Murban Futures Trading

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NewBase Energy News 29 March 2021 - Issue No. 1420 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E: Start of trading in Abu Dhabi's Murban Futures a 'new
era' for global oil markets
The National
Monday start for contracts for future delivery of UAE's flagship crude listed on international
commodities exchange at ADGM. ICE Futures Abu Dhabi will be based at the Abu Dhabi Global
Market, the capital's main financial centre. Alamy
From Monday, Murban crude, trading under the symbol "ADM", will join the ranks of prominent oil
price benchmarks Brent and West Texas Intermediate in a "new era" for global energy markets.
A light crude, which accounts for half of the UAE's oil production, Murban will have a contract for
future delivery bought and sold on the ICE Futures Abu Dhabi exchange from Monday.
The exchange, run by Intercontinental Exchange (ICE) is a historic first for the Middle East, as
Murban, the UAE's flagship crude grade, produced from onshore wells by the Abu Dhabi National
Oil Company, is used to price and hedge oil being traded into Asian markets.
Writing in The National, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, Adnoc
managing director and group chief executive, said on Sunday, "a new era will begin for global oil
markets, when the first Murban futures contract is sold on the opening day of trading on Ice Futures
Abu Dhabi."

"Murban will be traded, and increasingly, when traders turn on their screens anywhere in the world,
Murban will appear alongside its benchmark peers," he said.
The new Murban contract will be be based on a two-month delivery, with the first one for June
delivery expiring at the end of April. From New York to Singapore, traders will be able to buy and
sell Murban futures contracts, 22 hours a day, five days a week.
Two-thirds of global oil is traded in reference to the Brent benchmark, which is calculated on the
basis of fields in the North Sea that are in decline. WTI, which tracks US crude grades, is more
indicative of domestic supply and demand in the world's largest producer of oil and gas.
The Middle East accounts for the largest share of global production at 31.9 per cent, according to
BP Statistical Review of World Energy 2020. The UAE, which is the third-largest producer within
Opec accounts for nearly 4.2 per cent of global output.
Adnoc has been pushing for an international role for Murban, which flows at approximately 1.7
million barrels per day in the UAE, and is shipped to customers across Asia, including Japan, China
and India.
Global oil and gas companies as well as crude oil traders came together in 2019 to set up the
international commodities exchange as a platform for Murban Futures. As part of this, Abu Dhabi
reversed its retroactive pricing mechanism for crude last year and has now lifted restrictions on the
resale of Murban bought on the market.
ICE Futures Abu Dhabi will be based at the Abu Dhabi Global Market, the capital's main financial
centre. Contracts traded at the Abu Dhabi exchange will be cleared at ICE Clear Europe alongside
global benchmarks such as Brent, WTI, ICE Platts Dubai and ICE Low Sulphur Gasoil.

Saudi Arabia sees fields of green with major tree-planting drive
Reuters + NewBase
Saudi Arabia aims to plant 10 billion trees in the coming decades as part of an ambitious campaign
unveiled by Crown Prince Mohammed bin Salman on Saturday to reduce carbon emissions and
combat pollution and land degradation.
The de facto ruler of the world’s top oil exporter said that Saudi Arabia aims to reduce its carbon
emissions by generating 50% of the country’s energy from renewables by 2030.
Riyadh would also work with other Arab states on a Middle East Green Initiative to plant an
additional 40 billion trees, which the prince said would be the world’s largest reforestation
programme.
The statement did not provide details on how the ambitious planting project would be carried out in
a country with limited renewable water resources. The world’s largest producer of desalinated water
has in the past said it would use cloud seeding and recycled water to plant local trees that require
less irrigation, including in urban areas.
The Saudi Green Initiative is part of the prince’s Vision 2030 plan to reduce its reliance on oil
revenues and to improve the quality of life in the country. “The Kingdom, the region and the world
needs to go much further and faster in combating climate change,” Prince Mohammed said.
He said the share of clean energy production in the Middle East does not currently exceed 7% and
that Saudi would work with regional partners to help contribute to a reduction in carbon emissions
resulting from hydrocarbon production in the region by more than 60%.

