New base 741 special 06 december 2015

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,

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

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NewBase 06 December 2015 - Issue No. 741 Edited & Produced by: Khaled Al Awadi

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

UAE markets expected to hold steady despite Opec decision The National +NewBase

In the week ahead stock markets in the UAE will avoid any drastic reaction to sliding oil prices in the wake of Opec’s decision not to curb its output levels. Opec on Friday agreed to maintain its oil output at about 31.5 million barrels per day, pushing the price of Brent crude close to its lowest point in six years. Historically, UAE shares have follow ed oil prices, but stocks are expected to be only slightly affected by the oil market’s reaction to Opec’s move, according to traders. “This was expected and factored in [the market],” said a regional-based trader. “Iran’s [increased] oil production is coming next into play, it is a matter of time. So the market is expecting that and the UAE is diversifying its GDP away from oil.” Sebastien Henin, head of asset management at TNI, The National Investor, in Abu Dhabi, said that there could be a “psychological impact” on the market after oil at one point fell below the $40 per barrel threshold, but this could drive the UAE market to a “weak opening and nothing major” on Sunday. Brent crude has fallen about 18.5 per cent in the past three months and Dubai’s benchmark index is almost 9 per cent lower during that time. Abu Dhabi’s index has been relatively unscathed, down only 2.66 per cent during the same period. This has been partly down to interest from foreign investors looking at emerging markets tracked by the index compiler MSCI. “The MSCI influence helped [Abu Dhabi-listed] Etisalat last week to trade to an all-time high,” said the regional trader. “We can expect some foreign buyers to purchase the stock in the coming days.” Market heavyweight Etisalat joined the MSCI Emerging Markets Index last week, after the telecoms operator allowed foreign investors to buy its shares from September. The MSCI emerging market equity benchmark itself fell 1.7 per cent last week, driven by a drop in energy and consumer stocks. The free fall in oil prices is happening amid strong anticipation that the US Federal Reserve would this month raise interest rates for the first time in seven years. The decision, expected on December 16, is looking more likely after the world’s largest economy last month added more jobs than expected. “Now it will happen,” said Mr Henin. “I suspect that it will not have an impact on the UAE market, unless there’s a lot of volatility across emerging markets.”




UAE: DEWA Al Tayer showcases Dubai’s Excellent Practices in

Energy Efficiency and Water Desalination

(WAM): Within the activities of the twenty-first session of the United Nations Conference on Climate Change (COP 21), held in Paris and in the presence of Dr. Sultan Al Jaber, UAE Minister of State and Special Envoy for Energy and Climate Change, Saeed Mohammed Al Tayer, Vice Chairman of the Dubai Supreme Council of Energy in Dubai, and Managing Director & CEO of the Dubai Electricity and Water Authority ( second from left ), showcased Dubai’s excellent practices in energy efficiency and water desalination, during his participation in the panel discussion organised during the launch of the "Global Alliance for desalination clean water H2O Minus CO2".

The panel discussion was moderated by Jean-Louis Bal, President "Syndicat des Energies Renouvelables" in France.

The panel was attended by Ahmed Belhoul, CEO-Masdar, Paddy Padmanathan, CEO - ACWA Power, Jean-Louis Chaussade, CEO-SUEZ Environnement, Rapahel Schoentgen, VP-Research-ENGIE, and Andrea Watson, Head of Strategy and Integrated Applications –National Renewable Energy Laboratory in the USA.

Al Tayer said " I would like to commend this alliance and wish you all the success in order to contribute in bringing value not only to the milestones achieved by the UAE in its sustainability




drive and the preservation of our environement and precious water resources but for the region as well".

"Recently, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai launched the Dubai Clean Enery Strategy 2050 , through which Dubai aims to produce 75% of its energy using clean sources. The strategy focuses on five key pillars, including infrastructure , legislation , green fund , skills and knowledge and environmentally friendly energy mix for both electricity and water. By 2030, we should be able to produce an environmentally friendly energy mix , 25% from Solar, 7% from Clean Coal, 7% from Nuclear and 61% from Natural Gas", he added.

"In Dubai our production capacity 470 MIG per day of desalinated water. This summer we reached a peak load of 350 MIG per day and out of this 20 million is produced using Reverse Osmosis (RO) technology. Also in Dubai most of the plants are using Multi-stage flash distillation (MSF) technology, and only 6 % use RO technology. So 70 % of our production is from the waste heat and it is fuel free . This means that its carbon footprint is zero. Also we combine water and power to improve efficiency while reducing capital and operating costs as it is," he said.

