New base 21 october 2019 energy news issue 1287 by khaled al awadi (1)

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NewBase Energy News 21 October 2019 - Issue No. 1287 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Saudi Aramco delays planned IPO until after earnings update
Reuters + Bloomberg + NewBase
Saudi Aramco has delayed the planned launch of its initial public offering in hopes that pending
third-quarter results will bolster investor confidence in the world’s largest oil firm, two sources
familiar with the matter said.
Aramco had been expected to announce plans next week to float a 1 per cent to 2 per cent stake
on the kingdom’s Tadawul market, in what would have been one of the largest ever public offerings,
worth upwards of $20 billion.
However, after a September 14 attack on its Abqaiq and Khurais plants temporarily knocked out
half its crude output, the world’s top exporter wants to reassure investors by first presenting results
covering the period, the two sources said, speaking on condition of anonymity as the information is
not public.
“They want to do all that they can to hit the valuation target. Solid results after the attack will put
them in a stronger position,” said one of the sources.
www.linkedin.com/in/khaled-al-awadi-38b995b
Aramco sits on 263 BB
oil and 320 TCF gas,

The second source confirmed the offering had been postponed, and there was currently no new
date set for the listing. Neither source knew when third quarter results were likely to come out.
In a statement to Reuters on Friday, Saudi Aramco said: “The company continues to engage with
the shareholders on IPO readiness activities. The company is ready and timing will depend on
market conditions and be at a time of the shareholders’ choosing.”
The news comes after Reuters, citing sources familiar with the IPO, reported on September 24 that
the offering was unlikely to happen this year in light of the attacks. The Financial Times, which
initially reported the IPO delay on Thursday, cited a source as saying the listing was delayed by
“weeks”.
The prospect of Aramco selling a piece of itself has had Wall Street on tenterhooks since Crown
Prince Mohammed bin Salman first flagged it three years ago.
However, his desired $2 trillion valuation has always been questioned by some financiers and
industry experts who note that countries have been accelerating efforts to shift away from fossil
fuels to curb global warming, putting oil prices under pressure and undermining producers’ equity
value.
Then came the September attack, which initially knocked out 5.7 million barrels per day (bpd) of
production, or more than 5 per cent of global oil supply.
Aramco executives have insisted since the attack that it would have no impact on its plans to list
the company. The full restoration of oil output as declared by Energy Minister Prince Abdulaziz bin
Salman on October 3 — at a faster clip than expected — was seen boosting the company’s image.
“The official line was that the Q3 results were very good, so they want to update the analysts and
market the IPO after the Q3 numbers,” the second source said. Aramco halted plans for a
blockbuster international listing of around 5 per cent last year amid debate over where to list
overseas, but talks resumed this summer. Saudi investors see the IPO as a chance to own part of
the
Saudi Aramco has enlisted the help of a former Donald Trump national security adviser and an ex-
House of Representatives majority leader to pull off the
world’s biggest IPO.
One-time Trump staffer Dina Powell, a partner at
Goldman Sachs Group Inc., and Moelis & Co. Vice
Chairman Eric Cantor are among scores of Wall Street
veterans hired to sell shares in the kingdom’s state oil
firm. The roster of bankers reads like a who’s who of
finance, underscoring the importance of Saudi Arabia
less than a year after the murder of government critic
Jamal Khashoggi prompted a brief spell of skittishness
over doing business with the country.
At the end of the month, many of Aramco’s bankers are expected to converge at the Future Investment
Initiative -- an annual jamboree to showcase the kingdom’s aspirations that’s been dubbed Davos in the
Desert. The Saudi government is set to give the official green light for the IPO at a meeting on Thursday,
aiming to raise about $40 billion for the kingdom’s sovereign wealth fund, and a formal announcement
is expected to follow on Sunday.

