ACWA Power's Bokpoort CSP project in South Africa

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NewBase 16 March 2016 - Issue No. 809 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Saudi ACWA Power’s Bokpoort CSP project in South Africa unveiled
Saudi Gazette
Trade Ministers from South Africa and Saudi Arabia jointly inaugurated the Bokpoort
Concentrated Solar Power (CSP) Project, which has been developed by a consortium led by
ACWA Power in the Northern Cape Province of South Africa, marking the official launch of the
R5 billion project.
South Africa’s Trade and Industry Minister Rob Davies and Dr. Tawfig Fawzan Alrabiah, the
Kingdom of Saudi Arabia’s Minister of Commerce & Trade officiated at the ceremony at the site
which will provide enough power to supply more than 200,000 homes.
The project was developed as part of the government’s Renewable Energy Feed in Tariff (REFIT)
Procurement Program, and will contribute significantly to the government initiative to augment
much needed power capacity, attract foreign direct investment, and create jobs while also
stimulating the country’s economy.

The tariff offered by ACWA Power at the second procurement window was 12% lower than the
cap set by government for CSP technology at that round; in line with ACWA Power’s mission to
deliver reliable power at the lowest possible cost, thereby contributing to the economic
development of South Africa and social welfare of its citizen.
“The formal inauguration of the Bokpoort CSP plant is a significant milestone in supplying South
Africa with reliable and cost competitive renewable electricity,” said ACWA Power Chairman,
Mohammad Abunayyan. “The success of the project demonstrates a robust partnership between
the Government of South Africa, through the Department of Energy, and ACWA Power.”
“We see this as the start of an enduring partnership with South Africa to augment the foundation
for economic growth and social development” he added.
Equipped with more than nine hours of thermal storage capacity, the Bokpoort CSP plant operates
like a giant rechargeable battery. This unique utility scale storage system allows this power plant
to feed over 200,000 South African households with electricity during the day and night.
Bokpoort CSP is utilizing the only reliable renewable technology available to South Africa today at
a commercial scale to cover the country’s daily evening peak demand from 5pm to 9pm which is
crucial for increasing sustainable supply for Eskom, the South African public electricity utility.
Chris Ehlers, the company’s managing director for the Southern Africa region said: “We are here
to serve the nation and to contribute to its development. Our commitment to the development of
South African economy beyond reliably supplying renewable energy at a cost competitive tariff is
demonstrated by the R2 billion worth of locally sourced components made in South Africa that has
been used in the construction of this plant and the creation of 1,300 construction jobs.”
“Furthermore, In addition to sharing 5% of the ownership of this business venture with the local
community via a community trust and 5% ownership with the national non-profit organization,

LoveLife, we have also committed R5 million to date in providing education and training for people
from the local community and in improving social infrastructure in the area,” he said.
ACWA Power, headquartered in Saudi
Arabia is a developer, investor, co-owner and
operator of a portfolio of power generation
and desalinated water production plants with
presence in 12 countries, with an investment
value in excess of $32 billion, which can
generate 22.8 GW of power and produce 2.5
million m3 /day of desalinated water.
The project has been highly recognized throughout the industry, recently being awarded the title of
African Community Project of the Year at the African Utility Week Industry Awards as well as
Project Finance ‘Deal of the Year’ by PFI, and World Finance’s Solar Deal of the Year.
Bokpoort CSP plant is the first in a series of investments in the power sector that ACWA Power is
making in South Africa. The company is expecting to commence construction on the 100 MW
Redstone CSP Project, also in Northern Cape, and is awaiting the outcome of tender submissions
for a 300 MW coal-fired plant in Mpumalanga and another 150 MW CSP plant also at Northern
Cape.
Bokpoort

