NewBase 646 special 13 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

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NewBase 13 July 2015 - Issue No. 646 Senior Editor Eng. Khaled Al Awadi

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

Understanding kiloWatt-hours in electric cars David Herron (longtail)

Electricity is measured in coulombs, or kiloWatt-hours, while gasoline is measured in gallons. To understand the new world one has to understand the energy.

For this phase of electric cars (January 2015), typical electric car models have a battery pack capacity of 24 kiloWatt-hours. Some have a bit more, or a bit less, but it’s around that number. The Tesla Model S comes in two battery pack capacities, 60 kiloWatt-hours and 85 kiloWatt-hours. Both GM and Nissan are promising electric cars with 200ish mile ranges, and while they haven’t announced details we do know the battery pack has to hold at least 60 kiloWatt-hour of electricity. Within a few paragraphs of reading below you will learn why.

But, what is a kiloWatt-hour? The prefix “kilo” means “thousand”, so a kiloWatt-hour is a thousand Watt-hours. By extension megaWatt-hours is a million Watt-hours, and gigaWatt-hours is a billion. The abbreviation is kWh. The ‘W’ is capitalized because the Watt is named after 1800’s inventor James Watt.

A Watt-hour (Wh) is the amount of electricity consumed by a circuit using one Watt of power for one hour. A circuit consuming 10 Watts for 6 minutes, or 60 Watts for 1 minute, also consumes one Watt-hour of electricity. A 60 Watt incandescent bulb consumes 60 Watt-hours every hour, and requires 1000 minutes (16.6667 hours) to consume 1 kiloWatt-hour of electricity.

The ‘W’ is capitalized in honor of James Watt.

As an aside – the LED equivalent to a 60 Watt incandescent bulb runs at 9.5 Watts, requiring 105 hours to consume 1 kiloWatt-hour of electricity while producing the same amount of light. That’s why LED lights are so interesting, because they achieve the same effect, while consuming a fraction of the electricity, and having an enormously long lifespan.

That’s nice, but what does that mean for a car? An electric car driving down the road consumes electricity. To understand these cars we need to understand electricity.

Here’s a few electric cars, some of which are from the previous EV era, and their electricity consumption and MPGe ratings (which we’ll discuss in a bit). First thing I see in these numbers is that great aerodynamics on the GM EV1 enabled amazing energy efficiency ratings. The EV1 was such a beautiful car, it’s a crime that GM crushed them. In any case, GM and Aerovironment worked together to give it excellent aerodynamics.




We go over this elsewhere, but a 24 kiloWatt-hour battery pack is roughly equivalent to 2/3rds of a gallon of gasoline equivalent, while delivering an 80 mile driving range. An 85 kWh pack is a tad over 2 gallons of gasoline equivalent, while delivering a 265 mile driving range. When we have that little energy on-board, we want to make the most use of it as we can, making aerodynamics extremely important. What let’s a vehicle with 2/3rds of a gallon equivalent energy drive 80 miles is the efficiency of electric drive trains.

Among the current crop of EV’s, the BMW i3 is the efficiency king. BMW’s engineers didn’t win that crown through aerodynamics, but by light weight. BMW developed a method for mass producing carbon fiber, using it for major structures on the BMW i3 such as the whole passenger cabin. Carbon fiber has an extremely high strength to weight ratio, letting BMW build a lightweight car for high efficiency while improving structural rigidity in a way that should be extremely safe for the occupants. The point is that a lighter weight vehicle requires less energy to move.

At the other end of the scale is the Tesla Model S, which many complain is a “heavy” vehicle. That weight is readily apparent in the low efficiency ratings. Compare the 60 kWh and 85 kWh models, and the effect of a heavier car is obvious. That’s an

additional 30 Wh/mile cost to move that extra weight. At the same time, with over twice the energy capacity of the typical affordable electric cars, the Model S 85 has a much longer electric driving range, about 265 miles, versus the 85ish mile range of the typical 24 kWh electric car. That extra range comes at a much higher cost, around $100,000 for the Model S.

