New base energy news issue 883 dated 29 june 2016

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,
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NewBase Energy News 29 June 2016 - Issue No. 883 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE motorists face fourth consecutive monthly petrol price rise
The National staff
Prices of petrol and diesel have increased for the fourth month in a row, but only marginally this
time. The Ministry of Energy announced on its website that all grades of petrol have been increased by 2
fils a litre for July, with diesel getting dearer by 8 fils.
From July, Super 98 will retail at Dh1.88 a litre compared with Dh1.86 in June, an increase of
more than 1 per cent. Prices of Special 95 have gone up by 1.14 per cent to Dh1.77 from 1.75 a
litre and EPlus 91 will cost motorists Dh1.70 compared with Dh1.68 in June, a rise of 1.19 per
cent.
Transport companies will see their fuel bills increase by 4.5 per cent next month as the price of
diesel has gone up to Dh1.85 from Dh1.77 a litre.
Brent crude futures, the international benchmark, rose to above $50 a barrel this month on the
back of a report from the International Energy Agency that demand will increase by 100,000
barrels per day to 1.3 million bpd this year as the supply glut eases.
However, oil prices fell sharply after the British voters opted to leave the European Union, with
Brent ending the week at $48.41. Petrol and diesel are by-products of crude oil, which is why the
movements (or in this case, stability) in Brent crude affect prices at the pump. However, the UAE
has not released which benchmark or method it bases petrol price fluctuations.

Qatar: Petrol prices to go up in July 2016
Gulf Times
Petrol prices in Qatar will go up next month while there will not be any change in the diesel price in
July, shows an announcement by the Ministry of Energy & Industry.
According to the Ministry of Energy & Industry the 91-octane Premium gasoline will cost
QR1.3/litre and Super QR1.4 in July.
The price fixed for this month is QR1.2/litre (Premium) and QR1.3/l (Super), which will be in effect
until June 30.
Diesel, however, will remain unchanged at QR1.4/l in July.
Fuel prices in Qatar were allowed to fluctuate in response to changes in the global market from
May 1, the Ministry of Energy and Industry said.
Every month, a special committee comprising representatives from various government bodies,
would review fuel prices (gasoline and diesel) and make recommendations on proposed prices for
the local market
accordingly.

Qatar: Maersk Oil to leave Qatar in 2017 following Al Shaheen decision
Source: Maersk Oil
In July 2015 Qatar Petroleum (QP) invited a number of international oil companies to participate in
a competitive tender process regarding the future development of the Al Shaheen oil field in
Qatar. Presently Maersk Oil is the operator of the field and the current 25 year production sharing
agreement expires in July 2017.
Earlier this year Maersk Oil submitted its bid in the tender. QP on Monday communicated that they
have selected another oil company as partner for the future development of the Al Shaheen field.
'Maersk Oil presented a highly competitive technical and commercial proposition based on more
than 20 years of technical
knowledge and experience
working with the Al Shaheen
field,' says CEO in Maersk Oil,
Jakob Thomasen.
During the past 24 years Maersk
Oil and QP have together
developed the Al Shaheen Oil
field into Qatar’s largest off-shore
producing oil field. Under the
terms offered by Qatar
Petroleum, a minority
shareholding for Maersk Oil in the
new joint venture would have
created a marginal impact on the Maersk Group earnings in the years ahead.
Maersk Oil will continue to operate Al Shaheen until the end of the current license in July 2017.
Leading up to the expiry of the existing production-sharing agreement Maersk Oil will work
together with QP to support a safe and efficient transition of the existing operations to the new
operatorship.
'Maersk Oil is growing as a result of improved operating performance and with major projects like
Culzean in the UK and Johan Sverdrup in Norway, we continue adding new production through to
the end of the decade. We will continue to deliver in the years ahead based on a strong
operational performance and cost focus and ensure that our major projects are executed on time
and on budget,' says Jakob Thomasen.
Maersk Oil will be redeploying a number of its employees which today are based in Qatar
elsewhere in its global organisation. The majority of remaining employees in Qatar are expected
to be offered employment by the new operator.
A.P. Møller - Mærsk A/S’ financial outlook for 2016 remains unaffected and no need for write-
downs will occur. The Group’s reserves and resources (by end of 2015 2P + 2C of 1,141 million
boe) will not be impacted by the expiration of the agreement.