Qatar:Economic diversification reins in oil impact: Minister
The Peninsula
Qatar’s ambitious economic diversification programme has helped the country check
unprecedented global oil price crash impact, Minister of Economy and Commerce H E Sheikh
Ahmed bin Jassim Al Thani stated yesterday.
Delivering the opening address at the MEED’s Qatar Projects
conference, the Minister said that growth of Qatar’s non-oil
economy has been expedited and the country is well positioned to
meet its 2030 vision, in which economic diversification is a key
component. He pointed that the non-oil sector grew at an
accelerated pace over the recent years, to contribute 49 percent
to the gross domestic product (GDP) in 2014.
The Government, committed to its development role, has been
successful in introducing new legislative reforms that have been established to increase private
investment in the country. .“State legislation such as the New Companies Law has been put in
place to create an investment environment to allow investors to participate in all aspects of Qatar’s
economy”, he said.
He said the Ministry is currently working on a number of other initiatives as well, to boost private
investment, including establishing a public-private-partnership (PPP) frame work. The plans for
new free zones is to be implemented by 2019, which would plug the gap in logistics.
“The ministry is currently working on reinforcing the principle of public private partnership to further
bolster the economic diversification programme. The ministry’s decision to develop the logistics
zones projects was part of this strategy. Covering an area of about 9 million sqm, the project is
aimed at meeting the demands of the domestic market in the logistic and storage sector,” the
Minister said.
Qatar to pass law on PPPs by year-end
Qatar aims to enact a law covering the use of public-private partnerships (PPPs) by the end of
2016, part of efforts to boost its fledgling private sector and ease the strain on government
finances caused by low oil prices.
Qatar’s ministry of economy and commerce will submit a draft PPP law to the cabinet by August,
Saud Al Attiyah, an official at the ministry, said yesterday. “We hope to have the framework
completed and start implementing the law by the end of the year,” he said.
In PPPs, private investors take stakes in projects
along with the government, bearing part of the
risk and sharing profits.
Qatar has used the structure in the utility and oil
and gas sectors — in 2015, Qatar General
Electricity and Water Corp signed a contract with
a Japanese-led consortium to develop a $3bn
water and power project — but the new law
would make PPPs easier to operate and expand
their use into other sectors.

India Mulls Shutting Oldest Nuclear Plants Amid Mounting Costs
Bloomberg - Rajesh Kumar Singh
India may shut two of its oldest reactors almost five decades after they went into operation as
power tariffs aren’t keeping pace with maintenance costs, according to Sekhar Basu, secretary at
the Department of Atomic Energy.
The two reactors at Tarapur, in the western state of Maharashtra, suffer frequent maintenance
shutdowns that make them unprofitable, Basu said in a phone interview. They earn about 0.89
rupees (1 cent) for every kilowatt hour of electricity produced, which isn’t enough to sustain
operations. Nuclear plants in India received an average tariff of 2.78 rupees per kilowatt hour in
the year ended March 2015, according to the Department of Atomic Energy.
“We are pouring in money into the reactors rather than making income from them,” Basu said. “At
the current tariff, it’s become unviable to run the two reactors and we may be forced to shut them
down if the tariff is not increased.”
Nuclear Power Corp., the nation’s sole operator of nuclear power plants, may approach the
electricity regulator for a tariff increase when operations become unsustainable, Basu said.
Nuclear Power spokesman N. Nagaich couldn’t be reached on his office phone for a comment.
Sanjeev Kumar, chairman at Maharashtra State Electricity Distribution Co., which buys power
from the reactors, didn’t respond to phone calls and a text message sent on his mobile phone.
The boiling water reactors, which can produce 160 megawatts each, were supplied by General
Electric Co. and started operating in 1969, marking India’s foray into nuclear energy. India plans to
raise atomic power capacity more than ten-fold by 2032 as part of its clean-energy drive.
‘Significant Improvements’
The nation’s older reactors, including the two at Tarapur, have gone through “significant” safety
improvements based on periodic reviews, according to India’s Atomic Energy Regulatory Board.
Two other reactors, 540 megawatts each, started at Tarapur in 2005 and 2006.
Tarapur 1 and 2 aren’t capable of in-service inspections, like some newer reactors, and need to
be cooled down for safety inspections, which are frequent, Basu said. One of the two reactors has
beenoffline since Sept. 2015, according to a March 9 Central Electricity Authority report. The
reactors are under International Atomic Energy Agency’s safeguards and run on imported
uranium.
S. Harikumar, a spokesman at Atomic Energy Regulatory Board, said the two reactors are safe
and don’t pose any risks.

