Transcript
Page 1: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 1

NewBase 03 February 2015 - Issue No. 532 Khaled Al Awadi

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

UAE:DEWA receives delegation from Électricité de France AMEinfo

HE Saeed Mohammed Al Tayer, MD & CEO of Dubai Electricity and Water Authority (DEWA) received a delegation from Électricité de France (EDF), the French electricity company. The delegation included Marina Hashim, Managing Director of EDF Middle East, and Alain Regnier, Manager of Business Development & Institutional Affairs, EDF International Development Division, Middle East and North Africa.

Al Tayer welcomed the visitors and gave an overview of the key projects DEWA is currently implementing in Dubai and the latest technologies and green initiatives that support the Dubai Integrated Energy Strategy 2030 to diversify the energy mix and reduce energy demand in Dubai by

implementing international best practices in preserving natural resources.

Al Tayer highlighted DEWA’s efforts to be a global role model in implanting smart applications and systems. He noted that DEWA achieved competitive results surpassing leading European and American companies in efficiency and reliability. The delegation appreciated DEWA’s achievements, emphasising that EDF is keen to exchange expertise with DEWA to share it success stories.

The EDF delegation outlined the company’s latest developments and projects. They highlighted EDF’s record of achievements in electricity technologies, and in research and development. EDF has one of the oldest and largest energy research and development centres in the world.

The delegation expressed their interest in taking part in DEWA’s projects, particularly those related to clean energy, and exchange of knowledge, expertise, and technologies, as well as contributing to the sustainable development of Dubai. Al Tayer welcomed the exchange of expertise between DEWA and EDF.

Page 2: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 2

Qatari N-KOM celebrates 100th LNG carrier repair N-KOM + NewBase

Nakilat-Keppel Offshore & Marine (N-KOM) celebrated its 100th LNG carrier repair at Erhama Bin Jaber Al Jalahma Shipyard in Qatar. The milestone is confirmation of N-KOM’s position as a leading provider of repairs and maintenance to LNG carriers in the region.

N-KOM’s strengths include the might of its leading parent companies — Qatar’s Nakilat and Singa pore’s Keppel Offshore & Marine — a high level of LNG carrier expertise and Erhama Bin Jaber Al Jalahma Shipyard’s strategic location in Ras Laffan

Industrial City. Abdullah Fadhalah al-Sulaiti, N-KOM chairman and Nakilat managing director said, “Nakilat is a world-leader in global gas transportation and we are proud that Nakilat’s joint venture with Keppel Offshore & Marine has grown to become a leader in the repair of LNG carriers. “The shipyard’s continued success is part of our commitment to the sustainable diversification of Qatar’s economy and to the Qatar National Vision 2030. On the occasion of this important milestone, we are deeply thankful to HE the Minister of Energy and Industry, Dr Mohamed bin Saleh al-Sada for his invaluable guidance. We are also grateful to our stakeholders including QP for their ongoing support of Erhama Bin Jaber Al Jalahma Shipyard.” The shipyard counts major industry players such as MOL, NYK, “K”-Line, Teekay, Pronav and Shell amongst its growing clientele today. In an effort to strengthen its service offering for sustainable solutions, the shipyard has signed an agreement to co-operate on LNG and gas solution projects. N-KOM is set to undertake the first ME-GI (electronically controlled–gas) conversion of a Q-Max LNG carrier later this year, and is also involved in other engine retrofit projects for vessels to run on LNG fuel. Established in 2007, N-KOM is a joint venture between Nakilat and leading offshore rig constructor and ship repairer Keppel Offshore & Marine. Nakilat is a Qatari marine transport company providing the essential transportation link in Qatar’s LNG supply chain. Its LNG shipping fleet is the largest in the world, comprising 61 LNG vessels. The company also manages and operates four large LPG carriers and four LNG carriers. Through two strategic joint ventures, N-KOM and NDSQ, Nakilat operates the ship repair and construction facilities at Erhama Bin Jaber Al Jalahma Shipyard. Nakilat also offers a full range of marine support services to vessels operating in Qatari waters.

