New base energy news issue 916 dated 28 august 2016

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NewBase Energy News 28 August 2016 - Issue No. 916 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
OPEC members' net oil export revenue in 2015 drops to
lowest level since 2004
U.S. EIA, derived from data in the Short-Term Energy Outlook
Members of the Organization of the Petroleum Exporting Countries (OPEC) earned $404 billion in
net oil export revenue in 2015, according to U.S. Energy Information Administration (EIA)
estimates. These earnings represent a 46% decline from $753 billion earned in 2014. Although
these net export earnings include Iran's revenues, the net export revenue is not adjusted for
possible price discounts that Iran may have offered its customers between late 2011 and January
2016, when nuclear-related sanctions targeting Iran's oil sales were in place.
OPEC members' net oil export revenue has fallen as crude oil prices have declined. The monthly
average Brent spot price dropped from $112 per barrel (b) in June 2014 to $38/b in December
2015. Based on EIA price forecasts, which are subject to a wide range of uncertainty, OPEC
revenue is expected to fall to $341 billion in 2016 before rising to $427 billion in 2017.
OPEC members' 2015 net oil export revenue was at the lowest level since 2004, with significant
implications for the fiscal condition of member countries that rely heavily on oil sales to fund social
programs and to import other goods and services. In inflation-adjusted terms, OPEC net oil export
revenue totaled $606 per person in 2015, down 83% from the 1980 level of $3,500 per person.

Source: U.S. Energy Information Administration, derived from data in the Short-Term Energy Outlook
Note: Data before 1994 do not include Angola or Ecuador. Figure does not include Gabon, which rejoined
OPEC on July 1, 2016.
The effects of recent declines in net oil export revenue on the economies of each OPEC member
state depend on the importance of oil export revenues and the existence of other financial assets.
Petroleum exports by OPEC members accounted for between 5% (Indonesia) to 99% (Iraq) of
total export revenues in 2015.
Generally, countries with sizeable financial assets, such as the Persian Gulf States (Saudi Arabia,
Kuwait, Qatar, and the United Arab Emirates), are affected to a lesser degree than other oil-
producing countries, such as Iraq, Nigeria, and Venezuela, that do not have large financial
reserves.
Although declining crude oil prices have been the main driver behind lower OPEC revenue since
mid-2014, unplanned production outages among some OPEC members have also contributed to
lower export earnings. A number of OPEC countries have experienced relatively high levels of
unplanned outages.
Some of these outages are the result of political factors, such as the sanctions-related production
shut-ins in Iran between 2011 and early 2016, when roughly 0.8 million barrels per day (b/d)
remained off the market. In Venezuela, crude oil production has declined sharply since the end of
2015, as oil service companies have largely stopped work in response to a lack of payment by
state-owned Petroleos de Venezuela S.A., and oil production may continue to decline in the near
term.
Other unplanned outages have been related to armed conflict and militant activity in countries
such as Libya and Nigeria. Libya has struggled to maintain crude oil production and exports since
the fall of the Qaddafi regime in 2011, and more recently, opposing factions have clashed for
control of the country's oil export terminals.
The resulting lack of available oil export outlets has necessitated that most of the country's
production capacity remain shut in. In Nigeria, continuing militant attacks since the start of 2016
have targeted oil and natural gas infrastructure, resulting in more shut-in production.
More information about OPEC revenue and unplanned outages in OPEC member countries is
available in This Week in Petroleum.

OPEC's Barkindo: Oil Producers Show Realisation Action
Needed On Output… by Reuters
OPEC Secretary-General Mohammed Barkindo sees a growing understanding inside and outside
the oil producers' group that action is needed to manage crude production in order to support
prices, he said in remarks published in London-based newspaper Al-Hayat.
He told the newspaper: "There is growing realisation within OPEC and outside that producers
inside and outside must take more proactive stands in relation to production management in order
to complement traditional market forces."
"We have seen where the approach of non-intervention in prices since 2014 has led," he said in
remarks published in Arabic. Members of the Organization of the Petroleum Exporting Countries
will meet on the sidelines of the International Energy Forum (IEF), which groups producers and
consumers, in Algeria on Sept. 26-28.
Asked about the possibility of an agreement on freezing production levels, he said: "Nothing is
impossible in the current situation, and I know that no country in OPEC is immune to low prices."

