NewBase 05-November -2022 Energy News issue - 1563 by Khaled Al Awadi.pdf

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NewBase Energy News 04 November 2022 No. 1563 Senior Editor Eng. Khaed Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E: Adnoc Drilling awards $1.6bn integrated drilling fluids
services contract
TradeArabia News Service
Adnoc Drilling Company on (November 2) awarded a five-year framework contract worth $1.6 billion
for integrated drilling fluids services to support the expansion of Adnoc’s lower-cost and lower-
carbon intensive production capacity, as it continues to respond to growing global demand for
energy.
The award covers Adnoc’s onshore and offshore fields and will see an additional $750 million above
guidance added to Oilfield Services (OFS) revenue, or $150 million per year.
The contract award brings the total value of awards confirmed by Adnoc Drilling in 2022 to $8.85
billion, of which $1.15 billion has been incremental to the Company’s previously disclosed revenue
guidance.
Adnoc Drilling CEO Abdulrahman Abdullah Al Seiari said: "Integrated drilling fluids services are
crucial in support of delivering the wells needed to meet Adnoc’s strategy to increase its production
capacity and achieve gas self-sufficiency for the UAE."
"This award, one of several multi-billion dollar long-term contracts that we have secured in 2022,
reaffirms our strategic value to Adnoc not just as a drilling provider but as a major OFS player," he
stated.

Al Seiari pointed out that contracts of this scale helps the group to ensure that it delivers strong and
sustained growth for the UAE and Adnoc Drilling’s shareholders. "The addition of $750 million in
above-guidance revenue solidifies that growth trajectory," he stated.
According to him, Adnoc Drilling remains committed to expanding its offering to further capitalise on
market opportunities. The company plans to double its OFS revenues by 2025, and this IDFS award
will accelerate its ability to achieve and exceed that target, he added.

German Uniper Suffers €B 40 Loss as Russian Gas Supply Cuts
Bloomberg + NewBase
Uniper SE reported a net loss of about €40 billion ($39.3 billion) in the first nine months of the year
as the company struggles to survive after Russia strangled gas supplies to Europe.
The German energy giant -- already set to receive a €30 billion aid package that will lead to its
nationalization by year-end -- has been one of the firms hardest-hit by Russia’s supply curtailments
amid its war in Ukraine. The crisis has pushed European gas prices to record highs this year, far
beyond what the utility was paying for fuel piped from Russia under long-term contracts.
Uniper said the loss -- on an international financial reporting standards basis -- includes €10 billion
of realized costs for gas replacement volumes, and roughly €31 billion of anticipated future losses.
It posted an adjusted net loss of €3.2 billion in the first nine months of the year, according to a
statement on Thursday.
“Uniper has for some time been procuring gas at significantly higher prices and, as is well known,
has thus recorded considerable losses because the replacement costs of procuring new gas aren’t
being passed through to consumers,” Chief Financial Officer Tiina Tuomela said in the statement.
“Implementing the stabilization package therefore has the highest priority.”
Uniper is considered essential for Germany’s energy system and its failure could have a domino
effect on the sector. Details of the government support package are currently being finalized, the
Duesseldorf-based company said. Deputy Finance Minister Florian Toncar has said the government
will ensure that Uniper can operate and have the necessary funding.

Adnoc, Siemens Energy to co-develop CO2 certificates
TradeArabia News Service
Abu Dhabi National Oil Company (Adnoc) and Siemens Energy have announced plans to pilot
blockchain technology to certify the carbon intensity of a range of products.
By using smart sensor data gathered from across Adnoc’s operational chain – from the oil well right
to the customer – the pilot will show how much CO2 was used to make products such as Murban
crude, ammonia, and aviation fuels. This information will be automatically recorded onto a
decentralised blockchain ledger.
Such transparency will allow
independent regulators to certify the
carbon intensity of products. It will also
give customers greater confidence and
clarity over the carbon footprint of their
purchases, said Adnoc.
Abdulmunim Saif Al Kindy, Executive
Director, People, Technology &
Corporate Support Directorate at Adnoc,
said: “People typically associate
blockchain technology with crypto
currencies, but the use of decentralized
ledgers has significant implications for
the energy industry. This pilot promises
to shine a digital spotlight into our manufacturing processes. It will show the world why energy
supplied by Adnoc is among the least carbon intensive in the oil and gas industry.”
The low-carbon energy certificate initiative forms part of a broader memorandum of understanding
between Adnoc and Siemens Energy. Under the agreement, specialists from both companies will
co-create technologies to accelerate decarbonization and the transition to clean energy. They will
collaborate at Adnoc’s state-of-the art innovation facility in Abu Dhabi. Other areas under joint
development include electrification and “Power-to-X” technologies to produce green hydrogen and
its derivatives, including synthetic CO2-derived products.
Dr Fahad Al Yafei, Chief Technology Officer, Siemens Energy Middle East, said: “By leveraging our
unique knowledge and expertise of certificates of sustainability, Siemens Energy will work with
Adnoc to develop solutions for the benefit of the energy industry. Investing in innovation and the co-
creation of technologies are vital tools for reducing emissions and meeting Net Zero targets.”
Under an agreement, signed at the Abu Dhabi International Petroleum Exhibition and Conference
(Adipec), collaboration between Adnoc and the Siemens Energy Innovation Center will commence
by the end of the fourth quarter of 2022. The agreement was signed by Sophie Hildebrand, Chief
Technology Officer, Adnoc and Dr Al Yafei.
The collaboration is the latest in a series of innovation partnerships between Adnoc and leading
technological pioneers from around the world.
The Siemens Energy Middle East Innovation Center is one of four global innovation hubs exploiting
the company’s expertise in developing sustainable, reliable and affordable clean energy
technologies. -

