NewBase 640 special 05 july 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

publication. However, no warranty is given to the accuracy of its content. Page 1

NewBase 05 July 2015 - Issue No. 640 Senior Editor Eng. Khaled Al Awadi

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

Solar Impulse2 lands in Hawaii, making history

Solar Impulse 2 just completed its single most challenging task: a record-breaking leg from Nagoya, Japan to Hawaii lasting 4 days, 21 hours and 51 minutes, making it the longest-duration solo flight in history.

The flight was handled by André Borschberg, who has been piloting the craft on alternating stints with project co-founder Bertrand Piccard. Borschberg was originally planning to fly from Nanjing, China to Hawaii in one continuous journey,

but deteriorating weather conditions forced him to cut the leg short with a layover in Japan. The aircraft, which must fly high during the day and low at night to carefully manage solar charging and discharging of its batteries, cruises at a very low speed and relies on nearly perfect weather to fly safely; in high headwinds, the plane's groundspeed can actually be negative.

Piccard and Borschberg are using the Solar Impulse 2 as a tool to raise awareness about the benefits of renewable energy, but the tour doesn't stop here: the aircraft will fly next to the contiguous United States, before eventually returning to Abu Dhabi where the round-the-world journey began in early March. The timeline to finish is flexible depending on weather conditions, however — the crew waited for weeks in Japan before taking off for Hawaii




Qatar 2015 expected GDP per capita above $81,000 will be‘GCC highest’ Gulf Times + NewBase

Qatar’s GDP per-capita this year is expected to be above $81,000, the highest among the GCC countries, Doha Bank CEO Dr R Seetharaman has said. He was speaking at a knowledge sharing session in

Ahmedabad in India’s Gujarat state on Friday. Seetharaman said Qatar’s economy is expected to grow by more than 7% in 2015. The construction sector is expected to witness a double-digit growth this year, thereby supporting the non-hydrocarbon sector diversification. On major opportunities in Qatar, he said, “Projects worth more than $31bn are expected to be bid in 2015. The major sectors, which are expected to witness activity, include the construction and transport sectors. Qatar’s recent interim budget has

earmarked $18bn for major projects in health, education, infrastructure and transportation as well as projects related to FIFA 2022.” On GCC economies, he said “According to IMF April 2015 outlook, Saudi’s growth for 2015 is at 3% in 2015. The UAE’s growth for 2015 is estimated at 3.2% in 2015; Oman 4.6%, Kuwait 1.7% and Bahrain 2.7%. The fall in oil prices will have an impact on growth. GCC GDP at current prices will exceed $1.4tn in 2015. ”

On global economy, he said, “According to IMF April 2015 outlook, global growth has been forecast at 3.5% in 2015 and 3.8% in 2016 respectively. Global growth in 2015 will be driven by a rebound in advanced economies. After a weak 2014, growth in the euro area is showing signs of picking up in 2015. However Greece concerns remain. Growth for emerging and developing economies is projected at 4.3% in 2015.” Seetharaman touched upon the Indian economy and said, “The Indian economy grew at 7.3% in 2014-15. The IMF April 2015 outlook expects growth in India at 7.5% in 2015-16.Consumer prices rose 5.01% in from a year earlier in May 2015. “India’s current account deficit in 2014-15 narrowed to 1.3% of GDP. It can even fall below 1% in the current fiscal on the back of easing of global commodity prices. India achieved a fiscal deficit of 4% of GDP in 2014-15. The fiscal deficit is expected at 3.9% of the GDP in 2015-16 and 3.6% in 2016-17




respectively. In 2014 India attracted $35bn though the FDI route in areas such as electricity, gas, water and waste management.” Dr Bhaswat Chakraborty, chairman, Confederation of Indian Industry (CII Gujarat) panel on Pharma & Health Care in his welcome address said, “India-GCC relationship is growing stronger by the day as both realise the potential and importance of each other. Trade and commerce is the most important pillar of the India-GCC relationship. “India’s bilateral trade with Qatar increased from $2.9bn in 2007-08 to $16.3bn in 2012-13. Indian exports to Qatar increased from $538.77mn in 2007-08 to $687.05mn in 2013. Qatar’s exports to India amounted to $15.61bn in 2012-13 compared with $6.89bn in 2007-08.”




Qatar: Milaha unit fully acquires 2 LNG carriers from SocGen Milaha

Milaha yesterday said its subsidiary Qatar Shipping has fully acquired two liquefied natural gas (LNG) carriers from Societe General.

