Alkhaleej energy groups

06/08/2015

Pakistan prepares to proceed with Iran pipeline project
Asian country’s petroleum minister expects a third of the pipeline’s capacity to begin flowing before the end of 2017
Islamabad: The removal of economic sanctions on Iran will clear the way for Pakistan to pursue an ambitious gas pipeline for eventually importing up to $2.5 billion (Dh9.18 billion) worth of Iranian gas annually, says Pakistan’s petroleum minister.

Pakistan’s energy-starved economy currently has a deficit of 2 billionn cubic feet of gas per day, rising to 2.5 billion cubic feet per day during the winter months, according to Shahid Khaqan Abbasi.

Gas shortages across the country have become crippling over the past seven years, at times prompting angry protests from consumers. Stations providing compressed natural gas (CNG) for automobiles have all but shut down due to the shortages.

“We need gas. Iran has the world’s second-largest gas reserves,” said Abbasi. He said the Iranian pipeline will eventually provide a peak of 750 million cubic feet of gas per day once it is fully operational by 2020 — amounting to $2.5 billion annually at current prices.

Following a deal last week with world powers to curb its nuclear programme Iran is preparing for the unwinding of sanctions, expected within the next six months.

Abbasi expects at least 250 million cubic feet, or a third of the pipeline’s capacity, to begin flowing before the end of 2017 following the construction of two gas pipelines — one from Pakistan’s south-western port of Gwadar to the city of Nawabshah, and a second from Gwadar to the Iranian border.

Pakistani officials have previously told their Iranian counterparts that the country was forced to delay the project in view of international sanctions banning trade with Iran. This won them time to avoid paying a penalty from this year onwards.

“We don’t have a choice; we have to undertake this project. We are looking at penalties of up to $3m dollars a day,” said Abbasi. “Once the sanctions go there is no excuse.”

However, analysts say Pakistan may face fresh pressure over the project from allies in the Saudi-led Arab world.

Saudi Arabia and most of its Gulf neighbours have a longstanding rivalry with Iran, and are nervous both about its nuclear ambitions and any moves that will make its economy stronger.

“Pakistan’s gas shortages have become increasingly alarming. But the Saudis and others will try to force a delay just to discourage new sources of revenue [for Iran],” said one senior western official in Islamabad.

Hasan Askari Rizvi, a commentator on security and diplomatic affairs, said the Iran pipeline project “will be a major test of prime minister Nawaz Sharif’s ability to... resist pressure from his allies in the Arab world”.

Sharif, who in 2013 became prime minister of Pakistan for the third time, spent more than six years in exile in Saudi Arabia after being removed in a 1999 military coup led by General Pervez Musharraf.

“He [Mr Sharif] feels beholden to the Saudis, so it would be interesting to see how far he will go with this [Iranian gas pipeline] project,” added Rizvi.

The US and India have been pushing for a separate project, the Tapi pipeline, running from Turkmenistan through Afghanistan and Pakistan to India, but it has been stonewalled for years by security concerns and financing difficulties.

05/08/2015

Eni discovers up to 15b cubic metres of gas in Egypt — oil ministry
Gas production is set to start in two months
CAIRO: Italy’s Eni has discovered gas reserves of up to 15 billion cubic metres in Egypt’s Nile Delta region, with production set to start in two months, the Egyptian oil ministry said on Monday.

The discovery was made in Western Abu Madi, 120 km northeast of Alexandria, where Eni holds 75 per cent of exploration rights through an Egyptian subsidiary, with Britain’s BP holding a 25 per cent stake.

Eni made the discovery at a depth of 3,600 metres and initial estimates point towards reserves of up to 15 billion cubic metres of natural gas and natural gas condensate, an Egyptian oil ministry statement quoted the company as saying.

The oil ministry signed a $2 billion (Dh7.34 billion) energy exploration deal with Eni in June.

Egypt raised the prices it pays Eni and Edison for the natural gas they produce in the country in July.

The agreements marked an attempt by Egyptian authorities to improve terms for foreign oil and gas businesses in the hope that more competitive pricing will encourage investment in the energy-hungry country.

