NewBase 605 special 17 May 2015

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 17 May 2015 - Issue No. 605 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: International Renewable Energy Agency HQ in Masdar City
named Green Commercial Building of the Year
(WAM + NewBase ) -- The recently completed International Renewable Energy Agency (IRENA)
headquarters, located in Masdar City, where Masdar is building the world’s most sustainable city,
has been named the Green Commercial Building of the Year by the Emirates Green Building
Council (EGBC).
The EGBC recognised IRENA building architect and lead consultant Woods Bagot and design and
build contractor Brookfield Multiplex at an awards ceremony dinner at the Murooj Rotana Hotel in
Dubai. The award recognises a building in the Middle East-North Africa region whose construction
and completion has surpassed the highest sustainability standards and includes innovation in
design and processes.
Owned and developed by Masdar, Abu Dhabi’s renewable energy company, the IRENA building is
the first in the UAE to receive the four-pearl rating for design and construction from Estidama, the

Abu Dhabi-certification system which measures and evaluates the energy, water and carbon
efficiency of buildings.
Anthony Mallows, director of Masdar City, said, "Our commitment to establishing Masdar City
as a leading hub for innovation and sustainability is generating great recognition
with the new IRENA headquarters named as the ‘Green Building of the Year.’
"Achieving a four-pearl Estidama rating for the IRENA building, within a
competitive, market-driven budget, demonstrates that innovative design and
construction, combined with a thorough understanding of sustainable building
requirements, can produce outstanding results."
Richard Fenne, project director at Woods Bagot, remarked: "This award
recognises how a truly integrated design process – with all of the project
stakeholders engaged – has yielded an exemplary building, and one which sets a new standard
for commercial Grade A office space in the UAE and across the wider region."
The focus of the design was to create a highly-sustainable four-pearl Estidama-rated commercial
building which exemplifies the overall development of Masdar City as a living test bed for
innovation and embodies the Estidama ‘four pillars of sustainability’ – social, environmental,
economic and cultural.
The new IRENA building offers a total floor area of 32,000m2 and has approximately 1,000m2 of
rooftop solar photovoltaic panels supplying electricity to the building. Due to passive design and
smart energy management systems, the building demands over 40 per cent less energy than
global energy-efficiency standards. It also demands approximately 50 per cent less water than
commercial buildings in Abu Dhabi.
Masdar City is a pedestrian-friendly urban development and free zone that is establishing a
‘greenprint’ for how urban centres can accommodate dense populations while reducing energy,
water and waste consumption.
IRENA is an intergovernmental organisation that supports countries in their transition to a
sustainable energy future.
About Emirates Green Building Council :
The Emirates Green Building Council (EmiratesGBC) was
founded in June 2006, and became the 8th full member of
the World Green Building Council in September 2006.
EmiratesGBC is an organization that promotes and
educates on green issues in the built environment and is
the official body for the UAE endorsed by the World Green
Building Council.
EmiratesGBC currently has around 260 members in the
UAE which represents thousands of individuals interested
and involved in Green Building in the UAE and the region.
In addition, EmiratesGBC members receive discounts on
a number of programmes such as those related to
conferences, seminars, training and green building
events.

UAE: Dubai gateway to thriving Mideast market
Agencies + NewBase
Ibrahim Mohamed Aljanahi, Deputy CEO of Jafza, the UAE's flagship free zone entity,
reiterated the strategic importance of Dubai as the hub to access and
serve the thriving market of more than 2.5 billion consumers in the wider
Middle East region, at the "Invest in Dubai" seminar organized by Falcon
and Associates during "Dubai Week in China" in Beijing. He was
speaking at the panel discussion "Why Dubai" within the seminar.
Stressing on the role of Jebel Ali Free Zone (Jafza) as the logistics hub
for serving all key markets in the wider Middle East region, which spans from West Asia,
the CIS, Africa and the Indian Subcontinent, Aljanahi said: "The evolution of Dubai as the
gateway and a hub for such a huge market demonstrates the power of great vision and
astute planning.
Dubai's visionary rulers thought ahead of time and developed world-class economic and
transport infrastructure to evolve Dubai from a small trading center to an international
business hub for the region.
Jafza was created in 1985 and in the last thirty years, leveraging Dubai's outstanding
multimodal facilities grew into one of the world's finest logistics hubs. The Free Zone
attracted practically all big multinationals into the Free Zone who were interested in the
wider Middle East's rapidly growing economies.

