New base 831 special 17 april 2016

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NewBase 17 April 2016 - Issue No. 831 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Today world’s oil producer will gather in Doha & what
are the Expectations
News Agencies + NewBAse
Nations representing almost 60% of the world’s oil production will gather in Doha today to discuss
freezing their output at January levels in an effort to stabilise prices. Russia, Saudi Arabia, Qatar
and Venezuela made a preliminary deal in February and are seeking to add more producers and
extend the recent price recovery.
The discussion is only about freezing production and not exports, as Russia and Saudi Arabia –
which together account for about 30 per cent of world oil exports – also have been competing
fiercely for market share in China and other Asian markets.
Who’s going?
In addition to the four signatories to the preliminary deal, Algeria, Angola, Azerbaijan, Colombia,
Ecuador, Indonesia, Iraq, Kazakhstan, Kuwait, Mexico, Nigeria, Oman and the UAE will attend.

Who’s not attending?
Some of the world’s biggest producers including the US, Canada, China, Brazil and Norway won’t
be showing up. Among the 13 nations in the Organization of Petroleum Exporting Countries, Iran
and Libya - whose output are crippled by sanctions and conflict - have ruled out going to Doha.
The key Opec member resisting a production freeze is Iran. On Saturday, Iran’s deputy oil
minister said the country “saw no reason” to attend the talks because it needs to get back to the
level it produced before international sanctions against Tehran.
How likely is an agreement?
Forty traders and analysts surveyed by Bloomberg this week were evenly split on whether there
will be a deal. While Russia’s Energy Ministry is “optimistic” and Qatar’s has a “positive feeling,”
Saudi Arabia’s Deputy Crown Prince, Prince Mohammed bin Salman, said in an interview on
Thursday that the kingdom won’t restrain its oil production unless other producers, including Iran,
agree to freeze output.
What impact would a freeze have on oil prices?
Crude has rallied more than 30% to above $40 a barrel since the preliminary freeze accord in mid-
February prompted a shift in market sentiment. A final accord could lock that gain in place, or
even extend it to $50, said Bank of America Corp. Yet a freeze will do little to mop up the glut
because Saudi Arabia and Russia - the world’s biggest crude producers - are already pumping

near record levels. Morgan Stanley said “our downbeat oil view is unchanged” by the prospects of
a freeze.
How much oil supply is at stake?
Producers that have confirmed they will consider joining the freeze produce about 47mn bpd of
crude. Many of those nations were already pumping flat out in January, with little scope for
increasing output. Russia and Saudi Arabia both held production steady this year, even before a
final agreement to freeze.
Production from the 11 members of Opec that are backing the agreement is already almost half a
million barrels a day lower than January.
Would the oil freeze make a difference?
With most Doha participants already expected to keep output steady, much more important for the
oil market will be what happens in the US and Iran. Declining shale oil production is expected to
make up the lion’s share of the 710,000 bpd reduction in output from non-Opec countries this
year, according to the IEA. Iran plans to increase production by about 700,000 bpd this year from
the 3.3mn pumped in March.
What would the accord mean for US producers?
Any deal that pushed up prices would be “self-defeating” because it would allow a revival of
drilling by US shale producers, who can return to work at $55 a barrel, according to Goldman
Sachs Group Inc. That would only postpone the supply curbs analysts say are needed to re-
balance overloaded global markets.
How would the freeze be monitored and enforced?
During previous supply cuts, Opec monitored members’ compliance using data on their production
provided by external sources such as news agencies and tanker-trackers. It has no mechanism to
punish countries that flout their limits and members habitually exceeded the group’s quotas,
before production targets were effectively abandoned in December.
What happened when Opec last made a deal with non-members?
Opec has grounds to doubt the sincerity of its partners. The last time it struck a deal with rival
suppliers was in late 2001, when Russia, Mexico, Oman, Angola and Norway promised to cut
supply by a combined 500,000 bpd.
Yet by the middle of the following year, Russia had actually increased output and the only
production declines were in Mexico and Norway.
What if there’s no deal?
With expectations growing over the past week, oil traders embarked on a buying spree that
pushed crude to a four-month high. If ministers fail to reach an accord, prices will see a “severe
negative impact,” Citigroup predicts. Opec’s refusal to cut output in 2014 prompted calls to write
off the group, and an inability to finalise the freeze might see those epitaphs being carved. The
ensuing disappointment could drag prices down to $30 a barrel, said Saxo Bank.

