New base 497 special 15 december 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
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NewBase 15 December 2014 - Issue No. 495 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Abu Dhabi to host Tenth Arab Energy Conference next week
http://www.oapecorg.org/Home/Activities/Seminars-and-Conferences/Arab-Energy-Conferences
Under the high patronage of President His Highness Shaikh Khalifa Bin Zayed Bin Sultan Al
Nahyan, the Tenth Arab Energy Conference will be convened in Abu Dhabi from December 21 to 23.
The theme of the conference will be “Energy and Arab Cooperation”. The Conference will be
chaired by Suhail Mohammad Faraj Al Mazroui, the UAE Minister of Energy.
Discussions will cover current developments in the oil and natural gas markets and their
implications for Arab countries; investment requirements to develop the energy sector in Arab
countries; energy, environment, and sustainable development.
Discussions will also cover energy resources; energy consumption and conservation in Arab
countries; Arab electricity interconnection; and technological developments and their implications
for the energy sector.
OBJECTIVES
The Arab Energy Conference has the following objectives:
• To establish an Arab institutional framework to review oil and energy issues in order to
develop a Pan-Arab perspective.
• To coordinate relations among Arab institutions concerned with energy and development.
• To harmonize energy policies with development issues.
• To investigate present and future Arab energy requirements and the means of meeting
them.
• To identify and assess energy resources existing in the Arab countries, and to coordinate
and enhance efforts towards developing these resources.
• To identify and evaluate the impact of international energy policies on the Arab countries.

Egypt: Once Noble field expanded,gas to flow to Damietta LNG
Source : Noble Energy + NewBase
The Texas-based companies Noble Energy (Noble) and Isramco Negev and their Israeli
partners Delek Drilling, Avner Oil Exploration (Avner) and Dor Gas Exploration ( Dor Gas) signed
a non-bidding letter of intend (LOI) with Union Fenosa Gas SA (UFG), the joint venture between
Gas Natural from Spain and Eni from Italy, to supply natural gasfrom the Tamar field offshore
Israel to the Spanish-Italian group operated Damiettaliquefied natural gas (LNG) terminal in
Egypt.
In 1999, BG Group (BG) from UK and Israeli partners won an exploratory license in the Block
Matan as part of the Levant Basin in the Eastern Mediterranean Sea, along the coast of Israel.
From seismic campaigns, BG could detect large gas fields offshore Haifa but left the joint venture
in 2005before starting any drilling operations.
Noble joined in 2006 with the other
partners moving in and out the joint
venture to the current situation
whereas:
- Noble 36% is the operator
- Isramco Negev 28.75%
- Delek Drilling 15.625%
- Avner 15.625%
- Dor Gas 4%
In 2009, Noble and its partners
drilled the first exploratory well and
discovered the Tamar field by240
meters water depth and 4,900
meters of total depth.
With 10 trillion cubic feet (tcf) of
proven and possible (2P) reserves,
Tamar provides Israel with the
opportunity to become a major
exporter of LNG in the
Mediterranean Region.
Noble to expand Mari-B platform pipe gas to Damietta. In 2013, Noble and its partners Isramco
,Negev, Delek Drilling, Avner and Dor Gas started the first production out of the Tamar gas field.
Since the Leviathan Basin is containing gas reserves for hundreds years of Israel consumption ,
Noble and its partners are investigating opportunities for exporting gas to neighboring countries.
In parallel, Union Fenosa Gas had to face shortage of gas supply in its Egypt Damietta LNG
export terminal, leading to tension with its local partners Egypt Gas (EGAS) and Egypt Petroleum
Corporation (EGPC).