"In line with the newly launched Dubai Clean Enery Strategy 2050 , it is not feasible to retrofit the exsiting plants by PV or solar panels. So to reduce carbon emissions in the future, these MSF plants needs to be connected to a central solar plant. Our Future strategy consists of building ROs to meet water demand since they require only 30 to 40 % of energy required for MSF (which Energy intensive technology). Our carbon abatement strategy focuses on reducing carbon emissions by 16% by 2021, DEWA contributes by more than 50% of this target. These targets will be reviewed in the light of the newly declared Dubai Clean Energy Strategy 2050," he added.

"DEWA has a full research and development programme with a budget of 136 Million dollars for the next five years. This programme focuses on clean and sustainable solutions for the generation of electricity and water and we have already started with some projects through the UAE Water Aid Foundation "Suqia" that will produce clean water using clean solar energy, he concluded.




Mozambique: Anadarko achieves new Mozambique LNG milestones Source: Anadarko

Anadarko Petroleum has announced that, along with the concessionaires of Offshore Area 1 (operated by Anadarko Mozambique Area 1 Ltd. (AMA1)) and Offshore Area 4 (operated by Eni East Africa (EEA)), it has signed a Unitization and Unit Operating Agreement (UUOA) for the development of the massive natural gas resources that straddle the two blocks.

'We appreciate the cooperation of the Government of Mozambique, Eni and our co-venturers in Offshore Area 1 for their collaborative efforts in achieving this UUOA, which is fair, equitable and consistent with best industry practices,' said Mitch Ingram, Anadarko Executive Vice President, Global LNG. 'We have already made tremendous progress advancing the natural gas resources in the Golfinho and Atum fields that are fully contained within our block, and with this UUOA, we can also expect to move the Prosperidade and Mamba straddling reservoirs forward more efficiently, while capitalizing on greater economies of scale."

Under the terms of the UUOA and previously announced Decree Law, the Prosperidade and Mamba straddling natural gas reservoirs, which comprise the Unit,

will be developed in a separate but coordinated manner by the two operators until 24 trillion cubic feet (Tcf) of natural gas reserves (12 Tcf from each Area) have been developed. All subsequent development of the Unit will be pursued jointly by the Area 1 and Area 4 concessionaires through a joint-venture operator (50:50 Anadarko and Eni). The UUOA is subject to final approval by the Government of Mozambique.




Domestic Natural Gas

In addition, Anadarko reached a Memorandum of Understanding (MOU) with the Government of Mozambique to provide natural gas from its Mozambique LNG development for domestic use.

Under the terms of the MOU, Offshore Area 1 will provide initial volumes of approx. 50 million cubic feet of natural gas per day (MMcf/d) per train (100 MMcf/d) for domestic use in

Mozambique. The natural gas will be provided at pricing that is fair to all parties and supports local natural gas

development, and the concessionaires

are prepared to sell up to 300 MMcf/d of additional volumes into the domestic market in future years as projects are matured and commercial terms agreed.

'Signing this MOU is an important step,' added Ingram. 'We look forward to continuing to work with the Government of Mozambique to finalize the legal and contractual framework that will enable us to deliver natural gas for domestic projects and LNG cargoes for export to premium markets around the world, both of which will benefit Mozambique through a reliable source of cleaner energy and significant revenue generation.'

Offshore Area 1

Anadarko is the operator of the Offshore Area 1 Block with a 26.5-percent working interest. Co-venturers include the National Oil Company Empresa Nacional de Hidrocarbonetos, E.P. (ENH) (15 percent), Mitsui E&P Mozambique Area 1 Limited (20 percent), Beas Rovuma Energy Mozambique Limited (10 percent), BPRL Ventures Mozambique B.V. (10 percent), ONGC Videsh Limited (10 percent), and PTTEP Mozambique Area 1 Limited (8.5 percent).

Offshore Area 4

Eni operates Area 4 with a 50-percent indirect interest owned through Eni East Africa (EEA), which holds 70 percent of Area 4. The other partners are Galp Rovuma (10 percent), KOGAS Mozambique (10 percent) and ENH (10 percent). CNODC owns a 20-percent indirect participation in Area 4 through Eni East Africa.




