New base 758 special 30 december 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,
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NewBase 30 December 2015 - Issue No. 758 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
‘First oil’ at Taqa’s new Cladhan field in the UK North Sea
The National - LeAnne Graves
Abu Dhabi National Energy Company, also known as Taqa, on Tuesday announced first oil from
the new Cladhan field development in the UK North Sea. The field is located in the northern North
Sea, about 100 kilometres North-east of the Shetland Islands.
“Cladhan is the third field developed by Taqa and the largest to date, said Peter Jones, Taqa’s
UK managing director. “First oil therefore represents a significant milestone.” The Abu Dhabi-
based company said the latest producing field shows its commitment to “invest in infrastructure
and to maximise economic recovery in the North Sea”.
The company operates five platforms in the UK, that produce from 13 fields across the North Sea.
Like other oil and gas companies, Taqa has been hit by the tumbling price of crude. The company
reported a loss of Dh416 million for the three months that ended on September 30, compared with
a profit of Dh107m in the same quarter last year.
The lower price of oil has sent shocks across the board for oil and gas companies. The price of
Brent is now less than US$40 a barrel, compared with highs in summer last year of more than
$110 a barrel.

Saudi Arabia economic shakeup shows it is planning for
prolonged cheap oil era
Reuters+Gulf-Times + NewBase
Saudi Arabia’s planned cuts in spending and energy subsidies signal that the world’s largest
crude exporter is bracing for a prolonged period of low oil prices.
The Opec heavyweight shows no signs of wavering in the long-term oil strategy it has
orchestrated since last year. Instead, it appears willing to continue tolerating cheap crude to
defend market share and wait for the market to balance without cutting supplies, oil sources and
analysts say.
In one of the strongest signals that the kingdom will stay the course despite the impact on its
finances, Saudi Aramco’s chairman Khalid al-Falih said it could outlast others.
“We see the market balancing sometime in 2016, we see demand ultimately exceeding supply
and soaking up a lot of the excess inventory and prices in due course will respond regardless of
when and by how much,” Falih told a news conference late on Monday detailing next year’s
budget. “Saudi Arabia more than anyone else has the capacity to wait out the market until this
balancing takes place,” he said.
Analysts said the plans announced on Monday to shrink a record state budget deficit with
spending cuts, reforms to energy subsidies and a drive to raise revenues from taxes and
privatisation showed Riyadh was expecting lower revenues.
“We don’t see any changes to Saudi Arabia’s oil policy - in the context of oil production,” said
Amrita Sen, chief oil analyst at consultancy Energy Aspects. “The budget changes suggest they
are expecting oil prices to stay low for some time and the reforms are a small step towards
addressing that.”
The 2016 budget and reforms announcements marked the biggest shake-up to economic policy in
the kingdom for over a decade and aimed to cut the government deficit to 326bn riyals, down from

367bn riyals or 15% of gross domestic product in 2015. Next year’s budget projects spending of
840bn riyals, down from 975bn riyals spent in 2015. The government also said it was hiking
prices for fuels, water and electricity as well as gas feedstock used by industry, as part of
politically sensitive subsidy reforms.
“Saudi Arabia can either spend its
way out of the current scenario or
start belt-tightening. In the past
the country has spent lavishly on
health, education and
infrastructure in difficult times
knowing that oil prices will be
supportive,” said Asim Bakhtiar,
head of research and investment
advisory, Saudi Fransi Capital. “If
oil has entered a down cycle then
belt-tightening will prevail.”
Falih, who is also the health
minister, became chairman of
Aramco, the world’s biggest state energy firm, earlier this year after more than 30 years in the
company.
As one of one of a handful of Saudi figures whose views are closely watched by traders and
analysts for any insight into the kingdom’s oil thinking, Falih has long been considered a possible
successor to Saudi Oil Minister Ali al-Naimi.
His appearance at the news conference with two other ministers, during which he shared his
views on oil prices and market assessment, was seen as a possible signal he could be named oil
minister when al-Naimi, 80, eventually retires.
The Organization of the Petroleum Exporting Countries (Opec) rolled over its year-long strategy of
pumping at will in its December 4 meeting, raising the stakes in its survival-of-the-fittest market
strategy. Riyadh was the driving force behind Opec’s shift in policy last year, rejecting calls to
reduce output to support oil prices that are trading this month at their lowest since 2004. It chose
instead to defend market share against higher-cost-rivals.
Falih said the policy had borne fruit.
“Over the last year we have seen the down cycle in the oil markets have a significant impact on
both supply and demand. Supply has plateaued in North America and started declining by
significant amounts and we expect that to continue or perhaps accelerate in 2016,” he said.
The Finance Ministry did not disclose the average oil price assumed in its 2016 budget
calculations but economists estimated it was about $40 a barrel and saw crude production
remaining high at above 10mn bpd next year.
“We do not see Saudi Arabia... cutting production in order to support upward movement in prices.
So far, Saudi policy of gaining market share has worked, with lower prices undercutting both Opec
and non-Opec competitors in key markets,” wrote analysts at Jadwa Investment, a leading Saudi
financial firm, in a note yesterday.

