newbase 624 special 11 june 2015

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NewBase 11 June 2015 - Issue No. 624 Khaled Al Awadi

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Renewable Energy Targets Quadrupled Globally Since 2005, New IRENA Report Finds

Press Releases… Renewable energy targets are now a defining feature of the global energy landscape, according to a new report by the International Renewable Energy Agency (IRENA). Renewable Energy Target Setting, launched on the side lines of IRENA’s ninth Council meeting, finds that 164 countries have adopted at least one type of renewable energy target, up from just 43 countries in 2005. Two more countries, Canada and the United Arab Emirates, have set renewable energy targets at the sub-national level.

“Renewable energy targets have emerged as a popular mechanism to set national and regional economies on the path towards a more secure and sustainable energy future,” said IRENA Director-General Adnan Z. Amin. “They provide an important signal to the industry and can help to align stakeholders by creating a clearer, common vision for the development of the energy sector.”

Developing and emerging economies are leading the adoption of targets, accounting for 131 of the 164 countries with renewable energy targets. The majority of countries focus on the electricity sector – 150 countries have renewable electricity targets – but commitments in other sectors are also on the rise. The number of countries setting targets for the heating/cooling sector increased from two countries in 2005 to 47 today. Similarly, renewable transport targets have more than doubled from 27 countries in 2005 to 59 today.

“Governments are increasingly adopting renewable energy targets to meet multiple objectives including energy security, environmental sustainability and socio-economic benefits,” said Mr. Amin. “The rapid growth of targets is just one more signal of the world’s ongoing shift towards renewable energy and away from fossible fuels.”

Global map of National Renewable Energy Targets of all types 2005 to 2015




While underscoring the importance of renewable energy targets, the report recognises that they are not sufficient in and of themselves. In order to be seen as credible by investors and society and to provide a reliable trajectory for the future evolution of the energy mix, they need to be accompanied by a clear strategy and backed by specific policies and measures.

Download Renewable Energy Target Setting

About the International Renewable Energy Agency (IRENA)

The International Renewable Energy Agency (IRENA) is mandated as the global hub for renewable energy cooperation and information exchange by 140 Members (139 States and the European Union). Roughly 32 additional countries are in the accession process and actively engaged. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity. www.irena.org

- See more at:

http://www.irena.org/News/Description.aspx?NType=A&mnu=cat&PriMenuID=16&CatID=84&News_ID=413#sthash.NrefSmgo.dpuf




Saudi: SR4.4 trillion Last 5 years spending drives growth Arab News + NewBase

Saudi Arabia’s total spending on development projects during the past five years reached SR4.4 trillion, with 30 percent of the amount going to capital projects, said Fahd Al-Mubarak, governor of Saudi Arabian Monetary Agency.

The SAMA chief made this comment after presenting the central bank’s 50th and 51st annual reports to Custodian of the Two Holy Mosques King Salman during a reception at Al-Salam Palace in Jeddah on Tuesday.

King Salman expressed his satisfaction over the Kingdom’s financial situation as a result of its security and stability. He commended SAMA’s role in strengthening the national economy and implementing monetary policies.

Al-Mubarak expected the Kingdom to make comprehensive economic growth during 2015 and the coming years. He praised the king for adopting a series of decisions and measures to restructure economic sectors to make them competent to support best utilization of the country’s economic resources.

The two reports covered monetary, banking and financial developments in 2013 and 2014. Crown Prince Mohammed bin Naif, deputy premier and minister of interior, Finance Minister Ibrahim Al-Assaf, Deputy SAMA Gov. Abdul Aziz Al-Fareeh and other senior officials attended the reception.“The national economy has achieved good results in 2014 with GDP making an actual growth rate of 3.5 percent, exceeding the rate of 2.7 percent achieved in 2013 and the world average of 3.4 percent,” Al-Mubarak told the king.

During 2014, the private sector achieved a growth rate of 5.6 percent while the public spending rose to SR1.11 trillion or 40 percent of the GDP. Public debts were brought down to 1.6 percent of the GDP while the balance of payment recorded a surplus of SR288 billion.




“This is the 16th consecutive year, the balance of payment is making surplus,” the governor pointed out. The cost of living index has been brought down gradually from 6 percent in 2008 to 2.8 percent in 2014.

Al-Mubarak said the monetary and banking sector has contributed to boosting economic activity during the year by providing liquidity required to finance projects. Total liquidity rose by 12 percent in 2014.

