New base 787 special 15 februaury 2016

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NewBase 15 February 2016 - Issue No. 787 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
MENA Region: Non-oil sector revenues to drive 3.8% GDP
growth in 2016.. Saudi Gazette
The MENA Region is expected to witness a 3.8% growth in GDP in 2016, revealed an Al Masah
Capital Limited Report titled ‘MENA Yearbook – 2016’. In contrast, the global economic growth
prospects are somewhat modest with the World Bank, International Monetary Fund (IMF) and the
Organization for Economic Co-operation and Development (OECD) lowering their forecasts to
2.4%, 3.1% and 2.9% respectively.
The sharp decline in oil prices, various global factors and rising geopolitical tensions meant that
the MENA Region is estimated to have registered a lower GDP growth rate of 2.3% in 2015 as
opposed to 2.6% a year earlier. According to the report, despite these headwinds the MENA
Region has continued its growth trajectory with the same expected this year on account of the
various government initiatives to introduce alternative measures to boost revenues and GDP
contributions of the non-oil sector.
With oil prices dropping to record lows since mid-2014, government revenues are dwindling and
state deficits are burgeoning. Oil price volatility is expected to continue in 2016 and hence
increasing non-oil sector revenues will enable governments fund their ambitious spending
programs which are key to sustaining regional economic growth.

The report highlights and analyzes the economic performance and prospects of the key MENA
economies namely the six GCC countries and Egypt, as well as the key developed economies of
USA, Eurozone and Japan, and emerging economies of China and India. It highlights the various
macroeconomic challenges that prevailed in 2015 which are expected to persist and most likely
intensify further this year. The events that unfolded in 2015, the success or failure of the divergent
monetary policies of the central banks in developed economies and headwinds in key emerging
markets especially China, are critical factors that will shape the global economy in 2016, cites the
report.
Lower oil revenues in 2015 have weakened the fiscal position and impacted the capital spending
program of the Saudi Arabian government aimed at boosting economic activity. Amidst tough
economic conditions in 2016 and expectations of a sizeable reduction in project spending and
gradual cut in subsidies, the IMF forecasts GDP growth to be curtailed at 1.2% down from 3.4% in
2015. The report states that if Saudi Arabia is to reduce its fiscal deficit it will need to follow the
regional trend and introduce tough reforms to boost non-oil revenues in addition to introducing
measures to tackle youth unemployment, its biggest socio-economic challenge.
The UAE despite being the most diversified market in the region is expected to register a modest
3.1% GDP growth in 2016 as concerns over low oil prices continue to prevail resulting in a
slowdown in economic activity.
However driven by its vision of increasing the non-hydrocarbon sector’s contribution to the GDP to
81% within the next 5 years, the UAE has made considerable progress through its economic and
policy reforms – enhancing business competitiveness, encouraging foreign investments and
supporting a range of projects and initiatives based on the knowledge economy.
The IMF expects Egypt’s GDP to grow at 4.3% in 2016 slightly up from the estimated 4.2% growth
in 2015 however the government has projected a growth rate of 5% for FY 2015-16. The report
states that despite the government’s efforts to reinforce security and introduce positive reforms,