Friends Matter
Aramco has hired about 25 institutions to sell the stock. Many bankers have spent years wooing officials
to get a lucrative spot on the listing, making intense pitches multiple times to Aramco executives and
maintaining ties even as it was
delayed. While the selection of
firms such as HSBC Holdings Plc
and JPMorgan Chase & Co. --
which have long dominated deal
making in the kingdom -- was
expected, other mandates were
more surprising and highlight how
personal relationships and loyalty
matter more than ever.
The IPO’s financial advisers
Moelis, Lazard Ltd. and Michael
Klein have all played a key role in
selecting banks and working to
ensure Aramco can secure its
valuation expectations,
Bloomberg News has reported.
Klein, a former Citigroup Inc. executive with longstanding ties in the kingdom, has been especially
instrumental in pulling the deal together. Even though many investors are expected to come from inside
the kingdom, more than 300 bankers are now working on selling the deal worldwide.
BofA Surprise
Bank of America Corp.’s appointment to one of the top roles on the IPO was a big surprise, according
to people with knowledge of the matter, who asked not to be identified because the information is private.
The U.S. bank -- a latecomer to business with Saudi government entities -- wasn’t expected to win a
place on the deal until Chief Operating Officer Tom Montag intervened, the people said.
Montag personally covers the kingdom’s sovereign wealth fund, the Public Investment Fund, and has a
good relationship with its governor Yasir Al-Rumayyan, who also chairs Aramco. He got more of the
firm’s New York bankers involved in the process and helped convince Aramco’s IPO committee to give
them a role, the people said. Julian Mylchreest, who’s worked on blockbuster oil deals including Royal
Dutch Shell Plc’s roughly $50 billion acquisition of BG Group Ltd., is playing a big role.
Credit Suisse Group AG was another surprise name on the roster. While the bank has been trying to
beef up its Saudi operations and secured a banking license in the country earlier this year, it has little
track record on local IPOs and isn’t one of Aramco’s key lenders.
The pitch team was led by CEO Tidjane Thiam. The strength of Credit Suisse’s private banking business
was also a key factor for Aramco -- offering access to the many billions they manage for ultra-rich
investors. Jim Peterkin, head of the EMEA energy practice, and local CEO Khalid Al Ghamdi are heavily
involved in the deal.

For Moelis, the mandate is seen as a further sign of the boutique bank’s strong ties with the kingdom
and its upper echelons.
Lazard’s selection is a particular boon for the bank, which wasn’t one of the advisers on Aramco’s first
listing attempt. The boutique bank’s work on Aramco’s debut bond sale earlier this year, which attracted
more than $100 billion of orders, put it in pole position to secure an IPO role. Their team is led by
Francois Kayat, the Paris-based banker who opened the doors for the bank in the kingdom after working
on the sovereign bond.
Top Roles
Two of the nine joint global coordinators, JPMorgan and Morgan Stanley, are managing the lion’s
share of the deal including work around tax, royalties and the company’s dividend policy, the people
said.
Goldman Sachs, which also secured a top role, has been making a push into Saudi Arabia as the
bank’s Middle East operations face fallout from the corruption scandal in Malaysia involving the
1MDB investment fund. Egyptian-born Powell, Trump’s former deputy national security adviser for
strategy, was spearheading the effort to win the deal alongside CEO David Solomon and
international banking head Richard Gnodde.
Suhail Sikhtian, global energy co-head at Goldman, is one of the bank’s key people on the deal
along with senior London-based energy banker Andrew Fry and growth-markets ECM head
Jonathan Penkin.
Representatives for Aramco and the banks declined to comment or didn’t immediately respond to
requests to comment.
The Aramco IPO is key to Prince Mohammed bin Salman’s plans to fund the diversification of the
kingdom’s economy away from its reliance on oil. The proceeds from the IPO will also help boost
the firepower of the OPEC nation’s sovereign wealth fund, which already has investments in funds
managed by Blackstone Group Inc. and SoftBank Group Corp.
Massive Profit Potential of the Aramco IPO (Without Buying the Stock)
News of the Saudi crown prince's visit to the United States has dominated headlines this week.
It's not surprising, either, since industry insiders expect he's here in part to sell the upcoming Aramco
IPO. The Saudi Arabian oil company is not just the world's most profitable company, its valuation is
also an astronomical $2 trillion. You see, it has unfettered access to Saudi Arabia's 265 billion
barrels of oil reserves.

