New base 19 march 2020 energy news issue 1325 by khaled al awadi

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NewBase Energy News 19 March 2020 - Issue No. 1325 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: DSCE reviews operational efficiency, reducing emissions
DEWA.ae
The Dubai Supreme Council of Energy (DSCE) has reviewed the best practices in the operations
of factories, operational efficiency as well as waste to energy in Dubai, drawing maximum benefit
from alternative energy and by reducing waste.
At a meeting chaired by Sheikh Ahmed bin Saeed Al Maktoum, Chairman of DSCE and in the
presence of Saeed Mohammed Al Tayer, Vice Chairman of the DSCE, the participants discussed
several topics, including a presentation by Emirates Global Aluminium on operating its H-Class
turbine at Jebel Ali, which has one of the latest technologies for reducing fuel consumption and
carbon emissions with a high operational efficiency.
The power plant is expected to reduce greenhouse gas emissions from energy generation in the
facilities of Emirates Global Aluminium in Jebel Ali and reducing carbon emissions in general.
Ahmad Buti Al Muhairabi, Secretary-General of the DSCE attended the meeting along with board
members Dawood Al Hajiri, Director-General of Dubai Municipality; Abdulla Jassem bin Kalban,
www.linkedin.com/in/khaled-al-awadi-38b995b

Managing Director of Emirates Global Aluminum; Saif Humaid Al Falasi, CEO of Emirates National
Oil Company, ENOC; Waleed Salman, Vice Chairman of the Dubai Nuclear Energy Committee; and
Frederick Chemin, General Manager of Dubai Petroleum.
"We have reviewed the best practices in operations. This supports the vision of His Highness
Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and
Ruler of Dubai, to enhance the shift towards a sustainable green economy. This also supports the
Dubai Clean Energy Strategy 2050, to provide 75 per cent of Dubai’s total power output from clean
energy sources and make Dubai the city with the lowest carbon footprint in the world by 2050," said
Al Tayer.
The meeting also discussed the Dubai Waste Minimisation Strategy, through sorting and recycling,
which reduced waste at Dubai Municipality's, DM, landfills, a WAM report said.
Dubai Electricity and Water Authority, DEWA, collaborates with DM in a project to treat all types of
solid waste by using direct burning technologies to generate thermal energy and convert it into clean
electrical energy and export it to the grid. The plant has the highest thermal efficiency in solid waste
treatment, which achieves Dubai’s strategies.
"We have discussed the upcoming stage of the Waste to Energy project. It is expected to treat 5,500
tonnes of DM’s solid waste and produce 200 megawatts of electricity by 2022," said Al Muhairabi

Iraq: Gulf Keystone suspends Shaikan field drilling activities
Source: Gulf Keystone Petroleum
Gulf Keystone Petroleum has been closely monitoring the Coronavirus (COVID-19) situation in the
Kurdistan Region of Iraq. Gulf Keystone's priority is the welfare of its staff, contractors and the
communities close to its operations. We remain committed to deliver safe operations, protection of
the asset and the underlying business.
In an attempt to limit the spread of Coronavirus (COVID-19), the Kurdistan Regional Government,
in line with many other jurisdictions, has put in place a series of tight controls on the movement of
personnel into and around the region.
With these controls, along with the increasing global restrictions on movement, it has become
difficult to ensure Gulf Keystone has the appropriate drilling personnel and equipment on site in
order to continue safe drilling operations.
Therefore, with the SH-13 well - the current well in the campaign - at a safe stage, the decision has
been taken to suspend drilling activities until conditions improve to ensure safe operations.
Production rates from the Shaikan field are at c.38,000 bopd and production currently continues
unaffected by the impact of Coronavirus (COVID-19). However, as a precaution, the Company has
restricted the access to its production facilities. As a result, certain construction activities related to
the expansion to 55,000 bopd have also been suspended until circumstances improve.
The current situation is extraordinary and we believe that our actions protect the long-term value of
the asset. The planned production increase to 55,000 bopd, scheduled for Q3 2020, and average
production guidance for 43,000 - 48,000 bopd remain priorities.
However, the suspension of drilling and certain expansion operations may impact Gulf Keystone's
ability to meet these targets in the timeframes currently in place. Gulf Keystone will continue to
closely monitor this fast-moving situation and will provide updates, as appropriate. As previously
announced, the Company will release its Full Year results on 26 March 2020.

