New base energy news issue 854 dated 19 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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours 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 19 May 2016 - Issue No. 854 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: Dubai Green Economy Partnership showcases efforts to enhance
the level of low-carbon and sustainable development
(WAM) - In line with the UAE's signing of the Paris Agreement at the Climate Conference COP21,
the latest edition of Dubai Green Leadership Series (GLS) organized by Dubai Science Park and
Dubai Green Economy Partnership discussed ways to unite public and private sector efforts in
achieving a low-carbon resilient development in the UAE.
"As global citizens, we are obliged to make sure our planet can sustain future generations, which
is only possible if we make fundamental changes at the grass root level.
The UAE has been a driving force to make this global initiative a resounding success, and today
we examine our efforts towards achieving a green economy and deliberate on how public-private
partnership can help achieve green economy goals.
It is an inevitable fact that both the public and private sector share the responsibility to take action
to meet COP21 goals," commented Dr. Thani Al Zeyoudi, Minister of Climate Change and
Environment, in his keynote speech.

This year's discussions, themed "COP21 Outcomes and Effects on the Public-Private Sectors",
was Chaired by Marwan Abdulaziz Janahi, Executive Director of Dubai Science Park, with
participation from Ministry of Energy (MoE), Dubai Electricity and Water Authority (DEWA), Dubai
Supreme Council of Energy (DSCE), United Nations Development Programme (UNDP), Dubai
Municipality and Suqia.
In his welcome speech, Ahmed Buti Al Muhairbi, Secretary General of Dubai GEP, and Dubai
Supreme Council of Energy, said, "How we manage our natural resources is the key to meeting
the objectives of the Paris Agreement. To achieve set goals, the UAE government needs the
support of the private sector.
The discussions at GLS will help the integration of public and private efforts as well as create a
roadmap for Public -Private partnerships. We are here to support the UAE's economic growth
through sustainable energy supply and promote efficient energy use to meet green objectives.
"We want to help create a more sustainable and self-sufficient future that maximizes the use of
indigenous resources and talent. Supporting innovation and promoting the use of cutting-edge
technologies and information by companies to foster green growth is vital to achieving the Paris
Climate Agreement goals.
At Dubai Science Park , we aim to play a significant part in Dubai's own Vision 2021 goals, by
facilitating a future that is less reliant on natural resources through our business partner's work in
the science sector," said Marwan Abdulaziz Janahi, Executive Director of Dubai Science Park .
All 196 participating countries at the COP21 signed the Paris Agreement adopting a universal
accord on climate change agreeing to keep global temperature rise well below 2 degrees Celsius.
As per the agreement, all signatories will submit a climate action plan every five years from 2020,
reflecting different national circumstances, as well as review progress every five years starting
2023.

Norway: Lundin Petroleum awarded five licences in 23rd
licensing round
Lundin Petroleum has announced that its wholly owned subsidiary Lundin Norway has been
awarded five exploration licences in the 23rd Norwegian Licensing Round. All the licences are
located in the southern Barents Sea with three of the licences being operated by Lundin
Norway.
Loppa High awards
PL609C and PL851 are both located on the Loppa High, east and northeast of the Lundin
Norway’s operated Alta discovery. PL609C is operated by Lundin Norway and is located
immediately to the east of the Alta discovery. This licence has been secured as protection
acreage in the event that the Alta play fairway is shown to extend east and northeastwards.
PL851 is operated by Lundin Norway and is located immediately to the north of PL609C. This
acreage is mapped as containing exploration potential on the eastern flank of the Loppa High.
Southeastern Barents Sea awards
PL857 is located in the newly opened south eastern Barents Sea area close to the Russian
border and around 150 km from the northern coast of Norway. The PL857 acreage is mapped

