New base energy news issue 860 dated 29 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 29 May 2016 - Issue No. 860 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: DEWA to boost ties with Russian energy, environment,
water and green-building businesses
(WAM) --- A high-level delegation from Dubai Electricity and Water Authority (DEWA), headed by
Saeed Mohammed Al Tayer, MD & CEO of DEWA, is visiting Russia to promote opportunities for
joint cooperation with electricity, water, environment, renewable and clean energy businesses
there.
During the visit, Al Tayer delivered a seminar on business opportunities for water, clean energy
and environmentally-sustainable services in Dubai.
He highlighted the development of the bilateral relationship between the United Arab Emirates and
the Russian Federation, where the trade exchange UAE and Russia exceeded US$2.5 billion
(AED9.2 billion) in 2015, showing the strong ties between both countries.
"The bilateral relations between the UAE and Russia were strengthened under the leader ship of
President His Highness Sheikh Khalifa bin Zayed Al Nahyan and His Highness Sheikh

Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister and Ruler of Dubai," Al
Tayer added.
"Through the UAE Vision 2021, we aim to become one of the best countries in the world by 2021.
This in turn, strengthens the UAE’s global competitiveness, especially in renewable energy, and
green economy technologies and products.
Dubai has a comprehensive vision for a sustainable future which is pivotal to the success of
building a green economy. In the past decade, Dubai Government has spearheaded a host of
eco-operations, all of which aim to further integrate green economy policies into the Emirate’s
development process. "
"In line with the Dubai
Plan 2021, and the
Dubai Clean Energy
Strategy 2050, we
aim to be a global
role model by
supporting Dubai’s
economic growth
having secured
energy supply, using
energy efficiently and
meeting our
environmental and
sustainability goals,
to transform Dubai
into global centre for
clean energy and
green economy," Al
Tayer said.
DEWA invited
Russian companies
to participate at
WETEX 2016 and inaugural edition of Dubai Solar Show which will be organised by DEWA as
part of the third Green Week under the under the directives of His Highness Sheikh Mohammed
bin Rashid Al Maktoum, Vice President and Prime Minister and Ruler of Dubai, and under the
patronage of H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Finance
Minister of the UAE and President of DEWA.
While in Russia, Al Tayer conducted a series of meetings with a group of officials including CEO
of the Russian Green Building Council, Vladimir Limin; Head of the Department of Renewable
Energy Sources Development at the Russian Ministry of Energy, Magamed-Salam Umakhanov;
Director of Innovation and Management Systems at the Russian Ministry of Energy, Alekxey
Konev; Head of Service of the Chief Technologist Technical Administration, at the St Petersburg
Water Authority, Tatiana M Portnova; Deputy Director of the Department of Energy and
Mechanics SUE at the St Petersburg Water Authority, Elena J. Bezrukova; and Head of the
Structuring and Investment Projects Support department at the St Petersburg budgetary
enterprise centre for energy savings, Kuzma D Zaitsev.

UAE: US firm Epic Piping to open Abu Dhabi plant
The National - Anthony McAuley
Epic Piping, a US firm that makes products mainly for the oil and chemicals industry, plans to
open a large plant in Abu Dhabi, its first outside North America.
The Abu Dhabi facility will serve the Middle East region and, at 400,000 square feet, will be the
company’s largest single facility, according to a local report in Epic’s home base in southern
Louisiana.
Epic Piping was created only last spring, just as oil prices were collapsing, with the backing of a
private equity consortium led by Bernhard Capital Partners, a firm started by Jim Berhnard, the
founder of the energy services conglomerate The Shaw Group, which was sold to CB&I in 2013.
The new Abu Dhabi plant will have production capacity of about 6,000 spools used for steel
cabling a month, which will bring Epic’s total production to 20,000 spools from plant space that will
exceed 1 million sq ft.
The company’s other plants are located at Livingston and Baton Rouge, Louisiana, San Marcos,
Texas and a joint venture plant – Falcon Fabricators and Modular Builders – in Canada.
The company did not say what the investment would be in the Abu Dhabi plant nor how many jobs
would be created, but the Texas facility that has the same capacity cost about US$45 million and
employed about 300 when it opened last October.
“This [Abu Dhabi] expansion
allows us to better meet our
clients’ growing global needs
by increasing our production
capabilities and enabling us to
take on larger projects," said
Remi Bonnecaze, Epic’s
international president,
according to
Louisiana’s Baton Rouge
Business Report.
The Abu Dhabi business will be managed by Mazen Azizieh, currently the Dubai-based vice
president of international operations at Epic. Mr Azizieh previously was an executive of CB&I.
Mr Bernhard, via Bernhard Capital Partners, has been building up another energy services
conglomerate in the past three years via investments in companies such as Epic Piping, Brown
and Root (which absorbed most of KBR, while another part of KBR formed Epic’s Canadian joint
venture), and ATC Group Services.

