New base 02 october 2017 energy news issue 1078 by khaled al awadi

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NewBase Energy News 02 October 2017 - Issue No. 1078 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: Masdar's seawater energy project marks key milestone
Masdar Institute of Science and Technology’s Sustainable Bioenergy Research Consortium
(SBRC) – a non-profit entity supported by Etihad Airways, Boeing, Takreer, Safran and General
Electric – has announced that its flagship project, the Seawater Energy and Agriculture System
(SEAS), has reached a critical milestone in its development of sustainable aviation biofuels
through the first harvest of the biofuel feedstock.
A unit of the Khalifa University of Science and Technology, the Masdar Institute said harvesting of
the first crop of oil-rich plants grown in the desert using seawater brings the UAE closer to fueling
aircraft with locally-produced biofuel.
Dr Alejandro Rios G, the director of the SBRC, led a team of Masdar Institute researchers in
harvesting the first crop of the biofuel feedstock Salicornia, which is a local salt-tolerant and oil-
rich plant.
The harvesting took place at a two-hectare SEAS pilot facility in Masdar City, where seafood and
sustainable biomass are being cultivated using saltwater and desert land to contribute to the
UAE’s sustainable food and fuel security.
Harvesting the Salicornia is the first in a series of steps before the oil collected from its seeds is
ready to be refined. The steps include drying and grinding the plants, winnowing out the seeds,
extracting the oil from the seeds by pressing, and finally cleansing the oil to remove any
impurities.
In February 2018 the clean Salicornia oil is to be processed at the Takreer Research Center for
conversion into aviation biofuel. Once the process is complete, the biofuel will be mixed at low
concentration with regular jet fuel to power a flight by Etihad Airways on a Boeing aircraft.

Dr Steve Griffiths, the interim executive VP for research, Khalifa University of Science and
Technology, said: "In achieving this key milestone, the SBRC is closer to establishing a truly
sustainable model for aviation fuel production using only our local resources."
The success of the Seas pilot facility, and the collaborative research effort that has supported it,
exemplifies our commitment to providing sustainable solutions to the UAE’s food security and
energy needs, he noted.
Etihad Airways CEO Peter Baumgartner said: "Alternative sustainable fuels are a key facet in
ensuring the future of aviation. This milestone, leading to our first flight on a truly sustainable
homegrown biofuel, is a reflection of the commitment not just of our airline and the SBRC partners
but of Abu Dhabi."
Bernard Dunn, the president, Boeing (Middle East, North Africa and Turkey) said: “This is another
critical step in achieving our joint ambition of developing sustainable aviation biofuel. As Abu
Dhabi takes ambitious steps in this direction, the Seas facility is showing solid results that will help
make our collective future more secure.”
Dr Mikael Berthod, VP at Takreer Research, said: "With this new great achievement, the SBRC
demonstrates its commitment to the development of a sustainable biofuel industry in the UAE. In
Takreer and throughout the entire Adnoc Group, we are transforming how we identify, develop
and deploy technology to increase profitability and productivity."

"In line with this, Takreer from the beginning of the project, looked forward to this step as the
Salicornia oil obtained from this harvest will be the feedstock that will be processed in the
research center, to produce the first ever biojet fuel 100 per cent made in UAE," observed Dr
Berthod.
"With this new fundamental step, the dream to produce biofuel from the desert and the sea is now
becoming a reality and will allow us to achieve the expected future jet fuel specification," he
added.
The Seas pilot facility has six aquaculture units that use seawater to raise fish and shrimp. The
fish farm produces a nutrient-rich effluent, which is directed into the halophyte fields where it
fertilizes the oil-rich Salicornia plants.
The leftover effluent from the process is then diverted into the cultivated mangrove forests, which
further purify the water and remove carbon dioxide from the atmosphere while sheltering fish
nurseries that live around their underwater roots.
"The collaborative nature of the SBRC has been key to our success and will continue to be
instrumental in overcoming future challenges of scalability," remarked Dr Rios.
"With engagement across all points of the supply chain spectrum, from R&D to refinery and use,
we look forward to establishing the UAE’s aviation biofuel industry and promoting cleaner skies,"
he stated. According to him, food security is a challenge for desert regions, especially as
populations rise.
Close to 70 per cent of the UAE’s seafood is currently imported, and SBRC’s integrated system,
with extensive aquaculture as a key element, will not only support the need for aviation biofuels,
but also support growing food demand in a sustainable way, he added.-