The governor said SAMA continued its role in executing the Kingdom’s monetary policies to preserve its liquidity level and ensure price stability. It backed the Saudi riyal’s exchange rate to serve economic and business activities.

“SAMA’s monitoring of banks and insurance companies has contributed to strengthening the economy with international rating agencies giving Saudi Arabia excellent ratings. This has strengthened the Kingdom’s economic stability and enabled it to attract domestic and foreign investors,” he explained.

The Kingdom’s economic policies addressed vital issues such as development of the national manpower, modernization of infrastructure, diversification of production base, and fall in oil prices.

Al-Mubarak noted Saudi Arabia’s role in ensuring global oil market stability and its efforts to grab a reasonable share of international oil market. He also stressed the need for diversification of revenue sources instead of depending on a single source that is depleting fast.

“Training and employment of young Saudis and providing them with housing are other challenges facing the country.” He said the fall in oil prices since the middle of last year posed a big challenge to the national economy. “This demands necessary measures to make optimum use of resources to continue the Kingdom’s development march.”

Meanwhile, Crown Prince Mohammed bin Naif also received copies of the two SAMA reports from Al-Mubarak in the presence of Finance Minister Al-Assaf. “Banks continued to provide their financial services in all parts through branches, ATMs and e-channels,” the governor said. Insurance premiums rose by 20 percent to reach more than SR30 billion, he added.




Saudi Arabia keeps pumping at three-decade high: OPEC Saudi Gazette + NewBase

Saudi Arabia, the world’s biggest oil exporter, told OPEC that it kept pumping the most crude in three decades last month amid growing signs that the 12-nation group’s quest to maintain market share is working. The kingdom produced 10.33 mbpd in May, an increase of 25,000 bopd from April, according to data the country communicated to the Organization of Petroleum Exporting Countries. The group supplied almost 31mpd collectively, the most in almost three years. OPEC decided on June 5 to persist with a strategy of maintaining production, insisting suppliers outside the group should be the ones to curb a surplus. Oil stockpiles in developed economies are more than 100 31mpd above the five-year average for the time of year. US production will peak this year and shale supply is starting to slow, Energy Department reports show. “The current oversupply in the market is likely to ease over the coming quarters,” OPEC said in its monthly oil market report Wednesday. The group “expects non-OPEC supply to decline in the second half of 2015, compared to an increase in the first half.” Brent crude futures for July settlement gained as much as $1.48, or 2.3%, to $66.36/bbl on the London-based ICE Futures Europe exchange, the highest since May 22.

The contract was at $66.21 as of 11:33 a.m. local time. Prices have risen 15% this year. Supply from nations outside OPEC will expand by 680,000 bpd this year, “one third of the growth witnessed in 2014,” OPEC’s Vienna-based secretariat said in the report. The number of rigs drilling for oil in the US has fallen for 26 consecutive weeks, reducing the number of active machines by about 60% since October as the collapse in the price reduced profitability. Crude production from shale formations, such as North Dakota’s Bakken and Texas’s Eagle Ford, will shrink 1.3% to 5.58 31mbpd this month, according to estimates from the U.S. Energy Information Administration. It’ll drop further in July to 5.49 mbpd, the lowest level since January, the agency said. Output in the US will peak at a 43-year high in 2015 as producers work through a backlog of uncompleted wells before trailing off in the second half of the year. Production will increase to 9.43 mbpd, the most since 1972, the EIA said Tuesday in its monthly Short-Term Energy Outlook. That’s 240,000 bopd higher than last month’s estimate. Commercial oil stockpiles within the Organization for Economic Co-operation and Development increased by 30.8 mbpd to 2.776 Bbbl in April, the highest since August 2010, according to OPEC forecasts. Commercial crude inventories rose for a fifth month in April to 1.395 Bbbl while product supplies were at 1.38 Bbbl, 16 mbpd above the seasonal average. OPEC pumped 30.975 mbpd in May, according to data from third parties compiled by the group’s analysts. The organization agreed last week to keep its output ceiling at 30 mbpd and will meet again on Dec. 4. It has exceeded its target for the last 12 months, according to Bloomberg.




