New base issue 1189 special 24 july 2018 energy news r

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 July 24, 2018 - Issue No. 1189 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE Orascom consortium to build 500MW Egypt wind farmF
forbes-Energy middleeast
As part of a consortium, Orascom Construction has signed a deal to develop a new 500 megawatt
wind farm in Egypt’s Ras Ghareb, along the Red Sea coast. The Egyptian construction giant says
it will be the largest renewable energy project of its type and size in the country, according to a
stock exchange filing from the firm, which is listed on Nasdaq Dubai.
It’s developing the wind farm along with France’s ENGIE and Japan’s Eurus Energy Holdings
Corporation, which is owned by Toyota Tsusho. The developers signed the agreement with the
Egyptian Electricity Transmission Company as the off-taker and the New & Renewable Energy
Authority as the land owner.
The partners expect to complete documentation, including the financial close, and begin
construction by the second half of 2019. It did not reveal financial details for the project.
The new project comes on the heals of an existing agreement between the consortium—they’re
currently developing a 250 megawatt wind farm together, also in Egypt, which is expected to be
commissioned in the second half of next year.
Orascom reported in 2017 that the total investment cost amount for the wind farm was $400
million, and that it had a 20% stake in the project.
Earlier this month, Orascom said it had added $650 million in new awards to its backlog in Egypt
and the U.S. during the second quarter of 2018. The value of the new awards in Egypt stood
at $415 million, including projects in transportation, water and urban developments.
With revenues of $3.7 billion and a market value of $2.1 billion, Orascom came in at number 82
on Forbes Middle East’s ranking of the Top 100 Listed Companies In The Arab World 2018.

UAE engineers join FANR Nuclear 1 year Training Programme
By Staff Writer, WAM (Emirates News Agency)
The UAE’s Federal Authority for Nuclear
Regulation, FANR, has welcomed to its
staff seven Emirati engineers, who have
recently graduated from UAE universities
to join its flagship Developee Engineers
Programme, as part of its strategy to
build long-term sustainability by
developing Emirati talent in the nuclear
sector.
The engineers will commence a yearlong
nuclear regulatory development
programme. It will provide them with the
fundamental knowledge necessary in order to understand the technical concepts applicable to
nuclear engineering and regulation.
"Ensuring the human sustainability in the nuclear sector tops our priority. FANR’s flagship
Developee Engineers Programme plays an indispensable role in building national capacity to
make them able to contribute to the sector," said Shaimaa Al Mansoori, Director of Education and
Training at the Federal Authority for Nuclear Regulation.
The programme for the new engineers is based on a modular approach with a mix of both
technical and soft skills development as well as a rotation plan in FANR’s various operational
departments to learn the various functions of the nuclear regulator.
The second part of the programme consists of an intensive 13-week nuclear fundamentals course
focusing on nuclear principles: safety, security and safeguards as well as environmental
protection, health physics and general engineering. The engineers will then undergo four eight-
week job rotation modules followed by a study tour abroad.
With the addition of the new engineers, FANR now has a core of Emirati engineers and health
physicists who represent FANR’s sustained commitment to overseeing peaceful, safe and secure
nuclear activities in the UAE. It currently employs over 230 employees, of whom 64 percent are
Emiratis.

