UAE energy firms expand globally with new investments

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NewBase Energy News 27 May 2018 - Issue No. 1173 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: Mubadala Petroleum forays into Russian upstream
market with joint venture deal Gazprom Neft-Vostok
The national - Sarmad Khan
The Shinginskoe field, operated by Gazprom Neft-Vostok. The deal is Mubadala Petroleum’s first
investment in the Russian oil and gas sector. Courtesy Gazprom Neft-Vostok
Mubadala Petroleum, an Abu Dhabi-owned energy firm, and the Russian Direct Investment Fund
have formed a joint venture with Russia’s Gazprom Neft-Vostok to develop several oil fields in the
country.
Mubadala Petroleum, a subsidiary of Abu Dhabi strategic firm Mubadala Investment Company,
and RDIF, the sovereign wealth fund of Russia, will acquire a 49 per cent equity stake in Gazprom
Neft-Vostok, the operator of the oil fields in Western Siberia, the companies said in a joint
statement on Thursday.
The deal is Mubadala Petroleum’s first investment in the Russian oil and gas sector. Proven and
probable oil reserves in the fields amount to approximately 300 million barrels. Oil production from
the fields last year was about 33,000 barrels per day (bpd). The output from the fields is sold into
Russia’s domestic as well as the international markets, and transported primarily through the
Eastern Siberia-Pacific Ocean oil pipeline.

"This investment marks a further step in our long-term growth strategy and sees Mubadala
Petroleum’s entry into Russia,” said Bakheet Al Katheeri, the chief executive of Mubadala
Petroleum. “Through this new partnership with RDIF and Gazprom Neft … we will not only share
but also further build on our expertise and capabilities in oil and gas while adding significant oil
production to our existing oil and gas portfolio. "
Kirill Dmitriev, the CEO of RDIF, said the fund, its Abu Dhabi partner and Gazprom Neft-Vostok
see this project as the “first step in creating a consortium to pursue further significant investments
in the sector”.
Both RDIF and Mubadala Petroleum on Thursday did not specify the split of 49 per cent stake
between the partners or the monetary value of the deal, which is subject to regulatory and internal
approvals.
Reuters earlier reported that RDIF will take a 5 per cent shareholding while Mubadala Petroleum
is buying a 44 per cent stake in Gazprom Neft-Vostok, a subsidiary of the Russian gas major
Gazprom, which is worth at least $271 million. Gazprom board has already agreed to sell the
stake in its unit to Abu Dhabi-based company, the new agency cited a Gazprom statement as
saying.
Mubadala Petroleum manages assets and operations currently spanning eight countries with a
geographic focus on the Middle East and Southeast Asia. The Abu Dhabi company's average
working interest production in 2017 was around 320,000 bpd of oil equivalent.
The company in April signed
the production sharing contract
for Andaman I in Indonesia,
which was awarded by Jakarta
in the 2017 licence round.
Mubadala Petroleum is the
operator of Andaman I and a
partner in Andaman II,
operated by UK-based Premier
Oil. The two adjacent fields are
located in the under-explored
North Sumatra basin offshore
Aceh, a region where
Mubadala Petroleum has been
active since 2011 through joint
study agreements.
Mubadala Petroleum’s parent
company invests globally and manages over $200 billion of assets through a diversified portfolio
spanning 13 sectors and 30 countries. Mubadala's Petroleum and Petrochemicals platform
currently values its portfolio at $40bn, with just over $8bn spent in the last year alone in a raft of
upstream and downstream investments.
Mubadala Petroleum and Petrochemicals is seeking lower-cost barrels of oil at home and across
Asia, even as it positions itself as a strong player in the North American natural gas and chemicals
industry, its chief executive Musabbeh Al Kaabi told The National in March.

