New base 779 special 03 februaury 2016

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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NewBase 03 February 2016 - Issue No. 779 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
ADNOC Distribution to roll-out eight month pilot phase of
ADNOC SMART Self Service in Abu Dhabi
(WAM) -- ADNOC Distribution today announced the roll-out an eight-month pilot phase of its
smart self-service refueling, ADNOC SMART, in the Emirate of Abu Dhabi from 1st March to 1st
October 2016. The pilot phase will cover four service stations located on Abu Dhabi Island and
allow customers to try out self-refueling using state-of-the art technology and also benefitting from
a variety of payment methods.
The ADNOC SMART service
is in line with the guidelines of
Abu Dhabi Vision 2030 and
the UAE?s efforts aimed at
shaping smart governments
and smart cities. The new
service will mark an important
milestone in enhancing the
operational capacity and
efficiency of the ADNOC
Distribution network.
To live the experience to the
utmost and benefit
from ADNOC SMART's full
features, all individual
customers are encouraged to
register for ADNOC Wallet
account. The ADNOC Wallet
allows customers to pay for
their purchases at the
participating service stations
in three different ways ? via
the Smart Tag, a smart chip installed at the fuel inlet of the vehicles? fuel tank and linked to
the ADNOC Wallet account, ADNOC Plus cards, or via their ID card that is also linked to
the ADNOC Wallet and activated for payments. The smart payment solutions are aimed at
providing customers with added convenience and safety, enabling them to manage their accounts
from anywhere, at any time using tablets or mobiles.
The company says that ADNOC SMART eventually seeks to reduce queues and waiting time
at ADNOC Distributions network of service stations.
Abdulla Salem Al Dhaheri, CEO of ADNOC Distribution, said, " ADNOC SMART service allows
customers to benefit from our cutting-edge technologically advanced infrastructure to experience

self-refueling in a fast, easy and safe environment when they visit one of our smart service
stations. We will monitor and evaluate the pilot phase of ADNOC SMART and the customer’s
actual experience throughout the implementation of this pilot phase.
Based on the outcomes, we hope to expand the service, after carrying out improvements if
needed, across our network of service stations in the Emirate of Abu Dhabi." Al Dhaheri added,
"as per the Abu Dhabi Vision 2030 guidelines, ADNOC Distribution is committed to fulfilling the
vision of the UAE leadership to achieve smart governments and cities through implementing this
service.
We are keen to provide an enhanced experience to our customers at our smart service stations
and are taking all necessary efforts to make this transition phase a smooth and rewarding one for
customers, partners and all concerned stakeholders."
At the launch of the pilot phase, ADNOC Distribution will provide additional incentives to its
customers to subscribe to the ADNOC Wallet through offering the Smart Tags for free to the first
5,000 customers opting to experience the service. The company will also issue ADNOC Plus
cards for free to the first 5,000 customers. In addition, customers registering for ADNOC Wallet
will also have their ID cards linked to their ADNOC Wallet accounts and activated for free.
The four service stations included in the pilot phase are all located in Abu Dhabi Island - Rabdan
Service Station located in Al Mushrif area on Sheikh Rashid bin Saeed Al Maktoum Street - Abu
Dhabi Road, Al Nasr Service Station located on Sheikh Zayed the First Street, Al Zafarana
Service Station located near Khalifa University, and Al Qanah Service Station located on Al
Khaleej Al Arabi Street.
Customers can get instant directions to the locations of service stations implementing the pilot
phase of ADNOC SMART by entering the stations? numbers on the company’s free to download
mobile application (mobileapp.adnocdistribution.ae) where the four pilot service station numbers
are identified as follows: Rabdan Service Station (162), Al Nasr Service Station (928), Al Qanah
Service Station (752) and Al Zafarana Service Station (973).
ADNOC Distribution will also provide six smart centers (Rahal Centers) across Abu Dhabi
for ADNOC Wallet accounts registration during the pilot phase. These include Al Dhafrah Service
Station (930) on Airport Road opposite Abu Dhabi Central Hospital, Khalifa City (A) service station
(766), Global Centre (Daman Building) first floor located in Musaffah area, Abu Dhabi City
Municipality Centre, at the Main Lobby, and the ADNOC Distribution Headquarters Main Lobby
(both centres are located on Sheikh Zayed bin Sultan Street, previously known as Salam Street).
The last centre is at the Rabdan service station located in Mushrif area opposite to Al Nahda
National School.
ADNOC Distribution has started multifaceted educational and awareness campaigns to introduce
the pilot phase of the ADNOC SMART service and encourage customers to register and benefit
from free incentives.

