New base energy news 17 june 2020 issue no. 1347 compressed

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NewBase Energy News 17 June 2020 - Issue No. 1347 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
MENA: APICORP estimates US$792bn planned and committed
investments in MENA in next five years
WAM/Tariq alfaham/MOHD AAMIR
The Arab Petroleum Investments Corporation, APICORP, a multilateral development financial
institution, estimates that planned and committed investments in the MENA region will exceed
US$792bn over the next five years (2020–2024).
According to APICORP’s MENA Energy Investment Outlook 2020-2024, the amount marks a
USD173mn decline from the USD965bn in last year’s five-year outlook.
The overall decline in the investment outlook - mostly in planned investments - is largely attributed
to the 2020 triple crisis: the COVID-19-related health crisis, oil crisis and a looming financial crisis.
Despite these difficult circumstances however, the GCC region’s committed investments increased
by 2.3 percent compared to a 6 percent overall decrease in the MENA region as a whole, indicating
a higher project execution rate in the GCC.
Dr. Ahmed Ali Attiga, Chief Executive Officer of APICORP, said, "The impact of COVID-19 is already
deeper and longer lasting than past downturns. Indeed, the nature of this triple crisis and the
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profound restructuring in oil and gas will hit energy investments for a potentially long period of time,
sowing the seeds of supply crunches and price volatility.
Therefore, we expect a W-shaped recovery for the MENA region. Furthermore, despite the positive
effects of digitization and automation on efficiencies across the value chains, many fundamental
questions remain that will negatively affect investments.''
''International collaboration between the private and public sector will therefore be critical to counter
the expected shortfalls in investment, and APICORP will continue to play a lead support role in this
regard as a trusted financial partner to the region’s energy sector," he added.

Saudi Aramco Completes $70 Billion Takeover of Sabic
Bloomberg - Matthew Martin
Saudi Aramco has completed a deal it reached last year to buy a 70% stake in Saudi Basic
Industries Corp. for around $70 billion, roughly equal to the
chemical maker’s entire value now.
Aramco will pay Saudi Arabia’s sovereign wealth fund in
several installments between August this year and April 2028,
the company said in a statement to the stock exchange in
Riyadh. The first payment of $7 billion will be made on Aug. 2,
Aramco said. The sovereign fund, known as the Public
Investment Fund, will provide Aramco with a loan for the
acquisition.
The deal effectively transfers cash from one arm of the Saudi state to another. It enables Aramco
to accelerate its push to turn oil into products such as plastics, while giving the PIF more cash to
pay for its burgeoning list of spending commitments both inside the country and abroad.
Aramco, the world’s biggest oil exporter, agreed in March last year to pay 123.4 riyals a share for
the PIF’s stake in Sabic, the equivalent of $69.1 billion. The rest of the chemicals maker will remain
listed on the Saudi stock exchange, where a small sliver of Aramco stock also trades. That will
prevent Aramco from being able to fully integrate Sabic.
Sabic Stock Drops
Since the deal was announced, Sabic’s stock has dropped to less than 90 riyals. The transaction
serves as a way for the PIF to get a significant cash injection, since the proceeds it was counting
on receiving from Aramco’s initial public offering fell short of expectations.