Thousands of world's top multinationals today have established their regional
headquarters in Jafza and serve all key markets in the entire region efficiently." Aljanahi
also talked about the recently developed Dubai Logistics Corridor which allows all Jafza-
based companies to transfer their cargo from one mode to another in less than an hour,
the fastest turn-around in the world.
Jafza is the only free zone in the world, which is located between the two largest trade
enablers viz. Jebel Ali Port, the largest container terminal, and Al Maktoum International
Airport, the biggest cargo and passenger airport, in the region.
The Free Zone is also just 30-minutes' drive away from the Dubai International Airport.
"Dubai is today considered one of the top aviation hubs in the world with Dubai
International Airport ranked the busiest airport.
More than 140 airlines serve Dubai and Al Maktoum International Airports providing the
fastest air connection to reach any destination in the world at the shortest possible time.
Jebel Ali Port, on the other hand, is today one of the top 10 container ports in the world
and the largest in the region.
More than 170 main shipping lines call the port providing efficient sea connections to all
major trading corridors across the world," Aljanahi said.

Indonesia set to rejoin Opec after 7 years
Reuters + NewBase
Indonesia's energy minister said yesterday that President Joko Widodo agreed to a plan for the
country to rejoin Opec, seven years after Southeast Asia's biggest crude producer left the oil
exporters group.
"He fully agrees because we need to associate with the market," said the Energy and Mineral
Resources Minister Sudirman Said "We are one of the biggest buyers, so naturally we should
establish relations with producers, not only exporters," he stated. Said revealed that Widodo also
approved his
request to attend
a two-day Opec
meeting on June
3.
Opec's statute
stipulates,
however, that any
"country with a
substantial net
export of crude
petroleum, which
has fundamentally
similar interests to
those of member
countries, may become a full member of the organisation, if accepted by a majority of three-
fourths of full members, including the concurring votes of all founder members."-

Pakistan, Turkmenistan to Discuss TAPI Project
Express Tribune + NewBase
Pakistan and Turkmenistan will discuss issue related to TAPI gas pipeline project next week
when, Pakistani newspaper Express Tribune reported earlier this week. The topic will come up
during Pakistani Prime Minister Nawaz Sharif’s visit Turkmenistan on May 20.
Last year, gas companies of Turkmenistan, Afghanistan, Pakistan, and India established a
company that will build, own and operate the planned 1,800-kilometer TAPI natural gas
pipeline. The pipeline will export up to 33 billion cubic meters of natural gas a year from
Turkmenistan to Afghanistan, Pakistan, and India over 30 years.
The above four nations are currently in negotiations for the award of a multibillion-dollar contract
to French energy giant Total as well as a Chinese and a Russian firm, Express Tribune reported.
Pakistan wants work on the project to start as swiftly as possible as the country wants to augment
gas supplies in the economy. The country has been facing severe shortage of natural gas which
has affected power generation and other industrial activities.
In 2012, Waheedullah Shahrani, Afghanistan’s Minister of Mines and Petroleum, visited Ashgabat
to finalise the gas prices with Turkmenistan.The President of Turkmenistan assured him of a
suitable price for the coming 30 years. Afghanistan will import 500 million cubic meters of gas
annually. An agreement to this effect is expected to be signed in 2014.
Afghanistan’s import of 500 million cubic metres of gas will be increasedin the next decade to one
billion cubic metres and in the third decade it would be increased to 1.5 billion cubic meters. The
TAPI gas pipeline project worth $10 billion would create substantial job opportunities and help in
the economic prosperity of the country. Afghanistan willget $400 million of revenue annually from
the pipeline.

US: Power generation from coal and natural gas expected to
temporarily converge this spring .Source: U.S. Energy Information Administration
EIA's most recent Short-Term Energy Outlook forecasts that the amount of electricity generation
fueled by natural gas in April and May will total just 3.5% less than the projected amount of coal-
fired generation.
This convergence has occurred only once before, in April 2012, when natural gas fueled just 1.5%
less generation than coal. Power generation from the two fuels is expected to rise at similar rates
over the next couple months, and then diverge again later in the summer as demand rises and
coal unit capacity utilization continues to rise.
Natural gas-fired generation has been rising over the past few months, as the cost of natural gas
has fallen to levelsnot seen since 2012. These low fuel costs have made natural gas combined-
cycle generating units in some areas of the country cheaper to operate than coal-fired plants.
The increase in natural gas-fired generation has largely come at the expense of coal generation.
Generation from both fuels generally falls during the spring months as power plant operators take
units offline for maintenance when electricity demand is relatively low.
The convergence is not expected to last, as EIA forecasts slowly rising natural gas prices through
the rest of the year. Prices at the natural gas benchmark Henry Hub are forecast to reach an
average of $3.13 per million British thermal units (MMBtu) by the fourth quarter of 2015, up from
an average of $2.90/MMBtu in the first quarter.

