New base energy news issue 896 dated 31 july 2016 ilovepdf-compressed

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NewBase Energy News 31 July 2016 - Issue No. 896 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 petrol prices to fall for first time in five months
The National LeAnne Graves
The cost of petrol will decrease for the first time in five months, beginning Monday, amid a global
oversupply of oil.
The Ministry of Energy announced on its website that all grades of petrol have decreased by 15
fils a litre for August, an average drop of 8.3 per cent compared with last month, with diesel
cheaper by 9 fils.
From August, UAE motorists using Super 98 will pay Dh1.73 a litre compared with Dh1.88 in July,
a decrease of 7.9 per cent. Special 95 will retail at Dh1.62 from Dh1.77 a litre. EPlus 91 will cost
motorists Dh1.55 compared with Dh1.70 in July, a drop of 9.6 per cent.
Vehicles running on diesel will be charged 4.8 per cent less as the fuel slides to Dh1.76 from
Dh1.85 last month.
The decrease corresponds to the decline in oil prices as petrol and diesel are byproducts of crude
oil. Brent crude futures, the international benchmark, began to rally last month to more than
US$50 per barrel. Yet this month was a different story, with prices dropping by about 14 per cent
to $43 as the market returns to reality, according to Edward Bell, a commodities analyst at
Emirates NBD.

He said that the talk when Brent prices began to rise was that the oil surplus was going to tighten
up quite a bit.
"The market has come back to the awareness that the fundamentals are still not supportive for the
kind of rally we saw for most of the second quarter," Mr Bell said, pointing to a new dilemma.
The oil glut has now moved into the products market, where inventories for items such as petrol
are continuing to build. This has led to a decrease in refining as it becomes less economical for
operators. "Refiners are less incentivised to process crude with the market that they earn coming
down quite a bit over the past couple of months," he said.
Previously the market was overstocked with crude oil, but not with product inventory. This
transition has moved the market, and the way it responds is with softer prices, Mr Bell said.
One Abu Dhabi resident working in the oil and gas industry said that while low oil prices are
hurting his company, at least his wallet was getting help. Suraj Mathew was spending about
Dh100 a week on Super 98 to fill up his Toyota Fortuner.
He said that he was happy that prices at the pump would be cheaper next month, even though his
company was getting battered. "Sales at my company have dropped. It’s half of what it was last
year, but it doesn’t change the fact that as a consumer I’m going to spend less from my own
pocket," Mr Mathew said.

Oman: Global firm advises on Qurayyat IWP
Oman Observer
Global law firm Dentons has advised Qurayyat Desalination SAOC — a special purpose company
formed by Hyflux Ltd and Modern Channel Services LLC — with respect to the Qurayyat
independent water project (IWP) involving an awarded $250 million contract to design, build, own
and operate the Qurayyat desalination project in Qurayat.
The project was awarded by government-owned Oman Power and Water Procurement Company
(OPWP) under a 20-year water purchase agreement with OPWP and adds another 200,000 cubic
metres per day of drinking water to the country’s water supply.
The transaction reached financial close in June and involved cross-border elements across Oman,
Singapore, the United Kingdom and the United Arab Emirates. Dentons Middle East senior
partner, Neil Cuthbert, commented, “We are delighted to have worked with Hyflux and Modern
Channel Sources LLC on this independent water project in Oman, particularly as it was Hyflux’s
first Build-Own-Operate (BOO) project in the Middle East.”
The Dentons team was led by Neil Cuthbert and assisted by partners Ian McGrath in Istanbul, Ian
Dalley in Abu Dhabi and Paul Sheridan, Andrew Figgins and Sadaf Buchanan in Muscat, as well
as Dubai associates Carina Onzer and Mona Hammadi.
Dentons’ leading energy and project finance teams have an in-depth understanding of the Oman
market, having first advised on the privatisation of the Sultanate’s power and water sector in the
late 1990s. The team has since worked on many power and water projects in Oman, advising both
the government of Oman as well as the private sector.

Libya government, oil guards reach deal to reopen ports
Reuters + NewBase
Libya's U.N.-backed government has signed a deal with an armed brigade controlling the major
Ras Lanuf and Es Sider oil ports to end a blockade and restart exports from the terminals shut
since December 2014.
Reopening the ports would be a huge step for the North African state, which since the 2011 fall of
Muammar Gaddafi has slipped into chaos that has cut its oil output to less than a quarter of pre-
2011 levels of 1.6 million barrels per day.
No specific date was set for restarting exports, but swift resumption would be hampered by
technical damage from militant attacks and by opposition from the state-run National Oil
Corporation, which objected to paying cash to reopen the ports.

