newbase 595 special 03 may 2015

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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 03 May 2015 - Issue No. 595 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE GCC rail, road & maritime projects worth $422 billion Saudi Gazette + NewBase The GCC’s integrated transport strategy will be the focus of NATRANS Arabia 2015, a first-of-its- kind event piecing together the Gulf region’s transportation infrastructure with rail, road, and maritime projects, which according to Fleming Gulf research, is worth an estimated $422 billion and completed within the next five years. The conference-led exhibition which is being held in partnership with the UAE Federal Transportation Authority – Land and Maritime and held under the patronage of Dr. Abdulla Belhaif Al Nuaimi, Minister of Public Works and Chairman of the Federal Transport Authority - Land and Marine, will highlight the UAE’s position within the region as a leading state in transport infrastructure development. “The event will discuss and showcase proven, deployed schemes, pioneering research and development solutions that are intended to solve real world problems which are critical regional imperatives,” said Alex Heuff, Exhibition Director, NATRANS Arabia which takes place at the Abu Dhabi National Exhibition Centre (ADNEC) on Oct. 19-21, 2015. “By creating an event which covers the industry as a whole, NATRANS Arabia is set to deliver a unique networking platform for the region’s entire land and maritime transportation sector,” added Heuff. NATRANS Arabia consists of three distinct conference streams, incorporating the regions established rail conference – the 6th Middle East Rail Opportunities on Oct. 19- 20 plus two

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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,

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NewBase 03 May 2015 - Issue No. 595 Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE

GCC rail, road & maritime projects worth $422 billion

Saudi Gazette + NewBase

The GCC’s integrated transport strategy will be the focus of NATRANS Arabia 2015, a first-of-its-kind event piecing together the Gulf region’s transportation infrastructure with rail, road, and maritime projects, which according to Fleming Gulf research, is worth an estimated $422 billion and completed within the next five years.

The conference-led exhibition which is being held in partnership with the UAE Federal Transportation Authority – Land and Maritime and held under the patronage of Dr. Abdulla Belhaif Al Nuaimi, Minister of Public Works and Chairman of the Federal Transport Authority - Land and Marine, will highlight the UAE’s position within the region as a leading state in transport infrastructure development. “The event will discuss and showcase proven, deployed schemes, pioneering research and development solutions that are intended to solve real world problems which are critical regional imperatives,” said Alex Heuff, Exhibition Director, NATRANS Arabia which takes

place at the Abu Dhabi National Exhibition Centre (ADNEC) on Oct. 19-21, 2015. “By creating an event which covers the industry as a whole, NATRANS Arabia is set to deliver a unique networking platform for the region’s entire land and maritime transportation sector,” added Heuff. NATRANS Arabia consists of three distinct conference streams, incorporating the regions established rail conference – the 6th Middle East Rail Opportunities on Oct. 19- 20 plus two

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 2

dedicated one-day conferences, firstly addressing road issues on Oct. 19 and secondly addressing maritime issues on Oct. 20. During the 6th Middle East Rail Opportunities Summit, designs of nearly $200 billion in network projects will be presented, running from the Gulf coast from Kuwait, through Saudi Arabia, to the UAE and Oman, with branches linking Bahrain and Qatar. These projects will be completed before the end of the first quarter 2016.

“Construction is already in progress and will be fully operational in 2018. Abu Dhabi is spearheading the GCC rail network with its AED40 billion ($10.9 billion), Etihad Rail link project, which stretches for 1,200 kilometers, from Ghweifat on the Saudi border to south of Fujairah on the Omani border,” said Heuff. The Middle East Road Conference will examine the progress of the region’s mega road project which is set to grow at a rapid pace over the next 5 years, valued at an estimated $32 billion. The conference will also cover the international traffic management, (ITS), parking, road safety & maintenance of and transport infrastructure projects, such as multimodal systems and management have helped decrease accidents and the use of ITS technology in road safety. The third streamed seminar, Middle East Maritime Conference, will take an in-depth look at the different investments in the maritime industry, which are expected to reach $66 billion in the next three years, with the UAE contributing 30-35% of the Middle East’s projected total investment valued at $190 billion over the next three years. With the global significance of the Middle East’s ports and facilities is now more important than ever before and delegates will be presented with the latest industry developments. The conference will also feature international case studies about how operational and logistical challenges and complexities can be overcome. Speakers at NATRANS Arabia include Dr. Abdelgader Elshabani, Department of Transport, Abu

