NewBase 650 special 20 july 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 20 July 2015 - Issue No. 650 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Seychelles unveils green energy tie-up with Masdar. GDN online
Seychelles has launched a renewable energy initiative in collaboration with the UAE’s Masdar
Company to establish new wind and solar energy projects to secure future domestic needs of the
country.
Seychelles President James
Michel said the “democracy of
renewable energy” initiative would
give hope to the Seychelles people
to obtain solar and wind energy to
tackle a severe shortage in
domestic energy sources because
of the country’s poor hydrocarbon
wealth and small financial
resources needed to import
energy.
He paid tributes to Abu Dhabi for
helping Seychelles in constructing
a wind energy station and supporting plans to set up a solar energy project. He said the new
initiative is also intended to achieve sustainable development and encourage investors in this
field.
“The scarcity of water resources in Seychelles requires us to rely on sea water and this naturally
requires energy…therefore ensuring new sources of energy has become essential for our country
and I would like to thank Abu Dhabi for its help in this respect….we welcome investors from the
UAE, other Gulf states or any other country to set up renewable energy projects in Seychelles,” he
said.
He noted that Masdar has helped Seychelles build a six-MW wind energy station in the capital
Victoria, the first renewable energy project in Seychelles. He said that the station ensures more
than eight per cent of the energy needs of Mahe Island, home to over 90 per cent of Seychelles’
population. He added that the project was funded through a $28-million grant provided by the
government-owned Abu Dhabi Development Fund.
Michel said that Abu Dhabi, the global renewable energy capital, would host a “blue economy”
summit in 2016 in collaboration with Seychelles on the sidelines of the energy summit due to be
held at the exhibition centre in Abu Dhabi.
Recent figures showed that the renewable energy was the largest recipient of investments in the
energy industry last year, accounting for nearly 16 per cent of the total energy investment or
around $310 billion.

Saudi oil exports fall to five-month low on China
Saudi Gazette + NewBase
Saudi Arabia’s crude oil exports slumped to a five-month low in May as refineries closed for
maintenance in China. The world’s biggest oil exporter shipped 6.94 million barrels a day in May,
down from 7.74 million in April and the lowest since December, according to data published
Sunday on the website of the Joint Organizations Data Initiative (JODI).
Exports fell for a second month even with output at 10.33 million barrels a day, the most since at
least 2002, according to JODI, which compiles data provided by oil-exporting countries. The
nation used more crude at home in May to fuel new refineries and power air conditioners.
Crude oil imports in China, the world’s biggest energy consumer, declined 11 percent in May from
a year earlier, according to the Beijing-based Customs General Administration. Shipments from
Saudi Arabia, China’s biggest supplier in 2014, fell 18 percent over the same period to the lowest
since August 2012.
Chinese refineries had almost 1 million barrels a day of capacity offline in May, according to
London-based Energy Aspects. China’s stockpiling also probably came to an end that month, it
said. Oil prices were little changed Friday amid the stronger dollar and concerns that the historic
Iran nuclear deal could unleash more Iranian crude on the global market.
“The stronger dollar played all week long... and that’s keeping pressure on prices,” said Carl Larry,
director of oil and gas for consulting firm Frost & Sullivan. The US currency climbed this week
after Federal Reserve Chair Janet Yellen reaffirmed the central bank’s plan to raise zero-level
interest rates this year, in what would be the first hike since 2006.
On Friday, the greenback traded at its highest level since late May against the euro, which fell to
$1.0841. A stronger greenback makes dollar-priced oil more expensive for buyers using weaker
currencies.
Abundant supplies of crude oil continued to put pressure on the market. The agreement between
Iran and six major powers for Tehran to curb its nuclear program, announced Tuesday, could lead
to lifting sanctions that have slashed Iran’s oil exports. The idea that additional Iranian oil could
enter the market, even if that was not expected to happen before 2016, continued to stoke “lots of
concerns,” said Bart Melek at TD Securities. “We could see significant amounts of new oil from
Iran hit the global market. Iran is said to have near 50 million barrels of crude ready to ship from
tankers as soon as the lifting of the sanctions is performed,” Melek said .