Page 3: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 3

GE Oil & Gas strikes service deal with Qatar Fertiliser BYTIMES NEWS SERVICE

GE Oil & Gas yesterday said its downstream technology solutions business has been awarded along-term service contract with Qatar Fertiliser Company (Qafco) to help optimise the performanceof the company's fertiliser plant in Mesaieed, Qatar. Qafco is one of the world's largest fertiliser

producers. The actual agreement is betweenQafco and GE's joint venture withQatar Petroleum, Al Shaheen GEServices Company (QSC), whichsupports GE's regionalisationstrategy of deploying capabilityand resources closer to itscustomers around the world

The long-term service agreementcovers the standard maintenanceand repairs of existing GE on-sitepower and compressionequipment as well as training forQafco workers and site operators.Qafco's Mesaieed facility produces

ammonia and urea contributing to the total Qafco annual production capacity of 3.8 million MT ofammonia and 5.6 million MT of urea

"A key priority for us is to optimise the long-term availability and efficiency of our Mesaieed plant'sexisting fertiliser production facilities," said Khalifa A Al Sowaidi, chief executive officer. "Not only is GE Oil & Gas the original equipment manufacturer for the gas and steam turbines,centrifugal compressors and associated equipment, but it also has the proven local customerservices capabilities we need to help us meet our production targets," he added

The agreement with Qafco comes nearly a year after GE first launched its downstream technologysolutions business to more effectively serve the $10 billion refining, petrochemical, industrial anddistributed gas segments. Downstream technology solutions provides integrated solutions, addingthe value of a single equipment source with a key focus on applications for ethylene, low-densitypolyethylene, ammonia and urea as well as refinery processing

Rami Qasem, president and chief executive officer of GE Oil & Gas for the Middle East, NorthAfrica and Turkey, said: "This agreement with Qafco further builds on our strong partnership withthe organisation and our long-term presence in Qatar. Our existing equipment will bring the cuttingedge in GE's innovative technology, assuring higher efficiency, reliability and will support theoptimal performance of the company's fertilizer plant in Mesaieed, Qatar.

"Our long-term service agreement with Qafco illustrates the many advantages that we can offerour customers in the fertiliser and other downstream industries through our collaborations withlocal project partners," said Hasan Dandashly, president and chief executive officer ofdownstream technology solutions, GE Oil & Gas. "The agreement also underscores how GE'sregionalisation strategy enhances the value of our products and services in Qatar and throughoutthe Middle East."

Page 4: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 4

Egypt's Gas Production to Fall to 4.85 bcf/d by 2017-18 AlBorsa newspaper + NewBase

Egypt’s natural gas production is expected to fall to 4.85 billion cubic feet per day (bcf/d) in fiscal 2017-18 from 5.03 bcf/day in 2014-15, Cairo based newspaper Al-Borsa reported Sunday citing Petroleum Ministry statement.

Meanwhile the ministry expects country’s natural gas demand is expected to rise by 24 percent from 5.98 bcf/day to 7.42 bcf/day over the same period. Gas imports are expected to rise from 0.5 bcf/day to 1.0 bcf/day starting 2016-17, the newspaper added.

The Egyptian economy is facing severe gas shortage as local demand has ballooned in recent years amid declining domestic production. The government has been in the process of procuring gas from various sources.

In December, Algeria and Egypt signed a previously announced natural gas deal. As per the deal Algeria will supply 850,000 cubic meters of LNG in six shipments to Egypt during 2015. The two countries will begin fresh talks shortly regarding supply of Algerian gas during 2016-2020, the ministry said adding that negotiations will start in Cairo and will be completed by February in Algiers. Cairo is also expected to sign a deal to import LNG from Gazprom. Egypt is likely to buy 35 shipments of LNG over the next five years from the Russian company. Shell is another company likely to begin supplying gas to Egypt this year. Earlier this month reports Platts quoted Shell's Middle East and North Africa region vice president, Mounir Bouaziz, as saying that the company will supply Egypt with 1 million mt/year of LNG, starting this year.

