New base 01 december 2017 energy news issue 1107 by khaled al awadi

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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NewBase Energy News 01 December 2017 - Issue No. 1107 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE petrol prices to increase for December (0.09 on petrol,0.12 on Diesel )
NewBase + The National-LeAnne Graves
UAE residents will pay around 12 fils more per litre for petrol starting on 1st
December 2017 as oil
prices hit a new two-year high earlier this month; see oil price section page 11.
The UAE Ministry of Energy announced on Tuesday that consumers will pay Dh2.15 a litre for
Super 98, a 5 per cent rise from November’s figure of Dh2.03. Special 95 will increase 6 per cent
to Dh2.04 from Dh1.92, and E Plus will cost Dh1.97, up from Dh1.85. Diesel prices will rise to
Dh2.20, a 4 per cent hike from last month.
For more than two years, the cost of petrol and diesel in the UAE has moved with the market as
the Ministry of Energy began its liberalisation policy. The ministry uses “benchmark prices” which
have not been publicly disclosed, though the prices should fluctuate with the international market.
Petrol and diesel are made from crude oil, which means that the price of oil impacts the price to fill
up a car tank.
The international benchmark, Brent crude, hit a new two-year high at US$64.27 on November 6 in
response to Saudi Arabia’s corruption crackdown which resulted in government officials and
businessmen being detained in connection with money laundering, bribery and extortion.
The change has instead come from Iraq as real interruptions in shipments fell by an estimated
170,000 barrels per day in October. The IEA said: “These supply disruptions, geopolitical
concerns, a growing expectation that the OPEC/non-OPEC output accord will be extended
through 2018 at the end of the month, and with demand growth still robust, largely explain firmer
prices.”
The monthly average from October 27 to November 28 was $62.57, up 13 per cent from the
previous month’s average. Opec will meet on Thursday to decide if it will extend production cuts.

UAE’s Abraaj plans 500MW gas-fired power plant in Mexico
Abraag Group + NewBase
Abraaj Group, a leading investor operating in growth markets, has announced it has invested in a
111 MW natural gas-fired power plant in Chihuahua, Mexico.
The investment represents the first phase of Abraaj’s plan to develop a 500 MW natural gas-fired
power generation platform in the country. The investment was made through an Abraaj-managed
Fund focusing on opportunities in Mexico.
In order to address a large and growing demand for competitively priced energy in Mexico, Abraaj
will leverage its global energy expertise to actively invest in gas-fired and renewable power
generation projects, and natural gas midstream sector ventures. Abraaj has partnered with
Emerging America (EMA), a Mexican firm that is developing natural gas-fired projects.
The power plant, which is being financed with debt from local banks Banorte and Nafinsa, is
expected to commence operations at the beginning of 2019, and will enjoy a first-mover
advantage in Mexico’s new wholesale power market. The plant is strategically located in the
northern state of Chihuahua, which provides reliable access to competitive natural gas.
The Mexican power sector continues to grow rapidly, underpinned by an increasing demand for
power from the manufacturing sector and a growing middle class. The Mexican Secretariat of
Energy estimates that 55 GW of additional capacity will be required in the next 15 years to meet
growth in demand. The government has implemented a stable and transparent regulatory
framework with a target to achieve clean energy generation of 35 per cent by 2024 and 50 per
cent by 2050.
Aligned with this framework, the Platform will bridge the energy gap and provide sustainable
energy at competitive rates, reducing the cost of electricity for consumers. The inaugural plant in
the Platform will be one of the first to come into operation under Mexico’s new legal and regulatory
power sector framework.