Qatar 2016 oil demand to firm up on transportation, industrial demand
Gulf Times - Pratap John
Oil demand is expected to grow firmly in Qatar in 2016 with transportation fuels, especially
gasoline, and industrial fuels such as diesel and residual fuel oil playing a "significant part" in the
overall oil demand growth, an Opec report has shown.
Oil demand growth in the region is projected to reach 0.19mn bpd in 2015, while in 2016 it is
anticipated to record around 0.21mn barrels per day of growth.
Oil demand grew strongly in Qatar and the UAE this year, shows Opec’s latest ‘Monthly oil market
report’. In both countries, transportation fuels – notably gasoline – dominated the increases.
Elsewhere in the Middle East, solid demand requirements have been registered in October with oil
demand growth in Saudi Arabia hitting the highest level in 2015.
Oil demand in Saudi Arabia continues its positive momentum, growing by around 0.34mn bpd, or
15% year-on-year. All products recorded positive gains during the month, without exception.
Direct crude burning recorded highest gains in both percentage and volumetric basis, it said.
Transportation, industrial fuels and direct crude burning were the contributing elements in rising
Saudi Arabian demand in 2015, which continues to be the pattern of consumption during October
this year.
Demand grew solidly also in Kuwait, particularly lifting road transportation and industrial fuels,
gasoline and gas diesel oil. Iraqi oil demand continued its positive growth trend which started in
June, with most gains being observed in fuel oil and gasoline.
But, the report said Middle East oil demand growth may be challenged in 2016 by some downside
risks, which relate to the continuing geopolitical turbulence in some countries.
Oil demand growth in the Middle East is projected to reach 0.19mn bpd in 2015, while in 2016 it is anticipated
to record around 0.21mn bpd of growth.

The report also showed world oil demand in 2015 was estimated to grow by 1.53mn bpd, around
300,000 bpd higher than the initial forecast in July 2014.
The upward revision has been supported by lower oil prices in the main demand centres,
particularly the Organisation for Economic Co-operation and Development (OECD), Americas and
Europe.
Motor fuel consumption in the US and Europe was encouraged by cheaper product prices, along
with improving car sales. Petrochemical consumption also contributed to the higher growth.
In the non-OECD, demand growth came mainly from China, India and the Middle East. In
contrast, Brazilian oil requirements slipped back into a contraction as economic momentum
slowed.
In 2016, world oil demand is expected to grow by 1.25mn bpd, partly supported by the
improvement in global economic activities. The OECD region is anticipated to rise by 150,000
bpd, led solely by the US, while Europe and Asia Pacific are seen declining.
In the non-OECD region, growth is expected to be around 1.1mn bpd, with China showing slightly
lower growth.
Steady oil requirements are expected in Asia, the Middle East and Latin America.
Nevertheless, the demand forecast for 2016 is subject to considerable uncertainties, depending
on the pace of economic growth, development of oil prices, and weather conditions, as well as the
impact of substitution and energy policy changes.
Non-Opec supply growth in 2015 has been revised down by 310,000 bpd since the initial forecast
to now stand at 1mn bpd. This has been mainly due to the impact of low oil prices and declining
investments in the oil industry.
The adjustment is also attributable to downward revisions in both the OECD and developing
countries of 420,000 bpd and 40,000 bpd, respectively.
Higher-than-expected growth in the UK, Malaysia, Russia, China and Colombia has been more
than offset by lower-than-expected growth in Canada due to the wildfire in Alberta in Q2, 2015, the
unexpectedly sharp decline in Mexico, and higher declines in Australia and from Caspian
producers.
US oil output increased by a lower-than-anticipated 810,000 bpd, the report said.
In 2016, non-Opec oil supply is forecast to decline by 380,000 bpd. Growth is seen coming mainly
from Canada and Brazil, with declines also expected in the US, Mexico, Russia, Kazakhstan, the
UK and Azerbaijan.
Opec’s natural gas liquids (NGLs) are seen increasing by 170,000 bpd in 2016, following a growth
of 160,000 bpd in 2015.
As a result of the current forecasts, the demand for Opec crude in 2016 is expected at 30.8mn
bpd, which represents an increase of 1.5mn bpd over the estimated level for 2015.