Notwithstanding the above, the Company remains in a strong financial position to manage through
these turbulent times with a cash balance of $159 million, as at 13 March 2020.
Jón Ferrier, CEO, commented:
'As a Company we place the welfare of our people and those we work with and near as our absolute
priority. We also have to be confident of having the right people on site to continue safe operations.
Whilst we are not aware of any employees or contractors having been infected, we believe it is
prudent to suspend drilling and certain production facility expansion operations during this time. We
are watching the situation closely and will keep all of our stakeholders informed of
developments. Meanwhile, the Shaikan Field itself is performing well.'

NewBase March 19-2020 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil Rollercoaster Drop to 18-Year Low, No sight to end war
NewBase + Reuters + Bloomberg
Oil shaky after plunging to the lowest level in 18 years as investors weigh efforts by policy makers
across the globe to strengthen economies against the impact of the coronavirus pandemic.
Futures steady as low as much as 18% in New York, the most since December 2008, following a
24% rout in the previous session. Oil has been hammered by the dual shocks of collapsing demand
and an impending supply flood, but are getting some relief along with other markets from stimulus
measures.
The European Central Bank has unleashed an emergency bond-buying program, while the U.S.
Senate cleared the second major bill responding to the outbreak. White House economic adviser
Larry Kudlow said the government might take equity positions as part of corporate rescues.
The global spread of the virus pandemic continues to gather pace, with the number of confirmed
cases in Europe now exceeding China. Italy’s death count has surged to almost 3,000, while the
U.K. imposed tighter controls on movement including closing all schools.
“There is just extreme volatility in the market now as participants try to assess the economic impact
of the coronavirus and what it means for oil demand,” said Daniel Hynes, an analyst at Australia &
New Zealand Banking Group Ltd. in Sydney. “The high level of uncertainty around the hit to demand
Oil price special
coverage

means that markets are going to continue to test these levels and invite some sort of reaction from
producers.”
As the world’s biggest oil producers move to ramp up production and exports, U.S. Republican
Senator Kevin Cramer called on President Donald Trump to ban crude imports from Russia, Saudi
Arabia and other OPEC members in response to recent action taken by them to “distort energy
markets” when demand is already weak. The kingdom has ordered state-run Aramco to keep
output at 12.3 million barrels a day over the coming months.
West Texas Intermediate for April delivery, which expires Friday, climbed $ 2.09 to $22.46 a barrel
on the New York Mercantile Exchange as of 11:47 a.m. in Singapore after closing at $20.37 on
Wednesday, the lowest since February 2002. Brent for May delivery added 2.77% to $25.57 on
London’s ICE Futures Europe exchange after settling at the lowest since May 2003.
In wider global markets, the dollar extended its recent gain, the yen slumped and equities were
mixed as investors questioned the effectiveness of a rapidly strengthening set of economic and
financial support measures.
The ECB announced the bond-buying program worth 750 billion euros ($820 billion) after an
unscheduled meeting on Wednesday night, joining other central banks in a bid to ease a funding
squeeze. Meantime, Kudlow said the administration could “up the ante” beyond its $1.3
trillion stimulus proposal and cautioned that the idea of taking equity positions was just one of many.

While Russia and the Saudis are set to swamp the market with crude, the Kremlin said it
would prefer higher prices after Iraq, OPEC’s second-biggest producer, urged the cartel and its
former allies to convene a meeting to consider steps to re-balance the market.
The Saudis “are working against the central banks in some way, creating a deflationary spiral for
energy prices with their massive effort to oversupply the global market,” said John Kilduff, a partner
at Again Capital in New York. “Prices are at panic levels.”
Oil industry may fill global storage in months as record glut builds
Reuters + NewBase
The oil market could see a record supply surplus in April as coronavirus wipes out demand and big
producers pump more, creating a global glut that threatens to overwhelm storage capacity within
months and force widespread industry shutdowns, analysts said on Wednesday.
Crude is already gushing into storage at land and sea worldwide as countries curb travel and
economic activity falls due to coronavirus. Storage levels are rising even before a wave of supply
hits the market from Saudi Arabia, Russia and other producers who are gearing up to fight a price
war for market share.
U.S. benchmark crude fell to its lowest since 2002 to settle at $20.37 a barrel on Wednesday, and
is down more than 60 percent since the start of the year. [O/R] Both U.S. and Brent prices have
fallen by more than 50% in the last 10 trading days, following the most pronounced demand
destruction since the financial and economic crisis of 2008.
As storage reaches capacity, a slide toward $10 per barrel is possible, according to some investors
and analysts. That last happened during the 1998 glut before both oil companies and oil producing
nations curbed supply.
Some Canadian crude is already trading not far off $10 per barrel because of steep price discounts
to U.S. benchmark WTI crude.