For an attempt at perspective: At 300 Wh/mile (Nissan Leaf), that’s equivalent to burning five 60 watt light bulbs for an hour, to drive one mile.

Official Window Sticker for 2014 Chevy Spark EV




Oman: Austrian know-how for bitumen production in Oman Oman Observer + NewBase Austrian engineering specialist Pörner Group says it has been contracted by Oman Oil Refineries and Petroleum Industries Company (Orpic), the Sultanate’s refining and petrochemicals flagship, to provide the technology behind a major bitumen production unit envisioned as part of the multi-billion dollar Sohar Refinery Improvement Project (SRIP) under way at Sohar Port.

Vienna-headquartered Pörner Group revealed it will supply its proprietary Biturox technology to enable the Sultanate to become a producer of bitumen for the first time in the country’s history. Oman has been entirely dependent on imports, primarily from neighbouring Iran and the United Arab Emirates, for its requirements of bitumen which is used for, among other things, asphalting in road construction projects. Imports of bitumen have burgeoned on the back of escalating investments in road construction and related infrastructure programmes. Pörner Group says it will support the construction of a bitumen unit featuring a pair of reactors each with a capacity to produce 516 tonnes per day (tpd) of bitumen. This equates to an installed capacity of around 300,000 tonnes per annum, which should go a long way in meeting a substantial chunk of Oman’s yearly requirement of bitumen, particularly for road asphalting purposes. In addition to supplying the licence and basic engineering, Pörner Group will also undertake the detailed engineering, pilot testing and commissioning of the new Biturox unit. Additional assistance will be rendered in the form of start-up support, documentation and training, it said. The Pörner Group is acknowledged as a global leader in the licensing of technology that enables refineries to produce high quality bitumen from a wide range of crudes and intermedia refinery feedstock. More than 40 Biturox-based bitumen units are currently in operation around the world, according to the Group. A joint venture of Daelim Industrial and Petrofac International is currently executing the expansion and modernisation of Orpic’s Sohar Refinery. Upon completion by end-2016, the upgraded complex will feature five new units: Vacuum Distillation Unit, Hydro-Cracker Unit, Delayed Coker Unit, Isomerization Unit, and Bitumen Blowing Unit. The upgrade will also enable Orpic to meet the domestic growing needs for gasoline in the near and far future. The new units will add a further 82,000 barrels per day (bpd) of Oman Export Blend crude oil processing capacity to the existing refinery to achieve a total refining capacity of 198,000 bpd. Crude throughput of the refinery will increase by 70 per cent with increased product yields for diesel (90 per cent), gasoline (37 per cent), Jet Fuel (93 per cent), LPG (91 per cent), Naphtha (175 per cent) and Propylene (44 per cent).




Tunisia: Dualex Energy awarded one year extension to the Bouhajla Exploration Permit. Source: Dualex Energy

DualEx Energy International has announced that ETAP, the Tunisian state oil company, has agreed to an additional one year extension to the first exploration period of the onshore Bouhajla Exploration Permit (to August 2016),

Also it has submitted the required application to the Ministry for approval. This extension remains subject to Ministry ratification, which the Company anticipates receiving in late July, and will allow the Company additional time to bring new partners into the project.




Gas-starved factories pay a price as Egypt keeps lights on Gulf Times + Bloomberg

As Egyptian industrialist Moataz al-Alfi enjoys the chilly blast from his air-conditioning - the first time in three summers his Cairo home has had a reliable electricity supply - he knows the improvement is coming at the expense of his fertiliser plants.

The government has taken “a sovereign decision that it’s more important to generate electricity” for households than provide energy to factories, al-Alfi, chairman of Egypt Kuwait Holding Co, said in an interview. While that’s been true to some extent since 2011, it’s “much worse” this year, he said.