UAE: Strong global interest in RAK oil concessions
Gulf News
The tendering process to explore oil and gas resources in Ras Al Khaimah has received a positive
interest on a global scale. The licensing process to explore oilfields in seven contract areas
The newly established RAK Petroleum Authority is managing the licensing round in accordance
with the directives of His Highness Shaikh Saud Bin Saqr Al Qasimi, Member of the Supreme
Council and Ruler of Ras Al Khaimah.
“The licensing round has successfully generated an encouraging and positive response from
many international companies eager to explore Ras Al Khaimah’s oil and gas potential,” said
Nishant Dighe, the Chief Executive of the RAK Petroleum Authority, who is also the CEO of RAK
Gas.
The licensing process covers seven contract areas including four shallow water offshore blocks
and three onshore blocks and the process will remain open to interested parties until later this
year.
Great potential
Petroleum rights will be governed by a new exploration and production sharing agreement. The seven
blocks available for exploration have great potential for as yet untapped hydrocarbons due to the unique
geology of RAK, a result of the Hajar Mountains uplift and existing oil and gasfields in proximity, Dighe
added.
The development comes as the Government of Ras Al Khaimah brings a new law to regulate the petroleum
sector to ensure the protection, recovery and commercial utilisation of petroleum resources for the benefit
of the economy. Central to the law and its objectives is the creation of the Ras Al Khaimah Petroleum
Authority (RAKPA), the competent authority to regulate the petroleum sector in the emirate.

UAE: ADNOC sees 'considerable' interest in $45bn downstream
ArabianBusiness - Sam Bridge
Abu Dhabi National Oil Company (ADNOC) has announced that it is receiving considerable
interest from potential partners, as it explores a range of new growth options and initiatives to
accelerate the delivery of its recently announced downstream strategy.
ADNOC plans to invest AED165 billion ($45 billion) to become a global downstream leader,
enabling it to further stretch the value of every barrel it produces, creating a range of opportunities
for new and existing partners and investors.
The downstream strategy will build on the ADNOC transformation program of the last two years,
which focuses on maximizing value by driving operational efficiency, enhancing performance,

realigning the management of its portfolio of assets, and introducing a new and expanded
partnership and investment model, a statement said.
Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “As we grow in
the downstream, a central pillar of our strategy will be the creation of a global refining and
petrochemical growth engine at Ruwais. We are exploring a range of options in Ruwais, including
bringing in partners who share our vision to develop new businesses that will accelerate the
growth of the complex.
“The expansion and enhancement of our refining capabilities in Ruwais, along with the
development of Derivatives and Conversion Parks, are key initiatives aimed at significantly
expanding ADNOC’s downstream operations.
"They will provide the UAE private sector, and international companies, the opportunity to partner
with us to build and profit from the extended petrochemical value chain. The entire plan will
support the development and diversification of the UAE’s economy, create highly skilled,
specialized jobs and contribute to GDP growth.”
ADNOC said it is now accelerating this transformation by executing its downstream strategy that is
aligned with ADNOC’s 2030 strategy of a more profitable upstream, more valuable downstream,
more sustainable and economic gas supply, and more proactive, adaptive marketing and trading.
ADNOC added that it will look to create long term downstream partnerships, providing access to
opportunities across the value chain for both investors and partners.
Bob Dudley, CEO of BP, said: “Abu Dhabi for us is a strategic partner, it’s a great place to
invest...the UAE has great resources to produce, and it exports those, but now it can take them
and add more value to every barrel of crude oil and natural gas it produces, turning them into
other products, and sending them to the markets. This seems like a natural fit because Abu Dhabi
is located at the cross roads of the world, and it’s a really ambitious idea that Abu Dhabi has
experience of executing.”
Central to the plan will be a major enhancement and expansion of refining, petrochemicals and
manufacturing operations and capabilities in Ruwais.
The plans will see crude oil refining capacity doubled, and petrochemicals production tripled by
2025. In addition, the plans will see the creation of more than 15,000 highly skilled, specialized
jobs in the petrochemicals and refining fields added by 2025, along with a contribution of an
additional 1 percent to GDP per year.
With a refining capacity of 922,000 barrels per day (bpd) of crude and condensate, ADNOC’s
operations in Ruwais already make it the fourth largest refining complex globally, representing 10
percent of refining capacity in the Middle East.
ADNOC aims to increase and enhance the processing capacity and capabilities of the Ruwais
refinery and petrochemicals complex through a range of new initiatives and investments, including
a new greenfield refinery project, a gasoline aromatics project, a new linear Alkyl Benzene project,
a mixed feed cracker and an additional polypropylene plant.
In parallel to the developments at its domestic refining operations at Ruwais, ADNOC said it is
actively pursuing international expansion by targeting select growth market opportunities to
establish new refining and petrochemical footprints across the value chain and improve its market
access and product placement capabilities.