UAE Mubadala Investment Company, H1 2017 financial results
(WAM)
Mubadala Investment Company has announced its half-year 2017 financial results ending 30th
June, 2017, and has announced that revenues were AED83.4 billion, compared to AED72.9 billion
for the same period in 2016 due to strong performance and higher revenues across Mubadala’s
four investment platforms.
The results incorporate the Mubadala Development
Company, MDC, and International Petroleum
Investment Company, IPIC, financial statements
from the first half of 2017.
Commenting on the announcement, Group Chief
Executive Officer and Managing Director, Khaldoon
Khalifa Al Mubarak, said, "The results from the first
half of 2017 reflect the strength and scale of
Mubadala Investment Company’s diversified global
portfolio and robust balance sheet. We will
continue to integrate, optimise and grow the
company’s assets under our global business
platforms, to create and realise maximum financial
and strategic returns to support diversification of
the economy of Abu Dhabi and the country."
Chief Financial Officer, Carlos Obeid, said, "In the
first half of 2017, we worked to integrate the two
portfolios under the Mubadala Investment Company. We managed our costs prudently, while
monetising mature assets and growing our profit as we reduced our overall leverage."
Mubadala Investment Company’s four global business platforms are: Alternative Investments and
Infrastructure, Petroleum & Petrochemicals, Technology, Manufacturing and Mining, and
Aerospace, Renewables and Information & Communications Technology.

Saudi Arabia produces 44% of GCC’s natural gas
REUTERS/Ali Jarekji
A senior official from the King Abdullah Petroleum Studies and Research Center (KAPSARC)
announced in Manama that Saudi Arabia produces 44 percent of the natural gas in the Gulf
Cooperation Council (GCC).
Speaking at the Gulf Petrochemicals and Chemicals Association (GPCA) Fertilizer Convention
held in Bahrain, the director of the markets and industrial development program at KAPSARC,
Kang Wu, said natural gas plays a key role in the industrial development of GCC countries,
particularly in the region’s fertilizer industry.
The convention, held under the patronage of Sheikh Mohammed bin Khalifa bin Ahmed Al-Khalifa,
Bahrain’s minister of oil, concluded on Thursday in Manama. Kang delivered the keynote speech
during the first session of the convention, providing strategic insights into the natural gas market
and fertilizers as a strategy.
He pointed out that industrial fertilizers of different kinds are highly dependent on reliable and
competitive natural gas feedstock. KAPSARC’s address at the convention provided the 240-
member participating companies an overview of the major issues related to gas markets around
the world and, on that basis, ways to effectively sustain the fertilizer industry in the Middle East in
general, and Saudi Arabia in particular.
Kang said his center has developed economic frameworks to reduce the overall costs and
environmental impacts of energy supply; increase the value created from energy consumption;