Libyan Presidential Council deputy Mousa Alkouni signed the agreement late on Thursday with
Ibrahim al-Jathran, commander of the Petroleum Facilities Guards, one of Libya's many armed
brigades that has controlled the terminals.
"I think the resumption depends now on technical part ... and I think also it will happen from within
a week to two weeks, but not more," Alkouni told Reuters by telephone.
He said the agreement
included paying an
unspecified amount in
salaries to Jathran's
forces. He said they had
not been paid wages for
26 months. Their role is
protecting the oil ports,
though critics have said
they used it to extort
money from Tripoli. In a statement issued later on Friday, Alkouni said there was "absolutely no
truth to rumors that the resumption of oil exports was the result of extortion or deals".
Rival governments and a complex network of armed groups who once fought against Gaddafi and
have quasi official status are vying for power and control of the country's oil wealth, closing down
pipelines and battling over export terminals. Ali Hassi, a spokesman for Jathran's PFG brigade,
said no date had been decided for reopening the ports because that would depend on the
National Oil Corporation. But he confirmed an agreement had been signed between the council
and Jathran.
Jathran's brigades led blockades of the ports starting in 2013, saying he was trying to prevent
corruption in oil sales, though others disputed his motives. He has also called for more autonomy
for his eastern region.
Opening Ras Lanuf and Es Sider would add a potential 600,000 barrels per day of capacity to
Libya's crude exports, though experts estimate damage from fighting and the long stoppage must
be repaired before shipments are at full capacity again.
The NOC has said damage from recent attacks by Islamic State, which expanded in the country's
chaos, meant the ports would struggle to get beyond 100,000 bpd in the near term.
Beyond technical problems, NOC chairman Mustafa Sanalla has also objected to any deal with
Jathran, saying it was a mistake to reward the brigade commander by paying to end his blockade
of the oil ports. Sanalla said a deal including payments would encourage other groups to disrupt
oil operations in the hope of a similar payout. The NOC has also threatened to withdraw its
recognition of the Presidential Council.
Eurasia Group analyst Riccardo Fabiani said the agreement was likely to stick, unlike previous
attempts to reopen the ports, because both sides had an interest in making it work. Facing
resistance from hardliners and protests over living conditions, the presidential council needs oil
revenues to improve services and economic stability as a way of bolstering its legitimacy. Jathran
is also increasingly politically isolated and has decided to side with the council.
"Despite recent attempts by the Tripoli-based NOC to undermine the agreement, the unity
government decided to prioritize the reopening of the ports," Fabiani said. "This deal will give the
Tripoli authorities much-needed revenues and is a relatively easy political victory."

Pakistan: Jura Energy announces gas discovery in Guddu Block
Source: Jura Energy
28 Jul 2016
Jura Energy has announced that the exploration well, Khamiso-1, in the Guddu Block has been
drilled to the total depth of 753 meters in the Pirkoh Limestone formation of Eocene age.
During a short duration pre-stimulation test on a 32/64 inch choke, the well flowed gas at an
average rate of 2.95 MMcf/d, having heating value of approximately 697 Btu/Scf, with an average
wellhead flowing pressure of 505 psi. A rigless post completion acid stimulation test is expected in
the next few days.
Anticipated future production from the Khamiso-1 gas discovery in Guddu Block is expected to be
entitled to a gas price of US$3.75 per MMBtu, based on carriage and freight crude oil price of
US$45 per barrel, under the Pakistan Petroleum (Exploration & Production) Policy, 2012.
Jura holds a 13.5% working interest in the Guddu Block, which is operated by Oil and Gas
Development Company Limited.
Jura Energy's Pakistan assets - including the Guddu Block

Indonesia INPEX Looking to Bring to Fruition Abadi LNG Project
INPEX
Japanese energy firm INPEX in its annual report said it is taking steps to quickly bring to fruition
the Abadi LNG project in Indonesia.
In light of an increase in natural gas reserves, INPEX submitted a revised development plan for
the Abadi LNG project in September 2015 envisioning the adoption of a FLNG plant with an
annual LNG processing capacity of 7.5 million metric to ns.
In April this year, the Japanese firm received a notification from Indonesian government
authorities instructing to re-propose a plan of development based on onshore LNG for the project.
“Moving forward, we will negotiate with government authorities for the optimal development of the
project with the goal of early start-up of development,” INPEX said in its annual report which was
released on Friday.
“Under a policy that seeks the project’s early start-up, the company operates on the basis of
selecting the most technologically and economically rational choices and moving the project
forward. In line with this basic policy, we are now reviewing how optimal development, including
the onshore LNG development system, can be achieved. We will discuss this with our partner,
Royal Dutch Shell, and Indonesian government authorities.”
Ichthys LNG Project
Ichthys LNG project in Australia is steadily moving forward, the company said. Development work
on the project has steadily progressed in preparation for the start of production in Q3 2017.
“As of June 2016, the installation of 90% of the more than 200 modules had been completed,”
INPEX said.
Inpex has a 62.2% stake in the 8.9 mn mt/yr project.