Eni has operated in Egypt for more than 60 years through its Egyptian subsidiary IEOC and is one of the main energy producers in the country, with a daily output of around 180 thousand barrels of oil equivalent.

04/08/2015

Iran eyes $185 bln oil, gas projects after sanctions
Iran wants “two-way trade” with Europe — minister
Vienna: Iran outlined plans on Thursday for the rebuilding of its core industries and trade links in the wake of a nuclear agreement with world powers, saying it was targeting oil and gas projects worth $185 billion by 2020.

Iran’s Minister of Industry, Mines and Trade Mohammad Reza Nematzadeh said the Islamic republic would focus on its oil and gas, metals and car industries with an eye to exporting to Europe after sanctions have been lifted.

“We are looking for a two-way trade as well as cooperation in development, design and engineering,” Nematzadeh told a conference in Vienna.

“We are no longer interested in a unidirectional importation of goods and machinery from Europe,” he said.

The United Nations Security Council on Monday endorsed a deal to end years of economic sanctions on Iran in return for curbs on its nuclear programme.

Sanctions are unlikely to be removed until next year, diplomats say, as the deal requires approval by the US Congress. Nuclear inspectors must also confirm that Iran is complying with the terms of the deal.

But many European companies have already signalled interest in re-establishing business in Iran.

Iran’s deputy oil minister for commerce and international affairs, Hossein Zamaninia, said Tehran had identified nearly 50 oil and gas projects worth $185 billion that it hoped to sign by 2020.

In preparation for negotiations with possible foreign partners, Zamaninia said Iran had defined a new model contract which it calls its integrated petroleum contract (IPC).

“This model contract addresses some of the deficiencies of the old buy-back contract and it further aligns the short- and long-term interests of parties involved,” he said.

He said Iran would introduce the oil and gas projects it has identified and the new contract in international markets later this year.

Deputy Economy Minister Mohammad Khazaei said Iran had already completed negotiations with some European companies wanting to invest in the country.

“We are recently witnessing the return of European investors to the country. Some of these negotiations have concluded, and we have approved and granted them the foreign investment licences and protections,” Khazaei told the conference.

“Even in the past couple of weeks we have approved more than $2 billion of projects in Iran by European companies,” he said, without naming the firms or providing further details.

Nematzadeh said Iran aimed to join the World Trade Organisation once political obstacles were removed and would be interested in preferred trade deals with Europe and central Asian countries.

03/08/2015

Distribution companies welcome deregulation of fuel prices
The decision will help in expansion and modernization, top executives of the companies say
Abu Dhabi: Distribution companies in the UAE have welcomed the move by the Ministry of Energy to deregulate fuel prices from August 1 in line with the international price structure as they seek to expand and modernise their services.

Abdullah Salem Al Daheri, Chief Executive Officer of Adnoc Distribution said they will support the new regulation.

“It will rationalise consumption of fuel, conserve the environment and protect natural resources for future generations,” Al Daheri said in a press statement.

He said the decision will give them an opportunity to upgrade their services and help in expansion to build new service stations.

“We are proud to contribute to the economic development of the UAE for a better future and achieve sustainable development in keeping with the vision of our leaders.”
Adnoc Distribution, which is owned by the government, is involved in the marketing and distribution of petroleum products in the UAE and internationally.

It runs more than 300 service stations across the UAE and is planning to increase the number to 507 as part of its business plan for 2015-16.

Sustainable
Emirates National Oil Company (Enoc) Chief Executive Officer Saif Humaid Al Falasi said the decision will support the vision of the UAE government to ensure sustainable development and help rationalise consumption of fuel and protect environment.

“We are committed to all that is contributing to the sustainable and economic development in the UAE. We in the Enoc are looking forward to expansion of our projects and setting up more modern stations,” Al Falasi said in a statement.

Wholly owned by the Dubai government, Enoc has over 30 active subsidiaries and international joint venture operations. The company’s portfolio includes refining, oil trade, bunkering, liquefied petroleum gas, aviation fuel marketing with core operations in the Middle East, Asia, Europe and Africa.

Emarat, the other major distribution company in the UAE refused to comment when contacted.