Oman: OOCEP presses ahead with wider Block 60 exploration
Oman Observer
Having successfully delivered Oman’s first commercial tight-gas project, state-owned upstream
energy firm Oman Oil Company Exploration and Production (OOCEP) says it is continuing to
make headway in unearthing the hydrocarbon potential of its relatively small, but significantly
promising, Block 60 concession in central Oman. Block 60, a roughly 1,580 sq kilometre
concession encompassing the wilayats of Ibri and Haima, is home to the prolific Abu Butabul tight
gas field, which was successfully brought into operation last December — the culmination of a
$1.2 billion investment by OOCEP in this landmark project.
While condensates go into PDO’s Main Oil Line at Barik, processed natural gas from Abu Butabul
is fed into the gas grid operated by Oman Gas Company . Gas production is being gradually
ramped up to reach a plateau output of 70 million standard cubic feet per day (mmscfd) along with
condensates averaging 6,000 barrels per day (bpd).
Roughly in parallel with the appraisal and development of the Abu Butabul field, OOCEP has also
been pushing ahead with an exploration programme targeting other hydrocarbon prospects within
Block 60.
According to its Annual Report 2014, issued here recently, the company plans to build on the
success of its maiden exploration well, Bisat-1, which was spudded last September.
Previous wells drilled by the company since it acquired the concession following its relinquishment
by British operator BG International in 2010 have primarily comprised appraisal and production
wells.
Bisat-1 targeted the Bisat prospect, located in the north-western part of the block in an area
dominated by sand dunes and sabkha. The well was planned to be drilled to a depth of around
4,500 metres to evaluate multiple reservoir objectives. En route, it encountered the “presence of
hydrocarbons” at several stratigraphic intervals, including the Shuaiba, Lower Haima/Barik and
Ghudun formations, according to the company.
“The exploration drilling programme is likely to further expand from the earlier envisaged
programme of minimum of 4-5 wells by incorporating follow-up exploratory wells to the Bisat
success,” OOCEP stated.
A wholly owned subsidiary of Oman Oil Company, the strategic and energy investment vehicle of
the Omani government, OOCEP described 2014 as a “remarkable year” punctuated by an array of
milestones and developments that have underscored the continued growth of the company.
Oil and gas production from assets — either wholly and partly owned or operated by OOCEP —
(corresponding to its share) averaged 33,000 barrels of oil equivalent per day in 2014. Proven and
probable reserves (2P) were pegged at 774 million barrels of oil equivalent by the end of the year.
The Abu TabuI tight gas field
in Block 60 (known as ABB)
was first discovered by
Petroleum Development
Oman in 1998, and was
appraised by BG
International, from April 2006
to June 2010. OOCEP
acquired the Block in March
2011. Following that work