Repeated power cuts, especially during the summer months, helped fuel anger against former president Mohamed Mursi, who was toppled by the army in July 2013 after widespread protests. The current government, led by former army chief Abdel-Fattah El-Sisi, isn’t taking any chances: keeping the lights on at home comes first. That decision carries risks for an economy that has stagnated during four years of turmoil. The government predicts a rebound this year, forecasting growth above 4% for the first time since 2010. Yet lower energy supplies are hurting industry. Non-oil exports tumbled 20% to $8bn in the first five months of this year. “We give priority to electricity,” said Khaled Abdel Badie, chairman of the state-run Egyptian Natural Gas Holding Co. The power-generation industry gets “100% of its needs and then we give the rest to factories.”




Many Egyptian industries use gas to generate power while the fertilisers sector uses it as a raw material. At the end of March the government told steel, petrochemicals and cement producers that pumping would be “halted indefinitely,” said Mohamed Hanafy, head of the Chamber of Metallurgical Industries at the Federation of Egyptian Industries. Most factories have been able to operate no more than 40 days this year, he said. Steelmaker El Ezz Aldekhala has said its plants are experiencing a “severe” gas supply shortage. Shares in the company have tumbled 26% this year, compared with a 10% drop in the benchmark EGX 30 Index. Al-Alfi’s Egypt Kuwait Holding has dropped 17%. Egyptians began to feel an energy crunch after the 2011 uprising against Hosni Mubarak, as investment in natural-gas exploration dwindled and demand quickly outpaced supply. Seeking to bridge the gap, the government began importing liquefied natural gas in April and rented a facility that turns it into gas pumped into pipelines. “There was a short window for improvement before the summer when imports started, but it quickly closed,” Mohamed Abu Basha, a Cairo-based economist at EFG-Hermes Holding, said by phone. “The extra gas only allows improvement in electricity to households, not more.” Abu Basha said the gas supply to factories should improve when a second so-called regasification unit the government is planning to rent starts operating in October. The industrial slowdown means Egyptian companies are struggling to export, adding to a foreign-currency squeeze that’s left the country dependent on handouts from its oil-rich Gulf backers. In fertilisers, natural gas is provided to plants which produce for the local market, not to exporters, according to Mohamed Salem, head of research at Cairo-based investment bank Prime Securities. Exports of petrochemicals and building materials, which make up about a third of non-oil sales, fell 28% in the first five months. Industries, at the mercy of political priorities, have little to do but wait for the summer to end. “They told us they aren’t committed to pump gas,” industrialist Hanafy said. “Go figure it out.”




Turkmenistan: TAPI pipeline states to select consortium leader in Sep.2015

Source: Reuters + Newbase

The four countries planning a gas pipeline from Turkmenistan to Pakistan and India via Afghanistan will in September pick a company to lead construction, paving the way to the start of work on the project, the Turkmen president said on Saturday. Turkmenistan, a central Asian nation of 5.5 million, holds the world's fourth-largest natural gas reserves and sees the TAPI pipeline, named after the countries it is designed to cross, as a way of boosting exports. It has won support from the United States but security concerns and costs estimated at $10 billion have caused delays.

'At this moment negotiations ... are entering the final stage, a consortium leader will be named in September, after which the implementation of the project will begin,' President Kurbanguly Berdymukhamedov said during talks with visiting Indian Prime Minister Narendra Modi. A Turkmen government official, who asked not be named, said construction work could start in December. Companies involved in the talks have not been named.

The 1,735 km (1,084 mile) pipeline, with a proposed annual capacity of 33 billion cubic metres (bcm) of gas, will run more than 700 km across Afghanistan on its way to Pakistan and India, raising questions about the stability of shipments via the chronically unstable country. Yet the pipeline, to be built in three years, is crucial for Turkmenistan, which is currently dependent on gas exports to China, which buys annually 30 bcm of the fuel. Berdymukhamedov said the pipeline would attract $1 billion in investments to Afghanistan and create 12,000 jobs.

