New base 20 december 2020 energy news issue 1394 by khaled al awadi

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NewBase Energy News 20 December 2020 - Issue No. 1394 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 Masdar, PT PJBI to drive development of Indonesia’s
first floating solar power plant
© Copyright Emirates News Agency (WAM) 2020.
Masdar, one of the world’s leading renewable energy companies, and PT PJBI, a subsidiary of
Indonesia’s state electricity company PT PLN (Persero), today announced the formation of a joint
venture to drive the development of the Cirata Floating Photovoltaic Power Plant – Indonesia’s first
floating PV project.
The new company, PT. Pembangkitan Jawa Bali Masdar Solar Energi (PMSE), was formally
announced at a ceremony at the Cirata reservoir in West Java, where the project will be located.
The event was held as part of UAE-Indonesia Week, taking place throughout this week to mark the
close ties between the two nations.
"This partnership will help to strengthen the
already-powerful ties of friendship and bilateral
collaboration between the UAE and Indonesia,"
said Abdullah Salem Obeid Al Dhaheri, the UAE
Ambassador to Indonesia and the ASEAN
region.
"The UAE has committed to not only diversifying
its energy mix but to extending its expertise
outside its own borders. The Cirata project
marks the UAE’s first investment in Indonesia’s
renewable energy sector, and will contribute to
the nation’s sustainable development."
The Cirata ceremony also celebrates the significant progress made this year on the project, which
is the largest of its kind in Southeast Asia and one of the largest in the world, and is scheduled to
start construction in the first part of 2021.
www.linkedin.com/in/khaled-al-awadi-38b995b

Since Masdar announced the 145-megawatt (ac) plant at Abu Dhabi Sustainability Week this
January, it has been designated a National Strategic Project (PSN) by the Indonesian government,
giving it priority status and recognizing its economic and social benefits to the nation.
"The creation of this joint venture company, PMSE, will enable us to continue the exceptional
progress we have made on the Cirata Floating Photovoltaic Power Plant with our development
partner PT PJBI," said Mohamed Jameel Al Ramahi, CEO of Masdar.
"This project marks our entry into Southeast Asia, where we see tremendous potential, given the
region’s rapid economic growth and commitment to sustainable development. It also demonstrates
the continuing strong relationship enjoyed between the UAE and Indonesia, and will support the
transfer and exchange of knowledge between our two countries. Masdar looks forward to extend its
successful collaboration and strategic partnership with PJBI and PLN to expand its presence and
investments in Indonesia".
"The development of the 145 MWac Cirata Floating PV is a big step for PJBI – a subsidiary of PJB
– to develop a business and partnership as an electricity producer in Indonesia. Through our joint
venture company PJBI with Masdar, we commit to contribute to the development of new renewable
energy power plants. We hope this collaboration will be the first step in PJBI and Masdar’s
cooperation in Indonesia and in the region," said Gunawan Yudi H, President Director of PJBI.
Upon completion, the Cirata Floating Photovoltaic Power Plant, which will be located on a 250-
hectare plot on the 6200-hectare reservoir, will power 50,000 homes, offset 214,000 tons of carbon
dioxide emissions and contribute to the creation of up to 800 jobs.
Indonesia, the world's largest archipelago, is targeting 23 per cent of its energy mix coming from
renewables by 2025 under its Electricity Infrastructure Acceleration Programme. The government
is currently considering plans to develop an additional 60 floating PV plants, capitalizing on its more
than 600 lakes and reservoirs, and helping to preserve precious land resources.
Scaling up renewables could save Indonesia, the largest energy user in the Association of
Southeast Asian Nations (ASEAN) region, as much as US$ 51.7 billion per year when the impacts
on air pollution and climate change are included, according to the International Renewable Energy
Agency (IRENA).
Delivering a sustainable recovery in a post-COVID-19 world will be a key topic at the ADSW Summit,
being held next month as part of Abu Dhabi Sustainability Week.
Hosted by Masdar, the virtual summit will bring together leaders from policy, business and
technology to reimagine sustainable development and open up social, economic and technological
avenues of collaboration.