Rising natural gas costs and the return of coal plants after spring maintenance will likely increase
the level of coal generation. Overall, EIA expects coal to account for an average of 36% of total
U.S. generation in 2015 and natural gas to account for 31%.
A contributing factor in the declining share of coal generation is the recent retirement of some
coal-fired power plants. These plants are shutting down as power generators respond to the
sustained competitiveness of natural gas prices and to the Mercury and Air Toxics Standards
(MATS) regulations. In addition to 4.1 gigawatts (GW) of coal capacity that was retired last year,
plant operators have retired or plan to retire 12.8 GW of coal capacity in 2015.
These retiring coal plants are generally smaller units that have typically operated at lower capacity
factors in recent years. In 2014, the average capacity factor for all coal units was 61%, but the
subset of coal units retiring in 2015 had an average capacity factor of just 36%. The coal capacity
retiring in 2015 accounted for 1.6% of total U.S. generation during 2014.

Latvia’s forest gas storage to shape Baltics energy balance
Reuters + NewBase
Buried under heavy clay deep in the Latvian birch forests, sit the giant Soviet era gas reservoirs
whose fate draws together the main players in the tense energy power game of the Baltics. A
share in the site is for sale, which will dent Russia’s influence. The asking price from the German
stake-seller deterred Latvia itself
from stepping in, leaving a European
Commission-linked fund as the only
bidder, government sources say.
Looking on are Latvia’s Baltic
neighbours, who are at least as keen
to cut their reliance on Russian gas.
The site’s capacity is enough to see
Latvia and also Estonia through the
winter, while Lithuania hopes to use
it to hold some of its gas imports.
Beginning in June, the Latvian parliament will start debating its draft law to split Latvijas Gaze, the
operator of its prize energy asset, into two, bringing it in line with EU liberalisation law.
The storage facility minimises the need for pipelines as gas is injected during the low demand
summer season and withdrawn during the winter.
Latvijas Gaze’s main shareholders
are Russia’s Gazprom, with 34%,
which provides the gas and
Germany’s E.ON, which has said it
will sell its 47.2% stake. Gazprom
has not disclosed any plans.
E.ON has been progressively selling
assets. Last year, it sold a 38.9%
stake in Lithuania’s gas company and
also in its grid. The sale netted
€113.2mn ($128.78mn), a discount of
15% to the market value on the
Vilnius exchange.
For its stake in Latvijas Gaze, E.ON
asked for €220mn, government
officials said, after the Latvian
government submitted a non-binding offer to buy it in September last year. The government said
that price was too high. Now government sources say the Marguerite Fund is the exclusive bidder.
The equity fund and E.ON decline to comment.
“There is an uncertainty about the proposal for legislation and most probably the Marguerite Fund
takes it into consideration, but I believe there won’t be anything to make Marguerite rethink its
plans,” one government source, speaking on condition of anonymity, said.
He said it was hard to judge the price, but his impression was “lower than €220mn.” Set up under
Latvijas Gaze’s underground gas storage facility
in Incukalns, Latvia

Luxembourg law to invest in strategic EU energy projects, the Marguerite Fund has the backing of
the European Investment Bank and the European Commission.
The details are unclear, but the government has said Latvijas Gaze will be divided into two: one
company for sales and distribution, and another to hold the strategic infrastructure. Latvijas Gaze
says maintaining the existing monopoly is the best solution, but accepts it will have to conform to
EU law once Latvia’s derogation ends early in April 2017.
Both sides have a point, analysts say. Latvian gas demand has plunged with the collapse of
industry, falling to around 1.3 bcm from nearly 3 bcm in 1991. Efficiency and renewable energy
could cut demand further.
“If these member states physically connect their markets, the aggregate demand could be enough
to spur investments and get some competition going,” said Tim Boersma of the Brookings
Institution in Washington.
But he added the Baltic States could be an instance of a region that “cannot avoid paying some
form of a premium to safeguard energy security”. Lithuania has weakened Gazprom’s dominance
by investing in a liquefied natural gas (LNG) terminal, which has allowed it to negotiate cheaper
prices, but over time could augment them given the added costs of LNG versus pipeline gas,
analysts say.
It wants Latvia to liberalise, as it has done, to fire up a regional market and Lithuania hopes that at
some point its LNG will be among the gas pumped into the Incukalns storage. This year’s injection
season begins late in May, a month later than usual following a mild winter.
The ground shakes as gas, most of which has travelled 3,500 miles from Siberia, is injected to a
maximum of 4.5bn cubic metres. Around half is working gas and half technical gas that maintains
pressure.

