New base energy news november 19 2018 no-1214 by khaled al awadi

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NewBase Energy News 19 November 2018 - Issue No. 1214 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Adipec 2018 attracts record 145,000 visitors
ADIPEC.com + NewBase
The 21st edition of the Abu Dhabi International Petroleum Exhibition and Conference (Adipec 2018)
witnessed a huge participation from exhibitors and visitors, marking the biggest edition since the
exhibition’s inception in the year 1984.
The number of visitors to the latest edition exceeded 145,000 comprising specialized experts and
VIP visitors, in addition to the participation of 2,200 exhibiting companies from 67 countries as well
as 29 country pavilions.
Supported by the Abu Dhabi National Oil Company (Adnoc), UAE Ministry of Energy and Industry,
and the Abu Dhabi Chamber, the exhibition was held under the patronage of H.H. Sheikh Khalifa
bin Zayed Al Nahyan, President of the UAE at the Abu Dhabi National Exhibition Centre (Adnec)
from November 12 to 15.
The exhibition was of great importance, highlighting the wise leadership’s keenness in participating
in its various activities and meet with the decision makers and specialized experts representing both
public and private companies operating in this vital sector.
Dr Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of the Abu Dhabi National Oil
Company (Adnoc), said: “In line with the support and directives of our nation’s wise leadership,

Adipec 2018 has achieved great success – not only in the authority, influence and expertise of
Adipec’s speakers and wide range of rich discussion and debate, but also in the volume and
importance of the agreements and projects announced.
“This year’s Adipec also marked a significant moment for our industry, as it refocuses its core
mission as a critical enabler of the fourth industrial revolution. At Adnoc, we have defined this
mission as ‘Oil & Gas 4.0’ –where we will leverage the latest technologies from artificial intelligence,
big data and blockchain to ensure growing economies have the energy they need, by enhancing
our operational efficiency, driving performance, maximizing profitability and empowering our people.
We look forward to working with our colleagues, partners and friends in attendance this year, seizing
the promising opportunities before us and accelerating our industry’s progress.”
Dr Al Jaber praised the exceptional efforts made by Adnec, which expertly organized and executed
this year’s conference, ensuring that Abu Dhabi and the UAE remain the most important global hub
for our industry, well-positioned to incubate some of the most innovative and forward-looking ideas,
projects and plans to set organizational agendas for years to come.
Humaid Matar Al Dhaheri, Group CEO of Adnec, said: “We are proud of the results that the
exhibition has achieved in terms of number of visitors and the deals signed on the sidelines of the
events, which reflect the success of Adnec’s efforts in supporting existing exhibitions and enhancing
its regional and international competitiveness, as part of its strategy to underscore Abu Dhabi's
position as the region’s capital for business tourism.”
He pointed out that the success of the exhibition in its current edition will contribute to enhancing
the confidence of the organizers of the events specialized in the infrastructure of our centers and
the competitiveness of the Emirate to attract more leading global exhibitions and conferences, in
the sectors identified in the Abu Dhabi Plan and the Emirates Economic Vision 2030.
Al Dhaheri emphasized that Adnec is constantly working with its partners in the public and private
sectors to ensure the success of all events being held in its various centers inside and outside the
UAE and to organize them in a manner befitting Abu Dhabi’s global reputation and position. The
overwhelming response garnered by the exhibition in its biggest edition since inception, is a result
of the continues efforts of several national institutions, for which, we extend gratitude and
appreciation for this constructive and fruitful cooperation.
Christopher Hudson, President of dmg: events, one of the world's leading exhibition and conference
organizers, and the organizer of Adipec 2018, said: “We are delighted with the turnout of this year's
attendees, which included over 100 Ministers, CEOs and policy makers from across the world. From
the conference programme to the exhibition floor, Adipec 2018 reflected the UAE's and Abu Dhabi's
position as a worldwide convening power for the oil and gas industry that shapes the future of the
industry. We thank Adnoc for the tremendous support we received and the great levels of
cooperation from across all departments within Adnec."

