New base energy news 18 august 2020 issue 1364 by senior editor khaled alawadi

Copyright © 2020 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 endeavors 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 Energy News 18 August 2020 - Issue No. 1364 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:Abu Dhabi to Merge Oil Services Firms Into National Champion
Bloomberg - Paul Wallace
Abu Dhabi is seeking to create a national champion in oil services by merging National Petroleum
Construction Co. and local rival National Marine Dredging Company PJSC. NMDC shares rose
14% in Abu Dhabi on Sunday to 5 dirhams, their highest since March 2017, after NPCC’s
shareholders proposed the deal.
NPCC, ultimately controlled by the Abu Dhabi government through one of its investment vehicles,
ADQ, wants to transfer all the firm’s share capital to NMDC, according to a statement released on
Sunday. The merger would create an entity that had a combined revenue of 8.9 billion dirhams ($2.4
billion) last year.
“This transaction will create a larger, more diversified and financially flexible national champion,”
said Khalifa Al Suwaidi, chief investment officer at ADQ and chairman of Senaat, which is NPCC’s
main shareholder and itself controlled by ADQ.
Abu Dhabi, the oil-rich capital of the United Arab Emirates, has been merging some companies as
it looks to bolster the economy and diversify from hydrocarbon production. Earlier this year, it
decided to combine utilities Taqa and ADPower.
Follow-on Offering
www.linkedin.com/in/khaled-al-awadi-38b995b

Under the latest proposal, NMDC would issue NPCC shareholders an instrument convertible into
575,000,000 ordinary shares in the combined group upon the closing of the transaction,
the statement said. The price at which the instrument would convert into NMDC shares is 4.40
dirhams per share. The offer implies an equity value for NMDC of 1.1 billion dirhams, the statement
said.
NMDC would continue to be listed on the Abu Dhabi Securities Exchange, and would become one
of its biggest companies, the statement said.
ADQ, which is being advised by Moelis & Co., said it will consider increasing the entity’s free float
though a follow-on offering in due course.

U.A.E: Adnoc’s Ruwais refining upgrade 73% complete
Copyright 2020 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).
The Abu Dhabi National Oil Company (Adnoc) said that significant progress has been made on its
“Crude Flexibility Project” (CFP), with 73% project delivery of Adnoc’s ongoing upgrade of refining
capabilities in Ruwais. “Crude Flexibility Project” (CFP), with 73% project delivery of Adnoc’s
ongoing upgrade of refining capabilities in Ruwais.
Image used for illustrative purpose. General view of the Borouge petrochemical facility at ADNOC's Ruwais Industrial
Complex in Ruwais, United Arab Emirates May 14, 2018.
REUTERS/Christopher Pike
For more than 40 years, Adnoc has predominantly refined Murban grade crude, extracted from its
onshore fields in the Emirate of Abu Dhabi. The CFP allows for the Upper Zakum grade, extracted
from Abu Dhabi's offshore oil fields, to be processed along with over 50 other types of different
crudes.
Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc
Group CEO said: “We continue to focus on stretching the margin of every barrel of oil we produce
to maximize the value of our resources, while also making responsible investments in the current
market environment.
This investment is another step in our progress to develop Ruwais into a dynamic, global hub for
downstream activity, further strengthening Adnoc's role as a key driver of the UAE's long-term
industrial growth and economic diversification.”
Upon completion in mid-2022, the CFP will allow Adnoc to process up to
420,000 bpsd (Barrels per Stream Day) of heavier and sourer grades of
crude oil, as part of the 840,000 bpsd refinery in Ruwais.

In 2018, Adnoc announced plans to diversify the feedstocks it processes. The $ 3.5 billion CFP
upgrade initiative is a core driver of Adnoc Downstream’s 2030 smart growth strategy.
The project will increase the value Adnoc derives from every barrel of oil, both by boosting refining
margins and by leaving more high-value Murban crude available for export.
Much of the physical infrastructure required for the CFP has now been put in place. Major structural
elements, notably 2 new fractionators and 24 atmospheric residue desulfurizer reactors have been
installed at the site over the past two months.
Each of the 317-ton fractionators was transported to the UAE from South Korea. Installing the 80-
meter structures took three weeks across June and July 2020. They will serve to separate the
component products within the crude oil to allow for further refining.
Upon completion in mid-2022, the CFP will allow Adnoc to process up to 420,000 bpsd (Barrels per
Stream Day) of heavier and sourer grades of crude oil, as part of the 840,000 bpsd refinery in
Ruwais.

