New base energy news issue 895 dated 28 july 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 28 July 2016 - Issue No. 895 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Yemen: Exiled government sells crude to Glencore -agency
Reuters/Mohammed Dabbous
Yemen has said it sold 3 million barrels of crude to Glencore, according to a news agency
affiliated to the exiled Yemeni government, in a move that drew criticism from the main refinery
struggling to provide fuel for local power stations.
The Sabanew.net news agency quoted an oil ministry official as saying the deal was the result of
a tender, in which 29 international companies were invited to submit bids for the Masila crude
grade.
It said three companies had submitted bids, four declined to bid while 22 others did not respond to
the invitation.
"The quantity was approved to be sold to Glencore, which had presented the highest bids and was
confirmed by the high committee for marketing crude oil, in accordance with the standing rules,"
the agency quoted the official as saying. The report did not say where the oil was being kept or

where it was going to be shipped from. It said the revenues would be deposited into the
government account as public revenue.
Aden's refinery criticised the sale, saying President
Abd-Rabbu Mansour Hadi's government had promised
to give it a portion of the crude that had been kept at
Dabbah port on the Gulf of Aden to resume operations.
"But yesterday, we were surprised by the news
published in the official Saba news agency about the
sale of the entire shipment to an international
company," a company official said in a statement.
Aden refinery had struggled to provide fuel for power
stations in the city since Hadi's forces drove the Houthis
out in July last year.
Yemen was a small oil producer and exporter before
civil war divided it and forced foreign oil companies to
leave, halting production and exports.
A Saudi-led coalition of Arab states has been fighting to restore the Hadi government and force
the rebel Houthis to retreat back to northern Yemen, where they had been based before they
seized much of the country starting in 2014.
The fighting allowed Islamist militants to seize tracts of land, including the Hadramout provincial
capital of Mukalla and the main al-Shihr oil terminal, 68 km (42 miles) east of Mukalla. Hadi's
supporters, backed by forces from the United Arab Emirates, retook the area in April.

Iraq: Japan agrees $2.1bn loan to develop Basra refinery
Japan has agreed to lend $2.1 billion to Iraq to develop Basra refinery, a top official was quoted as
saying in an Iraq Business Newsreport.
“The Japanese government has agreed to lend Iraq a loan of $2.1 billion to execute a number of
projects for rehabilitating Basra Oil Refinery.
The loan will be repaid in 40 years with a 2
per cent interest rate,” Ali Shadad Al Fares,
head of Oil and Gas Committee of the Basra
Provincial Council was quoted as saying.
“The allocated loan will be used to execute a
number of strategic and vital projects in Basra
refinery and these projects will be completed
by 2020. These projects include oil gas
hydrogenation project with a capacity of
20000 barrels per day.”
“These projects are designed to bring production at the refinery to about 4,500 tons of
reformulated gasoline, and about 27 thousand barrels of fuel oil and 40000 barrels of
hydrogenated oil gas per day, in addition to the production of 500 tons of liquid gas,” he added.
Gazprom commissions 10th well at Iraq’s Badra
Russia-based oil and gas giant Gazprom Neft has commissioned its 10th production well (P-07) at
the Badra oil field, a report said.
With production volumes at the newly launched well now at 6,527 barrels per day, its
commissioning has allowed daily production levels at the field to reach 67,000 barrels, added
the Iraq Business Newsreport.
Three other wells were also commissioned at the field earlier this year, collectively producing
24,000 barrels per day. Drilling of four further wells — P-10, BD-2, P-14 and P-19 — is currently
ongoing, with construction expected to be completed in early 2017.

