New base 01 march 2021 energy news issue 1411 by khaled al awadi 2021

Copyright © 2021 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 01 March 2021 - Issue No. 1411 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E:President appoints a new 11-member wider board of ADNOC
The National + NewBase
Sheikh Khalifa appoints new board of directors for Adnoc, Abu Dhabi Crown Prince Sheikh
Mohamed bin Zayed to chair the board of state-owned energy producer
UAE President Sheikh Khalifa, who also heads Abu Dhabi's Supreme Council for Financial and
Economic Affairs, appointed a new board of directors to govern the state-owned Abu Dhabi National
Oil Company.

The new board will be chaired by Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and
Deputy Supreme Commander of the Armed Forces, and will include the company's group chief
executive Dr Sultan Al Jaber, who has additionally been appointed managing director of Adnoc.
Dr Al Jaber, who is also the Minister for Industry and
Advanced Technology, is also part of an executive
committee of Adnoc's board which includes energy
minister Suhail Al Mazrouei, Mubadala Investment
Company chief executive Khaldoon Al Mubarak, chairman
of Abu Dhabi's Department of Finance Jassem Al Zaabi
and Minister of State, Ahmed Al Sayegh.
The executive committee will be chaired by Sheikh Khaled
bin Mohamed bin Zayed, who is a member of the Abu
Dhabi Executive Council and the chairman of the Abu
Dhabi Executive Office.
Adnoc's new board of directors includes Sheikh Hazza bin Zayed, Sheikh Mansour bin Zayed,
Sheikh Khaled bin Mohamed bin Zayed, Dr Al Jaber, Khaldoon Al Mubarak, Ahmed Mubarak Al
Mazrouei, Jassem Mohammed Al Zaabi, Suhail Al Mazrouei, Ahmed Ali Al Sayegh and Awaidha
Murshed Al Marar.
The new board of directors takes over from the Supreme Petroleum Council (SPC), which previously
governed Adnoc. The council formerly known as the SPC ratifies Adnoc's annual five-year spending
plan, discoveries of new resources and allocation of concessions to international energy companies.
The SPC was replaced in December by the Supreme Council for Financial and Economic Affairs,
with Sheikh Khalifa as the chairman and Sheikh Mohamed bin Zayed as its vice-chair. The
constitution of Adnoc's first board marks a significant milestone in the group's evolution from a
national oil firm to an integrated energy company with a growing international reach.
The new council was established to support Abu Dhabi's competitiveness and its economic and
financial sustainability.
It will set financial and economic policy and will oversee the approval of strategies for a number of state-
owned entities including Adnoc, Mubadala Investment Company, Abu Dhabi Investment Authority and
holding company ADQ. The council has the oversight over the Department of Finance but it will operate with
autonomy on a day-to-day basis.
The UAE, Opec's third-largest producer, accounts for nearly 4.2 per cent of global output of oil. Most of the
production comes from fields owned and operated by Adnoc in Abu Dhabi. The national oil company has
streamlined its operations under Dr Al Jaber, who was appointed to his existing position in 2016.
Under his leadership, Adnoc invited partnerships from international investors into its upstream concessions
and also opened up opportunities across its midstream and downstream assets to foreign capital. Last year,
the company forged a number of agreements with global asset managers across its value chain, attracting
$16.8 billion in foreign direct investment into the UAE. The Abu Dhabi firm also plans to spend $122bn over
the next five years, of which $43.5bn will be directed towards the local economy.
Adnoc pumps almost all the oil and gas in the United Arab Emirates, the third-biggest crude producer in
OPEC. Sultan Al Jaber, Adnoc’s chief executive officer, has been given the additional title of managing
director and will sit on both boards.
The decision comes after Abu Dhabi in December merged the Supreme Petroleum Council, which used to
set the government’s energy policy, with a new Supreme Council for Financial and Economic Affairs. Most
of the Adnoc board members were on the SPC.