Senegal: Cairn Energy spuds BEL-1 offshore Senegal
Source: FAR
JV partner FAR reports that, following the successful drilling of the first two appraisal wells
offshore Senegal, the third well to be drilled by Cairn Energy as part of the SNE oil field
appraisal program offshore Senegal, BEL-1, has been spudded.
The BEL-1 well will be drilled in approx. 1,100 metres of water and drilled to a TDVSS (total
vertical depth subsea) of approx. 2,757 metres before an evaluation program including logging
and coring is undertaken (refer figures 1 and 2).
The aim of the appraisal program is to
progress towards proving a minimum
economic field size for the SNE
discovery, which FAR estimates to be
approx. 200 million barrels of oil. In
addition, the BEL-1 well will drill
the Bellatrix exploration
prospect which will evaluate
the untested Buried Hills play. BEL-1
will also be deepened to appraise the
northern portion of the SNE oil
Drilling of the BEL-1 well will be followed
by a wireline logging and coring program
before the well is plugged and
abandoned according to plans. BEL-1
operations are expected to be completed
next month.
FAR and its joint venture partners will be
operating a tight hole policy, and
therefore FAR does not anticipate
making any further announcements regarding the drilling program until the BEL1 well has
reached TDVSS.

Tanzania: Aminex announces Kiliwani North update
Source: Aminex
Aminex has advised that the final well integrity testing of the Kiliwani North-1 well ('KN-1') has
been concluded, recording a high tubing pressure reading relative to the other producing wells on
Songo Songo Island. A wellhead control panel has been installed and all work required by the
Company prior to gas
production will shortly be
complete.
Tanzania Petroleum
Development Corporation
('TPDC') has provided a
revised work schedule and
informed the Company that the
commissioning of the Songo
Songo Island gas plant is
expected to commence in early
April. During the
commissioning programme,
the initial production rates will
be managed to allow for
testing of the new gas
processing facility and related
pipelines.
All KN-1 gas will be sold to the
TPDC at wellhead for an
agreed price of $3.00 mmBTU
(approx. US$3.07 per mscf),
payable in US dollars, and will
ultimately be transported by
pipeline to Dar es Salaam,
where it will be sold into the
local Tanzanian market.
Aminex CEO, Jay Bhattacherjee,
commented:
'The successful conclusion of the well
integrity tests and installation of the
wellhead control panel finalises the
Company’s preparations prior to the
commissioning of the new Songo
Songo Island processing facilities.
Aminex looks forward to the
commencement of gas production and
revenues from Kiliwani North.'

US: Obama Bars Atlantic Offshore Oil Drilling in Policy Reversal
Bloomberg - Jennifer A Dlouhy
The Obama administration is reversing course on opening Atlantic waters to a new generation of
oil and gas drilling, after a revolt by environmentalists and coastal communities that said the
activity threatened marine life, fishing and tourism along the U.S. East Coast.
The proposed offshore
leasing program being
released Tuesday
eliminates the
administration’s initial
plan to auction off drilling
rights in as many as 104
million acres of the mid-
and south-Atlantic in 2021,
according to an Interior
Department statement. The
proposal also sets the
stage for selling oil and gas
leases in the Arctic waters
of the Chukchi and
Beaufort seas, as well as
Alaska’s Cook Inlet and the
Gulf of Mexico, where 10
auctions were tentatively
scheduled from 2017 to
2022.
"This is a balanced
proposal that protects
sensitive resources and
supports safe and
responsible development of
the nation’s domestic
energy resources to create
jobs and reduce our dependence on foreign oil,” Interior Secretary Sally Jewell said in a
statement. "The proposal focuses potential lease sales in areas with the highest resource
potential, greatest industry interest and established infrastructure."
The Atlantic pullback is a major blow to the oil industry, delivered by a president who once
promised an all-of-the-above approach to energy but is now moving aggressively to advance
renewable power and cut the greenhouse gas emissions tied to burning fossil fuels. Energy
companies had eyed the U.S. Atlantic, where drilling was abandoned decades ago because of
high development costs, as a promising frontier, with the potential to supplement eventual
production declines on shore.
BP, Shell
Obama’s decision leaves offshore oil producers, such as BP Plc, Chevron Corp. and Royal Dutch
Shell Plc, largely confined to the long-tapped Gulf of Mexico. Although the proposal includes U.S.

