new base energy news issue 907 dated 15 august 2016

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 Energy News 15 August 2016 - Issue No. 907 Edited & Produced by: Khaled Al Awadi

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Iraq starts natural gas processing plant in southeast region Reuters

Iraq started operating a new natural gas processing plant for oil fields in the southeastern region on Sunday as part of a plan to use gas that was previously flared to generate electricity, the oil ministry said in a statement.

The plant located in Misan province, on the border with Iran, will process gas associated with crude pumped at the Fakka and Bazargan fields, it said. All Misan fields to be brought on stream in the future will be connected to the plant.

OPEC's second largest oil producer after Saudi Arabia, Iraq flares about 70 percent of its gas output, according to the Basrah Gas Company which the nation set up in partnership with Shell and Mitsubishi.

Basrah Gas this year also started exporting cargoes of gas condensates and liquefied petroleum gas processed from fields in the Basrah region. Thirteen years after the U.S.-led invasion that toppled Saddam Hussein, the country still suffers from an acute electricity shortage as it lacks power stations and gas supply .




SEC fuels wind, solar projects in line with Vision 2030 Saudi Gazette

In line with the Kingdom’s Vision 2030, the Saudi Electricity Company (SEC) have begun technical studies to take advantage of renewable energy and in line with that has identified sites that could produce solar energy in the various regions of the Kingdom.

SEC CEO Ziad Al-Shiha told Al-Watan Arabic newspaper, “This trend began when the company entered the field of renewable energy by implementing the Farasan Project with 500 kilowatts to be the first, which works quite efficiently.”

He noted that the Board of Trustees of SEC approved renewable energy initiatives to build different stations for solar and wind power with a total capacity of 300 megawatts, which provides the equivalent of 25.5 million barrels of fuel over the estimated productive lives of 25 years.

Al-Shiha confirmed that, since the announcement of the Kingdom’s Vision 2030, the company has worked with the Ministry of Energy and Mineral Resources to develop its plans and its initiative to implement renewable energy projects capacity of 9.5 GW in the towns of Al-Jouf and Rafha in order to create two working solar energy technologies. Al-Shiha explained that the company is working on the implementation of Harimale Project to produce 2,750 kilowatts of wind power in addition to preparing the necessary studies to implement projects for wind power on the west coast of the Kingdom with capacity of 50 megawatts.

He explained that he has signed two separate contracts that are considered the largest power plants in the world’s electric power integrated with solar thermal energy (ISCC). The CEO stated that he is currently implementing the solar power plant in the city of Aflaj with a total capacity of up to 50 megawatts, which is one of the first renewable energy plants initiated by the company in collaboration with the King Abdulaziz City for Science and Technology.




Pakistan:Russia Seeks $1.25 per unit to Transport LNG Through Pakistan's North-South Gas Pipeline … The Express tribune

Russia has sought a tolling fee of $1.25 per unit for transmitting the imported LNG through the North-South gas pipeline, reported The Express Tribune, a Pakistani newspaper.

PT Global Resources, a subsidiary of Rostec, has commenced discussions with Pakistani side regarding commercial aspects of the North-South gas pipeline construction project in the South Asian nation.

In October 2015 in Islamabad, an intergovernmental agreement was signed between the governments of Russia and Pakistan on the construction of the North-South gas pipeline from Karachi to Lahore.

The pipeline will have a length of 1,100 km and a capacity of up to 12.3 bcm a year. It will connect LNG terminals in the ports of Karachi and Gwadar in

southern Pakistan with power plants and industrial gas consumers in Lahore in the north of the country.

The fee was proposed during negotiations between the two countries in Islamabad, officials have told the newspaper.

Pakistan’s Economic Coordination Committee (ECC) has agreed the creation of an SPV (Special Purpose Vehicle) in Pakistan, the responsibilities of which will include responsibility for implementing the project, that meets the parameters of the intergovernmental agreement.

The ECC has taken a decision to implement the project on BOOT (Build, Own, Operate, Transfer) contract terms, under which the constructed gas pipeline after its commissioning will be owned and operated by the project company for 25 years and then transferred over to the Pakistani side.