Adnoc, Baker Hughes to drive UAE sustainable energy future
Baker Hughes, an energy technology company, and the Abu Dhabi National Oil Company (Adnoc)
have signed a strategic technology collaboration agreement during Adipec 2022 to explore
collaboration opportunities around research and development (R&D) for technologies that can help
drive a sustainable energy future in the UAE.
The agreement aims to support the development of technology proofs of concept, technology scale-
ups and technology pilots while exploring the feasibility of their deployment across key projects at
Adnoc.
In line with the objectives of the UAE’s In-Country Value program, the agreement supports the
development of home-grown innovations, with an opportunity to leverage the Adnoc Research and
Innovation Center to foster these R&D projects.
Sophie Hildebrand, Adnoc Group Chief Technology Officer, said: “Adnoc is accelerating the
development and deployment of advanced technologies to provide smarter, lower carbon, energy
to the world. Together with Baker Hughes, we will focus on finding innovations that help the UAE
achieve its Net-Zero by 2050 strategic initiative, while also generating In-County Value.”
Zaher Ibrahim, Vice President, Europe, Middle East and Africa, Baker Hughes, said: “We are
honored to be signing this agreement with Adnoc, which reinforces our commitment to supporting
In-Country Value and innovation in the UAE. As an energy technology company, we are keen to
work with Adnoc to locally develop technologies that can support a more sustainable energy future
in the UAE and beyond.” -

Turkey: Trillion Energy announces the commencement of the
second well in its SASB development program.. Source: Trillion Energy International
Trillion Energy International has announced commencement of the recompletion of the Akcakoca-
3 natural gas well, the second operation in the Company’s 17 well SASB development program.
On October 31, 2022, the Uranus Rig was repositioned 3 meters while at the Akcakoca Platform to
the Akcakoca-3 well slot. The recompletion will replace the bent 2 ½” tubing with 4 ½” tubing,
perforate remaining gas zones upon which time the well will be put back onto production. The
recompletion started on November 1st and is expected to take 12 days.
The Akcakoca-3 well originally entered production during March 2011 and has produced 9.78 Bcf
(100% interest) of natural gas to date. The well encountered mechanical issues with the production
tubing and water build-up and as a result, has only intermittently produced gas since November
2019. The well is expected to start producing natural gas again immediately upon recompletion.
SASB Production to Substantially Ramp Up in 2022
 Add near-term value to shareholders by ramping up new well drilling mid-2022.
 Development of 17 shallow water gas wells with exceptional profitability to commence in
2022 through directional drilling from existing platforms & infrastructure.
 High natural gas prices over >US$30/mcf; with a 10 year average of US$7.50/mcf vs. low
development cost.
 NPV10% of US$169 Million* net to Trillion for reserves & prospects based on GLJ third party
reports relating to 2022 drilling program.
 Excellent longer-term blue-sky upside through exploration on the SASB block and in the
surrounding areas with large discovery prospects.
 Excellent longer-term value upside through exploration on the SASB block and in the
surrounding area around the SASB block.

