NewBase Energy News 26 December 2017 - Issue No. 1119 Senior Editor Eng. Khaled Al Awadi

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NewBase Energy News 26 December 2017 - Issue No. 1119 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: DEWA and General Electric discuss closer ties, to projects
(WAM) -- Saeed Mohammed Al Tayer, Managing Director and CEO of the Dubai Electricity and
Water Authority, DEWA, has received a senior delegation from General Electric, GE.
The meeting is part of DEWA’s keenness to enhance cooperation with international companies in
order to share best practices and developments in the energy sector, particularly in clean and
renewable energy The delegation included Russell Stokes, President and CEO of GE Power; Dr.
Dalya Al Muthanna, President and CEO of GE Gulf; Joe Anis, President and CEO of Power
Services Middle East and Africa; Mohammed Mohaisen, President and CEO of GRID Solutions
MENAT; and Michael Keroulle, CCO of GE Power Steam Power System.
During the meeting, Al Tayer welcomed the delegation, and explained that the visit will boost
cooperation with DEWA’s private sector partners in the field of energy, and enhances
infrastructure according to the highest standards and best international practices.
He also reviewed DEWA’s most important projects, initiatives, and programmes, highlighting
DEWA’s commitment to achieve the objectives of the Dubai Clean Energy Strategy 2050. The

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strategy, announced by the Vice President, Prime Minister and Ruler of Dubai, His Highness
Sheikh Mohammed bin Rashid Al Maktoum, aims to provide 75 percent of Dubai’s energy through
clean sources by 2050. It also aims to explore promising opportunities in the renewable and clean
energy sector, to diversify energy sources, and establish Dubai as a global hub for clean energy
and green economy.
The delegation demonstrated some of their solutions and technologies in the field of clean and
renewable energy technologies, and expressed their interest in participating in DEWA’s strategic
projects.

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Kuwait Secures LNG Deal as Gulf Energy Exporters Hunt for Gas
Bloomberg + NewBase
Kuwait struck a 15-year deal with Royal Dutch Shell Plc for liquefied natural gas, locking in
supplies as neighbors in the oil rich Gulf consider their own import strategies.
The United Arab Emirates and Kuwait are the only importers of LNG in the region, with
Bahrain joining the club in 2019. Saudi Arabia is looking at natural gas assets from Russia to East
Africa and the U.S. The three oil producers pump about half of OPEC’s output, but use growing
quantities of that crude in power generation, losing out on export revenue.
Now these countries are looking to import more natural gas for power needs and to feed into
petrochemical plants.
“The big issue for Kuwait is they burn a lot of oil, most of their power generated is from oil, and so
importing LNG for them is cheaper and frees up oil for export,” Robin Mills, chief executive officer
of Dubai-based Qamar Energy, said by phone.
Kuwait Petroleum Corp.’s sales purchasing agreement with Shell International Trading Middle
East Ltd. will start in 2020, the companies said Sunday in an emailed statement. Shell has
supplied Kuwait with LNG since 2010 and declined to disclose the volumes in the new contract.
While KPC is working to boost domestic gas production, and the country is negotiating a pipeline
deal with Iraq, there is a “pressing requirement” to secure supplies in the meantime, they said.
Kuwait imported 3.49 million metric tons of LNG in 2016, according to the International Group of
Liquefied Natural Gas Importers.
Saudi Arabia, the biggest crude producer in the Organization of Petroleum Exporting Countries,
diverts tens of millions of barrels of crude every year into its electricity generation plants,
particularly during the peak air-conditioning season in the summer. It doesn’t produce enough gas
to supply its power stations. Most the gas it does pump goes to its fast-growing petrochemicals
industry.

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Kuwait is planning petrochemical projects in the U.S., Canada and Bahrain, and will start offshore
drilling for oil and gas in March, KPC Chief Executive Officer Nizar al-Adsani said in October.
Kuwait Signs LNG Import Deal With Shell
The sales purchasing agreement with Shell International Trading Middle East Ltd. will start in
2020, the companies said Sunday in an emailed statement. Shell has supplied Kuwait with the
super-cooled fuel since 2010 and declined to say how much gas is covered under the new
contract. While KPC is working to boost local natural gas production, Kuwait has a “pressing
requirement” to secure natural gas supplies in the meantime, they said.
LNG could help meet Kuwait’s domestic demand for power to run air conditioners during hot
summer months and cut the amount of crude oil burned instead of exported for profit. The contract
will cover 2 million to 3 million metric tons of LNG a year, priced at 11 percent below a Brent
benchmark, a person familiar said, asking not to be identified because terms of the deal are
private.
“The big issue for Kuwait is they burn a lot of oil, most of their power generated is from oil, and so
importing LNG for them is cheaper and frees up oil for export,” Robin Mills, chief executive officer
of Dubai-based Qamar Energy, said by phone.
Kuwait wants cleaner burning energy sources such as natural gas to reduce emissions and
improve air quality, according to the Shell and KPC statement.