Turkey seeks alternatives to Russia energy supplies

AFP + NewBase

Turkey yesterday said it was seeking alternatives to Russian energy as relations with Moscow plunge over the downing of a warplane, with President Recep Tayyip Erdogan vowing his country will “not collapse” under sanctions.

Moscow has imposed a series of economic sanctions against Ankara after Turkish fighter jets shot down a Russian jet on the Syrian border on November 24, sparking the biggest crisis between the two countries since the Cold War.

Turkey says the plane strayed into its airspace and ignored repeated warnings, while furious Moscow insists it did not cross from Syria and has accused Ankara of a planned provocation.

Energy-hungry Turkey relies on Russia for 55% of its natural gas and 30% of its oil, but Erdogan indicated that Ankara is now seeking new suppliers in the wake of the plane crisis. “It is possible to find different suppliers,” Erdogan said in a televised speech in Istanbul, referring to Qatar and Azerbaijan.

Erdogan visited Qatar this week and agreed a liquefied natural gas deal, while his Prime Minister Ahmet Davutoglu travelled to energy-rich Azerbaijan. Addressing concerns over possible gas shortages, Erdogan said Turkey could turn to its renewable energy resources.

He said Russia had made “no sign” yet that the crisis would affect their energy partnership, including joint work on the Akkuyu nuclear plant in southern Turkey. Russian energy minister Alexander Novak said on Thursday that talks had been suspended with Ankara on the joint TurkStream project, to pipe gas to Turkey and southern Europe.




But Erdogan dismissed the remark as a “lie”, saying that in fact Turkey suspended the project because of Russia’s “non-compliance with our demands”.

Russian President Vladimir Putin has vowed that Turkey will be made to regret the downing of the plane, with the Kremlin announcing sanctions including a ban on the import of some foods and a halt on sales of holiday packages, a major blow to Turkish tourism.

But experts suggest the initial impact of the sanctions will likely be limited, with Nafez Zouk of Oxford Economics pointing out that only around 4% of Turkish imports made it to Russia this year. Erdogan said yesterday that he does not care whether Russia imports goods from Turkey or not.

“Turkey is not a country which will collapse with your ... $1bn imports,” he declared. “We will stand firm.” He pointed out that unlike other countries, Turkey did not launch sanctions against Russia over the Ukraine crisis.

“We continued to export goods. When they asked us why we shipped, we replied that Russia was our strategic partner,” Erdogan said. The president also lashed out at what he said were Moscow’s attempts to escalate the crisis.

“We are not speaking with their language now. We are speaking a diplomatic language. We are patient on this issue,” he said.

Foreign Minister Mevlut Cavusoglu called for dialogue with Moscow to “narrow our differences” after meeting with Russian

counterpart Sergei Lavrov on Thursday, in the first high-level contact between the two sides since the plane was shot down.




Turkey, Azerbaijan Hope to Complete TANAP Before 2018

Trans-Anatolian Natural Gas Pipeline Project, or TANAP is expected to be complete before 2018, according to Turkish premier, Ahmet Davutoglu.

"We have reached an agreement [with Azerbaijan] to realize the TANAP project not in 2018 as planned, before it [2018]," Anadolu Agency quoted Davutoglu as saying Thursday at a joint press conference with Azerbaijani President Ilham Aliyev in Baku.

TANAP would initially carry 16 billion cubic meters (bcm) of gas a year of which 6 bcm will be supplied to Turkey, the rest going to Europe. By 2023, TANAP's capacity will rise to 23 bcm per year and then to 31 bcm by 2026.

Russian said Thursday that negotiations over the multi-billion-dollar Turkish Stream pipeline project, which would have carried Russian natural gas to Europe through Turkey, have been suspended, Anadolu Agency reported. This comes amid deteriorating relations between Ankara and Moscow after Turkey downed a Russian SU-24 bomber jet late last month.

Meanwhile, Turkey and Qatar on Wednesday signed a preliminary LNG deal. State owned BOTAS inked the deal with Qatar

Petroleum during President Erdogan's visit to the country. Although there has been no move by Moscow to cut gas supplies to Turkey however there is a concern regarding winter supplies. Turkey gets more than half of its gas from Russia while LNG is sourced from mainly Algeria.




