New base energy news issue 842 dated 02 may 2016

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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NewBase Energy News 02 May 2016 - Issue No. 842 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Solar power Costs tumble 2.99 USCent/kwh as Dubai’s
Mohammed bin Rashid Al Maktoum Solar Park sets the mark
The National - LeAnne Graves
The hotly contested race to win the latest phase of work at Dubai’s utility-scale solar plant is
pushing bids down to record-breaking lows, at less than half the price of power generated by
natural gas, potentially helping to boost the emirate’s efforts to diversify its energy mix.
The Mohammed bin Rashid Al Maktoum Solar Park is the largest single-site project to generate
electricity from solar energy in the world, with a planned capacity of 5,000 megawatts – enough to
power 800,000 homes – by 2030 and a total investment of Dh50 billion, according to Saeed Al
Tayer, the managing director and chief executive of the Dubai Electricity and Water Authority
(Dewa). Dewa has received five bids for the park’s 800MW third phase, with the lowest at 2.99 US
cents per kilowatt hour (kWh).
That compares to the second phase’s winning bid last year, a then world record 5.84 cents per
kWh, from Saudi Arabia’s Acwa Power and its Spanish partner TSK. The average cost for power
produced from natural gas in the UAE, its biggest source, is about 7 cents per kWh, according to
industry experts.
The solar park was initially slated to be 1,000MW by 2030, and Dewa has increased capacity
twice as the price of solar has steadily dropped. Dewa received 95 expressions of interest for the
third phase in September. Bids were submitted at the end of last year. With only five remaining
applicants in the running, the utility provider is reviewing bids and looking to award the scheme in
June. “The next step in the bidding process will review the technical and commercial aspects of
the bids to select the best one," Dewa said.

Among the companies vying for the project, Abu Dhabi’s Masdar with partner FRV, China’s Jinko
and Acwa are said to be the most competitive. When contacted by The National, Masdar and FRV
referred questions back to Dewa.
Last week, Mr Al Tayer and Mohamed Al Ramahi, Masdar’s chief executive, met in Dubai to
discuss ways to enhance cooperation and “exchange experiences in clean and renewable
energy". Dubai is targeting a share of power output from clean energy sources of 7 per cent by
2020, 25 per cent by 2030 and 75 per cent by 2050.
The potentially new record low price for the third phase of the Dubai plant could turn the tide for
solar energy in the region, but it could also pose major risks for project developers, according to
Gus Schellekens, partner at Ernst & Young.
Mr Schellekens added: “There is a danger of driving prices down too quickly just in an attempt to
win work by bidders," he said, adding that the point may have already been reached where little
profit is on offer for the winning bidder. You want to make sure that you attract companies that are
robust and reliable enough to see the project through to completion."
Mr Schellekens said the pressure to bring down the cost of utility-scale solar is mounting. Italy’s
Enel bid for a solar project in Mexico at 3.5 cents per kWh to be delivered in 2019, according to
Bloomberg New Energy Finance.
Regional ambitions for expanding renewable energy capabilities are building. Last week, the Abu
Dhabi Water and Electricity Authority pre-qualified 34 companies for its 350MW photovoltaic park
in Sweihan. And Saudi Arabia could require US$20 billion of investment to meet its renewable
energy targets as it also looks to diversify its economy away from its dependence on oil by 2020.
The country has set an “initial target" for the installation of 9.5 gigawatts of renewable energy as
part of its National Transformation Plan.