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India Oil Explorer to Buy, Not Drill, Its Way to Output Goal
Bloomberg - Saket Sundria
India’s biggest oil explorer plans to snatch up producing assets to reach its goal of raising
overseas output by more than half in about three years, a faster route than drilling for new
reserves.
ONGC Videsh Ltd., the overseas investment unit of state-run Oil & Natural Gas Corp., spent $2.2
billion last year on an existing Russian project, which raised production by 4 million tons, or 44
percent. The company still needs to add more than 7 million tons to achieve its target of 20 million
tons by 2020.
“Short-term production goals can only be achieved through producing assets because the
exploration life cycle is very long,” Managing Director Narendra Kumar Verma said in an interview
last week. “That’s why we are focusing on producing assets to boost production in short term.”
Russia Boost
ONGC Videsh's annual production volumes jump after Vankor acquisition
Source: company website
Prime Minister Narendra Modi is pushing India’s energy companies to raise domestic output and
secure assets overseas to bolster energy security for a country that imports more than 80 percent
of its oil. Adding supplies through the purchase of producing assets is a faster, and potentially
more-costly, alternative to exploring and developing new fields.
ONGC Videsh, the nation’s largest overseas oil and gas investor, is struggling to reverse
declining output from Russian unit Imperial Energy Corp., which it acquired in 2008, revive assets
in troubled Sudan and Syria, raise production in Venezuela and start pumping from Mozambique.
The company bought a 26 percent stake in Russia’s Vankor project last year from oil giant
Rosneft, lifting its overall output to about 12.8 million tons in the year ended March 31, from 8.92
million in the previous year. The company expects total outputto reach 14 million tons by March,
with half of that coming from Russia.

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“Russia has been giving us good opportunities, and our governments share good relations,”
Verma said. The company is working toward a more diversified portfolio, he said, "but if a good
opportunity emerges again in Russia, we will not hesitate.”
Russia Heavy
Russia accounts for more than half of ONGC Videsh's output
Source: Oil & Natural Gas Corp.
The oil price crash that started in 2014 helped the company bulk up on assets that have been in
production for years. Global benchmark Brent oil, which hit the lowest in more than a decade
during January 2016, has recovered to about $65 a barrel.
“Definitely the low oil price has offered a window of opportunity for us to consolidate and increase
our footprint,” Verma said. “Gradually, people are reconciling with the low prices.”

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NewBase December 26 - 2017 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil Prices near June 2015 high as production cuts tighten market
Reuters + NewBase + Bloomberg
Oil prices were stable on Tuesday, with Brent crude lingering near 2015 highs on the back of an
outlook for healthy demand amid ongoing production cuts led by OPEC and Russia.
U.S. West Texas Intermediate (WTI) crude futures were at $58.50 a barrel at 0141 GMT, up 3
cents from their last settlement.
• Oil prices were stable on Tuesday, with Brent crude lingering near 2015 highs
• Brent has risen by 47 percent since mid-2017
• OPEC and Russia have been withholding output in order to tighten the market and prop up prices
Brent crude futures, the international benchmark for oil prices,were at $65.25 a barrel, unchanged
from their last close, but near the $65.83 per barrel briefly on Dec. 12 - the highest since June
2015.
Oil price special
coverage

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Brent has risen by 47 percent since mid-2017. The Organization of the Petroleum Exporting
Countries (OPEC), the Middle East-dominated producer club, and Russia - the world's single
biggest oil producer - have been withholding output in order to tighten the market and prop up
prices.
The agreement to cut started last January and is set to cover all of 2018.
Jabar al-Luaibi, oil minister of OPEC-member Iraq, said on Monday there would be a balance
between supply and demand by the first quarter of 2018, leading to a boost in oil prices. "During
the first quarter of next year there will be more balance between supply and demand, which will
reflect positively on improving global oil prices," he said.
The production cuts come amid healthy global demand, which many analysts expect to hit 100
million barrels per day (bpd) for the first time at some point next year or in 2019. Keeping a lid on
prices for the moment is the expected return of the Forties pipeline system in the North Sea, which
can supply up to 450,000 bpd of crude underpinning Brent futures.
The pipeline shut down earlier in December due to a crack, but operator Ineos said the system
was being tested following repairs and full flows should return in early January.
In the longer term, efforts by OPEC and Russia efforts to prop up prices could also be undermined
by U.S. production, which has soared by more than 16 percent since mid-2016, fast approaching
10 million bpd.
Only OPEC king-pin Saudi Arabia and
Russia produce more, but the
UnitedStates is fast catching up, largely
thanks to shale drillers.
The U.S. rig count, an early indicator of
future output, held at 747 in the week to
Dec. 22, according to the latest weekly
report by Baker Hughes. That's still
much higher than a year ago, when
only 523 rigs were active, and most
analysts expect U.S. output to rise past 10 million bpd within weeks.

