Ne base 10 june 2021 energy news issue 1437 by khaled al awadi

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NewBase Energy News 10 June 2021 - Issue No. 1437 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E Mubadala joins EIG-led consortium to acquire 49% stake
in Aramco pipeline
WAM/Tariq alfaham/Hazem Hussein
Mubadala, the Abu Dhabi-based sovereign investment company, today announced that it has joined
the EIG-led consortium which has entered into a transaction with Saudi Arabian Oil Co. (Aramco)
to acquire a 49 percent equity stake in the newly formed entity Aramco Oil Pipelines Company.
Mubadala said in a statement that Aramco will retain the remaining 51 percent stake in the new
entity. The new entity has rights to
25-years of tariff payments for oil
transported through Aramco’s
stabilised crude oil infrastructure
network, backed by minimum
volume commitments.
Aramco will continue to retain title
to, and operational control of, the
network, and the transaction will
not impose any restrictions on
Aramco’s actual crude oil
production volumes (which are
subject to production decisions
issued by the Kingdom of Saudi
Arabia).

Oman: HEA appointed advisor for Odin Energi's farmout of
Block 15 in the Northern Oman Basin …. Source: HEA Advisors
Holt Energy Advisors ('HEA') have been appointed by Odin Energi as farmout advisor for Block
15 in the Northern Oman Basin.
Block 15 contains a mix of appraisal/development and low-risk exploration prospectivity covering
an area of 1,400 Km2 in the North Oman Basin. The licence is covered with pre-existing 2D data
as well as more recently acquired 3D surveys.
The Ataya discovery was originally drilled in 2017 and Odin Energy now wishes to re-enter the
Ataya-1 well and sidetrack the well towards the crest of the structure and the development could
recover 2 mmbbl of oil from the Naith C formation and further potential from the Naith A.
The Ataya area is covered and mapped with very high spec 3D acquired by OXY. The forward work
plan is to sidetrack the Ataya-1 well and after acidizing, putting the well on a long-term test to
consider how to optimise the development of the full structure.
Also on the block are the Thimar and Prospect-8 exploration targets with prospective resources of
10 and 7 mmbbl respectively which Odin would like to drill in 2021-22.

Odin Energi are seeking a partner(s) to join them in the exploitation of the licence which is expected
to yield term term production from the Ataya development and material upside from the exploration
potential on the block.
Project Detail

Asia: Coal and LNG's surge in Asia plays into renewable energy hands
By Clyde Russell Reuters
Liquefied natural gas (LNG) and thermal coal prices in Asia have been roaring ahead in recent
months amid strong demand, but while welcome news for the commodity producers, the rally is a
longer-term boon to their main rival, renewable energy.
Spot LNG prices have nearly doubled since the post-winter low of $5.60 per million British thermal
units (mmBtu), ending last week at $10.95.
The rally has mainly been driven by increased demand, with the volume of the super-chilled fuel
being discharged at Asian ports reaching 22.33 million tonnes in May. That was up from April’s
20.81 million and well above the 18.96 million from May 2020, according to vessel-tracking data
compiled by Refinitiv.
The demand has been largely driven by China, which imported 7.31 million tonnes in May, up from
6.52 million in April and the strongest month since January. China has imported 33.22 million tonnes
in the first five months of 2021, up by close to a third from the 25.62 million imported in the same
period in 2020.
While China is driver of spot LNG prices, it’s also playing a role in boosting thermal coal prices,
even though its imports are actually weaker so far this year.
China’s total coal imports were 21.04 million tonnes in May, down from 21.73 million in April,
according to official customs data. And for the first five months of the year, China’s coal imports
were 111.17 million tonnes, down a quarter from the same period in 2020
That the world’s biggest importer is buying less would appear bearish. But it’s the nature of China’s
purchases that are driving the market. China’s unofficial ban on imports from Australia, the world’s
second-biggest shipper of thermal coal behind Indonesia, has roiled markets, forcing Chinese
traders and utilities to scramble for coal from alternatives such as Indonesia and Russia.