Kenya: Africa Oil operations in the South Lokichar basin
Source: Africa Oil
Africa Oil Corp has reported an update on activities in the South Lokichar basin, Kenya.
Drilling Programme
Tullow Oil, Maersk Oil, and Africa Oil (the 'Joint Venture Partners') plan to recommence drilling
activities in the South Lokichar oil basin located in Blocks 10BB and 13T in Kenya in the fourth
quarter of 2016 with an initial programme of four wells and the potential to extend this by a further
four wells.
The first two wells will be the Etete
and Erut prospects in the north of
South Lokichar basin. Other
potential prospects in the
programme include further
appraisal of the Ngamia and
Amosing fields to target un-drilled
flanks, with an aim of extending the
size of these existing discoveries.
In addition, the Joint Venture is
planning an extensive water
injection test programme in the
fourth quarter of 2016 to collect
data to optimise the field
development plans. Africa Oil holds
a 25% interest in Blocks 10BB and
13T.
The Joint Venture Partners
received a three year extension to
the Second Additional Exploration
Period for a period of three years
(expiring 18 September 2020) on
Blocks 10BB and 13T.
Outside of the South Lokichar
Basin, the result from the basin
opening Cheptuket-1well in the
Kerio Valley Basin in Block
12A was announced in March
2016. The well encountered good
oil shows, seen in cuttings and
rotary sidewall cores, across an
interval of over 700 metres and
post-well analysis is still in
progress. A FTG survey over Block 12A commenced earlier this month to gain further data on this
prospective area. Further exploration activities in Block 12A and Africa Oil's other remaining
unexplored acreage, continue to be evaluated. Africa Oil holds a 20% interest in Block 12A.

Development
The Government of Kenya announced that it intends to run a crude oil pipeline from South
Lokichar to the port of Lamu. The Joint Venture Partners have signed a Memorandum of
Understanding with the Government of Kenya which confirms the intent of the parties to jointly
progress the development of a Kenya crude oil pipeline.
The pipeline Joint Development Agreement is currently being finalized and is expected to be
signed in the third quarter of 2016. The Joint Venture Partners continue to progress the technical,
environmental and social studies and tenders required to proceed to FEED for both the upstream
and pipeline projects. Both
FEED studies are expected to
start in early 2017.
In addition to progressing the
full field development,
an Early Oil Pilot Scheme
(EOPS) transporting oil from
South Lokichar to Mombasa,
utilising road or a combination
of road and rail, is being
assessed.
The EOPS would provide
technical and non-technical
information that will assist in
full field development planning, utilising existing upstream wells and oil storage tanks to initially
produce approx. 2,000 bopd gross around mid-2017, subject to agreement with National and
County Governments.

Norway: Statoil Suffers Surprise Loss Amid Collapse in Oil Prices
Bloomber - Mikael Holter @mikaelholter
Statoil ASA deepened spending cuts after Norway’s biggest oil producer reported an unexpected
loss amid lower crude prices and taxes on unprofitable
international operations.
The adjusted loss after tax, which excludes financial
and other items, was $28 million in the second quarter
after a profit of $929 million a year earlier, the
Stavanger-based company said Wednesday. That
missed the average estimate of 16 analysts for a profit
of $294 million.
“The results were strongly affected by weak oil and gas
markets,” Statoil Chie Executive Officer Eldar Saetre told reporters in Oslo.
Statoil, which is 67 percent owned by the Norwegian government, has followed rivals such as BP
Plc in slashing spending and reducing costs to protect cash flow and preserve shareholder
payouts. The company cut its capital expenditure to about $12 billion this year from an earlier
target of $13 billion. That’s 40 percent lower than record spending of $20 billion in 2014.
Statoil’s shares fell as much as 4.1 percent and were down 3.4 percent to 137.90 kroner as of
9:49 a.m. in Oslo. That made the stock the worst performer on the 20-company STOXX Europe
600 Oil & Gas Index and pared this year’s gain to 12 percent.
Poor Result
The company’s adjusted loss was the first for that earnings measure in figures going back to
2008. The loss reflects an effective tax rate of 103.1 percent, up from 67.8 percent a year earlier.
Statoil’s adjusted net loss at its international unit tripled to $549 million from a year earlier, while
profit at its Norwegian unit fell to $436 million from $705 million.