Morocco postpones opening of world's largest solar power project
The Guardian
Morocco has postponed without explanation the inauguration of Noor-1, a solar power plant due to
open Sunday in Ouarzazate, part of what will eventually be the world’s largest solar power
production facility.
When asked by AFP, the communications agency that organised the inauguration on behalf of
Moroccan solar energy agency Masen gave no reasons for the last-minute delay.
With an electricity production capacity of 160 megawatts, Noor-1 is supposed to allow Morocco to
significantly reduce emissions of greenhouse gases.
The complex should allow Morocco to cut carbon dioxide emissions by 240,000 tons per year,
according to estimates from the energy ministry.
The project’s next phases – Noor 2 and Noor 3 – are to follow in 2016 and 2017, and a call for
tenders is open for Noor 4.
Once all phases are complete, Noor will be “the largest solar power production facility in the
world”, its developers say, covering an area of 30 sq km (11.6 sq miles).
It will generate 580 megawatts and provide electricity to a million homes. Morocco has scarce oil
and gas reserves, and is the biggest importer of energy in the Middle East and North Africa.
The plant is part of a vision to move beyond this heavy dependency and raise renewable energy
production to 42% of its total power needs by 2020.
The Ouarzazate project in Morocco aims to create 2,000
megawatts of solar generation capacity by the year 2020 and
provide 38% of the country’s annual electricity generation.

Turkey: BOTAS to Issue Tender for Construction of Gas Pipeline from Kurdistan
Daily Sabah + NewBase
Turkey’s state-owned energy company, the Petroleum Pipeline Corporation (BOTAŞ), will issue a
tender for construction of gas pipeline from Northern Iraq early February, Daily Sabah reported
Monday citing the tender document.
Şırnak gas pipeline will connect into the Turkish national network and will be constructed between
the provinces of Şırnak and Mardin.
Natural gas from Kurdistan region is expected to starting flowing into Turkey in next two to three
years, Tony Hayward, chairman of Genel Energy said during seventh annual Atlantic Council's
Energy and Economic Summit in Istanbul earlier this year.
"The Kurdish region [in northern Iraq] has in excess of 850 bcm of natural gas, with a potential of 5
trillion cubic meters of gas. It will satisfy the entire Turkish [gas] demand for decades to come,"
Anadolu Agency quoted Hayward as saying.
Along with oil, the area of Kurdish autonomy is rich in gas. Natural gas
reserves are estimated at 2.83 trillion cubic meters, accounting for about 89
percent of all of Iraq. Natural gas from the territory of Kurdish autonomy was
considered as a source for filling the Nabucco pipeline, designed to ensure
diversification of supply and energy security of Europe.

Afghanistan Will Raise Force for TAPI Security
Afghanistan will raise a 7,000-member security force to guard the Turkmenistan-Afghanistan-
Pakistan-India (TAPI) gas pipeline, reported Radio Pakistan on Monday.
Daud Shah Saba, Afghan Minister of Mines and Petroleum, told Upper House in Kabul that the
force will be responsible for the security of the project inside the Afghan territory during the
implementation and demining stage.
The Minister added that the procurement process for demining will be completed next month and
work on clearing of the pipeline passage would commence in April.
Earlier this month, Afghan President Ashraf Ghani talked about the importance of TAPI gas
pipeline project to a gathering of tribal elders. He told the gathering that the pipeline project is of
enormous economic importance and would change Afghanistan into an economic hub in the
region. The much delayed project was formally inaugurated on December 13.
The ground breaking ceremony, which was held in Mary in the southeastern part of Turkmenistan,
was attended by Afghan President Ashraf Ghani along with Turkmenistan President Gurbanguly
Berdymuhamedov, Pakistan Prime Minister Nawaz Sharif and Indian Vice President Muhammad
Hamid Ansari.

