New base energy news 25 september 2020 issue no. 1376 by senior editor khaled alawadi

Copyright © 2020 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase Energy News 25 September 20020 - Issue No. 1376 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE expected to add more than 50% renewables to grid by 2050
The National + NewBase
The UAE is expected to meet more than 50 per cent of its power needs from renewable sources by
2050 due to the addition of nuclear and solar power to grid, according to the chairman of the Abu
Dhabi Department of Energy.
The country had set a target to achieve at least half of its energy needs from clean energy sources
by 2050. "You will be surprised that we will exceed that [the current target],” Awaidha Al Marar told
a panel discussion organised by Goals House as part of UN General Assembly virtual meetings.
"So far we’re at a 38 per cent once we have the four units already operational in Barakah."
" [About] 70 per cent of [our] investment [is] in renewables and solar actually here in the GCC. Abu
Dhabi [is] either the second or the third ranking worldwide on investment in concentrated solar power
plants,” he added.
www.linkedin.com/in/khaled-al-awadi-38b995b

The UAE accounts for 4 per cent of global crude output, much of it is from oilfields in Abu Dhabi.
The country is diversifying its energy mix, adding solar and nuclear sources to its grid, as it looks to
free up crude for export. Meanwhile, its capital Abu Dhabi intends to generate half of its power
requirements from clean energy sources by 2030.
The UAE has also ramped up nationwide efforts
to increase its renewable energy capacity at a
time of record low oil prices. In April, a planned
2 gigawatts solar scheme in Abu Dhabi – the oil
hub for the UAE – received the world's lowest
tariff on the basis of levellised costs of
electricity.
Emirates Water and Electricity Company, a
subsidiary of Abu Dhabi Power Corporation,
said it received a cost-competitive tariff for solar
PV energy of 4.97 fils per kilowatt hour (1.35
US cents/kWh)
The Dhafrah project, which will be built through
an independent power producer model, will
cover an area of 20 square kilometres and
could power 110,000 households across the
UAE, according to Ewec.
IPPs are typically not owned by the state but they build and operate power plants for the sale of
electricity to buyers, which could include a utility, the government or end users. With the addition of
the latest project to the grid, Abu Dhabi's total solar power generation capacity will stand at 3.2GW.
The UAE also connected Unit 1 of the Barakah nuclear power plant to grid, with the plant currently
operating at 50 per cent capacity. The power plant was connected to grid last month.
Mr Al Marar said the UAE was redoubling efforts to curb carbon dioxide emissions as part of its
commitments to UN Sustainability Development Goals. "We've achieved affordable energy and
water for 100 per cent. We've achieved almost 98.5 per cent with regard to fuel for cooking,” he told
the panel.
"The issue of carbon dioxide, we are still
on the border average. But I can tell you a good news that when the nuclear plant is fully operated
and the new [solar plant] Al Dhafrah is in operation as well that will stabilise the carbon dioxide
target emission,” he added.

Abu Dhabi transfers ENEC to ADQ’s ownership
ADQ, one of the region’s largest holding companies with a broad portfolio of major enterprises
spanning key sectors of Abu Dhabi’s diversified economy, today announced that the Emirates
Nuclear Energy Corporation (ENEC) has been added to its utilities portfolio.
Under a decree issued by Abu Dhabi Executive Council, the full ownership of ENEC’s shares were
transferred to ADQ from the Government of Abu Dhabi with immediate effect, a statement said.
Mohamed Hassan Alsuwaidi, Chief Executive Officer of ADQ, said: “We welcome ENEC to our
portfolio of companies which comprises some of Abu Dhabi’s most successful and ambitious
enterprises. We are working closely with our utilities companies, including TAQA, EWEC, ADSSC
and now ENEC, to advance our nation’s solid infrastructure that is vital for supporting the growth
and development of many sectors of the economy.”
Mohamed Ibrahim Al Hammadi, Chief Executive Officer of ENEC, said: “We are pleased to join
ADQ, as part of our commitment to advancing Abu Dhabi’s long-term economic diversification. We
remain fully committed in our quest to delivering this new form of emissions-free electricity to
strengthen and sustain the UAE’s energy sector.
With the recent commencement of operations of the Barakah Nuclear Energy Plant, we are
supplying clean electricity to the UAE, and are committed to safely and efficiently generating
electricity, supported by working with our UAE partners and stakeholders.”
Khalifa Sultan Al Suwaidi, Chief Investment Officer at ADQ, said: "Nuclear energy has a crucial role to play
in our nation’s future, and we look forward to working closely with ENEC as it continues to build on its
ambitious peaceful energy programme with the highest international safety and quality standards.
ENEC’s delivery of clean electricity from nuclear energy across the UAE further diversifies the power
generation sources and reinforces our reliable power grid.” ENEC joins ADQ’s strategic utilities
portfolio that also includes Abu Dhabi National Energy Company PJSC (TAQA), Abu Dhabi
Sewerage Services Company (ADSSC) and Emirates Water and Electricity Company (EWEC).
Headquartered in Abu Dhabi, ADQ was established in 2018 as a public joint stock company (PJSC).
It holds a broad portfolio of major enterprises spanning key sectors of Abu Dhabi’s diversified
economy, including utilities, tourism and hospitality, aviation, transportation, logistics, industrial, real
estate, media, healthcare, food and agriculture, and financial services. ENEC is working to deliver
safe, clean, efficient and reliable nuclear energy to the UAE - energy that is needed to support the
UAE’s social and economic growth.

