New base 791 special 21 february 2016

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NewBase 21 February 2016 - Issue No. 791 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Training the UAE’s nuclear pioneers at the Barakah plant
The National - Caline Malek
The Emirates Nuclear Energy Corporation (Enec) is working to deliver safe, clean, efficient and
reliable nuclear energy to the UAE – energy that is needed to support the country’s social and
economic growth.
Established in December 2009 by President Sheikh Khalifa, Enec specialises in the deployment,
ownership and operation of peaceful nuclear energy plants within the UAE. This new and
abundant source of low-carbon electricity will diversify the country’s energy supply, support energy
security and help to power the future growth and prosperity of the UAE.
By 2020, Enec’s four nuclear energy units will provide up to a quarter of the nation’s electricity
needs and save up to 12 million tons of carbon emissions every year. The five consoles in the
Barakah nuclear plant training simulator may not look like much, but they are a second home for
students learning to operate the complex systems at the plant.

The Emirati trainees, in groups of five at a time, spend hundreds of hours during the final six
months of the two-year Energy Pioneers programme behind those consoles. They learn to deal
with an array of potentially catastrophic steam generator tube ruptures, jammed valves or leaks at
the nuclear facility.
“Part of Fanr’s [the Federal Authority for Nuclear Regulation] requirement is to be trained on
fundamentals related to physics and the nuclear power plant,” said reactor operator Ali Ibrahim Al
Nuaimi. “You study courses on the system, you have to understand everything that’s on the plant.
And then you go through the simulator training, which is aimed at gaining the highest level of
knowledge and training on a real-life plant.”
The software developed in the system simulates all the nuclear plant’s systems, including the
reactor itself, the steam generator, turbines, controls and the condensating system. “We make
sure we have full power and we develop scenarios to see how operators will mitigate accidents,”
said simulator manager Cherif Desouky.
“Every one or two years, operators need to get a requalification, like a pilot. It’s a core element of
the power plant and without the simulator, you can’t run the plant and you wouldn’t have any
operator’s licence.”
Korean, American and French experts train students in the simulator. The first part of the training,
which lasts a year and a half, begins in Abu Dhabi in the fields of reactor operations, radiological
protection and maintenance.
The Emirates Nuclear Energy Corporation (ENEC) completed cold hydrostatic testing at Unit 1 in Barakah, a
crucial step in preparing the plant for commercial operations. The testing verified that welds, joints, pipes and
components of the reactor coolant system and associated high-pressure systems meet quality standards, as per the
regulations of the Federal Authority for Nuclear Regulation (FANR). Unit 1 is now more than 84 percent
complete and Unit 2 is 64 percent complete. Overall, construction of Units 1 to 4 is now more than 58 percent
complete. The switchyard connects the generation capabilities of the plant with the transmission network of the
Abu Dhabi Transmission and Despatch Company (TRANSCO) and the Gulf Cooperation Council
Interconnection Authority (GCCIA), allowing electricity that will be generated at the plant to be carried to UAE
homes and businesses. This also enables the plant to draw power from the transmission grid to support
commissioning and operational testing. The energization is the culmination of two and a half years of work
involving more than 1,000 highly skilled ENEC and TRANSCO experts.

In between breaks, students must also do on-the-job training in South Korea. The next step is six
months of on-site experience in the plant’s “red zone” where students are expected to complete
1,040 hours.
Training courses are being held to get as many young Emiratis on board to meet shortages of
skilled staff in the industry. “The nuclear programme is a long-term programme extending beyond
100 years,” said Hamad Alkaabi, UAE permanent representative to the International Atomic
Energy Agency.
“Development of a qualified local cadre is crucial for the long-term success and sustainability of
the sector. Training young Emiratis and their early involvement in the sector is key to ensuring that
they are qualified and ready for future leading positions.”
With electricity demand expected to increase beyond 2020, he said the UAE was very likely to
consider expanding the programme by building additional reactors to the present four. “We will
see more trained Emirati engineers and technicians working at the plant and supporting its
operation,” said Mr Alkaabi.
The nuclear plant is expected to be completed on time and on budget, with the first reactor
operational next year. “It’s going extremely well when compared with any other plant in the world,”
said Lady Barbara Judge, former head of the UK Atomic Energy Authority.
“I am incredibly impressed with the diligence of the people working on it and how committed they
are to getting it done to a very high standard.” Emiratis should feel that the nuclear plant is their
own, said Lady Judge, who is also a member of the international advisory board for the
development of nuclear energy in the UAE.
“They should have their own people running their own plant for the benefit of their country. That
would be true energy independence,” she said.