USA: Oil-Producing States Battered as Tax-Gushing Wells
Are Shut Down
Bloomberg - Darrell PrestonShare on FacebookShare on Twitter
In Kern County, California, one of the nation’s biggest oil producers, tumbling energy prices have
wiped more than $8 billion from its property-tax base, forcing officials to tap into reserves and cut
every department’s budget. It’s only getting worse.
The county of 875,000 in the arid Central Valley north of Los Angeles may face another blow in
January, when it reassess the oil-rich fields that line the landscape. Last year’s tax bills were
based on crude selling for $54 a barrel. It’s now at about $37.
“We may never go back to $99 a barrel, but we were good at $54,” said Nancy Lawson, assistant
administrative officer of Kern County, which includes the city of Bakersfield. “If it keeps going
down and stays down we may have to look at more cuts in the next budget.”
As the price of crude falls for a second year, marking the steepest decline since the recession, the
impact is cascading through the finances of states, cities and counties, in ways big and small.
Once flush when production boomed, some governments in major energy producing regions are
facing a new era of unwelcome austerity as wells are shut -- along with the tax-revenue gushers
they spouted.
Alaska, Louisiana and Oklahoma have seen tax collections diminished by the rout, which has put
pressure on credit ratings and led investors to demand higher yields on some securities. In Texas,
the largest producer, the state’s sales-tax revenue dropped 3 percent in November from a year
earlier as the energy industry exerted a drag on the economy.
Further west, Colorado’s legislative forecasters on Dec. 21estimated that the state’s current year
budget will have a shortfall of $208 million, in part because of the impact of lower commodity
prices. In North Dakota, tax collections have trailed forecasts by 9 percent so far for the 2015-

2017 budget. “The longer it goes the more significant it gets,” said Chris Mier, managing director
with Loop Capital Markets in Chicago.
The pressure contrasts with what’s happening in most of the country, where states and cities are
enjoying a break from the fiscal strains that lingered for years after the recession ended in 2009.
In the three months through June 30, a period when income-tax payments are due, states’
collections jumped by 6.8 percent from a year earlier, the biggest increase in two years, according
to the Nelson A. Rockefeller Institute of Government in Albany.
Because of such gains, Standard & Poor’s has boosted more ratings than it has cut for three
years, the longest streak of improvement since 2001.
Reversal of Fortune
Some states are being left out, a result of the energy-price crash that’s also being felt by countries
including Saudi Arabia andVenezuela.
On Dec. 23, Moody’s Investors Service said Oklahoma may be downgraded from Aa2, the third
highest rank, because of the prospect for a “prolonged, muted recovery in prices and production.”
In February, S&P and Moody’s cut their outlooks on Louisiana’s rating -- which is now the third
highest from both -- because of oil’s impact, which left the state with a $487 million mid-year
deficit. Alaska is at risk of loosing its AAA rating from S&P, which cut its outlook on the state in
August after the government’s revenue was cut by more than half.
The outlook has led investors to demand higher yields relative to other debt. A 10-year Louisiana
bond traded last month for a yield of 2.64 percent, or 0.56 percentage point over top-rated debt,
more than triple the gap when they were first sold a year ago. That difference on a 10-year Alaska
bond has nearly doubled since August to 0.31 percentage point.
“We’ve been avoiding Alaska for some time now because we don’t like the fundamentals,” said
Dan Heckman, national investment consultant at U.S. Bank Wealth Management, which oversees
about $130 billion.
Tough Jobs Ahead
When legislatures begin work next year on new state budgets, they may face another round of
deficits. Oklahoma officials this month estimated that there will be a $900 million budget hole for
the fiscal year beginning in July after revenue fell short of estimates. Governor Mary Fallin in
October ordered state agencies to plan to cut spending by 10 percent, said Preston Doerflinger,
finance director.
“This offers us a chance to improve efficiency and decide what services we will offer,” he said.
In Kern County, where Chevron USA Inc. is the largest taxpayer, a fiscal emergency was declared
in January, allowing officials to use reserves and make spending adjustments. For the current
budget, which lasts through June, the county cut spending by $61.5 million, or 2 percent. The new
property-tax assessments will set the outlook for next year.
Investors have demanded higher interest rates from Kern County, though it can still borrow for
yields similar to localities with top credit grades. At its annual note sale in June, the county paid a
0.31% yield on one-year notes, the same as AAA rated debt, according to data compiled by
Bloomberg. A year earlier, it paid about 0.10 percentage point less than benchmark debt.