Cyprus expects third offshore gas licensing round to conclude in
early 2017… Source: Reuters / energy-pedia
Cyprus expects a third offshore natural gas licensing round in the eastern Mediterranean to be
concluded early next year, despite opposition from Turkey, its energy minister said.
Cyprus, which discovered natural gas off its coast in 2011, is seeking to develop its energy sector
to bolster an economy that relies mostly on tourism, business services and shipping. It has 13
offshore licensing blocks, five of which are already licensed to Italy's ENI, France's Total and a
consortium comprised of Noble Energy, BGInternational and Israel's Delek Drilling and Avner.
But its attempts to tap offshore reserves has fuelled tensions with Turkey, which backs a
breakaway Turkish Cypriot state in the island's north. Ankara sent ships last year to protest
against the Cypriot government conducting the licensing rounds.
'We are moving ahead with international contracts,' George Lakkotrypis told journalists in
Brussels, adding the deadline for bids is July 22 and licences should be awarded by the beginning
of 2017. Lakkotrypis said efforts to resolve tensions with Turkey are the government's priority but
'we are not going to freeze everything else we are doing...Cyprus will press on despite the
difficulties'.
Since the 2011 discovery of the field, named Aphrodite, the island has been exploring export
options, including building a gas liquefaction plant and pipeline links to territorial neighbours. 'The
most economically viable options is to drive the gas to the Egyptian shore...and liquefy there to
ship to European markets,' Lakkotrypis said
The Aphrodite field is estimated to contain about four trillion cubic feet of natural gas, according
U.S. company Noble Energy.

Mozambique: Sasol begins Mozambique development drilling
Source: Sasol
Sasol's field development plan (FDP) for the Production Sharing Agreement (PSA) licence in
Inhambane province, Mozambique, has reached an important milestone with the commencement
of the drilling of the first well.
Adjacent to its current producing Petroleum Production Agreement licence, the PSA development
is an integrated oil, Liquefied Petroleum Gas (LPG) and gas project.
The spud marks the beginning of the drilling campaign, which is part of the first phase of the FDP;
the delineation and initial development of the Temane G8, Temane East, Inhassoro G6 and
Inhassoro G10 reservoirs. Thirteen production wells will be drilled (including a water disposal well)
during this initial phase, while oil and LPG production facilities will be installed close to the existing
Central Processing Facility (CPF). A 5th gas processing train will be installed at the CPF to
process the additional gas.
'The spud of the first well in the PSA licence area reaffirms Mozambique as the heartland of
Sasol's oil and gas strategy in sub-Saharan Africa and provides a platform from which to drive
socio-economic growth,' said John Sichinga, Senior Vice President, Sasol Exploration and
Production International.
Mozambique's Council of Ministers approved the PSA FDP in January this year. Shortly
thereafter, Sasol commissioned a drilling rig from French-based drilling contractor Société de
Maintenance Pétrolière which arrived in Maputo port on 19 March.
The phased development plan envisages the development of further hydrocarbon resources that
will help to drive the growth of both Mozambique and Southern Africa.
This first phase of the PSA Development is anticipated to cost approx. US$1.4 billion.
Phase 1 development represents the optimal development of four of the PSA geological layers in
a safe and sustainable manner to the benefit of all stakeholders. The utilisation of existing
infrastructure in the area enables the safe and efficient use of resources, while the development in
tranches of the complex reservoirs is a prudent approach for timely de-risking of subsurface
resources and maximisation of overall project value.

