New base 719 special 02 november 2015

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase 02 November 2015 - Issue No. 719 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE’s Masdar sees renewable energy opportunities
in MENA region
Policy shifts over climate change as countries seek to diversify energy sources have opened
investment opportunities for renewables in the Middle East and North Africa (MENA), the head of
UAE green energy firm Masdar said.
Countries in the region are increasingly setting renewable energy targets in their energy mix as
demand grows, serving as a boost for investments in solar and wind power ventures, Masdar’s
Chief Executive Ahmad Belhoul told Reuters in Paris.
“A few years back when Abu Dhabi set a target of 7 per cent of renewable energy by 2020,
nobody in the region had any renewable energy target. Today, there are targets being set in
Jordan, Morocco, etc,” Belhoul said in an interview.

“What we have noticed is that, over the past couple of years, there has been significant interest by
many governments in renewable energies. We have seen many policy changes that allow
investors to come in,” he said.
Masdar, owned by Abu Dhabi state fund Mubadala, was set up with a $15bn commitment to invest
in green energy.
Belhoul said Masdar, through its private equity arm that manages two funds, had deployed over
half a billion dollars invested in green projects with a portfolio of about 4.5 gigawatts of renewable
energy, equivalent to about four nuclear reactors.
Masdar was looking to set up
a third fund, he added.
Its investments include a 35
percent stake in the planned
Dudgeon offshore wind farm
in Britain with Norwegian
partners Statoil and Statkraft.
It also has a 20 percent share
in the 600-megawatt London
Array, the world’s largest wind
farm.
Belhoul said investments in
mature markets such as
Britain and Spain, where it
has also invested in a joint
venture with Spain’s Sener, were balanced out with investments in developing markets in the
Middle East and North Africa.
“Our strategy over the next five years is the MENA region plus selected investments in mature
markets,” he said, adding that Abu Dhabi and the rest of the United Arab Emirates were
immediate priorities.
“If you look at how the sector has evolved, prices are becoming increasingly competitive,” he said.
“Solar cells, for example, even in the UAE with our local gas, are more competitive than gas.”
Belhoul said Morocco was attracting huge attention and investments.
“The Moroccan government has set a target and they are following through quite systematically, it
is a very mature market and quite competitive. We are closely looking at it,” he said, adding that
Masdar had bid for projects in the country.
Electricity demand in Morocco rises by an annual 7 percent and the country is investing heavily in
renewables. Earlier this month, Morocco secured a $519m loan from the World Bank partly to
finance two solar power plants with a combined capacity of up to 350 megawatts.
“North Africa has tremendous growth and with that growth comes a huge requirement for energy,
different types of energy,” Belhoul said, adding that Masdar was also looking at Egypt.
By: Reuters + NewBase

Saudi SABIC, KSU in partnership to support KSA’s economic plans
Saudi Gazette + NewBase + Sabic.com
SABIC and the King Saud University (KSU) have signed a strategic cooperation agreement
covering a variety of programs to support to Kingdom’s plans to transform into a knowledge
economy as well as to fulfil SABIC’s 2025 growth strategy.
The agreement was signed during the “Universities and Private Sector Partnership in Developing
Scientific Research” symposium at KSU in Riyadh last Oct. 28.
Awadh Al-Maker, SABIC Executive Vice President, Technology and Innovation, signed the
agreement on behalf of SABIC, while Dr. Badran Al-Omar, University Rector, signed on KSU’s
behalf. The signing ceremony was attended by Dr. Azzam Al-Dekheel, Minister of Education, and
Yousef Al-Benyan, SABIC acting Vice Chairman and CEO.
The programs covered under the agreement include: joint research projects by SABIC and the
university with the exchange of industrial and academic expertise, training and development of
students at SABIC research centers, leveraging the experience of post-doctoral fellowships, use
of SABIC and KSU science facilities for mutual benefit, and undergraduate awards for academic
achievements.
Commenting on the signing of the agreement, Al-Benyan said: “This agreement supports SABIC’s
2025 strategy, which is aimed at growing the company’s global businesses and addressing future
research and development challenges. It effectively contributes to the ongoing efforts to transform
the national economy into a knowledge economy capable of better driving the development of the
Kingdom.”