U.S:Gas Stages Record Rally Since Mid-December on Cold Outlook
Bloomberg - Naureen Malik
Gas futures surged 22 percent from mid-month to Monday, the biggest rally ever for the period in
New York Mercantile Exchange data going back to 1990. Prices rebounded from a 16-year low 11
days ago on speculation that colder weather in January will stoke demand and help ease a supply
glut. Berkshire Hathaway Inc.’s Northern Natural Gas pipeline said Monday that storms are
affecting transportation of the fuel in the Rockies, Oklahoma, West Texas and New Mexico.
Temperatures across most of the Midwest and East Coast will drop to seasonal levels Jan. 2
through Jan. 6, said Commodity Weather Group LLC. The low in Chicago on Jan. 4 will be 18
degrees Fahrenheit (minus 8 Celsius), 1 below average, AccuWeather Inc.’s website showed.
“The market is reacting a little bit to the prospect of lower temperatures in the next couple of
weeks,” said Santiago Diaz, energy trading associate at FCStone Latin America LLC in Miami.
“Traders that were short are probably covering those positions, maybe realizing some of the gains
to report at the end of the year or to get some spending money.”
Gas futures for January delivery jumped 19.9 cents, or 9.8 percent, to $2.228 per million British
thermal units on the Nymex, the highest close since Dec. 1 and the most since Oct. 29. Prices had
dropped to $1.755 on Dec. 17, the lowest settlement since March 1999. January options expire
Monday and the futures contracts for the month expire Tuesday.
Options Trading
January $2.10 puts were the most active options in electronic trading, dropping 9.1 cents to 0.1
cent on volume of 1,304 at 3:08 p.m. while $2.20 calls for the same month rose 2.5 cents to 3
cents.

As the January options and futures contracts expire, “we may see some volatility at the front of the
curve as books are squared in those instruments amid declining volumes and open interest,” Tim
Evans, an energy analyst at Citi Futures Perspective in New York, said in a note to clients
Monday.
Cold weather and storms are sweeping parts of the West and Midwest. The weather is lifting
demand for the power-plant and heating fuel while also curtailing some supply.
Gas Deliveries
Gas deliveries to customers climbed to 87 billion cubic feet on Monday, up 11 percent from a
week earlier, PointLogic Energy data show. Consumption rose among power generators and
residential and commercial users.
The storms in western Texas and New Mexico are affecting “supply deliverability,” Laura
Demman, a spokeswoman for Northern, said Monday in a telephone interview.
Kinder Morgan Inc.’s El Paso Natural Gas pipeline issued a warning to customers that supply from
Texas’ Permian Basin and New Mexico’s San Juan Basin were flowing below scheduled rates,
according to a website notice.
The spot price for gas delivered into El Paso’s pipeline system south of the Blanco, New Mexico,
compressor station jumped 75 percent to $2.9219 on the Intercontinental Exchange. Gas there
typically trades at a discount to the Henry Hub in Louisiana, the delivery point for New York
futures. Instead, gas was being sold at Blanco for 84 cents more, the biggest premium to the
benchmark since March 2014.
Winter Arrives
“It took two months, but winter is finally here and natural gas futures are moving along with them,”
Aaron Calder, senior market analyst at Gelber & Associates in Houston, said in a note to clients
Monday. “The demand situation still has a long way to go before the supply glut is dealt with, but
this is an encouraging start.”
Equity investors aren’t buying the gas rally. While the front-month futures have rallied over the
past two weeks, the forward curve has shown relatively little gain, with prices staying below $3 per
million Btu until December 2017. Consol Energy Inc. shares dropped 10 percent to $7.785 at 3:11
p.m. in New York and Chesapeake Energy Corp. slumped 8.4 percent to $4.076.
Gas inventories probably fell by 42 billion cubic feet last week, based on the median of four
analyst estimates compiled by Bloomberg. The five-year average decline for the period is a
withdrawal of 95 billion. The U.S. Energy Information Administration is scheduled to release its
next gas inventory report on Dec. 31.
Stockpiles totaled 3.814 trillion on Dec. 18, 12.1 percent higher than the five-year norm for the
time of the year, EIA data show. That’s the biggest such supply surplus since March 2013. The
pace of storage withdrawals will pick up in coming weeks, jumping to triple-digit levels in the first
two weeks of January, Evans said. “While cooler temperatures will mean larger net withdrawals
from storage in the weeks ahead, we still expect the drain on working gas inventories to average
somewhat below five-year average rates.”