Expectations are low on Doha oil meeting that is scheduled to take place on Sunday. According to
analysts, some sort of a deal on freezing production at around current levels could be reached
between oil producing countries but that would not be enough to remove the glut dogging the oil
markets since 2014.
“Some watered down deal is my
current expectation. A deal, watered
down or not, would have limited impact
on the current oversupply but would
still send a message that Opec and
non-Opec members can do more than
just talk up the market,” said Ole
Hansen, an energy expert from Saxo
Bank.
At least 15 countries are expected to
take part in the meeting including
Saudi Arabia, Russia and a number of
other oil producing countries.
Saudi Arabia ruled out any restraint on
its production if other countries
including Iran don’t agree.
In an interview to Bloomberg on
Thursday, Saudi Deputy Crown Prince
Mohammad Bin Salman said they “will
not freeze production if all major
producers don’t freeze production”.
It is not clear whether Iran will be
taking part in the talks. Petroleum
Ministry’s website Shana said Iran will
be represented by its Opec Governor,
Hussain Kazempour Ardebili instead of
Petroleum Minister Bijan Zangeneh. A Reuters report quoting sources said Iran will not attend
Sunday’s talks in Doha.
Little commitment
“Expectations have been toned down during the past few days. Russia hinted that there would
only be a loose agreement with little commitments,” Hansen said.
He said that the game changer in the oil market these past few months has not been delivered by
the men sitting down in Doha at the weekend but due to decline in production from the high cost
shale oilfields in the US.
“A surging oil price following a deal will be counterproductive as it will help stabilise production
among these high-cost producers, which carries the risk of prolonging the move towards
rebalancing the global market.”

When asked whether there they will agree to production cuts to prop up prices, Hansen said it
would be a huge surprise if they do so.
“No one is prepared to yield market share, especially not at a time where the global oil market has
begun its healing process.”
UAE stance
The meeting takes place in the backdrop of record drop oil prices, which have plunged by nearly
60 per cent in the last two years from a peak of $115 per barrel in 2014 to about $44 per barrel
currently as production outpaces demand.
Russia, Saudi Arabia, Venezuela and Qatar agreed in February to freeze production at January
levels, but said at the time the deal was contingent on other producers joining in.
The UAE said they would support any consensus to cap production.
“Stubbornness is not useful anymore,” the Energy minister Suhail Al Mazroui told reporters last
month.
Richard Devine, Partner in Dubai based Cyde & Co firm said it would be difficult the predict the
outcome of the meeting due to conflicting opinion coming from various oil producing countries.
“Whatever the decision, there would be some impact on the markets. If they decide to free
production, oil prices will go up and if they don’t there would be downward pressure.”
Opec is currently producing 32.3 million barrels per day (mbd) and Russia 11 mbd, a total of 43.3
mbd. A five per cent cut of production exceeding 2 million barrels a day will do the trick to stablisie
oil prices, analysts said.
Saudi Stance : could Add a Million Barrels Immediately
Saudi Arabia could raise crude output by more than a million barrels a day immediately if there
was demand for it, said the kingdom’s Deputy Crown Prince, as he reiterated the nation would
only agree to freeze production if all major producers including Iran do the same.
The world’s largest oil exporter could increase
output to 11.5 million barrels a day immediately
and go to 12.5 million in six to nine months "if
we wanted to," Prince Mohammed bin Salman,
who is also chairman of the Supreme Council
of Saudi Arabian Oil Co., said in an interview
Thursday. The country pumped 10.2 million
barrels a day last month, according to data
compiled by Bloomberg.
If the kingdom chose to increase investment in
its oil industry, total production capacity could
be increased to 20 million barrels a day, the prince said at King Salman’s private farm in Diriyah,
the original home of the Al Saud royal family.