Egypt,Greece,Cyprus Form Six-Member Mediterranean Gas Group
Bloomberg - Salma El Wardany
Greece, Italy, Egypt, Israel and two other countries will form a permanent organization to promote
co-operation over natural gas in the Eastern Mediterranean. Turkey, which has raised tensions by
exploring for the fuel in contested waters, is not as yet included.
Energy ministers from the group, which also includes Cyprus and Jordan, signed a charter to
establish the East Mediterranean Gas Organization, Egypt’s Ministry of Petroleum & Mineral
Resources said Tuesday. The body will be based in Cairo and focus on “strengthening regional
cooperation,” according to a statement.
Other Eastern Mediterranean countries can join, the statement said, without giving further detail.
Representatives from the U.S. Department of Energy and the European Union signed the
agreement as observers.
“Today is an historic moment,” Egypt’s oil minister, Tarek el-Molla, said. “Once the organization is
up and running, we will soon see important projects that add value to all our countries.”
The six members met several times last year in Cairo, where they agreed to work together to exploit
gas reserves. Greece, Cyprus and other EU states have sharply criticized Turkey’s recent moves
aimed at bolstering its claims to energy deposits. Late last year, Ankara won the backing of war-
torn Libya’s United Nations-recognized government for a controversial new sea boundary between
the two countries. It covers waters contested by other governments, including Greece.
The EMGO members have been building energy ties in recent years. Two years ago, Israel agreed
a $15 billion deal to export gas to Egypt.

Saudi Arabia Is ‘Assessing All Options’ to Stimulate Economy
Bloomberg - Matthew Martin
Saudi Arabia is “assessing all the options” to boost its economy after taking painful measures to
offset a sharp decline in oil revenue and deep economic contraction caused by restrictions to halt
the spread of the coronavirus, the kingdom’s commerce minister said.
“The impact of oil prices has affected Saudi Arabia’s revenue and like any other country we have to
adjust,” Commerce Minister Majid Al-Qasabi told Bloomberg TV in an interview. “The government
is in continuous review of what is best for the people and the nation and its interests.”
An almost 40% drop in Brent crude prices over the past year, combined with production cuts to drain
a supply glut, helped push Saudi Arabia’s oil revenue down by 45% in the second quarter from a
year earlier. In response, the government embarked on a range of austerity measures, cutting
investment spending while also increasing taxes and slashing payouts to poorer families.
But the impact on citizens income has irked many. A recent broadcast of an interview with Finance
Minister Mohammed Al-Jadaan was bombarded with questions about the possibility of lowering
VAT, which was introduced for the first time in 2018 and tripled to 15% this year, even though it was
pre-recorded.
Al-Qasabi acknowledged measures like the hike in VAT would pressure people’s incomes, but said
the government needed new revenue so it was not so dependent on oil. Tripling VAT was “painful
in the short-term but it was needed at the time,” he said. Asked if the government would consider
lowering the duty in future, he said it would “take actions to stimulate the economy and ensure
steady growth.”
Still, the government could face a budget deficit of about 13% of gross domestic product in 2020,
according to the median of forecasts compiled by Bloomberg. Finance Minister Al-Jadaan has said
the kingdom will double its borrowing this year to soften the impact on the state’s reserves, which it
needs to maintain above a certain level to support the kingdom’s currency peg to the U.S. dollar.
Saudi Arabia’s economy is expected to contract 4.8% in 2020 before growing by 3.2% next year,
according to a Bloomberg survey of 11 economists.

