New base 20 december 2021 energy news issue 1475 by khaled al awadi

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 21 December 2020 No. 1475 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 Adnoc Drilling, Helmerich & Payne signs deal to boost
performance of land rigs
The National - Sarmad Khan
Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, signed a
deal with US-based contract drilling company Helmerich & Payne to improve the Abu Dhabi
company’s land rig operational performance.
The Rig Enablement Framework Agreement between the two companies will also support Adnoc
Drilling’s growth and expansion plans, it said in a statement on Monday to the Abu Dhabi Securities
Exchange, where its shares are traded.
An Adnoc Drilling rig. The company says its deal with Helmerich & Payne will improve drilling efficiencies
and save operational costs. Photo: Adnoc
Focused on improving drilling efficiencies and saving operational costs, the framework agreement
builds on the asset purchase deal and initial public offering cornerstone investor pact the two
companies announced in September.
The agreement is a “natural evolution of both our strategic alliance with H&P and Adnoc Drilling’s
growth trajectory”, said Abdulrahman Al Seiari, chief executive of Adnoc Drilling.

“The resulting efficiency gains will deliver enhanced operational excellence, in turn delivering even
greater value to our shareholders.”
The partnership allows sharing of global best practices, further optimising the company’s rig fleet
and “turbocharges Adnoc Drilling’s significant competitive advantage”, helping it cement its position
as the largest national drilling company in the Middle East, Mr Al Seiari said.
As a cornerstone investor, H&P has committed $100 million to Adnoc Drilling’s IPO, subject to a
three-year lock-up period. The share sale, oversubscribed more than 31 times, was the largest
listing on the ADX, raising over $1.1 billion.
Investment into Adnoc Drilling – which owns 96 rigs and provides drilling rig hire services and rig-
related services to Adnoc Group – is a “testament to our belief in what Adnoc Drilling and H&P can
achieve together”, said John Lindsay, H&P’s president and chief executive.
The finalisation of the latest agreement with Adnoc provides further opportunity to build on the
strategic relationship and combine capabilities to deliver operational performance, he added.
Earlier this month, Adnoc Drilling agreed a five-year, $3.8bn contract with Adnoc Onshore for the
continued provision of drilling, workover and other well services that will drive efficiency in work
crews, rig move time and maintenance scheduling.
Adnoc Drilling reported a 48 per cent increase in third-quarter net profit, backed by its onshore and
oilfield services segments. Net profit climbed to $178m, from $120m in the same period a year
earlier.
Adnoc has an 84 per cent stake in Adnoc Drilling, while US energy services company Baker Hughes,
which entered into a strategic partnership with the company in October 2018, has a 5 per cent stake.
H&P holds 1 per cent shareholding in the company.

Europe’s Energy Prices Soar as a Deep Freeze Arrives
Bloomberg + NewBase
Europe is bracing for energy shortages as freezing weather sets in, boosting demand and sending
prices surging at a time supply just can’t keep up.
Temperatures are forecast to fall below zero degrees Celsius in several European capitals this
week, straining electricity grids already coping with low wind speeds and severe nuclear outages in
France. To make matters worse, Russia intends to keep natural gas flows through a major transit
route to Germany limited on Monday after capping supplies over the weekend.
Energy prices have spiraled out of control this year, with European gas surging some 600%. The
region’s benchmark gas contract rose as much as 8.8% early Monday, while short-term electricity
also jumped.
In France, day-ahead power rallied to the most since 2009 in an auction on Sunday and was priced
even higher in broker trading on Monday. The German contract was the third-highest on record and
looks set to break that level again.
Rising prices have fueled inflation, a headache for policy makers already contending with the spread
of the omicron virus variant just before the holiday season. Geopolitical tensions between Russia
and Ukraine could also make things worse, with a potential invasion likely to send prices even
higher.
Jeremy Weir, chief executive officer of commodities trader Trafigura Group, last month warned that
Europe could experience rolling blackouts in case of a cold winter. That was before Electricite de
France SA said it was halting reactors accounting for 10% of the nation’s nuclear capacity, leaving
the region at the mercy of the weather at the height of winter in January and February.
Benchmark Dutch gas prices jumped to almost 149 euros a megawatt-hour, the highest for a most-
active contract since a 40% surge on Oct. 6. Traders are also on edge as auctions for pipeline
capacity next month will provide an indication as to whether Gazprom PJSC intends to boost