She said a shortage of skilled staff in the industry was a global challenge. “I think the Emiratis are
handling it the best way they can by sending their own students abroad to various good
universities in the US and the UK to get trained,” she said.
“They’ve also set up courses in Abu Dhabi to train many young people while bringing people
onboard as apprentices. So they’re trying to set it up as one of the most impressive and important
professions for young people by giving them the means to acquire the necessary education to be
effective for the job at the plant.”
Christer Viktorsson, director general of Fanr, said the authority’s highest priority was to train and
educate young Emiratis who would oversee nuclear energy production in the UAE for decades to
come.
“Nuclear regulators are depending on a corps of skilled and experienced staff,” he said. “Some of
those Emiratis will serve as resident inspectors at the Barakah nuclear power plant, helping to
ensure compliance with all the regulations.”
Barakah by numbers:
• More than 19,000 people are currently working at the site of the Barakah nuclear power plant.
• All four units and the associated subsidiary buildings are now more than 58 per cent complete.
• By 2020, it will need approximately 2,500 highly trained personnel — the operators, engineers,
technicians and support staff responsible for the safe operations of the plant.
• All four units will save up to 12 million tonnes of carbon emissions every year.
• There have been 7,500 dedicated safety training sessions since the beginning of the programme
• 41,000 man-hours have been dedicated to performing rigorous quality audits
• 1,070,376 cubic metres of concrete have already been used in the construction of the Barakah
units, which is more than three times the total value of concrete used in the Burj Khalifa
• More than 1,700 employees work at Enec, of which more than 61 per cent are Emirati
• More than 20 per cent of Enec employees are women
• More than 90 women are based in Barakah
• More than 27 per cent of students in Enec’s educational programmes are female
• Around 400 students are enrolled by Enec at top academic and professional institutions to
prepare to operate the plant
• Enec hosted 21 public forums so far attended by more than 6,600 UAE residents.
• Enec selected a consortium led by the Korea Electric Power Corporation (Kepco) to design, build
and help operate the plant after a year-long evaluation process run by a team of 75 experts in the field.
• As of December 2015, Unit 1 is more than 84 per cent complete, Unit 2 is 64 per cent complete,
Unit 3 is 41 per cent complete and Unit 4 is 25 per cent complete.

Indonesia

Russia Sees Oil Output Slump in Worst Price Case Amid OPEC Talks
Bloomberg - Elena Mazneva
Russian oil production may slump 14 percent in the next five to ten years under a worst case
scenario prepared by the Energy Ministry.
Crude output may drop to 460 million metric
tons (9.2 million barrels a day) by 2020-2025
from 534 million tons last year, before starting
to show a slight growth, the Energy Ministry’s
press service said by e-mail Thursday, in
response to a report in Vedomosti newspaper.
The worst case, prepared for the nation’s long-
term energy strategy, envisages oil prices
remaining at about $31 to $33 a barrel in 2016-
2017 with a rebound to $42 in 2020, it said.
The scenario assumes demand in China and
other Asian nations slows on faltering economic
growth, Middle East countries boost cheap
supplies and the U.S. increases shale output,
while other countries pump more oil after
currency devaluations cut production costs, the
ministry said.
Vedomosti reported Thursday that a “stress"
scenario for the country’s oil industry was aired
yesterday by Energy Minister Alexander Novak
at a meeting of a government energy
commission.
Russia, which relies on energy for more than 40 percent of its budget, is battling its longest
recession in two decades as its economy is battered by the drop in oil prices and international
sanctions over the Ukrainian crisis. It has been planning to keep its crude output stable at about
525 million tons through 2035, drafting its budget with oil averaging at least $50 for at least the
next three years.
Oil Deal
Brent crude, the global oil benchmark, traded at $35.01 a barrel at 6:33 a.m. in London, rising for
second day on talks between global crude exporters over output levels.
Russia and Saudi Arabia came to a preliminary agreement on Tuesday to freeze output at
January levels to support prices. The deal hinges on the cooperation of other suppliers. Iran, once
the second-biggest producer in OPEC, still hasn’t said whether it would deviate from plans to
restore exports after international sanctions were removed last month.
Russia’s Energy Ministry calculated its worst case scenario assuming that producers have limited
access to financing, which would cut investments by at least 10 to 15 percent. Much will depend
on the state’s tax policies, it said.
Even if the worst scenario comes about, crude prices should rebound after 2020 as global oil
oversupply would decrease given spending cuts, according to the ministry.

