NewBase 602 special 12 May 2015

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,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase 12 May 2015 - Issue No. 602 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: refiner Takreer diversifies products to meet demand
from transport sector
The National + NewBase
Abu Dhabi Oil Refining Company, known as Takreer, is diversifying its product line-up to better
meet rising demand from the transport sector in Asia, as it seeks to boost profit margins amid
lower crude prices.
This year, the state refiner brought online an extra 417,000 barrels per day (bpd) of capacity at its
Ruwais facility, located about 240 kilometres west of Abu Dhabi city, after completing a US$10
billion expansion programme to double capacity.
Since then, its parent, Abu Dhabi National Oil Company (Adnoc), has been diverting marginally
more of its Murban grade crude to the refinery rather than exporting it to customers in Asia.
Together with the addition of two refineries in Saudi Arabia, this has added more than 1 million
bpd of new refining capacity in the region.
Much of the output is being geared towards diesel production to meet demand in the region and
Asia, according to the UK consultancy Energy Aspects.
Total new capacity to 817,000 bpd

“These refineries are going to have a meaningful impact on every product market, and we are
seeing a shift toward upgrading the quality of products to meet tighter export specification for
countries,” said Richard Mallinson, energy analyst for Energy Aspects.
According to information provided by Takreer at the Abu Dhabi International Downstream
conference yesterday, by the end of the year the Ruwais extension will also have the capacity to
produce up to 600,000 tonnes annually of high-quality base oils.
These oils are used mostly as a lubricant in the car industry, which is projected to grow rapidly,
according to US-based Transparency Market Research.
“Rapid population growth and urbanisation is bolstering the continuous rise in vehicle production
volumes globally,” the firm said in a report released in December. It added that this would “likely
increase the demand for finished lubricants and base oils” over the next five years.
It also projected that global demand for base oil would increase by 14.5 per cent by 2020
compared to 2013.
By the end of the year, Ruwais will have annual capacity of 500,000 tonnes of Grade III
base oil and annual capacity of 100,000 tonnes of Group II base oil. Since groups II and III are
cleaner, the product can easily be exported to markets with stringent emission regulations such as
the United States and Europe.
Mr Mallinson said that base oil producers were responding to the increase in standards globally as
countries tighten environmental regulations, partly aimed at cutting carbon emissions, on a par
with the US and Europe.
Ali Al Mansoori, planning and supply department manager at Takreer, said yesterday that the
company planned to expand storage capacity and develop greener fuels.
“Our ambitions will not stop here, this is just the beginning,” he said.

Saudi Fuel Exports Throw Lifeline to Tankers as Refining Surges
Bloomberg + NewBase
With Arab Gulf diesel exports poised to exceed imports for the first time, owners of fuel tankers
are ordering more ships.
Overseas sales of refined products from the Gulf may rise 45 percent over the next decade,
outpacing a 13 percent increase in crude exports. The region will become a net exporter of diesel
next year, according to JBC Energy GmbH. Scorpio Tankers Inc. is adding 15 fuel tankers to its
fleet while D’Amico International Shipping SA ordered two more to meet demand it expects from
longer shipping routes to service the surge.
Seeking to extract more value from their resources
by processing them, Saudi Arabia and other Gulf
producers will add at least 1.4 million barrels a day
of refining capacity over the next five years,
according to BMI Research, a unit of the Fitch
Group. After meeting domestic demand they will
ship the more-lucrative fuels abroad, boosting
product tankers whose average rates this year are
the highest since 2011.
“As more and more new refineries in the Middle
East go into production, there will be need for more
product carriers,” Park Moo Hyun, an analyst at
Hana Daetoo Securities Co. said by phone from
Seoul on May 6. “It’s only a matter of time before
product carriers become a bigger business there.”
Refinery Expansion
Oil producers including Saudi Arabia, Abu Dhabi and Kuwait are expanding refining capacity to
reduce imports of fuel needed to meet rising domestic demand and to produce cleaner-burning
diesel that fetches premium prices compared with crude oil in overseas markets.
To cope with the rising exports, D’Amico International ordered two Long Range product tankers
from Hyundai Mipo Dockyard Co. for $44 million each, it said in an April 27 statement. The
vessels are due to be delivered in 2017 from the South Korean company’s Vietnam shipyard.
The shipping company, whose fleet includes Handymax and Medium Range tankers, is buying the
Long Range vessels because their larger cargo capacity “will be in great demand in the years to
come,” Marco Fiori, chief executive officer of D’Amico, said in the statement.
Scorpio, based in Monaco, and Ireland’s Ardmore Shipping Corp. are among companies to
benefit, said Hana Daetoo’s Park. Middle Eastern refinery operators may also consider creating
new shipping units to haul their own products, further boosting demand for tankers, he said.
Capacity Grows
“Scorpio is the primary beneficiary of the increase in Middle East exports,” Robert Bugbee, the
firm’s president, said by phone May 6. The company, which owns and operates 88 product
tankers, has 12 on order and is buying at least three more, he said.