Industrial and electric power sectors drive projected growth in
U.S. natural gas use… Source: U.S. Energy Information Administration, Annual Energy Outlook 2016
U.S. consumption of natural gas is projected to rise from 28 trillion cubic feet (Tcf) in 2015 to 34
Tcf in 2040, an average increase of about 1% annually, according to EIA's Annual Energy Outlook
2016 (AEO2016) Reference case. The industrial and electric power sectors make up 49% and
34% of this growth, respectively, while consumption growth in the residential, commercial, and
transportation sectors is much lower.
Much of this growth in natural gas consumption results from relatively low natural gas prices. In
the AEO2016 Reference case, average annual U.S. natural gas prices at the Henry Hub are
expected to remain around or below $5.00 per million British thermal units (MMBtu) (in 2015
dollars) through 2040. The Henry Hub spot price averaged $2.62/MMBtu in 2015, the lowest
annual average price since 1995.
Prices rise through 2020 in the AEO2016 Reference case projection as natural gas demand
increases, particularly for exports of liquefied natural gas (LNG). Currently, most U.S. natural gas
exports are sent to Mexico by pipeline, but LNG exports, including those from several facilities
currently built or under construction, account for most of the expected increases in total U.S.
natural gas exports through 2020.
The persistent, relatively low price of U.S. natural gas is the primary driver for increased natural
gas consumption in the industrial sector. Energy-intensive industries and those that use natural
gas as a feedstock, such as bulk chemicals, make up most of the increase in natural gas
consumption.
Low natural gas prices also support long-term consumption growth in the electric power sector.
Natural gas use for power generation reached a record high in 2015 and is expected to be high in
2016 as well, likely surpassing coal on an annual average basis.

However, a relatively steep rise in natural gas prices through 2020 (rising 11% per year) and rapid
growth in renewable generation—spurred by renewable tax credits that were extended in 2015—
also contribute to a decline in power generation fueled by natural gas between 2016 and 2021.
Throughout the 2020s and 2030s, electricity generation using natural gas increases again.
Because natural gas-fired electricity generation produces fewer carbon dioxide emissions than
coal-fired generation, natural gas is expected to play a large role in compliance with the Clean
Power Plan for existing generation from fossil fuels, which takes effect in 2022. The electric power
sector's total consumption of natural gas from 2020 through 2030 is 6 Tcf greater in the AEO2016
Reference case than in a case where the Clean Power Plan is not implemented (No CPP).
Natural gas use in the residential, commercial, and transportation sectors does not significantly
contribute to growth in total natural gas consumption through 2040. Although natural gas use in
vehicles grows rapidly, particularly beyond 2030, it only accounts for a small portion of U.S.
natural gas use. Natural gas consumption through 2040 is relatively flat in the residential and
commercial sectors because of increased efficiency of natural gas equipment such
as furnaces and water heaters.

NewBase 29 May 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil slips for 2nd day as $50 level sparks new output fears
Reuters + NewBase
Oil prices dipped for a second day in a row on Friday as some investors took profit on a surge to
seven-month highs while others worried about higher production with the market hovering near
$50 a barrel.
A stronger dollar also weighed on demand for dollar-denominated oil from holders of other
currencies. The dollar spiked after Federal Reserve Chair Janet Yellen said a U.S. rate hike was
probably appropriate in coming months.
A three-day weekend for the United States, owing to Monday's Memorial Day holiday, further
discouraged investors from holding bullish bets. Also on Friday, oilfield services firm Baker
Hughes reported the number of rigs operating in U.S. fields fell by 2 to 316 in the previous week.
At this time last year, drillers had 646 oil rigs online.
Brent fell 22 cents to $49.37 a barrel, retreating further from the previous session's $50.51 peak,
its highest since early November. U.S. crude settled down 0.3 percent, or 15 cents, at $49.33 a
barrel, and last dropped 6 cents to $49.42 a barrel after touching $50.21 on Thursday, its highest
since early October.
"People are worried crude production will come roaring back at these prices," said Phil Flynn,
energy markets analyst at the Price Futures Group in Chicago. "But I also think we are down
because of higher interest rate concerns and the longer weekend," Flynn said. "You don't want to
be long on a $50 position when oil could be below $48 by the time the new week opens."
Oil price special
coverage