Norway: NPD reports January 2016 production figures
Source: NPD
Norway's NPD reports that preliminary production figures for January 2016 show an average daily
production of about 2,068,000 barrels of oil, NGL and condensate. This is 13,000 barrels per day
(about 0.5 percent) more than December 2015. Total gas sales were about 11.1 billion Sm3,
which is 0.1 GSm3 less than previous month.
The average daily liquid production in January was: 1,627,000 barrels of oil, 410,000 barrels of
NGL and 32,000 barrels of condensate. The oil production is about 0.5 percent above the oil
production in December last year. The oil
production is about 2 percent above the NPD’s
prognosis for the month.
The total petroleum production in January is
about 21.3 million Sm3 oil equivalents (MSm3
o.e.), broken down as follows: about 8.0 MSm3
o.e. of oil, about 2.2 MSm3 o.e. of NGL and
condensate and about 11.1 MSm3 o.e. of gas for
sale. The total volume is 1.4 MSm3 o.e. higher
than in 2015.
Final production figures from December 2015
show an average daily production of about 1.643 million barrels of oil, 0.412 million barrels of
NGL and condensate and a total of 11.2 billion Sm3 saleable gas production.

US: Oil production in federal Gulf of Mexico projected to reach
record high in 2017
Source: U.S. Energy Information Administration, Short-Term Energy Outlook, February 2016
U.S. Gulf of Mexico (GOM) crude oil production is estimated to increase to record high levels in
2017, even as oil prices remain low. EIA projects GOM production will average 1.63 million barrels
per day (b/d) in 2016 and 1.79 million b/d in 2017, reaching 1.91 million b/d in December 2017.
GOM production is expected to account for 18% and 21% of total forecast U.S. crude oil
production in 2016 and 2017, respectively. Production in the GOM is less sensitive than onshore
production in the Lower 48 states to short-term price movements.
However, decreasing profit margins and reduced expectations for a quick oil price recovery have
prompted many GOM operators to pull back on future deepwater exploration spending, reduce
their active rig fleet by scrapping and stacking older rigs, and restructure or delay drilling rig
contracts.
These changes added uncertainty to the timelines of many GOM projects, with those in the early
stages of development at greatest risk of delay or cancellation. Contributing to the forecasted
production growth are 14 projects: 8 that started in 2015, 4 starting in 2016, and 2 anticipated to
start in 2017.
During 2015, eight fields in the Gulf of Mexico came online. With the exception of Anadarko's
Lucius field, each of the fields was developed as a subsea well that is tied back to nearby existing
production facilities.
The use of subsea tiebacks allows producers to reduce both project costs and start-up times. The
Lucius field produces oil using a type of floating production platform that supports drilling,
production, and storage operations known as a truss spar.

The Lucius spar is the largest in Anadarko's fleet. It consists of a large, hollow, weighted cylinder
supporting a deck and is connected to an anchor on the seabed through a mooring system. Its
design provides increased stability in harsh offshore conditions.
Four fields are expected to start producing in 2016, including the Anadarko-operated Heidelberg
field, which began producing in January. Heidelberg is producing at a spar that uses the same
design as the Lucius truss spar, allowing the company to reduce development costs.
Shell's Stones field
development uses
the first floating
production, storage,
and offload (FPSO)
vessel in the GOM.
FPSOs allow the
development of fields
that are complex, that
have unique reservoir
properties, and that
do not have existing
infrastructure.
Crude oil produced
from the Stones field
will be transported from the Stones FPSO using tankers to refineries along the U.S. Gulf Coast.
The other two fields expected to begin producing in 2016 (Gunflint and Holstein Deep) are subsea
tiebacks. Two additional projects are projected to begin producing in 2017, and both are expected
to be developed as subsea tiebacks.