Canada: QatarEnergy and ExxonMobil awarded exploration
block offshore Canada… Source: QatarEnergy
QatarEnergy has announced a successful bid for Parcel 8 of the Orphan Basin, offshore the
province of Newfoundland and Labrador in Canada.
The Parcel 8 winning bid by QatarEnergy (30% working interest) and ExxonMobil (operator, with a
70% working interest) was announced by the Canada-Newfoundland and Labrador Offshore
Petroleum Board 'C-NLOPB' as part of the 2022 Newfoundland and Labrador Call For Bids NL22-
CFB01.
Commenting on this occasion, His Excellency Mr. Saad Sherida Al-Kaabi, the Minister of State for
Energy Affairs, the President & CEO of QatarEnergy, said: 'We are pleased to be the successful
bidder in Parcel 8 offshore Canada, and look forward to maturing the lead prospect’s potential,
testing an exciting play within a transparent and stable regulatory environment.'
His Excellency Minister Al-Kaabi added 'This successful bid demonstrates our ambition to further
increase our footprint in the Atlantic basin, as part of our international growth drive. I would like to
take this opportunity to thank the C-NLOPB for an efficient tender process, as well as our strategic
partner, ExxonMobil, for their excellent cooperation in achieving this result.'
Located offshore Eastern Canada, Parcel 8 lies
in water depths of 2,500 to 3,000 meters and
covers an area of approx. 2,700 sq kms. Entry
to the Parcel 8 license is subject to customary
government approvals.

U.S: High natural gas production and storage injections in
September drove U.S. prices down. U.S. EIA, Weekly Natural Gas Storage Report
Injections into U.S. working natural gas storage in the Lower 48 states during the 2022 injection
season (April through October) have brought storage levels back near historical averages. The
overall increase in natural gas storage was driven primarily by five consecutive triple-digit increases
in September and early October.
U.S. natural gas injections totaled 427 billion cubic feet (Bcf) in September—a month that included
the second-largest weekly net injection on record during the week ending September 30 (129 Bcf),
according to data from our Weekly Natural Gas Storage Report (WNGSR), a report that dates back
to 1993.
In September, reduced seasonal demand and strong natural gas production led to more natural
gas injections into underground storage and lower natural gas spot prices.
For the past five injection seasons, an average of 18% of natural gas injections into storage during
the refill season occurred during September. We currently estimate that this September, natural gas
injections into storage accounted for 21% of the total, according to WNGSR and our Short-Term
Energy Outlook (STEO).

U.S. natural gas production has increased to meet growing demand for U.S. liquefied natural gas
(LNG) exports throughout the year. In 2019, dry natural gas production averaged 92.9 billion cubic
feer per day (Bcf/d) in the United States before declining in 2020, largely because of the economic
impacts of the COVID-19 pandemic. U.S. natural gas production has grown through 2021 and 2022.
So far in 2022, dry natural gas production has averaged record volumes (over 96 Bcf/d), up 4%
from last year and up 2.2% from 2019 annual production. In September, daily U.S. dry natural gas
production exceeded 97 Bcf/d every day in September and exceeded 100 Bcf/d on seven days,
according to data from PointLogic.
Data source: U.S. Energy Information Administration, Dry shale gas production estimates by play
Increases in natural gas production from shale plays have been driving growth in U.S. natural gas
production this year and, so far, shale natural gas production has accounted for 78% of all U.S. dry
natural gas production. The Permian Basin and Haynesville play in the U.S. Gulf region have led in
production growth, and they reached record production highs this summer.
In September, dry natural gas production for the Haynesville play increased 51% from September
2019, averaging 13.7 Bcf/d. Permian Basin production was up 40% from September 2019,
averaging 15.4 Bcf/d. These plays' infrastructure and proximity to the U.S. Gulf Coast’s LNG export
terminals attract new operators, especially with relatively high summer spot prices at the U.S.
benchmark Henry Hub.
Domestic demand for natural gas and natural gas-fired electricity fell in September because lower
seasonal temperatures reduced demand for heating and cooling in buildings. These factors, coupled
with high production, has allowed more natural gas to be injected into working storage.
The Henry Hub natural gas spot price fell more than 30% throughout September, averaging $9.38
per million British thermal units (MMBtu) on September 1 and $6.40/MMBtu on September 30. In
early October, natural gas prices fell below $6.00/MMBtu. More analysis is available in our
upcoming STEO, which is scheduled for release on November 8.