Indonesia Bangka, Jangkrik Projects Begin Gas Production in a year
Reuters
Production of natural gas from two Indonesia offshore projects, Bangka and Jangkrik, is expected
to commence this year and the next, respectively, Reuters reported Friday.
The Bangka project, majority owned by Chevron, will start operation in August this year,
Wiratmaja Puja, the director general of oil and gas at Indonesia's Energy Ministry, told Reuters in
an interview. While the Jangkrik project is 80 percent complete and is expected to commence
operation in July 2017. The project is operated by Italy’s Eni.
Both projects are located in the Kutai Basin offshore
East Kalimantan province.
Chevron has a 62% interest in the Bangka project.
The project has a design capacity of 115 million
cubic feet of natural gas and 4,000 barrels per day
(bpd) of condensate, according toReuters.
Eni owns 55% stake in Jangkrik project. The project
is expected to produce 450 million cubic feet of
natural gas and 4,400 bpd of condensate

Norway: DNO launches offer to acquire Gulf Keystone
TradeArabia News Service
DNO ASA, the Norwegian oil and gas operator, today unveiled a proposal to acquire for $300
million all of the enlarged share capital in Gulf Keystone Petroleum following the latter's
contemplated financial restructuring announced earlier this month.
Gulf Keystone Petroleum is an oil and gas exploration and production company operating in the
Kurdistan region of Iraq. It is listed on the main market of the London Stock Exchange.
The terms of the DNO proposal, which would comprise cash and shares, reflect a 20 percent
premium to the share price of $0.0109 at which, on July 14, Gulf Keystone issued shares
representing 5.6 percent of its share capital, and also reflect a 20 percent premium to the price at
which Gulf Keystone intends to issue further shares in its restructuring, a DNO statement said.
In addition, for the Gulf Keystone guaranteed note holders the DNO terms reflect 111 percent of
par value compared to 99 percent under the contemplated restructuring, and for the convertible
bondholders the DNO terms reflect 18 percent of par value compared to 15 percent under the
contemplated restructuring, a DNO statement said.
By offering $120 million in cash (approximately 40 percent of the consideration), DNO would
provide an early exit for those note holders and bondholders who may be unable or unwilling to
hold equity for an extended period, it said.
The additional offer of 170 million DNO shares (approximately 13.6 percent of the post transaction
DNO share capital) would provide Gulf Keystone investors with continued exposure to the
Shaikan field in addition to DNO's wider portfolio of assets, significantly larger market
capitalization, more robust cash flow, stronger balance sheet and proven operating and
management capabilities, it said.
Gulf Keystone Petroleum Limited is an independent exploration and production company,
quoted on the Main Market of the London Stock Exchange plc. (LSE:GKP). The Company is a
leading operator and producer in the Kurdistan Region of Iraq, where amongst its portfolio of
exploration, development and production assets it operates the world class Shaikan oil field.
As one of the first companies to see the potential of the region, over the last six years Gulf
Keystone has drilled or participated in over 20 wells and remains one of the most active
operators in the Kurdistan Region of Iraq.
With the Shaikan discovery alone, declared commercial in 2012, Gulf Keystone has one of the
largest onshore developments in the world today and the Company is currently producing in
excess of 40,000 barrels of oil per day before progressing to the FDP production target of
110,000 bopd. We believe that we have only scratched the surface of the true value of our
blocks and our ongoing exploration and appraisal activity is expected to result in further
upside.

DNO has been active in the Kurdistan region of Iraq since 2004 and ranks number one among the
international oil companies in oil production (50 percent), oil exports (60 percent) and proven oil
reserves (50 percent). DNO holds a 55 percent stake in and operates the Tawke oil field at a
current production level of around 120,000 barrels of oil per day (bopd) of 27 degree API crude.
Gulf Keystone holds a 58 percent stake in and operates the Shaikan oil field at a current level of
around 40,000 bopd of 17 degree API crude. Production from Shaikan is transported daily by road
tanker to DNO's unloading and storage hub at Fish Khabur for onward pipeline transport to export
markets, the statement said.
"Combining these two companies will create further scale and unlock operational synergies that
will reinforce DNO's already formidable presence in Kurdistan," said Bijan Mossavar-Rahmani,
DNO's executive chairman. "We understand Shaikan's challenges and opportunities and we are
well positioned to focus financial, technical, commercial and logistical support to maintain and then
grow production at this field to the benefit of both Kurdistan and our investors," he added.
Gulf Keystone, a Bermuda incorporated and London listed company, has called a special general
meeting for August 5 to consider its contemplated financial restructuring.