and achieve effective alignment between energy policy objectives and outcomes. Saudi Arabia’s
fertilizer products portfolio consists of ammonia (26 percent), urea (28 percent), and diammonium
phosphate (DAP)/MAP (22 percent).
The country hosts one of the largest known but undeveloped phosphate rock deposits in the
world, spread across the entire northern section of the Kingdom. Its reserves are estimated at
around 956 million tons of phosphate rock in a number of discrete deposits: Al-Jalamid, Umm
Wu’al, Al-Amud, Quraymiz, Thaniyat Turayf and As Sanam, each with the potential for commercial
development.
According to the GPCA Fertilizer Indicator report, Saudi Arabia is the largest fertilizer exporter in
the GCC region, with exports amounting to 6.4 million tons, growing at an annual rate of 7.6
percent in the past decade.
The industry is responsible for creating 10,000 direct and 30,000 indirect jobs, of which
approximately 55 percent are held by Saudi nationals. The Saudi fertilizer industry generates $3
billion in sales revenue, accounting for 47 percent of sales of the regional fertilizer industry as a
whole.
The 8th GPCA Fertilizer Convention, held under the theme “New beginnings: Return to growth,”
offered exclusive insight into the likely impact of recent market changes on the fertilizer trade, and
highlighted the key drivers behind future growth.
“Looking ahead, the pace of growth in Saudi gas demand is not likely to ease. Total electricity
consumption will be pushed up by industrial development, in line with the Vision 2030, and rising
population levels. Concurrently, the petrochemical sector, identified by the Vision to help increase the
Kingdom’s non-oil exports, will see further capacity expansion. Accordingly, we forecast that Saudi
Arabia will need to grow gas output by an annual average rate of either 3.7 percent, in the base case
scenario, or 6.6 percent, in the high case scenario, in the decade to 2030. We also calculate that the
government could save $71 for every barrel of crude oil substituted by a barrel of equivalent of gas in
electricity generation in 2030.

Indian power majors embrace renewables
The National -Rebecca Bundhun
India has set a target of generating 175 gigawatts by 2022, with solar power making up the
majority of this production. Andrew Caballero-Reynolds/Bloomberg
Energy firms in India are increasingly diversifying to generate revenues from renewables in a
effort to keep pace with the country’s push towards green energy.
“As we go ahead, if we look at the energy mix, the renewables energy percentage is going to
increase, so if these companies do not keep up, they’ll be left behind,” says Rohit Kumar, the
head of REC in India, a Norwegian solar energy firm. “It’s [adoption of renewables] gathering
momentum now.”
Indian companies that are actively trying to expand their presence in the renewable sector include
Reliance Industries – an oil-focused conglomerate controlled by India’s richest man, Mukesh
Ambani. He in July said Reliance “will invest in new sources of energy, aiming for leading
positions in renewables”.
Bharat Petroleum, an Indian oil refining, exploration and marketing conglomerate, is trying to
increase its revenues from renewable sources. It has a policy on renewable energy that focuses
on increased use of solar and wind power.
Meanwhile, companies including Hindustan Petroleum and Tata are also working on bolstering
their presence in the renewable energy sector.
Prime minister Narendra Modi’s government has ambitious plans when it comes to renewables –
aiming for the country to generate 40 per cent of its energy from renewable sources by 2030 – to
meet the growing demand and achieve energy security, as well as to help tackle climate change.
India is the third-largest carbon emitter after the United States and China, according to the most
recent data from the Global Carbon Project, an international organisation that seeks to quantify
global carbon emissions and their causes.
Most of India’s energy needs today are met by coal-fuelled power plants. The country has set a
target of generating 175 gigawatts (GW) by 2022, with solar power making up the majority of this
production. A country with a population of about 1.3 billion, India’s energy needs are rapidly
rising as the economy expands, urbanisation progresses and as it focuses on advancing
its manufacturing.
Currently, there are about 300 million people in India who do not have access to electricity,
according to the World Bank.

