New base energy news issue 872 dated 14 june 2016

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NewBase Energy News 14 June 2016 - Issue No. 872 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 contracts for Emirati companies hit milestone
through Barakah plant
The National -Anthony McAuley + NewBase
The value of contracts awarded to local companies in building the UAE’s first nuclear plant has
reached Dh11 billion, or more than double their value this time last year, Enec said yesterday.
Emirates Nuclear Energy Corporation (Enec) said that more than 1,400 UAE-based companies
are now part of the construction effort for the country’s first nuclear energy plant. It is scheduled to
start bringing online four South Korea-designed reactors, one each year starting next year.
It will supply about 25 per cent of the country’s electricity when all are online by 2020.
Enec and its prime contractor, Korea Electric Power Corporation (Kepco), have awarded contracts
during the past six years since the US$20bn project began, with beneficiaries including Dubai’s
Ducab and Emirates Steel.

“Emirati companies are now contributing to the construction of the nuclear plant at Barakah and
also gaining a competitive advantage in providing nuclear-quality services and materials
worldwide," said Mohamed Al Hammadi, Enec’s chief executive, in marking the milestone.
Part of the contracting process has required companies to meet tough standards set by
international bodies in the industry and, Enec pointed out, this has resulted in companies
becoming internationally competitive.
Ducab is a recent example, signing last month its first international export contract with the Korean
Hydro-Nuclear Power Company to provide nuclear industry standard cables for the Shin Hanul 1
and 2 nuclear power reactors.
“A major factor in the UAE’s decision to pursue a peaceful nuclear energy programme was the
opportunity to develop and enhance the nation’s budding industrial sector and provide a diverse
range of opportunities for talented Emiratis. The UAE’s peaceful nuclear energy programme has
supported the diversification and growth of the nation’s economy since its inception," said Mr Al
Hammadi.
The project, which has an operation phase contracted to run for 60 years after construction, is
expected to be a significant contributor to Abu Dhabi’s Al Gharbia region.
Mr Al Hammadi had previously said that Barakah should employ about 2,000 directly when it is up
and running and he has said that each direct employee results in about six indirect ones in sectors
such as transport and health care.
This time last year, Mr Hammadi said that $1.2bn of contracts had been awarded to local firms.
Al Gharbia covers 40,000 square kilometres, or about 60 per cent of Abu Dhabi emirate’s land
mass, but has a relatively low – but growing – share of the population at about 200,000.
“By working with Enec’s
dedicated Industrial Development
Team to raise their standards
and meet the unique
requirements of the nuclear
energy industry, Emirati
companies are now contributing
to the construction of the nuclear
plant at Barakah and also gaining
a competitive advantage in
providing nuclear-quality services
and materials worldwide,” Enec’s
Chief Executive Officer,
Mohamadd Al Hammadi, said in
a statement.
The project at Barakah is
progressing steadily with Unit 1 at more than 87 per cent, Unit 2 70 per cent, Unit 3, 48 per cent
and Unit 4 at 29 per cent complete, Enec said. Overall, construction of Units 1 to 4 is now more
than 65 per cent complete. The project, once finished, will provide approximately 25 per cent of
the UAE’s electricity needs and save up to 12 million tons of greenhouse gas emissions each
year.

Qatar to cut condensate exports in January, expects lower
naphtha price, official says.. Reuters – Tom Finn
Qatar will reduce its condensate exports by a third in January 2017 when a new splitter at its Ras
Laffan refinery starts operating, a Qatar Gas official told Reuters on Monday.
"Qatar is exporting around 30 cargoes (of condensate) a month. This will be reduced by 10
cargoes a month starting January," said the official, who declined to be named saying he was not
authorized to speak publicly.
Condensate is a type of light crude oil produced in association with natural gas and can be split
into various fuel products including naphtha, which is used to make gasoline or dilute heavy crude,
for export or to sell domestically.
Qatari condensate exports have faced competition from U.S. and Iranian light oil shipments but
the new splitter should help the Gulf state soak up some of its condensate at home.
The Qatar Gas official said the completion date of the splitter would depend on the progress of
tests now being run on new equipment and that some "technical difficulties" had been faced at
Qatar's first condensate refinery, Laffan 1, which started production in September 2009.
Last week a Qatar Petroleum official told Reuters that trials on the new splitter would begin in
August.
Output of full-range naphtha will double with the start of the splitter, Ibrahim Al Sulaiti, marketing
director of condensate at Qatar International Petroleum Marketing Co, or Tasweeq, said in 2014.
Part of this would then be used as feedstock for new gasoline and aromatics units that are set to
come online in late 2017.
The Qatari unit's start-up will increase Middle East naphtha exports to Asia, which is already
struggling with a stubborn supply glut and tepid demand from gasoline producers.
But the Qatar Gas official said that Qatar would have no difficulty selling the product.
"There is no issue about exporting or marketing the project, it's about the premium applicable. We
expect during the first phase for there to be a reduction in value (of naphtha) but when the facility
comes on stream with a steady flow we should get the right premium. We know the market, we
know there is plenty of demand for it".