supplies in January. German year-ahead power, a benchmark in Europe rose as much as 1.1% to
245 euros a megawatt-hour, just 0.8% off a record.
With nuclear outages biting, electricity producers will have to use more gas to keep the lights on.
Russia plans for gas flows into Germany via the key Yamal-Europe pipeline to remain capped,
potentially forcing Europe to rely on its already depleted inventories. Storage sites are only 60%
filled, a record-low for this time of year.
Only 4% of capacity was allocated for Monday to send gas through Germany’s Mallnow station,
where the pipeline crossing Belarus and Poland terminates. That compares with about 35% of
available space that Russia has booked for most days this month.
There’s no relief to market tightness in sight as temperatures are expected to remain below normal
levels in the U.K., Denmark and northern Germany next week. While traders expect liquefied natural
gas may help to some extent, due to lower demand in Asia, cargo diversions will take time and
increased arrivals at European ports are unlikely to come before January.
Meanwhile, wind power is expected to stay low in Germany until Dec. 23. In France and Britain,
generation is forecast to dip on Tuesday causing further supply issues.

India’s clean energy got more loans than coal for third year
Bloomberg + NewBase
Clean energy projects got 74% of the total funds from financial institutions last year, or 243.8 billion
rupees ($3 billion), according to a report by New Delhi-based research organizations Climate Trends
and Centre for Financial Accountability. That’s a 6% rise from 2019 approvals for clean energy
projects of about 229.71 billion rupees in 2019.
Indian lenders channeled more funds to clean energy projects compared to coal-based ones for a
third straight year in 2020 with more expected to flow into the renewables sector in the coming years
after Prime Minister Narendra Modi unveiled ambitious goals last month for cutting emissions.
Clean energy projects got 74% of the total funds from financial institutions last year, or 243.8 billion
rupees ($3 billion), according to a report by New Delhi-based research organizations Climate Trends
and Centre for Financial Accountability. That’s a 6% rise from 2019 approvals for clean energy
projects of about 229.71 billion rupees in 2019.
Just 85.2 billion rupees, or 26% of the 2020 funds from Indian lenders went to coal-fired plants, data
from the report showed. This represents an 86% slump in approvals for coal plants since 2017 and
is in line with declining availability of funds globally for fossil-fuel projects.
This trend is expected to continue after Modi announced India’s plan for net zero emissions by 2070
at COP26. Modi also raised India’s 2030 target for low-emission energy capacity to 500 gigawatt
from 450 GW and to wants the country to generate half its electricity using renewable energy.
Renewable energy forms 40% of India’s current installed capacity of 392 GW while coal remains
the mainstay at 52%, according to government data.

The report, which analyzed 42 project finance loans worth 329.97 billion rupees that closed last
year, showed that solar energy got most of the financing and commercial banks didn’t lend to coal
projects. Only the state-run Power Finance Corporation and Rural Electrification Corporation
disbursed funds to fossil fuel-based projects.
Despite lenders favoring clean energy, lending for coal in 2020 grew by 40% to 85.2 billion rupees
after two straight years of declines as the state-owned banks emerged as the lenders of last resort.
Also the number of coal projects getting financing have fallen although India has brought online
significant coal capacity with about 34 GW getting built and another 21 GW in the pipeline.
“Worryingly, the stranded risk of these assets is significant,” Climate Trends and CFA said in the
report. “As the growth in India’s energy demand slows, and the number of renewable energy
installations rises, the utilization rate of coal plants will continue to decline. As such, their economics
will deteriorate further.”