This has driven up the prices of coal from these producers, in turn forcing India, the world’s second-
biggest importer, to increasingly switch away from Indonesia, its former number one supplier, and
buy Australian coal instead.
That, coupled with strong demand from Japan and South Korea for high-grade Australian coal,
leaves the stars aligned for strong price gains across Asia’s seaborne coal grades.
The benchmark weekly index for Australian high-grade thermal coal at Newcastle Port, as assessed
by commodity price reporting agency Argus, rose to a decade high of $121.48 a tonne in the week
to June 4. That level is almost triple the 2020 low of $46.37, plumbed last September at a time when
many Asian economies were locked down as part of efforts to combat the coronavirus pandemic.
Lower-grade Indonesian coal has also performed well, ending last week at $55.04 a tonne, up 143%
from its low point in September 2020.
LONG-TERM PAIN?
While the price gains in spot LNG and thermal coal will boost the fortunes of producers, who saw
profits collapse during the pandemic, it will also sharpen the minds of utilities and countries in Asia
planning their energy futures.
Already, coal-fired and natural gas-fired power plants struggle to compete with renewables such as
solar and wind, even when battery back-up storage is factored in.
A recent report compiled by Australia’s science agency CSIRO and the Australian Energy Market
Operator showed that the current capital cost of building a new coal-fired power plant using higher-
grade fuel was about A$4,450 ($3,435) per kilowatt.
A combined cycle gas-fired plant came in A$1,801 per kilowatt, while large-scale solar was A$1,408
and onshore wind was A$1,951. An integrated solar plant with two hours of battery storage had a
capital cost of A$2,139, above the cost of a combined cycle gas plant - but less than half of a new
coal-fired plant.
The figures in the report are for capital costs, and they didn’t assess operating costs, which heavily
favour renewables as they don’t require fuel purchases, operate with fewer workers and cost less
to insure. It also excludes the impact of any potential climate change policies being implemented,
such as carbon taxes or emissions trading.
An indication of what a carbon-constrained future might mean for coal was that a coal-fired plant
with carbon capture and storage was assessed at a capital cost of A$9,311 per kilowatt, rendering
it completely uncompetitive with any other type of electricity generation in the study.
Several Asian countries, such as Bangladesh and Pakistan, have recently signalled an end to
building coal-fired power plants, and the likelihood of new plants that are reliant on imports being
built is rapidly retreating across the region.
LNG producers view their fuel as a more climate-friendly alternative to coal. But while capital costs
are competitive with renewables currently, any utility opting for a gas-fired plants based on LNG
imports faces risks not apparent with opting for renewables instead.
Chief among them is what has happened in recent months to prices, with wild swings in the spot
market: uneven demand caused by a colder-than-expected northern winter drove prices to a record
high, following soon after the pandemic caused a slump to a record low in the middle of last
year.Price volatility and security of supply may be LNG’s Achilles heel in Asia, as is the risk that the
fuel is increasingly targeted by climate activists, who have already made coal-fired power
developments increasingly difficult.

