New base energy news issue 851 dated 16 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 16 May 2016 - Issue No. 851 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE Minister of FA and IC Sheikh Abdullah bin Zayed
launches Palau solar projects
Sheikh Abdullah bin Zayed, Minister of Foreign Affairs and International Cooperation, has
inaugurated three small-scale solar energy projects in the Pacific island nation.
The projects were developed by Abu Dhabi’s renewable energy company, Masdar, with funding
provided by the Abu Dhabi Fund for Development as part of the second cycle of the Dh183.5
million UAE-South Pacific Partnership Fund.
“Three years ago, we launched the UAE-South Pacific Islands Fund to help support countries who
share the UAE’s commitment to diversifying their energy mix and advancing sustainable
development," said Sheikh Abdullah.
“Today, I am proud to see that the fund — bolstered by strong government-to-government
cooperation and through Masdar’s effective execution and project management — is fulfilling its
mission of supporting countries on their green development journeys."
The fund covers project feasibility studies, engineering design, plant equipment supplies and
installation, construction and operation and maintenance training.
On his visit to Palau, Sheikh Abdullah also met with the country’s president, Tommy E
Remengesau, reported state news agency Wam. Sheikh Abdullah relayed UAE President Sheikh
Khalifa’s keenness to strengthen relations between the two countries.
Remengesau said he wished Sheikh Khalifa good health and happiness and added he was
committed to strengthening relations with the UAE.
Sheikh Abdullah bin Zayed, Minister of Foreign Affairs and
International Cooperation, meets with the President of Palau,
Tommy E Remengesau, during a visit to inaugurate three solar
energy projects. Wam

The two discussed ways to cooperate in the fields of trade, economy, investment and energy.
Sheikh Abdullah also met with other government officials, including Billy Kuartei, Palau’s foreign
minister, to discuss bilateral relations and Rukebai K Inabo, vice president of the senate of Palau.
Inabo reiterated that her country strives to develop its bilateral relations with the UAE in a way that
serves the interests of both sides.
She affirmed the importance of exchanging visits between officials of both countries, which, she
said, were contributing to the establishment of a common ground of understanding, dialogue and
exchange of ideas and cultures.
The meeting was attended by Mousa Abdul Wahid Al Khaja, UAE ambassador to the Philippines
and non-resident ambassador to Palau. The UAE and the Republic of Palau established formal
diplomatic relations at ambassadorial level in October 2009.

Oman: Pacts inked for Ibri, Sohar-3 projects
Oman Observer
Oman Power and Water Procurement Company (Member of Nama Group), the sole procurer of all
new power generation and water desalination capacity in the Sultanate, yesterday signed a
number of agreements to establish two Independent Power Plants located at Ibri and Sohar.
This represent the single largest procurement by the power sector of the Sultanate, with expected
installed capacity of 3,219 MW, accounting for approximately 30 per cent of power capacity in the
Main Integrated System.
The event was held under the patronage of His Highness Sayyid Taimur bin As’ad al Said, with
the attendance of a number of government officials, and representatives from the consortium and
electricity sector in the sultanate. The agreements were signed by Ahmed bin Saleh al Jahdhami,
Chief Executive Officer of OPWP, with representatives of the consortium comprising Mitsui & Co,
Ltd, ACWA Power, and Dhofar International Development and Investment Holding Co.
Representing the consortium partners were Yoshio Kometani, Chief Operating Officer of Mitsui &
Co, Ltd, Mohammed Abunayyan, Chairman ACWA Power and Shaikh Khalid al Mashani,
Chairman, Dhofar International Development and Investment Holding Co.
At a cost worth over RO 885 million, the two new natural gas-fired combined cycle power plants
will have total installed capacity of 3,219 MW, consisting of 1,509MW at Ibri, and 1,710MW at
Sohar-3. Both projects will be connected to the existing Main Integrated System (MIS) grid once in
operation. The Ibri plant is planned to be commercially operated by Q2 2019, and Sohar-3 plant is
planned to be in operation by Q1 2019.
Speaking at the event. Ahmed al Jahdhami, CEO — OPWP, said: “These projects will have an
active role in meeting the increasing demand for electric power in light of urbanisation and
ambitious projects that are implemented in various sectors in the Sultanate. The projects will be
constructed using the latest technologies and standards in line with the OPWP’ s strategy to raise
efficiency and reduce costs.”
Al Jahdhami added: “The development of these projects with a total cost of more than RO 885
million reflects the confidence of foreign investors to invest in the Sultanate and in the electricity
and water sector in particular, given the legal and regulatory transparency and stable
environment.”