U.S: EIA forecasts natural gas production will establish a new
monthly record high in 2022 …U.S. Energy Information Administration, Short-Term Energy Outlook
In our December Short-Term Energy Outlook (STEO), we forecast that U.S. dry natural gas
production will increase from 95.1 billion cubic feet per day (Bcf/d) in October 2021 to 97.5 Bcf/d by
December 2022, a new record high. The previous monthly record of 97.2 Bcf/d was set in November
2019.
In early 2020, COVID-19-associated declines in demand resulted in a corresponding natural gas
price decrease and reduced drilling. As a result, monthly natural gas production declined to a low
of 87.3 Bcf/d in May 2020. Dry natural gas production in the United States has generally risen since
then, with a brief exception in February 2021, when winter weather substantially reduced natural
gas production in Texas.
Our forecast for U.S. natural gas production growth includes expected output from natural gas-
directed drilling activity as well as natural gas production associated with crude oil production
(associated gas).
In both the Haynesville region (mainly in Texas and Louisiana) and the Appalachia Basin (mainly
in Pennsylvania and West Virginia), increased drilling activity and greater output per well have led
to more natural gas production in recent months, according to metrics compiled in our Drilling
Productivity Report.
Associated natural gas production has also increased as producers have completed wells that were
previously drilled but uncompleted (DUC wells).

The number of natural gas-directed rigs—rigs drilled primarily in natural gas-bearing formations—
decreased throughout 2019 and the first half of 2020, based on data from the Baker Hughes
Company.
By late August 2020, the natural gas-directed rig count had fallen to 68 rigs, the fewest in Baker
Hughes’s data series, which dates back to 1987. The number of natural gas-directed rigs has since
increased to 102 in mid-November 2021.
Rig counts are considered a leading indicator of newly drilled wells, but increases in drilling
efficiency (the number of new wells each rig can drill) and new-well production have complicated
the relationship between rig counts and eventual production.

EU to allow joint gas buying, plots low-carbon gas shift
Reuters
The European Commission on Wednesday proposed rules allowing EU countries to jointly buy
strategic reserves of gas, under plans that would also bolster gas storage and aim to add more low-
carbon gases to the network.
European Union countries including Spain, Greece and Romania have called for joint gas buying,
a move they say would help shore up supplies. Gas prices surged to record highs in recent months,
stoked by factors including high demand and lower-than-expected exports from Russia.
The European Commission has responded by proposing a system by which countries' transmission
system operators (TSO) could jointly buy strategic stocks of gas, which could be used in an
emergency situation of severe scarcity.
Participation would be voluntary and countries would first need to notify the Commission, sharing
details including the volume to be bought, the operating procedures to activate the supply in an
emergency, and expected costs and benefits.
EU countries would also need to include storage in their regional assessments of gas supply risks,
including relating to foreign ownership of storage infrastructure, under the Commission proposal. If
they identify risks, countries should consider measures such as obliging TSOs to buy strategic
stocks.
Spanish deputy prime minister Teresa Ribera told reporters on Tuesday that joint rather than
individual purchasing could help secure better terms in global gas markets. read more
Officials from some other EU states have said they do not expect their countries to take part in such
a scheme.

FOSSIL GAS
The EU executive body's proposal will not take effect in time to combat the gas price spike this
winter. It could face months of negotiations between the European Parliament and EU member
countries, who must app rove the rules and who disagree on the role of gas in the energy transition.
The proposal would require countries' long-term fossil gas contracts to end by 2050, the date by
which the EU has pledged to reach net zero greenhouse gas emissions. Fossil gas provides roughly
a quarter of EU energy, with 90% of it imported.
To push more low-carbon gases into the grid, TSOs would be required to accept fossil gas with a
blend of up to 5% hydrogen from 2025 at cross-country interconnections, while hydrogen network
operators would have to cooperate at EU level to help develop a market.
The EU has said its gas use must drop 25% by 2030, from 2015 levels, to meet climate
goals and that a shift to locally-produced renewable energy is its long-term defence against
supply issues and the volatile price of imported fossil fuels.

