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Middle East Market Update August 2014

Posted by: Chemist Posted on: September 2, 2014 , ,

OPEC OIL PRODUCTION FIGURES

  • The OPEC Reference Basket lost all the gains earned over the previous month as the crude oil market has become complacent about the risk of supply disruptions, while a supply overhang and lacklustre refinery demand in Asia and Europe drove prices lower. The Basket lost about $2.30 over the month on average. Ample supply amid low refinery demand due to poor refining margins — particularly in Europe and Asia — contributed greatly to weakness in outright crude oil prices, which in turn was reflected in the Basket value.
  • On a monthly basis, the OPEC Reference Basket slipped to an average of $105.61/b in July, down by $2.28, or 2.11% below the previous month. Y-t-d, the Basket was 36¢ higher compared with the same period one year earlier, standing at $105.35/b compared with an average of $104.99/b a year ago.

 Crude Oil Price Movements

opecbasket

  • Brent-related Basket components from West and North Africa lost a significant share of their value in July, as each dropped over $4 from the previous month. This retreat was mainly attributed to poor refining economics for light products, which translated into modest light sweet crude oil demand from refiners in Europe as well as in Asia. An overhang of supply also affected the market. A month-long overhang in West African barrels amid rising Libyan crude supply additionally depressed prices for similar grades in Europe and Africa. Brent-related Basket components Saharan Blend, Es Sider, Girassol and Bonny Light dropped $5.11 or 4.5%, on average. Latin American Basket components Merey and Oriente slipped in line with the drop in outright prices on the WTI market and weak heavy oil cracks relative to light crude, losing almost 3.7% over the month on average.

 

  • Oriente and Merey decreased by $3.54 and $3.65 in July, respectively. Middle Eastern spot prices also suffered from weak Asian refining margins and lower refinery runs, though not as much as in Europe. Middle Eastern spot components and multidestination grades fell by around $1.90 and $1.45, respectively. On 7 August, the OPEC Reference Basket stood at $102.23/b, $3.38 under the July average.

 

UNITED ARAB EMIRATES

  • Middle East contracts awarded: July 2014 – Over $8bn of contracts were awarded in July in the Middle East.
  • Middle East rig count on the rise – The region is now the world’s second-biggest market for operating oil rigs.
  • Dubai’s 13 biggest shopping mall developments – Mall of the World tops the $2.7bn-worth of Dubai-based shopping centre projects.
  • UAE upstream awards dominated by Petrofac and NPCC – Nasr award brings total National Petroleum Construction Company haul to $4.3bn since 2012.
  • DMCC fuels commodity flows through Dubai – Dubai’s diamond and gold trade soars.
  • Contractors submit bids for Abu Dhabi Guggenheim – Saadiyat Island will be home to several major museums.
  • Mitsubishi likely to win new Dubai Metro work – Dubai Road & Transport Authority prepares to tender $1.8bn in construction deals and signals Mitsubishi-led consortium as frontrunner.
  • Parsons wins more Dubai Water Canal work – US-based consultant will design infrastructure for the new development.
  • Standard Chartered invests in Topaz Energy and Marine – Topaz is a subsidiary of Oman-based Renaissance Services.

 

SAUDI ARABIA

  • Saudi Electricity Company awards $2.9bn of contracts – State utility has already awarded more transmission contracts in the second quarter than for whole of 2013.
  • Saudi oil revenues expected to top $300bn – Strong oil prices coupled with sustained high production leads to upwards revision in forecast.
  • Yanbu Export Refinery – The refinery, jointly owned by Saudi Aramco and China Petrochemical Corporation, will have a capcity of 400,000 barrels a day.
  • The Middle East’s refinancing burden – Region’s investment grade companies need to refinance $91bn-worth of debt by 2018.