New dedicated exhibition zone focuses on digitalization
Adipec 2018 witnessed the launch of three new dedicated exhibition zones - Digitalization in the
energy sector, Heavy Machinery and the Commercial Dive Zone. The use of modern and
appropriate technologies that will help increase operational efficiency, improve performance,
increase profitability in the oil and gas sector was also under the spotlight at the recently concluded
Adipec, which reviewed the sector’s digitalization efforts.
More than 160 strategic conferences held
The Adipec conferences and technical sessions, created by a committee of industry experts,
provided insights on the future of the oil and gas industry through a wide variety of specializations,
including: Ministerial Sessions; Global Business Leader Sessions; Executive Dialogues, C-Suite
Dialogues; CEO Finance Breakfasts; Inclusion & Diversity in Energy and Offshore and Marine
Global Business Leader Sessions, in addition to a comprehensive technical programme.
Underpinning the event’s status as a premier meeting place for companies of all sizes, across the
oil and gas value chain,42 national and international oil companies, as well as leading policy and
decision makers, along with 980 speakers from around the world participated in over 160 strategic
conference sessions that analyzed every aspect of the sector.
Another major highlight of Adipec 2018 was the closed door, invitation only roundtables hosted by
the VIP members only Middle East Petroleum Club, where c-suite business leaders and influencers
engaged in open dialogue with the agenda of embracing change and putting in place strategies
capable of navigating critically important areas to help define forward looking business models and
influence transformative strategies to steer growth across the industry, setting the agenda for the
future of oil and gas.
Young Adipec programme
The fourth edition of Offshore & Marine exhibition, strategically co-located alongside the leading
global oil and gas event, provided attendees with the unique opportunity to network and interact
with the owners and operators of work boats, supply boats and drilling rigs.
Meanwhile, the sixth edition of the Young Adipec programme, fully supported by Abu Dhabi
Department of Education and Knowledge (ADEK), witnessed the participation of around 600 Emirati
and international high school students, to gain first-hand knowledge and insights into the many
career options that are available in the nation’s vital oil and gas industry. Launched in 2013, the
programme is the youth outreach initiative of Adipec and has hosted more than 1,900 students aged
14 to 17 in its first five years.
Adnec provides around 133,000 sq m of world-class indoor and outdoor space and waterfront areas
in Adnec Marina, capable of catering to the needs of customers, with more than 6,000 parking slots,
which makes it one of the most advanced exhibition centres in the region.

Saudi Acwa, AlGihaz reach financial close for Sakaka PV IPP
Acwa + NewBase
Acwa Power, a leader in power generation and water desalination plants, and AlGihaz Holding
Company, a major Saudi contractor and investor, have announced the financial closure of the SR1.2
billion ($320 million) Sakaka PV IPP.
The Sakaka PV IPP is the first ever utility scale renewable energy project to be developed in Saudi
Arabia under the landmark National Renewable Energy Program executed by REPDO (Renewable
Energy Project Development Office).
A new company “Sakaka Solar Energy Company (SSEC)” has been formed with Acwa Power
holding 70 per cent and AlGihaz 30 per cent through its subsidiary AlGihaz Renewable Energy
Company to own the Sakaka PV Plant. SSEC has concluded a 25 years Power Purchase
Agreement with Saudi Power Procurement Company (SPPC) acting as offtaker.
The transaction is financed through limited recourse ring fenced project financing with the entire
debt fully underwritten by Natixis as Initial Mandated Lead Arranger and Bookrunner. In addition,
Arab National Bank provided an equity bridge loan for the transaction.
Paddy Padmanathan, president & chief executive officer of Acwa Power, said, "We are excited to
commence construction of this first utility scale PV plant in the Kingdom project which will allow us
to utilize the considerable expertise and relationships with technology providers and the supply
chain we have acquired through the development of 3000MW of renewable energy projects in 5
other countries over the last 7 years to now deliver at our home not only the lowest tariff for PV
power but also to start establishing a renewable energy industry in the Kingdom which we believe
will become one of the most significant cornerstone to deliver several of the objectives of Vision
2030 of the Kingdom."
Marking the occasion, Osama Bin Abdulwahab Khawandanah CEO, SPPC, added: The Sakaka
300MW Solar PV project is the first step in a long journey the Kingdom has committed to
undertaking. We are blessed with abundant sunshine and wind, and it is our mission to utilize these
valuable resources to diversify our energy mix, eliminate the use of high-value liquid fuels from our
power generation system, and encourage further private sector contributions in the power sector”.
Sami Al Angari, vice-chairman & chief executive officer of AlGihaz said: “We are delighted to be
investing with Acwa Power on this important and landmark project in Saudi Arabia and are honoured
to provide our support to the consortium for the delivery of the project.
“The Kingdom’s plan to become more diversified in its energy sources and concentrate on
renewable energy is an important part of the National Transformation Plan (NTP) and we are keen
to play a major role in helping deliver this. AlGihaz is committed to a green future for the Kingdom
and for the world and we will aim to participate to any renewable energy project that would help
achieve this goal.”
Rajit Nanda, chief investment officer of Acwa Power, said: “Sakaka PV IPP is a landmark project
for the Saudi renewable energy sector as it serves as first step towards achieving the visionary
goals of the Saudi National Renewable Energy Program that aims to accelerate the shift of the