An offering of just 5% of the company could be worth $100 billion. That crushes the record for largest
IPO ever, set by Alibaba Group Holding Ltd.'s (NYSE: BABA) $25 billion IPO.
You've likely heard all of this before. If you're a Money Morning subscriber, you've read all about
the Saudi Aramco IPO, the battle over where to list the company, and the brains behind
it, Mohammad bin Salman.
But what you might not know is that while the Aramco IPO will shatter records with its eye-popping
valuation, that's not where the real profit opportunity lies. That's right: Your biggest opportunity to
profit from this historic IPO actually won't be from owning the stock.
You see, Saudi Arabia is selling Aramco to finance its sovereign wealth fund, a crucial part of
Mohammad bin Salman's plan to diversify the Saudi economy. It will instantly become the biggest
fund like it on the planet. And knowing where this massive fund will deploy its money is the key
to your next profit play.
Just look at how the new fund will stack up to the rest of the world after the IPO…
Money Morning Global Energy Strategist Dr. Kent Moors is an energy industry insider, and he's
revealing a lucrative backdoor way to play this historic IPO. Dr. Moors is a 35-year veteran of the
energy markets, where he's advised some of the biggest players in the industry, from governments
like the United States, Russia, China, and Iraq, to some of the biggest energy companies.
His contact list includes ambassadors, OPEC leaders, and global oil ministers. On top of all that,
he's won presidential citations from Nixon, Reagan, and Clinton for his service to the country. In
short, when Dr. Moors talks, we listen. And when he talks about how to profit from this incredible
wealth creation event, we take notes.
By his estimation, you could end up with a life-changing, combined 1,329% payday with these four
backdoor plays on the biggest IPO in history. And Kent sat down with Money Morning to share his
insight on the IPO, this massive $2 trillion fund, and how you can turn it into your next profit
opportunity.

UAE EWEC, ACWA Power announce B.Dhs3.19 of RO project
Business Bureau, Gulf Today
Emirates Water and Electricity Company (EWEC), a subsidiary of Abu Dhabi Power Corporation
(ADPower) and a leading company in the integrated coordination of planning, purchasing and
supply of water and electricity across the UAE, and ACWA Power, the leading Saudi-based
developer, investor and operator of power generation and desalinated water plants, have confirmed
the successful financial closing of the world’s largest reverse osmosis (RO) desalination plant.
The new plant will be located at the Taweelah power and water desalination complex in Abu Dhabi,
with completion expected in 2022. A partnership of Abu Dhabi Power Corporation and Mubadala
Investment Company holds a 60 per cent equity interest in the Taweelah project with the remaining
40 per cent held by ACWA Power.
The project is to cost Dhs3.19 billion, with funding sourced from a combination of senior project
finance loans worth a total of Dhs2.71 billion, in addition to equity contributions from shareholders
and operating cashflow from pre-operations.
The Taweelah plant’s loan structure is a “Soft Mini Perm”, with an expected refinancing period of a
maximum three years starting after the commencement of the Taweelah project’s commercial
operations. Loans (including conventional and Islamic tranches) have been arranged by a group of
local and international banks including: Emirates NBD, Natixis, Mizuho Bank, Siemens Bank, Bank
Boubyan and The Norinchukin Bank. Natixis is the Agent Bank.
Othman Al Ali, CEO of Emirates Water and Electricity Company, said: “We are delighted to
announce that our financial targets have been met and that this new initiative can now get underway.

Mohammad Abunayyan, Chairman of ACWA Power, added: “Achieving such a strategic milestone
at this stage in our relationship with Emirates Water and Electricity Company is a sure indicator of
the type of success we can expect from this project.
The financial closing of the Al Taweelah plant with renowned institutions was made possible by our
cooperation, the scale and impact of this project and the future growth and development we
anticipate in the UAE.”
“We are truly delighted to play a role in the Independent Water Producers programme (IWP)
launched by Emirates Water and Electricity Company helping secure the water needs for its
communities.”
The Taweelah plant will set new benchmarks for its size, efficiency and cost of water produced.
Supplying 909,200 m3/day, it will be 44 per cent larger than the world’s current largest reverse
osmosis plant of 624,000 m3/day.
The desalination facility is sufficient to meet the water demand for over 350,000 households. A major
driver for the adoption of reverse osmosis instead of thermal desalination is the higher energy
efficiency it offers. EWEC ensures the supply of power and water to consumers in the Emirate of
Abu Dhabi and beyond.
The company is responsible for purchasing, selling, planning, organising and managing supply and
demand of power and water. Emirates Water and Electricity Company is committed to identifying
opportunities and the development of power and water generation facilities, with a focus on
sustainability and renewable technologies.
ACWA Power is a developer, investor and operator of a portfolio of power generation and
desalinated water production plants currently with presence in 12 countries including in the Middle
East and North Africa, Southern Africa and South East Asia regions.
ACWA Power pursues a mission to reliably deliver electricity and desalinated water at a low cost,
thereby contributing to the social and economic development of the communities and countries it
invests in and serves. ACWA Power strives to achieve success by adhering to the values of Safety,
People and Performance in operating its business.