Kuwait Inv.Fund fund to buy North Sea pipeline firm for £1.3bn
Reuters + The National + NewBase
Kuwait Sovereign Wealth Fund unit said to purchase North Sea pipeline company. EPA
The British infrastructure arm of Kuwait's sovereign wealth fund has agreed to buy oil and gas
pipeline firm North Sea Midstream Partners (NSMP) for around £1.3 billion (Dh6.27bn) from
ArcLight Capital, according to two sources.
Wren House, the London-based infrastructure investment arm of the Kuwait Investment Authority
(KIA), fought off bids from JP Morgan, Blackstone, and private equity fund KKR to buy NSMP,
according to one of the sources.
"Wren House was bidding against some very big players and they simply offered the best terms,"
said the source. A spokesman for Wren House could not be reached for immediate comment.
Its bid was lower than one other but it offered better overall terms, according to one of the
sources. The current management team, including NSMP CEO Andy Heppel, will remain, the
source said.
NSMP was valued at around £1.2bn to £1.3bn, the sources said. Bank of America Merrill Lynch
advised ArcLight on the transaction. Patrick de Loe, Merrill's managing director of Emea
infrastructure, declined to comment.
Freshfields Bruckhaus Deringer was ArcLight's legal adviser. Wren House was advised by
Jefferies and Macquarie Capital. Its legal advisor was Slaughter and May.
The Sovereign Wealth Fund Institute ranks KIA as the world’s fourth-biggest sovereign fund,
managing $592bn. Only Norway, China and UAE have bigger sovereign funds.
Wren House is headed by Hakim Drissi Kaitouni, a former investment banker who worked at Bank
of America Merrill Lynch in London and New York. Its other investments in the United Kingdom
include stakes in Associated British Ports, London City Airport and Thames Water.

NSMP owns a 67 per cent interest in the Sirge pipeline that transports natural gas from the West
of Shetlands basin and a 100 per cent interest in the Fuka pipeline which transports gas from the
Sirge pipeline and various fields in the northern and central North Sea.
NSMP also owns the St Fergus Gas Terminal and Teesside Gas Processing Plant. NSMP counts
the Rhum gasfield, in the North Sea and which is 50 per cent owned by the Iranian Oil Company,
among its clients.
NSMP Assets: 1- The SIRGES
The SIRGE System Pipeline is a new build 234km 30" nominal bore pipeline. The system has a
nominal capacity set at 665MMsfcd. The pipeline runs from the Total operated Shetland Gas Plant
(SGP) at Sullom Voe on Shetland to a sub-sea tie-in on the FUKA Pipeline at the MCP01 bypass
valves.
The pipeline is expected to provide transportation services for the export of gas from the emerging
West of Shetland frontier to the UK mainland market.
Ownership interests in the SIRGE System are as follows:
Pipeline capacity is owned on a "divided rights" basis which means that each SIRGE owner may
enter into individual commercial agreements to transport 3rd party gas. If a SIRGE Owner
receives a 3rd Party request for transportation services then all other SIRGE Owners will be
notified of that request.
If the 3rd Party wishes to proceed with the transportation services request, it will enter into a
common SIRGE Transportation Agreement and an Individual Commercial Terms Agreement with
the SIRGE Operator and SIRGE Owner respectively.
Under the current expectations of long-term oil and gas prices and indications given by investors,
the infrastructure is expected to be operational for a minimum of 18 years.
Technical Specifications

The 6km onshore section of the pipeline
runs from inside the Shetland Gas Plant
fence to the landfall at Firths Voe. The
facilities at the Shetland Gas Plant
consists of a pig launcher, HIPPS (High
Integrity Pressure Protection System)
and beach valve. No processing or
compression services are available from
SIRGE to meet the SIRGE entry
specification.
The offshore route continues to head in
a general easterly direction until it
reaches a point to the East of the Out
Skerries. At this point it turns and heads
in a southerly direction, before tying-in
subsea to the FUKA system at the
MCP01 bypass valves. The offshore
route is 228.5km in length, giving a total
pipeline length of 234.5km from the
Shetland Gas Plant to the MCP-01
bypass valves.
The offshore section is designed to
DNV-OS-F101 with the onshore section
designed BS PD 8010-1. Linepipe
material is carbon steel grade L450 FDU
SAW. Fluid classification is class D:
non-toxic, single-phase natural gas. The
tie-in to the FUKA pipeline at the MCP-
01 bypass valves is via two 12” sub-sea
tie-ins.
Potential Third Party tie-in points are available at the Laggan-Tormore- Shetland Gas Plant (SGP)
onshore Shetland, plus the two pre-installed hot-tap tees as shown below.
Assets: 2- Teesside Gas Processing Plant
The Teesside Gas Processing Plant (TGPP) is located at Seal Sands on Teesside in northeast
England. The plant processes gas from the UK Central North Sea and from the norther part of the
Southern Gas Basin for a number of large multi-national oil and gas companies and has the
capability to process up to 6% of UK demand for natural gas.
TGPP is a highly efficient and flexible gas processing plant which has, since construction, been
operated and managed to world class standards by the same highly motivated and proficient
team. The plant consists of two gas processing trains with a combined capacity to process up to
675 million cubic feet of gas per day.
Operational reliability since start-up has been in excess of 99.5% and the plant has an exemplary
safety record.

