New base 503 special 23 december 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
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NewBase 23 December 2014 - Issue No. 503 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
UAE: World Future Energy Summit to showcase space solar power
WAN + NewBase
Seventeen Japanese companies and organizations for are taking part in the World Future Energy
Summit 2015 (WFES 2015) and two other companies and organizations will take part in the
International Water Summit (IWS 2015) as partners of the Japanese pavilion where symbolic
exhibitions on solar power energy will be organised.
The two events will take place in Abu Dhabi in January 2015.
This symbolic exhibition area will introduce SSPS (Space Solar Power Systems) researched and
developed by JAXA (Japan Aerospace Exploration Agency) under support from Ministry of
Economy, Trade and Industry (METI).
SSPS is a space-based solar power plant that generates energy by collecting sunlight in
geostationary orbit. The energy is then transmitted to the ground in the form of microwaves or
laser beams, and converted into electricity and hydrogen for practical use.
In addition, the pavilion will also showcase a H-IIA launch vehicle model (1/33 scale), one of the
Japan’s flagship launch vehicles.
Together with SSPS, the Japan pavilion will be introducing a propositional exhibit to showcase
"Green Float", a future environmental island o which utilises energy transmitted by SSPS. Green
Float is a "city in the sky floating 700-1,000m above the equator where temperatures are stable at
26-28 C year-round and the impact of typhoon is minimal." The innovations include the following: -
An energy distribution system that uses direct current. (Zero loss in DC-AC conversion) - A
seawater desalination plant that makes fountain of fresh water above the ocean.
- Surrounding Co2 capture with CCS (Carbon dioxide Capture and Storage) system At this
exhibition area, there will be authorities from both exhibitors to explain the technologies and
welcome visitors with Japanese hospitality.

Kingdom will invest $91b to spur petrochemical industry
Saudi Gazette + NewBase
Saudi Arabia has experienced a robust growth in its economy in recent years and growth of
around 4 percent expected for the financial year 2014-2015. The growth came as the country has
diversified its business interest to various other sectors in a bid to lessen its reliance on its oil-
based economy.
However, the Kingdom is determined to maintain its leading position as one of the largest
producers of petrochemicals and is aiming to achieve a production capacity of over 100 million
tons per annum by 2015.
It has earmarked $91 billion to be spent over the next 10 years to build new plants, expand
existing ones and integrate refineries with new or existing petrochemical units. In order to sustain
this expansion, Saudi Arabia has created lucrative business opportunities in its plastic and
petrochemical industries.
In fact, it is the only state in the Gulf Cooperation Council (GCC) to allow private investment in the
petrochemical sector with several incentives such as affordable energy, low-cost raw materials,
and advanced industrial infrastructure, especially in Yanbu.
This has led to growth in Saudi plastics and petrochemicals from less than $0.5 billion in 1985 to
$22 billion in 2011. To further throw the spotlight on the Kingdom's two primary economic sectors,
the Riyadh Exhibition Company will organize Saudi Plastics and Petrochem — the 12th
International Plastics and Petrochemicals Trade Fair — in Jeddah in 2015
Accredited by UFI, the Global Association of the Exhibitions Industry, Saudi Plastics and
Petrochem 2015 will be held from March 1-3, 2015 at the Jeddah Center for Forums and Events
to highlight cutting edge technologies and products in petrochemicals and plastics sectors.
Organizers confirmed the participation of Saudi Basic Industries Corporation (Sabic) as the
Diamond sponsor along with Rabigh Refining & Petrochemical Co. (Petro Rabigh) as the Gold
Sponsor.
The exhibitors will get an opportunity to showcase their solutions and services to a broad
audience comprising diplomats and high-ranking government officials, industrialist and
manufacturers, distributors, suppliers and retailers, industrial engineers, and purchasing and
operations managers, to name a few. Saudi Plastics and Petrochem 2015 will be held
concurrently with Saudi Print and Pack 2015 – the 12th International Trade Exhibition for Printing
and Packaging Technologies.