Azerbaijan: Azeri Oil Worker Dies, 30 Missing After Rig Fire, Bloomberg + NewBase

An oil worker died and 30 were missing in Azerbaijan after an offshore platform caught fire, the State Oil Co. of Azerbaijan said in a statement. The fire at the Guneshli field in Azerbaijan’s section of the western Caspian Sea started Friday and was caused by a gas leak following a storm , the Baku-based company said on Saturday. Thirty-two people were rescued, it said.

The 30 people missing are presumed to have died, said an official for the company known as Socar, who asked not to be identified because of policy. Firefighters battled Saturday to control the fire, which is the deadliest incident in the company’s history, he said. The oil workers went missing when one of two lifeboats capsized several hours after the fire broke out at 5:40 p.m. local time, the Ministry of Emergencies and Prosecutor General’s Office said in a joint statement. Rescue efforts were suspended because of the storm and darkness, and resumed only after the dawn, they said. President Ilham Aliyev established a state commission headed by First Deputy Prime Minister Yaqub Eyyubov to investigate the incident, state news agency Azartac reported. Socar is owned by the state of Azerbaijan, the largest oil producer in the former Soviet Union after Russia and Kazakhstan. The company lost five workers in 2013 and 14 last year in similar accidents, said Mirvari Qahramanli, head of the Center for Protection of Oil Workers’ Rights, a Baku-based advocacy group.




U.S. oil drillers cut rigs for 13th week in 14: Baker Hughes Reuters + NewBase

U.S. energy firms this week cut oil rigs for the 13th week in the last 14, data showed on Friday, a sign drillers were still waiting for higher prices before returning to the well pad.

On Friday, OPEC decided to keep production near record highs despite depressed prices, as a way to boost market share by forcing rivals to reduce output.

Drillers removed 10 oil rigs in the week ended Dec. 4, bringing the total rig count down to 545, the least since June 2010, oil services company Baker Hughes Inc said in its closely followed report.

That decrease brings the total rig count down to about a third of the 1,575 oil rigs operating in same week a year ago. Since the end of the summer, drillers have cut 120 oil rigs. U.S. oil futures averaged $41 a barrel so far this week, down from $42 last week.

U.S. futures fell below $40 after OPEC decided to maintain its production level.

Energy traders noted the rate of weekly oil rig reductions since the start of September, about nine on average, was much lower than the 18 rigs cut on average since the rig count peaked at 1,609 in October 2014, due in part to expectations of slightly higher prices in the future.

U.S. crude futures for next year were trading around $44 a barrel, down from $47 last week, according to the full year 2016 calendar strip on the New York Mercantile Exchange. Higher prices encourage drillers to add rigs. The most recent time crude prices were much higher than now was in May and June, when U.S. futures averaged $60 a barrel.

In response to those higher prices, drillers added 47 rigs over the summer.

Drillers cut rigs in three of the four major U.S. shale oil basins this week. They removed five rigs in the Permian in West Texas and eastern New Mexico; two in the Bakken in North Dakota and Montana; and one in the Niobrara in Colorado and Wyoming. The number of rigs in the Eagle Ford in South Texas remained unchanged.

Despite an increase of three natural gas rigs this week, the removal of 10 oil rigs knocked the nation's total rig count down to a 16-year low. The rig count is one of several indicators

traders look at to predict whether production will rise or fall in future months.




NewBase 06 December - 2015 Khaled Al Awadi

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

Oil drops after Opec sticks to current production rates Bloomberg, Reuters + NewBase

Oil dropped after Opec’s president said the group will continue producing at levels that exceed its own target.

The Organisation of Petroleum Exporting Countries is committed to production of about 31.5mn barrels a day, Nigeria’s Minister of State for Petroleum Resources and Opec President Emmanuel Ibe Kachikwu said in Vienna after the group’s meeting.

Ministers may gather again before June if prices keep falling, he said. The group pumped about 31.4mn in October, according to estimates in its monthly market report.

Oil has slumped since Saudi Arabia led Opec’s decision last year to maintain production and defend market share against higher-cost rivals. The kingdom, the group’s biggest producer and architect of the current policy, has steadfastly opposed a cut in output unless countries outside the group cooperate. Opec has pumped more than its collective target of 30mn barrels a day for the past 18 months, data compiled by Bloomberg show.

Falling crude prices helped spur a rout in oil-industry stocks, which were the worst performers on the Standard & Poor’s 500 Index this year. Its Energy Sector Index has fallen 21% in 2015, while the S&P 500 is up 0.7% as of Friday.