South Africa: Prospects for Oil, Gas Exploration and Development
by Nicholas Newman|Rigzone
South Africa has very little in the way of proven oil and gas reserves. Exploration for oil and gas
started as far back as 1913 and, so far, has proved disappointing. During the 1990s, prospectors
and exploration companies, using modern survey techniques, discovered locally-useful but
globally-insignificant amounts of oil and gas. Today, while the petro-geology for oil looks modest,
the prospects for natural gas, whether conventional gas, shale gas or coal-bed methane (CBM)
gas, appear to be more promising.
Oil Discoveries have been Very Small So Far
South Africa has proven crude oil reserves of some 15 million barrels, located in the Orange Basin
off the west coast and the Bredasdorp Basin in south coast of Cape Province (source: Council for
Geoscience).
To date, even in terms of its proven crude oil reserves, finds by exploration companies have been
very small. Today's crude oil production by state-owned energy company PetroSA amounts to
less than 5,000 barrels per day and comes from the Oribi and Oryz fields, which are located in
Block 9 off South Africa's southern coast. In 2014, PetroSA reported a total oil production output of
some 160,000 barrels per day, made up largely from imports of 425,000 barrels per day of crude il
in 2014, according to South African Revenue Service data.
Eighth-Largest Shale Gas Reserves in the World
Recent estimates by the U.S. Energy Information Administration (EIA) put South Africa's
recoverable offshore gas at 9 trillion cubic feet (Tcf), while there is another 9 Tcf of unconventional

gas located in the arid Karoo desert and some 1.5 Tcf of CBM gas. South Africa is estimated to
have the eighth largest shale gas resources in the world.
Most of South Africa's natural gas produced by PetroSA comes from the maturing offshore
65,000-boepd (barrels of oil equivalent per day) Moss Gas F-A and South Coast Complex fields,
and is sent onwards via an onshore pipeline to the gas-to-liquids) facility in Mossel Bay in Eastern
Cape. However, all is about to change, according to Paul Eardley-Taylor who is responsible for
Standard Bank's Oil & Gas sector coverage activities for Southern Africa, across upstream,
midstream, downstream, "off South Africa's west coast is the 540-billion cubic feet Ibhubesi gas
field, which is now licensed for development".
Ibhubesi gas production is expected in late 2017, at an initial flow rate of 100 million standard
cubic feet per day. This gas will be delivered first to Eskom's 1,300-MW Ankerlig power station in
Atlantis, Cape Province, and eventually to a planned 800-MW independent power plant.
Rising Domestic Demand for Gas
South Africa currently consumes some 180 billion cubic feet of gas per year, of which imports of
120 billion cubic feet (Bcf) arrive by pipeline from central Mozambique for customers in
Johannesburg (source: EIA, January 2016). With the prospect of rising demand for gas in South
Africa, ROMPCO, the pipeline operator, plans to increase capacity from 88 million gigajoules per
year to 212 million gigajoules per year by the end of 2017 (source: Engineering News).
The main customer segments for
gas are power generation, GTL
production, heating and
manufacturing activities. Gas
provides about 3 percent of South
Africa's total installed power output
of 45,645 MW (source: Statistics
South Africa). Today's gas-to-
power program envisages
increasing gas power generation to
3.1 GW by 2025. To support the
gas-to-power program, and avert a
looming power crisis, South Africa
needs an interim solution as the
development of prospective gas
fields is at least a decade away.
Two main options are under consideration: increasing gas imports from neighboring
Mozambique's northern gas fields and LNG imports. The former would entail the construction of a
$6-billion, 1,615-mile long pipeline to link Johannesburg with the new fields. However, in the short-
to-medium term South Africa could rely on imports of gas by LNG tanker to perhaps Saldanha
port, either with a floating storage and regasification unit (FSRU) or a floating LNG (FLNG) import
terminal.
Oil Firms have a Renewed Interest in SA's Hydrocarbon Resources
The discoveries made to date bear no comparison with the significant finds off Argentina or the
North Sea gas fields. However, ongoing advances in technology and seismographic equipment