Tanker with disputed Libyan oil returns to country for unloading
Bloomberg/London/Tripoli
A tanker with oil from eastern Libya returned with its cargo to the North African country after the
UN blacklisted the shipment, amid an escalating struggle between the nation’s rival governments
for control of its crude wealth.
The Distya Ameya will discharge its cargo at the refinery of Zawiya in western Libya over the next
few days, Mustafa Sanalla, chairman of the Tripoli-based National Oil Corp, said on Saturday in
an e-mailed statement. Unloading at Zawiya was delayed because of bad weather, Mansur
Abdulla, an official at the refinery, said yesterday by phone.
The UN Security Council added the vessel
to its sanctions list on Wednesday after the
Mediterranean island of Malta refused to let
it dock there. The NOC in Tripoli called the
shipment illegal and informed Libya’s newly
formed UN-backed unity government about
the eastern government’s attempt to export
oil independently.
“This episode is a clear warning to all ship
owners and trading companies that oil
exports from Libya by any other entity than
the National Oil Corp of Libya are illegal and will be stopped,” Sanalla said. “We need to agree
that our oil should not be divided.”
The NOC’s competing administration in eastern Libya will continue shipping oil from the port of
Hariga and notify the UN, Nagi Elmagrabi, head of NOC in the east, said in an interview.
Libya, with Africa’s largest proven crude reserves, broke into two separately governed regions in
late 2014, one centred around Tripoli in the west and the other an internationally recognised
government in the east. Libyans are working with US and European support to establish a
Government of National Accord. While the country’s divide extends to the state oil company, it’s
the NOC leadership in Tripoli that’s recognised by traders such as Glencore and Vitol Group as
the Opec member’s official crude marketer.
Libya pumped about 1.6mn bpd of crude before a 2011 rebellion that ended Muammar Gaddafi’s
42-year rule. It’s now the smallest producer in the Organization of Petroleum Exporting Countries,
producing 330,000 bpd in March, according to data compiled by Bloomberg. Since Gaddafi’s
ouster and death, armed militias are also competing for control of the nation’s oil facilities.
“In the last three years, we have lost close to $75bn up to April 2016 due to blockades at our oil
ports and oil pipelines by militias,” Sanalla said in the statement. “We can double our production –
and national revenues – within a matter of months if the blockades are lifted. We have a plan to
bring oil production back to pre-revolution levels,” he said, without providing details.
The Distya Ameya arrived on Saturday at about 9am local time at Zawiya in western Libya,
Sanalla said. The tanker, with a cargo-carrying capacity of 650,000 barrels, will unload in the next
few days, he said.By returning to Libya, the tanker avoided the more forceful resolution to an
incident in 2014 when US Navy SEAL commandos seized a crude tanker that rebels tried to ship
from the country’s central region. That ship was subsequently rerouted to a port under the control
of the Tripoli authorities.

Iraq Oil Exports Near Record Even as Protests Threaten Paralysis
Bloomberg - Khalid Al Ansary
Iraq’s oil exports approached a record high in April, adding barrels to a worldwide supply glut even
as protests against public corruption threatened to paralyze the government of OPEC’s second-
largest producer.
Shipments rose to 3.36 million barrels a day, or 100.92 million barrels for the month, Asim Jihad,
an Oil Ministry spokesman, said by text message Sunday. The figures don’t include sales by the
Kurdistan Regional Government. Exports rose from 3.29 million barrels a day in March and were
close to the November all-time high of 3.365 million a day, according to ministry figures.
Oil shipments and production weren’t affected Sunday after protesters stormed the parliament in
Baghdad, Falah Al-Amri, chairman of Iraq’s State Oil Marketing Organization, said by Facebook
message. The demonstrators have accused the government of putting off necessary reforms as it
struggles in the fight against Islamic State militants and sees its finances battered by collapsing oil
prices.
“Politically, things have worsened dramatically in Iraq,” Richard Mallinson, an analyst at Energy
Aspects Ltd., said Sunday by phone from London. “It’s a negative for the country’s oil industry
over the medium term. We’re going to see production plateau and start to decline later this year”
as government turmoil and spending cuts affect projects needed to maintain output.
Iraq produced 4.3 million barrels a day in April, data compiled by Bloomberg show. Output has
increased from 3.25 million barrels a day two years ago, with companies including BP Plc and
Lukoil PJSC boosting production at fields they operate in the south of the country.
The government declared a state of emergency in Baghdad after supporters of Shiite Muslim
cleric Moqtada al-Sadr stormed parliament. The action on Saturday increases “the social and