On the week, Brent rose 1 percent and U.S. crude about 3 percent, helped by gains from earlier
this week.
With prices finally hitting $50, both Brent and U.S. crude are likely to face technical barriers in the
next three to five weeks, analysts said. Producers and speculators have also been loading up on
options contracts of U.S. crude to protect themselves from downside risk.
Oil pushed past $50 after supply disruptions from Canadian wildfires and militant attacks in
Nigeria helped cut global daily output by 4 million barrels.
"Most of these outages are unlikely to last," UBS analyst Giovanni Staunovo said, anticipating
resumption of supply from those sources as well as higher production from the Organization of the
Petroleum Exporting Countries.
Dominick Chirichella, senior partner at New York's Energy Management Institute, said U.S. crude
output could rise by an estimated 300,000 to 400,000 barrels per day as shale producers put
drilled but uncompleted wells, or DUCs, into production.
In the coming week, investors will watch the outcome of an OPEC meeting for signs of more
output from Saudi Arabia and Iran in their battle for market share.
U.S. oil drillers cut rigs despite price recovery: Baker Hughes
Reuters - SCOTT DISAVINO
U.S. oil drillers cut rigs for a ninth week in the last 10, energy services company Baker Hughes Inc
said on Friday, even as crude prices this week tested a seven-month high at $50 a barrel.
Prices were on track to recover for seven out of the last eight weeks, and are now at the high end
of a level that analysts and producers had said could soon trigger a return to the well pad.

Drillers cut two oil rigs in the week to May 27, bringing the total rig count down to 316, the lowest
since October 2009 and about half the 646 rigs of a year ago, Baker Hughes said in its closely
followed report.
Before this week, drillers cut on average 11 oil rigs per week for a total of 218 so far this year.
They cut on average 18 oil rigs per week for a total of 963 in 2015, the biggest annual decline
since at least 1988 amid the biggest rout in crude prices in a generation.
The rig count has dropped since hitting a peak of 1,609 in October 2014 as U.S. crude futures fell
from over $107 a barrel mid-2014 to a near 13-year low around $26 in February.
U.S. oil futures have recouped about half of their losses. They broke above the $50-mark on
Thursday and were trading around $49 on Friday with analysts predicting range-bound markets
for the next few months as supply outages slowly help clear a glut of crude.
U.S. oil executives and analysts have said any price rise above $50 could fuel a resurgence in
new drilling projects.
"For approximately two weeks, crude has held steady in the $45-50 range. During the first quarter
earnings season, a number of exploration and production companies indicated that prices near
that range could lead them to add rigs," analysts at Simmons & Co, energy specialists at U.S.
investment bank Piper Jaffray, said this week in a note.
"These anecdotes lead us to believe that a modest
improvement in the rig count could develop beginning in
the coming weeks," Simmons said. The U.S. rig count
generally reacts to prices with a three or four-month lag.
Further ahead, crude futures were fetching around $50
for the balance of 2016 and over $51 for calendar 2017.
The rig count is one of several indicators of future
production.
U.S. crude output is expected to fall from 9.4 million barrels per day in 2015, the highest since
1972, to 8.6 million bpd in 2016 and 8.2 million bpd in 2017, according to federal estimates.

Battle Inside OPEC Eases as Saudi Oil Strategy Finally Pays Off
Bloomberg - Grant Smith
Saudi Arabia has been fighting with fellow OPEC members since the oil rout started two years
ago. For the first time next week, it can argue convincingly that its strategy of squeezing rival
producers is succeeding.
By stifling high-cost suppliers, the Saudi approach has now almost eradicated the global
oversupply, spurring a price rally of 80 percent since January. All but one of 27 analysts surveyed
by Bloomberg said the Organization of Petroleum Exporting Countries will stick with the strategy
rather than set output limits when ministers gather in Vienna on June 2.
“It might not look a victory compared with when oil was $100 a barrel, but the Saudi strategy is
working as you’ve got significant production declines showing up in a lot of places, and prices are
grinding higher,” said Seth Kleinman, head of energy research at Citigroup Inc. “Which makes the
odds of them abandoning the plan even more remote.”
Lower prices have taken their toll on production from the U.S. to Nigeria. Analysts from the
International Energy Agency to Goldman Sachs Group Inc. say the crude glut is dissipating as
supply and demand move back into balance. That shift may mean a less contentious meeting than
the last gathering in December, which ended with public criticism of Saudi Arabia’s position from
fellow members Venezuela and Iran.
Biggest Slump
Oil production outside OPEC is headed this year for its biggest drop since 1992 as the U.S. shale-
oil boom that fostered the world surplus sputters out, the Paris-based IEA forecasts. U.S. output
has fallen for 11 weeks to its lowest since September 2014, and will average 8.5 percent lower
this year than 2015, the Energy Information Administration estimates.