U.A.E : ADNOC Mulls Stake in Egypt’s First Army Firm Offer
Bloomberg - Mirette Magdy
Abu Dhabi National Oil Co. is among suitors interested in a majority stake in one of the first Egyptian
army-held companies being offered to investors, according to people familiar with the matter.
Under the proposal, Adnoc would partner with Egypt’s sovereign wealth fund, giving the two full
ownership of Wataniya Petroleum, a fuel distribution firm currently affiliated to Egypt’s military, the
people said.
Taqa Arabia Co., a private Egyptian energy distribution company, has also expressed interest in the
majority stake and partnering with the fund, according to the people. They asked not to be identified
because the talks are confidential.
The chief executive officer of the wealth fund, Ayman Soliman, said Wataniya has “attracted a lot of
investors,” but declined to identify them. Adnoc which is owned by Abu Dhabi’s government,
declined to comment, while officials in Taqa couldn’t be reached for comment.
Adnoc produces most of the oil in the United Arab Emirates, OPEC’s third-largest producer. Its
service station unit, Abu Dhabi National Oil Company for Distribution PJSC, has previously said it
wants to expand in Egypt.
Appetite for Wataniya, which has a network of more than 200 filling stations and is one of two army-
held firms Egypt this month announced are up for sale, could be a bellwether for private-investor
interest in a part of the economy that President Abdel-Fattah El-Sisi has said could be more open
to the public.
100% Stakes
The North African nation plans to eventually offer stakes of as much as 100% in up to 10 companies
held by the National Service Products Organization, which is affiliated to the Defense Ministry. The
fund is helping the NSPO choose the assets, promote them to investors and potentially co-invest in
them by taking minority stakes.

The National Company for Producing and Bottling Water (Safi) is the only other firm identified so
far.
The plans are part of a push by the Arab
world’s most populous country, which has
enacted sweeping economic reforms over the
past four years, to attract much-needed private
investments -- something the International
Monetary Fund says previously might have
been hindered by competition from some
Egyptian state enterprises.
If Adnoc reached a deal, it would be part of the
$20 billion joint-investment platform that ADQ,
formerly known as Abu Dhabi Development
Holding Co., agreed to establish last year with
Egypt’s sovereign fund, the people said. ADQ
didn’t respond to a request for comment.
Egypt’s NSPO, established in 1979, owns more than 30 companies in sectors ranging from building
materials and food to mining and petrochemicals.
The selected companies would first be offered to private investors and could then be listed on
Egypt’s stock exchange. Cairo-based investment bank EFG Hermes is advising the wealth fund on
the initiative.

Egypt launches 416 renewable projects worth $B6.08 in 2 years
© 2020 Daily News Egypt. Provided by SyndiGate Media Inc. (Syndigate.info).
According to the report, the most prominent energy project in the mentioned period was the South
Helwan Steam Power Station with a capacity of 1,950 MW.
The Ministry of Planning and Economic Development has issued a report on the renewable energy
sector’s situation in fiscal years (FY) 2018/19 and 2019/20.
Hala El-Said, Minister of Planning and Economic Development, indicated that 416 projects have
been established in the electricity and renewable energy sector, with a total investment cost
estimated at EGP 95.6bn, of which 194 projects, worth EGP 33.6bn, were completed at the end of
FY 2019/20.
On the geographical distribution of these projects, El-Said pointed out that Cairo came at the top in
terms of the number of projects, with about 60 projects worth EGP 7.5bn, followed by Aswan with
36 projects with investment cost of EGP 3.7bn, and then Assiut with 23 projects worth EGP 9.2bn,
and the Red Sea governorate with 22 projects worth EGP 9.1bn.
El-Said added that Upper Egypt and the border governorates accounted for 37% of electricity sector
projects during the past two years, at a total investment cost estimated at EGP 33.8bn. A total 118
projects were implemented in Upper Egypt governorates at a cost of about EGP 19bn, and 35 others
were launched in border governorates for EGP 14.8bn.
Other governorates’ share came as follows: 21 projects in Alexandria worth EGP 1.4bn, 16 projects
in Beheira worth EGP 3.5bn, 13 projects in Giza worth EGP 8.1bn, 13 projects in Sohag worth EGP