Russia, which imported more than 40 bcm of Turkmen gas in 2008, will buy no more than 4 bcm this year. Moscow says its development of gas fields elsewhere has made purchases of Turkmen gas unprofitable. Turkmenistan's relations with Russian gas export monopoly Gazprom worsened this week after Ashgabat accused it of not paying for gas supplied this year. Gazprom declined comment. Neighbouring Iran also buys small volumes of Turkmen gas.




Azerbaijan: US to continue cooperating with Azerbaijan in Southern Gas Corridor. By Maksim Tsurkov – Trend + NewBase

Being a strategic partner and friend of Azerbaijan, the US will continue cooperating on the Southern Gas Corridor project and other projects to be implemented in the future, Special Envoy and Coordinator for International Energy Affairs at the US Department of State Amos Hochstein told reporters July 11.

"Today, the delegation has met with Azerbaijani President Ilham Aliyev,” he said. “We have discussed the energy security and the role of Azerbaijan and the US in partnership, Azerbaijani gas supply to Europe. This is part of the solution to the energy security problem of Europe.”

“Under the leadership of President Aliyev, Azerbaijan has played an important role in transforming an idea into reality,” he said. “The Southern Gas Corridor is being formed. The pipelines are being constructed. We are looking forward to its implementation. As a strategic partner and friend of Azerbaijan, the US will continue working with Azerbaijan on this and other projects in the future. The relations between the two countries are very strong. We intend to collaborate on further projects."

He said that the Southern Gas Corridor is a complex project from commercial and technical, as well as political and diplomatic sides.

The length of the pipeline is 691km, with 443 km in Azerbaijan and 248 km in Georgia. The diameter is a 42-inch . In the first quarter of 2015, SCP spent about $12 million in operating expenditure and $245 million in capital expenditure. In the first quarter of 2015, SCP’s daily average throughput was 21 million cubic metres of gas per day.




"The US renders diplomatic and strategic support to this project,” he said. “There are those who want to see the failure of this project. But there are the countries supporting the idea of other pipelines and projects. And I believe that the Southern Gas Corridor project, being implemented by Azerbaijan, is a project which will really ensure Europe's energy security. So, the US government will continue supporting this project at all levels as a major one in ensuring the energy security of Europe."

Commenting on the participation of the US companies in this project, Hochstein said that the US energy sector is totally private.

"We can not tell companies where to invest,” he said. “The US wants to help the companies. Our support is not a business initiative. Our support is strategic."

He said that the purpose of the visit is to continue a dialogue between Azerbaijan and the US, which is based on the unity of the positions and efforts.

The Southern Gas Corridor is one of the priority energy projects for the EU. It envisages the transportation of gas from the Caspian Sea region to the European countries through Georgia and Turkey.

At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan’s Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.

As part of the Stage 2 of the Shah Deniz development, gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline and Trans-Adriatic Pipeline.

US Department of State Amos Hochstein the delegation has met

with Azerbaijani President Ilham Aliyev




Pakistan: Jura Energy provides update on Zarghun South and Guddu Source: Jura Energy

Jura Energy has provided an update on its operations in the Zarghun South and Guddu Blocks in Pakistan.

Zarghun South Block After provisional notification of tight and conventional gas prices by the Government of Pakistan, the operator of the Zarghun South Block has issued gas sales invoices relating to sales during the period from August 2014 through April 2015. Jura's share of these gas sale invoices is approximately US$ 4 million, payment of which is expected to be received in late July 2015.

Current production from the Zarghun South Block is approx. 14.3 MMcf/d (Jura share 5.7 MMcf/d). Based on current daily production, and assuming crude oil priced at US$ 70 per barrel, Jura's share of monthly revenue from the Zarghun South Block is approx. US$ 0.70 million. Jura holds a 40% working interest in the Zarghun South Block, which is operated by Mari Petroleum Company.

Guddu Block After tie-in with the existing gas pipeline infrastructure, production from development well Reti-2, in the Reti Lease, has commenced. Currently, the well is producing gas at the rate of approx. 3.1 MMcf/d (Jura share 0.33 MMcf/d).