Page 5: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 5

Work on Duqm Liquids Terminal to start in Q4 2015

(OEPPA Business Development Dept) The Special Economic Zone Authority at Duqm (SEZAD), which is overseeing the development of a world-scale industrial and maritime hub on Oman’s Wusta coast, has invited international engineering firms to prequalify for its contract to design and build a major Bulk Liquid Berths Terminal at the Port of Duqm.

The facility will be suitably equipped to handle liquid volumes, comprising mainly refined petroleum commodities, chemicals and petrochemicals, that will be generated when a major refinery, as well as other petrochemical plants, come on stream at the adjoining Special Economic Zone.

International engineering consultancy services firm WorleyParsons is currently undertaking the front-end engineering design (FEED) of the Bulk Liquid Berths project, at the heart of which is a

refinery products terminal with six liquid berths, and a Pet Coke berth. Along with the FEED, WorleyParsons’ remit also covers the Project Definition, and project management and supervision services during the construction phase.

According to SEZAD, the prequalification exercise marks the start of a competitive process leading to the appointment of a competent engineering firm to carry out the Detailed Design, Procurement and Construction of the new bulk liquid berths terminal. Preference will be given to major contractors and joint venture companies in light of the multi-disciplinary nature of the work scope, the Authority said.

In addition to the construction of the jetty, the project also includes a significant dredging and reclamation component, while topside facilities will include product storage tanks, dry bulk facilities, pipelines, buildings, road and other infrastructure.

Bidders that meet SEZAD’s prequalification criteria will be invited to tender for the main EPC package in Q2 2015, with construction work on the project slated to commence before the end of the year.

A dedicated area along the Northern Lee Breakwater has been earmarked for the development of a number of terminals designed to the handle the SEZ’s substantial component of liquid cargoes. The first of these terminals will be built on behalf of Duqm Petroleum Terminal Company (DPTC), which is a partnership of Oman Oil Company (90 per cent) and Port of Duqm (10 per cent).

PTC’s facilities will handle all of the volumes flowing into and out of the refinery, as well as other related petrochemical investments at the SEZ. The company intends to build a 1 million cubic metres tank storage terminal to support the jetty’s operations at the Port of Duqm. The Bulk Liquids Terminal project is scheduled to be handed over to DPTC in Q4, 2018 ahead of the start-up of the proposed Duqm Refinery project in 2019.

Page 6: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 6

Difficult transition ahead as China’s coal consumption declines Oman Observer + NewBase

China, the world’s largest consumer of coal has seen a drop in consumption for the first time in this century, as environmental policies start to put significant constraints on its coal industry. Green groups are celebrating the new data, but experts warn about a tough transition and economic uncertainty ahead with an unwieldy oversupply of coal against a weakening demand.

China’s coal consumption decreased in 2014, with production falling 2.5 per cent year-on-year and imports falling by 10.9 per cent compared to 2013, according to China’s National Coal Association. “An already grim situation is made worse by weak demand, overcapacity and a large amount of imports,” Association Vice President Jiang Zhimin said.

Ratings agency Fitch also said 2014 was a difficult year for China’s coal industry, with prices sliding by about 20 per cent due to factors such as new import duties and the government’s ban of domestic production and imports of low-quality coal.

China has the world’s third-largest known coal reserves, but lacks gas and oil resources. Nearly 70 per cent of the country’s energy still comes from coal, with the population of 1.3 billion burning as much as the rest of the world combined.

Yet coal production growth has been slowing since 2012, affected by the slower rate of economic growth and efforts to shift the country’s economy from a reliance on heavy industry to sectors such as service and tourism.

Rapid development in renewable energy technology is also a factor, with higher than average rainfall last year benefiting hydropower generation. Local governments have been under orders since last year to gradually shut down smaller-scale coal mines with annual production capacity of less than 90,000 metric tonnes.

That has helped to eliminate highly polluting mines but took a toll on mining jobs and salaries. “Two years ago, it was very easy to get by on my monthly salary… Now with wages falling it may be time to go home,” a miner for Kailuan Group said in the central Chinese city of Wuhan.

