAE and Energy program broadcasted Energy program broadcasted Energy program broadcasted Energy program broadcasted

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

NewBase 27 July 2014 K. Al Awadi

new base special 27 july 2014

Economy & Finance