Qatar Shipping acquired the remaining 60% stake in ‘Milaha Ras Laffan’ and ‘Milaha Qatar’, which were chartered to RasGas under a 25-year long-term fixed time agreement, a Milaha spokesman said in a communiqué to the Qatar Stock Exchange. However, the communiqué was silent on the monetary aspects of the deal. ‘Milaha Ras Laffan’ and ‘Milaha Qatar’ have about 14 years and 16 years remaining, respectively, under the time charter agreement. Both vessels were built by Samsung Heavy Industries. Milaha Ras Laffan was built in 2004 with a capacity of 138,273 cu m, while Milaha Qatar was built in 2006 with 145,602 cu m. “This transaction reflects the disciplined execution of our long-term strategy of investing in core businesses. We have a strong momentum and believe that we can sustain our growth and continue to execute on our strategy,” said Sheikh Ali bin Jassim al-Thani, chairman of Milaha. Qatar Navigation had merged Qatar Shipping in April 2010, following the government directive to combine the operations of both the companies and subsequently the latter was delisted from the Qatari bourse. “In order to inspire growth in investment and increase profitability for the benefit of the national economy of Qatar and its investing public, both Qatar Navigation (Milaha) and Qatar Shipping received a direction from the government of Qatar to merge,” a bourse statement had said earlier.




Oman: Savannah finds massive copper targets in Oman Oman Absorber

Savannah Resources Plc said it has identified a number of potential clusters of Volcanic Massive Sulphides (VMS) in the strongly mineralised Semail Ophiolite in northern Oman. While announcing the massive sulphide copper targets, Savannah’s CEO, David Archer said, “these

early results underscore Savannah’s strategy that through the application of systematic exploration an excellent opportunity exists in Oman to build a significant mid-tier copper producer, utilising a central processing facility to support the development of a set of satellite deposits.” A Versatile Time Domain Electromagnetic (VTEM) survey was completed over Block 4 using 100m spaced survey lines running from east to west, for a total of 3,727 survey line kilometres

covering an area of 336 square kilometres. “We see this as a significant opportunity to quickly build on the existing 1.7Mt at 2.2 per cent copper Mineral Resource base we have in Oman,” Archer said. The VTEM survey system is very much like an airborne metal detector where the VTEM loop sends down a “ping”, and if it goes over a conductive zone of copper mineralisation, we can detect an echo using sensitive computerised detectors. The VTEM survey system has the ability to detect massive to semi-massive copper mineralisation from surface to a depth of up to 200 metres. Archer said, “The VTEM survey over Block 4 has allowed us to dramatically shorten the process of identifying high priority massive sulphide copper targets, both brownfield and greenfield. We have moved much closer to our objective of discovering copper orebodies which, either in aggregate or individually, can be mined in this very favourable infrastructure setting. According to report, the explorer has also raised £0.55 million to start work on a resource definition and scoping study at the Mutamba/Jangamo mineral sands joint venture with Rio Tinto in Mozambique. Archer said: “Block 4 provides Savannah with a rare opportunity to apply proven VTEM technology to a strongly mineralised, underexplored area in the heart of the most prolific copper production area in Oman and in one of the most mineralised ophiolite belts in the world. “ The Block 4 area has been a prolific producer of copper from both open-cut and underground mines at Aarja, Bayda, Lasail and Lasail West with reported contained copper, both mined and unmined, of approximately 238,840 tonnes. In Oman, ten Priority 1 and 33 Priority 2 VTEM anomalies were identified from the metal detection survey, with three major potential volcanic massive sulphide clusters defined. “A string of strong, Priority 1 VTEM anomaly responses were identified around the Lasail VMS deposit, while more priority targets are clustered around the old copper mines at Aarja and Bayda and further south in the greenfields Zuha area,” Archer said.




Germany clinches coal deal after months of squabbling Reuters

Germany has abandoned plans for a levy on coal-fired power plants but will reduce brown-coal power generation to safeguard its 2020 carbon-reduction targets, coalition leaders agreed yesterday. The plans, which follow months of wrangling within Angela Merkel’s government, were welcomed by industry but condemned by environmental groups which accused the chancellor of selling out to business interests.