the prevailing unstable geopolitical climate and slow implementation of new projects and structural
reforms are likely to restrict growth going forward.
Qatar is likely to have registered a GDP growth of 4.7% in 2015 which is expected to rise to 4.9%
in 2016. Despite its reliance on the oil and gas sector, its economy is expected to continue
growing propelled by the government’s strong commitment to continue investing in major
infrastructure projects as part of its efforts to diversify its revenue sources.
According to IMF preliminary estimates, Kuwait’s GDP is expected to have grown by 1.2% in 2015
and increase to 2.5% in 2016 driven by the non-hydrocarbon sector growth. In addition the
implementation of the $112.4 billion infrastructure development plan is expected to boost private
sector participation in the economy, supporting future robust growth.
The IMF expects Oman’s economy to expand by 2.8% in 2016 compared to 4.4% in 2015 as its
fiscal position continues to remain under pressure on account of its high breakeven price for oil
which could result in spending restraints and impairment of economic growth. Despite several
challenges, reforms and alternative methods to boost revenues can offset some of the headwinds
facing the economy this year and beyond.
According to IMF estimates, Bahrain’s economy is expected to expand at 2.1% in 2016 however
its fiscal position is deteriorating as oil prices continue to decline. With modest forex reserves and
one of the highest debt-to-GDP ratios in the region, Bahrain will need to continue introducing
reforms and diversify its economy to boost non-oil sector revenues to drive growth.
The US economy gained further strength in 2015, with annual growth expected to be the strongest
since the post-crisis rebound in 2010 on account of the gradual improvement seen in the labor
market. Estimated to grow at 2.4% in 2016, the US is expected to mainly drive global economic
growth this year along with other developed economies.
The eurozone is on a gradual recovery path which is likely to improve further on the back of loose
monetary policy by the central bank, however deflationary pressure continues to persist. It is
expected to register a 1.5% growth in 2015 on account of strong domestic demand driven by the
progress made in the labor market.
Japan’s economy has been impacted by the slow implementation of pro-growth reforms, recording
inconsistent growth during 2015. Loose monetary policy which is likely to support investment and
consumption demand, rising consumer confidence driven by steady improvements in the labor
market, and increased capital expenditure boosted by a weaker yen are expected to increase
Japan’s economic activity this year.
The report states that although continuing to grow at a faster pace than the developed markets,
emerging markets had a challenging past year and are expected to continue facing headwinds in
2016 – a key reason behind the revised growth forecasts by the World Bank, IMF and OECD.
China accounts for nearly a third of the global economic growth hence the impact of the
deceleration in its economy during 2015, registering a growth rate of under 7%, was felt across
the world especially since it is transitioning from one an investment-led to consumption-based
economy. This means that the world will have to absorb a slowing growth in China and
accordingly adjust to new realities going forward.
The Indian economy on the other hand grew at a rate of 7.5%, higher than China for the first time
in a decade, and is expected to remain steady at 7.5% GDP growth in 2016 and 2017. — SG

Oman: BP expands scope of $16b Khazzan gas project
Block 61 will add 1,000 square kilometres to the original 2,700 square kilometer area of
development, BP said Sunday
Bloomberg + Gulf News+NewBase
BP and state-owned Oman Oil Co agreed to expand an exploration and production sharing
agreement of the Khazzan natural gasfield to include a second development phase, at an
estimated cost of $16 billion (Dh58.7 billion) for the entire project.
Block 61 will add 1,000 square kilometres (386.1 square miles) to the original 2,700 square
kilometer area of development, BP said Sunday in an emailed statement. The project will produce
1.5 billion cubic feet of gas per day, or 40 per cent of Oman’s current output.
The new development requires final approval of Oman’s government and BP, which is expected in
2017, the company said. The reservoir is known to have “tight gas,” which is trapped in
impermeable rocks and requires techniques including hydraulic fracturing to extract.
Oman, an exporter of liquefied natural gas to Spain, Japan and South Korea, is studying options
to import LNG to help generate power. Domestic consumption jumped to 774 billion cubic feet in
2013 from 520 billion cubic feet in 2009, according to the US. Energy Information Administration.
Oman imports gas via a pipeline from Qatar and is in talks to build a link with Iran across the Gulf.
“Khazzan is a major resource with the potential to produce gas for Oman for decades,” BP Chief
Executive Officer Bob Dudley said in the statement.

The first phase of the project is expected to deliver gas in 2017 and the second will start in 2020.
BP owns 60 per cent of the block, with the remaining 40 per cent held by Oman Oil. More than
325 wells are planned over 15 years.