Egypt: SDX Energy completes 3D seismic acquisition at South Disouq
Source: SDX Energy
SDX Energy has provided an update on its activities at its South Disouq asset located onshore
Nile Delta Egypt.
Further to the announcement on 16 March 2016 regarding the commencement of a 3D seismic
programme at the Company's South Disouq asset where SDX has a 55% equity interest and is
operator. SDX has confirmed that the seismic acquisition programme has been completed as of
12 June 2016. The programme consisted of the acquisition of 300 km2 of 3D data and has been
completed safely, under budget and ahead of the anticipated schedule.
The initial data set is of good quality and clearly indicates the presence of the prolific Abu Madi
trend within the block. Data processing will commence immediately and is anticipated to take 3
months to complete. The Company intends to use the processed data to build a prospect
inventory with a view to selecting a location for a fully carried exploration well, which is anticipated
to be drilled in late 2016.
Paul Welch , CEO, commented:
'We are delighted that the seismic programme has been completed early and we are excited to
begin fully processing the data. The initial data set is of high quality and shows evidence on our
block of the Abu Madi trend, along which operators have made large commercial discoveries in
recent years. Additionally, this new data has allowed us to image deeper stratigraphy much better
than originally anticipated which opens up a new range of potential targets within the block,
several of which may be oil bearing.

US shale oil output to dip for 7th consecutive month - EIA
Source: Reuters + EIA + NewBase
U.S. shale oil output is expected to fall in July for the seventh consecutive month, according to a
U.S. government forecast on Monday, despite a recent rally in crude prices to an 11-month high
over $51 a barrel. Total output is expected to fall 118,000 barrels per day (bpd) to 4.723 million
bpd in July, according to the U.S. Energy Information Administration's (EIA) drilling productivity
report.
Bakken production from North Dakota is forecast to fall 32,000 bpd, while production from the
Eagle Ford formation is expected to drop 63,000 bpd. Production from the Permian Basin in West
Texas is expected to drop 7,000 bpd, according to the data, representing its third consecutive
monthly decline.
The U.S. shale oil and gas industry, led by upstart drillers who upended the global energy order
after starting the shale revolution in 2005, has been under siege, pushed to the brink - or beyond it
- by enormous debt loads and the largest, longest price rout in a generation.
U.S. crude futures fell from over $107 a barrel mid-2014 to a near 13-year low around $26 in
February. Since then, prices have almost doubled, breaking through $51 last week as U.S.
inventories declined and on supply worries in Nigeria.
Total natural gas production is forecast to decline for a fifth consecutive month in July to 45.8
billion cubic feet per day (bcfd), the lowest level since July 2015, the EIA said. That would be
down almost 0.5 bcfd from June, making it the biggest monthly decline since March 2013, it noted.
The biggest regional decline was expected to be in Eagle Ford, down 0.2 bcfd from June to 6.1
bcfd in July, the lowest level of output in the basin since May 2014, the EIA said. In the Marcellus
formation, the biggest U.S. shale gas field, July output was expected to ease by about 0.1 bcfd
from June to 17.5 bcfd. That would be the fourth monthly decline in a row.
In the Marcellus formation, located in Pennsylvania and West Virginia, initial production during the
first full month for a new well was expected to increase to a record high 11.2 million cubic feet per
day in June. That compares with 8.9 mmcfd in July 2015. If correct, that would be the 15th straight
monthly increase in initial production for a new well in the Marcellus. That growth rate, however,
was on track to decline for a fifth consecutive month in July.

