New base energy news issue 856 dated 23 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 23 May 2016 - Issue No. 856 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: Nuclear power is the answer to growing energy demands,
The National - Caline Malek
Nuclear power is the best way for the country to meet its energy demands, visitors to a forum
have heard. Emirates Nuclear Energy Corporation held an event last week where the company’s
mission was outlined to about 200 members of the public.
Mohammed Al Hammadi, Enec’s chief executive, said population growth meant different kinds
of energy sources needed to be exploited.
“Energy demand is growing, not just in the UAE, but
the whole world which is facing a challenge in meeting
that demand to raise the standards of living. We also
face the challenge of climate change and we have to
consider the environment while meeting our energy
demand," he said.
He said there was no one energy policy that worked
for all countries. “There is a consensus that all available forms of energy will be needed to meet
future demands," he said. “Each country must assess the most viable means to deliver electricity
to power their economic growth. In the UAE, we are moving decisively forward with an energy
portfolio that is adequately diversified and balanced."

The peaceful use of nuclear energy will play an important role in this policy. “It offers a safe, clean,
reliable and efficient source of electricity that has almost no carbon emissions," Mr Al Hammadi
added. “This industry will also contribute to the economic and social growth and provide
opportunities for UAE nationals. Such forums are an important part of that promise."
By 2020, the country’s nuclear power plant in Barakah will supply around a quarter of the
Emirates’ electricity needs. But that will not suffice. “Studies have shown that the UAE requires a
growth of nine per cent in electricity production which is three times the global average," said Ali Al
Nuaimi, senior reactor operator at Enec. “By 2020, we see there will be a great gap between what
is needed and what is being produced and this gap has led to an urgent need to develop
additional sources of electricity production."
By 2030, the UAE’s population is forecast to grow by 40 per cent and its GDP to more than triple.
“Energy and electricity are at the very heart of a country’s growth," he said. “We are facing huge
increases in energy demands and, as we build our infrastructure, we need to grow and develop.
All industries are developing and none of this can be achieved without electricity."
Radiation was another topic of discussion in an aim to rectify misconceptions among the
population. “We’re trying to make people understand that the natural radiation sources that we
have are much [better] than the artificial ones that are being produced and we want to explain to
people that the power plant operates on the highest safety and quality standards," said 29-year-
old Emirati Maryam Qasem, Enec’s senior nuclear fuel logistics engineer for the past five
years. “We have multiple defence systems to contain the radiation,
it’s very safe for people to work on a power plant and to live in a
proximity."
She said raising awareness among Emirati youth was vital. “We
are at an age and time where it’s very important to make sure the
community is on our side so they can raise their children to
contribute towards projects that the country gets involved in," she
said. “We want to make sure they know how much the UAE is
investing in these projects for their advantage and for the growth of
their country."
Fatma Al Amiri, a 34-year-old Emirati from Sharjah, attended the forum in the hopes of working in
the nuclear industry in the near future. “It’s something for the future and every year we witness the
growth of the nuclear power plant," she said. “Oil and gas will not last forever so I want to try to
contribute as much as I can. I used to work in the military for more than 10 years so this is about
serving my country."

SolarImpulse is in Dayton Ohio USA, to head to NewYork
Solarimpuls.com
Solar Impulse will take off for its thirteenth flight to New York (John F Kennedy International
Airport, JFK/KJFK) in the United States of America. The pilot will fly the zero-fuel airplane on
about 1436km (775NM) for an estimated time of 20 hours. The opportunity to reach out to
governments, NGOs, universities and schools to spread Bertrand Piccard's and André
Borschberg's message about clean technologies.
André Borschberg landed in the birthplace of the Wright Brothers, Dayton, Ohio at 1:56 AM UTC,
3:56 AM CET on May 22nd and 9:56 PM EDT on May 21st. After spending a week in Tulsa,
Oklahoma, our engineers found a clear path that will lead Si2 to New York, our goal before
attempting the Atlantic Crossing.
Dayton, Ohio not only brings us a step closer to attempting the Atlantic Crossing but also marks
the birthplace of an aviation revolution: the success of the first flight with a powered, heavier-than-
air aircraft.
This flight marks the completion of the fourth Solar Impulse mission flight this year. Despite tricky
weather conditions over the United States, our mission engineers at the Mission Control Center in
Monaco and the Air Traffic Control in the United States have made it possible for us to push
forward in order to attempt the completion of the round-the-world solar flights.
André Borschberg completed this 16 hour and 34 minute flight, arriving with a strong tailwind that
brought him to Dayton International Airport a little earlier than expected. He crossed a total
distance of 28,528 kilometers, flying over Missouri, Illinois, Indiana, until finally arriving in Ohio.