Saudi Arabia and Jordan to develop electricity interconnection grid
The National - Jennifer Gnana
Saudi Arabia signed an agreement with Jordan to develop a 164-kilometre electricity grid between
the two countries. The link will span 164km and is part of Saudi Arabia's Vision 2030 strategy
Riyadh and Amman have undertaken a comprehensive study to evaluate the feasibility of the
project, according to a statement in Saudi Arabia's state news agency SPA. The development of
an electricity grid between the two countries was part of the kingdom’s Vision 2030, Saudi Arabia's
energy minister Prince Abdulaziz bin Salman said.
“There are promising opportunities from the project to support the reliability of the electrical networks
between the two countries, achieve economic savings, [enable] electrical networks to enter
renewable energy and achieve optimal investments in electricity generation projects,” he said.
After the feasibility studies, the two sides agreed to link Qurayyat in Saudi Arabia with East Amman
in Jordan. Saudi Arabia is also exploring plans to export renewable energy through the planned
link.
The kingdom is developing its first wind power plant – a 300MW project – in the north-western Al
Jouf region, which borders Jordan. Riyadh expects to account for about half of the region’s wind
capacity additions by 2028.
Jordan is currently carrying out a three-year programme to overhaul its public debt, which reached
a record 94 per cent of its gross domestic product in 2019. To structure its finances, the country
needs to reduce its energy import bill.
Jordan, which imports over 94 per cent of its energy needs, is looking to diversify its grid by
incorporating solar and wind into its energy mix. Around 285MW of wind and 771MW of wind and
solar power capacity were integrated into its grid last year.
Amman plans to raise its renewable capacity to 2.7 gigawatts by 2021. Jordan follows Iraq in
plugging into the GCC's interconnection grid to meet its own supply shortfalls. Baghdad signed an
agreement in 2019 for a transmission line that would allow it to import 500MW of electricity from the
GCC.
Iraq plans to import electricity through a 300km transmission line that would connect Kuwait to its
port in Faw. The project will be funded by the GCC. Opec's second largest producer also imports
electricity from its neighbour Iran.

Oman crude export to India rises in July with export to China 88.8%
Oman Observer - Jomar Mendoza
China and India were the only two markets for Omani crude exports in July, the latter lifting 11.19
per cent of total exports of 778,012 barrels per day (bpd) for the month, an increase of 9.25 per cent
from the previous month. China, long the dominant importer of Omani crude, accounted for the
remaining 88.81 per cent, the Ministry of Oil and Gas said in its monthly report.
Crude oil production during July 2020 averaged 671,275 bpd, representing a decline of 1.85 per
cent m-o-m compared with the June 2020 daily production average. Exports of 778,012 bpd were
lower by 13.5 per cent compared with the previous month.
Oil prices for all reference crude oil grades around the world experienced a bullish trend during the
trading days of July 2020 — for September 2020 delivery — compared with trading of June 2020.
The average price of West Texas Intermediate Crude Oil at the New York Mercantile Exchange
(NYMEX) settled at $40.91 per barrel, an increase by $2.42. The average price of North Sea Oil
(Brent) at the Intercontinental Exchange (ICE) in London averaged $43.22 per barrel, rising by $2.45
compared with trading during July 2020.
The average price of Oman’s Crude Oil futures contract on the Dubai Mercantile Exchange similarly
increased by 4.9 per cent compared with the previous month. The monthly official selling price for
Oman Crude oil for September 2020 delivery – traded during July 2020 — was $43.62 per barrel,
an increase of $2.03 compared with the June 2020 official selling price. The daily trading marker
price ranged between $42.73 per barrel and $44.98 per barrel.
“Crude oil prices experienced overall optimistic sentiments during trading in July 2020 due to several
factors, which had direct and positive impact on prices. The main factors that supported positive
trading sentiments were some of OPEC+ countries curbing their production to more than what was
agreed. In addition, oil flows to Asia rose for a third consecutive month, reflecting healthier demand.
Moreover, data showed that US oil companies have reduced the number of oil rigs month on month,
which reflects the expectation of a of lower production growth in the USA,” the Ministry added.