Japan:Unswayed by Increasing Pressure to Disavow Coal Support
Bloomberg - Chisaki Watanabe
Japan, faced with increasing calls from environmentalists to phase out coal, is standing by its
support of the fossil fuel, saying it will help developing countries adopt the best available
technologies for coal-fired power plants.
Pressure to rein in carbon dioxide emissions is intensifying, especially after the Paris Agreement,
a global deal reached in December to tackle climate change. Environmentalists have criticized
Japan for being one of the biggest providers of coal financing among Group of Seven nations and
for being a laggard in switching to cleaner energy sources.
In response, Japan says it’s helping to develop more efficient coal-fired plants that can cut carbon
dioxide emissions. The Asian nation’s financing of coal-fired projects is also helping to improve
energy security in countries that still rely on the cheap fuel, officials say.
“It is not realistic to quit coal entirely,” Takafumi Kakudo, director of the clean coal division at the
Ministry of Economy, Trade and Industry, said in an interview. “Environmental aspects alone can’t
dictate the way countries set their energy policies.’’
Asian countries such as India and Indonesia are planning to add more coal capacity to meet
growing power demand. Japanese companies such as Toshiba Corp. have plans to supply
equipment to such coal-fired plants, while the state-owned Japan Bank for International
Cooperation has provided loans for projects abroad.
Coal Technologies
“We want to make our contribution so these countries can reduce emissions,” Kakudo said,
adding that Japan is also ready to provide support for gas-fired power projects.
The government has been promoting exports of technologies for coal- and gas-fired power. In a
set of infrastructure export strategies adopted in May, the government said it will push for energy-

related infrastructure such as high-efficiency thermal power plants and equipment to remove air
pollutants.
Japanese companies are counting on demand for cheap electricity in developing countries.
“There is big demand for power in emerging economies and Africa where industries have yet to
emerge,” Takio Nishizuma, a senior executive vice president at Mitsubishi Hitachi Power Systems
Ltd., said at a seminar in Tokyo earlier this month. Mitsubishi Hitachi Power is a supplier of
equipment to coal-power plants.
Environmental groups, meanwhile, have been stepping up pressure on Japan to scale back on
coal financing.
Japan’s public financing of coal power plants and mining is larger than any other member of
Group of Seven industrial nations, according to a report released last month by a collection of
environmental groups including the Natural Resources Defense Council.
Financing Pressure
The Asian nation placed last among G-7 members in terms of efforts being made to phase out
coal-power generation, according to a “coal scorecard” report from E3G, a non-profit group
promoting a low-carbon economy.
In November, members of the
Organization for Economic Cooperation
and Development agreed to scale back
public financing for coal-fired stations in
order to rein in emissions, with member
countries agreeing to provide subsidies
only for coal-fired plants with so-called
ultra-supercritical technology.
Even with advances in technology, coal-
fired plants still emit more carbon
dioxide than gas-fired stations.
Development of carbon capture and
storage is needed to drastically reduce
emissions, METI’s Kakudo said.
“Japan needs to recognize it has a
problem,” Chris Littlecott, program
leader for fossil fuel transition and CCS at E3G, said at a recent seminar on coal in Tokyo. “Japan
is going to be under pressure.”

NewBase 14 June 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil futures fall as global growth, Brexit concerns weigh
Reuters + NewBase
Crude oil futures fell in Asian trade on Tuesday, as investors ignored signs of market tightness to
focus on concerns over global growth and overnight declines in stocks on the impending vote on
Britain's possible European Union exit.
Brent crude oil futures slipped below $50 a barrel, falling 50 cents to $49.85 by 0226 GMT, easing
for a fourth successive day.
U.S. crude was down 53 cents, or 1 percent, at $48.35 a barrel, also down for a fourth day in a
row.
A stronger dollar overnight spilled into the oil market, while markets eyed recent polls showing
Britain's "Leave" campaign in the lead ahead of a referedum on membership of the European
Union.
"The risk-off mood that has been pervasive in the markets in the last few days has taken hold of
oil prices, with weakness in Asian markets and a strong dollar contributing to Brent crude dripping
back below $50 per barrel," said Mihir Kapadia, CEO at Sun Global Investments, which has
assets under management totaling $500 million.
"There are some that think that the recent recovery in prices is due to temporary supply issues
and not to do with any strengthening demand on the back of a robust global economy," Kapadia
said.
Oil price special
coverage