containing a large dome-like structure with several stacked prospects at Jurassic and Triassic
levels with in excess of a billion barrels of oil equivalents in total resource potential. The PL857
licence has 1 committed exploration well.
PL859 is located north of PL857 and around 420 km from the northern coast of Norway. The
PL859 acreage is mapped as containing two dome-like structures with stacked prospects at
Jurassic and Triassic levels with each prospect having the potential to contain several billion
barrels of oil equivalents in resources. The PL859 licence has 2 committed firm exploration wells.
Kristin Faerovik, Managing Director of Lundin Norway comments:
'I am very pleased that the Norwegian Ministry of Petroleum and Energy has awarded us what
we regard as high impact exploration acreage in the southern Barents Sea. Through this 23rd
licensing round we have further consolidated our leading acreage position in the Loppa High
where we hold the Alta and Gohta oil discoveries. I am particularly excited about the billion barrel
prospectivity on the acreage awarded in the southeastern Barents Sea. This acreage is for the
first time being made available for oil and gas exploration and with the new 3D seismic data we
have available means that these prospects are drill-ready.'
The five licence awards are as follows:
PL609C * 40%; PL851* 40%; PL853* 60%; PL857 20%; PL859 15%.
*operator Lundin Norway

Statoil is among oil majors to be awarded Arctic oil licences. AP Photo/Scanpix, Statoil
Oil companies win licences to drill in virgin Arctic waters
Norway has awarded licences to 13 oil companies as it expands into an entirely new part of the
Arctic Barents Sea in an area previously disputed with Russia in a bid to stimulate exploration at a
time of low crude prices.
Statoil, Lundin Petroleum and Det Norske were among companies that were awarded 10 licences
in the country’s 23rd round, according to the petroleum and energy ministry. Other companies
include Chevron and ConocoPhillips, as well as Russia’s Lukoil and the LetterOne-owned DEA.
“The Barents Sea offers great, new opportunities," said the petroleum and energy minister Tord
Lien said. “The industry’s interest in new acreage shows that the Norwegian continental shelf
remains attractive. The potential is huge."
The new licences include blocks in the Barents Sea South-east, an area bordering Russian waters
that is the first virgin acreage to be opened to oil exploration in Norway since 1994. Western
Europe’s biggest oil producer is expanding activity in the largely unexplored Barents Sea to make
up for falling production from ageing fields in the North Sea. Norway’s output has halved since
2000.
The awards come as the collapse of oil prices has led companies to cut investments, with
authorities expecting exploration spending to fall by a third this year. The government is betting it
can lure explorers impatient to search in untapped blocks after they had their driest drilling spell in
almost a decade last year.

The 10 new licences, which span 40 of the 57 geographical blocks that companies could apply for,
also include the northernmost acreage ever awarded in Norway – a move that ignored protests
from environmental groups and opposition parties which argue drilling will occur too close to the
polar ice cap.
Three of the licences were in waters that became accessible to exploration after a border deal
with Russia.
The blocks are located in the biggest licence, PL 859, where the Statoil-led partnership has
committed to drill three exploration wells, according to the ministry.
Environmentalists criticised the move, with Friends of the Earth Norway saying drilling for oil in the
Arctic was incompatible with the goals of last year’s climate pact in Paris.
“With this offer the government is going full throttle toward a warmer world," the group said,
demanding that the licences be withdrawn.
As part of the Paris Agreement in December, Norway pledged to reduce its greenhouse gas
emissions by 40 per cent by 2030, compared with 1990 levels.
The Norwegian prime minister Erna Solberg at the time said the deal should be a “turning point" in
a global transition to “low-emission societies".
Mr Lien said: “This will contribute to employment, growth and value creation in Norway."
The environmental group Greenpeace also criticised the awards.
“It is with shock and anger we register that Norway is violating two recent environmental
agreements, just to get their hands on Arctic oil," said the Greenpeace Norway head Truls
Gulowsen.
Mr Lien said the government “is pursuing a policy that has broad support in the Norwegian
parliament".
“If the companies can’t operate safely they can’t get permission to do business, that’s the same for
the North Sea and the Barents Sea," he said, adding the Arctic exploration was in line with
existing legislation.
With production declining at its North Sea fields, Norway has encouraged exploration of ice-free
waters in the Barents Sea, to continue oil and gas exports that have made it one of the richest
countries in the world.
Companies that applied but were not awarded any licences include BP and Russia’s Rosneft.
Royal Dutch Shell withdrew its application, saying the oil-price rout forced it to reconsider
spending after its acquisition of BG Group.
The Barents Sea is thought to hold almost half of Norway’s undiscovered 18 billion barrels of oil
and gas, according to the Norwegian Petroleum Directorate. While less hostile than other parts of
the Arctic thanks to the Gulf Stream, the Barents Sea remains a remote area with little
infrastructure and only two fields in production to date: Statoil’s Snoehvit gas field and Eni’s Goliat
oil project.