Speaking at the ceremony, Yoshio Kometani, Chief Operating Officer of Mitsui & Co, Ltd, managing
member of the consortium and Mohammed Abunayyan, Chairman ACWA Power said that they are very
excited to be part of these Independent Power Projects, in continuation from its partnership in Salalah
Independent Power Project Phase II which is currently under construction.
It will give them a further significant opportunity to be part of the socioeconomic development of the
Sultanate through their extensive business operation knowhow and delivery of reliable electricity. Mitsui &
Co, Ltd as Managing member will hold a 50.1 per cent stake, ACWA Power 44.9 per cent, and DIDIC 5 per
cent.
Oman plans two 800-1000 MW power schemes
Private investment in the Sultanate’s burgeoning electricity and related water sector will continue
unabated over the foreseeable future with the Oman Power and Water Procurement Company
(OPWP) unveiling plans for the procurement of two new major power schemes slated for
commercial launch during the 2021-2022 timeframe.
According to a senior official of the state-owned utility, a pair of Independent Power Projects
(IPPs), each sized at 800 — 1000 megawatts, are envisaged for implementation in the post-2021
period.
While the first of these large schemes, envisioned in Muscat Governorate, is planned for
commercial launch in 2021, the other will be procured and developed in 2022 in another part of

the Sultanate — the precise location of which is yet to be determined, said Yaqoob al Kiyumi,
Chief Operating Officer, OPWP.
Importantly, the latter scheme will be procured under OPWP’s new, liberalised procurement
philosophy. First unveiled last year, the new capacity procurement process is designed to enable
existing power plants with expiring contracts to compete directly with new project bidders for long-
term contracts.
The move is part of a series of initiatives launched by the wholly government-owned utility —
Member of Nama Group — with the aim of liberalizing the sector and opening it up to competition
for the first time. Al Kiyumi was speaking to journalists on the sidelines of a ceremony marking the
signing of project agreements linked to the procurement of the largest power generation capacity
in Oman’s history.
The agreements cover the development of 3,219 MW of gas-based generation capacity which will
be established as two Independent Power Projects — one in Ibri (1,509 MW) and the other in
Sohar-3 (1,710 MW). When operational by Q2 2019, the two IPPs will boost Oman’s total grid-
connected generation capacity by a hefty 30 per cent.
A Request for Proposals (RfP) for the first of the two new power schemes, planned for launch
during 2021-2022, is likely to be floated before the end of this year, according to the Chief
Operating Officer. “The qualification process for the first 800-1000 MW project is due to start soon,
and should be completed, hopefully before the end of this year, upon which an RfP will be
prepared.
“ This plant will come up in Muscat. Next year, we will commence the qualification process for
another power plant planned for launch in 2022. We have yet to finalise the location for this
project. Capacities of both are roughly 800 — 1000 MW, although the latter one could be higher,”
Al Kiyumi said.

Significantly, the commercial launch of the two new schemes will also coincide with the planned
rollout of the spot market, according to the official. The spot market, slated for launch during
2019-2020, will provide an alternative route for producers to sell power to OPWP outside of a
standard Power Purchase Agreement (PPA). Qualified producers will be able to participate in a
spot market and receive prices determined on a day-to-day basis in accordance with specified
market rules.
OPWP aims for 20pc gas consumption cut by 2021
Oman Power and Water Procurement Company (OPWP) aims to achieve a further 20 per cent in
gas consumption by the power and related water sector by the 2021, according to the utility’s
Chief Executive Officer.
Ahmed bin Saleh al Jahdhami said the state-owned entity plans to achieve this goal by supporting
the use of modern gas turbine technology, improved dispatch via Oman Electricity Transmission
Company (OETC), and power trading opportunities with GCC interconnectors and Petroleum
Development Oman (PDO).
The goal, he said, is to reduce gas consumption by the electricity sector to 205 cubic metres of
gas for every megawatt-hour of electricity produced. Gas consumption per unit of power
generation has plummeted a hefty 29 per cent since 2009, according to OPWP.
From a high of 343 cubic metres of gas per megawatt-hour of electricity produced in 2010,
consumption fell to 291 cubic metres in 2014. The decrease was the steepest in 2015, with gas
consumption declined to 267 cubic metres per megawatt-hour of electricity, entailing a decrease
of 8 per cent.