NewBase 30 December - 2015 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Crude oil prices drop more than 1% as weak outlook prevails
Reuters + NewBase
Crude oil futures fell around half a dollar early on Wednesday as the market remained under
pressure from slowing demand and high supplies, while forecasts that a cold snap in Europe and
the United States would be short-lived also hurt prices.
Crude prices have plunged by two-thirds since mid-2014 as soaring output from the Organization
of the Petroleum Exporting Countries, Russia and the United States led to a global surplus of
between half a million and 2 million barrels per day.
More recently, a slowing demand outlook, especially in Asia but also Europe, has started dragging
on prices. Front-month U.S. West Texas Intermediate crude futures were trading at $37.18 per
barrel at 0140 GMT, down 69 cents or 1.82 percent from their last settlement. Brent futures were
down 47 cents, or 1.24 percent, to $37.32 a barrel.
Traders said the price falls were largely a result of a weak outlook for next year and the closing of
2015 trade books. "The 2016 outlook is for lower prices, especially early next year. Many are
closing their last long positions for the year today as nobody wants to come back in January and
be surprised badly. Better start with a clean sheet," a trader said.
Forecasts that an upcoming cold weather in Europe will only be short-lived could also hurt crude
prices. U.S. crude and Brent had both rallied about 3 percent in the previous session on hopes
that a drop in temperatures would buoy demand for oil for heating purposes.
But weather data in Thomson Reuters Eikon shows that average continental European
temperatures are expected to drop from around 5 degrees Celsius currently towards and slightly
below the seasonal norm of 2.4 degrees by Jan. 3 before rising to as high as 6-8 degrees by Jan. 7.
For most of the United States, a brief cold period is also not expected to last for much more than a week.
Oil price special
coverage

NewBase Special Coverage
News Agencies News Release 30 Dec.. 2015
Feeling a little warm this year? 2015 will set a record
CNBC - John W. Schoen
Call it the Year of Living Warmly.
It'll be a few more days before it's
official, but 2015 will go down in
the record books as the warmest
year since those books were first
kept 135 years ago.
In parts of the U.S., this year will
be remembered for unusually
warm weather when the season
typically brings snow and ice. On
much of the East Coast, December
has felt like spring, complete with
early blooming flowers and
sprouting daffodils.
But the warming trend also has
brought more extreme weather in
other parts of the country, with
severe storms causing tornadoes
across the Midwest and
snowstorms in Texas and New
Mexico.
Last month brought the highest
monthly temperature, according to
the National Oceanic and
Atmospheric Administration, with
the average global surface
temperature running 1.7 degrees
Fahrenheit (1.0 degrees Celsius)
warmer than the 135-year average.
The difference was even greater in
the northern hemisphere, where
much of the developed world lives.
Despite those who reject
mainstream climate science, the
majority of the world's climate
scientists attribute the warming