West Texas Intermediate crude for

January delivery dropped 91¢, or 2.2%, to $40.17 a barrel at 11:56am on the New York Mercantile Exchange. Futures touched $39.60, the lowest since November 20. The volume of all futures traded was 40% above the 100-day average.

Brent for January settlement slipped 47¢, or 1.1%, to $43.37 a barrel on the London-based ICE Futures Europe exchange. It’s down 3.3% this week. The European benchmark crude traded at a $3.20 premium to WTI.

Oil price special

coverage




“We’re in for another leg down,” Bill O’Grady, chief market strategist at Confluence Investment Management in St Louis, which oversees $3.4bn, said by phone. “The Saudis didn’t blink. They want to see non-Opec countries cut supply before they take action.”

Global oil stockpiles have risen to record levels as Saudi Arabia, Russia and Iraq boosted supply, the International Energy Agency said on November 13. There is global oversupply of 1.5mn to 2mn barrels a day, Iran’s Oil Minister Bijan Namdar Zanganeh said yesterday, before the ministers met.

Iran, which pumped 2.8mn barrels a day last month, according to a Bloomberg Survey, plans to boost supply by 500,000 barrels a day within weeks of sanctions being lifted and by 1mn barrels months later.

“This decision reflects the consensus going into the meeting of Opec’s policy for prices needing to find a floor to deter new non-Opec supply projects,” Gareth Lewis-Davies, London-based energy strategist at BNP Paribas, said by phone. “The higher quota reflects the realpolitik of accommodating Iran.”

Adding to the glut is Russia pumping at near record levels and increasing North Sea shipments, while crude stockpiles in the US, the world’s largest consumer, have expanded to more than 120mn barrels above the five-year seasonal average. Russia, Mexico and other big producers outside of the group have given no indication they would agree to any Opec-led supply cuts.

Opec’s secretary-general Abdullah al-Badri said Opec could not agree on any figures because it could not predict how much oil Iran would add to the market next year, as sanctions are withdrawn under a deal reached six months ago with world powers over its nuclear programme.

Most ministers left the meeting without making comments.

Badri tried to lessen the embarrassment by saying Opec was as strong as ever, only to hear an outburst of laughter from reporters and analysts in the conference room.

A year ago, Saudi Arabia pushed though an Opec decision to defend market share instead of cutting output, ultimately hoping to drive high-cost producers such as US shale firms out of the market.

Many poorer Opec members have said the group’s largest producer was effectively twisting their arms, prompting the Saudi oil minister, Ali al-Naimi, to say he would listen to everyone this time.

Iran has made its position clear ahead of the meeting with Zangeneh saying Tehran would raise supply by at least 1mn barrels per day — or 1% of global supply — after sanctions are lifted. The world is already producing up to 2mn bpd more than it consumes.

Naimi earlier had said he hoped growing global demand could absorb an expected jump in Iranian production next year: “Everyone is welcome to go into the market”. He made no comment after the meeting.

At the meeting, Opec welcomed back returning member Indonesia, its 13th member. The group accounts for about a third of world oil output and does not include Russia or the US, which rival Saudi Arabia as the world’s biggest producers.

“The pressure will build on Opec and oil prices. At this rate of overproduction we will run out of onshore storage in the first quarter,” said Gary Ross, a veteran Opec watcher and the founder of PIRA think-tank.




Opec offers no hope for end to oil slump as output target removed Bloomberg + NewBase

Opec has signalled no respite from the global oil glut that has driven prices to a six-year low.

The Organisation of Petroleum Exporting Countries will keep pumping about 31.5mn bpd, the group’s President Emmanuel Ibe Kachikwu said on Friday after a meeting of ministers in Vienna. Members set aside their previous daily output target of 30mn barrels, a ceiling breached for 18 months.

Opec will wait until June to decide on a new limit, secretary general Abdalla El-Badri said. “Why should Opec alone sacrifice its part in the market,” Iraq’s Oil Minister Adel Abdul Mahdi told reporters after the meeting. “Americans don’t have any ceiling, Russians don’t have any ceiling, why should Opec have a ceiling?”

Guided by its biggest producer Saudi Arabia, Opec has increased output in an oversupplied market in a bid to force higher-cost producers to scale back their operations. A proposal on Thursday from Venezuela for a 5% cut in the group’s production went nowhere as Iran joined the ranks of members refusing to accept any curbs.

