New base 790 special 18 february 2016

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NewBase 18 February 2016 - Issue No. 790 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE Energy Minister tells CIS states to improve business
climate to bring in investors
The National - Michael Fahy
Countries within the Commonwealth of Independent States should pass laws that will help to
improve the investment climate to bring in more international funding, said the UAE’s Minister of
Energy Suhail Al Mazrouei.
During his keynote address at the CIS Global Business Forum, which took place in Dubai on
Wednesday, Mr Al Mazrouei said that the decline in hydrocarbon prices “puts lots of pressure” on
CIS states that are generally exporters of oil and gas.
“But I think there are opportunities, and those are to look at the full value chain. To look at
attracting investments in your countries where you utilise each barrel and each molecule of gas
before it is exported,” he said, citing the strides that had been made in the US, Canada and
elsewhere converting shale gas into petrochemicals.

“But for major investors to come, you need also to work more [on] regulations. In the UAE, we
found the best way for us to grow and invest is to sign some important treaties. Some tackle the
tax issue [to prevent] double taxation, and some tackle the protection of investment. Those are the
kind of things I would advise you to consider.”
Mr Al Mazrouei said that CIS states should also focus on the diversification of their energy
resources to reduce reliance on natural gas so that it can be channelled towards industry, citing
the UAE’s own target of cutting gas use for energy by 30 per cent by 2030.
He added that he was willing to work with CIS countries and “share what knowledge we have” to
assist, with a view to recreating the “Silk Road” East-West trade through the UAE.
Majid Al Ghurair, the chairman of Dubai Chamber, said that non-oil trade between Dubai and the
CIS states grew from Dh15.5 billion in 2012 to Dh20.8bn in 2014. In the first half of last year, trade
between the two sides was Dh7.8bn.
“The CIS markets with their geographic and economic size offer a potentially lucrative business
perspective for UAE and Gulf-based businesses,” said Mr Al Ghurair.
Last month, the IMF stated that the CIS countries had been “caught in the slipstream” of Russia’s
recession. It said the Russian economy would shrink by 1 per cent this year, and in the other CIS
states GDP would remain flat, before recovering next year to post growth of 1.7 per cent.
At yesterday’s conference, the energy minister would not be drawn into making comments about
Tuesday’s proposal by Saudi Arabia, Russia, Qatar and Venezuela for oil producers to freeze
output at January levels to prop up prices.
However, in remarks on Twitter yesterday, he said that the country’s oil policy was open to
cooperation with all producers towards the mutual interest of market stability.
He also said the UAE was optimistic about the future.
Whether the plan is enough to put a floor under prices is uncertain. The proposal depends on
cooperation from a range of producers, including Iran .

GCC-CIS trade growing 20% a year
Bilateral trade between the Gulf Cooperation Council (GCC) and the Commonwealth of
Independent States (CIS) totalled $8 billion (Dh29.3 billion) in 2014, according to a report by
Dubai Chamber of Commerce and Industry.
Although the trade level is modest, it has grown at 20 per cent a year for the past five years,
according to the report ‘A Common Wealth: Building Gulf-CIS ties’, published on Wednesday at
the CIS Global Business Forum at the Atlantis hotel in Dubai.
Trade is dominated by pairs of
countries, notably by Saudi
Arabia and the UAE with
Russia and Ukraine, as well
as by the UAE with
Turkmenistan.
Trade between the GCC and
Russia has increased by 31
per cent over the past five
years.“The data contained in
the report has considerable
significance for investors in
both the regions and will
enable them to create
practical engagement on a
number of key sectors,” said
Hamad Bu Amim, president
and CEO of Dubai Chamber.
The UAE and Kuwait have been the most active GCC countries in setting up commercial trade
treaties with CIS nations, while Belarus was the most active CIS state seeking trade deals with the
GCC.
The report noted that despite the CIS bloc’s ratings on the Ease of Doing Business Index
improving, it has not yet achieved its potential in key areas that include cross-border trade, secure
electricity and dealing with construction permits.
Islamic finance offers a potentially large market for Gulf firms, with 82 million Muslims in the CIS
area, but many sovereigns and companies in the region are rated below investment grade.
It also noted the role of low-cost Gulf airlines such as flydubai and Air Arabia in connecting CIS
countries with the rest of the world, particularly Africa and South Asia.
Flydubai serves 19 CIS destinations, it noted.
DP World is operating a new overland freight route in Kazakhstan, connecting ancient Silk Road
routes with modern demand, the report said.
GCC retail firms have tended to overlook CIS states as they focus on opportunities in Africa and
the Middle East and are unlikely to change their outlook as weak currencies, including the rouble,
reduce consumer spending power in the CIS bloc.
Delegates attending Commonwealth of Independent
States Global Business Forum 2016 on Wednesday