Gabon: VAALCO Energy confirms oil in Etame 9P appraisal well
Source: VAALC Energy
VAALCO Energy has announced that the Etame 9P appraisal well, targeting the subcropping
Dentale reservoir beneath the VAALCO-operated Etame field offshore Gabon, was successfully
drilled to a total depth of 10,260 feet and encountered both Gamba and Dentale oil
sands. Operations are underway to plug back to a shallower depth and drill the Etame 9H horizontal
development well section in the Gamba reservior.
Key highlights:
 Verifies the presence of a Dentale oil column first identified in the Etame 4V well drilled in 2001
 Encountered approximately 35 feet of good-quality Dentale oil sands with 27% porosity and 3,000
mD of permeability
 VAALCO estimates gross recoverable oil resources of 2.5 to 10.5 million barrels of oil present in sub
cropping Dentale reservoirs
 Identified an oil column which was thicker than expected in the Gamba reservoir which may result in
higher ultimate oil recovery from the planned Etame 9H and Etame 11H wells than previously
expected
 VAALCO did not encounter H2S in either the Gamba or Dentale reservoirs
 Operations are underway to retrieve drill pipe and tools that became lodged in the wellbore after
reaching total depth which will delay completion of the Etame 9H into December.
Cary Bounds, Chief Executive Officer, commented:
'We are excited that our first appraisal wellbore in the 2019/2020 drilling campaign has confirmed
our estimates of meaningful recoverable resources in the subcropping Dentale, which we currently
have classified as prospective. The successful Etame 9P is the first of many appraisal opportunities
that we have identified that have the potential to create substantial organic value for our
shareholders. The result reaffirms the upside potential yet to be exploited from the Etame field.
We continue to assess the viability of drilling future Dentale development wells as we aim to extend
the overall life of the field by continuing to add reserves and production.

Egypt: Shell plans to sell assets in Egypt’s Western Desert
All Rights Reserved - Mubasher Info © 2005 - 2019 Provided by SyndiGate Media Inc. (Syndigate.info).
Shell Egypt revealed plans to sell its onshore upstream assets in the Egyptian Western Desert,
according to a statement on Sunday. The company said it aims to focus on growing its offshore gas
exploration and integrated gas business in the North African nation.
Shell affirmed its commitment to support “the government’s energy hub vision by growing Shell
positions across the offshore and LNG value chain,” Shell upstream director, Wael Sawan, said.
Negotiations with potential buyers are expected to begin in the fourth quarter of 2019, Shell Egypt’s
chairman, Khaled Kacem noted. Negotiations with potential buyers are expected to begin in the
fourth quarter of 2019: Shell Egypt's chairman.
Kacem stressed that “any sale is contingent on finding an appropriate buyer, commercial
negotiations, and required approvals.”
“Shell companies are progressing with new offshore activities, including [its] West Delta Deep Marine
(WDDM) Phase 9B project, which involves eight new development wells, and exploration in WDDM, for which
a 2nd offshore rig has been recently mobilised, that will be followed up with exploration in Rosetta as well as
the recently awarded Blocks 4 and 6,” Kacem remarked.
Shell has a 50% interest in the Badr Petroleum Company (BAPETCO), a self-operated joint venture between
Shell and the Egyptian General Petroleum Corporation (EGPC). BAPETCO onshore operations are in the
Western Desert where we have an interest in nine oil and gas producing development leases, as well as four
exploration concessions (North East Obaiyed, North Matruh, North East El Shawish and North Umbaraka).
We have interests in two gas-producing areas offshore the Nile Delta. We have a 40% interest in the Rashid
Petroleum Company, a self-operated joint venture between Shell, EGPC and Edison, which operates the
Rosetta concession (Shell interest 80%).
We also have a 25% interest in the Burullus Gas Company (Burullus), a self-operated joint venture between
Shell, EGPC and PETRONAS. Burullus operates the West Delta Deep Marine concession We also have a
60% interest in the development rights over the Harmattan Deep discovery and in the Notus discovery
offshore the Nile Delta. In April 2018, we approved the FID for the development of Phase 9B of the WDDM
offshore concession (Shell interest 50%).