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NewBase Special Coverage
News Agencies News Release December 26-2017
Renewable energy and electric vehicles dodge a bullet in tax bill
Tom DiChristopher | @tdichristopher
Electric car makers and the renewable energy industry can mostly breathe a sigh of relief after
many feared changes to the U.S. tax code would weigh on demand for clean technology.
The House bill released last month took direct aim at federal subsidies for electric vehicles, wind
energy and solar power. The Senate left current policies unchanged, but its bill contained financial
provisions that would have eroded the value of wind and solar tax credits.
The final Republican tax bill passed this week restored the status quo on many fronts, but clean
energy lobbyists aren't resting easy just yet. A complicated provision made its way into the bill,
and the renewable power industry worries that it could still weigh on demand.
Here's how tax policy for electric vehicles and renewable energy stands right now.
• The final GOP tax bill leaves a $7,500 credit for electric vehicle purchases intact after the House
proposed killing it.
• The House also aimed to reduce or eliminate tax credits for wind and solar power credits.
• A complicated provision known as BEAT could still dent investment in renewable energy, industry
groups warn.
Electric vehicles
The House sought to repeal a credit that allows car buyers to claim up to $7,500 for electric
vehicle purchases or leases. That raised concerns that demand for the plug-in vehicles would
plummet.
It also put jobs American jobs at risk, according to Calstart, a clean transportation group. Electric
vehicle and component manufacturing employs more than 215,000 U.S. workers, according to
Department of Energy research cited by Calstart.
The final bill keeps the credit in tact. Manufacturers can claim the credit until they've sold 200,000
electric vehicles. After that, a phase-out period begins.
Wind energy
The House also proposed reducing the tax credit for building wind energy facilities. It would have
knocked the current 2.4 cents per kilowatt hour production tax credit down to 1.5 cents per kilowatt
hour.
Lawmakers also suggested retroactively changing the rules that determine which wind projects
qualify for the production tax credit. That means developers who started projects under the old

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guidelines would have to prove those projects met the new guidelines. If they couldn't provide
proof, they would no longer qualify for the full credit and would likely see their project costs rise.
Neither provision survived the conference process in which the House and Senate reconcile their
bills.
The wind industry also had reason to cheer the repeal of the corporate alternative minimum tax,
which sought to make sure companies didn't pay too little in taxes.
The Senate bill allowed companies to offset the provision with various tax credits. However, it
would have only allowed wind farm developers to offset the minimum tax with production tax
credits for the first four years after a project enters service. That would have been a problem
because the subsidy is designed to distribute benefits over a 10-year period.
Solar power
The House bill also would have ended a tax credit for investment in solar power for commercial
properties and large solar farms. The 30 percent investment tax credit is scheduled to gradually
reduce to a permanent 10 percent rate in the coming years, but the House aimed to eliminate the
credit altogether after 2027.
The provision was not a major concern,
but it would reduce long-term certainty
and force the solar industry to plow its
time and energy into a campaign to
extend the credit.
More immediately, the House bill
proposed changes to eligibility rules that
would make it harder for solar farm
investors to claim the credit in a given
year. As a result, some solar projects
may have only qualified in later years, when the value of the credit is scheduled to fall.
In the end, the permanent 10 percent tax credit survived, and the eligibility criteria remained the
same.
BEAT: The bullet yet to be dodged
Investment in the renewable sector is also under threat by a provision in the Senate bill called the
Base Erosion Anti-Abuse Tax, or BEAT, a provision that targets companies that lower their tax bill
through cross-border transfers to affiliates.
The BEAT is complicated, but here's the takeaway for renewables. In the original Senate bill,
claiming production and investment tax credits would increase a company's chances of running
afoul the BEAT, so the provision makes investment in renewables less attractive.
The final bill allows companies to offset up to 80 percent of their BEAT burden with production and
investment credits for renewables. This marks an improvement, but the BEAT could still dampen
investment in renewable power projects, industry associations say.

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Many renewable power developers don't have a large enough tax bill to use the investment tax
credits, so they secure investments from banks and other institutions that carry hefty tax burdens
and can benefit from the credits. This is called tax equity investment.
Tax equity investors won't necessarily know how BEAT will affect them until the end of each year.
That uncertainty could cause them to be more cautious about funding renewable projects if they
can't be sure how much of their investment they'll be able to recoup.
Industry representatives say they'll be working with Congress to potentially tinker with BEAT.
Tom DiChristopherEnergy Report

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NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
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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
khdmohd@hawkenergy.net
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Khaled Al Awadi is a UAE National with a total of 27 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 December 2017 K. Al Awadi

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

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