Arctic waters, low oil prices and Shell’s disappointing results at a critical test well in the Chukchi
Sea have lowered the industry’s appetite for new drilling there for now.
The about-face also is a defeat for the governors of Georgia, South Carolina, North Carolina and
Virginia, who had lobbied for nearby offshore drilling they say would create jobs and new
economic activity.
Environmentalists hailed the decision Tuesday as a victory for whales, sturgeon and other animals
that live in the Atlantic -- as well as the fishermen, boaters and hotel operators whose lives and
livelihoods are tied to those waters.
‘Giant Step’
“President Obama has taken a giant step for our oceans, for coastal economies and for mitigating
climate change,” said Jacqueline Savitz, U.S. vice president for the conservation group Oceana, in
an e-mailed statement. “This is a courageous decision that begins the shift to a new energy
paradigm, where clean energy replaces fossil fuels, and where we can avoid the worst impacts of
decades of our carbon dioxide emissions.”
Sierra Weaver, a senior attorney with the Southern Environmental Law Center, said the win
reflects “the hard work of thousands of people and a collection of communities and elected
leaders from both parties who stood up to protect the Southeast’s beautiful beaches."
Offshore drilling in the Atlantic is "an exploration activity that hopefully leads to the discoveries that
give us our energy security and put us on a road to energy independence," said Erik Milito, the
American Petroleum Institute’s director of upstream and industry operations. "Canada, Cuba,
Venezuela, South America, Europe, West Africa -- they all do it, and we’re sitting back kind of
witnessing it without exploring ourselves."
It’s unclear how much oil and gas could be deposited along the U.S. East Coast; government
projections using decades-old geological surveys estimate 3.3 billion barrels of oil and 31.3 trillion

cubic feet of natural gas. Geologists say discoveries in other Atlantic waters around the world
suggest even bigger potential.
Arctic Waters
The plan being released Tuesday is only the latest step in a long, multiyear process of developing
the U.S. government’s five-year offshore leasing program, with both the available acreage and the
number of auctions generally whittled over time. Both the proposal and an environmental analysis
of the program now will be subject to public comment and could be further revised before the
Obama administration finalizes it late this year.
The most likely changes now could be on the proposed Arctic lease sales -- one each in the
Beaufort and Chukchi seas north of Alaska. The Interior Department’s Bureau of Ocean Energy
Management has identified several areas where there is potential conflict between energy
development and ecological resources or subsistence activities. The agency is asking the public
to weigh on how to protect the territory.
’Unique Place’
“We know the Arctic is a unique place of critical
importance to many – including Alaska Natives who
rely on the ocean for subsistence,” Interior Secretary
Jewell said. “As we put together the final proposal,
we want to hear from the public to help determine
whether these areas are appropriate for future
leasing and how we can protect environmental,
cultural and subsistence resources.”
Environmentalists blasted the administration for
keeping Arctic drilling on the table and said they
would lobby for lease sales in the Chukchi and
Beaufort seas to be spiked later.
Conservationists argue the Interior Department must
preclude Arctic drilling to fulfill a pledge President
Barack Obama made with Canadian Prime Minister Justin Trudeau to weigh "the life-cycle
impacts of commercial activities in the Arctic" and satisfy an international climate accord
commitment to cut carbon dioxide emissions released when fossil fuels are burned.
Obama Legacy
“Any new offshore drilling will be a stain on President Obama’s climate legacy,” May Boeve,
executive director of the group 350.org, said in a statement Monday. "If the president is going to
meet the targets he agreed to at the climate talks in Paris, he needs to keep fossil fuels in the
ground or in this case, under the sea. We can’t afford any more oil spilling into the oceans and
carbon pouring into the atmosphere."
The proposed offshore plan will not affect oil and gas companies’ existing drilling rights in U.S.
waters.
The drilling debate has stoked passions from the coastline to the campaign stump as former
Secretary of State Hillary Clinton and Vermont Senator Bernie Sanders vie for the Democratic
presidential nomination. Sanders has promised to block all offshore oil and gas development.
Clinton told environmental activists she was “against drilling off the Atlantic” during an event last