India: High oil prices are eating into Narendra Modi’s budget
The Indian express
Fuel prices have started to pinch as Brent, the benchmark for more than half of the world’s oil, hit
$80 a barrel last week. It’s still short of its all-time high of $147.50.
Prime Minister Narendra Modi has an oil problem. And it’s set to worsen with Saudi Arabia rooting
for the commodity to push through the $80 barrier.
Modi’s government made the most of cheap oil by substituting any fall in prices with taxes that
kept retail fuel rates unchanged for consumers and boosted the federal revenue. Now, pressure is
mounting to forego some of that windfall as pump prices of gasoline and diesel hit records, likely
marring the ruling party’s prospects at the national ballot in 2019.
“There is a strong case for the central government to take another excise duty cut, and ask state
governments to reduce value added tax,” Anil Sharma and Ravi Adukia, analysts at Nomura
Financial Advisory and Securities India Pvt. wrote in a note Tuesday.
Fuel prices have started to pinch as Brent, the benchmark for more than half of the world’s oil, hit
$80 a barrel last week. It’s still short of its all-time high of $147.50. But cutting local taxes, which
account for more than half of the retail gasoline and diesel prices, would stretch government
finances at a time when the subsidy burden on kerosene and cooking gas is climbing.
Assuming an average oil price of $70, the fiscal 2019 subsidy would total about 355 billion rupees,
or 105 billion rupees higher than budgeted, according to Kotak Institutional Equities. Meanwhile,
Moody’s Investors Service estimates that fuel subsidies could total 340-530 billion rupees in fiscal
2019, the highest since fiscal 2015, if Brent crude oil prices average $60-$80 per barrel.

While Saudi Arabia has avoided pinpointing an exact price target for oil, Bloomberg reported citing
people familiar with development that it is aiming for $80 to support the valuation of Saudi Aramco
before an initial public offering.
Still, the political implications of cushioning the blow for motorists may be more compelling. State
refiners that control more than 90 percent of the retail market, didn’t raise gasoline and diesel
prices for nearly three weeks ahead of the elections in the southern Karnataka state. Elections for
at least four more state assemblies are scheduled later this year.

For the Congress party, which trumped Modi’s BJP to form a coalition government in Karnataka,
this is a political opportunity and the party is holding protests against rising fuel prices in the
national capital and in Mumbai.
Holding prices even for days weighs on the finances of the state refiners Indian Oil Corp., Bharat
Petroleum Corp. and Hindustan Petroleum Corp. They end up absorbing the losses since fuel
prices have technically been deregulated and the government does not provide any subsidy. Not
surprisingly, their shares have been among the worst performers on the NSE Nifty 50 Index this
year.

US National average gasoline prices approach $3 per gallon
Source: U.S. Energy Information Administration, Gasoline and Diesel Fuel Update
Heading into the 2018 Memorial Day weekend, regular gasoline prices averaged $2.92 per gallon
(gal) nationally on May 21, up from last year’s price of $2.40/gal before the holiday weekend. This
year marks the highest price ahead of the Memorial Day weekend since 2014, when the national
average price of regular gasoline was $3.67/gal. Relatively higher crude oil spot prices, higher
gasoline demand, and falling gasoline inventories are all factors contributing to higher gasoline
prices.
EIA forecasts that gasoline prices will be higher this summer compared with last summer primarily
because EIA expects Brent crude oil prices to average $22 per barrel (b) higher than during last
summer. U.S. gasoline prices have been more closely tied to Brent crude oil prices than to West
Texas Intermediate prices.
The Brent price averaged $78/b the week of May 18, 2018, or 51% higher than the same week in
2017. Because gasoline taxes and retail distribution costs have been generally stable, movements
in gasoline and diesel prices have been mainly the result of changes in crude oil prices and
wholesale margins.
EIA expects summer season (April through September) regular gasoline prices to average
$2.90/gal in 2018, 49 cents higher than last summer. For all of 2018, EIA projects that U.S. regular
gasoline prices will average $2.79/gal.
The price of gasoline typically increases during spring because of the switch from winter-grade
gasoline to the more expensive summer-grade gasoline. This year, the average price for regular
gasoline has increased by 22 cents/gal (8%) since the start of the summer driving season in April.