Current production from the Guddu Block, including production from Reti-2, is approx. 15.5 MMcf/d (Jura share 1.65 MMcf/d). Based on current daily production, and assuming crude oil priced at US$ 70 per barrel, Jura's share of monthly revenue from the Guddu block is approx. US$ 0.13 million.

Jura holds a 10.66% post commerciality working interest in the Guddu Block, which is operated by Oil and Gas Development Company Limited.

Jura Energy provides update on Zarghun South and Guddu Blocks




UK: INEOS raises the roof on Europe's biggest ethane tank at

Grangemouth in Scotland. Source: INEOS

• In a remarkable feat of engineering, Grangemouth on Friday saw the 330 tonne roof on Europe’s biggest ethane tank floated up almost 150 feet on nothing more than a cushion of air.

• The investment into the ethane project represents part of a £450 million rescue plan for Grangemouth. The tank is designed to hold over 60,000 cubic metres of ethane brought from the United States to replace declining North Sea supply.

• INEOS has established a groundbreaking $1 billion dollar global project, spanning China, the US and Europe – all to bring ethane to Grangemouth and Norway.

• This project will transform the Grangemouth petrochemicals business, providing a secure supply of essential ethane for the next 15 years.

INEOS Grangemouth on Friday saw the massive roof that covers Europe’s biggest ethane storage tank rise into place using just four low pressure fans, following six months of building work. The huge tank is 56 metres in diameter and 44 metres high – that gives it a displacement volume of 108,372 cubic metres – large enough for 560 double decker

buses to fit inside.The investment in the Grangemouth tank and infrastructure is part of the company’s £450 million rescue package to equip the site to import ethane gas from the US. The project will transform Grangemouth overnight and will allow its manufacturing assets to once more compete globally, providing raw materials for thousands of manufacturing businesses across the UK and Europe.

John McNally, CEO of INEOS O&P UK, says, 'This is a landmark day for Grangemouth. We know that

US ethane has transformed US manufacturing and now Scottish industry will benefit as well. This will secure a cost-effective supply of ethane for the next 15 years, and give a sustainable base for Grangemouth for that time.'

The building of Europe’s largest ethane storage tank is just part of INEOS’ $1 billion global project to get US Shale gas to Europe.

INEOS has contracts to access a 100 mile pipeline from the Marcellus Shale in western Pennsylvania to the

Marcus Hook gas terminal close to Philadelphia.

INEOS has commissioned eight huge Dragon class ships to carry the liquefied Shale gas ethane from the US to Europe. INEOS has even built two brand new import terminals to receive the gas, one at Grangemouth and the other at Rafnes in Norway. This huge ethane storage tank and supporting infrastructure is one part of this project.

John McNally adds, 'Bringing US ethane to Europe is a huge undertaking involving INEOS experts from across the globe. To raise the roof of this huge tank means that yet another milestone for the project has been reached. It is still early days on this project as we now set to work on the internal structure of the tank and the surrounding infrastructure. We are on schedule for the first US ethane to arrive in Grangemouth during the second half of 2016.'

Grangemouth tank - a remarkable feat of engineering




Oil Price Drop Special Coverage

Oil prices fall as Iran nuclear deal seems likely Reuters + NewBase

Oil prices fell on Monday as Iran and six world powers were close to nailing down a nuclear deal, but high Chinese crude import figures prevented prices from tumbling further. The potential of Iran soon adding to global oil oversupply and the demand side weakening over China and Europe led several analysts to say that crude would fall further.

U.S. crude prices were down around 90 cents at $51.83 a barrel at 0226 GMT. Front-month Brent crude futures fell around a dollar to $57.74 a barrel on the back of an expectation that a deal with Iran would lead to an easing of sanctions against Tehran and to higher crude exports.

Chinese customs data showing that its crude imports in the first half of the year were up 7.5 percent compared with the same time in 2014 prevented prices from falling further despite analysts saying this was more down to stockpiling of strategic reserves than a real rise in demand.