Iraq Discussing $7 Billion Energy Deal With Total, Minister Says
Bloomberg - Khalid Al Ansary
Iraq is discussing a “giant” agreement with French oil giant Total SE to build large infrastructure
installations, develop oil fields and produce gas, Oil Minister Ihsan Abdul Jabbar told Asharq News
in an interview that aired on Saturday.
The minister said he expected the contract to be finalized before July. The relationship with Total
will be based on targeting low-carbon industry and capturing all flaring gas, and is set to produce
1GW of solar energy in the first stage. A specialized team from the oil ministry is leading these
discussions with Total.
“The agreement is giant, and the volume of the investment exceeds $7 billion,” the minister said.
Abdul Jabbar said conditions, including the political and administrative decisions for the economic
model that protects the rights of both parties, had been hammered out already.
In January, Iraq signed a memorandum of understanding with Total CEO Patrick Pouyanne on
capturing natural gas, clean energy and infrastructure. Talks between Iraq and Total were first
reported in October.
Total Considers Investing in Iraqi Natural-Gas Projects
Iraq this year is also expected to ink a deal to build an oil export pipeline from the southern province
of Basra to Jordan’s Aqba port on the Red Sea. A framework agreement may be signed before mid-
April, Abdul Jabbar said.
The minister said Iraq will lower its gasoline and gasoil imports by 50% in 2021 and by 90% in 2022.
Iraq will need a very limited volume of gasoil imports to support power generation, he said.
Iraq’s current gas output stands at 1.5b scf/d and will reach 4b scf/d in 2025. The country in 2010
built gas-fired turbines to generate 20GW, and those plants need 5b scf/d of gas.
Iraq now buys gas from Iran and is trying to diversify imports from Qatar, Kazakhstan and other
producers, Abdul Jabbar said.

NewBase March 29-2021 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil Falls as Suez Ship freed & Refloated, Market Weighs Demand
Bloomberg + NewBase
Oil retreated as salvage teams freed & refloated the giant vessel that has been blocking the Suez
Canal, and traders weighed the impact of renewed lockdowns on global demand before an OPEC+
policy meeting.
WTI for May delivery was 2.4% lower at $59.54 a barrel on the New York Mercantile Exchange at
1:24 p.m. in Singapore. Prices have still rallied about 23% since the start of the year, and a fourth
quarterly rise would cap the best run since the period to mid-2018.
Brent for May settlement tumbled 2% to $63.25 a barrel on the ICE Futures Europe exchange.
Murban for June delivery traded at $62.09 a barrel on the ICE Futures Abu Dhabi.
West Texas Intermediate lost as much as 2.5%, while Brent fell. Crude has been hit by rising
volatility in recent sessions, with WTI swinging between gains and losses last week. The Ever Given
is now being secured, according to maritime services provider Inchcape, although it isn’t clear when
the canal will reopen.
Traders were also tracking the advent on Monday of a significant new contract, with Abu Dhabi
kicking off futures for its oil in a bid to establish a new regional benchmark. The move represents a
bold challenge to the way nearly one-fifth of the world’s crude is priced.
Oil price special
coverage

Oil is still set to close out a fourth consecutive quarterly gain this week, aided by sustained supply
curbs imposed by the Organization of Petroleum Exporting Countries and its allies, and optimism
that global demand will expand as coronavirus vaccines get rolled out.
But a run of three weekly losses for WTI has put a dent in crude’s performance, driving speculation
that OPEC+ will again refrain from easing curbs when ministers meet on April 1.
“With the Suez and OPEC+ uncertainties on top of a foggy demand picture, we may see big mood
swings and high intraday volatility,” said Vandana Hari, founder of energy consultancy Vanda
Insights. “I don’t see how OPEC+ or the Saudis could risk putting more oil into the market after the
downward pressure on crude of the past fortnight.”
The crisis in the Suez Canal has caused a vast backlog of ships on either side of the vital waterway,
and spurred some vessels to avoid the congestion by taking the longer, much costlier route around
Africa. Rates for tankers had increased, boosting the cost of shipping crude around the world.
Despite progress with vaccines, the Covid-19 pandemic remains a challenge. Global cases rose for
a fifth week, with several European nations facing a resurgence. Brisbane, Australia’s third most-
populous city, will enter a three-day lockdown, while India’s Maharashtra -- which encompasses
Mumbai -- asked authorities to prepare for another shutdown if a rebound isn’t quelled. Also in Asia,
the Philippine capital is also back under strict curbs.
At the last OPEC+ gathering, the alliance surprised investors by sticking with curbs despite
expectations the taps would be loosened. This time around, Goldman Sachs Group Inc. is among
banks forecasting no change for production in May. Citigroup Inc. has said the restrictions may even
be tightened.
Brent’s prompt timespread was 14 cents in backwardation. While that’s a bullish pattern -- with near-
term prices above those further out -- it’s down from 67 cents at the start of March.