U.S. crude oil exports have fallen in each month since their
record high in February,,,Source: U.S. Energy Information Administration, Petroleum Supply Monthly
U.S. crude oil exports reached a record high in February 2020 and have since fallen in each month,
based on data through June, according to the U.S. Energy Information Administration’s
(EIA) Petroleum Supply Monthly.
However, U.S. crude oil exports in the first half of the year are still higher than they were in the first
half of 2019. Monthly crude oil imports declined sharply in April before increasing in May and June,
but they were still lower in the first half of 2020 compared with the first half of 2019.
Global petroleum demand began to decline rapidly in early 2020 as much of the world initiated
measures to limit the spread of coronavirus.
In EIA’s Short-Term Energy Outlook, EIA estimates that global petroleum demand fell from 100.7
million barrels per day (b/d) in the first half of 2019 to 90.0 million b/d in the first half of 2020.
Declining global demand for crude oil and petroleum products has driven U.S. exports and imports
lower.
Despite a decline since the record monthly high of 3.7 million b/d in February, U.S. crude oil exports
averaged 3.2 million b/d in the first half of 2020, up from 2.9 million b/d in the first half of 2019. U.S.
crude oil exports to China drove part of this increase—increasing 213,000 b/d from the first half of
2019 to 361,000 b/d in the first half of 2020.
The large increase in crude oil exports to China during the first half of 2020 was driven by exports
in May and June of 1.3 million b/d and 0.7 million b/d, respectively. In those months, China
surpassed all other destinations to become the largest destination for U.S. crude oil exports.

In the first half of 2020, U.S. crude oil exports to China were the second largest after Canada. U.S.
exports to Canada averaged 389,000 b/d of crude oil, down 19% from the same period in 2019.
The Netherlands, South Korea, and the United Kingdom were the next largest destinations for U.S.
crude oil exports in the first half of 2020. Compared with the first half of 2019, exports to the
Netherlands and the United Kingdom increased by 11% and 18%, respectively, and exports to South
Korea fell by 27%.
U.S. crude oil imports averaged 6.2 million b/d in the first half of 2020, down 12% compared with
the first half of 2019. Monthly imports declined significantly in April before increasing in May and
June. Imports from Saudi Arabia drove the large monthly increase in U.S. crude oil imports in May,
which increased from 0.4 million b/d in April to 1.2 million b/d in both May and June.
This spike in U.S. imports from Saudi Arabia followed a surge in Saudi Arabia’s crude oil production
in April, which occurred as an earlier agreement to cut production by the Organization of the
Petroleum Exporting Countries and partner countries (OPEC+) expired and before a new
agreement was in place.
Crude oil production in Saudi Arabia rose to a high of 11.6 million b/d in April (the highest level in
EIA’s monthly data going back to 1993).
Because the transit time for crude oil tankers from the Persian Gulf to the United States is several
weeks, these imports from Saudi Arabia did not show up as U.S. imports until May and June.
OPEC+ implemented its most recent production cuts in May, and as Saudi Arabia’s crude oil
production declined, U.S. imports from Saudi Arabia fell. Preliminary weekly data indicate that U.S.
imports from Saudi Arabia fell in July and August to 513,000 b/d and 311,000 b/d, respectively.

For a more detailed discussion on U.S. imports and exports in the first half of 2020, see EIA’s This
Week in Petroleum published on September 16.
NewBase

Norway gets applications from 33 oil firms to explore 'mature' areas
Reuters + NewBase
The Norwegian oil and energy ministry has received applications from 33 companies for oil and gas
licenses in so-called mature offshore areas, it said on Friday.
The number of applications was the same as for last year’s round. The ministry said it aimed to
award licenses in early 2021.
In June, the ministry decided to offer 36 news blocks in the western part of the Norwegian Sea,
close to areas that have been previously explored.
The ministry said
companies expressed
interest both in newly
offered and previously
added blocks.
Companies included
international oil majors
ConocoPhillips COP.N,
Shell RDSa.L and
Total TOTF.PA, as well as
Norway's
Equinor EQNR.OL, and
independents such as
Aker BP AKERBP.OL and
Lundin LUNE.ST, it
added.