NewBase October 21 – 2019 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices fall as global demand concerns grow
Reuters + NewBase
Oil prices fell on Monday on concerns about slackening global demand that outweighed bullish
signals from Europe, where fears of an economically damaging no-deal Brexit have eased.
Global benchmark Brent crude oil LCOc1 was down 62 cents to $58.80 a barrel by 1050 GMT. U.S.
West Texas Intermediate crude oil CLc1 declined 11 cents to $53.67 a barrel.
Signs of still ample global oil supplies, combined with concerns about economic growth in China,
the world’s largest oil importer, pressured prices.
“A rebound in upside potential looks unlikely at this stage given that bullish catalysts are in short
supply,” said Stephen Brennock of oil broker PVM. “Only a meaningful U.S.-China trade agreement
or deeper OPEC cuts will change the negative status quo, neither of which seem to be forthcoming.”
Oil price special
coverage

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other oil producers, an
alliance known as OPEC+, agreed in December to cut supply by 1.2 million barrels per day (bpd)
from the start of this year.
Russia, the world’s second-largest oil producer, said on Sunday it did not meet its supply reduction
commitment in September because of an increase in natural gas condensate output as the country
prepared for winter.
Additionally, talks between OPEC members Kuwait and Saudi Arabia to resume oil production from
joint fields in the Neutral Zone between the two countries, with capacity of 500,000 barrels per day,
could mean more supply returning to the market.
While market participants believe OPEC+ could decide to extend output cuts in an upcoming
December meeting, economic headwinds are curbing bullish sentiment and fueling oil demand
concerns.
China’s economic growth slowed to 6% year-on-year in the third quarter, its weakest in 27-1/2 years
and short of expectations due to soft factory production and continuing trade tensions.
However, a 9.4% year-on-year increase in China’s refinery throughput for September signaled that
petroleum demand remained robust. “This level of crude intake would imply that every province
had simultaneously processed close-to-record volumes of crude based on their historical regional
reporting,” JBC analysts said in a note.
European shares opened slightly higher on Monday and UK government bond yields rose as
investors remained hopeful that Britain would be able to avoid a disorderly exit from the European
Union.
Analysts have said any British-EU agreement that avoids a no-deal Brexit should boost economic
growth and oil demand.

Total launches its first large liquefied natural gas (LNG) bunker vessel
Source: Total
Total has announced that its first large liquefied natural gas (LNG) bunker vessel has been
launched, following the signature of a long-term charter contract between Total and Mitsui O.S.K
Lines (MOL) in February 2018.
After delivery in 2020, the bunker vessel will operate in Northern Europe, where it will supply LNG
to commercial vessels, including 300,000 tons per year for CMA CGM’s nine ultra-large newbuild
containerships in Europe-Asia trade, for a period of at least 10 years.
The LNG bunker vessel’s construction is in line with the International Maritime Organization (IMO)
decision to drastically limit the sulfur content of marine fuels as of 2020. In this context, the transition
from heavy fuel oil to LNG is a competitive, efficient and immediately available solution for maritime
transportation.
Used as a marine fuel, LNG sharply reduces emissions from ships, resulting in a significant
improvement in air quality, particularly for communities in coastal areas and port cities. LNG helps
to cut:
 Sulfur emissions by 99%,
 Fine particle emissions by 99%,
 Nitrogen oxide emissions by 85%,
 Greenhouse gases emissions by around 20%.
'Developing infrastructure like this giant bunker vessel is essential to allow LNG to become a widely
used marine fuel,' said Momar Nguer, President for Total Marketing & Services. 'This first ship