PAKISTAN PREPARES TO PROCEED WITH IRAN PIPELINE PROJECT
BY FARHAN BOKHARI, FINANCIAL TIMES + GULF NEWS + NEWBASE
The removal of economic sanctions on Iran will clear the way for Pakistan to pursue an ambitious
gas pipeline for eventually importing up to $2.5 billion (Dh9.18 billion) worth of Iranian gas
annually, says Pakistan’s petroleum minister.
Pakistan’s energy-starved economy currently has a deficit
of 2 billion cubic feet of gas per day, rising to 2.5 billion
cubic feet per day during the winter months, according to
Shahid Khaqan Abbasi. Gas shortages across the country
have become crippling over the past seven years, at times
prompting angry protests from consumers. Stations
providing compressed natural gas (CNG) for automobiles
have all but shut down due to the shortages.
“We need gas. Iran has the world’s second-largest gas
reserves,” said Abbasi. He said the Iranian pipeline will
eventually provide a peak of 750 million cubic feet of gas per day once it is fully operational by
2020 — amounting to $2.5 billion annually at current prices. Following a deal last week with world
powers to curb its nuclear programme Iran is preparing for the unwinding of sanctions, expected
within the next six months.
Abbasi expects at least 250 million cubic feet, or a third of the pipeline’s capacity, to begin flowing
before the end of 2017 following the construction of two gas pipelines — one from Pakistan’s
south-western port of Gwadar to the city of Nawabshah, and a second from Gwadar to the Iranian
border.
Pakistani officials have previously told their Iranian counterparts that the country was forced to
delay the project in view of international sanctions banning trade with Iran. This won them time to
avoid paying a penalty from this year onwards.
“We don’t have a choice; we have to undertake this project. We are looking at penalties of up to
$3m dollars a day,” said Abbasi. “Once the sanctions go there is no excuse.” However, analysts
say Pakistan may face fresh pressure over the project from allies in the Saudi-led Arab world.
Saudi Arabia and most of its Gulf neighbours have a longstanding rivalry with Iran, and are
nervous both about its nuclear ambitions and any moves that will make its economy stronger.
“Pakistan’s gas shortages have become increasingly alarming. But the Saudis and others will try
to force a delay just to discourage new sources of revenue [for Iran],” said one senior western
official in Islamabad.
Hasan Askari Rizvi, a commentator on security and diplomatic affairs, said the Iran pipeline
project “will be a major test of prime minister Nawaz Sharif’s ability to... resist pressure from his
allies in the Arab world”.
Sharif, who in 2013 became prime minister of Pakistan for the third time, spent more than six
years in exile in Saudi Arabia after being removed in a 1999 military coup led by General Pervez
Musharraf. “He [Mr Sharif] feels beholden to the Saudis, so it would be interesting to see how far
he will go with this [Iranian gas pipeline] project,” added Rizvi.

UK: Protesters slam Government decision to allow gas storage
at Preesall in Lancashire. Source: Blackpool Gazette
• Government passes Halite’s gas storage plans
• Plans previously rejected by Government three times
• 300 construction jobs to be created, and 40 permanent posts afterwards
• Plans will see 900m cubic metres of gas stored in 19 caverns beneath River Wyre
• Compulsory purchasing could now be used to secure site
Campaigners have slammed the Government for allowing gas storage to go ahead on the east
side of the Wyre Estuary at Preesall in Lancashire. Despite tens of thousands of objections,
opposition from local authorities, and three previous rejections by the Government. Energy
Minister Lord Bourne has granted planning consent for the Preesall Underground Gas Storage
Facility project. The scheme, proposed by Halite Energy, will see 900 million cubic metres of gas
stored in 19 salt caverns under the River Wyre.
Lord Bourne made his announcement after Halite –
previously Cannatxx – forced a judicial review into the
Government’s third rejection of the hugely-unpopular
scheme. The scheme could still have been refused, but the
Government granted it
permission.
The news of Halite’s success
has been greeted with shock
and dismay across Wyre.
June Jackson, a Stalmine farmer who has been fighting
against gas storage since the earlier plans were first mooted
– some 12 years ago – said: 'This has come as a big shock. The reasoning behind the
Government’s decision, that it will create just 40 permanent jobs, is unbelievable. It is so
unreasonable after all the hard work that people have put in, people like Ian Mulroy and Howard
Phillips of Protect Wyre who have done geological studies, and the thousands who sent off
letters.'
Mrs Jackson also raised fears that Halite will now instigate compulsory purchase moves to allow
pipe work across huge swathes of land. She added: 'Halite has already stated it won’t be
responsible for the actual construction work, so who will be? It can only be hoped it is a company
with proper experience.'”
Fleetwood MP Cat Smith said: 'I’m hugely disappointed at this decision. For many years this has
rumbled on, and we’ve seen MPs and councils of all political parties working together on this and
sharing concerns. I’ll continue to work with Wyre and Lancashire County councils to make sure
matters including geology and jobs are handled right. It’s a shock'.
Coun Peter Gibson, leader of Wyre Council, said: 'I’m very disappointed by this news. I can’t
believe the minister responsible would ignore such strong local feelings about this issue. We will
be looking to raise concerns through our MPs, because they have all opposed it. I will also talk to
planners to see if there is anything else that can be done. It has gone against what everyone in
this area wanted.'