Kingdom towards utilizing renewable energy resources and ensuring energy security at the lowest
cost.
“The new world record tariff of US Cents 2.3417/kWh will set the stage for a robust and competitive
market for renewable energy in the Kingdom, thus enabling Saudi Arabia to expand its portfolio of
clean energy projects to support the sustainable development of country.”
The commercial operation date of the plant is scheduled to be towards the end of calendar year
2019.
Upon completion, the 300 MW Sakaka PV IPP will supply more than 75,000 households with green
power while offsetting over 430,000 tonnes of carbon dioxide per year. The project will also create
new employment opportunities in fields including construction, operations and maintenance as well
as enhancing the local capabilities in terms of local content.
The engineering, procurement and construction (EPC) contract for the project was awarded to a
consortium of Mahindra Susten and Chint. The operations and maintenance agreement was signed
with DiaaSakaka Operation and Maintenance Company, an affiliate of First National Operations &
Maintenance Co. Ltd. (NOMAC).
The plant is located in Al Jouf at a site spanning over 6 sq km.

Iraq restarts some Kirkuk oil exports after year-long halt
Reuters + NewBase
Iraq on Friday restarted exports of Kirkuk oil, halted a year ago due to a standoff between the central
government and Kurdistan’s semi-autonomous region, after a new government in Baghdad agreed
a tentative deal with Erbil.
The development is a win for the U.S. government, which has been urging both sides to settle the
dispute and resume flows to help address a shortage of Iranian crude in the region after Washington
imposed new sanctions on Tehran.
U.S. State Department spokeswoman Heather Nauert said on Twitter that resumption of exports of
Kirkuk oil was “another important step in our efforts to reduce Iran’s oil exports.”
Flows resumed at a modest level of around 50,000-60,000 barrels per day (bpd) compared with a
peak of 300,000 bpd seen last year and it was not clear when and by how much they would rise,
industry sources said.
Iraq oil ministry confirms resumption of Kirkuk oil exports

The Kirkuk crude is being exported to the Turkish Mediterranean port of Ceyhan by a pipeline
crossing Kurdistan. A spokesman for Iraq’s Oil Ministry, Asim Jihad, confirmed exports had
restarted, adding that an agreement had been reached to resume flows at 50,000-100,000 bpd.
“The resumption of Kirkuk shipments of between 50,000 and 100,000 barrels per day will not add
to Iraq’s total exports,” Jihad said. Oil prices rose, with Brent crude up more than $1 per barrel,
supported partially by the lower-than-expected flows from Kurdistan.
The deal signals that new Iraqi Prime Minister Adel Abdul-Mahdi and Oil Minister Thamir Ghadhban
are ready to work with Erbil despite previous tensions and a failed independence referendum in
September 2017.
The halting of exports from Kirkuk in October 2017 stopped almost 300,000 bpd flowing out of Iraq
toward Turkey and international markets - causing a net revenue loss of some $8 billion over the
past year.
Most of Iraq’s exports come from southern fields, but Kirkuk is one of the biggest and oldest oilfields
in the Middle East, estimated to contain 9 billion barrels of recoverable oil.
Exports had been on hold since Iraqi government forces retook Kirkuk from Kurdish authorities in
2017. The Kurds had taken control of Kirkuk and its oilfields after Islamic State militants drove the
Iraqi army out in 2014, and Kurdish forces, in turn, ejected the militants.
A pipeline Baghdad once used for export via Turkey was wrecked by Islamic State - leaving only
one working. Kurdistan is producing and exporting some 400,000 bpd via the pipeline. Resumed
flows from Kirkuk will lift this to 450,000-500,000 bpd, but short of the 700,000 bpd the Kurdish
region had exported at some point last year.
Iraqi authorities say they still need to feed local refineries, where Kirkuk’s output has been diverted
over the past year. The refineries are set to receive some 185,000 bpd under the latest deal, the
sources said.
Baghdad and Erbil have yet to find a compromise over maximum flow levels as well as budget
transfers from the central government to Erbil - something the two sides have struggled to agree on
for many years.