have kindled renewed interest in South Africa's hydrocarbon resources by some of the world's
largest oil companies.
According to Eardley Taylor, since 2012 "in respect of each of offshore and onshore (primarily
shale) blocks, leading industry participants such as Exxon Mobil, Eni, Anadarko, Shell, Statoil,
Total, Chevron (among others) are now involved in pre-drilling exploration".
In October 2015, Shell was given the go-ahead to start drilling in South Africa's Orange basin
(source: Fin24). In general, current exploration activities are focused on the Karoo Desert for
shale gas, on the North Coal fields for coal seam gas and for gas off the West and Southern
coasts of the Cape and Natal coasts.
However, the size of all of these resources is yet to be determined, a process which will take time.
Though Paul Eardley Taylor comments that "current estimates of yet-to-find resources are for …
trillions of cubic feet of gas and billions of barrels of oil", he also stresses that "this potential is
entirely untested at this point and is speculative".
Even with such an eye- watering prospect at hand, the exploration and development of South
Africa's oil and gas sector is likely to be slow and at least a decade away. Of more immediate
impact will be imports of liquid natural gas, which will facilitate a quick and substantial ramp-up in
power output by both state and independent gas power producers in coming years. As for
domestic oil and gas discoveries, turning a prospect into reality will require many years and lots of
money.

NewBase 21 February 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil down 4 percent as U.S. glut overshadows producer talks
REUTERS + NEWBASE
Oil prices fell 4 percent on Friday, with Brent down a third straight week, as record high U.S. crude
stockpiles intensified worries that a plan to freeze world output will do little or nothing to reduce
massive oil supplies already in the market.
A slide in the U.S. equity markets, which have for weeks been trading in tandem with oil, also
weighed on crude, traders said.
Brent crude settled $1.27, or 3.7 percent, lower at $33.01 a barrel. U.S. crude lost $1.13, also
finishing 3.7 percent lower at $29.64.
Even data from industry firm Baker Hughes showing the U.S. oil rig count at its lowest since
December 2009 after nine straight weeks of declines failed to lift crude prices.
Brent finished the week down 1 percent while U.S. crude ended flat after a particularly volatile
week for oil, where prices fell and rose as much as 5 percent in a day.
Oil has shed 70 percent from highs above $100 a barrel in a selloff that has seen little pause over
the past 20 months. Since last Friday though, some traders believed the market had seen a
bottom on talk that OPEC was on a plan to reign in production.
Oil price special
coverage

This week, Saudi Arabia, the lynchpin of the Organization of the Petroleum Exporting Countries,
along with Qatar and Venezuela, and non-OPEC member Russia, proposed to freeze output at
January's highs.
Iran, the main stumbling block to any production control due to its zeal to recapture market share
lost to sanctions, welcomed the plan without commitment. Iraq was also non-committal.
U.S. government data on Thursday meanwhile showed crude inventories rose 2.1 million barrels
to a new peak of 504.1 million last week, overshadowing the output freeze proposed by the
producers.
"There's a stark contrast between a freeze and a cut and the continued U.S. inventory builds will
show the ineffectiveness of any production caps," said Pete Donovan, crude broker at New York's
Liquidity Energy.
Analysts are generally of the view that U.S. stockpiles will rise amid seasonal spring refinery
maintenance works.
Saudi Oil Minister Ali Al-Naimi will deliver a keynote on Tuesday at the annual IHS CERAWeek
conference in Houston, his first public appearance in the U.S. since the kingdom OPEC's shock
decision in November 2014 to keep heavily pumping oil even though mounting oversupply was
already sending prices into free-fall.
On the positive side, U.S. shale producers, for the first time in months, were placing new hedges
to lock in 2017 prices at around $45 a barrel, prompting price recovery at the back end of the U.S.
crude futures curve.
Bank of America Merrill Lynch said in a note that if the output freeze worked and gasoline fuel
prices remained affordable, oil should rise to $47 a barrel by June.