NewBase September 25 -2020 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil heading for weekly drop as coronavirus demand concerns mount
Reuters + Bloomberg + NewBase
Oil prices edged higher on Friday but were set for a weekly decline due to mounting worries about
the impact on fuel demand of a widespread resurgence in coronavirus infections, as well as some
concern about the likely return of exports from Libya.
Brent crude LCOc1 was down 5 cents at $41.89 a barrel by 11.36 GMT, while U.S. West Texas
Intermediate (WTI) crude down 10 cents to $40.21.
Brent is heading for a drop of nearly 2% this week with U.S. crude on track for a decline of around
1%. Both benchmarks are also heading for a monthly decline, which would be the first for Brent in
six months.
“This month has not been kind to the oil market,” said Stephen Brennock of oil broker PVM.“Rising
virus infections, renewed lockdowns, slowing economic recovery and stalled U.S. stimulus talks
have put the brakes on the fragile revival in fuel demand.”
Oil price special
coverage

In the United States, which has the highest death toll from the coronavirus pandemic and is the
world’s biggest oil consumer, unemployment claims unexpectedly rose last week suggesting an
economic recovery is flailing and pushing down fuel demand.
U.S. fuel demand remains in the doldrums as the pandemic constrains travel. The four-week
average of gasoline demand last week was 9% below a year earlier, government data showed on
Wednesday.
In other parts of the world, daily increases of coronavirus infections are hitting records and new
restrictions are being put in place that will likely limit travel and fuel demand.
In India, throughput by crude oil refiners in August fell 26.4% from a year ago, the most in four
months, as fuel demand ebbed because surging coronavirus cases hindered industrial and transport
activity.
In Libya, an oil tanker was loading a cargo on Thursday from one of three Libyan terminals that
were reopened in recent days and more cargoes are expected to be lifted in the coming days.
However, analysts have questioned how quickly the country could ramp up supply.“Fundamentally,
nothing has changed to the supply side of the equation that is weighing on oil prices in the bigger
picture,” said Jeffrey Halley, senior market analyst at OANDA.
Oil Traders Left Puzzled by Extra Iraqi Cargoes on Spot Market
Oil traders are reporting a sharp increase in Iraqi export cargoes for next month, as they look for
clues to the country’s ability to meet its OPEC quota.
A larger-than-normal number of Iraqi crude cargoes is being sold in the spot market for October
loading, according to five people involved in the market in Europe and Asia. The additional

shipments are available on what’s called a destination-free basis, meaning they can be purchased
and shipped anywhere.
The extra cargoes probably indicate higher overall output and exports, according to several traders,
and would add oil to a market that’s already experiencing a glut.
Prices Hold Up
OPEC has allowed Baghdad to pump more crude next month by giving it more time to make up for
breaching its quota earlier in the year. But the puzzle for the market is whether the increase in
cargoes means Iraq could breach its new quota of 3.6 million barrels a day -- just as the cartel
is redoubling efforts to tighten discipline.
So far at least, spot prices for Iraqi crude are holding up, suggesting that any increase is being easily
absorbed. Basrah Light for delivery in October has recently changed hands at a premium of 60
cents a barrel above its official selling price, versus a premium of 30 cents for September loadings.
An official familiar with Iraq’s export plans said any additional barrels won’t violate the quota. Neither
Iraq’s oil ministry nor state crude marketer SOMO gave immediate comments on plans for
production and sales volumes next month.
The Iraqi cargoes offered for October could amount to 5 million to 10 million barrels of crude more
than usual, one trader estimated. That works out at 160,000 to 320,000 barrels a day.
Iraq said it pumped just below 3.6 million barrels a day in August and, according to tanker-tracking
data up to mid-September, exports are on course to rise this month.
OPEC+ Wrestles
The Gulf nation’s output is important for the overall market because it is OPEC’s biggest producer
after Saudi Arabia. And the more united the alliance is, the more successful it’s likely to be in
bolstering oil prices.
The Organization of
Petroleum Exporting
countries and its partners -
- a group known as
OPEC+ and led by Saudi
Arabia and Russia -- are
wrestling with a collapse in
global demand due to the
coronavirus. As the
nations restrict supply,
Saudi oil minister Prince
Abdulaziz bin Salman has
railed against members,
including Iraq, who haven’t
met their quotas. Iraq has
repeatedly pledged to
fulfill its commitments, and
its oil ministry did so again
on Thursday in a statement to reporters.