month in Norfolk, Virginia. The issue has not gotten significant attention in the Republican primary
contest, where candidates generally support more domestic oil and gas development.
In weighing which waters to lease, the government is required to consider an array of factors,
including the interests of oil and gas producers, the goals of affected states, and the proximity of
energy markets.
Community Protests
Interior officials have signaled they were paying attention to the protests of coastal communities,
dozens of which used letters and resolutions to formalize their opposition to offshore oil
development.
Oil companies and trade groups have countered that the coastal opposition is an outlier, bucking
polls that show consistent support for offshore drilling. An analysis by the industry-backed
Consumer Energy Alliance said that communities that formally oppose offshore oil development
account for no more than 7.2 percent of the total population.
"By removing the entire proposed Atlantic leasing area, the administration has failed to present a
serious offshore plan that will help meet our energy needs over the coming decades," Consumer
Energy Alliance president David Holt said in an e-mailed statement.
Oil companies drilled 51 wells in
U.S. Atlantic waters decades ago,
but walked away amid high costs to
develop those discoveries.
This isn’t the first time Obama has
reversed a plan to open up the
Atlantic for offshore drilling; he took
similar steps to offer oil and gas
leases along the East Coast in 2010
but reversed course after BP’s failed
Macondo well blew out in the Gulf of
Mexico, keeping the territory out of a
2012-2017 leasing program.
6

Hydraulic fracturing accounts for about half of current U.S.
crude oil production.. Source: U.S. Energy Information Administration, IHS Global Insight, and DrillingInfo
Even though hydraulic fracturing has been in use for more than six decades, it has only recently
been used to produce a significant portion of crude oil in the United States. This technique, often
used in combination with horizontal drilling, has allowed the United States to increase its oil
production faster than at any time in its history. Based on the most recent available data from
states, EIA estimates that oil production from hydraulically fractured wells now makes up about
half of total U.S. crude oil production.
Hydraulic fracturing involves forcing a liquid (primarily water) under high pressure from a wellbore
against a rock formation until it fractures. The fracture lengthens as the high-pressure liquid in the
wellbore flows into the formation.
This injected liquid contains a proppant, or small, solid particles (usually sand or a manmade
granular solid of similar size) that fills the expanding fracture. When the injection is stopped and
the high pressure is reduced, the formation attempts to settle back into its original configuration,
but the proppant keeps the fracture open. This allows hydrocarbons such as crude oil and natural
gas to flow from the rock formation back to the wellbore and then to the surface.
Using well completion and production data from DrillingInfo and IHS Global Insight, EIA created a
profile of oil production in the United States. In 2000, approximately 23,000 hydraulically fractured
wells produced 102,000 barrels per day (b/d) of oil in the United States, making up less than 2%
of the national total.
By 2015, the number of hydraulically fractured wells grew to an estimated 300,000, and
production from those wells had grown to more than 4.3 million b/d, making up about 50% of the
total oil output of the United States. These results may vary from other sources because of the
types of wells included in the analysis and update schedules of source databases.