Pakistan: OGDC discovers gas in Sukkur
Source: The Express Tribune
Oil and Gas Development Company (OGDC) has discovered gas in its exploratory well Thal West
01, which is 100% owned by the company and is located in Sukkur district of Sindh.
The Thal West 01 was drilled and tested using OGDC’s in-house expertise. The well was drilled
down to the depth of 3,983 metres to test the hydrocarbon potential of Basal Sands of Lower Goru
formation.
The results showed presence of significant reserves of hydrocarbon in the well. The zone
produced 17.2 million standard cubic feet of gas per day (mmscfd) at wellhead flow pressure of
2,820 per square inch (psi).
The discovery has opened a new avenue and will add to the gas reserve base of OGDC and the
country. OGDC, a leading oil and gas exploration company, posted a decline of 36% in its net
profit for nine months ended March 31, 2016.
OGDCL is the national oil & gas company of Pakistan and the flagship of the country’s E&P
sector. The Company is the local market leader in terms of reserves, production and acreage, and
is listed on all three stock exchanges in Pakistan and also on the London Stock Exchange since
December 2006. The Company is all set to ride the wave of E&P activity, equipped with its Vision
& Mission, Business and Strategic Plan, a debt-free and robust balance sheet and healthy cash
reserves. The Company is ready to take on the challenges of a volatile E&P industry.

Indonesia: Santos JV reports rxcellent flow test results at
Northwest Natuna appraisal well…..Source AWE
JV partner AWE Limited has been advised by Santos as Operator that a successful Drill Stem
Test (DST) has been conducted on the G Sand reservoir at the AAL-4XST1 appraisal well,
offshore Indonesia, achieving an averaged stabilized flow rate of 828 barrels/day (bopd) on a
64/64 inch choke over a 9 hour period. The results exceeded pre-drill expectations and are 58%
higher than the previous G-sand tests
at AAL-3X (525 bopd).
The DST was successfully conducted
over a 3.5m perforated interval in the
sidetrack well bore and was assisted by
an electrical submersible pump (ESP)
which is standard procedure in heavy oil
fields due to the viscosity of the oil.
Bulk oil samples were recovered for
further testing but wellsite measurements
indicate the G-sand oil to have a
specific gravity of 10.7 API at 60° F,
consistent with previous samples from
AAL-3X. Produced gas and water were
at rates too low to measure.
AWE’s preliminary analysis of the
wireline log data indicates an 8m oil
column in the G-Sand and excellent
quality reservoir, the best encountered
in the field to date. No oil-water-contact
was intersected in the well. Operations
are now underway to commence a second DST test in the main AAL field K-sand reservoir.
AWE Managing Director and CEO, David Biggs, said:
'The better than expected flow rates achieved and excellent reservoir quality underline the
significant potential of the AAL oil project. The positive results of the G-sand DST, together with a
forecast lower cost environment and an improving long-term outlook for the oil price are all
encouraging in respect of a decision to develop the AAL field.'
The AAL-4X well has been drilled in water depth of approx. 72m using the Raniworo jack-up drilling rig and
is forecast to be completed within the Operator’s budget. The Northwest Natuna PSC is located offshore
Indonesia in the Natuna Sea and includes the Ande Ande Lumut (AAL) oil project. The AAL project
comprises the K Sand reservoir (101 million barrels gross recoverable oil, net 24.3 million barrels of 2P
Reserves and 1.7 million barrels 2C Contingent Resources to AWE) and the underlying G Sand reservoir.
The AAL-4X appraisal well’s primary target is the G Sand reservoir, which is estimated to contain 289
million barrels gross oil in place with 36 million barrels gross recoverable oil (net 8.4 million barrels 2C
Contingent Resources to AWE). Appraisal of the G Sand will facilitate the preparation of a Plan of
Development for this resource, which could be developed in conjunction with the already approved K Sand
development.'