NewBase December 20-2021 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil prices slide as rapid Omicron spread dims fuel demand outlook
Reuters + NewBase
Oil prices slumped by $2 on Monday as surging cases of the Omicron coronavirus variant in Europe
and the United States stoked investor worries that new mobility restrictions to combat its spread
could hit fuel demand.
Brent crude futures fell by $2.66, or 3.62%, to $70.86 a barrel by 19.35 GMT while U.S. West Texas
Intermediate (WTI) crude futures were down $2.863 or 3.99%, at $68.03. "Simply put, it is not a
case of if but when governments impose tougher restrictions," Stephen Brennock of broker PVM
said in a report.
Oil price special
coverage

"Both crude markers are taking a sharp dive as the new week gets underway amid the prospect of
a bigger than expected Omicron-spurred dent to global demand."
The Netherlands went into lockdown on Sunday and the possibility of more COVID-19 restrictions
being imposed ahead of the Christmas and New Year holidays loomed over several European
countries. read more
U.S. health officials urged Americans on Sunday to get booster shots, wear masks and be careful
if they travel over the winter holidays, wuith the Omicron variant raging across the world and set to
take over as the dominant strain in the United States.
Meanwhile, U.S. energy companies this week added oil and natural gas rigs for a second week in
a row.
The oil and gas rig count, an early indicator of future output, rose by three to 579 in the week to
Dec. 17, representing its highest since April 2020, energy services busines Baker Hughes Co said
in its closely followed report on Friday.
Lower exports are expected from Russia, however, with exports and transit of oil from the country
planned at 56.05 million tonnes in the first quarter of 2022 versus 58.3 million tonnes in the fourth
quarter of 2021, a quarterly export schedule seen by Reuters showed on Friday. read more
Meanwhile, OPEC+ compliance with oil production cuts stood at 117% in November, up 1% from
the previous month, two sources from the group told Reuters, as output continues to lag agreed
targets.
Goldman Says $100 Oil Possible as Record Demand Outpaces Supply
Oil at $100 a barrel cannot be ruled out in 2023 as supply additions are expected to be too slow to
keep up with record demand, according to Goldman Sachs Group Inc.
While the bank’s base forecast is for Brent to stay around $85 next year and 2023, it could breach
triple digits through either higher cost inflation for drillers, or if an unexpected supply shortfall forces
prices to spike high enough to destroy demand, said Damien Courvalin, head of energy research.

The upside risks underscore why Goldman remains bullish on oil even after prices have rallied more
than 40% this year. The bank sees the recent sell-off as overdone on unnecessary concerns about
omicron-related restrictions and expects investors to buy the dip once asset managers reallocate
money next year.
“There’s insufficient supply in the face of strong demand,” Courvalin said in a call with reporters
Friday. “Oil prices have to be higher to overcome the higher cost of capital to fund projects.”
The recent $10 dip is the equivalent of pricing in a loss of 5 million barrels a day of demand for three
months. That’s likely an overreaction, Courvalin said, as governments seem to be responding to
omicron with more testing than new lockdowns so far.
Longer term, output growth is being hit by challenges including upstream cost inflation and more
expensive financing as investors opt to support ESG-focused sectors, he said. Investments in long-
cycle oil projects have also dipped due to uncertainties around energy transition and its impact on
fuel usage.
Demand for everything from gasoline, diesel and plastics is currently at a record level, with
consumption expected to reach new highs in 2022 and 2023, he said. Use of jet fuel will continue
to lag due to Covid-related travel restrictions, but some pent-up demand for travel is likely to emerge
as borders reopen.
Demand is being supported by strong government capital expenditure, both to support the economic
recovery from Covid and to fund the energy transition needed to combat climate change. An
increased focus on income inequality will also support commodities, as poorer people tend to spend
a higher portion of their income on goods and energy.
Oil prices could go as high as $110 a barrel if supply can’t keep up and the market needs demand
destruction in order to balance, he said.

NewBase Special Coverage
The Energy world –Dec -21 -2021
The Electric Vehicle Sales Market and its Charging Worth
By City + NewBase
Sales of electric vehicles (EVs) have been remarkably strong recently. In the 12 months to June
2021, sales of EVs were more than 160% higher than in the same period a year earlier and were
up by more than 130% in the comparable period in 2019 (according to BNEF data).
 Electric vehicle sales have soared by 160% over the past year, and the trend is showing no
sign of slowing.
 More than 300 million new EV charging ports will be required globally by 2040, up from fewer
than six million today.
 The electric vehicle charging market is expected to be valued at as much as $1.6 trillion in
the coming years.
So, although the transition to EVs is truly underway, this is just the beginning and there is a lot
further to go. In the UK, for example, EVs accounted for 11% of total passenger vehicle sales last
year. However, that share will have to rise to 100% in fewer than nine years if the target to ban sales
of new internal combustion engine (ICE) vehicles by 2030 is to be met.