4bn, 10 projects in Damietta worth EGP 4.2bn, and 9 projects in Beni Suef worth EGP 1.6bn. A total
of 34 energy projects involved more than one governorate with an investment cost of EGP 33.4bn.
According to the report, the most prominent energy project in the mentioned period was the South
Helwan Steam Power Station with a capacity of 1 ,950 MW. The Ministry also referred to some
power plants which were converted from single-cycle to combined-cycle power generation, including
the West Damietta 2 Gas Power Plant increasing its capacity to 750 MW, the West Assiut Power
Plant boosting its capacity to 1,500 MW, and the 6th of October Gas Power plant adding 340 MW.
Other major projects also included the 32 photovoltaic solar power stations in Benban, Aswan, with
a total capacity of 1,465 MW; the photovoltaic cell station in Kom Ombo, with a capacity of 26 MW,
the wind farms of Jabal Al-Zeit 1, 2, and 3, with a total capacity 380 MW in the Red Sea governorate,
and the Gulf of Suez Wind Farm, with a capacity of 250 MW.

Oman’s OQ unveils green energy project in JV with Belgium firm
Oman Observer - Conrad Prabhu
The Alternative Energy unit of OQ, the integrated energy group of Oman, is joining hands with
DEME Concessions, the Belgian-based global solutions provider for the maritime infrastructure and
offshore energy industries, in the implementation of a world-scale green hydrogen project at the
Special Economic Zone (SEZ) in Duqm.
The so-called HYPORT Duqm Green Hydrogen Project, envisaging an electrolyser capacity of 250-
500 MW in the first phase, will be part of an array of solar, wind and other alternative energy projects
planned for development in a sprawling zone earmarked within the SEZ at Duqm. Recently, the
Public Authority for Special Economic Zones and Free Zones (OPAZ), which regulates the country’s
free zone developments, allocated an expansive 150 sq kilometres for large-scale green energy
investments at Duqm.
OQ’s partnership with DEME Concessions in the delivery of a mega green hydrogen venture
effectively marks the wholly government-owned energy giant’s formal foray into the promising
renewable and alternative energy space in the Sultanate.
In a statement issued on Thursday, Belgian headquartered DEME and OQ Alternative Energy
announced the start of a “joint” initiative to develop a “world-leading” green hydrogen project at
Duqm in cooperation with OPAZ.
It cited Duqm’s advantageous geographical location, in addition to the abundance of land, as well
as solar and wind resources, to support mega-scale investments in green energy projects. Besides
contributing to the decarbonisation of industries in the SEZ, green hydrogen and other spinoffs,
notably green ammonia, will be shipped to international customers in Europe, it noted.
While DEME and OQ will provide the funding, technology and other wherewithal, OPAZ will pitch in with
regulatory support and other assistance. “OPAZ is coordinating with all the government related entities to
allow for a smart usage of the infrastructure that is being set up in the Special Economic Zone at Duqm.

This includes access to high voltage power lines, access to the sea water intake for the generation
of demineralised water and access to the Duqm Port for the export of green hydrogen and its
derivatives,” it said.
Dr Ali bin Masoud al Sunaidy, Chairman of the Board of Directors of OPAZ, said: “The start of this
cooperation between DEME and OQ is very important, not only for the project, but towards the
biggest cause of placing Duqm as hub in the Hydrogen Value chain.
The step is also complementing the recently announced decision of the Public Authority of Special
Economic Zones and Free Zones of dedicating 150 square km of land for green energy projects in
the Special Economic Zone at Duqm, in line with the Oman Vision 2040.”
Dr Salim al Huthaili, CEO Alternative Energy at OQ commented: “Oman is blessed with solar and
wind resources and their potential for renewable energy are amongst the world’s best. OQ always
looks to maximise the resources available to us, and our utilisation of these renewable resources is
just beginning.
The prefeasibility study has demonstrated potential for a green hydrogen project in Duqm using
solar and wind resources. This has enabled the decision for OQ to enter jointly with DEME into the
engineering and design phase of the project.”
Alain Bernard, Executive Chairman DEME Concessions and Deputy Chairman Port of Duqm
Company, added: “We are thrilled to engage with OQ Alternative Energy into the next step of the
ambitious HYPORT Duqm Green Hydrogen Project.
“It is a major step in both our collaboration with the Omani Authorities as well as our partner the Port
of Antwerp in the development of the Port of Duqm and related industrial and shipping activities.”
ABOUT DEME
DEME is a world leader in the highly specialised fields of dredging, solutions for the offshore energy industry, infra
marine and environmental works. The company can build on more than 140 years of know-how and experience and
has fostered a pioneering approach throughout its history, enabling it to be a front runner in innovation and new
technologies.
DEME’s vision is to work towards a sustainable future by offering solutions for global challenges: a rising sea level, a
growing population, reduction of CO2 emissions, polluted rivers and soils and the scarcity of natural resources. While
the company’s roots are in Belgium, DEME has built a strong presence in all of the world’s seas and continents,
operating in more than 90 countries worldwide. DEME can rely on 5,200 highly skilled professionals across the globe.
With a versatile and modern fleet of over 100 vessels, backed by a broad range of auxiliary equipment, the company
can provide solutions for even the most complex projects. DEME achieved a turnover of 2.62 billion euros in 2019.