Saudi Aramco said to hold talks with banks. selling Islamic bonds
Gulf Times
The state-owned company is maintaining investments in oil and gas projects amid the fall in
prices, chairman Khalid al-Falih said at a conference last week in Riyadh. The oil giant is also
studying options including the sale of shares in the parent company or its downstream operations,
he said.
Saudi Arabian Oil Co has held talks with banks about selling Islamic bonds for the first time,
according to three people with knowledge of the matter.
Saudi Aramco, as the company is known, discussed setting up a programme that could include
several Shariah-compliant bond sales over the next few years, the people said, asking not to be
identified as the information is private. No banks have been appointed and the size of the sale
hasn’t been determined, they said.
The state-owned company is maintaining investments in oil and gas projects amid the fall in
prices, chairman Khalid al-Falih said at a conference last week in Riyadh, and is also studying
options including the sale of shares in the parent company or its downstream operations, he said.
The oil producer recently held talks with banks to raise $4.7bn to refinance an oil refinery it
developed with China Petroleum & Chemical Corp, people told Bloomberg in December, and last
year also borrowed $10bn, four people with knowledge of the matter said at the time.
A Saudi Aramco Islamic bond issue would be a first for the company. The closest it has come in
the past to selling debt is a 3.75bn-riyal ($1bn) sukuk issued by Saudi Aramco Total Refining &
Petrochemical Co, a joint venture with France’s Total known as Satorp. In 2013, another Saudi
Aramco joint venture, Sadara Chemical Co with Dow Chemical Co, raised 7.5bn riyals through a
sukuk to finance a chemicals complex.
A spokesman for Saudi Aramco declined to comment.
Saudi Arabia is seeking to cut its dependence on oil, which accounted for about 73% of
government revenue last year, according to a statement posted on the finance ministry website
when it issued the budget for 2016. The country is forecasting total revenue will fall to 513.8bn
riyals in 2016, from 608bn riyals last year.
A picture shows a flame from a Saudi Aramco oil installation known as “Pump 3” in the desert
near the oil-rich area of Khouris, 160km east of Riyadh.

Pakistan to Explore for Shale Gas, OGDCL and PPL to
Undertake Pilot Project . by Rigzone Staff
Pakistan hopes to tap potential shale gas resources in the country and has allotted the
exploration project to two oil and gas companies, a local media reported Tuesday.
"Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Company Limited
(PPL) have been tasked to carry out a pilot project to explore shale gas deposits, estimated at
more than 10,000 trillion cubic feet (Tcf)," The News International said, quoting an official source.
The Pakistani government is making efforts to explore for shale gas resources given a supply
deficit of around 2 billion cubic feet per day (Bcf/d) gas in the South Asian country and rising
energy needs, while domestic gas production stands at around 4.16 Bcf/d gas.
According to the official, Pakistan's shale gas exploration project follows a study conducted in
cooperation with U.S. Agency for International Development (USAID), which pointed to the
potential availability of around 10,159 Tcf of shale gas and 2,323 billions of stock tank barrels
(Bstb) shale oil in the country. The findings resulted from a study of 124 wells, including laboratory
analysis on shale cores and cuttings in the United States, The News International indicated.