“The volume-maximising strategy goes on for Opec,” said Giovanni Staunovo, an analyst at UBS Group in Zurich. “It’s at least better to give up a useless ceiling. The burden to adjust supply remains on non-Opec producers.”




Crude slumped about 38% in the last year, with global benchmark Brent crude headed for its lowest annual average in a decade after reaching a six-year low of $42.23 on August 24. Brent fell 1.9% to $43 a barrel on Friday, while West Texas Intermediate crude dropped 2.7% to $39.97.

“We will be looking at a teeter-totter market,” said Daniel Yergin, the Pulitzer Prize-winning oil historian and vice chairman of industry consultants IHS Inc. “US production is going down while Iranian production should be increasing.”

Failure to reduce the global oversupply could push oil prices $20 lower next year, Venezuelan Oil Minister Eulogio Del Pino warned before the Opec meeting.

After Friday’s Opec decision “everyone does whatever they want,” said Iranian Oil Minister Bijan Namdar Zanganeh. “I think there will be a decision about how to act on the market in the second quarter of 2016,” after Iran has restored some of its oil shipments, he said.

Iran won’t accept any production curbs until it restores about 1mn bpd of output after the removal of international sanctions next year over its nuclear programme, he said. Saudi Arabia said it didn’t feel obliged to cut production, which is running close to a record.




NewBase Special Coverage

News Agencies News Release 06 Dec.. 2015

China to double oil purchases next year Reuters + Bewbase

China is likely to double its strategic crude oil purchases next year as one of the biggest ever price routs spurs a buying spree that would offer some support to battered markets for the commodity.

Beijing will add 70mn-90mn barrels of crude to storage tanks in 2016 to build up its strategic petroleum reserves (SPR), according to most respondents in a poll of five analysts and data collected by Reuters analysts.

That is the equivalent to almost a fortnight’s worth of average Chinese imports and would help push the country’s overall oil purchases to record levels, challenging the US as the world’s top importer.

Any sign of fresh buying for China’s strategic reserves would offer rare support to crude prices, which have more than halved since 2014 on soaring global output that has seen 0.5mn to 2mn barrels of oil being churned out every day in excess of demand. The Organisation of the Petroleum Exporting Countries (Opec) meets in Vienna yesterday to discuss its output target.

“Next year, stockpiling is going to play a bigger role (in China) than this year,” said Wendy Yong at energy consultancy FGE.




China’s secretive SPR build-up, which the government wants to raise to OECD-standards of 90 days’ worth of import demand, started in 2006 as part of a drive to become more energy independent. The government’s National Development & Reform Commission did not respond to requests for comment yesterday.

Researchers at FGE, consultancy ICIS and bank Barclays estimated that China would double crude imports for SPR facilities to 70mn-80mn barrels next year, versus 30mn-40mn barrels in 2015, while other analysts said the volume could be higher still.

“There is still significant spare capacity in China’s SPR, which can take in another 12mn tonnes of crude (88mn barrels),” said Yaw Yan Chong, Asia director at Thomson Reuters Oil Research and Forecasts, which he said the government would try to fill provided prices remain relatively low.

He added that this was equivalent to 66% of remaining capacity in SPR facilities based on an analysis of China’s import trade data. SPR imports of around 90mn barrels would take the reserve’s total to over 300mn barrels, more than halfway towards the government’s target of reaching 550mn barrels by 2020.

Energy Aspects said it was possible that 150mn barrels of capacity could be filled in 2016, but said that some of that would likely slip into 2017. The discrepancy in estimates is partly because some commercial storage is also used for strategic reserves without being reported as such.

Six new SPR sites, including some commercial assets being used for the programme, with a total capacity of 146mn barrels are under construction and experts expect most of them to be filled next year.

But some senior Chinese traders were more cautious, arguing that a clampdown on safety after the deadly Tianjin port blast this year could delay new depots, stifling imports.

A trading executive previously involved in reserve purchasing estimated an additional 30mn barrels would be stockpiled for 2016, versus 20-30mn this year. He declined to be identified due to the sensitivity of the matter.

“As China has already built up a comfortable cushion of stocks, the pressure to rush has eased, especially as the government is more convinced that low oil will stay for another year or two,” he said.