Saudi Aramco, Sabic One Step Closer to Turning Oil Into Chemicals
Bloomberg - Wael Mahdi
Saudi Arabian Oil Co. and Saudi Basic Industries Corp. are one step closer to building their first
plant to process crude directly into chemicals, cutting out a costly intermediate link in the
production of plastics.
Aramco and Sabic, as the
state-owned companies are
known, signed an agreement
Tuesday for a feasibility study
to build the project in Saudi
Arabia, possibly in a joint
venture, they said in a
statement. The study is due to
be completed by early 2017,
they said. Oil companies
normally refine crude into
transportation fuels including
gasoline and diesel and leave
byproducts such as naphtha to
be processed separately into
chemicals.
The companies could
“substantially” increase Saudi Arabia’s production of petrochemicals, while enabling them to boost
exports and spur industrial diversification, Aramco Chief Executive Officer Amin Nasser, said in
the statement. Aramco and Sabic are also studying “possible” joint investment in shale gas, Sabic
CEO Yousef Abdullah Al Benyan said at the signing ceremony.
Largest Exporter
Saudi Arabia, the world’s largest oil exporter, is pursuing a plan to modernize its economy by
reducing the kingdom’s reliance on crude sales. The plan includes selling shares in Aramco and
expanding the manufacturing industry, partly by using oil-based chemicals to produce materials
like plastics that can go into consumer products.
Saudi Aramco would be partly listed on the nation’s stock exchange under the plan outlined earlier
this year by Deputy Crown Prince Mohammed Bin Salman, the king’s influential son. The prince’s
strategy calls for both Aramco and Sabic to be owned by the state’s Public Investment Fund,
which currently holds 70 percent of the chemical company’s stock, according to data compiled by
Bloomberg. The government owns Saudi Aramco directly.
Saudi Aramco and Sabic, the third-biggest petrochemical maker in the world by sales, want to
build the oil-to-chemicals plant in Yanbu on the Red Sea coast, people with knowledge of the plan
said in April, asking not to be identified because the project was confidential.
Aramco and Sabic had previously been working separately on projects to produce chemicals from
oil, they said. Former Saudi Oil Minister Ali al-Naimi had announced in 2013 that the ministry was
working with Sabic for an oil-to-chemical refinery in Yanbu.

US: Newest U.S. refinery sold at a loss, hurt by oil price slump
Reuters
A North Dakota refinery that was the first to be built in the United States since the 1970s has been
sold at a loss, with profit elusive since it opened last year, as low oil prices took a toll on the
region's energy industry, crimping the appetite for diesel.
The sale to Tesoro Corp, which owns the only other refinery in the state, makes it unlikely another
refinery will be built in the United States in the near future, despite the glut of cheap crude due to
shale oil production.
Beyond North Dakota, the refinery business
in the past year has been hammered by
growing fuel inventories, turning a typical
advantage - cheap oil - on its head.
MDU Resources Group Inc and Calumet
Specialty Product Partners LP, which were
equal partners, broke ground on the refinery
in 2013, with executives eager to supply
diesel to the trucks, drilling rigs and other
equipment powering an oil boom North
Dakota was then experiencing.
The state's governor, two U.S. senators and
other dignitaries showed up for the
groundbreaking in Dickinson, about two hours
south of the oil capital of Williston. Yet construction delays, weather and other factors pushed the
refinery's cost to $430 million, about 40 percent above initial estimates.
The Dickinson refinery was designed to produce only 8,000 barrels of diesel per day, far less than
refineries on the U.S. Gulf Coast, and not gasoline or jet fuel.
Despite that small size, it opened later than expected, in May 2015, and started hemorrhaging
cash. MDU lost $7.2 million during the first quarter on its investment.
"Selling the refinery reduces our risk by decreasing our exposure to commodity prices," Dave
Goodin, MDU's chief executive, said in a statement.
To complete the deal, MDU paid off Calumet's $28.5 million in refinery debt on Monday and
absolved Calumet of any environmental obligations, effectively taking full ownership.
MDU then sold the refinery to Tesoro, which owns a refinery near Bismarck, the state capital.
The sale price was not disclosed, but Tesoro assumed the refinery's $66 million in debt and said it
would invest $10 million. MDU's board voted to approve the deal on Friday. The company said it
expects an impairment charge of at least $150 million.
Wall Street cheered the decision: shares of Calumet rose 5.3 percent to $4.53 while shares of
MDU rose 0.5 percent to $23.34. Tesoro owns more than five refineries around the United States.