It will supply low-emission and efficient energy, compared to more highly polluting fuel oil power
plants in the country. The plant will also enable the expansion of renewable energy by providing
ancillary services to the grid to address energy deficits that arise from intermittent power
generation.
Saad Zaman, partner at The Abraaj Group, said: “This plant represents the first of many
investments that Abraaj intends to carry out in the Mexican energy infrastructure sector.
“We have an advanced pipeline of attractive projects and will leverage our global energy expertise
to develop complementary natural gas-fired and renewable energy platforms. Buoyed by a strong
regulatory framework, the Mexican energy infrastructure sector is a long-term and sustainable
investment opportunity for Abraaj. We are delighted to partner with Emerging America to deliver
efficient and more affordable power to the country.”
Eduardo Cortina, managing director at The Abraaj Group, said: “This is an exciting first step for
Abraaj into the energy market in Mexico. The Mexican government’s support and new policies
have encouraged private capital investments to produce more efficient power generation. Our on-
the-ground presence in Mexico, local market knowledge and extensive experience in developing
energy projects globally make Abraaj uniquely positioned to ensure the timely construction of the
power plant and the successful development of the natural gas-fired power generation platform.”
Daniel Gutierrez, chief executive officer at Emerging America, said: "We are excited to partner
with The Abraaj Group to generate enormous value for the Mexican electricity market. With this
partnership we will have a meaningful impact on the local economy by generating savings to
consumers and bringing more efficient technologies to the Mexican system, and enable a higher
penetration of renewables into the generation matrix."
The Abraaj Group has comprehensive investment experience in the energy sector, having
invested over $1 billion across growth markets. In 2015, Abraaj partnered with the Aditya Birla
Group to build a 1 GW scale solar energy platform in India, and in 2017, acquired a majority stake
in Jhimpir Power, a 50 MW wind power project in the Jhimpir wind corridor in Southeast Pakistan.
In September 2017, Abraaj announced a partnership with Engie Group to develop a wind power
platform of over 1 GW in India. –

Morocco: Sound Energy provides exploration volume estimates
for Sidi Moktar in Central Morocco … Sound energy
Sound Energy, the African and European focussed upstream gas company, has provided the
Company's first volumes estimate of the exploration potential of the Sidi Moktar exploration
permits in Central Morocco.
The Sidi Moktar Permits cover 2,700 sq kms in the Essaouira basin, central Morocco and contain
an existing gas discovery in the Lower Liassic ('Kechoula') and significant pre-salt potential. Sidi
Moktar is close to existing infrastructure and gas demand, including the large-scale Moroccan
state owned OCP Phosphate plant.
The Company has recently successfully re-entered, completed, perforated and flared gas at
surface from the Argovian reservoir (historically the main producing reservoir in the Kechoula
discovery). The Company will provide an update on the Argovian work programme shortly.
The Company recently commissioned Echo Geoscience Management ('EG') to undertake an
independent preliminary technical evaluation of the available historical exploration well and 2D
seismic data across the Sidi Moktar Permits area with a focus on the under-explored pre-salt
plays beneath the Argovian reservoir (the 'EG Study').

The Company is pleased to report the results of the EG Study, which has significantly enhanced
the Company's view of the exploration potential and confirms the substantial upside of this pre-salt
play.
EG have defined and mapped a portfolio of 28 Liassic, Triassic and Paleozoic leads in a variety of
hydrocarbon trap types across the Sidi Moktar Licences. Much of the potential lies within 11 of
the pre-salt Triassic and Paleozic leads ranging in size individually from 200 Bcf to 2.5 Tcf.
The EG Study highlights an exploration potential best case of 8.9 Tcf with an high of 11.2 Tcf and
a low case of 6.7 Tcf, unrisked gas originally in place (gross). The largest of the leads include the
following unrisked gas originally in place (gross):
• The 'EG6' Lead (30km south-east of the producing Meskala gas field), a tilted fault block
with estimated volumes of 2.5 Tcf best case, a 4.3 Tcf high case and a 0.9 Tcf low case.
• The 'EG3' Lead (40km east of Meskala gas field), a tilted fault block with estimated
volumes of 1.1 Tcf best case, a 1.9 Tcf high case and a 0.4 Tcf low case.
• The 'EG7' Lead (20km east of the Kechoula gas discovery), a well-defined four-way-dip
closure with a 0.7 Tcf best case with a 1.3 Tcf high case and a 0.3 Tcf low case.
The Company expects to shortly sign a new eight-year Exploration Permit for the Sidi Moktar
Licences covering a larger area of 4,499 sq kms. The Company expects to hold a 75% position in
this renewed Exploration Permit with Morocco's Office National des Hydrocarbures et des Mines
('ONHYM') holding a 25% position.
After award the Company will
commence the reprocessing of
existing 2D seismic data and
begin the acquisition a minimum
of 500 kms of new 2D seismic
data and undertake further
geological studies in anticipation
of high impact exploration
drilling. The work programme
will be focussed to address the
critical risks with the expectation
of increasing the chance of
geological success to greater
than 30% prior to drilling.
Preparations for the new 2D
seismic programme are already
underway.
The Company cautions that
exploration in the oil and gas industry contains an element of risk and there can be no guarantee
that its current estimates of volumes of gas originally in place will be substantiated.
Notwithstanding the preliminary volumetric assessments of exploration potential across the Sidi
Moktar Licences estimated by the EG Study, the Company requires further exploration activity,
including the acquisition of additional seismic and further drilling activities to substantiate the
exploration potential and the potential recoverable volumes.

