ENERGY

Lost City Found

           The shifting sands of the Arabian Peninsula hide more than their fair share of secrets. Once, flourishing lakes teeming with life lie buried beneath scorching dunes. Even entire cities have been swallowed by the gaping maw of the desert. “Searching for and finding one of them is one of the great adventures of a lifetime,” said John Faulhaber, at a recent meeting of the Arabian Natural History Association “Just reading about it is exciting.”

One such city was Ubar, “the Atlantis of the Sands.” Ubar flourished from about 2800 BCE to about 300 CE as a remote desert outpost where caravans assembled for the transport of frankincense across the desert. Used in cremations and religious ceremonies, as well as in perfumes and medicines, frankincense was as valuable as gold. 
As the only source of permanent water in thousands of square kilometers, Ubar became a nexus for trade, especially frankincense. Trade brought affluence, and at their height the people of the region might have been the richest in the world, said Faulhaber. 
The historian Al-Hamdani, writing in the sixth century CE, hailed Ubar as first among the treasures of ancient Arabia. Then at the height of its wealth, Ubar vanished. The Qur’an says that the people there were punished for wasting their wealthy sinful lives. By the seventh century, its location was forgotten.
Ubar’s rediscovery was the result of an intriguing combination of space-age technology, literary detective work, painstaking archaeology and two larger-than-life adventurers, Nicholas Clapp and Ranulph Fiennes. 
The pair became interested in Ubar after reading Bertram Thomas’ book Arabia Felix. Thomas, the first European to cross the Rub‘ al-Khali, noticed that the tribes living in the region of the Dhofar mountains in South Oman considered themselves the descendants of the “People of ‘Ad,” the people associated in the Qur’an with Ubar. Thomas mentions that he came across ancient caravan tracks, which his Arab guides called the “road to Ubar.”
Clapp started reading everything he could lay his hands on. He also persuaded Jet Propulsion Laboratory scientists Charles Elachi and Ronald Blom to scan the region with a Space Shuttle radar system. 
The radar was able to “see” through the sand and loose soil to pick out subsurface geological features. The imagery clearly showed the ancient trade routes, which were packed down into a hard surface by the passage of hundreds of thousands of camels. The images revealed pieces of the ancient tracks converging on the small oasis settlement of Shisur in Oman.
Clapp and Fiennes, accompanied by archaeologist Juris Zarins, began work at Shishur. Their excavations revealed a sizeable walled fortress with eight or more towers, connected by a 2.5- to 3-meter-high limestone wall about a meter thick. 
The fortress had partially collapsed into a large sinkhole. Analysis shows that the sinkhole was originally a large subterranean cave partly filled with water. There was almost certainly a well on top to allow access to the water. When the cave collapsed, the resulting sinkhole took down almost the full interior space of the fortress and a sizeable part of the gate and adjacent walls, said Faulhaber. 
The excavated site closely matches written descriptions. The Quran calls it “a city with lofty buildings.” The Arab historian Yaqut ibn Abdallah said a “great well” was the city’s main feature. The Qur’an also says the city was destroyed by “sinking into the sand,” which is what clearly happened at Shisur, said Faulhaber. Reaching Ubar these days requires little more than a few hours’ drive from Salalah, he said. “There are even signs reading ‘Road to Ubar.’”

Qatargas Unveils Exhibition

          Qatargas unveiled today an interactive exhibition which is open to the public and will explain the process by which liquefied natural gas (LNG) is created. Located on the Corniche, the exhibition will welcome visitors in Doha through April 9th. Under the patronage of H.E. Abdullah bin Hamad Al Attiyah, Deputy Premier and Minister for Energy and Industry, Faisal Al Suwaidi, Chief Executive Officer of Qatargas Operating Company Limited, officially opened the exhibition on Doha’s Corniche.

“I am delighted to open this exhibition and start the countdown to the inauguration of Qatargas 2” said Faisal Al Suwaidi. “I encourage as many people as possible to attend this exhibition to learn more about LNG. I particularly look forward to welcoming students so they can learn more about the opportunities for a career at Qatargas”. Visitors to the exhibition will be able to walk between screens illustrating how LNG is produced – from the drilling & offshore stages, to the onshore processing, to the shipping and distribution. Facts appear throughout the exhibition that highlight the unprecedented accomplishments of Qatargas 2 and describe the technology implemented to make the project a reality. Additionally the exhibition explains the many uses and benefits that gas and associated technologies have brought to the Qatari people and to others around the world. Reaching young people is of particular importance to Qatargas. School children from throughout Qatar have been invited to attend the exhibition to learn more about LNG. Students from the Al Khor International School and the Abdullah bin Ali Al Misned Secondary School for Boys were in attendance to witness the ribbon cutting.