 

OMAN

  • Al-Hassan wins $68m piping deal on Sohar refinery expansion – Local group awarded sub-contract by Petrofac/Daelim consortium.
  • Oman extends deadline for water network project – Work will involve expanding distribution networks in Muscat.
  • WSP wins Oman airport work – Canadian firm appointed by J&P for detailed design work on Muscat and Salalah airport projects.
  • Oman seeks bids for Sohar Port sewage project – Contract will involve providing project management services for treated sewage effluent scheme.
  • Oman receives bids for road dualisaton scheme – UAE’s Ghantoot Transport & General Contracting submitted low bids for both road dualisation packages.
  • Oman tenders package 10 of Batinah Expressway – Almost $2.1bn-worth of contracts have already been awarded on road project.
  • KEO wins Duqm consultancy contract – Kuwaiti consultant will prepare feasibility studies and design for two major areas of Duqm’s Special Economic Zone.

 

BAHRAIN

  • GP Zachariades Group wins Bahrain hospital contract – Cypriot contractor will build cancer centre at northern hospital.
  • Saudi Aramco to tender $350m Bahrain pipeline – Pipeline deal to build new link with Bapco refinery expected by the end of July.
  • Bahrain growth to slow in 2014 – Lower oil prices will slow growth in Bahrain this year and increase its budget deficit, says National Bank of Kuwait.
  • Bahrain’s ABC Bank launches syndication of $500m loan – Four banks selected to arrange deal.

 

IRAQ

  • Petronas extends deadline on Gharraf tenders – Companies asked to bid on Iraq oil and gas facilities by end of September.
  • Iraq starts up Halfaya-Missan export pipeline – China-operated oil fields to export crude via Iraq’s Gulf port of Al-Faw.
  • Petrochina tenders third phase of Halfaya oil development – Third central processing facility to boost Iraq field’s capacity to over 500,000 barrels a day.
  • Mansouriya gas project halted on unrest in northern Iraq – Turkey/Kuwait/South Korea consortium pulls staff from Diyala province operations.
  • Iraqi Kurdistan oil sector curbs operations – At least eight foreign companies take precautionary measures and relocate personnel as Kurdish army clashes with Isis militants.
  • More Iraqi Kurdistan oil operations affected – Afren and Genel Energy operations in northern Iraq affected by growing unrest.
  • Gazprom team tenders Badra oil well deal – Companies asked to bid for work on southern Iraq project by 26 September.
  • Halfaya project management bid deadline extended – Petrochina asks companies to submit bids on project management consultancy on 18 August.

 

IRAN

  • Iran pushes back London launch of new oil contracts – London event delayed until February 2015, says government official.
  • Iran looks to develop joint venture oilfields – Islamic Republic looks to boost output of two fields in the Gulf it shares with Oman and Saudi Arabia.
  • Iran met uranium targets, says UN nuclear watchdog – Tehran had successfully converted controversial 20 per cent-enriched stock in line with Geneva deal.
  • Iran invites interest for wastewater consultancy contract – Work will involve providing consultancy services and project management for the construction of plants at various locations.
  • Iran prepared to accept halt in nuclear fuel expansion – Tehran could roll back expansions for several years, foreign minister tells newspaper.Middle East gas output surged in 2013 – Regional increase fastest in the world as Qatar boosts gas production and exports.
  • Middle East May steel output surged 7.3 per cent – Rising steel production in region driven by Qatar, Saudi Arabia and Iran.

 

EGYPT

  • Egypt urges oil companies to restart projects – Post-revolutionary turmoil and unpaid bills are making firms wary of investing in energy assets.
  • BG Egypt upgrades gas infrastructure – West Delta Deep Marine control system upgraded as wells are brought online.
  • RWE Dea starts Egypt gas production – Company sees oil and gas output lifted by more than 50 per cent as new facility comes online.
  • Bidders given new closing date for Cairo metro Line 3 tender – Seven groups prequalified for third phase of Cairo metro Line 3.
  • Production starts at DEKA project in Egypt – Gas begins to flow from subsea well in the offshore Nile Delta.
  • Sea Dragon Energy announces Egyptian farm-out – Independent operator IPR Energy Resources grabs a stake in Sea Dragon’s South Disouq concession.