This was definitely a special day to fly. 89 years ago to this date, Charles Lindbergh landed in Le
Bourget, Paris after being the first to cross the Atlantic Ocean, pushing the limits of aviation. Our
landing in Dayton is
symbolic as well since
it’s home to the Wright
Brothers, the birthplace
of their ideas and
aircraft development.
While André was flying
Si2 to Ohio, Bertrand
Piccard boosted ahead
to Dayton International
Airport with the Solar
Impulse team to make
sure they were
prepared for another
historic landing.

Kuwait: How Kuwait is Reacting to Oil Shock
Bloomberg + NewBaseShare on FacebookShare on Twitter
The man in charge of helping Kuwait navigate the global oil-price shock said the Middle East’s
second-richest nation is responding to the crisis by “spending as much as possible” to bolster
economic growth.
Anas Al-Saleh, Kuwait’s deputy premier, said that the government isn’t canceling any projects. At
the same time, authorities are cutting wasteful spending to plug a budget deficit that could exceed
13 percent of gross domestic product in 2016, according to International Monetary Fund
estimates.
Al-Saleh, the minister of finance and the country’s acting oil chief, is pushing a plan to reduce
Kuwait’s reliance on oil, a challenge shared by major crude exporters from Saudi Arabia to
Nigeria. The measures include reducing utility subsidies, introducing corporate taxes, merging
state entities to downsize the government and tapping local and international debt markets.
“We are determined to go forward and spend as much as possible on our economy and
infrastructure ,” Al-Saleh said in an interview with Bloomberg Television at his office in the oil
ministry on Wednesday. Reducing the budget shortfall is also a priority, he said.
Sovereign Wealth
Kuwait has enough financial firepower to respond gradually to the plunge in global crude prices,
Al-Saleh said.
Its sovereign wealth fund is the world’s fifth-largest with $592 billion in assets under management,
according to data compiled by the Sovereign Wealth Fund Institute. Kuwait’s gross domestic
product, adjusted for exchange rates, was more than $70,000 per head in 2015 -- making it the
world’s sixth-richest nation and second only to Qatar in the Arab world, according to IMF
estimates.

The oil decline “has clearly shown the structural issues in our economy,” said the minister, who is
also the wealth fund’s chairman. “But, and this is the good side, with our robust budget, having low
debt, strong local and international reserves, it helps us making reform quite steadily” without
“reacting aggressively” with steep spending cuts, he said.
But a combination of Kuwait’s
wealth and political
squabbling has stymied past
reform efforts. Parliament has
resisted previous government
plans to boost investments
and curtail spending. In 2013,
lawmakers sought to write off
interest payments on bank
loans taken by nationals over
five years to bail out indebted
citizens.
Bond Sales
Al-Saleh said key elements of
the government’s current plan
don’t need parliamentary approval.
Steps taken so far include starting a domestic bond-sale program, and the government is planning
to tap global debt markets to help finance the deficit and avoid drying up domestic liquidity. It has
also sought technical advice from the IMF and hired consulting firm Oliver Wyman & Co. to advise
on a debt strategy.
“You have to finance the deficit one way or another,” Al-Saleh said. “We see a great appetite” for
Kuwaiti assets from both domestic and international investors, he said.
Al-Saleh also cited examples of streamlining state entities to reduce red tape, including plans to
merge port and customs authorities.
Saudi Plans
Other Gulf Arab monarchies have also sprung into action. Saudi Arabia, the world’s biggest oil
exporter, cut spending and raise fuel and utility prices. Deputy Crown Prince Mohammed bin
Salman also plans to transfer its ownership of state-oil company Saudi Aramco to the Public
Investment Fund and sell a stake of not more than 5 percent to the public. The move will
transform the PIF, as the fund is known, into the world’s largest sovereign investment company
with assets of more than $2 trillion.
Al-Saleh said Kuwait’s Investment Authority, which describes itself as the world’s oldest sovereign
wealth fund, is targeting global infrastructure projects after taking part in a consortium that bought
the London City Airport this year.
He also said the government has dipped into KIA’s “general reserve fund” to finance the budget
shortfall, but has maintained its policy of adding 10 percent of revenue to its so-called Future
Generations Fund.
“We’re injecting and we’re taking out of it to finance our budget,” Al-Saleh said.