Egypt launches 2016 International Bid Round
Source: EGPC
The Egyptian General Petroleum Corp (EGPC) has launched the International 2016 Bid
Round to explore/exploit for oil and gas in Egypt under the Production Sharing Agreement
model. The International 2016 Bid Round includes eleven exploration blocks in the Gulf of
Suez and Western Desert sedimentary basins. See map.
Further information is available via the EGPC web site at www.egpc.com.eg. Closing date for
applications is August 31 2016.

Kenya creates 17 new exploration blocks - plans licensing round in 2017
Source: Reuters
Kenya has created an extra 17 new oil exploration blocks, bringing its total to 63 and aims
to auction them in a licensing round in 2017, Kenyan newspapers quoted Ministry of Energy
and Petroleum saying on Saturday.
British explorer Tullow Oil and partner Africa Oil first struck oil in Lokichar in northwest Kenya in
2012. The recoverable reserves are an estimated 750 million barrels of crude. Since the
discovery, interest from explorers seeking blocks in Kenya increased.
Privately-owned Standard Newspaper quoted the Energy and Petroleum ministry as saying it
aimed to hold an auction for the new blocks in 2017. 'We constituted all the blocks and the
country now has 63 blocks .... We now have 17 blocks to license,' the Standard quoted Martin
Heya, the ministry's commissioner for Petroleum Energy, as saying.
Africa Oil and Tullow were 50-50 partners in blocks 10 BB and 13T where Kenya's the
discoveries were made. Africa Oil has since sold a 25 percent stake in those blocks to A.P.
Moller-Maersk. Africa Oil and its partners aim to announce a final investment decision for
production in early 2017. Early this month, Kenya started a search for companies to design a
crude oil export pipeline costing some $2.1 billion and which it expects to be completed by 2021.

Indonesia: Santos Spuds AAL-4Z Appraisal Well in Indonesia's
Offshore NW Natuna PSC by AWE Ltd.|Press Release
AWE Limited reported Monday that the Operator of the Northwest Natuna Production Sharing
Contract (PSC), Santos Limited, has confirmed that the AAL-4X appraisal well has been spud
successfully at 20:00 hours (8.00pm) AEDT May 14.
As at 09:00 hours (9.00am) AEDT Monday May 16, the well was at 656 feet (200 meters) Total
Vertical Depth Sub Sea (TVDSS) in a 24 inch hole. The AAL-4X well will be drilled to a planned
maximum total depth of 4,042 feet (1,232 meters) TVDSS and is forecast to take approximately 48
days to complete. The well is being drilled in water depth of approximately 236 feet (72 meters)
using the jackup Raniworo (345' ILC).
The Northwest Natuna PSC is located offshore Indonesia and includes the Ande Ande Lumut
(AAL) oil project. The AAL project comprises the K Sand reservoir (101 million barrels gross
recoverable oil, net 24.3 million barrels of 2P Reserves to AWE) and the underlying G Sand
reservoir.
The AAL-4X appraisal well is targeting the G Sand reservoir, which is estimated to contain 289
million barrels gross oil in place with 36 million barrels gross recoverable oil (net 10 million barrels
2C Resources to AWE). Appraisal of the G Sand will facilitate the preparation of Plan of
Development for this resource, which could be developed in conjunction with the already
approved K Sand development.
The Joint Venture partners in the Northwest Natuna PSC are:
1. AWE Limited (via subsidiaries) - 50.00 percent
2. Santos Limited (Operator) - 50.00 percent

NewBase 16 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 rise on Nigeria, Venezuela disruptions (48.5 & 46.8)
Reuters + NewBase
Oil prices edged up in early trading on Monday as output falls in Nigeria and worries about
political instability in Venezuela tightened the market, although rising OPEC output and a stronger
dollar capped gains.
International Brent crude futures were trading at $48.11 per barrel at 0148 GMT, up 28 cents, or
0.6 percent, from their last settlement.
U.S. West Texas Intermediate crude futures were up 25 cents, or 0.5 percent, at $46.46 a barrel.
Analysts said that falling supplies from producers such as Nigeria, the Americas and China had
pushed up prices, although they added that increases elsewhere were capping gains.
"Oil struggled to hold gains from the previous day as the return of output from Canadian producers
negated (production)losses," said ANZ bank.
In Nigeria, oil major Exxon Mobil suspended exports from the country's biggest crude stream, Qua
Iboe, and other producers like Royal Dutch Shell and Chevron have also suffered disruptions
following acts of sabotage, cutting output to its lowest in decades of around 1.65 million barrels
per day (bpd).
In the Americas, major oil exporter Venezuela seemed to be on the brink of political and economic
meltdown, triggering fears of default by its national oil company PDVSA, which has to make
almost $5 billion in bond payments this year.
Oil price special
coverage