Kuwait’s acting oil minister Anas Al-Saleh, said on May 18 that OPEC’s policy “has been working
well.” Brent crude futures traded for $48.98 a barrel in London at 3:47 p.m. local time, after
climbing as high as $50.51 on Thursday. Any action that raises prices would only rescue U.S.
drillers and jeopardize the return to equilibrium, said Mike Wittner, head of oil market research at
Societe Generale SA in New York.
“The Saudis might be concerned that if prices go a little higher and sustain it, that could nip the re-
balancing in the bud just when it’s getting going,” said Wittner. “I don’t know they have a whole lot
of incentive to particularly do anything.”
Opposition Fades
While the economies of OPEC members such as Venezuela and Nigeria remain under strain, they are
probably resigned to the course set by Riyadh, said Jason Bordoff, director of the Center on Global Energy
Policy at Columbia University in New York.
“Countries like Venezuela have been pushing OPEC for over a year now to do something to get the prices
up,” said Bordoff. “They probably recognize that that’s a futile effort at this point. The Saudi strategy of
allowing low prices to do the work of low prices is working.”
The chances of reaching any supply agreement look especially dim after OPEC failed to complete an
accord with Russia and other non-members on freezing supply levels in Doha last month, according
to Daniel Yergin, vice chairman of consultant IHS Inc. The deal collapsed at the last minute when Saudi
Arabia’s Deputy Crown Prince Mohammed bin Salman insisted that political adversary Iran, which had
ruled out participating, would need to join.
Iranian Clash
“The clash between Iran and Saudi Arabia makes it very difficult for OPEC to do anything,” Yergin said in a
Bloomberg television interview. “It’s pretty hard to have any deal at this point.”
Iran -- a key advocate of output restraint in previous years -- is unlikely to push for a new group limit as it
remains focused on restoring exports previously constrained by sanctions, Societe Generale’s Wittner said.
The only analyst surveyed who predicted an agreement, Phil Flynn at Price Futures Group Inc. in Chicago,
expects the group to follow up on the aborted Doha initiative by deciding to “freeze” production at current
levels.
OPEC’s previous ministerial meeting in December ended without any agreement on a group output ceiling,
abandoning the target of 30 million barrels a day that the organization had held -- and mostly ignored --
since late 2011.
Key Figure
While prices collapsed after that gathering amid OPEC’s inaction, just as they had when the approach was
first revealed in November 2014, the response will probably be subdued this time as the market has
accepted the laissez-faire policy is here to stay, said Harry Tchilinguirian, head of commodity markets
strategy at BNP Paribas SA in London.
The Vienna meeting will be the first opportunity to assess the stance of new Saudi Energy Minister Khalid
Al-Falih, appointed this month when Ali al-Naimi stepped down after two decades, according to
Tchilinguirian. Al-Falih is close to Prince Mohammed, whose plan to partly privatize the state oil company
has sparked speculation it may further expand production capacity and market share, severing its ties to
OPEC. That change in Saudi leadership means the meeting will still be “pivotal for the cartel and
its future,” said Tchilinguirian.