UAE: Dolphin Energy Signs Contract with Abu Dhabi Ports
Press Release ( images by NewBase )
Dolphin Energy today announced it has signed a contract with Abu Dhabi Ports , the
master developer, operator and manager of ports and Khalifa Industrial Zone Abu
Dhabi (Kizad), to accommodate hardware for its Emergency Pipeline Repair System (EPRS)
at its new facility based in Kizad.
A signing ceremony was held at Dolphin Energy 's offices, attended by Dolphin Energy 's Chief
Executive Officer, Mr Adel Ahmed Albuainain, and Captain Mohamed Juma Al Shamisi, CEO
of Abu Dhabi Ports , as well as other senior management officials from both companies.
The EPRS project allows Dolphin
Energy to intervene at short
notice and address any damage
sustained to its subsea pipelines
(the 48" export line and the twin
36" sea lines). The project
incorporates the development of
a pipeline repair capability that
encompasses the organization,
resources, documentation and
processes that support
intervention, recovery and repair
in the shortest time possible.
Strategically located at
the Khalifa Industrial Zone Abu Dhabi (Kizad), the AED 55 million facility on a 45,388 square
metre plot will accommodate all EPRS hardware which will be housed, maintained and kept in a
state of readiness in the event it is required.
"The Dolphin Gas Project meets 30% of the UAE's energy requirements every single day so it is a
significant strategic asset. The EPRS will allow us to address in the shortest time possible any
damage sustained to our subsea pipelines and enhances our approach to risk management,
quality and excellence. We are delighted to join forces with Abu Dhabi Ports in this way, whose
support is critical in helping us maintain energy security for the country," explained Mr Adel Ahmed
Albuainain.
Captain Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports , commented: "We are proud to
supportDolphin Energy 's project by providing ready-built infrastructure and the integrated services
needed to ensure the uninterrupted availability of natural energy resources. The EPRS project
demonstrates Kizad's capability and facilities to host technologically advanced projects. This
facility on Kizad's Modular Path, which enables smooth movement of large plants and equipment
to and from Khalifa Port to the customer's site, will also draw attention to our combined efforts to
enable economic developments while sustaining environmental needs."
The first major equipment order for two subsea pipe handling frames is expected to be awarded
by the middle of April 2016 for delivery in August 2017. The new emergency/marine base is
scheduled for hand-over in September 2017 and completion of the EPRS project is expected by
the beginning of 2018.