Some 2.7 gigawatts of power generation from brown coal, equivalent to the output from five power plants, will be closed but retained as reserve power in case of emergency, parties in Merkel’s right-left coalition agreed early yesterday. Shares in utility RWE were up 5.6% at €20.42 as of 1058 GMT after plans for a charge on coal power plants was dropped. In another positive for utilities, the parties also agreed that power providers would be compensated if they participated in a new “capacity reserve” system where brown coal plants can be switched back on if there are power shortages, something the firms had long pushed for. “We are sending an international signal to show we are achieving the switch to renewables in a highly industrialised country,” Social Democrat (SPD) Economy Minister Sigmar Gabriel said. There will also be support for power and heat co-generation, more investment in efficiency measures and the coalition settled a dispute over high-voltage power lines needed to carry green energy from the north to Germany’s industrial south. Gabriel’s ministry is expected to draw up a law for later this year on the details. Environmental group Greenpeace derided the plans, saying they made a mockery of a Group of Seven (G7) climate deal brokered by Merkel at Schloss Elmau in Bavaria in May. “Angela Merkel has broken her climate promises from Elmau. Instead of starting the exit from coal, she has ensured all the dreams of the plant operators come true,” said Greenpeace’s Tobias Muenchmeyer. Coal accounts for about 44% of Germany’s power generation compared to about 27% from renewable sources.

An aerial view shows Vattenfall’s ‘Schwarze Pumpe’ brown coal power station in Spremberg, eastern

Germany. Germany agreed yesterday to mothball about five of the country’s largest brown coal power

plants to meet its climate goals by 2020.




India’s $100bn solar push draws foreign companie Reuters

India’s $100bn push into solar energy over the next decade will be driven by foreign players as uncompetitive local manufacturers fall by the wayside, no longer protected by government restrictions on the sector.

The money pouring into India’s solar industry is likely to be soaked up by foreign-organised projects such as one run by China’s Trina Solar – not the country’s own solar panel manufacturers. Last week, Softbank became the latest foreign player to enter India’s solar market, leading an investment of up to $20bn. The Japanese firm said it would consider making solar panels locally, but with Taiwan’s Foxconn rather than a local manufacturer. Many Indian solar panel producers have benefited over the past six months from a surge in demand for panels not yet fulfilled by foreign companies. But their small scale and outdated technology will quickly make itself felt when the global players arrive. “The smaller manufacturers of India, especially the cell manufacturers, will be adversely hit because they are unable to compete both on technology and even on price structures,” said Jasmeet Khurana at solar consultancy Bridge To India. India’s solar panel makers can no longer turn to the Indian government for help. The government is more concerned about creating jobs quickly and ensuring plentiful power supply in a country known for its many blackouts. India, in contrast to Chinese and German efforts to protect local producers, has scrapped most restrictions on where equipment that turns sunshine into energy is bought. Last year, it dropped an anti-dumping duty on panel import.




Foreign players making panels in India are expected to compete with local manufacturers to fulfil so-called domestic content requirements for government projects. Trina has unveiled plans for a $500mn plant and US-based SunEdison is investing up to $4bn in a manufacturing facility. Both are tying up with Indian power firms to build the plants. India has said it expects peak power demand to double over the next five years from around 140,000 megawatts today. To help meet that demand, 100,000 MW of new capacity is to come from solar panels, and of that it wants at least 8,000 MW to come from locally-made cells. Foreign players manufacturing in India will probably win the bulk of those orders. Indian rivals like Indosolar and Moser Baer produce panels, but they cost 8 to 10% more than

foreign producers, Khurana said. It is not yet clear which foreign firms will emerge as the winners, with most of the facilities years away from being built and the big tenders for huge solar parks touted by the government still to be awarded. But those who can quickly build scale will be the most able to compete on cost. “The lowest cost in manufacturing will only

come from scale and integrated facilities,” said Sujoy Ghosh, India Country Head at US-based First Solar. First Solar is to build 5,000 MW of solar power before 2020, but will rely on imported panels for now because it is cheaper to buy component parts internationally where they are more readily available. As for some of India’s small panel makers, they are looking to complement the efforts of foreign players instead of trying to derail them. Maharishi Solar, a small manufacturer based in Delhi, is looking to tie up with a foreign company, the company’s head Ajay Prakash Shrivastava told Reuters. It stopped producing solar panels a few years back as it could not compete with foreign manufacturers, primarily Chinese. Shrivastava said import panels are as much as 45% cheaper thanks to subsidies in their home countries and lower borrowing costs. “The Indian manufacturers do have a disadvantage,” he said. “We are trying to find a partner who can bring in the latest technology.”