NewBase Special Coverage
News Agencies News Release 29 May 2016
Aramco plans to expand upstream and downstream market share
The National - Anthony McAuley
Saudi Aramco, the kingdom’s national oil company, has signalled that it will continue to pursue an
expansionist strategy as it builds toward a public share sale by 2018.
In Aramco’s just-published annual review, its chairman, and recently appointed Saudi energy
minister Khalid Al Falih, noted the company’s record oil output last year, which averaged 10.2
million barrels per day, and promised that “expanding oil and gas supplies … is at the core of
Saudi Aramco’s business". Aramco’s current maximum capacity is 12 million bpd and it was 9.5
million bpd in 2014.
Aramco’s chief executive, Amin Al Nasser, echoed the sentiment, saying the state oil company
plans expansion of both upstream and downstream – including further investments in chemicals –
over the coming year. He said this will include continued aggressive pursuit of oil market share.
“We are preserving our market share which continues to increase year-on-year," said Mr Al
Nasser after the review was published.
“This year, as last year, it is increasing [and] our market share is picking up."
The remarks come ahead of Thursday’s meeting of Opec oil ministers in Vienna and will be taken
as a signal that Saudi Arabia will stand firm on the relatively laissez faire policy to world oil
markets. The rationale – that higher-cost producers, such as US shale, Canadian and deepwater
offshore, should be first to cut to alleviate a glut – seems to have been vindicated, as benchmark
oil prices lifted above US$50 per barrel last week for the first time in seven months.
Aramco’s corporate strategy is a key factor for the oil markets in coming years, especially as the
company seems to be taking a new tack.
As Mr Al Falih said in Aramco’s review the company’s aim now clearly is to become “a top-tier,
globally integrated energy and chemicals company".
That means creating a company that is more in the image of ExxonMobil – although it would be
potentially more than twice the size of Exxon, and have access to the world’s largest source of
crude reserves.

Exxon has for decades pursued a corporate strategy of creating a “natural hedge" by having its
upstream production about in balance with its downstream refining capacity – which is about 1
million bpd more than upstream output at around 6.4 million bpd.
The fruit of that strategy can be seen in Exxon’s share price performance during the latest
downturn, when it held up better than its peers and lost only about 30 per cent at the lowest point,
before rebounding strongly.
Exxon shares ended last week above $90 a share, down only about 10 per cent from their level
when oil prices were above $100 per barrel, even though oil prices are still more than 50 per cent
lower than their 2014 peak.
The path toward making Aramco the world’s largest integrated oil company is taking shape with
deals such as last week’s announcement that it had secured a long-term deal to supply 270,000
bpd to Indonesia’s Cilacap refinery, the expansion of which it is jointly funding with Pertamina, its
Indonesian counterpart. Aramco has potential deals for two more refineries in the South East
Asian country.
In its annual review, Aramco also highlighted the recent start-up of its giant Sedara
petrochemicals joint venture with Dow Chemical, as well as expansion plans for Petro Rabigh, the
venture with Sumitomo that also has a 25 per cent public share float, which recently tendered for
contractors to expand.
Petro Rabigh plans to add a polyether polyols plant with annual capacity of 220,000 tonnes, a
naphtha-treating unit to produce clean fuel and a sulphur recovery unit with capacity of 106,000
tonnes a year.
Mr Nasser also said Aramco plans to raise production at its giant Shaybah oilfield to its newly
expanded capacity of 1 million bpd, while the company was also offering Asian customers more
Arab Light volume from the field.
It is competing head-to-head in Asia with both Iran and Iraq, which also have greater volumes to
sell this year.
Saudi Arabian Oil Co. is pressing ahead with an expansion of the Khurais oil field despite lower
crude prices and plans to double its production of natural gas over the next 10 years, the
company’s chief executive officer said.
The world’s biggest oil exporter, known as Saudi Aramco, won’t cancel any oil, gas or refining
projects, Amin Nasser told reporters during a conference in Al-Ahsa in eastern Saudi Arabia.
Aramco is also studying a possible expansion of the country’s largest oil refinery, Ras Tanura,
which has a capacity of 550,000 barrels a day, he said Wednesday.
“Until now all of our downstream and upstream projects are continuous,” Nasser said. “No project
in our programs got canceled.”
Saudi Arabia led a 2014 decision by the Organization of Petroleum Exporting Countries to
maintain output, not cut it, in order to defend market share and drive out higher-cost producers.
Crude prices have tumbled almost 50 percent since the decision in November that year. Saudi
Arabia plans to join a meeting next month of producers from within and outside OPEC in Doha,
Qatar, adding its weight to a campaign by financially stricken crude exporters to freeze output and
overcome the glut weighing on the market.