Venezuela's oil production has already fallen by at least 188,000 bpd since the start of the year as
PDVSA struggles to make the necessary investment to keep output steady.
Adding to these disruptions were the United States, where crude production has fallen to 8.8
million bpd, 8.4 percent below 2015 peaks as the sector suffers a wave of debt-fuelled
bankruptcies.
In China, Asia's biggest oil producer and consumer, output fell 5.6 percent to 4.04 million bpd in
April, compared with the same time last year.
Yet countering these disruptions was rising supply from the Organization of the Petroleum
Exporting Countries (OPEC)following the lifting of sanctions against Iran which triggered a race for
market share between Tehran and OPEC-rivals like Saudi Arabia, Iraq, the United Arab Emirates
and Kuwait.
OPEC pumped 32.44 million bpd in April, up 188,000 bpd from March. This is the highest since at
least 2008, according to a Reuters review of past OPEC reports.
Also weighing on markets was recovering output in Canada following forced closures due to a
wildfire, as well as a 3 percent rise in the dollar this month against other leading currencies. A
firmer dollar makes dollar-traded fuel imports more expensive for countries using other currencies,
potentially weighing on demand .
Oil Gains Amid Drop in U.S. Rig Count as China Refines Record
Oil rose as China’s refineries processed crude at record rates and U.S. drilling continued to slow
amid a glut.
Futures added as much as 1.2 percent in New York after advancing 3.5 percent last week.
Chinese plants processed crude at 10.93 million barrels a day in April as independent refiners
boosted operations while oil production fell to the lowest in 14 months, according to government
data released Saturday. The number of active rigs in the U.S. dropped to the smallest level since
October 2009, Baker Hughes Inc. said on its website Friday.

Oil has rebounded after falling earlier this year to the lowest since 2003 amid signs the worldwide
glut will ease as U.S. output declines. The market shifted into deficit this month, a quarter earlier
than expected, on strong demand and falling production, Goldman Sachs Group Inc. said in a
report. The bank raised its crude estimates and forecast a return to surplus early next year.
“There is evidence that the market is moving back toward balance,” Michael McCarthy, chief
strategist at CMC Markets in Sydney, said by phone. “Given the proximity to the top of the broader
trading range between $48 and $50 a barrel, it seems less likely that oil can push significantly
higher.”
West Texas Intermediate for June delivery increased as much as 57 cents to $46.78 a barrel on
the New York Mercantile Exchange, and traded at $46.75 by 10:07 a.m. Hong Kong time. The
contract slid 1.1 percent to close at $46.21 on Friday, paring the 7.5 percent advance over the
previous three sessions amid supply outages from Nigeria to Canada. Total volume traded was
about 28 percent below the 100-day average. Prices have climbed more than 75 percent from the
February low.
China Output
Brent for July settlement increased as much as 64 cents to $48.47 a barrel on the London-based
ICE Futures Europe exchange. The contract declined 25 cents to close at $47.83 on Friday. The
global benchmark crude was at a premium of 99 cents to WTI for July.
China reduced crude production in April by 5.6 percent from a year ago to 16.59 million metric
tons, the lowest level since February 2015, according to data from the National Bureau of
Statistics. The decline rate was the most since November 2011.

NewBase Special Coverage
News Agencies News Release 16 May 2016
Oil Drillers Betting Three-Month Crude Rally Is Nearing the End
Bloomberg - Joe Carroll jcarrollchgo
Oil producers are taking advantage of the rebound in crude markets to lock in protection against
another slump.
They increased their bets on falling prices to the highest level in 4 1/2 years as U.S. inventories of
stored oil remained near an 87-year high, while a natural disaster in Canada and militant attacks
in Africa curtailed output. Negative sentiment among the group expanded for a third consecutive
week, the longest streak since February.
Energy companies from EOG Resources Corp. to Chesapeake Energy Corp. used financial
instruments such as futures, swaps and collars to guard against another fall in prices. West Texas
Intermediate oil, the benchmark U.S. crude, has gained more than 75 percent since hitting a 12-
year low in mid-February.
“They’ve been getting more and more active in hedging ever since the first initial jump,” said John
Kilduff, a partner at Again Capital LLC in New York. Oil producers “appear to be drawn to this
market as everyone tries to stay alive through the downturn,” he said.
Producers and merchants increased their short position in WTI by 3.8 percent for the week ended
May 10 to the highest since September 2011, according to data from the Commodity Futures
Trading Commission.