Extended policies case shows reduced energy use, emissions,
more renewables, efficiency… U.S. EIA, Annual Energy Outlook 2016
Tax credits and efficiency standards for appliances and vehicles have been key drivers for
increasing renewable energy use and energy efficiency in the United States. Extending these
policies and increasing the stringency of the Clean Power Plan beyond 2030 would reduce
energy-related carbon dioxide (CO2) emissions by reducing motor fuel use and energy use in
buildings by increasing efficiency and by increasing the share of solar and wind in the electricity
generation mix.
In EIA's Annual Energy Outlook 2016 (AEO2016) Reference case projection, which generally
assumes current laws and policies, electricity generation from solar and wind sources across all
sectors increases from 227 billion kilowatthours in 2015 to 950 billion kilowatthours in 2040.
In the Extended Policies case, which perpetuates policies beyond their legislated expiration, solar
and wind generation grow to 1,236 billion kilowatthours in 2040, or 30% above the Reference
case level.
Production tax credits for renewable energy are legislated to expire or reduce in value in 2017,
and investment tax credits for solar energy begin to decline in 2020. In the residential sector,
these credits expire completely at the end of 2021.

As these tax credits decline or expire, utilities and distributed generator (e.g., rooftop solar panels)
customers accelerate investment and production projects to take advantage of the full value of the
credits.
In the Reference case, this acceleration results in a period of fast growth in renewable generation
up to those expiration dates. In the Extended Policies case, these credits are extended at their
current value through 2040, leading to steadier and ultimately larger growth in renewable energy.
Source: U.S. Energy Information Administration, Annual Energy Outlook 2016
The Extended Policies case also extends federal energy efficiency policies that encourage the
adoption of efficient appliances and equipment in the residential, commercial, industrial, and
transportation sectors.
Reductions in transportation energy use in the Extended Policies case are driven by extension of
fuel economy requirements that further decrease energy consumption in light-duty, medium-duty,
and heavy-duty vehicles.
Lower energy use and emissions in the buildings sector in the Extended Policies case result from
improved energy efficiency of equipment for heating, cooling, and other uses, as well as increased
adoption of more stringent building energy codes. Greater use of distributed generation, such as
rooftop solar photovoltaic systems, reduces purchases of electricity

UK” North Sea Oil Industry Faces Years of Brexit-Induced Turmoil
Bloomberg - Angelina Rascouet @arascouet
The U.K.’s North Sea oil and gas industry, already reeling from low prices, high costs and
collapsing investment, now faces several years of turmoil as the nation’s decision to quit the
European Union looks set to trigger a second independence vote in Scotland.
A poll on Scottish independence from the U.K. was defeated in 2014, but after voters
there overwhelmingly backed the losing side in the referendum on EU membership a new vote is
“very much on the table,” Scotland’s First Minister Nicola Sturgeon said on June 26. This leaves
the North Sea oil and gas industry, the bulk of which is in Scottish waters, potentially facing years
of uncertainty and political paralysis.
The prospect of another Scottish referendum “is not great for the investment climate,” Alan
McCrae, U.K. head of energy tax at PwC, said by phone. “The industry needs both fresh
investments and continuation of the existing investments.”
The North Sea has been battered by the slump in oil prices because of its high costs and
dwindling resources. Oil and gas producers in the region will spend 40 percent less this year than
in 2014 and by the end of the year an estimated 120,000 jobs will have been lost because of the
downturn. The government of Prime Minister David Cameron, who resigned on Friday, supported
the industry with tax cuts and the industry’s lobby group said it’s essential that the current political
uncertainty be minimized.
Critical Juncture
“The U.K. oil and gas industry is at a critical juncture and we need to ensure the U.K. continental
shelf continues to attract investment,” industry group Oil & Gas U.K. said in a statement on June
24. It urged U.K. government to “clearly” outline the process of leaving the EU in order to “make
this transition as smooth as possible.”