Libya needs $60bn to overhaul energy infrastructure, says NOC chairman
The National + Jennifer Gnana + NewBase
Libyan oil revenues for the first nine months of the year were around $17bn, according to the head
of the country's state producer, Mustafa Sanalla. Satish Kumar for the National
Libya needs up to $60 billion in investment to revive its energy industry, with $40bn required to raise
refining capacity to a million barrels per day, with the remainder
being channelled over the next five years in development of
upstream infrastructure, the chairman of Libya’s National Oil
Corporation said.
"For the next five years $20bn is required [upstream], for
downstream we have to validate the study with Wood Group. So total
requirement would be $60bn,” Mustafa Sanalla the head of Libya's
NOC told The National in an interview in Abu Dhabi.
Talks are underway with the UK energy services firm Wood Group to prepare a study on overhauling
the country’s refining assets, with plans for grassroots integrated refining and petrochemicals plants,
Mr Sanalla said.
Libya, which has some of the cheapest, largely sweet oil in northern Africa, has seen much of its
production remain offline during the bloody civil war that erupted between rival factions following the
downfall of Muammar Qaddafi in 2011. Production, which had remained at about 1.75 million bpd
then fell by 850,000 bpd over the succeeding years as protests and blockades prevented export of
crude via the the country’s key port terminals.
However, following the handover of key Libyan ports Ras Lanuf, Es Sider, Zueitina and Hariga in
June, Libya has managed to get more crude to the markets, with current production in the range of
1.2 to 1.3 million bpd, according to Mr Sanalla. Production has averaged a million bpd for this year,
a figure that Mr Sanalla hopes to raise to two million bpd in four year's time.
"By 2022 we are going to have more than two million bpd of oil, and more three billion standard
cubic feet of gas, so we need a total of $20bn for the next five years, so this [is going] to increase
production,” he added.

The investment would be channeled into the rehabilitation of oil fields, particularly the damaged
ones, which have taken around 150,000 bpd offline, he said. “We could add more than hundreds
of thousands of barrels per day if we do some repair on pumps, generators,” said Mr Sanalla.
Libya’s state-backed producer, which received revenues from its hydrocarbons assets - including
from the eastern provinces - of $1.66bn in September said revenues for the first nine months of the
year totalled nearly $17bn.
"Last year’s total [was] $13bn and the year before only $4bn," he said, adding, "This is for the whole
of Libya’s oil, gas, petrochemicals, royalties and taxation.”
The company has struggled with its budgets and payments from the east but the overall situation is
better than previous years, with the government benefitting from better oil and gas revenues, Mr
Sanalla said.
Upstream, the country is currently preparing bids for (A&E) blocks offshore to the north of the
country, a “mega-project” valued between $4bn and $5bn, he said.
"By 2019 hopefully the bid will be ready and then we will start immediately," Mr Sanalla said. "We
had meetings last week with Mr Descalzi [of Eni] in Tripoli with his staff to discuss opportunities...and
how to maintain and sustain production,” Mr Sanalla said.
NOC is also betting on the establishment of its fully-owned Zallaf Company to revive production. Mr
Sanalla said he hopes to see the “first drop of oil hopefully by end of 2019,” from Zallaf's assets.
The company will focus on production from the country’s south west, besides focusing on the Sidra
and Ras Lanouf terminals, which have now come under the control of the UN-backed Government
of National Accord.
“We have a bottleneck there on the storage capacity, so hundreds of millions of US dollars [are
needed] only for the storage tanks in Sidra and Ras Lanouf,” said Mr Sanalla.
Work on the ports, which prior to protests, had a collective total capacity of 240,000 bpd, was being
fast-tracked to expedite exports to get them up and running by next year.