Crown Prince Mohammed Bin Salman had expected the share sale to value Aramco at $2 trillion
and perhaps raise as much as $100 billion from global investors. After international investors balked
at the Prince’s numbers, Aramco settled on a smaller domestic offering, which raised about $30
billion, still making it the largest IPO ever.
The sovereign wealth fund, under the leadership of Yasir Al-Rumayyan, who’s also Aramco’s
chairman, is shifting its investment focus. Five years ago it was a holding company for government
stakes in the likes of Sabic and National Commercial Bank. After an aggressive period of
dealmaking, the fund now holds stakes in Citigroup, Facebook, Uber and is one of the major
investors in SoftBank’s Vision Fund.
The PIF lies at the heart of Saudi Arabia’s economic transformation plan known as Vision 2030,
which aims to reduce its reliance on oil. The fund is meant to be an anchor investor in domestic
projects like the $500 billion futuristic city of Neom, which Prince Mohammed wants to develop on the
kingdom’s northwestern coast.
SABIC was established by royal decree in 1976 and its aim was to help diversify Saudi Arabia’s dependence
on crude oil. At the time, natural gas produced in the kingdom was associated with the extraction of crude oil
and, in fact, was an impediment to oil exports, since natural gas must be removed before oil can be shipped.
Most of it was flared on the spot. The kingdom soon realized that the natural gas should be collected and
used to provide industrial opportunities as well as benefit citizens by providing low-cost electricity and
desalinated seawater. SABIC was tasked with using natural gas to produce chemicals, thus adding value to
the kingdom’s main basic product: crude oil. In 2018, SABIC had total sales of $45 billion, with a net profit of
$8.5 billion on total assets of $85 billion and equity of $59 billion. In just over forty years, SABIC has become
the world’s fourth-largest chemical company in terms of sales.

Iraq to Slash Oil Exports by at Least 15 Percent
Bloomberg K. Al-Ansary, K. Ajrash and A. Di Paola
Iraq has asked IOCs operating in the country, including BP, Exxon and Lukoil, to start curbing
production. Iraq said it will cut oil exports by at least 15% this month to meet a production cap under
an OPEC+ agreement that’s sparked a rally in crude prices.
The second-biggest producer in the Organization of Petroleum Exporting Countries will ship about
2.8 million barrels of crude a day in June, Oil Minister Ihsan Abdul Jabbar said late Sunday on the
Al-Sharqiya channel. While Jabbar did not specify if the figure excluded sales from the semi-
autonomous Kurdish region, Baghdad officials usually leave those out of their forecasts.
Iraq exported 3.26 million barrels day in May from central-government operated fields in the south
and center of the country, and 3.61 million when Kurdish output from the north is included, according
to data compiled by Bloomberg.
“Compliance is in our interest,” said Jabbar, who was appointed this month. Otherwise, oil prices
“could slide and at the end of the day we will be the biggest losers.”

The OPEC+ alliance agreed to record output cuts of nearly 10 million barrels a day through July as
the coronavirus pandemic decimated energy demand. The group of 23 nations, led by Saudi Arabia
and Russia, aims to support a rally that’s seen Brent crude nearly double to about $38 a barrel since
late April, paring its loss this year to 42%.
The failure of members such as Iraq, Nigeria and Angola to meet their quotas has threatened the
accord, with Riyadh and Moscow pushing for full compliance.
Iraq has asked international oil companies operating in the country, including BP Plc, Exxon Mobil
Corp. and Lukoil PJSC, to start curbing production, Jabbar said. They should do it without reducing
natural gas output and while maintaining supplies of light grades of Basrah crude, he said.
BP has been told to cut production at the nation’s biggest field of Rumaila in the south by 10%,
according to a person familiar with the matter.
This year’s crash in energy prices has hit Iraq harder than most other major producers. Its annual
budget deficit is forecast to swell to 22% of gross domestic product, higher than anywhere else in
the Middle East and North Africa, according to the International Monetary Fund.
Iraq will sell its crude for about $34 a barrel this month and $40 in July, Jabbar said. At those prices
-- which compare with $14 for April and $21 for May -- Iraq’s oil revenue in June will exceed $2.5
billion, said the minister, who was previously the acting director general of state-owned Basrah Oil
Co.
The government is trimming oil use by domestic refineries and directing Kurdish authorities to cap
exports at 370,000 barrels a day, Jabbar said.
Last month, the country’s overall output, including domestic sales, of 4.2 million barrels a day
exceeded its OPEC+ limit by roughly 600,000 barrels, according to data compiled by Bloomberg.