Officials said the SPV will also be listed on the Pakistan stock market by floating its shares in order to generate funds for the project.

( Gas flow 1000,000 MMBTU/Day x 1.25 U$D/MMBTU , thus revenues = U$D 1,250,000 )




DNO launches offer to acquire Gulf Keystone Source: DNO

DNO, the Norwegian oil and gas operator, on July 29 unveiled a proposal to acquire for USD 300 million all of the enlarged share capital in Gulf Keystone Petroleum following the latter's contemplated financial restructuring announced earlier this month.

The terms of the DNO proposal, which would comprise cash and shares, reflect a 20 percent premium to the share price of USD 0.0109 at which, on 14 July 2016, Gulf Keystone issued shares representing 5.6 percent of its share capital, and also reflect a 20 percent premium to the price at which Gulf Keystone intends to issue further shares in its restructuring.

In addition, for the Gulf Keystone guaranteed note holders the DNO terms reflect 111 percent of par value compared to 99 percent under the contemplated restructuring, and for the convertible bondholders the DNO terms reflect 18 percent of par value compared to 15 percent under the contemplated restructuring.

By offering USD 120 million in cash (approx. 40 percent of the consideration), DNO would provide an early exit for those noteholders and bondholders who may be unable or unwilling to hold equity for an extended period.

The additional offer of 170 million DNO shares (approx. 13.6 percent of the post transaction DNO share capital) would provide Gulf Keystone investors with continued exposure to the Shaikan field in addition to DNO's wider portfolio of assets, significantly larger market capitalization, more robust cash flow, stronger balance sheet and proven operating and management capabilities.

DNO has been active in the Kurdistan region of Iraq since 2004 and ranks number one among the international oil companies in oil production (50 percent), oil exports (60 percent) and proven oil reserves (50 percent).

DNO holds a 55 percent stake in and operates the Tawke oil field at a current production level of around 120,000 barrels of oil per day (bopd) of 27 degree API crude. Gulf Keystone holds a 58




percent stake in and operates the Shaikan oil field at a current level of around 40,000 bopd of 17 degree API crude.

Production from Shaikan is transported daily by road tanker to DNO's unloading and storage hub at Fish Khabur for onward pipeline transport to export markets.

'Combining these two companies will create further scale and unlock operational synergies that will reinforce DNO's already formidable presence in Kurdistan,' said Bijan Mossavar-Rahmani, DNO's Executive Chairman.

'We understand Shaikan's challenges and opportunities and we are well positioned to focus financial, technical, commercial and logistical support to maintain and then grow production at this field to the benefit of both Kurdistan and our investors,' he added.

Gulf Keystone, a Bermuda incorporated and London listed company, has called a special general meeting for 5 August 2016 to consider its contemplated financial restructuring. DNO has written to the board of directors of Gulf Keystone to present its proposal and to facilitate immediate engagement with Gulf Keystone's investors ahead of the meeting to ensure sufficient time for these investors to carefully consider the enhanced terms proposed by DNO.

Shaikan Significant operational progress has been made on the Shaikan block since the Shaikan-1 world-class discovery in 2009 to the ramp up of production and crude oil export sales levels of today.

The Shaikan block is situated about 85 km to the north-west of Erbil covering an area of 283 km². The Production Sharing Contract (“PSC”) for the Shaikan block was awarded in November 2007 to Gulf Keystone Petroleum International (Operator with the working interest of 75%), Kalegran Ltd. (100% subsidiary of MOL Hungarian Oil and Gas Plc. with 20%) and Texas Keystone Inc. (5%).