Dolphin Energy Limited
Dolphin Energy Limited was created to develop substantial energy projects throughout the GCC
and to create long-term economic wealth and new business opportunities for GCC citizens, far
into the future.
Dolphin Energy 's major strategic initiative, the Dolphin Gas Project, involves the production and
processing of natural gas from Qatar's North Field, and transportation of the dry gas by sub-sea
export pipeline from Qatar to the UAE, which began in July 2007.
The long term customers for Dolphin Energy gas from Qatar are ADWEC (Abu Dhabi Water &
Electricity Company), DUSUP (Dubai Supply Authority) and OOC (Oman Oil Company). Each has
signed a gas supply agreement with Dolphin Energy for 25 years.
Dolphin Energy is owned 51 percent by Mubadala Development Company, on behalf of the
Government of Abu Dhabi - and 24.5 percent each by Total of France and Occidental Petroleum
of the USA.
About Abu Dhabi Ports
Established in 2006, Abu Dhabi Ports ' core objective is to facilitate the diversification of the
economy by stimulating trade and development. This is done by delivering high quality maritime
services, supporting partners' infrastructure projects and setting up new companies and joint
ventures in the ports and logistics sectors.
The flagship state-of-the -art
Khalifa Port and Khalifa
Industrial Zone play a big role,
supporting the diversification of
the economy. Khalifa Port was
inaugurated on 12/12/12 by
UAE President HH Sheikh
Khalifa bin Zayed Al Nahyan.
The port's semi-automated
container terminal handles all
of Abu Dhabi's container
traffic, after its transfer from
Zayed Port, the historic port in
the city centre.
Phase One of Khalifa Port has
a capacity of 2.5 million TEUs
and 12 million tonnes of
general cargo. Further phases
of development will occur as
market demand requires. When all phases are complete, Khalifa Port will be able to handle 15
million TEUs and 35 million tonnes of general cargo per year.
Abu Dhabi Ports manages nine commercial, logistics, community and leisure ports, and Khalifa
Industrial Zone which is serving a range of logistics and manufacturing investors. Abu Dhabi
Ports is boosting Abu Dhabi's economic growth and diversification, following Abu Dhabi's
Economic Vision 2030.
A signing ceremony was held at Dolphin Energy’s offices, attended by
Dolphin Energy’s Chief Executive Officer, Mr Adel Ahmed Albuainain,
and Captain Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports

Kazakhstan: Mega Kazakh oilfield to be back online this year
Gulf News - By Alexander Cornwell
Kazakhstan will resume production in the Kashagan oil and gasfield by the end of 2016, according
to the First Deputy Chairman of state energy firm Kazmunaygas. The Kashagan field, located
west of Kazakhstan in the Caspian Sea, is the world’s largest oil discovery in the last four
decades.
A gas leak in a main pipeline of the field forced production to stop in October 2013 just a month
after it had started. But on Wednesday, Christopher Hopkinson, First Deputy Chairman of
Kazmunaygas, said in Dubai that the field will be back online by “the end of the year.”
Kazakhstan is a major oil producer, the second-largest out of the former Soviet states after
Russia, churning out 1.6 million barrels a day in 2014, the same as Opec member Angola.
But the low oil price has put pressure on Kazakhstan. Opec forecasts the country to produce 1.55
million barrels a day this year, 40,000 less than 2015.
However, Kazakhstan is not planning to wait for prices to rebound with Hopkinson telling a
business forum in Dubai the field is “on target to be ready.”
A reported $50 billion (Dh183.65 billion) of investment have been invested in the Kashagan oilfield
over the past two decades as international and national oil companies have tried to figure out how
to tap it.
Now that they have found a way, Kazakhstan’s decision to resume production under the current
oil price is likely to add further strain on the oil market that is suffering from a global glut. The field
has an estimated recoverable reserves of 9-13 billion barrels.

US: 35% of drillers at high risk of bankruptcy: Report
CNBC - Tom DiChristopher
A growing number of energy firms are at risk of filing for bankruptcy this year as debt pressure
mounts, Deloitte's John England said Tuesday.
Nearly 35 percent of publicly traded oil and gas
exploration and production companies around
the world — about 175 firms — are at high risk
of falling into bankruptcy, the auditing and
consulting firm reported. Not only do these
companies have high debt levels, but their ability
to pay interest on those loans has deteriorated,
according to the firm.
"Clearly, this is the year of hard decisions I think
for a lot of these companies. They were kind of
sheltered in 2015 through hedges and some access to equity and debt markets," England,
Deloitte's U.S. oil and gas leader, told CNBC's "Fast Money: Halftime Report."
Those tough choices include selling assets that are core to drillers' portfolios, cutting shareholder
payouts, laying off more workers, and further slashing capital spending plans, he said.
Oil and gas companies canceled or postponed about $380 billion in projects between the start of
the oil price rout in 2014 and the beginning of this year, according to consultant Wood Mackenzie.
The probability of
bankruptcy is high for 50
members of the roughly
175 companies, said
Deloitte. That is because
their assets are worth
less than the
outstanding balances on
their loans or their
leverage ratios have
crept into the danger
zone.
Some 160 companies
are also in danger
because, while less
leveraged, they are facing cash-flow constraints, Deloitte said.
Those groups include both micro-cap companies and firms with market capitalizations in excess of
a billion dollars, England told CNBC.
"There is some larger players that are certainly in that bucket, and I think those are the ones that I
think are taking the hardest look right now at trying to shed assets pretty rapidly in an effort to try
to meet their debt needs," he said.