Germany:VW starts using first LNG-powered Vessel car carrier
Offshore Energy + NewBase
German giant Volkswagen Group is to send the first LNG-fuelled vessel it chartered from Siem Car
Carriers on its maiden voyage. The Siem Confucius is the first of two vessels built at China’s Xiamen
Shipbuilding yard which will replace Volkswagen’s conventional heavy oil-powered ships.
The car freighter will leave Germany’s port of Emden on Tuesday with more than 4,800 new vehicles
on board, according to Volkswagen. The LNG-powered vessel is setting out on a three-week
voyage to Mexico, and on the way there it will call at ports in Canada and the USA.
The German giant will use both of the vessels on the trans-Atlantic route, so-called America Round
Tour, from Emden to Mexico. The second vessel Siem Aristotle will embark on its maiden voyage
later this year.
With these two vessels, Volkswagen
becomes the first automaker to use LNG-
powered ships in long-distance overseas
distribution of cars and light vehicles.
The vessels have two LNG tanks with a
capacity of 1,800 cubic meters, each. That’s
enough for a complete round trip, and it
ensures a ten percent reserve tank,
sufficient for several days, according to
Volkswagen.
Both vessels feature a 12,600 kilowatt dual-
fuel marine engine with direct injection and exhaust gas treatment from MAN Energy Solutions. Due
to their duel-fuel propulsion, the ships are also “future-proof for further developments in regenerative
fuels”.
In the medium-term, they could run on biogas or e-gas and thus be virtually CO2-neutral, according
to Volkswagen. “We are proud to commission the world’s first LNG vehicle transporters of this size”,
said Thomas Zernechel, Head of Volkswagen Group Logistics, adding that this is an important part
of the company’s decarbonization strategy.
With its “goTOzero” strategy, the German company aims to reduce its total CO2 emissions by 30
per cent by 2025 and to be CO2-neutral in its balance sheet by 2050. To achieve this, all
transportation – by sea, road and rail – must be climate-friendly. “We have to take action now,
because ships like the two LNG freighters will be in operation for many years”, said Zernechel.

UK:oil & gas industry pledges to halve operational emissions by 2030
LNG World - Bojan Lepic
Industry trade association Oil & Gas UK (OGUK) has revealed plans for halving emissions from
production and exploration by 2030, with the country’s basin becoming net-zero by the year 2050.
Deirdre Michie; Source: OGUK
OGUK committed itself on Tuesday to halving operational
emissions in the next decade. The oil and gas sector is
one of the first in the UK to commit to industry-wide
targets and provide details on how they will be achieved.
A report published by industry body OGUK, The Pathway
to Net Zero: Production Emissions Targets, outlines how
targets will be achieved through changes to operations,
progressive reductions in flaring and venting, and major
capital investment programmes aimed at using electricity
rather than gas, to power offshore facilities.
According to the trade association, the targets are a key part of a transformational sector deal that
the industry is now formally discussing with the UK Government. With jobs at its core, the sector
deal will consider how the UK’s oil and gas industry can support a green recovery.
This could see the sector support wider UK efforts to decarbonise, by developing critical carbon-
cutting solutions such as industrial-scale carbon capture usage and storage like Norway’s Northern
Lights Project, and the use of hydrogen for heating and heavy transport.
‘Green recovery needed’
OGUK chief executive Deirdre Michie said: “The coronavirus pandemic and low oil and gas prices
have had a devastating impact on the UK’s offshore oil and gas industry.