Egypt: SDX Energy announces positive development well
results in NW Gemsa.. Source: SDX Energy
SDX Energy has provided the following update on the recently completed Al Amir SE 24
(AASE-24) development well in North West Gemsa, where SDX Energy has 10% working
interest. The well encountered significant oil bearing reservoir sections in both the Kareem
Rahmi and Shagar formations and has been completed as a producer in the Shagar.
Al Amir SE-24 Well:
AASE-24 was drilled to a depth of 9,925 feet where both the Shagar and Rahmi oil reservoirs
were encountered. Log analysis indicates 15 feet of net Shagar oil pay and 7 feet of net Rahmi
oil pay. The well has been completed as an oil producer in the Shagar and has flowed on test
light 43.6° API oil at an average rate of 1,714 BOPD with 3.062 MMSCFD of associated gas.
The well has been connected to the existing facilities and it will be placed on production
immediately.
Commenting, Paul Welch, CEO of SDX Energy, said:
'The AASE24 well is expected to be another strong producer from the Shagar and is the second
of two successful development wells to be drilled in the field this year. The results of these two
development wells combined with a 9 well work-over program, which his currently underway, will
allow us to maintain production at a plateau rate of 8,000 Boepd for the remainder of 2016.'
About North West Gemsa
The North West Gemsa concession is located onshore on the west side of the Gulf of Suez,
approx. 300 km southeast of Cairo. Two main oil fields are producing light oil, the Al Amir SE
field along with the Al Ola extension to the south and the Geyad field to the north. SDX has a
10% working interest in the North West Gemsa Concession.

Egypt's gas projects to increase to 5.5-6BCFD by end-2019
Reuters + NewBase
Egypt will increase its natural gas production to between 5.5 and 6 billion cubic feet per day by the
end of 2019, Oil Minister Tarek El Molla said on Sunday, up from the current 3.9 bln cubic ft per
day.
Once an energy exporter, Egypt has turned into a net importer because of declining oil and gas
production and increasing consumption. It is trying to speed up production at recent discoveries to
fill its energy gap as soon as possible.
Egypt currently has 12 natural gas field development projects underway worth a total of $33 billion
in investment, Molla said, speaking at the inauguration of a fertilizer plant in the port city of
Damietta. The three largest projects, which include the mammoth Mediterranean gas field Zohr
discovered by Italy's Eni last year, are expected to collectively bring 4.6 bln cubic ft of gas per day
online by the start of 2019, said Molla.
Recent discoveries and increased production may help the country save precious hard currency
as it deals with an acute dollar shortage. Egypt now spends $795 million per month on imports to
meet its energy needs, about $250-$300 million of which is dedicated to natural gas, he said.
Egypt is also looking to rent its third floating and storage regasification unit (FSRU) by the second
quarter of 2017, he added. The FSRUs let the energy-starved country import liquefied natural gas
(LNG) and convert it to natural gas to feed its power grid, which in past years has been affected
by blackouts during peak months of consumption during the summer. "With the arrival of the third
regasification unit, Egypt's total imports of natural gas will reach 2 bln cubic feet per day," said
Molla. Egypt currently imports around 1-1.1 bln cubic ft per day of LNG.

NewBase 23 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 dip on strong dollar, firm global supply
REUTERS + NewBase
Oil prices slipped in Asian trade on today Monday 23/05/2016 on a strong dollar and signs that
global crude supply is holding up even as volumes hit by unplanned outages rise to at least five-
year highs.
In a further indication of abundant supply, the number of rigs operated by U.S. drillers was steady
last week for the first time this year.
Brent futures ( July 2016 ) were down 18 cents at $48.54 a barrel as of 0421 GMT, after ending
the previous session 9 cents down. U.S. crude futures ( August 2016 ) fell 26 cents to $48.15 a
barrel, having settled down 41 cents in the previous session.
The dollar index .DXY was marginally lower in early trade on Monday after gaining for a third
straight week last week. A stronger greenback makes dollar-priced commodities more expensive
for holders of other currencies.
That came as U.S. crude rose 3.3 percent last week, while Brent was up 1.7 percent, as
unplanned supply outages rose to the highest since at least 2011 due to wildfires in Canada and
losses in Nigeria, Libya and Venezuela.
Oil price special
coverage