UK: EDF Pushes for Nuclear Project Energy Experts Call ‘Crazy’
Bloomberg - Jessica Shankleman
Critics of the U.K.’s first new nuclear plant in more than 20 years, who say the project will prove
bad value for millions of British consumers, could be proved right after the government asked to
review the deal.
U.K. Business and Energy Secretary,
Greg Clark, said the government needed
to carefully consider the project before
making a final decision to build the 18
billion-pound ($23.7 billion) station. That
statement came just hours after the
board of Electricite de France SA had
decided to press on with construction.
It will take almost a decade to build the
two giant reactors and the new power
station has been described by Peter
Atherton, an associate at Cornwall
Energy, as “the most expensive object in
the world.”
“It’s a terrible deal for bill payers,” said
Michael Liebreich, founder of Bloomberg
New Energy Finance. “It’s a stupid deal.”
The station will provide about 7 percent
of the U.K.’s power demand and EDF will
be paid 92.50 pounds for every
megawatt-hour of electricity it produces
for 35 years. Those subsidies are
projected to reach more than 30 billion
pounds, more than twice the estimate
made a year ago, according to data
published on a government website on
July 7. The estimate reflects declining
long-term forecasts for wholesale
electricity prices.
‘Crazy’ Price
“The crazy thing is the price,” said Juan Camilo Rodriguez, analyst at AlphaValue SA, in a phone
interview. “You pay a really high price for a technology that hasn’t been tested yet,” referring to
the EPR reactor design that’s under construction in Finland, France and China, but hasn’t yet
been commissioned.
Renewable energy, which last year delivered a quarter of the U.K.’s power demand, could be a
cheaper option, according to a report by the National Audit Office last month. Danish utility Dong
Energy A/S won a contract to deliver offshore wind power in the Netherlands at 72 euros a

megawatt-hour ($80) for 15 years earlier this month, a deal that may be the cheapest in the world
for the technology. While many condemn the economics of the projects, others point out that it’s
so long-term it’s impossible to know the final outcome.
EDF “could either look like geniuses in 10 years time when it’s built if we’ve electrified transport
and heating and there is an increase in demand for electricity,” said Jon Ferris, strategy director
at Utilitywise, a Newcastle, England-based utility, said by phone. “Or it could be that increasing
storage from electric vehicles means that demand peaks are lower and we’re making more
efficient use of generation we’ve got.”
CFO Resigns
EDF stalled on making a final investment decision in Hinkley Point amid claims from inside the
company the project will be financially crippling. EDF Chief Financial Officer Thomas Piquemal
quit in March after his plea to delay the decision due to cost concerns was rejected.
After months of delays EDF may have now rushed the
decision at short notice over fears the new Prime
Minister Theresa May may be seeking to ditch the
project as part of a new industrial strategy, said
Liebreich.
At a meeting between Theresa May and French
President Francois Hollande earlier this month Britain’s
new prime minister was non-committal about the
project, according to people present at the private talks.
Now that EDF has made the final investment decision,
“if the U.K. cancels it, then the U.K. becomes liable for
canceling the contract,” said Liebreich.
EDF has already spent 2.5 billion pounds on Hinkley
Point, and needs the project to maintain its know-how in
the industry, according to the company’s chief
executive Jean Bernard-Levy.
“EDF are so exposed now. There’s a 2.6 billion-pound
hole in the Somerset ground that EDF have spent of
their own money,” said James Heappey, a local MP and member of the Energy and Climate
Change Select Committee. “I don’t think they can walk away from that scale of investment.”