The Stressed-Out Oil Industry Faces an Existential Crisis
Bloomberg - Dan Murtaugh
The Saudis may go public, OPEC’s in disarray, the U.S. is suddenly a global exporter, and shale
drillers are seeking lifelines from investors as banks abandon them.
Welcome to oil’s new world order, full of stresses, strains and fractures. For leaders gathering in
Houston next week at the IHS CERAWeek conference -- often dubbed the Davos of the energy
industry -- a key question is: what will break first? Will it be the balance sheets of big U.S. shale
companies? The treasuries of Venezuela and Nigeria? The resolve of Saudi Arabia, whose recent
deal with Russia to freeze output levels offered the first hint of a rethink?
After watching prices crash through floor after floor in the worst slump for a generation, the
industry is eager for answers. Insiders say it’s not too hard to visualize what markets might look
like after the storm -- say five years down the line, when today’s cost-cutting creates a supply
vacuum that will push up prices. But it’s what happens in the meantime that’s got them scratching
their heads.
“This is a weird thing for a market analyst to say because it’s usually the opposite case, but I have
more conviction in my five-year outlook than my one-year outlook,” said Mike Wittner, head of oil
market research for Societe Generale SA. “Maybe I’m letting my head get turned upside down by
the last couple months.”
Seeking clarity at closed-door sessions, cocktail hours and water-coolers in Houston will be some
of the industry’s biggest players, from Saudi Petroleum Minister Ali al-Naimi to Royal Dutch Shell
Plc Chief Executive Officer Ben Van Beurden.
In a less volatile year, the long-term viability of fossil fuels might have been high on their agenda
after December’s breakthrough climate deal in Paris. But within the industry, that debate has

“fallen into the abyss of $27 oil,” said Deborah Gordon, director of the Carnegie Endowment for
International Peace’s energy and climate program.
“It seems like it’s never a good time,” she said. “You can’t have these conversations when oil is
$125 because then you can’t get it out of the ground quickly enough. And you can’t have it at $27
because you’re just trying to survive.”
Shale Boom
U.S. shale drillers had a key role in bringing prices that low, by adding 4 million barrels a day in
less than four years -- almost like a new OPEC member materializing overnight. Natural gas has
mirrored the pattern, with surging output and plunging prices.
Oil Prices
Now the companies are victims of their own success. As many as 74 face significant difficulties in
sustaining debt, according to Moody’s Investors Service. The effective yield of the Bank of
America Merrill Lynch High-Yield Energy Index rose to more than 21 percent on Feb. 11, the most
since it was created in 1997.
So far, shale bankruptcies have been limited to smaller outfits like Magnum Hunter Resources
Corp. and Swift Energy Inc. Some investors are worried that Chesapeake Energy Corp., the
second-largest natural gas producer in the U.S., could be the first big fish out of the water: its
shares have plunged 90 percent in the past year.
The one thing the stress on companies hasn’t done is destroy production. Engineers have found
ways to lower costs and boost output at oil wells, allowing cash-starved drillers to keep enough
rigs active so that output is still within 5 percent of last year’s high.
OPEC Output
Meanwhile, on the international scene, the Saudi-Russian accord announced Tuesday, to which
Venezuela and Qatar have also signed up, would cap production at January’s levels -- a record
high in Russia’s case, and not far off for the Saudis. Iran isn’t a party to the plan, and its imminent
return to world markets could add to the glut. Historically the No. 2 OPEC producer, the Islamic
Republic is preparing to ramp up exports after sanctions were lifted last month.
Brent crude failed to sustain a rally after the plan was announced, suggesting that traders don’t
see any change in the underlying picture: Suddenly, there’s oil everywhere. Without a rebound in
prices, the consequences for governments -- from Russia to Nigeria to Venezuela -- range from
grim to catastrophic.
Russia has a relatively diversified economy, but it’s still running the biggest deficit in five years,
and selling assets to finance a stimulus program. Nigeria, which depends on oil for almost all of its
exports, is battling to stave off a currency devaluation and pleading for development loans to
replace the missing petrodollars. Venezuela is even worse off, with debt defaults looming and an
inflation rate estimated by the International Monetary Fund at 275 percent.
“You’ve got half of OPEC in existential crisis as to whether they can be viable governments at this
point,” said Allen Gilmer, chief executive officer of energy consulting firm Drilling Info Inc. in
Austin, Texas.
Saudi Arabia