Thailand: Mubadala spuds exploration well in Gulf of Thailand
Mubadala Petroleum + Offshore News
Mubadala Petroleum has started drilling the Sri Trang-1 exploration well in the Northern Gulf of
Thailand. Mubadala made plans to drill the well after it started drilling the first of two development
wells on the Manora field in March.
The Sri Trang-1 exploration well is located in the Reservation Area of the G1/48 concession in the
Gulf of Thailand approximately 18 kilometers north northeast of the Manora oil
development. Mubadala Petroleum is the operator of the G1/48 Reservation Area concession with
60% interest, and its partners are Tap Oil with 30% and Northern Gulf Petroleum with 10%
interest.
According to Tap Oil, the Atwood Orca jack-up drilling unit spudded the Sri Trang-1 exploration
well at 17:30 hrs WST. During the period from 17:30 hrs WST 17 May 2016 to 07:00 hrs WST 18
May 2016, the well was drilled to a depth of 435.3 metres measured depth.
Tap also added that the well was being drilled in 40 metres of water and it would be drilled to
approximately 2,590 metres measured depth. The well is expected to take 10 days on a trouble
free dry hole basis, Tap added.
The well objective is to evaluate the primary Middle Miocene lacustrine sands target with
secondary targets of Late Miocene fluvial sands. The Middle Miocene lacustrine sands target is
the main reservoir level at the Manora Oil Field.
A valid test of the primary objective Middle Miocene sands is essential as it will validate the
hydrocarbon prospectivity of the Northern Kra basin and de-risk dependent prospects immediately
to the West of Sri Trang-1.
Tap Oil stated that the outcome of the well would determine any likely development scenario,
including a scenario where a production platform is tied back to the Manora production facility.
The drilling cost of the Sri Trang-1 well will be offset against the G1/48 Reservation Area fee
(~$3.8 million) paid to the Thai Department of Mineral Fuels by the Joint Venture of the
Reservation Area in the G1/48 concession. Providing the well comes in on budget, Tap said it
would not be required to contribute any further cash for the well. Tap’s share of the expected well
cost is $1.02 million.
The forward plan for the Sri Trang-1 well is to set and cement the 9 5/8 inch casing prior to drilling
ahead to the planned total depth of 2,590 metres measured depth.

Vietnam: Gazprom, PetroVietnam to Launch New Oil, Gas Projects
GasProm
Gazprom and PetroVietnam on Monday signed memorandum of understanding (MoU) on the
development of new oil and gas projects. The two parties also signed memorandum pertaining to
power generation and
agreed to cooperate on
personal training.
The agreements were signed
by Alexey Miller, Chairman
of the Gazprom Management
Committee, and Nguyen
Quoc Khanh, Chairman
of the Board of Directors
of Vietnam Oil and Gas
Group (PetroVietnam). The
signing ceremony was
attended by Dmitry Medvedev,
Prime Minister of the Russian
Federation, and Nguyen
Xuan Phuc, Prime Minister
of Vietnam.
According to the MoU on the development of new oil and gas projects, the parties plan to examine
further opportunities for mutually beneficial cooperation in the field of hydrocarbon prospecting,
exploration and development. Among the opportunities being considered are joint activities within
new projects at licensed blocks on the shelf
of Vietnam and in third countries.The MoU
on power generation would pave way
to explore the possibilities of joint projects for
gas-based power generation within Vietnam.
To achieve that goal, the parties plan to use
gas from their joint projects offshore Vietnam
and LNG from Gazprom Group's portfolio,
Gazprom said. The cooperation agreement
on personnel training was extended for five
years under the Addendum.
“Together with PetroVietnam
we successfully conduct hydrocarbon
exploration and production, work
on NGV projects, and implement staff
training programs. The documents signed
today expand the scope of our collaboration.
We plan to jointly deliver new oil and gas
projects and cooperate in the power sector,
thereby gradually enhancing our
partnership,” said Miller.