NewBase Special Coverage
The Energy world – March 29- -2021
Mozambique: $B120 LNG Project Delay could leave some of
Africa's biggest gas assets stranded. Bloomberg Matthew Hill and Paul Burkhardt
An insurgency threatens to delay plans by energy majors to spend as much as $120 billion on
Mozambique’s natural-gas industry, jeopardizing the viability of Africa’s largest-ever private
investment.
Total SE halted work on its $20 billion project in the conflict-hit northern Cabo Delgado province at
the start of the year and said it would only resume once the area has been secured. On Wednesday,
a day after the company agreed to restart construction following government assurances on
security, suspected militants attacked Palma, the closest town to the project site.
Exxon Mobil Corp. delayed its adjacent project again this month.
Investor unease over the state’s failure to contain the fighting is growing, with yields on
Mozambique's government debt surging. Construction needs to get going urgently if the southeast
African nation is to cash in on some of the continent’s biggest natural-gas resources.
Without a resolution soon, “prospective buyers of Mozambique LNG may start looking at alternative
supply options," said Leslie Palti-Guzman, president of New York-based consultancy Gas Vista
LLC.
The stakes could hardly be higher for Mozambique, ranked by the World Bank as the sixth-poorest
country. The government expects to pocket $96 billion over 25 years from the first three liquefied-
natural-gas plants.
Construction at Total’s LNG site in Mozambique, in 2020. Photographer: Borges Nhamirre/Bloomberg

Yields on Mozambique’s $900 million of Eurobonds have risen almost 100 basis points this year as
project delays increase the risk that the government will struggle to meet its obligations when
interest payments on the notes jump to 9% in 2024. The debt, which has already been restructured
twice, is due to be repaid from 2028.
“It’s going to be touch-and-go,” said Anthony Simond, emerging-markets debt investment director
at Aberdeen Standard Investments in London, one of the biggest owners of Mozambique’s dollar
debt until it sold most of its holding in January, partly due to security concerns. “The market is
definitely seeing this as a risk.”
The government doesn’t anticipate any restructuring negotiations with private creditors, the Finance
Ministry said in reply to emailed questions.
Besides having to service and settle debt, estimated to have reached 120% of gross domestic
product last year, Mozambique’s government needs money to quell the violence that’s left more
than 2,600 people dead and displaced 670,000. Funds are also required to rebuild areas devastated
by severe tropical cyclones and counter the fallout from the coronavirus pandemic.
Mozambique is currently in talks with the International Monetary Fund that the government says
could lead to a funded program. That would help the country service external loans, including the
Eurobonds.
Insurgents Threaten Mozambique LNG Site
Standard Bank Group Ltd., the continent’s largest lender, puts the value of Total’s development and
others in the pipeline at $120 billion, with most final investment decisions set to be taken in the next
five years. That equates to eight times annual economic output in a nation where two in three people
live on less than $1.90 a day.

Doubt remains over whether all the investment will materialize: Exxon has delayed formal approval
of its planned $30 billion project for a third year and the government doesn’t expect a final
investment decision to be taken in the next two years.
Total CEO Patrick Pouyanne said in February that government forces must secure an area of at
least 25 kilometers (16 miles) around the company’s project site if it is to resume onshore work.
Palma, the town attacked on Wednesday, is less than 10 kilometers away.
Total Commitment
The necessary measures have been implemented and workers will start returning to the project site
next week, with construction likely to return to normal levels by the end of April, said Rafael Bie, a
press adviser at the Mineral Resources and Energy Ministry. The ministry expects the first project
financing disbursement to take place early next month and has obtained a commitment from Total
to deliver its first LNG cargo in 2024.
Bie's comments were made before the latest attack, and it’s unclear if it will result in further delays.
Even if Total’s mega-project is delayed, a much smaller one that Eni SpA is building will probably
start producing LNG by next year. All its infrastructure will be located on a floating plant moored
above the gas fields about 80 kilometers offshore and the fuel will be directly exported via tanker,
sparing it from the onshore turmoil.
Most of the insurgents are poor, disenfranchised local youths, although some have come from
Tanzania and other nearby states. They started out as an Islamic sect in 2007 and in 2018 they
aligned themselves to Islamic State, which has claimed responsibility for dozens of the attacks in
Cabo Delgado.
The government had appeared to be making headway against the insurgents. Prior to this week, no
major assaults had been staged since Total halted work in early January after fighting erupted close
to the perimeter fence of its project site.
Tropical Forests
The lull in hostilities could partly be attributed to the rainy season, which hampers movements
through Cabo Delgado’s dense tropical forests. The insurgents kept a low profile early last year
before rampaging through the province from late March, seizing towns and forcing the military to
flee.
By August, they’d occupied Mocimboa da Praia, a key port town just 60 kilometers south of Total’s
project. It’s unclear whether the government has regained control.
Those responsible “should not be at peace and should regret having dared to attack our
country,” President Filipe Nyusi said this month at a ceremony to inaugurate his new army chief of
staff, Joaquim Mangrasse.
Gas Glut
With a slew of other LNG projects due to come on stream from about 2025, delays to the
Mozambican projects could see it trying to sell the fuel into a glutted market. That raises the risk of
its gas and the infrastructure needed to export it becoming stranded assets in the longer term,
according to Fitch Ratings.
“A bad situation in Mozambique will be a boon for rival exporters such as Australia, Qatar, and
Russia,” Palti-Guzman said.