Mauritania: Exxon nears deal to explore for oil and gas offshore
Source: Reuters
ExxonMobil is close to signing a deal to explore for oil and gas offshore Mauritania, its first foray
into the West African country, Mauritania’s oil, energy and mines director said on Wednesday. An
ExxonMobil spokeswoman declined to comment on the deal, but said the Texas-based company
does not yet have drilling activities in Mauritania.
Interest has surged in oil and
gas fields offshore of
Mauritania and neighbour
Senegal since big discoveries
by Cairn Energy and Kosmos
Energy, the latter now
partnered with BP, in separate
projects over the last three
years. Both are expected to
start production early next
decade.
London-based BP is already
developing a major gas
project and France’s Total has
bought into several
exploration licences in both
countries.
'We have agreed on the terms
of three blocks,' Moustapha
Bechir, Mauritania’s director
general of oil, energy and mines told Reuters on the sidelines of an Oil & Gas Council conference
in Dakar. He said they and Exxon had yet to formally sign the deal, but would do soon.
Experts describe the deep waters there as the next big frontier in energy drilling, though the true
size of the deposits is not yet known. BP next year plans to make a final investment decision on a
liquefied natural gas (LNG) project that would ship West African gas worldwide.
Long overlooked by firms more focused on massive deposits in the Gulf of Guinea further south,
Senegal’s and Mauritania’s oil and gas was discovered by new technology that has given
companies a better idea of what lies under the sea bed.
Now, specialist firms are trawling the deep waters making seismic tests to determine what is
below. Oil service companies such as Baker Hughes, now part of General Electric, Schlumberger,
and others are lining up to team up with oil producers to develop the resources.
Governments in less developed areas south of Senegal and Mauritania’s deposits, including
Gambia, Guinea Bissau and Guinea, are also trying to coax oil companies in the hope that they
can emulate the interest. Gambia is marketing oil blocks in its thin sliver of territorial water, while
Guinea has started to drill offshore.
Guinea Bissau plans to drill its first deep offshore well next year, Celedonio Vieira, the director of
marketing and business development at state-run PetroGuin, told Reuters. 'We are optimistic
because of the success in Senegal,' he said.

Denmark: DUC partners approve the largest ever Danish
North Sea investment.. Source: Maersk Oil
Maersk Oil has announced that the Danish Underground Consortium (DUC) has approved an
investment of approx. 21bn DKK ($3.36 billion) in the full redevelopment of the Tyra gas field. The
announcement follows the Danish Parliament’s approval to implement legislation to secure the
investment.
The redevelopment of Tyra ensures continued production from Denmark’s largest gas field, and
will protect and rejuvenate important Danish North Sea infrastructure.
Today’s announcement represents the largest oil and gas project investment ever made in the
Danish North Sea, enabling Tyra to continue operations for at least 25 years. At peak production,
the redeveloped Tyra gas field will provide enough gas to supply 1.5 million Danish homes,
supporting energy security, future tax revenues and employment for Denmark.
The investment cost for the modification to existing facilities and construction of new facilities
(CAPEX) is estimated at approx. 17bn DKK, and the cost in relation to removal and
decommissioning of current facilities (ABEX) is estimated at approx. 4bn DKK.
Maersk Oil and partners to invest $3.4 billion in full redevelopment of the Tyra gas field
Extending the life of the Danish North Sea
Tyra is the centre of Denmark’s national energy infrastructure, processing 90% of the nation’s gas
production. Through new development projects and third party tie-ins, the redevelopment of Tyra

can be a catalyst for extending the life of the Danish North Sea – not just for Maersk Oil and the
DUC, but also for Denmark.
The new infrastructure can enable operators to pursue new gas projects in the northern part of the
North Sea, where the most recent development, Tyra Southeast, delivered first gas in 2015 and is
producing above expectations.
The redeveloped Tyra is expected to deliver approx. 60.000 barrels of oil equivalent per day at
peak, and it is estimated that the redevelopment can enable the production of more than 200
million barrels of oil equivalent. Approximately 2/3 of the production is expected to be gas and 1/3
to be oil.
Alongside the Maersk Oil-operated Culzean development in the UK North Sea, the Tyra gas field
redevelopment increases Maersk Oil’s exposure to natural gas production; an important bridging
fuel for the energy transition.
Maersk Oil Chief Executive Officer, Gretchen Watkins, said:
'Tyra has been a key asset in the history of Maersk Oil, and an important source of energy
security for Denmark. The redevelopment of Tyra is the largest investment carried out in the
Danish North Sea, and when completed in 2022, production from the Tyra field itself has the
potential to cover Danish gas consumption for a decade.'
The future Tyra area (Source: Maersk Oil)