US: Electricity from renewable sources expected to grow 9% ,2016
Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2016
Electricity generated from utility-scale renewable plants is expected to grow by 9% in 2016, based
on projections in the latest Short-Term Energy Outlook. Much of the growth comes from new
installations of wind and solar plants and increases in hydroelectric generation after a relatively
dry 2015. In 2016, electricity from utility-scale renewable sources is expected to account for 14%
of the total electricity generated in the United States, with wind and solar contributing 5.2% and
0.8%, respectively.
Increases in renewable capacity and generation are influenced by federal, state, and local
policies. Extension of federal tax credits as part of the Consolidated Appropriations Act passed at
the end of 2015 is expected to have little effect on renewable capacity additions in 2016 because
most utility-scale plants that will enter service in 2016 are already being developed, including
several wind and solar projects.
EIA's Electric Power Monthly, based
on data reported on EIA's Annual
Electric Generator Report (EIA-860)
about planned capacity additions,
shows that wind and solar plants
make up two-thirds of all capacity
additions planned for 2016.
Changes in electricity generation from
other renewable fuels in 2016 are
expected to be flat (in the case of
biomass) or relatively modest (4%
increase in geothermal). Electricity
generation from hydropower facilities
is expected to increase 5% in 2016 based on expectations of high precipitation during El Niño,
with water levels recovering from the relatively dry years in recent history.

US: It's the 1980s Again, Thanks to the Oil Glut
The reaction in the U.S. to lower energy prices has been strikingly similar this time around.
Bloomberg - Luke Kawa
History doesn't repeat, but it does rhyme. Or so the saying goes.
Sometimes history indeed repeats. Our latest example: how the distribution of growth across the
U.S. is strikingly similar to what took place in the mid-1980s, which is the last time the country
grappled with fallout from a supply-driven plunge in oil prices.
The Philadelphia Fed uses four variables (non-farm payrolls, average hours worked in
manufacturing, real wages, and unemployment rate) to produce a monthly coincident activity
index for each state. Neil Dutta, head of U.S. economics at Renaissance Macro Research,
compared the annual change in each state's coincident activity index in December 2015 with
those in December 1986 to get a sense of how analogous the distribution of growth has been.
His results show that, by and large, the winners in 2015 were also the winners in 1986:
"Basically, the idea
is that a positive
supply shock in the
energy sector hurts
oil-producing states
and helps oil-
consuming ones,"
explained Dutta. "It
is surprising,
frankly, how well
this works."
Amid raging debate
as to whether the
U.S. is already in,
or headed for, a
recession, it's
important to
emphasize
that most states are
enjoying an uptick
in activity. The large cluster of states in the first quadrant shows that the vast majority are seeing
improved activity relative to the previous year, similar to the situation at the end of 1986.
The small number of states in the second and fourth quadrants of the graph signal that, on roughly
90 percent of occasions, the reaction to low oil prices has been the same as it was in the mid-
1980s: States that were doing better as oil fell at that time are also doing well now. While the
reaction itself seems intuitively apropos, the degree of similarity spanning 30 years is uncanny.
The inclusion of manufacturing as an input to these indexes also suggests that the pain in this
sector is more localized than has been commonly acknowledged—or at the very least, isn't
significant enough of a drag to sink the headline growth number in many states.

NewBase 03 February 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil futures drop for 3rd session on rising crude stocks, oversupply
Reuters + NewBase
Oil futures extended losses into a third session in Asian trade on Wednesday, as U.S. crude
stocks last week surged to more than half a billion barrels and as Iran plans to boost exports from
March.
Milder weather forecast for the last eight weeks of the U.S. November-March winter heating
season has also dampened demand hopes . Brent for April delivery had dropped 25 cents to
$32.47 a barrel as of 0204 GMT, after settling down $1.52, or 4.4 percent.
U.S. crude, also known as West Texas Intermediate (WTI), fell 27 cents to $29.61, after ending
the previous session down $1.74, or 5.5 percent. "Oil prices are coming off again. Prices are going
to zig-zag for a while," said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
U.S. crude stocks rose by 3.8 million barrels to 500.4 million in the week to Jan. 29, data from
industry group, the American Petroleum Institute showed on Tuesday. Weekly inventory data from
the U.S. Department of Energy's Energy Information Agency is due later on Wednesday.
"The (global) inventory situation is going to get worse in the second quarter as we hit the peak
refining rate at the end of this quarter," Nunan said. "(But) this has been so well documented that
Oil price special
coverage

