New base 990 special 22 january 2017 energy news

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 22 January 2017 - Issue No. 990 Senior Editor Eng. Khaled Al Awadi

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

UAE:Enoc appoint Sheikh Hamdan at the top of Dragon Oil The national - Anthony McAuley

Emirates National Oil Company has revamped the board of its upstream subsidiary, Dragon Oil, as it prepares for expansion.

The Dubai government-owned Enoc said that Sheikh Hamdan bin Rashid, Deputy Ruler of Dubai, Minister of Finance and chairman of Enoc Group, will be Dragon Oil’s new chairman.

The announcement follows last week’s move to install Saif Al Falasi, Enoc group chief executive, as chief executive of Dragon Oil, taking over from long-serving Abdul Al Khalifa, a former Saudi Aramco executive.

Yesterday’s statement said Mr Al Falasi would continue as chief executive of Dragon Oil "at this stage" but a spokesperson could not confirm if it had begun a search yet for a long-term replacement for Mr Al Khalifa.

The changes to the board come as Enoc prepares Dragon Oil for a long-planned phase of growth following its late-2015 buyout of minority shareholders in the company.

Enoc has made it clear that it wants to use Dragon Oil as the prime upstream expansion platform for the company – and for Dubai – as it seeks to complement its refining and marketing assets to create a fully integrated oil concern to enhance the emirate’s energy security.




"Over the last 15 months, Enoc Group has conducted due diligence for the integration of Dragon Oil into its fold and is now set to embark on a new era of growth," Enoc said when announcing the board changes.

"The new board will provide critical leadership and direction to Dragon Oil as it seeks more upstream opportunities while building on existing contracts."

Dragon Oil’s main asset is the Cheleken offshore oil and gasfields in Turkmenistan, where it is sole operator under a production-sharing agreement with the government. It has invested more than US$5 billion over the past decade and a half to reach production levels of about 100,000 barrels per day (bpd) by the end of 2015.

The company also has interests in exploration assets in Iraq, Algeria, Tunisia, Afghanistan and Egypt.

Meanwhile, Enoc is expanding capacity at its Jebel Ali refinery by 50 per cent to 210,000 barrels per day. It is also increasing its retail chain by about 50 per cent to take it to near 200 outlets, while expanding into Saudi Arabia.

The other board members named yesterday are: as vice chairman, Saeed Al Tayer, the chief executive of Dubai Electricity and Water Authority; Abdulrahman Al Saleh, the Dubai government’s director-general of finance; Hussain Al Sayegh, the deputy chairman, Oilfields Supply Centre; Abdul Rahman Al Awar, the director general, Federal Authority for Government Human Resources; Ahmad Sharaf, the chief executive of Dutco Energy and chairman of the Dubai Mercantile Exchange; and Ahmad Al Muhairbi, the secretary general of the Dubai Supreme Council of Energy.




UAE President sets up Mubadala Investment Company & Board (WAM)

In his capacity as the Ruler of Abu Dhabi, President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued a law establishing Mubadala Investment Company.

As a public joint stock company, the new company will be an independent legal entity and enjoy financial and administrative independence and full legal capacity to exercise its activities and achieve its goals.

Stakes of the Government of Abu Dhabi in the Mubadala Development Company and International Petroleum Investment Company, IPIC, will be transferred to the new company so that each of the two companies will be wholly owned by the new company.

According to the law, the company will run operations in acquisition, development, construction, financing, operation and investment in various sectors.

The law also provided for some amendments to the law that had established IPIC, including the company's objectives, legal form, capital, management and its statute.

The law also included some amendments to the Emiri Decree regarding the establishment of the Mubadala Development Company, including the company's objectives, the legal form, capital, management and its statute.

Mubadala Investment Company's board members

The Ruler of Abu Dhabi, President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued an Emiri Decree forming the Board of Directors of Mubadala Investment Company under the chairmanship of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.

The decree stated that H.H. Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, will be Vice Chairman.

Members of the board include Mohammed Ahmed Al Bowardi, Suhail Mohammed Al Mazrouei, Khaldoon Khalifa Al Mubarak as managing director, Hamad Al Hurr Al Suwaidi, Abdul Hamid Mohammed Saeed and Mahmood Ebraheem Al Mahmood.