demonstrates our commitment to offering our customers both more environmentally friendly fuels
and the associated logistics. Thanks to this pioneering investment, Total is making a positive
contribution to the sustainable evolution of global shipping.'
Built by Hudong-Zhonghua Shipbuilding at their shipyard near Shanghai, the bunker vessel is fitted
with innovative tank technologies, with a capacity of 18,600 cubic meters, provided by the French
company GTT. Designed to be highly maneuverable, the 135-meter-long vessel will be able to
operate safely in the ports and terminals considered. Lastly, she meets the highest environmental
standards thanks to the use of LNG as fuel and complete reliquefaction of boil-off gas.
Total, Second-Largest Private Global LNG Player:
Total is the second-largest private global LNG player, with an overall portfolio of around 40 million
tons per year by 2020 and a global market share of 10%. With 22 million tons of LNG sold in 2018,
the Group has solid, diversified positions across the LNG value chain. Through its stakes in
liquefaction plants in Qatar, Nigeria, Russia, Norway, Oman, Egypt, the United Arab Emirates, the
United States, Australia and Angola, Total sells LNG in markets worldwide.
Signs marine fuel deal with China's Zhejiang Energy
French oil company Total has signed a deal with Chinese state-owned Zhejiang Energy Group
(ZEG) to create a joint venture company to supply and delivery marine fuels in the Chinese region
of Zhoushan, the companies said on Monday.
Total China Investment (TCI) will hold a 49% share in the new joint venture company, and Zhejiang
Zheneng Petroleum New Energy (ZZPNE) will hold the remaining stake. The Zhoushan region
covers the Ningbo and Shanghai ports, representing the busiest shipping hub in the world in terms
of cargo tonnage, Total said in a statement.

Opec’s next meeting may unveil new approach to cuts
Gulf News + NewBase
The Organisation of Petroleum Exporting Countries and its partners — known as Opec+ — have
reduced output this year to contain a glut created by faltering oil demand and surging US shale
supply. Amid forecasts of a new surplus next year, there’s a chorus of calls from Morgan Stanley to
Commerzbank AG for the alliance to deepen the curbs when it meets in Vienna in December.
But in recent months global markets have grown tighter, removing any immediate need to act. If
extra cutbacks are announced, it would mark a break with tradition for the group, which typically
waits for a glut to emerge before responding.
“It would break the mold,” said Derek Brower, a director at consultant RS Energy Group. “Opec
makes policy reactively, not proactively.”
Depressed oil prices may compel the group to change its habits. Crude has slumped about 20 per
cent in six months to around $59 a barrel in London — below the levels most Opec nations need to
cover government spending — and on Friday posted a weekly loss of 1.8 per cent. A renewed sell-
off in 2020 would squeeze revenues even further.
‘Daunting’ stockpiles
Opec+, a collective of 24 producers that pumps half the world’s oil, confronts a “daunting” surplus
in the first six months of 2020 of about 1.2 million barrels a day, according to the International Energy
Agency. Demand is being eroded by the weakest global growth in a decade and the US-China trade
war, while supplies are swelling in the US and elsewhere. As a result, the group is facing a “serious
challenge” to defend prices, said Neil Atkinson, the agency’s head of oil markets.
The coalition agreed to cut output by 1.2 million barrels a day this year, a reduction that has been
compounded by a range of crises, from sanctions on Iran to a missile attack on Saudi Arabia’s oil-