Page 7: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 7

“The end of China’s coal boom is evident,” Greenpeace East Asia spokeswoman Fang Yuan said. ‘‘The global coal industry should brace for impact.”

Qi Ye, Director of the Low Carbon Development Policy Research Centre of Tsinghua University, said the drop in coal consumption can lead to a decrease in carbon emissions, and mixed economic consequences.

“Industries which rely on coal production and coal transportation will suffer,” said Qi. ‘‘And there is another potential impact. When coal prices go down, the costs for its downstream industries will also be decreased. So coal may end up enjoying a price advantage compared with renewable and non-fossil fuel energy,” he said.

Consistently lower prices could make coal more attractive than cleaner energy sources, he said. Yang Fuqiang, senior adviser on energy environment and climate Change for the National Resources Defence Council, praised efforts to make coal production more efficient but said the government should step back to allow the overcapacity situation to regulate itself.

“Let the market fully control and enhance competition. The government, especially local governments, intervene too much,” he said, “and this is the main reason for overcapacity.” Economist Yao Jingyuan said China can do more to make coal production cleaner and more efficient. “China’s energy structure would stay the same for a long time.

We don’t have enough alternative energy sources and can’t just abandon coal but we are constrained by environmental challenges, and need to learn from other countries to make smarter use of coal,” he said.

Greenpeace said China should consider amending its targets for peak coal production in light of the new data. The government’s current guidelines aim to ensure that coal burning reaches no higher than 4.2 billion tonnes per year by 2020.

Page 8: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 8

Gazprom to Invest $495 mn in Kyrgyzstan Gas Infrastructure Gzprom + NewBase

Gazprom plans to develop gas infrastructure in Kyrgyzstan and increase domestic gasification from 22 to 60 per cent by 2030. To implement the plan the Russian firm is looking to invest approximately 34 billion roubles ($495 million) during 2015-2017, Gazprom said in statement last week.

The issues were discussed during a meeting in Bishkek on Friday attended by Alexey Miller, Chairman of the Gazprom Management Committee with Almazbek Atambayev, President of Kyrgyzstan and Djoomart Otorbaev, Prime Minister of the Republic.

Gazprom envisages a large-scale reconstruction and upgrade of Kyrgyz gas transmission network as well as underground gas storages and distribution facilities. The scheme provides for constructing gas distribution capacities for gas shipments to southern regions of the country as well as for autonomous gasification of individual regions.

On April 10, 2014 Gazprom and Kyrgyzgaz signed the Sales and Purchase Agreement for a 100 per cent stake of KyrgyzgazProm (renamed Gazprom Kyrgyzstan), a wholly-owned subsidiary of Kyrgyzgaz. Gazprom Kyrgyzstan is an exclusive importer of natural gas to Kyrgyzstan and the owner of the domestic gas transmission and distribution systems.

Page 9: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 9

France's Total Likely to Win TAPI Contract Express Tribune + NewBase

French energy major Total is expected to win project financing contract for the TAPI gas pipeline project, according to Pakistani newspaper. Ministers of four countries, Turkmenistan, Afghanistan, Pakistan and India will meet on February 11 in Islamabad and attend a meeting of the steering committee on the gas pipeline project, officials have told the newspaper.

According to officials, Turkmenistan has agreed, in principle, to sign a service contract with Total, allowing the company to act as the consortium leader for financing the pipeline.

Two US energy companies, Chevron and ExxonMobil, too were in the race for the contract but dropped out of the race following dismissal of their demand for an equity stake in the project. Noticing an empty field, Total had entered the fray and negotiated a deal with Turkmenistan for gas exploration without seeking any stake, Express Tribune stated. Express Tribune reported that as per the deal Total will help extract gas from Turkmenistan’s fields, which will be exported to Afghanistan, Pakistan and India. In return, the company will be paid a service fee in cash or in kind. Two Pakistani companies, Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL), are likely to be part of the consortium and take part in gas extraction in Turkmenistan. Last year, gas companies of Turkmenistan, Afghanistan, Pakistan, and India established a company that will build, own and operate the planned 1,800-kilometer natural gas pipeline. Turkmengas, Afghan Gas Enterprise, Inter State Gas Systems, and GAIL (India) Limited own equal shares of the company. The TAPI pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years.