“We have an agreement with the GNA government on how to fast-track the maintenance and
recovery because we have a big problem in the storage capacity," said Mr Sanalla. "We couldn’t
have the logistics...to export easily. So we’re leveraging our staff, our operations, to make easy
exportation.”
Libya, which has 50.5 trillion cubic feet of proven gas reserves is also looking to ramp up production
of the cleaner fuel for domestic consumption as well as for export via its Greenstream pipeline to
Italy.
The addition of 10 new wells through a mega project being executed with Italian energy company
Eni in Bahr Essalam in the country’s north-west could see additional gas flowing through the
pipeline.
“By the end of this year a total of 10 wells will be online," said Mr Sanalla. "This will give us room
for more production and we’re targeting to produce a total of 1.1 billion standard cubic feet per day.
This will give more gas production and
we could export [via Greenstream].”
More gas production could also come on
stream from the onshore Al Wafa field.
Through its partnership with Eni, NOC
aims to increase production from the field
by 70 million standard cubic feet per day,
he said.
Current capacity on the 540km-long
pipeline is around 301 million standard
cubic feet, “less than 30 per cent,” Mr
Sanalla said. Priority is being accorded
to the Libyan market.
Downstream, the state producer has
plans to raise refining capacity to a
million bpd from its current 350,000 bpd.
"We’re still importing more than 70 per
cent of our needs from outside, we don’t
have enough capacity to refine, so we have done a feasibility study and we are trying now to revive,”
said Mr Sanalla.
Negotiations are underway with Wood Group “for the selection of a refining scheme associated with
petrochemicals,” he said. "We’re going to sign a contract with them very soon...maybe before the
end of this year and hopefully they can do a feasibility study of the downstream.”
NOC, which estimates costs for refining overhauls in the range of $40bn, will look for joint ventures
with international oil companies. The construction of a grassroots refinery in Tobruk to the far east,
near the Egyptian border is on the books.
The country’s largest refinery is at Zawiya, west of Tripoli, where NOC is planning to double refining
capacity from to 250,000 bpd from 120,000 bpd at present.
“We are having also to expand Ras Lanouf complex...and also to expand Marsa el-Brega complex
and...have a new petrochemicals complex west of Benghazi... but we have to make validation of
the study with Wood Group,” he said.

Egypt: Undersea gas fires Egypt’s regional energy dreams
AFP + NewBase
Egypt is looking to use its vast, newly tapped undersea gas reserves to establish itself as a key
energy exporter and revive its flagging economy. Encouraged by the discovery of huge natural
gasfields in the Mediterranean, Cairo has in recent months signed gas deals with neighbouring
Israel as well as Cyprus and Greece.
Former oil minister Osama Kamal said Egypt has a “plan to become a regional energy hub”.
In the past year, gas has started flowing from four major fields off Egypt’s Mediterranean coast,
including the vast Zohr field, inaugurated with great ceremony by President Abdul Fattah Al Sissi.
Discovered in 2015 by Italian energy giant Eni, Zohr is the biggest gasfield so far found in Egyptian
waters.
The immediate upshot has been that since September, the Arab world’s most populous country has
been able to halt imports of liquefied natural gas (LNG), which last year cost it some $220 million
(Dh808 million) per month.
Economic pipeline
Coming after a financial crisis that pushed Cairo in 2016 to take a $12 billion loan from the
International Monetary Fund (IMF), the gas has proved a lifeline. Egypt’s budget deficit, which hit a
record 103 per cent of GDP in the financial year 2016-17, has since fallen to 93 per cent. Gas
production has now hit 184 million cubic metres a day.
Having met its own needs, Cairo is looking to kick-start exports and extend its regional influence.It
has signed deals to import gas from neighbouring countries for liquefaction at installations on its
Mediterranean coast, ready for re-
export to Europe.
In September, Egypt signed a deal with
Cyprus to build a pipeline to pump
Cypriot gas hundreds of kilometres to
Egypt for processing, before being
exported to Europe.
That came amid tensions between
Egypt and Turkey — which has
supported the Muslim Brotherhood,
seen by Cairo as a terrorist
organisation, and has troops in
breakaway northern Cyprus.
In February, Egypt — the only Arab
state apart from Jordan to have a peace
deal with Israel — inked an agreement
to import gas from the latter’s Tamar
and Leviathan reservoirs.
A US-Israeli consortium leading the
development of Israel’s offshore gas
reserves in September announced it would buy part of a disused pipeline connecting the Israeli
coastal city of Ashqelon with the northern Sinai Peninsula.