Electric power sector CO2 emissions drop as generation mix
shifts from coal to natural gas …U.S. EIA, Power Plant Operations Report
Over the past 15 years, the U.S. electricity generation mix has shifted away from coal and toward
natural gas and renewables, resulting in lower CO2 emissions from electricity generation. In 2019,
the U.S. electric power sector produced 1,724 million metric tons (MMmt) of CO2, 32% less than
the 2,544 MMmt produced in 2005.
Lower CO2 emissions have largely been a result of a shift from coal to natural gas in the electricity
generation mix. In 2005, coal made up 50% of U.S. electricity generation; that share declined to
23% in 2019. Conversely, natural gas increased from 19% of total generation in 2005 to 38% in
2019.
For the next few years, this trend may be changing. In the recent releases of our Short-Term Energy
Outlook, we forecast that higher natural gas prices will lead to less natural gas-fired generation and
more coal-fired generation in 2021. However, in 2022, we expect both coal and natural gas to lose
a portion of their shares to renewables.
When generating electricity, coal emits significantly more CO2 than natural gas. In 2019, coal-fired
generation produced 2,257 pounds of CO2 per megawatthour (MWh) of electricity. Natural gas-fired
generation produced less than half that amount at 976 pounds of CO2/MWh.
CO2 emissions associated with generating electricity from coal and natural gas differ because of
differences in the fuels themselves—coal has more carbon content per unit of energy. In addition,
coal-fired plants and natural gas-fired plants differ in how efficiently they convert their respective
fuels to electricity.
The amount of CO2 produced when a fuel is burned depends on a fuel’s carbon content. Coal
produces more CO2 per unit of energy than natural gas does when burned. Coal consumption for
electricity generation produces 209 pounds of CO2 per million British thermal units (MMBtu),
compared with 117 pounds of CO2/MMBtu for natural gas.

Natural gas-fired generators, especially those that operate in a combined-cycle configuration, are
also more efficient than coal-fired generators. On average, natural gas-fired generators produce
electricity with significantly less energy input than coal, also helping to lower CO2 emissions. A
lower heat rate indicates a more efficient plant. In 2019, the conversion efficiency for natural gas-
fired generation was 7,731 British thermal units per kilowatthour (Btu/kWh) and 10,551 Btu/kWh for
coal-fired generation.
The increased use of renewables has also reduced emissions from generating electricity in the
United States. In 2005, 9% of the electricity generated in the United States came from renewable
sources. The renewable share of generation rose to 18% in 2019, largely driven by growth in wind
and solar generation. Nuclear generation, a zero-emission energy source, made up about 20% of
U.S. generation in both 2005 and 2019.
Although both the increased use of renewables and the shift from coal-fired to natural gas-fired
generation contributed to reductions in electric power sector CO2 emissions, the shift from coal to
natural gas had a larger effect. Of the 819 million metric ton decline in CO2 emissions from 2005 to
2019, approximately 248 million metric tons (30%) of that decline is attributable to the increase in
renewable generation.
In comparison, almost 532 million metric tons (65%) of the decline in CO2 emissions is attributable
to the shift from coal-fired to natural gas-fired electricity generation. Decreased petroleum-fired
generation largely influenced the remaining decrease in CO2 emissions.
As the rate of coal-to-gas switching reverses in the short-term, the trend of declining power sector
CO2 emissions may change. Annual changes in power sector CO2 emissions from natural gas and
coal depend first on changes in the shares of those fuels in electricity generation and second on
improvements in natural gas-fired generation efficiency.

NewBase June 10-2021 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil skids as start of U.S. summer driving fails to lift fuel demand
Reuters - Jessica Jaganathan
Oil prices fell on Thursday as inventory data in the United States, the world's top oil consumer,
showed a surge in gasoline stocks that indicates weaker-than-expected fuel demand at the start of
summer, the country's peak season for motoring.
Brent crude oil futures were down 40 cents, or 0.55%, at $71.82 a barrel by 7.31 GMT, while U.S.
oil futures declined by 40 cents, or 0.57%, at $69.456 a barrel. All indications are leading to higher
prices after mid day with NTMExchange opening.
Oil price special
coverage