There are “silver linings” to the political turmoil in the U.K., said PwC’s McCrae. The plunge in the
pound to a 31-year low against the dollar will most likely cut costs for oil companies while their
sales of crude -- denominated in dollars -- will benefit. Nevertheless, it remains vital that the
government and the industry accelerate their collaboration to work through the current uncertainty,
PwC said.
Government Support
The U.K. government has sought to mitigate the impact on the oil industry of the drop in crude
prices to 12-year lows earlier this year. Chancellor of the Exchequer George Osborne said in
March that the Treasury would forgo 1 billion pounds ($1.3 billion) in taxes over the next five years
to support the industry. BP Plc received $317.6 million from the U.K. government in tax credits last
year, the company said in a June 24 statement.
Whoever becomes the next U.K. prime minister, the process of leaving the EU is set to dominate
their government’s agenda for several years. Cameron said June 24 that he won’t trigger the start
of the secession process under Article 50 of the EU treaty, leaving that to his successor who will
be appointed by September. Once Article 50 is set in motion, the U.K. formally has two years to
negotiate its way out of the bloc. Analysts say it’s unlikely that this will be long enough to work out
the more complex trading accords.
Referendum map
The industry would face an even longer period of turmoil if the U.K.’s EU exit were followed by a
split with Scotland. That
would probably mean reserves of
oil and gas would be split,
possibly along the so-called
median line already used to
allocate fishing rights. The
division would hand the Scots
about 96 percent of annual oil
production and 47 percent of
natural gas, according to
estimates for 2012 by the
University of Aberdeen’s Alex
Kemp and Linda Stephen cited by
the Scottish government at the
time of the 2014 referendum
campaign.
A spokeswoman for BP said the question of the future of Scotland in the U.K. isn’t a question for
the company but it will “monitor the situation closely.” Royal Dutch Shell Plc, Europe’s largest
energy company, reiterated its position during the 2014 referendum, saying it would prefer to see
Scotland remain part of the U.K.
There may be a pause in investment while companies assess uncertainties, including the
possibility of another Scottish referendum, said Ian Thom, senior research manager at Edinburgh-
based consultant Wood Mackenzie Ltd.
“The main issues remain managing high costs in a low oil price environment and a lack of new
investment opportunities,” Thom said.

Venezuela’s Oil Output Decline Accelerates as Drillers Go Unpaid
Bloomberg - Angelina Rascouet @arascouet
Venezuela’s oil output, already the lowest since 2009, is set to slide further this year as
contractors scale back drilling after the cash-strapped country fell more than $1 billion behind in
payments.
The Latin American nation’s oil production, which generates 95 percent of export revenue, will
decline by about 11 percent to 2.1 million barrels a day by the end of the year, Barclays Plc
estimates. Output is falling largely because oil-services companies aren’t being paid, according to
the International Energy Agency.
Venezuela’s economy has been in crisis since crude prices slumped, with sporadic looting as the
desperate population fights for food and other essentials. President Nicolas Maduro has pledged
to continue payments to bondholders, while the partners of state-run oil company Petroleos de
Venezuela SA, known as PDVSA, aren’t paid. Further output decline in the OPEC nation,
combined with disruptions in fellow members Nigeria and Libya, could leave the oil market short of
supply next year.
“The situation is becoming more and more difficult for oil services in Venezuela,” Baptiste Lebacq,
an analyst at Natixis SA in Paris, said by phone. As long as oil prices are at current levels, it’ll be
“very difficult” for PDVSA to pay the contractors, he said.
Unpaid Debts
Schlumberger Ltd., the world’s largest oil-services company by market value, was owed $1.2
billion by PDVSA as of March 31, according to an April 27 filing. Halliburton Co. said last
month the amount it was owed rose 7.4 percent in the first quarter to $756 million.
The number of rigs drilling for oil in Venezuela fell by 10 to 59 in May, the lowest level in more
than a year, according to Baker Hughes Inc.