U.S. gasoline consumption has remained relatively high, putting additional upward pressure on
prices. As of May 11, 2018, the four-week average U.S. demand was 9.4 million barrels per day
(b/d), about 1% higher than mid-May levels last year. AAA (in association with IHS Markit) expects
more than 41.5 million Americans will travel this weekend, nearly 2 million more travelers than last
year and the highest travel volume since 2005.
Decreasing gasoline inventories, including finished gasoline and gasoline blending components,
are also contributing to the recent increase in gasoline prices. Although 2018 inventories are
higher than the previous five-year average, they have remained lower than 2017 inventory levels
for the past five weeks.
Retail gasoline prices can vary significantly within the United States because of regional supply
and demand balances, gasoline specification requirements, and taxes. The West Coast region,
defined by Petroleum Administration for Defense District (PADD) 5, typically has the highest retail
gasoline prices in the country because of the region’s tight supply and demand balance, isolation
from additional supply sources, and gasoline specifications that are more costly to meet. West
Coast regional gasoline prices have been more than $3.00/gallon in each of the previous 20
weeks.
The Gulf Coast region (PADD 3) generally has the lowest retail gasoline prices in the country,
because this region has more than half of the U.S. refining capacity and produces more gasoline
than it consumes. Through May 21, average Gulf Coast gasoline prices are 27 cents/gal lower
than the national average, and West Coast prices are 56 cents/gal higher.

NewBase 27 May 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices slump as OPEC and Russia consider output boost
Reuters + NewBase +Bloomberg
Oil prices fell more than $2 per barrel on Friday as Saudi Arabia and Russia discussed easing
production cuts that have helped push crude prices to their highest since 2014.
Brent crude futures LCOc1 fell $2.35, or 3 percent, to settle at $76.44 a barrel. The global
benchmark lost about 2.7 percent this week, its largest weekly drop since early April. The contract
hit its highest since late 2014 at $80.50 last week.
U.S. West Texas Intermediate (WTI) crude CLc1 slumped $2.83, or 4 percent, to finish at $67.88
a barrel. For the week, WTI tumbled about 4.9 percent, its biggest loss since early February, a
sharp course reversal after six weeks of gains.
The discount of WTI to Brent hit $8.60 per barrel, its widest since May 17, and not far off levels
last seen three years ago.
Oil price special
coverage