"Markets had been optimistic on demand as the U.S. enters the peak summer driving season,"
analysts from ANZ Research said in a note on Thursday.
"An acceleration in (coronavirus) vaccinations and rising traffic numbers are a plus for demand for
transportation fuel. However, this data highlights it won't be a smooth road back to recovery."
U.S. crude oil stockpiles that include the Strategic Petroleum Reserve (SPR) fell for the 11th straight
week as refiners ramped up output, but fuel inventories grew sharply due to weak consumer
demand, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories (USOILC=ECI) that exclude the SPR fell by 5.2 million barrels in the week to June
4 to 474 million barrels, the third consecutive weekly drop. But fuel stocks were up sharply, with
product supplied falling to 17.7 million barrels per day (bpd) versus 19.1 million the week before.
Gasoline demand fell to 8.48 million bpd in the week to June 4, down from 9.15 million bpd from the
week before, but up from 7.9 million bpd a year ago, EIA data showed.
In another development weighing on prices, Libya's Waha Oil Co aims to return to normal output
operations on Thursday after fixing a leak on a pipeline that more than halved the company's oil
production, an oil source at the Es Sider crude export terminal said.
In India, the world's third-largest oil consumer, fuel demand slumped in May to its lowest since
August last year, with a second COVID-19 wave stalling mobility and muting economic activity in
the world's third largest oil consumer.

NewBase Special Coverage
The Energy world – June - 10- -2021
The Little Engine That Won an Environmental Victory Over Exxon
Bloomberg - Saijel Kishan and Joe Carroll
Chris James pulled off a feat that for years had eluded the Rockefeller family, giant pension funds,
and money managers. In just six months—and after staking his own money—James’s tiny
investment startup,
Engine No. 1, won a victory over one of America’s most iconic companies. Its acrimonious six-month
proxy battle against Exxon Mobil Corp., centered on its flagging performance and resistance to
preparing for a low-carbon future, resulted in three dissident directors being elected to the
company’s 12-member board.
The victory not only stunned the oil world and corporate America at large, but it also marked a
coming of age for socially conscious investors who’ve long pressed companies to improve their
environmental policies, often with mixed results. Engine No. 1’s proxy campaign may usher in a new
age for them.
“It opens up a new strategy,” says Timothy Smith, director of ESG shareowner engagement at
Boston Trust Walden Co., who’s been speaking with companies and filing shareholder resolutions
for 50 years. “There’s never been a case of directors being unseated for ESG issues,” he says.

A confluence of trends set the stage for Engine No. 1’s success: mounting societal concern about
the warming planet, world leaders and corporations setting emissions targets, and Exxon’s poor
recent performance. The heart of Engine No. 1’s argument was that Exxon’s failure to address
climate change was damaging its finances and harming shareholders.
Board Members Elected in the U.S.
There was also already a groundswell in investor pressure. In the U.K., billionaire activist investor
Chris Hohn had started a campaign pushing companies to produce plans to cut greenhouse-gas
emissions and give shareholders a say on those efforts.
And after facing criticism for its record on environmental issues, mammoth money
manager BlackRock Inc., a top Exxon shareholder, said it would start voting against corporate
directors whose companies fail to act on the climate. The shareholder vote held May 26 gave seats
to three candidates Engine No. 1 supported.
It was a shocking defeat for Exxon Chief Executive Officer Darren Woods, who is four and a half
years into what’s already been a rocky tenure. His first task will be to convince the fossil-fuel skeptics
in his own boardroom that the company should continue searching for untapped oil fields.
Exxon has to find the equivalent of 1.4 billion barrels every 12 months just to offset what it pumps
out of the ground every year. Operating on that gargantuan scale requires vast exploration programs
that burn through billions of dollars for years on end, with no guarantee of success.
For most of its history, Exxon was known for its unrivaled financial and operating acumen. But a
series of blunders in the past 20 years—including ill-timed forays by Woods’s predecessor into