Product tanker capacity is expected to grow 7.4 percent this year and 4.3 percent in 2016 if orders
for new ships aren’t made, JPMorgan Chase & Co. said in an April 8 report.
“The whole product sector is benefiting broadly” from the refinery boom, Anthony Gurnee, chief
executive officer of Ardmore Shipping, said by phone on May 7. The company has a fleet of about
20 ships, most of which are Medium Range.
Saudi Arabia began operating a 400,000 barrel-a-day refinery at Yanbu on the Red Sea last year.
Another plant with the same capacity is scheduled to begin operation in 2017 at Jazan in the
country’s southwest. The kingdom’s oil-product exports rose 44 percent last year following the
startup of a refinery in the Gulf port of Jubail, according to the Riyadh-based Joint Organisations
Data Initiative.
Export Surge
Abu Dhabi National Oil Co. is doubling the capacity of the 400,000 barrel-a-day Ruwais refinery,
while Kuwait’s Al-Zour plant is planned to open in 2020 with a capacity of 615,000 barrels a day.
Oman will award a contract next year to build a 230,000 barrel-a-day plant to come online by the
end of 2019.
The Gulf will become a net exporter of 55,000 barrels a day of diesel in 2016 after importing a net
90,000 barrels in 2015, Richard Gorry, a Singapore-based director at JBC Energy, a Vienna-
based industry consultant, said by e-mail May 7. That means the region’s sales will exceed
purchases for the first time on an annualized basis, he said.
Crude sales from the Middle East are still forecast to be significant and the region “is and will be a
major player,” according to Gorry. Net exports will reach 16.4 million barrels a day in 2015 and will
grow to 18.5 million by 2025, he said.
Brent for June settlement lost 9 cents to $64.82 a barrel on the London-based ICE Futures Europe
exchange at 12:45 p.m. Singapore time.
Crude tanker rates are in the midst of a recovery after owners ordered too many ships before last
decade’s global economic recession. The daily cost to send a product tanker from Saudi Arabia to
Japan was $20,375 yesterday according to the Baltic Exchange, more than double that of a year
earlier, data compiled by Bloomberg show.
“Fundamentals suggest better times for ship companies,” JBC’S Gorry said. “With these middle-
distillate monsters, gasoil exports will grow and become more significant. This is the last real
refinery-growth zone.”

Saudi Aramco plans up to $80 billion spending abroad
BYBLOOMBERG NEWS + NEWBASE
Saudi Arabian Oil, the world's largest oil exporter, is planning to spend between $70 billion and
$80 billion on overseas acquisitions and investments during the next five years, three people with
knowledge of the matter said.
The investment is part of the state-owned company's target of spending $150 billion at home and
internationally through 2019, the people said, asking not to be identified as the information is
private. Saudi Aramco, as the company is known, will focus on Asia, particularly China and Korea,
they said.
Boost ties with Asia
Saudi Aramco is expanding in refining and petrochemicals and seeking to boost ties with Asia as
part of its ambition to become both the world's largest oil and chemicals producer by the end of
the decade. Last year, it bought a $2 billion stake in S-Oil Corp., South Korea's third-largest oil
refiner.
The company has joint-venture plants in China, owns stakes in refining businesses in South
Korea, Japan and the US and markets its crude and refined products globally. Aramco secured a
$10 billion loan in March that could be used to fund potential acquisitions, people with knowledge
of the matter told Bloomberg at the time.