US: Texas Energy Regulator Faces Questions on Oil-linked Quakes
by Reuters|Luc Cohen
An oil and gas regulator in the top U.S. energy-producing state of Texas cast doubt on research
linking growing seismic activity to petroleum production on Wednesday, following the release of a
study arguing most of the state's earthquakes are manmade.
Ryan Sitton, one of three members of the Texas Railroad Commission, which regulates the oil and
gas industry, told a Houston Bar Association gathering that studies linking earthquakes to disposal
wells for wastewater produced as a byproduct of oil and gas production were based on "very
aggressive assumptions that you would not normally accept in a scientific study."
The comments came on the same day researchers released a paper arguing that as many as nine
in 10 of Texas's earthquakes in the past 40 years may have been caused by oil and gas
production, raising the specter of greater regulation in a state that produces 20 percent of U.S.
energy output and is home to some of the country's hottest shale plays.
Following a speech touting the role of the oil industry in Texas' economy and criticizing the Obama
administration's carbon emission regulations, the first audience question Sitton faced was on
whether the commission was looking into reports linking earthquakes to fossil fuel production.
"If seismicity is being caused by oil and gas activities, then I want to know it, and we're going to
regulate it," Sitton said. "But if not, I don't want somebody in parts of the state to be convinced it's
oil and gas and not address whatever the real issues are."
Texas's earthquake issue pales in comparison to northern neighbor Oklahoma, where regulators
have clamped down on disposal well volumes as a result of growing seismicity. But University of
Texas-Austin researcher Cliff Frohlich, the lead author of Wednesday's study, said Texas
regulators have been too slow to acknowledge a link.
Studies like Frohlich's have been criticized by the Railroad Commission and industry groups for
relying too heavily on correlations between the spacing and timing of earthquakes and disposal
wells and not enough on subsurface pressure data.
"This is not the time for anybody - the Railroad Commission, academia, federal or state
jurisdictions - to be putting out half-cocked information," Sitton said in an interview on the sidelines
of the meeting.
Frohlich defended his methods in an interview, noting that Texas contained relatively few seismic
monitoring stations and praised a recent state decision to install more.

NewBase 19 May 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil drops on surging dollar, rising U.S. crude stocks, jump in Iran exports
Reuters + NewBase
Oil prices fell on Thursday, pulled down by rising U.S. crude inventories, a stronger dollar and
surging output from Iran to Europe and Asia.
Brent crude futures were down 87 cents, or 1.8 percent from their last settlement, trading at
$48.06 per barrel at 0159 GMT. U.S. crude futures were down 74 cents, or 1.5 percent, at $47.45
a barrel.
Both contracts broke 2016 highs earlier in the week on the back of output cuts across the
Americas, in Africa and also in Asia. But the bull-run ended after the U.S. Energy Information
Administration (EIA) published data showing an unexpected 1.31 million barrel rise in U.S. crude
stocks to 541.29 million barrels.
"We suspect the oil market has moved too high, too far, too soon," French bank BNP Paribas
said. The inventory build came despite another fall in U.S. crude oil production to 8.79 million
barrels per day (bpd), down from a peak of over 9.6 million bpd last year.
Despite this, analysts said oil was being pushed lower by the minutes of the Fed's April 26-27
policy meeting which showed the central bank was likely to raise rates in June if economic data
pointed to stronger second-quarter growth, driving up the dollar.
Oil price special
coverage