As a joint venture between Gas
Natural andEni, Union Fenosa holds
80% stake in Damietta LNG while the
remaining 20% are split between EGPC
and EGAS.
Unfortunately the troubles in Egypt had the
direct consequence to prevent any
agreement on the gas prices and the
Government, thus to stop the exploration
required to maintain thegas production high
enough to supply the domestic market and
the export demand through
LNG terminal such as Damietta. Therefore
Union Fenosa is keen to substitute gas supply from countries such as Israel to load
its DamiettaLNG Terminal in the meantime Egypt gas production may ramp up again high enough
to enableLNG exportation.
With the LOI, Noble would export 440 million cubic feet per day (cf/d) to Union Fenosa.
To do so Noble and its partners are considering $2 billion capital expenditure for the expansion of
the existingTamar Mari-B platform with three additional production wells and a subsea export
pipeline to Damietta.
Assuming the LOI to be converted in formal contract on early 2015, Noble and its partners Delek
Drilling,Isramco Negev, Avner, and Dor Gas are expecting to start first export of natural
gas from Tamar to Union Fenosa Gas Damietta LNG terminal in Egypt.

Kenya: Tower Resources provides update on Badada-1 well site
preparation and rig contract. Source: Tower Resources
Tower Resources, the AIM-listed Africa-focussed oil and gas exploration company, notes the
announcement dated 11 December 2014 from the Operator, Taipan Resources, relating to
theBadada-1 well operations, onshore Kenya (Tower 15%, Premier Oil 55% and Taipan 30%
working interests).
Lawyers representing Taipan's wholly-owned
Kenya-based subsidiary, Lion Petroleum,
together with Taipan, Premier Oil, the County
Government of Wajir, the Ministry of Energy
and Petroleum, the Attorney General and the
National Land Commission appeared in the
High Court of Kenya on 10 December 2014
where they received confirmation of the
amendment to the injunction served on 17
November 2014 which had allowed work to
continue at the Badada-1 well-site. A further
hearing is scheduled after the projected
completion of the well, but will not affect our
drilling timetable.
In addition, Taipan, on behalf of the Block-
2Bjoint-venture partners, have executed a
contract with Greatwall for the GW-190 land
rig and have also contracted Aberdeen-based Norwell Engineering to manage the drilling
operations of the Badada-1 well. The GW-190 land rig recently completed the drilling of the
Sala-1 discovery in Block-9 of Anza Basin, Kenya, adjacent to Block-2B.
Further to the Company's announcement on 27 November 2014, Taipan has advised that drilling
is expected to commence in early January 2015. The well is expected to take approx. 70 days to
drill and gross well costs are estimated at US$20 to US$25 million (US$3.0 to US$3.75 million
net to Tower).
The Badada-1 well will test analogous geology to the Lokichar Basin where Tullow Oil and Africa
Oil continue to unlock the potential of the Tertiary Rift sequence. The well is designed to test the
Tertiary age reservoirs with the total depth of the well planned between 3,000 to 4,000 metres.
Taipan's estimate of gross mean unrisked prospective resources for Badada-1 is 251mmboe
(Source: Sproule International February 2014). This compares with Tower's estimate of gross
unrisked prospective resources ranging from 402mmboe (P10) to 16mmboe (P90) with a Pmean
of 169mmboe and reflects its more conservative approach to the extent of the Badada structure.
In the event of success with the Badada-1 well, we envisage material upside potential in Block-
2B with multiple follow-on prospects and leads in a Tertiary sequence analogous to the Tertiary
discoveries in Block 10BB and 13T of the Lokichar Basin.
As part of the Operator's focus on local content a number of Kenyan companies have been
contracted to provide well-site services including logistics, road repairs and the drilling of water
wells and other services. In addition, as part of the programme of corporate social responsibility
in the Anza Basin, the Operator has embarked on a number of initiatives including clean water
projects and access to basic medical care for the local community.