U.S. liquefied natural gas exports set a record in November 2020
Source: U.S. Energy Information Administration, Natural Gas Monthly, Short-Term Energy Outlook, and Liquefaction Capacity Table
During the summer of 2020, monthly exports of liquefied natural gas (LNG) from the United States
were the lowest in 26 months but have since increased, and in November, estimated LNG exports
surpassed the previous record set in January 2020.
In the December 2020 Short-Term Energy Outlook, the U.S. Energy Information Administration
(EIA) estimated that November U.S. LNG exports reached 9.4 billion cubic feet per day (Bcf/d),
which was 93% of peak LNG export capacity utilization.
Several factors contributed to the increase in U.S. LNG exports in recent months. International
natural gas and LNG prices increased in Asia and Europe because global natural gas demand
increased after COVID-19 restrictions were eased and global LNG supply fell due to unplanned
outages at LNG export facilities in Australia, Malaysia, Qatar, Norway, Nigeria, and Trinidad and
Tobago.
In addition, 2.7 Bcf/d of new U.S. LNG export capacity was added in 2020, and several U.S. LNG
terminals affected by hurricanes and annual maintenance have resumed LNG shipments.

U.S. shale will face aggressive’ policies coming from Washington
CNBC + NewBase
American shale producers are likely being kept up at night over what could be in store for their
industry over the next four years, if pledges made by some lawmakers in Congress and President-
elect Joe Biden are anything to go by.
KEY POINTS
 President-elect Joe Biden has pledged to pursue “aggressive emissions reductions,”
focusing on a greener agenda that aims to reduce fossil fuel dependence and fight climate
change.
 Industry experts have warned that cutting support for America’s fossil fuels could threaten its
security by reducing its energy independence.
 U.S. oil and natural gas producers employed around 1 million American workers in 2019,
though jobs in the industry have been hit hard by the coronavirus pandemic.
U.S. Energy Secretary Dan Brouillette seems to think so. Asked by CNBC’s Hadley Gamble whether
shale producers, whose drilling boom catapulted America to the position of the world’s largest oil
producer in 2018, should be worried about the incoming administration, Brouillette replied, “Of
course.”
“I think they should be, frankly, because there are some in Congress who are going to drive a climate
policy that’s going to be very aggressive. So there may be some concern on the part of those folks,
I know the ESG (Environmental, Social, and Corporate Governance) movement is very strong.”
“The investment money may become a bit more difficult to get,” he added. “Those are all policies
where we’ll have to wait and see what happens with this new Congress.”
The ESG movement has picked up pace in recent years, with some major investors —
notably BlackRock, the largest asset manager in the world — “making sustainability integral to
portfolio construction,” according to its CEO Larry Fink. Fink wrote this year that “climate risk is
investment risk,” and that it’s brought the world to “the edge of a fundamental reshaping of finance.”
But climate action on a federal government level may be what scares shale producers the most.
Biden has pledged to pursue “aggressive emissions reductions,” focusing on a greener agenda that