“‘We’re paying taxes in some countries where we’re losing money,” Chief Financial Officer Hans
Jakob Hegge said in an interview, citing Algeria, Azerbaijan, Angola and Nigeria. “It’s especially
marked by a poor result in the international unit.”
Statoil will pay a dividend of 22 cents a share for the second quarter, in line with the board’s
intention of keeping payouts flat for the first three quarters of the year. It continued a scrip
program allowing owners to take payouts in shares.
Net debt to capital employed rose to 31.2 percent from 28.1 percent three months ago.
Hegge said after the first quarter that while Statoil was comfortable with exceeding the 30 percent
threshold, the company would take measures to get back within a 15 percent to 30 percent range
if it happened.
Debt Ratio
Statoil has no time frame for when it wants to get the debt ratio below 30 percent, the CFO said on
Wednesday. The company’s main focus will be further cost cuts, but it could also sell assets and
continue cutting capital expenditure next year if necessary, he said.
While Statoil maintained a target of $2.5 billion in annual savings for 2016, it further cut its
exploration spending for the year to $1.8 billion from an earlier target of $2 billion.
The company, which dominates oil and gas production in its home country even as it has
expanded internationally, produced 1.959 million barrels equivalent a day of oil and natural gas in
the second quarter. That compared with 1.873 million a year ago and a forecast of 1.915 million in
an analyst survey
conducted by Statoil.
BP on Tuesday reported a
45 percent slump in
earnings and missed
analyst estimates, hurt by
weaker refining margins in
addition to lower oil prices.
Royal Dutch Shell Plc and
Total SA will publish
earnings on Thursday, and
Exxon Mobil Corp. and
Chevron Corp. on Friday.
While oil prices rebounded
in the second quarter to
average $47.03 a barrel for
the Brent benchmark, up
from a 12-year low of
$27.10 in January, crude’s
recovery has showed signs
of fading over the past
weeks as huge stockpiles
remain. The International
Energy Agency said earlier
this month that “the road
ahead is far from smooth.”

Cyprus : ExxonMobil, Statoil, Total, Eni show interest in blocks offshore
Offshore Energy Today Staff
Cyprus has received expressions of interest from Statoil, ExxonMobil, Eni, Qatar Petroleum, Cairn
Energy and Total for offshore blocks offered in Cyprus’ third licensing round, the energy ministry
said on Wednesday.
The country’s third offshore licensing round for offshore exploration in blocks 6, 8 and 10 in the
Exclusive Economic Zone of Cyprus was launchedin March this year and the deadline for the
submission of applications expired on Friday, July 22, 2016.
The ministry received six applications in total, by eight companies and for all three available
blocks.
The names of the interested companies/consortia were released on Wednesday, July 27, 2016,
after the President of the Republic and the members of the Council of Ministers were officially
briefed during a scheduled meeting of the Council.
According to the energy ministry, Eni and Total applied for block 6 with Eni as the operator.
Further, Cairn Energy’s unit Capricorn Oil applied together with Israel’s Avner Oil and Delek
Drilling for block 8 with Cairn as the operator. Italian oil company Eni also applied for block 8 on its
own.
Finally, two consortia and one company applied for block 10, the first one being a consortium
between Eni and Total and the second one between ExxonMobil and Qatar Petroleum. In
addition, Statoil Upsilon Netherlands applied on its own.
Under the provisions of the relevant legislation, the ministry said that the six applications
submitted will be evaluated by the competent Advisory Committee, which will then draft its opinion
in a preparatory report.
On the basis of the report and the recommendation of the Minister of Energy, the Council of
Ministers will appoint the team that will negotiate, with the companies selected, the final terms of
the Exploration and Production Sharing Contracts (PSCs).
The energy ministry noted that the final decision for the granting of exploration licenses is at the
discretion of the Council of Ministers.