Tesla beats delivery forecast with 52% quarterly jump Bloomberg/Frankfurt Tesla Motors CEO Elon Musk with Model S in Fremont (file). Tesla, whose biggest shareholder is Musk, reworked its Model S lineup in April, replacing the cheapest version with an all-wheel-drive car costing 7.1% more at $75,000. Tesla Motors beat its car-sales forecast for the second consecutive quarter with a 52% surge in the three months through June. Tesla delivered 11,507 Model S sedans in the period, the Palo

Alto, California-based

manufacturer said yesterday in a statement of

preliminary figures. The company predicted in May that it would sell 10,000 to 11,000 of the electric-powered car, its only model, during the second quarter.

That brings the preliminary total so far the first half to 21,552 deliveries, less than 40% of its full-year target of selling 55,000 vehicles. Output and deliveries are projected to increase with the introduction of the Model X sport utility vehicle this quarter. In its three-paragraph statement, the company said the second-quarter figure may be adjusted slightly and reminded investors that quarterly financial results are also affected by cost of sales and other inputs. Tesla shares rose 4.2% to $280.47 at 8:23am New York time, before regular trading. The stock gained 21% this year through Wednesday, outpacing the Russell 1000 Index’s 1.4% increase. The automaker, whose biggest shareholder is chief executive officer Elon Musk, reworked its

Model S lineup in April, replacing the cheapest version with an all-wheel-drive car costing 7.1% more at $75,000. Tesla also plans to begin selling a lower-priced third car in 2017. Tesla’s first-quarter sales jumped 56% from a year earlier to 10,045 vehicles, exceeding the company’s forecast by 5.7%. The second-quarter total was a record for the carmaker, which was founded in 2003 and began deliveries of the Model S in 2012. Tesla is also developing large-scale energy- storage systems for homes and businesses.




Indian tycoon plans to invest $2.5bn in Brazil oil and gas Bloomberg/Mumbai

Videocon Industries, an Indian maker of consumer electronics with ambitions to become a major energy producer, plans to invest as much as $2.5bn over three years in Brazilian oilfields,

chairman Venugopal Dhoot said. The scope for oil from its blocks in the South American country is four times higher than the largest field in India and the company will pursue expanding its energy operations there, the billionaire said in an interview in London. “It is just the beginning,” said Dhoot, who sold Videocon’s 10% stake in a Mozambique natural

gas field for $2.5bn to two state-owned Indian explorers in 2013. Dhoot, 64, is seeking to reposition Videocon as an oil & gas explorer with stakes in at least eight hydrocarbon blocks in countries including Indonesia and East Timor. It is exploring “more and more,” with mergers and acquisitions being one of the key opportunities, the company said in its annual report last month. In an interview published on June 23 in India’s Mint newspaper, Dhoot said the Aurangabad, Maharashtra-based company will be known as an oil and gas firm. In the 18-month accounting period ended December 31, consumer durables accounted for 90% of the Rs171bn ($2.7bn) in sales, according to company filings. He plans to reverse this in the next three years, he tod the paper. Videocon owns stakes in 10 exploration blocks in Brazil through a joint venture with an upstream unit of Indian refiner Bharat Petroleum Corp. Many of them are operated by state-owned Petroleo Brasileiro SA, which is selling assets to reduce debt that stands at an industry-high of $125bn. Petrobras invited a small group of international companies with offshore experience to bid for stakes in some concessions, including pre-salt blocks, people with knowledge of the matter said last month.




Indonesia: Cooper Energy to drill Bunian-4 appraisal well, South Sumatra, Indonesia .. Source: Cooper Energy

Cooper Energy has rescheduled its drilling plans for the Sukananti KSO, South Sumatra, Indonesia to prioritise the drilling of theBunian-4 appraisal well, following analysis of the results of the successful Bunian-3 ST2 well. Preparations are now being made to spud Bunian-4 in mid-July 2015 following completion of rig maintenance.