UAE: Toyota says to explore hydrogen fuel potential in the UAE Japanese car maket to collaborate with Masdar, ADNOC on joint research program from May

Global car giant Toyota has agreed to collaborate with UAE-based companies in a joint research program to explore the potential of hydrogen energy use in the Gulf country for the creation of a sustainable, low-carbon society.

As part of the program, Toyota will begin driving and refueling demonstration tests of the Mirai fuel cell vehicle (FCV) in the UAE from May, it said in a statement. Toyota said it will work with Masdar, Abu Dhabi National Oil Company (ADNOC), Air Liquide, and Toyota distributor Al-Futtaim Motors on the fuel project.

The program partners will jointly research on key issues involving the establishment of a hydrogen-based society, including hydrogen production, logistics, scalability, and business feasibility.

The research is expected to take place in part at Masdar Institute, an Abu Dhabi-based independent graduate research university, which has been part of the discussions on the scope of hydrogen research.

Using a hydrogen station that is to be built in May, Toyota will conduct a complete range of driving and refueling tests under extreme heat, dust, and other conditions unique to the local environment.

Toyota said it will also provide short-term leases to the UAE government institutions and opinion leaders so as to promote better understanding of FCVs and hydrogen-based societies.

“The UAE has vast potential for the expansion of hydrogen production. The country has excess capacity at hydrogen production facilities located at oil refineries, and the ability to produce




hydrogen as a byproduct at caustic soda and other factories, not to mention the production potential from mega solar power stations,” said Takeshi Uchiyamada, chairman of the Toyota Motor Corporation.

“As the government continues to promote new initiatives and pursues the creation of a hydrogen-based society, the UAE is able to emerge as the world leader of next-generation clean energies,” Uchiyamada added.

As a major oil-producing nation, the UAE has been dependent on oil as its primary industry. The government is currently promoting a new national agenda called the UAE Vision 2021, which prioritises air quality improvement, expansion of the use of clean energies, and to make the nation a world leader in infrastructure quality.

Mohamed Jameel Al Ramahi, CEO of Masdar, said: “Masdar is thrilled to be part of this exciting and important initiative with Toyota, ADNOC, Air Liquide, Masdar Institute and Al-Futtaim Motors, which aims to unlock the enormous potential of hydrogen energy use in the UAE. Hydrogen can make an important contribution towards the UAE's target for a 50 percent low carbon energy mix by 2050.




Dubai's DEWA invites bids for phase 4 of giant solar park Fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park will be operational by April 2021, says DEWA chief

Dubai Electricity and Water Authority (DEWA) has invited bidders for a 200MW solar power Plant, the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park.

The Mohammed bin Rashid Al Maktoum Solar Park is the largest single-site strategic solar energy project of its kind in the world, based on the independent power produer (IPP) model.

The 13MW first phase became operational in 2013. The 200MW second phase will be operational by 2017 while earlier this week, it was announced that the construction of the 800MW phase 3 will start at the end of this month following the award of the engineering, procurement and construction (EPC) contract for the project.

The total capacity of the Mohammed bin Rashid Al Maktoum Solar Park will reach 1,000MW by 2020, and 5,000MW by 2030, with total investments of

AED50 billion, a statement said.

The fourth phase will be operational by April 2021 and is "another milestone achievement that will put Dubai and the UAE at the forefront in the region in producing renewable and clean energy", said Saeed Mohammed Al Tayer, managing director and CEO of DEWA.

The fourth phase of the solar park is part of the Dubai Clean Energy Strategy 2050, which aims to diversify the energy mix so clean energy will generate 7 percent of Dubai’s total power output by 2020, 25 percent by 2030 and 75 percent by 2050.




Morocco: Sound Energy announces proposed acquisition of OGIF's interests in Eastern Morocco Source: Sound Energy

Sound Energy, the African and European focused upstream gas company, has announced the signature, following the successful extended well test, of non-binding heads of agreement for the acquisition of all of Oil & Gas Investment Fund's ('OGIF's') assets in Eastern Morocco.

