Day: July 8, 2008
Abu Dhabi National Oil Company (Adnoc) and ConocoPhillips, the US oil and gas company, will finalise a long-awaited deal to develop Abu Dhabi’s first major sour gas project at a signing ceremony later today in the capital.
According to industry sources, the companies are likely to announce a 30-year partnership to develop the US$10 billion (Dh36.7bn) onshore gas project, which last year was the biggest Middle Eastern energy development open to bids by international oil companies.
The goal of the technically challenging Shah project is to produce up to one billion cubic feet per day (cfd) of gas to help boost Adnoc’s current output of about 4.5 billion cfd of gas to a targeted six billion cfd. The gas, which could start flowing in 2011, is urgently needed to fuel power and industrial developments in the emirate.
To achieve this, ConocoPhillips and Adnoc would tap deadly sour gas deposits, containing a high concentration of toxic hydrogen sulphide, from thousands of metres below ground. The partnership, in which Adnoc is likely to hold a 60 per cent controlling stake and ConocoPhillips a 40 per cent interest, would call on the US company’s international experience with such developments to render the gas safe.
The deal has been many months in the making. Adnoc surprised the industry in January, when it picked ConocoPhillips as the front-runner for the Shah project, which was expected to go to one of Adnoc’s existing partners – a select congregation that includes the Anglo-Dutch energy group, Royal Dutch Shell, and the US oil companies, ExxonMobil and Occidental Petroleum, all of which submitted bids.
ConocoPhillips may have had to agree to some exceedingly tough terms from Adnoc to gain a foothold in the Middle East and access to the region’s coveted oil and gas reserves analysts said. For instance, it may have agreed to produce Shah’s gas free of charge, in exchange for a substantial share of the liquids that are extracted from the gas and sulphur when the hydrogen sulphide is removed.
The strategy would be extremely risky for the international partner, especially with a forecast of volatile commodity prices. “They would be relying on prices for liquids and sulphur remaining high,” said Ross Cassidy, an analyst with the British energy industry research firm, Wood Mackenzie.
“Adnoc would continue to get a cheap source of gas, which I think has been their objective all along,” he added.
Still, natural gas liquids such as ethane, propane and butane – which are used as petrochemical feedstock and often trade at a premium to crude – are currently fetching near record prices on world markets. Likewise, the price of sulphur, a yellow solid used to make fertilisers and sulphuric acid, has soared more than 10-fold since the beginning of this year to unprecedented heights.
The end game for ConocoPhillips may not be development of the Shah project, but the chance to participate in future energy projects in Abu Dhabi and the Gulf region. Total, the French energy company, is thought to have the best chance of winning a contract for Adnoc’s next sour gas development, the proposed Bab project near Abu Dhabi’s Gulf coast.
But the US company may have set its sights on the emirate’s oil projects.
The 75-year oil concessions that are held by Occidental, ExxonMobil, Shell and other Adnoc partners are due to expire in the next decade, some as early as 2012.
Whether ConocoPhillips would eventually reap an acceptable financial return from joining the UAE concession holders’ club is an open question, although it would certainly be able to book substantial oil and gas reserves. “I do not think Adnoc is going to give anything away as a favour. When these other projects come along, they will be just as competitive,” Mr Cassidy predicted.
However, the US company has already established a beachhead in one Gulf state, Qatar, where it is a partner with the state-owned Qatar Petroleum in a large gas production and liquefaction project. Qatar is the world’s leading exporter of liquefied natural gas.
Last December, ConocoPhillips and Qatar Petroleum signed another deal to pursue joint energy projects outside Qatar.
Adnoc officials could not be reached yesterday for comment, and ConocoPhillips did not return calls.
Diesel queues have no end in sight
THE NATIONAL July 07. 2008
Although petrol prices in the Emirates are among the lowest in the world, diesel prices at retailers other than Adnoc are among the highest. As a result, long queues of lorries have been forming outside Adnoc stations, where the pump price is less than half that of other fuel retailers. Drivers are waiting up to an hour to take advantage of cheaper fuel offered there and blocking traffic in the process.
Last month Dubai-based petrol retailers such as Emarat, Enoc and Eppco raised the price of diesel by 75 fils to Dh19.25 per gallon (US$5.24) while Adnoc’s has remained relatively constant at Dh8.60 (US$2.34). Unlike the Abu Dhabi-based Adnoc, the Dubai companies purchase fuel at international rates and thus are subject to the rising costs of crude. Over the past 18 months they have had to more than double the price they charge for diesel.