He added, “SABIC has opened all avenues for cooperation with local academic institutions and
research organizations to support national efforts aimed at becoming a knowledge-based
economy. It seeks to support Saudi universities through agreements for the establishment of
research canters, sponsoring research chairs and projects, and providing annual grants to enrich
research and technical aspects – all with the aim of meeting development targets and stimulating
economic activity.”
SABIC and KSU will form a six-member steering committee, three members from each side, to
supervise all activities related to the latest agreement. It will also submit a report annually to the
university and the SABIC leadership on the benefits generated from the joint programs.
Meanwhile, Dr. Azzam Al-Dakhil, Minister of Education, honored SABIC for its sponsorship of the
“Universities and Private Sector Partnership in the Developing Scientific Research” symposium.
Yousef Al-Benyan, Acting Vice Chairman and CEO, SABIC, received an honorary plaque on
behalf of SABIC.
During the first session of the symposium, which focussed on “Partnership and the Knowledge
Economy,” Mosaed Al-Ohali, SABIC Executive Vice President, Corporate Finance, touched on the
importance of transparency and disclosure to achieve successful partnerships.
Awadh Al-Maker, SABIC Executive Vice President, Technology and Innovation, spoke in the
second session on “Successful partnership models for joint scientific research funding.”

Saudi Consumers Are Still Spending Like the Oil Slump Never Happened
Bloomberg - Deema Almashabi
Spend the afternoon strolling through Riyadh’s shiny shopping malls, or an evening at one of its
luxury restaurants, and you’d never guess there’s an oil slump.
That’s not an accident, it’s Saudi policy in action. Sharing oil wealth with the public has helped
keep the Al Saud family securely in power as turmoil sweeps the region. When the revenue slows
down, as it’s doing now, the kingdom’s rulers would rather run huge budget deficits than risk
tampering with that bedrock social contract.
Eventually, economists say, something may have to give. The International Monetary Fund
predicts a fiscal gap exceeding 20 percent of economic output this year, and says at that rate
Saudi savings would run out after five years. Standard & Poor’s cut the country’s credit rating last
week. But for now, as it looks to trim project spending and payments to contractors, the world’s
top oil exporter is making sure most of its citizens don’t feel the pinch.
“Directly, the cuts are not going to affect a typical household,” Farouk Soussa, London-based
Middle East Economist at Citigroup Inc., said by phone. They probably won’t touch “the social
safety net, the welfare transfers or any of the social expenditures the government undertakes,” he
said.
If anything, the government’s largess increased this year. After King Salman ascended to the
throne in January, he handed out two-month salary bonuses to all state employees as part of a
package costing about $30 billion.
With that money coursing through the system, the Granada Center mall in the capital Riyadh has
remained packed. Sales staff at M.A.C Cosmetics ask customers to form lines outside the store,
and employees say business has never been better.
Saudi retail index has outperformed construction stocks since the oil slump.
Across the $630 billion economy, average monthly retail sales are up more than 10 percent this
year. They dropped 3.5 percent from a year earlier in September, though that was partly caused

by the Eid religious holiday when the country shut down for several days. Last year the festival
was in October, and there was a similar drop that month.
“It could well be the Eid effect, though I think that there is probably a confidence factor too,” James
Reeve, Samba Financial Group’s deputy chief economist in London, said in response to e-mailed
questions.
While Saudi retail stocks have declined since the oil shock began in June last year, they’re kept
pace with emerging-market equities in general and have performed much better than the country’s
construction companies.
“The sector has been more resilient than other areas of the economy,” John Sfakianakis, a
Riyadh-based Middle East director at Ashmore Group Plc, said by phone.
On Tahlia St., the go-to thoroughfare for Riyadh’s diners, restaurants are crowded. Abdulrahman
Al-Khathlan, the founder and chairman of AHK Group, has franchises for the upscale French
chains Ladurée and Fauchon, says there’s been a slight drop in customers this year, but he’s still
planning at least four new outlets in Riyadh, Jeddah and Khobar.
Perks for Saudis range from education -- the government spends billions of dollars a year sending
students abroad -- to cheap energy. Gasoline costs well below $1 a gallon, and electricity is so
cheap that residents of Riyadh have little incentive to switch off the air-conditioning when they go
away for summer holidays.
Fuel subsidies alone will cost Saudi Arabia as much as $52 billion this year, or 8 percent of gross
domestic product, Riyadh-based Samba Financial Group said in an August report. Saudi Arabia
ranks fourth globally after Qatar, Luxembourg and Kuwait in energy subsidies per capita, and
seventh in terms of dollars spent, according to the IMF.
While other Gulf nations including the United Arab Emirates are scaling back subsidies, Saudi
Arabia probably won’t follow suit this year or next, said Fahad al-Turki, chief economist at Jadwa
Investment Co. It’s trying to “mitigate the impact of oil prices on the domestic economy as a whole,
and on consumers in particular,” he said.

