New base energy news issue 843 dated 03 may 2016

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase Energy News 03 May 2016 - Issue No. 843 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Solar Impulse 2 takes off from California ( just Landed )
The National - Naser Al Wasmi
Solar Impulse 2 took off at 4pm UAE time on Monday from Northern California en route to Arizona
on the 10th leg of its fuel-free attempt to circumnavigate the world.
After identifying a suitable weather window for the next leg of their North American flight, Andre
Borschberg will pilot the solar-powered plane for more than 16 hours as he transverses deserts
and mountains on his way to the city of Phoenix, Arizona’s capital.
“We fly over desert today and over high mountains. It’s very warm, so it can create turbulence
from pressure influences. So that will be the challenge today, but we have good weather and it’s
well coordinated, so we should have a good flight today," he said on Monday.
Mission control in Monaco has plotted a flight path for Borschberg to fly through well-known areas
such as the Mojave Desert and the Sierra Nevada mountain range, while avoiding restricted
military zones.
Within the first hour of his flight on Monday, the Swiss pilot crossed San Francisco Bay and flew
into Sierra Nevada before taking a south-easterly path towards Phoenix.
The Masdar-sponsored aircraft began its attempt to circle the world in March last year. It flew from
Abu Dhabi to Oman, India, Myanmar, China, Japan and finally the United States.
After completing that leg, the Solar Impulse 2 team plans to make one more US stop, in the east
coast, before undertaking a record-breaking attempt at crossing the Atlantic.
Solar Impulse Has just landed in
Arizona, USA at 07:55 AM Dubai timing

“The Nasa base reminds me of my childhood in Cape Canaveral and the Apollo missions,"
Bertrand Piccard, Solar Impulse’s co-founder and co-pilot, said yesterday when he was with
Borschberg at Moffett Federal Airfield, a common testing ground for US space programmes.
Piccard broke an aviation record by crossing the US three years ago in a prototype version of
Solar Impulse 2. He said that it was one of the more pleasurable journeys he had made.
“Exactly three years ago, I took off from here to start the cross-America flight," he said.
“ Now it’s his [Borschberg] turn and it’s a beautiful flight because you go from the greenery of San
Francisco and transition into the desert, the colours begin to change."
The team hopes to reach New York before crossing the Atlantic Ocean into Europe, and then
returning to Abu Dhabi.
“This is something we started 13 years ago. It’s a long process we have built step by step, there
has been a lot of learning," said Borschberg.
“But Bertrand and I have a vision for the future."

Oman: Working petroleum system in Block 50 confirmed: MOL
Oman Observer - Conrad Prabhu
Drilling activities targeting Block 50 offshore Oman’s eastern seaboard have confirmed the
presence of a ‘working petroleum system’ in the 17,000 sq km concession — a discovery that
bodes well for offshore exploration in the Sultanate.
Masirah Oil Ltd (MOL), the company that owns
and operates Block 50 under an Exploration &
Production Sharing Agreement (EPSA) signed
with the Omani government, made the
announcement last week following the
successful completion of the drilling of the
Manarah-1 well.
Hydrocarbon shows encountered during the
drilling programme proved the presence of a
working petroleum system, Masirah Oil said in
the statement. Analysis of a petroleum system is
key to understanding how petroleum fluids form
in the source rock, move to the trap where they
are retained, and accumulate in the reservoir
from which they are produced.
Announcing the discovery, Dr Rabi Bastia, an
advisor at Masirah Oil, stated: “Manarah-1 well’s confirmation of the source rock and a working
petroleum system in Block 50 gives us great encouragement and important information towards
our deeper understanding of the 17,000 sq km block.”
Evidence of the presence of hydrocarbons in the Block was first uncovered in early 2014 when
Rex International Holding, which has an effective stake of 72.03 per cent in Masirah Oil, made a
stunning discovery in GA South in the block.
During a 48-hour test, hydrocarbons were flowed to the surface and the well achieved alight oil
flow rate of up to 3,000 stock tank barrels per day (stb/d) with no water production. It was the first
offshore discovery east of Oman after around 30 years of exploration activity in the area.
The Block is estimated to have gross mean unrisked prospective resources of 4.7 billion barrels of
oil equivalent.
According to the company, the Manarah-1 well was drilled to a target depth in excess of 3,000
metres. The goal was to evaluate the potential in two sandstone and carbonate primary targets, as
well as three secondary targets.
High gas count with oil shows were encountered in both primary targets and two of the secondary
targets. “Side wall cores were collected in another secondary target and preliminary inspection of
these indicate an extremely good reservoir quality of the sand as well as source rock potential in
the shale intervals. These cores will now be analysed in detail,” the company added.
Despite the economic downturn, Masirah Oil says it is drawing up plans for additional wells in the
area. It is also in discussion with the Ministry of Oil and Gas for an extension of the current
exploration phase.