The exhibition highlights what Qatargas does and explains the vital role of LNG in Qatar. Additionally, it showcases the opportunities for a career in engineering and other professions relevant to Qatargas’ ongoing development. “We are very pleased that this exhibition will allow us to share the achievements of the Qatargas 2 project with so many people,” said Al Suwaidi. “The launch of Qatargas 2 is a very significant moment for the State of Qatar. By explaining the LNG process in a fun and interactive exhibit, we hope to both educate and engage visitors in Doha.” The exhibition was created as part of Qatargas’ ongoing commitment to education and community engagement and in anticipation of the inauguration of Qatargas 2, the world’s first fully integrated value chain liquefied natural gas (LNG) venture. The inauguration ceremony will take place at Ras Laffan on April 6th. Qatargas 2 is large enough to supply 20 percent of the UK’s natural gas needs. It involves the development of two world-class LNG trains, three storage tanks, power utilities and water injection systems, and a fleet of 14 state of the art liquified natural gas tankers. The $13 billion investment in this project will bring prosperity to the country and its citizens for hundreds of years.

Kazakh National Oil Company KazMunaiGas Announces Major Presence At ‘Caspian Energy Hub’

          KazMunaiGas (KMG), the national oil company of Kazakhstan today announced its intention to establish a major presence at Caspian Energy Hub (CEH), the fourth in a series of energy cities conceived by leading GCC Islamic investment bank Gulf Finance House.  In a move that underlines the heavy momentum building on the CEH initiative, KMG will also be calling on all foreign energy companies to follow their lead as Kazakhstan bids to double domestic oil production and triple gas production by 2015.

KMG is one of the largest oil producing companies in Kazakhstan and is currently developing 46 oil fields in the west of the country.  KMG fields account for approximately 1.7 million barrels per day of between 9 and 17 billion barrels in provable reserves throughout Kazakhstan.  With a strategy of continued growth driven by further exploration and selected acquisitions, KMG have chosen the  technical, educational, research and human resource components that Caspian Energy Hub will offer to assist in the pursuit of their commercial goals.

In close collaboration with PFC Energy and in partnership with the Government of Kazakhstan, GFH announced CEH as the fourth in its burgeoning series of energy cities in April of 2008.  The initiative is an integrated business cluster designed entirely to serve the needs of the future domestic energy sector and the international industry players who will play a significant role in harvesting the vast Kazakh hydrocarbon resources.
KazMunaiGas Chairman, Kairat Kelimbetov commented on the announcement today saying, “Efficiently harvesting the tremendous domestic hydrocarbon resources in Kazakhstan to the benefit of the regional economy and future generations in Kazakhstan calls for a careful balance of wisdom, experience and vision.  In CEH we’ve found a concept offering each of these virtues, integrating all the components we believe are central to the development of a 21st century energy platform.   KMG has ambitious plans in the years ahead and we have every confidence our goals will be realized alongside a host of global energy players as part of this visionary energy community.”
Kazakhstani Governor of Mangistau, Kairat Kusherbayev added, “Both Gulf Finance House and PFC Energy offer a rare caliber of energy sector thinking.  The experience they share in catering to the current and anticipated demands of the energy sector are clearly evident in the CEH initiative.  They demonstrate extraordinary foresight but more importantly they know how to translate an idea into a sustainable platform delivering commercial success and well-being to future generations.  These virtues make them a natural partner to Government’s looking to build a prosperous future for their communities.”
Gulf Finance House Deputy-CEO, Mehran Jamsheer added, “We know that energy resources can bring extraordinary benefits to emerging economies.  In all our energy cities we seek a platform that offers commercial opportunity to business through the agglomeration of key services and the long term delivery of enhanced socio-economic well being. Furthermore, KMG’s announcement today confirms the desire amongst major energy players for cutting edge energy platforms.”

Al-Sulaim Ends 33-Year Career

           Capping a 33-year career with Saudi Aramco, executives joined recently to bid farewell to outgoing executive director of Industrial Services Amer A. Al-Sulaim.

The Industrial Services organization is composed of Saudi Aramco’s Transportation, Marine, Aviation, Roads and Heavy Equipment, and Mechanical Shops Services departments, and Al-Sulaim was challenged with finding ways to significantly increase Saudization while maintaining outstanding services.