Gas from the Central North Sea is
transported to TGPP via the Central
Area Transmission System (CATS)
offshore pipeline system. TGPP also
processes gas from the
INEOS operated Breagh field in the
Southern North Sea and controls the
day-to-day operations of the
normally unmanned offshore
platform and pipeline on behalf of
the operator. Gas is transported to
reception and processing facilities at
TGPP via a 110 km pipeline from
the Breagh Alpha platform.
The Teesside region is one of the
largest chemical and industrial regions in Europe. Once dominated by ICI group companies, the
region is now home to a diverse number of businesses centred on three main areas, Wilton,
Billingham and North Tees. An extensive network of pipelines and utility services connect the
areas creating an infrastructure that continues to attract petrochemical and energy intensive
businesses to the region.
TGPP is located right in the heart of the region in the North Tees area together with the
ConocoPhillips operated Norsea oil processing terminal, the bp Operated CATS terminal and a
number of other major hydrocarbon processing industries including an aromatics facility operated
by Sabic. The Wilton Site, now managed by Sembcorp, has a number of resident process plants
including the Sabic hydrocarbon cracking facility. Billingham is home to a number of businesses
including the Growhow agrichemicals plant.
Assets: 3- FUKA/St.Fergus
The St Fergus Gas Terminal is located on the north east coast of Scotland just north of
Peterhead. The St Fergus area is the landfall for several major North Sea gas pipelines and the
home to the adjacent Shell operated SEGAL gas terminal and the Apache operated SAGE gas
terminal, as well as a National Grid National Transmission System (NTS) facility.
FUKA stands for Frigg UK Association which refers to the original development of the cross
UK/Norwegian border Frigg gas field – with the 362 km, 32” FUKA pipeline being constructed to
transport the gas from the UK part of the Frigg field to St Fergus, with a parallel pipeline
constructed to transport the gas from the Norwegian part of Frigg to St Fergus, the Frigg
Norwegian pipeline. The pipelines and facilities began initial operations in 1977.

Mauritania: Chariot Oil & Gas back-in with Shell in Block C-19
Source: Chariot Oil & Gas
AIM-listed Chariot Oil & Gas, the Atlantic margins focused oil and gas exploration company, has
announced that, through its wholly owned subsidiary Chariot Oil & Gas Investments (Mauritania),
it has secured an option to back-in for between 10% to 20% equity in the C-19 block in Mauritania
that has recently been awarded to Shell Exploration and Production Mauritania (C19), part of
the Shell Group of Companies.
Background:
Chariot secured an exploration licence over the C-19 block in Mauritania in June 2012. The
Company subsequently acquired 3500km2 of 3D seismic data and undertook extensive
reprocessing of legacy 2D seismic data which led to the identification of a significant resource
base in a number of plays, prospects and leads.
The work undertaken by Chariot to derisk this block resulted in significant interest in farm-out data
rooms from a number of potential partners, however the prevailing industry sentiment in a low-
price environment was such that these did not lead to a transaction. As a consequence, in June
2016 the Company elected not to enter the First Renewal Phase which carried a well commitment.
Back-in Option:
In the intervening period Chariot has been working with Shell, SMHPM (the Mauritanian State oil
company and a 10% partner in Block C-19) and the Mauritanian Ministry of Petroleum, Energy
and Mines to secure a new exploration and production contract over the C-19 block.