Pakistan's Only FSRU Has Pumped 77bcf of of Gas Into the System
Express Tribune – Pakistan
Pakistan’s only operational LNG terminal at Port Qasim has so far regasified and pumped over 77
billion cubic feet of gas (bcf) into the national gas distribution network, Express Tribune reported
Tuesday. According to Amir Mahmud, terminal manager of Engro Elengy Terminal Limited (EETL)
a total of 1.7 million tons of LNG has been imported so far.
The terminal became operational about a year ago. Utilising Excelerate's floating storage and
regasification vessel (FSRU), the Exquisite, the facility has the capacity to deliver up to 690 million
ft3/d of natural gas directly to Sui Southern Gas Company's natural gas pipeline system.
Most of the gas has been supplied to gas-based power plants that were either sitting idle due to
non-availability of gas or burning expensive form of fuel to produce expensive electricity, he said.
“This terminal alone will save up to $600 million for Pakistan through fuel substitution and will
generate up to 2,000MW of electricity,” Express Tribune quoted Mahmud as saying. “The step to
set up LNG import infrastructure is in the right direction and the country needs another three to
four LNG import terminals to curtail the ongoing crisis. “
Pakistan has been facing severe gas shortage since last few years. To augment energy
supplies, Pakistan has stepped up effort to attract foreign investment, especially in the oil, gas and
LNG sectors. The government recently approved the construction of Russian funded North-South
gas pipeline. The pipeline will start from Nawabshah and end at Kasur, near Lahore.
Islamabad has also attracted Chinese investment in LNG terminal and other pipeline projects. The
Pakistani economy has been facing severe shortage of natural gas which has led to frequent
power outages affecting industrial activity. To fill up the gap it has commenced import of LNG
mainly from Qatar. Earlier this year, Islamabad and Doha signed a long term LNG contract after
prolonged negotiations

Afghanistan Assures Full Protection to TAPI Gas Pipeline
Natural Gas Asia + NewBase
Afghanistan has assured it will take all necessary measures to ensure safety of the TAPI gas
pipeline. The assurance was given by senior Afghan officials during a conference ‘The importance
of TAPI gas pipeline’ held in Herat in Afghanistan on April 25, 2016. The conference was attended
by heads of state institutions and representatives of
international organizations working in Herat, as well as
more than 200 representatives of the people of Herat
province, Turkmenistan’s foreign ministry said in a
statement.
The conference was attended by Turkmenistan’s
deputy minister of foreign minister V.Hadzhiev, Afghan
deputy minister of foreign affairs Ahmad Nasir Andishe,
deputy minister of mining and oil resources, Abdul
Quddus Hamidi, the governor of Herat province Mohammad Asef Rahimi, the governor of Farah
province, Mohammad Asef Nang, head of the Herat Provincial Council Kamran Alizai and
research director of TurkmenGaz M.Halylov.
All the speakers noted that the implementation of the gas pipeline project will have a positive
impact on the stabilization of the internal situation and the restoration of peace in Afghanistan. It
was said that the project is essential to strengthen the political and social stability in Afghanistan
and the region.
The multi-billion dollar project has recently seen some progress after years of delay. Earlier this
month, Turkmenistan, Afghanistan, Pakistan and India, the four TAPI countries, agreed to invest
$200 million in the next stage of the project. The agreement was signed during 24th meeting of
the steering committee of the TAPI pipeline project which was held in Ashgabat.
The much delayed
transnational pipeline was
formally inaugurated on
December 13. TurkmenGaz
is the leader of the
consortium and has 85
percent equity. Along with
GAIL India, ISGS of Pakistan
and Afghan Gas Enterprise
(AGE) have 5 percent stake
each.
The TAPI pipeline will have a
capacity to carry 90 million
standard cubic metres a day
(mmscmd) gas for 30 years
and is planned to become
operational in 2018.