The energy ministers of Russia and Saudi Arabia met in St. Petersburg to review the terms of a
global oil supply pact that has been in place for 17 months, ahead of a key OPEC meeting in
Vienna next month.
The ministers, along with their counterpart from the United Arab Emirates, discussed an output
increase of about 1 million barrels per day (bpd), sources told Reuters. Russia’s energy minister
said oil ministers from OPEC states and non-OPEC countries participating in a deal to cut output
would likely decide to gradually ease curbs at their meeting in Vienna next month.
“After hitting that $80 level, which is a psychological level, we were seeing a little bit of a pull-back
yesterday, and then rhetoric out of Saudi and Russia has only exacerbated the sell-off today,” said
Matt Smith, director of commodity research at ClipperData.
Global crude inventories have fallen over the past year because of the OPEC-led cuts, which were
boosted by a dramatic drop in Venezuelan production.
The prospect of renewed sanctions on Iran after Trump pulled out of an international nuclear deal
with Tehran has further supported prices in recent weeks. This comes even as U.S. crude
production has risen. The United States in February produced 10.3 million bpd, a record.
The U.S. oil rig count, an indicator of future production, rose by 15 to 859 in the week to May 25,
the highest level since March 2015, General Electric Co’s (GE.N) Baker Hughes energy services
firm said.
Hedge funds and other money managers raised their bullish bets on U.S. crude futures and
options in the latest week after four consecutive cuts in the net long position, according to data
released on Friday.
The increase lifted the wagers from 6-month lows, in the week to May 22, according to data from
the U.S. Commodity Futures Trading Commission (CFTC). The speculator group raised its
combined futures and options position in New York and London by 2,009 contracts to 421,916
during the period.
Why Are Oil Prices Falling Again?
Saudi Arabia and Russia are considering increasing crude oil supply, driving down prices. Here,
Saudi Energy Minister Khalid al-Falih and Russian Energy Minister Alexander Novak attend a
After reaching its highest point since the second week of November 2014 on Wednesday, the
price of crude oil slid by almost 3 percent Thursday and Friday. Trading at $79.80 on Wednesday,
the global benchmark Brent crude fell sharply over the next two days, closing Friday trade at
$76.44, driven by the prospect of an increase in supply by Russia and the Organization of the
Petroleum Exporting Countries (OPEC).
The recovery in the price of crude oil, from its low point of below $30 in mid-January 2016, has
been more or less steady, but picked up pace with the worsening domestic political situation in
Venezuela — an OPEC member and the country with the largest proven crude oil reserves in the
world — and the hawkish approach of the Trump administration toward Iran — also an OPEC
member, fourth on the list of countries with proven oil reserves.

It was also in 2016 that Russia — currently the world’s single largest producer of crude oil — and
OPEC agreed to tighten the supply of crude as a step to reduce the glut of inventory and to push
prices up. Many of the OPEC member countries, as well as Russia, are dependent in large part on
oil revenues to manage their national economies. The decision to curb supplies went into effect 17
month ago, at the beginning of 2017, and the price rally since prompted President Donald Trump
to recently complain about it on Twitter on April 20, just over a month ago.
Opec, Russia discuss raising oil output by about 1 million bpd
Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully
loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!
At an economic forum in St. Petersburg, Russia, OPEC’s Secretary-General Mohammad Barkindo
said Friday the discussion by OPEC to increase supplies followed Trump’s tweet.
The bloc and Russia will raise their output gradually, if a decision to change policy was reached,
energy ministers of Saudi Arabia and Russia said at the same meeting. The increase in supply
would likely start in the July-September quarter this year.
OPEC and its partners are to meet formally in June, but the Saudis and Russians will hold at least
two more meetings before that.
Another factor that is affecting oil output, and prices, is the domestic production in the United
States, where output from shale has hit record levels. Despite that, retail prices for gasoline in the
U.S. are at their highest since 2014, at about $3 a gallon.
The U.S. benchmark, West Texas Intermediate, had crossed above $70 earlier this month, but fell
to below $68 on Friday, from a high of $72.24 at the beginning of the week.
Saudi Arabia and Russia are discussing raising Opec and non-Opec oil output by around 1 million
barrels per day (bpd), easing 17 months of strict supply curbs amid concerns that a price rally has
gone too far, sources familiar with the matter said.

NewBase Special Coverage
News Agencies News Release 27 May 2018
The fight to own Antarctica
Leslie Hook and Benedict Mander
An aircraft of a Chilean tourism firm waits to pick up tourists at Chile's military base Presidente
Eduardo Frei, in the King George island, in Antarctica.
Antarctica is a continent with no government. The closest thing it has is a drab, 10-person office,
with a small sign on its wooden door in Buenos Aires that reads "Secretariat of the Antarctic
Treaty". This is the group whose job it is to keep things running smoothly among the 53 nations
that together govern Antarctica.
If that sounds like a quixotic system for a continent twice the size of Australia that contains vast
untapped natural resources, it is. But the idealism underpinning it is very clear.
"One of the amazing things is that Antarctica is the only continent where people work together for
peace and science," says Jane Francis, head of the British Antarctic Survey, who last week
attended the annual Antarctic Treaty Consultative meeting that brings all of the nations together.
"You wouldn't believe that 53 nations after two weeks can agree . . . It can be done in this world."
However, not everyone does agree. And at last week's meeting in the Argentine capital some of
those divisions were on show. There is a growing number of issues that the Antarctic Treaty
System, which has kept order on the continent for almost six decades, is struggling to deal with.
From climate change to fishing, new geopolitical tests are facing Antarctica that are increasingly
difficult for a consensus-based group to address. "One of the things the treaty system needs is
almost like a new kind of vision," says Klaus Dodds, a professor of geopolitics at London's Royal
Holloway University, and an expert on Antarctic governance. "One where parties are explicit about
what they are trying to do."