aims to reduce fossil fuel dependence in the fight against climate change, which climate scientists
almost universally agree is a grave threat to the planet.
A 2018 report by scientists in President Donald Trump’s own administration warned that climate
change will cost the U.S. hundreds of billions of dollars yearly and harm human health. Trump, who
has consistently supported the fossil fuel industry in favor of American energy independence, replied
by saying, “I don’t believe it.”
How anti-fossil fuels is Biden?
The Democratic former vice president doesn’t plan to outright ban fracking, the fossil fuel extraction
process by which shale gas is produced, or oil and natural gas production generally, which
employed nearly 1 million American workers in 2019, according to official U.S. figures.
But he aims to significantly stifle it with regulation, many analysts say.
Biden has pledged to protect national parklands and wildlife refuges, where Trump allowed or tried
to allow drilling to take place, and says he will be “banning new oil and gas leasing on public lands
and waters,” according to his campaign website. He also promised to enact punishments for major
corporate polluters, proposing fines and even jail time, and warned that he’d force “polluters to bear
the full cost of the carbon pollution they are emitting.”
And when asked about his approach to the industry in a pre-election presidential debate with Trump,
Biden said, “I would transition away from the oil industry, yes. The oil industry pollutes significantly.
It has to be replaced by renewable energy over time.” He later backtracked somewhat, telling
reporters, “We’re not getting rid of fossil fuels. We’re getting rid of the subsidies for fossil fuels, but
we’re not getting rid of fossil fuels for a long time.”
$60 oil in 2021?
A major engine of the U.S. economy, the oil and gas industry has shed a staggering more than
100,000 jobs this year and thousands of shale wells have been forced shut as demand and prices
plummeted due to the coronavirus pandemic. But Brouillette sees recovery in 2021, noting that oil
benchmarks are already trading at around $50 per barrel, a dramatic recovery from the record lows
hit in April.
“I think you’ll continue to see that increase in price and it will stabilize, somewhere in the mid $50s
to $60s, provided the economies open up. If they don’t open up then I think we’re going to be looking
at a decline very shortly,” he said, adding that “inventories are still a bit high.”
Global crude oil inventories remain at historically high levels. Onshore inventories have slipped by
76 million barrels from a peak of 3.76 billion barrels in late May, according to energy analytics firm
Kpler, but they are still at the highest of any December on record and 276 million barrels higher than
this time a year ago.
Democrats may be hamstrung
Biden’s presidency won’t necessarily be a death blow to the industry. It’s important to note that the
Democrats, who champion a climate-centric energy agenda, hold a very thin majority in the House
of Representatives and may end up being in the minority in the Senate, depending on the result of
the Georgia runoff election on January 5. That would effectively block them from passing any
legislation that could negatively impact the oil and gas sector.
Industry experts have warned that reducing support for America’s fossil fuels could threaten its
security by reducing its energy independence — a term that itself is debated, as the U.S. still imports

significant volumes of oil from other countries, including Saudi Arabia, though those levels have
dropped dramatically in the last two decades.
Asked whether that increased independence will be put at risk over the next four years, Brouillette
replied, “I think every change in administration, should there be one, is going to require the American
people to evaluate what the new policies are. But I don’t know that the American people are going
to ever take a step backward from this independence that’s been established over the last three
and a half to four years.”

NewBase December 20 - 2020 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil Posts Weekly Gain With Stimulus Hopes Aiding Vaccine Rally
Bloomberg + NewBase
Oil rose for a seventh straight week as efforts to pass another U.S. virus relief package added to
optimism that the vaccine’s rollout will provide a long-awaited boost to demand.
Futures rose 1.5% in New York on Friday, extending this week’s rally to over 5%. Talks on a relief
package have made some headway, with Senate Majority Leader Mitch McConnell saying he’s
“even more optimistic now” that an agreement is near. Recent progress in rolling out a Covid-19
vaccine has also buoyed the outlook for consumption.
Brent crude settled up 76 cents, or 1.5%, to $52.26 a barrel after touching $52.48, its highest since
March. U.S. West Texas Intermediate (WTI) crude settled up 74 cents, or 1.5%, to $49.10 after
reaching $49.28, its highest since February.
 West Texas Intermediate for January delivery rose 74 cents to settle at $49.10 a barrel
 Brent for February settlement gained 76 cents to $52.26 a barrel
 Both benchmarks closed at their highest since late February
Oil price special
coverage