Bahrain Needing More Gulf Aid as It’s Downgraded by Fitch
Bloomberg - Paul Abelsky
Bahrain received its first downgrade in over two years from Fitch Ratings, which said it will likely
“require further Gulf backing” in the medium term as the government’s finances remain under strain.
“This may be contingent on Bahrain enacting further fiscal reforms given that Gulf creditors are
themselves facing the need for fiscal consolidation,” Fitch analysts including Toby Iles said in
a report.
Fitch on Friday cut Bahrain’s sovereign rating one step to B+, leaving it four levels below investment
grade and on par with Egypt, Bolivia and Jamaica. The outlook is stable.
Bahrain, the smallest among economies of the six Gulf Cooperation Council members, is vulnerable
despite a $10 billion bailout package secured from its regional allies in 2018. Lower oil prices and
the global coronavirus pandemic have combined to stretch its finances.
The government sold $2 billion in dollar bonds in May, boosting foreign reserves that dropped to
just 290 million dinars ($769 million) a month earlier, the lowest in decades. The stockpile recovered
to 674.9 million dinars in May, according to the latest central bank data.
“The extent of the shock has worsened Bahrain’s credit profile and aggravated risks to medium-
term debt sustainability,” Fitch’s analysts said. Fitch forecasts the state budget deficit will widen to
15.5% of gross domestic product in 2020 from 4.6% in 2019
The rise in this year’s budget shortfall, combined with a 12% drop in nominal GDP, will push the
ratio of government debt to economic output to 130% in 2020; Fitch had predicted Bahrain’s
debt/GDP at 105% before oil prices declined
Even with the deficit projected to narrow, the rating company sees government debt/GDP falling
only to 128% in 2022 The total debt stock includes 14.4% of GDP of long-term interest-free loans
from the GCC and 8.5% of GDP of government liabilities to the central bank; Fitch said Bahrain’s
government includes the former, but not the latter Excluding those items, Fitch estimates
government debt at 107% of GDP in 2020

Iraq to Sign Memorandum With Chevron to Explore For Oil
Bloomberg - Khalid Al-Ansary and Kevin Crowley
Iraq plans to sign a memorandum of understanding with Chevron Corp. to explore for oil in the
country’s southern province of Dhi Qar, according to a person familiar with the matter.
The deal formalizes Chevron’s interest in exploring the eastern and western parts of Nasiriyah, the
capital of Dhi Qar, the person said. It would exclude areas of the province that contain oil fields and
exploration blocks.
Chevron began talks with OPEC’s second-biggest producer two years ago and resumed meetings
with oil ministry officials recently. While any production would likely be years away, the California-
based oil major is looking to use this year’s crude price crash to gain access to quality reserves
cheaply, while European rivals are focusing on a transition to low-carbon energy sources and Exxon
Mobil Corp. is reining in spending.
Chevron spokeswoman Sally Jones declined to comment.
After focusing on U.S. shale for the past three years, Chevron appears to be ramping up activity
with the Middle East. Its $5 billion purchase of Noble Energy Inc. last month brings it a massive
Israeli gas field, and the company is also increasing production from the partitioned zone between
Saudi Arabia and Kuwait.
The MOU was earlier reported by Dow Jones, which said it could be announced later this week
when Iraq’s new prime minister visits Washington.

NewBase August 18-2020 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil edges lower as suppliers try to hold line on output cuts
Reuters
Oil prices edged lower on Tuesday, mostly holding onto overnight gains after OPEC+ said the
producer grouping is almost fully complying with output cuts to support prices amid a drop in demand
for fuels due to the coronavirus pandemic.
Brent crude LCOc1 was down 2 cents, or 0.44%, at $45.17 a barrel by 04.18 GMT, after gaining
1.3% on Monday. U.S. crude was down 23 cents, or 0.54%, at $42.66 a barrel, having risen 2.1%
in the previous session.
Compliance with OPEC+ oil output cuts was seen at around 97% in July, two OPEC+ sources told
Reuters. The oil producers curbed output by record levels to reduce worldwide inventories, as
demand collapsed from the pandemic.
Still, the Organization of the Petroleum Exporting Countries (OPEC) and allies known as OPEC+ in
August reduced their agreed cuts to 7.7 million barrels per day (bpd) from 9.7 million bpd previously.
Oil price special
coverage