In recognition of the expertise and knowledge developed by the Chariot technical team and the
potential contribution they can make through this expertise, Shell has offered the Company the
option to back-in for a working interest of between 10% to 20% equity in the C-19 block at a future
date, subject to the customary regulatory approval by the Mauritanian Ministry of Petroleum,
Energy and Mines.
The Company is currently considering the merits of exercising this back-in option right and will up-
date the market following any further material decision taken.
Larry Bottomley, CEO commented:
'The focus for Chariot is the delivery of transformational value through the discovery of material
hydrocarbon accumulations. Chariot considers the C-19 block has the potential to deliver material
hydrocarbon accumulations. The focus of our evaluation of the option will be on value, portfolio
balance, risk management and capital discipline.
We would like to thank Shell for their constructive approach, participation and leadership in the
process of securing the C-19 block, SMHPM for their continuing support of our partnership and
the Ministry of Petroleum, Energy and Mines for facilitating our attempts to progress exploration
on this licence.
Securing this option is a testament to the quality of the technical team and the tenacity of the
organization.'
Block 19
lock C19 covers an area of 12,175km2 and is located 30km off the coast of Mauritania with water
depths ranging from 5m-2,100m. To date, Chariot has exceeded its work commitments on the
licence with the acquisition of a 3,500km2 3D seismic programme.
Fast track data was received in mid-March and final Pre-Stack Depth Migration (PSDM) volumes
are due to be received in November this year. This data will be fully interpreted and analysed with
the objective of identifying a drillable prospect in 1Q 2014 and, subject to the results of this, drilling
planning and the evaluation of partnering options will commence thereafter.

Morocco:Schlumberger acquires participating interest in Sound Energy's
Source: Sound Energy
Sound Energy, the Moroccan-focused upstream gas company, has announced that, following the
initial success in Eastern Morocco and in anticipation of the forthcoming drilling programme, the
initiation of the process of converting the existing 27.5% synthetic interests held by an affiliate
of Schlumberger Oilfield Holdings in the Tendrara Lakbir permits, the Anoual permits and the
Matarka reconnaissance licence (together the 'Eastern Morocco Portfolio') into 27.5% joint venture
licence participating interests in the Eastern Morocco contract area. Sound Energy will remain the
operator of the Eastern Morocco Portfolio.
In accordance with Moroccan requirements, the conversion of Schlumberger's interests are
subject to the approval of the licence joint venture partners and the relevant Moroccan ministries.
The Company's interests in the Eastern Morocco Portfolio consist of an operated 47.5%
participating interest. The remaining interests in the Eastern Morocco Portfolio are held 27.5% by
Schlumberger pursuant to an existing Field Management Agreement entered into with the
Company (prior to the interest conversion now initiated) and 25% by Morocco's L'Office National
des Hydrocarbures et des Mines.
Sound Energy also confirms that it
has entered into a revised Field
Management Agreement with
Schlumberger which re-confirms the
parties' materially unchanged working
relationship post-conversion and their
intention to continue to collaborate
strategically across their interests in
the Eastern Morocco Portfolio,
including in relation to the
development of the existing Tendrara
discovery and to the drilling at
Tendrara, where Sound Energy and
Schlumberger have now approved
the first two defined wells, namely
TE-9 and TE-10.
Following the recent application for a
development concession relating to
the Tendrara gas discovery (the
'Development Concession'), Sound
Energy and its licence Joint Venture partners intend to apply for a new 8-year petroleum
agreement over the entire, combined, Eastern Morocco Portfolio area (except the areas relating to
the Development Concession and to the Anoual petroleum agreement) shortly.
James Parsons, Sound Energy's CEO commented:
'I am delighted to have begun the process of bringing Schlumberger directly onto the various
licences in Eastern Morocco and look forward to further drilling success together.'

