New base 537 special 10 february 2015

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NewBase 10 February 2015 - Issue No. 537 Khaled Al Awadi

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

Adnoc weighing revised concession bids from BP, Shell GulfNews + NewBase

Abu Dhabi National Oil Company (Adnoc) is expected to respond this week to revised bids from BP and Royal Dutch Shell for stakes in a 40-year onshore oilfield concession, industry sources familiar with the matter said on Monday.

BP and Shell were asked to raise their signing bonus, which is paid in advance in cash, one source told Reuters, in line with that offered by France’s Total, which has already renewed its concession.

“BP and Shell have made their [revised] offers, their bids are received well,” a second source told Reuters. Adnoc could make its announcement “soon”, the source said. Adnoc signed an agreement on January 29 with Total giving the firm a 10 per cent stake in the new concession to help operate the United Arab Emirates’ biggest oilfields.

Shell and BP are also expected to get 10 per cent stakes, if they agree to Adnoc’s terms, while Asian newcomers may take the remaining shares, a second source said. “Shell has been present in Abu Dhabi for over seven decades, and our aspiration is to continue to be a partner in the Emirate’s energy future,” a Shell spokesperson said.

BP could not immediately be reached for comment.

A total of nine firms bid for stakes in the Abu Dhabi Company for Onshore Oil Operations (Adco) concession which became available after a 40-year deal with Western oil companies expired in January 2014.

ExxonMobil, Shell, Total and BP each held 9.5 per cent equity stakes in that Adco concession.After the deal expired last year, Adnoc took 100 per cent of the concession as political leaders in Abu Dhabi weighed up whether to bring in Asian firms, industry and diplomatic sources said.




Shell, Total and BP have made new bids, while Exxon has decided against bidding. Other bidders include US firm Occidental Petroleum Corp, Italy’s ENI, China National Petroleum Corp. (CNPC), Norway’s Statoil, Korea National Oil Corp. and Japan’s Inpex.

Each company submitted a proposal for a 5 percent stake and another for a 10 per cent stake. The fields produce 1.6 million barrels per day (bpd) and are

expected to reach 1.8 million bpd from 2017. In the new concession, the companies are expected to receive a per-barrel fee of around $2.85 versus $1 under the previous concession, the first source said.

Follow – Up

The Total win was the culmination of a year-long process that initially involved 11 companies, including four of the original five foreign shareholders in the onshore concession, which dates back to the 1930s: Total, BP, Royal Dutch Shell, and ExxonMobil.

Exxon dropped out early last year to concentrate instead on its large offshore Abu Dhabi project, the Upper Zakum field development.

The companies were asked the week before last to submit revised bids for 10 per cent or 5 per cent shares in the new Abu Dhabi Company for Onshore Operations, Adco, with terms matching those agreed to by Total.

Abdulla Al Suwaidi, Adnoc’s director general, was quoted yesterday by Bloomberg News at a Dubai conference that the deadline for revised bids is today, and Mr Al Suwaidi reiterated that remaining bidders must match Total’s terms.

Those terms have not been disclosed, although analysts are assuming that Total paid a “signing bonus” of about US$2 billion, based on the 10 per cent share of the fields Total will have rights to over the 40-year life of the contract.

“If you say they are buying roughly 2.2 billion barrels and that they pay on average $2 per barrel on higher margin barrels they have acquired, then you would expect the signing bonus to be materially below that,” said Irene Himona, a London-based analyst who covers Total for Société Générale.

Therefore, the French bank calculates that Total will pay out about $2bn this year to acquire the concession and will have revenue of $166 million a year from its share, rising to $190m a year when Adco production rises to an expected plateau of 1.8 million barrels per day from the end of 2017 from 1.6 million bpd currently.

That revenue projection is based on assumed fee of $2.85 per barrel for Total, which is the royalty Exxon agreed for Upper Zakum, up from the $1 per barrel paid on the old concession. When the deal was an announced at the end of last month, the Total chief executive Patrick Pouyanné demurred on specific commercial terms.