“The oil and gas sector world is undergoing a transition,” Bharat Petroleum says in it latest annual
report. “While an increased world growth and improving prosperity would imply growth in energy
demand, technological advancements and environmental concerns have contained energy
consumption and are causing a shift towards cleaner fuels.
Although oil and gas, together with coal, continue to dominate the energy mix, there are clear
indications of an impending change in the energy mix, in favour of renewable energy.” The
company notes that the rise of non-fossil fuels poses “both an opportunity as well as a threat”.
Renewable energy is “an opportunity, since it provides a platform to migrate towards cleaner and
more efficient forms of energy and a threat as it risks the obsolescence of huge investments in
conventional forms of energy”, the report adds.
Hindustan Petroleum, meanwhile, runs wind farms in the states of Maharashtra and Rajasthan
with a capacity totalling more than 100 megawatts.
“A shift to renewable energy is required and several companies are moving in that direction,” says
Suhail Nathani, the managing partner at Economic Laws Practice, based in Mumbai. “Traditional
energy will always have a role to play, but a partially running traditional power plant is not
economically viable and therefore will always face pricing challenges. As technologies develop, I
envisage traditional power players establishing hybrid plants or integrating renewable energy
power plants and seamlessly offering both renewable and traditional energy.”
There is some scepticism around whether Mr Modi will achieve his renewable energy targets.
Figures from India’s ministry of new and renewable energy show that the country’s total renewable
power capacity as of the end of August was below 60GW. But there are serious efforts underway
to boost renewables.
“With advancements in technology, and with the price of solar and wind reducing, we are not only
sure but confident that we will not only achieve the target, but exceed it,” said Anand Kumar, the
secretary of new and renewable energy ministry, speaking at the Renewable Energy India Expo
held in Delhi recently, which attracted more than 750 exhibitors.
Mr Kumar sees scope in improving renewables manufacturing, particularly solar manufacturing, in
which he said India’s capabilities were “modest”. “We should set up manufacturing bases for
batteries in India,” Mr Kumar said. “Once we overcome the obstacle of storage, then the ideal of
24-hour free energy for the people can be realised.”

He added that the ministry in recent meetings had “begun to take more seriously the potential of
India’s offshore wind and hydropower capacities”, and hinted that “these technologies will be
brought under the renewable energy target”.
From the perspective of the government’s finances, moving away from reliance on oil is highly
desirable, given the fact that India is heavily dependent on oil imports which weigh on its trade
deficit.
“I think Indian companies have started looking at renewables,” says Pritam Doshi, the director at
PAE Renewables, a solar company based in Mumbai. “But I don’t think that any of the big oil
giants have done a lot of quick scaling up. I think we will start seeing some of these companies do
a lot more as the dependence on oil starts reducing.”
The discussion on renewables comes against a backdrop of India’s falling economic growth,
which in the quarter between April and June slowed to a three-year low of 5.7 per cent compared
with 7.9 per cent for the same period last year, according to official data.
“Going ahead, energy is going to be one of the most critical aspects for our development of the
country and all-round growth,” said Mr Kumar. “One of the best things that can happen is to
capture this additional energy requirement from renewables.”
Falling costs mean setting up solar energy solutions has become “commercially viable” now for
companies, he added. Additionally, Mr Kumar said sluggish oil prices have made oil investment
and exploration less attractive and this could also be a factor in traditional energy companies
looking beyond dependence on fossil fuels at this point
“The cost is built into the installation,” says Mr Doshi. “You need money upfront to put up a large
power plant and a manufacturing facility. Also, if you want to be huge in scale, you need a lot of
land and therefore you need a lot of muscle in terms of the right network to acquire that land,
whether it’s government permissions, whether it’s local accumulation of land.”
With a continued move by traditional energy firms towards renewable sources in India, they can
potentially help secure the future of their own businesses and play a role in achieving the
country’s energy security.