As reported to the ASX 19 May 2015, Bunian-3 ST2 resulted in the addition of 1.26 million barrels of 2P oil reserves net to Cooper Energy. Interpretation of the log and test data acquired indicates that the volumes of oil and gas in the Talang Akar Formation TRM3 and K1 Sands in the Bunian field may yield significantly higher reserves and production potential than previously recognised. The Tangai-5 development well, which had originally been scheduled to follow Bunian-3, will be deferred as appraisal of the Bunian field reserves is prioritised. Bunian-4 will be drilled on a deviated trajectory to a subsurface target 380 metres south-southeast from the surface location and 450 metres from the Bunian-3 ST2 subsurface location at the top of the TRM3 Sandstone. Data from the well will provide clearer definition of the structure and will deliver critical information to assist in integrated field development planning to increase production and to optimise oil recovery. The primary objective will be the TRM3 Sandstone to test the down-dip extent of the oil column in that reservoir. Bunian-4 will also help better define the oil-water contact depth in the K1 Sand. The Sukananti KSO is currently producing at approx. 800 barrels oil per day (gross joint venture output) of which the Bunian field is contributing approx. 660 barrels oil per day. Production is currently limited by export constraints and studies have been initiated to optimise the overall field development. In the meantime, a program of work is underway to increase short-term production capacity. This includes increasing the surface facility fluid handling capacity, reviewing crude oil haulage and road infrastructure limits as well as addressing downstream pumping limitations and improving access to the Pertamina downstream pipeline network. When these debottlenecking activities are complete, it is anticipated that KSO gross production can be increased to over 1,000 barrels oil per day. Joint Venture participants in the Tangai-Sukananti KSO are: Cooper Energy (55% and Operator); Mega Adhyaksa Pratama Sukananti Ltd (45%).




China oil output set to rise from 2014 record Reuters +NewBase

China’s crude oil output looks set to rise this year from a record in 2014 as new production from third largest producer Cnooc helps to counter reductions from its two bigger rivals. Output growth from China would add to a global glut even as exporters such as the Organisation of the Petroleum Exporting Countries (Opec) and Russia produce at near record highs and US

shale producers keep ramping up output. With the global oversupply as much as 2.6mn barrels per day (bpd), international crude prices have been nearly cut in half over the past year. While there is no official Chinese production outlook, information from the biggest state oil companies indicates the nation’s output will rise slightly in 2015, largely due to increased production from Cnooc Ltd, the listed unit of state-owned China National Offshore Oil Corp. “What we have spent in the last few years has laid the foundation for the production growth this year,” said an

employee with Cnooc’s investor relations department who asked to remain unnamed. Cnooc spent 107bn yuan ($17bn) on capital expenditures in 2014. Despite recent cost cuts, Cnooc has said it has already added at least 40,000 bpd of crude output this year. And it aims to increase daily domestic oil and gas output in China by at least 135,000 barrels of oil equivalent by the end of 2015, according the company’s 2015 outlook. China, the world’s fourth biggest oil producer, raised its output in the first five months of this year by 1.8% from a year ago to 4.25mn bpd, compared with growth of just 0.1% over the same period in 2014. In 2014, China produced an annual record 4.2mn bpd. “I think Chinese crude output is going to maintain its current levels ... and go higher before the end of the year,” said Priya Narain Balchandani, director of global research for Standard Chartered. The bank expects China’s production to rise 1.6% this year, although growth could stall or decline in 2016. Other analysts, including one that had forecast a decline for this year, said they are going to revise their production outlooks for China upwards. Combined output from Cnooc and smaller producers was up 16% from a year ago by end-April, according to a biweekly report from the official Xinhua news agency. China’s two largest producers, PetroChina and Sinopec Corp, have both announced cuts. PetroChina plans to shrink its worldwide output by 1.5-1.6% in 2015 – about 40,000 bpd – with more than 70% of the cuts to come in China. Sinopec’s output in China is set to fall 30,000 bpd, or about 3.5%, to around 820,000 bpd this year, according to its annual report.




BP reaches $18.7b governmet fines settlement Reuters + NewBase HOUSTON — BP Plc will pay up to $18.7 billion in penalties to the US government and five states to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago in the largest corporate settlement in US history. The agreement adds to the $43.8 billion that BP had previously set aside for criminal and civil penalties and cleanup costs.

The company said its total pre-tax charge for the spill now stands at $53.8 billion. BP shares jumped more than 5 percent in New York trading as investors said the British company, often mentioned as a potential acquisition target, could now turn the page on one of the darkest chapters in its century-long history. Under the agreement with the US Department of Justice and the states, BP will pay at least $12.8 billion for Clean Water Act fines and natural resource damages, plus $4.9 billion to states. The payouts will be staggered over as many as 18 years. The preliminary settlement, subject to all sorts of variables, avoids a substantial amount of further litigation. The rig explosion on April 20, 2010, the worst offshore oil disaster in US history, killed 11 workers and spewed millions of barrels of oil onto the shorelines of several states for nearly three months. The agreement, which still needs to be approved by courts, covers Clean Water Act fines and natural resources damages, along with claims by Alabama, Florida, Louisiana, Mississippi and Texas as well as 400 local government entities.