Schlumberger has reduced activity in line with the drop in payments, the company’s president,
Patrick Schorn, told investors last week at the Wells Fargo West Coast Energy Conference. It still
works in the country and could boost operations if “new payments models” are implemented, he
said.
Italy’s Saipem SpA declined to comment on its operations in Venezuela. The company referred
back to comments from Chief Executive Officer Stefano Cao, who said in April that it had idled all
but 3 of 28 rigs in the country.
Halliburton declined to comment.
Minister’s Response
While Oil Minister Eulogio Del Pino declined to say whether PDVSA has delayed payments to
contractors, he said the companies would remain in Venezuela.
“They have been operating in the country for more than 100 years,” Del Pino said. “They are not
going to leave.”
Venezuela is preparing to take over some of the functions of the oil-services providers with
the creation of Camimpeg, a new state enterprise under the control of the military. This is unlikely
to solve the problem, according to consulting firms Energy Aspects Ltd. and FGE.
“You’ll get more natural declines at a steeper rate” because these local providers don’t have the
experience needed to maintain production levels at the country’s aging wells, said FGE analyst
Thomas Olney.
Declining Production
Supply reductions in Venezuela, combined with a political stalemate in Libya and militant attacks
on oil infrastructure in Nigeria, helped curb an oversupply in the oil market this year. The surplus
could turn into a shortfall in 2017 if the Organization of Petroleum Exporting Countries can’t pump
an extra 650,000 barrels a day, according to Bloomberg calculations based on IEA data.
Venezuela faces further hurdles with the finances of its state-run oil company. While PDVSA has
continued paying back the debt it owes to bondholders, almost $4 billion is due in the fourth
quarter and the company will probably default, Moody’s Investors Service said in a report this
month.
An oil price of about $50 a barrel is enough for PDVSA to avoid default, said Del Pino, who is also
the state oil company’s president. “We have been paying all of our debts” during “the longest cycle
of low prices that we have had,” he said.
West Texas Intermediate crude, the U.S. benchmark, traded at $47.43 a barrel on the New York
Mercantile Exchange at 1:04 p.m. Tuesday. The average price of all crudes handled by PDVSA
was $40.16 on June 24, according to government data.
In the worst case scenario, the nation’s output could fall as low as 1.7 million barrels a day by
year-end, Barclays said. That would be the lowest since a strike halted much of the nation’s oil
output in 2003, according to data compiled by Bloomberg.
“Further supply weakness from Venezuela cannot be ruled out,” Barclays said in a note.

NewBase 29 June 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices rise on Norway strike threat; Brexit shock fades
Reuters + NewBase
Oil rose early on Wednesday as financial traders poured money back into commodities following
the initial shock of Britain's vote to leave the European Union, and as a potential strike in Norway
and crisis in Venezuela threatened to cut supply.
International Brent crude futures were trading at $48.76 per barrel at 0019 GMT, up 18 cents from
their last settlement. U.S. West Texas Intermediate (WTI) crude was up 30 cents at $48.15 a
barrel.
Both crude oil benchmarks had climbed on Tuesday after financial markets shook off some of the
shock of last week's referendum in Britain in which most voters elected to exit the EU, triggering
turmoil across markets and regions.
"The risk-on tone should see commodities continue to push higher," ANZ Bank said on
Wednesday.
"Oil led the (commodities) sector as the shock of the UK voting to leave the EU wore off. Oil gains
were solidified by news that the decline in Venezuela's oil output appears to be accelerating, while
a strike in Norway also looked like it would impact production," it added.
Prices were also supported by supply fundamentals, as a looming strike by Norwegian oil and gas
field workers threatened to cut output from the biggest North Sea producer.
Oil price special
coverage