OPEC+ agreed to take nearly 10 million barrels of crude, about 10% of normal supply, off the market
starting in May. That helped Brent crude bounce back above $40 a barrel, though the benchmark
is still down 37% this year.
Output constraints have eased since the end of June. And at a meeting last week, the cartel granted
Iraq and other laggards more time to implement cuts meant to compensate for past over production.
The official with knowledge of Iraq’s export plans says that decision would allow the country to
produce and sell more oil, while remaining within limits.
Like many other OPEC+ members, Iraq’s economy has been battered by the plunge in oil prices.
The Iraqi budget deficit will hit 22% of gross domestic product this year, higher than anywhere else
in the Middle East and North Africa, according to the International Monetary Fund.
Iraq doesn’t release a full monthly loading program for its exports, making it difficult to see a full
picture of sales.
The higher volume of October Basrah barrels available may indicate that international oil companies
that partner with Iraq at some of its biggest fields are getting more crude. As production rises, those
companies would receive a larger proportion of output, said the Iraqi official.
Middle Eastern producers normally sell on long-term contracts to refiners who have to take their
cargoes to a specific crude-processing plant. A majority of buyers of Iraqi crude under long-term
contracts in Asia received the allocation they requested for October sales, according to a Bloomberg
survey.
OPEC+ agreement to reduce production to global oil market rebalancing
On April 15, members of the Organization of the Petroleum Exporting Countries (OPEC) and 10
non-OPEC partner countries, collectively known as OPEC+, agreed to reduce crude oil production
in response to rapidly increasing global oil inventories in the first quarter of 2020.

At the time, efforts to contain the spread of coronavirus resulted in a steep decline in demand for
petroleum liquids and lower crude oil prices. Starting in May 2020, the OPEC+ agreement called for
a decrease in crude oil output by an initial 9.7 million barrels per day (b/d) that gradually tapers
through April 2022, the end of the current agreement period.
The U.S. Energy Information Administration's (EIA) monthly data show that OPEC total crude oil
production decreased by 6.0 million b/d from April to May, which was the largest monthly production
decline since 1993.
Compared with January 2020 total petroleum liquids production, partner countries’ output fell by an
estimated 5.9 million b/d in May, 7.9 million b/d in June, 7.1 million b/d in July, and 5.6 million b/d in
August. OPEC members Iran, Libya, and Venezuela were exempt from the production cut
agreement because of economic sanctions or domestic political instability.
EIA estimates that the OPEC+ agreement, along with declines in production elsewhere, including
the United States, brought global supply lower than the level of global demand for the first time since
mid-2019.
Lower supply than demand has resulted in significant global liquid fuels inventory draws since June.
EIA expects inventories to continue declining in the second half of 2020 and during most of 2021,
resulting in a relatively balanced market by the end of next year, according to EIA’s September
2020 Short-Term Energy Outlook.

Gas Prices Are Plunging and Traders Are Still Bullish on Winter
After benchmark U.S. natural gas prices tumbled 22% in the past week, you could be forgiven for
thinking that traders would be gloomy. Yet many of them remain upbeat as they look past the selloff
to a winter rally.
While the most-active futures contract on the New York Mercantile Exchange slumped below $2 per
per million British thermal units in recent days, futures for delivery in December through March
continue to trade above $3. Almost half of respondents in a Bloomberg News survey of traders
and analysts say winter prices could rise even higher that, perhaps testing $4 or more, a level not
seen for years.
That bullish outlook is essentially underpinned by two bets: That this time around we’ll see more
normal weather conditions following two unusually mild winters, which will spur demand, and that
cuts to domestic gas supplies arising from reduced U.S. shale oil output will continue. Taken
together, those factors are seen ultimately eroding the glut that’s currently weighing on spot prices.
In other words, while gas futures for near-term delivery -- the “front end” of the futures price curve,
in trading parlance -- have sold off, several months further out on the calendar, when Americans will
be burning more gas to heat their homes during winter, they’re steady at far higher levels.