“I don’t suggest that we should produce more, but we can produce more,” said the prince, who is
the king’s son, second in line to the throne and a leading force in the country’s economic policy.
“We can produce 20 million barrels of oil per day if we invested in production capacity, but we
can’t produce beyond 20 million.”
Record Production
The prince’s comments come as at least 15 nations prepare to gather in Doha on Sunday to
discuss freezing output at January levels in order to stabilize an oversupplied market.
He reiteratedthat Saudi Arabia’s commitment to a production cap would depend on the
participation of other nations including Iran. On Saturday, Iran’s deputy oil minister said the
country “saw no reason” to attend the talks because it needs to get back to the level it produced
before international sanctions against Tehran.
Saudi Arabia set a crude production record of 10.564 million barrels a day in June, exceeding a
previous high in 1980, according to data the kingdom submitted to the Organization of Petroleum
Exporting Countries. The country ramped up output after it led the group to change strategy in
November 2014, fighting for market share instead of supporting prices by cutting production.
Saudi production has been steady at about 10.2 million since January -- the proposed level of the
freeze. Russia pumped 10.9 million barrels a day of crude and a light oil called condensate last
month, also little changed from January, according to Energy Ministry data.
Saudi Arabian Oil Co. has said it will press ahead with new developments and won’t cut
investments because of the plunge in crude prices. The company is planning to complete an
expansion of the Khurais oil field’s output to 1.5 million barrels a day in 2018.
Saudi Arabia is producing below its potential capacity because it only responds to demand, the
prince said. "If we produced more oil than there is demand, we would destroy many markets. So
we consider supply and demand, and we look at any demand we receive and we deal with it."

US:ExxonMobil exports first cargo of offshore Gulf of Mexico crude
Source: Reuters via Yahoo! Finance
ExxonMobil is shipping a cargo of crude produced from its deepwater Julia field in the Gulf of
Mexico to its refinery in Rotterdam, Netherlands, marking the first export of offshore oil to
leave a U.S. port since a ban was lifted.
The crude came from initial well tests conducted on the Julia project, Aaron Stryk, a company
spokesman, said in an emailed statement on Thursday.
The oil company is sending a modest 18,000 barrels of oil on a Panamax tanker, the PGC
Marina, according to a bill of lading published at Bloomberg terminals and Thomson Reuters
vessel tracking data. Refiners typically do tests to see how new crudes will impact yields from
making fuels. While only a small volume, the cargo is the first known export of offshore oil from
the United States since Congress lifted a ban last December. Until now, all other shipments had
been of light onshore oil.
The vessel departed from Gramercy, Louisiana, in early April and is expected to arrive in
Rotterdam on April 19, according to the data.
It was not clear whether Exxon would continue to export Julia crude, but the firm anticipates an
initial production of 34,000 barrels per day (bpd) following the startup of the field in the second
quarter of this year, according to its website.
Initial testing on the Julia field, a joint venture between Norway's Statoil and Exxon Mobil located
roughly 200 miles south of New Orleans, Louisiana, began in March. Commissioning activities
are underway for the startup of the field, Stryk said in an email. Two wells are completed, and the
company is in the process of drilling a third well.