Protecting shared interests
The redevelopment of Tyra is enabled by the legislation implemented by the Danish Parliament 28
and 30 November 2017.
The Danish Minister for Energy, Utilities and Climate, Lars Chr. Lilleholt (V), said: 'I am pleased
that the DUC partners have made the final decision for this investment. The full reconstruction of
Tyra is vital to the development of the Danish North Sea oil and gas sector. Not just to Maersk Oil
– but to many companies relying on Tyra as a central gas hub.'
Maersk Oil’s Chief Operating Officer, Martin Rune Pedersen, said: 'The redevelopment of Tyra is
evidence of a shared interest in prolonging the life of the Danish North Sea. The investment in this
globally significant oil and gas project will support several thousand Danish jobs, and it can enable
future significant industry investments in new development projects made possible by the
redeveloped Tyra gas infrastructure.'
The Tyra field will be shut-in for the redevelopment in November 2019, and production is expected
to recommmence in July 2022.
Facts:
• The Tyra field is operated by Maersk Oil on behalf of the DUC, a partnership between A.P.
Moller – Maersk (31.2%), Shell (36.8%), Nordsøfonden (20%) and Chevron (12%).
• The Tyra field requires redevelopment due to subsidence of the chalk reservoir which has led
to the platforms sinking by around 5 metres over the last 30 years. This has reduced the gap
between the sea and the platform decks.
• Tyra is Denmark’s largest gas field and the facilities are the processing and export center for
all gas produced by the Danish Underground Consortium (DUC).
• Tyra East and Tyra West is also the hub for a number of smaller facilities in the Tyra field. This
includes the neighbouring unmanned facility, Tyra Southeast, which was extended in 2015.
• See the fact sheet for a description of the redevelopment and the new Tyra facilities:

NewBase December 01 - 2017 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices gains for third Straight Month as OPEC Extends Supply Curbs
Reuters + Bloomberg + NewBase
Oil posted its longest streak of monthly gains since early 2016 after an OPEC-led coalition of
major crude producers followed through on a much-anticipated extension of supply cuts.
Futures closed little changed for the day in New York and ended November up 5.6 percent. The
Organization of Petroleum Exporting Countries reached a deal with non-OPEC allies such as
Russia on Thursday to extendproduction curbs through the end of next year. A bullish addition to
the deal: the cooperation from two previously exempt producers, Libya and Nigeria.
“The market is not too surprised at the OPEC announcement,” Michael Lynch, president of
Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone. “Most
of the noise coming out beforehand was pretty moderate and suggested nobody was going in
ready for battle.”
Oil has risen about 17 percent since the last time producers gathered for an official meeting back
in late May. Russia and Saudi Arabia are aligned in a long-term oil strategy and will oversee
compliance monitoring, Saudi Arabia’s Energy Minister Khalid Al-Falih said at a press briefing in
Vienna. Including Libya and Nigeria in the deal means there will be no surprises from the two
producers next year, he said.
Oil price special
coverage

“We weren’t expecting fireworks from this meeting,” Chris Kettenmann, chief energy strategist at
Macro Risk Advisors LLC, said by telephone. “The Saudis in combination with the Russians are
trying to deliver a very curated message to suppress volatility in the oil market to attract
investment.”
West Texas Intermediate for January delivery added 10 cents to settle at $57.40 a barrel on the
New York Mercantile Exchange. Futures rallied as high as $57.98 and dipped as low as $56.82 a
barrel during the session.
Brent for January settlement, which expired Thursday, rose 46 cents to end the session at $63.57
on the ICE Futures Europe exchange. Brent traded at a premium of $6.17 to January WTI. The
more-active February contract advanced 10 cents to settle at $62.63.
OPEC will meet again in June to review the status of the accord, not to map out an exit strategy,
Nigeria Oil Minister Emmanuel Kachikwu said at the Vienna meeting. Russian Energy Minister
Alexander Novak also said the June meeting will provide the chance to assess what needs to be
done.
“The market is getting most of what it expected,” Rob Haworth, who helps oversee $150 billion in
assets at U.S. Bank Wealth Management in Seattle, said by telephone. “Even though they are
extending, they are doing it cautiously.”
OPEC’s Easy Win Masks Tougher Oil-Market Choices Still to Come
The group of oil nations agreed to extend year-old production cuts through the end of 2018 to help
boost prices, no small achievement. Yet as smooth as the gathering seemed to go, the deal
actually left all the big questions unanswered, meaning that the real drama will commence next
year.