Ma’aden produces first alumina from local bauxite
Saudi Gazette + Newbase
The Saudi Arabian Mining Company (Ma’aden) and lightweight metals leader Alcoa said on
Sunday that the alumina refinery at their joint venture aluminum complex in Saudi Arabia has
successfully produced its first alumina from Saudi Arabian bauxite.
The alumina refinery at Ras Al Khair is the first ever refinery to be constructed and operated in the
region. The milestone marks the commencement of the final link in the supply chain of this fully
integrated aluminium facility.
The alumina refinery will refine Saudi Arabian bauxite, supplied from Ma’aden Bauxite mine at Al
Ba’itha and transported by 600-kilomter rail to Ras Al-Khair. The alumina from this refinery will
feed into the Ma’aden Aluminium Smelter which produces the aluminium needed for the Ma’aden
Aluminium Rolling Mill.
This fully integrated chain delivers operational efficiency and creates the most competitive
aluminum complex in the world. Once fully operational the refinery will produce 1.8 million mtpy
(metric tons per year) of alumina.
The alumina will be transported by conveyor to the adjacent smelter to produce 740,000 mtpy of

high quality aluminium products for customers in the Gulf region and in international markets.
“We are building a minerals and metals industry in Saudi Arabia that maximizes the value of the
nation’s mineral resources; contributes to sustainable economic diversification and shareholder
value; provides high value job opportunities for Saudis and a reliable supply of quality products to
our global customers. This milestone marks a significant moment for our industry in Saudi Arabia
and the broader GCC region,” said Khalid Mudaifer, President and CEO of Ma’aden.
“As the lowest cost aluminum complex in the world, the Ma’aden Alcoa joint venture is an
important part of Alcoa’s strategy to create a globally competitive commodity business,” said Klaus
Kleinfeld, Alcoa Chairman and Chief Executive Officer. “The first alumina milestone is another
demonstration of our disciplined execution as we transform Alcoa to create sustainable
shareholder value.”
About the Ma’aden Alcoa joint venture
In its initial phases, the joint venture will develop a fully integrated industrial complex which will
become the world’s preeminent primary aluminum, alumina and aluminum products, with access
and proximity to growing world markets. The complex comprises:
• A bauxite mine with an initial capacity of 4,000,000 metric tons per year
• An alumina refinery with an initial capacity of 1,800,000 metric tons per year
• An aluminum smelter with an initial capacity of 740,000 metric tons per year
• The rolling mill, with initial capacity of 380,000 metric tons per year.

Qatar Total exploring for more Qatar opportunities, CEO
Gulf Times + NewBase
Global energy major Total, which has a “strategic relationship” with Qatar, looks for more
opportunities in the country, from upstream to downstream including marketing and solar energy,
said Global CEO Patrick Pouyanné.
“The Middle East as a whole is extremely significant for Total, and
Qatar is a very important part of those Middle East operations. We
have been in this country for nearly 80 years and today have a wide
range of activities here,” Pouyanné told Gulf Times in an interview.
Total’s interests in Qatar Upstream include Qatargas 1 and Qatargas 2
as well as in Dolphin Energy. But in a country where the energy
industry is somewhat dominated by gas and liquefied natural gas (LNG), Total also has a key
asset in oil: the Al Khalij field.
Discovered by Total in 1991, it began production in 1997. In 2013, Total signed a new 25-year
concession agreement; the company now has a 40% operating interest with Qatar Petroleum
(QP) holding the remaining 60%. Qatar also, Pouyanné said, constitutes one of Total’s largest
integrated platforms for refining and petrochemicals activities, split between Messaied and Ras Laffan.
Qapco was established in 1974 in Mesaieed and since has been expanded several times. Since
2011, Ras Laffan Olefin Company (RLOC) has been producing ethylene in Ras Laffan that is
transported through a pipeline to Mesaieed and partly used by Qatofin, a JV between Qapco and Total.
Laffan Refinery 1, located in Ras Laffan, is a condensates refinery with a capacity of 146kb/d. An
expansion to double this capacity (Laffan Refinery 2) is underway for a start-up in the second half
of 2016, Total’s global CEO said.
“Our interests in Dolphin Energy, Qatargas 1 and Qatargas 2, Al Khalij, Qapco, RLOC and Laffan
Refinery underline our commitment to the country. These are long-term licences and agreements
that will last for many years to come, and we would also consider taking on new business or
entering into additional agreements if we think we can add value,” Pouyanné said.
“We have a strategic partnership with Qatar. Not only we intend to maintain it, but also we are
always looking for new opportunities from upstream to downstream including marketing and solar energy.
“Qatar is a very special country for me as I have held the position of managing director of our
upstream affiliate here and group representative from 1999 to 2002. My visit here has, of course,
a special meaning,” said Pouyanné during his first visit to Doha after assuming charge as Total’s
Global CEO.