NewBase November 05 -2022 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil settles the week up 5% as further interest rate hikes loom
Reuters + NewBas
Oil prices settled up by more than 5% on Friday amid uncertainty around future interest rate hikes
by the U.S. Federal Reserve, while a looming EU ban on Russian oil and the possibility of China
easing some COVID restrictions supported markets.
Though fears of global recession capped gains, Brent crude futures settled up $3.99 to $98.57 per
barrel, a weekly gain of 2.9%. U.S. West Texas Intermediate (WTI) crude futures were up $2.96, or
5%, at $92.61, a 4.7% weekly gain.
China is sticking to its strict COVID-19 curbs after cases rose on Thursday to their highest since
August, but a former Chinese disease control official said substantial changes to the country's
COVID-19 policy are to take place soon.
China's stock markets have been buoyed this week by the rumours of an end to stringent lockdowns
despite the lack of any announced changes.
However, signals about the size of U.S. interest rate hikes caused oil to pare some gains.
Oil price special
coverage

The U.S. Labor Department's non-farm payrolls report on Friday showed a rise in the unemployment
rate to 3.7% last month from 3.5% in September, suggesting some loosening in labor market
conditions that could give the Fed cover to shift towards smaller rate increases. read more
Richmond Federal Reserve President Thomas Barkin on Friday said he is ready to act more
"deliberatively" on consideration of the pace of future U.S. interest rate hikes, but said rates could
continue rising for longer and to a higher end point than previously expected.
"The China re-opening talk this morning got oil going, but the various Fed representatives have
been making it clear there's a long way to go with respect to interest rate hikes, and oil markets are
more sensitive to that," said John Kilduff, partner at Again Capital LLC.
While demand concerns weighed on the market, supply is expected to remain tight because of
Europe's planned embargoes on Russian oil and a slide in U.S. crude stockpiles.
"The slight weakness in the dollar, the upcoming ban on Russian oil sales are certainly supportive
as focus is shifting from recession fears to supply issues," said PVM Oil Associates analyst Tamas
Varga.
"The main catalyst, however, is reports that China may ease its zero-Covid restrictions, which would
be a boon to its economy and oil demand."
The EU ban on Russian crude imports
is due to take effect from Dec. 5. Details
of G7 price cap aimed at alleviating
constraints on Russian flows outside
the EU are still under discussion.
RECESSION FEARS
On the bearish side, fears of a recession
in the United States, the world's biggest
oil consumer, grew on Thursday after
Fed Chairman Jerome Powell said it
was "very premature" to be thinking
about pausing interest rate hikes.
"The spectre of further rate hikes
dimmed hopes of a pick-up in demand,"
ANZ Research analysts said in a note.
The Bank of England warned on
Thursday that it thinks Britain has
entered a recession and the economy
might not grow for another two years.
Underscoring demand concerns, Saudi Arabia lowered December official selling prices (OSPs) for
its flagship Arab Light crude to Asia by 40 cents to a premium of $5.45 a barrel versus the
Oman/Dubai average.
The cut was in line with trade sources' forecasts, which were based on a weaker outlook for Chinese
demand.
Looking into next week, investors are awaiting the U.S. Energy Information Administration's short-
term energy outlook and the November U.S. Consumer Price Index for insight on the pace of
inflation.

NewBase Specual Coverage
The Energy world –November -05 -2022
CLEAN ENERGY
Europe’s Imperfect Options for Transforming Its Energy Markets
Bloomber Josefine Fokuhl and Todd Gillespie + NewBase S. Editor
The European Union is hoarding natural gas to make it through the winter, but it’s also trying to
solve a bigger problem: breaking the link between gas and power prices altogether.
Currently, the most expensive form of generation -- gas -- sets the price for all electricity that’s sold
into the market. That means consumers are bearing the brunt of Russia’s supply cuts to the
continent. It also means Europe isn’t feeling much of the benefit of low-cost renewables like wind
farms, which get to sell at big margins.
Policymakers now have a once-in-a-generation opportunity to cut the tie to gas, allowing the region
to become more reliant on cheaper, greener energy. The stakes are huge: getting it right could
transform the market, while a misstep could worsen the supply crunch and scare off investment in
renewables.
The bloc may have to introduce temporary fixes while a broad overhaul is under way. Here are
some short- and long-term measures the EU is considering.
Gas Price Cap

As a stop-gap measure, EU officials have considered a broad cap on wholesale gas prices to bring
down power costs, but the technical details are tricky. Any such step would need to avoid boosting
demand, subsidizing electricity to foreign consumers or choking off imports. Critics have urged the
EU to tread cautiously.
“Do not hamper the wholesale price signal,” said Steffen Koehler, chief operating officer of the
European Energy Exchange. “It is essential for risk management. Let the wholesale market decide
on a price first. And then if you really want to introduce a cap, do it as late in the process as possible.”
The European Commission has been considering a temporary, dynamic cap to curb price volatility
to ease the energy crisis. EU member states aim to sign off on the commission’s short-term
proposals at an emergency meeting on Nov. 24. It’s not clear if a wholesale gas-price cap will be
included.
Iberian Model
A similar short-term fix would be to limit the price of gas used in electricity generation, which Spain
and Portugal have already done. Gas-fired generators get to recover some of their lost revenue via
a surcharge on consumer bills. The so-called “Iberian model” could lower wholesale prices across
Europe by between 10% and 35%, according to Finnish energy technology company Wartsila Oyj.
As with a broader cap, lowering prices could discourage energy efficiency and increase power
exports. Countries that use a lot of gas in power generation, like the Netherlands, may be on the
hook for a higher share of costs. In addition, some generators could see huge profits if they’ve
already sold forward their production and get reimbursed.