Reports that oil producers and refiners in crisis-struck Venezuela were struggling to keep output
up due to power outages and equipment shortages also supported prices, traders said.
Additionally, the American Petroleum Institute (API) indicated in a preliminary report on Tuesday
that crude inventories could have fallen nearly 4 million barrels for the week to June 24, some two-
thirds more than the 2.4 million barrels expected by analysts. The U.S. Energy Information
Administration will issue official stockpile data on Wednesday.
OPEC Says Its Oil Revenue Plunges $438 Billion to 10-Year Low
Bloomberg
OPEC said its oil revenue plunged by $438 billion to a 10-year low last year, as an increase in
export volumes failed to compensate for the collapse in prices.
The Organization of Petroleum Exporting Countries earned $518.2 billion in 2015 from the sale of
crude and refined fuels, the lowest figure since 2005, the group’s Vienna-based secretariat said in
its Annual Statistical Bulletin. It boosted exports by 1.7 percent to 23.6 million barrels a day,
maintaining its share of global markets, as Iraq increased output and Saudi Arabia pressed on
with a policy to squeeze rivals.
Oil futures tumbled by 35 percent last year as U.S. crude production held up despite the Saudi-led
strategy to pressure OPEC’s competitors with lower prices. Crude has since recovered, rising
almost 90 percent in London from the lows reached in January, as U.S. output retreats and
disruptions from Canada to Nigeria help whittle away a global surplus.
The organization’s exports increased by an average of 400,000 barrels a day in 2015, raising its share of
global production for the first time in four years, by 0.2 percentage points to 43 percent. Still, that wasn’t
enough to compensate for the price rout. As a result of the lost revenue, OPEC nations recorded their first
current account deficit since 1998, at $99.6 billion, compared with a surplus in 2014 of $238.1 billion,
according to the report.
Exports from Saudi Arabia, which has steered the group’s policy often in defiance of poorer members like
Venezuela and Algeria, were steady last year at 7.163 million barrels a day. The kingdom’s production rose
by 4.9 percent to 10.193 million a day, according to the report. While drilling activity declined in OPEC
nations last year, with the number of rigs dropping by 60 to 887, the drop-off in other parts of the world was
far more severe, the report showed.

NewBase Special Coverage
News Agencies News Release 291 June 2016
Who Will Now Invest £100 Billion to Keep Britain's Lights On?
Bloomberg - Jessica Shankleman
As if managing the Brexit crisis weren’t enough, the U.K. government also needs to find 100 billion
pounds ($132 billion) to keep the lights on nationwide after 2020.
With more than a dozen power plants due to close in the next decade, Prime Minister David
Cameron’s government has been working to lay out incentives that will draw in money for new
electricity infrastructure. Finding that investment will be made more difficult by voters’ decision to
leave the European Union, said Fatih Birol, executive director of the International Energy Agency.
“Decision makers don’t like uncertainties, especially in the economic outlook,” Birol said in an
interview in London. “The U.K.’s electricity system is one of the oldest in the world. It’s aging very
quickly, and we need to bring in new capacity.”
There’s already evidence of investors rethinking British projects. Vattenfall AB, which is planning a
5.5 billion-pound wind farm off England’s east coast, said it’s reassessing the risk of working in the
U.K. PensionDanmark A/S, which also is funding energy projects in Britain, has said it would lose
interest in new deals if the U.K. voted to leave.