The long queues for the fuel at stations within Abu Dhabi’s city limits – which often spill onto busy streets – have created many problems, especially during the rush hour. Previous efforts to reduce the appeal of Adnoc’s diesel to lorry drivers have met with little success. When Abu Dhabi limited the amount of diesel that could be purchased to Dh50, lorry drivers simply drove off and rejoined the queue, exacerbating the problem. Now, on the advice of the road safety division of the traffic and patrols department, Adnoc stations in the city of Abu Dhabi will no longer sell diesel during rush hours.
Adnoc has 129 outlets in every emirate but Dubai – 80 of them outside Abu Dhabi. The same congestion problems have materialised in these emirates. In Sharjah, the police have begun fining drivers Dh400 for queueing along roads while limiting the sale of diesel to Dh100 to 300. Because of the lack of Adnoc stations, drivers are waiting up to three hours to be served, compounding the problem.
The situation is not sustainable, but the resolution will not be easy. While the congestion created is a genuine hazard that increases the likelihood of accidents, one must sympathise with transport companies struggling to remain profitable among numerous sky-rocketing costs. Nor can the Dubai-based companies, whose profits are being squeezed as a result of rising crude costs, be asked to keep their prices the same as Abu Dhabi’s. While the most obvious solution would be for Adnoc to build more stations throughout the UAE, that would amount to unfair competition with other suppliers.
What is clear is that the current measures do not address the root cause of the problem. As long as there is a significant price differential between Adnoc’s and the other companies’ fuel, there will be queues. Either Adnoc will have to raise its prices – highly unpopular – or provide its competitors with cheaper diesel – highly expensive. Even that will be difficult as Abu Dhabi’s refining capacity is under strain. There are likely to be queues for some time.
Bid to curb diesel sales
Matt Chung for THE NATIONAL July 07. 2008
ABU DHABI // Adnoc has been asked to restrict sales of diesel at its petrol stations on the island to reduce traffic congestion and accidents caused by vehicles queuing on main roads to take advantage of cheap prices.
The Abu Dhabi National Oil Company sells diesel for Dh8.60 (US$2.34) per gallon, less than half the cost of fuel at the Emirates National Oil Company (Enoc), Emarat and Emirates Petroleum Products Company (Eppco) stations in Dubai and the northern Emirates, where it costs Dh19.25 (US$5.24) per gallon.
The price of diesel in the northern Emirates is said to have increased by 58 per cent this year.
An increase in the number of vehicles using diesel has contributed to congestion and clogged right-hand lanes of roads near the petrol stations are causing more accidents, according to a report by the Abu Dhabi Traffic and Patrols department, seen by The National.
Lorry drivers say they can wait up to an hour to fill their tanks. At busy times, some stations are imposing limits on diesel sales, such as Dh50 or Dh100 per vehicle.
However, as some drivers merely leave the pump and rejoin the queue, this may have made congestion only worse.
“They gave a limit, but some people, they come back around,” said Imtiaz Khan, 32, a lorry driver who works for a construction company in Abu Dhabi.
The report recommended diesel should not be sold to lorries and buses on the island between 7am and 9am, 1pm and 3pm and 6pm and 9pm.
The department’s report says long-term solutions could include selling diesel only at stations outside the city, creating station entrances and exits away from main roads where possible and opening new stations only in areas where road safety can be guaranteed.
Some stations have already stopped selling diesel, which yesterday afternoon was not available at the Adnoc outlets on Airport Road between 11th and 13th streets.
Major Hussein al Harthi, the head of the traffic engineering and road safety section for Traffic and Patrols, said Adnoc had been asked to co-ordinate with traffic police when choosing new sites for stations and to modify entrances. Officers were being sent to petrol stations to manage vehicles entering and exiting stations and to break up lengthy queues. The most congested stations were at the intersection of Fourth and Al Saada streets, Airport Road near Zayed Sports City and Between Two Bridges, said the report.
Adnoc, which also has 49 petrol stations in the emirates of Sharjah, Ajman, Ras al Khaimah, Umm ul Quwain and Fujairah, has kept its diesel prices at Dh8.6, despite the sharp increase at other UAE petrol stations. Petrol prices, fixed at Dh6.25 per gallon for an octane rating of 95, have been steady since 2005.
The Ministry of Interior’s traffic department and Adnoc officials met in May to discuss limiting the sale of diesel to certain hours for lorries heavier than 2.5 tonnes and building diesel stations on main roads outside cities. Ghaith al Za’abi, the director of the ministry’s traffic department, said the department had also suggested Adnoc increase its number of diesel pumps.