Oil Price Drop Special Coverage
Oil steadies below $67 as global glut builds
Reuters + Newbase
Brent crude oil steadied below $67 a barrel on Friday 15 May-2015 after reports that a growing
supply glut is boosting inventories worldwide. Oil futures have rallied strongly since January after
collapsing last year but analysts say the rebound may have overshot, and could be about to
correct.
Although the US oil market is becoming more balanced, production elsewhere is still running well
ahead of consumption. "A mood change is in the air," Eugen Weinberg, global head of oil and
commodities research at Commerzbank in Frankfurt, told the Reuters Global Oil Forum. "The oil
price rally looks like it may be slowly running of steam."
Brent for July was at $66.60 a barrel by 1100 GMT, down 10 cents from Thursday's close and
trading in a narrow 55-cent range. U.S. crude for June was down 32 cents at $59.56 a barrel.

Major market forecasters including the International Energy Agency (IEA) say big oil producers in
Opec are pumping at least 2 million barrels per day (bpd) more than required, filling up inventories
from Europe to China.
The US government's Energy Information Administration says world oil stocks are rising at 1.95
million bpd this quarter and will continue to build until at least the end of 2016.
Although demand for fuel is likely to pick up in the second half of this year, the current oversupply
is so great there is unlikely to be any shortage any time soon unless there is a major, unexpected
interruption to production.
"We have an oversupply of more than 2 million bpd, almost 3 million bpd. It must weigh on the
market," Weinberg said. Thomas Pugh, economist at Capital Economics, agreed: "The rally got
ahead of itself. We think oil prices are more likely to fall over the rest of this year than to rise."
Investors kept a close eye on rising tension in the Middle East after Iranian vessels fired shots at a
Singapore-flagged tanker in the Gulf on Thursday. President Barack Obama vowed on Thursday
to back Gulf allies against any "external attack," seeking to reassure them about their security
amid Arab anxiety over U.S.-led efforts to reach a nuclear deal with Iran.
Baker Hughes will release weekly US rig count data later on Friday. The data has become a
closely watched indicator to gauge adjustments in US production.

Rig Count Overview & Summary Count
From: Baker Hughes
Area Last Count Count
Change from
Prior Count
Date of
Prior Count
Change from
Last Year
Date of Last
Year's Count
U.S. 15 May 2015 888 -6 8 May 2015 -973 15 May 2014
Canada 15 May 2015 77 +2 8 May 2015 -76 15 May 2014
International April 2015 1202 -49 March 2015 -147 April 2014
Baker Hughes has issued the rotary rig counts as a service to the petroleum industry since 1944,
when Hughes Tool Company began weekly counts of U.S. and Canadian drilling activity. Hughes
initiated the monthly international rig count in 1975. The North American rig count is released
weekly at noon central time on the last day of the work week. The international rig count is
released on the fifth working day of each month.
The Baker Hughes Rig Counts are an important business barometer for the drilling industry and its
suppliers. When drilling rigs are active they consume products and services produced by the oil
service industry. The active rig count acts as a leading indicator of demand for products used in
drilling, completing, producing and processing hydrocarbons.
Baker Hughes Rig Counts are published by major newspapers and trade publications, are referred
to frequently by journalists, economists, security analysts and government officials, and are
included in many industry statistical reports. Because they have been compiled consistently for 70
years, Baker Hughes Rig Counts also are useful in historical analysis of the industry.