Pacific Islands to enhanced renewables ambition under climate goals
Source: International Renewable Energy Agency (IRENA)
In a year of critical action on climate mitigation and adaptation, Pacific Island governments have
reinforced their commitment to energy transition action and strengthened sustainable energy goals
within updated nationally determined contributions (NDCs) ahead of COP26 in Glasgow, the United
Kingdom in November.
At a meeting of high-level policy and
intergovernmental representatives jointly
hosted by the International Renewable
Energy Agency (IRENA), the Regional
Pacific NDC Hub and the UK COP26
Presidency, ministers and government
representatives reiterated the need for
transformative pledges that significantly
reorient the world’s energy transition
pathway. Pacific nations aim to be at the
forefront of global efforts.
During the discussion, H.E Charles Obichang, Minister of Infrastructure, Palau, reaffirmed his
country’s commitment to a sustainable energy future:
'Palau is developing a new roadmap that will ultimately result in a 100 per cent fossil fuel free energy
system. The pursuit of energy security through renewable energy makes environmental, social and
economic sense for us, helping to fight climate change while creating opportunities for new
industries and new jobs. Renewables are an opportunity for us to thrive in a new era of fossil fuel
free energy production.'
Currently, 13 of the 14 Pacific Small Island Developing States (SIDS) have quantified renewable
energy targets in their NDCs, submitted under the first round of Paris Agreement climate pledges,
equating to nearly 2GW of renewables
capacity. All Pacific SIDS are engaged in a
process of NDC enhancement ahead of
COP26 under the coordination of the Regional
NDC Pacific Hub and with support of various
development partners. Fiji, Marshall Islands,
Papua New Guinea and Tonga have already
submitted enhanced contributions.
Angeline Heine, Director of Energy, Republic of
the Marshall Islands, noted that in order to meet
multiple national objectives, her country’s
strategy is organised around three pillars:
'As a front liner on climate change the Republic of the Marshall Islands is fully committed to meeting
its NDC objective of 100 per cent renewable energy by 2050. Our goal is ambitious, but our
electricity roadmap has identified three key priorities, which address the technology, human
resources, and investment components of the plan. We believe this ensures our transition is owned
and advanced by the Marshall Islands people.'
Countries are given the opportunity to submit enhanced NDCs by COP26 by revising and enhancing
mitigation and adaptation targets, finance goals, and developing concrete action plans for the
implementation, formulation, and communication of long-term emission reduction strategies in 2020.

Representing the UK government, H.E Ken O’Flaherty, COP26 Ambassador for Asia and the
Pacific, spoke of the opportunity for Pacific leadership both during, and in the lead up to, the climate
meeting later this year:
'The consequences of a warming planet will be catastrophic, particularly for citizens of the Pacific.
COP26 can be the moment when the world comes together to ramp up momentum towards a
climate resilient, zero-carbon economy and Pacific leadership can deliver the changes we need to
see in the world. Many Pacific states have already committed to net-zero targets in their revised
NDCs, which serve as inspiration for other countries to raise ambition.'
Francesco La Camera, Director General, IRENA, highlighted the global role Pacific Islands play in
decarbonisation:
'Pacific SIDS have become remarkable hubs of innovation on climate strategies, and a source of
inspiration for the rest of the world. Even as they are severely impacted by deadly natural disasters,
they continue to lead on climate action with steadfast resolve.
While many Pacific nations set ambitious targets in their first NDCs, there is no doubt regional
leadership shown in enhanced NDCs can inspire global efforts to drive meaningful action this year.'
Christian Gorg, Project Manager, Regional Pacific NDC Hub, said as the focus moves from ambition
to implementation of the Paris Agreement goals, countries will need well-structured programmes to
drive renewables development:
'Energy is a common mitigation strategy among regional countries, and while their carbon emissions
are insignificant their commitments are bold. The energy transformation can only be realised if
countries understand their policy context, recognise any potential legislative barriers to
development and are aware of the financing options available.'
A total of USD 5.2 billion of investment is needed by 2030 to implement what is currently targeted
under the region’s NDCs, according to IRENA data based on the first round of NDCs. IRENA is
working closely with several countries across the Pacific to enhance the renewable energy
component of new NDCs for submission ahead of COP26.

EU officials urge World Bank to exclude fossil-fuel investments
Reuters + NewBase
Senior officials from Europe have urged the World Bank’s management to expand its climate change
strategy to exclude investments in oil- and coal-related projects around the world, and gradually
phase out investment in natural gas projects, according to three sources familiar with the matter.
World Bank Group1 Finance to Fossil Fuels since the Paris Climate Agreement
In the six-page letter dated on Wednesday, World Bank executive directors representing major
European shareholder countries and Canada, welcomed moves by the Bank to ensure its lending
supports efforts to reduce carbon emissions.
But they urged the Bank — the biggest provider of climate finance to the developing world — to go
even further.
“We… think the bank should now go further and also exclude all coal- and oil-related investments,
and further outline a policy on gradually phasing out gas power generation to only invest in gas in
exceptional circumstances’’, the European officials wrote in the letter, excerpts of which were seen
by Reuters.