Abdulrahman F. Al-Wuhaib, senior vice president of Operations Services, spoke at the luncheon held in Al-Sulaim’s honor and detailed his colleague’s history with Saudi Aramco, which began in 1976 after he graduated from the University of Petroleum and Minerals with a bachelor’s degree in civil engineering.

After a three-year stint with the Central Area Projects Division, Al-Sulaim went to work on a master’s degree in construction management from the University of Washington. Upon his return in 1981, he resumed work with his former division and later with the Industrial Projects Division before being named superintendent of the Vendor Inspection Division in 1986. In 1988, he took charge of the ‘Udhailiyah Producing Maintenance Division and became manager of Pipelines Projects Department in 1992.

In 1993, he became quality director for the Engineering and Operations Services business line and founded the Saudi Association for Quality Management. From 1996-2001, Al-Sulaim served as manager of the Marine and Mechanical Shops Services departments. He then was named general manager of Training and Career Development before his appointment as executive director of Industrial Services.

Al-Wuhaib also outlined Al-Sulaim’s numerous accomplishments, from renovating Dhahran-area mosques in the late 1970s to the creation of the Aviation Department Arrival Terminal in 2003. Al-Sulaim’s recent credits include several Saudization initiatives, which have given thousands of young Saudis opportunities to train for Industrial Services and private-sector jobs.

On the leadership side, he helped start and shape quality, excellence, team-building and Saudization initiatives that changed the corporate culture from command and control to a collaborative and vision-focused culture things that permeate the quality culture of every Saudi Aramco department today.

He founded four more associations in the areas of aviation, marine, materials and heavy equipment to encourage people involved in those businesses to work more closely together to resolve tough challenges.

He’s had his hand in the outsourcing of non-core service and maintenance work and ensuring that contractors are able to provide services meeting the company’s expectations of quality.

"As much as everyone is happy for you to be starting a well-earned retirement, there is no doubt there are many people who are also a little sad," Al-Wuhaib told Al-Sulaim. "You’ve made a lot of friends here, and they’ll be sorry to see you go."

For Al-Sulaim it’s a time both for reflection and excitement. "I don’t call it retirement as much as I call it graduation — graduation from the best school in the world great Saudi Aramco," Al-Sulaim told luncheon participants. "I am proud of my achievements, the most apparent of which in the professional side are igniting the start of the Specialists Program in Engineering and charting the course for corporate maintenance as a stand-alone profession."

He thanked management for its strong support over the years and the many employees who have helped him achieve his goals. "In the big scheme of things, very few companies in the history of business have provided so many wonderful opportunities to so many people, from basic services to jobs to professional careers to executive and corporate leadership. I am so honored and so fortunate and so grateful to have had the opportunity to be a part of this creative and wonderful organization."

Many of Al-Sulaim’s current and former colleagues attended, including president and CEO Khalid A. Al-Falih; senior vice presidents Amin H. Nasser of Exploration and Producing, and Salim S. Al-Aydh of Engineering and Project Management; as well as old friends and family members.

"Just as many of us look back fondly at our university years, I always will treasure the memories I have of Saudi Aramco and all of you," Al-Sulaim told the audience. "Few companies can even approach Saudi Aramco. That is because with every barrel of oil we pump, we build a nation and, more importantly, we build human character that contributes to building the society we all live in."

Who Will Fix the Electricity Sector in Lebanon?

          All those who worked closely with Prime Minister Saad Hariri in Saudi Arabia when he ran his father’s business empire say the young man loves challenging missions.

For this reason Saad succeeded in doubling the fortune of Saudi Oger and even expanded his business to the Middle East, Europe and Africa.

But the premier, who managed to win the hearts and minds of even his die hard opponents in Lebanon, realize that his efforts to bail out Lebanon from its various economic problems will not be a piece of cake.

Apart from the $49 billion public debt and aging and inefficient public departments which he inherited from all his successors, Saad Hariri realize that the most overwhelming problem he really faces is the cash strapped electricity sector.

Literally, the electricity sector is draining the resources of the already troubled treasury and the Finance Ministry estimate the annual deficit of this sector at more than $1.5 billion, or one third of the government’s revenues.

There are different proposed scenarios for the electricity sector and one of the most publicized ones is privatization.

But what investor in a good state of mind will be willing to risk billions of dollars on a sector which is plagued with huge problems.