KSA: Expert explains importance of ‘reduce, reuse, recycle’ concept
Gulf Times
The “prevailing focus” of the construction industry is to first reduce the amount of waste produced,
an official of Qatar Project Management (QPM) has said.
In a presentation delivered at
the recently-concluded “6th
Waste Management and
Recycling Summit” in Doha, Dr
Mark Evans, who is also with
Qatar Rail’s PMC Major Stations
Department as Environmental &
Sustainability manager, said:
“There is a need to reinforce the
role of resource efficiency in
construction and related
training, which is a relatively
new addition to courses.”
He added: “The industry,
overall, has a lot of gaps to
bridge. Some waste is unavoidable, but there are plenty of opportunities for reuse and recycling.”
Evans said Qatar Rail is taking the “reduce, reuse, and recycle” concept “to a higher level.”
“In what they are calling a methodology to ‘Design Out Waste’, the project managers are
implementing a seven-point ‘avoid, reduce, reuse, recycle, recover, treat, and dispose responsibly’
plan,” he explained. Evans stressed that “no amount of wishful thinking” will replace consistency
in repeating the principles of the seven-point methodology.
“Toolbox sessions define the operational, health, safety, and environmental policies that workers
need to understand and learn from. People will inevitably make mistakes. But they can learn to
avoid repeating them,” he noted.
He said Qatar Rail utilises all materials it can reuse at its projects and also segregates unusable
waste for proper disposal or dispatch to recycling facilities. This also includes water usage, which
is monitored closely and used only as necessary, while also ensuring that any runoff does not
contaminate groundwater reserves.
Evans said reused materials, acquired from excavation and demolition and as surplus during the
build, are inspected to ensure project integrity in adherence to the latest Qatar Construction
Standards (QCS) code.
“Prevention of waste will lead to the best improvements in terms of environmental impact as well
as cost savings across materials, labour and transportation, which all add to the bottom line.
When you study the impact of a well-defined waste management plan, the benefits soon add up
and can be a much more powerful motivator for developers than legislation alone,” he said.
Evans also praised the efforts of the Qatar Green Building Council and its members, who
represent many of the country’s biggest projects and companies for fighting for higher standards,
while sharing new insights from all around the world that can be implemented locally.

Turkey: OMV initiates process to sell OMV Petrol Ofisi
Source: OMV
OMV has announced a process to sell up to 100% of its wholly owned
subsidiary OMV Petrol Ofisi, a leading company in the Turkish oil products
retail and wholesale market.
OMV is currently selecting its advisors to support the potential transaction and the structuring of
the envisaged process. A potential transaction is aimed at optimizing OMV’s integrated portfolio in
a challenging market environment.
OMV Petrol Ofisi is a leading player in the Turkish fuel distribution industry. With 1,785 fuel
stations the company operates the largest retail station network in Turkey and it is a leading fuels
supplier to commercial and industrial customers.
Total sales volume in 2015 amounted to ca. 10 million tons. In addition, OMV Petrol Ofisi owns
the largest fuel storage and logistics business in Turkey with a total storage capacity in excess of
1 million cubic meters. The company is also the largest distributor of lubricants in Turkey.

Egypt:Renewable energy developers edged out in’s Kom Ombo solar project
The National - LeAnne Graves
Renewable energy developers are being squeezed out of the Egyptian market in the wake of the
government’s strategy shift.
Egypt had originally announced that it would tender 10 projects totaling 20 megawatts each for the
Kom Ombo solar photovoltaic (PV) scheme in Upper Egypt. It has now opted to consolidate those
into one utility-scale project totaling 200MW, the government-owned Egyptian Electricity
Transmission Company told The National.
This change, which only allows one winner, is hurting the country’s renewable energy market,
according to Italy’s Building Energy. “This changes a lot in the market in the region in general,”
said Matteo Brambilla, the managing director of Africa and the Middle East for Building Energy.
“The real market is struggling to happen.”
Building Energy was pursuing two of the 20MW solar offers but, now that the total has changed to
one lump sum, the company and its consortium partners are re-evaluating.
This could pose problems for companies that signed bilateral agreements with the Egyptian
government last year, meaning that a standard tendering process was avoided by striking a direct
deal with the authorities.
“These deals won’t be feasible if the Egyptian government starts tendering out so many projects
on the side,” said one regional developer involved in the North African country, asking not to be
named. “These scattered developments are frustrating investors.”
The local solar developer Solar Shams said the process was presented to all 15 prequalified
candidates. Faisal Eissa, the chief operating officer of Solar Shams, said the government had
found it difficult to evaluate the offers based on prices and realised that it would be complicated for
multiple, smaller projects. “They looked at [those prequalified] and saw it was the same firms that
had signed on for the 50MW tenders,” said Mr Eissa. “So why make it smaller if those companies
are all capable of completing 200MW?”

But some of those firms are not capable, including Building Energy. The company decreased its
stake in its two 50MW projects in Benban and Dubai’s Access Power has stepped on board to
help these projects reach completion.
While Building Energy declined to comment, Access said it was always “evaluating potential
renewable energy projects that fall in line with our growth strategy in Africa and Asia”.
Mr Eissa said this is not the first project change. “Some companies that entered qualifications and
couldn’t continue on their own, so they began approaching others to help with the development,”
he said, adding that it has happened “a few times”.
“The Egyptian market is on a steep learning curve but we need to see a universal agenda,” said
Hadi Tahboub, vice president of the Middle East Solar Industry Association.