Alstom, GE test stamina in showdown with EU over energy deal Bloomberg

The attempt by General Electric Co and Alstom to convince the European Union to clear a planned combination of their energy businesses has been a gruelling effort. It’s not over. The duo confronted European Commission officials at a Brussels hearing yesterday, seeking to win over regulators who argue the €12.4bn ($13.7bn) deal would leave only Siemens as GE’s main rival in Europe in the gas turbines market — potentially thwarting innovation and triggering price rises.

Patrick Kron, the chief executive officer of France’s Alstom, said this week he’s “very confident” the companies can get EU approval. But after holding around 50 meetings with regulators and handing over 50,000 pages of written arguments, he owned up to a sense of fatigue over the process. “I find it all very long, very hard to go through from a human standpoint, for teams — and from a financial and commercial standpoint,” Kron said on Tuesday at Alstom’s annual general meeting

near Paris. GE’s purchase of most of Alstom’s energy operations holds a special significance as the US company seeks to retreat from lending activities and return to its manufacturing roots. Fairfield, Connecticut-based GE is selling about $200bn of assets as it shrinks the finance arm and refocuses on

manufacturing units making heavy-duty products such as gas turbines, jet engines and medical scanners. The French manufacturing firm is keen to get the deal through for different reasons. Alstom had a net loss of €719mn in the fiscal year ended March 2015 as it got a €720mn fine to settle a bribery probe in the US Its earnings were also hit by a drop in energy equipment sales, restructuring charges and the writedown of some Russian assets, while income from operations at Alstom’s train-making business climbed 19%. “If the deal were to be up in the air, we would be in a very difficult situation,” Kron said. “But there is no reason to think that will be the case.”The hearing will be an opportunity “to provide explanations” and address the list of competition concerns sent by the commission last month, said Kron. The commission, GE and Alstom all declined to comment on the hearing. GE is seeking to avoid a repeat of its failed bid for Honeywell International, which was scuttled by EU regulators in 2001. While GE has a history of regulatory tussles with the EU, the company faces US government opposition to another of its deals — the $3.3bn sale of its appliance business to Electrolux. The Swedish company agreed in September to acquire the century-old GE unit in a transaction that would put the company on par with industry leader Whirlpool Corp in the US




Siemens buys out Dresser-Rand for $7.8bn by Slavka Atanasova OIL&GAS

Siemens acquired US oilfield firm Dresser-Rand for $7.8bn on Tuesday after the EU Commision approved the bid placed in 2014.

The German conglomerate will pay all shareholders $83 per share and cover a time-dependent ticking fee totaling $2.20 per share for the months of March to and including June 2015. The transaction also includes Dresser-Rand's $1.2bn debt.

Siemens is financing the purchase price from operating and investing cash flows and with newly issued USD bonds. The shares of Dresser-Rand Group Inc., which is headquartered in Houston, Texas and Paris, are currently listed on the New York

Stock of July 2015, its shares will no longer be listed on the exchange.

Dresser-Rand's business – together with Siemens' compressor unit and the related service business – will form a new Dresser-Rand unit within Siemens Power and Gas Division with a primary focus on the oil and gas industry.

Dresser-Rand's current CEO, Vincent Volpe will lead the business through the initial integration phase. In Spetember Christopher Rossi, 28-year veteran of Dresser-Rand, will take over as CEO at the newly formed business. Siemens manager Heribert Stumpf will serve as the unit's CFO. Siemens is anticipating annual synergies of about $221mn from the integration of Dresser-Rand by 2019.

Dresser-Rand had revenue of around $2.8bn in fiscal 2014 and employed about 7,900 people.

"With Dresser-Rand on board, we now have a comprehensive portfolio of equipment and capability for the oil and gas industry and a much expanded installed base, allowing us to address the needs of the market with world-class products, solutions and services," said Lisa Davis, member of the board of Siemens.

"The current level of oil prices increases the focus of our customers for ways to reduce costs. So despite the challenges of a low oil price, this also brings opportunities as we focus our efforts on offers that reduce costs and increase efficiency. The long-term growth trajectory for oil and gas remains intact," she added.

UAE CEO Kay Zwingenberger




Oil Price Drop Special Coverage

Oil slides in thin trade on rising U.S. rig count Reuters + NewBase

Oil prices dropped on Friday as a rising U.S. rig count stoked more concerns about global oversupply while an investigation by Chinese regulators into suspected stock market manipulation further unsettled the market.