Oman: Orpic’s plastics complex to offer $1.5b in business By A E JAMES/[email protected]

As part of a major initiative to strengthen in-country value (ICV) while building mega projects, contractors handling $6.5 billion worth of Liwa Plastics Industries Complex project have agreed to purchasing a minimum of 25 per cent from local vendors, as well as meeting a minimum

Omanisation level of 30 per cent, and providing training for Omani youths in excess of 15 per cent of those employed. The prestigious Liwa Plastics Industries Complex is being built by state-owned Oman Refineries and Petroleum Industries Company (Orpic). The estimated minimum value for ICV is approximately $1.5 billion, Dr. Hilal Al Hinai, general manager – Corporate Support Services – Orpic, told Times of Oman, prior to an in-country value roadshow in

Sohar. Local small and medium enterprises are expected to significantly benefit from the business opportunities, which include sub-contracting work, purchase orders, and support services,to be purchased by major contracting firms. Orpic has already awarded four major packages to multinational contracting firms for building Liwa Plastics Industries. Among the four packages, a joint venture of CB&I and CTCI Company was awarded a contract for a steam cracker and utilities, Italy's Tecnimont won a contract for building a plastics units, a consortium of South Korea's GS Engineering and Construction and Japan's Mitsui & Co won a contract for constructing a natural gas liquids extraction facility, and India's Punj Lloyd was awardeda contract to build a pipeline between Fahud and Sohar.

“Orpic is leading five business opportunities across oil and sector, which has been identified in the Blue Print Strategy Book. Orpic actively supports SME development-related engineering design for the manufacturing industry, detailed engineering design, development of an engineering services hub, tank maintenance and cleaning and purchasing of commodity chemicals. These opportunities are progressing at different stages, starting with preparation or under strategy phase,” said Al Hinai. Al Hinai also noted that Orpic’s ICV agenda corresponds with that of the oil and gas industry and, as such, the company fully supports the national ICV programme and the ICV committee, which was formed by the Ministry of Oil and Gas. The company has embedded ICV into its own business model, with particular reference to its major projects over the next four years.




“The ICV mechanism is in place to perform site visits to audit and monitor each ICV component provided by the contractors to ensure the desired ICV outcome is generated, and meetings are held with contractors to communicate and understand the challenges faced,” added Al Hinai. Orpic’s ICV strategy is to support business development, human capability development, and stimulate productivity in the Omani economy through the retention of maximum in-country value. To achieve this, the ICV department aims at reaching the authentication (made in Oman) of materials procured by Orpic, and development of human capital in all Orpic projects by ensuring at least 30 per centof Omanisation across all categories and levels, sustainable development of Omani Small and Medium Enterprises (SMEs) through the support of those directly linked to Orpic’s business and communication of ICV achievements through dashboards to all key stakeholders. The ICV and procurement teams have started a new practice to ring-fence a number of tenders, which are suitable to SMEs, in terms of their capabilities, in order to ensure 10 per cent allocation to local businesses. “We have allocated a certain scope for either SME’s or local suppliers for those scopes, which are currently being undertaken by international suppliers.” The ICV team works with all agencies and departments to study tenders, to identify any ICV opportunities through Omanisation or local sourcing, in an effort to include them in the tender document. Liwa Plastics Industries Complex is one of the strategic growth projects being undertaken by Orpic as part of its transformational journey. The $6.5 billion project, which is scheduled for commissioning in 2020, will transform Orpic’s product mix and business model, double company profits, create new business opportunities, generate significant employment opportunities and support the development of a downstream plastics industry in Oman. Upon completion, plastics production will have increased by 1 million tonnes, allowing Orpic to produce 1.4 million tonnes of polyethylene and polypropylene by 2020.




NewBase 15 August 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 up on potential producer action to prop up market Reuters + NewBase

Oil prices edged up early on Monday and have risen more than 10 percent since the start of the month as speculation intensifies about potential producer action to support prices in an

oversupplied market.

International Brent crude oil futures were trading at $47.10 per barrel at 0018 GMT, up 13 cents from their last settlement, and over 10 percent above the last close in July. U.S. West Texas Intermediate (WTI) crude futures were at $44.65 a barrel, up 16 cents from their last close.

"Oil posted another ... gain as speculation of potential production freezes by OPEC picked up pace. Saudi Arabia signaled that it is prepared to discuss stabilizing

the markets at informal OPEC discussions next month," ANZ bank said on Monday.

"This was despite another strong rise in drilling activity in the U.S. ...Baker Hughes data showed the number of rigs operating in the U.S. rose by 15 last week to 396," it added.