Page 10: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 10

US:Shell Meets With Oil Workers Union as Strike Shuts Refinery (Bloomberg) Royal Dutch Shell Plc met with the United Steelworkers on Monday about a new, three-year labor contract for U.S. oil workers, less than two days after the union started the biggest refinery strike since 1980.

Shell, negotiating the contract on behalf of oil companies, and the United Steelworkers “resumed communications on Monday in hopes of coming to a mutually satisfactory contract agreement,”

Ray Fisher, a spokesman for The Hague, Netherlands-based Shell said by e-mail. The USW, representing employees at more than 200 refineries, terminals, pipelines and chemical plants, said in a statement that the meeting was at Shell’s request and that “no progress was made.”

The plants on strike account for 10 percent of U.S. refinery capacity. One site has curbed production and a full walkout of USW workers would threaten to disrupt as much as 64 percent of U.S. fuel output. Union leaders

haven’t called a strike nationally since 1980, when a stoppage lasted three months. Shell and union officials began negotiations on Jan. 21 amid the biggest collapse in oil prices since 2008.

“There’s no guarantee that if we can’t get back to bargaining we won’t increase the number of refineries” on strike, USW international president Leo Gerard said in a phone interview from Pittsburgh on Monday. All nine sites remain on strike, Lynne Hancock, a USW spokeswoman in Nashville, Tennessee, said by e-mail late Monday.

Offer Rejections

The union has rejected five offers made by Shell on behalf of companies including Exxon Mobil Corp. and Chevron Corp.

The USW has been asking employers for better health-care benefits and measures to prevent fatigue and keep union workers rather than contract employees on the job, Gerard said. The company has refused to discuss lowering the $7,500 that workers must pay annually before health insurance kicks in 100 percent, known as the out-of-pocket maximum, he said.

The refineries on strike can produce 1.82 million barrels of fuel a day, data compiled by Bloomberg show. They span the U.S., from Tesoro’s plants in Martinez and Carson, California;

Page 11: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

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and Anacortes, Washington, to Marathon Petroleum Corp.’s Catlettsburg complex in Kentucky to three sites in Texas, according to the USW’s statement.

U.S. benchmark West Texas Intermediate oil rose 45 cents to $50.02 a barrel in electronic trading on the New York Mercantile Exchange at 10:21 a.m. Singapore time on Tuesday. Gasoline for March delivery added 0.9 percent to $1.5585 a gallon, and the diesel contract for the same month gained 0.7 percent to $1.7704.

Contingency Plans

In Texas, Shell’s Deer Park complex, Marathon’s Galveston Bay plant and LyondellBasell Industries NV’s Houston facility are affected, according to the union.

Lyondell, Marathon, Shell and Tesoro have contingency plans in place to keep refineries operating, according to company statements. The walkout also includes Marathon’s Houston Green cogeneration plant in Texas and Shell’s Deer Park chemical plant.

United Steelworkers members do everything from operating units to performing maintenance to testing and analyzing samples in labs at U.S. refineries, Hancock said by phone Monday.

Tesoro said on Monday that it was shutting process units at the Golden Eagle refinery near Martinez, California, since half of its processing capacity was already offline for maintenance. Its Anacortes and Carson refineries are operating, Tina Barbee, a spokeswoman at the company’s headquarters in San Antonio, said by e-mail.

Remaining USW-represented sites are operating under rolling, 24-hour contract extensions, according to the union.

Page 12: New base 532 special 03 february  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 12

Oil Price Drop Special Coverage

OPEC cautious over oil-price rebound Agencies + NewBase Oil prices may stay depressed until summer due to weak seasonal demand even as Saudi Arabia's strategy of curbing the output growth of rival producers might have started achieving tangible results, OPEC delegates told Reuters.