US becomes biggest oil producer in 2014 SG/Agencies + NewBase

The United States has overtaken Saudi Arabia as the world's biggest oil producer in 2014 while India has recorded the highest growth in energy consumption among major economies. The US produced 15.9% more oil in 2014 at 11.6 million barrels of oil per day to topple Saudi Arabia's 11.5 million bpd production, according to BP Plc's Statistical Review of World Energy released on Wednesday. Russia with 10.8 million bpd oil production was placed third. The US surpassed Russia as the world's largest producer of oil and gas, producing 1,250.4 million tons of oil and oil equivalent natural gas in 2014. This compared with Russia's 1,062 million tons of oil equivalent.

BP said the US shale revolution helped it overtake "Saudi Arabia as the world's biggest oil producer and surpass Russia as the world's largest producer of oil and gas." On the consumption side, BP Statistical Review said world primary energy consumption slowed markedly, with growth of just 0.9% in 2014, a lower rate than at any time since the late 1990s (other than in the immediate aftermath of last decade's financial crisis). Chinese growth in consumption slowed to its lowest level since 1998 as its economy rebalances away from energy intensive sectors, though China remained the world's largest growth energy market.

India, however, posted a 7.1% rise in energy consumption, the fastest among major economies and second only to Algeria's 8.4 per cent expansion. It consumed 637.8 million tons of oil and oil equivalent natural gas, coal, nuclear energy, hydro electricity and renewable energy.This consumption was dwarf in comparison to 2972.1 million tons of oil equivalent energy consumed in China and 2298.7 million tons in the US. It was also lower than Russia's 681.9 million tons but more than Japan's 456.1MT oil equivalent energy consumption.




While India's oil production declined 1.3% at 895,000 bpd, consumption rose 3% to 3.8 million bpd. Though India is heavily dependent on imports to meet its oil needs, it is self-sufficient in refining capacity, housing a total capacity of 4.3 million bpd, fourth largest in the world behind the US (17.79 million bpd), China (14.09 million bpd) and Russia (6.3 million bpd).

Natural gas production dipped 5.9% to 31.7 billion cubic meters. BP Group Chief Executive Bob Dudley said: "The eerie calm that had characterized energy markets in the few years prior to 2014 came to an abrupt end last year. However, we should not be surprised or alarmed. "These events may well come to be viewed as symptomatic of a broader shifting of the tectonic plates that make up the energy landscape, with significant developments in both the supply of energy and its demand. Our task as an industry is to meet today's challenges while continuing to invest to meet tomorrow's demand, safely and sustainably," he added.




Mozambique: Thai oil company PTTEP to Invest $1.5 bn in LNG Project

PTTEP is willing to invest about $1.5 bn in the Mozambique LNG project after the joint venture secured orders for 8 million tons of LNG a year, The Nation newspaper reported Thursday.

Company’s chief executive officer Tevin Vongvanich said the company's investment plan for 2015 and 2016 on the further development of petroleum fields would involve LNG production in Rovuma offshore basin Area 1 in Mozambique.

The Thai firm has 8.5 percent equity stake in the project and would contribute is share of around $1.5 bn over the period of four or five years, The Nation said. Total investment in the project will be about $20 billion, including the construction of an onshore LNG plant. The project is expected to produce about 12 million tons of LNG annually from Area 1 and has already secured long-term contracts for 8 million tonnes of LNG a year. The remaining 4 million tonnes of annual output could be sold in the spot market. As for the land-based LNG production plant, Anadarko, the majority shareholder in the project, has already selected a construction contractor; construction of the plant is expected to begin soon.

www.mzlng.com




Russian oil and gas reserves jump most in BP league table Reuters + NewBase

Russia added the most oil and gas reserves during the past year while the United States overtook it as the top energy producer, oil company BP said on Wednesday in its benchmark annual review

of world energy. The BP Statistical Review of World Energy, first published in 1951 and considered an industry handbook, showed Russia added as much as 10 billion barrels of reserves, enough to supply the world for more than 100 days. The review also showed that world oil demand grew by just 843,000 barrels per day last year, the slowest pace in 14 years outside U.S. recessions.

Russian reserves jumped above 100 billion barrels for the first time with BP estimating proved reserves at 103 billion, up from 93 billion in the 2013 review, which is based on primary official sources, third party data and independent estimates.




"The big picture remains one of abundant reserves, with new sources of energy being discovered more quickly than they are consumed. Total proved reserves of oil and gas in 2014 were more than double their level in 1980, when our data begin," BP said.

"The issue is not whether we will run out of fossil fuels, but rather how we should use those ample reserves in an efficient and sustainable way," it said in the review.