So dramatic is the drop in production of so-called associated gas that traders aren’t just making
wagers on prices for next year but are inquiring about 2022 as well, an unusually long way off into
the future, according to Samantha Dart, head of natural gas research at Goldman Sachs Group Inc.
“The sell-off in gas is mostly at the front end of the curve because of concerns in the physical market
about excess inventories during a weak demand period,” Dart said in an interview. “You are not
seeing a whole lot of liquidation” for 2021.
Twelve of 27 traders and analysts surveyed by Bloomberg News say futures prices may climb this
winter beyond current indicated levels for the peak of the heating season, while nine predict prices
will hold steady. The rest were bearish.
For the bears, the high inventory levels left over from last winter that have persisted through extreme
heat this summer are a concern. Their fears were crystallized last week with the latest government
data on U.S. stockpiles, which showed a bigger-than-expected jump to 3.614 trillion cubic feet as of
Sept. 11, a record for the time of year.
Just two days before that inventory report, money managers had increased their bullish gas bets to
a three-year high, U.S. Commodity Futures Trading Commission data show. The subsequent
stockpile data triggered a swift selloff in New York futures, which plunged 9.9%.
Still, the weather, as always, will be the biggest single factor for the gas market. December through
February will be 8% cooler than the same period a year earlier with 2,495 heating degree days, a
measure of weather-driven gas demand factoring in population, primarily because of La Nina
conditions, said Steven Silver, senior meteorologist for commercial forecaster Maxar. The South
and East are expected to see another winter with warmer-than-normal temperatures, he said.

Increased global demand for liquefied natural gas is also sparking optimism. The flows of U.S. gas
to LNG exports has rebounded since the worst effects of the coronavirus pandemic. On Friday that
flow topped 8 billion cubic feet per day for the first time since the start of May, before slipping again
this week amid an unplanned outage and after a tropical storm curtailed pipeline flows. The demand
boost from a cold start to winter across Northeast Asia could be enough to lure more U.S. export
cargoes, according to Energy Aspects, an independent research consultancy.
“That $3 mark is the tough nut to crack here, and I think we’ll easily do that,” Kilduff said on winter
prices. “We could easily see us getting upwards of $5 to $7 this winter if things start off with a bang,”
including some early season cold weather and continued demand for exports.
BP Hits 25-Year Low a Week After Unveiling Climate Strategy
Just a week after revealing its plan to turn itself into a clean-energy giant, BP Plc watched its share
price drop to a 25-year low.
Chief Executive Officer Bernard Looney and his new management team gave more than 10 hours
of presentations over three days last week, in a bid to show the world that the oil and gas giant could
adapt to a low-carbon future without sacrificing returns.
The company’s shares closed in London on Thursday at 232.4 pence, the lowest level since October
1995. While falling crude prices and fears of the second wave of the coronavirus haven’t help BP,
the slide suggests shareholders weren’t convinced by Looney’s pitch.
“Investors remain skeptical,” said Mirza Baig, Global Head of Governance at Aviva Investors.
“Particularly as this move is being forced on the company by climate change.”
Looney took over as CEO in February, but the so-called “BP Week” this month was his big moment,
designed to put flesh on the bones of a bold plan to become a “net-zero” energy company by 2050.

It was also an opportunity to persuade shareholders to stick with BP after the company slashed its
dividend by half in August.
“What investors are looking for with companies, when they announce big strategic changes of
direction of any sort, is compelling answers to three questions: The what, the why and the how?”
said Nick Stansbury, a fund manager at Legal & General Group Plc.
BP’s European peers are also trying to answer the same questions, with varying degrees of
success. Royal Dutch Shell Plc, which also made a deep cut to its dividend this year, is barely
trading above the post-pandemic share price low reached in March. Total SA has so far done a
better job of maintaining investor confidence in its energy-transition plan.
At the heart of BP’s reinvention is a reduction in oil and gas production and simultaneous growth in
its renewables business. Looney promised investors he could do this while delivering returns of 8%
to 10%. That’s not as high as the double-digit returns oil developments can sometimes bring in, but
greater than many clean-energy projects.
Looney said BP will take advantage of its experience, integration, low borrowing costs and trading
prowess, but the market is likely to remain skeptical until such returns can be demonstrated in
practice, analysts at Redburn wrote in a research note.
“BP’s challenge lies in the building up of its skill set in renewable energy solutions and a competitive
advantage in its chosen areas that allows investors to believe they can deliver attractive financial
returns from the capital allocated,” said Aviva’s Baig, who strongly supported the company’s net-
zero ambition.