The officials took note of the World Bank’s $620 million investment in a multi-billion dollar liquified
natural gas project in Mozambique approved by the Bank’s board in January, but did not call for its
cancellation, one of the sources said.
The World Bank confirmed receipt of the letter but did not disclose all its contents. It noted that the
World Bank and its sister organisations had provided $83 billion for climate action over the past five
years.
“Many of the initiatives called for in the letter from our shareholders are already planned or in
discussion for our draft Climate Change Action Plan for 2021-2025, which management is working
to finalise in the coming month’’, the Bank said in an emailed statement. The Bank’s first climate
action plan began in fiscal year 2016.
The United States, the largest shareholder in the World Bank, this month rejoined the 2015 Paris
climate accord, and has vowed to move multilateral institutions and US public lending institutions
toward “climate-aligned investments and away from high-carbon investments.”
World Bank President David Malpass told finance officials from the Group of 20 economies on
Friday that the Bank would make record investments in climate change mitigation and adaptation
for a second consecutive year in 2021. “Inequality, poverty, and climate change will be the defining
issues of our age’’, Malpass told the officials.
‘‘It is time to think big and act big in finding solutions’’, He said it was also launching new reviews to
integrate climate into all its country diagnostics and strategies, a step initiated before the letter from
the European officials, said one of the sources.
World Bank Group Fossil Fuel Project Finance Since the Paris Climate Agreement1
:
By Bank Division2
(million US$)

India’s Biggest Oil Retailers Are Focusing on Rural Revival
Bloomberg
Villagers fill their tractor at a Hindustan Petroleum Corp. station in rural Uttar Pradesh. The
agricultural sector is the second-biggest consumer of diesel after transportation. Photographer:
Sanjit Das/Bloomberg
If there’s one part of India’s economy that’s been relatively unscathed by the devastating impact of
Covid-19 it’s the vast rural hinterlands. And the country’s biggest fuel retailers are sitting up and
taking notice.
Stay-at-home orders first imposed from March last year had a disproportionate impact on India’s
teeming cities, but in small towns and villages people mostly went about their business with fewer
restrictions. A bumper agricultural crop and a splurge in government spending to pull the economy
out of a slump is also expected to put more money into the hands of rural farmers and laborers.
The increasing economic importance of India’s hinterlands is influencing business expansion plans
and accelerating a trend of more service stations being opened in the countryside. Bharat Petroleum
Corp. and Hindustan Petroleum Corp. -- two of the three biggest fuel retailers -- both said they
planned to raise the proportion of outlets they have in rural areas this year.
Rural Push
Indian fuel retailers looking to countryside for growth
“While the first-level cities are getting saturated, demand is coming up in rural areas,” Hindustan
Petroleum Chairman Mukesh Kumar Surana said. The new outlets Hindustan is looking to open

would “have a reasonable component of second-rung cities and rural areas without any doubt,” he
said.
India is pinning its hopes on the agricultural sector to help the economy recover after its worst
recession since the 1950s. Rural India was a bright spot in local automaker Mahindra & Mahindra
Ltd.’s latest financial results amid strong demand for tractors and farm equipment. The rural sector
continues to outperform urban India, Ambuja Cements Ltd. Chief Executive Officer Neeraj Akhoury
said on a conference call with analysts last month.
A farmer uses a tractor to plough a flooded paddy field in Haryana in June 2020.
India’s economy pulled itself out of recession last quarter amid a steady drop in virus cases and as
agriculture continued to perform well. Gross domestic product rose 0.4% year-on-year in the final
three months of 2020, according to data released Friday, after contracting 7.3% in the previous
quarter.
HPC and BPC, together with Indian Oil Corp., account for more than 90% of Indian fuel sales. The
share of rural service stations in the world’s third-biggest oil importer rose to 26.8% in January from
24.8% a year earlier, oil ministry data show, and the rate of increase looks set to accelerate this
year.
Diesel is the most widely used petroleum product in India, accounting for around 40% of total fuel
use. The agricultural sector is the second-biggest consumer of diesel after transportation.
Bharat Petroleum, the second-biggest fuel retailer, opened 2,212 outlets in the past year, with two-
thirds of these in rural areas, the oil ministry data show.
“We weren’t having a presence in the rural segment the way our competition had and that impacted
us in Covid times,” said N. Vijayagopal, finance director at Bharat Petroleum. “So, we are now
targeting an expansion drive of retail in places where we are under-represented -- the rural side.”