If the cuts succeed in meeting their stated goal of bringing global inventories back down to their
five-year average level, how will the deal be unwound? And if they don’t, will the deal be extended
in perpetuity?
Along with the growing global economy, the production cuts have helped push up oil prices. But
that has left OPEC and its allies with a quandary: How to keep prices high without stimulating
further growth in U.S. shale oil production.
“OPEC is between the devil and the deep blue sea,” said David Fyfe, head of market research
and analysis at Geneva-based commodities trader Gunvor Group Ltd.
Khalid Al-Falih, Saudi Arabia’s energy minister and OPEC’s most powerful member,
acknowledged a “number of variables that we cannot fix with certainty going into the new year."
Shale Production
By pushing prices to their highest level in more than two years, with benchmark Brent trading
above $63 a barrel, the cuts have allowed shale producers to lock in margins and plan new
investments.
In a sign of the challenges that OPEC faces, the U.S. government reported a large increase in
domestic production in September, bringing the total to 9.48 million barrels a day, the fourth
highest monthly level since the early 1970s. Oil output surged in Texas and New Mexico, home of
the prolific Permian shale basin.
Al-Falih professed to be unconcerned by the growth in shale output. “The contribution of shale in
2017 is going to be very much manageable,” he said. “My expectation is that 2018 will not be
significantly different from 2017."
It’s not just shale output that’s turning a corner. After two years of cutbacks and deleveraging, oil
majors are beginning to regain their swagger. Royal Dutch Shell Plc this week said it would stop
paying dividends in shares for the first time since 2015. Exxon Mobil Corp. started production at
the Hebron field off the coast of Canada.
United Front
For now, though, the signatories, especially Saudi Arabia and Russia, presented a united front,
contrary to Wall Street banks such as Goldman Sachs Group Inc. and Citigroup Inc., which had
bet that Moscow would sink any deal.
"You can’t find light between us, we have been united shoulder-to-shoulder," Al-Falih said,
referring to Russian counterpart Alexander Novak.
Or as Jamie Webster, an OPEC watcher at the Boston Consulting Group, put it, “For now, the
OPEC-Russia bromance continues.”
What’s more, Libya and Nigeria, which had been exempt from the deal, agreed not to lift
production above their peak 2017 levels.
While saying he was "very bullish" about oil demand for next year, Al-Falih said the group had not
yet defined exactly when it would start unwinding the cuts, or how.
June Meeting
Novak suggested that the next OPEC meeting, in June, might be a time when the group could
consider adjustments to the deal if needed.

Both men pointed to the level of inventories as a key indicator for the producers’ group -- but they
didn’t say which data they would use as a benchmark, nor exactly what their target would be.
"It’s way premature to design the exit strategy," said Al-Falih. "As I mentioned we have upwards of
150 million barrels of inventories to draw."
All that means that 2018 is likely to be the year of fireworks for the deal, when Russia and Saudi
Arabia’s new-found cooperation in oil markets will either be proved a resounding success or be
put to the test.
"Next year will mark the peak of U.S. shale annual growth," said Ann-Louise Hittle, vice-president
at consultant Wood Mackenzie Ltd. in Boston. "If OPEC can go through 2018, then they will have
weathered the storm."
OPEc Impact
The duration of the extension helps defuse the risk of a sharp increase in production from
currently high and rising available spare capacity, according to Goldman. While Nigeria and Libya
have committed to keep their production below their 2017 highs of a combined 2.8 million barrels
a day, the bank wasn’t expecting either of the countries to exceed those level next year.
Oil producers are aiming to return stockpiles to their five-year average by keeping 1.8 million
barrels a day of cuts in place for a further nine months. Since the pact started about a year ago,
global inventories have fallen and prices have jumped. Still, the group faces the risk of a new flood
of oil coming from U.S. shale fields as crude strengthens.