India May Raise Natural Gas Price First Time in 3 Years: Survey
Blommberg - Saket Sundria
India may increase domestic natural gas prices for the first time in nearly three years, providing
some relief to producers who are struggling to recover costs, a Bloomberg survey of analysts and
industry participants showed.
The government is likely to raise natural gas prices for the six months beginning Oct. 1 to $2.8 per
million British thermal units, almost 13 percent higher than the current price of $2.48, according to
an average of eight responses. The government sets the rate every six months and an
announcement on the price is due this week.
The forecasts compiled by Bloomberg range from $2.60 to $3.15.
The government last raised gas prices when it introduced a new pricing formula in November
2014. Since then, it has reduced prices by more than half through five successive cuts. Lower
prices have squeezed the margins of explorers such as Oil & Natural Gas Corp. and Reliance
Industries Ltd. but have helped the government increase demand for the fuel from fertilizer
companies and power generators, and encouraged its use in transport and cooking.
“Not much relief is expected for Indian producers,” Vaibhav Chowdhry, an analyst at K.R. Choksey
Shares and Securities Pvt., said over phone, adding he expects gas prices to rise again in April.
“The price revision won’t be a big help for producers like ONGC as its average cost of production
is about $3.5 per mmbtu.”
The current gas-price formula is based on U.S., Canadian, U.K. and Russian rates.
ONGC produced about 66.3 million cubic meters a day of natural gas in the first quarter of the
financial year that began in April, comprising about three-quarters of India’s total gas output. Its
output is set to increase byabout 10 percent by the end of the financial year as the company
boosts production from its offshore fields on the west and east coast.
Reliance spokesman Tushar Pania, ONGC spokesman Pallab Bhattacharya and oil ministry
spokesman Rahul Gowlikar didn’t respond to emails seeking comment.
Companies producing gas from some deep-water fields with high pressure and high temperature
areas are allowed a higher tariff of about $5.56 per million British thermal units. That price is also
due to be revised from Oct. 1

Japan: Naming ceremony held for world's largest FSRU
Source: MOL
Mitsui O.S.K. Lines (MOL) has announced that a naming ceremony for the MOL FSRU
Challenger was held at the Okpo shipyard of Daewoo Shipbuilding & Marine Engineering Co in
Korea on September 28.This is the first FSRU for MOL to independently build, own and operate.
Many Guests were invited to witness the naming of the FSRU (Floating Storage Regasification
Unit) as the MOL FSRU Challenger. The MOL FSRU Challenger will provide storage and
regasification services to a project in Turkey after delivery during October. Operation is scheduled
to commence within 2017.
The MOL FSRU Challenger has a LNG storage capacity of 263,000m3 and has LNG re-shipment
and gas transfer capabilities. Its specifications allow for the re-export of LNG and supply of LNG to
neighboring regions where the vessel is located. MOL is moving boldly into the LNG secondary
transport and LNG fuel supply businesses in Asia and Central and South America regions where it
anticipates rising demand for LNG.
FSRUs are drawing attention as a solution for flexibility and mobility in the LNG supply chain. MOL
will promote the FSRU business, which meets customer needs for diversified LNG procurement,
as one of world's largest LNG carrier operators, the only Japanese FSRU owner and operator,
and the only Japanese shipping company that owns and operate FSRU.
In addition to ownership and operation of the FSRU, MOL announced its decision to participate in
an FSRU project in India, reflecting its ongoing strategy to 'pursue vertically integrated businesses
that are not limited to transportation in the LNG business,' as set forth in its new 'Rolling Plan
2017' management plan. MOL is always ready to move assertively into progressive and creative
business fields and contribute to the growth of the LNG business.