Turkey:ready to resume talks on Turkish Stream gas pipeline project
Reuters Gleb Garanich /
Turkey has confirmed it’s ready to continue negotiations on the Turkish Stream gas pipeline
project, said Russian Deputy Prime Minister Arkady Dvorkovich as representatives from the
energy ministries of the two countries met on Tuesday.
Gazprom ready to restart Turkish
Stream dialogue after Erdogan apology
..The issue with the pipeline
construction, which will deliver Russian
natural gas to Turkey, could be clarified
after the meeting, Dvorkovich said.
According to the minister, they have also
discussed going ahead with Turkey’s
Akkuyu nuclear power plant. "We
discussed some investment projects,
including the construction of the Akkuyu
nuclear power plant. There is some
progress here already. The necessary
regulatory framework is being finished
by the Turkish side. We expect to be
able to move forward quite
quickly," Dvorkovich told reporters.
The Turkish Stream gas pipeline and the
Akkuyu nuclear power plant are major
projects for Russia and Turkey.
The construction of the Turkish Stream pipeline to deliver Russian gas to Turkey via the Black
Sea was initially scheduled to begin in 2014 but was delayed after the failure to reach an
intergovernmental agreement. Negotiations on the project were suspended after Turkey shot
down a Russian jet in Syria in November 2015.
Russia halts Turkish Stream project over downed jet
Gazprom and Turkey’s Botas signed a memorandum of
understanding to construct the pipeline two years ago. The
1,100km pipeline was planned to have four lines with a capacity of
up to 63 billion cubic meters (bcm) of gas annually. About 16 bcm
was to be supplied for use in Turkey while the remaining 47 bcm
was to go to a hub on the Greek-Turkish border to be transported onwards to Europe.
In 2010, Moscow and Ankara signed an agreement to construct and operate the Akkuyu nuclear
power plant in the Mersin province of Turkey. The $20 billion project was expected to become the
first nuclear power plant in the country which is aiming to develop its own generating capacity. The
construction of the 4800 megawatt Akkuyu nuclear power plant will enable Ankara to reduce the
cost of power generation and cost to consumers.
Neither Turkish Stream, nor Akkuyu were included in the list of economic sanctions against
Turkey introduced by the Russian government after the jet incident. The list included an embargo
on food products and a ban on charter flights.

Britain offers new oil and gas licenses amid exploration drought
REUTERS - ANDY BUCHANAN/POOL
Britain has cut rental fees by up to 90 percent in its latest tender for oil and gas licenses in the
North Sea launched on Wednesday in a bid to attract companies to find new fields in the mature
basin.
Companies will now be able to apply for cheaper and
more flexible licenses to gain access to 1,261 blocks by
Oct. 26, followed by license awards to be issued by the
Oil and Gas Authority (OGA) at a later date.
The hunt for new oil and gas fields in the British part of the
North Sea is expected to fall to the lowest in 45 years this
year as energy companies have scaled back exploration
budgets due to weak oil prices.
Despite being an old basin, Britain's North Sea is
estimated to have billions of barrels left for extraction,
worth around 200 billion pounds ($262.56 billion) to British
government coffers.
The latest licensing round, the 29th, offers access to new areas in the Rockall Trough, the mid-
North Sea High and East Shetland, which were subject to a government-funded seismic testing
campaign earlier this year.
"We recognise that market conditions are currently very difficult but nevertheless we have a
shared goal of making the basin as attractive as possible for exploration," Andy Samuel, chief
executive of the OGA, said.
The Oil and Gas Authority's contract changes will reduce license rental fees in some cases by up
to 90 percent per square kilometer and allow explorers more flexibility in terms of when they can
carry out certain work programs.
Companies which obtained licenses in last year's bumper 28th licensing round, Britain's biggest
ever, included Shell and Eni .

Ghana:Tullow to Pump First Oil From TEN Project on August
Bloomberg - Angelina Rascouet @arascouet
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Tullow Oil Plc’s new project off Ghana will produce its first oil early next month after more than
three years of development, cementing the company’s footprint in the African country.
Production of oil at TEN -- also known as the Tweneboa-Enyenra-Ntomme project -- will start early
August, the company said in a statement Wednesday. Output should gradually increase to 80,000
barrels a day by the end of this year, it said.
The Africa-focused explorer reported a net
income of $30 million in the first half from a
net loss of $68 million a year earlier, while
net debt rose almost a third to $4.72 billion.
“The start of production from the TEN field in
early August will be transformational for the
group,” Tullow Chief Executive Officer Aidan
Heavey said in the statement. The new
project will allow the company “to
significantly increase our net production and
begin the process of deleveraging our
balance sheet.”
The TEN project adds to Tullow’s flagship
Jubilee field, also located off Ghana.
Production there dipped to 62,900 barrels a
day in the first half following a technical
issue on its floating production, storage and
offloading vessel, or FPSO. Output from
Jubilee averaged 102,600 barrels a day last
year, before the issue appeared.
The start of TEN comes after oil prices fell
by more than half in the past two years amid
an oversupply. Brent, the global benchmark,
is trading at $44.77 a barrel, compared with
more than $115 in June 2014. TEN is the biggest project to start up in Africa so far this year and
one of the largest new developments in the world, Martin Kelly, senior analyst for Sub-Saharan
Africa for Wood Mackenzie, said by e-mail Monday.
Also working on the TEN project with Tullow are Kosmos Energy Ltd. and Anadarko Petroleum
Corp., each with a 17 percent interest. Ghana National Petroleum Corp. has a 15 percent stake
and South Africa’s PetroSA holds 3.8 percent, according to Tullow’s website. Tullow and its
partners have spent about $4.9 billion on the development of TEN.
Last month, Tullow cut its West African production guidance for 2016 to 62,000 to 68,000 barrels
a day from a previous forecast of 73,000 to 80,000. Output will be lower than expected because of
the shut down to address a faulty turret on the Jubilee FPSO. The installation of a new mooring
system to resolve the problem will also halt production in the first half of next year, the company
said. The total for this year includes an average contribution of 11,000 barrels a day from TEN, the
company said. Shares of Tullow gained 20 percent so far this year, making it the third-best
performer on the Stoxx Europe 600 Oil and Gas Index.