England said he believes a wave of mergers and acquisitions activity is now on the horizon.
Wolfe Research senior oil & gas analyst Paul Sankey said Tuesday he expects to see
bankruptcies almost daily.
On the other hand, Wolfe is most optimistic about Pioneer Natural Resources, Sankey said, noting
that the company remains heavily hedged. The firm also likes Occidental Petroleum on the
strength of its balance sheet, he said.
Almost every other company is in trouble at current crude prices below $30 a barrel, including oil
major Exxon Mobil, which faces risk to its credit rating, he said.
"Our analogy at these prices is that you've got a landslide of the whole industry basically slipping
down the slope, and Exxon's mansion is cracking at the top of the hill," he told CNBC's "Squawk
on the Street."

US: Diesel fuel retail price falls below $2.00 per gallon for first time since 2005
Source: U.S. Energy Information Administration, Gasoline and Diesel Fuel Update
EIA's weekly survey of diesel prices shows that the U.S. average retail price for on-highway diesel
fuel was $1.98 per gallon ( U$D 0.52 per litter ) on February 15, falling below $2/gal for the first
time since February 14, 2005. The U.S. average retail diesel price had last approached, but not
gone below, the $2.00 mark in early 2009. Falling diesel prices reflect both decreasing crude oil
prices and increasing inventories of crude oil and refined products worldwide.
U.S. average regular retail gasoline prices moved below the $2/gal mark a little over a month ago.
In recent years,diesel prices have tended to be higher than gasoline prices, reflecting strong
global demand for diesel, federal fuel taxes for diesel that are six cents/gal higher than those for
gasoline, and the higher production cost of ultra-low sulfur diesel.
Diesel prices tend to vary less by region than gasoline prices. In 2015, the average range among
diesel prices in the five Petroleum Administration for Defense Districts (PADDs), three sub-
PADDs, and California averaged just under 50 cents/gal, while the range for gasoline was just
over $1/gal.
This difference in price ranges was largely because gasoline supply chains on the West Coast
were adjusting to several refinery outages in 2015 that tightened gasoline supplies and increased
prices. From 2010 to 2014, regional diesel price spreads averaged 32 cents/gal while gasoline
price spreads averaged 57 cents/gal.
EIA surveys a statistically representative sample of 403 retail truck stops and service stations
across the contiguous United States each week for on-highway diesel prices. Stations are
surveyed each Monday morning and report their self-serve cash-only prices, including all taxes, as
of 8:00 a.m. local time. Survey results are reported in theGasoline and Diesel Fuel Update later
that day, one of the quickest turnaround times of any government survey.
As discussed in the February Short-Term Energy Outlook released last week, EIA expects diesel
prices to remain relatively low throughout 2016 and 2017, averaging $2.22/gal and 2.58/gal,
respectively.

US: Gasoline Trades as If U.S. Nearing Recession, Goldman Says
Bloomberg - Dan Murtaugh danmurtaugh
Gasoline futures are trading as if the U.S. economy is about to hit the brakes, according to
Goldman Sachs Group Inc.
Contracts for delivery in the summer months are currently priced less than $20 a barrel higher
than crude oil. If those premiums were realized, they would be the smallest since 2010, when the
U.S. unemployment rate was above 9 percent.
That’s too low, Goldman analyst Damien Courvalin said in a research note Wednesday. Last year,
gasoline’s premium fluctuated from $23 to $33 a barrel above crude as American drivers drove a
record number of miles.
Gasoline’s premium has slipped this year as record production boosted inventories to highest
level since at least 1990. Refineries have already started cutting back output, though, and several
will soon temporarily shut down for maintenance.
That should boost gasoline enough that the only way summer premiums could be as low as
they’re currently priced is if the U.S. economy began to shrink, causing driving demand to fall,
Courvalin said.
“The demand implied by such margins would be consistent with a U.S. recession, which our U.S.
economist team estimates has only a 15 percent to 20 percent probability of occurring,” Courvalin
said in the note.
Gasoline for March delivery added 1.5 percent to $1.0181 a gallon on the New York Mercantile
Exchange by 11:55 a.m. Singapore time.