From U.S. domination to energy transition, two years that changed oil
Reuters - By Jessica Resnick-Ault
Former U.S. Secretary of State Mike Pompeo took the stage at the world’s largest energy
conference in 2019 to declare an age of U.S. dominance after a decade of rapid shale development
made the United States the world’s top oil and gas producer.
Two years later, the oil industry is recovering from the worst recession it has ever experienced after
measures to contain coronavirus stopped billions of people from traveling and wiped out one-fifth of
worldwide demand for fuel. The U.S. fossil fuel industry is still reeling after tens of thousands of jobs
were lost.
The pandemic has also accelerated the energy transition, interrupting a steady rise in fuel
consumption that may have otherwise continued for several more years unabated. Oil demand may
never recover from that hit. This year, the CERAWeek conference in Houston is entirely virtual and
numerous panels are dedicated to the transition to the low-carbon economy of the future, hydrogen
technologies and climate change.
Microsoft Corp co-founder Bill Gates, U.S. climate envoy John Kerry, and speakers from Amazon
and renewable fuels giant Iberdrola are among the headline speakers.
“The tone is different: There’s one theme that permeates the entire conference and that is energy
transition,” said CERAWeek Founder Dan Yergin, vice chair of IHSMarkit.
Last year’s conference was one of the first major global events to be canceled as the pandemic
started to rage and quickly made it unfeasible to gather thousands of people from 85 countries at
the conference venues.
Since that time, many of the world’s major oil companies have set ambitious goals to shift new
investments to technologies that will reduce carbon emissions to slow global warming. U.K.-based
BP Plc has largely jettisoned its oil exploration team; U.S. auto giant General Motors Co announced
plans to stop making gasoline and diesel-powered vehicles in 15 years.
To be sure, the 2021 program includes oil leaders who typically appear at CERAWeek. They include
Mohammed Barkindo, secretary general of the Organization of the Petroleum Exporting Countries
(OPEC), and the chief executives of Exxon Mobil, Total, Chevron and Occidental Petroleum.

But they will participate in panels focusing on the energy transition. Barkindo will discuss what kind
of a recovery oil and gas will have as future demand is challenged.
BP’s Looney will join Andy Jassy, who is set to become Amazon.com Inc’s CEO later this year, on
a panel about reinventing energy. Occidental CEO Vicki Hollub and Ahmed Al Jaber, United Arab
Emirates minister of state, are slated to tackle cutting carbon emissions.
Oil companies have come under
increasing pressure from
shareholders, governments and
activists to show how they are
changing their businesses from fossil
fuels toward renewables, and to
accelerate that transition.
“This year’s program reflects the reality
of the transition toward a net zero
future,” said Julien Perez, vice
president of strategy and policy for the
Oil and Gas Climate Initiative, a
consortium of major oil companies.
Yergin said Gates will discuss the difficulty in reducing emissions to slow temperature rise around
the world. He is expected to focus on the technologies that are missing, but required, from the
energy transition.
“You’ll often go to conferences where people say, ‘Hey, let’s get companies to report their emissions
and somehow magically make the emissions go away, or we’ll just divest the stocks,’” Gates told
Reuters in an interview earlier this month.
The reality, Gates said, is
much tougher. Many
heavy industries that use
oil and gas are hard to
shift away from those
fuels, and that is where
new technologies are
needed. Steel, for
instance, still relies on
furnaces fired by
metallurgical coal.
“If you’re a steel
company, you’re going to
report a very big
(emissions) number.
People still need basic
shelter, and it’s unlikely we’ll stop building buildings.”
While the shared goal of carbon neutrality has now become widely accepted, finding the best way
to reach that goal is much more difficult, Yergin said.
“Previous energy transitions unfolded over centuries. This is meant to unfold over less than three
decades - that’s a really heavy lift,” he said.