52 YEARS

Russia jumped up the ranks of the global reserves league table, overtaking OPEC heavyweights Kuwait and the United Arab Emirates for the first time to rank sixth behind Venezuela, Saudi Arabia, Canada, Iran and Iraq.

The revisions came about after BP started using official Russian data, first published last year, BP Chief Economist Spencer Dale said. The United States also saw a significant upgrade of its oil reserves to 48.5 billion from 44 billion a year earlier.

Thanks to the Russian and U.S. increases, global reserves climbed to 1,700 billion barrels, or enough to supply the planet for more than 52 years at current production levels, from 1,688 billion in the previous report.

Other leading global energy producers all saw their reserves remain relatively stable throughout 2014. On the gas side, Russia also had the largest gain adding 1.35 trillions cubic metres, or enough to supply the world for almost five months.

Russia long dominated the world's gas reserves league table before ceding top spot to Iran recently after BP put Iranian gas reserves estimates at 34 trillion cubic metres (tcm) .Over the past year, Russian gas reserves increased to 32.6 tcm from 31.25 tcm in the 2013 report.

Russia has long been the world's top oil and gas producer but a U.S. shale oil revolution led to a spike in energy production volumes in North America allowing the United States to overtake Russia and Saudi Arabia as the world largest oil producers for the first time since 1975, according to BP.




US: Proposed Clean Power Plan rule would reduce coal production, especially in the West. Source: U.S. E I A, Analysis of the Impacts of the Clean Power

EIA's analysis of the Environmental Protection Agency's proposed Clean Power Plan rule shows U.S. coal production falling after the proposed rule takes effect. In 2024 in the Base Policy case, coal production falls to a level last seen in the late 1970s. Total production recovers gradually thereafter, as coal-fired generation increases in the later years of the projection, but it never surpasses levels reached in the 1980s. Production levels at all major coal basins are affected, but production in the West falls the most.

• Western coal production, which primarily includes the Wyoming Powder River basin, is 214 million tons (34%) lower by 2024 in the Base Policy case compared to the Annual Energy Outlook 2015 Reference case. Western coal production in the Base Policy case closes the gap with the Reference case to only 110 million tons (19% lower) but does not return to its 2013 production level by 2040.

• The Interior region, which primarily includes coal from the Illinois and Gulf-lignite basins,

is 103 million tons (45%) lower by 2024 in the Base Policy case compared to the Reference case. After 2024, the region resumes a trend of increasing production, reaching 211 million tons in 2040 but still 88 million tons lower than projected levels without the proposed rule.

• Appalachian coal production in the Base Policy case is 46 million tons (19%) lower by

2024 compared to the Reference case, with total Appalachian production hovering around 200 million tons thereafter. In the Reference case, the power sector is projected to be less reliant on Appalachian coal, and the proposed rule accelerates this trend. The power sector consumed about 150 million tons Appalachian coal in 2013 (excluding stocks). That consumption falls to 106 million tons in 2040 in the Reference case and to 70 million tons in the Base Policy case. Nonpower sector use and exports account for the balance of Appalachian coal production.

Although the proposed Clean Power Plan rule results in less coal-fired electricity generation, several factors contribute to projected increases in coal generation from 2024 through 2040.




Oil Price Drop Special Coverage

Oil prices fall as World Bank cuts economic growth outlook Reuters + NewBase

Crude oil futures fell on Thursday as the World Bank cut its global economic growth forecast, ending a two-day rally triggered by a sharp U.S. inventory drawdown.

In its twice-yearly Global Economic Prospects report, the World Bank predicted the global economy would expand 2.8 percent this year, below its 3 percent outlook in January, with India recording the biggest growth of major economies for the first time, ahead of slowing China.

Front-month Brent crude oil prices were down 13 cents at $65.57 a barrel by 0512 GMT, while U.S. crude shed 23 cents to trade at $61.20 a barrel. "Considering China's economic slowdown, we lean towards lower prices today," said Daniel Ang, an analyst at Singapore-based Phillip Futures.

In South Korea, the world's No.5 importer of crude oil, the central bank cut its policy rate by 25 basis points to a record-low 1.50 percent in a bid to shield a tottering economy from an outbreak of a deadly respiratory disease.