Coun Ruth Duffy, leader of Wyre’s Labour Group, said: 'It is very disappointing that this Tory
Government has granted gas storage, I’m aghast at this decision. What shocks me is that
concerns about the safety of this scheme have been clearly raised at more than one public
inquiry. If anything were to go wrong it could be catastrophic - we have an urban population right
next to this thing. They have tried to dump fracking on us, now this. It is yet another example of
the South dumping on the North'”
Margaret Daniels, of Fleetwood Civic Society, part of the Protect Wyre umbrella group, said: 'The
Government knows the strength of feeling locally, yet this scheme has still been allowed. It is very
disappointing.'
But a delighted Keith Budinger, chief executive of Halite Energy said: 'Today’s decision is the
culmination of more than four years of detailed work to demonstrate that this facility can be built
and operated safely. We look forward to working with the local community to ensure that the
people and businesses of Lancashire benefit from our project. We are currently reviewing the
detail of the Development Consent Order and have no further comment at this stage.'
The facility is proposed to be constructed on the east side of the Wyre Estuary at Preesall in
Lancashire and will be used to store and extract gas from local underground salt caverns. The
project may create up to 300 jobs during construction and up to 40 permanent jobs once
operational. Preesall would be a demand response facility, with gas entering the national system
in response to market conditions.
Energy and Climate Change Minister Lord Bourne, the Minister responsible for energy planning
consents, said: 'Investment in new energy infrastructure is essential if we are to keep the lights on
and bills down. This is a major project which will benefit the local economy by creating jobs and
stimulating businesses. Gas is also the greenest fossil fuel and helps us lower our carbon
emissions, which is important in the UK’s move to a cleaner energy future.'
In making the decision, staff at the Department of Energy and Climate Change took into account
an assessment by Senergy, an independent geological assessor, which suggested that the
development was suitable for the local geology.

Oil Price Drop Special Coverage
Oil steady as U.S. cuts drill rigs, Saudi crude exports fall
Reuters + NewBase
Oil prices held steady in early Asian trade on Monday as a resurgence in U.S. drilling activity seen
earlier this month seemed to fizzle out, while data showed Saudi Arabian exports fell to the lowest
in five months despite record output.
U.S. energy firms cut seven oil rigs last week, Baker Hughes Inc (BHI.N) said late on Friday in its
closely watched report. U.S. crude futures CLc1, also known as West Texas Intermediate (WTI),
briefly turned higher after the report.
U.S. crude was down 5 cents at $50.84 by 0056 GMT (0156 BST), after falling more than 3
percent last week and more than 14 percent in July. The August contract expires on Tuesday.
Schlumberger NV (SLB.N) said it is betting on an uptick in demand in coming quarters for oilfield
services in North America, a market that has been battered by a steep drop in oil prices.
Money managers cut their net long U.S. crude futures and options positions in the week to July
14, the U.S. Commodity Futures Trading Commission said on Friday.
Brent September crude LCOc1 was 10 cents lower at $56.99 a barrel. The benchmark had fallen
nearly 3 percent last week and more than 10 percent for the month.
Saudi Arabia's crude oil exports fell in May to their lowest since December, with official data
showing daily shipments stood at 6.935 million barrels a day (bpd) compared to 7.737 million bpd
in April.
The decline came despite record high output of over 10 million bpd as the Kingdom - traditionally
the world's biggest exporter of crude - transforms into one of the largest oil refining centres.
Russian Energy Minister Alexander Novak said he will meet OPEC Secretary-General Abdullah
al-Badri in Moscow on July 30 to discuss oil markets and the Iran situation.