The Buenos Aires meeting was typical: it produced a series of agreements that represented
relatively low-hanging fruit, such as new rules for drone use, and guidelines for heritage sites (like
the hut built by Ernest Shackleton and his team more than 100 years ago).
But the thorniest issues — for
example, what happens when
countries violate the treaty rules
— are almost never addressed.
Scientists and diplomats are
growing concerned that the
existing system will be unable to
respond to the new pressures.
At stake is the last pristine
continent, one that contains the
world's largest store of
freshwater, huge potential
reserves of oil and gas and the
key to understanding how
quickly climate change will
impact the world through rising
sea levels.
"What we are seeing at the moment . . . is almost like a lethargy among the treaty parties to take
the necessary steps," says Daniela Liggett, professor of geography at New Zealand's University of
Canterbury. The last major binding protocol in the treaty system came into force 20 years ago, she
adds. Any new protocol must be approved by consensus, so even one dissenting country
effectively has veto power.
The greatest areas of tension are those that touch on the growing economic and strategic
interests in Antarctica, such as tourism and fishing (mining is banned). Signatories to the treaty,
which dates back to 1959, agree to set aside their territorial claims, and use the continent only for
peaceful purposes.
However, the growing number of signatories has made the system unwieldy: In 1980 there were
just 13 countries that had "consultative" status to make the key decisions on treaty matters — that
number has risen to 29, a diverse group ranging from Finland to Peru, India and Belgium.
Meanwhile the number of permanent scientific research stations on the island, a proxy for activity,
has grown to more than 75. China has been a particularly enthusiastic builder of new research
stations since it joined the treaty in 1983, and the environmental approvals for its latest, a fifth
base, have caused division among the treaty members.
"Resources have always been the big trigger," says Prof Dodds. "Once you get more explicit
about resource exploitation, then you raise the troubling issue of who owns Antarctica. That's the
issue that haunts the Antarctic Treaty, and the Treaty System more generally."
Those anxieties are growing in tandem with Antarctica's importance. The continent is covered in
an ice sheet up to a mile thick and represents a window into how the planet is changing.
Temperatures in some parts of Antarctica are rising much faster than the global average, and the
pace of glacial melting there will help determine how quickly global sea levels rise in future.
The Southern Ocean, which surrounds Antarctica, is becoming a significant fishing ground, as
resources in other seas are depleted. And it plays a crucial role in absorbing heat and carbon from
the atmosphere, in ways that are not yet fully understood.