Turkey suggests to build LNG project to Russia
Reuters + NewBase
Turkey could propose to Russia building an LNG terminal in an energy complex on its border
with Greece, as part of talks on planned new gas pipeline with its northern neighbour, Turkish
Energy Minister Taner Yildiz said.
Last week Russia scrapped the South Stream pipeline project to supply gas to southern Europe
without crossing Ukraine, citing EU objections, and instead named Turkey as its preferred partner
for an alternative pipeline.
Calling the new pipeline plan "Turkish Stream", a nod to the scrapped South Stream, Yildiz said
Turkey would study the new pipeline plan with Russia. "We can do this project but it will not be a
transit project," Yildiz told the Bosphorus energy club meeting in Istanbul.
"We have proposals on this and perhaps including an LNG terminal, the construction of an
integrated energy complex could be on the table," he said. He said that if the planned pipeline was
built, it would not necessarily mean that Turkey would buy more gas.
Kirill Molodtsov, Russian deputy energy minister, told reporters on Thursday that the first line of a
proposed pipeline could be build in some 2.5-3 years starting from now, including preparation of
all necessary project documentation.
Separately, Yildiz told reporters on the sidelines of the meeting that Turkish oil refiner Tupras had
begun buying shipments of Iraqi crude oil. Last month the government of Iraq and the semi-
autonomous region of Kurdistan reached a deal on oil exports.

Tupras subsequently said it would begin purchasing crude oil from northern Iraq shipped by
pipeline and sold by Iraq's Oil Marketing Company (SOMO).
"In the short term 550,000 barrels will flow per day and in that way both Baghdad and Arbil crude
oil will come. From the outset, Tupras established a link with this crude to (central Turkey's)
Kirikkale refinery and this flow has started," Yildiz said on Thursday.
Yildiz also said that a planned Russian gas export pipeline does not necessarily mean Turkey will
buy more supplies.
Russian gas monopoly Gazprom now intends to build a second subsea gas pipeline to Turkey
with annual throughput capacity of 63 billion cubic metres, having scrapped plans to build the
South Stream route that would have had a similar capacity.
The existing Blue Stream pipe already delivers up to 16 Bcm of Russian gas to the country.
Shell in Turkey 'exploration bid' Year under a $300 million investment
Shell is reportedly set to start exploration off Turkey in the New Year under a $300 million
investment together with the Ankara government.
The Anglo-Dutch explorer is looking to tap the country’s oil and gas prospectivity following
discoveries in the Romanian basin with the drilling effort set to kick off in the western Black Sea in
January, Energy Minister Taner Yildiz was quoted as saying by Reuters.
Turkey would have a 50% interest in the exploration joint venture with Shell. "Our seismic data
indicate that drilling in this basin would be accurate, given the indications," Yildiz said. Turkish
vessel Barbaros Hayrettin Pasa has recently carried out a 3D seismic survey over a 1540 square-
kilometre area off Turkey’s north-west coast.

Pakistan Seeks Preferential Treatment from Qatar on LNG Imports
Natural Gas Asia
Pakistan is seeking a preferential treatment from Qatar for the import of LNG, a senior
government official said on Friday, according to The News.
“The Qatari government has lowered the price to $14-16 mmbtu (million metric British thermal
unit) but Pakistan wants more concessionary price in the wake of sharp decline in the LNG price
in the international market,” a senior government official involved in the recent talks with the Qatari
government on LNG imports told The News.
Islamabad is looking to import 500 million cubic feet day of LNG from Qatar over 20 years.
However, final decision has not been reached because of pricing issues and non-availability of
LNG terminal in Pakistan.
Initially, Qatar was seeking $18 mmbtu which Pakistan said was very expensive. Also, Pakistan
hopes to get its first LNG terminal ready by early next year. The terminal is being constructed
by Elengy Terminal Pakistan Limited.
A second LNG terminal is also expected to come up at Gwadar.