Russia and American shale gas—laid the groundwork for steep declines in cash flow and oil
production.
The crisis intensified with 2020’s twin perils: a global crude glut and a pandemic-driven slump in
demand crushed oil prices. Exxon posted its first annual loss in at least 40 years, and the stock
registered its worst annual performance since it merged with Mobil in 1999. Even as revenue
plunged to less than half of what it was earlier in the decade, Woods pledged to protect the S&P
500 index’s third- largest dividend and borrowed heavily to fund it.
Ballooning debt and bleak prospects for any imminent rebound gave activists an opening. But
whether the three new board members Engine No. 1 proposed will be able to alter the company’s
course remains to be seen. “We welcome the new directors and look forward to working with them,”
Exxon spokesman Casey Norton says.
But Felix Boudreault, managing partner at ESG researcher Sustainable Market Strategies, is
skeptical that Exxon’s embrace will be a warm one. “They’ve shown so much resistance,” he says.
“At best, they will do the bare minimum on climate.”
Nonetheless, Engine No. 1’s victory has emboldened socially conscious investors, who for decades
have been coaxing companies to improve their environmental and social practices. They typically
talk with corporate managers and submit shareholder resolutions to be voted on at annual meetings.
Matt Patsky, who’s done socially responsible investing for more than 30 years, sees Engine No. 1’s
win as a way for him to up the ante by shaking up boardrooms. “We would consider doing this type
of activism as part of a coalition of large investors,” says Patsky, CEO of Trillium Asset Management.
“It’s opened up new opportunities for us. It’s a third tool.”
Investors such as the California State Teachers’ Retirement System, Legal & General Investment
Management, and the Rockefeller family spent years fruitlessly pressing Exxon to take action on
global warming. CalSTRS, an early backer of Engine No. 1’s Exxon fight, says it may use other
strategies with companies it’s already in talks with on ESG issues.

LGIM, one of Europe’s largest money managers, which cut its stake in Exxon two years ago after
failed talks on the climate, said it could throw its weight behind other investors who mount activist
campaigns, as well. “More aggressive ESG tactics are here to stay,” says John Hoeppner, head of
its U.S. stewardship and sustainable investment unit. “Companies should expect more of this.”
Engine No. 1’s campaign wasn’t focused on metrics like carbon dioxide levels or the planet’s
temperature.
The fund argued instead that Exxon had generated poor returns—and jeopardized its own
dividend—through years of wasteful energy-project spending and rising debt. It was important to
make that financial case to other investors, James says. “In many of these cases, shareholders who
vote aren’t the loudest about these ESG issues. We are assessing the total value of a business,
their impacts on stakeholders and shareholders.”
Taking on one of the world’s biggest oil companies was a big risk for James, who spent at least $30
million on legal fees. Engine No. 1 had only a 0.02% stake in the $260 billion company. But his firm
won backing from the three-largest U.S. money managers, which together own about a fifth of
Exxon, and the three largest U.S. pension funds.
James is now focusing on expanding his fledgling socially conscious business, including plans for
an exchange-traded fund that will encourage changes at the companies it holds through proxy
voting.
He declined to comment on what his next targets might be. But a recent government filing shows
Engine No. 1 had taken stakes in several companies including automaker General Motors Co.,
agribusiness Bunge Ltd., and manufacturer Deere & Co. before the end of March. All operate in
high-carbon-emitting industries, so the Exxon fight is likely not far from his mind.
BOTTOM LINE - Exxon long resisted calls from climate-concerned investors. Its loss to a slate of
activists could speed other ESG campaigns against poorly performing companies.

The Retreat of Exxon and the Oil Majors Won’t Stop Fossil Fuel
Rachel Adams-Heard
When Exxon Mobil Corp. decided to get out of a big oil field in Iraq, the government took on the
unusual role of salesman. Iraqi officials pitched West Qurna-1 to likely buyers from among Exxon’s
supermajor peers, including arch-rival Chevron Corp. There weren’t any takers.
Iraqi workers walk on pipelines of an oil refinery near the city of Basra in 2009. In November of that year, Iraq
awarded the right to develop the West Qurna-1 field to a consortium led by Exxon and Shell.
That left Iraq with narrowed options: sell to one of China’s state-backed oil majors, or else buy back
Exxon’s stake itself. The sale process remains unresolved but either outcome would stand as a
powerful indicator of what’s become of the global oil market. With supermajors from the U.S. and
Europe in retreat around the world, national oil champions are set to fill the void.
The supermajors — a group that, in addition to Exxon and Chevron, includes BP Plc, Royal Dutch
Shell Plc, TotalEnergies SE, and Eni SpA — are shrinking even while fossil-fuel demand holds
strong. These companies are under growing pressure to pay down debt while cutting greenhouse
gas and, for some, transitioning to renewable energy. Recent weeks saw Exxon and Chevron
rebuked by their own shareholders over climate concerns, while Shell lost a lawsuit in the Hague
over the pace of its shift away from oil and gas.
National oil companies, or NOCs, are largely shielded from those pressures. When the owners are
governments, not shareholders, there aren’t dissident board members like those now sitting inside
Exxon. That means state oil producers like those who populate OPEC+ can be the buyers of last
resort for fossil-fuel projects cast off by the shrinking supermajors.
State companies can also gobble market share by simply producing oil that their private-sector rivals
won’t. Saudi Aramco and Abu Dhabi National Oil Co. are spending billions to boost their respective