Turkmenistan: TAPI gas pipeline Ashgabad outlines plans
Natural Gas Asia + NewBase
A day after signing a $200mn-investment agreement on the Turkmenistan-Afghanistan-Pakistan-
India pipeline (Tapi), Ashgabad announced on April 9 that the welding work on the first kilometre
of the 214-km length of the Turkmen section of this pipeline was completed.
The giant Galkynysh gas field, with 27.4
trillion m³ of gas reserves, will supply the
gas for the 1.42-metre diameter line. The
ministry said that drilling a new well to a
depth of 4,800 metres has started in this
field, and seven more have been planned.
In total, taking into account the uncompleted
wells, left from 2015, some nine wells are
expected to become operational by the end
of 2016, of which five would be completed
this summer. For now the field produces
10bn m3
/yr of gas, but Turkmenistan is preparing to increase the volume to 95bn m3
/yr by 2020.
The average daily production of each well is projected to be between 1.7mn and 2mn m³, the
ministry’s official website reported on April 6. Over 774 km of Tapi will pass through Afghanistan
and 826 km will stretch from Pakistan to Fazilka on the Indian border to transit 33bn m³/yr.
The Turkmen government announced on April 11 that the rate of growth natural and associated
gas for the first quarter of 2016 stood at 100.4%, while export of gas was 103%. After halting
Turkmen gas intake by Russia in early 2015, Ashgabad exports gas to China and Iran.
Azerbaijan accelerates Shah Deniz 2 development
Russia has also stopped gas import from Azerbaijan since early 2014, but the statistics indicate
that the more Russia cut gas imports from Azerbaijan, the more Azeri gas was delivered to
Turkey, one of Russia’s major gas clients.
Azerbaijan is preparing to start exporting gas to Turkey once Shah Deniz gas field’s stage 2 (SD
2) is on stream, expected by 2018.
BP's regional president for Azerbaijan, Georgia and Turkey Gordon Birrell announced on April 12
that BP together with its partners has invested $58bn on development of the Azeri-Chirag-
Guneshli and Shah Deniz oil and gas fields over 20 years.
A source at state oil and gas company Socar told NGE on April 13 that some $16bn have been
invested in Shah Deniz project. “About $7.427bn were invested in Shah Deniz project during
2015, of which $4.37bn went in the upstream sector and $1.1bn for the South Caucasus Pipeline
Expansion (SCPX).
In total, some $7.5bn from the mentioned $16bn were invested in SD2,” he said. The
development of SD2 is expected to cost $25bn, while about $3bn investment is expected to be
needed for SCPX.

Indonesia to offer 14 oil, gas blocks in 2016, says official
Platts
The Indonesian government plans to invite bids for 14 conventional and unconventional oil and
gas blocks in its first 2016 round as part of efforts to increase the country's output, a senior official
said Friday. "We plan to announce it next month," Oil and Gas Director General at the Energy and
Mines Ministry Wiratmaja Puja told reporters, adding the total was comprised of 11 conventional
and three unconventional blocks.
Four conventional blocks will be offered via regular tender onshore Sumatra, Papua and offshore
Kalimantan, and seven via direct proposal in Sulawesi, Kalimantan and Papua, mostly onshore
blocks, Puja said.
The unconventional blocks comprise one shale gas and two coalbed methane blocks, he said.
"We are also carrying out geological and geophysical studies on potential oil and gas blocks that
will be offered until 2019," he added.
The government is eyeing offering at least 27 potential oil and gas blocks over 2017-2019,
according to Oil and Gas Directorate General data.
Article Continues below...
Indonesia has two mechanisms for tendering blocks; a regular bidding system and a direct offer
mechanism, under which a company can indicate its interest in any block not offered by the
government, which is then opened up to bids from other investors. If no higher bid is submitted,
the original company is automatically awarded the block.

The government at end March approved state-owned oil and gas company Pertamina's
development plan for its Nunukan block in North Kalimantan bordering Malaysia and the
Philippines, which is said to contain 8.37 million barrels of crude and 280.24 billion cu ft of gas,
according to Puja.
"The block is expected to start production in 2019 with an accumulative output of 1.05 million
barrels of crude and 212.66 billion cu ft of gas. The block's production is small but it becomes
important amid the lower crude price and its location on the borders," Puja said.
Pertamina subsidiary Pertamina Hulu Energi holds a 64.5% stake in the block alongside PRL
Ventures Indonesia B.V (12.5%) and Videocon Indonesia Nunukan Inc (23%). Development of the
block is estimated to cost $556.5 million and revenue to be generated at $441.5 million, Puja said.
The government has also extended local company Medco Energi Internasional's license for the
Lematang block in South Sumatra that expires in 2017 by 10 years as Pertamina was not
interested in taking it over, Puja said. Medco holds 51.1% stake in the block, which is currently
producing at around 40 billion British thermal unit/day.
Indonesia is making concerted efforts to ramp up exploration and development activity in the
country as it has seen its crude output fall due to natural decline at ageing fields.The country
withdrew its OPEC membership in 2008 and rejoined in 2015, Platts reported earlier.