“It’s all about the return to pre-pandemic life, and we’re getting there,” said Edward Moya, senior
market analyst at Oanda Corp. “You have major breakthroughs on the vaccine front, which has
been very positive for the demand recovery outlook. People are also playing close attention to the
overall trajectory of the U.S. dollar.”
The Bloomberg Dollar Spot Index is set for a weekly decline and has been trading near its lowest
since 2018. A weaker dollar raises the appeal for commodities priced in the currency.
Underlying the climb in headline crude prices, premiums on nearer-dated contracts relative to later
ones are indicating improving demand. The bullish pattern known as backwardation has
strengthened at the back end of oil’s forward curve.
West Texas Intermediate’s nearest December contract trades more than a $1 a barrel higher than
that for December 2022, compared to trading at a discount less than a month before.
Yet, there are signs the market’s rally is due for a pause. Brent’s nearest timespread ended the
week at parity, compared with a premium of as much as 18 cents the week prior. At the same time,
premiums for real-world barrels are easing.
“There’s great news about the arrival of vaccines, the promise they hold, and that global demand is
likely to return in a big way as a result,” said Matt Marshall, director of market analytics at AEGIS.
“But in the near term, that has zero effect on petroleum demand.”
The spreading virus and lockdowns are weighing on demand, but the hit is much smaller than earlier
in the year and is likely only a speed bump to rebalancing the market, according to a Goldman
Sachs note.
This will leave the oil market range-bound and choppy in coming weeks as vaccine enthusiasm is
followed by headlines on tighten pandemic restrictions, the bank said.
Meanwhile, as oil prices move higher, there are concerns this might lure producers to tap capacity
that’s been sidelined during the pandemic. While the U.S. shale industry requires heavy

reinvestment to boost output, the large amount of spare capacity could present a risk to further price
gains.
“As has been the case for several years, a swing factor on whether oil can retain rallies or violently
give them back is U.S. supply growth,” Macquarie Group analysts including Vikas Dwivedi said in a
note dated Dec. 17.
“This spare capacity again introduces surprise supply risk that could limit the magnitude and
duration of rallies, especially if the WTI forward curve exceeds $50 per barrel.”
Drilling rigs targeting crude oil in the U.S. rose for the fourth straight week and to the highest level
since May 8.

NewBase Special Coverage
The Energy world – Dec. 08 -2020
Vaccine impact on moribund oil demand is several months away
– IEA By Noah Browning
The roll-out of vaccines this month to combat the coronavirus pandemic will not
quickly reverse the destruction wrought on global oil demand, International
Energy Agency (IEA) warned on Tuesday.
“The understandable euphoria around the start of vaccination programmes partly
explains higher prices but it will be several months before we reach a critical
mass of vaccinated, economically active people and thus see an impact on oil
demand,” the IEA said in its monthly report.
"In the meantime, the end of year holiday season will soon be upon us with the
risk of another surge in COVID-19 cases and the possibility of yet more
confinement measures."

The Paris-based watchdog revised down its estimates for oil demand this year by
50,000 barrels per day (bpd) and for next year by 170,000 bpd, citing scarce jet
fuel use as fewer people travel by air.
Europe accounts for much of the backslide, with demand set to be lower in the
fourth quarter compared with the third due to renewed lockdown measures.
The IEA praised “effective” supply management efforts by major producers in
the Organization of the Petroleum Exporting Countries and allies including
Russia, a grouping known as OPEC+, for a deal this month to largely keep
supply reined in.
Along with relatively robust Asian demand, the deal helped push oil prices back
above $50 a barrel, according to the IEA.

“Demand is clearly going to be lower for longer than expected when the supply
agreement was concluded in April and there is rising production from Libya to
accommodate,” the agency said.
“The market remains fragile and is in need of careful adjustment”.
Global oil stocks, which have mounted as consumption faltered during the
pandemic, will finally reach a deficit compared to pre-crisis levels at the end of
2019 by July, the IEA added.
Reporting by Noah Browning, editing by Louise Heavens and Ed Osmond
Our Standards: The Thomson Reuters Trust Principles.