That would bypass a land pipeline across the Sinai that was repeatedly targeted by jihadists in 2011
and 2012. The $15-billion deal will see some 64 billion cubic metres of gas pumped in from the
Israeli fields over 10 years.
Independent news website Mada Masr reported that Egypt’s General Intelligence Service is the
majority shareholder in East Gas, which will earn the largest part of the profits from the import of
Israeli gas and its resale to the Egyptian state.
Kamal said he sees “no problem” in that, adding that the agency has held a majority stake in the
firm since 2003. “That guarantees the protection of Egyptian interests,” he said.
Ezzat Abdul Aziz, former president of the Egyptian Atomic Energy Agency, said the projects were
“of vital importance for Egypt” and would have direct returns for the Egyptian economy.
They “confirm the strategic importance of Egypt and allow it to take advantage of its location
between producing countries in the east and consuming countries of the West”, he said.
Expanding energy ambitions
The Egyptian state is also hoping to rake in billions of dollars in revenues from petro-chemicals. Its
regional energy ambitions are “not limited to the natural gas sector, but also involve major projects
in the petroleum and petrochemical sectors,” said former oil minister Kamal.
Minister of Petroleum and Mineral Resources Tarek Al Molla recently announced a deal to expand
the Midor refinery in the Egyptian capital, to boost its output by some 60 per cent.
On top of that, the new Mostorod refinery in northern Cairo is set to produce 4.4 million tonnes of
petroleum products a year after it comes online by next May, according to Ahmad Heikal, president
of Egyptian investment firm Citadel Capital.
That alone will save the state $2 billion a year on petrochemical imports, which last year cost it some
$5.2 billion. Egypt is also investing in a processing plant on the Red Sea that could produce some
four million tonnes of petro-products a year — as well as creating 3,000 jobs in a country where
unemployment is rife.

NewBase 19 October 2018 - 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices climb amid expected OPEC cut, but markets remain wary
Reuters + Bloomberg + NewBase
Oil prices rose around 1 percent on Monday as traders expected top exporter Saudi Arabia to push
producer club OPEC to cut supply toward year-end.
Despite that, market sentiment remains weak on signs of a demand slowdown amid deep trade
disputes between the world’s two biggest economies, the United States and China.
Front-month Brent crude oil futures LCOc1 were at $67.29 per barrel at 0259 GMT, up 53 cents, or
0.8 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1, were up 71 cents, or 1.3 percent, at $57.17
per barrel.
“The market’s bullish radar is still waiting for OPEC+ to deliver a sizeable cut number,” said Stephen
Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.
Oil price special
coverage

The Organization of the Petroleum Exporting Countries (OPEC), de-facto led by Saudi Arabia, is
pushing for the producer cartel and its allies to cut 1 million to 1.4 million barrels per day (bpd) of
supply to adjust for a slowdown in demand growth and prevent oversupply.
Despite Monday’s gains, crude prices remain almost a quarter below their recent peaks in early
October, weighed down by surging supply and a slowdown in demand growth. This comes in part
after Washington granted Iran’s major oil customers, mostly in Asia, unexpectedly broad exemptions
to sanctions it re-imposed on Tehran in November.
Japanese refiner Fuji Oil is set to resume Iranian crude purchases after Japan received one of those
waivers, industry sources familiar with the matter said.
Japan had ceased all purchases of Iranian oil prior to receiving the waiver in early November.
Meanwhile, oil production in the United States is surging.
U.S. energy firms added two oil rigs in the week to Nov. 16, bringing the total count to 888, the
highest level since March 2015, a weekly report by energy services firm Baker Hughes said on
Friday.
The rising drilling activity points to a further increase in U.S. crude oil production C-OUT-T-EIA,
which has already jumped by almost a quarter this year, to a record 11.7 million bpd.
Put off by a surge in supply and the slowdown in demand, financial markets have been becoming
increasingly wary of the oil sector, with money managers cutting their bullish wagers on crude
futures and options to the lowest level since June 2017, the U.S. Commodity Futures Trading
Commission (CFTC) said on Friday.
The speculator group cut its combined futures and options positions on U.S. and Brent crude during
the week ended Nov. 13 to the lowest since June 27, 2017.