Morocco: Sound Energy spuds second well at Tendrara, onshore
Source: Sound Energy
Sound Energy has confirmed the commencement of drilling of the second well at Tendrara,
onshore Morocco.
Following the recent success of the first Tendrara well (TE-6), a sub-horizontal appraisal well (the
Company's second well on the licence; TE-7) was spud on 25 August 2016. The well objectives
of TE-7 include proving sufficient gas volumes and well deliverability to enable finalization of the
field development plan
and a concession
application and
demonstrating the
benefits of sub-horizontal
drilling, which is expected
to be implemented as the
production well concept
for Tendrara.
The TE-7 site is approx.
830 metres to the
Northeast of TE-5 and
hence some 1.6 kms
from the TE-6 site.
Drilling is planned to
reach a total measured
depth of 3440 meters
with specific tools being
used to geo steer the well
at close to an 88 degree
angle inside the TAGI
reservoir to ensure a
horizontal drain of
between 600 and 900 metres. The sub-horizontal section will run to the North, parallel to the
minimum horizontal stress observed in TE-6.
The TE-7 drilling programme is anticipated to follow key three phases:
• Drilling and logging (approx. 54 days)
• Completion and stimulation (approx. 30 days)
• Clean-up and initial well testing (up to 10 days)
The Company looks forward to updating shareholders on achievement of each of the three casing
points and achievement of total depth. The final results of the well will be announced after the
initial well test.
An extended well test will follow for approx. 70 days thereafter to confirm production sustainability
and to aid comprehensive field development planning.

UK: Scottish deficit grows to nearly £15bn as oil revenues collapse
Deficit is now equivalent to 9.5% of its GDP, with latest figures showing bigger gap
between tax income and spending than UK….The Gordian
The gap between Scotland’s public spending and tax revenues has widened, with the crash in
global oil prices leading to a deficit of nearly £15bn.
The latest official data shows that Scotland’s structural deficit was more than twice that of the UK
last year, after its share of North Sea oil tax revenues collapsed, falling from £1.8bn in the
previous year to £60m.
The government expenditure and revenue Scotland (Gers) figures show that in 2015-16, Scottish
tax receipts were £400 less than the UK average, at £10,000, after several decades during which
oil had pushed them above the UK level.
The Scottish and UK governments spent £1,200 a head more on public services in Scotland, and
on Scotland’s share of UK and overseas spending, while overall tax receipts fell by £400 a head.
Compared with spending at UK level, that led to a gulf of £1,600 a head between what was raised
in taxes and spent in Scotland. Overall government spending as a share of the economy
increased again to reach nearly 44% of Scotland’s GDP, compared with 40% at UK level.
Nicola Sturgeon, the Scottish first minister, said the figures were very difficult and the plunge in oil
prices meant that Scotland had “suffered an economic shock, which has impact on our fiscal
position”.
The Gers data presented a challenging picture for Scotland, she said, adding: “It is a challenge we
have had for some time now – how to grow and diversify our onshore economy.”

Senior economists warned that a budget deficit of this scale made Scottish independence
effectively unaffordable, unless Sturgeon made very tough choices on spending cuts or tax rises.
The Fraser of Allander Institute, an economics think tank at Strathclyde University, directly
challenged Sturgeon’s statement on Wednesday that “the route to closing the deficit is
fundamentally on the revenue growth side”.
Closing a 21% structural deficit would need rates of economic growth for Scotland not seen in
current lifetimes, the FAI said. As Sturgeon had pointed out on Tuesday, the Brexit vote was likely
to make those efforts even more difficult.
“It is simply not possible to operate under independence with a deficit at this scale – full stop,” the
FAI said. “The Scottish government needs to set out the tough choices that it would make
alongside a detailed and comprehensive plan for how it would manage the public finances under
independence. This won’t be easy, but is essential.”
The data put Scotland’s net fiscal deficit last year at £14.8bn, including North Sea receipts, £522m
higher than the previous year. That was equivalent to 9.5% of Scotland’s GDP. The UK’s
estimated deficit for the same period was 4% of GDP.
Asked how an independent Scotland could meet the EU’s requirements for anannual spending
deficit to be lower than 3%, Sturgeon said independence would change Scotland’s overall
financial position. “I accept Scotland faces, whatever our constitutional arrangements, a very
challenging fiscal position, [but] the fundamentals of our economy are strong,” she said.
Scotland’s tax revenues were estimated at £53.7bn, but the Scottish and UK governments spent
£68.6bn on public services in Scotland, and on Scotland’s share of UK and overseas spending.
Kezia Dugdale, the Scottish Labour leader, said the figures “should act as a reality check for those
calling for another independence referendum”.