While Oil Minister Ali Naimi said this week that the government is examining whether to raise
domestic energy prices, similar comments by officials in the past haven’t been followed up.
The kingdom’s dramatic swing into deficit -- it posted budget surpluses averaging about 7 percent
of GDP in the past 15 years, according to the IMF -- is the main reason why the economy’s
slowdown is likely to be muted. It will probably grow 3 percent this year, down from 3.5 percent in
2014, according to a Bloomberg survey.
Government spending was also central to Saudi efforts to avoid contagion from the 2011 Arab
Spring: that year, King Abdullah allocated $130 billion to create jobs, build homes and raise
salaries, and the economy grew 10 percent.
Oil peaked above $140 a barrel during Abdullah’s reign, and that’s one reason why promised
economic reforms never happened, according to Gregory Gause, a professor of international
affairs at Texas A&M University.
“Abdullah said in the late 1990’s that everything had to change, but not much
did,” he said. “When times are looking tougher, there is a reluctance to put more burdens on the
citizens, so hard decisions get put off.”
His brother and successor Salman has reshuffled the kingdom’s economic team this year, putting
his son, Deputy Crown Prince Mohammed bin Salman, at the head of a new committee to oversee
economic and development policy. Under Salman, Saudi Arabia has also become more assertive
abroad, and is engaged in a war in neighboring Yemen.
With the leadership still in flux, a radical overhaul of Saudi economic policy would be difficult to
impose, said David Butter, an associate fellow at Chatham House’s Middle East and North Africa
Program.
“You need to have a very strong political center of gravity,” he said. “That’s perhaps the problem,
because you don’t really have that at the moment.”

Nigeria moves to split up delayed oil industry bill
AFP
Nigeria looks set to unbundle a long-awaited oil law to speed up its passage through parliament,
potentially unlocking billions of dollars in frozen investments. The Petroleum Industry Bill (PIB) has
been gathering dust since 2008 because of disagreements between the government and global oil
majors over its terms.
The new head of the Nigerian National Petroleum Corporation (NNPC) Emmanuel Kachikwu, who
is likely to become junior oil minister, said recently the delay was hurting the economy. “The
average source of volumes in investments that we are losing on an annual basis because of the
lack of PIB is in excess of $15 billion (13.7 billion euros),” he told senators.
“The non-passage of the bill in whatever form over the years has created a level of uncertainty
that no international investor wants to grapple with.” Parliament needs to “find a way of working
with us and go ahead and pass those elements of the PIB where there’s not much contention”, he
added.
Analysts believe the PIB would help redefine the fiscal terms in the oil and gas industry, increase
Nigeria’s share of revenue and also help restructure the state-run NNPC. Kachikwu, a former
ExxonMobil executive, was appointed in August as part of President Muhammadu Buhari’s drive
to overhaul the NNPC and cut down on corruption.
The PIB as proposed would see international oil companies pay 10 per cent of their net profits to a
“Petroleum Host Community Fund” to benefit oil- and gas-producing areas. Oil majors, though,