Highlights:

• The Company to purchase a further 20% interest in Tendrara, a 75% interest in Meridja and an application for a 75% position in the relinquished area close to Tendrara

• The consideration for the acquisition will be 272 million new ordinary shares in the Company, subject to shareholder approval

• OGIF introduced as a second cornerstone investor with future Non-Executive Board representation, thereby further institutionalising Sound Energy

OGIF is a Moroccan fund, owned by seven large Moroccan financial institutions: Attijariwafa Bank Group (the largest Moroccan bank), CIMR and CDG Group (the largest Moroccan Pension Funds), Finance Com and Advisory and Finance Group (Investment Companies), Mamda-Mcma and Saham (Insurance Companies).

OGIF's Eastern Moroccan assets consist of a 20% interest in Tendrara, a 75% interest in Meridja (including a 55% interest in Meridja over which Sound Energy has previously exercised an option, conditional on regulatory approval) and an application for a 75% position in the relinquished area close to Tendrara.

The consideration for the acquisition of the OGIF Interests will be 272 million new ordinary shares in the Company. The Consideration Shares will, on issue, represent 29.0% of the Company's enlarged issued share capital (24.5% of the Company's fully diluted share capital).

As part of the transaction, OGIF will agree to a 12 month lock-in in relation to the Consideration Shares, a 36 month restriction on exceeding 29.9% ownership of the Company and will enter into a relationship agreement with the Company.

OGIF will be granted the right to appoint one Non-Executive Director, expected to be a senior OGIF executive, to the Board of the Company for so long as OGIF continues to hold more than 10% of the Company's issued ordinary share capital.




Further to the expression of interest from OGIF to fund, build and operate a new pipeline connecting Tendrara to the Gazoduc Maghreb Europe (GME) pipeline announced on 7 July 2016, OGIF and Sound Energy have also agreed, as part of this transaction, to together identify and secure a low cost and high quality solution for the Tendrara infrastructure, which may include using OGIF's shareholders to fund the pipeline.

Following this transaction Sound Energy will hold 75% of Tendrara and 75% of Meridja on a gross basis - representing 47.5% of Tendrara on a net basis (after the Schlumberger synthetic farm in announced in December 2015) and 75% of Meridja on a net basis. The remaining 25% interests in Tendrara and Meridja are held by Morocco's Office National des Hydrocarbures et des Mines ('ONHYM').

The Proposed Acquisition will, subject to contract and Sound Energy shareholder approval, render it unnecessary to finalise the completion of the Company's previously exercised option to acquire a 55% operated interest in Meridja.

A circular containing details of the Proposed Acquisition and a notice convening a General Meeting for the purposes of seeking shareholder approval for the issue of the Consideration Shares, will be posted to shareholders in due course, following the finalisation of contracts.

James Parsons, Sound Energy's Chief Executive Officer commented:

'This transaction positions Sound Energy with:

• a hugely attractive, material and consolidated portfolio across Eastern Morocco

• significant additional upside prior to the drilling of TE-8, our first step-out well at Tendrara, which is due to spud next month

• a second supportive cornerstone investor group made up of Morocco's largest institutions which secures us a hugely advantaged position in Morocco

We are pleased to have entered into heads of agreement with OGIF following the successful extended well test and I look forward to welcoming them to our shareholder register. I have worked closely with the OGIF team for over 18 months now and their access to Moroccan debt capital and their relationship and influence in country are second to none.'

Mohammed Benslimane, Chief Executive Officer of OGIF's management company commented:

'Morocco is a fast growing and low risk emerging country with significant hydrocarbon potential. Sound Energy has already played a critical role in unlocking the Eastern Moroccan gas promise over the last eighteen months and we remain hugely impressed by James and his team. This new partnership aligns the interests of OGIF and Morocco's largest financial institutions with those of Sound Energy. We see huge short term upside potential in the equity of Sound Energy and look forward to what will certainly be a successful future together.'




Saudi Oil Shipments Soared Ahead of OPEC Production Cut Bloomberg - Alaric Nightingale

Saudi Arabia’s crude exports surged to a 13 1/2-year high in November, just before it led global producers in restricting supplies to curb the worst glut in decades.

The world’s biggest exporter shipped 8.26 million barrels a day, according to data published Thursday on the website of the Joint Organisations Data Initiative in Riyadh. That was the biggest outflow for any month since May 2003.