OPEC Output Curb Plan Overshadows U.S. Production
Oil shot back up following six weeks of losses as speculation of OPEC weighing bigger output cuts
overshadowed signs of expanding American crude production.
Futures in New York rose as much as 1.5 percent after a 6.2 percent slump last week. With U.S.
production at a record, Baker Hughes data Friday showed working oil rigs rose to the highest in
more than three years. The market is recovering after concerns over global oversupply spurred the
Organization of Petroleum Exporting Countries and its allies to considerreducing output.
Oil’s in a bear market after slipping from a four-year high last month as the U.S. granted surprise
waivers for sanctioned Iranian crude. Trade tensions between the world’s biggest economies
escalated over the weekend with U.S. Vice President Mike Pence’s attack on China, adding to
worries supply may overtake demand. In response to those concerns, Saudi Arabia has said
producers may need to cut 1 million barrels a day, while Russian President Vladimir Putin said
Thursday an oil price of “around $70 suits uscompletely.”
“Investors currently have their focus on the potential production cuts discussed by OPEC and its
allies, with Russia talking of $70 level,” said Hong Sungki, a Seoul-based commodities trader at NH
Investment & Securities Co. “The market expects OPEC to set the direction and play the role of
swing producer again even as American production rises.”
West Texas Intermediate for December delivery, which expires Monday, traded at $57.14 a barrel
on the New York Mercantile Exchange, up 68 cents, at 12:37 p.m. in Singapore. The contract lost
$3.73 last week. Total volume traded was about 5 percent below the 100-day average. The more-
active January contract gained 70 cents to $57.38.
Brent for January settlement rose 55 cents to $67.31 a barrel on the London-based ICE Futures
Europe exchange. The contract has dropped $3.42, or 4.9 percent, last week. The global benchmark
crude traded at a $9.93 premium to WTI for the same month.

The number of working American oil rigs gained by 2 to 888 last week, the highest level since March
2015, Baker Hughes data said. U.S. crude production has been rising, hitting a record in the week
ended Nov. 9, according to government data.
Meanwhile, traders are assessing how much output reduction will be agreed when OPEC meets in
Vienna early next month. The group and its allies are considering cutting production by more than
1 million barrels a day as they’re increasingly worried about the potential for oversupply, people
familiar with the matter said.
U.S. drillers add oil rigs for fifth week in six: Baker Hughes
U.S Energy firms this week added oil rigs for a fifth time in six weeks, keeping the rig count at its
highest in over three years and crude production from shale basins at a record high.
Drillers added two oil rigs in the week to Nov. 16, bringing the total count to 888, still the highest
level since March 2015, General Electric Co’s Baker Hughes energy services firm said in its closely
followed report on Friday.
After rig additions stalled at five during the third quarter, drillers have added 25 rigs so far this
quarter.
The U.S. rig count, an early indicator of future output, is higher than a year ago when 738 rigs were
active because energy companies have spent more this year to ramp up production to capture
prices that are higher in 2018 than 2017.
More than half the total U.S. oil rigs are in the Permian Basin, the country’s biggest shale oil
formation. Active units there increased by one this week to 493, the most since January 2015.
U.S. crude output from seven major shale basins was expected to rise 113,000 barrels per day
(bpd) to a record 7.9 million bpd in December, driven largely by increases in the Permian Basin of
Texas and New Mexico, the U.S. Energy Information Administration (EIA) said this week.