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,

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Dhabi, Senior Transportation Planning Specialist, UAE; Mohammed Al-Mudharreb, Roads & Transport Authority (RTA), Director of Rail Operation, Rail Agency; and Loay Ghazaleh, Ministry of Works, Advisor to Undersecretary of the Ministry of Works, Bahrain. “In addition, over 50 ministers and including key government decision makers will be attending this year’s conference to discuss the potential partnership opportunities available right across the region,” added Heuff. Some of the key focus sessions include developing a competitive, sustainable and future-proof rail network for the GCC; effective interoperability among the new railway systems of the Middle East; integrated public transport for sustainable urban development; traffic management and surveillance; the role of automation in efficient port operations; the use of geo-spatial technologies in port security, plus a series of country transport project updates. Running alongside the conferences is an exhibition accommodating over 100 exhibiting companies that is divided into four themed zones compatible with the conference streams, plus an extra zone showcasing intelligent transport systems. The exhibition is likely to attract in excess of 2,500 trade visitors. The exhibition has already attracted key support from the European Parking Association (EPA) and MAFEX, the Spanish Railway Association plus sponsors Laborex and LGW.

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 4

DEWA reviews bids for first phase of Hassyan clean-coal power plant

after receiving lowest international tariff ( WAM +NewBase)

Dubai Electricity and Water Authority (DEWA) has opened the bids it has received for the first phase of the Hassyan clean-coal power plant, which is based on the Independent Power Producer (IPP) model.

The first phase of the 1,200MW project is expected to be operational by 2020. Four global bidders have been shortlisted after opening the bids. They will be evaluated and the best bid will be selected based on the criteria developed by the advisory committee that oversees the project.

DEWA previously extended the bid deadline for the first phase of the IPP Hassyan clean-coal power plant to accommodate requests from developers. The deadline was extended

to 30 April 2015. The lowest price among the bids that DEWA received is US$4.9 cents/kWh.

"The Hassyan Clean Coal Power Project reflects our commitment to the vision of His Vice President and Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, to diversify the energy mix.

It also reflects our commitment to our goals to energy diversification and sustainability of resources, and achieving the Dubai Integrated Energy Strategy 2030, which focuses on producing electricity from clean coal as part of Dubai's energy mix," said HE Saeed Mohammed Al Tayer, MD and CEO of DEWA.

Al Tayer noted that this is a major step in implementing the energy diversification strategy approved by the Dubai Supreme Council of Energy, which focuses on producing electricity from clean coal as part of Dubai's energy portfolio.

He noted that the Hassyan power plant uses ultra-supercritical technology to produce energy according to the highest international standards set by the European Union. Last year, DEWA awarded the consultancy service contract for the first phase of the IPP project to an international consultant.

Al Tayer expressed his satisfaction with the wide interest in the project from international developers. He noted that the wide international participation in this vital field reflects the trust and interest of international investors to invest in large projects supported by the Government of Dubai.

Al Tayer noted that DEWA is working to diversify its energy sources and increase its share of renewable energy. He explained that the Dubai Integrated Energy Strategy 2030 initially set the percentage of renewable energy in Dubai’s energy mix to be 1% by 2020 and 5% by 2030 but DEWA has increased this target to 7 % by 2020 and 15 % by 2030. The Dubai Integrated Energy Strategy 2030 diversifies Dubai’s energy mix to include 71% from gas, 7% from clean coal, and 7% from nuclear power.

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

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India: ONGC Makes Two Oil, Gas Discoveries Offshore Natural Gas Asia + NewBase

Indian state owned energy firm ONGC has made two significant oil and gas discoveries off India’s east coast. The first discovery is in deep water NELP-I block KG-DWN-98/2, KG-PG Basin in the

east coast of Andhra Pradesh state at the well KG-DWN-98/2-M-4. The well was drilled down to a depth of 3,246m. “Based on the subsurface geological, MDT / Mini DST and electro-log data, six hydrocarbon bearing zones with net pay of 78m have been established in this well. Object in the interval 2,900-2,908m tested conventionally flowed oil at a rate of about 3,160 BOPD and gas at a rate of about 319,483 m3/day,” ONGC said in a statement Wednesday. The discovery has enhanced the value of the block KG-DWN-98/2 and has opened up further area for exploration and appraisal, the company added. The second discovery was in shallow water NELP-VI block KG-OSN-2004/1, KG-PG Basin. The well was drilled down to a depth of 2,555m in water depth of 69m. On conventional testing flowed gas at a rate of about 209,405 m3/day through 24/64” choke, ONGC announced.