its been built into prices. I do think we're close to the bottom and the bottom in prices will be this
quarter."
Nunan forecast Brent would trade in a $25-$35 a barrel range in the first quarter and then slowly
recover over the rest of the year. Crude stocks at the Cushing, Oklahoma, delivery hub rose by
141,000 barrels, the API said.
The increase led to renewed fears of overflowing oil tanks at the key U.S. storage hub, causing
the spread between prompt and forward U.S. crude oil futures to slump to an 11-month low.
"The U.S. crude inventory is already at the highest levels since (the) 1930s," ANZ analysts said in
a note on Wednesday. Traders fear that filling tanks to the brim could cause the next leg of a rout
on distressed selling.
Meanwhile, Iran is aiming for crude exports of 2.3 million barrels per day in the fiscal year
beginning on March 21, the managing director of the National Iranian Oil Company was quoted as
saying on Tuesday.
That is higher than the 1.44 million bpd Iran is expected to export in February and 1.5 million bpd
in January, according to data on Iran's preliminary tanker loading schedules.
Russia is ready to implement further cooperation in the oil market with OPEC and non-OPEC
countries, Russian Foreign Minister Sergei Lavrov said on Tuesday .
Oil Prices Could Jump 50% by the End of 2016
Bloomberg - Ben SharplesShare on Twitter
Oil bulls distressed that last week’s rally fizzled can find some comfort in forecasts for a bigger
and longer rebound by the end of the year.
Analysts are projecting prices will climb more than $15 by the end of 2016. New York crude will
reach $46 a barrel during the fourth quarter, while Brent in London will trade at $48 in the same
period, the median of 17 estimates compiled by Bloomberg this year show. A global surplus that
fueled oil’s decline to a 12-year low will shift to deficit as U.S. shale output falls, according to
Goldman Sachs Group Inc.
U.S. production will drop by 620,000 barrels a day, or about 7 percent, from the first quarter to the
fourth, according to the Energy Information Administration. Meanwhile, the International Energy
Agency forecasts total non-OPEC supply will fall by 600,000 barrels a day this year. That may
pave the way for a rebound as lower prices have stimulated global demand. Oil is the “trade of the
year,” according Citigroup Inc., which is among banks from UBS Group AG to Societe Generale
SA that predict a gain in the second half.
“U.S. shale should take the hit, that’s where you will see cuts and supply should start to taper off,”
Daniel Ang, an investment analyst at Phillip Futures, said by phone from Singapore. “On top of
that, there are bullish demand forecasts for the second half.”
West Texas Intermediate and Brent both closed at the lowest level since 2003 on Jan. 20. WTI for
March delivery ended the session at $29.88 a barrel on Tuesday and would need to gain 54
percent to reach the median estimate of $46 a barrel. The London contract for April delivery

settled at $32.72 and needs a 47 percent boost to hit $48. The median price was taken from
estimates provided this year by 17 analysts who gave forecasts for both oil grades.
Shrinking Output
WTI and Brent added 4.4 percent and 8 percent last week, respectively, amid speculation Russia
and OPEC will meet to discuss trimming crude output. They have since given up most of those
gains.
The oil price rout will shut sufficient production to erode the global glut and crude will turn into a
new bull market before the year is out, analysts including Goldman Sachs’ Jeff Currie said in
a Jan. 15 report. U.S. production hit a record high of 9.61 million barrels a day in June, according
to weekly data from the EIA, and is forecast to average 9.11 million barrels a day in the first three
months of the year. It may fall to average 8.49 million barrels a day during the fourth quarter,
according to the agency.
‘Drown in Oversupply’
“We’ll see higher oil prices” with “supply and demand tightening in the second half of the year,”
Bob Dudley, chief executive officer of BP Plc, said in a Bloomberg Television interview Tuesday.
The market will remain “tough and choppy” in the first half as it contends with a surplus of 1 million
barrels a day, he said.
A worldwide oversupply contributed to a 30 percent slump in WTI and 35 percent decline in Brent
last year. U.S. crude supplies have swelled to a record and the Organization of Petroleum
Exporting Countries have effectively abandoned output targets as they seek to defend market
share.
“We need to see supply giving up and I think that all falls to the U.S.,” Dominic Schnider, the head
of commodities and Asia-Pacific foreign exchange at UBS’s wealth-management unit in Hong
Kong, said Friday in a Bloomberg Television interview. Schnider at the beginning of this year
correctly predicted Brent would drop near $30 a barrel. “We’re still oversupplied.”
Ratings Cut