“During the independence
referendum, Nicola Sturgeon
personally promised a second oil
boom. Her own government’s
figures show she misled people and
that is unforgivable,” she said.
“The SNP’s own figures confirm
independence would mean severe
cuts over and above those already
being imposed by the Tories, at
exactly the time when our public
services need more investment.”
David Mundell, the Scottish secretary, said: “Scotland weathered a dramatic slump in oil revenues
last year because we are part of a United Kingdom that has at its heart a system for pooling and
sharing resources across the country as a whole.
“The fact public spending was £1,200 per head higher in Scotland than the UK as a whole also
demonstrates that the United Kingdom, not the European Union, is the vital union for Scotland’s
prosperity.”
Sturgeon denied that this meant the country was being subsidised by the rest of the UK, saying
Scotland had paid in a higher rate of tax revenues than the UK on average in recent decades.
That position ignores the far higher levels of public spending in Scotland, which needed in effect
an injection of £15bn last year from the UK treasury.
Sturgeon denied that closing the gap would require spending cuts or tax rises. “What I say is
growing revenue is the priority. Public spending in Scotland is higher than the rest of the UK for
some very good and in many respects unavoidable reasons, such as its rurality. It costs more to
deliver health services to island communities,” she said.
Sturgeon insisted that the data offered cause for some optimism. It showed that taxes from the
onshore economy, excluding North Sea revenues, had grown by £1.9bn. At 36.5% of Scotland’s
GDP, this was the best figure since the financial crisis and more than offset the £1.7bn lost from
the decline in oil and gas taxes.
But she said the overall figures underlined her anxieties about the damage that leaving the EU
could do to the Scottish economy. “Leaving the EU will leave the task of growing the onshore
economy so much harder than it might be,” Sturgeon said.
Prof John McLaren, an independent economist at Scottish Trends, said future oil revenues were
never likely to recover enough to significantly cut the deficit. A doubling of current oil prices to
$100 a barrel would still only raise oil receipts to £2.8bn.
McLaren said Scotland’s worse position compared with the UK was likely to continue for the next
five years, the direct reverse of claims made in Alex Salmond’s white paper on independence in
2013 that Scotland’s tax revenues and finances would remain stronger than the UK’s.
“Scotland’s fiscal position relative to the UK can be forecast with greater certainty and is likely to
remain at around the current level – about 5.5% of GDP worse off than the UK’s,” McLaren
predicted.

Russia-India oil deal at risk due to US sanctions - media
Reuters
US sanctions are threatening to derail Russian energy major Rosneft’s acquisition of a 49 percent
stake in India's Essar Oil, reports The Times of India. The deal was curtailed by the US Treasury's
Office of Foreign Assets Control, according to the daily.
In July 2014, the Department of the Treasury
included Rosneft on the list of sanctioned Russian
companies after Washington accused Moscow of
involvement in the military conflict in Eastern Ukraine
and of annexing Crimea.
Indian banks, which invested over $5 billion into
Essar Oil and currently hold 17 percent, expressed
concerns over the deal due to fears of the potential
consequences. “We may have to review our
exposure to Essar Oil if Rosneft comes on board,” said a top banker with a state-run lender, as
quoted by The Times of India.
However, Essar Oil will reportedly try to
push the deal with Rosneft through,
allowing the Russian company to enter the
Indian energy market.
Searching to expand cooperation with
Russia beyond the traditional defense
buyer-supplier relationship, New Delhi has
invested over $5 billion in the Russian
energy sector.
The Essar-Rosneft deal aims to open up India's retail energy business to the world's largest oil
producer.
The deal was planned to be sealed by June. The Indian company had to reduce the share
intended for sale by 25 percent, but the measure failed to change the situation.
Moreover, the sale of a 25 percent stake to the Dutch multinational trader Trafigura Group risks
collapse due to the close ties with Rosneft. Trafigura handles much of the crude exported by
Russia.

NewBase 28 August 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil steady in volatile session, down 2 percent for the week
By Devika Krishna Kumar + NewbASE
Oil prices were largely unchanged on Friday in a volatile session, as traders reacted to comments
from Fed Chair Janet Yellen and reports of missile activity in Saudi Arabia.
The market was taking its cues from the movement in the dollar, which has been choppy following
Yellen's remarks.
At one point, crude benchmarks were up as much as 2 percent before drifting lower. Brent crude
futures settled at $49.92, up 25 cents or 0.5 percent. U.S. crude ended the session 31 cents
higher at $47.64.
Prices gathered support briefly from Baker Hughes data showing that U.S. oil drillers kept rig
count steady after eight weeks of additions.
The market was primed to react to Yellen's speech in Jackson Hole, Wyoming, as her remarks
initially caused a big rally in the dollar, which caused oil to slip. Later, the dollar pared those gains,
with the dollar index at one point down as much as 0.5 percent. It was later up 0.8 percent.
Oil price special
coverage