Pakistan enters LNG supply deal with Qatar Petroleum
Gulf News + NewBase
Qatar Petroleum has entered into a new long-term Sale and Purchase Agreement (SPA) with
Pakistan State Oil Company Limited (PSO) for the supply of up to 3 million tons per annum (MTPA)
of liquefied natural gas (LNG) to Pakistan.
Under the 10-year agreement, LNG deliveries
to Pakistan’s world-class receiving terminals will
commence in 2022 and continue until the end of
2031.
The SPA was signed in Islamabad by Saad
Sherida Al-Kaabi, the Minister of State for
Energy Affairs, the President and CEO of Qatar
Petroleum, and Syed Taha, the Managing
Director & CEO of PSO in a special ceremony
held under the patronage and with attendance
of Imran Khan, the Prime Minister of Pakistan,
senior Pakistani government officials and
Sheikh Saoud bin Abdulrahman Al Thani,
Qatar’s Ambassador to Pakistan.
Al-Kaabi said: “We are delighted to enter into this new long-term agreement with Pakistan State Oil
Company Limited and to continue our contributions towards meeting Pakistan’s increasing energy
demand.
“This agreement further extends Qatar’s long standing LNG supply relationship with Pakistan and
highlights our commitment to meeting Pakistan’s LNG requirements. We are confident that the
exceptional reliability of our LNG supplies will provide PSO with the required flexibility and supply
security to fuel Pakistan’s impressive growth.”
“With a well-established gas market and distribution system, Pakistan is a strategically important
market for Qatar LNG. We are encouraged by Pakistan’s exceptional growth and excellent
economic potential as well as by the prospect of it being one of the world’s fastest growing LNG
markets.
I would like to take this opportunity to thank His Excellency Prime Minister Imran Khan for his support
and for his patronage of this special event. I also would like to thank Pakistan’s energy officials as
well as PSO’s management for all their efforts and for the professional and transparent negotiations
leading to today’s important agreement,” Al-Kaabi concluded.
Pakistan currently has two operational LNG receiving terminals, namely the Engro LNG Receiving
Terminal and Pakistan GasPort LNG Receiving Terminal, both of which utilize Floating Storage and
Regasification Units moored in Port Qasim. There are a number of additional terminals currently
under consideration by various private sector players in the country.
This is the second such agreement signed between Qatari and Pakistani entities since 2016, when
Qatargas signed a long-term agreement to supply PSO with 3.75 MTPA of LNG. The agreement
raises the total of long-term LNG supplies from Qatar to Pakistan to 6.75 MTPA. – TradeArabia
News Service

NewBase March 01-2021 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil prices climb after progress on huge U.S. stimulus bill
Reuters + NewBase
Oil prices rose more than $1 on today – Monday 01/03/2021 on optimism in the global economy
thanks to progress in a huge U.S. stimulus package and on hopes for improving oil demand as
vaccines are rolled out.
Brent crude futures for May rose $1.24, or 1.92%, to $65.66 per barrel by 9.04 GMT. The April
contract expired on Friday. U.S. West Texas Intermediate (WTI) crude futures jumped $1.19,
or 1.93%, to $62.69 a barrel.
Oil price special
coverage

“Oil prices are recovering this morning in line with most risk assets on the back of the U.S. stimulus
bill passing the House and as central banks continue to sabre rattle to ward off market-implied
financial tightening,” Stephen Innes, chief global markets strategist at Axi, wrote in a note on
Monday.
U.S. House of Representatives passed a $1.9 trillion coronavirus relief package early Saturday.
Democrats who control the chamber approved the sweeping measure by a mostly party-line vote of
219 to 212 and sent it to the Senate, where Democrats planned a legislative maneuver to allow
them to pass it without the support of Republicans.
More positive news on the coronavirus vaccination front and signs of an improving Asian economy
also boosted prices.
A U.S. Centers for Disease Control and Prevention advisory panel voted unanimously on Sunday
to recommend Johnson & Johnson’s COVID-19 shot for widespread use, and U.S. officials said
initial shipments would start on Sunday.
J&J expects to ship more than 20 million doses by the end of March and 100 million by midyear,
enough to vaccinate nearly a third of Americans.
Over in Japan, a private survey showed factory activity expanding at the fastest pace in over two
years in February, adding to signs of a rebound in Asian growth.
On the flip side, investors are betting that this week’s meeting of the Organization of the Petroleum
Exporting Countries (OPEC) and allies, a group known as OPEC+, will result in more supply
returning to the market.
“More supply needs to come onto the market to ensure OPEC+ meets incremental demand and
keeps internal discipline ducks in a row,” Innes added.
U.S. drillers add rigs for seventh month in a row, pace slows - Baker Hughes
U.S. energy firms this week added oil and natural gas rigs for a seventh month in a row for the first
time since May 2018, but the rate of growth in February slowed even as oil prices rose to their
highest since 2019.
The oil and gas rig count, an early indicator of future output, rose five to 402 in the week to Feb. 26,
its highest since May, energy services firm Baker Hughes Co said in its closely followed report on
Friday.