The UAE government in a major decision has announced to deregulate fuel prices on Wednesday. Diesel prices will reduce and petrol prices will rise marginally due to the decision, officials said. The new fuel prices will be announced on July 28 for the month of August.

Dr Mamdouh G. Salameh, an international oil economist and World Bank consultant said the UAE government has been subsidising fuel prices to the tune of $22 billion annually.

“Subsidies are normally paid to fuel distribution companies such as Adnoc or Eppco/Enoc or Emarat to cover the difference between the prices they sell gasoline and diesel in the UAE and the international prices.”

According to him, a litre of gasoline sells in the UAE at 47 US cents compared with $1.1 internationally though in the United Kingdom and some European countries a litre of gasoline costs up to $2.0.

“As a result of the deregulation, the fuel distribution companies will have to charge higher prices for gasoline and diesel across the UAE. Still the rise in prices will have very little impact on households particularly in a country with a very high GDP per capita as the UAE”.

02/08/2015

Fuel subsidies cost UAE $2,378 per person per year
Dubai: The UAE government spends 5.6 per cent of its GDP subsidising oil, gas and electricity, according to figures compiled by the International Energy Agency.

That’s an average of $2,378 (Dh8,374) for every resident, every year — but don’t imagine the end of road fuel subsidies will cost you that much, because they constitute only part of the total energy subsidy.

Nevertheless, the road fuel subsidy was estimated to cost the state-owned oil companies Dh16.5 million a day in 2011, when Brent Crude was above $110 a barrel.

The sharp fall in world oil prices saw Federal National Council (FNC) member Hamad Ahmad Al Rahoumi in February call for a reduction in the price of road fuel.
Despite the subsidy, petrol prices in the UAE are the third highest in the Middle East, behind Tunisia and Syria, according to a report by an ad hoc FNC committee chaired by Mohammad Butti Al Qubaisi.

Until recently, the UAE was forced to import diesel and petrol because of a lack of refining capability. However, the ongoing expansion of Adnoc’s Ruwais refinery in Abu Dhabi, to more than double its earlier 415,000 barrels per day, is expected to make the UAE self-sufficient in fuel.

Although the Ruwais refinery reached between 80 and 90 per cent of capacity in spring, run rates were cut in May for further testing.

Gulf News asks Dubai residents from around the world their thought on the upcoming August 1st gas price increase. See more at: http://gulfnews.com/gntv

01/08/2015

Most expensive petrol in the world
Latest list identifies 10 countries with most expensive fuel
Dubai: Fretting about your current petrol spending? What you're currently paying is nothing compared to some places, where a few litres can cost more than just the price of a sandwich.

Researchers at GlobalPetrolPrices.com reviewed the latest prices and found at least ten markets, mostly European countries, where petrol is at least four times more expensive than in UAE.

As of July 20, 2015, the most expensive petrol in the world is sold in Hong Kong, where a litre of petrol costs $1.96 (Dh7.2), four times higher than the current pump price of unleaded petrol in the UAE.

The price of petrol E Plus 91 in the UAE stood at Dh1.61 per litre as of Wednesday, according to the UAE Ministry of Energy, while unleaded petrol 98 was priced at Dh1.83 and unleaded gasoline 95 at Dh1.72.

1. Hong Kong - 1.96

2. Norway - 1.94

3. Netherlands - 1.90

4. United Kingdom - 1.82

5. Italy - 1.81

6. Turkey - 1.80

7. Israel - 1.79

8. Denmark - 1.78

9. Greece - 1.72

10. Monaco - 1.72

31/07/2015

Around $200bn of upstream oil and gas projects could be shelved by the end of 2015, according to Wood Mackenzie.

The fall in oil prices has already seen 45 major project final investment decisions (FID) deferrals this year.

“As a result, we estimate 20bn boe of reserves has been pushed back from a diverse range of onshore, shallow-water and deepwater projects,” said Angus Rodger, principal analyst, Wood Mackenzie

“Together, this creates a $200bn hole in the industry’s investment pipeline.

“Projects that are technically challenging, have significant upfront costs and/or low returns have proved vulnerable – over 50% of the 20 billion boe is located in deepwater projects, and nearly 30% in the Canadian oil sands.”