output capacities by a million barrels per day each, and Qatar Petroleum is spending more than $30
billion to increase its liquefied natural gas exports by more than 50%. (Aramco and Abu Dhabi
National Oil declined to comment.)
Taken together, NOCs make up just over half of today’s worldwide oil supply. By 2050, Rystad
Energy sees that share growing to 65%.
Big Oil Is Getting Smaller
The majors' spending on oil and gas production has fallen
It’s an unmistakable trend that’s drawing heightened attention to some of the largest and
most secretive entities in the world. Many government leaders are seeking to lower
planet-warming emissions, with nine of the 10 biggest economies staked to net-zero
goals.
At the same time, these opaque government-sponsored oil producers — insulated in
most cases from both investors and environmentalists, and under little obligation to
disclose climate data — are taking over the job of filling the millions of barrels consumed
each day.
“We hear government officials and NOC officials say, ‘We look at the divestment of
international oil companies from some projects as an opportunity for us to grow,’” said
Patrick Heller, an adviser at the Natural Resource Governance Institute. “And I do think
that’s potentially really risky.”
Some observers worry that campaigns by activists to have oil majors divest from fossil
fuels could end up accelerating a shift to government owners who operate with less

transparency and, occasionally, worse environmental records. Jason Bordoff, director of
the Center on Global Energy Policy at Columbia University’s School of International and
Public Affairs, argued in a recent essay that such efforts could result in “unintended
consequences” without the necessary drop in demand.
For all the focus on companies like Exxon and Shell, the majors recently accounted for
only 15% of the world’s supply of oil, according to the International Energy Agency. Some
of them are set to see their production drop, too, in part due to selling off chunks of their
existing businesses.
BP has spent the past two years pursuing divestment deals partly to help meet its net-
zero goal, and next it plans to sell a stake in an Omani gas block to Thailand’s national
energy firm for $2.6 billion.
Shell, with its own pledge to zero-out emissions, recently said it would hand back leases
to the Tunisian government instead of producing more oil from them. Such deals reach
beyond oil and gas extraction: Mexico’s Pemex is set to buy a Texas refinery from Shell.
(Pemex declined to comment.)
An oil drilling rig on one of the causeway islands at the Saudi Manifa oilfield. Aramco and Abu Dhabi
National Oil Co. are spending billions to boost their respective outputs by a million barrels per day each.
While state-sponsored oil companies vary greatly — from Norway’s climate-
conscious Equinor to Russia’s Gazprom, a top three emitter for decades — overall NOCs
make an outsized contribution to global emissions. Consider methane, a greenhouse