Oil To Account For Only 5% Of UAE’s GDP By 2021- Deputy PM

Oil revenues currently contribute 30 per cent to the UAE's overall GDP. By Gulf Business

The contribution of oil revenues to the UAE’s GDP is set to drop from around 30 per cent at present to only five per cent by 2021, the country’s deputy PM said on Monday.

Speaking at the Government Summit in Dubai, Sheikh Saif bin Zayed, who is also the UAE’s Interior minister, said that the current drop in oil prices was a “challenge, but not a crisis.”

“In the 70s, the UAE used to depend on oil revenues for 90 per cent of its GDP. If 30 years ago, the oil prices fell to extreme lows, we would have been affected. But today it’s a challenge which we can overcome.”

His words echoed similar sentiments expressed by Abu Dhabi’s Crown Prince Sheikh Mohamed Bin Zayed, who said on Monday morning that the UAE’s economy was diversified and would ride through the drop in oil prices.

Oil prices fell close to six-year lows earlier this year, before recovering in the last two weeks to over $52 per barrel on reports of reduced supply.

In January, the International Monetary Fund (IMF) slashed its economic growth forecast for the UAE owing to the decline in oil prices.

The fund said that the UAE is expected to see GDP growth of 3.5 per cent in 2015 and 2016, down by one per cent from its October estimate.

Abu Dhabi, highly dependant on hydrocarbon revenues, is set to see an overall economic growth of three per cent while its non-oil economy is slated to grow 5.5 per cent in 2015, IMF said.

Meanwhile, Dubai’s economy is projected to grow by 4.5 per cent this year and 4.6 per cent in 2016, it added.

However, Sheikh Saif stressed that the country was diversifying into sectors such as investment – through institutions such as sovereign wealth fund ADIA, and into developing its human resources.

“While oil is considered the wealth of a country, our true wealth lies in investing in the mind, investing in the education of our children,” he said.

“We will look at the future with optimism even when the last barrel of oil leaves, because our youth, in whom we have invested, comprise our real wealth.”




The UAE is focussing on diversifying its economy and can ride out the recent drop in oil prices, Abu Dhabi Crown Prince Sheikh Mohamed Bin Zayed Al Nahyan asserted at the ongoing Government Summit in Dubai on Monday.

Sheikh Mohamed, who is also deputy supreme commander of the UAE Armed Forces, admitted that the dramatic drop in oil prices was causing panic and fear in the market.

“But people forget that in 2008 oil prices were even higher than last

year’s high, and then they dropped even lower [after the financial crisis] than the current low. Despite that, the UAE kept moving forward and we have seen several achievements,” he said.

Brent crude fell almost 60 per cent since reaching a high of $115 in June 2014, but has since recovered, hitting above $57.80 per barrel on Friday. Sheikh Mohamed emphasised that the UAE’s economy was buoyed by its focus on sectors such as education, health, economic diversity, and security.

“In the next 50 years or so, we may not have any oil or gas. And this is something that the government is thinking about. “Maybe in the next 50 years, after we ship off our last barrel of oil, will we be sad? If we invest today in the right sectors, we will celebrate at that moment,” he said.

The country was already seeing progress in industrial sectors through companies like Strata, which manufactures parts for aircraft makers Airbus and Boeing. Dubai’s airport is also growing, becoming the busiest in the world after welcoming over 70 million passengers last year.

Sheikh Mohamed also highlighted the UAE’s nuclear programme, which aims to supply up to 25 per cent of the country’s power needs when completed. The first plant is scheduled to go live in 2017.

“We need to invest in education and the right kind of education, which provides skill sets for the next 25 years and beyond,” he said. “Unity and strength of the country are also essential to ensure our sustainability in the face of challenges.

” Despite all the challenges in the Middle East, the UAE has, since its inception, tried to send a positive message to the world that it is safe and “here to stay,” he added.




Dubai:Costs still weaken case for small-scale solar plants The National + NewBase

Costs remain a hurdle for the application of solar energy on a small-scale in Dubai, even after the government issued a new framework allowing customers to install their own solar power generation systems, experts said.

Dubai Electricity and Water Authority (Dewa) at the end of last month announced standards for installing photovoltaic (PV) panels that allow customers to produce their own electricity, then feed any excess into the grid in exchange for credit towards their utility bills.