In western Canada, raging forest fires closed in on Alberta’s vast oil sands, prompting tens of
thousands of residents to flee and interrupted shipments of the thinning agent used to help move
the extra-heavy crude produced there through pipelines.
Fire’s Impact
Royal Dutch Shell Plc, Exxon Mobil Corp., Suncor Energy Inc. and other producers curtailed
operations, imperiling more than 1 million barrels of daily output. The threat to oil-sands
operations has since receded.
In Nigeria, militant attacks on oil installations operated by foreign companies including Shell and
Chevron Corp. prompted evacuations and the shutdown of some production in Africa’s biggest oil-
producing nation. Output tumbled to a 20-year low last month, compounding the negative
economic impacts on a country already strained by slumping energy markets, according to data
compiled by Bloomberg.
U.S. output dipped to the lowest since September 2014, according to the Energy Information
Administration. Inventories shrank in the week ended May 6 for the first time in more than a
month, though stored supplies remained close to the highest since 1929.
‘Bearish Indicator’
“The failure to rally on bullish news was a bearish indicator, at least for a handful of sessions,”
said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The market still looks
relatively overbought.”
WTI began the month fresh off a 36 percent gain in March and April, the biggest two-month
advance since May and June of 2009, according to data compiled by Bloomberg. Futures
advanced by 2.3 percent to $44.66 a barrel on the New York Mercantile Exchange during the
CFTC report week and closed at $46.21 on May 13.
In other markets, money managers’ net-long bets on Nymex gasoline fell 34 percent to 15,480
contracts as prices slipped 1.6 percent. Speculators reduced net-long positions on ultra low sulfur
diesel the first time in five weeks as the fuel rose 0.3 percent.
Money managers’ net-long wagers on WTI fell 8.6 percent to 216,521 futures and options
combined in the report week, a second consecutive decline after three straight gains.
“Some subset of managed accounts have been trying to pick a top in crude,” Evans said. “We’ve
been rallying for months so the question is, ‘Are we in the middle or late stages of the rally?”’
Goldman Surprised by Oil Market’s Flip to Deficit on Supply Cuts
The global oil market has flipped to a deficit sooner than Goldman Sachs Group Inc. had
expected.
A sharp decline in production driven by unexpected disruptions in supply as well as sustained
strong demand have led to a “sudden halt” to the market surplus, Goldman analysts including
Damien Courvalin and Jeffrey Currie wrote in a report dated May 15. That’s prompted the bank to
raise its U.S. crude price forecasts to $50 a barrel for the second half of 2016 from a $45 estimate
in March.

The unexpected outages caused by everything from wildfires in Canada and pipeline attacks
in Nigeria will keep the market in deficit through the second half of this year, according to
Goldman. Still, the return of some of the output and higher-than-expected U.S., North Sea, Iraq
and Iran production means the bank predicts the shortfall will be at 400,000 barrels a day versus
900,000 that was previously expected. A shift back to a surplus is seen in early 2017, it said.
“The physical rebalancing of the oil market has finally started,” the Goldman analysts wrote. The
changes to forecasts “reflects our long-held view that expectation for long-term surpluses can
create near-term shortages and leaves us cyclically bullish but long-term bearish.”
Oil Demand
Goldman cut its crude price forecast for the first quarter of 2017 to $45 a barrel from $55
previously, but sees oil rising to $60 by the end of that year. The bank expects global oil demand
to grow by 1.4 million barrels a day in 2016, versus 1.2 million predicted earlier.
West Texas Intermediate crude, the U.S. benchmark, rose 1.6 percent to $46.96 a barrel by 10:25
a.m. Singapore time on the New York Mercantile Exchange. Front-month futures are up almost 80
percent from a 12-year low earlier this year. Brent, the marker for more than half the world’s oil,
was at $48.61 a barrel in London.
Goldman’s expectation for the market to return to a surplus in 2017 reflects the view that low-cost
producers will continue to drive output growth, boosted by Saudi Arabia, Kuwait, the U.A.E. and
Russia, the bank said.
“While the physical barrel rebalancing has started, the structural imbalance in the capital markets
remains large,” the analysts wrote. “The industry still has further to adjust and our updated
forecast maintains the same 2016-2017 price level that we previously believed was required to
finally correct both the barrel and capital imbalances, and eventually take prices to $60 a barrel.”

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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 16 May 2016 K. Al Awadi

New base energy news issue 851 dated 16 may 2016

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New base energy news issue 851 dated 16 may 2016