 

QATAR

  • Joint venture wins more work on Doha Metro – Team secures contract for elevated sections of railway.
  • CH2M Hill Halcrow secures Qatar road services contract – Consultancy deal will help improve road safety in Qatar.
  • Qatar extends deadline for packages on reservoirs megaproject – Water Security Mega Reservoirs project will provide seven days of strategic water storage.
  • Qatar invites consultants to prequalify for wastewater contract – Deadline set for 25 September.
  • Doha evaluates bids for port construction package – Seven groups submitted prices for naval infrastructure package at new port.
  • Prequalification starts at $7.4bn Qatar chemicals scheme – Prequalification starts at $7.4bn Qatar chemicals scheme
  • 18 August 2014 4:16 GMT
  • Al-Sejeel petrochemicals complex invites interest for last two packages at Ras Laffan.
  • Dolphin Energy plans gas pipeline to supply Sharjah – UAE group awards design deal to ILF Consulting Engineers and invites prequalification.
  • Oil exporters put the brakes on spending – Oil exporters are starting to trim spending to keep budgets more in line with oil prices.
  • Investors start developing malls in Doha ahead of World Cup – A series of new private-sector shopping mall projects in Doha are in the early stages of development.
  • Qatar drives Middle East mergers and acquisitions – Value of deals in the second quarter highest since start of 2011.

 

JORDAN

  • Jordan auctions three oil blocks – Jordan Energy Ministry sets 20 October deadline on proposals for developing Azraq and Sirhan areas.
  • First Solar wins Jordan plant contract – US firm will build 52.5MW Shams Maan photovoltaic plant.
  • Jordan cancels third round of renewables programme – Amman also postpones submission date for second round until end of year.
  • Jordan extends deadline for renewable energy bids – Developers have extra time to work on submissions for second round of Jordan’s direct proposal programme.
  • Jordan signs agreements for initial renewables round – 12 developers will build and operate photovoltaic power plants in Jordan.
  • Drake & Scull wins contracts in Jordan – Work involves providing engineering services at Saraya Aqaba development.

 

KUWAIT

  • Kuwait University tenders building work – Kuwait University contract covers building and operation work.
  • Kuwait extends deadline for overhead lines contract – Eight contractors have been prequalified for the Kuwait overhead lines tender.
  • Kuwait delays New Refinery Project bid submission deadline – $1.1bn New Refinery Project package is pushed back by nearly two months.
  • Yemen and Kuwait discuss oil and gas cooperation – Yemeni officials hope for Kuwaiti investment to help revive flagging oil production.
  • Kuwait prequalifies consultants for Bubiyan port design deal – Work will involve designing main buildings and additional infrastructure for new port.
  • October start for Clean Fuels Project site works – After years of delays, work is expected to begin on expanding Kuwait’s Mina al-Ahmadi and Mina Abdullah refineries.

Discovery of Crude Oil in Tunisia

Posted by: Chemist Posted on: August 28, 2014 ,

Circle Oil Plc, the Middle East and Africa focused oil and gas exploration, development and production company, is pleased to announce the preliminary results of drilling of the well EMD-1 in the Mahdia Permit, offshore Tunisia.

The El Mediouni-1 well (EMD-1) is located within the north central area of the Mahdia Permit in a water depth of 240 metres, 120 km east of the port of Sousse. EMD-1 was spudded on 8 June 2014 and drilled to a TD of 1,200 metres MD in the Upper Ketatna carbonates. The stratigraphy encountered in the well was exactly as prognosed and very good light oil shows were encountered both in the Lower Birsa carbonate primary target and the Upper Ketatna carbonates secondary target over a combined interval of 133 metres.

The strong hydrocarbon indications encountered in the Birsa and Ketatna carbonates confirm the existence of a working petroleum system in the Mahdia Permit for this and other prospects. The robustness of the El Mediouni trap has also been proven. The losses incurred within the target formations, as described below, give further confirmation of high quality permeability. The gross oil zone interval in the Lower Birsa is 77 metres and the Upper Ketatna has a minimum interval of 48 metres, subject to confirmation by logs. Using known reservoir and fluid parameters from equivalent formations in the Gulf of Hammamet, the internally estimated most likely recoverable prospective resources discovered by the EMD-1 well are approximately 100 MMBO.