Saeed Al Tayer, the chief executive of Dewa, said that manufacturers of solar power equipment should begin registering their products with the authority “as soon as possible”.

While Dubai has made headlines with the world’s cheapest utility scale solar PV tariffs, smaller scale applications remain unfeasible, according to Cornelius Matthes, the managing director of the Mena region for Building Energy, a US clean energy firm.

“[Residential] solar systems are substantially more expensive than the larger, commercial and industrial systems,” he said. The relatively low level of residential electricity prices in Dubai means the payback for installing a solar system in a home is well over 10 years, according to Mr Matthes.

Current tariffs amount to 23 fils per kilowatt hour (kWh) under 2000 kWh a month, and Dewa estimates one person uses about 20,000 kWh a year. Based on those statistics, a one-bedroom flat would have an average yearly power bill of around Dh4,600.

“[Regulatory authorities] should increase the price per kilowatt faster – that is the best incentive to begin saving energy, and then to think about residential solar,” said Mr Matthes. He said that because of the low prices there is not enough of an incentive to incorporate technologies such as small scale rooftop solar PV systems.

In comparison, European power bills are almost four times that price, with the energy information administration reporting an average of 20 euro cents (83 fils) per kWh. In the residential segments of some countries such as Belgium one out of 13 homes is equipped with PV systems, according to the European PV Industry Association.

The high turnover of the mostly expatriate-dominated population is also an obstacle to a return on investment. Expatriates make up about 84 per cent of the UAE’s total population, according to data from Pew Research.

“Almost nobody in Dubai plans to stay more than five years and the planning horizon you need to purchase a solar home system is much longer,” said Mr Matthes.




Dubai-based MAF Dalkia, an energy management services company, said that most people were willing to wait only three to five years before seeing a return on investment. Francisco Marques, business development and marketing director for MAF Dalkia, said that the company’s current position was to provide corporate customers with short-term paybacks such as optimising the technology already in place to provide immediate energy savings.

The company delivers energy saving solutions to various firms, including optimising seven Dewa-owned buildings across Dubai. Mr Marques said that in today’s current market, incorporating solar PV units for residential or commercial buildings was not a profitable solution.

“With the figures that we’ve had until now, in terms of electricity tariffs and investment costs for PV technology, it just isn’t feasible,” he said. The development of dedicated financing packages in cooperation with local banks could help, according to Mr Matthes.

“Or with a bold move, even own or co-own residential solar systems, creating a new business line,” he said. Such a scheme would make small-scale solar projects more bankable, increase jobs and make the overall power system more diversified and reliable.

Mr Al Tayer said in the statement at the end of last month announcing the new framework that “Dewa will periodically review the performance of these systems and their compatibility, and improve the process to ensure the solar power technologies are seamlessly integrated with the current power production systems”.

Recent bids submitted to Dewa for the second phase of the Mohammed bin Rashid Al Maktoum solar park – which will eventually produce 1,000 megawatts – demonstrate the competitiveness of solar PV technology at the utility scale.

A consortium led by Riyadh-based Acwa Power won the contract to build and operate the phase with a final price of 5.84 cents per kWh – the cheapest on record and much lower than the 9 cents for electricity produced from natural gas.




Saudi Aramco arm inks products supply accord with S-Oil Reuters + NewBase South Korean refiner S-Oil Corp has sold 1.2 trillion won ($1.09 billion) of oil products to a trading arm of its top shareholder, Saudi Aramco , as the Middle East oil giant boosts its trading clout in Asia.