The company didn't respond to requests for comment.
The Saudi state-owned oil company reduced its borrowing costs when it used the new $10 billion
facility to replace a $4 billion facility, the company said in a later statement confirming the deal.
That was despite the drop in oil prices.
Falling energy prices
Falling energy prices and low borrowing costs have sparked a wave of consolidation in the oil and
gas sector. Mergers and acquisitions activity in the energy industry rose 58 per cent to $355 billion
in 2014, according to data compiled by Bloomberg.
The fall in oil prices has made some upstream assets more attractive to buy, Saif Al Falasi, chief
executive officer at Emirates National Oil Co., said in April. The company is bidding to buy the 46
per cent of London-traded producer Dragon Oil that it doesn't already own, the company said in
March.
Kuwait Foreign Petroleum Exploration Co., known as Kufpec, may increase the size of a $1 billion
loan to $2.5 billion, three people with knowledge of the matter said in March. Brent crude, a
pricing benchmark for more than half of the world's oil, has rebounded 13.7 percent this year to
$65.21 a barrel as of 2:26pm Dubai time, after falling almost 50 per cent last year.

Qatar:SPE Qatar Section organises 1st ‘Women in Energy’ event
Fifty women oil-and-gas professionals and students attended the inaugural staging of the “Women
in Energy” event, organised recently by the Society of Petroleum Engineers (SPE) - Qatar
Section, at the W Hotel Doha.
SPE deputy chairperson Jassim al-Khori said, “This is a great opportunity for women
professionals to network and gain soft-skills that will support their career development.”
“As a result, the participants got to know one another, discovered their own personal version of
success and balance, understood what was the most important to them, identified the areas of
their lives they would love to develop even more, and committed to a new way forward to achieve
a fulfilling life and much more,” added al-Khori, who is also technical manager of Maersk Oil
Research and Technology Centre.
The event featured a three-hour interactive session presented by Empower World founders
Jeanine Bailey and Marie Quigley, who discussed topics such as maximising potential and ability
to use skills, understanding priorities, creating balance between work and personal life, networking
and building relationships on a more personal level, and creating a friendly environment of fun,
enjoyment, connection, and learning.
Also, Qatari life coach Ajayan al-Hababi discussed dreams and challenges. He also provided one-
on-one sessions to participants after the event. SPE has 143,000 members in 147 countries, with
199 sections and 337 university chapters. They are united by the SPE vision “to enable the global
oil and gas exploration and production industry to share technical knowledge needed to meet the
world’s energy needs in a safe and environmentally responsible manner.”
In Qatar, there are more than 520 professional members and more than 200 student members at Qatar
University and Texas A&M University, Qatar. Chaired by Maersk Oil Qatar deputy managing director
Sheikh Faisal bin Fahad al-Thani, SPE Qatar Section’s mission “is to collect, disseminate, and exchange
technical knowledge concerning the exploration, development and production of oil and gas resources, and
related technologies for the public benefit; and to provide opportunities for professionals to enhance their
technical and professional competence.”
Participants listening to speakers during the first ‘Women in Energy’ event organised
by the Society of Petroleum Engineers (SPE) Qatar Section in Doha recently.