Rodger added that from a corporate perspective, there are two main drivers for deferring projects: releasing capital in response to the fall in oil prices; and giving more time to develop enhanced designs, cost optimisation and other measures to improve overall economics.

“In essence, rebuilding projects for a lower price environment,” he added.

The research note added: “Inflationary pressures have pushed many projects into economically marginal territory and operators are now reworking costs and development solutions to achieve their hurdle rates. But it won’t be easy. We estimate that half of the new greenfield developments still produce sub-15% development IRRs, which is below most companies’ economic hurdle rate.

“For most operators, hoping a 10% reduction in capex is sufficient to reach FID won’t be enough, as only a handful have an NPV10 breakeven below US$50/bbl. Given where we are in the corporate capex cycle, only those assets with the most robust economics can expect to make the grade.

“We estimate the majority of these projects are now targeting start-up between 2019 and 2023. However, if the major IOCs continue to focus on cutting future capital commitments – to the detriment of future production growth – then these dates will be pushed back further.

“For some, aggressive re-phasing of capital spend and savings from cost deflation will enable them to have another run at FID over the next six to 12 months. But in a world of greater financial discipline and lower oil prices, others will require more radical changes to make them attractive investments.”

30/07/2015

Iran’s Mapna building $2.5bn power plant in Iraq

Iran’s Mapna Group, a leader in construction and installation of energy production machinery, is building a natural gas combined cycle power plant in Basra, Iraq at a cost of $2.5 billion, a report said.

The project aims to add 3,000 MW of electric power to Iraq's national grid, added the Iran Daily report, citing a Press TV release.

Mapna signed the deal with the Iraqi-Jordanian Shamara Group, following implementation of Najaf and Baghdad power plants which will receive Iranian gas through a pipeline to begin operation the report added.

Mapna had begun implementing the Rumaila power plant near Basra after one and a half years of negotiations with the Iraqi side, Abbas Aliabadi, managing director of Mapna was quoted as saying in the report.

The facility will be completed in four years while the first unit is expected to join the national grid in early 2017.

The deal includes the Iraqi government's guaranteed purchase of the electricity generated from the power plant for 15-17 years, Shamara CEO Ali Shamara said, adding his country will finance the entire project.

Mapna will supply equipment, including gas and steam turbines and boilers besides engineering and supervising the project.

According to Shamara, security issues have been taken into consideration in deciding to build the facility in Rumaila in the relatively stable southern Basra which is only 60 km from the Iranian city of Ahvaz.

"Mapna's reliability and its accessibility are the reasons that convinced us to cede the project to this company since it can immediately report to the site in any eventuality," Shamara added.

The project is set to boost Iraq's overall power generation capacity by 20 percent as part of plans to generate 20,000 megawatts by 2016.

30/07/2015

How much will it cost to fill up your tank?
Dubai: How much will it cost to fill up your tank when the new pump prices kick in on August 1?

That depends partly on what kind of car you drive.

According to the Olum Al Dar programme, which was broadcast on Abu Dhabi TV, here is how the increase may impact your wallet:

Four cylinders

In case of four-cylinder cars with a 40-litre fuel tank capacity, which constitute 50 per cent of the total number of cars in the UAE, a fuel price increase of 10 per cent would cost a driver Dh7 more to fill the tank.

If prices rose by 20 per cent, drivers would likely have to pay Dh14 more every time they fill up.

Six cylinders

A six-cylinder vehicle with a 60-litre fuel tank, which account for 30 per cent of total number of cars in the UAE, would see a 10 per cent increase in prices pushing up refuelling cost by Dh10.

A 20 per cent price increase would cost drivers Dh21 more.

Eight cylinders

An eight-cylinder car with an 80-litre tank, which account for 20 per cent of the total number of cars in the UAE, with a price increase of 10 per cent, would cost drivers Dh14 more.

A 20 per cent increase would raise refuelling costs by Dh28.

29/07/2015

Oil prices fall to near 6-month lows over China
SINGAPORE, 5 hours, 49 minutes ago
Oil prices fell for a fifth straight session on Tuesday to their lowest in almost six months, as a rout in Chinese equities cast further doubt over the outlook for crude demand in the world's top commodities consumer.