NewBase Special Coverage
News Agencies News Release December 01-2017
OPEC's Endless Hot-and-Cold Shower
By Liam Denning
OPEC, trying to manage the temperature of the oil market, knows the feeling. Except, the controls
on this shower have changed and more than a dozen sets of hands are trying to operate them (I'll
end the imagery there).
OPEC, long a motley crowd, had an especially wide array of interests to balance heading into its
latest meeting, which wrapped up Thursday in Vienna:
• Extend supply cuts to support oil prices; but not so much that prices rise to a level that
dampens demand growth ...
• ... or sets off a drilling boom elsewhere (Texas, Canada etc.);
• Set supply, process and timeline for participants (including all-important Russia) at a level
they can still live with, while factoring in wildcards like Libya, Nigeria and Venezuela;
• Do enough to keep speculative money onside, supporting near-term futures prices ...
• ... and the prospects of a certain planned initial public offering.
This explains Thursday's outcome. The group has extended supply cuts through the end of 2018
albeit with a review in June. Saudi Arabia's energy minister emphasized his country's commitment
and its close relationship with Russia. Libya and Nigeria agreed not to raise production further
next year.

This extend-and-maybe-amend approach keeps some barrels off the market and, importantly,
signals to speculators that the group isn't done yet.
Buying The Rumor
Speculative net length in two of the big crude oil contracts was very high heading into this OPEC
meeting
Source: Bloomberg
Note: Net length in futures and options for positions held by money managers.
Meanwhile, the agreement to a review signals that OPEC isn't ignoring uncertainty on supply,
demand and prices and can adjust if necessary. It also signals that this isn't a permanent
arrangement, an issue important to Russia and its oil majors.
In one sense, this is a win for OPEC, an organization with a spotty track record on cohesion.
Yet it also demonstrates the group's fragility. Start with the obvious: Russia's involvement is more
important than that of many OPEC members, its participation lending critical credibility. This, along
with roping in so many other non-members they had trouble fitting everyone into Thursday's group
photo, is as much an expression of OPEC's weakness as it is of intense diplomacy. The
participation of Libya and Nigeria is a positive signal, but let's not forget Libya can only
charitably be considered a country right now.
In addition, an agreement initially penciled in to run for six months will now last maybe four times
as long. I say "maybe" because any nine-month extension with an embedded review is really a
three-month agreement with an option.
This parsing of the timeline highlights OPEC's shower problem.

OPEC has moved prices significantly in the past, notably after the financial crises of 1997 and
2008. Controlling them has proven much tougher, and the inability to meet the challenges of
China's demand surge and later Arab uprisings spurred prices to levels that destroyed demand
and fueled competing supplies, such as tight oil.
A decade ago, OPEC could at least count on a lag of several years between adjusting the controls
and supply and demand reacting, as it took time to drill new wells and consumer behavior to
change. No longer. Demand still has a built-in lag, but it now operates in the shadow of the
encroaching threat of electric vehicles. And on the supply side, tight oil can react within 6 to 12
months, especially given a huge stockpile of drilled-but-uncompleted wells.
Therein lies the risk of OPEC's attempt to manage prices with such blunt, and dispersed, tools. By
signalling an extension, even conditionally, it is not merely supporting headline prices, but
potentially also those further out:
Shaping The Future
OPEC's actions have helped support longer-term oil prices, which helps to support hedging by
E&P firms and the case for developing new projects
Source: Bloomberg
Note: Calendar-year swaps for Nymex WTI crude oil.
The recent increase in 2017 and 2018 prices has provided U.S. exploration and production firms
an opportunity to hedge more near-term output. The tick-up in prices further out, while less
dramatic, is a warning. Encouraging those to rise would create a runway for steady increases in
U.S. production (and potentially elsewhere).
In a recent presentation, consultancy Rystad Energy forecast output from the Permian Basin at
various price levels. At a $45 oil price, it is forecast to rise by about 0.9 million barrels a day by the
end of 2020. At $65, the gain would be more like 1.5 million barrels a day.
That is a narrow range of sensitivities for OPEC to navigate. It can take some comfort in the fact
that, unlike this time last year, prices beyond 2018 haven't rallied in lock-step with near-dated
ones. Equally, though, that may well also reflect expectations of continuing pressure on production
costs, especially outside OPEC, and the belief that, sooner or later, the agreement unravels.
Three years ago, OPEC did the rational thing and flooded the market to squeeze out rival supply,
but this proved too painful to maintain. Now, despite those shower controls being fiendishly
sensitive, OPEC feels compelled to stay in there for as long as it can.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” 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 27 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years, he has developed great
experiences in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of supply routes. Many years were spent drafting, &
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 November 2017 K. Al Awadi

New base 01 december 2017 energy news issue 1107 by khaled al awadi

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