Russian oil firm Rosneft repays around $7bn in debt
Reuters + NewBase
Russia’s top oil producer Rosneft said yesterday it had met a $7bn loan repayment, partially
easing fears among investors that Western sanctions banning major Russian firms from access to
European and US capital could prompt mass defaults.
Shares in the company rose 2.5% in Russian trade after Rosneft confirmed it had made the
payment – part of a two-year $12.7bn loan it used to buy oil firm TNK-BP – from its own cash
reserves. Rosneft, which produces more oil than Iraq or Iran, has asked for 2.5tn roubles
($44.07bn) from the government to help it weather sanctions and refinance its debts.
But the government is yet to decide how much money to give from the National Wealth Fund,
resulting in speculation last week – denied by Rosneft – that it was buying foreign currency on the
domestic forex market.
Rosneft Chief Executive Igor Sechin said yesterday: “To service its debt the company does not
need to enter the currency market, because it generates enough foreign currency earnings.
Surplus balances are used on the market, in such a manner.”
Analysts say Rosneft is too big for the state to allow it to fail and point to its successful sale earlier
this month of 625bn roubles worth of domestic bonds – the bulk of the company’s current planned
debt refinancing.
“As for other companies, there is still concern, but I do not expect large-scale defaults on the
public debt market,” said an analyst at a major Russian bank who declined to be named.
The company continues to face a severe squeeze from a collapse in oil prices and the rapid
devaluation of the rouble, which has lost 45% of its value against the dollar as a result of the
sanctions, an approaching economic recession and a the dramatic fall in the value of oil, upon
which the state budget depends.
Rosneft must make a second loan repayment of $6.9bn in February.

Its bridge loan providers were BNP Paribas, Bank of America Merrill Lynch, Bank of Tokyo-
Mitsubishi UFJ, Barclays Bank, Citi, Credit Agricole CIB, ING Bank, Intesa Sanpaolo, JP Morgan,
Mizuho Corporate Bank, Natixis, Societe Generale and UniCredit, according to Thomson Reuters
LPC data.
Meanwhile Rosneft said yesterday it had to abandon plans to purchase the oil trading business of
US bank Morgan Stanley after failing to win regulatory approval.
The December 2013 deal for an undisclosed amount covered Morgan Stanley’s Global Oil
Merchanting business that included agreements on stockage capacity as well as physical oil
inventories.
Rosneft said it and Morgan Stanley were abandoning the transaction “due to an objective
impossibility to complete the deal that has arisen as a result of regulatory clearances being
refused.”
Rosneft said in a statement that both companies regretted having to drop the deal and that they
will “continue to cooperate in other spheres”.
Meanwhile, Morgan Stanley said it “will now consider a variety of options for the unit that take into
account the interests of the firm’s shareholders, clients and employees.”
Rosneft, the top quoted oil company by production volume, is led by Igor Sechin, a confidant of
Russian President Vladimir Putin who was placed on US and EU sanctions lists over Moscow’s
annexation of Crimea and support for separatists in eastern Ukraine.
Rosneft has long affirmed that the sanctions will not affect its cooperation with its principal
partners: Britain’s BP which holds nearly 20% of its capital and US company ExxonMobil.