Egypt: SDX Energy announces discovery at SD-3X well, South Disouq
SDX Energy, the North Africa focused oil and gas company, has announced that a gas
discovery has been made at its SD-3X well in the South Disouq Concession, Egypt (SDX 55%
working interest and operator).
The SD-3X well was drilled to a total depth of 7,842 feet and encountered 32.6 feet of net
conventional natural gas pay in the Abu Madi and Kafr el Sheik horizons, with an average porosity
in the pay sections of 21.7%.
The SD-3X well will now be completed as a producer in the Abu Madi horizon and then tested
after the drilling rig has moved off location. In order to optimise the potential recovery from the
SD-3X well, the Abu Madi horizon will be completed and produced initially before re-entering the
well to complete and produce the Kafr el Sheik horizon. The Abu Madi testing is anticipated to
commence between 30 and 45 days after the rig departs, depending on the availability of testing
equipment. Assuming a successful test in the Abu Madi, it is anticipated that the well will be
connected to the infrastructure located adjacent to the original SD-1X discovery, where production
start-up is anticipated late in the 4th quarter of 2018.
Paul Welch, President and CEO of SDX, commented:
"The discovery of gas in both the Abu Madi and Kafr el Sheik horizons is a very positive outcome
for the SD-3X well. As demonstrated by the Ibn Yunus discovery earlier this year, the Kafr el
Sheik horizon is an excellent quality productive sequence. The SD-3X discovery has confirmed
that this horizon is extensively present throughout the concession.
We will now analyse the data from all four wells drilled in the South Disouq campaign, as well as
reprocessing and inverting the existing 3D seismic we have on the concession. Upon
interpretation of this data, and completion of the new 3D survey later this year, we expect to
identify further Abu Madi and Kafr el Sheik prospectivity for drilling in 2019 and 2020.

NewBase 24 July 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil steady as U.S.-Iran row balances trade worries
Reuters + Bloomberg + NewBase
Oil prices steadied on Tuesday as rising tension between the United States and Iran highlighted
risks to supply while escalating trade disputes raised the prospect of slower economic growth and
perhaps weaker energy demand.
Brent crude oil was unchanged at $73.06 a barrel by 0840 GMT. U.S. light crude was up 15 cents
at $68.04.
Oil price special
coverage

Both oil benchmarks have fallen this month as crude supplies from Russia, Saudi Arabia and
other members of the Organization of the Petroleum Exporting Countries have increased and
unscheduled production losses have eased.
Market sentiment has been driven by geopolitical worries: fears that supply could be disrupted by
confrontation in the Middle East or that Washington’s trade dispute with its major trading partners
could dampen global growth.
Iran, OPEC’s third-largest producer pumping 3.75 million barrels a day, has come under
increasing U.S. pressure, with the administration of President Donald Trump pushing countries to
cut all imports of Iranian oil from November.
Saudi Arabia and other large producers are ramping up output to offset losses that are likely to
come as the November deadline approaches.
“While oil prices were the primary beneficiary of the weekend’s headline battle between President
Trump and Iranian President (Hassan) Rouhani, that boost started to fizzle as traders then veered
to oversupply concerns,” said Stephen Innes at brokerage OANDA.
(GRAPHIC: Russia, Saudi Arabia Oil Production 2018: tmsnrt.rs/2L6ck2a)
G20 finance leaders voiced concern over the weekend about the risk to global growth from trade
tensions between the United States and China, among others.
“It is surely only a matter of time before something tangible yields from the ongoing trade war
stories and it probably won’t be a pretty outcome,” said Matt Stanley, a fuel oil broker at Freight
Investors Services in Dubai.
“I imagine crude will stay in a fairly narrow range over the next few days,” Stanley said.
Meanwhile, U.S. crude inventories at the U.S. crude futures delivery hub at Cushing, Oklahoma
rose in the four days to Friday, according to data supplier Genscape, traders said.
On a weekly basis, stockpiles at the hub were expected to fall for the 10th consecutive week,
traders said.
A Reuters survey on Monday estimated on average that total U.S. crude oil stocks fell about 3.2
million barrels last week, after unexpectedly rising in the week to July 13. [EIA/S]
U.S. industry body the American Petroleum Institute is scheduled to release its inventories data
for last week at 4:30 p.m. EDT (2030 GMT) on Tuesday.
Oil Advances as U.S.-Iran Tensions Escalate
Brent crude rose as tensions between the U.S. and OPEC member Iran escalated, stoking
concern that the spat will lead to supply disruptions.
The global benchmark climbed as much as 2 percent as U.S. President Donald Trump said there
will be unspecified “consequences” if the Islamic Republic threatens the U.S., after President
Hassan Rouhani warned Trump not to block Iran’s oil exports.
Futures in New York advanced as much as 1.5 percent in New York, before paring gains as a
report by data-provider Genscape Inc. is said to show a build in supplies at Cushing, Oklahoma.