No winner yet as oil prices still remain in flux
Rashid Hussain + SG + NewBase
WHO won this round of battle? With oil prices creeping and crossing the $60-mark, there is a
growing buzz all around that Opec, led by Saudi Arabia, has emerged victorious in this round. And
the debate is raging.
When in that decisive
ministerial in Vienna on
November 27, 2014, Opec
finally opted not to cut output
- as some felt then
imperative to strengthen the
markets - rather than
keeping it steady - pundits underlined that the Gulf oil producers were endeavoring to flush out
new competitors from the arena.
Many believed the strategy also converged with the geopolitical objectives of the Gulf oil
producers. Markets have strengthened in the meantime.
Some are also beginning to feel relieved - the strategy was working. While talking to The Financial
Times, an unnamed Saudi official, reportedly confirmed this was part of the kingdom’s strategy;
“there is no doubt about it, the price fall of the last several months has deterred investors away
from expensive oil including US shale, deep offshore and heavy oils,” he said, adding that “Saudi
Arabia wants to extend the age of oil … we want oil to continue to be used as a major source of
energy and we want to be the major producer of that energy.”
No policy reversal seems in sight at the moment. Opec’s monthly oil report said the kingdom’s
production rose to a record high of 10.3 million bpd in April, a slight rise over the previous month’s
total of 10.29 million bpd. This is the highest oil production level in more than three decades.
The strategy has still to go a long way further. The Paris-based International Energy Agency,
however, believes the battle for markets share is just getting started. In its monthly oil market
report, the IEA confirms that Opec’s tactic was working - to some extent. The relentless output
increment of the US shale oil output is halting - courtesy months of cost-cutting.
The Agency now expects the US shale oil output growth to slow by 80,000 barrels a day this
month. IEA now estimates that the number of rigs running in the US plunged around 60% in
response to lower oil prices.
The US shale had “buckled” in April “bringing a multiyear winning streak to an apparent close,” the
IEA noted. The agency is predicting a 57,0000 bpd-decline in the US output for May and a further
86,000 bpd will disappear in June.
However, other non-OPEC producers too continue to ramp up production, IEA highlighted, raising
its forecast of 2015 non-OPEC production growth by 200,000 bpd to 830,000 bpd. Russia’s output
too jumped an unexpected 185,000 bpd year-on-year in April and Brazilian production was up
17% in the first quarter, the IEA added.
Meanwhile, production in China, Vietnam and Malaysia has also shown persistently strong growth.

The IEA expects Chinese oil production to increase by 100,000 barrels a day this year to 4.3
million barrels a day.
A recent rally in oil prices could also give US shale oil producers a fresh lease of life. “It would
thus be premature to suggest that OPEC has won the battle for market share. The battle, rather,
has just started,” the IEA underlined.
IEA report then further adds that Opec’s decision not to cut output in November was only “the first
step in a plan that includes actually ramping up output and aggressively investing in future
production capacity.” While non-OPEC producers are cutting costs, Kuwait, Saudi Arabia and the
United Arab Emirates are all expanding their drilling programs.
Iraq’s oil production hit its highest level since 1979 in April and Iranian supplies hit their highest
since July 2012. The IEA thus points out, in rather clear terms, that it would still be too early to
suggest if Opec has finally won the battle for market space.
US shale producers too are contesting the success of the Opec strategy in squeezing them out.
EOG Resources, the largest shale oil producer in the US, is projecting a return to “double-digit”
production growth, if the US benchmark, West Texas Intermediate, rises to $65 per barrel or
higher.
Occidental Petroleum Corp. too has boosted its planned production for the year. Other drillers too
are saying they would open the taps if WTI touches $70-mark. And in the meantime, oil production
in North Dakota too has increased by 1 percent despite obvious signs of a slowdown in the state’s
shale reserve areas.
As per the North Dakota Industrial Commission (NDIC) oil production report in March, the last full
month for which data was available, was 1.19 million barrels per day, up from the 1.18 million bpd
in February. The increase comes despite a drop in the number of rigs active in the No. two oil
producer in the nation.
“The drilling rig count dropped 25 from February to March, 17 more from March to April, and has
since fallen 8 more from April to today,” the NDIC said in its monthly report. The rig count of 83 is
the lowest since January 2010. Yet the output is up.
The strategy to flood the crude market and squeeze out US producers won’t work, and the claim
of success is premature, Harold Hamm, the founder of Oklahoma-based Continental Resources
said late last week on CNBC’s “Squawk Box”.
The strategy adopted by Opec has “ almost guaranteed us an outlet to world markets.” It might in
fact help rally support in Washington for lifting the decades-old US export ban, prohibiting
American producers from selling crude overseas, he said.
“We’ve had our hands tied behind our backs here without being able to export oil,” said Hamm. “It
looks like now we may get that opportunity.” It is perhaps in this perspective that investment bank
Goldman Sachs is suggesting the rebound in crude prices was “premature” as there’s still far
more oil being pumped and stored than the world needs.
Opec strategy is working, markets have definitely improved, yet, the war is on. The final hurrah is
still to be made!