Hariri will surely work closely with the new energy and water minister Jebran Bassil to find quick solutions for electricity and at the same time to relief the treasury from the huge losses this sector incurs each year.

"The power sector continues to be one of the most poorly developed in Lebanon and calls for wholesale privatization have been growing louder in recent years, with EDL (Electricite du Liban) hindered by substantial power generation and distribution costs which require crippling subsidies," an energy expert told Business Life Magazine.

He added that some politicians want to throw the problem on the laps of the private sector because they believe that the state does not have the means or the resources to fix this chronic problem.

The expert said the government will tell the Lebanese that the state can’t afford to build more power plants to meet the growing demand and any new project should be solely financed by the private sector.

Over 60 percent of Lebanon’s power is already being generated by the private sector, including a percentage being supplied by energy providers abroad according to Alain Tabourian, energy and water minister in the former government.

Plans to address Lebanon’s electricity crisis were held up in the previous government, but there is now hope that the plan prepared by Tabourian will finally be executed. The ministerial declaration states that 600 Megawatts of new generation capacity is to be immediately installed, and will be on stream by the end of 2010. This was the short-term measure advocated by Tabourian to provide stopgap power, while preparations are made to build efficient and low-cost power stations, something which requires over five years to execute.

The Lebanese electricity situation has been a major talking point for some time with many residents left without power for several hours each day.

Tabourian is very clear about his aims for the energy situation. "I believe the best solution is for the public sector to work hand in hand with the private sector via a Public-Private-Partnership (PPP). Both parties have strengths that, if applied properly, would lead to the lowest cost service." According to Tabourian, "each party has its own competitive advantage. As an example, private companies are more efficient than the state in building and operating power plants, whereas the state has a much lower cost of capital to finance public infrastructure, so let the government finance the project and have the private sector build and operate it." Tabourian believes affordable power and a profitable quality service can be provided through this sort of mechanism.

But according to, secretary general of the higher council of privatization Ziad Hayek, the Lebanese government is not looking to privatize the power sector.

"The power-sector reform includes, in some of its aspects, the involvement of the private sector, but there are no plans to privatize EDL today," says Hayek. "Once the system is healthy, we can consider privatizing it."

Obviously money is at the root of the problem, especially the very high cost of producing electricity.

"Put very simply, EDL has a very high electricity-production cost, as most of the production cost is directly tied to the price of oil derivatives and more than 60 percent of the power is generated using diesel, a very high cost fuel, while 40 percent uses heavy fuel oil, another expensive fuel as compared to natural gas and coal. It costs a lot more to generate electricity than is recouped from selling it and this is because of poor past decisions in terms of the type of power plants that were built and because of the lack of investments in the sector to replace existing plants that are old and very expensive to operate, by new, modern, efficient, low-production cost plants. Electricity is being subsidized, mostly in order for people to have reasonable electricity prices," says Tabourian. "Staff wages and operating and maintenance costs are not the core problem; they account for less than $200 million a year, a very small portion of EDL’s spending. Likewise, electricity theft is a problem, at an annual cost of just over $140 million according to a World Bank study, but even if it were eradicated, it is very small when compared to the billion-dollar-plus deficits that are accrued every year.

Hayek believes the structural problem with the current system is people "not paying the full price." The state provides a subsidy for power, setting a tariff of $25 a barrel while the real cost of oil is $100, meaning everyone in Lebanon receives cut prices for their power.

He also confirms that the reason for the constant power cuts is because" Lebanon produces 800 Megawatts less than it needs due to insufficient power-production capacity.

The financing of new public infrastructure using the private sector is controversial. "The public sector has access to public-infrastructure project financing at less than 2 percent per annum and the latest Eurobond issue was oversubscribed and cost just 7.5 percent for a 15-year note. On the other hand, private sector Independent Power Producers (IPP) requires returns on the order of 15-20 percent and demand government guarantees. The difference in cost is on the order of 15 percent, a huge figure. If the entire sector were privately owned and we were to assume that the required investment to have a properly functioning electrical system, starting from scratch, was on the order of $10 billion, the annual surplus cost to resort to private-sector financing/ownership would be $1.5 billion, as big as the current deficit! An IPP is nothing more than another form of financing, call it structured financing, albeit an expensive one that should be a means of last resort, if the state is not able to raise financing by other more traditional means," said Tabourian.

Hayek said that "we have 10 companies already in the process (of expressing an investment interest). They are all highly respected entities, all qualified with the necessary experience," and adding: "But as long as the system is in the shape it is in today, there are no [interested] investors."