But with just 18 additions, the pace of increase slowed in February, compared with 33 in January
and 31 in December, partly due to a rare deep freeze in Texas last week and also oil companies’
continuing commitment to capital discipline.
That count is still 388 rigs, or 49%, below this time last year. The total count, however, has soared
since hitting a record low of 244 in August, according to Baker Hughes data going back to 1940.
U.S. oil rigs rose four to 309 this week, their highest since May, while gas rigs rose one to 92.
All of the oil rig additions this week were in the Permian Basin in West Texas, prompting some
analysts to question how producers were able to start drilling again so quickly after last week’s deep
freeze.
“All I heard last week was how the Permian Basin was frozen in,” said Bob Yawger, director of
energy futures at Mizuho in New York. “Now, I am being led to believe ... that crews have already
returned to the frozen tundra and started drilling new holes.”
In February, oil rigs rose for a sixth straight month, gaining 10, their smallest monthly build since
September as their growth slowed from a rise of 28 in January and 26 in December.
After falling to record lows below zero in April 2020 due to coronavirus demand destruction, U.S.
crude futures have climbed over $63 a barrel this week and hit their highest settle since 2019. [O/R]
Most energy firms said they plan to keep spending flat in 2021 with 2020 levels as they focus on
boosting cash flow and reducing debt rather than increasing output.
U.S. financial services firm Cowen & Co said the 45 independent exploration and production (E&P)
companies it tracks plan to keep spending flat in 2021 versus 2020. That follows capex reductions
of roughly 49% in 2020 and 12% in 2019.

NewBase Special Coverage
The Energy world – March 01- -2021
OPEC+ Faces Calls to Cool Oil Market Frenzy With Extra Barrels
Bloomberg - Grant Smith Javier Blas , and Salma El Wardany + Platts + NewBase
From trading houses in Geneva to Wall Street banks, much of the oil world agrees that global
markets could use some more barrels. The big question is whether OPEC+ will provide enough of
them.
A crude glut that piled up during the pandemic is vanishing fast. Global inventories are plunging at
the steepest rate in two decades, according to Morgan Stanley. Prices have rallied to pre-virus
levels, while U.S. production has taken a hit from freezing storms. Talk swirls of market supercycles,
and even the return of $100 oil.
With the need for more supply evident, traders expect the OPEC+ coalition, led by Saudi Arabia
and Russia, will agree to increase production when it meets on March 4, reversing some of the
output cuts made last year.
But it’s unclear if the group will act vigorously enough. Wary of the virus’s persisting threat to
demand, Saudi Energy Minister Prince Abdulaziz bin Salman has urged fellow producers to remain
“extremely cautious.”

If the alliance agrees an output hike that falls short of requirements, however, it could trigger a
further price surge -- and the group would be forced to deal with its unwelcome consequences.
“There’s a real risk they’re going to over-tighten the market,” said Bill Farren-Price, a director at
research firm Enverus and veteran observer of the cartel. “It’s already super-tight, and if OPEC just
focuses on keeping prices up, that’s going to eventually provoke supplies from their rivals.”
The Organization of Petroleum Exporting Countries and its allies rescued the global oil industry from
an unprecedented slump last year by slashing production when the coronavirus crisis pummeled
demand. The strategy has revived international benchmark Brent crude to $67 a barrel, shoring up
revenues for the producers’ battered economies.
The 23-nation coalition continues to idle just over 7 million barrels of daily output -- about 7% of
global supply -- and on Thursday will decide whether to revive a 500,000-barrel tranche in April. In
addition, the Saudis will confirm whether an extra 1 million barrels they’ve recently taken offline will
return as scheduled.
Demand Recovery
Global oil markets are signaling that they could comfortably absorb the full complement of 1.5 million
barrels.
Demand in China, the world’s biggest oil importer, is back above pre-virus levels as its containment
of the disease allows much of normal life and economic activity to resume. India, another key
customer, warns that high prices are jeopardizing the global economic recovery. Propelled by cold
weather, fuel use in Japan, the fourth-largest oil consumer, posted in January its first year-on-year
increase since mid-2019.
In the U.S., stockpiles of crude oil and refined products are back near levels last seen a year ago.
Though demand for aviation fuels remains depressed, purchases of products that cater to working
and consuming at home -- like diesel for trucks and plastics -- have boomed.
OPEC’s own data show it can go ahead with this year’s scheduled production increases and still
manage to deplete world oil inventories, whittling them down to their five-year average -- the group’s
desired target -- by August.