The deal, the largest ever between the two firms, comes after state-run Saudi Aramco increased its holding in S-Oil last month to 63.41 percent from 34.99. S-Oil said in a statement to the stock exchange that it will supply up to 14 million barrels of diesel, including ultra-low-sulfur diesel and low-sulfur diesel, and up to 14 million barrels of light naphtha to Saudi Aramco Products Trading Co under the contract valid between Feb. 1 and Dec. 31 of 2015. A S-Oil official said the deal, equivalent to 3.9 percent of the refiner's total sales volumes in 2013, is the largest between the firms since Saudi Aramco Products Trading was set up in 2012. S-Oil buys almost all of its crude from Aramco. "This contract is seen to hike S-Oil's domestic and overseas competitiveness as it will secure stable overseas sales markets and receive required raw materials via a subsidiary of the major shareholder Aramco," S-Oil said in a separate statement. South Korea's third-biggest refiner, a major Asian diesel exporter, in December scrapped tenders offering 2015 term contracts in a move taking traders by surprise. S-Oil said that it will receive 120,000 tons of paraxylene and 2 million barrels of heavy naphtha from Saudi Aramco Products Trading with output of both expected to drop due to maintenance shutdowns this year. A Singapore-based trader said the deal showed how Aramco was expanding its trading presence in Asia, while another industry source said the firm may set up a trading office in the island state. Aramco, which used to sell most of its own naphtha from the Middle Eastern refineries on a free on board (FOB) basis, has become a key spot seller of naphtha and is now exporting diesel from its new joint venture refineries in Saudi Arabia as well as more active in derivatives trading.




Qatar:Japan keen to help Qatar realise 2030 National Vision Gulf Times + NewBase

Japan is keen on helping Qatar realise its economic development goals, specifically the Qatar National Vision 2030, an official of the Japanese Ministry of Economy, Trade and Industry (Meti) said.“I am sure that these developments can be strongly supported by Japanese Information Technology (IT).

This time, we can contribute to your efforts to make the Qatari society better by using our technologies,” said Meti’s Information and Communication Electronics Division director Takatoshi Miura during a business forum hosted by the Qatar Chamber yesterday. Miura was referring to the economic, human, social, and environmental development, which comprise

the four pillars of the Qatar National Vision 2030. He said nine Information Technology (IT) companies specialising in the fields of environment, health, and security were part of a visiting trade delegation that exhibited various advancements in Japanese technology at the chamber. Miura noted that the IT industry has created more than 1mn jobs in Japan and is considered one of the country’s key industries. “We are looking towards achieving growth in relations between Qatari and Japanese private sectors,’ he said. “Today, we are under the global spotlight and everyone’s attention is on Qatar…There is so much of the pie left that anyone can grab a piece of it. The Japanese have a lot to offer us and we also have a lot to offer them because the opportunities available in Qatar are beyond limit,” Rowhani He added, “This is the first time that Japan has sent a large delegation to expose their technology to Qatar and we need to take advantage of that.” Japanese ambassador Shingo Tsuda told Gulf Times the forum reiterates the discussions held between HH the Emir Sheikh Tamim bin Hamad al-Thani and Japanese Prime Minister Shinzo Abe, who was in Doha in August 2013. “We are looking forward to have His Highness the Emir in Japan so we could forge again another comprehensive partnership between Qatar and Japan,” the ambassador said. With a total trade volume of almost $38bn recorded in 2014 ($36bn in imports; $1.5bn, exports), Tsuda said Qatar was Japan’s largest trading partner for liquefied natural gas (LNG) and other petroleum-based products. “Another great opportunity for closer co-operation between the two countries would in the preparatory stages for two international events: the Tokyo Olympics in 2020 and the FIFA World Cup in 2022. I hope that these two historical events will be another motivating factor to bring both nations closer and ensure their success as host countries,” Tsuda added.




Oman: Deadline for Duqm Refinery EPC prequalification extended omanobserver + NewBase

Global engineering firms eyeing multibillion dollar contracts linked to the implementation of a mega refinery scheme at Duqm on Oman’s Wusta coast have been granted a roughly 4-week extension to submit their prequalification offers. Accordingly, prequalification documents are now due in latest by March 12, 2015, as opposed to the earlier submission date of February 15, 2015.