gas that’s far more potent than carbon dioxide in the short term. Countries where state-
owned entities dominate energy supply make up three-quarters of all methane emissions
from oil and gas, according to the IEA.
The vast majority of those methane emissions are attributable to just 15 countries,
including Russia, Saudi Arabia and Iraq.
Pressure driving supermajors to shrink isn’t coming solely from climate activists. The IEA
drew widespread attention last month when it released its first report laying out a
roadmap for a global net-zero economy by 2050. In that scenario, demand for fossil fuels
plummets and investment in new oil and gas fields needs to stop. Methane emissions
from fossil fuel, meanwhile, would fall 75% by 2030.
In the near-term, the majors have “ample spare capacity,” Bordoff said in an email
interview. “But if investment by the majors remains depressed and oil demand continues
on its current trajectory, markets will tighten.”
As oil prices rise, he sees state-owned or smaller, private players stepping in to fill the
gap. “A shift in production to major nationally owned companies — such as in Latin
America or the Gulf or Russia — carries geopolitical supply risks,” Bordoff said, “while
smaller independents have often demonstrated poorer safety and environmental
practices.”
Divestments and reduced spending on exploration means oil majors will simply run out
of proved reserves — the quantity of hydrocarbons that they can produce — within 15
years, Rystad said in a recent report, “unless the group makes more commercial
discoveries, and fast.”

Even Exxon, which hasn’t set a net-zero target, has severely curtailed its ambitious
growth plans to save money and reduce debt. The company is keeping production at the
lowest level in two decades through 2025, a drop of 25% compared to pre-pandemic
estimates.
Exxon's asset sales are “financial transactions, not an effort to reduce emissions from
our portfolio,” the company said in a statement. “Our business plans call for reduced
emissions intensity, which emphasizes improved operational efficiencies and emissions
performance, rather than the divestment of individual assets.”
Chevron has also backed away from new megaprojects in favor of more flexible U.S.
shale. Both companies forecast flat output this year compared to last. BP will cut its oil
and gas production by 40% by the end of this decade, while Shell sees a gradual decline
in oil output of around 1% to 2% each year.
As a group, the majors are holding spending at 2% lower than last year, the IEA reported
last week, despite overall capital expenditures on exploration and production rising 8%
in 2021. Spending on new oil and gas fields “has traditionally been well above the levels
from their peers in the Middle East, Russia and China,” the IEA said. “This is no longer
the case.”
But global demand isn’t falling as rapidly, at least according to current projections. In fact,
it’s expected to rise over the next 15 years based on recent estimates from clean-energy
researchers at BloombergNEF. That leaves about 55 million barrels of oil a day of new
supply needed by 2050, BloombergNEF says, equivalent to global demand in the middle
of the 1980s.
Upstream Oil Investment Required
Significant new production will be needed even if demand eventually falls

State-owned oil companies see this as an opportunity. “A lot of oil and gas host
governments and NOCs believe that the industry is underinvesting in exploration and
production, and some believe they can step up and fill the gap,” said Ben Cahill, a senior
fellow in the Energy Security and Climate Change Program at the Center for Strategic
and International Studies.
Not all will be able to do so. Cahill said companies like Pemex, Venezuela’s PDVSA and
Algeria’s Sonatrach will struggle just to maintain their output. But that leaves giants like
Aramco, Russia’s Rosneft and Qatar Petroleum in a position to double down on their
core business.
Iraq’s oil ministry said in a statement it’s committed to attracting new investments with
international oil companies. This year Iraq has been discussing a $7 billion energy deal
with Total, for example, even as Exxon has sought to shed its stake in an oil field.
“Everyone knows that many international companies have changed their strategies,” said
Asim Jihad, an oil ministry spokesman. “Iraq respects the will of the companies operating
in Iraq.”
National Oil Champions Have Weaker Climate Plans
A higher Bloomberg Intelligence Climate Transition Score indicates better preparation for a
low-carbon future