This new oil production has primarily come from shale and other tight rocks in the Eagle Ford
formation and Permian Basin of Texas, and the Bakken and Three Forks formation of Montana
and North Dakota.
The use of hydraulic fracturing is not limited to certain oil-containing formations such as shales or
source rocks, nor is its use limited to only horizontal wells. Hydraulic fracturing has been
successfully used in directional and vertical wells, both natural gas and oil wells, in tight
formations and reservoirs, and in offshore crude oil production.
More information on U.S. crude oil production from tight formations is available in EIA's most
recent Drilling Productivity Report.

Russia: NOVATEK completes deal to sell 9.9% stake in Yamal LNG to
China's Silk Road Fund….. Source: NOVATEK
NOVATEK has announced the closing of a transaction to sell a 9.9% equity stake in the Yamal
LNG project to China’s Silk Road Fund ('SRF') for a payment amounting to EUR 1,087 million.
Following the deal completion, the shareholder structure of the Project is as follows:
NOVATEK 50.1%; Total 20%; CNPC 20%; SRF 9.9%. Earlier in December 2015, as part of the
transaction, NOVATEK received a 15-year loan from SRF for the purpose of financing of the
Project.
Background
The Yamal LNG project envisages the construction of an LNG plant with annual capacity of 16.5
million tons per annum based on the feedstock resources of the South-Tambeyskoye field.
According to the PRMS reserve standards, the proven and probable reserves of the South-
Tambeyskoye field as of 31 December 2015 were appraised at 926 billion cubic meters of natural
gas. The Project is currently at the active
construction stage.
The Silk Road Fund is a $40 billion medium- to
long-term investment and development fund
established in Beijing in December 2014. The Silk
Road Fund makes outbound investment through
both the acquisition of equity stakes and the
provision of debt financing.
The fund focuses on infrastructure, energy/resources,
industrial capacity cooperation and financial cooperation
that are vital to the connectivity of the Chinese economy
with the rest of the world.

NewBase 16 March 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices rise as US producers struggle, focus shifts to inventory
Reuters + NewBase
Oil prices rose early on Wednesday after falling in the previous session, with U.S. producers
showing increasing signs of financial distress and as focus shifted to U.S. inventory data due later
in the day.
U.S. West Texas Intermediate (WTI) crude futures were trading at $36.94 per barrel at 0117 GMT,
up 60 cents from their last settlement. International benchmark Brent futures were up 40 cents at
$39.14 a barrel.
The climbs came after crude prices dropped around 2 percent the previous session.
Preliminary inventory data from industry group American Petroleum Institute (API) showed late on
Tuesday that U.S. crude stockpiles rose 1.5 million barrels last week, but by less than half of what
was expected by an analyst poll, lending markets some support.
The U.S. government's Energy Information Administration (EIA) will issue official inventory figures,
which have hit consecutive records over the past weeks, later on Wednesday.
"The focus on U.S. oil inventory will be even greater this week after some strong gains recently.
Another build amid signs of weakness in gasoline demand could see prices under further
pressure," ANZ bank said on Wednesday.
Oil price special
coverage

Traders said that the prospect of falling U.S. oil output was also supporting markets. U.S. shale
producer Linn Energy said on Tuesday that bankruptcy may be unavoidable as the company
missed interest payments amid a slump in oil prices.
Other companies, fighting for survival as banks cut loans, are seeking a costly alternative by
borrowing from private equity firms at hefty interest rates.
Despite Wednesday's price rises, oil markets remain dogged by a global supply overhang which
sees over 1 million barrels of crude pumped every day in excess of demand, leaving storage tanks
around the world brimming with unsold oil.
And there are few signs of changing fundamentals. While major producers like Saudi Arabia and
Russia have proposed to freeze their output at January volumes, near record levels of over 10
million barrels per day (bpd) each, others are refusing to cooperate.
Iran, freed from international sanctions which halved its production to little more than 1 million bpd,
has tripled its output to over 3 million bpd since January.
"Any such deal (to freeze output) would still not be a game changer. It would really just maintain
the excess supply that is now in place," Thomas Pugh of Capital Economics said in a note.