A vote by Britain to leave the European Union, dubbed "Brexit," may tip Europe back into
recession, putting more pressure on the global economy.
Britain's "Out" campaign has increased its lead over the "In" camp before the June 23 referendum,
according to two opinion polls published by ICM on Monday.
Concerns about Chinese growth are also weighing on sentiment, enough to set aside bullish signs
such as a U.S. government forecast on Monday that shale oil output is expected to fall in July for
the seventh consecutive month.
OPEC also forecast on Monday that the world oil market would be more balanced in the second
half of 2016 as outages in Nigeria and Canada help to speed up the erosion of a supply glut.
NewBase Special Coverage
News Agencies News Release 14 June 2016
Opec: oil demand exceeding its production for first time in 3 years
Gulf Times + NewBase
Opec forecast yesterday that the world oil market will be more balanced in the second half of 2016
as outages in Nigeria and Canada help to speed up the erosion of a supply glut.
In a monthly report, the Organisation of the Petroleum Exporting Countries said its current
production is lower than the average forecast demand for its crude in the second half of 2016.
The last full quarter when Opec pumped less than demand for its crude was in 2013, according to
past Opec reports.
Oil has risen to $50 a barrel from a 12-year low of $27 in January as the outages curb excess
supply.
These, say Opec, are accelerating a tightening in the market it expected to happen anyway, as
lower prices finally take their toll on higher-cost supply outside the group.
“The excess supply in the market is likely to ease over the coming quarters,” Opec said in the
report, resulting in “a more balanced oil market toward the end of the year.”
Prices collapsed from $100 two years ago in a drop that deepened after Opec refused to cut
output, hoping lower prices would curb rival supply.
With signs the strategy is working, Opec at a June 2 meeting made no change to its output policy.
Attacks on Nigeria’s oil industry, wildfires in Canada and losses elsewhere pushed the level of
unplanned supply outages to the highest in at least five years in May.
But inventories are high and Opec cautioned, “Nevertheless, there is still a massive global supply
overhang.”

In Monday’s report, Opec said its oil output fell 100,000 bpd to 32.36mn bpd in May.
That is 500,000 bpd less than Opec’s forecast of the demand for its crude in the third quarter, and
160,000 bpd below the average of expected demand for Opec crude in the second half.
That points to a tighter market than in the first quarter of this year, when Opec said its output
exceeded the demand for its crude by 2.59mn bpd and prices hit the 12-year low.
The price drop is hitting non-Opec supply as companies have delayed or cancelled projects
around the world.
Opec forecasts supply from outside producers will decline by 740,000 bpd in 2016 led by the US,
unchanged from last month.
Opec supply had been climbing since the 2014 policy shift, reaching its highest since 2008 in
April. The output drop in May was led by Nigeria, the report said, citing secondary sources.
Opec stuck with a forecast that world oil demand will rise by 1.2mn bpd this year.
The next closely watched report on global oil supply and demand is today from the International
Energy Agency.
IHS Energy Insight: Oil demand will exceed supply in Q2
IHS Energy Insight VP Victor Shum says oil prices have been driven higher by demand
outstripping supply as the oil glut comes to an end this quarter.

Microsoft Pays $26 Billion for LinkedIn in Biggest Deal Yet
Bloomberg - Sarah Frier sarahfrier
Microsoft Corp. is acquiring the professional social network LinkedIn Corp. for $26.2 billion, one of
the largest technology-industry deals on record, as the maker of Windows software attempts to
put itself at the center of people’s business lives.
The deal is a way for Microsoft, which largely missed out on the consumer Web boom dominated
by the likes of Google and Facebook Inc., to sprint ahead in social tools -– in this case, for
professionals. While Chief Executive Officer Satya Nadella has drawn kudos for efforts to reshape
the company and reignite sales growth, the board is urging an even faster shift toward software
and services delivered over the Internet.
Microsoft will pay $196 per share in an all-cash transaction, including LinkedIn’s net cash, a 49.5
percent premium to LinkedIn’s closing price Friday. LinkedIn will retain its brand, culture and
independence and Jeff Weiner will remain CEO of the social network, Microsoft said in a
statement Monday. The price relative to LinkedIn’s earnings makes the transaction the most
expensive of any major deal this year, according to data compiled by Bloomberg.
“This is about the coming together of the leading professional cloud and the leading professional
network," Nadella said in an interview. “This is the logical next step to take. We believe we can
accelerate that by making LinkedIn the social fabric for all of Office.”
The deal is the biggest ever for Microsoft as Nadella, 48, focuses on appealing to business
customers with cloud-based services and productivity tools rather than regular customers. In a
presentation announcing the deal, Redmond, Washington-based Microsoft outlined a vision in