The Long Term Impact Of Low Cheap Oil On The GCC
By :Abhay Bhargava + NewBase
Volatile fuel prices could be a good thing for the GCC, writes Abhay Bhargava,
associate director and regional head – ME, Energy & Environment Practice,
Frost & Sullivan.
The current situation of a drop in oil prices is not something new to the
industry, but the rapid decline is a reason for concern.
The concern is significantly higher in the Gulf Cooperation Council
(GCC), where the oil and gas sector still contributes to the GDP to a
large extent — it has been contributing anywhere between 80-85 per
cent of GDP on average for the last three years.
Oil prices have been prone to fluctuations in the past, affected by not
just the supply-demand equations, but also perceptions that are primarily fuelled by political
and socio-economic issues (Suez crisis, Iran – Iraq war, Asian economic crisis, etc.).
However, over the long term, the future for oil is expected to remain stable. This may sound
contradictory until some specific factors are considered.
First, we need to look at the reasons for the current drop in oil prices. This drop can be
attributed to a number of key factors, a constant reduction in US imports (substituted by
domestic production and Canadian imports), which have declined by nearly three million
barrels per day, the European slump over the long term, fuelled by a slower economy and a
drop-off in the refining sector, reduced Chinese demand over the short term and inaction on
the part of the Organisation of the Petroleum Exporting Countries (OPEC) to reduce supply,
as a means to increase prices.
Over the long term, some of these factors will remain in play and oil demand is indeed likely
to be challenged, and in certain regions/ industries, this demand will actually decline.
Alternate sources of energy, primarily renewables, are expected to see an increase in
adoption, fuelled by increasing efficiency through R&D and decline in production costs.
Energy efficiency measures are likely to gain significant momentum in two major end-user
segments: Power generation and vehicles (primarily in developed countries). These factors
would result in a decrease in consumption of oil in developed nations as well as nations that
have abundant access to renewable sources of energy.
However, there are other factors that would counter the decline to a large extent.
Increased consumption from other sources, including the refining and industrial sector, fuelled
by growth from developing countries, will offset the decline emanating from other sources
outlined above.
From a regional perspective, over the long term, while the US demand for oil imports is likely
to decline, a significant increase is forecast across Asia, Africa, and the Middle East, and in
totality, global consumption of oil is also likely to increase.
The supply of oil itself is expected to face challenges in the long term, which in turn could
result in increased opportunities for oil exploration and production.

Existing conventional oil production fields are facing the issue of depletion. A detailed report
published by the UK Energy Research Centre cites a 6.5 per cent/annum average rate of
decline in fields that are past their peak of production and four per cent/annum in current
producing fields. Considering the overall long-term increase in demand, coupled with the
forecast decline rates, we do not expect the oil industry to face sustained challenges.
These fluctuations in oil price are expected to significantly impact selective segments of the
industry that have a high dependence on high oil prices including oil fields that are in
advanced stages of maturity, or decline, such as in the North Sea, deep water production
zones and countries that need higher oil prices to sustain their economies like Iran,
Venezuela, and Russia.
However, these fluctuations would only have a short-term impact on US shale frackers. This
is due to the strategic importance of reducing US dependence on oil imports and a trait
peculiar to this industry where production shutdowns and restarts are much quicker compared
to conventional oil facilities. Hence, we do not expect to see a long-term impact of fluctuating
oil prices on the US shale industry.
Looking towards the GCC, while member countries enjoy a large contribution to their
economies due to oil, they also face a substantial outflow to this account in the form of
subsidies.
Annually, the six nations in the GCC spend between $50-$60 billion as subsidies on oil alone,
which is nearly five per cent of combined GDP for 2013. If oil continues to face fluctuations,
GCC countries are likely to focus on re-routing part of these subsidies towards developing
alternate sources of energy as a means to build greater sustainability in their energy mix. This
will prove to be eventually beneficial for the renewables sector.
Additionally, there have been significant attempts by GCC countries to reduce their
dependence on oil, which is clearly visible in the reduction of oil’s contribution to GDP over
the last five years.
To conclude, while the GCC has faced a significant decline in potential earnings on account
of the recent oil fluctuations, over the long term, we see a positive impact across both the oil
producing sector and the non-oil sector, allowing for a more holistic development of the region
as a whole.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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 25 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years, he has developed great
experiences in the designing & constructing of gas pipelines, gas metering & regulating stations
and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 17 May 2015 K. Al Awadi

NewBase 605 special 17 May 2015

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