Natixis SA lowered its forecasts for 2016 and 2017 over concerns that Iran will boost exports after
sanctions were lifted and on the possibility a more stable Libyan government will increase
production. The Paris-based bank projects WTI will average $38 a barrel in the fourth-quarter, the
lowest of 17 estimates compiled by Bloomberg. And while the IEA sees supply outside OPEC
sliding, it warned last month that “the oil market could drown in oversupply.”
The price slump prompted Exxon Mobil Corp. to cut its drilling budget to the lowest in 10 years,
while Standard & Poor’s reduced Chevron Corp.’s credit rating for the first time in almost three
decades. The agency also cut Royal Dutch Shell Plc’s debt rating to the lowest since S&P began
coverage in 1990.
There are signs supply and demand will start to come back into balance this year, OPEC
Secretary-General Abdalla El-Badri said Jan. 25 at a conference in London. Global demand is
forecast to increase by about 1.3 million barrels a day while supply from outside the producer
group is expected to contract by about 660,000 a day, he said.
Iraq, the second-biggest producer in OPEC, and Pierre Andurand, the founder of the $615 million
Andurand Capital Management, predict oil may rise to $50 a barrel, while the United Arab
Emirates sees the glut shrinking, even after Iran boosts exports.
While prices continue to fluctuate, buy the December 2016 WTI contract below $40 a barrel
because prices are forecast to average $48 by the end of the year, according to Mark Keenan, the
head of commodities research for Asia at Societe Generale in Singapore. There may be
“meaningful signs” of shale production balancing in the second half, Keenan predicts.
“The combination of continued demand growth and falling U.S. production will eventually help
create a floor in the market from where it will be able to rally back towards the $40 to $50 range by
year-end,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by e-mail.

NewBase Special Coverage
News Agencies News Release 03 February 2016
Pacific Drilling: Three out of seven drillships out of work
Pacific Drilling, an offshore drilling contractor headquartered in Luxembourg, informed on Monday
that its ultra-deepwater drillship Pacific Khamsin is now without employment after completing its
contract with Chevron in Nigeria.
This means that three out of Pacific Drilling’s seven drillships are now without a contract. Apart
from Pacific Khamsin, the driller’s other drillships without a job are Pacific Mistral and Pacific
Meltem.
To remind, in June 2015, the driller’s largest customer, Chevron, cancelled a Gulf of Mexico rig
tender for which the Pacific Drilling was the likely winner leaving Pacific Meltem without a potential
gig. The 2014-built drillship Pacific Meltem is still idle and located in Aruba as well as the 2011-
built Pacific Mistral.
When it comes to Pacific Khamsin, the drillship was working for Chevron offshore Nigeria since
the delivery in 2013. The two-year contract started in December 2013, and the drillship completed
its drilling operations for the oil major on December 17, 2015.
According to the offshore driller’s February fleet status report, Pacific Khamsin is currently located
in Tenerife, Spain.