U.S. natural gas production reaches record high in 2015
Source: U.S. Energy Information Administration, Natural Gas Monthly
U.S. natural gas production reached a record high level of 79 billion cubic feet per day (Bcf/d) in
2015, an increase of 5% from the previous year, even as natural gas prices remained relatively
low. Production from five states—Pennsylvania, Ohio, West Virginia, Oklahoma, and North
Dakota—was responsible for most of this growth, offsetting declines in much of the rest of the
United States.
EIA uses three different concepts to measure natural gas production. Gross withdrawals are the
full volume of compounds extracted at the wellhead, which includes all natural gas plant liquids
and nonhydrocarbon gases after oil, lease condensate, and water have been removed.
Marketed natural gas production, which is used in this analysis, excludes natural gas used for
repressuring the well, vented and flared gas, and any nonhydrocarbon gases. Dry natural gas
production equals marketed production minus natural gas plant liquids.
Natural gas production from Pennsylvania, Ohio, West Virginia, Oklahoma, and North Dakota
accounted for 35% of total U.S. natural gas production in 2015. In most cases, production in these
states continued to increase in 2015, but at a slower pace than in the previous year.
For instance, in Pennsylvania, the second-highest producing state, year-over-year natural gas
production growth fell from 2.6 Bcf/d in 2014 to 1.5 Bcf/d in 2015.
In contrast, natural gas production growth continued to increase in Ohio, with production
increasing by 1.4 Bcf/d in 2015, 41% higher than production growth in 2014. Most of the increase
in Ohio's natural gas production is from the relatively less-developed Utica Shale play. Production
from the Utica Shale will likely grow in the future.
Total natural gas production in the federal Gulf of Mexico grew slightly (6%), reaching 3.6 Bcf/d in
2015, after declining for five consecutive years. The long-term decline in natural gas production
from the Gulf of Mexico is likely the result of the higher cost of offshore production compared with
onshore production. Historically, most Gulf of Mexico natural gas production has come from
shallow water fields.

Natural gas production in Louisiana fell 2% to 5.3 Bcf/d from 2014 to 2015. Between 2012 and
2015, natural gas production from the Haynesville Shale play decreased by 45%, contributing to
the drop in Louisiana's natural gas production.
Natural gas production from other states remained relatively flat, and total production from shale
plays around the country more than offset the longer-term declines in the Gulf of Mexico and
Louisiana.
EIA's Short-Term Energy Outlook projects natural gas production growth will slow to 0.9% in 2016,
as low natural gas prices and declining rig activity temporarily reduce production. In 2017,
however, forecast production growth increases to 2.2%, as projected natural gas prices rise,
industrial demand grows, and liquefied natural gas (LNG) exports increase.

NewBase 17 April 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
US oil closes at $40.36, and Brent at $43.18 , ahead of Doha
Reuters + NewBase
U.S. oil prices fell nearly 3 percent on Friday in thin trade as analysts anticipated a meeting of
major oil exporters would provide a floor for the market, but do little to help to clear global
oversupply quickly.
Futures slightly pared losses after oilfield services firm Baker Hughes reported the number of rigs
drilling for oil in U.S. fields fell by 3 to a total of 351 in the previous week. At this time last year,
U.S. producers were operating 734 oil rigs.
Oil producers led by top exporters Saudi Arabia and Russia will meet in Doha, Qatar on Sunday to
discuss freezing output around current levels in an effort to contain a glut exacerbated by
production that exceeds demand by about 1.5 million barrels a day.
It would be the first joint action by major OPEC and non-OPEC producers in 15 years, although
Iran has refused to participate, saying that it wants to rebuild its output to levels achieved before
imposition of the recently lifted economic sanctions.
"Unless there's a total surprise, the likelihood is that the Doha meeting on Sunday between
OPEC/non OPEC will produce something very wishy washy and will be nothing more than smoke
and mirrors," one trader said. "I therefore want to sell crude today."
Brent crude futures were down 66 cents, or 1.5 percent, at $43.18 a barrel by 2:33 p.m. ET. U.S.
West Texas Intermediate (WTI) settled 2.75 percent lower, or $1.14, at $40.36. Traders said profit
taking by funds ahead of the meeting also added to the pressure on prices in the session.
Oil price special
coverage