First U.S. LNG shipment goes to China as Panama Canal opens
Reuters + Newbase
The first liquefied natural gas vessel from the lower 48 U.S. states is on its way to China,
according to a Reuters interactive map on Friday, the latest sign that the expanded Panama Canal
is allowing U.S. exports to reach the world's top LNG buyers in Asia.
Royal Dutch Shell's Maran Gas Apollonia loaded up with gas at Cheniere Energy Inc's Sabine
Pass LNG export plant in Louisiana, the map showed. It passed through the canal earlier this
week and was moving northwest up the west coast of Mexico on Friday afternoon.
Shell does not disclose the destination of its vessels, company spokesman Ray Fisher said. LNG
experts at energy data provider Genscape confirmed the ship's destination was China, but said
that could change.
China's fast-growing demand for gas, to help alleviate high levels of pollution from burning coal,
has outstripped its domestic supply since 2007, according to U.S. Energy Information
Administration data.
The Panama Canal shaves distances between export plants dotted along the Gulf of Mexico and
Asia to 9,000 miles (14,484 kilometers) from 16,000, allowing U.S. producers to better compete in
one of the world's biggest gas consuming markets.
Since Sabine Pass started exporting gas in February, 20 ships have picked up about 65.9 bcf of
gas from the facility, based on the capacity of the tankers. So far, gas from Sabine has been
delivered to South America, India, the Middle East and Europe.
The United States, which has been exporting LNG to Asia from Alaska since 1969, has not
shipped gas directly to China at least since 1973, according to federal energy data going back that
far. The United States, however, did re-export some gas from at least one other country to China
in 2011, according to the federal data.
A surge in U.S. gas production from the shale revolution stimulated billions of dollars of
investment in building LNG export terminals, transforming the country from an importer of LNG to
an exporter of the fuel.
By 2019, the United States is expected to be pumping out around 60 million tonnes of LNG
annually. So far only Sabine Pass is exporting LNG from the lower 48 states and output will
double to 9 million tonnes per annum as Cheniere adds a second production line later this year.

NewBase 31 July 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil ends July with worst monthly loss in a year
Reuters + NewBase
Oil prices steadied on Friday after touching three-month lows during a week-long selloff fueled by
a persistent global supply glut, bringing the monthly decline to nearly 15 per cent, the biggest
monthly loss in a year for US crude.
Slower economic growth and high inventories of crude and refined oil products have driven Brent
and US West Texas Intermediate (WTI) crude futures to bear market territory, 20 per cent below
their 2016 highs.
The two benchmarks matched April lows on Friday before their most actively traded contracts
settled up on what traders said was short-covering by investors taking profit on bearish bets.
Hedge funds, some of the biggest bulls in oil, slashed their positive bets on US crude to a five-
month low during the week to July 26, while holding a record net short, or bearish position, on
gasoline, data showed.
The dollar's drop to a three-week low .DXY also made greenback-denominated oil more affordable
to holders of the euro and other currencies.
The September Brent contract LCOU6, which expired as the front-month, settled at $42.46 a
barrel, down 0.6 per cent on the day and 14.5 per cent lower on the month. That was the biggest
monthly drop for Brent since December.
Oil price special
coverage

Brent's more actively traded October contract LCOV6 rose 30 cents to settle at $43.53, after
hitting $42.52, its lowest since April 19.
WTI's front-month contract, September CLU6, rose 46 cents, or 1 per cent, to settle at $41.60 a
barrel, after slipping below $41 for the first time since April 20. The contract notched a monthly
decline of 14 per cent, the biggest for a WTI front-month since July 2015.
Crude prices remained up more than 55 per cent from 12-year lows of $26 to $27 hit in the first
quarter. The recovery faded after prices above $45 enticed US oil drillers to return to the well pad.
Drillers added 44 rigs in July, the most in a month since April 2014.
Cheap crude has led refiners to produce more fuel worldwide, adding to the oversupplied market.
Oil majors Exxon Mobil Corp, BP, Royal Dutch Shell and Chevron Corp each had a poor second
quarter because of weak refining margins.
"Doubts are rife as to whether the oil supply imbalance is indeed slowly drawing to an end," said
Stephen Brennock, of London-based oil brokers PVM. Some traders said oil could see technical
support in the near-term after Brent and WTI fell below their 200-day moving averages on Friday.
Analysts in a Reuters survey said they expected higher oil prices this year based on growth in
demand.
"We are maintaining a bearish posture while at the same time suggesting that additional crude
price declines of around $4 a barrel from current levels could require a few more weeks," said Jim
Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates. –
US Oil Producers in U.S. Add to Rig Fleet for a Fifth Week
U.S. oil producers are continuing to return to the shale patch. Rigs targeting crude capped their
first five-week gain since August, rising by 3 to 374 in the period ended July 29, according to
Baker Hughes Inc. data released Friday. Prices have climbed from a 12-year low in February,
prompting American firms to expand drilling after idling more than 1,000 oil rigs since the start of
last year.