As usual in an OPEC meltdown, all eyes have turned to Saudi Arabia, the world’s top exporter and
architect of the cartel’s keep-pumping strategy as it seeks to defend market share.
While the Saudis have deeper pockets than most of their OPEC peers, they haven’t been immune
from the price turmoil -- especially with wars in Yemen and Syria to finance. Reserves tumbled by
about $115 billion last year. Saudi rulers have slashed subsidies, announced new taxes and said
they’re even considering selling shares in the state oil giant, Saudi Aramco.
“We don’t want a reduction in supply,” Al-Naimi said after the Russian deal. But he also said it was
only the “beginning of a process.”
The Saudi minister will address IHS CERAWeek’s main hall on Tuesday morning, in the week’s
most eagerly anticipated event. A packed audience will be hoping he elaborates.
“There’s a short fix, and a long fix,” said Andrew Lebow, a senior partner at Commodity Research
Group. “Are we going for the short fix of a production cut, or the long-haul slog of rebalancing the
market? That’s what everyone at CERA is going to be talking about. And it’s all dependent on the
Saudis.”
Russian oil and the freeze talk
Major oil-producing nations, seeking to curb a flood of supply that’s cut prices almost in half in the
past year, agreed to wrap up talks on capping output by the start of March, according to Russia’s
Energy Ministry.
“We agreed that all consultations should be completed by March 1,” Energy Minister Alexander
Novak told state TV on Saturday. Countries publicly supporting the deal export about three-
quarters of the world’s crude, so it “would be a positive signal” for the market, Novak said.
Saudi Arabia, Russia, Venezuela and Qatar reached a preliminaryagreement in Doha on Tuesday
to freeze output at January levels if other states join them. The deal’s success hinges most
notably on the attitude of Iran, which has vowed to raise production by 1 million barrels a day after
sanctions on the nation’s exports were lifted last month.
Iran Constructive
Iran was “constructive” on the Doha outcome, although the country hasn’t made any statements
on whether it may join the pact, Novak said. Consultations with nations that aren’t members of the
Organization of the Petroleum Exporting Countries are also possible, he said, when asked about
Mexico and Norway.
Talks with OPEC on cuts also aren’t ruled out if the market worsens, Interfax reported Saturday,
citing Vladimir Voronkov, Russia’s envoy for international organizations based in Vienna.
“We’ve worked out a common position,” Novak said, commenting on the deal. “We discussed
various options, including doing nothing and cutting production.”
An oil price at $50 a barrel is acceptable for exporters and consumers over the long term, he said.
Brent crude, a global benchmark, traded at about $33 on Friday after dropping 45 percent over the
past year.

NewBase Special Coverage
News Agencies News Release 21 February 2016
Japan LNG imports fall 14 percent in Jan, biggest drop since’09
REUTERS + NEWBASE
With Asian spot LNG prices remain low, at around $5.50 per million British thermal units
Japan's liquefied natural gas (LNG) imports fell 14.1 percent in January, its biggest drop in nearly
seven years, as utilities curbed purchases on slowing demand and nuclear power output picked
up after the Fukushima disaster in 2011 drove LNG imports to record highs.
Customs-cleared LNG imports by the world's top consumer last month fell to 7.245 million tonnes
from a year earlier, marking a fifth straight month of declines, preliminary trade data from the
Ministry of Finance showed on Thursday.
LNG imports fell in 2015 for
the first time since the
Fukushima nuclear disaster,
and are set to fall further in
the coming years as nuclear
output gradually rises,
industry analysts have said.
Asian spot LNG prices
remain low, at around $5.50
per million British thermal
units (mmBtu) for March
delivery, amid mounting
supply overhang,
contributing to a more than
halving in costs for LNG
purchases.
Imports of thermal coal for power generation also declined 13.2 percent in January to 9.72 million
tonnes, the data showed. Japan, the world's fourth-biggest crude oil buyer, imported 3.44 million
barrels per day (16.93 million kilolitres) of crude oil in January, down 3.4 percent from the same
period last year.
Two nuclear operators, Kyushu Electric Power and Kansai Electric Power, have resumed
operations at three reactors after stringent safety screening imposed after the Fukushima disaster,
and have projected their first profits in five years.
Kyushu Electric, which restarted two reactors last year, said it sees a 78 billion yen ($684.87
million) boost to its finances in January-March by reducing fuel costs and power purchases from
rivals.
Kansai Electric, which is aiming to restart a second reactor later this month, said it is projecting a
3.6 percent reduction in fossil fuel consumption to 3.74 million tonnes in LNG equivalent in
January-March.

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 21 February 2016 K. Al Awadi

New base 791 special 21 february 2016

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