political risk that will have to be factored in to assessing Iraq,” said Edward Bell, a commodities
analyst at lender Emirates NBD PJSC in Dubai.
Al-Sumaria television reported later on Sunday that Al-Sadr’s supporters would leave Baghdad’s
fortified Green Zone, where the government buildings are located, citing a statement from the
protests’ committee.
Mallinson and Bell both said they didn’t expect the unrest in Baghdad to cause any immediate
interruptions in production or exports of oil from southern Iraq. Most of Iraq’s crude reserves and
all of its maritime export terminals are located in the south, away from the front lines in the
government’s military campaign against Islamic State.
The country has lost sales and revenue from its northern region as a payments dispute with the
semi-autonomous Kurdish region and interruptions to the flow of oil for export through a pipeline to
Turkey have crippled shipments.
It’s also seen revenue squeezed by slumping crude, which has lost more than half its value since
mid-2014. Yet prices have rebounded in recent months on signs that declining U.S. production will
help reduce the global surplus. Benchmark Brent advanced 22 percent in April for a third monthly
gain.
Oil fell a second day after Iraq’s oil exports approached a record high in April, adding barrels to a
worldwide supply glut.
Futures declined as much as 0.8 percent in New York after dropping 0.2 percent Friday. Iraq,
excluding sales from the Kurdistan Regional Government, shipped 3.36 million barrels a day last
month, an oil ministry spokesman said by text message Sunday. Operations weren’t affected on
Sunday after protesters stormed parliament in Baghdad, threatening to paralyze the government
of OPEC’s second-largest producer.
Oil has rebounded after slumping this year to the lowest since 2003 as U.S. production has
slipped below 9 million barrels a day. Disruptions ranging from pipeline attacks to field shutdowns
removed as much as 800,000 barrels a day of supply this year, according to energy-industry
consultant FGE.

“Lower output was one of the biggest bullish factors we had back in the first quarter, but as this is
something we can’t sustain, the upward momentum in oil prices will slow,” Hong Sung Ki, a
commodities analyst at Samsung Futures Inc., said by phone in Seoul. “If we see more signs of
easing production disruptions, this can have a strong downward pressure.”
Iraqi Shipments .
West Texas Intermediate for June delivery lost as much as 37 cents to $45.55 a barrel on the New
York Mercantile Exchange and was at $45.61 at 11:17 a.m. Seoul time. The contract fell 11 cents
to $45.92 on Friday. Total volume traded was about 52 percent below the 100-day average.
Brent for July settlement dropped as much as 42 cents, or 0.9 percent, to $46.95 a barrel on the
London-based ICE Futures Europe exchange. The June contract closed down 1 cent to expire
Friday at $48.13 a barrel. The global benchmark was trading at a 68-cent premium to WTI for July.
Exports rose from March’s 3.29 million barrels a day and neared the record 3.365 million in
November. Iraq declared a state of emergency in Baghdad after supporters of Shiite Muslim cleric
Moqtada al-Sadr stormed parliament. Protesters, who also breached Baghdad’s fortified Green
Zone, agreed to leave the secure zone, al-Sumaria reported, citing a statement issued by the
protests’ committee.
The country produced 4.31 million barrels a day in April, data compiled by Bloomberg show, and
drilling has increased as companies including BP Plc and Lukoil PJSC boosting production at
fields they operate in the south of the country. The Organization of Petroleum Exporting Countries
increased production by 484,000 barrels to 33.217 million a day in April, the most in monthly data
compiled by Bloomberg going back to 1989, according to a survey of oil companies, producers
and analysts.

India's Essar Oil Plans to Double CBM Output
Natural gas Asia
Essar Oil is looking to double coal bed methane (CBM) output in India to 1.8 million standard
cubic metres per day (scmd) by end of current fiscal (Apr 1, 2016-Mar 31, 2017). The company
wants to boost production to 2.5 million scmd during fiscal 2017-18.
Essar plans to achieve this target by increasing the number of wells in the Raniganj East block
from around 300 to 363 this year. “We’ll increase the well count by March 2017. Of the nearly 300
wells, 266 have been fracked, 247 have been completed and 175 have been on the active de-
absorption cycle,” company’s CEO for exploration and production, Manish Maheshwari,
told Business Standard, a financial daily
Essar owns rights to explore for CBM in Raniganj block in West Bengal, Sohagpur in Madhya
Pradesh-Chhattisgarh, Rajmahal in Jharkhand and Talcher and Ib Valley in Odisha. Currently,
production is taking place only at Raniganj block.
Further drilling at Raniganj block is expected to begin later this month. Greka Drilling will
commence drilling as it has got mobilisation order for two drilling rigs from Essar.
Greka and Essar signed the contract in January this year. Essar had previously engaged Greka
Drilling in late 2013 to provide drilling services on Raniganj East block and this contract was
concluded in 2015 with a total of 16 wells being drilled. The current contract is for a period of one
year and has an estimated value of around $8 million.
The Indian government is looking to aggressively exploit country’s coal bed methane reserves to
augment domestic gas supplies. Despite lot of talks and discussions about the sector, there has
not been much progress. Private sector players say that large scale exploration is not
economically viable at prevailing domestic prices. The government, however, has expressed
willingness to talk to the companies about the pricing issue.