have balked at the prospect of their profits being cut, complaining the terms were too harsh and
could stymie investment.
Companies such as Shell, Total and Chevron have in recent years been selling off assets in
Nigeria while new investments have stalled. At the same time, areas that would benefit from the
increased revenue are mainly in the oil-producing south, creating opposition in other parts of
Nigeria.
Politicians in the impoverished north already claim the south gets more than its fair share of oil
revenue. Both complaints have contributed to the delay. White collar unions have also said the
terms in areas such as the extent of Nigerian firms’ involvement in the sector needs to be
addressed. NNPC spokesman Ohi Alegbe said the PIB was currently being fine-tuned before it is
resubmitted to parliament early next year.
“The Vice President Yemi Osinbajo and Dr Kachikwu have made a commitment the PIB will be
split into sections. This is necessary to move forward,” he said. Muda Yusuf, Director-General of
Lagos Chamber of Commerce and Industry (LCCI), said cherry-picking parts of the wide-ranging
bill made sense in the current economic climate.
Nigeria — Africa’s number one crude producer and biggest economy —depends on oil for more
than 90 per cent of government revenues. But the global crash in crude prices since mid-2014
has seen revenues fall by 70 per cent in that time, weakening the naira currency and depleting
foreign reserves.
“Our current economic problems have roots in the global oil crash. If the PIB is in place, the oil
majors will be encouraged to invest more in the industry,” said Yusuf. The latest proposals have
created uncertainty among many expatriate oil workers at a time of wider disquiet about the
Nigerian economy among investors.

US: Oil Producers Curb Megaproject Ambitions to Focus on U.S Shale
Bloomberg - Joe Carroll
Big U.S. oil companies are starting to think small.
A stubborn 16-month crude rout with no end in sight is driving the largest U.S. oil producers away
from costly, high-risk megaprojects long touted as the industry’s future and toward safer shale
operations that generate the cash needed to satisfy anxious investors.
Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., ConocoPhillips and Hess Corp. have
all either delayed or abandoned projects that range from the deep seas of the Gulf of Mexico to
Canada’s oil sands and the U.S. Arctic. At the same time, Exxon and Chevron both announced
plans to substantially increase U.S. crude production, largely as a result of their shale operations.
“What makes more sense in this environment: drill a $100 million well in the deepwater Gulf that
might come up empty, or poke lots of holes in west Texas where you already know there’s oil for a
few million apiece?” said Michael Webber, deputy director of the University of Texas Energy
Institute.
Reduced Spending
Explorers are expected to slash spending on deepwater wells by 20 percent to 25 percent next
year, compared with a 3 percent to 8 percent overall reduction on all types of fields, according to
Barclays Plc analysts including J. David Anderson. The type of giant reservoirs that require
megaproject treatment are now found in only the roughest, deepest and coldest parts of the world.
One example: An equipment failure forced Chevron to put its $5.1 billion Big Foot development, a
deepwater Gulf of Mexico project that was supposed to begin pumping crude this year, on hold
until at least 2018. The San Ramon, California-based company hasn’t said whether the delay will
bloat the price tag, which already had risen 28 percent from a 2010 estimate of $4 billion.
International producers are failing to deliver 80 percent of megaprojects on time and on budget,
compared with about 50 percent in 2005, said Neeraj Nandurdikar, oil and gas director at
Independent Project Analysis Inc.
“It’s really bad for megaprojects now,” said Joseph Triepke, managing director at Oilpro.com and
a former analyst at Citadel LLC’s Surveyor Capital unit. “When oil was $90 or $100 a barrel, there
was a lot of wiggle room to make a return. But at $45 oil, there’s no wiggle room. Enormous
projects can’t go over or be late.”
Updating Shareholders