Morocco:Sound Oil in Talks to Buy Stake in Tendrara Gas
Natural Gas + NewBase
Sound Oil on Monday said it has been granted a 30 day period of exclusivity from the Moroccan
Oil and Gas Investment Fund (OGIF) in relation to a potential farm in to the Tendrara licence,
onshore Morocco.
The grant of exclusivity initiates exclusive negotiations between Sound Oil and OGIF and follows
the submission of an indicative offer letter from Sound Oil to OGIF in respect of the Tendrara
licence.
The Tendrara licence is currently owned 75 percent by OGIF and 25 percent by The National
Office of Hydrocarbons and Mines (ONHYM), the Moroccan national hydrocarbon and mineral
company - which has a 25 percent carried interest during the exploration phase
Sound Oil has offered to assume operatorship of the Tendrara licence and to take a 55 percent
working interest (with OGIF retaining 20 percent and ONYHM the remaining 25 percent). The
onshore Tendrara licence includes two stranded gas discoveries with low risk appraisal potential
and significant blue sky exploration upside, the company said.
The licence area covers eight blocks across a total of 14,500 sq kms in the North East of Morocco.
Seven wells have been drilled on the Tendrara licence to date, of which five discovered hydrocarbons
and two were tested successfully, Sound Oil said. Gas produced is expected to either feed the
Moroccan domestic market or be connected to the Gazoduc Maghreb Europe (GME) gas export
pipeline.

UK Oil & Gas Investments announces upgrade to Horse Hill conventional
Portland Sandstone Oil in Place Volumes .. source: UKOG
AIM-listed UK Oil & Gas Investments (UKOG) has announced an upgrade to the conventional
Stock Tank Oil Initially In Place ('STOIIP') volumes estimated for the overall Upper Portland
Sandstone conventional reservoir in the Horse Hill-1 ('HH-1') and Collendean Farm-1 ('CF-
1') structure ('Horse Hill'), in the PEDL137 licence area (Surrey-West Sussex, Weald Basin).
This revised STOIIP is separate to the oil-in-place volumes estimated for the argillaceous
limestones and mudstones of the Kimmeridge, Oxford and Lias rock sections of the HH-1 well,
as reported on 9 April 2015 and 15 April 2015. The Company has a net attributable interest of
20.358% in PEDL137.
An independent study of the Portland Sandstone reservoir was conducted by Xodus Group, an
international energy consultancy based in the UK (see www.xodusgroup.com). The study is
based on new petrophysical evaluations of both the HH-1 discovery and the older Collendean
Farm-1 ('CF-1') well plus an updated interpretation of 2D seismic data across the Licence. The
study report is available on UKOG's website (see www.ukogplc.com).
The HH-1 and CF-1 discoveries lie within an approx. 100-foot thick, Upper Portland sandstone
gross reservoir interval, within a 6km by 3km tilted fault block structure as defined by 2D seismic.
The crest of the Upper Portland conventional oil discovery lies at approx. 1,760ft TVDSS, and
extends over a mapped maximum areal closure of approx. 2,000 acres. The Upper Portland
reservoir is productive at the nearby Brockham field, some 9km NNW, in which the Company has
an indirect interest of 3.6%.

Xodus calculate that the Upper Portland Sandstone conventional reservoir contains a "Best
Estimate" (P50) gross STOIIP of 21.0 MMbbl, which is slightly more than UKOG's own revised
latest estimate of 20.0 MMbbl, and which is entirely within PEDL137 and encompasses both the
HH-1 and CF-1 wells. This is an increase of 12.8 MMbbl over the 8.2 MMbbl (P50) gross STOIIP
reported on 17 December 2014, which results largely from the new petrophysical evaluation of
HH-1 electric logs, calibrated to new XRD and MICP data, and a new interpretation of the CF-1
electric logs, calibrated to core data.
The gross Upper Portland STOIIP ranges estimated by Xodus are as per the table below:
The oil in place hydrocarbon volumes (STOIIP) estimated should not be construed as recoverable
resources or reserves. Meaningful estimates of recoverable oil within the Upper Portland can likely
only be made following the proposed HH-1 flow test and a significant proportion will not be
recovered during any future production regime.
The Upper Portland is the uppermost, conventional oil-saturated reservoir found in the HH-1 and
CF-1 wells. It overlies, and is entirely separate from, the Kimmeridge, Oxford and Lias oil-
saturated argillaceous limestone and mudstone rock sections reported on 9 April 2015 and 15
April 2015.
The Xodus study is an independent review, solely of the Upper Portland sandstone trap-
constrained conventional oil reservoir. It does not include any assessment of the deeper
Kimmeridge, Oxford and Lias oil-saturated argillaceous limestone and mudstone rock sections,
which are currently the subject of a separate review by Nutech Ltd.
Reporting Standards:
Xodus' STOIIP volumes have been prepared in accordance with the 2007 Petroleum Resources
Management System prepared by the Oil and Gas Reserves Committee of the Society of
Petroleum Engineers (SPE), reviewed, and jointly sponsored by the World Petroleum Council
(WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum
Evaluation Engineers (SPEE).
Xodus state in their Executive Summary that; "In
conducting this review Xodus has utilised
information and interpretations supplied by
UKOG, comprising operator information,
geological, geophysical, petrophysical, well logs
and other data along with various technical
reports. Xodus has reviewed the information
provided and modified assumptions where it
considered this to be appropriate. Site visits were
not considered necessary for the purposes of this
report."