OPEC Reference Basket July 2014

Posted by: Chemist Posted on: August 12, 2014 , ,

The OPEC Reference Basket (ORB) extended its previous month’s gains by nearly
$2.50 in June to reach its highest value this year, uplifted by a surge in crude oil
outright prices. For most of June, global crude oil markets were rattled by supply
concerns due to the ongoing crises in Libya and Ukraine, while the geopolitical tension
in Iraq has fuelled fears of disruption in exports from the Middle East region. This is
despite the fact that crude oil markets were adequately supplied during the month. In
fact, some markets were over supplied amid poor refining economics, which caused
physical crude oil markets in many regions to weaken significantly. Physical crude
markets were under pressure with the differentials of physical crudes to their respective
benchmarks at their lowest in over a year in most markets.

On a monthly basis, the ORB improved to an average of $107.89/b in June, up $2.45,
or 2.33% over the previous month. On a year-to-date basis, the Basket was higher, the
first time since December 2012, compared to the same period last year. The Basket
year-to-date value stood at $105.30/b compared to the $105.09/b average of last year,
21¢ or 0.20% higher.

crudeoilpricemovement2014

OPEC reference basket

All Basket component values increased in June mainly due to the uplift in outright
prices of their respective benchmarks and pricing formula elements. Benchmark prices,
particularly Brent, surged in response to fresh geopolitical tension in Iraq in addition to
the ongoing conflicts in Libya and Ukraine that raised supply disruption concerns,
increasing the geopolitical risk premium.
Nevertheless, this support for the component values was countered by pressure from
lacklustre physical crude demand on the part of major buyers and weak refining
margins. A narrowing in refining margins has hit European demand for both sweet and
sour crudes, while large customers such as China have been buying less West African
crudes due to high product stocks, cheaper crude in other markets and higher freight
rates. West African oil has become relatively expensive for Asian importers due to a
high premium of Brent crude oil, against which it is benchmarked, to Dubai crude.
Asia’s crude demand has also been muted as weak demand for oil products coupled
with excess regional supply are expected to keep refinery operating rates lower
through the third quarter and into the end of the year.

A glance to Oil Market in 2015

Posted by: Chemist Posted on: August 12, 2014

Despite some weakness in the first half of the year, the world economy continues to recover. Global GDP
growth in 2014 is now forecast at 3.1%, slightly higher than the estimated 2.9% for 2013. The US
experienced a surprisingly large contraction in economic activity in the first quarter due to severe winter
weather, leading to a downward revision in US GDP growth to 1.6% from 2.4% previously. However, with the
US economy expected to rebound and continued large monetary stimulus in the Euro-zone and Japan, the
OECD is seen growing by 1.7% in 2014 and 2.0% in 2015.
China’s GDP is forecast to grow by 7.2% in 2015 from 7.4% in the current year. India and other major
emerging economies are forecast to recover. This, in combination with the expected improvement in OECD
economies, leads to a global GDP growth forecast of 3.4% in 2015 (Graph 1). However, a number of
uncertainties remain, ranging from the consequences of monetary policies in the developed economies to
the threat of deflation in the Euro-zone, as well as the risk of geopolitical tensions and potential spillovers.

oilmarketforecast2015

Despite some weakness in the first half of the year, the world economy continues to recover. Global GDP
growth in 2014 is now forecast at 3.1%, slightly higher than the estimated 2.9% for 2013. The US
experienced a surprisingly large contraction in economic activity in the first quarter due to severe winter
weather, leading to a downward revision in US GDP growth to 1.6% from 2.4% previously. However, with the
US economy expected to rebound and continued large monetary stimulus in the Euro-zone and Japan, the
OECD is seen growing by 1.7% in 2014 and 2.0% in 2015.
China’s GDP is forecast to grow by 7.2% in 2015 from 7.4% in the current year. India and other major
emerging economies are forecast to recover. This, in combination with the expected improvement in OECD
economies, leads to a global GDP growth forecast of 3.4% in 2015 (Graph 1). However, a number of
uncertainties remain, ranging from the consequences of monetary policies in the developed economies to
the threat of deflation in the Euro-zone, as well as the risk of geopolitical tensions and potential spillovers.