US:Many industries use combined heat and power to improve
energy efficiency .. Source: U.S. EIA, Annual Electric Generation Survey EIA-860 (2015 early release)
Combined heat and power (CHP) systems have long been used to reduce the overall energy
intensity of industrial systems. There are two types of combined heat and power, depending on
whether the system produces power first, then heat, or heat first, then power.
In topping cycles, the hot exhaust of an electricity generator such as a natural gas turbine or
reciprocating engine is used to provide process heat, hot water, or space heating for the site.
According to preliminary 2015 data, topping cycles are used by 89% of total CHP capacity. In
bottoming cycles, also referred to as waste heat to power, wasted heat from a furnace or other
high-temperature industrial processes is recovered and used for power production.
Bottoming cycles typically use waste heat boilers or steam turbine systems. Ongoing research,
development, and deployment efforts are focused on these systems as a way to reduce wasted
heat and increase industrial energy efficiency.
Bottoming cycles are mostly used in industrial facilities in the chemical, paper, and primary metals
sectors, as these industries often have high-temperature waste streams that are favorable for
waste heat recovery.
As much as 20% to 50% of the energy consumed in some industrial processes is ultimately lost
through waste heat contained in streams of hot exhaust gas and liquids and through heat
conduction, convection, and radiation from hot equipment surfaces and heated product streams.
The overall energy efficiency of some industrial processes can be improved by capturing and
reusing the waste heat.
In some cases, such as industrial furnaces, efficiency improvements resulting from waste heat
recovery can improve energy efficiency 10%–50%. A study by the U.S. Department of
Energy's Energy Efficiency and Renewable Energy office identified research, development, and
demonstration efforts to expand waste heat recovery practices in the U.S. industrial sector. The

waste steams analyzed in this study showed that roughly 60% of unrecovered waste heat is low
quality (i.e., temperatures below 450 degrees Fahrenheit).
According to the study, the greatest potential for expanding bottoming-cycle CHP is in energy-
intensive industries, such as iron and steel, glass, and cement. These industries have high-
temperature waste streams that can provide the input to generate electricity.
Technological advances that allow the use of lower temperature waste streams can increase the
potential for bottoming-cycle CHP. These new technologies with lower temperature requirements
can also help to expand the bottoming cycle for non-energy-intensive industries such as wood
products, transportation equipment, and fabricated metal products.
Determining the applicability of the bottoming cycle requires more complex analysis than the
topping cycle. One approach, called pinch analysis, examines the temperature and heat flow rates
of hot and cold streams and attempts to optimize the heat exchange between streams.
Even though effectively implementing bottoming-cycle CHP is complex, the energy that is
converted to electricity would otherwise be wasted. More efficient use of waste heat would also
reduce the need for other purchased fuels.

NewBase 28 July 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil scrambles off April lows but oversupply still weighs
Reuters + NewBase
Oil prices recovered slightly from April lows in early trading on Thursday, but the outlook for the
industry remained weak as crude producers and fuel refiners continue to pump out more than the
market can consume.
International Brent crude oil futures were trading at $43.61 at 0118 GMT, up 14 cents from their
previous close. U.S. West Texas Intermediate (WTI) crude was at $42.06, up 14 cents.
Brent and WTI hit their lowest since April in the previous session, at $43.27 and $41.68 per barrel,
respectively, after U.S. government data revealed a surprise build in crude and gasoline
inventories. The build adds to an already huge global refined product glut just as slowing
economic growth dents the demand outlook for crude.
"Oil prices were sold off heavily after the weekly EIA report showed a surprise build in crude oil
inventory. The 1.7 million barrel increase (to 521.1 million barrels) was against market
expectations of a 2.3 million fall. U.S. oil production also increased," ANZ bank said on Thursday.
"Oil remains weak, with the surprise build in US stocks likely to linger into today's trading," it
added.
Oil markets have been dogged by oversupply for the last two years, which pulled down prices by
as much as 70 percent between 2014 and early 2016, when Brent hit the lowest in more than a
decade at around $27 per barrel.
Oil price special
coverage