US: Baker Hughes outlines path for the future following termination
of Halliburton merger…… Source: Baker Hughes
Following the termination of its merger agreement with Halliburton, Baker Hughes has outlined
a series of actions to reduce costs and simplify its business, enhance its commercial strategy,
and optimize its capital structure. The steps are intended to strengthen the company's
competitive position, financial performance and shareholder returns during the ongoing industry
challenges of today and for the additional opportunities that will be available when the market
recovers.
Baker Hughes Chairman and CEO Martin Craighead said that the company is well positioned to
build on its heritage as a product innovator,
focusing on the development of products that
lower costs and maximize production for
operators in the oil and gas industry.
'Innovation is what we do best and what our
customers need the most. It is an enviable
capability that is part of our culture and
continues to differentiate us in the market.
Baker Hughes also has an experienced and
exceptionally talented team of people, a global
footprint, and industry-leading products,
services and technology expertise,' Craighead said. 'More than ever, our customers need to
lower their costs and maximize production. These objectives align with our strengths in Well
Construction, where we have leading capabilities in drilling services, drill bits and completions,
and Well Production, where we have a unique portfolio with artificial lift systems, wireline
services and production chemicals. We intend to build on our strong foundation and market
position by simplifying the structure of our business and evolving our commercial strategy to
deliver significant value to shareholders.'
Actions outlined by the company include:
Improving operational efficiency and effectiveness
Baker Hughes is taking immediate steps to remove significant costs that were retained in
compliance with the former merger agreement. In addition to removing those previously
disclosed costs, the company is evaluating broader structural changes to further significantly
reduce costs and improve efficiency, which will allow it to better serve the rapidly shifting global
market.
The initial phase of the cost reduction efforts is expected to result in $500 million of annualized
savings by the end of 2016.
Evolving the company's go-to-market strategy
As it seeks to further capitalize on its leadership position as a product innovator, the company is
evolving its go-to-market strategy to align with a changing marketplace and maximize its return
on invested capital. The company will be rationalizing where it provides its current full-service
model and will build a broader range of global sales channels for select countries, including
tailored operating models. These new channels will allow Baker Hughes to take its products to
market more efficiently and participate differently in existing markets with lower investment and
fewer risks.

In an effort to improve its return on invested capital the company has decided to retain a
selective footprint in its U.S. onshore pressure pumping business, while preserving the flexibility
to expand for the right opportunities. This approach will allow the company to achieve cash-
positive operations in a capital-intensive segment that is expected to remain challenging due to
overcapacity, commoditized pricing and low barriers to entry.
Optimizing the company's capital structure
The company also is taking actions to optimize its capital structure to achieve the right balance
between returning capital to shareholders, maintaining strong investment grade ratings and
having the necessary cash to fund cost efficiency initiatives, while preserving its financial
flexibility.
As part of these plans, the company intends to buy back shares totaling $1.5 billion and debt
totaling $1 billion, from proceeds of the $3.5 billion breakup fee. In addition, the company intends
to refinance its $2.5 billion credit facility, which expires in September 2016.
'The company will approach these actions thoughtfully, decisively and swiftly to position the
company for success and to maximize shareholder value,' Craighead said. 'As we implement
these changes, we remain focused on running the business efficiently while capitalizing on our
strengths as a product innovator to create new growth opportunities. We are extremely
appreciative of our customers and their loyalty to Baker Hughes, and our employees are
energized to turn our technology expertise into the latest game-changing product innovations that
create even more value for them.'
Baker Hughes will provide more details on its plans when Craighead and Senior Vice President
and Chief Financial Officer Kimberly Ross host a webcast on Tuesday, May 3 at 7:00 a.m.
Central Time (8:00 a.m. Eastern Time). To access the webcast, go to the Events and
Presentations page on the Company's website at:www.bakerhughes.com/investor.

NewBase 03 May 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices dip on rising Middle East supply( Brent=45.68 & WTI=44.71)
Reuters + NewBase
Oil prices dipped in early Asian trading on Tuesday on signs that production in the Middle East is
continuing to rise, countering falls in U.S. output and threatening to keep a global supply overhang
in place for longer.
The international Brent crude benchmark was trading at $45.68 per barrel at 0100 GMT, down 15
cents from its last close. U.S. West Texas Intermediate (WTI) crude futures were down 6 cents at
$44.72 a barrel.
The dips came as Iraq, the second biggest exporter within theOrganization of the Petroleum
Exporting Countries (OPEC), was the latest OPEC-member to announce its exports were rising,
reporting oil shipments from southern fields at an average rate of 3.364 million barrels per day
(bpd) in April.
That was higher than the March average of 3.286 million and close to its November record of 3.37
million bpd.
"Energy was weaker. Concerns over rising OPEC supply were raised after Iraq announced it had
shipped 3.36 million bpd in April," ANZ bank said on Tuesday.
Production in OPEC's biggest exporter, Saudi Arabia, was 10.15 million bpd in April, but sources
have said it may rise to near-records of 10.5 million bpd in coming weeks.
Oil price special
coverage