The plug-in electric market on the other hand continues to expand at a rapid rate. In June, the
number of registrations increased 131% year-over-year to almost 32,000. That's 17.2% of the
market! It's one of the best months ever and let's take a note that all-electric cars took more than a
tenth of the market.
Plug-in electric car registrations in the UK – June 2021
 BEVs: 19,842 (up 123% year-over-year) at market share of 10.7%
 PHEVs: 12,139 (up 146% year-over-year) at market share of 6.5%
 Total: 31,981 (up 131% year-over-year) at market share of 17.2%
So far this year, more than 132,000 new passenger plug-in cars were registered in the UK
at an average market share of 14.5%.
Sales YTD:
 BEVs: 73,893 (up 139% year-over-year) - market share of 8.1%
 PHEVs: 52,207 (up 197% year-over-year)- market share of 6.4%
 Total: 132,100 (up 161% year-over-year) - market share of 14.5%

On the commercial vehicle side, more and more companies are committing to ambitious
decarbonization targets, which means emissions from commercial vehicle fleets are coming under
scrutiny. The 111 members of the ‘EV100’ group, which includes companies such as Tesco and
Ikea, have committed to switch their fleets to EVs and/or install charging for staff and/or customers
by 2030.
In addition to these policies and target tailwinds, the economics of EVs continue to improve as the
industry expands. Indeed, EVs are expected to become cheaper than ICE vehicles within the next
few years. This will be an important tipping point for the market which will further accelerate the
transition.
Top models
In June, the volume deliveries of the Tesla Model 3 (as usual in the last month of a quarter) resulted
in a very strong result of 5,468 registrations, which is the best result overall.
The Model 3 is not yet in the top 10 year-to-date, which means it must be below 15,124. What we
know is that with 6,585 units in March, the Model 3 is at no less than 12,053.
Vauxhall (part of Opel) reports that the Vauxhall Corsa-e (in the rest of Europe known as Opel
Corsa-e) noted 2,795 sales so far this year and remains the best-selling all-electric supermini (the
Corsa is also #1 overall with 24,399 ICEs/BEVs).
Vauxhall Vivaro-e is the top-selling electric delivery van in the UK, with a record of 613 units in June,
and 1,487 YTD. Sales of the Vivaro-e clearly accelerate thanks to a huge order backlog.
How big could the EV charging market be?
According to estimates by Bloomberg, more than 300 million new EV charging ports (across
residential, public, fast charging and fleet) will be required globally by 2040, up from fewer than six
million today. The enormous volume of chargers required to support the shift to EVs (both passenger
and commercial), means this is expected to remain a growth market until around 2035, when
investment in charging infrastructure peaks.

What are the opportunities and challenges?
Until recently, it has been difficult for equity investors to directly access the EV charging theme:
either because the companies were private, or because small EV charging businesses were tucked
away in larger, diversified companies.
However, a raft of EV charging companies have gone public in the past 12 months, often via special
purpose acquisition vehicles (SPACs). Consequently, the opportunities for investors have expanded
considerably.
While the proliferation of well-funded EV charging companies bodes well for the industry’s ability to
support the energy transition, it also raises a pressing question from an investment perspective.
With so many companies jostling for a piece of the action, will competition prevent these companies
from achieving decent returns?
What does this mean for investors?
Many of these companies may be able to continue to do well in the short term as the EV charging
sector continues to expand rapidly. In the long term, however, the gap between those companies
which have managed to create real customer retention (for example, through selling software
subscriptions) and those whose business model is focused primarily on selling the charging
hardware or electricity, may become more apparent.
Investors who remember the evolution of the solar manufacturing industry over the last 10 years will
be all too familiar with the idea that a market can grow rapidly while delivering poor returns to
shareholders. As investors in climate change, our role is to look beyond the eye-catching growth
numbers and seek out those companies with durable long-term competitive advantages.

NewBase Energy News 21 December 2021 - Issue No. 1475 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.

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