“Given the limited impact that the severity of the lockdown has had on global emissions, it is clearer
than ever that we need a fair, inclusive, and sustainable transition towards climate targets. We need
a green recovery which supports jobs, supply chain companies and energy communities”.
The UK oil and gas trade body remains focused on tackling climate change as outlined in its
Roadmap 2035, published in 2019. According to OGUK, the industry will play its part in reducing
emissions through solutions needed to make a significant contribution to the UK’s overall targets.
“With a clear pathway to becoming a net-zero basin by 2050 and with support from governments
and regulators, we can protect domestic energy supplies, jobs and communities whilst embracing
the opportunities which will come from being at the forefront of delivering a low carbon economy”,
Michie added.
Government support present
UK Government Minister for Energy Kwasi Kwarteng said: “The offshore oil and gas sector’s
commitment to halving operational emissions over the next decade is a welcome step for an industry
that has a vital role to play in our energy transition in the years to come. The UK Government will
continue to work tirelessly with all partners to deliver a dynamic Sector Deal”.
It is worth noting that Sector Deals have already been made for industries such as offshore wind and
aerospace.
Just last week, the Scottish government set up a $78 million fund to help the energy sector recover
from the economic impacts of COVID-19 and the oil and gas price crash with net-zero opportunity
in mind.
The so-called “Energy Transition Fund” will support businesses in the oil, gas, and energy sectors
over the next five years as Scotland attempts to “become a world leader in the transition to net-
zero”.
Regarding OGUK’s plan, Paul Wheelhouse, Scottish Government Minister for Energy, Connectivity,
and the Islands stated: “I welcome this report from the UK oil and gas industry and the ambitious
targets committing it to halve operational emissions over the next decade.
“This is […] a significant step to support Scotland’s just transition to net-zero which helps us move
at pace. This report is timely as it follows the Scottish Government’s announcement […] of £62
million to support our energy transition.”
Report author and OGUK emissions improvement manager Louise O’Hara Murray claims that these
targets would remove over 9 million tonnes of CO2 equivalent greenhouse gas emissions from
operations over the next decade.
“Many of the major capital investment projects which will help our sector to decarbonise, including
the powering of assets with electricity instead of hydrocarbons, the development and deployment

of carbon capture and storage (CCS) and hydrogen both on and offshore, will need to be developed
at scale to help other industries accelerate their efforts to reduce emissions”, Murray said.
Oil majors a few steps ahead
Britain’s oil major BP has already presented its plan to become a net-zero company by 2050 or
sooner. To achieve that, it opted to leave three U.S.-based trade organizations and reduce its global
workforce by 10,000 this year as part of its plans to make the organization smaller and fit for the
energy transition.
Other large oil companies like Shell and Equinor also have their sights set on net-zero by 2050 with
plans already in place.
Just to put things a bit more into perspective, a report from November 2019 by Carbon
Tracker stated that the world’s oil and gas majors must cut combined production by more 35 per
cent by 2040 to align with net-zero by 2050.
OGA to monitor progress
In a separate statement, the UK’s Oil and Gas Authority (OGA) welcomed the industry’s commitment
to decreasing emissions and ultimately becoming net-zero. OGA chief executive Andy Samuel said:
“In January the OGA challenged the UK oil and gas industry to commit to clear, measurable,
production emission reduction targets.
“The industry has responded and engaged positively and we welcome this significant and ambitious
commitment. It is now crucial industry keeps pace on efforts to reduce its footprint and also puts a
strong focus on achieving impactful emissions reductions in the near term.
“Therefore, we will incorporate these targets into our data benchmarking to track and monitor
performance and progress”.

Bharain: Petrofac awarded project by Tatweer Petroleum
Reuters + NewBase
Petrofac, a leading a provider of oilfield services, said that its Engineering & Production Services
division (EPS) has been awarded a multi-million dollar engineering, procurement, construction, and
commissioning (EPCC) contract by Tatweer Petroleum for an upstream gas project in Bahrain.
Under the terms of the contract, the
scope of work includes well hook-ups,
associated pipelines, and tie-ins for
several new gas wells that Tatweer
Petroleum is planning to drill as part of
its gas delivery strategy in the Bahrain
field.
Mani Rajapathy, Managing Director,
EPS East, said: “This award
demonstrates continued confidence in
our teams to deliver safe, timely, and
efficient solutions for key projects in
Bahrain. It leverages Petrofac’s best-
in-class expertise and experience in
upstream gas.
Tatweer Petroleum is an important
customer in the region, and we look
forward to continuing our relationship
with them and furthering our
commitment to building capability in
the Kingdom.”
Petrofac has been present in Bahrain
since 2015, following the award of an
EPCC contract to supply a new 500
MMSCFD gas dehydration facility by
Tatweer Petroleum. The project was
successfully completed in 2018, and
additional scope of work was awarded
to Petrofac for the engineering,
procurement, and construction of
several gas wells, to be connected to the facility.