Bangladesh: Samsung Keen on Building LNG Receiving Terminal
Dhaka Tribune+ NewBase
Samsung C&T Corporation is interested in building LNG receiving terminal in Bangladesh,
according to local daily Dhaka Tribune. The South Korean firm gave a proposal letter in this
regard to State Minister of Power, Energy and Mineral Resources Nasrul Hamid in March.
The plant will be set up on a “build, own and operate” (BOO) basis, Dhaka Tribune reported
adding that Samsung will submit a final proposal after getting the nod from the ministry. The
Power Ministry is considering Samsung's proposal and will forward it to Prime Minister Sheikh
Hasina, who is in charge of the ministry, a ministry official told the newspaper.
Bangladesh has been witnessing acute shortage of gas which has affected industries such as
fertilizer and power. In 2011, Bangladesh signed a MoU with Qatar to import annually 4 million
tons of LNG from the Qatar Petroleum. But the country could not import the fuel as necessary
infrastructure for this purpose is yet to be built.
The MoU expired in March 2015 after a two-year extension from its initial tenure, but Bangladesh
expects its tenure to be extended until 2017.

Senegal: Cairn Energy submits three year evaluation
plan to Government . Source: Cairn Energy
Cairn Energy and its joint venture partners have submitted a three year evaluation work plan to
the Government of Senegal including an initial programme of three firm and three optional
exploration and appraisal wells, with drilling starting in Q4 2015 in Cairn’s new basin play
offshore Senegal focused on the acreage around the SNE-1 discovery well. Cairn estimates that
the existing two discoveries and the currently identified prospects and leads have an estimated
mean risked resource base of more than a billion barrels.
The Ocean Rig Athena, a 7th generation dual activity drillship has been selected for the drilling
programme. The rig is currently contracted to ConocoPhillips in Angola. Cairn is in the final

stages of working with its joint venture partners to finalise the rig contract and associated support
services, which are being tendered to secure current market pricing.
The firm three well programme is currently planned to include two appraisal wells of the SNE-1
discovery which will core and test the reservoir, as well as one shelf exploration well. There
will also be a 2,000km2 3D seismic data acquisition campaign over the Sangomar and
Rufisque blocks to help fully map the prospectivity of the contract area.
A work programme and budget for the three optional wells will be presented to joint venture
partners in Q3 2015. Targets for these wells will be drawn from a combination of further
evaluation of the SNE-1 discovery, additional exploration in the shelf region, and exploration in
the acreage around FAN-1. Drilling plans for these wells will be subject to ongoing FAN studies
and the results of the first three firm wells.
Cairn has identified five prospects and eighteen leads across three blocks
Cairn believes there is substantial prospectivity across all three of its blocks and to date at
least five prospects and eighteen leads have been identified and continue to be matured to
drillable status.
Cairn hosted a Capital Markets Day presentation on its operations in Senegal on Monday in
London for sell-side analysts and institutional shareholders. The event included a series of
presentations from senior managers and will be shown on the Company's website via a live
webcast. Registration for the webcast and all materials from the day can be found at the
following link www.cairnenergy.com/capitalmarketsday
Simon Thomson, Chief Executive of Cairn Energy said:
'Cairn made two significant discoveries offshore Senegal in 2014 proving a hydrocarbon system
in a new and emerging Atlantic Margin Basin. We are excited about the exploration and appraisal
opportunity of this world class asset.
We have now submitted a three year evaluation work plan to the Government of Senegal which
is designed to lay the foundation for a long term multi-field, multi phase exploitation plan. Our
focus will be to add value in Senegal within a balanced, well funded company. We are well
placed to take advantage of this exciting opportunity as we build on the success of last year.'