West Texas Intermediate for December delivery rose 53 cents to $46.59 a barrel Friday on the
New York Mercantile Exchange.
Exxon and Chevron may update investors on their biggest ventures when they report third-quarter
results on Friday. “Chevron is taking actions responsive to the current price environment,” said
Kurt Glaubitz, a company spokesman. “We are getting our cost structure down and actively
managing to a smaller capital program.” An Exxon spokesman declined to comment.
ConocoPhillips, the third-biggest U.S. oil producer, canceled plans in July to search the deep Gulf
of Mexico this year. Terminating a long-term rig lease may cost the Houston-based company as
much as $400 million.
Other megaproject disappointments include Exxon’s Kearl oil-sands development in western
Canada, where logistical challenges and harsh weather repeatedly delayed the $12.7 billion
project before its opening in 2013. Plans to increase output again by 2020 have been shelved
indefinitely. At Chevron’s gas-export project in Gorgon, the largest construction undertaking in
Australia’s history, rising labor costs helped bloat the price tag by about 20 percent to $54 billion.
Supply Glut
The shale drilling boom led to a supply glut that deflated prices by more than half since 2014 and
shale remains one of the most economic options for producers. For Exxon and Chevron, that’s
meant rededicating their spending to a region they’d mostly ignored for the half century before the
shale boom while they pursued giant overseas discoveries.
Exxon has more than tripled the number of rigs it has drilling shale formations around the U.S.
since buying XTO Energy for $35 billion in June 2010, Jack Williams, the senior vice president in
charge of Exxon’s wells, said during a March meeting with analysts in New York. Exxon plans to
double U.S. shale production in the next three years.
For Chevron, shale wells are forecast to contribute the equivalent of 160,000 barrels of daily oil
output in the next two years, the company said in a March presentation to analysts. Despite the
fall in crude markets, Chevron Chairman and CEO John Watson has so far stuck to his goal of
boosting worldwide output 20 percent to 3.1 million barrels a day by the end of 2017, in large part
because of shale.
Only 10 percent of non-shale discoveries this year will be profitable, down from 40 percent in
2010, said Julie Wilson, a senior exploration analyst at Wood Mackenzie. Cost overruns have
afflicted 64 percent of oil and gas megaprojects and 73 percent of them have faced delays,
according to an Ernst & Young LLP survey of 365 developments.
“Projects are getting bigger and bigger and they are failing more often,” said Howard Duhon,
systems engineering manager at Gibson Applied Technology and Engineering Inc., which advises
major oil companies on how to design deepwater projects. Equipment is more complex and
project teams are three or four times bigger, and “it’s not clear we’re getting any better results,” he
said.

NewBase 02 November - 2015 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices drop on China demand worries, but stable
Reuters + Newbase
Oil prices fell in Asian trading hours on Monday as analysts expected weaker demand from China
in upcoming months. Benchmark U.S. crude futures had dropped 24 cents from their last
settlement to $46.36 per barrel by 0232 GMT. Internationally traded Brent futures were at $49.48
a barrel, down 8 cents.
Monday's falls came after gains made last week following a further decline in the U.S. oil rig count
which indicated that domestic crude production could drop in coming months. But in Asia, the
possibility of slowing demand in China dominated trade on Monday, with growth faltering in the
world's No.2 economy.
While China has so far avoided a hard landing, activity in China's manufacturing sector contracted
in October for a third straight month, an official survey showed on Sunday, fueling fears the
economy may still be losing momentum in the fourth quarter despite a raft of stimulus measures.
"Weak economic data out of China will likely keep any gains in commodity prices limited," ANZ
said.
Barclays said that China's oil demand growth for September, adjusted for inventories, slowed to
226,500 barrels per day (bpd), or 2.1 percent, compared with the same month last year, much
lower than the 6.3-percent gain registered for the first three quarters of the year.
Oil price special
coverage

Want to See Who's Happy About Low Oil Prices? Look at Refiners
Bloomberg - Dan Murtaugh
While oil drillers cut spending to the bone, U.S. refiners are reaping a windfall from low oil prices.
Tesoro Corp. reported record profit in the third quarter, while Valero Energy Corp., Phillips 66 and
Marathon Petroleum Corp. posted their best quarter in at least three years. Crude prices are down
by more than half from their 2014 peak, while American drivers are on pace to set a record for
miles driven.
“Refining is one of the better places to be in right now,” said Carl Larry, head of oil and gas for
Frost & Sullivan LP in Houston. “They have the luxury of low crude feedstock prices and high
demand for their products.”
Shares of Phillips 66, the largest U.S. refiner by market share, rose 3 percent on Friday to $89.05,
a record high. An index of the four companies is up 26 percent on the year. The broader Standard
and Poor’s 500 Energy Index is down 14 percent over the same time.
The profit margin for converting oil into gasoline has soared this year as crude prices fall and
driving demand rises. On the Gulf Coast, home to about half the nation’s refineries, the margin
has averaged $12.21 a barrel this year, the highest since at least 2010.
Because of the high margins, refiners are churning through as much crude as they can. U.S.
plants set a processing record during the last week of July, going through more than 17 million
barrels a day. Tesoro said it ran its plants at 101 percent of their capacity during the third quarter.
Next Year