Russia:Yamal LNG to get state fund’s backing
LNG World News + Newbase
Yamal LNG could be receiving a 150 billion roubles of state support from Russia’s National
Wealth Fund in the first quarter of 2015.
Interfax news agency quoted Deputy Energy Minister Nikolai Podguzov saying that Rosneft asked
for 250 billion roubles from the fund for its four projects.
There are more companies looking for state’s fund support as the sanctions imposed on Russia
have largely denied them access to foreign investment.
Yamal LNG project will have a 16.5 mtpa capacity and the three process trains with a 5.5. mtpa
capacity each are planned for commissioning in 2016, 2017 and 2018.
Shareholders in the Yamal LNG are Russia’s Novatek, France’s Total and China’s CNPC. As the
currency of 1.0 Russian ruble = 0.017712 USD.
•••• Capacity: 16.5 Mt/y produced by 3 LNG trains
•••• Operator: Yamal LNG, a joint-venture company owned by
Novatek (60%), Total (20%) and CNPC (20%)

U.S. gas prices fall to lowest since May 2009
Reuters + NewBase
The average price of a gallon of gasoline in the United States fell 25 cents in the past two weeks,
tumbling to its lowest level in more than five-and-a-half years, according to the Lundberg survey
released Sunday.
Prices for regular-grade gasoline
fell to $2.47 a gallon in the survey
dated Dec. 19, down 25 cents
since the previous survey on Dec. 5
The recent drop has taken prices
down more than $1.25 a gallon
since a recent peak in May of this
year.
"This is mostly driven by crude oil
prices, and absent a sudden
spike we very well may see a
drop of a few pennies more," said
the survey's publisher, Trilby Lundberg. "That said, demand is up at these low prices."
U.S. crude futures have been sharply weaker of late, dropping for four straight weeks, as well as
in 11 of the past 12 weeks. Crude prices fell 14.2 percent over the past two weeks, though they
rose 5.1 percent on Friday, settling at $57.13 per barrel.
The highest price within the survey area in 48 U.S. states was recorded in Long Island at $2.82
per gallon, with the lowest in Tulsa, at $1.99 per gallon.
3.3$/G
1.9$/G

Oil Price Drop Special Coverage
Brent climbs & slides between $63-61 amid stronger Asia markets
Reuters + NewBase
Brent crude futures rose more than 2 percent toward $63 a barrel on Monday as Asian markets
firmed into a holiday-shortened week and consensus spread that prices would likely remain above
$60 for the rest of the year.

MSCI's broadest index of Asia-Pacific shares outside Japan extended gains and was up 1.4
percent. Japan's Nikkei pared early gains but managed to eke out a 0.1 percent rise ahead of a
Japanese public holiday on Tuesday, while Australian shares surged 1.9 percent.
Brent rose 2.4 percent $62.86 at 0748 GMT. U.S. crude was also up 2.3 percent at $58.45 a
barrel.
While analysts said prices would likely remain over $60 barrel for the rest of the year, they also
said that further large jumps were unlikely. "Any oil relief rally is likely to be limited and short-lived,
barring a major outage. We see too many headwinds that must be addressed," Morgan Stanley
said on Monday in a report.
"An oversupplied market is
likely to keep crude oil
prices under pressure in
the first half of 2015, while
demand struggles to
recover in Asia," ANZ said
in a report.
National Australia Bank
said "given the lead time in
permit approval and rig
construction ahead of oil
production, a sizeable
negative U.S. supply
response given the price
drop is unlikely to take
place until late 2015, which
places further downward
pressure on oil prices in the
first six months of next
year."
The bank added that it expected Brent and WTI to average $68 and $64 per barrel respectively in
2015.
Beyond fundamental drivers, Reuters analyst Wang Tao said that Brent prices could drop as low
as $41.99 per barrel in the next three months before receiving support, based on technical
indicators, and that prices would unlikely rise above $70.
"The rebound may not be strong enough to extend to $71.37, most likely it could end at a lower
level," he said. Analysts also said they expected relatively low price volatility for the remainder of
the year as traders begin to wind down their 2014 positions.
Oil Rises for Second Day on Saudi Confidence in Demand
Bloomberg + Newbase
Oil rose for a second day, extending the biggest rally since October 2012 after Saudi Arabia said
it was confident that crude will rebound as world economic growth boosts demand.
Brent futures climbed as much as 2.6 percent in London. A global glut that has driven prices
lower was created by a lack of cooperation from producers outside the Organization of Petroleum