With discussions among producers focusing on freezing output rather than cutting it, most
analysts said they had little hope for a deal that reduces the global oversupply. The crude surplus
has pulled down crude prices by as much as 70 percent since mid-2014.
"A cut in production is very unlikely at this meeting and I would say it will probably not even be a
discussion item on the meeting agenda," said Energy Management Institute analyst Dominick
Chirichella.
"The conclusion for today is to buckle up your seatbelts — the ride could get wild next week."
Barclays said that while the Doha meeting does not materially change the oil market balances, if
recent supply-side fundamental support holds and the market's expectations for a credible
statement and commitment are met, it could help prevent prices from falling back to the low $30
range.
Consultancy Petromatrix said it saw the Saudis as a G20 member pushing for a deal to freeze
output because both the IMF and the U.S. Federal Reserve are growing increasingly impatient
about low oil prices.
Energy consultancy Wood Mackenzie said that "even if an output freeze is announced, we do not
expect a genuine one to occur during the remainder of 2016."
Instead, Wood Mackenzie said it expected "OPEC output to rise 0.5 million barrels per day (bpd)
year-on-year in 2016, with most of that growth coming from Iran and Iraq, both of whom have
indicated plans to grow output in 2016."
US Oil Drillers Cut Rigs to November 2009 Lows
Baker Hughes says US energy firms cut oil rigs for a fourth week in a row to the lowest level since
November 2009.
April 15 (Reuters) - U.S. energy firms cut oil rigs for a fourth week in a row to the lowest level
since November 2009, oil services company Baker Hughes said on Friday, as energy firms keep
slashing spending despite a more than 50 percent jump in crude futures since hitting a near 13-
year low in February.

Drillers cut 3 oil rigs in the week to April 15, bringing the total rig count down to 351, Baker
Hughes said in its closely followed report. The number of U.S. oil rigs operating compares with the
734 rigs operating in the same week a year ago. In 2015, drillers cut on average 18 oil rigs per
week for a total of 963 for the year, the biggest annual decline since at least 1988 amid the
deepest rout in crude prices in a generation.
Before this week, drillers cut on average 13 oil rigs per week for a total of 182 so far this year.
Energy firms have sharply reduced oil and natural gas drilling since the selloff in crude markets
began in mid-2014. U.S. crude futures collapsed from over $107 a barrel in June 2014 to around
$26 in February.
But with U.S. crude futures this week trading around $40 a barrel, up over 50 percent from the
February low on talk of a possible OPEC production freeze, some analysts think the rig count will
bottom soon and rise later this year and next as prices increase.
U.S. crude futures were fetching around $43 a barrel for the balance of 2016 and about $45 for
calendar 2017. U.S. oil and gas exploration and production firm Pioneer Natural Resources Co.,
the most active oil producer in the Permian basin in Texas with 12 rigs in the play, this week said it
will add five to 10 rigs if oil prices return to $50 a barrel, which it expects by the end of 2016 or
early 2017.
Analysts at Cowen & Co, a U.S. financial services firm, this week estimated the number of active
U.S. gas and oil rigs would slide from an average 559 in the first quarter to 411 in the second
quarter and 401 in the third quarter before rising to 415 in the fourth quarter.
With the decline in oil rigs this week and no change in natural gas rigs, total U.S. oil and gas rigs
fell for a 17th week in a row, down three to 440, the lowest since at least 1940, according to Baker
Hughes data going back that far.