But analysts expect excess oil production to cushion the

impact on global oil markets of the strategic stockpiling. “The price impact of China’s SPR stockpiling is likely to be small,” said Barclays analyst Zhang Chi.

“Compared with the estimated excess supply in the market of about 1.5mn bpd, our estimated 0.23mn bpd of crude purchases for the SPR would provide only marginal support for the market balance.”




China cities boost Toyota’s hunt for hybrid car buyers Bloomberg + Newbase

China’s former leader Deng Xiaoping famously quipped that it doesn’t matter if a cat is black or white, so long as it catches mice. When it comes to environmentally- friendly cars that might help clear up the nation’s polluted skies, China has ignored Deng’s advice – to the detriment of Toyota Motor Corp’s lineup of hybrid cars. That may soon change.

Tianjin and Guangzhou, home to Toyota’s local joint ventures, are becoming the first cities to let buyers of new Levin and Corolla hybrids enter lotteries usually restricted to plug-in cars, virtually guaranteeing access to coveted new licence plates. The cities are rewarding Toyota for sharing some hybrid technology and know-how with local partners.

More Chinese cities are adopting the plate restrictions to control the number of autos on their roads and promote greener cars. These lotteries are routinely undersubscribed. Getting a plate for a gas engine-powered car is far more difficult. In Beijing, for example, a consumer has 0.5% chance of winning a plate in lotteries held every two months.

“Toyota has done its part to localise production and lower costs,” said Zhang Yi, a Tokyo-based auto industry consultant at Nomura Research Institute. “The government support is the last step they need to reverse hybrid’s fate in China.” Under the new arrangement in Tianjin and Guangzhou, Toyota’s newest China models will get a marketing edge as the Japanese carmaker plays catch-up with Volkswagen and General Motors in the world’s largest auto market. Toyota agreed to localise development and production of hybrid car components after almost two decades of keeping the work contained to Japan.

China has doled out subsidies to electric-car buyers and puts less-stringent purchase restrictions on plug-in autos in urban centres as part of a government strategy to reduce tailpipe emissions and dependence on imported oil. Conventional hybrids, which run on a combination of a gasoline engine and a battery, have been excluded in the government’s new-energy vehicle programmes until now.

The lack of state support has hampered Toyota’s bet that hybrids could be a more realistic solution to reducing emissions, since plug-in cars sold by companies including BYD Co and Chery Automobile Co are dependent on still-nascent charging infrastructure. While Toyota has sold more than 8mn hybrids globally, it delivered only about 1,000 Prius and 5,700 Camry hybrids last year in China.




With Tianjin and Guangzhou getting behind the Corolla and Levin hybrids, Toyota received orders for 8,000 units in the three weeks after their introduction in late October. That level of hybrid demand is unprecedented for the carmaker, which first introduced the gasoline-electric Prius to the China market in 2005.

The FAW Toyota joint venture plans to increase production of Corolla hybrid next year by as much as 15% to 45,000 units, said Zhang Sijun, a general manager of marketing planning division. This would boost both FAW and local Chinese battery supplier Hunan Corun New Energy Co. Hunan Corun rose as much as 7.4% as of 1:25 pm on Friday while the benchmark Shanghai Composite Index fell as much as 1.5%.

“Toyota has taken 10 years to sharpen a sword,” Hiroji Onishi, Toyota’s chief executive officer for the China region, said last month at the Guangzhou Motor Show. “This year marks the start of a hybrid era in China.” Beijing made its lotteries for gasoline cars more stringent from last year as part of efforts to contain tailpipe emissions. Despite these efforts, a round of air pollution blanketed the city’s sky as President Xi Jinping visited Paris for the United Nations-led talks on a deal to fight climate change.

Guangzhou’s hybrid support was a deciding factor for Jason Chen, a 35-year-old city resident, who’s placed an order for a 150,000 yuan ($23,400) Levin hybrid. “I like the car’s fuel efficiency and exterior design, but what really convinced me is the dealer said I can get a free number plate,” he said by phone.

Toyota is negotiating for more cities to offer hybrids support similar to what the government offers for new-energy vehicles, said Jiang Jun, president of FAW Toyota Motor Sales Co. “It’s been proven that years of lobbying the central government won’t work,” said Zhang, of Nomura Research.

“Cracking open local cities one by one should be a better strategy.”




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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.

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NewBase 06 December 2015 K. Al Awadi




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New base 741 special 06 december 2015