OPEC decided at the end of November to restrict supplies by 1.2 million barrels a day starting this month, with Saudi Arabia instrumental in the plan. Despite the extra barrels exported, Brent crude oil prices did rise that month, mostly because of the announcement of supply restrictions. Non-member producers, including Russia, pledged additional curbs.

The initial signs are that producers are honoring their commitments to cut output this year. Saudi Arabia’s Energy Minister Khalid Al-Falih said at the World Economic Forum in Davos, Switzerland, Thursday that there’s been “very strong” compliance with the plan. The producers’ pledges are to restrict what’s pumped out of the ground, rather than what’s loaded on tankers.

Saudi Arabia’s oil production edged up to 10.72 million barrels a day in November, from 10.62 million in October, the JODI data show. The output data tracked exactly what the country told the Organization of Petroleum Exporting Countries, according to a monthly report the producer group published on Wednesday.

Story on how Saudi Arabia is increasingly using gas at home

One reason for the increase in cargoes could have been a surge in natural gas usage rather than crude domestically. The nation’s Wasit gas plant has had an “immense impact” since coming online last March, leading to the substitution of gas for oil in power generation, OPEC said in its report. That potentially frees up more oil for export markets.




Russia has cut oil output by 100,000 bpd: ministry Reuters + Bloomberg + NewBase

Russian Energy Minister Alexander Novak has stated "We have reduced (production) by an average of 100,000 barrels per day (bdp)," Russian Energy Minister Alexander Novak said.

Russia has cut its oil production by some 100,000 barrels a day, Energy Minister Alexander Novak said Saturday ahead of a key meeting in Vienna.

Under a landmark deal in November last year, the Opec oil cartel agreed to reduce production in order to boost prices.

Non-Opec-countries -- notably Russia, but not the United States -- followed suit and agreed in December to make cuts.

Both deals boosted oil prices by around 20 percent to above $50 per barrel, but gains have been capped by unease about implementation and rising US shale production thanks to the higher prices.

A committee to monitor compliance with the deals is scheduled to meet in Vienna later Saturday.

Russia has previously pledged to cut its daily production by 300,000 barrels in the first half of 2017.

"We have reduced (production) by an average of 100,000 barrels per day (bdp)," Novak said, in remarks carried by RIA Novosti news agency.

Russian oil companies are working "ahead of schedule" to make the agreed cuts, said Novak, who is set to attend the compliance committee meeting.




He will also meet Saudi Energy Minister Khaled al-Falih, a government spokesman said, according to Ria Novosti. "We are doing all we can to participate in the implementation of the agreement" reached with the Organization of Petroleum Exporting Countries and non-cartel members, Novak added.

Opec, Russia meet in Vienna for first check on oil-cuts progress

Representatives of Opec and several other major oil producers arrived in Vienna on Friday for their first meeting to monitor compliance with an agreement to cut output.

Ministers from Saudi Arabia, Kuwait, Algeria and Venezuela will meet counterparts from non-Opec nations Russia and Oman to figure out ways to verify that the 24 signatories to the historic deal are following through on their pledge to remove a combined 1.8 million barrels a day of supply from the market for six months. They intend to prove the group is serious about finally eliminating a three-year crude oversupply and dispel scepticism stemming from previous unfulfilled promises.

International oil prices rose to an 18-month high of more than $58 a barrel after the Organisation of Petroleum Exporting Countries and several non-members agreed on December 10 to end two years of unfettered production and instead cut output. Crude has since slipped about 5 per cent from that peak as traders await proof that they will follow through on the deal.

Ministers will hold an informal dinner Saturday evening before gathering at Opec headquarters for the first official meeting of the monitoring committee Sunday morning, according to people familiar with the matter, who asked not to be identified because the agenda isn’t public.

With January not yet complete, the first meeting will focus mostly on how compliance will be assessed rather than producing any new data, said one person. The committee currently has no plans to use external agencies, such as consultants that track oil exports by monitoring tanker movements, to verify that countries are implementing the pledged supply curbs, said three people familiar with the matter.

As outlined in Opec’s initial agreement, monthly production data known as “secondary sources” compiled by analysts in the group’s secretariat will be the principal tool for judging whether members are complying with the deal, the people said. Those figures do not cover non-members such as Russia. The committee will hold monthly meetings, they said.