It’s hard to glean a complete picture of what that will mean for emissions, in large part
because many state-owned companies don’t disclose greenhouse-gas data.
Aramco recently revamped its disclosures and still doesn’t report data from join ventures
or the emissions from customers burning its fuels. Overall, disclosure from state-owned
oil companies are highly variable and lack the transparency of the majors.
But what little is known indicates there’s low-hanging fruit on greenhouse gas from
NOCs. In some cases it would cost nothing for petrostates to slash methane emissions,
according to a previous IEA report.
Russia’s Rosneft may find an opportunity to double down on their core business, along with its giant
national oil company peers Aramco and Qatar Petroleum. Photographer: Andrey Rudakov/Bloomberg
“NOCs are sort of the biggest keys when it comes to looking at country-level emissions,”
said Ratnika Prasad, director of energy strategy at the Environmental Defense Fund,
which recently commissioned a report by Carbon Limits on methane emissions by state-
owned oil companies. “It’s easy to see how taking action on NOC emissions, especially
methane, will yield pretty quick and more effective climate results.”
Pressuring government-run entities to take action introduces new, daunting hurdles.
After years of campaigning, there’s a playbook of sorts for forcing change at the Western
supermajors. Activist groups such as Follow This and As You Sow encourage climate-
conscious citizens to buy stock in publicly traded companies like Exxon or Shell. Then

shareholder activists push climate-friendly proxy measures during annual shareholder
meetings.
Strategic pivots by Shell and BP toward low-carbon fuels came after years of intensifying
shareholder pressure, and the same process appears to be playing out inside Exxon
right now.
The Texas oil giant lost an unprecedented battle with an activist investor Engine No. 1
at its annual meeting this year. With just 0.02% of Exxon’s shares, the previously unknown
group won backing from large institutional investors and placed three of its own
candidates on Exxon’s board.
State-owned entities lack an equivalent mechanism, unless a significant portion of their
shares is listed on a stock exchange. Any drive to lower emissions is tied to the ambitions
of the countries that own them.
“NOCs are at the core of economic life in a lot of oil producing countries,” said Heller.
“The health of the NOC is in some cases seen as synonymous with the health of the
economy overall. So that does contribute to status-quo thinking.”
There’s some cause for optimism. Countries with the most prolific state-backed oil
companies have signed on to the Paris Agreement, with some taking their commitment
a step further and participating in voluntary coalitions aimed at reducing emissions.
The Oil and Gas Climate Initiative counts five national oil companies, including Aramco
and China National Petroleum Corp., among its members. That organization requires a
target to reduce the average methane emissions per barrel of oil produced by 2025,
although this doesn’t ensure that absolute emissions will fall.
To some degree, this is a phenomenon that Exxon has been warning against for years.
As BP and Shell have sold off assets in a pivot to renewables, Exxon has said such
moves only work to move production — and emissions — elsewhere.
Exxon CEO Darren Woods drew criticism from climate activists last year for labeling
rivals’ asset sales to lower emissions nothing more than a “beauty competition.” His
wider point underscores the long path ahead for the world as it grapples with climate
change.
“This is not a company challenge, this is a global challenge,” Woods said in March 2020.
“This idea of moving things in and out of the portfolio from one company to the other
actually isn't getting us any closer to a solution.”
But Mark van Baal, founder of Follow This, said that by pressuring the majors it’s still
possible to drive an overall reduction in emissions—even without directly challenging the
NOCs. State-owned entities will follow if majors push ahead on investment in renewable
energy, he said, lowering the costs for everyone. “We need the most innovative oil and
gas companies to change and put their full weight behind renewables to speed up the
energy transition,” van Baal said. “Others will follow.”

NewBase Energy News 10 June 2021 - Issue No. 1437 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. 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 the UAE operations base. Khaled is the Founder
of NewBase Energy news articles issues, an international consultant, advisor,
ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste
management, waste-to-energy, renewable energy, environment protection and
sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities &
gas compressor stations. Executed projects in the designing & constructing of gas
pipelines, gas metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted &
finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements.
Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass
energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous
conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-
in-Chief of NewBase Energy News and is a professional environmental writer with more than 1400 popular
articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste
management and environmental sustainability in different parts of the world. Khaled has become a reference
for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC
leading satellite Channels. Khaled can be reached at any time, see contact details above.

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