“The producer club cannot afford prices to slump too far, as its members’ economies rely heavily on
the revenue generated by petroleum exports,” Eurasia Group said in a note.
But it noted that “U.S. producers are also taking advantage of supply cuts led by OPEC and Russia.”
The U.S. Energy Information Administration last week reduced its global oil demand forecast,
suggesting a smaller than previously expected reduction in global inventories.
Oil refiners shut plants as demand losses seen continuing
Oil refiners are permanently closing processing plants in Asia and North America and facilities in
Europe could be next as uncertain prospects for a recovery in fuel demand after the coronavirus
pandemic triggered losses.
The pandemic initially cut global fuel demand 30% and refiners temporarily idled plants. But
consumption has not returned to pre-pandemic levels and lower travel may be here to stay, leading
to tough decisions for permanent shutdowns. Here are some of the plants involved:
* Royal Dutch Shell (RDSa.L) will permanently shut its 110,000-barrel-per-day Tabangao facility in
Philippines’ Batangas province, one of only two oil refineries in the country. Shell blamed a
pandemic-led slump in margins for turning the plant into an import terminal.
* Marathon Petroleum (MPC.N), the largest U.S. refiner by volume, plans to permanently halt
processing at refineries in Martinez, California, and Gallup, New Mexico. The larger plant in
California will become an oil-storage facility and may convert to produce renewable diesel, a fuel
made from industry waste and used cooking oil.
* “Around 4 million barrels per day (bpd) of shutdowns will be necessary over the next few years to
underpin a meaningful refinery margin recovery,” said Kostantsa Rangelova, head of downstream
at JBC Energy.
“Of that, we see about 1.5 million bpd coming from Asia, with OECD and Southeast Asian refiners
showing the greatest vulnerability.”
* JBC Energy said it expected a strong push for consolidation in China’s refining sector potentially
offsetting part of the strong capacity growth expected in the country.
* Plants in Japan, Australia and New Zealand could be likely candidates for closure ahead, said Mia
Geng, at consultancy FGE.
* Refining NZ (NZR.NZ) said in late June it was considering shutting New Zealand’s only oil refinery
and turning it into a fuel import terminal in the long run, but first would reduce its operations to cut
costs and break even into 2021.
* The coronavirus-driven collapse in fuel demand is also threatening Australia’s oil refining industry,
just as supply chain disruptions wrought by the pandemic have focused the government on the need
to shore up fuel security.
* There have been no permanent plant closures in Europe due to the virus. However, Gunvor Group
said in June it was considering mothballing its 110,000 bpd refinery in Antwerp as COVID-19 hurt
the plant’s economic viability.
* Energy consultancy Wood Mackenzie separately estimated 1.4 million barrels per day, about 9%,
of refining capacity in Europe is at risk of shut-downs by 2022-2023. It put plants in Netherlands,
France, and Scotland on a list of potential closures.

NewBase Special Coverage
The Energy world - Special 18- August -2020
Oil for Less Than Nothing? Here’s How That Happened
Bloomberg - Sheela Tobben
April 20, 2020 will go down in oil-market history as the day when the U.S. benchmark price for crude
dropped below zero for the first time -- and then kept tumbling. In a massive and unprecedented
swing, the future contracts for May delivery of West Texas Intermediate fell to minus $37.63 a barrel.
The jaw-dropping development partly reflected chronic oversupply in the aftermath of a crude price
war and slumping demand caused by the coronavirus, but also came about because of an extreme
glitch in the way U.S. oil futures operate.
1. Why would anyone pay to sell their oil?
For some producers, it may be cheaper in the long run than closing down production or finding a
place to store the supply bubbling out of the ground. Many worry that shutting their wells might
damage them permanently, rendering them uneconomical in the future.
Then -- crucially for the plunge into negative prices --- there are the traders who buy oil futures
contracts as a way of betting on price movements who have no intention of taking delivery of barrels.
They can get caught by sharp price drops and face the choice of finding storage or selling at a loss.
Or they can make a fortune by exploiting the idiosyncrasies of futures contracts. The escalating glut
of oil also made storage space scarce and increasingly expensive.
Crude Oil
Price per barrel of West Texas Intermediate

2. Where did the glut come from?
Either the pandemic or the price war alone would have rocked energy markets. Together, they
turned them upside down. As the virus started to spread around the globe, it began eating away at
oil demand.
But just as countries like Italy showed what kind of damage a national lockdown could do
economically, Saudi Arabia and Russia, the world’s biggest oil producers, escalated the price war.
A pact that had restrained production collapsed and both countries opened their taps to the fullest,
releasing record volumes of crude into the market.
When a deal was worked out by OPEC, Russia, the U.S. and the Group of 20 countries, it proved
to be too little, too late. Prices initially turned negative just in obscure corners of the U.S. market
such as Wyoming, where storage options are few. Then major hubs began to register negative
prices for small streams of selected crudes. And on April 20, prices fell sharply below zero on the
NYMEX exchange, which is owned by CME, the world’s largest energy market.
3. What did futures contracts have to do with that?
The lowest prices came in trades in futures -- contracts in which a buyer locks in a purchase at a
stated price at a stated time. Futures are a tool for users of oil to hedge against price swings, but
also a means of speculation.
The contracts run for a set period, and traders who don’t want to unwind their position or take
delivery generally roll over their monthly contracts shortly before expiration to a month further in the
future.
Contracts for May delivery were due to expire on April 21, putting maximum pressure the day before
on traders whose contracts were coming due. For many, selling at a steeply negative price was
better than taking delivery of actual oil because nobody needs it and there were fewer and fewer
places to put it.