Doubts about Big Oil’s ability to maintain returns as the world shifts away from fossil fuels are
reflected in companies’ dividend yields. The measures have been climbing steadily for both BP and
Shell, suggesting shareholders aren’t confident the payouts can be maintained even after they were
cut sharply earlier this year.
Investors don’t appear to be any more confident that sticking to oil and gas is a safe bet. Exxon
Mobil Corp., the U.S. giant that shows little intention of transitioning to renewable energy and is still
pumping huge amounts of money into hydrocarbon projects, has the highest dividend yield of all.
Getting BP into a position where it can deliver profits from large-scale renewable energy projects
will require lots of upfront spending. The company made a $1.1 billion splash in offshore wind earlier
this month, buying a stake in developments owned by fellow oil giant Equinor ASA. The near-term
milestones laid out last week suggests that more deals will follow.
“For BP to meet its low-carbon
target of 50 gigawatts of
renewable generation capacity
by 2030, considerable growth
is required over the coming
years,” said Stuart Lamont, an
investment manager at Brewin
Dolphin Holdings Plc. “This will
require discipline from the
company, ensuring a delicate
balance between working
toward decarbonization targets
while achieving attractive
returns for shareholders.”

NewBase Special Coverage
The Energy world - Special 25- September -2020
How Hydrogen Became the Hottest Thing in Green Energy
Bloomberg - Vanessa Dezem
Wind and solar power are the main focus in the fight against climate change, but there are sources
of greenhouse gases they can’t clean up. Manufacturing steel, cement and chemicals has
traditionally required fossil fuels, either to burn to create the extreme temperatures needed, or as
raw materials and catalysts for chemical reactions.
That’s why hydrogen is becoming the new climate bet. It burns far more cleanly than fossil fuels,
can stand in for carbon in some reactions and so-called green hydrogen -- gas produced using
electricity from renewable sources -- is essentially emissions free.
Hydrogen is also seen as a clean solution for fueling cars, trucks and ships and heating buildings.
All that involves vast expense and work of creating a new energy industry almost from scratch, and
bringing costs down to competitive levels.
1. What’s hydrogen’s advantage?
Hydrogen flames hot and clean. Replacing the fossil fuels now used in furnaces that reach 1,500
degrees Celsius (2,700 Fahrenheit) with hydrogen could make a big dent in the 20% of global
carbon dioxide emissions that now come from industry. In steelmaking, hydrogen could replace the
coal that’s now used not only for heat but as a purifying agent. Hydrogen also removes the oxygen
from the iron ore, but the result is water vapor rather than CO2.
2. How is it made?
There’s plenty of hydrogen in the atmosphere around us, but harnessing it for industrial purposes
is a different matter. Here are the main techniques for manufacturing it:

A way of making green hydrogen is via electrolysis, a process that sends an electric current through
water to split hydrogen atoms from oxygen. Using renewable electricity to feed the process is key
to harvesting the full benefit of hydrogen.
Nowadays, most of the hydrogen used as fuel is derived by splitting it off from molecules of natural
gas. But that requires a good deal of energy and also produces carbon dioxide at the same time,
making the process decidedly unclean. So switching to electricity generated by renewables is key
to harvesting the full benefit of hydrogen.
Another technology option for producing hydrogen from renewables is steam reforming of
biomethane and biogas, in which high-temperature steam reacts with the methane source, in the
presence of a catalyst.
There are also other less developed technologies, such as pyrolysis, which heats up natural gas
until it generates hydrogen. Carbon is produced as a residue, but in a solid form that’s easier to
store without adding to atmospheric emissions.
Smokestack Fumes
Industry accounts for a fifth of the world's annual CO2 emissions
3. Who’s doing this?
The European Union has set a target to build 40 gigawatts of renewable hydrogen electrolyzers by
2030, the equivalent of twice the capacity of China’s Three Gorges Dam, the world’s largest energy
plant.
For that, it envisages as much as 470 billion euros of public and private investments by 2050 and
plans to kickstart a global hydrogen market, allowing the fuel to be traded as a liquid commodity
denominated in euros. In Germany, Chancellor Angela Merkel’s climate cabinet said in September
green hydrogen would play a central role in “rebuilding” Germany’s industrial base as it moves to
zero emissions by 2050.