The EIA also said producers drilled 1,577 wells and completed 1,308 in the biggest shale basins in
October, leaving total drilled but uncompleted wells up 269 at a record high 8,545, according to data
going back to December 2013.
That was the most wells drilled in a month since February 2015 and the most completed in a month
since March 2015, according to EIA data.
U.S. financial services firm Cowen & Co this week said the exploration and production (E&P)
companies it tracks have provided guidance indicating a 25 percent increase this year in planned
capital spending.
Cowen said the E&Ps it tracks expect to spend a total of $90.0 billion in 2018. That compares with
projected spending of $72.2 billion in 2017. Cowen said early 2019 capital spending budgets were
mixed.
Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week
forecast the average combined oil and natural gas rig count would rise from 876 in 2017 to 1,031 in
2018, 1,092 in 2019 and 1,227 in 2020.
Since 1,082 oil and gas rigs are already in service, drillers do not have to add any rigs for the rest
of the year to hit Simmons’ forecast for 2018.
Year-to-date, the total number of oil and gas rigs active in the United States has averaged 1,026.
That keeps the total count for 2018 on track to be the highest since 2014, which averaged 1,862
rigs. Most rigs produce both oil and gas.

NewBase Special Coverage
News Agencies News Release 19 Nov. -2018
The oil price is now controlled by just three men
Bloomberg – Julian Lee
OPEC has lost what control of the oil market it ever had. The actions (or tweets) of three men —
President Donald Trump and Vladimir Putin and Crown Prince Mohammed Bin Salman — will
determine the course of oil prices in 2019 and beyond. But of course they each want different things.
While OPEC struggles to find common purpose, the U.S., Russia and Saudi Arabia dominate global
supply. Together they produce more oil than the 15 members of OPEC. All three are pumping at
record rates and each could raise output again next year, although they may not all choose to do
so.
It was Saudi Arabia and Russia that led the push in June for the OPEC+ group to relax output
restraints that had been in place since the start of 2017.
Both subsequently jacked up production to record, or near record, levels. U.S. output soared
unexpectedly at the same time, as companies pumping from the Permian Basin in Texas overcame
pipeline bottlenecks to move their oil to the Gulf coast.
These increases, alongside smaller downward revisions to demand growth forecasts and President
Trump’s decision to grant sanctions waivers to buyers of Iranian oil, have flipped market sentiment
from fears of a supply shortage to concerns about a glut in the space of three months.

Oil stockpiles in the developed nations of the OECD, which had been falling since early 2017, are
rising again and are likely to exceed their five-year average level when October data are finalized.
As oil prices have headed south, Saudi Arabia said it would cut exports by 500,000 barrels a day
next month and warned fellow producers that they needed to cut about 1 million barrels a day from
October production levels. That drew a lukewarm response from Putin and swift Twitter rebuke from
Trump.
Bin Salman needs oil revenue to fund his ambitious plans to transform Saudi Arabia, while avoiding
unrest from those hurt in the process. The International Monetary Fund forecasts that the kingdom
will need an oil price of $73.3 a barrel next year to balance its fiscal budget.
Brent crude is trading about $5 below that, with Saudi Arabia’s exports trading at a discount to the
North Sea benchmark. Prolonging output cuts for a third year is the only way he can realize the
price he needs.
He will face more challenges from Putin and Trump. The Russian president shows no great
enthusiasm for restricting his country’s production again. Moscow’s budget is much less dependent
on oil prices than it was when Russia agreed to join OPEC-led efforts to re-balance the oil market
in 2016 and the country’s oil companies want to produce from the fields where they have invested.
Putin may yet decide that maintaining his improved political relationship with MBS, as the Crown
Prince is known, is worth a small sacrifice. But it’s not a foregone conclusion that Russia will agree
to extend output cuts when producers gather in Vienna next month. Putin says oil prices of around
$70 a barrel suit him “completely.”

A bigger U.S. threat to Saudi plans than Trump’s tweets will come from the Texas oil patch.
American producers have added a volume equivalent to the entire output of OPEC’s Nigeria in the
past 12 months.
Their production could reach 12 million barrels a day by April, according to the Department of
Energy. That’s six months sooner than it was forecasting just a month ago and 1.2 million barrels a
day more than it foresaw in January.
Saudi Arabia will have to risk Trump’s wrath, Putin’s indifference and a booming U.S. shale industry
if it hopes to balance the oil market in 2019.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk
Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 28 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 2018 K. Al Awadi

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