The Glut Strikes Back as Oil Returns to Brink of Bear Market
Bloomberg - Grant Smith
The bullish spirit that gripped oil traders as industry giants from Saudi Arabia to Goldman Sachs
Group Inc. declared the supply glut over is rapidly ebbing away.
Oil is poised for a drop of 20 percent since early June, meeting the definition of a bear market.
While excess crude production is abating, inventories around the world are brimming, especially
for gasoline, and a revival in U.S. drilling threatens to swell supplies further. As the output
disruptions that cleared some of the surplus earlier this year begin to be resolved, crude could
again slump toward $30 a barrel, Morgan Stanley predicts.
“The tables are turning on the bulls, who were prematurely constructive on oil prices on the basis
the re-balancing of the oil market was a done deal,” said Harry Tchilinguirian, head of commodity
markets strategy at BNP Paribas SA in London. “It’s probably going to take a little longer than they
expected.”
Oil almost doubled in New York between February and June as big names from Goldman and the
International Energy Agency to new Saudi Energy Minister Khalid Al-Falih said declining U.S. oil
production and disruptions from Nigeria to Canada were finally ending years of oversupply. Prices
are set for their biggest monthly loss in a year amid a growing recognition the surplus will take
time to clear.
“There’s lots of crude and refined products around,” said David Fransen, Geneva-based head of
Vitol SA, the biggest independent oil trader. “Demand growth has faltered a bit.”
The stockpiles of crude and refined oil that built up in industrialized nations during the years of
oversupply remain formidable, standing at a record of more than 3 billion barrels, according to the

Paris-based IEA. Traders struggling to sell cargoes are hoarding the most barrels on board
tankers at sea since the end of the 2008-2009 financial crisis, the agency estimates.
In some countries the glut seems to be getting bigger, with weekly U.S. government data on
Wednesday showing a surprise inventory increase in the world’s biggest oil consumer at at time
when summer driving demand should deplete stockpiles.
The latest challenge for the market is “a shift in the surplus from crude to products,” Jeff Currie,
head of commodities research at Goldman Sachs in New York, said in a Bloomberg Television
interview Wednesday. Refiners churned out gasoline earlier in the year to take advantage of
cheap crude, and stockpiles of the motor fuel are now at the highest for the time of year in at least
20 years, EIA data show.
The next move lower could come as crude production ramps back up, said Adam Longson, an
analyst at Morgan Stanley in New York. Canadian oil-sands producers have restored what was
halted in May when wildfires menaced more than 1 million barrels of daily output. Nigeria has
partially recovered after militant attacks curbed production to a three-decade low, according to the
IEA.
In the U.S., production declines have leveled off over the past three weeks, EIA data shows. The
weekly count of active oil rigs published every Friday by Baker Hughes Inc. has recorded its
longest run of increases since August.
Hidden Surplus
“Did the glut disappear in the first place?” asked Eugen Weinberg, head of commodities research
at Commerzbank AG in Frankfurt. “It was masked for a while by the shortfalls in Nigeria and
Canada, but it did not disappear.”
Still, banks from Citigroup Inc. to Barclays Plc and Societe Generale SA are confident the overall
re-balancing of the market remains on track, despite the current price retreat, and that markets will

recover by the end of year. The latest sell-off reflects the strength of the dollar, which curbs
investors’ appetite for commodities, rather than any worsening of supply-demand fundamentals,
according to Goldman Sachs.
“I would call it a bump on the road towards a looming rebalancing,” said Miswin Mahesh, an
analyst at Barclays in London. “The supply side is adjusting sharply and we will see it slow down a
lot faster than demand from the fourth quarter onwards. The low price is creating a one-two punch
moment for the supply side, taking off both current and future supplies.”
The recovery will take prices up to $50 a barrel by the end of the year, according to Barclays and
Commerzbank. In the meantime however, sentiment has soured so much that further losses to
$40 are inevitable, Commerzbank’s Weinberg said. West Texas Intermediate crude futures lost as
much as 1.4 percent to $40.57 a barrel on Friday.
“The oversupply will diminish,” Weinberg said. “But the market is deaf in one ear right now.
Sentiment was too pessimistic at the beginning of the year, extremely bullish in June, and now
back again to pessimism.”
Sinking Oil Prices Mean Fragile Unity for OPEC’s New Chief
Bloomberg - Grant Smith Wael Mahdi
When OPEC’s new chief starts next week, he’ll take over an organization that’s largely reconciled
internal differences after a two-year fight over strategy. But as oil prices sink again, that unity
could be at risk.
Nigerian Mohammed Barkindo will be the first
new top official at the Organization of
Petroleum Exporting Countries in almost a
decade. He comes to the role after a dispute
over output policy split OPEC’s richest and
poorest nations and marked the final months of
his predecessor’s tenure. While members now
back Saudi Arabia’s tactic of pumping without
restraint to choke off supply from rivals such as
U.S. shale drillers, many struggle with its
effects.
Oil’s 53 percent recovery since January hasn’t boosted prices enough to relieve the economic
pain that pushed some members, notably Venezuela, into a state of crisis. Worse still, crude is
sliding back toward $40 a barrel as demand growth slows and the slump in U.S. production levels
off, with drilling again on the rise.
“Barkindo is taking the post at a critical time for the organization,” said Abdulsamad al-Awadhi,
who was Kuwait’s national representative to OPEC from 1980 to 2001. “His success will not only
rely on his relations to Saudi Arabia” and its Gulf allies, “he has to win the confidence of the other
founding members: Iran, Iraq and Venezuela," he said.