Exporting Countries, according to Saudi Arabian Oil Minister Ali Al-Naimi. The market is
oversupplied by 2 million barrels a day, said Mohammed Al Sada, Qatar’s energy minister.
Oil has slumped about 20 percent since OPEC decided to maintain its production target at a Nov.
27 meeting even as the U.S. pumps crude at a record pace. Producers outside the 12-member
group should should cut their “irresponsible” output as excess supply harms the market, according
to Suhail Al Mazrouei, the energy minister of the United Arab Emirates.
“We can expect more persuasive talk to try and get prices back to a happy median,” Jonathan
Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone today.
“A good balance for the market is $70. We’re coming into the Christmas period of low liquidity, so
expect volatility and fluctuations to continue.”
Brent for February settlement gained as much as $1.59 to $62.97 a barrel on the London-based
ICE Futures Europe exchange and was at $62.59 at 4:10 p.m. Singapore time. It increased 3.6
percent on Dec. 19. The European benchmark crude traded at a premium of $4.33 to
West Texas Intermediate. Prices have fallen 43 percent this year, set for the largest drop since
2008.
OPEC Supply
WTI for February delivery climbed as much as $1.40, or 2.5 percent, to $58.53 a barrel in
electronic trading on the New York Mercantile Exchange. The January contract expired on Dec.
19 after advancing $2.41 to $56.52. The volume of all futures traded was more than double the
100-day average.

OPEC, which supplies about 40 percent of the world’s oil, will probably resist cutting output even if
non-member producers offer to supply less, Al-Naimi said at a conference in Abu
Dhabi yesterday. The group pumped 30.56 million barrels a day in November, exceeding its
collective target of 30 million for a sixth straight month, a Bloomberg survey of companies,
producers and analysts shows.
“We’re now in a provisional, correctional period,” Qatar’s Al Sada said at the same event. “Markets
have stabilization mechanisms that will bring stability. We don’t know exactly how long it will take,
but it will stabilize because the current prices will separate the efficient producers from the
producers who have high costs.”
Shale Boom
Output in the U.S., the world’s biggest oil consumer, expanded to 9.14 million barrels a day
through Dec. 12, according to the Energy Information Administration. That’s the highest level in
weekly data that started in January 1983.
The nation’s oil boom has been driven by a combination of horizontal drilling and hydraulic
fracturing, which has unlocked supplies from shale formations including the Eagle Ford and
Permian in Texas and the Bakken in North Dakota. The three shale plays supplied record
amounts in November, said the industry-funded American Petroleum Institute.
In China, the world’s second-largest oil consumer, crude imports from Russia increased to a
record 3.31 million metric tons in November, up 65 percent from a year ago, data from the
General Administration of Customs in Beijing show. That’s about 808,700 barrels a day.
Shipments from Saudi Arabia shrank by 5.9 percent from last year while Iranian supplies slid 2.6
percent.