trend to increased man-made carbon dioxide.
"Global climate is changing and this is apparent across the United States in a wide range of
observations," according to the third U.S. National Climate Assessment. "The global warming of
the past 50 years is primarily due to human activities, predominantly the burning of fossil fuels."
The trend over the last 135 years is clear, with average global temperatures rising every decade.
More recently, the impact has been felt in more severe weather events with costly — and deadly
— results. Since 1980, the number of extreme weather events bringing economic losses of more
than $1 billion each has been rising, according to a NOAA report.
Earlier this month, a long-running effort to curb greenhouse gas emissions and slow the warming
trends produced an agreement in Paris among more than 190 countries to join the effort.
The agreement set a long-term goal of keeping global warming "well below" 2 degrees Celsius
(3.6 degrees Fahrenheit) and works toward limiting the temperature rise to 1.5 degrees Celsius
(2.7 degrees Fahrenheit).
To reach that target, governments pledged to set national targets limiting emissions "as soon as
possible" but stopped short of setting specific targets.

Predictions for 2016: Keep calm, it’s chaos as usual
The National and agencies
Market swings have become the norm as 2015 draws to a close. But this has not stopped us from
indulging in some forecasting for a year ahead that promises to surprise investors and companies
alike – such as the UK exiting the EU and oil reaching $100 again.
Will 2016 be marked by rising interest rates, a wallowing oil price and a full-on recovery in Dubai’s
property market? Experts, commentators and analysts join The National’s business team in our
special look ahead at what the next 12 months might bring in financial and economic terms. A mix
of the plausible, the unlikely and the downright humorous below:
Sustainability a priority
“In light of the major social, economic and political challenges that our world experienced in 2015,
particularly across large parts of the Middle East and North Africa, I sincerely hope that 2016 will
be the year in which achieving more inclusive and sustainable growth becomes an overriding and
urgent priority for businesses, non-profits and governments alike.”
Badr Jafar, the chief executive of Crescent Enterprises and the founder of the Pearl Initiative
Britain leaves the EU
“David Cameron will call a referendum in the autumn and Britain will vote narrowly for Brexit,
forcing him to resign.”
Ivan Fallon, the author of Black Horse Ride: The Inside Story of Lloyds and the Banking
Crisis, and the former business editor of The Sunday Times
Bankruptcies
“1. A major energy-sector bankruptcy or restructuring. 2. Another GCC country beside the UAE
goes big in solar.”
Robin Mills, the head of consulting at Manaar Energy and the author of The Myth of the Oil Crisis
Year of living on edge
“Anxiety and worries about the economic outlook and financial landscape both in the UAE and
globally will rise but events will not unfold as feared allowing optimism to grow into 2017.”
Mustafa Alrawi, The National’s Business Editor
Commodity weakness
“With most of the developing world in an economic slowdown, IHS is forecasting prolonged
weakness in commodity prices over the next decade. Prices for coal, iron ore and crude oil are all
likely to remain depressed for the next few years.”
From business-info group IHS’s report on top trends that will affect maritime trade in 2016

Internet spreads
“A key facet of the digital transformation revolution that is beginning to take shape in the region is
the emergence of the Internet of Things (IoT) ecosystem, with IDC predicting that IoT-related
investments in [the Middle East, Turkey and Africa] will create a market opportunity of US$7.03
billion in 2016.”
From the tech consultancy IDC’s FutureScape Predictions for the year ahead
Internet will get greener
“The internet will get greener in 2016, even as the number of global internet users reaches 50 per
cent of the world’s population. This continuous expansion of our digital lives requires massive
amounts of electricity, particularly for the data centres that serve as catalysts of the digital
economy. Operators of data centre know that has consequences in a fossil fuels-based economy,
with 84 per cent of North American operators recently recognising a need to consider renewable
energy for meeting future energy demands.
“In 2016, we’ll see more enterprises adopt renewable energy principles. Companies that rely on
electricity to supply power to critical internet infrastructure and maintain operational reliability will
continue to reevaluate the energy efficiency of their data centres, adopt proven energy-saving
techniques and evolve sustainability best practices.”
Tony Bishop, VP Global Enterprise Strategy and Marketing, Equinix
To peg or not to peg
“A depeg of the Saudi riyal is our number one Black Swan event for the global oil market in 2016,
a highly unlikely but highly impactful risk.” Bank ofAmerica strategists led by Francisco Blanch
wrote in a November 19 report. “It is a lot easier politically to implement a modest supply cut at
first than allow for a full-blown currency devaluation.”
Bank of America looks for the outlier
Dubai property price fall
“Cluttons said that although the rate of house price declines is slowing, the amount of new stock
coming on to the market continues to grow. Therefore, it expects prices to continue to fall by 3 to 5
per cent next year.”
From a November 25 report in our pages on Cluttons’ outlook for the Dubai property market in
2016
Cybercrime on the rise
“2016 will also see more players entering the world of cybercrime. The profitability of cyberattacks
is indisputable and more people want a share of the spoils. As mercenaries enter the game, an
elaborate outsourcing industry has risen to meet the demands for new malware and even entire
operations. The latter gives rise to a new scheme of Access-as-a-Service, offering up access to
already hacked targets to the highest bidder.”
Juan Andrés Guerrero-Saade, a senior security expert at the cybersecurity company Kaspersky
Lab.