Since oil is traded in dollar, a stronger greenback makes fuel purchases for countries that use
other currencies more expensive, potentially denting demand. After falling by almost 8 percent
against a basket of other currencies between January and April, the dollar has since recovered
3.5 percent, weighing on oil.
Surging oil exports from Iran after sanctions against it were lifted in January also dragged.
Iran's oil exports are set to jump nearly 60 percent in May from a year ago to 2.1 million bpd. The
rises suggest that the country's logistical problems following years of sanctions have been
overcome or were less severe than thought.
Despite Thursday's price falls, analysts said that global supply disruptions still loomed. ANZ bank
said that almost 2.5 million barrels of daily oil production has been lost since the start of the year,
and that further cuts were likely.
"The situation in Venezuela looks particularly bleak," the bank said, adding that the country's oil
exports had fallen from 2.4 million bpd at the end of 2015 to 2.15 million bpd in April. "We suspect
the nation's recent issues could see this fall below 2 million bpd in May," ANZ said.
Overall, traders said that global oil markets would likely remain in a slight production surplus of
between 0.1 and 1 million bpd this year, compared with a glut of as much as 2.5 million bpd in
2015.
World oil prices may rise to $ 70 a barrel in H2: Regional energy conference predicts
World oil prices are projected to rise to $70 a barrel in the second half of 2016, driven by growing
demand for derivatives, a decrease in the number of operating oil platforms in the United States
and Canada and the decline in oil output in Nigeria, Venezuela and Canada besides efforts being
made by producers to stabilise output levels, researchers and analysts told the Conference on the
Repercussions of the Oil Crisis on Arab Economies’ Management, organised by the Arab
Administrative Development Organization (ARADO) in the Egyptian capital, Cairo, today.
In a set of recommendations issued today at the end of two-day of deliberations, the conference
called on the oil producing countries to reconsider their subsidies to petroleum products, water
and electricity services and restructure their prices according to new economic realities, introduce
new fees and fines on economic activities and implement the value added tax.
The conference stressed that countries that depend heavily on oil revenues in their budget should
introduce structural economic reforms, gradually privatize some economic sectors and relax
legislative and regulatory measures to allow broader participation of the private sector in economic
life.
The conference called on Iran to co-operate with other OPEC and non-OPEC producers to
reverse the downtrend in oil prices.
''The current world oil crisis provides a fitting opportunity to oil producing countries to re-assess
their development policies and work to diversify their sources of income, encourage and attract
foreign investment and create a proper infrastructure for sound economies,'' the conference
stressed.
The conference also called for supporting projects for renewable and clean energy.

NewBase Special Coverage
News Agencies News Release 19 May 2016
Oil outages speeding up new world energy order
Patti Domm | @pattidomm
The world's oil market is rebalancing faster than expected due to several serious outages, but for
now there is enough oil in storage and excess capacity to keep prices from spiking.
"We've strung together an impressive number of outages and supply disruptions for the moment,
but there's every incentive in the dire straits the industry's been in to get these barrels on line,"
said John Kilduff, partner with Again Capital.
Outages and supply disruptions in
Canada, Nigeria, Venezuela, and
other producing regions have reduced
oil production by an estimated 3.8
million barrels a day. Some of those
outages should be temporary, and
could bring a wall of oil back to the
market once they are resolved. There
is also the potential for more
production from Saudi Arabia, Iran
and even the U.S. - if prices rise
enough to enable America's shale
producers to restart some drilling.
"Some of it's temporary, and if it goes on long enough, there will be longer lasting implications,"
said Michael Cohen, head of energy commodities research at Barclays. In Canada, an estimated
1.2 million barrels a day are offline due to forest fires in Alberta. The uncontrolled fire, covering
704,000 acres, moved toward energy production facilities Tuesday, after jumping a fire break
area=.
Suncor shut down its base plant, and said it had not sustained any damage, while Enbridge's
Cheecham crude tank farm was less than a mile away from fire but fire fighters had the fire there
under control, according to Reuters.
"This is bad," said Cohen, adding it's the biggest disruption in North America since Hurricane Ike
in 2008. "It looks like it's getting worse before it gets any better...It's hard to say. Is it two weeks?
Is it four weeks? If it goes on for another two weeks we're going to have some medium term
implications for some of the projects up there."
The industry had been hopeful the fires would be out and they would start sending workers back
to their jobs just several days ago. "We had this big U-turn in events over the past 48 hours," said
Jackie Forrest, vice president energy research at Arc Financial Corp. "It's getting difficult to predict
when this wild fire will be put out." She said the fact it has moved north means it will take longer
for the industry to restart oil sands production, now down by about 50 percent.