Oil-price drop will be real test for Gulf: Experts
BY BLOOMBERG NEWS
The boom that adorned Gulf Arab countries with glittering towers, swelled their sovereign funds
and kept unrest largely at bay may be over after oil prices dropped by almost 50 per cent in the
last six months.
They have used the oil
wealth to remake their
region. Landmarks include
man-made islands on
reclaimed land, as well as
financial centres, airports
and ports that turned the
Arabian desert into a
banking and travel hub.
The money was also
deployed to ward off social
unrest that spread through
the Middle East during the Arab Spring
"The region has had 10 years of abundance," said Simon Williams, HSB's chief economist for
central and eastern Europe, the Middle East and North Africa. "But that decade of plenty is done.
The drop in oil prices will hurt performance in the near term, even if the Gulf's buffers are powerful
enough to ensure there's no crisis.
Brent crude, which has averaged $102 a barrel since the end of 2009, plunged to about $60 by
the end of last week. The slump accelerated after the Organisation of Petroleum Exporting
Countries (Opec), whose top producer is Saudi Arabia, decided in November to keep output
unchanged. At $65 a barrel, the six nations of the Gulf Cooperation Council (GCC), which hold
about a third of the world's crude reserves, would run a combined budget deficit of about 6 per
cent of gross domestic product, according to Arqaam Capital, a Dubai-based investment bank.
Growth forecast
Cheaper oil "will force a reassessment of the ambitious infrastructure investment programme" in
the region, Qatar National Bank (QNB) said in a report. One exception is likely to be Qatar, which
is spending on infrastructure to host the 2022 soccer World Cup final, QNB said. The oil-price
drop has already prompted economists to cut next year's growth estimates for Saudi Arabia, the
United Arab Emirates and Kuwait, according to data
The GCC spending spree hasn't resolved problems such as high youth unemployment, especially
in Saudi Arabia, where the rate was close to 30 per cent in 2012, according to the International
Monetary Fund. Despite total employment growth averaging near 8.5 per cent, employment
growth for Saudis was 4.6 per cent in the years between 2010 and 2012, the IMF said in July last
year. The spending did help insulate the monarchies from the revolts of 2011
That year, The Custodian of the Two Holy Mosques King Abdullah of Saudi Arabia allocated $130
billion to create jobs, build homes and raise salaries, while Qatar ordered $8.2 billion in to boost
pensions and pay for civil servants. When protests broke out in Bahrain, the only GCC country to
experience major upheaval, their Gulf neighbours pledged $20 billion in assistance.

Real test
The Bloomberg GCC 200 Index has fallen 9.2 per cent in the past six months, while Saudi
Arabia's Tadawul All Share Index, the benchmark of the Arab world's biggest stock market, is
down 12 per cent.
"Lower oil prices will be a real test," said
Crispin Hawes, managing director of
research firm Teneo Intelligence in London.
"If there was a problem in the past, they
threw sacks of cash at it."
That cash also financed a global spending
spree. Qatar, the richest country in the world
on a per-capita basis, has holdings in
Harrods department store in London and in
banks such as Barclays. Abu Dhabi's
national carrier Etihad Airways made a string of purchases, including a multi-billion-dollar
investment in Alitalia
Ample reserves
The richer GCC countries were saving while they spent. Saudi Arabia, the Arab world's biggest
economy, has seen its net foreign assets jump 80 percent to $773 billion since 2009, according to
central bank data. The UAE and Qatar have two of the world's largest sovereign wealth funds.
With those funds available, "my guess is that the Gulf states will just draw down resources" rather
than "do anything really serious," said Gregory Gause, head of the International Affairs
Department at Texas A&M University. Before having to tap their reserves, oil prices may rebound.