“We believe we have not seen the worst of the price rout yet, as the market will soon come to realize
that it may be facing one of the largest supply surpluses in modern oil market history in April,” said
Rystad Energy’s Head of Oil Markets Bjornar Tonhaguen.
IHS Markit analysts estimated the global oil supply surplus on a monthly basis to range between 4
million barrels per day (bpd) and 10 million bpd from February to May 2020 - equal to 4-10% of
global demand.
Standard Chartered Bank expected an “extreme” global surplus of 12.9 million bpd in the second
quarter - 13 percent of global demand - and a cumulative surplus exceeding 2.1 billion barrels by
the end of the year - well above the annual output of OPEC’s second largest producer Iraq.
“Does the world have enough storage capacity to handle it? ... For crude oil, we estimate total spare
inventory capacity at 900 million barrels,” BofA Global Research said.
Goldman Sachs sees over 1 billion barrels of unused storage still available and said while it does
not expect the glut to lead to a breach in storage capacity, “it will likely lead to a breach in logistical
capacity, meaning ships, pipelines, terminals and processing units.”
Available U.S. crude storage as of September came to roughly 253 million barrels, out of 653 million
barrels of total capacity, not including the nation’s strategic reserves, according to the U.S. Energy
Department.
Graphic: Goldman Sachs on oil demand destruction - here

STRATEGIC RESERVES
The Organization of the Petroleum Exporting Countries (OPEC) and Russia failed to seal a deal to
cut oil production earlier this month, as they disagreed on how to respond to the impact on demand
of coronavirus. Since then, OPEC’s de facto leader Saudi Arabia has pledged to flood the world
with cheap oil.
Saudi Arabia now plans to boost its crude oil production to a record high of 12.3 million bpd in April,
and its crude oil exports to more than 10 million bpd from May.
Some major oil consuming nations like the United States and India have tried to take advantage of
low oil prices and bulk their its strategic stockpiles.
Graphic: Standard Chartered on oil demand - here

U.S. President Donald Trump vowed to fill the country’s Strategic Petroleum Reserve to the top.
The U.S. strategic reserve has the capacity to take an additional 77 million barrels of crude, and will
fill it over several weeks.
That is a fraction of the expected global glut.
Around 3.3 billion barrels of oil is stored globally onshore, close to the peak of 3.4 billion barrels
reached in early 2017, according to Kpler data.
Another 91 million barrels is in floating storage - in vessels at sea. That is not far off peaks reached
in 2009.
The surplus will only get bigger if producers continue their price war. It will be “intensified by the fact
that other OPEC countries will likely do their utmost to boost exports as their fiscal budget is under
pressure due to lower prices,” said Homayoun Falakshahi, senior analyst at Kpler.
The International Energy Agency said on March 9 it expected oil demand to be 99.9 million barrels
per day (bpd) in 2020, lowering its annual forecast by almost 1 million bpd and signaling a
contraction of 90,000 bpd, the first time demand will have fallen since 2009.

The IEA said that in the first quarter alone, the virus wiped out 2.5 million bpd of demand or 2.5%.
“We estimate OPEC+ spare capacity at 2 million bpd, and at 3 million bpd if Libya’s nearly 1 million
bpd production comes back online. What we are seeing here is essentially the atomic bomb
equivalent in the oil markets,” said Rystad Energy’s analyst Louise Dickson.
Graphic: IEA supply 2020 - here