U.S. coal consumption continues to decline across all sectors
Source: U.S. Energy Information Administration, Quarterly Coal Report
U.S. coal consumption has been declining since its peak in 2007 of 1.1 billion short tons. In 2019,
U.S. coal consumption totaled 590 million short tons (MMst). The electric power sector accounts for
the majority (more than 90%) of domestic coal consumption, but the industrial and commercial
sectors also consume coal. Coal consumption in the industrial and commercial sectors has declined
from 98 MMst in 2000 to 48 MMst in 2019.
The industrial sector includes coal consumed in coking plants, in manufacturing facilities, and for
other industrial uses. In 2019, 62% of industrial coal consumption in the United States was used in
manufacturing.
U.S. Energy Information Administration (EIA) data on coal consumption by detailed manufacturing
industry, based on North American Industry Classification System (NAICS) codes, show that food
manufacturing and nonmetallic mineral products manufacturing consumed more coal than other
industries in 2019.
Coal consumption in food manufacturing has remained relatively stable since 2000. Food
manufacturing uses coal largely for heating purposes. For example, in sugar manufacturing, sugar
cane juice has to be boiled to extract the sugar crystals, requiring intense heat. Coal can also serve
a secondary purpose of providing electricity for food processing facilities located in remote areas.

Although coal use has remained stable in food manufacturing, most other manufacturing industries
have seen significant declines in coal consumption as a result of fewer facilities and less
consumption at remaining facilities. The largest declines have been in the paper manufacturing,
chemical manufacturing, and primary metal manufacturing industries.
The primary metal manufacturing industry includes the production of steel, silicon metals, and other
metal and iron-based products. From 2010 to 2012, the industry’s coal consumption contracted
sharply, dropping from 9 MMst to 3 MMst, and has since remained relatively low.
The steel industry was significantly affected by the recession that occurred between 2007 and 2009
and the declines in housing starts, construction, and auto manufacturing that drive steel demand.
Another industrial use of coal is to produce coke. Coke is created by heating coal at high
temperatures to burn off impurities, resulting in nearly pure carbon. Coal coke is used as a fuel in
blast furnaces to make steel and smelting iron. Coking plant coal consumption has not declined as
drastically as many other manufacturing industries, falling by 38% from 29 MMst in 2000 to 18 MMst
in 2019.
The commercial and institutional sector, which includes universities, correctional facilities, and
hospitals, accounts for the smallest portion of U.S. coal consumption, measuring less than half of
1% of the U.S. total since 1998.
Between 2000 and 2019, commercial and institutional consumption declined from 4.1 MMst to 0.9
MMst. Many of the facilities in the commercial and institutional sector have switched from consuming
coal for space heating to consuming natural gas.

NewBase June 17-2020 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil stable as U.S. crude stocks build amid virus resurgence fears
Reuters + NewBase
Oil prices declined on Wednesday 17/06/2020 as data showed an increase in U.S. crude and fuel
inventories, raising the prospect of oversupply as a potential second wave of the coronavirus
pandemic threatened to halt any recovery in demand.
Brent crude futures were up 9 cents, or 0.22%, at $40.05 a barrel as of 0907 GMT, and U.S. West
Texas Intermediate (WTI) CLc1 futures fell 5 cents, or 0.13%, to $38.33 a barrel.
Both benchmarks rose more than 3% on Tuesday, after the International Energy Agency (IEA)
raised its 2020 oil demand forecast to 91.7 million barrels per day (bpd) and U.S. retail sales posted
a record jump in May.
The rise in U.S. crude and fuel inventories, however, stoked concerns about a surplus and
pressured oil prices, as the number of coronavirus infections surpassed 8 million globally and
several U.S. states saw their case numbers spike.
Oil price special
coverage