Fires were reported at a worker camp, but Forrest said there was oversupply of camp space since
they were built for the construction workers at the oil sands, not the smaller workforce that
operates it.
The Canadian situation is different from other outages in that it is seen as a short-term problem,
due to an act of nature, and while uncertain, the situations in Nigeria or Venezuela could be
harder to predict.
In Nigeria, militants have knocked oil production offline as the country struggles with the impact of
lower oil prices on its economy.
"If Nigeria goes offline, it's sticky. These armed militants are very intent on shutting down
production. They have the capacity to do so," said Helima Croft, head of commodities research at
RBC Capital Markets.
Croft said the government's decision to
prosecute the militants has resulted in
increased activity. Unknown attackers
were reported to have blown up a gas
pipeline owned by Italy's ENI in Nigeria's
Niger Delta, the latest attack on an energy
facility in the region.
Nigerian oil production is now down about
800,000 barrels a day, and Croft said the
outages could be prolonged.
"This is a decision they made to engage this confrontation. No one looks like they're blinking yet,"
she said. "A small number of well-armed men in Nigeria can do significant damage to the energy
sector."
Venezuela is another trouble spot, politically and economically. It is producing about 2.3 million
barrels a day, but analysts see it as in a state of decline.
"Things are falling apart. People aren't getting paid. Equipment is not being brought in, and that's
precipitating production declines," said Eric Lee, an energy analyst at Citigroup. He said the
situation could lead to failures in infrastructure, such as ports, pipelines and refineries.
Venezuelan officials this week said they were able to secure a better loan-for-oil deal from China,
buying time on debt payments.
"When prices are low, you strip out the oil revenue and things start to gum up," said Cohen.
"You've got people upset in Nigeria, Iraq and Libya, and part of it is they're not getting paid
off…You've got Kirkuk oil field off line and you have a government in Iraq that is in a serious state
of disarray."
But Cohen said oil could return to the market from disruptions and that could send prices lower
again. Brent crude was trading just under $50 Wednesday, and West Texas Intermediate was at
about $48.70, up about 11 percent in the past week.
Prices were steady even though U.S. inventory data showed a surprise increase of 1.3 million
barrels of crude stockpiles.

"There's just too much oil around even with the big draw down in gasoline inventories today. We're
just so well supplied," said Kilduff.The outages, however, are outweighing the bearish forces for
now, he said. On the other side of the supply equation, there are also major producers that could
add production.
One of those is Libya, and news of a deal to
solve the crisis at the Marsa al Hariga
terminal could lead to the resumption of
some production.
"It's a good sign if the government in the east
is going to recognize the UN government,
but we'll have to see on this. The story
changes day to day," said Croft. "They're at
150,000 and they have capacity at 1.6
million," she said. "Is it really a sustainable
situation that you can get back to 600,000 or
700,000 on a longer term basis?" She said Libya could get back to production of about 350,000
barrels a day. "I look at Libya and I'm still a pessimist for now. This is plan "B" for ISIS," she said.
The presence of ISIS near the oil facilities is a threat. "They're not going to try to operate it.
They're trying to make it inoperable."
Besides Libya's expected increase in production, Iran has been returning oil to the market more
quickly than expected.
Saudi Arabia has said it could add another million barrels to the market this year, and analysts are
watching to see if it will do that. Saudi Arabia has made clear it is ready to ramp up production to
meet customer demand but it changed the dynamic of the market when it pushed OPEC to move
to let the market set pricing instead of adjusting output.
That strategy led to a collapse in oil prices that took WTI to $26 per barrel. Oil has since been
recovering from that low, and has received an extra lift from the outages.
"The political change in Saudi Arabia is going to change not only Saudi Arabia but the oil market,"
said Daniel Yergin, vice chairman of IHS. "In terms of achieving their objectives, they want to
enhance their position of being the low cost supplier."
Yergin said it's striking that the oil disruptions have had such little impact. "You still have a big
overhang of inventories, but after 18 months, the market is turning and it was time for a turn," he
said. "Supply and demand in the second half is pointing to around $50 a barrel. But that's barring
any major disruption. If we see further disruption that could put more upward pressure on prices."
Yergin said U.S. shale producers could start to resume some drilling activity and that could add
barrels to the market. "Certainly at $50 that's the number that starts to stabilize U.S. shale. I think
people come back and start putting on more drilling rigs. People, at $50, will be a lot more efficient
than they were before," he said.
The U.S. Energy Information Administration reported another weekly drop in U.S. production
Wednesday to 8.79 million barrels a day from 8.80 million the week earlier. A year ago, production
was 9.35 million barrels a day.