Senegal, Mauritania bet on oil and gas in perilous climate
AFP + Gulf News + NewBase
While petro-states reel from plunging oil prices and gas producers brace for American exports to
hit the market, two West African nations are forging ahead with potentially massive extraction
projects others might fear to touch.
Energy firms say Senegal and Mauritania’s current oil and gas ventures will transform them into
net exporters by 2020, betting on long-term demand and the eventual recovery of the slumped
market, as well as their proximity to Europe.
Located off Africa’s western
extremity, three oil wells drilled
by Scottish firm Cairn Energy
have yielded a “significant
resource base” in Senegalese
waters, its chief executive Simon
Thomson said in early April,
confirming that work would
begin on a fourth.
Meanwhile Texas ased Kosmos
Energy has confirmed a single,
very large pool of “high-quality
gas” straddling the Senegalese -
Mauritanian maritime border,
and now plans to prospect for oil
in the same area, the firm told
AFP.
“We have excellent working
relationships with both
governments,” said Kosmos
spokesman Thomas Golembeski,
describing four years of work
that have yielded a predicted 20
trillion cubic feet of natural gas.
The discovery of that “threshold”
amount — considered the
minimum for viable production
— after digging just four wells
was an encouraging sign in a
business where dozens can be
drilled and all found completely
dry, Golembeski said. The Senegalese government has stressed it will take “every measure” to
ensure the projects are carried out in the “best interests of all current and future generations,”
President Macky Sall said in a recent speech.
Other nations such as Kenya and Tanzania are waiting for a better economic climate to exploit
similar resources, said Nadine Kone of Oxfam International, a strategy she urged Senegal and
Mauritania to heed.

“I don’t see a clear vision for the use of this resource,” Kone told AFP. Furthermore, “why rush
with oil given where prices are now?”
World Bank country manager for Mauritania Gaston Sorgho told the Financial Times last month
the project was potentially risky if not properly handled, with the Chinguetti oilfield discovered 15
years ago in Mauritanian
waters producing a fraction
of what was hoped.
However, it offered a “huge
opportunity” if the two
governments were able to
work together, Sorgho said.
Much remains to be done
before the outcome is set:
Cairn and Kosmos are
negotiating with production
firms to get the product out
of the ground and onto the
market, and attracting
finance for such billion-
dollar projects is “the real
hard part”, according to
Wood Mackenzie analyst
David Thomson.
“These projects are
massive and they’re very
capital intensive,” Thomson
said, adding that although it
could take time in the current circumstances, he believed both firms would nonetheless secure the
funding required.
There was enough gas alone found so far to last for three decades, he added. Kosmos’
Golembeski said the firm believed demand will have risen by the time the gas site commences
delivery, with ease of shipping to Europe a clear advantage on the export side. “Demand for oil
and gas will continue to increase over time as more and more people around the world move from
rural areas into the cities and want the conveniences of modern life,” he told AFP.
The states’ 10 per cent stakes in each of the projects will be more than welcome: both battle youth
unemployment and persistent poverty, and are a long way from ensuring all their citizens have
clean water, housing and access to education and health services.
Mauritanian economist Isselmou Ould Mohamed said his country had in 2005 signed up to the
anti-corruption Extractive Industries Transparency Initiative. “That considerably reduces the
chances of large-scale corruption. [Mauritania] is required to reveal all the payments received from
these companies, which in turn must report all payments made to the state,” he told AFP.
Nonetheless, Oxfam’s Kone believes the five-to-10 year window from exploration to sale is not
enough to guarantee a legal framework to ensure the proceeds will be used correctly. The two
countries could look to the regional example of Ghana, she said, which has a dedicated fund from
the proceeds of oil and gas directed to priority areas such as agriculture and education.