Giant Field
Khurais oil field’s expansion is due to be complete in 2018, Nasser said. Aramco was seeking to
add 300,000 barrels a day to the field’s production to reach a capacity of 1.5 million barrels a day,
the company’s former CEO Khalid Al-Falih said in October 2013.
Ghawar oil field, the world’s biggest, has
been producing for 70 years and will keep
pumping oil for “many years to come,”
Nasser said at the conference. Sixty percent
of Saudi Arabia’s crude oil output comes
from Ghawar, Abdul Latif Al-Othman,
governor of the Saudi Arabian General
Investment Authority, said at the same event.
Aramco has made a “promising” shale gas
discovery at the Jafurah field in the Al-Ahsa
region and is assessing and appraising the
area for future production, Nasser said. The
company plans to double its gas production
to 23 billion cubic feet a day over 10 years,
he said. Aramco will also keep exploring for
oil and gas in the Red Sea area, he said.
Proposals to sell a stake in some of Aramco’s assets, announced by Deputy Crown Prince
Mohammed bin Salman in early January, fanned speculation that the slump in oil prices had
intensified Saudi Arabia’s push to diversify its economy away from crude. Saudi Arabia’s
dependence on oil isn’t sustainable, Nasser said.
crude output at record amid market share battle
Saudi Arabian Oil Co, the world’s largest crude producer, increased output to an all-time high last
year while keeping its reserves unchanged
as the kingdom battles for market share.
Saudi Aramco, as the state-owned
company is known, produced 10.2mn bpd
of crude in 2015, up from 9.5mn in 2014,
according to an annual review posted on
its website on Thursday. Natural gas
output rose to 11.6bn standard cubic feet
a day from 11.3bn. The company
discovered three oil deposits last year, the
same as in 2014, while gas field
discoveries declined to two from five.
“Expanding oil and gas supplies to meet the needs of domestic and international markets is at the
core of Saudi Aramco’s business, and in 2015 the company delivered on its commitments,
reaching record levels of oil production and gas processing,” chairman Khalid al-Falih said in the
review.

Opec, led by Saudi Arabia, chose in November 2014 to keep pumping crude to protect its share of
the market rather than cutting output to boost prices. Last month, the Organisation of Petroleum
Exporting Countries and other major producers including Russia failed to reach an agreement
over a proposal to freeze output after Saudi Arabia insisted that it couldn’t sign up to a deal
without the participation of Iran, which has pledged to boost its own oil production to pre-sanctions
levels before considering a cap.
The Saudi company’s oil reserves were unchanged at 261.1bn barrels, while those of gas
increased to 297.6tn standard cubic feet from 294tn. The company said it maintains an oil-
production capacity of 12mn barrels a day.
Aramco is undergoing a major transformation that will include selling less than 5% of its shares to
the public by the end of 2018. The company’s restructuring plan will be announced within six
months, Deputy Crown Prince Mohammed bin Salman said in an interview in Riyadh on April 15.
After the IPO, Aramco will become a holding company that is not involved in the daily
management of its subsidiaries, he said.
The company exported 2.6bn barrels of crude in 2015, or 7.1mn bpd, up from 2.54bn in 2014.
Aramco’s exports to major Asian markets increased “substantially” last year from a year earlier,
with shipments to India jumping 18%. Exports to China grew 4.5%. The company said it was able
to maintain the same level of exports to US market at 1mn barrels a day “despite competition from
shale oil.”
The company said it expanded its geographical sales area and opened new markets last year in
the Baltic. Aramco also “enhanced its role as a supplier” through increasing sales of spot cargoes
to its customers in Asia and Europe last year from its storage facilities in Okinawa and Rotterdam,
it said.
The operation of new local refineries helped Saudi Aramco’s exports of petroleum products to
increase by 38%.Saudi Aramco’s fully owned oil-refining capacity was 3.1mn bpd at the end of
last year, the same as in 2014, according to the report. The company’s total refining capacity was
5.4mn bpd in 2015. Saudi Aramco is seeking to double its refining capacity to 8mn to 10mn bpd,
chief executive officer Amin Nasser said in March.
Aramco said in the review that it’s expanding its Rabigh Refining & Petrochemical venture with
Sumitomo Chemical Co. The second phase of the project will increase the production capacity of
the ethane cracker, add a new world-scale aromatics complex and create 22 process plants. The
project will start commissioning in mid-2016.
Last year, Aramco began exploring the development of a chemicals complex to be integrated with
its SATORP joint venture with Total SA, it said.

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

New base energy news issue 860 dated 29 may 2016

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New base energy news issue 860 dated 29 may 2016