The refining party won’t be stopping anytime soon, said Harold York, vice president of integrated
energy research at consulting company Wood Mackenzie Ltd. Margins may weaken next year
from this record level, but they will still be good enough for plants to operate at high rates.
“It’s going to be strong
again in 2016,” York said
in an interview in
Houston. “Crude runs are
going to reach another
all-time high.”
Refining can be a cyclical
business. Less than four
years ago Marathon’s
refining margins were just
39 cents a barrel for a
quarter. Companies are
using the current windfall
to diversify by buying
pipelines and other
assets that offer more
stable profits because
they’re less impacted by
commodity prices.
Marathon is trying to buy MarkWest Energy Partners LP, a natural gas gathering and transporting
company. Valero said it may exercise an option to take a 50 percent stake in Plains All American
Pipeline LP’s $900 million Diamond oil pipeline.
“Refining is cyclical. Pipelines and storage are always going to be in demand,” Larry said. “It’s a
safety net for them if things start to turn south sooner than they expect.”

NewBase Special Coverage
News Agencies News Release 02 Nov.. 2015
Vehicle standards around the world aim to improve fuel
economy and reduce emissions. Source: U.S. EIA- Global Comparison: Light-duty Fuel Economy and GHG
Nine countries and regions, which together account for 75% of global fuel consumption by light-
duty vehicles, have adopted mandatory or voluntary standards for increasing fuel economy and
reducing greenhouse gas (GHG) emissions.
The intent and structure of these emissions policies vary widely around the world. Because fuel
economy and GHG emissions policies have large effects on fuel consumption, vehicle standards
are one of the most important components of future demand for liquid fuels.
One area of difference is the metric specified in the standard, even though these metrics are
related: fuel economy and carbon dioxide (CO2) emissions are directly related (improvements in
fuel economy directly translate to reductions in CO2 emissions), and CO2 emissions are a subset
of GHG emissions. Some standards specifically focus on reducing GHG or carbon dioxide (CO2)
emissions, while others specifically focus on improving fuel economy. Still others focus on some
combination of these objectives.
• Emissions reductions. The European Union (EU), Canada, and India have standards that
aim to reduce emissions. The EU and Indian standards focus on CO2 emissions, while the
Canadian standard includes restrictions on all GHGs.
• Fuel economy. Brazil and Japan have standards that aim to increase fuel economy,
requiring light-duty vehicles to achieve a certain miles-per-gallon rating.
• Fuel consumption. China has a fuel-consumption standard that requires light-duty
vehicles to reduce fuel consumption to achieve a certain number of gallons per mile. The
fuel consumption standard is inversely equivalent to the fuel economy standard. Instead of
increasing fuel economy, light-duty vehicles must decrease the gallons consumed per mile.

• Combination or option. The United States and Mexico have both fuel economy and GHG
standards, and manufacturers must satisfy both. By contrast, South Korea's light-duty
vehicle manufacturers have the option to choose which standard to meet, either fuel
economy or GHG standard.
The structure of vehicle standards also differs.
• Footprint-based corporate average. The United States, Canada, and Mexico have
footprint-based corporate average standards. This standard sets GHG emission and fuel
economy targets (in the United States and Mexico) and GHG emission targets (in Canada)
based on the footprint of the vehicle, which is its wheelbase multiplied by average track
width. The overall target of the manufacturer is determined by averaging the target for each
footprint the manufacturer produces.
• Weight-based corporate average. Brazil, the EU, India, and South Korea have weight-
based corporate average standards. These standards are similar to the footprint-based
standard except they are based on vehicle weight.
• Weight-class based per vehicle and corporate average. China has a weight-class
based per vehicle and corporate average standard that is more stringent than the weight-
based corporate average standard alone. Light-duty vehicle manufacturers in China must
meet a fuel consumption standard at each weight class level and must meet an overall
corporate average fuel consumption standard.
• Weight-class based corporate average. Japan has a corporate average standard based
on weight class. Under Japan's standard, each light-duty vehicle in a weight class must
meet the standard for the weight class rather than an overall manufacture standard.
Fuel economy and emissions standards are typically applied to the vehicles that a company sells within a
country, rather than the vehicles that a particular country produces. For instance, U.S.-manufactured
vehicles have to meet European standards for vehicles sold in Europe, and Japanese standards for those
sold in Japan.
Even though light-duty vehicle manufacturers have to meet different standards in different countries, as
more countries adopt light-duty vehicle standards, many of these differences in standards will likely persist
because of variations in policy goals and consumer preferences across countries. However, because of the
global nature of light-duty vehicle manufacturing, fuel economy for all new vehicles will likely increase, and
GHG emissions per vehicle will likely decrease globally under these standards.