Venezuela, Iraq, Nigeria, Algeria and Libya were dubbed by RBC Capital Markets as OPEC’s
‘Fragile Five,’’ the countries most at risk of political turmoil as they struggle to balance their
budgets. Only Kuwait and Qatar are close to their fiscal break-even points with oil prices at $50 a
barrel, according to the International Monetary Fund. Saudi Arabia, while needing higher prices,
can tap its foreign currency reserves, the world’s fourth largest, to cover any shortfall.
“Clearly, it’s a very divided organization,” Mike Wittner, head of oil market research at Societe
Generale SA in New York, said by phone. “There’s the haves and have-nots. The haves are the
core Gulf countries, and then there’s everybody else. In a long and painful down cycle, those
divisions become starker than ever.”
For a story on the looming bear market for crude, click here.
West Texas Intermediate crude futures, the U.S. benchmark, lost as much as 1.4 percent to
$40.57 a barrel on Friday before bouncing back to a 0.8 percent gain. They were still headed for
their biggest monthly loss in a year.
Venezuela’s embattled socialist government is struggling to pay for vital imports and service debt,
while enduring the sharpest contraction in a decade and the highest inflation rate in the world.
Barkindo’s native Nigeria is suffering a recession for the first time since 1991 and a plunge in its
currency to a record low as the oil rout is compounded by militant attacks on pipelines and other
facilities.
El-Badri Exits
The schism between OPEC’s richest and poorest states widened in the run-up to Barkindo’s
appointment, as the wealthy Gulf nations insisted on unfettered production to defend market
share, while a bloc led by Venezuela urged them to cut output and boost prices.
While Barkindo’s predecessor, Libya’s Abdalla El-Badri, had been due to stand down in 2012 after
serving the maximum two terms allowed by OPEC’s rules, he was repeatedly asked to stay on as
members failed to agree on a successor.
In December 2015, frustrated by their failure to reverse Saudi Arabia’s strategy, Venezuela and its
allies insisted that by mid-2016 a replacement should be found for El-Badri, who had defended the

market-share policy. Barkindo was chosen as his successor when the group next gathered on
June 2.
Barkindo was acting secretary general in 2006 and served for several years as one of Nigeria’s
OPEC representative. He also was managing director of state-owned Nigerian National Petroleum
Corp. in 2010.
“He is a highly skillful negotiator and middleman” and these qualities “will be tested significantly”
by the divisions in OPEC, said Ed Morse, head of commodities research at Citigroup Inc. in New
York. “Barkindo will be as successful as anyone could be, more successful than most others,”
having learned from experiences in Nigeria’s oil industry how “to forge agreements through
compromise,” he said.
Although the secretary general doesn’t set policy, the role is important as the organization’s public
representative and, as was often the case with El-Badri, its top internal diplomat, resolving
disputes between members. There are now 14 with the recent addition of Gabon.
Tensions between OPEC’s members have always been a feature of the organization and haven’t
prevented the group’s latest maneuver from being successful, said Societe Generale’s Wittner.
OPEC Cohesion
Still, cohesion has been key for some of OPEC’s most effective actions, such as the record supply
cuts that helped revive prices after the 2008 financial crisis. Coordination may be needed again in
the future as rising fuel demand and the rout in non-OPEC supply makes the world more reliant on
new supplies from OPEC, Wittner said.
As OPEC’s present strategy is to remain passive while the market corrects itself, Barkindo’s first
challenge may be to define the organization’s function in this new context, said Jamie Webster, an
independent analyst in Washington who regularly attends OPEC meetings.
“The big thing he’s going to have to deal with is trying to show they’re still relevant,” said Webster.
“They’re searching for relevance in an era when they’re not really making any decisions. Not
dead, but certainly in hibernation.”