A sharp move lower in late-morning U.S. trade was exacerbated by thin liquidity, with many U.S. market participants off for the U.S. July Fourth holiday. U.S. oil drilling increased this week after 29 consecutive weeks of declines, the strongest sign yet that higher prices are coaxing producers back after an extended period of low prices.

Oil rigs increased by 12 to 640 following a slump that cut the number of active U.S. rigs from a peak of 1,609 in October to a nearly five-year low last week, energy services firm Baker Hughes Inc (BHI.N) said. "This is the first weekly increase in 30 weeks and is an indication that the slump in drilling activity has ended," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.

Brent crude for August LCOc1 settled down $1.75 at $60.32 a barrel, extending a downward trend since early May during which prices have fallen around 13 percent. Front-month U.S. crude CLc1 was at $55.52, down $1.41, dropping below a trading range of $57 to $62 seen since early May.

"We have broken out of a

two-month trading range and there are a lot of bearish factors that have come out, plus there are very, very thin volumes today," said Tariq Zahir, an analyst at Tyche Capital

Advisers in New York. The rising U.S. rig count adds to near-record production by Russia and the Organization of the Petroleum Exporting Countries, which is feeding a huge oversupply.

OPEC oil supply hit a three-year high in June due to record or near-record output from Iraq and Saudi Arabia, a Reuters survey showed this week. The cartel's production is close to 2.5 million barrels per day above demand, filling stocks worldwide.

The Greek debt crisis ahead of a referendum on Sunday and concerns over China's commodities markets weighed on investor sentiment. Traders said commodity markets were also worried by reports that China's regulators had opened an investigation into suspected market manipulation after a slump of more than 20 percent in Chinese stocks since mid-June.




Oil prices to stay low amid high stockpile .. ENERGY OUTLOOK Syed Rashid Husain

Faced with major headwinds, crude oil markets last week registered their biggest weekly decline since March. The ongoing Greek financial soap opera, prospect of a deal between Iran and the west, resilient production from US shale, increasing output from OPEC, the cooling down of the Chinese dragon and high inventory levels both in the US and Europe - all appear weighing heavily on crude markets. The heat is on. "There's not too much conviction in the market in terms of where we're going, and you have big support to the downside and big resistance to the upside," Citigroup energy strategist Chris Main was quoted as saying by CNBC. Despite the fact that it is neither a major oil consumer nor a significant producer, the financial turmoil in Greece is a major drag on crude markets, impacting both supply and demand fundamentals. It is dragging down global equity and commodity markets, spooking investors fearing a broader contagion. The crisis could hit the value of the euro, making the US dollar attractive, both as a safe haven and as an investment vehicle. If the dollar appreciates, that will push down oil – since oil is priced in dollars. With the US dollar holding firm, oil prices would remain pressured, Daniel Ang, the investment analyst with Phillip Futures in Singapore, was quoted as saying by AFP. Already signs of weakness were evident early last week, as the crisis in Athens unfolded. Crude begin tracking losses in global equity markets last Monday after Greek Prime Minister Alexis Tsipras opted to break the bailout reform talks, calling for a referendum on austerity conditions demanded by its creditors. Iran nuclear talks is also under spotlight. Markets are awaiting, rather impatiently, to see if Iran and major world powers can reach a deal on Tehran's nuclear program. An agreement could put 1 million barrels of Iranian crude back on the market eventually. Should negotiators reach a deal for Iran to end its nuclear program, in addition to the increase in production, Iran could also unleash an estimated 30 million to 40 million barrels of oil it now stores on tankers, reports underline. "It's a substantial amount of oil. It could potentially move the market out of the current range," Patti Domm quoted Michael Cohen, head of energy commodities research at Barclays, as saying. "This may be the time when we break lower and into the $50s," Bjarne Schieldrop, head of commodity analysis at SEB in Oslo emphasized. Again Capital analyst John Kilduff told CNBC if talks actually fell apart altogether, the price of oil could immediately jump $10 a barrel. "The knee-jerk is going to be higher (prices). Also, I would assume relations will deteriorate between the US and Iran, and maybe others, and that will raise the security premium for potential military action that Israel will push for," he added. And in the meantime, the share battle, between the OPEC and non-OPEC producers' continues unabated. A rebound in US drilling last week, after a 29 weeks siesta, added to signs that shale producers will keep pumping into an oversupplied market. The US output already last week touched the 40-year high of 9.6 million bpd. OPEC oil supply was also at a three-year high, close to 2.5 million bpd above the call on its crude, a Reuters survey showed. The Saudi production has also been on rise, touching the 10.3 million bpd in May as compared to 9.69 million bpd a year earlier. All this is contributing to the market glut.