The rise in the price of diesel has contributed to inflation by pushing up the cost of transporting food and daily commodities and the proposals would make it even more difficult for transport companies to obtain cheap diesel.
Adnoc stations in the northern Emirates stopped sales of diesel to lorries with Dubai licence plates last month and police have been handing out fines to vehicles queuing in Sharjah. Saudi Arabia has introduced fines of 5,000 riyals (Dh4,03) to stop its residents attaching second fuel tanks to their lorries.
Some drivers are selling their vehicles, fed up with the long queues and the rising prices. “It’s not economical any more,” said Hamdi Shehabeh, who recently sold his diesel Isuzu lorry. He said he remembered a time when it cost only Dh4.5 a gallon to fill his tank.
“Imagine what is happening with contractors who don’t have a choice and have to use diesel,” he said.
* With additional reporting by Hashim al Mohammed
New system being installed at Dubai airport to detect fake travel documents
By Bassma Al Jandaly, Staff Reporter GULF NEWS Published: July 07, 2008, 18:02
Dubai: The Dubai Naturalisation and Residency Department (DNRD) reinforced its employees’ skills and ability to spot falsified documents and passports following an extensive training on the Electronic Documentation Information System on Network (EDISON) for verifying various passport security features and examination of questioned documents.
The system which is currently implemented by DNRD at the Dubai International Airport various terminals to assist passport control officers in detecting forged travel documents containing images of over 1,400 genuine and fake travel document samples from over 190 countries and is recognised as a global reference for testing the authenticity and validity of travel documents.
Questionable documents are taken to a specially-set laboratory at the DNRD offices at the DIA to avoid any delays inflicted on regular passengers.
A delegation from the International (EDISON) Committee headed by Diederik Fabius recently met with Major General Mohammad Ahmad Al Merri, Director of DNRD to discuss the next phases of the implementation of the system.
Enjoy non-stop green drive on Abu Dhabi road
By Binsal Abdul Kader, Staff Reporter GULF NEWS Published: July 08, 2008, 00:09
Abu Dhabi: Motorists on Al Salam Road, or the Eastern Ring Road, in Abu Dhabi can have a non-stop drive, after the ongoing project is completed.
Two major projects – Al Salam Road upgrade, and roads and parking project in Marina Village – will give a facelift to the city, Engineer Abdullah Al Shamsi, Director of Roads and Infrastructure at Abu Dhabi Municipality, told Gulf News.
The projects have been planned to improve the traffic capacity in accordance with an unprecedented increase in number of vehicles in the recent past, he said.
Number of vehicles increased by more than 100 per cent during the past eight years, from 242,409 in 2000, to 526,161 in 2007, according to a report by Department of Planning and Economy of Abu Dhabi Government.
Al Salam Road project will increase the capacity by 100 per cent, said the official. “Environmental aspect has also been taken care of with all road projects,” he said.
The capacity of Al Salam Road will increase by 100 per cent to 6,000 vehicles per hour from the current capacity of 2,500 to 3,000 vehicles, said the official.
The road will be the gateway to the city centre, Al Mina Port, Corniche, and new developed areas such as Reem Island and Saadiyath Island. The four-lane road will have four tunnels to facilitate non stop drive.
Two tunnels will be at the beginning of the road, near Shaikh Khalifa Park, the third one will be near Sea Palace, and a fourth big tunnel will be close to Hazaa Bin Zayed Road.
The 4.6billion project of 13.7km is being carried out in three phases. The construction started in November 2007 and will be completed by 2010.
“We are reorganising the roads in the newly developed Marina Village No. 1,” said the official.
The 1.6km road project costing more than Dh20 million will be completed soon.
The next stage will be done according to the studies of the Department of Transport on the requirements in the area after the introduction of public transport.
Tackling travel time
– More than 100 per cent increase in number of vehicles in eight years – from 242,409 in 2000, to 526,161 in 2007.
– Motorists spend an average of 45 minutes in Abu Dhabi to get to their work.
– Abu Dhabi population has increased steadily by 69.9% during the 1995-2008.
– UAE loses about Dh5 billion a year due to road congestion.
– One person dies every eight hours in road accidents (UAE). Most of the victims are young UAE nationals.
Abu Dhabi: Major road projects, including the upgrade of the international highway and reconstruction of the Mafraq interchange, will have a huge impact on Abu Dhabi mainland, a senior official told Gulf News.
The projects will shift the focus from the city and will take development all over the emirate, in accordance with the 2030 plan of Abu Dhabi Government, said Abdullah Al Shamsi, Director of Roads and Infrastructure at Abu Dhabi Municipality, in an exclusive interview with Gulf News.