"Things have changed profoundly," says Damon Stanwell-Smith, a marine biologist who first
visited Antarctica more than 25 years ago. "It is visible in a human lifetime — the change in
coastal waters, ice, retreat of glaciers, and then the related wildlife movement. Nowhere else has
it been so obvious."
A critical factor is the addition of
many more visitors. Mr. Stanwell-
Smith heads the International
Association of Antarctica Tour
Operators, the closest thing the
region has to a tourist police.
Last month Iaato reported that the
number of visitors to the region
rose to more than 51,000 last
season, an increase of 17 per cent
on the previous year. That number
is expected to keep growing. Some
20 new polar expedition vessels are
under construction, adding to the
33 already registered with Iaato, to
serve the growing interest, says Mr.
Stanwell-Smith.
For most tourists — who pay
between $10,000 and $100,000 for
a trip — visiting Antarctica involves
stepping off the boat at just a
handful of highly regulated landing
sites. But there are loopholes in the
system, such as private yachts that flout permitting rules, as well as a growing number of tours
that involve activities such as kayaking or skiing.
"It's becoming a bit of an adventure playground, and the trouble is the unregulated tourism," says
Prof Francis, at the British Antarctic Survey. "It has become much easier for people just to sail
their yachts to Antarctica, to fly their private aircraft to Antarctica."
The fastest-growing source of new visitors last year was China, which was second only to the US
in the ranking of total tourists. At the same time Beijing is investing heavily in missions to
Antarctica, part of its plan to become a "polar great power" — moves that have not always been
welcome. One idea that has been met with concern is China's proposal for a special "code of
conduct" that would apply for a large area around its Kunlun Station research base, which has
been seen as an attempt by China to limit activities near its base.
The construction of China's fifth research base has also been controversial because preliminary
building activities were started before the environmental impact assessment was complete, in
violation of protocol. The lack of punishment for these — and similar infractions by other countries
— is one of the weaknesses of the treaty system.
China spends more on its Antarctic research programme than any other country, according to
Anne-Marie Brady, professor of political science at the University of Canterbury and editor of The
Polar Journal. China's interest is not limited to the potential natural resources available, but also

the continent's strategic importance — having a ground station near the South Pole can increase
the accuracy of global satellite navigation systems.
The US, Russia and China all have critical infrastructure in Antarctica to aid their global
positioning systems. "That makes Antarctica very, very interesting right now," says Prof Brady.
She adds that the Antarctic Treaty System may be poorly equipped to respond to a growing "clash
of values" in the region.
"There is a lot that is unresolved [in the treaty] and may not be fit for purpose for our current global
strategic environment," she says. "If the Antarctic Treaty is going to be sustainable, there has to
be more high-level attention paid by governments on how to adjust to the changing environment
and how to protect Antarctica."
The Chinese Arctic and Antarctic Administration declined a request for an interview.
New Zealand scientist Gavin Dunbar talks about the movement of icebergs at the New Zealand
run Scott Base beside the Ross Sea in Antarctica.
China and other countries are positioning themselves for a day when the current confines of the
Antarctic Treaty System may no longer apply. While it does not technically expire, the provisions
that ban mining could change after 2048 — the year in which the environment protocol is
expected to come up for review.
As the number of signatories has expanded it means there will be far more voices involved in any
potential review. "What role do these countries [not among the 12 original signatories of the 1959
treaty] intend on playing? For sure, they have one eye focused on the resources that might be
available in the future," says Máximo Gowland, Argentina's director for Antarctic foreign policy.
He points out that both water and mineral resources could become an issue. "You don't know how
quickly the situation might evolve," he says, mentioning the severe water shortages in Cape Town
, where the idea of towing an iceberg from Antarctica to South Africa, to ease the crisis, was
discussed.
Already the treaty system is struggling to protect resources in the Southern Ocean, where fishing
for krill is on the rise. Opposition from China and Russia has repeatedly delayed the creation of
new marine protected areas, a topic that will be discussed again at a meeting in October.
Another unresolved issue is bio-prospecting — taking biological samples from Antarctica to study
in a lab. Because the species that exist in Antarctica are adapted to extreme cold conditions, they
could contain compounds with valuable commercial or pharmaceutical applications. Yet the
question of who owns the intellectual property from these samples is impossible to solve, because
of the many and varied sovereign claims on the continent.
While there is no indication that anyone is about to take the step of quitting the Treaty System,
there is equally little hope that it will be able to reform itself. A risk is that it simply becomes less
relevant as it fails to address the challenges facing the continent, says Prof Liggett.
Evan Bloom, the top polar diplomat in the US, which sends the largest number of scientists and
tourists to Antarctica each year, says Washington supports the treaty system despite its
limitations. "It has worked quite well in terms of setting aside those political differences, and
allowing science to occur," he says.
How much longer that continues to be the case will rely on a fragile treaty that is about to face its
greatest tests.

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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
Mobile: +97150-4822502
khdmohd@hawkenergy.net
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 May 2018 K. Al Awadi

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Call us for details khdmohd@hawkenergy.net
Your Energy Consultant for the GCC area
Khaled Al Awadi

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