processing facilities. Nonetheless, traders and consultants from Gunvor Group Ltd to Rystad Energy
AS recommend a further cutback when Opec+ meets on December 5-6.
“If by December there are clear signs of economic weakness, then a further deepening by a
minimum of 500,000 barrels a day would be highly likely,” said Ed Morse, head of commodity
research at Citigroup Inc in New York.
Opec’s top officials have signalled
they’re prepared to consider this.
Secretary-General Mohammad
Barkindo said the group will do
“whatever it takes” to prevent a
market slump and that members
are willing to “put all options on the
table.” Saudi Energy Minister Prince Abdulaziz bin Salman, who represents Opec’s biggest
member, said his job is to check a surplus.
Even Russia’s President Vladimir Putin, who leads Opec’s most important, yet often reluctant ally,
has said he recognises the need for further cooperation.
Yet announcing a supply cut while the market is in deficit would be a departure for the organisation.
When Opec+ was established in late 2016, surplus inventories had ballooned to a record of more
than 300 million barrels and were still accumulating at a rate of 1.4 million a day, according to the
Paris-based IEA. Its current round of cuts was agreed in late 2018, when supply was exceeding
demand by 2.7 million barrels a day.
Tardy approach
In the past, Opec has more typically been criticised for acting too slowly. When a surplus brews,
members are reluctant to gamble that sacrificing sales volumes will be compensated by higher
prices. There’s also the inevitable discussion over how much each nation should cut.
“It’s far easier for Opec to sit on its hands, ignore gloomy forecasts for as long as possible and try
to deal with any problems after they’ve emerged, rather than start the painful and tedious
negotiations that are always needed before a new deal,” RS Energy’s Brower said.
When Opec assembles at its Austrian headquarters in December, global markets probably won’t be
telegraphing any immediate surplus to be dealt with.
World oil inventories contracted in the third quarter by the most in a decade, falling by 228 million
barrels, according to Opec, as summer demand proved surprisingly robust and the group’s
deliberate cutbacks were amplified by disruptions in Iran, Venezuela and Saudi Arabia.
Stockpiles are poised to shrink further in the fourth quarter, even if the kingdom has fully restored
output from the September 14 missile and drone strikes, the IEA estimates. Inventories may decline
by about 55 million barrels.
Yet the outlook for the first six months of 2020 may nonetheless spur the producers into acting. The
alliance needs to cut supply by 1 million barrels a day, and the only question now is the timing, said
Bob McNally, president of Rapidan Energy Group and a former oil official at the White House under
President George W. Bush.
“Normally it’s Opec’s habit to wait until they can see the oversupply in the whites of the eyes,”
McNally said. “But the heavily swollen balances for the first half of next year may push them to cut
production earlier than planned.”

NewBase Special Coverage
News Agencies News Release Oct. 21-2019
Electric vehicle prices finally in reach of millennial, Gen Z car buyers
PUBLISHED SUN, OCT 20 201910:00 AM EDT
Christopher Butler
KEY POINTS
The cost gap between electric vehicle models and traditional gas cars is beginning to shrinking.
As the cost of lithium-ion batteries has gone down by over 70%, the gap in average transaction
price between the Nissan LEAF and Nissan Maxima is closing.
Tesla Model 3
Source: Tesla
Members of the millennial and Gen Z generations care more than past generations about
climate change, but younger Americans have been slow to show that belief in one
important way: electric car buying.
Only 10% of electric vehicle buyers are between the ages of 25 and 34, according to Cox
Automotive. A big reason: price. Younger generations of Americans are struggling with
student debt and wage stagnation at a time when more than 70% of electric car
customers’ incomes are at least $100,000.
The biggest competition has been in the affluent consumer market, where Tesla had an
early lead and is now being challenged by luxury car makers including Porsche, which

recently debuted its first electric car at an even higher price point than Tesla’s most
expensive models.
But with global auto manufacturers including GM, Volkswagen, Nissan and Kia coming
to market with more electric car offerings, the situation is changing.
The cost gap between electric models and gas models is beginning to shrink, according
to Rachelle Petusky, the manager of research and market intelligence for Cox
Automotive Mobility. And that shift is going to accelerate. “Going to be even more so the
case in the next two to three years,” she said.
Between 2010 and 2016, the cost of electric car batteries went down by over 70%,
lowering the average transaction cost for electric cars. Nissan LEAF prices have
decreased by 2.5% since 2012, while combustion engine cars like the Nissan Maxima
have increased by 7.5%, closing the cost gap.
Younger demographics are becoming more aware of the economic benefits of owning
electric vehicles. The Cox Automotive survey showed 65% of Gen Z consumers said that
charging an EV costs less than fueling a gas car.
According to the US Department of Energy, fueling an electric car costs almost half as
much as a gasoline car, with a gallon of gasoline costing $2.64 on average in the U.S.,
and an electric eGallon costing $1.24.
Affluent buyers still dominate EV market