NewBase 18 February 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
US oil surges 8% after crude stocks fall, Brent crude 8.4%
Reuters + NewBase
U.S.oil prices rose near 8 percent on Wednesday, after an unexpected drop in crude inventories.
Crude inventories fell by 3.3 million barrels in the week to Feb. 12 to 499.1 million, compared with
analysts' expectations for an increase of 3.9 million barrels. Crude stocks at the Cushing,
Oklahoma, delivery hub dipped by 175,000 barrels, API said.
Refinery crude runs fell by 27,000 barrels per day, API data showed.
Oil futures have staged a rebound from their lowest levels in a dozen years, bouncing after Iran
voiced support for a move led by Russia and Saudi Arabia to freeze production in an oversupplied
market.
Iranian Oil Minister Bijan Zanganeh met counterparts from Venezuela, Iraq and Qatar in Tehran
for over two hours on Wednesday, saying the proposed production "ceiling" should be the first
step toward stabilizing the market.
Zanganeh, quoted by Tehran's Shana news agency, did not say explicitly say that Iran will keep its
own output at January's levels, in line with the proposal that major producers including Russia and
Saudi Arabia restrict output.
Oil price special
coverage

But the tacit endorsement from Iran helped pushed global crude benchmark Brent up more than
$2 a barrel. Tehran has been the main obstacle to the first joint OPEC and non-OPEC deal in 15
years, after its pledge to recapture market share lost during years of sanctions.
Brent crude was up $2.70, or 8.39 percent, at $34.88 a barrel, having risen as high as $34.76.
Traders also cited options expiry in U.S. crude for the rebound. The March contract settled 5.58
percent higher, or $1.62, at $30.66 a barrel, and last traded up 7.95 percent, or $2.31, at $31.35 a
barrel.
"I'm pricing between $35 and $45 for Brent by summer, as we still have a daily surplus of up to 1.7
million barrels of oil to contend with," said Phil Davis, an independent crude trader at PSW
Investments.
"But I don't see the panic move down below $30 happening again," Davis said. "That's just
untenable."
Crude prices have fallen from highs above $100 a barrel with little resistance for most of the past
20 months, thanks to near-record output by the Organization of the Petroleum Exporting Countries
and other major drillers such as Russia.
Standard & Poor's cut its rating on the Kingdom of Saudi Arabia's long-term foreign and local
currency sovereign credit to 'A minus/A-2' from 'A plus/A-1,' citing a fall in oil prices since the
rating agency's last review of the country in October.
An Iranian official earlier said the fourth largest producer in OPEC would continue increasing its
output until it reached levels achieved before the 2012 trade sanctions. The pact to freeze output
will make little difference to this year's overall supply-demand balance in oil, according to some
analysts.
"The market needs a cut, not a production freeze," PVM analyst David Hufton said. Investors are
also eyeing U.S. oil inventory data from industry group the American Petroleum Institute later on
Wednesday and official government figures on Thursday for further direction on prices, with a poll
of analysts suggesting a gain of 3.9 million barrels in crude oil stocks last week.

Goldman Says Producers Freezing Oil Output Won't Help Prices
Bloomberg - Sharon Cho
The first coordinated decision on oil output between OPEC and producers outside the group in
fifteen years isn’t going to revive crude prices, according to Goldman Sachs Group Inc.
The agreement between Saudi Arabia and Russia to freeze production will have “little impact on
the oil market as proposed, while there remains high uncertainty that it even
materializes,” analysts including Jeffrey Currie said in a note e-mailed Wednesday. The
bank reiterated its call for prices to remain volatile while being bound to a range in the coming
months until inventories stop increasing.
Oil is trading near a 12-year low as record stockpiles continue to swell more than a year after
the Organization of Petroleum Exporting Countries decided to keep pumping to defend market
share amid a global glut. Coupled with record Russian output and U.S. shale fields producing
more oil and gas than previously estimated, prices could slide below $20 a barrel before the rout
is over, Currie said last week.
“While an agreement could create the perception that more could be achieved, such as production
cuts, we believe this would not be sufficient to set a floor on prices as they will only stabilize once
inventories stop building,” according to Goldman, which predicts that stockpiles may stop
increasing in the second half of this year. Additionally, a broader reduction in output would be self-
defeating as shale producers could boost output in 80 days when prices start to recover, Currie
said in a separate Bloomberg Television interview on Tuesday.
Brent for April settlement was little changed at $32.19 a barrel on the London-based ICE Futures
Europe exchange at 2:34 p.m. Singapore time. West Texas Intermediate for March delivery traded
at $28.95 a barrel on the New York Mercantile Exchange.