The projects will support all upcoming developmental activity on the mainland, especially in Al Gharbia (the Western Region) which will attract large numbers of people to settle there, he said.
The projects will transform Abu Dhabi into “Greater Abu Dhabi” as envisaged in Abu Dhabi government’s 2030 plan.
Al Gharbia has a population of 120,000. Abu Dhabi government has earmarked Dh98 billion for infrastructure, tourism and economic development projects in the region.
Al Gharbia comprises seven main cities: Madinat Zayed, Mirfa, Liwa, Ghayathi, Sila, Ruwais and Dalma Island, and is close to the borders of Saudi Arabia and Qatar.
Mafraq Interchange, about 30 kilometres from Abu Dhabi City is a gateway for motorists from Dubai and Al Ain to Al Gharbia (Western Region). When the reconstruction is completed, three levels of the project, main roads, a bridge and two flyovers will smooth traffic flow said Al Shamsi.
The existing road to Al Ain will be widened as part of the project. Traffic towards Mafraq Hospital, Baniyas, Shaikh Khalifa Bin Zayed City and Shaikh Mohammad Bin Zayed City will also be improved. A more than Dh753,767,195 project started in March 2008, will be completed in March 2010.
Upgrading the international highway from Mafraq to Al Guweifat on the Abu Dhabi-Saudi border will improve the movement of people and goods from neighbouring countries to the UAE.
About 330 kilometres of road will be upgraded in four phase at a cost of Dh9.5 billion to be completed by 2011. The road will start with three lanes from the border (Al Guwaifat to Al Ruwais ) but will be widened with four lanes (from Al Ruwais to Mafraq).
A Dh651,312,549 project will support the industrial city in Mafraq. The construction of a a 38 kilometre road will start this month and is to be completed within 300 days.
The creation of a 7.1km dual carriageway on Al Fayah Road near Al Khatim will support the Industrial Cities of Abu Dhabi (ICAD) and help attract more investment and important industrial projects.
A Dh539,103,925 project for an 18 kilometre dual carriageway between Baniyas East and Al Heelieh Road will support the new cities being developed in the area. Those cities will attract people from other congested cities.
This project will also help to distribute the population to the mainland. The project will be started soon and will be completed within 550 days.
The Ghayathi-Madinat Zayed Road Construction will link the two towns. The Dh450,340,000 project started in March 2008 and will be completed by March 2010 . It will give better connectivity between the towns of Al Gharbia.
The Al Ruwais road will link the Al Ruwais industrial area to the residential area and Al Ruwais town which will be linked to the international highway. The project was started in May 2007 and will be completed by the end of 2009.
Authority for community development
(Wam)8 July 2008
DUBAI — His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has issued, in his capacity as Ruler of Dubai, a local law establishing Dubai Community Development Authority (DCDA) as a government entity mandated with enhancing social development and national identity, as well as strengthening citizens and residents’ role in social life.
Shaikh Mohammed also issued a decree appointing Dr Mariam Mohammed Matar as Director-General of the DCDA.
According to the law, the DCDA shall be in-charge of regulating community development in the emirate of Dubai and overseeing provision of social services with the aim of establishing an integral and efficient social development system in the emirate.
The DCDA will combine under its umbrella a number of service-oriented entities.
It will also cooperate with the Ministry of Social Affairs. The Secretary-General of Dubai Executive Council, Ahmed bin Bayat, said the establishment of the DCDA was consistent with Dubai leadership’s approach to further strengthening social bonds in the emirate which has hundreds of nationalities living together in great harmony. —
Bus service exclusively for women
By Joy Sengupta Staff reporter/KHALEEJ TIMES 8 July 2008
DUBAI — The Roads and Transport Authority (RTA) plans to introduce a bus service exclusively for women by the end of this year, according to a senior RTA official.
The CEO of Public Transport Agency at the RTA, Essa Al Dossari, said: “We are in the process of planning better public transport services. The number of women travelling by buses is very high. Our future plans include a fleet of buses which would be only for women.”
Women commuters have been demanding more seats in the buses, he said. There are also complaints that bus drivers often do not stop to pick up women passengers because of non-availability of seats for them as the seats are few. Presently, there are only 12 seats in each bus for women.
Dossari had told Khaleej Times earlier that RTA was studying the bus routes on which the number of seats for women could be increased. He said that during peak hours, the bus drivers needed to stop at the bus stops which had women waiting. “Logically, if all the seats are occupied the driver can normally carry on the trip flow. During peak hours, however, the drivers must stop and take all the women on board.”