NewBase 02 May 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices fall on rising OPEC crude production
Reuters + NewBase
Oil prices dipped in early Asian trade on Monday as rising production in the Middle East
outweighed falling U.S. output and the recent slide in the dollar, which has been supporting crude.
Brent futures were trading at $47.05 per barrel at 0028 GMT on Monday, down 32 cents from their
last settlement. U.S. crude was down 28 cents at $45.64 a barrel.
Analysts said rising output from the Organization of the Petroleum Exporting Countries (OPEC)
and especially the Middle East was outweighing supportive factors such as an ongoing, albeit
slow, fall in U.S. output and a sliding dollar, which makes it cheaper for countries using other
currencies to import dollar-traded fuel.
"The weaker dollar failed to excite investors in the crude oil markets," ANZ bank said, citing a rise
in OPEC-output as the main downward driver for prices. The dollar has fallen over 6 percent this
year against a basket of other leading currencies.
French bank BNP Paribas said that a recent oil rally, with prices jumping almost a third since April,
was largely driven by sentiment and lacked physical fundamentals. "The recent rally in oil prices ...
appears to have little to do with fundamentals," it said.
"We see the recent rally as sowing the seeds of its own demise, and extending our
recommendation to protect against short-term downside risk." OPEC-supplies rose to 32.64
million barrels per day (bpd) in April, from 32.47 million bpd in March, according to a Reuters
Oil price special
coverage

survey based on shipping data and information from sources at oil companies, OPEC and
consultants. That almost matches January's 32.65 million bpd, when Indonesia's return to OPEC
boosted production to records.
Despite Monday's lower prices, other analysts are growing confident that a near-two-year rout in
oil has ended, and many have raised their price forecasts. The chief of the International Energy
Agency (IEA) said oil prices may have bottomed out, providing the health of the global economy
does not pose a concern.
"In a normal economic environment, we will see the price direction is rather upwards than
downwards," IEA Executive Director Fatih Birol said on Sunday. Non-OPEC output is set to fall by
more than 700,000 bpd this year, the biggest decline in around 20 years, he said.
With global oil demand seen growing by 1.2 million bpd this year, the draw in global stockpiles will
start soon, helping push up prices, he said.

Oil price bottoming depends on global growth: IEA chief
Reuters + NewBase
International Energy Agency (IEA) chief Fatih Birol said yesterday that oil prices may have
bottomed out, providing that the health of the global economy does
not pose a concern.
Oil prices hit 2016 highs on Friday with Brent crude reaching $48.50
a barrel on optimism that a global oil glut will ease. That, coupled with
a weaker dollar, has helped lift crude futures by more than $20 a
barrel since prices plumbed 12-year lows below $30 in the first
quarter.
A decline in non-Opec production amounting to more than 700,000 bpd this year, and production
outages such as in Nigeria and Kuwait, have driven the rally, Birol told Reuters on the sidelines of
the Group of Seven energy ministers’ meeting in Kitakyushu, south-western Japan.
Asked if oil prices had bottomed out, he said: “It may well be the case, but it will depend on how
the global economy looks like. In a normal economic environment, we will see the price direction
is rather upwards than downwards.”
“We believe under normal conditions towards the end of this year, second half of this year but
latest 2017, markets will rebalance.”
Birol said he hopes to see a rebound in upstream oil investments next year, following a 40% curb
in investments over two years. Non-Opec output is set to fall by more than 700,000 bpd this year,
the biggest decline in around 20 years, he said.
“What we would like to see is, after a big decline in 2015 and 2016, there will be a rebound in
investments (in 2017), and bringing (investments) to the level of $600bn once again,” he said.
Birol said a third year of decline in investments would be problematic for oil markets as it could
cause oil price spikes and increase volatility, which would not be good for consumers.
With global oil demand seen growing by 1.2mn bpd this year, the draw in global oil stockpiles will
start soon, which will help push up oil prices, he said.
“I think the trend is that there’s a decline of stocks worldwide and the stock building rate is slowing
down considerably, and we expect towards the end of this year stock draw will start to kick in,” he
said.
Birol said that despite the recent rally in oil prices, it will take a while to change the direction of
falling US oil production. “It will depend on how high the price recovery will go and how long the
level of prices will stay,” he said.
“Our analysis shows we need $60-$65 of oil prices in order to reverse the trends in shale oil and
this would require also some time for shale oil to come back because there’s a lot of work to be
done. We think up to one year is needed in order for shale oil production to change the trends.”
Analysts are growing increasingly confident that a near-two-year rout in oil has ended, and raised
their price forecasts for a second month running last by end-April, as healthier demand and a drop
in US shale output balance the market by 2017.