NewBase Special Coverage
News Agencies News Release 17 April 2016
Surging oil output, low prices dare Doha talks
Saudi Gazette
OPEC isn’t what it used to be. Ahead of a planned meeting of most of the cartel and other major
oil producers in Qatar to approve a freeze on oil production, some OPEC members are pumping
record levels of crude even as prices wallow at less than half their level two years ago — a clear
sign of the dissention gripping the group.
While markets may well react off any decision made on Sunday in Doha, analysts predict low
prices will continue through this year and into the next as producers keep pumping to keep their
government budgets afloat.
That calls into question what long-term gain producers can expect from a promised freeze, and
indeed how much power OPEC now wields as American shale firms stand poised to re-enter the
market if prices rise.
“We put the probability of a successful freeze agreement … at 50 percent,” Societe Generale
analyst Michael Wittner wrote this month. “There is simply a tremendous amount of uncertainty.”
At least 15 oil-producing nations representing about 73 percent of world output are expected at
the Doha meeting, Qatar’s Energy and Industry Minister Mohammed bin Saleh Al-Sada has said.
The gathering follows a surprise Doha meeting in February between Qatar, Russia, Saudi Arabia
and Venezuela, in which they pledged to cap their crude output to their January levels if other
producers do the same.
The countries hope the cap will help global oil prices rebound from their dramatic fall since
summer 2014, when prices stood at above $100 a barrel, though no one is talking seriously about
the more dramatic step of reducing global supply by collectively cutting production for now.
Prices dropped briefly under $30 a barrel, a 12-year low, in January, but have climbed to around
$40 a barrel this week, boosted in part by market speculation about the coming meeting.
The drop is good news for consumers. Drivers in the United States now pay $2.05 a gallon (54
cents a liter) on average, the lowest rate for this same date since 2009, according to AAA. Airlines
also have enjoyed savings of billions of dollars in jet fuel costs.
But for producing countries that depend on oil revenues, the results have been devastating. OPEC
member Nigeria’s once-fast-growing economy cratered, while Venezuela faces triple-digit inflation
and rationing.

The low prices have squeezed wealthy Gulf nations too, though less dramatically, with rulers
across the United Arab Emirates raising fees on airport departures and parking.
Iraq says it boosted its production to over 4 million barrels of oil a day in March, record territory, as
Kuwait says it pumps 3 million barrels a day and wants to reach 4 million a day by 2020.
“If nothing is decided in Doha, then the fiscal constraints will accelerate much more rapidly than if
action is taken and oil prices respond,” said Mathias Angonin, a Dubai-based analyst with the
ratings agency Moody’s.
Some are hopeful for an agreement. Anas Al-Saleh, Kuwait’s finance minister and acting oil
minister, smiled and acknowledged being optimistic before being whisked away in an elevator with
his entourage after entering the luxury hotel hosting the meeting in Doha.
But several spoilers lurk for oil producers, chief among them OPEC member Iran, which
announced late Friday it would send an emissary to the meeting.
With many international sanctions lifted after its nuclear deal with world powers, Iran began
exporting oil into the European market again and is eager to claw back a market share. It
produces 3.2 million barrels of oil a day now, with hopes of increasing to 4 million by April 2017.
On Friday, the Iranian Oil Ministry reiterated it would not join a freeze “before it brings its oil
exports to the pre-sanctions levels.”
Sunni-ruled Saudi Arabia already has said it won’t back any freeze if Iran, its Shiite rival, doesn’t
agree to it, throwing into question whether any deal will be agreed to at all. The kingdom seems
determined to ride out the low prices that could squeeze Tehran.
That dispute underscores the level of discord inside OPEC as it faces arguably its biggest
challenge since the oil glut of the 1980s.
“Ultimately, we believe the biggest hurdle to reaching any meaningful agreement will be the
conflicting Saudi and Iranian stances,” Goldman Sachs said in a report released this week.
Saudi Oil Minister Ali Al-Naimi said nothing to journalists after arriving in Doha.
Yet there is a market risk to walking away without a deal: a contentious OPEC meeting in
December that ended without an agreement saw oil prices tumble.
Meanwhile, though more-costly US shale oil production has dropped, it could re-enter the market
if oil prices rise. And a large amount of crude already building up provides a major damper on
prices, as does a generally weakened global economy, according to the US Energy Information
Administration.
A T H I R D S E N I O R O I L S O U R C E T O L D R E U T E R S .
O A N H A S S A I D I T W O U L D N O T P A R T I C I P A T E A S I T C O U L D N O T A C C E P T P R O P O S A L S T O F R E E Z E I T S P R O D U C T I O N .

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 17 April 2016 K. Al Awadi

New base 831 special 17 april 2016

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