Other concerns are still holding them back, according to Petusky. Their biggest concern
is not price, but range anxiety — the fear that the car will run out of power before the
battery can be recharged.
That was the main hesitation for 26-year-old William Lai, who currently leases a BMW i3,
which has an MSRP around $44,450, according to Edmunds.
Cox Automotive’s research shows that electric vehicles are closing the gap in expected
range. A Nissan Leaf has a range of approximately 225 miles, while Gen Z’s average
estimated range for electric cars is 218 miles; for millennials the average estimated range
is 248 miles.
The density of younger consumers in urban areas can be a reason for the limited appeal
of electric cars, said Jessica Caldwell, executive director of insights at Edmunds.
According to the 2017 census, 17.8% of people living in New York City were between
the ages of 25 and 35, the age group with the highest percentage. Younger people who
live in many urban areas may not need to own a car – public transportation is the norm.
But Lai, who lives in the San Francisco Bay Area, said public charging stations helped
make an EV work for his lifestyle. “You have to live in a place where you can charge it,”
said Lai.
Although he does not have a home-charging station, he said he has the ability to use charging
stations at his place of work, as well as free stations in public spaces like grocery store parking
lots.cl affect electric vehicle adoption, says former Ford CEO
Buying a used electric vehicle is cheaper than buying a new one, with used EVs costing between
43% to 72% less than new ones, depending on the model, according to Edmunds.
For 25-year-old Brain LaClair, buying a used electric car was the best option for him.
LaClair recently purchased his first electric car in July, a used 2017 Nissan LEAF. While
he admits the engines on newer models are much better, he said his can go 120 miles
before needing to charge, fitting
into his daily commute of
roughly 40 to 50 miles.
“A lot of people my age would
be able to afford an electric
vehicle if they looked into it,” he
said. “I really don’t think that it’s
a thought that really crosses a
lot of people’s minds, because
when they think about electric
cars, they think about Tesla.”
LaClair paid $12,000 for his
used Nissan LEAF. He received $1,000 for trading in his old vehicle and also received a
$750 electric vehicle incentive from a local utility for home charging. He was surprised

by how inexpensive it is to maintain and power his car, spending $14 on charging fees
in August.
But LaClair is not the norm in the electric vehicle consumer market according to Caldwell,
who said buyers of used electric cars remain rare. Lai, whose annual income is $100,000,
said he prefers to lease his BMW i3due to how rapidly technology advances. He said he
wouldn’t want to purchase a car in which the battery and technology would quickly go
out of date with each new update.
Tesla remains the leader
Even though the LEAF has a base MSRP of $29,990, more car buyers are interested
in Tesla, which just increased the price for the most affordable version of Model 3 from
$38,990 to $39,940. Electric cars make up around 2% of car sales, and the majority of
the market share is Tesla, according to Cox Automotive’s research.
There are federal tax incentives for electric car purchases, though those decline once a
manufacturer reaches a fixed number of 200,000 cars sold, and Tesla’s models are
already in the incentive phase out-period, with the original $7,500 credit now down to
$1,875 tax credit available until the end of this year.
ELECTRIC CAR PRICES
Some states, including New York and Vermont, offer tax incentives for electric vehicle
drivers. In some of these states, residents receive tax rebates by proving they’ve driven
exclusively with electric power for a given number of miles, while in others, residents
receive a rebate when they initially purchase an electric vehicle.

In some states, electric vehicle owners are required to make yearly car fees, with owners
in 11 states paying more than gasoline taxes.
New York State resident Ian Bresalier, who leased a BMW i3, said he used the money
from the rebate to purchase an in-home charging station.
“Basically, it pays for itself,” the 24-year-old said.
But Bresalier is an example of how long the road will still be for the mass adoption of
electric vehicles. The deciding factor for him in buying an electric car was the fact that
he was an BMW employee at the time and received an employee deal.
He loved the electric car, but he no longer has one. Bresalier now drives a gas-powered
2015 Chevy Sonic because the car averages 40-miles per gallon on the highway and he
does a lot of travelling. Range anxiety was a big issue for Bresalier.
LaClair, who makes payments on his used LEAF every month, is focused on the long-
term benefits.
“While I now have car payments, I’m also spending about $250 less per month on
powering my car” he said. “Even though I’m spending money to plug my car in at home,
it is incredibly less than if I were filling up at the gas pump every week.

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
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk
Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
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 2019 K. Al Awadi

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