Opec’s production fell by 220,900 barrels a day to 33.085 million a day in December, led by declines in Saudi Arabia and Nigeria, according to secondary sources data in the group’s monthly report published January 18. The organisation agreed to reduce its output to 32.5 million barrels a day, although that total included about 740,000 barrels a day of output from former member Indonesia.

The first two weeks of January saw “very strong” compliance and the majority of producers are already exceeding their pledged cuts, Saudi Arabia’s Minister of Energy and Industry Khalid Al-Falih said at the World Economic Forum in Davos, Switzerland, on Thursday. About 1.5 million barrels a day of production has been withdrawn from the market so far, he told Al Arabiya television in an interview Friday.

Russia has pumped an average of 11.1 million barrels a day in January, a reduction of 108,000 barrels a day from official government figures for both November and December, initial Energy Ministry data compiled by Bloomberg show. The largest producer involved in the cuts agreement said it would make a reduction of 300,000 barrels a day by April or May.




Venezuela 2016 inflation hits 800%, GDP shrinks 19% Document Reuters

Venezuelan consumer prices rose 800 percent in 2016 while the economy contracted by 18.6 percent, according to preliminary central bank figures seen by Reuters, the sharpest contraction in 13 years and the worst inflation reading on record.

The extended slump in oil prices has turned the OPEC nation's once-prosperous oil-boom economy into a mirror of the latter day Soviet Union, with rampant product shortages leading leaving to skip meals and wait hours in food lines.

President Nicolas Maduro's government blames the situation on an "economic war" led by political adversaries with the help of the United States. As problems mounted, the central bank has stopped releasing quarterly and monthly economic indicators.

The oil sector, which provides nearly all of Venezuela's hard currency, in 2016 shrank 12.7 percent, according to an excerpt of a document containing the figures that was shown to Reuters. The non-oil sector shrank by 19.5 percent, according to the document.

The figures could be changed in the process of approval by the central bank's board of directors, according to a source with firsthand knowledge of the situation. In 2015, the economy contracted 5.7 percent while inflation reached 180.9 percent, the central bank said last year.

Maduro accuses opposition-linked businesses of artificially creating economic problems. He says inflation is the result of speculative price-gouging by unscrupulous capitalists, and insists workers are better off as a result of minimum wage increases in 2016 that totaled 454 percent.

"In a year we have raised minimum wage five times, and I say today that (those increases) are well above 2016 inflation," he said during a news conference this week, without offering an inflation figure.

The country's currency controls have left businesses unable to obtain dollars, meaning merchants struggle to stock shelves and factories sit idle for lack of raw materials or machine parts. Venezuelans last year began crossing into neighboring Brazil and Colombia to buy groceries.

Investor concern that Venezuela may not be able to continue servicing its foreign debt has made its bonds among the highest-yielding emerging market securities, paying investors on average 21 percentage points more than similar U.S. Treasury notes.

Maduro dismisses rumors that the country or state oil company PDVSA could default, noting that the ruling Socialist Party has never missed a bond payment.




US: Power sector carbon dioxide emissions fall below transportation sector emissions U.S. Energy Information Administration, Monthly Energy Review

U.S. carbon dioxide (CO2) emissions from the transportation sector reached 1,893 million metric tons (MMmt) from October 2015 through September 2016, exceeding electric power sector CO2 emissions of 1,803 MMmt over the same time period.

On a 12-month rolling total basis, electric power sector CO2 emissions are now regularly below transportation sector CO2 emissions for the first time since the late 1970s. CO2 emissions from electric power have been trending lower since 2007.

Comparing emissions over a 12-month period reduces the effects of seasonal fluctuations. Both sectors tend to have higher consumption and emissions in the summer months when electricity demand and vehicle travel are relatively high. Emissions levels through September 2016 represent the latest available data in EIA’s Monthly Energy Review.

The electric power sector makes up a larger share of total U.S. energy consumption than the transportation sector. However, CO2 emissions from the electric power sector are now lower than those from transportation because the carbon intensity of the power sector has fallen much faster than the carbon intensity of the transportation sector.




Source: U.S. Energy Information Administration, Monthly Energy Review

Emissions from the electric power sector are primarily from coal-fired and natural gas-fired electric generators. On average, emissions associated with combusting coal are higher than those associated with combusting natural gas.