Investors were also watching whether China's stock markets can stabilize after a barrage of government support sparked a bounce in its key CSI300 stock index. The Greek debt crisis continued as political leaders argued late into the night at an emergency summit, so far without result.

With oversupply ongoing and abundant economic risk, the International Energy Agency (IEA) and several banks said they had lowered their oil price forecasts. "The bottom of the market may still be ahead," the IEA said in its monthly report.

Bank of America Merrill Lynch said that U.S. crude prices "could soon drop well below our $50 per barrel target in 3Q15". Commerzbank said that a return of Iranian supplies could add to current oversupply of 1.5 to 2 million barrels per day and that "a fall below $55 per barrel in Brent and below $50 per barrel in WTI (U.S. crude) is therefore conceivable".

During the 2,650 trading sessions since 2005, U.S. crude prices have spent a mere 178 days, or 7 percent, of the time below $50 a barrel, Reuters data shows. The sub-50 periods have been clustered into three episodes: early 2005, when prices began to rise away from historically lower levels, the post-2008 global financial crisis time and the current period of oversupply.




Oil hurdle remains on path to Kurdish independence The National + Robin Mills + NewBase

Three recent developments across the Kurdish territories move the Kurds closer to political independence and economic autonomy. But despite these victories, the financial viability required by a Kurdish state or states is still in question.

In last month’s Turkish elections, the Kurdish party secured a potentially king-making bloc in parliament. In Syria, Kurdish forces, the YPG, made dramatic gains at the expense of ISIL, capturing a key border post and advancing towards the group’s capital of Raqqa. And the Kurdish region of Iraq appears to have abandoned its revenue-sharing deal with Baghdad and is again attempting to sell oil independently.

In Syria, the Kurdish cantons of Jazira and Kobani are now linked, and divided from a third region, Afrin, only by a stretch under the control of ISIL and some mixed opposition groups, from the west bank of the Euphrates to the outskirts of Aleppo. Beyond Aleppo, an uneasy anti-Assad alliance holds Idlib province and runs almost to the Mediterranean.

The Syrian Kurds are currently producing small amounts of oil for local use, from fields formerly operated by China’s Sinopec. The Sinopec fields yielded about 13,000 barrels per day in 2010, the last pre-war year, while the state Syrian Petroleum Company’s fields pumped about 200,000 bpd. But with the pipeline running through ISIL territory and on to the regime-held Homs, the Syrian Kurds cannot export their oil.

Meanwhile the Iraqi Kurds are tightening their grip on oil around Kirkuk. Their agreement to export “federal” Iraqi oil through their territory to Turkey, in return for a share of central government revenue, appears to have broken down, perhaps this time irretrievably.

The Kurds could export about 300,000 bpd from their own fields and another 300,000 bpd or more from the Kirkuk area claimed by Baghdad. At current prices, this would generate some US$900 million per month, close to the $1 billion the Iraqi Kurdish region requires for its monthly budget.

But Baghdad is likely to resume legal opposition, making buyers wary, while the Turks will not give the Iraqi Kurds a blank cheque, particularly while the situation of the Turkish Kurds remains uncertain. The YPG’s advances open the tantalising possibility of oil shipments from the Kurdish regions of Syria and Iraq to the Mediterranean.

But the main Syrian ports of Latakia, Baniyas and Tartus remain firmly in the Assad regime’s hands. Small quantities of Kurdish oil could be trucked to markets within Syria or smuggled




through it to Turkey. Such exports would be prone to robbery and ISIL “taxation”. Syrian Kurdish oil is heavy and poor quality, yielding little value unless processed in a sophisticated refinery.

Even if the Syrian Kurds and allied opposition secured contiguous territory to the Mediterranean, there is obviously no chance of building a pipeline under the current situation. Oil that does reach external markets would still be tainted by doubts over its legitimacy. Turkey’s president, Recep Tayyip Erdogan, has even floated the idea of a military intervention in northern Syria, with the unstated aim of preventing a united Kurdish belt.