India:Oilex reports Cambay Basin demonstrates strong economics
Source: Oilex + NewBase
Oilex has confirmed that the Cambay field is expected to have robust economics, despite the
recent sharp drop in oil prices. Initial production profiles modelled by the Company for the next
three horizontal wells using the Cambay-77H data provide the following indicative value metrics
per well:
The above modelling assumes a US$70 / Bbl oil and US$8 / MSCF gas price. The NPV
calculation assumes utilisation of existing tax losses. Full field economics will be assessed after
completion of the engineering studies, including determining the appropriate throughput rate for
gas processing facilities. A well with 700m lateral and 9 fracs compares favourably with Oilex's
previous commercial assessment for Cambay.
The "700m gas only" well shows the economic impact of no revenue from concurrent oil
production. Initial modelling indicates that, even a gas well with no associated liquids is
economic. A further positive from analysis of the Cambay-77H data is the significantly higher oil
gas ratio (OGR), which has a material positive impact on the revenue stream from future
Cambay horizontal wells.
The well economics are underpinned by the significant excess of demand over supply within the
Indian domestic economy, which is forecast to grow. According to the US Energy Information
Agency:
• India is a significant importer of crude oil, as the country's demand growth continues to
outstrip domestic supply growth; and
• Natural gas serves as a substitute for coal in electricity generation and fertiliser production
in India. The country began importing liquefied natural gas in 2004 and increasingly relies
on imports to meet domestic natural gas needs.
Oilex has concluded 2 gas sale agreements (GSA) to
date. Gas sale contracts are conducted via a bid system,
with buyers submitting offers to purchase via a tender
process. Given the demand for gas by nearby industrial
users, strong pricing is secured, above the floor price
recently established by the Indian Government.
Existing industry located within 15km of the Cambay Field
means very low capital cost is associated with sales of gas
to the local market and the tie-in to existing gas
transmission pipeline network. The network has excess
capacity for additional gas that can be used for gas from
the Cambay field.

US: Halliburton slashes 1000 jobs
AFP + NewBase
World’s second largest provider of oilfield services, Halliburton, will let a thousand workers go,
according to reports. The layoffs will affect workers in Europe, Asia, Africa and Middle East, while
there will be no workforce cuts in America.
Reportedly, Halliburton spokesperson told AFPthat the job cuts were necessary for Halliburton to
work through challenging market environment. Halliburton has a workforce of more that 80,000
employees, representing 140 nationalities in over 80 countries.
Oil prices have fallen more than forty percent since June, urging oil companies to cut spending,
which in turn has largely affected the supply chain firms. Even Schlumberger, world’s biggest
oilfield services provider, recently said it would reduce itsheadcount to cut costs.
Halliburton did not reply to an e-mail sent by Offshore Energy Today, seeking more information on
the reported layoffs. Elsewhere in the oil and gas industry, Dutch SBM Offshore yesterday said it
would lay off 1200 employees.
With latest Update:
In an e-mail sent to Offshore Energy Today, Emily Mir, a spokesperson for Halliburton, said:
“Halliburton has made the difficult decision to reduce its Eastern Hemisphere workforce by
approximately 1000 employees, effective immediately. The decision to eliminate jobs is never
easy. Our talented workforce is the foundation of everything we accomplish, and we place the
highest value on the commitment and hard work that our employees dedicate to building our
Company.
She added that the layoffs are not related to the recently announced Baker Hughes transaction.
“Yet, we believe these job eliminations are necessary in order to work through this market
environment. No layoffs have occurred or are presently planned as a result of the pending Baker
Hughes acquisition,” Mir said.

US: Despite lower crude oil prices, U.S. crude oil production expected
to grow in 2015. Source: North Dakota Department of Mineral Resources, Bloomberg
The recent decline in crude oil prices has created the potential for weaker crude oil production.
EIA's Drilling Productivity Report (DPR) includes indicators that provide details on the effect low
prices may have on tight oil production, which accounts for 56% of total U.S. oil production.
Analyzing these indicators and the changes in oil production following the drop in crude oil prices
during the 2008-09 recession may offer some insight into possible near-term oil production trends.
The price of West Texas Intermediate (WTI) crude oil delivered to Cushing, Oklahoma declined
more than 31% from June to November 26 and another 7% after the late November
announcement of the Organization of the Petroleum Exporting Countries (OPEC) decision to
maintain the current production level. At $60 per barrel, the current price of oil is likely
approaching or already below the expected per-barrel costs of some of the most expensive U.S.
tight oil projects.
Some of the most active production fields in the country are in North Dakota. Indicators tracked by
the DPR and North Dakota's Department of Mineral Resources (DMR) cover much of the
exploration and production process, from planning to production. These indicators include:
- Permits. Before drilling begins, producers must sign lease contracts and apply for
permits to drill exploration and development wells.
- Rig movement. Drilling rigs must be secured and moved to permitted locations.
- Spuds. Spudding is the term for the ground-breaking process of a new drilling project.
In North Dakota, the spud count is a count of new wells drilled.
Based on the most recent data released by North Dakota's DMR, drilling and production activities
in the state have not slowed, despite the significant decline in domestic crude oil prices since July
2014. Oil production in September 2014—the latest data available—rose 5% from the prior month.