But global oil supply has still outstripped demand by around 1.5 million barrels per day, Russian
Energy Minister Alexander Novak said on Friday.
"It's hard to trade with the current volatility in oil prices," said Jonathan Barratt, chief investment
officer at Sydney's Ayers Alliance.
"We've run up from $44 a barrel on economic growth and outages. Are we now at the top end?
Does that mean at $49-$50 a barrel we'll get U.S. oil shale production starting up?" he said.
"With the U.S. rig count steady, people are waiting to see whether producers will start turning
some production back on."
Meanwhile, Goldman Sachs said it expected (shale) productivity gains through 2020, which will
push average breakevens for shale plays below $50 per barrel for U.S. crude, the bank said in a
research report on Monday.
It also raised its average Brent forecast to $45 per barrel this year, up from $39, while West Texas
Intermediate would average $45 per barrel this year, up from $38 previously.
But greater U.S. and OPEC supply meant it lowered its forecasts for 2017, with an average of $55
per barrel for Brent, from $60 previously, and $53 per barrel for WTI, against $58 earlier.
Elsewhere, Iran plans to increase oil export capacity to 2.2 million barrels by the summer and has
no plans to freeze its level of oil production and exports, its deputy oil minister was quoted as
saying.
A meeting of the OPEC exporters' group, including Iran, is scheduled for June 2.

Why Brimming Oil Inventories Aren't Crashing Prices
By Julian Lee
Inventories of crude oil and refined products have soared, but seem to be having little impact on
prices. Measured in terms of the number of days of demand that could be met by the stored oil,
OECD commercial inventories have risen from 57 days at the end of 2013 to 67 days at the end of
March this year.
They exceed by 5 days the volume of oil in storage at the depth of the financial crisis, after global
oil demand had collapsed.
Surging oil inventories are normally associated with falling oil prices, because they're seen as a
signal that there's too much oil about. Until early this year, this time was no different. The 76
percent drop in crude oil prices that accompanied the rise in inventories is well known.
But the recent surge in prices, which have jumped by more than 75 percent from their mid-
January low, has not been accompanied by a drop in the volume of oil in storage. Quite the
opposite.
The relationship between stockpiles and prices has broken down because higher inventories are
now needed to meet surges in demand or disruptions to supply. That's very different to what the
global market had got used to over the past two decades, when these changes were met by a
pickup in production, made possible by OPEC's spare production capacity.
Companies hold inventories for a variety of reasons, which can be broadly defined as logistical,
speculative and security. Oil is needed to fill pipelines, refineries and the supply chain; that's the
logistical inventory.
Varying volumes may be held to profit from expected future movements in prices; the speculative
inventory. Oil is also held to provide a cushion against both anticipated and unexpected

fluctuations in supply and demand, this is the security inventory. All of these factors have
contributed to the growth in the oil stockpile since the end of 2013.
OPEC spent much of the 1990s and the 2000s trying to convince the global oil industry that it did
not need to hold large, expensive stores of oil. Instead, we could all rely on OPEC producers to
anticipate market needs and alter supply as required, making use of their spare production
capacity.
As Gadfly argued recently, that spare capacity has largely disappeared since Saudi Arabia
abandoned its role as swing producer in November 2014 and raised production. With almost
everybody else producing as much oil as they can, room to boost production is now all but non-
existent outside the kingdom. Much of the reported spare capacity is the result of disruptions to
supply that can't be restored without improvement in some underlying political problem -- whether
the unrest in the Niger River delta, or the chaos engulfing Libya.
The situation has worsened since the start of the month. A series of unforeseen supply outages,
most notably from Canada and Nigeria, has removed at least 2 million barrels a day of supply
from the market. But oil prices haven't moved much, because the growing stores create a sense
that there's plenty of crude available. But in the absence of spare production capacity, companies
will have to keep inventories that they can dip into to meet fluctuations in demand instead of
relying on OPEC to ramp up production like it normally would. The normal relationship between
inventories and prices may yet reassert itself.
But for now, so long as higher stockpiles are needed in place of spare production capacity to meet
spikes in demand, or disruptions to supply, high levels of inventory need not mean downward
pressure on prices