Oil prices touched the day's highs after reports of Yemeni missiles hitting Saudi Arabia's facilities,
traders said. Saudi state TV reported that a projectile fired from Yemen hit a power relay facility in
Najran, in the southern part of Saudi Arabia.
Sal Umek, senior analyst at the Energy Management Institute in New York, said he did not see
much effect on the market from the Saudi Arabia reports.
"At the end of the day, what is driving the market right now is short covering, being that it's Friday
and the dollar," he said.
A weaker dollar can be seen as supportive for oil prices as it makes dollar-traded oil cheaper for
countries using other currencies, potentially spurring demand.
Oil and natural gas traders have
also been watching for the impact of
tropical storms, saying some could
possibly become a major hurricane
in the Gulf of Mexico, taking out
further supply.
BP said it began securing offshore
facilities and evacuating non-
essential personnel from our
platforms and drilling rigs in the U.S.
Gulf.
Oil prices were down over 2 percent
for the week as the Saudi energy
minister watered down expectations
that the world's largest producers
might agree next month to limit their
output.
"We don't believe any significant
intervention in the market is
necessary other than to allow the
forces of supply and demand to do
the work for us," Saudi Energy
Minister Khalid Al-Falih told Reuters
late on Thursday.
Members of the Organization of the
Petroleum Exporting Countries will
meet on the sidelines of the
International Energy Forum, which
groups producers and consumers,
in Algeria from Sept. 26-28.
.
.
.

Oil up on reports of Yemen missiles hitting Saudi oil facilities
Reuters
Oil prices rose about 2 percent on Friday after reports of Yemeni missiles hitting Saudi Arabia's oil
facilities.
Yemeni forces have fired ballistic missiles at the facilities belonging to the Saudi state oil giant
Aramco in the kingdom's southwest, according to traders citing reports by Iran Press TV and
Yemen TV.
Prices were also supported dollar
tumbled against a basket of
currencies after U.S. Federal
Reserve Chair Janet Yellen's
comments at an international
gathering of central bankers in
Jackson Hole. The dollar index
fell 0.5 percent following Yellen's
comments, giving a boost to
greenback-denominated oil.
Brent crude futures rose 66 cents
to $50.33 a barrel by 10:36 am
ET. West Texas Intermediate
(WTI) crude rose 72 cents to $48.05 per barrel, a 1.5 percent gain. Prices were pressured early in
the session after Saudi energy minister watered down expectations that the world's largest
producers might agree next month to limit their output.
"We don't believe any significant intervention in the market is necessary other than to allow the
forces of supply and demand to do the work for us," Saudi Arabian Energy Minister Khalid Al-Falih
told Reuters late on Thursday.
Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of
the International Energy Forum, which groups producers and consumers, in Algeria from Sept. 26-
28.
Iran said on Friday that it would cooperate with other producers to stabilise oil markets, but added
that it expected others to respect its individual rights. Many observers interpreted that as Tehran
saying it would continue to try to regain market share by raising output after the lifting of sanctions
against it last January.
"I do not expect the OPEC meeting in September to agree any freeze or affect the oil market in
any significant way. This is because it appears key OPEC members remain more concerned
about market share," said Oystein Berentsen, managing director for crude at oil trading firm
Strong Petroleum in Singapore.
Analysts at Commerzbank also expressed doubt that any agreement might materialise next
month. "Capping production at this level would hardly reduce supply in any case, especially since
other leading OPEC producers such as Iraq are producing at or near record levels," the bank's
commodity team said in a note.
"And countries like Libya and Nigeria, which are producing significantly below their potential due to
unscheduled outages, are hardly likely to sign up to any voluntary restriction of production."