NewBase Special Coverage
News Agencies News Release 16 March 2016apher: Simon Dawson/Bloomberg
Oil Leaks and Disruptions Doing the Job That Producers Won't
Bloomberg - Ben Sharples
Pipeline leaks and shipping disruptions are doing more to reduce the global oil glut than producers
who can’t seem to agree on whether to cap output.
Outages from Iraq and Nigeria have disrupted more than 800,000 barrels a day of supply and
tightened the Brent market, according to Citigroup Inc. That’s coincided with a 20 percent jump in
Brent prices toward $40 a barrel since a proposed production cap from Saudi Arabia and Russia
captivated the market and helped turn sentiment bullish. No deal has been struck and Iran has
spurned the idea as it seeks to maximize output.
“Actual disruptions and cuts we’re seeing in the background are largely going unnoticed,” Daniel
Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney,
said by phone. “U.S. supply is declining and we’re seeing other little disruptions occur here and
there. Those types of things are slowly chipping away at the surplus.”
Brent oil has gained about 40 percent since slumping to a 12-year low in January. The
International Energy Agency predicts prices may have bottomed as shrinking supplies outside the
Organization of Petroleum Exporting Countries and disruptions inside the group erode the global
glut. JBC Energy Asia estimates the market, facing a surplus of about 2 million barrels a day in the
first three months of the year, will start to rebalance during the third quarter.
Shrinking Output

Saudi Arabia, Russia, Qatar and Venezuela agreed they would freeze output at January levels if
other producers followed suit to tackle a global oversupply. While Nigeria hoped producers would
meet this month, talks are now most likely to occur in April, said Gulf OPEC delegates, who asked
not to be identified because the matter isn’t public.
The pipeline disruptions in
Iraq and Nigeria are
temporary and production is
expected to come back
online, returning more supply
to the market.
Damage to a pipeline in Iraq
affected about 630,000
barrels a day of supply,
according to a March 14 note
from Citigroup. Disruptions
continue, even after its
repair. Exports from Kirkuk to
the Turkish port of Ceyhan
halted on oil ministry orders,
hours after pumping
resumed following a
prolonged shutdown, the Al-
Mada newspaper reported, citing an unidentified official at North Oil Co.
Nigerian daily exports next month are scheduled to be the lowest since Nov. 2013. Loading at the
Forcados facility was halted after a leak was discovered Feb. 14, according to the operator Royal
Dutch Shell Plc. While the company stopped short of citing sabotage, it said damage was
“consistent with the application of external force.” The shutdown cut oil production by 300,000
barrels a day and repairs will take as long as eight weeks, according to Minister of State for
Petroleum Emmanuel Ibe Kachikwu.
U.S. crude output has slipped more than 150,000 barrels a day since January as drill rigs
targeting oil fell to the lowest since December 2009. Production outside OPEC will drop by
750,000 barrels a day this year, or 150,000 barrels a day more than estimated last month, the IEA
said in a March 11 report. Markets are also being supported by losses in Iraq and Nigeria, the IEA
said.