‘Sooner or Later’
Oversea-Chinese Banking Corp. thinks a production cut will occur “sooner or later,” economist
Barnabas Gan said in a report Wednesday. OPEC may call for an emergency meeting as early as
March as the slump in oil prices squeezes profit margins, he said.
“We think that a production cut in the major oil producers will happen in 2016,” said Gan. “This
event, coupled with demand growth to stay positive, would rally both WTI and Brent to our year-
end forecast of $50 a barrel.”
While Saudi Arabia and Russia, the world’s biggest crude oil producers, joined Venezuela and
Qatar in an agreement Tuesday to cap output, the success of the deal will depend on Iran, Iraq
and other large exporters taking part, with the participation of Iran “unlikely,” according to
Goldman. The Persian Gulf state’s Oil Minister, Bijan Namdar Zanganeh, will meet with his
counterparts from Iraq and Venezuela in Tehran on Wednesday.
Iran, which was OPEC’s second-biggest producer before sanctions were stepped up in 2012, “will
not forgo its share of the market,” the Oil Ministry’s news service Shana reported Tuesday, citing
Zanganeh. An Iraqi official said his country was prepared to back the plan.
“Iran has continued to comment that it is committed to growing production and regaining market
share, suggesting that any deal involving Iran would likely need to allow for some production
growth,” said Currie. “We remain conservative on our Iranian production growth forecast given the
only limited increase in exports achieved so far and the limitation that the remaining U.S.
sanctions create in ramping up output.”

Over-supply, cheating and shale oil: the reasons Saudi Arabia-Russia oil
deal won't work.. Huileng Tan ,Essam Al-Sudani | Reuters
Oil exporting giants Russia and Saudi Arabia agreed on Tuesday tofreeze output levels in order to
counter persistently low oil prices, as long as other oil producers also agreed.
The deal could be the first agreement in 15 years between OPEC and non-OPEC countries to
support the energy market.
But investors were not impressed, with U.S. WTI and Brent crude oil grades settling lower in the
U.S. session after rallying earlier Tuesday on hopes of a supply cut instead of a freeze.
Here's why the market doesn't think much of this deal:
Supply will still outstrip demand
In an oversupplied energy market, a supply freeze simply means much less than a production cut,
particularly as Saudi Arabia and Russia pumped a record amount of oil in January.
Russia produced a post-Soviet Union record high of 10.88 million barrels a day last month, while
Saudi Arabia's output was near its record high of about 10.2 million barrels, senior commodities
editor at The Economist Intelligence Unit (EUI), Sebastien Marlier, said in a note.
Iran may well refuse to join in
Just released from Western sanctions, the oil-producer may refuse to join the freeze because it's
keen to increase output to bolster its economy after years of trading curbs.
Iran, which was not present on Tuesday's meeting, had planned to increase output by at least
500,000 barrels a day this year.
On Wednesday, Iran's OPEC envoy told Shargh newspaper that it was "illogical" to ask Iran to
freeze its oil production level, Reuters reported.
"Asking Iran to freeze its oil production level is illogical ... when Iran was under sanctions, some
countries raised their output and they caused the drop in oil prices ... how can they expect Iran to
cooperate now and pay the price?" Mehdi Asali was quoted as saying.
Russia may cheat - again
The non-OPEC producer doesn't have good track record when it comes to production
agreements. In the 1990s, Russia failed to respect a similar agreement with OPEC, senior
commodities editor at The Economist Intelligence Unit, Sebastien Marlier, pointed out.
In 2001, when the last OPEC and non-OPEC agreement was tabled, Saudi persuaded Mexico,
Norway and Russia to contribute to production cuts. But Moscow never followed through and
raised exports instead, Reuters reported.