“We’re watching the geopolitical risk premium get inflated as we continue to be battered by
headline risk, or Twitter risk,” said John Kilduff, a partner at New York-based hedge fund Again
Capital LLC. “The escalation and the rhetoric gets everybody concerned about what might happen
between the U.S. and Iran, and oil supplies in the Gulf.”
Brent has dropped about 7.5 percent so far this month amid concerns that ongoing trade conflicts
between the U.S. and China will damage economic activity and hurt demand. That’s offsetting a
range of supply risks, from Libya to Venezuela and the looming U.S. sanctions on Iran.
“You have a combination of factors for the more constructive mood on the market, including an
escalation of rhetoric between the U.S. and Iran that inflates the geopolitical risk,” said Harry
Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. He added that
the strike at Total’s North Sea facilities “helps” contribute to the bullish sentiment.
Brent for September settlement added 42 cents to $73.49 a barrel at 10:39 a.m. on the London-
based ICE Futures Europe exchange. The global benchmark crude traded at a $4.98 premium to
WTI.
West Texas Intermediate crude for September delivery rose 39 cents to $68.65 a barrel on the
New York Mercantile Exchange. Total volume traded was about 30 percent below the 100-day
average.
In a Twitter post late Sunday, Trump said, “To Iranian President Rouhani: NEVER, EVER
THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE
LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE
NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF
VIOLENCE & DEATH. BE CAUTIOUS!”
Trump’s tweet came hours after Rouhani warned the U.S. against threatening Iranian oil exports
and called for improved relations with neighbors, including rival Saudi Arabia.

Oil prices could jump to $200 a barrel if US and Iran go to war in
Persian Gulf, analyst says Tom DiChristopher | @tdichristopher + CNBC
• Oil prices could hit as high as $200 a barrel if Iran shuts down the Strait of Hormuz or
engages in military conflict with the United States, said Again Capital's John Kilduff.
• Iran's leaders this weekend threatened to shut the strait, the world's most important
seaborne transit lane for oil.
• The comments appeared to provoke a late-night response from President Donald Trump
threatening severe consequences for Iran.
Military conflict between the United States and Iran would threaten to shut the world's busiest
seaway for oil exports and send crude prices to all-time highs, perhaps even to $200 a barrel,
according to one analyst.
President Donald Trump on Sunday night warned Iranian President Hassan Rouhani on Twitter
that his country would "SUFFER CONSEQUENCES THE LIKES OF WHICH FEW
THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE" if Rouhani ever threatened the
United States again.
Donald J. Trump
To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL
SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER
SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED
WORDS OF VIOLENCE & DEATH. BE CAUTIOUS! 7:24 AM - Jul 23, 2018
Trump appeared to be responding to comments over the weekend from Rouhani, who said, "Iran's
power is deterrent and we have no fight or war with anybody but the enemies must understand

well that war with Iran is the mother of all wars," according to an English translation on the Iranian
president's official website.
The rhetoric has been heating up as the first of two U.S.-imposed deadlines for international
businesses to cut ties with Iran approaches next month. By November, the United States expects
most oil buyers to reduce purchases of Iranian crude to zero or face U.S. sanctions.
In May, Trump pulled out of an international nuclear accord with Iran and restored sanctions
against the nation, the world's fifth biggest oil producer.
This weekend, Iran renewed its threats to shut the Strait of Hormuz, the world's most important
seaborne passageway for crude oil shipments. Rouhani mentioned the strait in his speech on
Sunday, and Iran's Supreme Leader Ayatollah Ali Khamenei on Saturday endorsed the president's
threat to shut the chokepoint if U.S. sanctions disrupt Iran's exports.
"Mr Trump! We are the people of dignity and guarantor of security of the waterway of the region
throughout the history. Don't play with the lion's tail; you will regret it," Rouhani said.
John Kilduff, founding partner at energy hedge fund Again Capital, said Brent crude — the
international benchmark for oil prices — is on a path to $90 a barrel because the Trump
administration is unlikely to issue many sanctions waivers. Top Cabinet officials have recently said
countries could get sanctions relief on a case-by-case basis if they cannot entirely cut off
purchases from Iran by November.
However, if Iran opts for the "nuclear option" of shutting down the Strait of Hormuz, Brent could
pop to several hundred dollars a barrel, in Kilduff's view.
"The numbers on a blockage or any kind of upset or military situation in the Strait of Hormuz, that
is off to the races. Pick your number — $150, $200 — it goes sky high," he said. "Because we are
talking about an abject shortage of oil then in the global market."
Brent crude is currently trading just above $73 a barrel. It hit a record high above $147 a barrel in
2008.