The number of permits issued in October 2014 was 28% above the September level, but it
dropped 30% in November. However, when normalized based on the number of business days
during those months, October is only 17% above September's level, and November is only 10%
lower than October.
Although the current economic situation is fundamentally different from the recession of 2008-09,
changes in oil prices, production indicators, and production volumes during the recession may
offer insight into what may happen next with U.S. shale oil production.
During the 2008-09 recession, monthly average WTI prices fell by 71% to $39.09 per barrel
between June 2008 and February 2009. At the time, shale oil production in North Dakota was still
in the testing phase and thus relatively expensive.
Drilling and production continued to increase until November 2008, when WTI prices dropped
below $57 per barrel. Below $57 per barrel, the number of projects that were interrupted increased
significantly, with the number of permits declining 73% from December 2008 to July 2009, the
number of rigs declining 62% from November 2008 to May 2009, and the number of spuds
declining 55% from November 2008 to April 2009.
However, the decline in production was not nearly as dramatic, falling only 13% from November
2008 to January 2009, after which time production began increasing.
Looking forward, EIA expects 2015 drilling activity to decline as a result of less-attractive
economic returns in some areas of both emerging and mature oil production regions. Many
companies will redirect investment away from marginal exploration and research drilling and into
core areas of major tight oil plays.
However, projected oil prices remain high enough to support development drilling activity in the
Bakken, Eagle Ford, Niobrara, and Permian Basin, which contribute the majority of U.S. oil
production growth.
EIA expects U.S. crude oil production to average 9.3 million barrels per day (bbl/d) in 2015, up 0.7
million bbl/d from 2014, but down from expected growth of 0.9 million bbl/d in last month's Short-
Term Energy Outlook. However, all of the decrease in forecast production growth comes in the
second half of 2015. EIA revised production growth downward by 140,000 bbl/d and 270,000 bbl/d
in the third and fourth quarters, respectively, compared with the previous forecast. However, this
forecast remains particularly sensitive to actual prices available at the wellhead and drilling
economics that vary across regions and operators.

Oil Price Drop Special Coverage
Oil price fall defies market fundamentals, says OPEC chief
Reuters + NewBase
The head of OPEC said on Sunday the group had no target price for oil, signalling no change to a
policy to maintain production levels which has contributed to sharp falls in the price of crude.
Speaking at an event in Dubai, Abdullah Al-Badri said the oil price, which dropped to a succession
of five-year lows in recent days, had fallen further than market fundamentals should have dictated.
He urged Gulf states to continue investing in exploration and production, saying the United States
would continue to rely on Middle East crude for many years. The comments were Badri’s first
since OPEC, or the Organization of the Petroleum Exporting Countries, left its output levels
unchanged at a meeting last month, when it also said it had no target price.
“The fundamentals should not lead to this dramatic reduction (in price),” Badri, a Libyan, said in
Arabic in remarks made through an English interpreter. Oil’s relentless slide pounded energy
stocks and currencies exposed to crude exports on Friday, doused appetite for riskier assets and
pushed investors into the safety of government debt despite strong US consumer sentiment.
Adding to the effects of OPEC’s unchanged production level, a lower demand growth forecast
from the International Energy Agency further put the skids under oil, raising concerns of possible
broader negative effects such as debt defaults by companies and countries heavily exposed to
crude prices.
There was also talk of the price trend adding to deflation pressures in Europe, increasing bets that
Senior economist Henry Azzam and Secretary General of the
Organization of the Petroleum Exporting Countries (OPEC),
Abdullah Al-Badri (R), attend a panel discussion during the Arab
Strategy Forum on Sunday in Dubai. — AFP