The average rate of CO2 emitted from combusting coal ranges from 206 to 229 pounds per million British thermal units (lbs CO2/MMBtu), depending on the type of coal consumed. The combustion of natural gas emits on average 117 lbs CO2/MMBtu. Natural gas electric generators also tend to be more efficient than coal generators, because they require less fuel to generate electricity.

In the 12 months from October 2015 through September 2016, coal and natural gas had nearly equal shares of electric power generation in the United States: 31% and 34%, respectively.

However, their shares of electric power sector emissions were 61% and 31%, respectively, as coal is much more carbon-intensive. Overall electric power carbon intensity has also decreased as generation share of non-carbon-emitting fuels such as nuclear, hydropower, wind, and solar has grown.

Emissions from the transportation sector are primarily from motor gasoline, distillate fuel oil, and jet fuel, which have carbon intensities lower than coal but higher than natural gas. For example, gasoline emits an average of 157 lbs of CO2/MMBtu.

In the 12 months from October 2015 through September 2016, motor gasoline represented 60% of the total emissions from the transportation sector, while 23% was from distillate fuel oil and 12% was from jet fuel.




Very little electricity is used in the transportation sector. Attributing transportation’s share of electric power sector emissions to the transportation sector would only add 4 MMmt CO2 to the transportation sector’s total of 1,893 from October 2015 through September 2016.




NewBase 22 January 2017 Khaled Al Awadi

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

Oil settles up 2% ahead of producers' compliance meeting, Reuters + CNBC

Oil prices rose about 2 percent on Friday on expectations that a weekend meeting of the world's top oil producers would demonstrate compliance to a global output cut deal.

A weekend meeting in Vienna of members of the Organization of the Petroleum Exporting Countries and some producers outside of the group, including Russia, will establish a compliance mechanism to verify producers are sticking to a deal to reduce output by 1.8 million barrels per day (bpd), OPEC's secretary general told Reuters.

Saudi Arabia's energy minister said that 1.5 million bpd had already been taken out of the market, adding to signs that the oil market is rebalancing.

"The petroleum markets are moving higher in Friday trade on the latest round of positive talk about how much supply oil producers have taken offline ahead of Sunday's review by OPEC and non-OPEC representatives in Vienna," Tim Evans, Citi Futures' energy futures specialist, said in a note.

Oil price special

coverage

On average, oil to trade at $54: CNBC survey on 18 Jan 2017




U.S. West Texas Intermediate (WTI) crude oil futures settled up $1.05, 2 percent, at $52.42 a barrel. International benchmark Brent crude prices were up $1.34, or 2.5 percent, at $55.50 a barrel by 2:33 p.m. ET (1933 GMT).

Natural gas ended trading down nearly 5 percent on forecasts for warmer winter weather.

Oil prices briefly pared gains after oilfield services firm Baker Hughes reported its weekly count of oil rigs operating in the United States increased by 29 to 551, compared with 522 at this time last year.

That marked the largest weekly increase since a recovery in the rig count began in June, and the 11th week in 12 that drillers added rigs. Swelling oil stockpiles in the U.S. and rising shale production could threaten market rebalancing, analysts said.

"For a lasting balance to be restored on the oil market and the very high stocks reduced, the agreement will need to be strictly implemented over a considerable period of time," Commerzbank said in a note. "This is particularly true given that U.S. oil production is rising again and given that the oil supply from Libya and Nigeria may be expanded."

U.S. crude inventories rose unexpectedly last week as refineries sharply slowed production, while gasoline stocks soared amid weak demand, the Energy Information Administration said on Thursday.

Crude inventories soared 2.3 million barrels in the week to Jan. 13, while gasoline builds were much larger than expected, especially on the U.S. East Coast where stocks swelled to the highest level on record for this time of year.

The market was also eyeing U.S. drilling rig count data due after 1 p.m. as increased exploration and more efficient wells were boosting oil production. Libya's National Oil Corporation (NOC) said production had now climbed to 722,000 bpd, resuming its rise after poor weather had caused a small dip.

Bjarne Schieldrop, chief commodities analyst at SEB Markets, said Brent crude was starting to move into a trading range centered around $55 a barrel as the production cut deal had placed a floor price of $50 a barrel, while U.S. shale oil producers were capping the upside at $60 a barrel.