which a person’s LinkedIn profile resides at the middle of other pieces of their work life,
connecting with Windows, Outlook, Skype, Office productivity tools like Excel and PowerPoint,
and other Microsoft products.
Microsoft’s Cortana digital assistant could provide users with information pulled from LinkedIn
about participants in an upcoming meeting, for example, while a LinkedIn news feed will serve up
articles based on projects that users are working on. Other products could include a kind of
consulting service that will suggest an “expert” who might be able to help with a given project.
For a quick wrap of the analyst commentary on the deal, click here.
Microsoft could build LinkedIn, the largest global professional network, into a major customer
relationship management software system for salespeople, pushing into an area dominated by
Salesforce.com Inc., said Anurag Rana, a senior analyst for Bloomberg Intelligence.
“LinkedIn could really become a really big competitor for Salesforce going forward,” he said.
Building Relationships
LinkedIn’s analytics will help power data tools for Microsoft’s Dynamics, which competes with
Salesforce in helping companies manage relationships with their customers.
While Nadella and Weiner had spoken many times about partnerships, they first met to discuss a
potential acquisition deal in February. LinkedIn had just given a lower-than-expected revenue
forecast that caused its stock to fall more than 40 percent in a day.
“In that very first meeting, we both got excited as we were brainstorming and riffing a bit about the
things we could do in combination, combining the world’s professional network and the world’s
professional cloud,” Weiner said in an interview Monday.
Deal Dinners
What piqued Weiner’s interest most was Nadella’s idea for the structure of the organization -- that
LinkedIn could continue to operate independently like Facebook’s WhatsApp or Google’s
YouTube but still rely on Microsoft for a boost in potential customers. In April, several executives
met for dinner, where they spent the evening discussing ways they could make their technologies
work in concert. Attendees included the CEOs, as well as LinkedIn Chairman Reid Hoffman and
Microsoft executive Qi Lu, who had worked with Weiner at Yahoo! Inc., according to people
familiar with the matter.
A dinner Sunday night with both executive teams was more casual, with an icebreaker game to
deepen their relationship. The attendees were asked to share something about themselves that
was not on their LinkedIn profiles, the people said.
Shares Surge
LinkedIn shares surged 47 percent to $192.21 in New York, their biggest advance since 2011.
They had declined 42 percent this year through Friday as investors began to question the
company’s long-term prospects. Microsoft fell 2.6 percent to $50.14. Twitter Inc. jumped as much
as 9.1 percent amid speculation that it could be in play as well before paring some gains to close
up 3.8 percent at $14.55.

LinkedIn shares dropped sharply earlier this year after forecasting slower revenue growth. The
stock rebounded since the announcement of the deal with Microsoft.
The $26.2 billion offer values LinkedIn at about 91 times earnings before interest, taxes,
depreciation and amortization, according to data compiled by Bloomberg. Excluding net cash, the
multiple is about 84 times Ebitda. That’s the highest of any takeover valued at more than $5 billion
this year, the data show.
On a conference call, Microsoft said it’s confident in the cash position it has and that the company
will keep investing for growth.
However, the debt-financed LinkedIn deal gave Moody’s Investors Service pause. The agency
placed Microsoft’s debt rating under review for downgrade, saying the purchase will increase
Microsoft’s gross debt to two times Ebitda, exceeding the 1.5 times leverage Moody’s has said
could pressure the rating.
Microsoft and Johnson & Johnson are currently the only two U.S. companies with a AAA credit
rating.
Viral Growth
Microsoft made several big acquisitions over recent years under previous CEO Steve Ballmer,
though many of them have not panned out as hoped. Microsoft has largely written off it’s $9.5
billionpurchase of Nokia Corp.’s mobile phone business, Skype hasn’t matched the promise of
integrating into other products after the $8.5 billion deal in 2011, andYammer has been a mixed
bag after the corporate social-network operator was bought in 2012. Nadella’s 2014 purchase
of Mojang AB, the maker of the Minecraft video game, has been a bright spot.

When assessing acquisitions, Nadella thinks about whether the target would expand market
opportunity, ride the technology waves of the future and be at the core of Microsoft, he said in an
interview with Bloomberg Television. Buying LinkedIn “checks all those boxes,” he said.
For an analysis of Microsoft’s track record with acquisitions, click here.
LinkedIn has long been valued for having the potential viral growth of a social network with the
recurring revenues of a software-as-a-service business. But recently, growth has started to slow
and it’s been more difficult to get people to return to the site and pay for services. The company
has been rethinking its strategy, redesigning its suite of mobile applications to make the product
easier to use. Combining with Microsoft would give LinkedIn a boost in members with reasons to
visit, making it more useful if people are sharing updates more frequently.
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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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 14 June 2016 K. Al Awadi

New base energy news issue 872 dated 14 june 2016

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New base energy news issue 872 dated 14 june 2016