NewBase Special Coverage
News Agencies News Release 07 August 2016
Demand for LNG grows in Mena region
The national - Anthony McAuley
The slump in prices and surging power demand is spurring demand for liquefied natural gas in the
Middle East and North Africa.
Even the UAE, which earlier this year decided to put on hold indefinitely plans to build a huge
onshore LNG plant at the Indian Ocean port of Fujairah, instead recently chartered a floating
storage and regasification unit (FSRU) from Texas-based Excelerate to meet domestic gas
demand.
Throughout the region there are a growing number of such facilities under way or on the drawing
board to meet rising demand.
The slump in world seaborne gas prices is a major factor, driven largely by the waves of supply
that have hit the market as huge long-term projects came onstream in Australia, Papua New
Guinea, the US and elsewhere.
Last year, worldwide gas trade was surpassed only by oil as the most actively traded commodity,
and the surplus of supply over
demand reached its highest in a
decade, according to data from
BP.
There have even experimental
shipments of LNG from as far
afield as the US Gulf coast to
buyers in the Arabian Gulf,
including delivery to the Jebel Ali
LNG facility in Dubai.
"The external conditions are
driving Mena LNG demand
growth," said Emma Richards, an
analyst at BMI Research, part of
Fitch Ratings.
"The fact of the collapse in LNG prices and so much readily available supply has put companies in
a position to negotiate favourable long-term supply deals," she said.
At the same time, buyers have been favouring the more flexible FSRU option, which can be
chartered for a five or 10-year period, rather than a multibillion-dollar investment over 20 or 30
years in an onshore facility.

Excelerate confirmed that its namesake FSRU, which moored at Ruwais in Abu Dhabi’s Al
Gharbia region earlier this month, was chartered by Gasco – a joint venture between Adnoc, Shell
and Total.
The ship has been commissioned initially to take LNG from the Das Island LNG export facility and
feed into the UAE grid about 14 million cubic metres a day, or about 7 per cent of last year’s
average daily gas demand.

The UAE’s demand for gas grew by nearly two-thirds over a decade to last year’s consumption of
69 billion cubic metres, and although it has slowed it is still forecast to rise at a rate of 5 to 6 per
cent a year through 2020.
Domestic supply has been limited as the national oil company, Adnoc, prioritises the use of gas
for reinjection into oilfields to enhance production.
Other GCC countries have similar rates of gas demand growth and outside the troubled hotspots
like Yemen, Syria and Iraq, even faster rates of growth are expected.
"Egypt has low power consumption per capita and tremendous demand potential," said Ms
Richards. "The country is building out its gas power sector, which will be supported by domestic
gas projects, but will nonetheless remain dependent on LNG imports for many years. A third
FSRU could be installed, allowing for increased LNG imports."
Bahrain is expected to install an FSRU at the port of Hidd by 2018 and start importing an
increasing amount of LNG over the subsequent decade.
Morocco, Tunisia and Lebanon are also expected to become new LNG markets, BMI Research
said.
In Morocco, there is already a proposal for an LNG import facility at Mohammedia, about 30
kilometres east of Casablanca, while Lebanon needs to overcome some political squabbling to
greenlight its FSRU plans.
UAE , FSRU - LNG
As Dubai grows, so the demand for energy grows. DUSUP supports the growth of Dubai by
ensuring that it buys sufficient energy at competitive price to secure the future of the Emirate.
Whilst today DUSUP buys the majority of its pipeline gas from Abu Dhabi and Qatar, for the future
DUSUP continues to seek out new sources of energy from around the world; to diversify its supply
and to manage the growth in energy demand especially during the peak summer period. The
development of the DUSUP LNG terminal has been a key element of that diversification goal.
In 2010 DUSUP completed the construction of a Liquefied Natural Gas (LNG) Import Terminal in
Jebel Ali port which allows the import of LNG via a Floating Storage Regasification Unit (FSRU).
The FSRU is an LNG tanker specially converted into an FSRU for this purpose and it is
permanently moored at the Terminal. LNG tankers berth alongside the FSRU and discharge LNG
into the FSRU. The FSRU warms the liquefied gas back to its gaseous state using seawater
through a heat exchanger, and then flows the gas into the onshore pipeline network.
DUSUP buys LNG both on the basis of a long term agreement for supply and by purchasing LNG
spot cargoes to support changes in demand. The combination of DUSUP's FSRU terminal and
Margham gas storage facility makes it possible for DUSUP's LNG trading team to respond to spot
market opportunities at short notice. DUSUP has received a wide range of LNG specifications and