RETURN OF IRANIAN OIL MAY CAUSE MORE OPEC TENSIONS
AFP + GULF NEWS + NEWBASE
The return of oil from Iran following the landmark nuclear energy deal with world powers could
create fresh tensions within Opec but may reinforce the organisation’s output strategy, analysts
say.
Tehran and major powers — Britain, China, France, Germany, Russia and the United States —
clinched a historic agreement in Vienna on Tuesday aimed at ensuring Iran does not obtain a
nuclear bomb, and which paves the way for the removal of sanctions and the gradual return of
Iranian oil to the global market next year.
The accord puts strict limits on Iran’s nuclear activities for at least a decade. In return, sanctions
that have slashed the oil exports of Opec’s fifth-largest producer will be lifted and billions of dollars
in frozen assets unblocked.
The Islamic republic’s exports could reach a potential 2.4 million barrels per day (bpd) in 2016,
from 1.6 million bpd in 2014, according to data from economist Charles Robertson at investment
bank Renaissance Capital.
The Organisation of the Petroleum Exporting Countries — whose 12 members including Iran
pump one third of global oil — is mindful that Iranian oil could worsen a global supply glut and
depress oil prices further.
Opec decided at its last meeting in Vienna in June to maintain output levels, extending its Saudi-
backed strategy to preserve market share and fend off competition from booming US shale. Oil
prices sank last week, hit by the Iran nuclear deal and the strong dollar, raising jitters among some
Opec members who next meet on December 4.
Poorer Opec members Angola,
Algeria and Venezuela — whose
budgets are heavily reliant on oil
revenues — may again argue for
less output to support prices,
analysts say. Richer Gulf
producers, led by Opec kingpin
Saudi Arabia, remain eager for
the organisation to preserve
valuable market share and force
out high-cost US shale
producers with lower oil price
levels.
“Clearly there is a divide
between the countries on this
new policy of seeking new
market share,” Ann-Louise Hittle
at consultancy Wood Mackenzie
told AFP. “So it could be a
contentious [Opec] meeting and
there could be pressure for an emergency meeting before December.”

Faced with stubbornly low prices, Algeria’s energy minister Salah Khabri indicated to state news
agency APS last week that an emergency Opec meet could be needed. “The real problem starts
when Opec members begin to fight for quotas amid oversupply and market share disputes,” said
Jassem Al Sa’adun, head of Kuwait’s Al-Shall Economic Consultants.
“If Iran, Venezuela, Algeria and Libya — all of which need to pump more — enter into a dispute
with the Gulf producers, then it could be the end for Opec,” he warned. Danske Bank analyst Jens
Naervig Pedersen said such countries had been “really hit” by low oil prices.
But he added: “Their collective power is probably not great enough to turn the mind of Saudi
Arabia and the core members of Opec in the Middle East.” In June, Opec’s collective output
ceiling was left at 30 million bpd — where it has stood for three and a half years — despite an oil
price collapse between June 2014 and January that slashed precious revenues.
The organisation appeared to shrug off calls from some members, including Iran, for a
“reasonable” oil price of between $75 and $80 per barrel. Oil is forecast to languish at an average
of just above $62 per barrel next year, according to French bank Natixis.
Hittle cautioned that low price levels could slow down US shale energy production and make room
for returning supplies from Iran — provided that global energy demand does not falter. “When we
look at fundamentals [of supply and demand] in the next year, with prices at this level we do
expect to see a much slower growth in US oil supply,” she said.
“So there might actually be some room for Iranian production to start up, as long as oil demand
growth holds up and continues.”