Philippines to explore for oil and gas with China in disputed waters
Source: Reuters
The Philippines said on Thursday it was pursuing a long-delayed oil and gas exploration project
with Chinese state-owned entity CNOOC Ltd and a Canada-listed company in an area near
disputed waters in the South China Sea.
Energy Secretary Alfonso Cusi said the Philippine government was also looking for a 'win-win
solution' with other South China Sea claimants, including China, to pave the way for oil and gas
exploration within contested waters.
China claims most of the South China Sea, through which about $5 trillion in ship-borne trade
passes annually, while Brunei, Malaysia, Taiwan and Vietnam also have claims. The Philippines
suspended exploration in the disputed waters, halting two projects, as it pursued and eventually
won an arbitration case involving territorial disputes with China.
Cusi, speaking at a media briefing after a meeting in Manila with other energy ministers from
Southeast Asia, said the issue of energy exploration in South China Sea was not discussed. 'We
are looking for a win-win solution to move things forward so that we can enjoy whatever resources
are there.'
Cusi said he had put forward the Calamian project of PNOC Exploration Corp, a unit of state-
owned Philippine National Oil Company, in partnership with CNOOC andJadestone Energy to
President Rodrigo Duterte for his approval.
The Calamian project off the island of Palawan in western Philippines is covered by a service
contract awarded to the PNOC unit in 2008. It lies near the country’s main oil and gas fields,
including Malampaya, Nido, Cadlao and Matinloc.
Exploration was delayed by 'a lot of issues', Cusi said. CNOOC has a 51 percent interest in the
project, with PNOC Exploration keeping a 28 percent stake while Jadestone, formerly Mitra
Energy, has 21 percent.
Cusi was scheduled to meet his Chinese counterpart in Manila on Thursday to talk about energy
cooperation. 'We’re looking for a diplomatic way of doing things,' Cusi said. 'I don’t like to (set) any
timetable but we are trying our best to (lift the exploration moratorium) as soon as possible.'

Russia’s Rosneft elects Former German Chancellor Gerhard
Schroeder as new chairman… Reuters + Oman Observer
Former German chancellor Gerhard Schroeder faced further criticism at home after he was
elected as chairman of Russia’s biggest oil producer Rosneft on Friday.
Schroeder, a Social Democrat who led Germany
from 1998 to 2005, prompted widespread
criticism in his homeland in August when he was
nominated to Rosneft’s board, given Western
sanctions against Moscow over the Ukraine
crisis and Chancellor Angela Merkel’s frosty
relations with the Kremlin.
Shareholders in state-controlled Rosneft, which
is subject to the sanctions, elected Schroeder to
its board at a meeting on Friday, and shortly
afterwards Schroeder told a news briefing he was pleased to have been chosen to be chairman.
“Schroeder is a reputed and renowned politician, who has persistently advocated strategic
cooperation between Germany, Europe and Russia,” Rosneft CEO Igor Sechin told the company’s
shareholders before the vote.
“He is striving to improve Germany’s ties with Russia.” Schroeder calls Russian President Vladimir
Putin his friend and has criticised moves to impose sanctions on Russia.
“I really regret that there are sanctions,” Schroeder said after the vote. “The talks must be about
easing the sanctions,” he added through an interpreter. “I am not among those who support these
sanctions.”
“It is reasonable for the entire world to have a stable Russia from an economic and political point
of view.” Germany’s newspaper Bild, which had dubbed Schroeder “Gazprom Gerhard”,
reported the news with the headline: “Now he definitively belongs to Putin.”

NewBase October 02 - 2017 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices edge lower after strong third quarter
Reuters + NewBase
Oil prices edged lower on Monday in early Asian trading, pausing for breath after posting gains of
as much as 20 percent in the third quarter, after a survey pointed to a slight increase
in OPEC production in September.
• Oil prices edged lower on Monday in early Asian trading after posting gains of as much as 20% in the third quarter
• U.S. crude was down 2 cents at $51.65 a barrel
• Brent crude for December delivery was down 6 cents at $56.73 a barrel
U.S. crude was down 2 cents at $51.65 a barrel at 0057 GMT. The U.S. benchmark on Friday
posted its strongest quarterly gain since the second quarter of 2016 and the longest streak of
weekly gains since January.
Global benchmark, Brent crude for December delivery, was down 6 cents at $56.73 a barrel. On
Friday, Brent for November delivery closed 13 cents higher at $57.54 a barrel, notching up a third-
quarter gain of around 20 percent, the biggest gain in five quarters. It was the biggest third-quarter
increase since 2004.
The contract reached its highest in more than two years early last week, and posted its fifth
consecutive weekly gain. It was Brent's longest weekly bull run since June 2016. The price gains
have been supported by anticipated demand from U.S. refiners resuming operations after
shutdowns due to Hurricane Harvey.
Oil price special
coverage