The inability of Opec and non-Opec producers to agree to limit oil output at a meeting earlier last
month is not expected to slow the rebalancing of global demand and supply. The survey of 29
analysts projected a slightly more bullish outlook, raising their average forecast for Brent crude
futures in 2016 to $42.30 a barrel, compared to $40.90 in the March poll.
The March survey saw an upward revision in 2016 Brent forecasts for the first time in 10 months.
Brent has averaged about $40 a barrel in 2016. Analysts said the failure of the Qatar meeting
among the world’s largest producers to reach an agreement to keep output at January’s levels has
had little or no impact on prices.
“The status quo is already such that virtually all producers, except Iran, have little to no room to
increase production from current levels,” said Raymond James analyst Luana Siegfried. Since the
April 17 stalemate in Doha, the oil price has rallied 21% to its highest since November.
Iran’s oil output will rise only modestly this year and next, but it will be enough to stop global
supply and demand from rebalancing in 2016, according to a Reuters poll earlier this month.
“In the meantime, volatility will remain high as investors intermittently switch focus from
speculation about production cuts or freezes on the one hand, and existing oversupply, on the
other,” ABN AMRO senior energy economist Hans Van Cleef said.
However, a better demand outlook - with some analysts projecting an improvement by about 1mn
to 1.5mn bpd - and falling US production, should keep the market on track to reach supply-
demand balance next year.

NewBase Special Coverage
News Agencies News Release 02 May 2016
Oil Bulls Bet the Waning U.S. Shale Boom Will Curb Global Glut
Bloomberg - Mark Shenk ShenkMark
Hedge funds are rooting for a quick collapse of the U.S. shale boom.
Money managers turned the most bullish since May as West Texas Intermediate crude climbed to
a five-month high on optimism that falling U.S. production and rising fuel demand will trim the
global glut. Investors shrugged off an inventory gain that left supplies at the highest since 1929.
"The market’s focused not on current oversupply but on predictions of a balance in the second half
of the year," said Mike Wittner, head of oil markets at Societe Generale SA in New York.
"Managed money is just adding to the upward momentum."
Speculators’ net-long position in benchmark U.S. crude climbed to the highest since May 12 in the
week ended April 26, according to data from the Commodity Futures Trading Commission. Short
positions dropped to a 10-month low.
WTI futures surged 7.2 percent on the New York Mercantile Exchange in the CFTC report week,
and settled at $45.92 a barrel Friday.

Spending Cuts
Energy companies responded to the lowest prices since 2003 earlier this year by cutting spending
on exploration and developing new fields. The number of active oil rigs fell to 332 last week, the
least since November 2009, according to Baker Hughes Inc. The total is down to less than one-
fourth of the 2014 peak.
U.S. crude production fell to 8.94 million barrels a day in the week ended April 22, the least since
October 2014, Energy Information Administration data show. The agency on April 12 cut its
average forecast for the whole year to 8.6 million barrels a day. Output from U.S. shale formations
will drop in May to the lowest level in almost two years.
"Supply in the U.S. is falling pretty quickly, and globally, in the second quarter of this year for the
first time in more than three years we are going to have a contraction in global output," Francisco
Blanch, head of commodities at Bank of America Merrill Lynch in New York, said on Bloomberg
Television Friday. "That combination of lower supply and robust demand will lead to a change of
inventory dynamics in the second half of the year."
Consumption Gains
U.S. drivers are doing their part. Gasoline consumption over the past four weeks was up 5.6
percent from a year earlier at 9.4 million barrels a day through April 22, EIA data show.
Speculators’ net-long position in WTI rose 3,136 futures and options combined to 249,123, CFTC
data show. Short positions, or bets that prices will decline, tumbled 6.9 percent, while longs
slipped 0.5 percent.
In other markets, net bullish bets on Nymex gasoline rose 11 percent to 25,964 contracts.
Gasoline futures increased 5.8 percent in the period. Net bearish wagers on U.S. ultra low sulfur
diesel decreased 93 percent to 529 contracts, the least bearish position since July 2014, as
futures climbed 5.5 percent.
OPEC Barrels
Rising OPEC production leaves the oil market vulnerable to a correction, said Tim Evans, an
energy analyst at Citi Futures Perspective in New York. The Organization of Petroleum Exporting
Countries boosted production by 484,000 barrels a day to 33.217 million in April, the most in
monthly data going back to 1989, a Bloomberg survey of oil companies, producers and analysts
showed.
"More buying now will result in more selling later," Evans said. "At some point rising OPEC
production will be recognized as more than offsetting the drop in U.S. production."