Winners and losers from Iran’s eventual return to global energy markets
Robin Mills + The National + NewBase
One of the most consequential international agreements signed in decades – the nuclear deal
reached with Iran in Vienna last week – may also prove to be a turning point in global energy
markets. Once implemented, it brings one of the world’s leading holders of oil and gas back into
world markets.
Such a shift in energy affairs inevitably brings winners and losers – but even those put at a
disadvantage can yet salvage some compensations. So who are the winners?
The Iranian government itself, and its people, of course, should benefit from a release of frozen
funds, an increase in oil and petrochemical exports, and the gradual return of foreign investment
to the energy sector.
That could help Iran regain its position alongside Saudi Arabia, Russia, the US and Iraq as one of
the few truly decisive petroleum players. But over the past decade and more, Iran has been adept
at sanctioning itself – at deterring foreign investment through political infighting and unrealistic
contractual and price demands. Meanwhile, its economy will still face the headwinds of low oil
prices.
Oil consumers will gain from those
cheaper prices, probably US$5 to $10
per barrel lower than they would
otherwise have been, as about
500,000 to 800,000 barrels per day
return to world markets.
In the longer term, gas users may
benefit from an expansion of Iranian
exports. But gas is much more
vulnerable than oil to Iranian policy
missteps, and Iran faces a crowded
international market. Those best-
placed are Turkey, which already buys
its gas, and its three likely next
customers – Iraq, Oman and Pakistan.
The other gas-short GCC countries
could also benefit, if they can
overcome the political obstacles to
dealing with Tehran. The losers are oil
and gas producers, particularly those in a weak financial position or who have failed to diversify
their economies.
With the fall in oil prices since last summer, the oil market had already shifted into a new mode.
That marked the decisive end of the rising and high price trend that had mostly persisted since
2002.
Now, for the first time since it broke Venezuelan resistance in 1999, Saudi Arabia faces real rivals
within Opec – Iran and Iraq, both major reserves holders desperate to increase production for their

own domestic financial imperatives. With its output at record levels, Riyadh remains the dominant
power, but shale oil and its own rising demand pose further problems.
Venezuela, Iran’s erstwhile ally while then presidents Mahmoud Ahmadinejad and Hugo Chávez
were political and economic soul mates, looks particularly vulnerable. The positions of Algeria and
Nigeria are not comfortable either. North American shale oil producers, who were showing some
signs of revival as prices recovered to above $60 per barrel, face more tough conditions.
Russia and Qatar will suffer a double blow, from lower prices and more competition for their gas
and oil sales. But Iran will not challenge Doha’s plum Asian liquefied natural gas markets for
years, if ever. And Russia seems already to have moved to forestall Iranian moves into the
stagnant European gas market. The eventual easing of the UN arms embargo on Iran also gives
partial compensation to the Russians, with the prospect of future weapons sales.
For major oil companies, the impact will be negative, in terms of lower prices, but some –
particularly the Europeans, such as Shell, Total and ENI – can offset this by striking new deals
with Tehran. After their disappointments in Iraq, Iran will offer the only other accessible, low-cost,
giant fields.
Even those disadvantaged must have realised that Iran’s petroleum was not likely to stay on the
sidelines forever. For its neighbours, the deal presents grave political and security concerns, but
also opportunities in trade and better relations. With efforts on all sides, the nuclear accord can
produce many more winners than losers.

UAE’s sovereign ratings affirmed; outlook stable
Saudi Gazette + NewBase
The United Arab Emirates’ Long-Term Foreign and Local Currency Sovereign Ratings of ‘AA-’ and
its Short-Term Foreign and Local Currency Sovereign Ratings of ‘A1+’ were affirmed by Capital
Intelligence. The Outlook for the ratings is ‘Stable’.
The UAE’s ratings reflect the following factors: the overall strength of the country’s public and
external finances and the resultant capacity to absorb economic shocks; moderate levels of public
debt; and generally favorable macroeconomic performance. The ratings also take into account the
vast hydrocarbon reserves and financial assets of the government of Abu Dhabi, and CI’s
expectation that the emirate would be willing to support federal institutions in the unlikely event of
financial distress.
Economic growth is expected to remain steady in the medium-term, averaging 3.2 percent in
2015-17, with growth in the services and trade sectors partially offsetting the impact of the
prolonged period of low oil prices on the overall economy.
The consolidated budget surplus declined in 2014 to 2.2 percent (9.9 percent in 2013) due to the
decrease in international oil prices. Assuming an average oil price of $60 per barrel, the fiscal
position is expected to weaken in 2015-16, with the budget posting a deficit of 8.6 percent and 7.5
percent in 2015 and 2016, respectively.