"As a new consensus is starting to form, the fog around the oil market balance is starting to clear and the oil price is likely going to start to stabilize," he said.




US Oil imports could break from OPEC Echoes Old Refrain by Bailey Lipschultz and Mark Shenk

U.S. President Donald Trump’s pledge to make America independent from OPEC isn’t a new refrain in Washington. His “America First Energy Plan” posted on the White House website Friday doesn’t just echo his own campaign pledges but also President George W. Bush’s vow to cut imports from the Middle East when he famously said the nation was “addicted to oil.” Shipments from OPEC rose 10 percent during Bush’s time in office. It’s not an easy task. It would mean replacing about 3 million barrels a day of imports. That’s about three times as much as East Coast refineries consume.

Saudi Arabia and Venezuela lead the pack of OPEC suppliers to the U.S. They account for more than half of U.S. imports from the 13-nation group. Bush said he would put the country on course to reduce oil imports from the Middle East by more than 75 percent by 2025. His bold statement evoked a reaction from leaders of the Organization of Petroleum Exporting Countries.

“We do believe that energy issues cannot be handled in a unilateral way,” said Edmund Daukoru, then-Nigerian minister of energy and secretary general of OPEC. “We all have to work together towards global energy security.” President Trump’s goal may not be completely unobtainable as U.S. oil production has been on the rise and signs point toward possible energy independence. To achieve that, though, the country may need to reconsider a push for




exports that was supported by Republicans. Since scrapping restriction on sales to countries other than Canada at the end of 2015, U.S. crude exports have risen to more than 700,000 barrels a day.

"He will take steps to increase energy output," Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. "Regardless of what he does, we are getting closer to energy independence."




Saudi Oil Shipments Soared Ahead of OPEC Production Cut by Alaric Nightingale

Saudi Arabia’s crude exports surged to a 13 1/2-year high in November, just before it led global producers in restricting supplies to curb the worst glut in decades.

The world’s biggest exporter shipped 8.26 million barrels a day, according to data published Thursday on the website of the Joint Organisations Data Initiative in Riyadh. That was the biggest outflow for any month since May 2003.

OPEC decided at the end of November to restrict supplies by 1.2 million barrels a day starting this month, with Saudi Arabia instrumental in the plan. Despite the extra barrels exported, Brent crude oil prices did rise that month, mostly because of the announcement of supply restrictions. Non-member producers, including Russia, pledged additional curbs.

The initial signs are that producers are honoring their commitments to cut output this year. Saudi Arabia’s Energy Minister Khalid Al-Falih said at the World Economic Forum in Davos, Switzerland, Thursday that there’s been “very strong” compliance with the plan. The producers’ pledges are to restrict what’s pumped out of the ground, rather than what’s loaded on tankers.

Saudi Arabia’s oil production edged up to 10.72 million barrels a day in November, from 10.62 million in October, the JODI data show. The output data tracked exactly what the country told the Organization of Petroleum Exporting Countries, according to a monthly report the producer group published on Wednesday.




NewBase Special Coverage

News Agencies News Release 22 Jan. 2017

Big Oil back on the acquisition trail as outlook brightens Reuters

The world’s top oil companies are back in acquisition mode, targeting smaller exploration and development firms to boost oil and gas reserves rather than the mega-mergers that followed previous slumps in crude prices.

Since late November, major oil companies have announced 11 deals worth more than $500 million (Dh1.84 billion) each with a combined value of $31 billion, the clearest sign yet that oil executives are more confident a recovery is underway.

When crude prices collapsed in the second half of 2014, large oil firms slashed spending on exploration and production and offloaded assets to reduce debt so they could cope with lower revenue from oil and gas sales.

But with crude reservoirs declining at a rate of 10 per cent a year in some cases, major oil companies are now looking to snap up assets to start growing again and there are plenty of smaller firms burdened with debt looking to sell.

“You’re seeing the majors sharpening their pencils after a long while and actually flipping around from disposals to acquisitions,” said Tony Durrant, chief executive of British energy firm Premier Oil, which is looking to sell several stakes in its North Sea operations.