OPEC is already "cheating"
Despite OPEC setting production ceilings and targets, the oil cartel's real production levels have
always been a question mark, with compliance historically an issue for various member countries.
"Anybody who even thought there would be talk of a production cut have to know that the one
thing [you] can know about OPEC is they cheat. They cheat on everything. Even if they had
announced a production cut, nobody would have taken it seriously," said Dennis Gartman, founder
and publisher of "The Gartman Letter".
There's also a theory that OPEC may already be over-reporting production already.
"Some people believe that Saudi Arabia et al have been over-reporting production and exports
just so that when they go to the OPEC meeting they can say 'Oh yeah, we cut around here and
here'," UBS Wealth Management's commodities and FX strategist Wayne Gordon told CNBC's
" Street Signs " on Tuesday.
It won't lower supply by much anyhow
OPEC has consistently refused to cut production as kingpin Saudi Arabia sticks to its strategy of
low-cost production to squeeze out higher-cost players like shale companies.
With a production freeze, oil prices may be boosted, which in turn could make it economic for
shale producers to restart production, possibly taking traditional oil players back to square one.

NewBase Special Coverage
News Agencies News Release 18 February 2016
EU proposes new gas and LNG rules
LNG World News Staff
The European Commission has on Tuesday released new proposals for a raft of measures
related to prevention of gas crises and better coordination between EU countries.
The proposals will also “tighten-up so-called intergovernmental agreements in the energy field
between EU and non-EU countries and set out a strategy for boosting energy security through
access to LNG and gas storage,” the European Commission said in a statement.
These proposals are part of the
Commission’s Energy Union
strategy and will give “a strong
push to improving the EU’s
energy security and solidarity“.
They are also in line with the
EU’s commitments to fighting
climate change taken at the
Paris climate summit towards
the end of last year, the
statement said.
On gas crisis prevention, the
Commission plans to improve
coordination between EU
countries and create rules that
would require an EU country to
help out its neighbour if it is
experiencing a very severe gas crisis. Under the so-called solidarity principle, an EU country in
trouble would see gas supplies to its households and essential services ensured by neighbouring
EU countries.
Gas currently covers one quarter of the EU’s energy consumption and the EU is the biggest gas
importer in the world. The expected decline of domestic EU gas production will also impact on gas
imports. Besides, gas is also seen to play a determinant role in accompanying the EU’s transition
to a low carbon energy system since it is a back-up fuel for renewables when weather conditions
hamper renewable energy production.
The Commission has also published a proposal to tighten-up so-called intergovernmental energy
agreements between an EU country and a non-EU country. The new rules will allow the
Commission to take action before such agreements are signed if it assesses that such an
agreement could affect the security of gas supplies in another EU country or hamper the
functioning of the EU’s energy market, according to the statement.
Finally, the Commission has outlined how better access to a rapidly developing global market in
liquefied natural gas (LNG) and better use of gas storage across the EU would allow EU countries

that are dependent on very few gas suppliers to diversify their supply and hence strengthen their
energy security, the statement added.
LNG and gas storage strategy
The EU has a “major opportunity to improve its energy security and its competitiveness thanks to
the positive development of the global LNG market,” the statement said.
Ensuring that all member states have access to liquid gas markets and diversified sources of
supply is “therefore a key objective of the EU’s Energy Union.”
Europe’s overall LNG import capacity is significant – currently it is enough to meet around 43% of
total current gas demand 2015, the statement said.
However, significant regional disparities as regards access to LNG remain. The Commission sets
a “liquefied natural gas strategy that will improve access of all member states to LNG as an
alternative source of gas.”
“The central elements of this strategy are building the strategic infrastructure to complete the
internal energy market and identifying the necessary projects to end single-source dependency of
some of the member states,” the statement said.

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 18 February 2016 K. Al Awadi

New base 790 special 18 february 2016

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