Oil Price Drop Special Coverage
Oil prices slightly dip & holding on oversupply, worries over Greece
Reuters + NewBase
Oil prices eased on Tuesday as the market remained oversupplied and the dollar gained on fears
that Greece would not be able to repay its debts.
Greece paid about 750 million Euros ($836.70 million) to the International Monetary Fund late on
Monday, a day before it was due, Greek finance ministry officials told Reuters, but it was not
enough to stop worries over future payments.
"Just hours before the loan was due, Greece brought relief to the markets by ordering payment.
But don't be too happy just yet," Singapore-based brokerage Phillip Futures warned.
"The four-month extension of Greece's bailout plan, agreed in February, expires next month. This
means for the rest of May, Greece will be locked into debating another extension of its bailout
plan."
The brokerage said it expected prices to fall further on Tuesday, especially if the Organization of
the Petroleum Exporting Countries' (OPEC's) monthly report due to be released later on Tuesday
showed a rise in production.
"Fundamentals for oil are pretty stable and weak," said Shunling Yap, a senior oil analyst at BMI
Research, pointing to ample crude supply and slowing growth in China. June Brent crude was
down 8 cents to $64.83 a barrel by 0321 GMT. June West Texas Intermediate (WTI) dropped 2
cents to $59.23 a barrel.
The most recent price falls came after Brent climbed 40 percent from its January lows, with many
analysts saying upwards momentum looks to have come to an end as production around the
world continues to outpace demand.
The American Petroleum
Institute will release its data
on Tuesday at 4:30 p.m.
EDT (2030 GMT), while the
Energy Information
Administration (EIA) will
publish its data on
Wednesday at 10:30 a.m.
EDT (1430 GMT).

Oil prices to stay below $100 for next decade
SG/Agencies + NewBase
Oil prices will remain below the psychologically important $100-a-barrel mark until at least 2025,
according to a draft report by the Organization of the Petroleum Exporting Countries (OPEC),
seen by The Wall Street Journal.
In its most optimistic scenario, OPEC, which represents 12 oil-producing countries, forecast that
oil will sell for around $76 per barrel in 10 years' time, according to the report. However, it warned
that crude oil could cost as little as $40 per barrel in 2025.
"$100 is not in any of the scenarios," said a delegate at an OPEC presentation last week in
Vienna, according to The Wall Street Journal. Oil prices will remain below the psychologically
important $100-a-barrel mark until at least 2025, according to a draft report by the Organization of
the Petroleum Exporting Countries (OPEC), seen by The Wall Street Journal.
In its most optimistic scenario, OPEC, which represents 12 oil-producing countries, forecast that
oil will sell for around $76 per barrel in 10 years' time, according to the report. However, it warned
that crude oil could cost as little as $40 per barrel in 2025.
"$100 is not in any of the scenarios," said a delegate at an OPEC presentation last week in
Vienna, according to The Wall Street Journal. OPEC has refused to cut its output following a 60
percent crash in oil prices that began in June last year. Brent and WTI crude prices have partially
recovered from the lows seen at the start of 2015 to trade at around $65 and $59 per barrel
respectively.