NDA holds an estimated 92.30 million tons of oil reserves and 97.568 billion cubic meters of inplace gas reserves spread over seven fields. Verma said ONGC has submitted to the Directorate General of Hydrocarbons (DGH) a Declaration of Commerciality (DoC) for the oil find in the NDA and a detailed field development plan will be submitted within a year. ONGC bought 90 per cent interest in Block KG-DWN-98/2 from Cairn

Energy India in 2005.

Cairn still holds 10 per cent in the block. Before selling most of its stake and giving away operatorship of the block, Cairn made four discoveries in the area - Padmavati, Kanakdurga, N-1 andR-1 (Annapurna). Subsequently, ONGC made six significant discoveries - E-1, A1, U1, W1, D-1 and KT-1 in NDA and the first ultra-deepwater discovery UD-1 at a record depth of 2,841 metres. The NDA comprises discoveries like Padmawati, Kanadurga, D, E, U, A, while the ultra deepsea UD find lies in SDA.

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Kenya: Africa Oil announces Kenya operations update Source: Africa Oil

Africa Oil has provided an update on its appraisal program in the South Lokichar Basin, Kenya. In Kenya, the extensive appraisal program in the South Lokichar Basin continues. The Amosing-1 and Amosing-2 wells have been completed in five zones with hydraulically controlled completions that permit independent tests of selected intervals without well intervention in preparation for an Extended Well Test (EWT) of the field.

Initial rig-less flow testing during clean-up at a combined maximum rate of 5,600 and 6,000 bopd respectively exceeded expectations, demonstrating high quality reservoir sands which flowed 31 to 38 degree API dry oil under natural conditions.

The EWT involves production and water injection testing to enable dynamic flow characterisation between wells in the Amosing stacked oil reservoirs. The full EWT will commence shortly and results are expected over the next few months. The Amosing-4 appraisal well was drilled on the flank of the field and successfully encountered 27 metres of net oil pay in thick upper reservoir zones proving the significant down-dip extent of the field.

Elsewhere in the Lokichar basin, the Ekales-2 appraisal well reached a total depth of 4,059 metres and encountered an estimated 60-100 metres of net oil pay in the primary shallower objectives.

This highly deviated well was also deepened to test the basin centre stratigraphic play where it intersected sandstones with elevated pressures and 50 metres of oil bearing sands, however operating conditions precluded logging and confirmation of any oil pay in this section. This was

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the first test of this exploration target and is very positive for the future upside potential of the South Lokichar basin above the significant oil resources already discovered.

The Ngamia-7 appraisal well was drilled to test the Ngamia oil field's eastern flank and encountered up to 130 metres of net oil pay, expanding the proven extent of the field. The Ngamia-8 appraisal was drilled and encountered up to 200 metres of net oil pay in line with pre-drill expectations.

The well was positioned in the centre of the Ngamia structure and static pressure data indicates the well is in pressure communication with the oil discovered in the neighbouring Ngamia-1A, Ngamia-3, Ngamia-5, Ngamia-6 and Ngamia-7 wells. Ngamia-8 will be completed as part of the Ngamia field EWT planned for mid-year which will also include the Ngamia-3 andNgamia-6 wells.

The extensive appraisal activities in Kenya, including the planned EWT, along with the development concept studies completed in 2014 will enable a draft Field Development Plan (FDP) to be prepared by end 2015.

The current ambition of the joint venture partnership is to position the East Africa project, which will include the development of South Lokichar and Tullow's Lake Albert resources and an export pipeline, for possible sanction by the end of 2016, subject to receipt of all necessary permits and approvals.

Good progress continues to be made towards development of these oil resources and as part of the ongoing collaboration between the Governments of Kenya and Uganda on the oil export pipeline, a joint technical adviser was appointed in late 2014. The independent technical studies being undertaken by the adviser, with extensive support from the Kenya and Uganda upstream partners, are progressing rapidly and should assist in the finalisation of the pipeline route.