NewBase Special Coverage
The Energy world - Special 19- March-2020
Global oil, gas producers slash spending after price rout
Reuters + NewBase
Oil and gas companies around the world are planning to slash spending in the face of a plunge in
oil prices caused by the spread of the coronavirus and a push by Saudi Arabia and Russia to flood
the market with supply.
Below are plans announced by energy companies (in alphabetical order):
BPBP (BP.L) said it planned to reduce capital and operational spending. BP’s capital spending last
year reached around $15 billion.
CHEVRON CORP
Chevron Corp (CVX.N) said it was looking at ways to trim spending that could lead to lower near-
term oil production. The
company, however, did not
provide details. The oil major’s
2020 organic capex guidance
was $20 billion.
North American oil and gas
producers have slashed their
capital spending by about 30%
on average, according to data
compiled by Reuters.
EQUINOR
Equinor (EQNR.OL) is reviewing its capital and exploration spending plans, it said.
The second tranche of its share buyback program - worth $675 million when including the
Norwegian state’s share and scheduled to run from May 18 to Oct. 28 - is still on the table, pending
approval by the annual shareholders’ meeting, a company spokesman said.
EXXON MOBIL
Exxon Mobil (XOM.N) said it would make “significant” cuts to spending, without giving any details.
The company earlier budgeted $30-33 billion for projects this year.
GULF KEYSTONE
Kurdistan-focused producer Gulf Keystone has also suspended some of its drilling activities in the
northern Iraqi region.
KOSMOS ENERGY

Kosmos Energy (KOS.N) suspended its dividend and said it was aiming to reduce 2020 capital
spending by 30% with a view to becoming cash flow neutral at oil prices of $35 a barrel.
OIL SEARCH
Papua New Guinea-focussed Oil Search Ltd (OSH.AX) has slashed its 2020 investment and capital
spending by 38% and 44%, respectively, to cope with crashing oil prices.
PREMIER OIL
Premier Oil (PMO.L) said it had identified at least $100 million in potential savings on its 2020 capital
spending plans. Premier expects to be broadly cash flow neutral in 2020, assuming a $100 million
reduction in planned 2020 capex and $35 per barrel oil price for the rest of the year.
SANTOS
Santos Ltd (STO.AX), Australia’s No. 2 independent gas producer, said it is reviewing all its capital
spending plans in light of the collapse in oil prices and would stop all new hiring.

SAUDI ARAMCO
Saudi Arabia’s national oil company Aramco (2222.SE) said it planned to cut capital spending for
2020 to between $25 billion and $30 billion, compared with $32.8 billion in 2019.
TULLOW OIL
Tullow (TLW.L) said it would cut its investment budget by about a third to $350 million this year and
reduce its exploration spending, historically the group’s focus, by almost half to $75 million. It said
the oil price fall may jeopardize a planned $1 billion in asset sales needed to refill its coffers, raising
the risk the group’s lenders may become reluctant to approve loans essential to shoring up its future.

ConocoPhillips to reduce capex by 10 percent
Source: ConocoPhillips
ConocoPhillips is taking several actions in response to the recent oil market downturn.
'Our industry is clearly experiencing an unprecedented event brought about by
simultaneous supply and demand shocks,' said Ryan Lance, chairman and chief executive
officer. 'The actions we are now taking reflect an acknowledgement of current events as
well as uncertainty around the timing and path of a recovery.
Lance continued, 'We believe we have a significant advantage compared to most of the
industry through our strong balance sheet, diverse and low-decline portfolio, and low
capital intensity.
We ended 2019 with over $14 billion of liquidity, including cash, cash equivalents,
short-term investments and availability under our revolving credit facility. We continue
to monitor market conditions and consider various scenarios to inform any future
actions.
We have a significant level of flexibility between our capital, operating costs, and share
repurchase program, but we are choosing to exercise only a portion of it at this time.
We believe that the highest-value longer-term response is price-path dependent.'
The actions the company announced include:
 2020 operating plan capital expenditures will be reduced by $0.7 billion, representing about
a 10 percent decrease from the previously announced guidance. The reduction will be
sourced by slowing operated development activity in the Lower 48, expected decreases in
non-operated activity in the Lower 48, and deferred drilling in Alaska. These reductions are

expected to impact 2020 full-year production guidance by approximately 20 thousand barrels
of oil equivalent per day (MBOED).
 The 2020 planned share repurchase program will be reduced to a quarterly run rate of $250
million beginning in the second quarter, from the previous run rate of $750 million.
 On a combined basis, the capital and share repurchase actions represent a reduction in 2020
cash uses of $2.2 billion, with limited impact to the company’s productive capacity.
 The company continues to review its capital and operating plans and will provide a full 2020
guidance update in conjunction with first-quarter earnings on April 30.
'Today’s circumstances require action and we believe we’re taking the right steps at
the right time,' Lance continued. 'Current conditions represent a significant challenge for
our industry overall, but we remain focused on creating long-term value, especially
through cycles.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
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For additional free subscription emails please contact Hawk
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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 a total of 28 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 2020 K. Al Awadi

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