But oil output from the Organization of Petroleum Exporting Countries (OPEC) rose last month by
50,000 barrels per day (bpd), a Reuters survey found, as Iraqi exports increased and production
edged higher in Libya, one of the producers exempt from a deal to curb output and support prices.
Middle Eastern oil producers are concerned the recent price rise will only stir U.S. shale producers
into more drilling and push prices lower again. U.S. energy companies added oil rigs for the first
week in seven after a 14-month drilling recovery stalled in August, energy services firm Baker
Hughes said on Friday.
U.S. drillers add oil rigs for first week since mid-August
Drillers added six oil rigs in the week to Sept. 29, bringing the total count up to 750, General
Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. The
rig count, an early indicator of future output, is still higher than the 425 active oil rigs a year ago as
energy companies pursued ambitious spending programs for 2017.
For the month of September, the rig count fell by nine, after dropping by seven in August. This is
the first consecutive monthly reduction since May 2016, after which the drilling recovery took off
because of higher oil prices.
The rig count also dropped by six in the third
quarter, the first decline over a three-month
period since the second quarter of 2016. U.S.
crude futures have risen to around $52 per
barrel this week due to supply concerns,
including a global producer’s deal to curb
output.
Crude prices were up over 9 percent so far this
month, the biggest monthly increase since April
2016, after declining in five of the past six
months, including a near 6 percent drop in
August as rising U.S. output helped to add to a
global glut.
In spite of higher oil prices, Total SA this week
adjusted its capital expenditure plans for 2017 to $14 billion, the low end of its previous $14-$15
billion range. Although several exploration and production (E&P) companies have trimmed their
investments for this year due to the drop in crude prices, they still planned to spend much more
this year than last year.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week
revised higher its forecast for the total oil and gas rig count, now expecting it to rise to an average
of 973 in 2017, 1,004 in 2018 and 1,084 in 2019. Last week, it forecast 881 in 2017, 959 in 2018
and 1,114 in 2019. That compares with 861 oil and gas rigs so far in 2017, 509 in 2016 and 978 in
2015.

Oil's September Surge Propels Market Run on Demand Optimism
Oil posted its biggest quarterly gain in more than a year on forecasts for rising demand and
Turkey’s threat to halt Kurdish crude exports.
Futures jumped 9.4 percent in September and settled above $50 a barrel on Friday for the eighth
straight session. OPEC and the International Energy Agency this month boosted demand
forecasts, signaling the surplus that has weighed on prices may shrink further. Iraq said Thursday
that Turkey agreed to deal exclusively with the central government in Baghdad over exports
of Kurdish crude, a step that could disrupt supplies.
“We’re playing a little bit of catch up,” said Bill O’Grady, chief market strategist at Confluence
Investment Management LLC in St. Louis. “World economic growth is actually pretty good, so
that’s raising hopes for demand.”
Oil this week returned to a bull market on signs the persistent crude surplus was finally starting to
shrink, while Trafigura Group and Citigroup Inc. warned of a further supply squeeze in the next
two years. The Organization of Petroleum Exporting Countries and Russia have hailed the
success of their agreement to curb supplies and urged allies to stay the course. The effects of
Hurricane Harvey, which shut down a large number of refineries on the U.S. Gulf Coast, have
begun to fade.
West Texas Intermediate for November delivery rose 11 cents to settle at $51.67 a barrel on the
New York Mercantile Exchange. Prices advanced 12 percent during the quarter, the biggest gain
since the second quarter of 2016.
Brent for November settlement, which expired Friday, rose 13 cents to close at $57.54 on the
London-based ICE Futures Europe exchange. The price increased 20 percent during the quarter.
The global benchmark crude traded at a premium of $5.87 to WTI. With higher prices and
brightening demand forecasts, U.S. drillers have little incentive to scale back, said John Kilduff, a
partner at Again Capital LLC, a New York-based hedge fund. U.S. producers added six oil rigs .