Adding to surging Middle East output is Iran which, relieved of crippling sanctions in January, has
increased its exports to almost 2 million bpd currently from little over 1 million bpd at the start of
the year, with sales especially to South Korea soaring.
The surging supplies from the Middle East counter falling U.S. output, where production has
declined from a peak of around 9.6 million bpd in June 2015, to below 9 million bpd now,
according to U.S. Energy Information Administration (EIA) data.
"It was the falling U.S. production that helped lift prices earlier this year, so if a surge in Middle
East output now counters the U.S. decline, then we could well be in for another downward
correction in oil markets," one trader said.
Crude futures surged by almost a third in April, and they have recovered over 70 percent from
decade lows reached in early 2016.
"A weaker dollar, falling U.S. oil production, improving economic data from China, combined with
large speculative positions fuelled the rally. Analysts, however, have cautioned that inventories
remain high and oversupply persists," Singapore Exchange (SGX) said on Tuesday in its monthly
report.
BP Says Oil Price Not Lower Forever
RigZone - Andreas Exarheas
The oil price will not stay lower forever, says BP's Upstream Chief Executive Bernard Looney.
Oil prices will eventually rebound, BP’s Upstream Chief Executive Bernard Looney told attendees
during a presentation at the
Offshore Technology Conference
in Houston.
“Is it lower for longer or lower
forever? At BP we don’t think it’s
lower forever,” Looney assured
oil and gas industry delegates
during the first day of the global
conference.
“You hear people questioning the
future of oil and gas … The world
needs this industry; half the
world still lives in poverty…these
people deserve the same
opportunities we take for
granted and oil and gas has [the
potential to deliver that],” he
added.
BP’s Energy Outlook (EO) forecasts that energy consumption will increase by 34 percent between
2014 and 2035, as a result of the expected growth in the world economy. What’s more, a rising
global population is projected to increase by around 1.5 billion people to almost 8.8 billion people
by 2035.

The energy firm said fossil fuels will remain the dominant source of energy, providing around 60
percent of the increase in energy and accounting for almost 80 percent of total energy supplies in
2035. Demand will further increase to around 2.5 trillion barrels of oil and gas by 2050, according
to BP’s Technology Outlook report, which stated that the sector will be able to meet this challenge
using current upstream technology.
Looney championed driving productivity in the sector among the ways in which the industry can
help itself during the current market downturn. He said the process is the best insurance.” He also
promoted collaboration within the industry, but warned that such processes will need to continue
when the oil price eventually recovers.
Looney informed delegates that it the company may save around $10 billion on its Mad Dog
Phase 2 project, offshore in the Gulf of Mexico, through collaboration practices. The project’s
costs were originally scheduled to be around $20 billion.
In his presentation, Looney said that the industry needs to change some of its practices in order to
prosper. The BP frontman said that costs associated with the sector must stop being shaped by
the oil price and called for a steady decrease in prices. “We need to challenge what we’re doing
and learn to adapt,” said Looney.
In our forecast, low prices force the rebalancing of global oil supply and demand.
The partial recovery of price next year is required to resuscitate some supply
growth into 2017, in our central scenario.
At around $65/b WTI and $70/b Brent, the industry should be able to generate
enough supply growth to match basecase demand growth in the medium term, if
indeed Opec supplies grow as well – from Iran and later from Iraq, Libya, and
possibly Saudi Arabia as well. As for risks, plenty remain.
Britain's oil and gas industry is in a crisis. Dwindling production and low prices
are killing off company profits and jobs in the process.
In fact, things are so bad that the number of jobs has fallen at its fastest rate since
2004, according to research by the Aberdeen and Grampian Chamber of
Commerce.
The group estimated that 65,000 jobs were lost in the UK oil industry in 2014
and a further 5,000 were lost in 2015.
In November, Graves & Co, an energy industry consultancy, said oil and gas
companies have laid off more than 250,000 workers around the world, a tally
that will rise if oil prices remain in the dumps.