Futures markets testify that supplies are tightening sharply.
Near-term Brent contracts are commanding a sizable premium over later months known as
backwardation, with the six-month spread standing at $3.22 a barrel. That reflects “a sustained,
strong short-term deficit” of about 2 million to 3 million barrels a day, according to Giovanni Serio,
global head of market analysis at Vitol Group, the world’s biggest oil trader.
Bullish Calls
The shift to a tightening market has sparked a wave of bullish projections.
Goldman Sachs Group Inc. sees Brent hitting $75 a barrel in the third quarter as a new commodities
supercycle beckons, while trading giant Trafigura Group says it’s “very bullish” on the months
ahead. Socar Trading SA, a unit of Azerbaijan’s state oil company, predicts $80 could be reached
this summer and triple digits within two years.
“The fear is that in 12 months there will be a shortage” even if OPEC+ revives output, said Socar
Chief Trading Officer Hayal Ahmadzada. “It will drive the price very high, very fast.”
It’s still unclear what exactly OPEC+ will decide.
Russian Deputy Prime Minister Alexander Novak has signaled that the country once again wants to
proceed with an increase, noting on Feb. 14 that “the market is balanced” already. Saudi Arabia
sounds more reserved, urging its counterparts to recall the “scars” of last year’s collapse.
Prices are still far below the levels most OPEC nations need to cover government spending, and
the International Energy Agency -- a leading forecaster -- anticipates a market setback in the
second quarter as a seasonal lull briefly causes inventories to accumulate again.

If Riyadh wants to limit the overall size of the group’s increase, it has a powerful bargaining chip:
the pace it chooses to return the extra 1-million barrel cutback that’s supposed to expire at the end
of next month.
But for some in the market, the kingdom should instead be opening the taps wide. Keeping prices
high will only rekindle investment by U.S. shale drillers, they contend, and bring a flood of new
supply that cancels out OPEC’s hard work.
Even the full 1.5 million barrels isn’t sufficient to satisfy demand, says Jan Stuart, global energy
economist at Cornerstone Macro LLC.
HIGHLIGHTS:
 OPEC+ compliance up to 101% with new quotas
 OPEC Jan output 25.70 mil b/d, up 270,000 b/d
 Non-OPEC allies add 170,000 b/d on Russian surge
 Saudi output 9.11 mil b/d; Russia pumps 9.25 mil b/d
OPEC and its allies boosted their crude oil production for the seventh straight month in
January, according to the latest S&P Global Platts survey, as the coalition continued to unwind
its pandemic-prompted output cuts and take advantage of rebounding global demand.
OPEC's 13 members pumped 25.70 million b/d in the month, up 270,000 b/d from December,
while their nine non-OPEC partners, led by Russia, produced 12.91 million b/d, a rise of
170,000 b/d, the survey found.
The volumes bring the alliance's total output rise close to 2 million b/d since May, when it first
started record cuts to pilot the oil market out of its coronavirus nosedive.

January's boost was mainly attributed to ramp-ups by heavyweights Russia, Saudi Arabia, the
UAE and Kuwait, along with a rebound in Iran and Venezuela, two of the three members
exempt from quotas.
Under a deal agreed in early December, quotas were eased by almost 500,000 b/d in January,
which helped lift the group's collective compliance to 101% from 98.5% in December.
Looking ahead, February and March should see total OPEC+ production go down, with price
hawk Saudi Arabia having announced it would unilaterally cut its own output by an additional
1 million b/d in both months, more than offsetting the 75,000 b/d monthly rise granted to Russia
and Kazakhstan. All other members are set to hold their volumes steady.
A key OPEC+ monitoring committee on Feb. 3 reaffirmed the plan, saying it was
encouraged by the rollout of coronavirus vaccines in bolstering the global economic recovery,
which pushed crude prices to one-year highs of over $60/b on Feb. 8. The full coalition will
meet March 4 to decide on April quotas.
Barrels return
Russia posted the largest increase among the group in January, raising output by 170,000 b/d
to 9.25 million b/d, the Platts survey found.