After falling sharply from over 1,600 in 2014, before the price rout started, to a low of just 316 in late May, the U.S. oil rig count has steadily risen since then as U.S. producers have adjusted to lower prices.

Oil price special

coverage




NewBase Special Coverage News Agencies News Release 15 August 2016

Five oil producers that fly under the radar, and what you should know about them CNBC

Just about everyone knows about major oil producers like Saudi Arabia, Iran, Libya and Venezuela. Yet how much is known about some of the smaller nations that play a role in lubricating the machinery that keeps the world supplied with oil?

With all the scrutiny on OPEC countries and noncartel giants, places like Nigeria, Angola, Gabon and Trinidad — which some people may not realize is the largest oil and natural gas producer in the Caribbean — are often overlooked. Like their larger cohorts in the global oil market, they have also found themselves under severe pressure from falling oil prices. Still, the dynamics in these individual countries are worth taking a look at, especially because crude markets remain as volatile as ever.

CNBC surveyed the landscape, and highlighted some of the smaller oil producers that fly under the radar, but arguably deserve more attention as developments in the world economy shape their domestic economies.

Angola: A mess with opportunity




The bear market in commodities has put considerable pressure on Angola, which is highly dependent on oil and has one of the least diversified economies in the world. About 80 percent of government revenue comes from crude, which has sent public finances crashing.

Recently, the ruling party instituted austerity measures that sliced the government budget by 50 percent, but analysts at Standard & Poor's were unimpressed: On Friday, the agency cut the country's outlook to negative because of slumping growth prospects.

"The risks of the low oil price are rising inflation, currency devaluation, and social and economic difficulties," Claire Lawrie, Africa energy lead at Ernst & Young, told CNBC recently. She added there are still opportunities in the country's gas sector.

Colombia: Outlasting its neighbors

The Andean nation has not been completely immune to the slump in oil prices that has undermined other commodity-dependent economies. At the same time, Colombia has managed to coast in an economy that's hammering places like Venezuela, its geographic neighbor in the throes of an economic collapse.

Colombia ranks behind Venezuela and Brazil as one of South America's largest oil exporters, the U.S. Energy Information Administration notes, producing about 1 million barrels per day. The country is also pouring money into a $70 billion multiyear infrastructure spending project.

"Given the intensity of the oil price shock, it is our view that Colombia's recent growth performance has been quite strong," Michael Heydt, lead Colombia analyst and a vice president at DBRS, told CNBC recently. "Colombia's medium-term prospects are also good compared to regional peers," he said.




Gabon 'stable' despite oil slump

The West African nation only recently rejoined OPEC. The move may help to deepen commercial and financial relationships with other cartel members. Gabon produces about 240,000 barrels of oil per day, making it the smallest of OPEC's oil producers. Gabon remains a small country by population, but one with relatively high per capita growth.

"Oil production is stable, which is supportive for the country's creditworthiness. It is also making some progress on economic diversification, which is important," said Morgan Harting, senior portfolio manager at AB Global, who oversees the firm's emerging market multi-asset portfolio.

Nigeria: A 'borderline failed state'




Once one of the crown economic jewels of West Africa, Nigeria has been hammered by the oil slump. The country is not in as bad a shape as Venezuela, but comes awfully close: The government has been forced to battle terrorist elements, double-digit inflation and widespread energy shortages. A few months ago, short seller James Chanos said Nigeria was "caught in a macro hurricane," and was a "borderline failed state."

Trinidad and Tobago: Still resilient

Trinidad is about more than colorful carnivals and Soca music, arguably the country's most recognizable cultural exports. The Caribbean's wealthiest nation has a history in oil and gas production that goes back more than 100 years, but churns out only 70,000 barrels per day. Trinidad is also the world's largest ammonia exporter and a methanol powerhouse, according to IHS Global Insight data.

Oil's tumble has dealt the economy a stiff blow, but International Monetary Fund officials said in March that Trinidad "still has enormous strengths, including a well-educated workforce and a stable political system."

›




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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 26 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great

experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels. NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE NewBase 15 August 2016 K. Al Awadi

new base energy news issue 907 dated 15 august 2016

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