NewBase Special Coverage
News Agencies News Release 23 May 2016
Total's Big Gas Bet
David Fickling
Gas deals are like buses. You wait a whole year, then two come along at once.
Oil Search's $2.2 billion takeover of InterOil, with a lot of help from Total, comes the same week
as Range Resources' $4.4 billion play for Memorial Resource Development. Prior to that, there
hadn't been a gas-production deal worth more than $1 billion since Royal Dutch Shell's $79 billion
takeover of BG Group in April 2015, according to data compiled by Bloomberg.

It's certainly not game on, but in every commodities crash there comes a time when rising
optimism among buyers couples with enduring pessimism among sellers to result in M&A
offspring. This week's twin transactions are a sign that major gas players are starting to look
beyond their current predicament toward a more profitable future.
The deal is a complex one that takes Oil Search two statements and at least 700 words to
explain -- more than this column. While Oil Search is technically the one doing the takeover, it
boils down to Total buying about 60 percent of InterOil's assets in the highlands of Papua New
Guinea, while Oil Search gets the remainder.
The French company will provide $1.2 billion in cash to fund the first stage of the deal, plus
another $372 million once the key Papua LNG project gets the go-ahead. InterOil shareholders
will also be compensated if the Elk-Antelope fields underpinning Papua LNG prove to have more
gas than expected.
For InterOil, the transaction is vindication after years of being accused of all manner of
skulduggery, up to and including outright fraud. While the company's always had its bullish
backers such as, er, Shia LaBeouf, it's long been one of the energy sector's most heavily shorted
stocks. Detractors have thinned, thanks to Total's growing commitment to Papua LNG, but they're
yet to leave the building:
Oil Search gets to lift its stake in Papua LNG to an eventual 29 percent, matching its interest in the
nearby Exxon Mobil-operated PNG LNG project. Thanks to Total's cash infusion, it will also trim
about $300 million from net debt that had grown uncomfortably high -- Ebit in the 2015 fiscal year
was only 1.6 times the company's interest bill, Bloomberg data show.

What about Total? The oil major has made no secret of the fact that it sees the drop in oil prices
as an opportunity to bulk up in LNG. Stumping up a slice of its $25.4 billion in cash and
equivalents for 22 percent of an undeveloped gas project shows Total is prepared to put its money
where its mouth is.
Getting the first gas on ships will still require some $16 billion of capital spending, according to
InterOil, at a time when the likes of Australia's Woodside Petroleum have been pronouncing
the end of mega-projects. Macquarie Group analysts say demand will decline from Japan, the
world's biggest LNG consumer, and there'll only be limited growth from Korea and Taiwan.
Don't forget, also, that the world is in a historic gas glut. Papua LNG needs a price of $6.96 per
million British thermal units to break even, InterOil forecasts, well above current spot prices, which
stand at about $4.20/mmbtu for LNG arriving in Japan and $2.18/mmbtu for benchmark U.S.
domestic gas.
Still, those numbers probably overstate the challenges to Papua LNG of making a
profit. Macquarie estimates Asian LNG will cost in the region of $12/mmbtu by 2019, and gas
export projects take years to develop.
If you're predicting a future of persistent oversupply, it might be worth curbing your pessimism.
Total just bet $1.6 billion there's light at the end of the tunnel.
• Not including midstream projects like China Reform's purchase of a stake in
PetroChina's Trans-Asia Gas Pipeline, or QIC's purchase of Australian gas-storage
assets from Hong Kong utility CLP. WPX's purchase of RKI and LetterOne's bid for
EON's North Sea assets included a mix of oil and gas.
• The vast majority of LNG in the Pacific is priced on long-term contracts between
producers and power generators. Spot prices reflect only the spillovers when supply
and demand fall out of sync, so will be unusually low in the current glut and unusually
high when the market is short. Still, as the global LNG market becomes more
interconnected, there's a substantial risk that long-term contract prices start to converge
with the spot market.
• R E D I T : R E Z A / C O N T R I B U T O R

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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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 23 May 2016 K. Al Awadi

New base energy news issue 856 dated 23 may 2016

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