Choppy seas
“The choppy seas we foresaw in 2015 are likely to get choppier in 2016 … We forecast Japan
GDP growth to slow further to 5.7 per cent in 2016. That would be its slowest pace since 1998,
heightening the already non-trivial risk of credit crunches.”
Nomura’s chief economist for Asia ex-Japan Rob Subbaraman and his team weigh in on Asia
Stronger but not strong
“The world economy next year is shaping up to be stronger than in 2015 and roughly in line with
long-term growth averages, according to the IMF and economists surveyed by Bloomberg. But “a
return to robust and synchronised global expansion remains elusive”, the fund said in its October
outlook.”
From Bloomberg Businessweek’s cover story on the year ahead
It will all work out
“OK-ish”
From that same Bloomberg story, Adair Turner, former chairman of the UK Financial Services
Authority, boils the 2016 outlook down to its essence
Up and down year for oil
“Crude oil will trade both below $30 a barrel and above $60 in 2016.”
“Logic and momentum suggest the first part of this bet is a no-brainer, with both Brent and WTI
crude already having tested below $35 a barrel. The second part relies on history repeating itself
insofar as when the bottom is reached, the rebound tends to be rapid.”
Clyde Russell, Reuters commodities columnist
US bound for recession
“A repeat of 2008-9. Oil climbs back to $150 and US enters recession and its banking system is
once again on the brink of a collapse.”
Srinivasan Iyer, assistant business editor, The National
Bitcoin is back
The price of bitcoin could rise by 50 per cent next year from where it is now, it hit $500 in
November, when the mining reward is halved – it is designed to be halved roughly every four
years, to keep a lid on inflation, according toDaniel Masters, co-founder of Jersey-based Global
Advisors’ multimillion dollar bitcoin hedge fund. “If Opec came out tomorrow and said, ‘in six
months’ time we’re going to halve oil production’, the oil price would instantaneously react. But the
bitcoin market is still in its infancy, and I don’t think that factor is discounted into the price fully,” he
told Reuters in December.

Stay with equities
“While the new year tends to be a popular time to make changes, we believe that current
economic climate will remain unchanged during Q1 2016, which supports our view that portfolios
should continue to focus more on equities and away from the overpriced bond market.”
Commenting on its Q1 2016 Compass report, Vic Malik, the head of Global Investments and
Solutions for Mena at Barclays Wealth and Investment Management
US dollar volatility
“There are reasons for optimism and also caution as we look to the year ahead. Volatility on the
dollar will increase for the first half of the year, as nearly all Fed meetings will be seen as ‘live’ for
the possibility of a rate increase. Dealing with such interest rate policy uncertainty on the dollar is
something the market has not had to consider for seven years.
“Investors will have to learn new skills to deal with this. It will be a good year for the dollar, but it
won’t be a runaway year as the Fed will struggle to deliver the four interest rate increases the
Federal Open Market Committee had in their projections.”
Simon Smith, the chief economist at FXPro
Wishful thinking
“After North Korean hackers obliterate the internet, the world’s newspapers enjoy profits on a
scale not seen since Gutenberg was in little leather diapers. Raises, however, are not
forthcoming.”

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 30 December 2015 K. Al Awadi

New base 758 special 30 december 2015

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