U.S. crude oil inventories rose by 3.9 million barrels in the week to June 12 to 543.2 million barrels,
according to data from industry group the American Petroleum Institute (API), countering
expectations for a fall of 152,000 barrels.
“API data showed a build in crude inventories, and rising new coronavirus cases in the United States
and China have dampened expectations of improving fuel demand in the world’s top two oil
consumers,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
Gasoline stocks rose by 4.3 million barrels and distillate fuels, which include diesel and heating oil,
rose 919,000 barrels, the API reported.
Official data from the U.S. Department of Energy’s Energy Information Administration is due later
on Wednesday. [EIA/S]
A panel led by the Organization of the Petroleum Exporting Countries (OPEC) will meet on Thursday
to further discuss ways to strengthen and review compliance with producers’ commitment to curb
oil output.
Iraq reduced its oil exports by 8%, or 300,000 bpd, so far in June, indicating OPEC’s second-largest
producer is stepping up efforts to adhere to its pledged cut.
OPEC and its allies, collectively known as OPEC+, agreed to cut output by 9.7 million bpd - about
10% of pre-pandemic demand - to the end of July.

NewBase Special Coverage
The Energy world - Special 01- June -2020
Oil Demand Recovery May Take a Couple of Years, IEA Says
Bloomberg - Grant Smith + IEA + NewBase
Global oil demand will rebound next year as the world emerges from the coronavirus pandemic, but
recovering to pre-crisis levels may take a couple of years, the International Energy Agency said.
Fuel use around the world will remain 2.5% lower next year than in 2019, largely because of the
“the dire situation of the aviation sector,” the Paris-based agency said in its first detailed assessment
of 2021.
The projections add to a fragile outlook for the oil industry, coming a day after BP Plc wrote off
billions in assets on concern over long-term demand. Still, the report contains some good news for
producers.
The first half of this year is “ending on a more optimistic note” because demand losses during
lockdowns to curb the spread of coronavirus weren’t as severe as expected, it said. Output cuts by
OPEC+ and shutdowns in the U.S. should put the market into deficit in 2021, depleting the massive
1.5 billion-barrel surge in inventories seen so far this year.
Falling Short
Global oil demand will stay below pre-crisis levels next year
Source: IEA
Oil prices were trading above $40 a barrel in London on Tuesday, double the levels seen in late
April, as economic activity resumes and the Organization of Petroleum Exporting Countries and its
allies slash supply.

The IEA -- which advises most major economies on energy policy -- bolstered its demand estimate
for the second quarter by 2.1 million barrels a day, tempering some of the massive drop. Lifestyle
changes such as working remotely won’t trigger a long-term leveling off in fuel use, said Fatih Birol,
the agency’s executive director.
Nonetheless, world crude consumption is still on course for a record contraction of 8.1 million barrels
a day this year.
While it will climb by 5.7 million barrels a day next year, the average of 97.4 million a day will remain
2.4 million barrels a day below 2019 levels. Demand may not return to 100 million barrels a day until
2023, Neil Atkinson, the IEA’s head of oil markets and industry, said in a webinar after the release
of the report.
For now at least, the physical oil market is tightening.
Stockpiles are on track to diminish rapidly over the next six months, and -- in theory -- decrease
during each quarter of 2021, according to the agency’s forecasts.
OPEC+ made a “strong start” to its latest round of output curbs last month, delivering 89% of its
pledge to cut 9.7 million barrels a day, the IEA said. Earlier this month, the alliance agreed to press
on with the strategy, and members that haven’t yet implemented their share vowed to make up for
it.
Next year, global demand is on track to exceed supply, with the projected recovery in oil production
to be less than a third of the increase in fuel use, at 1.7 million barrels a day.
That could change however, if the OPEC+ coalition is tempted to revive output as consumption
rebounds or if rising prices reinvigorate American shale drillers, the IEA cautioned.
“The market may present producers with an opportunity to ramp up more quickly than dictated by
current OPEC+ policy, or U.S. and other non-OPEC production could recover more strongly than
forecast,” it said.
Aviation crisis means oil demand to stay below pre-virus levels before 2022
Oil demand is recovering from the greatest fall in its history in 2020, the International Energy Agency
(IEA) said on Tuesday, but less flying due to coronavirus fears means the world will not return to
pre-pandemic demand levels before
2022.
“Our first forecast for 2021 as a whole
shows demand growing by 5.7 million
barrels per day (bpd), which, at 97.4
million bpd, will be 2.4 million bpd below
the 2019 level,” the IEA said in its
monthly report.
“Reduced jet and kerosene deliveries
will impact total oil demand until at least
2022 ... the aviation industry is facing an
existential crisis”, the Paris-based IEA
said.
The IEA said air travel began to rise
slightly in the middle of May and
accelerated in June as economic