To be sure, the U.S. military and its Gulf allies would be able to reopen the strait in a matter of
days, according to Admiral James Stavridis, former Supreme Allied Commander at NATO.
However, Iran could repeatedly shut the strait on a temporary basis by mining its waters and using
other surreptitious methods, he told CNBC.
The U.S. Navy's Fifth Fleet is based in Bahrain and has responsibility for the waterways around
the Middle East, including the Strait of Hormuz, the entrance to the Persian Gulf.
Rouhani also hinted that Iran could cause problems in other regional sea routes. Those could
include Bab el-Mandeb, the strait off the coast of Yemen, where Iranian-aligned rebels are fighting
a Saudi-led coalition, said Helima Croft, global head of commodity strategy at RBC Capital
Markets.
"I don't think anyone believes that with the U.S. Fifth Fleet in Bahrain that we cannot protect ships
going through there, but if we start having to deploy those military resources, I think that's going to
put additional pressure on oil," said Croft.
"That's the scenario for a real breakout in oil prices in the back half of this year," she told CNBC's
"Squawk on the Street" on Monday.
The risk of conflict is rising because the Trump administration is signaling that its ultimate goal is
regime change in Iran, according to both Croft and Kilduff. On Sunday, Secretary of State Mike
Pompeogave a speech that was fiercely critical of Iran's leadership to an audience largely
composed of members of the Iranian diaspora.
On Monday, Trump's national security advisor, John Bolton — who has argued for launching a
military strike on Iran's nuclear infrastructure — doubled down on Trump's late-night tweet.
“I spoke to the President over the last several days, and President Trump told me that if Iran does
anything at all to the negative, they will pay a price like few countries have ever paid before,” he
said in a statement on Monday.

NewBase Special Coverage
News Agencies News Release 24 July 2018
Imagine a World Without OPEC
The NOPEC bill would decimate the world’s energy safety net. By Julian Lee
Imagine a world without OPEC. This is what the sponsors of legislation introduced in both houses
of Congress seem to want. Versions of the “No Oil Producing and Exporting Cartels Act,” or
the NOPEC bill, are working their way through the Senate and the House of Representatives, and
are likely to find much more support from the White House than they have in the past —
Presidents George W. Bush and Barack Obama both threatened to veto similar legislation.
The bill would allow U.S. antitrust laws to be enforced against OPEC members whom the
sponsors say have “used production quotas to keep oil prices artificially high.”
This is a popular argument in a country where the right to cheap gasoline might have been written
into the constitution alongside the right to bear arms, had that document been drafted a couple of
hundred years later than it was. But we need to look a bit further than the gas station forecourt.
And when we do, we will not be looking upon the promised land.
OPEC introduced production quotas in 1982, to allocate output between member countries faced
with a third year of falling global oil demand and rising supply from countries like Mexico and India,
which left them with as much as 12 million barrels a day of spare capacity.