4. Why did prices plunge so precipitously?
That was partly because of surging bets by retail investors that oil prices would rebound. To
understand why, Nymex offers a corollary instrument called Trading at Settlement, or TAS, in which
buyers and sellers agree to transact at whatever the settlement price -- determined by trades in the
last two minutes of trading -- turns out to be.
The TAS market is popular among exchange-traded funds and other funds whose mandate is to
track the price of oil rather than to get the best deal.
Expecting oil prices to recover, retail investors across the U.S. and Asia had been piling into ETFs
whose value was pegged to the April 20 settlement price -- meaning funds such as the Bank of
China Ltd.’s Treasure needed to roll over large numbers of May contracts and buy June ones. As
they sold in the TAS market on April 20, the oil price tumbled, losing $40 in an hour.
One group of London traders was said to have made hundreds of millions of dollars by buying
contracts in the TAS market while selling regular contracts, thereby adding to downward pressure
on prices, and pocketing the difference at the end of the day.
5. What happened to other oil prices?
Brent futures, the global benchmark, ended April 20 down sharply but still above $25 a barrel. The
physical domestic crude market in the U.S. saw negative trades for grades like WTI in Midland,
Mars Blend, Light and Heavy Louisiana Sweet crudes.
Horrified by negative benchmark prices, some U.S. oil producers began offering crude at fixed
prices for the first time since an oil rout in 2014-15.
The WTI futures contract for June delivery changed hands at $20 a barrel on April 20 before falling
further the next day -- highlighting the extent to which the rout was being caused by the glut in the

market rather than just a technical quirk. U.S. producers started pulling back where they could,
causing a slide in output.
The number of rigs drilling for oil and gas plunged in the U.S. and globally. At the same time, many
exchange-traded funds got out of trading in the most volatile part of the curve, the front-month
contract, and brokerages limited speculative positions for retail customers. Then in May, lockdown
measures started easing, leading to a recovery in oil prices. The WTI front-month contract, which
had fallen to $18.84 on April 30, recovered to $35.49 at the end of May and $39.27 at the end of
June. By end-July it had climbed to $40.27 a barrel.
6. What happened to storage?
After the glut began to build and prices began to fall, storage facilities moved toward capacity. Crude
stockpiles at Cushing in Oklahoma -- America’s key storage hub and delivery point of the WTI
contract -- jumped to 65 million barrels by the start of May. The hub had working storage capacity
of 76 million as of Sept. 30, according to the Energy Information Administration. The industry
accumulated supply aboard ships, while contemplating other creative options such as storing oil in
rail tanker cars. The Trump Administration, which is concerned about the possible ripple effect from
oil bankruptcies, eyed a proposal to pay drillers to keep their oil in the ground temporarily. It also
opened up its strategic petroleum reserve to allow companies to lease storage space. Some of that
is starting to be returned as storage space constraints ease.

NewBase Energy News 18 August 2020 - Issue No. 1364 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi, Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 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 the UAE operations base. Khaled is the Founder
of NewBase Energy, and an international consultant, advisor, ecopreneur and
journalist with expertise in Gas & Oil pipeline Networks, waste management, waste-
to-energy, renewable energy, environment protection and sustainable development.
His geographical areas of focus include Middle East, Africa and Asia. Khaled has
successfully accomplished a wide range of projects in the areas of Gas & Oil with
extensive works on Gas Pipeline Network Facilities & gas compressor stations.
Executed projects in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of gas/oil supply routes. Has drafted &
finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements.
Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass
energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous
conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-
in-Chief of NewBase Energy News and is a professional environmental writer with more than 1400 popular
articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste
management and environmental sustainability in different parts of the world. Khaled has become a reference
for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC
leading satellite Channels. Khaled can be reached at any time, see contact details above.
NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE
NewBase 2020 K. Al Awadi

For Your Recruitments needs and Top Talents, please seek our approved agents below

New base energy news 18 august 2020 issue 1364 by senior editor khaled alawadi

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Semelhante a New base energy news 18 august 2020 issue 1364 by senior editor khaled alawadi

Semelhante a New base energy news 18 august 2020 issue 1364 by senior editor khaled alawadi (20)

Mais de Khaled Al Awadi

Mais de Khaled Al Awadi (20)

Último

Último (20)

New base energy news 18 august 2020 issue 1364 by senior editor khaled alawadi