Revenue Limits
Non-gas generators can secure large profits by selling power that is based on expensive gas. A
revenue cap -- a quick fix -- could limit this windfall, redirecting the excess to help offset household
bills. The EU agreed to implement such a cap at €180 per megawatt-hour from December until June
of next year.
“The biggest negative is that potential profits are taken away from efficient, clean, and cheap
technologies, which is bad for longer-term investment,” said Fabian Ronningen, a power analyst at
Rystad AS.
Another tricky aspect of this plan is dealing with hedging and forward markets. Generators sell much
of their expected output months or years ahead, so there may be very little profit to capture if firms
have already sold future output at lower prices.
Splitting the Market
In the longer-term, Europe could split the wholesale market in two, keeping the current marginal
pricing system for fossil fuels and creating a separate market for renewables where prices would be
defined at the time of auction.
The UK, while no longer part of the EU, has taken steps in this direction through the Contracts for
Difference mechanism, which provides fixed revenues to clean generators. The CfDs prevent wind
farms from reaping massive profits from the high prices set by gas, and any excess funds are sent
back to suppliers to subsidize consumer bills.
UK Lays Out Plans to Stop Gas Prices Setting the Cost of Power

The challenge with CfDs is setting the right revenue levels, which can be fixed for a decade or more.
Recent discussions on expanding CfDs in the UK broke down quickly before a revenue cap was
announced.
Locational Pricing
As conducted in different forms in the Nordics and the US, locally-priced electricity could be
implemented in the longer term to reflect the cost of transmission bottlenecks, instead of one
wholesale price across a country.
However, this could increase investment risk “as prices can swing with changes in the local supply-
demand balance,” wrote Coralie Laurencin, senior director at S&P Global Commodity Insights. Still,
it’s an option being discussed by Ofgem, the regulator in the UK, where tight grid capacity between
Scotland and England means generators in the north often need to be paid to switch off, raising
costs for consumers.
Pay-as-Bid
Day-ahead power market auctions are currently conducted “pay-as-cleared,” where everyone gets
paid the price for which the most expensive producer offers to generate power. That could be
changed to pay-as-bid, where prices would be closer to each generator’s respective cost of
production. That means a wind farm would sell into the same market as a gas plant, only at a much
lower rate.
“A weighted average price based on a pay-as-bid auction could more accurately reflect the electricity
generation mix, potentially limiting the impact of gas on power prices in markets with high level of
non-gas power generation,” Laurencin said. This market intervention, however, could increase
speculative trading and lead to no or limited decline in power prices, she added.
Doing Nothing
Some analysts say a long-term power market redesign in the EU isn’t needed, leaving room for
temporary interventions at most. The current scheduled acceleration of renewables means that
cheaper energy sources will increasingly set power prices as more wind and solar is built, eventually
phasing out gas.
“We see that the market works very well also toward 2050 and long term in the current market
design,” said Sebastian Braun, head of power and hydrogen quant analytics at ICIS.

NewBase Energy News 05 November 2022 - Issue No. 1563 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as self leading external Energy consultant for the GCC
area via many leading Energy Services companies. Khaled is the Founder of the
NewBase Energy news articles issues, Khaled is an international consultant, advisor,
ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste
management, waste-to-energy, renewable energy, environment protection and
sustainable development. His geographical areas of focus include Middle East, Africa
and Asia. Khaled has successfully accomplished a wide range of projects in the areas
of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas compressor
stations. Executed projects in the designing & constructing of gas pipelines, gas
metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted
& finalized many contracts/agreements in products sale, transportation, operation & maintenance
agreements. Along with many MOUs & JVs for organizations & governments authorities. Currently dealing
for biomass energy, biogas, waste-to-energy, recycling and waste management. He has participated in
numerous conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is
the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with over 1400
popular articles to his credit. He is proactively engaged in creating mass awareness on renewable energy,
waste management, plant Automation IA and environmental sustainability in different parts of the world.
Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program
broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see
contact details above.

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