Total acquisitions of oil and gasfields, known as upstream assets, tripled to $31 billion in December from a month earlier, when the Organisation of the Petroleum Exporting Countries agreed to cut output for the first time in eight years, according to data from consultancy Energy Market Square.

Deals in the last month of 2016 alone accounted for nearly a quarter of total activity during the year.

BP announced a string of investments in the last two months of 2016, including a $1 billion partnership with Dallas-based Kosmos Energy in Mauritania and Senegal in West Africa, as well as acquisitions in Abu Dhabi and Azerbaijan.




The British company also spent $375 million on a 10 per cent stake in Eni’s giant Zohr gasfield in Egypt while Russian oil giant Rosneft bought 30 per cent stake of the same field for $1.575 billion.

France’s Total and Norway’s Statoil bought into Brazil’s lucrative sub-salt deepwater oilfields while ExxonMobil Corp bought assets in Papua New Guinea to meet growing Asian demand for liquefied natural gas.

The trend continued in January with Total boosting its stake in Uganda’s Lake Albert oil project by snapping up most of Tullow Oil’s stake for $900 million.

ExxonMobile and Noble Energy also struck deals worth nearly $10 billion combined for a larger slice of the Permian Basin, the largest US oilfield.

While deal-making outside the United States almost ground to a halt at the start of 2016, acquisitions in North American shale basins have continued at a steady pace.

In the Permian Basin, for example, the time it takes to produce oil and gas after an initial investment is far quicker and cheaper than developing conventional fields over three to five years.

More deals are likely this year as the large overhang of crude oil in the world that has weighed on the market since 2014 continues to clear and oil prices rise.




“When you can cut capex (capital spending), two-and-a-half to three years later you see production decline and reserves depleting and you have one choice only and that is going after high quality resource,” said Sachin Oza, co-manager with Stephen Williams of the Guinness Global Oil and Gas Exploration Trust.

“If you’ve not spent any time filling your hopper with these opportunities that take five years to build up, there is only one choice: you have to buy them,” said Oza.

The Guinness Trust is a fund that invests in firms in the early stages of exploration or development of energy resources which it believes will attract investment from oil majors.

Investors reckon large firms will focus on underdeveloped basins in east and West Africa, Romania and Albania, as well as nascent Latin American reserves in places such as Colombia, all areas where the growth potential is seen as greater than in established regions such as North America and the North Sea.

While slides in oil prices typically unleash a wave of takeovers, companies emerging from the current downturn are generally shunning outright acquisitions and instead looking at specific deals for specific fields.

After a prolonged period of low oil prices in the late 1990s Exxon merged with Mobil, Total merged with Elf Aquitaine and Petrofina, Chevron bought Texaco, BP snapped up Amoco and ARCO and Conoco and Philips merged.

This time round, the only standout acquisition has been Royal Dutch Shell’s takeover of BG, which was announced in April 2015 and completed in February a year later for $53 billion.

As large oil firms are wary of increasing their debt burden at this point, investors say corporate acquisitions are likely to be limited in numbers and scope but oilfield assets are very much in the crosshairs.




Oil majors are opting for joint ventures to develop specific fields in complex deals, such as share swaps or deferred payments, to lower their risk and limit the amount they need to spend upfront following two years of budget cuts.

“The international (ex-U. S.) asset market is a buyer’s market, as sellers continue in balance sheet preservation mode,” said Charles Whall, energy portfolio manager at Investec Asset Management.

“European majors, which already have large dividend commitments, are unwilling to use equity for assets without immediate cash flow ... Most of these asset deals are structured to minimise the debt impact in the near term,” he said.

Such deals also mean the sellers can retain a stake in the assets as their value rises with oil prices, said Oza and Williams at the Guinness Trust.

Analysts say for much of 2015 and 2016 there was subdued activity because buyers and sellers were too far apart on price.

Buyers hunting for bargain-basement deals were frustrated by sellers holding out for better terms but as oil prices have started to stabilise there has been more convergence.

According to Martijn Rats, equity analyst at Morgan Stanley, most of the deals announced in recent months have been based on a long-term oil price of about $60 a barrel to $65 a barrel.

While that is significantly lower than before the collapse in oil prices from a 2014 peak of $115 a barrel, it is still above current long-term oil price forecasts, Rats said.




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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.

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New base 990 special 22 january 2017 energy news