China's already-volatile benchmark stock index, with a combined market capitalization of $4.6 trillion, has lost 10 percent in the last two days of trade.

Most household debt is linked to real estate rather than the stock market, but with Chinese economic growth struggling to stick at 7 percent, analysts say demand for crude may not be enough to help mop up a global supply glut.

"Typically, equity markets do have a high correlation to quarterly GDP growth," Deutsche Bank strategist Michael Lewis said.

"Naturally, there is some risk that this could spill into the real economy. The more these things go down on a day-by-day basis, that is starting to affect the potential of Chinese demand growth being weaker."

Brent had fallen 78 cents to $52.69 a barrel by 0821 GMT, having hit a session low of $52.28, its lowest since early February, bringing the losses for July to nearly 18 per cent.

Brent crude is on track for its longest stretch of daily losses since March, when the price hovered just dollars away from six-year lows.

US crude was last down 36 cents at $47.03 a barrel after ending the previous session down 75 cents.

Adding to the uncertainty over the health of the Chinese economy is concern about rising global oil production in a market already oversupplied by some 2 million barrels a day.

Investors are watching for weekly data on U.S. inventory levels to gauge the strength of demand.

US commercial crude oil stocks likely slipped last week after crossing the five-year seasonal average build in the previous week, a preliminary Reuters poll of analysts showed ahead of industry and official weekly reports.

Crude stocks fell about 300,000 barrels to 463.6 million barrels in the week ended July 24, analysts estimated.

"We're not seeing the level of demand in the US one usually expects related to the summer drive-time," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance.

28/07/2015

Saudi-Kuwait joint Wafra oilfield staff told to take leave — paper
Abu Dhabi: The shut down of the jointly-operated Wafra onshore oilfield between Saudi Arabia and Kuwait, is set to be extended into next month after the distribution of a memorandum telling all non-vital staff to take leave as of Aug. 1, pan-Arab daily Asharq Al-Awsat reported on Thursday.

The Wafra field was first shut for maintenance on May 11 for two weeks in a move apparently aimed at giving the Gulf Opec allies time to solve a long-standing dispute.

On May 27, Chevron, which operates the oilfield on behalf of Saudi Arabia, said Wafra would remain shut until difficulties in operating there are resolved.

The memorandum, which the newspaper said it had obtained, was signed by Chevron and the Kuwaiti Gulf Oil Company, which represents the Kuwaiti side of operations.

The document also said staff would take “open-ended” leave if production did not resume by end-August, a step aimed at reducing costs amid the shutdown, the paper reported.

Wafra representatives could not be immediately reached by Reuters for comment.

The Neutral Zone is the only place in Saudi Arabia and Kuwait where foreign oil firms have equity in fields, which are otherwise owned and operated by state oil companies. Crude output is divided equally between the two countries.

It survived the nationalisation of the Saudi oil industry in the 1970s. Since then, Saudi reserves of 264 billion barrels, about a fifth of the world’s proven oil reserves, have been off limits to international oil companies.

Industry sources say Kuwait was angry because it was not consulted when the Chevron concession to operate Wafra was renewed by Riyadh in 2009 until 2039.

But the row goes back further to 2007, when a land dispute between Kuwait and Saudi Arabia led to a delay in Kuwait’s plans to build an oil refinery.

Chevron holds a lease on some of the land on Kuwait’s side which was earmarked for the new refinery.

The shutdown of Wafra, which has an output capacity of about 220,000 bpd of Arabian Heavy crude, came after the oil output from another jointly operated field, Khafji, was stopped in October to comply with environmental regulations.

28/07/2015

UAE to raise gasoline price by 24pc, diesel down 29pc
ABU DHABI, 3 hours, 26 minutes ago
The United Arab Emirates said it would raise domestic prices for gasoline and cut them for diesel in a politically sensitive reform designed to save the government money and encourage motorists to use fuel more efficiently.

The price of a litre of octane 95 gasoline will climb 24 per cent to Dh2.14 (58 US cents) at the start of August, while diesel will fall 29 per cent to Dh2.05