Eni makes progress on $8 bln asset sales goal
Source: Reuters via Yahoo! Finance
Italy's Eni is well on track to sell assets worth 5 billion euros in the next two years as
the oil major looks for resources to fund high-profile projects in Egypt and
Mozambique and offset the impact of lower oil prices. The state-controlled company,
which has one of the best success rates in the industry in finding new reserves at
one of the lowest cost bases, has tabled disposals of 7 billion euros ($8.01 bln) to
2019.
'That will be front-loaded with 5 billion euros in the first two years,' Eni CFO Massimo Mondazzi
told analysts on Friday.
With CEO Claudio Descalzi at the helm, Eni has been downsizing businesses like refining and
chemicals to focus on the bread-and-butter job of finding oil and gas. Some analysts are worried
the strategy could leave it more vulnerable to a downturn.
BP, Statoil and Total beat analysts' expectations for quarterly results last week, reflecting in part
resilient refining and petrochemical operations.
Eni, the biggest foreign oil producer in Africa, has said it is ready to sell down stakes in fields it
operates, such as the massive Area 4 gas field in Mozambique and the giant Zohr field in
Egypt, to bankroll development.
The group could benefit from a partner in Mozambique that has the right skillset to help it develop
the project, Mondazzi said on a conference call on first-quarter results. 'This contract is so big I
guess we could take advantage from a strong additional partner, not only stronger from a
financial point of view but also (with) a capability to run such a complicated project,' he said.

Eni has been in talks to sell down its 50 percent stake in Area 4, which holds 85 trillion cubic feet
of gas that will feed a series of onshore LNG export plants, mainly supplying Asia. Reuters
reported in March that ExxonMobil was in talks to buy a stake of varying potential sizes in Eni's
Area 4 development, including a full operating stake.
'Talks on disposals are under way and some are very well advanced,' Mondazzi said.
Eni's strategy of selling down oil and gas acreage, its large reserves and ongoing restructuring all
helped support a 'Buy' rating, Santander oil analyst Jason Kenney said. 'These should
differentiate it from peers no matter where oil prices settle in coming months/years,' he said.
Mondazzi expressed concern, though, about developments in Venezuela where state oil
company PDVSA, the exclusive operator of the country's oilfields, owes energy companies
billions of dollars in unpaid bills due to cash-flow problems.
'The situation in the country is critical. So far we've been paid but we envisage some delays in
payment,' he said, adding the amounts would not be huge. The group was testing certain
financial securitization tools to help secure payments, he said.
A slew of major U.S. corporations have taken sizeable writedowns on their Venezuela operations
due primarily to a steadily weakening currency. Eni produces 60,000 boed in Venezuela, mainly
from its giant gas field Perla.
In the first quarter Eni beat operating profit expectations despite swinging to a net loss because
of weak oil prices and a charge on its Saipem holding. Adjusted operating profit fell 95 percent to
73 million euros but was above an analyst consensus of 22 million euros.
'This is a good set of results, especially in the light of the unfavourable conditions in the E&P
(exploration and production) sector,' broker ICBPI said in a note.

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 02 May 2016 K. Al Awadi

New base energy news issue 842 dated 02 may 2016

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New base energy news issue 842 dated 02 may 2016