OPEC Oil Production Figures Jan 2014

Posted by: Chemist Posted on: January 6, 2014

• The OPEC Reference Basket in November fell below $105/b for the first time since July. A key factor behind the decline in the crude oil prices was reduced refinery crude intake due to scheduled turnarounds, as well as dismal margins. All Basket component values saw losses in November, but at varying levels. Crude futures prices also declined in November for the second month in a row. High crude inventories and rising supply in the US weighed heavily on Nymex WTI. The positive outcome at the Iran-P5+1 talks in Geneva also impacted the market. The Basket began to improve at the end of the month and into December to stand at $107.72/b on 9 December.

crudeoil update entire year 2013

• World economic growth for 2013 and 2014 remains unchanged at 2.9% and 3.5% respectively.
The forecast for the major OECD economies assumes a continued recovery, leading to higher growth in 2014 at 1.9%, compared to 1.2% in the current year, both unchanged from the previous report. China’s recent stimulus efforts and rising exports confirm this year’s forecast of 7.8%; growth is expected to continue at this level in 2014. While recent indicators point at some improvement, the forecast for India remains at 4.7% for 2013 and at 5.6% in 2014. Most recent advances in the OECD and China confirm the on-going recovery in the global economy.
• World oil demand growth in 2013 has been left broadly unchanged at 0.9 mb/d, while the forecast for 2014 remains at 1.0 mb/d. The bulk of next year’s growth is expected to come from the non-OECD, which is seen increasing by 1.2 mb/d, while OECD demand is projected to contract by 0.2 mb/d, which represents an improvement from the current year. China’s demand growth in 2014 is expected at 0.3 mb/d, in line with growth in 2013. Demand growth in OECD Americas is expected at 0.1 mb/d, while OECD Asia Pacific consumption is projected to contract by 0.1 mb/d.

• Non-OPEC oil supply is expected to increase by 1.2 mb/d in 2013, up slightly from the last report. In 2014, non-OPEC oil supply is forecast to grow by 1.2 mb/d. Output growth is expected to come mainly from the US, Canada, the Sudans, Kazakhstan, Russia, and Colombia, while oil supply from Norway, Syria, the UK, and Mexico is seen declining. In 2014, OPEC NGLs and non-conventional oils are forecast to grow by 0.15 mb/d over the current year to average 5.95 mb/d. OPEC crude oil production averaged 29.63 mb/d in November, a decrease of 193 tb/d from the previous month, according to secondary sources.
• Oil product markets remained relatively weak worldwide in November. The top of the barrel continued to show a poor performance, despite some positive signs of increasing seasonal demand for naphtha. However, tightening market sentiment fuelled by some refinery outages and run cuts helped to limit potential declines in margins in Asia and Europe. Meanwhile, falling US middle distillate inventories, amid increasing seasonal requirements and lower US crude prices, allowed US margins to show a healthy recovery.
• In the tanker market, spot freight rates for dirty vessels saw gains across various classes with VLCC rates encountering the strongest growth. VLCC, Suezmax and Aframax spot freight rates increased by 40%, 18%, and 5%, respectively, over the previous month. The improvements were driven by winter demand, higher Asian requirements, and increased delays in the Turkish straits. Clean tanker freight rates were mixed in November, with West of Suez freight rates increasing by 10%, while East of Suez freight rates remained weak, dropping by 9% from a month earlier.
• Preliminary data showed total OECD commercial oil stocks declined by 2.5 mb in October, indicating a deficit of around 10.1 mb compared to the five-year average. Crude inventories reached 26.4 mb above the seasonal norm, while products fell to 36.5 mb below the five-year average. In terms of days of forward cover, OECD commercial stocks stood at 58.5 days, 0.7 days more than the five-year average. Preliminary data for November shows that US total commercial oil stocks fell by 26.4 mb, but still indicated a surplus of 9.2 mb above the five-year average. Crude inventories indicated a surplus of 40.8 mb, while products showed deficit of 31.6 mb.
• Demand for OPEC crude in 2013 is estimated to average 29.9 mb/d, unchanged from the previous report and 0.6 mb/d lower than the 2012 level. Demand for OPEC crude in 2014 is also unchanged from the previous report at 29.6 mb/d, representing a decline of 0.3 mb/d compared to 2013.