Delegates from the Organization of the Petroleum Exporting Countries and external experts are meeting at OPEC's Vienna headquarters this week to discuss the producer group's long-term strategy. Such meetings do not set output policy. The talks arise as data from the United States showed a record drop in drilling rigs, prompting oil prices to jump above $50 a barrel on Friday as traders said they saw it as a sign that OPEC's strategy was taking a toll on the US shale boom. "The low prices are affecting the investment of some companies in shale oil. This should affect the supplies in the longer term," a delegate from a Gulf OPEC producer said. "Prices are stabilizing around $40 to $45, but the world economy is not very strong and stocks are too high." Two other OPEC delegates, one of whom is from a Gulf producer, said they could not rule out prices dropping to as low as $30-$35 due to weak demand combined with global refinery maintenance in the first and second quarters of 2015. "Prices are supported now by winter and stockpiling," one of the delegates said. Another Gulf delegate said: "The general feeling is that prices will still remain lower than what we all want because of the excess of supply in the market. The expectation is that these stocks will not decrease before the first half of the year." "There are a number of good signs, for example the shutdown of some production in the US and Canada.

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So it means that the policy decision made in the last meeting was the correct one, it'll be slow, painful for some more than others but in the end effective," that delegate said. OPEC last November decided against cutting its production despite misgivings from its non-Gulf members, after Saudi Oil Minister Ali Al-Naimi said the group needed to defend market share against US shale oil and other competing sources. The decision sent oil prices to what was a four-year low close to $71 a barrel. Crude later fell to a near six-year low of $45.19 on Jan. 13 - further than many delegates had expected - and was trading above $53 on Monday. Publicly, OPEC officials including Secretary-General Abdullah Al-Badri have started to express confidence that a bottoming out of prices and a recovery may be under way. The talks on OPEC's long-term strategy - which is updated every five years - continue on Tuesday. OPEC oil ministers, who decide the group's output policy, are not scheduled to meet until June 5. Oil prices may stay depressed until summer due to weak seasonal demand even as Saudi Arabia's strategy of curbing the output growth of rival producers might have started achieving tangible results, OPEC delegates told Reuters. Delegates from the Organization of the Petroleum Exporting Countries and external experts are meeting at OPEC's Vienna headquarters this week to discuss the producer group's long-term strategy. Such meetings do not set output policy. The talks arise as data from the US showed a record drop in drilling rigs, prompting oil prices to jump above $50 a barrel on Friday as traders said they saw it as a sign that OPEC's strategy was taking a toll on the US shale boom.

Oil prices reverse losses World oil prices rose Monday, reversing earlier losses, with focus on the United States where refineries were on strike. US benchmark West Texas Intermediate for delivery in March climbed 26 cents to $48.50 a barrel. Brent North Sea crude for March gained 60 cents to stand at $53.59 a barrel in afternoon deals compared with Friday's close. Analysts said dealers earlier took profits after WTI had Friday rebounded from six-year lows to rocket $3.71 and Brent had surged $3.46. Supporting the market has been a series of announcements by oil companies that they plan to cut investment amid lower returns for crude brought to the surface. Meanwhile the biggest strike at US refineries since 1980 was set to add to the world's oversupply of oil, weighing once more on prices, according to analysts. The refineries on strike can together produce 1.82 million barrels of fuel per day, about 10 percent of US capacity. The United Steelworkers union, which represents employees at more than 200 US

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Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

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in this publication. However, no warranty is given to the accuracy of its content . Page 14

refineries, terminals, pipelines and chemical plants, stopped work on Sunday at nine sites after failing to agree on a labor contract.

Despite firmer prices Monday, the oil market has lost more than half its value since June when the commodity was sitting at more than $100 a barrel, largely owing to a surge in global reserves boosted by robust US shale oil production. The problem was exacerbated in November after the OPEC oil cartel insisted that it would maintain output levels despite plunging prices. The 12-nation group pumps about 30 percent of global crude. Oil prices surged 8 percent on Friday as the market digested news another 94 rigs previously drilling for oil in the United States had been idled over the previous week. It was the largest number of rigs de-activated in a single week since at least 1987 and triggered the biggest one-day percentage increase in Brent prices since 2009. – Agencies

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

Your Guide to Energy events in your area

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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 02 February 2015 K. Al Awadi

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