Africa Oil owns a 50% working interest in Kenya Blocks 1BB and 13T with Operator Tullow Oil holding the remaining 50%.

Keith Hill, President and CEO, commented, 'We continue to be highly encouraged by the appraisal program in the Lokichar Basin which is above our expectations and confirms our belief that this is a world-class asset. We are working closely with our partners and the Kenyan Government to move the development project forward, particularly the export pipeline, which is the key to unlocking the value of this asset. The 3D seismic has been a great help in imaging new drilling targets in the basin and we plan to drill some high impact wells with the potential to add significant resources in the coming months.'

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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

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Oil Price Drop Special Coverage

Oil prices eased off 2015 highs on Friday Reuters + NewBase

June Brent was down 86 cents at $65.92 barrel at 11:37 a.m. EDT (1537 GMT), after matching Thursday's 2015 peak of $66.93 and jumping 21 per cent in April. US crude for June delivery was down 84 cents at $58.79, after hitting a 2015 high of $59.90. US crude futures gained 25 per cent last month.

Brent and US crude rallied between 20 and 25 per cent in April, helped by a weaker dollar and bets that a global supply glut would ease, following the June-to-January sell-off that halved prices from above $100 a barrel. News that Iraq's oil exports rose in April to a record 3.08 million barrels per day (bpd) from 2.98 million bpd in March served as a reminder of ample supply in the market. Iraq's data highlights increasing output from OPEC members, whose supply in April rose to its highest in more than two years at 31.04 million bpd, according to a Reuters survey. Despite a sharp drop in new US shale drilling in recent months, there have been few signs that a global supply glut is easing, and there are some signs that US oil production may not fall significantly in the near future. A fresh snapshot of US drilling activity is due from services firm Baker Hughes Inc later on Friday, after last week's report showed companies idled 31 oil rigs. "Any evidence of a slowed rate of

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decline such as a drop of less than 15-20 could spur some selling," said Jim Ritterbusch, president at Ritterbusch & Associates. "On the flip side, a drop of more than 30-35 will likely force some new highs," Ritterbusch said. Futures and options trades suggest U.S shale producers are locking in production costs for next year, which could pave the way for a rebound in production.

Opec output unchanged as Saudis show no letup BY BLOOMBERG NEWS + NewBase Opec oil production was little changed in April near the highest level since November 2012 as Saudi Arabia pumped 10 million barrels a day. Production by the Organisation of Petroleum Exporting Countries (Opec) slipped 1,000 barrels to 31.295 million a day, according to a

Bloomberg survey of oil companies, producers and analysts. March's total was revised 267,000 barrels higher to 31.296 million a day, mostly because of a change to the Saudi estimate. Prices tumbled the first quarter of this year as US output surged to the highest level in more than four decades and Opec members pumped more barrels. The 12-member group left its production quota unchanged at a November meeting, prompting speculation that it would let crude slide low enough to curb shale development in the US. "The high Saudi number is what sticks out," Julius Walker, senior consultant at JBC Energy in Vienna, said on Thursday by phone. "The consensus view is that the Saudis are going to continue with their present policy. The market continues to be substantially oversupplied." Trimmed output Saudi Arabia, Opec's top producer, trimmed output by 100,000 barrels a day to 10 million in April. March output was revised 330,000 barrels a day higher to 10.1 million. The country sold oil at a higher-than-projected rate in March as a result of the biggest discounts in at least 15 years. The oil market is in "excellent" condition, Prince Abdulaziz bin Salman, Saudi Arabia's deputy oil minister, said on Monday. Oil Minister Ali Al Naimi stressed earlier this month that the kingdom won't yield market share to higher-cost producers.

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America’s Oil Drillers Idle Rigs for 21st Straight Week Bloomberg + NewBase

Oil explorers idled rigs in U.S. fields for the 21st straight week, extending an unprecedented retreat in drilling that has curbed domestic output and helped crude prices rally.

Rigs targeting oil in the U.S. declined by 24 to 679, Baker Hughes Inc. said on its website Friday, the lowest level since September 2010. Texas’s Eagle Ford formation lost the most, dropping seven to 91, the Houston-based field services company said. The Williston Basin, home of North Dakota’s prolific Bakken shale, added a rig for the first time in five months.