has sourced the gas from all the major LNG exporting countries taking delivery from as far away
as Trinidad and Australia.
In 2015 began a programme of upgrading the capacity of the FSRU terminal to meet Dubai's
increasing energy needs. A newer and higher capacity FSRU designed to meet the future
operational requirements of the terminal replaced the original FSRU. This means that the Import
Terminal will be able to receive twice the number of cargoes than the original design.
DUSUP conducts regular programme Ship terminal compatability reviews and has a wide range of
LNG carriers approved for the terminal including a good safe track record of deliveries of different
carrier sizes up to and including the Q-Max class.
State-owned Abu Dhabi National Oil Company (ADNOC) is reportedly planning to start a
liquefied natural gas FSRU in the second half of 2016.
According to a report by Reuters, the floating LNG import terminal is being supplied by U.S.
company Excelerate Energy.
The LNG import terminal’s import capacity will be about 1 million tonnes per year, the reported
added.
The UAE already imports LNG via a floating terminal supplied by Excelerate Energy off the coast
of Dubai.
In 2010, Dubai Supply Authority (DUSUP) completed the construction of the LNG terminal in Jebel
Ali port which allows the import of LNG via a floating storage and regasification unit (FSRU).

LNG tankers berth alongside the Explorer FSRU, which regasifies the LNG using seawater
through a heat exchanger, and then flows the gas into the onshore pipeline network.
Oil Industry Shifts From Survival to Growth
Bloomberg - Rakteem Katakey
Multibillion-dollar oil and gas deals are back on the table.
More than $11 billion of transactions were announced globally in July as crude’s recovery fueled hopes of a
steadier market, Wood Mackenzie Ltd. said. That’s the highest monthly total this year and brings the
amount since May to $32 billion, triple that of the previous three months. Dealmaking will continue to
accelerate as oil prices stabilize, according to the consulting firm.
Exxon Mobil Corp. and Statoil ASA were among the buyers after crude’s rebound from a 12-year low
earlier this year bolstered confidence. Acquisitions will allow the companies to ensure future growth as the
industry has slashed $1 trillion in spending to protect their balance sheets during the downturn.
“The extreme oil price volatility in the first quarter caused a lot of uncertainty,” said Greig Aitken, principal
analyst for mergers and acquisitions at Wood Mackenzie. “Activity picked up as confidence returned and
companies started looking towards future growth instead of focusing entirely on survival.”
Exxon, the world’s largest oil producer by market value, agreed last month to acquire natural-gas explorer
InterOil Corp. for as much as $3.6 billion to add discoveries in Papua New Guinea. The company also is in
advanced negotiations with Eni SpA to buy a stake in gas finds off Mozambique, people with knowledge of
the talks said in July.
Statoil, Norway’s biggest oil producer, agreed last month to purchase an oil block off Brazil from Petroleo
Brasileiro SA for $2.5 billion, its biggest acquisition since 2011.
The deals follow a period of relative quiet as buyers and sellers failed to agree on valuations amid oil’s
decline. North America, home to many higher-cost shale drillers, saw the fewest transactions last year since
2004, according to data compiled by Bloomberg. Benchmark Brent crude averaged $35.21 a barrel in the

first quarter of 2016, the lowest in more than a decade. The grade traded at $49.42 at 2:38 p.m. Singapore
time.
“Buyers and sellers were so far apart in terms of price expectations,” said Bijan Mossavar-Rahmani,
executive chairman of oil producer DNO ASA, which made a $300 million bid for Gulf Keystone
Petroleum Ltd. in July. “A lot of the sellers still were hopeful that $100 oil or at least $80 oil was around the
corner, and it hasn’t happened.”
Shell-BG
Those companies that did make acquisitions had little cash to draw on. Royal Dutch Shell Plc’s debt
ballooned when it bought BG Group Plc, a rare mega-deal of the past two years, valued at more than $70
billion in April 2015. The transaction was announced just weeks before crude prices resumed their slide,
prompting some analysts and shareholders to suggest Shell was paying too much.
Such anxiety may ease with Brent crude now trading around $50 a barrel, and acquisitions could pick up as
buyers and sellers have more similar price expectations, according to Bloomberg Intelligence.
While crude has recovered, “there seems to be an increasing consensus that oil will not go back to over $100
any time soon,” said Philipp Chladek, a senior industry analyst for BI in London. “So the differing
perceptions about the asset values that, next to the volatility, was the main deal-breaker in the past, are
gradually converging.”
There’ll be plenty of assets up for grabs. Shell intends to raise $30 billion through divestitures in the three
years to 2018, while BP Plc plans as much as $5 billion of disposals this year. Total SA and Eni also are
putting assets on the block.
The market for oilfield acquisitions has “stabilized in the last three months and the consensus around
commodity prices and where prices are going has narrowed,” said Jon Clark, a transaction adviser at Ernst