In the meantime, China's crude appetite is slowing. China’s economic growth has been cooling in recent years, with 2014 marking its slowest GDP growth rate in a quarter century- impacting the Chinese crude demand patterns too. In the meantime, the Chinese stock market is increasingly looking like a bubble ready to pop. The Shanghai Composite, an index of all stocks traded on the Shanghai Stock Exchange, that had spiked by 40 percent so far this year and has doubled from mid-2014, and the Shenzhen Composite surged by a jaw dropping 90 percent since the beginning of 2015. But both are on now on retreat, Nick Cunningham reported. China’s Shanghai Composite has plummeted in recent weeks, falling around 25 percent. Since June 12, Shanghai and Shenzhen have seen $2 trillion dip in market capitalization. Dangers from China’s volatile stock market come on top of some warning signs about its energy demand too. A new report from the Australian government raises concerns over China’s tepid demand for LNG, of which Australia is one of the world’s top producers. China’s LNG consumption was expected to grow by more than 50 percent between 2014 and 2016, but “downside risks appear to be growing,” the report finds. For the first time since 2006, China imported less LNG in the first quarter of 2015 compared to the same quarter in the year prior. China’s level of oil imports have been looking shaky even before the latest turmoil. Beijing's oil imports, that hit a record high in April, dropped by 11 percent in May from a year earlier. Chinese oil demand growth has been leveling off in recent years and the elevation in its imports, experienced in recent months until April, could also be due to the decision to stockpile oil for its strategic reserve - while the prices were lower. Once that gets stopped, its imports had to abate. "In May, we saw a drop in crude imports. Part of the reason people suggested that was because they were doing less strategic stock building," Main added. Elevated crude inventory levels are also adding to the pressure on crude markets. When the glut like scenario sent crude prices plunging to near-six-year lows in the first quarter of the year, refiners started

stocking up. As more and more oil entered storage, pushing US inventories to the highest level in more than 80 years, it prompted some to stash oil on ships in the

ocean. Inventories in Europe and South Korea are also reported to be very high. All these stashed barrels are now

available with the refiners - adding to the growing pressure on the already soft crude markets. Markets are in for some rough ride!




Oil prices forecast to rise over next two years on demand growth Reuters

Oil prices are likely to be stable for the rest of this year and climb in 2016 and 2017 as global demand picks up, shrugging off setbacks from the Greek debt crisis and the possible lifting of sanctions on Iran, a Reuters poll has forecast.

The monthly survey of 31 analysts showed North Sea Brent crude is expected to average $62 a barrel in 2015, more than $2 above its average price of $59.29 so far this year.

"Oversupply will ease gradually in the second half of this year, helped by stronger demand and slower production from outside OPEC," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.

"If the Greek crisis remains contained, the impact on oil should be short-lived," he added.

Oil markets took a hit on Monday as investors worried a Greek debt default and the possible departure of Greece from the euro zone could hit growth in Europe and squeeze fuel demand. Brent is trading near the bottom of its recent range in the low $60s a barrel, almost 50 percent below the highs of 2014 but up over a third from its January low around $45.

Most analysts say the benchmark crude is unlikely to see fresh lows this year. Eight analysts who contributed to the Reuters May oil poll raised their average 2015 Brent price outlook in the latest survey, while 18 kept their forecasts unchanged.

Brent is expected to rise to $70.80 next year and $75.90 in 2017, the poll showed. Analysts expect the Organization of the Petroleum Exporting Countries to keep pumping close to capacity, but they see output from non-OPEC countries limited by relatively low oil prices.

The poll forecasts US light crude will average $56.30 a barrel this year and $65.80 in 2016. It has averaged $53.21 so far in 2015. Analysts said a nuclear deal between Iran and the West would eventually allow more Iranian oil onto world markets, but most said the impact on prices should be delayed.

"It may not be until 2016 before Iran can meet its side of any comprehensive agreement with the Western powers, so a surge in (oil) supply would not be imminent," Capital Economics analysts said in a research note.

US brokerage Bernstein had the highest 2015 average Brent and US crude price forecasts of $80 and $75 per barrel respectively, unchanged from last month's poll. BofA Merrill Lynch had the lowest Brent forecast for 2015 at $58, while Goldman Sachs had the lowest 2015 U.S. crude forecast at $52.04.




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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 &

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