Harsh realitiea finally push US champions of shale oil into retreat
FT + Gulf News + NewBase
Prolific output from US shale formations in recent years have thrown the world oil market off
balance. But a long market slump is now forcing shale producers to retreat.
US crude oil output hit a 44-year peak of 9.6 million barrels a day in April then began to decline.
By summer next year it will have fallen by a tenth, the US Energy Information Administration (EIA)
forecasts.
It took months for US supplies to finally reverse in response to the tumble in oil prices that started
in mid-2014. If prices creep higher again, any rebound in shale production will come with a similar
lag, analysts say.
The US shale energy industry has made a stunning contribution to the oil market glut. Of the
nearly 5million barrels/day in net global crude oil supply added between 2009 and 2014, 3.3
million barrels/day was from the US, EIA data show. World supply stood last year at 93 million b/d.
Most new US supply flowed from states such as North Dakota and Texas, where drillers used
improved drilling techniques to extract oil from previously difficult shale rocks.
After the rapid fall in the price of crude from mid-2014, analysts were at first surprised that US
shale operators did not immediately capitulate by cutting production. Output continued to climb
towards its peak in April this year even though drillers began to stop some rigs the previous
October, according to Baker Hughes, the oilfield services company.

There were several reasons for this state of affairs. Some investors betting on an oil price
rebound were content to extend capital to beleaguered drillers on advantageous terms. Some
shale producers had also managed to hedge their revenues to protect against declines in
revenues caused by a fall in the price of crude.
Frackers also extracted more oil out
of each well they drilled, with
innovations including the funnelling of
more sand into drilling holes to prop
open rocks. In North Dakota’s Bakken
shale region, new oil production per rig
has risen by 43 per cent in the past
year, according to EIA.
James Volker, chief executive of
Whiting Petroleum, a leading Bakken
producer, told a conference in early
October: “So while we’re slamming on
the brakes here and while we’ve
reduced our drilling rig count from 24
in the middle of last year to eight today, we were nevertheless able to set production records.”
Finally, shale companies’ costs have declined between 20-30 per cent as they negotiate better
terms with contractors keen to keep their equipment in use.
This has kept some operators afloat despite lower oil prices. However, the longer the slump
persists, the tougher life has become for operators. While wells in the best areas can break even
with oil at $30(Dh110) a barrel, some marginal ones require prices of $70 or higher. As a result,
producers are turning away from marginal areas and leaving some drilled wells uncompleted for
now. Producers under financial pressure have in some cases decided to reduce capital spending.
As a result, shale production is now falling.
The next victims of lower prices in North America will be projects with longer investment
timescales than shale, such as those in the Gulf of Mexico and the oil sands of Canada. Billions of
dollars of cutbacks in these areas will be felt later in the decade, analysts say.
Should there be a sudden rise in the price of crude, the shale industry could once again be
spurred into increasing supplies. The question for oil analysts is how quickly this might happen.
In the short term the backlog of drilled but uncompleted wells — known as Ducs — could be
brought into service fairly quickly. However, it takes months to drill new wells. Given this time lag
and the unpredictability of supply disruptions across the world, a smooth return of shale output is
not guaranteed.
Much will depend on the path of supply elsewhere, including Iran as it returns to the market after
reaching a deal on its nuclear programme with western powers. Also uncertain is whether the
Opec cartel will sustain its current policy of supplying unlimited volumes to put pressure on higher-
cost producers such as US shale.
In spite of offering a path to energy self-sufficiency, the fate of the shale sector lies in the hands of
foreign rivals.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 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 02 November 2015 K. Al Awadi

New base 719 special 02 november 2015

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