& Young LLP. “There seems to now be a shift back into M&A-type activity and we’re starting to see
potential divestments coming out of the majors.”
Special Report on - The Slow Death of Diesel The Slow Death of Diesel
Chris Bryant
Chris Bryant is a Bloomberg Gadfly columnist covering industrial companies. He previously
worked for the Financial Times.
Oil industry investors are all too familiar with the concept of "stranded assets": the risk that climate
policies make hydrocarbon resources financially unviable. It's not just oil. In Europe, coal and gas-
fired power stations have been left stranded by solar and wind's ascendance, resulting inbillions of
euros of impairments.
Carmakers outsource a lot to suppliers, but still insist on building their own combustion engines.
They form the bedrock of brand identity and the added value in manufacturing. The effort
still consumes billions of euros in capital, but the assets risk being stranded by the rise of electric
vehicles.
The danger's acute in Europe because carbon dioxide emissions rules are stricter than in the U.S.
The big bet on diesel by the continent's carmakers (the chart below shows their percentage of
diesel sales in Europe) just makes things worse. Thanks in part to Volkswagen, it's not a
technology winning many friends.
ICCT
For smaller cars in particular, the technical effort of making diesel engines compliant is becoming
uneconomical. While more than half the cars sold in the continent are diesel-powered,

consultants at Alix Partners expect this to be just 9 percent in 2030. Combustion engine plants will
close:
The problem for the industry is that the plants, technology and tools needed to make combustion
engines, vehicle transmissions and gearboxes, make up a big chunk of company balance sheets.
As Philippe Houchois at Jefferies points out, there's a real risk that Europe's autos industry will
have to write down investments.
It's hard to say by how much because there isn't much detail on those balance sheets. But you get
some indication about the industry's exposure from Fiat Chrysler, which estimates that
powertrain tooling and R&D is 20 percent of the cost of developing a vehicle.

Tesla, the electric bogeyman to Germany's wheezing carmakers, has its own problems,
as chronicled by my colleague Liam Denning. But Elon Musk won't have to write down a bunch of
legacy diesel plants. It's no wonder carmakers trade on such lowly earnings multiples.
The balance sheet hit will depend on how quickly electric vehicles take off. They account for less
than 2 percent of Europe's car sales and the industry thought they'd be a minority pursuit for
years, giving it time to depreciate investments at a manageable pace.
Yet with battery costs plummeting, Bloomberg New Energy Finance expects the cost of owning an
electric vehicle to fall below conventional fuel vehicles as soon as 2022. Having dragged its heels,
even Volkswagen says as much as one quarter of its sales will be electric cars by 2025.
ELECTRIC CARS CHEAPER THAN CONVENTIONAL ONES by 2022
Ideally, carmakers would halt diesel spending. Unfortunately, they'll have to keep investing to hit
Europe's tough 2021 emission targets. Electric cars won't have picked up the slack by then. So
they're stuck. Daimler announced a 3 billion euro ($3.4 billion) investment in diesel engines this
year. It says it still sees a long future for combustion engines -- both for new cars and spares.
VW's new boss Matthias Mueller at least seems to recognize the danger. He's said there
may be a time when it's no longer worth investing in diesel. BMW's chief Harald Krueger
says similar. But that time's getting uncomfortably close.
There are things that can be done to smooth the transition. Besides cutting diesel investment to
the minimum, carmakers could partner with rivals. Engine joint ventures already exist: Renault has
one with Daimler.
Trade unions will demand carmakers preserve jobs, so expect some to try converting combustion
engine factories to electric technology. VW is among those considering investments in battery
production.
But making electric motors and transmissions is much less complicated than combustion engines,
meaning there's less value added by carmakers. Some may outsource to a supplier. Meanwhile,
battery production won't be labour intensive, otherwise costs won't fall enough to make electric
vehicles economical.