U.S. energy producers have sidelined more than half of the country’s oil rigs since October, suspending production growth from the nation’s shale formations and helping end the rout in West Texas Intermediate oil prices that began last year. Crude output has fallen three out of the last five weeks. WTI futures capped their biggest monthly advance since 2009.

“If you continue to see these rig counts decline and wells not being completed, you could be losing something like 70,000 to 100,000 barrels a day every month by the end of this year,” Scott Treadwell, a TD Securities Inc. research analyst, said during a conference in Calgary. “That will put a floor on WTI very quickly and the discussion when we’re short of production won’t be about storage volumes getting full. It will be about storage volumes getting emptied.”

The U.S. benchmark West Texas Intermediate oil for June delivery dropped 48 cents to settle at $59.15 a barrel on the New York Mercantile Exchange. Prices advanced 25 percent in April, the biggest monthly gain since May 2009.

Slipping Output

Domestic oil production averaged 9.37 million barrels a day in the week ended April 24, down from the record 9.42 million reached in March, U.S. Energy Information Administration data show.

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,

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Stockpiles at Cushing, Oklahoma, the biggest U.S. storage hub, shrank for the first time since November.

“In our view, there is no doubt that U.S. output is falling, and that the pace of decline is likely to accelerate in coming months,” Standard Chartered Plc analysts including Nicholas Snowdon, said in a research note April 27.

The number of oil rigs drilling in U.S. shale plays would have to rise by 200 just to stabilize output, Snowdon said. “This is unlikely to happen this year,” he said.

U.S. oil drilling is subsiding as the Organization of Petroleum Exporting Countries, which accounts for about 40 percent of the world’s oil, resists calls to curb output. OPEC members pumped 31.295 million a day in April, near the highest level since November 2012, according to a Bloomberg survey of oil companies, producers and analysts.

Production Forecast

While U.S. output may decline between the second and third quarters, Goldman Sachs Group Inc. projected on April 26 that production in the fourth will still be 200,000 barrels a day above year-earlier levels. And that’s not including the backlog of uncompleted wells that drillers may start bringing online, the bank said.

“We see risk to our production modeling as skewed to the upside later this year,” Goldman said in a research note. “A rapid drawdown of the observed backlog of uncompleted wells could lead to higher production later this year and in 2016.”

The Williston because the first of the major U.S. oil plays to add a rig since drilling began collapsing across the country. The basin rose by one to 80 this week, Baker Hughes said.

Possible Rebound

The U.S. total may rebound to as high as 1,300 rigs should oil trade in the mid-$70s, Allen Gilmer, chief executive officer of the Austin-based energy data provider Drillinginfo, said by phone on Friday. The count will bottom in about a month, he said.

Whiting Petroleum Corp., the biggest oil producer in North Dakota’s Bakken shale, will put rigs back to work when oil prices rebound to $70 a barrel, James Volker, the company’s chief executive officer, said in a conference call with analysts on Thursday.

“Some of the rigs that we’ve released,” he said, “we can get back and pick up quickly.”

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Saudi oil policy to see continuity By: Sayed Hussain ( Energy outlook ) + NewBase

WE are a witness to monumental changes! And the Saudi energy sector is no exception. It is also undergoing massive structural changes - at an unprecedented pace. With Saudi Arabia, the world’s largest crude oil exporter and the Opec kingpin, crucially and strategically important to the global energy balance, the energy world remained glued to Riyadh, trying to decipher and understand the impact of the management changes on Saudi oil policy.