Near-Record Cash `Comfort' for Canada Oil Firms Amid Price Rout
Bloomberg - Jeremy Van Loon
Canada’s biggest oil producers are sitting on a near-record pile of cash, giving them the resources
to keep investing and manage debt while weathering the worst price rout in a generation.
The five largest oil producers including Suncor Energy Inc. and Cenovus Energy Inc. have a
combined C$8.5 billion ($6.4 billion) in cash and cash equivalents, an increase of 7.6 percent from
a year earlier and more than twice the levels seen during 2009 downturn. The figures, which are
little changed from a record C$9 billion in 2014, don’t include the proceeds from Imperial Oil Ltd.’s
recent sale of its Esso-brand gas stations for C$2.8 billion.
“Sitting on cash and a healthy balance sheet has become a competitive advantage,” Amir Arif, an
analyst at Cormark Securities Inc. in Calgary, said by phone. “These guys still have a lot of capital
they need to spend.”
Divestitures, cost cutting, equity raises, and dividend cuts have helped bolster balance sheets as
Canadian oil producers buckle down for the “lower for longer” prices Suncor Chief Executive
Officer Steven Williams has described. Compared with the last downturn when commodity prices
made a quick recovery, the industry isn’t betting on a return to high prices and needs the money to
keep their operations expanding.
Having cash is an important survival tactic as commodity markets remain volatile despite the
recent recovery that saw oil prices rebound toward $40 from more than a 12-year low of about $26
a barrel in February. West Texas Intermediate is expected to average C$39.50 this year,
according to the estimates compiled by Bloomberg. The North American benchmark settled at
$37.25 Monday on the New York Mercantile Exchange.
Steam Technology
Suncor’s Fort Hills bitumen mine alone this year could eat up half of the company’s available
cash. Spending on Fort Hills will cost C$4.5 billion this year, with Suncor responsible for about half
the outlay, the company has said.

“Our strong balance sheet helped us deliver on our commitments to shareholders including
funding our major growth projects, such as Fort Hills and Hebron,” spokeswoman Sneh Seetal
said in an e-mail. “We are drawing the cash balance down in order to continue funding those
projects through this period of low oil prices.”
Imperial and Cenovus will also need to cash to develop assets using steam technology. Imperial
Oil in a March 11 statement filed an application for an oil-sands project that would produce 50,000
barrels a day from 2022, while expansions at Cenovus’s Foster Creek and Christina Lake sites will
begin producing oil in the third quarter, the company said in a Feb. 11 statement.
Financial Resilience
“Our number one priority during this period of low oil prices is to maintain our
financial resilience and the strength of our balance sheet,” Brett Harris, a spokesman for Cenovus,
said in an e-mail. “We are going to be taking a very conservative approach to ensure that we don’t
compromise the balance sheet strength that we’ve worked so hard to build over the last year or
so.”
Imperial will evaluate the “pace and scope” of future investments depending on market and
business conditions, spokeswoman Killeen Kelly said in an e-mailed response.
Canada’s largest oil producers had about C$4 billion in cash in March 2009, as the price of crude
began to climb from a low of just under $34 a barrel in 2008. Their cash reserves fell to C$1.9
billion by 2011 as the recovery took hold and the industry began to expand again.
Nix Acquisitions
The spending, combined with the drop in prices, has taken a toll on balance sheets with debt now
standing at an average of 2.16 times earnings before interest, taxes, depreciation and
amortization, compared with 1.08 times last year, according to data compiled by Bloomberg.
The cash reserves are a “comfort,” in such an environment, said John Stephenson, chief
executive officer of Stephenson & Co. Capital Management in Toronto, which oversees C$55
million.
Canadian Natural Resources has the smallest cash pile of the five-largest producers. The
company’s cash-flow generation, flexible capital expenditure program and available liquidity “all
support a strong financial position,” said spokeswoman Julie Woo, in an email. Completion of the
next phase at the company’s Horizon oil-sands mine with result in a “significant step-change” for
cash flow later this year, she added.
Husky’s capital expenditures will remain in balance with cash flow this year, said spokeswoman
Kim Guttormson in an email. If oil prices rise above the company’s assumptions, the priorities will
include paying down debt, restoring a sustainable dividend, and investing in capital projects, she
added.
Suncor has already spent billions on two large transactions in the past year, including an all-stock
takeover of Canadian Oil Sands Ltd., a transaction worth C$6.3 billion including debt. The
Calgary-based oil producer also bought a 10 percent stake in the Fort Hills bitumen mining project
from Total SA.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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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 16 March 2016 K. Al Awadi

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