the European Central Bank will be forced to resort to further stimulus early next year. — Reuters
Badri said OPEC sought a price level that was suitable and satisfactory both for consumers and
producers, but did not specify a figure. Asked if there was a need for an emergency OPEC
meeting before June, Badri smiled and said: “I don’t know.”
The OPEC chief said November’s decision to leave output unchanged was not aimed at any other
oil producer.“Some people say this decision was directed at the United States and shale oil. All of
this is incorrect. Some also say it was directed at Iran. And Russia.
This also is incorrect,” he said. Brent crude settled at below $62 a barrel on Friday, more than 45
percent below its 2014 peak, after the world energy watchdog forecast even lower prices on
weaker demand and larger supplies next year.
Prolonged oil decline could weigh on Qatar economic outlook
Gulf Time + NewBase
Qatar yesterday cautioned that a prolonged weakening of oil prices could pose a key downside
risk to the economic outlook. “The economic outlook for 2014–2016 is still generally favourable,
although falling oil prices could be a key downside external risk if they persist for long,” Ministry of
Development Planning and Statistics said in its Qatar Economic Outlook (QEO) 2014-16 update.
However, the impact of falling oil prices on the wider economy is likely to be shielded by the
available fiscal headroom, it said, referring to the break even prices of $42 and $55 in 2014 and
2015.
A recent report said oil prices could go as low as $55 a barrel next week. Organisation of
Petroleum Exporting Countries (Opec) recently trimmed its 2015 demand forecast due to weaker
outlook for Europe and Asia as well as higher supply from the US shale and other non-Opec
sources.

For given levels of hydrocarbon output, government spending and non-hydrocarbon fiscal revenue
(including investment income received from Qatar Petroleum), the break-even price could
generate enough hydrocarbon revenues to fund the non-hydrocarbon deficit. Break-even prices at
these levels provide a “large cushion” over market prices as of mid-November 2014, the ministry
said.
These revised break-even prices are lower than those reported in June’s QEO for 2014 and 2015
owing to the larger investment income that the Ministry of Finance (MoF) has received from QP in
2014 than foreseen in June. For fiscal 2014-15, this investment income has already been realised
and so will not be affected by the recent decline in oil prices.
In 2016, however, the break-even price is expected to ratchet up to about $71 as government
expenditure continues to grow, oil production declines and QP’s financial surplus moderates, the
update said.
“Yet the projected breakeven price remains significantly below the latest consensus forecasts for
oil prices in 2016, and if required the state’s large financial reserves could be deployed to shore
up planned spending,” the report added.
The ministry also cautioned that if QP’s future financial surpluses and investment income received
on the budget were “adversely affected” by lower oil prices, the implied fiscal break-even prices
would in the near term be higher, it said, adding with investment income linked to oil prices, the
breakeven price could be $70 in 2015, rising to $81 by 2016.
Longer term, continued moves to build a sound fiscal position capable of absorbing oil price
shocks will be supported by the MoF initiatives on forward-looking fiscal policy guidance and
modernised budgetary processes, it said.
Government spending has risen not only in Qatar, but across the Gulf Cooperation Council (GCC)
countries since 2009, supported by stable and high oil prices. Although the Brent oil rose close to
76% between 2009 and 2013, government expenditures climbed 77.7% on average across all six
member states over the period.