Pacific Khamsin was delivered to the owner in September 2013 from Samsung Heavy Industries
in South Korea. The drillship is capable of operating in water depths of up to 12,000 feet and
drilling wells up to 40,000 feet deep. It can accommodate 200 persons.
Pacific Drilling has three more drillships under contracts with Chevron, two of those in the Gulf of
Mexico and one in Nigeria. The company’s fourth drillship, under contract with french Total, is also
operating in Nigeria.
The company owns a fleet of seven ultra-deepwater drillships as it recently abolished a deal with a
South Korean shipyard for the drillship Pacific Zonda that was supposed to be its eighth drillship.
A lot of idle rigs competing for limited jobs
When asked about the employment prospects for Pacific Drilling’s drillships in the current low oil
price environment, a Credit Suisse’s analyst, Gregory Lewis, commented: “Given the slowdown in
offshore tendering activity the prospects for finding work have become increasingly
challenging. Just last night Anadarko guided to a CAPEX reductions of 50% Y-Y.”
Lewis added: “Not surprisingly tendering activity for rigs has been limited and working rig
utilization is estimated in the high 60% range so there are a lot of idle rigs competing for limited
jobs.”
Offshore Energy Today also asked Lewis to comment on Pacific Drilling being considered a
potential takeover candidate by its larger peers. Lewis said: “PACD is primarily owned by the
sponsor which owns 70% of the company – any sale would have to be cleared through them.”
Since Pacific Drilling’s fleet is relatively young, with its oldest drillship delivered in 2010, and the
youngest one in 2014, Lewis explained the appeal of this offshore driller as a takeover
candidate: “PACD does have a premium UDW fleet which would look pretty good in someone
else’s fleet when the market eventually recovers, that is why the company has come up in the past
as a potential takeover target.
“However, with the bonds trading well below PAR value any buyer would have to make the bond
holders whole.”
Pacific Drilling is not the only offshore drilling contractor facing challenges in the current low oil
price environment as its peer Ocean Rig on Monday received a notice of breach of material
obligations from Premier Oil under the drilling contract for the Eirik Raude rig, which comes only
weeks after the driller lost a contract with Italian oil company, Eni.
Total looks downstream to spur gas demand, secure markets
Reuters – Bate Flix ( images NewBase )
France's Total is investing in gas and infrastructure as it looks to open up new markets for a fuel
seen as a greener alternative to coal. A move to gas from coal for energy can cut carbon
emissions by 50 percent, a quick win for countries aiming to meet their carbon emission reduction
targets, said Total's head of gas Laurent Vivier.

The company decided to remove coal-related businesses from its portfolio last year, positioning
itself to respond to gas demand growth. "The strategy is to secure gas outlets and boost
demand," Vivier told Reuters .
The global liquefied natural gas (LNG) market is growing by 4 percent annually and already
contributes 20 percent of Total's output and 30 percent of its profit. It plans to increase LNG
production to 20 million tonnes by 2020 from 12 million currently.
Vivier said Total was looking at ways to structure deals which could give it footholds into new
markets and capture new gas buyers.
It signed one such deal with Indonesia's Pertamina on Tuesday, a swap-and-purchase agreement
in which Total will buy 400,000 tonnes of Pertamina's LNG from Corpus Christi LNG, currently
under construction in the United States.
Pertamina, which would have struggled to ship the LNG from the plant, will buy increasing
volumes of LNG from Total, from 400,000 to 1 million tonnes per year for a 15-year period from
2020.
"We need to invest and we must invest in regasification projects in some countries. The countries
need to develop infrastructure," Vivier said. He declined to say how much Total has committed to
such projects.
"Most of the cost in gas is on logistics. Pipelines, ships and plants involve huge cost. Once you
have something that is so expensive, you need to be in the whole chain," he said.
Total has stakes in several LNG projects in emerging countries such as the Hazira LNG and Port
in India operated with Shell , and the Altamira LNG project in Mexico, another joint venture with
Shell.
Vivier said Total was looking at other gas projects in South Africa, Morocco, Ghana, Abu Dhabi
and Kuwait, and countries where there is a growing demand for power. "You don't know where
the money is going to be made on gas, so you want to be integrated," he said. "You need to be a
big player, which is what Total is targeting."
Although gas production has been on the rise, the market has been less active at creating
demand, Vivier said. Prices for LNG have been falling in tandem with oil prices due to global
oversupply and slow demand.
"We need to understand what is happening on the demand side. We need to go more
downstream," he said.
Switching from coal to gas will require heavy investments in terminals, regasification plants and
converting coal-fired plants to gas, he said, but would ultimately create demand.
This is where Total can step in with finance and expertise, especially in developing countries and
on projects that will enable it to unlock demand, Vivier said.
Total will face rivals Shell, which has completed a $52 billion takeover of BG Group, creating the
world's biggest LNG trader, and Italy's Eni , which discovered the largest known gas field in the
Mediterranean off the Egyptian coast last August.