Saudi Arabia had already reduced its oil production by 30 percent and, just as in 2016, was no
longer prepared to shoulder alone the burden of balancing oil supply and demand.
Making Space
OPEC supply management in the 1980s and 1990s made room for non-OPEC output growth
Sources: BP, Bloomberg
What would have happened if OPEC hadn’t got together? Sure, drivers in America and elsewhere
would have enjoyed cheaper gasoline for a while. But probably not for too long. Even with the
group’s supply management, oil prices reached a low of around $14 a barrel in 1986, according to
data from BP Plc.
How much further would they have fallen if member nations had continued to produce without
restraint? Certainly low enough to make production uneconomic in Alaska, the Gulf of Mexico, the
North Sea, Western Canada and a host of other oil provinces that have become mainstays of non-
OPEC production.
The group’s supply management created the space for 33 billion barrels of additional non-OPEC
production in the 20 years it took for them to get their supply back to the level it had been in 1978.
But nearly 40 years later, the world’s a different place. Here is what would happen if the NOPEC
bill became law and the group failed to protect itself from its reach. This would be the world
without OPEC.
There could be no collective action to try to balance oil supply and demand. Saudi Arabia has said
repeatedly that it wouldn’t balance the market on its own and support high-cost oil producers.
You don’t have to search too far to see what that means in practice. Just cast your mind back four
years, during the thick of OPEC’s pump-at-will policy.

Oil prices fell to $26 a barrel — great for drivers, but not so good for the U.S. oil patch, or for
investment in future production capacity needed to offset natural decline in existing fields.
Careful What You Wish For
The ending of Saudi Arabia's output restraint had a devastating impact on the U.S. oil patch
Sources: Bloomberg, Baker Hughes
Note: Both data series are relative to August 2014, when there were 1,575 active oil rigs in the
U.S. and Saudi Arabia was producing 9.6 million barrels a day.
As Saudi Arabia raised its production, the number of rigs drilling for oil in the U.S. fell by 80
percent. The only region in the world where drilling didn’t drop was the Middle East. It wasn’t long
before there were calls, including from candidate Trump’s energy adviser, for OPEC to act to
reduce supply and rescue prices that were too low for the American shale industry.
If the NOPEC bill becomes law, there’s little incentive for anyone to hold spare production
capacity. In recent decades this willingness has been an important safety valve to relieve the
pressure of supply disruptions.
A study by the King Abdullah Petroleum Studies and Research Center, initiated in 2016, assessed
the annual economic benefit to the global economy of OPEC’s spare production capacity at
between $170 billion and $200 billion through the reduction in price volatility in times of supply
disruption. Without that buffer, oil prices could have spiked above $300 a barrel during the Libyan
revolution, the study found.
The biggest consumer-held oil stockpile — the U.S. Strategic Petroleum Reserve — could not
have coped with the loss of supply that accompanied Iraq’s 1990 invasion of Kuwait, and it would
have struggled to offset the loss of Libyan production in 2011 for more than five months.
The loss of supply that may result from Trump’s revival of sanctions against Iran would exceed the
reserve’s ability to deliver within four months.

Insufficient Petroleum Reserve
After three months the SPR could not have coped with the loss of oil supply from Iraq's 1990
invasion of Kuwait. After four months, it won't be able to cope with losses from sanctions on Iran
Sources: Bloomberg, EIA
It seems perverse to be attacking President Trump’s ally against Iran and the world’s only source
of spare capacity, while simultaneously initiating the biggest supply disruption in nearly 30 years.
But attacking allies and destabilizing markets seems to be a favorite pastime in Washington these
days.
This column does not necessarily reflect the opinion of the editorial board or NewBase and its owners.
To contact the author of this story:
Julian Lee at jlee1627@bloomberg.net

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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Khaled Malallah Al Awadi,
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Mobile: +97150-4822502
khdmohd@hawkenergy.net
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Khaled Al Awadi is a UAE National with a total of 27 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, &
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NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase K. Al Awadi
August 2017
It is our honor to read your article in LinkedIn and having you sharing your comments with us,
similarly we would like to share with you our latest Energy news issue from ........
https://www.slideshare.net/khdmohd/new-base-1187-special-17-july-2018-energy-news
Regards , Khaled Al Awadi, UAE
PS> You may if you like to share the above file freely with all
Also a copy can be sent to your email if interested , khdmohd@hawkenergy.net
Please contact; marilyn@ppc-inc.com

Please contact; marilyn@ppc-inc.com

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