NewBase Special Coverage
News Agencies News Release 31 July 2016
A look back at Solar Impulse 2’s extraordinary round-the-
world solar flight
CNBC - Alexandra Gibbs | @alexgibbsy
In March 2015, solar-powered aircraft Solar Impulse 2 took on the mammoth task of a round-the-
world flight without a drop of fuel.
More than a year later, the plane successfully landed back Tuesdaywhere it started and has managed
to clock up a number of world records.
Pool/Solar Impulse/Bertrand Piccard/ | Anadolu Agency | Getty Images
Solar Impulse 2 pilots Bertrand Piccard (R) and Andre Borschberg (L) waves to the crowd after landing in Abu Dhabi to finish their
world flight on July 26, 2016.
Dubbed as the "definition of adventure" by its pilots and having brought solar-powered technology
to the forefront of people's minds, CNBC takes a look back at some of Solar Impulse 2's most
noteworthy moments during its round-the-world trip.
Before taking flight
The concept of Solar Impulse actually dates back to 1999, when pilot Bertrand Piccard flew
around the globe in a balloon. On his trip with Brian Jones, Piccard became extremely conscious
of the amount of fuel needed during the voyage; triggering a desire to ensure his next round-the-
world flight was fuel and emissions-free.

Following years of research, Piccard officially founded the Solar Impulse project with fellow pilot,
André Borschberg in 2004 and began working on the aircraft's first prototype. In December 2009,
the first prototype took a successful short "flea hop" test – for 350 meters, one meter off the
ground – and then went on to do its maiden flight in April 2010.
In 2014, the project's pilots and co-founders unveiled Solar Impulse 2 and took it on its first flight.
Taking to the skies
On March 9, 2015, Solar Impulse 2 (Si2) set about to create a world record: to fly around the world
powered only by the sun, during the course of five months. Taking flight from the Abu Dhabi, Solar
Impulse's CEO André Borschberg flew the plane for 13 hours to Muscat, Oman.
Piccard's vision for SolarImpulse Monday, 9 Mar 2015 | 7:00 AM ET|02:01
While the journey itself was seen as a first for many, for the pilots it was about promoting clean
technologies and demonstrating what solar energy can do for current and future generations.
"In our world today, if we want a better quality of life, to create jobs, to make profit for the industry,
to sustain growth for our world, we need new clean technologies, because this is what the world
needs," Solar Impulse chairman, Bertrand Piccard told CNBC before the journey began.
The carbon-fiber aircraft itself weighs 2,300 kg, and is equipped with more than 17,240 solar cells
stretched out on its wings, which helps power the propellers and electric engines.

July 2015: Breaking records
After travelling to countries including India, China and Japan, Si2 took on its eighth and most
challenging leg yet during the early hours (local time) of June 29, 2015: a five-day non-stop flight
from Nagoya, in Japan to Kalaeloa, Hawaii.
Piloted by Borschberg, Si2 travelled for more than 8,900 km, achieving the world record for the
longest non-stop solo flight.
Grounded: July 2015 – April 2016
Less than two weeks after landing in Hawaii, the pilots announced that Si2 had to be grounded for
several months, after the record-breaking flight caused the plane to suffer from "irreversible damage
to overheated batteries."
Solar Impulse takes its tech to COP21
Is Solar Impulse a viable option for society? Tuesday, 1 Dec 2015 | 4:40 AM ET|02:08
Even though Si2 was grounded in Hawaii, this didn't stop the pilots from promoting the power of
clean technologies, with Piccard and Borschberg taking to climate summit COP21, to show their
support for a greener world.
Everything society currently uses for energy is a "100 years old" Piccard told CNBC at COP21,
saying that if the world wants to solve climate change, "it will be done only by having these new

technologies which are profitable, create jobs, make new industrial markets and at the same time,
reduce CO2 emissions."
April 2016: Recharged and ready to fly
After almost 10 months of being grounded, Si2 returned to the skies on April 21, 2016 from Hawaii
and headed towards California's Silicon Valley, with Piccard at the helm.
July 2016: Mission Complete
Solar Impulse completes world tour Tuesday, 26 Jul 2016 | 12:15 AM ET|02:32
In mid July 2016, Si2 took to the skies for its 17th, and final leg of its round-the-world trip; starting in
Cairo and touching down back where it started in Abu Dhabi.
After the 16-plus months since it first took off, Si2 finished its tour on July 26 in the UAE, having
clocked up over 43,000 km and 23 days of flying during the round-the-world tour.
Shortly after Piccard touched down in the UAE, he told CNBC that having both elating moments
and setbacks made the solar-powered flight the "definition of adventure."

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 31 July 2016 K. Al Awadi

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