EA countries.
About this report
 We forecast that oil demand will fall by 8.8 mb/d y-o-y in 2020, a modest 50 kb/d downward
revision from our previous Report. Our 2021 demand forecast was revised down by 170 kb/d.
This is mainly because of another downgrade for jet fuel/kerosene demand, which will
account for around 80% of the overall 3.1 mb/d shortfall in consumption in 2021 versus 2019.
In 2021, demand for both gasoline and diesel is projected to return to 97-99% of their 2019
levels.
 Global oil supply rose 1.5 mb/d in November to 92.7 mb/d as the US recovered from
hurricane shut-ins and Libya built up production. In December, production may rise again
ahead of OPEC+ increasing its quota by 0.5 mb/d in January. OPEC+ dominates global
growth in the near term, with virtually all the 4Q20 gains and 80% in 1Q21. For 2021 as a
whole, non-OPEC producers outside OPEC+ are expected to increase output by 400 kb/d
after a fall of 1.3 mb/d in 2020.
 Global refinery throughputs fell almost 1 mb/d in October mainly due to maintenance and
hurricane shutdowns. The seasonal slowdown of refined product demand in the northern
hemisphere winter combined with tighter crude oil markets will result in a challenging
environment for refiners in the short-term. Estimated product stock draws reached their 2020
peak in October and are expected to slow until the next leg of the demand recovery in 2Q21.
 OECD industry stocks fell in October by 55.3 mb (1.78 mb/d) to 3 129 mb, and were 183.4
mb above the five-year average. Observed global stocks fell by 4.1 mb/d. Our analysis
suggests that the global crude market will have a stock surplus of 625 mb at the start of 2021
versus December 2019. If we assume that Chinese balances are neutral in 2021, the market
will absorb the 183 mb located elsewhere and in July it will move into deficit versus end-
2019.
 Oil prices have moved rapidly and smoothly from contango to backwardation, based on
stronger Asian demand and effective OPEC+ supply management. ICE Brent futures rose
$2.46/bbl in November to $43.98/bbl and closed at $49.97/bbl on 11 December. Physical
crude price discounts to futures improved in late November and early December. In
November, freight costs benefited from a rise of tanker activity for the first time in since May,
due to stronger Asian buying.
Highlights
We are close to the end of 2020 and Brent futures prices have recently moved above $50/bbl for
the first time since early March. Indeed, futures markets have moved into a shallow backwardation
looking twelve months ahead. On the other hand, physical barrels have only recently traded close
to futures prices, underlining the continued uncertainty that Covid-19 is causing oil demand and
market stability.
The understandable euphoria around the start of vaccination programmes partly explains higher
prices but it will be several months before we reach a critical mass of vaccinated, economically
active people and thus see an impact on oil demand. In the meantime, the end of year holiday
season will soon be upon us with the risk of another surge in Covid-19 cases and the possibility of
yet more confinement measures. From the supply side, sentiment has also been boosted by news
that the OPEC+ countries will increase their production quotas in January by significantly less than
planned.

In the short term, oil demand remains weak and we have reduced our estimate for the fourth quarter
of 2020 by 0.2 million barrels per day on small data revisions in various countries. For the year as
a whole, global demand will be 91.2 mb/d, which is 8.8 mb/d below the 2019 level and down 0.1
mb/d from our last Report. Demand has recovered from its trough in the second quarter when it was
16.3 mb/d (16.4%) below the year-earlier level, but in 4Q20 it remains 6.2 mb/d down year-onyear,
reflecting the impact of the second wave of lockdowns.
The recovery in the second half of 2020 is almost entirely due to China’s fast rebound from
lockdown. Demand there will grow by 0.7 mb/d in the period. The picture in OECD countries is bleak:
in the same period demand will be 5.3 mb/d lower than a year ago. Indeed, Europe appears to be
going backwards with demand in 4Q20 lower than in 3Q20 as re-imposed lockdowns take their toll.
Globally, weakness in the aviation sector largely explains a downgrade to demand in this Report of
0.3 mb/d for the first half of 2021. This contributes to a smaller rebound in demand in 2021 of 5.7
mb/d.
On the supply side, the OPEC+ countries have shown flexibility in amending their quota
arrangements. Demand is clearly going to be lower for longer than expected when the supply
agreement was concluded in April and there is rising production from Libya to accommodate. The
agreement to increase the quota by a modest 0.5 mb/d each month, subject to conditions providing
the headroom for more supply, is based on a recognition that the market remains fragile and is in
need of careful adjustment.
In 2020, we have seen unprecedented and historic turbulence in energy markets. The disruption to
normal life caused by the pandemic has had a serious impact on the health and welfare of millions
of people. We hope that the New Year will bring better times to you and your families.

NewBase Energy News 20 December 2020 - Issue No. 1394 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. 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, and 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.
NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE
NewBase 2020 K. Al Awadi

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