Global Oil and Gas News Update Jan 2014

Posted by: Chemist Posted on: January 6, 2014

• Statoil buys into new Greenland block – Statoil, along with partners ConocoPhillips and Nunaoil, has been awarded a block offshore Greenland’s northeast coast where the Norwegian oil company will be the operator.
• Cairn abandons offshore Morocco well – Oil and gas explorer Cairn has decided to plug and abandon its FD-1 wildcat exploration well offshore Morocco as it had not encountered its target reservoir.
• Southern gas corridor to Europe to go ahead: BP – The Shah Deniz consortium announced the final investment decision (FID) for the Stage 2 development of the Shah Deniz gas field in the Caspian Sea, offshore Azerbaijan, according to consortium operator BP. Iran buys 100,000 tonnes sugar from India in rare deal.
• RWE completes 3D seismic in promising Suriname block – German energy company RWE has announced the completion of its 3D seismic survey off the coast of Suriname in South America.
• Eni makes new oil and gas discovery in Barents Sea – Eni has made a new offshore oil and gas discovery in the Norwegian Barents Sea, approximately 240 km from Hammerfest in the north of the country.
• Dabbagh Group is planning to sell a 19 per cent stake in its lubricant business.
• RevOmax Lubricants Announces a Technology Breakthrough in Custom-Blended Lubrication Extenders at The PRI Show 2013.

Japan Oil and Gas News Update Jan 2014

Posted by: Chemist Posted on: January 6, 2014

• INPEX inaugurates new LNG receiving terminal – Japan’s INPEX Corporation has completed the Naoetsu LNG Terminal located in Joetsu City, in the Niigata Prefecture, Japan.
• India and Japan are stepping up the pressure for cheaper liquefied natural gas (LNG) with potential joint tenders as two of the world’s biggest gas buyers try to ease the pain of high prices and rising demand.
• South Texas-based Magnum Oil Tools International, Ltd. (“Magnum”) is proud to announce an exclusive distributorship agreement with Kureha Corporation from Tokyo, Japan.

Russian Oil and Gas News Update Jan 2014

Posted by: Chemist Posted on: January 6, 2014

• Gazprom considers Latin America for LNG exports – Russia’s fourth-largest energy firm Gazprom is considering supplying liquefied natural gas (LNG) from its Baltic LNG project to Latin America via its expanding European network.
• ExxonMobil & Chemlube INT Inc, help to reconstruct Turkmenistan’s largest oil refinery to produce hydro-synthetic oils
• Sugar Output Still Lagging Last Year’s Crop.
• Morgan Stanley (MS.N) has sold the majority of its global physical oil trading operations to Russian state-run oil major Rosneft (ROSN.MM), becoming the latest Wall Street firm to dispose of a major part of its commodity business. The deal represents a bold move into the U.S. market by Russia’s top oil producer, which is headed by Igor Sechin, a powerful ally of Russian President Vladimir Putin. The Russian state owns almost 70 percent of Rosneft. The deal includes more than 100 traders and shipping schedulers in London, New York and Singapore, over $1 billion worth of oil, and the bank’s 49 percent stake in tanker company Heidmar.

Africa Oil and Gas News Update Jan 2014

Posted by: Chemist Posted on: January 6, 2014

• Hayaat Group invests in E. Africa exploration firm – The Hayaat Group, a private investment company headquartered in Abu Dhabi with a diverse business portfolio, has acquired a 10 per cent share of East Africa-focused explorer Swala Energy for US$3 million.
• OMV buys into offshore Gabon fields – OMV has signed binding farm-in agreements with London-listed independent exploration firm Ophir Energy offshore Gabon in West Africa.
• Petrofac signs local capacity-building MoU in Nigeria.
• BRAZIL: US$2.2 million fund establish for ethanol production
• BG Group brings cheer to Tanzania gas future – Tanzania moves a step closer to realising its liquefied natural gas export potential following the conclusion of a successful drilling campaign by one of the biggest oil and gas operators in the country
• Brazil: Sugar exports fall in November due to fire in Santos port.
• Kenya: Kenya grappling with a sugar deficit.
• Diesel price spike to hurt Brazilian ethanol, says Unica.