lockdowns aimed at containing the virus were eased, but was still down by over 70% from 2019
levels. The IEA raised its forecast for 2020 oil demand by nearly 500,000 bpd due to stronger than
expected imports in Asia.
“China’s strong exit from lockdown measures has seen demand in April almost back to year-ago
levels. We have also seen a strong rebound in India in May, although demand is still well below
year-ago levels.”
Citing a plunge in global oil supply by 11.8 million bpd in May, the IEA said the Organization of the
Petroleum Exporting Countries and its allies including Russia - a grouping known as OPEC+ - had
reduced their output by 9.4 million bpd.
Output from countries outside the deal was down 4.5 million bpd since the start of this year, the IEA
added, noting that U.S. output was set to fall 900,000 bpd in 2020 and another 300,000 barrels next
year unless oil price rises encourage new shale oil investments.
“If recent trends in production are maintained and demand does recover, the market will be on a more stable
footing by the end of the second half, the IEA said. “However we should not underestimate the enormous
uncertainties.”

Huge stockbuilds to keep oil product profit margins under pressure
Massive build-ups in stocks in recent months are set to keep profit margins for refining crude into
petroleum products like road and aviation fuels subdued, the International Energy Agency said on
Tuesday.
“Large implied product stock builds set the stage for a subdued margin environment for the near
future,” the IEA warned.
The new coronavirus outbreak which at its peak meant that over 4 billion people where under some
form of lockdown destroyed demand for oil products, with road and aviation fuels being the hardest
hit.
Globally, mobility was reduced by close to 70% in April and 40% in May, according to the IEA.
As a result, refining margins in key hubs like northwest Europe and Asia Pacific turned negative,
meaning that refiners were producing the product at a loss.
The agency said that in April global refining intake was down 6.6 million barrels per day (bpd) to
68.8 million bpd month on month, and fell by a further 1 million bpd in May.

OECD oil product inventory stocks in April gained around 2 million bpd to 1.56 billion barrels, the
IEA said, with middle distillates leading the increase.
Preliminary data for May shows crude and oil product stocks increased in the United States and
Japan, while falling in Europe.
European May oil product fell by 10.3 million barrels in May, the IEA said, while U.S. stocks added
43.5 million barrels.
The IEA said road traffic and mobility in Northern Europe was almost back to normal as more
governments ease lockdowns, and in the United States it returned to previous highest levels, but
the agency did not expect a full rebound in refining activity until 2022.
“A potentially higher maintenance programme in 2021, to allow refineries to catch up with the work
deferred in 2020 due to travel restrictions and social distancing measures, could weaken the
recovery in runs,” the IEA said.
“In 1Q20, government-held stocks increased by nearly 2 mb, mainly product stocks in Europe,” it added.

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Khaled Al Awadi is a UAE National with a total of 28 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 2020 K. Al Awadi

New base energy news 17 june 2020 issue no. 1347 compressed

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New base energy news 17 june 2020 issue no. 1347 compressed