Despite being a co-chair of the monitoring committee, which is tasked with assessing member
compliance, Russia continues to be the worst quota violator, according to OPEC+ data seen
by Platts. It pumped 130,000 b/d above its January cap.
However, Russian crude exports are poised to dip in February as it directs more of its oil to
domestic refineries to address soaring gasoline prices ahead of its driving season, along with
tepid European demand for its crude.
Saudi Arabia, OPEC's largest producer and de facto leader, boosted its output by 100,000 b/d
in January to pump 9.11 million b/d, just 10,000 b/d below its new quota.
Exports from the kingdom fell last month, but domestic consumption rose as the 400,000 b/d
Jazan refinery started test runs, among other factors, according to survey panelists.
Saudi Arabia's extra cut for February and March has tightened the availability of medium sour
crudes, prompting many refiners to scramble for other supplies.
Fellow Gulf producers UAE and Kuwait also posted monthly increases of 40,000 b/d and
20,000 b/d, respectively, the survey found, largely in line with their January allocation.
Reclaiming market share
Iran and Venezuela -- both of which are exempt from the cuts due to US sanctions targeting
their crude exports – added 180,000 b/d to the market in January.
Iranian crude production rose sharply by 100,000 b/d to 2.14 million b/d, its highest since
November 2019, according to the survey.
Iranian crude exports have started to climb in recent months as the country pins its hopes on
improving relations with the US under the Joe Biden administration.
Iran's government has targeted 2.3 million b/d of exports if the sanctions are lifted and has
recently ordered its domestic oil operators to begin increasing production, largely from the
South Azadegan and West Karun fields. Pre-sanctions production capacity was 4 million b/d.
Similarly, Venezuela produced a seven-month high of 500,000 b/d, up 80,000 b/d from
December.
The increase mainly came from state-owned PDVSA's joint ventures in the country's Orinoco
Belt, which contains some of the world's largest reserves.
PDVSA has undertaken a well maintenance plan to repair some of its oil infrastructure, which
has deteriorated due to a lack of investment, exacerbated by US sanctions.
Libya, the third country exempted from OPEC+ quotas, produced 1.14 million b/d in January,
according to the survey, a fall of 40,000 b/d, marking its first month-on-month production fall
since May.
The decline was due to pipeline maintenance that affected the Waha oil fields, and some
exports were also disrupted briefly by strikes at some of Libya's key eastern terminals.

Iraq, Nigeria stay compliant
Iraq produced 3.82 million b/d of crude in January, a fall of 30,000 b/d from the previous month,
as southern exports dipped slightly.
That puts Iraq comfortably below its OPEC+ production quota of 3.857 million b/d, which is
effective through March.
The country's energy ministry has pledged to remain "resolute" to its OPEC+ commitments
but it has struggled to comply in recent months due to fiscal and political pressures.
Nigeria maintained its recently strong compliance, mainly due to more involuntary outages.
Nigeria produced 1.47 million b/d last month, a 40,000 b/d rise from December, but below its
January quota.
A pipeline closure affected Forcados exports, but this was offset by the return of Qua Iboe
output mid-month. Platts figures are compiled by surveying oil industry officials, traders and
analysts, as well as reviewing proprietary shipping, satellite and inventory data.

NewBase Energy News 01 March 2021 - Issue No. 1411 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,

Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. 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 the UAE operations base. Khaled is the Founder
of NewBase Energy news articles issues, an international consultant, advisor,
ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste
management, waste-to-energy, renewable energy, environment protection and
sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities &
gas compressor stations. Executed projects in the designing & constructing of gas
pipelines, gas metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted &
finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements.
Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass
energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous
conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-
in-Chief of NewBase Energy News and is a professional environmental writer with more than 1400 popular
articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste
management and environmental sustainability in different parts of the world. Khaled has become a reference
for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC
leading satellite Channels. Khaled can be reached at any time, see contact details above.
NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE
NewBase 2021 K. Al Awadi

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