Statoil CEO Is ‘Very Confident’ Oil Will Reach $50-60 a Barrel
Bloomberg - Mikael Holter @mikaelholter
The chief executive officer of Norway’s biggest oil company says he has few doubts that crude will
again trade at around $50 to $60 a barrel, marking a jump in prices that could be more than 30
percent compared with today’s level.
“Eventually, I’m very confident that it will,” CEO Eldar Saetre said in a televisioninterview with
Bloomberg’s Manus Cranny and Anna Edwards on Wednesday. “But there is a lot of uncertainty.
We still have a situation with a lot of volatility.”
Following a June 2014 peak, oil prices collapsed 77 percent through January, when prices hit a
low point of $27 a barrel. Brent crude has since recovered some of that drop as supply disruptions
from Nigeria to Canada trimmed a worldwide surplus. But those developments failed to maintain a
rally above $50, and oil has since dropped to about $45.
“The market will find a balance in the course of this year,” Saetre said in a separate interview in
Oslo after a press conference. “But we believe it will take a while before we get a normal situation
on the stockpile side. And it’s difficult to say how the market will play out in the meantime. There’s
a lot of uncertainty.”
The fallout of lower oil prices on Statoil’s earnings was broadly what the company had expected,
Saetre said on Bloomberg TV. The oil company posted its first adjusted loss as the price decline
took its toll. That comes after BP on Tuesday reported a 45 percent slump in earnings and missed
analyst estimates.

Why oil prices will head lower
Patti Domm | @pattidomm
Oil prices are heading lower and could fall into the $30s before the latest shakeout ends sometime
during the fall months.
But analysts say this sell-off is nothing like the one that took West Texas Intermediate crude to
$26 earlier this year, and some of the factors behind it are seasonal.
West Texas Intermediate oil futures are down 11 percent so far this month, after rallying above
$50 in the spring. WTI was trading settled a half percent
lower at $42.92 per barrel Tuesday, after breaking below its
100-day moving average of $44.25 on Monday.
The world remains oversupplied with crude oil, but the fact
that it has become very oversupplied with gasoline is
currently worrying the market.
"The gasoline inventories are 10 percent above a year ago
level, and that's feeding back into crude," said Greg Priddy,
director of global energy at Eurasia Group. The real fear is that the demand for crude will drop
even further once refineries go offline as they normally do in early fall for routine maintenance
ahead of winter fuel refining.
"What refining margins are telling us is there might be some weakness in product demand. I think
some of the fears out there are a bit overblown. If I look at product inventories, yeah, they're high,
but they've been high for months. Maybe markets are waking up to it. It's not like we've taken a
sudden turn for the worse," said Michael Wittner, head of oil research at Societe Generale.
U.S. refineries continue to produce more gasoline than drivers can use. While the U.S. can export
fuel, the whole world has plenty of refined product.
Wittner said some refineries on the East Coast have already reduced runs, perhaps signaling an
earlier maintenance season than usual because of the gasoline glut. "What people are worried
about is there's going to be a sharper than usual cut in runs as we head into the fall," he said.
Priddy agrees that the focus is on the maintenance season. "It's conceivable that it might start a
week or two earlier. We're looking at the worst of this as we head into fall," he said.
Analysts say it's possible oil will dip into the $30s, but some say it's not highly likely.
"I think there's a soft floor at around $40," said Wittner, adding it's possible it could go lower. "I
don't think we're collapsing. I know it feels ugly out there, but I don't think this is any way a replay
of the first quarter. It's very different — that transition from the huge global oversupply to balanced
is really important. That's why this is very different." Wittner expects oil to rise into the year end
after it troughs.
"I may be tactically very cautious. I'm not turning bearish. I'm not changing my forecast," he said.
His forecast is an average of $48 per barrel for the fourth quarter.
Bart Melek, head of commodities strategy at TD Securities, said oil could be heading to its 200-
day moving average at around $41 per barrel. "Technicals will seek a level around $40.38, then
we'll see ... the fundamental outlook is much, much better than it was six months ago. We're still
looking toward $60 for year end," he said. He added that if $40 is broken, the next level would be
just above $36.