With the demise of diesel looking assured, employees and investors face an electric shock.
Tesla Unveils the World’s Fastest Production Car: 0 to 60 in 2.5
SecondsIt’s also the first electric automobile with a range of
more than 300 miles.
Bloomberg - Tom Randall
Tesla’s Model S was already the fastest four-door sedan in the world. In “Ludicrous Mode,” it had the
speediest zero-to 60 jump of any car under $200,000. But this, apparently, wasn’t ludicrous enough.
On Tuesday, Tesla Chief Executive Officer Elon Musk released a new, 100-kilowatt-hour battery pack for
the dual-motor versions of the Model S and Model X. The upgrade makes the Model S the first all-electric
sedan with a range of more than 300 miles, and it cuts the zero-to-60 miles per hour interval to just 2.5
seconds. Only a few cars can compete with that, including the LaFerrari and Porsche’s 918 Spyder. Those
cars, however, are limited-run supercars that cost $1.4 million and $845,000 respectively.
For the first time, Musk
said, “the fastest car in the
world, of any kind, is
electric. In the future,
people are really going to
look at gasoline cars in the
same way we look at
steam engines today:
They’re quaint, but it’s not
really how you get
around.”
Here are the specs on the
new Model S, which is big
enough to seat five and is
available now, starting at
$134,500:
What may be even more
impressive is the upgrade
for the Model X SUV. The
Model X seats seven people, has two trunks, and can now get to 60 mph in 2.9 seconds, faster than a
Lamborghini. The new P100D Model X starts at $135,500.
Squeezing another 10 kilowatt hours out of what was already the world's largest car battery has posed a
difficult challenge, Musk said. The new battery packs use the same Panasonic cells as previous Teslas but
require new wiring and changes to the seats to ensure safety, given the additional weight. Production will
initially be limited to about 200 packs a week and will only be available to the performance models
equipped with Ludicrous Mode, at least for the first few months.

Musk said the battery packs are reaching performance and capacity limits for the current round of battery
cells. The company will be
shifting to a new, larger cell
with the launch of the
Model 3, enabling additional
gains for the entire Tesla
lineup in the future, he said.
Pedestrians pass the
New York Stock
Exchange (NYSE) in New
York, U.S., on Friday,
Aug. 26, 2016. U.S.
stocks rose as investors
focused on Federal
Reserve Chair Janet
Yellen's bullish comments on the economy and signaled more skepticism that Federal Reserve
officials will follow through with interest-rate increases.
On Tuesday, Tesla announced new versions of its luxury cars that break major barriers for electric
vehicles. But are the upgrades, as Chief Executive Officer Elon Musk claims, enough to hand
Tesla the title of fastest car in the world?
The P100D Model S with Ludicrous mode will propel the car to 60 miles per hour in just 2.5
seconds. Tesla's Model X sport utility vehicle will get there in 2.9 seconds. The bigger, 100-
kilowatt-hour batteries also provide the first official U.S. Environmental Protection Agency range of
more than 300 miles on a charge.
These speeds are crazy fast, matched only
by sold-out supercars with tiny production
runs: Ferrari’s $1.4 million LaFerrari,
Porsche’s $845,000 918 Spyder, and
Bugatti’s $2.3 million Veyron Grand Sport
Vitesse. Tesla’s new Model S, at $134,500, is
just as quick as any vehicle on the road.
Even its seven-seat SUV beats the McLaren
675LT.
Speeds like this offer more Gs than Earth, so
the rate of acceleration is faster than falling. It
can feel difficult to support your head and
shoulders if you first don't lean back on the
headrest. And perhaps the strangest feeling
of punching it on a Tesla is that, with two all-
electric motors, the wheels don’t slip and
acceleration is practically silent.
Here’s a chart that shows how Tesla ranks in
speed and price among the world’s elite. The
latest Model S is in a category of its own,
especially when you consider it’s a spacious
four-door sedan with two trunks. The Model X
Tesla's Newest Model S: 0 to 60 in 2.5 Seconds

is the only SUV to make the list.
For the first time, Musk said, “the fastest car in the world, of any kind, is electric. In the future,
people are really going to look at gasoline cars in the same way we look at steam engines today:
They’re quaint, but it’s not really how you get around.”
Squeezing another 10 kilowatt hours out of what was already the world’s largest car battery posed
a difficult challenge, Musk said. The improved battery packs use the same Panasonic cells as
previous Teslas, but they require new wiring and changes to the seats to ensure safety, given the
additional weight. Musk said the packs are reaching performance and capacity limits for the
current generation of cells. The company will be shifting to a larger cell with the launch of the
Model 3 next year, enabling additional gains for the entire Tesla lineup.
Here’s a table of the world’s quickest cars. The acceleration times are provided by the
manufacturers, though some cars have been clocked a bit faster on the track. (Previous versions
of Teslas have, too.)
The new Model S will get an EPA range of 315 miles per charge (that’s 613 kilometers, using the
more forgiving European rating model), while the Model X SUV will have a range of 289 miles
(542 kilometers on the EU scale). Production of the new cars will initially be limited to about 200 a
week, at least for the first few months, Musk said.
As the new batteries roll out to cheaper versions of the car that aren't optimized for performance,
we could see EPA ranges approach 350 miles per charge, if previous models are any indication

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 August 2016 K. Al Awadi

New base energy news issue 916 dated 28 august 2016

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New base energy news issue 916 dated 28 august 2016