Consolidated government debt, of which only a small proportion relates to the federal government,
is expected to edge up to 14.7 percent of GDP in 2015, from 12.1 percent of GDP in 2014. Public
debt is higher at around 58 percent of GDP, and primarily reflects the borrowings of commercially-
oriented government related entities (GREs) – most of which are not formally guaranteed by
Emirati governments. However, most GREs are currently able to rollover or repay maturing debt
obligations.
The consolidated government debt stock is almost fully matched by government deposits in the
banking system and is probably dwarfed by public external financial assets. There is limited
disclosure of the latter, but it is estimated that the Abu Dhabi Investment Authority, the largest of
the UAE’s several wealth funds, manages assets of around 160 percent of GDP.
While the consolidated net creditor position is not an indicator of the solvency risk of individual
emirates, CI would expect Abu Dhabi, as the wealthiest emirate, to provide financial assistance to
the federal government and the Central Bank if required.
The country’s external finances are expected to remain healthy in the short to intermediate term.
The current account surplus is expected to narrow to 5.3 percent of GDP in 2015, from 12.1
percent of GDP in 2014, with robust growth in the non-oil sectors partly offsetting the impact of
lower oil prices. Official foreign exchange reserves of about $74.8 billion (18.0 percent of GDP in
2014) provide solid backing for the currency peg and an adequate buffer against external liquidity
shocks, and are expected to remain at comfortable levels in the intermediate term.
Gross external debt remains manageable at an estimated 52 percent of GDP in 2015. About 92
percent of the debt stock represents the foreign liabilities of the private sector, especially the
UAE’s large banking sector, and is comfortably exceeded by banks’ foreign assets. The rest of the
debt represents various conventional and Islamic debt instruments issued to complete the
restructuring of GREs.
The UAE’s sovereign ratings are principally constrained by weaknesses in the country’s economic
structure and institutions, as well as by some structural fiscal shortcomings. Oil and gas still
accounts for about 82 percent of consolidated government revenue, 32.5 percent of total exports,
and (directly) 31.5 percent of GDP. Moreover, the government’s budget structure is relatively
weak in view of the overreliance on oil, the limited tax base and high expenditure rigidities.
The quality of economic data is relatively weak, although it is slowly improving. Fiscal accounts
are neither comprehensive nor, at the consolidated level, compiled in line with international
standards. Information on government external financial assets is not disclosed, hindering
assessments of balance sheet strength and flexibility.
The banking system is broadly sound with high levels of capitalization. Although asset quality is
improving, the share of non-performing loans in gross loans remains comparatively high, partly
due to the problems of the real estate sector in the major emirates and the ongoing financial
restructuring of loans owed by a few Dubai GREs. The Outlook for the ratings is ‘Stable’, meaning
that the UAE’s sovereign ratings are likely to remain unchanged over the next 12 months,
provided that key metrics evolve as envisioned in CI’s baseline scenario and no other credit
quality concerns arise.
The ‘Stable’ Outlook balances the strength of the government’s fiscal and external positions
against institutional weaknesses, reliance on hydrocarbon revenues, and susceptibility to
exogenous shocks (including factors such as periods of subdued oil prices and geopolitical risk).

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 01 July 2015 K. Al Awadi

NewBase 650 special 20 july 2015

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (17)

Similar to NewBase 650 special 20 july 2015

Similar to NewBase 650 special 20 july 2015 (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (20)

NewBase 650 special 20 july 2015