Despite Asia's slowing economies, Iraq on Thursday increased its July official selling price for Basra Light crude following strong demand for the grade last month. Crude prices, however, drew support from a big U.S. stocks drawdown that has boosted the outlook for summer fuel demand.

The U.S. Energy Information Administration (EIA) reported that crude oil stocks shrank by 6.8 million barrels last week, their largest drop in almost a year and four times more than forecast by analysts in a Reuters poll.

Prices in North America have been buoyed recently by high gasoline demand for road vehicles as well as low production in Canada as a result of wildfires."In Western Canada, crude oil inventories are at their lowest level since October as maintenance shutdowns and wildfires in northern Alberta take their toll on supply," ANZ bank said.

The premium for turning U.S. crude into gasoline hit a 2-1/2 month peak on Wednesday as inventories tumbled from seasonal highs and the market anticipated demand growth from the peak summer season for road travel.




N America may be more affected than Mideast by lower oil’ By Santhosh V Perumal/Business Reporter

North America is expected to be more affected than the Middle East by lower oil prices when it comes to funding challenges for sovereign investors, according to Invesco, a leading independent global investment management firm. “Low oil price creates expected funding challenges for some sovereign investors – notably North America expects to be more affected than the Middle East,” said Invesco in its Global Sovereign Asset Management Study, an in-depth report on the complex investment behaviour of sovereign wealth funds, which conducted survey amongst more than 50 individual sovereign investors across the globe, including Middle East based sovereign wealth funds, representing $7.09trn of assets. The steep fall in oil price has major implications for economies, stock markets and current account surpluses across the globe, all of which can drive funding for sovereign investors in the short term. However, this year’s study highlights that not all sovereign investors feel equally exposed to the effects of the falling oil price, revealing regional differences depending on the level of oil exposure (defined as oil rents as a percentage of gross domestic product) as well as governance, risk and liquidity management factors. “Perhaps counter-intuitively, the oil-funded emerging market sovereigns in the Middle East view themselves as being the least affected from a funding perspective,” it said. Rather, North American sovereign investors, who have emerged from state surpluses driven by high commodity prices, were the most frequent to say that they expected new funding to be “negatively” affected in the short term with the vast majority (80%) of North American sovereigns forecasting a decline in funding this year and the remaining 20% expecting it to remain the same.

“The timing of the fall in oil prices has been particularly challenging for state governments in North America and Canada; with reduced revenues from oil producers having driven down state taxation income at the same time as state expenses are rising sharply as a result of the baby boom generation retiring,” according to Nick Tolchard, chair of Invesco’s Global Sovereign Group and Head of Invesco Middle East. Sovereign investors, including those in the Middle East, are in a stronger position to manage funding and concerns over withdrawals resulting from the low oil price, it said, adding the Middle East sovereigns placed the highest importance on investment objectives – with the highest average target returns and the longest average time horizons.

Some respondents expressed concern that the fall in oil price may result in a short-term reversal to more conservative investment strategies and defer the implementation of more progressive long-term allocation trends towards alternatives. “Despite this, it remains clear that sovereign investors feel they are in a much stronger position to deal with the impact of falling oil prices this year than they would have been in 2008,” it said.




BP chief says energy industry faces turning point amid US energy glut and slowing Chinese demand. The National

The chief executive of BP says that the continued surge in United States oilsupply and a sharp slowdown in the growth of China’s energy consumption last year could mark a significant turning point for the energy industry.

“[Following] the eerie calm that had characterised energy markets in the few years prior to 2014 … the volatility and uncertainty that characterised 2014 felt like a return to more normal conditions,” said Bob Dudley in London yesterday at the launch of BP’s annual energy statistical review, one of the industry’s mostly widely referenced guides. Last year’s events “may well come to be viewed as symptomatic of a broader shifting in some of the tectonic plates that make up the energy landscape”, he said, with “profound implications for prices, for the fuel mix, and for carbon emissions”.

The rise in oil supply from the US – which overtook Saudi Arabia in oil, and Russia in oil and gas, as the world’s largest producer – seemed to take the market by surprise. The slowdown in demand was also greater than expected, with world energy demand growing at less than 1 per cent, the slowest since the late 1990s, save for the aftermath of the global financial crisis in 2008.

Renewable energy outpaced fossil fuels and increased its market share, which was a major factor in slowing growth of carbon emissions to their lowest since 1998. Global carbon emissions grew 0.5 per cent, also the weakest since 1998.




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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 11 June 2015 K. Al Awadi