UK: A rebranded wind farm subsidy is still a subsidy
The Telegraph
The 2015 Conservative Party manifesto took a clear and sensible stance on the issue of wind
farms. It stated that while they can form part of the “energy mix”, they are “unable by themselves
to provide the firm capacity that a stable energy system requires”.
The manifesto pledged to “end any n ew public subsidy for them”. So it is more than a surprise
and a disappointment to discover that the Government is considering a reversal – keeping the
subsidies and simply rebranding them.
Popular opposition to wind farms is practical, not ideological. Most people recognise that we need
to develop sustainable technologies and reduce pollution. But Britain also needs cheap, plentiful
energy – to fuel its economic growth and provide a high quality of life for all its citizens.
The turbines stand still and useless – a complete waste of the generous subsidies that
come from levies on consumers’ energy bills
Wind farms often fail to meet these criteria. Some people complain that they despoil the
environment by being ugly, loud and deadly to birds. Others point out that they can be desperately
inefficient. Britain demands energy most in the winter, to heat our homes.
But at this time of the year it is often windless, despite recent storms. The turbines stand still and
useless – a complete waste of the generous subsidies that come from levies on consumers’
energy bills. To make matters worse, when the wind blows too hard, the Government
actually pays the industry to turn the turbines off. Strong wind conditions in late January
Ovenden Moor Wind Farm Ovenden Halifax West Yorkshire Photo: Alamy

threatened to overwhelm the grid with more power than was needed – so the National Grid offered
lucrative payouts of between £58 and £115 per MWh to shut down the supply.
Wind farm at the village of Bothel in Cumbria, Lake District Photo: Alamy
Not only will the new turbines be less efficient than gas or coal, but there is also no
escaping the conclusion that hard-pressed consumers will still be bank-rolling the
expansion of a controversial energy source through their domestic bills
If the Government believes there is a case
to be made for continuing to subsidise the
industry then it should make it openly and
honestly. What the public does not want to
hear is spin – which is what the proposal of
redefining a subsidy amounts to.
Lobbyists say that any new onshore wind
farms will cost less to build than the old,
non-renewable plants they are replacing,
so they are a fair deal. Yet not only will the
new turbines be less efficient than gas or
coal, but there is also no escaping the
conclusion that hard-pressed consumers
will still be bank-rolling the expansion of a controversial energy source through their domestic bills.
We sincerely hope that the Government rejects any advice to rebrand this arrangement as
subsidy-free. The public deserves transparency in this debate.

NewBase 15 February 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil edges down, pares Friday's jump of over 10 percent
REUTERS + NEWBASE
Brent and U.S. crude futures edged down on Monday as a strong dollar weighed on prices, paring
gains from a more than 10-percent jump late last week that came amid renewed talk that OPEC
might finally agree to cut output to reduce a world glut.
The mood inside the Organization of the Petroleum Exporting Countries (OPEC) is shifting from
mistrust to a growing consensus that a decision must be reached on how to end the global oil
price rout, Nigeria's oil minister said, adding he will have talks with his Saudi and Qatari
counterparts.
London Brent crude for April delivery LCOc1 was down 45 cents at $32.91 a barrel by 0032 GMT
(7 p.m. ET on Sunday). It jumped $3.30 on Friday after the United Arab Emirates' energy minister
was quoted as saying that OPEC members are ready to cooperate on an output cut.
NYMEX crude for March delivery CLc1 was down 37 cents at $29.07 a barrel, after rebounding
more than $3 in the previous session from Thursday's 12-year low. There will be no settlement on
Monday for U.S. crude due to the Presidents Day holiday, and trading may be thinner than usual.
Oil price special
coverage

The U.S. dollar rose from a 15-month low against the yen and also gained against the euro on
Monday helped by a bounce in U.S. consumer spending last month. [USD/]
"The dollar's strength is contributing to slight declines in Brent and U.S. crude," said Kaname
Gokon at brokerage Okato Shoji in Tokyo. "But the market may not move much today due to the
U.S. holiday."
Iran is exporting 1.3 million barrels a day (bpd) of crude oil, and will be pumping 1.5 million barrels
a day by the start of the next Iranian year on March 20, a vice-president was quoted as saying on
Saturday.
Iran will load 4 million barrels of crude oil on tankers destined for Europe in the coming 24 hours, a
senior official was quoted as saying on Saturday, including 2 million barrels to be bought by
France's Total.
Amid worries over slowing global demand, China's exports, denominated in yuan, fell 6.6 percent
in January from a year earlier, while its yuan-denominated imports dipped 14.4 percent, trade data
showed on Monday.
Japan's economy contracted an annualized 1.4 percent in the final quarter of last year, data
showed on Monday.