Oil prices had been supported by disruptions around the world, including a major outage in
Canada due to forest fires. But Canada is back on line, and Iran is slowing down its additions of
crude to the market. Melek also does not expect much more output from Saudi Arabia or Russia.
U.S. production cuts have been a great re-balancer for the market, now that more than 1 million
fewer barrels per day are being produced compared with last year's peak. As a result of higher
prices, U.S. producers have also begun to add a few rigs.
"What we're seeing is a reaction to recent Baker Hughes data that showed a fourth consecutive
week of drilling activity increases. These rig counts are thought to basically be a precursor to more
production. That's probably true, but it's not going to be as fabulous as many people think. For the
most part, these companies are in financial impairment and it's difficult to attract capital," Melek
said. "Since the peak of October 2014, we've lost 1,291 rigs and what we've gained very recently
is 53."
Morgan Stanley analysts, in a note, say these wells could help increase production.
"As oil approached $40-50, a number of producers put on hedges to complete a backlog of
uncompleted wells. These wells have the capability to add production in short order without rigs.
U.S. rig counts are also rising. In fact, the headline rig count can understate the issue as rigs are
being added in the best acreage with greater incremental production," they wrote.
The analysts said oil could bottom in the mid $30s. "Oversupply should return by August,
reinforcing a return to the $30-50 oversupply pricing regime, before returning to a balanced market
in 2H17," they wrote.
U.S. oil inventory data is expected Wednesday morning from the U.S. Energy Information
Administration at 10:30 a.m. EDT.
Platts forecasts a drop in crude stocks of 2.6 million barrels, and a decline in gasoline of 700,000
barrels, a bullish sign. Refineries however, are expected to continue to run at high levels, and
distillate stocks are expected to rise by 400,000 barrels.
Wittner said there are a number of things that have aligned against the oil price for now. "We're
talking not only fundamentals. Obviously, we're talking market psychology, which is bearish. The
technicals are bearish. There's no geopolitics supporting prices," he said. "Bottom line is the
global markets are still balanced." He said that compares to last year when the world was
overproducing 1.7 million barrels a day.
Patti DommCNBC Executive News Editor

NewBase Special Coverage
News Agencies News Release 21 July 2016
$15.4 billion invested in European offshore wind in 2016 ,Report
CNBC.com - Anmar Frangoul
The first six months of 2016 saw a record 14 billion euros ($15.4 billion) of new investment in
Europe's offshore wind industry, according to a new report -- however the number of new
installations is dropping off.
Industry group Wind Europe said that a total of 3.7 gigawatts (GW) of new capacity has been
financed this year, with almost 75 percent of new investments in the U.K. The size of the wind
turbines being installed is also getting bigger, now averaging 4.8 megawatts, a 15 percent
increase compared to the same period last year.
Despite the large investments, WindEurope said that the volume of new "grid-connected
installations" in the first six months of this year was actually down by 78 percent compared to the
same period last year.
"The investment numbers are very encouraging," Oliver Joy, a spokesperson for WindEurope, told
CNBC via email. "Financiers are putting their money into a technology that is rapidly reducing
costs and beating all expectations," Joy added.
Joy acknowledged that this year's lower installation numbers represented "a significant drop" but
that this was seen rebounding in 2017 and towards 2020. "We expect to reach 23.5GW of
offshore wind by the end of the decade," he added.

Giles Dickson, CEO of WindEurope said that while there was a clear industry commitment to
offshore wind, challenges still remained, particularly in relation to what he described as "the
uncertainty over future volumes and regulation in many key markets for the period after 2020.
We're a long way from being able to say job done on offshore wind."

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 26 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 28 July 2016 K. Al Awadi

New base energy news issue 895 dated 28 july 2016

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New base energy news issue 895 dated 28 july 2016