The oil market will recover with global economic growth, Saudi Arabia Oil Minister Ali Al-Naimi
said in Abu Dhabi on December 21. "Fossil fuel will remain the main source of energy for decades
to come," he said. Oil surged from a five-year low at the end of last week after Al-Naimi said the
slump in prices was temporary
In the meantime, there's no guarantee that a spending strategy would work because the reserve
cushion may not last long without economic adjustments, said Nasser Saidi, president of Nasser
Saidi & Associates in Dubai and former chief economist of the Dubai International Financial
Centre.
Fuel subsidies
"Growing government spending has been eating into those surpluses," he said. "You're going to
have to adjust to the lower oil prices. The implication is that you either have to start to reduce
spending or you need new sources of revenue, or both."
Gulf governments maintain high fuel and power subsidies, which are used to transfer oil wealth to
their citizens. Cutting them is politically sensitive after domestic discontent led to the overturning of
governments in Tunisia, Libya and Egypt since 2011
Gulf leaders say they're aware of tougher times ahead. Saudi Finance Minister Ibrahim al-Assaf
said this month that the kingdom will use its financial reserves as a "line of defense" against lower
oil prices, and will keep funding "massive" development projects
Oman, which lacks assets on that scale, is considering a freeze on public sector hiring, Finance
Minister Darwish Al Balushi said last month.
Opec: Chinese stockpiling will support oil price
Reuters + NewBase
Lower oil prices will likely encourage more Chinese stockpiling of crude, which will help boost both
demand and prices, an Opec official said yesterday.
Oil prices have nearly halved since
June, driven lower by weaker growth
in Europe and Asia and an oil glut.
Arab ministers have blamed non-
Opec suppliers for the oversupply,
which is expected to continue to hurt
prices.Opec decided on November 27
to keep its output unchanged at 30
million barrels of oil per day despite
the oversupply.
“The boost for growth from lower oil
prices could even see demand
increasing. In particular, Asian buyers
are keen to stock up on oil at lower
prices,” said Ali Obaid Al Yabhouni,
the chairman of the Opec board of
governors. “One area where demand is likely to grow is from the build of Chinese strategic
stocks.”

He was speaking at a conference for the Organization of Arab Petroleum Exporting Countries
(Oapec). “As oil prices reach a low level, we can expect the Chinese to increase their acquisitions
of oil destined for strategic reserves. Not only will this benefit shipping companies, but it will also
support the oil price levels.”
China is expected to have a total reserve capacity of about 500 million barrels by 2016, according
to the International Energy Agency, the energy adviser to industrialised countries. The drop in oil
prices, though, will impact Arab energy investments, according to the Arab Petroleum Investments
Corporation (Apicorp).
Energy investments in the Arab region will average US$685bn in the next four years, a figure
lower than previous years. Apicorp had estimated last year that energy investments between 2014
and 2018 would be about $700 billion.
“In the context of subdued economic recovery, continuing geopolitical turmoil and collapsing oil
prices, our review of energy investments in the Arab world has established that compared to past
review, minimum capital requirements are likely to decline or remain flat at best over the medium
term,” said Ali Aissaoui, a senior consultant at Apicorp, adding that Saudi Arabia, the biggest
spender, has completed many major projects as well.
About three-quarters of these investments between 2015 and 2019 will come from the biggest
holders of oil and gas reserves, led by Saudi Arabia, followed by the UAE, Algeria, Iraq, Qatar,
Kuwait and Libya. There are major constraints for investments in energy, including the scarcity of
gas, escalation of project costs and accessibility funding, he said, with the likelihood of project
costs rising beyond inflation figures.
Equity financing will suffer, as low oil prices mean that countries will be constrained because their
break-even prices to balance the budget will not be met. “Policy markers should focus their policy
on improving the investment climate and creating a more enabling environment for the
development of the oil, gas and power investments,” said Mr Aissaoui.

Governments also need to tackle subsidies and overconsumption to make exploration for new
resources more profitable. GCC governments will continue to invest in projects to maintain their
market share. Lower oil prices will also drive investments away from high cost production such as
shale to the Middle East region, Mr Yabhouni said.
“Clearly everyone needs to tighten their belts. The bonzana is over and as investments in the
North American shale and tight oil and gas industry come to a slow halt, we can expect that
service companies and contractors to converge on the Arab world, where investments will
certainly continue, and increased competition in their region will lead to decline in costs to more
reasonable levels.”

Your Guide to Energy events in your area

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For additional free subscription emails please contact Hawk Energy
Khaled Malallah Al Awadi,
Energy Consultant
MSc. & BSc. Mechanical Engineering (HON), USA
ASME member since 1995
Emarat member since 1990
Mobile : +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 25 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years , he has developed great
experiences in the designing & constructing of gas pipelines, gas metering & regulating stations
and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation , operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally , via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 23 December 2014 K. Al Awadi

New base 503 special 23 december 2014

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New base 503 special 23 december 2014