Why Iran can't rely on oil to rescue economy: IMF
CNBC - Holly Ellyatt | @HollyEllyatt
Following the lifting of international sanctions, Iran has high hopes that its oil industry can be a key
pillar in its plan to return to economic prosperity, but a senior official at the International Monetary
Fund (IMF) is to warn the country that it has greater challenges ahead.
In a speech due to be given on Tuesday by David Lipton, the first deputy managing director of the
IMF will warn that Iran can no longer rely on its main export commodity – oil – to be the source of
its growth in future.
"I speak here today at a pivotal moment for Iran's economy," Lipton is expected to say during the
speech at the Central Bank of Iran on Tuesday.
"With important sanctions lifted, your country has a new opportunity to deepen its integration into
the global economy. That process has the potential over time to support faster growth and rising
living standards for Iranians."
"But positive results depend on overcoming two major obstacles as well. The first is navigating a
difficult global economic situation. And the second is building a competitive and flexible domestic
economy that will serve as a suitably strong platform for growth," he will say, adding that only a
non-oil based economy will bring Iran "sustainable growth."
Iran returned to the global
economic stage in January
when years of sanctions
imposed on the Islamic
Republic for its disputed
nuclear program were
lifted, heralding a resetting
of historically tense
relations between the
country and the West,
particularly the U.S.
Since the lifting of
restrictions on Iran's
banking and industrial
sectors, the country has scrambled to get its economy back on track and oil is seen as a large
component of that aim. However, the member of the 12-country oil producer group OPEC has
rejoined the global oil market at a time of turbulence and low prices brought on by the failure of
demand to keep pace with a glut in supply.
Iran and fellow OPEC member, the influential Saudi Arabian kingdom – countries which already
have a traditionally tense relationship as they vie for influence in the Middle East on religious and
geopolitical grounds – have also fallen out recently over Iran's ambitions to ramp up oil production
as it tries to accelerate growth.
Lipton will warn Iran that oil should not be viewed as a panacea, however. "Like other oil
exporters, Iran has to manage the transition to lower oil prices. Although the impact of lower prices

will be partly mitigated by higher oil export volumes, there are limited prospects for a large
increase in Iran's oil revenue because of high global output and weak demand."
Reorienting the Iranian economy
In January, the IMF predicted that Iran's real gross domestic product (GDP) could grow 4 to 5.5
percent in 2016 due to its higher oil output, lower costs for trade and its restored access to foreign
assets but Lipton is to warn that the global
economy remains weak and that Iran should
look closer to home for growth.
"The bottom line for Iran is that in the near
future the global economy is unlikely to be
the driving force to lift up emerging
economies that it was in the past," he will
state.
"Emerging and developing economies will
still account for the lion's share of world
growth. But their prospects remain subdued,
particularly for two reasons that are
important to Iran: the sharp fall in commodity
prices led by oil, and China's economic
rebalancing."
Read MorePower and a 'brutal' battle
against Iran: What the Saudi reshuffle
REALLY means
As such, Lipton will suggest that while Iran "will gain from pursuing integration with the global
economy, your ultimate success depends on what you do at home."
"Future sustainable growth will depend increasingly on the performance of the non-oil sector,
which is where almost all job creation will have to come. That, in turn, points to the need for a
reorientation of the Iranian economy—both to take advantage of the opening to international trade
and investment and to unleash entrepreneurial forces that can spur investment, lift productivity,
provide jobs, and raise living standards," Lipton will state.
Key to Iran's ability to mitigate a weaker global environment is its approach to macro-economic
policies and reforms, including an overhaul of the labor market and opening up its financial,
products and services sectors to enable better competition, he will suggest.
"The opportunity for Iran to deepen integration into global economy is coming. Development that
builds on the economic stabilization already achieved, combined with new reforms, can unleash
creativity and entrepreneurship that hold great promise. By continuing to strengthen its economy,
Iran can change the lives of its own people, particularly the younger generation, and build a legacy
for the future," Lipton will conclude.
Holly Ellyatt Assistant P

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 19 May 2016 K. Al Awadi

New base energy news issue 854 dated 19 may 2016

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to New base energy news issue 854 dated 19 may 2016

Similar to New base energy news issue 854 dated 19 may 2016 (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (20)

Recently uploaded

Recently uploaded (20)

New base energy news issue 854 dated 19 may 2016