4. What’s happening elsewhere?
In Asia, a number of countries are pursuing hydrogen more as a way of diversifying their energy
sources, than on the need to reduce carbon emissions. Most countries in the region are focusing
on the use of hydrogen for transport and electricity generation.
Japan has the world-largest renewable powered hydrogen project, with 10 gigawatts of capacity,
and is the leader in hydrogen refueling stations. South Korea plans to have six cities completely
fueled by hydrogen by 2025 as part of the country’s efforts to accelerate the energy transition.
The U.S. has 6,500 fuel cell electric cars available to costumers or running on the roads -- the
world’s largest fleet, accounting for almost half of the global market.
5. What’s the private sector doing?
Most of the world’s energy companies and big industrial groups are involved in hydrogen somehow.
Among the most recent announcements were Mitsubishi Power Americas Inc., that plans to
build three hydrogen-ready gas-fired power plants in the U.S. and Germany’s RWE, which plans
to supply hydrogen to steel maker Thyssenkrupp AG and to promote the use of the fuel at its
planned liquefied natural gas terminal in Germany.
The U.K.’s ITM Power and Ceres Power, Sweden’s Powercell and Norway’s Nel ASA are among
the listed companies whose core business involve hydrogen technologies. Australia’s Infinite Blue
Energy said it plans an initial public offering that would make it the first zero-emissions hydrogen
company to list on the Australian Stock Exchange.
Utility giant Entergy Corp. is taking steps to throttle back its reliance on natural gas by investing in
hydrogen production with Mitsubishi Power. And European plane maker Airbus SE is working on

designs for hydrogen-powered aircraft as it races to bring a zero-carbon passenger plane into
service by 2035.
6. What hurdles does green hydrogen face?
Mainly, its cost. While the companies involved are all confident the technology will work, question
marks remain over whether hydrogen can ever be profitable. Green hydrogen costs between $2.50
and $4.50 a kilogram to make, due to the relatively high price of renewable-powered electrolysis,
according to an analysis from BloombergNEF. That would need to fall below $1 in order to make
renewable hydrogen competitive with the low-cost hydrogen made from fossil fuels.
7. Anything else?
The other issue is that making huge amounts of green hydrogen may strain electricity grids that are
already facing a big challenge in preparing for a broad societal shift to powering more things with
electricity rather than fossil fuels, most notably electric cars. Hydrogen is also difficult to store,
transport and deliver: its very low density makes storage and most forms of transportation expensive
in comparison to fossil fuels. But those costs should come down with innovation and greater scale,
says BloombergNEF.
8. When will hydrogen technology be commercially viable?
As the technology scales up and distribution becomes more efficient, renewable hydrogen could be
produced for $0.70 to $1.60 per kilogram in most parts of the world before 2050, according to BNEF,
making it competitive with current natural gas prices in China, India, Germany and Scandinavia.

Others are even more optimistic -- by 2030, the cost reduction of hydrogen for the end user will
reach 60%, with the technology becoming a competitive alternative to conventional fuels in some
applications, according to Hydrogen Council, a CEO-led organization.
Hydrogen could meet as much as 24% of the world’s energy needs by 2050, if supportive policy is
in place, according to BNEF’s Hydrogen Economy Outlook.

NewBase Energy News 25 September 2020 - Issue No. 1376 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi, Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 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 the UAE operations base. Khaled is the Founder
of NewBase Energy, and an international consultant, advisor, ecopreneur and
journalist with expertise in Gas & Oil pipeline Networks, waste management, waste-
to-energy, renewable energy, environment protection and sustainable development.
His geographical areas of focus include Middle East, Africa and Asia. Khaled has
successfully accomplished a wide range of projects in the areas of Gas & Oil with
extensive works on Gas Pipeline Network Facilities & gas compressor stations.
Executed projects in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of gas/oil supply routes. Has drafted &
finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements.
Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass
energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous
conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-
in-Chief of NewBase Energy News and is a professional environmental writer with more than 1400 popular
articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste
management and environmental sustainability in different parts of the world. Khaled has become a reference
for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC
leading satellite Channels. Khaled can be reached at any time, see contact details above.
NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE
NewBase 2020 K. Al Awadi

For Your Recruitments needs and Top Talents, please seek our approved agents below

New base energy news 25 september 2020 issue no. 1376 by senior editor khaled alawadi

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to New base energy news 25 september 2020 issue no. 1376 by senior editor khaled alawadi

Similar to New base energy news 25 september 2020 issue no. 1376 by senior editor khaled alawadi (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (20)

Recently uploaded

Recently uploaded (20)

New base energy news 25 september 2020 issue no. 1376 by senior editor khaled alawadi