UAE “not panicking” as oil continues to slide
Gulf News
The UAE Energy Minister said on Sunday the country is “not panicking” and will not call an
emergency meeting despite oil prices continuing their steep decline.
Members of the Organisation of the Petroleum Exporting Countries (Opec), which includes the
UAE, can call an emergency session ahead of scheduled meetings to discuss the bloc’s oil policy.
“We decided to leave it to the market to balance,” Suhail Al Mazroui told Gulf News at the Arab
Strategy Forum.
Oil prices have fallen by around $15 (Dh55) a barrel since the November 27 Opec meeting where
members decided to keep output at 30 million barrels a day. Brent crude closed on Friday trading
at $61.85 a barrel, down 2.87 per cent for the day. The global benchmark is down more than 45
per cent since June.
Al Mazroui said producers and consumers should now “allow the market at the beginning of 2015
to balance”. Analysts estimate prices could now touch $50 a barrel, a loss of more than half of the
$115 June price tag, raising concerns for the national budget of many oil dependent economies.
“What price it will get to is not a concern,” Al Mazroui said. The UAE currently produces around
2.8 million barrels per day and is targeting to 3.5 million barrels a day by 2017.
Opec Secretary General Abdullah Al Badri declined to comment at the same forum when asked
how much further oil prices would have to fall to prompt an emergency session of Opec members.
Al Badri told reporters that all Opec members, who consume seven million barrels a day, should
cut “waste” in a bid to curb the impact of weaker oil prices on national budgets.
GCC well placed to withstand oil plunge, says Nobel Prize winner
The National
Paul Krugman, the Nobel Prize-winning US economist, believes the UAE and other Arabian
Gulf countries are better placed to withstand the
effects of a prolonged period of low oil prices
than they ever have been.
Mr Krugman, speaking at the Arab Strategy
Forum in Dubai, said that economic
diversification strategies meant that oil
producers in the region were better hedged
against falling oil prices, and that the UAE, and
Dubai in particular, might even benefit from any
increase in world trade as a result of lower
global energy prices.
“There is no crisis level here over the oil price. It
is an oil-dependent region so there will be an
effect, but the Emirates is more hedged and more diverse economically than it ever has been. If it
was 15 years ago, the fall in oil prices would have been a more negative blow,” Mr Krugman said.

“Because Dubai is an entrepôt economy, it will of course be hurt by anything that affects world
trade, but it can also benefit from increased economic activity from lower world energy prices.” he
added.
Francis Fukuyama, the US political scientist and author of the influential book The End of History
and the Last Man, told the forum that he believed Saudi Arabia was “relatively immune” from the
financial effects of low oil prices because of its huge financial reserves, and that there was a
“positive component” to the oil price decline.
“Countries like Russia, Iran and Venezuela will suffer and that’s a good thing. It will be
destabilising and a catalyst for change in those countries,” Mr Fukuyama said. The forum, held
under the patronage of Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of
Dubai, was opened by Mohammed Al Gergawi, UAE Minister for Cabinet Affairs.
Mr Krugman, who in 2008 won the Nobel Memorial Prize in Economic Sciences, said there were
three reasons for the fall in the oil price: weakness in demand because of weaker economies in
Asia and Europe; a big increase in world levels of supply because of US shale oil production; and
the price elasticity of shale, which has caused Saudi Arabia to maintain production at current
levels with the aim of forcing a reduction in US supplies. Asked if the falling oil price was the result
of a conspiracy between the US and Saudi Arabia against Russia, he said: “Believe me, I know
these people. They’re not that smart.”
Mr Krugman painted a downbeat picture of the world economy as it enters 2015. He said that the
deleveraging process that had been going on since the financial crisis in 2009 had slowed global
economic growth without getting rid of excessive levels of debt. “The debt problem is still there,”
he said.
He said that Europe was “perilously close to deflation” and that there was “quiet terror” at the
prospect in the European Central Bank. The US had recovered better, but low employment growth
was still a problem, holding back a sustained recovery. Japan, China and Russia all face
potentially serious economic difficulties, he said.
Next year, he said Europe would face its “moment of truth”, and that political support for the
European projects was “falling apart”. In the US, he said he was advising the Federal Reserve not
to raise interest rates. “If they do that, they could wake up in a few weeks and find they’re another
Japan”.
Mr Krugman said there was a “substantial opportunity China will become an open political crisis if
domestic consumption falls further”. He added: “If growth slows, they will be building ghost cities
and will run out of peasants to move into them.”
Mr Krugman told the forum there was a serious risk of default in Russia as levels of foreign
exchange denominated debt increased and the rouble devalued. “Russia looks scary. It is a
Venezuela with nuclear weapons and that’s scary.”

Your Guide to Energy events in your area

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Khaled Al Awadi is a UAE National with a total of 25 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 15 December 2014 K. Al Awadi

New base 497 special 15 december 2014

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New base 497 special 15 december 2014