The draft report seen by the newspaper recommended that OPEC reintroduce the quota system it
largely abandoned in 2011, which limited how much oil each member country could produce.
Crude oil markets held their breath in early Monday trading as markets waited for official word on
midseason trajectory from members of OPEC.
Last week's price rally faltered by Friday, with the US benchmark, West Texas Intermediate, losing
about 2 percent of its value and Brent crude oil prices holding relatively stable near the $65 per
barrel mark. Brent started Thursday around $67 per barrel.
The global benchmark Brent fell to around $64.87 per barrel in early Monday trading, a 2 percent
drop since the beginning of May. WTI prices were off slightly early in Monday trading, falling about
25 cents, or less than 1 percent, to $59.14 per barrel, relatively on par with the price at the start of
May.

China Overtakes US To Become World’s Top Crude Oil Buyer
Reuters + NewBase
China's crude oil imports hit a record of almost 7.4 million barrels a day last month.
China overtook the United States as the world’s top importer of crude oil for the first time in
April, and its purchases are expected to remain strong despite a slowing economy, with far-
reaching consequences for global oil and commodities markets.
The soaring imports came as a surprise as growth in the world’s second-largest economy was
sputtering and its oil demand was expected to ease. However, low oil prices and China’s
series of interest rate cuts – including one over the weekend – in a bid to stoke growth are
factors boosting demand.
China’s crude oil imports hit a record of almost 7.4 million barrels a day (bpd) last month,
putting it ahead of the United States’ estimated imports of 7.2 million bpd for April, Reuters
data show.
While China may drop back to second place in some months ahead, it is clearly headed
towards overtaking the United States as the world’s top crude importer on a permanent basis.
China is already the world’s biggest energy consumer, with oil by far the largest traded
energy market. Overtaking the United States means China is the top user of almost all
commodities, including coal, iron ore and most metals, with far-reaching implications for
markets which continue to shift from West to East.
“Being the world’s biggest crude importer should give China more buying power. China’s
engagement in the Middle East will continue to change, and it will no longer be the minority
player,” said Philip Andrews-Speed, head of energy security research at the National
University of Singapore.
“China becomes not only more important to Middle Eastern states, but the Middle East
becomes progressively more important to China relative to other countries that are importing
less oil,” he added.

A 60 per cent drop in global oil prices between June 2014 and January due to a supply glut
encouraged China to build stocks, changing both trade flows and oil politics.
Within a decade, oil producers around the world have had to fundamentally adjust their trade
routes as U.S. imports fell from over 10 million bpd 10 years ago to around seven million bpd
currently, just as China’s imports have risen seven-fold.
The Saudi-led decision by the Organization of the Petroleum Exporting Countries (OPEC) in
November 2014 not to cut production despite the slide in oil prices has been largely motivated
by an effort to defend market share against outside competitors like Russia or U.S. shale
producers.
GLOBAL IMPACT
Saudi oil minister Ali al-Naimi was on a high profile visit to China and other Asian countries in
April when he announced near record Saudi oil production and said he was “very positive”
about continued strong demand from China.
China’s nascent role as the world’s top crude buyer is also impacting trading.
The crude market has been traditionally dominated on the buy-side by Western oil majors
such as ExxonMobil, Royal Dutch Shell, Chevron or BP or merchants like Vitol and Mercuria.
Now, Chinese traders are increasingly active.
Companies like Unipec or China Oil, the respective trading arms of Chinese national oil
companies Sinopec and PetroChina, have entered oil markets on an unprecedented scale.
With prices still relatively low, China’s demand is expected to rise. “They will definitely
continue to buy more crude to fill up new storage capacity, both strategic and commercial,”
said Seng Yick Tee, director of SIA Energy in Beijing.

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 25 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years, he has developed great
experiences in the designing & constructing of gas pipelines, gas metering & regulating stations
and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 03 May 2015 K. Al Awadi

NewBase 602 special 12 May 2015

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to NewBase 602 special 12 May 2015

Similar to NewBase 602 special 12 May 2015 (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (20)

Recently uploaded

Recently uploaded (20)

NewBase 602 special 12 May 2015