The Finance Ministry said Total and Eni’s LNG projects remain on track. For now, Total
shareholders aren’t unduly concerned.
“Security costs will rise, hence operating costs will increase, but the project in the long term retains
its value for Total,” said Nikolay Marinov, a fund manager at Clartan Associes in Paris. “This rise in
operating costs shouldn’t have a major impact on the profitability of the project.”
LNG Projects in Mozambique
Besides the security risks, Mozambique’s gas industry has run into opposition from environmental
groups including Friends of the Earth, which are challenging the U.K. government’s decision to
provide $1 billion in financing for Total’s project.
Total and other gas producers argue that LNG is cleaner than the coal that emerging economies
such as China and India rely on for most of their electricity, and can provide affordable energy while
they transition toward cleaner sources.
Allegations that Mozambique’s forces and a military company the government hired committed
human-rights violations while trying to contain the insurgency have cast another pall over the
projects.
The U.S. government has said the contractors aren’t playing a helpful role in defeating the insurgent
group, which it refers to as ISIS Mozambique and locals know as al-Shabaab. It is now helping the
Mozambican military step up its response, running a two-month training program for the nation’s
marines and providing medical and communications equipment to the army.
Nyusi previously resisted offers of outside help, even as the insurgency spiraled out of control.
A failure to address the security risks in Cabo Delgado could translate into further delays and
additional costs for the gas projects that the industry and country can ill afford, Adrienne Benassy,
an associate director at Fitch, said in an emailed response to questions.
“The later Mozambique enters the LNG market, the greater the risk that LNG demand will be lower
than initially anticipated,” she said.
About the Mozambique Liquefied Natural Gas Project
The Mozambique LNG Project started with the discovery of a vast quantity of natural gas off the
coast of northern Mozambique in 2010, leading to a $20 billion Final Investment Decision in 2019.
Now, through cooperation and responsible project planning, the project is on track to deliver LNG
in 2024.

For now, our plans for the approximately 65 trillion cubic feet of recoverable natural gas include a
two-train project with the ability to expand up to 43 million tonnes per annum (MTPA).
The Project is operated by Total – the world’s second largest LNG player with a leading presence
in Africa – which is uniquely qualified to ensure the Mozambique LNG Project helps to meet the
world’s increasing demand for sustainable, reliable and cleaner energy sources.
The Project is committed to collaborating with Mozambican communities and government officials
to safely develop these resources in a manner that protects the environment, encourages additional
foreign investment, and contributes to the long-term social and economic stability of the country.
The Mozambique LNG Project will deliver a range of social and economic benefits to Mozambique.
Its geographic location positions the project well to meet Atlantic and Asia-Pacific market needs, as
well as tap into the growing energy demands of the Middle East and Indian sub-continent.
In the short term, construction of the LNG facilities will provide opportunities for professional training,
employment, and contracts for the supply of goods and services. The construction phase also
manages environmental and social impacts and reduces risks.
In the medium-to-long term, the Mozambique LNG Project is foundational for diversifying
Mozambique’s economic activities. The project will help to:
 Develop competent construction and operation workforces
 Develop subject matter experts that support those industries
 Generate revenue that will contribute to the socio-economic development of the country

NewBase Energy News 30 March 2021 - Issue No. 1420 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as Technical Affairs Specialist for Emirates General
Petroleum Corp. “Emarat “with external voluntary Energy consultation for the GCC
area via Hawk Energy Service, as the UAE operations base. Khaled is the Founder
of NewBase Energy news articles issues, an international consultant, advisor,
ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste
management, waste-to-energy, renewable energy, environment protection and
sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities &
gas compressor stations. Executed projects in the designing & constructing of gas
pipelines, gas metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted &
finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements.
Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass
energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous
conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-
in-Chief of NewBase Energy News and is a professional environmental writer with more than 1400 popular
articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste
management and environmental sustainability in different parts of the world. Khaled has become a reference
for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC
leading satellite Channels. Khaled can be reached at any time, see contact details above.
NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE
NewBase 2021 K. Al Awadi

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