NewBase Special Coverage
News Agencies News Release 03 May 2016
Can OPEC 'freeze' production, or is it already
frozen?
Roger Andrews from Energy Matters
Between July 2014 and January 2015 the price of OPEC's oil 'market basket' fell from over
$100/bbl to less than $50/bbl, causing considerable hardship to the OPEC countries who rely on
oil exports to finance their national budgets - which is all twelve of them.
Under these circumstances the logical reaction for a cash-strapped, oil-rich country would be to
pump more oil to increase revenues , yet only two - Saudi Arabia and Iraq - actually did so. The
remaining ten, which account for over 50% of OPEC's current total output, seem to have already
been pumping as fast as they could or were prevented from doing so by civil war (Libya) or
sanctions (Iran) or by other factors outside their control.
The implication is that all the talk about freezing OPEC production at January 2016 levels may be
just so much hot air. With Saudi Arabia also now pumping at capacity according to Euan's March
vital statistics post OPEC may no longer be capable of increasing production above current levels
even if it wanted to.
We begin with a comparison of monthly OPEC market basket prices with total OPEC crude oil
production (data from OPEC). The plot runs from July 2014, when the oil price 'collapse' began,
through March 2016:

Figure 1: OPEC crude production versus OPEC 'Market Basket' price, July 2014 through March 2016
OPEC held production relatively stable between July 2014 and February 2015 but then abruptly
increased it by 1.6 million bbl/day - about 5% of production - between February and June 2015,
and since then production has once again stabilized.
The timing of the increase leaves little doubt that it was at least partly a response to the price
collapse, but the production increase came almost entirely from two countries, with Saudi Arabia
adding 750,000 bbl/day and Iraq adding 850,000 bbl/day.
The Saudi increase was probably a policy decision but the Iraqi increase is less easily attributed. It
may simply have been a continuation of Iraq's ongoing attempts to rebuild its oil industry aided
by a December 2014 deal with the Kurds which increased the contribution from Iraq's 'northern oil'
by 451,000 bbl/day in May 2015.
Now a quick look at OPEC production by country. Figure 2 shows the little fish, with the Y-scale
fixed at 3.5 million bpd so that you can tell the countries apart (data from Peak Oil Barrel, which
obtains its data from OPEC monthly reports and contains expanded graphs of OPEC production
by country if anyone wants to review them).
Apart from the fluctuations in Libya and the erratic behavior of Angola and Nigeria the lines are
close to flat. There's no obvious sign of a production response to lower oil prices. (The abrupt rise
in Iranian production after January 2016 reflects the lifting of sanctions; the reasons for the equally
abrupt decrease in UAE production that effectively offsets it are not known.)

Figure 2: OPEC crude production from smaller contributors, July 2014 through March 2016
Figure 3 now adds the bigger fish. The January-May production increases in Saudi Arabia and
Iraq are evident. So is the extent to which Saudi Arabia continues to dominate OPEC production:
Figure 3: OPEC crude production by country, July 2014 through March 2016
Table 1 shows production changes by country between the time the oil price began to crater in
July 2014 and March 2016. The countries are sorted by the absolute change in production:

Since July 14 OPEC has increased its combined production by 5%, but without Iraq the number
falls to 1%, and if we add Iran we are looking at a small production decrease. Apart from Iraq and
Iran only Angola has increased production by more than 5%.
Production in Saudi
Arabia, Ecuador,
Venezuela, Kuwait and
arguably the UAE has
remained effectively flat
while in the remaining four
countries it has decreased
by up to 18%. Not only
were these four countries
(Qatar, Algeria, Nigeria
and - unsurprisingly -
Libya) unable to pump
more oil to generate
desperately-needed cash,
they apparently weren't
even able to stop ongoing
production declines. Which leads to the question of whether OPEC's strategy of not cutting
production to preserve its market share has worked. Generally it has, with OPEC's share of world
production falling only by 0.3% between July 2014 and March 2016, according to OPEC monthly
reports.
Only three of the twelve OPEC countries, however, have succeeded in increasing their market
share - Iraq, Iran and Angola. The rest, including Saudi Arabia, have lost slightly:
And what of OPEC's future production? This being the oil market it's unpredictable, but the data
presented here suggest that unless an unprecedented and lasting peace breaks out between the
squabbling and war-torn MENA countries in the next year or two it's unlikely to increase.
An OPEC production freeze seems inevitable regardless of attempts such as the recent Doha
Meeting to negotiate one. A quick glance back at Figure 1 shows that a de facto freeze has in fact
been in place since June 2015, but not because OPEC planned it.Z A /

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

New base energy news issue 843 dated 03 may 2016

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New base energy news issue 843 dated 03 may 2016