That’s unsettling for the government’s effort to attract the 100 billion pounds it says is needed for
energy infrastructure by the end of this decade. Already, the U.K. is facing the risk of price spikes
this winter after a number of plants finish their life in service, according to Deutsche Bank AG
analyst James Brand. As much as 7 gigawatts of closures were announced for 2016, equivalent to
11 percent of U.K. peak demand.
Winter Shortages
“We were already fearing severe problems of grid control in coming winters,” said Paul Younger a
professor of engineering at the University of Glasgow. “The challenges just got a whole lot worse.”
To date, the government has focused on stimulating offshore wind and new nuclear power plants
as part of a program to boost energy security, cut pollution and keep electricity affordable. The
board of Paris-based Electricite de France SA is considering whether to make a final investment
decision on new reactors at Hinkley Point in southwest England. Several large offshore wind
farms in the North Sea got financing last year.
The Department of Energy & Climate Change hasn’t detailed how the Brexit vote will reshape its
policies. Ministers are due to adopt a target this week on slashing carbon emissions by 2030. After
the vote, Energy Secretary Amber Rudd said in a posting on Twitter that the government is “still
committed to making sure consumers have secure, affordable and clean energy now and in the
future.”
Even so, uncertainty created by the Brexit decision may slow investment decisions in the energy
industry for two or three years, said Simon Currie, global head of energy at Norton Rose Fulbright
LLP.
Unsteady Policy
“It’s not like the U.K. can say, ‘We’re a steady state and we don’t need to build anything, we can
just keep going.’” Currie said. “That’s not where we sit. We need more investment. We can’t have
the entire industry pause for two years.”
The next government might renege on its deal with EDF over Hinkley because the project will
push up electricity bills, said Elchin Mammadov, an industry analyst at Bloomberg Intelligence.
The reactors would sell power for double the current market price -- and more than what wind
turbines or natural gas-fired plants cost.
Nuclear Question
“Hinkley Point is a big issue,” said Mammadov. “The current government has been pushing to get
the deal done. The next government may start asking questions about whether we need it. It’s
very expensive, and it’s an EU project.”
EDF Chief Executive Officer Jean-Bernard Levy said on Friday the utility is undeterred by
the referendum and is pressing ahead with its consideration.
A Vattenfall spokesman said Britain’s exit from the EU introduces more risk to the industry over a
period of time that can’t yet be measured. The company’s proposed offshore wind farm would
produce 1.8 gigawatts of electricity.

The aftermath of the vote “brings considerable uncertainty and market turmoil,” said Stephanie
Pfeifer, chief executive of the Institutional Investors Group on Climate Change, which represents
more than 120 pension, insurance funds and other institutional investors across Europe.
Not everyone is fazed by the vote. Energy UK, a trade association that represents more than 80
generators, said “people need not worry, the lights will stay on and power and gas will continue to
flow to homes and businesses.” Dong Energy A/S, the world’s biggest offshore wind developer,
also said it’s confident the U.K. will stick with offshore wind, in part because its long coastlines and
high-wind speeds are favorable for investment.
“U.K. energy policy is not dependent on EU membership,” Marianne Wiinholt, Dong Energy’s chief
financial officer, said by e-mail.
Even so, leaving the EU stands to tear up some of the structures that financed projects. The
status of the European Investment Bank, an EU development bank based in Luxembourg, is one
of the many details policy makers will have to work out. The institution loaned 42 billion euros ($46
billion) to the U.K. over the past eight years, including 7.7 billion euros in 2015. Almost half went
for projects that fight climate change.

“A significant portion of this was for offshore wind such as the Galloper wind farm and
transmission links,” EIB spokesman Richard Willis said by phone. “Our engagement in this sector
in U.K. waters would be under threat. There’s a significant potential for ramping down.”
Vestas Wind Systems A/S, one of the largest turbine manufacturers, also sees potential
uncertainty.
“It will be interesting to see how this develops,” Vestas Chairman Bert Nordberg said by phone. “It
could affect the wind industry. One could think that it could be a time for the government to pause
and see that it costs too much. On our strategy, it’s too early to say if it will have much of an
effect.”
C R E D I T : R E Z A / C O N T R I B U T O R

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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For additional free subscription emails please contact Hawk Energy
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
khdmohd@hawkenergy.net
khdmohd@hotmail.com
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 29 June 2016 K. Al Awadi

New base energy news issue 883 dated 29 june 2016

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New base energy news issue 883 dated 29 june 2016