NewBase Special Coverage
News Agencies News Release 02-October -2017
Saudis Pay the Price for OPEC Leadership
By Julian Lee
This isn't the result the Saudis were looking for, and they might just decide to fight back.
Saudi Arabia's leadership of OPEC and non-OPEC production cuts comes at a cost. Not only is it
trimming export volumes, it is also losing market share in key destinations, most gallingly, to
countries that are also part of the output deal. That could herald fierce competition for market
share once restrictions are lifted.
After almost of year of negotiations, OPEC member countries agreed in November to reduce
output by around 4.5 percent (with a couple of exemptions). The following month they secured
pledges from a group of non-OPEC countries to cut their production. Most important of these was
Russia, which agreed to trim output by 300,000 barrels a day, or 2.7 percent.
The kingdom might have expected that they were all in this together. Compliance with the cuts
has been much better than expected.
Walking the Walk
OPEC and non-OPEC countries' compliance with their output deal has been better than expected
However, the OPEC leader has lost ground to rivals selling in some of its key Asian export
markets, most particularly China and India. It has also seen flows to the U.S. slump to some of the
lowest levels of recent years.
Saudi Arabia was already seeing its crown as the biggest supplier to China being snatched away
by Russia, but the cuts that came into effect in January have accelerated that shift. True, Russia
complied and pared output, but its crude oil exports in the eight months of this year are actually
higher than they were on average last year.

China Crisis
Saudi market share in China is slipping away to other producers bound by the output deal
And it's not just Russia stealing a march in the Middle Kingdom. Fellow OPEC member Angola
has boosted its sales there, too. Flows from Iraq are also accelerating, driven in part by stakes in
its fields held by Chinese companies. And, the Saudi share of Chinese imports has fallen to
around 11 percent on average over the three months from June to August, down from 15 percent
on average in 2015.
The situation in India is little better. Saudi exports to the world's fastest growing oil market have
been overtaken by supplies from Iraq, which increased dramatically in the first months after output
cuts came into effect in January.
Advantage Iraq
Iraq overtook Saudi as India's biggest supplier as trade soared after output cuts took effect

The picture is even starker for crude sales to the U.S. Imports of Saudi crude fell to 637,000
barrels a day in the week to Sept. 22, according to data from the Energy Information
Administration. Weekly imports have dipped below 650,000 barrels a day only seven times since
the beginning of 2011 -- four of those have occurred since the start of June.
Losing America
U.S. crude imports from Saudi Arabia have fallen steadily since the start of June
After chairing a meeting between OPEC and other major producers in Vienna on May 25, Saudi
oil minister Khalid Al-Falih told reporters that exports to the U.S. would drop “measurably." Since
the start of June, inflows of his crude to the U.S. have averaged 808,000 barrels a day, equivalent
to 10 percent of total imports. That is down from 14 percent in 2016 and 15 percent in the first five
months of 2017.
Ceding volume and share in key export markets may be the price that Saudi Arabia has to pay to
lead efforts to rebalance the global oil market. But it is not sustainable for a country that holds the
world's largest stock of conventional reserves and is among the cheapest sources of supply on the
planet.
The kingdom is already seeking a stake in a planned 1.2 million barrel a day refinery on India’s
west coast and is pursuing a partnership with China National Petroleum Corp. to own a share in
the Anning refinery in China's Yunnan Province. Both projects are intended to create captive
markets for Saudi crude in the future.
Before they are completed, and once output restraint is lifted, which could begin as soon as April if
the deal is not extended, expect the start of an aggressive round of Saudi competition for sales.
This column does not necessarily reflect the opinion of NewBase and its owners.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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Khaled Malallah Al Awadi,
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 October 2017 K. Al Awadi

New base 02 october 2017 energy news issue 1078 by khaled al awadi

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