A number of measures - directly connected to the energy world - were announced over the last few days. Saudi Arabia’s Supreme Economic Council approved a restructuring of global oil giant Saudi Aramco, separating it from the oil ministry, it was revealed on Friday. “Saudi Supreme Economic Council agrees on Deputy Crown Prince Mohammed bin Salman’s vision of restructuring oil-giant Aramco,” it was reported in the press. “Restructuring of Saudi Aramco includes separation from petroleum ministry.” Also a 10-member supreme board, led by Deputy Crown Prince Mohammed bin Salman, was announced to oversee the company’s affairs. The Supreme Petroleum Council, which previously set oil policy and was led by the king, will be dissolved, the statement clarified. Earlier on Wednesday, King Salman announced appointing Saudi Aramco’s chief executive, Khaled Al-Falih, as chairman of the state oil firm and health minister. Amin Nasser was inducted as the acting CEO. Falih has been the CEO of Aramco since January 2009. He has been with the company for more than 30 years, and as CEO he has worked to modernize the company, making it more like its Western rivals. “He has been the CEO of Aramco, and he’s a man of considerable capability and breadth, and he is really respected throughout the oil world,” Daniel Yergin, was quoted in the international press as saying. And despite all the upheaval and the restructuring in Riyadh, the industry veteran, the octogenarian Petroleum Minister Ali Al-Naimi, known for his characteristic regular brisk walks in Vienna - during Opec ministerials - often pursued by a posse of reporters hanging on his every word - continues to steward the Saudi energy affairs. Despite some buzz within the energy fraternity about him hanging his boots and soon enough - he continues - providing a sense of continuity and stability to the energy world - in these rather turbulent times. In continuing with him, the King has once again reposed full confidence in him!

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Having served as the kingdom’s oil minister since 1995, Ali Al-Naimi is widely viewed as the mastermind behind Opec’s decision in November not to cut oil production below its current level of 30 million barrels a day, which would have reduced supply and bolstered prices that had been plunging since late June 2014. That the markets are showing some life now - underline that the policy was working. In recent days too, Saudi Arabia has been underlining; it would keep pumping oil to meet any demand for its supplies as it seeks to defend its share of the market.

The oil market is in “excellent” condition, Prince Abdulaziz Bin Salman, Saudi Arabia’s deputy oil minister, told reporters on Monday in Al-Khobar. The kingdom seeks to keep customers happy and maintain stability of prices, demand and supply, he emphasized. “Saudi Arabia is interested in maintaining its share in the market and interested in keeping its customers,” Prince Abdulaziz said. “We will supply any demand for Saudi oil, as we are interested in the stability of the market. Stability includes price, supply, and demand stability,” he added. “Saudi Arabia responds to demand in the market,” Prince Abdulaziz added. “We will provide oil to whoever asks for it.” Minister Ali Al-Naimi has been at the forefront - leading the Saudi campaign to let market forces determine the oil prices and not the traditional lever of OPEC output. He too had been stressing in recent months that the Kingdom won’t yield market share to higher-cost producers.Riyadh hence continues to pump at elevated levels. It pumped at close to a record pace in March, the International Energy Agency reported on April 15. To many, Minister Ali Al-Naimi’s survival is also a signal that King Salman was satisfied with Saudi oil policy, and that the restructuring in Riyadh were unlikely to affect Saudi oil production policy. “I don’t think there’s been any disagreement (within the Saudi leadership) about the idea of keeping up production, maintaining market share, refusing to be a swing producer,” Clement M. Henry, a professor at the Middle East Institute of the National University of Singapore was quoted by Reuters as saying. John Kilduff of Again Capital says the changes in Saudi Arabia appear supportive of the price of oil, which has begun to be more impacted by geopolitical events in recent weeks. Eugen Weinberg, head of commodity research at Commerzbank, is of the view that although it was too early to tell, yet any output change in Saudi policy were unlikely, given hints about supplying extra oil to Asia. “The focus should remain on its (Saudi Arabia’s) market share and the latest talk by (Ali al-Naimi) seems to support this view along; ‘we stay ready to supply more to Asian clients thanks to their

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stronger demand’,” he told CNBC. “I don’t think it (the changes) will have much impact,” Thomas Pugh, commodities economist at Capital Economics, was quoted by CNBC as saying. And there are already hints that the Kingdom is already working to increase its production capacity. James Williams, an energy economist at WTRG Economics, is of the view that the most recent data from Baker Hughes shows that Saudi Arabia had 125 active oil and gas rigs in March

of this year, up from 96 the same time a year earlier. The total represents an all-time high, according to Williams. He emphasized the number of active oil rigs is at a record too. The rig count has climbed despite the fact that the “world market was still flooded with oil,” Williams said. “This indicates that the Saudis are expanding production capacity,” he noted. One of the hallmarks of the Saudi oil policy has been stability and continuity. Despite some major changes at the top in Riyadh, the signals emerging are that Riyadh would continue to bet on the same. The oil policy of the Kingdom is not expected to undergo much change - at least in the shorter term.

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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 [email protected] [email protected]

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 2015 K. Al Awadi

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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

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