Storing CO2 while pumping for oil and gas
What if oil and gas production could be used to store carbon dioxide (CO2) permanently and thus
limit climate change? That is the premise behind EOR+, and in a new report and a webinar
presentation, the IEA has examined the opportunities, challenges and necessary
drivers to develop this novel approach to carbon capture and storage. Juho
Lipponen, the head of the IEA Carbon Capture and Storage Technology Unit,
explains the engineering behind EOR+, what can make it a success and the net
effect on global greenhouse gases.
Juho Lipponen ,Head, Carbon Capture and Storage Technology Unit
What is EOR+, and what future does the IEA see for the technology?
Let’s start with some background on technologies that contribute to EOR+. First there is carbon
capture and storage, or CCS, which can capture CO2 from fuel combustion or industrial
processes, then transport it and store it underground, often in depleted oil and gas fields, keeping
it out of the atmosphere where it would contribute to climate change. This would be your “classic”
CCS.
Then there’s EOR, or enhanced oil recovery, which involves injection of material into a reservoir to
increase the pressure so much that it alters the properties of the oil or reservoir, improving
recovery.
For nearly 50 years, the oil industry has used CO2-EOR, where it injects the carbon dioxide,
usually with water, into a reservoir; the CO2 mixes with the oil, improving flow. The gas is recycled
over and over again, but in today's EOR operations, its long-term behaviour in the depleted
reservoir is not monitored or verified.
Despite the large technical potential of EOR, its use with CO2 currently contributes only about
0.35% of global oil production. But CO2-EOR can make early, large-scale CCS projects viable by
partly offsetting capture costs, and hence benefiting CCS in the longer term.

But what if we used CO2-EOR not just to generate more oil but also to store the greenhouse
gaspermanently? That’s what we call EOR+, and it offers a win-win solution: commercial
opportunities for oil producers while also ensuring permanent storage of large quantities of
CO2 underground.
EOR+ could store 60 gigatonnes to 360 gigatonnes of CO2 in the next 50 years: that range covers
half to more than three times the amount of total CO2 storage required through 2050 under the
IEA 2 Degree Scenario to limit climate change.
The IEA recently published the report Storing CO2 through Enhanced Oil Recovery, which
outlines the economic and CO2 storage potential of EOR+ but also the challenges involved.
Remember how I said EOR+ is a win-win solution? According to our analysis, EOR+ practices can
result in net emissions savings, as the amounts of CO2 stored would be vastly superior to the
additional CO2 resulting from the combustion of the recovered oil.
What are those challenges to making EOR+ industry practice?
Adding the “plus” to EOR will require a paradigm shift from current industry practices. EOR+ is
technically viable, but to turn CO2-EOR into EOR+ requires at least four extra steps:
• Additional site characterisation and risk assessment about the reservoir’s cap-rock and
geological formations, as well as abandoned wellbores, to assess the potential for CO2 leakage.
• Extra measurement of venting and fugitive emissions from surface processing equipment.
• Monitoring and enhanced field surveillance to assess that the reservoir behaves as
anticipated.
• Changes to abandonment processesto assure long-term containment of injected CO2, such as
plugging and removal of the uppermost components of wells so they can withstand the
corrosive effects of CO2-water mixtures.
CO2-EOR operators would need sufficient incentive to offset the costs of the extra steps for
EOR+: that could be accomplished through carbon pricing or linking the regulatory framework for
oil production to that for tackling climate change.
But wouldn’t the captured CO2 just produce more oil that produces more CO2?
Remember how I said EOR+ is a win-win solution?
EOR+ involves injecting more CO2 per barrel of extra oil recovered than is the practice today. In
addition, EOR+ operators undertake monitoring
and verification of the CO2 that remains in the
reservoir. According to our analysis, EOR+
practices can result in net emissions savings, as
the amounts of CO2 stored would be vastly
superior to the additional CO2resulting from the
combustion of the recovered oil.
Still, as EOR+ is implemented, we will need new
and appropriate in-depth life-cycle analyses to
assess both project-level and cumulative net
impact.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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NewBase energy news is produced daily (Sunday to Thursday) and
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For additional free subscription emails please contact Hawk Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
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 03 February 2016 K. Al Awadi

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