NewBase Special Coverage
News Agencies News Release 15 February 2016
Crude oil rally based on 'false hope': Analyst
CNBC –T om DiChristopher
Oil prices rallied more than 12 percent Friday on renewed prospects for an output cut among the
world's oil producers, but analysts and market watchers told CNBC that traders shouldn't hold out
hope.
Crude prices spiked Thursday afternoon after UAE Energy Minister Suhail bin Mohammed al-
Mazrouei said consensus was forming within OPEC that it was time to discuss cuts with
nonmembers. He also said current low prices had forced some members to cap production.
Michael Cohen, Barclays head of energy commodities research, said he was not moved by the
latest news, which follows a string of similar comments from oil ministers and petroleum
executives in recent weeks.
"We think it's a lot of false hope. Basically what's been happening over the last month is, as the
market's gotten increasingly short, anytime that we see these kinds of headlines, they result in this
kind of rapid change in the price," he told CNBC's "Squawk on the Street" on Friday.
Cohen said there was simply too much distrust between de facto OPECleader and top oil exporter
Saudi Arabia and No. 1 producer Russia, which he noted has agreed to cuts in the past, but has
only enacted very small ones in reality.
To be sure, short covering also fueled Friday's drive as some traders believe oil hit a technical
bottom Thursday, when U.S. crude fell as low as $26.05. It settled above $29 on Friday. Citigroup
has said the bottom is at the $26 level.
There was nothing new in Thursday's UAE headline, and the reaction in oil markets has been
overblown, John Kilduff, founding partner at advisory firm Again Capital, said Friday.
"There was a lot of momentum players in this market, and yeah, this is your worst nightmare," he
told CNBC's "Fast Money: Halftime Report.""You see a headline like this and you just got short the
market, you're going to puke your position. That's what we're seeing here today."
He said Saudi Arabia will not be content until it is certain it has inflicted enough pain on
competitors, particularly U.S. drillers, whose production gains in recent years contributed
significantly to an oversupply that OPEC estimates at 2 million barrels a day. Kilduff reiterated his
called that oil will fall to $18 a barrel before the market rebalances.
Dennis Gartman, publisher of The Gartman Letter, noted that the CEO of Russian oil giant
Rosneft, Igor Sechin, had recently changed his tenor, suggesting he could possibly be open to
output cuts. But he too said a production drawdown was unlikely.

Gartman told CNBC's "Squawk Box" on Friday that a meeting to discuss cuts would probably
happen and "maybe" yield a productive outcome, but there was absolutely no chance OPEC
members would abide by quotas.
"If there's one thing we've learned from history, whatever OPEC says about curtailing production
never comes to fruition. Everybody cheats," Gartman said.
Both Gartman and Cohen noted that Russian producers are technically unable to reduce
production right now because temperatures are so cold, wells would freeze and need to be
redrilled.
Hilltop Securities Managing Director Mark Grant said Friday he believes technological innovation
in the American oil patch has broken the established order in crude markets.
"We can produce more oil and deliver more oil than anybody in the world, which means that all the
producing nations — Russia, Saudi Arabia, Libya, Yemen, you can go through the whole litany —
are toast. And I mean toast because they'll never recover. And so the whole energy game has
changed," he told "Squawk Box."
U.S. drillers still typically face a higher cost of production oil than OPEC members, and they are
feeling the pain. Since last year, 48 North American oil and gas companies have filed for
bankruptcy, according to law firm Haynes & Boone.
Many of these are shale drillers who rely on an expensive process called hydraulic fracturing,
which entails pumping water, minerals and chemicals deep underground to break up rock and free
oil and gas.
But BP suggested the current rout could pay off for shale drillers in the long run, as tough times
force them to become more efficient, Reuters reported. In its 2035 Energy Outlook, BP forecast
shale production would grow to 8 million barrels per day in the 2030s from about 4 million barrels
today, according to the news agency.
CNBC's Patti Domm contributed reporting to this story.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
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 15 February 2016 K. Al Awadi

New base 787 special 15 februaury 2016

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