The Iraqi and Syrian Kurds are not united either, although they have each lent the other military support against ISIL. They face tribal and party divisions. The Iraqi Kurds have a good working relationship with Turkey’s government, while the Syrian Kurds’ PYD party is closely linked to the PKK, which Ankara considers a terrorist group. They are also allied with the PUK, rivals to the KDP that dominates the Iraqi Kurdish government.

So these territorial advances do not secure the reliable, legitimate, large-scale oil exports that the landlocked Kurdish regions require to backstop a push for independence. But they do win the Kurds powerful friends abroad, most notably in Washington. And they contribute to a growing sense of the inevitability of some kind of Kurdish independence.




MENA M&A market hits three-year low in Q2 Zawya

The Mena M&A market markedly regressed during the second quarter (Q2) of 2015, well behind its prolonged three-year revived activity, with the total value reaching only $3 billion, a report said. With the total number of completed deals on a general declining trend since 2009, the announced value of M&As reached during Q2 is below its median level of the last six years, elaborated the report released by Mena Research Partners (MRP), a research outsourcing company and Bureau van Dijk (BvD), a global provider of business and M&A intelligence.

The overall 12-month activity now falls short from a sustained and marked rebound mainly due to the regional political turmoil which is cited amongst the major factors weighing on investor confidence in the Mena region. Thinking long-term, the region depicts a long-term compelling economic growth story, sufficient to propel more transactions going forward. This has depressed the average deal sizes although the trend of larger transactions still holds, the report said. From a geographic perspective, deal activity has been largely driven by a strong performance in GCC while the remaining of the region attracted a smaller share of the flow with selected Arab Spring countries like Egypt and Morocco witnessing a sustained uptrend. In fact, the GCC region continues to account for the bulk of the regional deal flow, with 79 per cent and 56 per cent respectively of the announced value and the volume of completed deals during Q2.

This is in line with the general trend witnessed during the years 2013 and 2014, in an indication of larger deals being closed outside the Arabian Gulf countries. All in all, larger ticket sizes are more common in the GCC, as opposed to a larger number of smaller deals in other Mena countries, according to the report. Lisa Wright, Zephyr director said: “After a positive showing in the first quarter of this year, Q2 2015 has been disappointing in terms of aggregate deal value in the Mena region.” “In all 120 deals worth $2,883 million have been closed in the Mena region in the second quarter of 2015. The decline can be attributed to a lack of high value deals; in the period under review




only one deal surpassed $1,000 million, a $1,100 million purchase of a 5 per cent stake in Abu Dhabi Company for Onshore Oil Operations by Inpex. This once again illustrates the difference a high-value transaction can make.”

Cyclical sectors continued to be a major focus for the acquirers. During the first half (H1) of 2015, sectors like banks, construction and service companies continued to account for a substantial share of the regional completed M&As, prolonging the previous years’ trend. In terms of deal attitude, minority acquisitions accounted for most of the number of the regional deals during H1, sustaining their lead over the past years relative to majority deals. This is in line with the general perception that regional investors are less reluctant to give up control of their business, the report said. Foreign acquirers have remained one major component in the Mena M&A market, although depicting a regression since 2010. During H1, they have accounted for 49 per cent of the number of completed deals, slightly lower than the numbers witnessed during the past five years. On one hand, this reflects a confidence of global players in a large number of regional economies and, on the other, a step backwards in the overall investor confidence in selected countries. All in all, it still offers some interesting exit options for local investors.




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Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010

Mobile: +97150-4822502 [email protected] [email protected]

Khaled Al Awadi is a UAE National with a total of 25 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great experiences in the designing & constructing of gas pipelines, gas metering &

regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels.

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

NewBase 13 July 2015 K. Al Awadi

NewBase 646 special 13 july 2015

Business

Transcript of NewBase 646 special 13 july 2015