Duqm Refinery and Petrochemical Industries Co LLC (DRPIC), a joint venture between Oman Oil Company (OOC) and International Petroleum Investment Co (IPIC) — respectively the energy investment arms of the Sultanate of Oman and the UAE Emirate of Abu Dhabi – are overseeing the development of the 230,000 barrels per day capacity refine ry at the Duqm Special Economic Zone (SEZ). With an estimated price tag of $6 billion, the giant project is expected to anchor the SEZ’s development, as well as catalyse investment inflows into this world-scale industrial hub. Envisioned in the second phase is the development of an integrated downstream petrochemicals complex at an additional cost of around $9 billion. A 900-hectare site within the SEZ is being readied ahead of the start of construction work on the giant scheme in late 2016. Implementation had earlier been envisaged in four distinct packages: Package 1 — Process & Hydrocracker Unit; Package 2: Process — Coker Unit etc; Package 3: Utilities, Flare Area & Piperack; and Package 4: Tank Farms. It is anticipated however that the entire project will be tendered out in two packages — one encompassing all of the process units, while the utilities and off-site facilities will bundled together in the second package. Each of the latter packages is estimated to run into billions of dollars. Main products from the refinery will comprise Diesel: 12,300, Jet A-1: 7,850, Coke: 3,600; Naphtha: 8,300; LPG: 1,100; and Sulphur: 700. Financial close is targeted by the end of 2015, with the refinery slated for commissioning in Q4 2018. The refinery will go into commercial production in 2019. In parallel with the Duqm Refinery project, development of a Bulk Liquid Berths project that will handle crudes arriving by sea for processing, as well as refined products for export, has commenced at the adjoining Port of Duqm. International engineering consultancy services firm WorleyParsons is currently undertaking the front-end engineering design (FEED) of the liquid berths project, at the heart of which is a refinery products terminal with six liquid berths, and a Pet Coke berth. Topside facilities will include product storage tanks, dry bulk facilities, pipelines, buildings, road and other infrastructure. Separately, a number of firms are also preparing to prequalify for a contract to design and build the Bulk Liquid Berths Terminal.




Mynmar: Shell to explore Myanmar waters

Shell and its partner Mitsui Oil Exploration Co.,Ltd. group (MOECO) have signed exploration and production sharing contracts (PSCs) with Myanma Oil and Gas Enterprise (MOGE) of the Republic of the Union of Myanmar for three deep-water blocks.

Shell says that this step marks its return to upstream operations in Myanmar.

“Exploration is a pivotal step in the development of Myanmar’s energy sector, an industry that plays a key role in the economic growth of the country,”said H.E. U Zay Yar Aung, Union Minister for the Ministry of Energy (MOE).

“We look forward to partnering with Shell and MOECO, who will bring international standards and expertise to an expanding offshore industry.”

Shell says it will use deep-water exploration technologies including advanced tools for acquiring, processing and interpreting seismic and other geophysical data. This will, the company explains, improve understanding of the potential resources.

“We are pleased to be able to sign the PSCs to operate the three offshore deep-water blocks with the Government of Myanmar and our partner MOECO,” said Graeme Smith, VP Exploration Asia and Australia at Royal Dutch Shell.

“The three blocks offer an exciting frontier exploration opportunity to apply the advanced deep-water technical capabilities we have built up around the world over the past three decades. I am delighted that we have the opportunity to explore and we look forward to helping meet Myanmar’s aspiration to unlock and develop its energy resources.”

Under the agreements, Shell will assess the potential of deep-water blocks AD-9 and AD-11 (Rakhine Basin) and MD-5 (Thanintharyi Basin). The three blocks together cover some 21,000 square kilometres. They are located approximately 300 kilometres offshore in water depths ranging from 1,800 to 2,700 metres.

Shell is the operator and has a 90% interest in the three contracts with MOECO holding the remaining 10%.




Oil Price Drop Special Coverage

Oil rallies for third day as Opec sees greater crude demand Reuters + NewBase

Oil rose for a third straight session on Monday as OPEC forecast greater demand for crude this year than previously thought and projected less supply from countries outside the group.

Data from last week showing the U.S. oil rig count at a three-year low also bolstered prices, which were attempting to find a floor after a brutal selloff in crude that wiped out over half of the market's value since June.

Benchmark Brent oil futures were up 55 cents, over nearly 1 percent, at $58.35 a barrel by 10:05 a.m. ET (1505 GMT), after revisiting Friday's one-week peak of $59.06.

U.S. crude futures, or WTI, rose $1.41, or almost 3 percent, to $53.05 after rising to $53.40 earlier.

WTI's front-month contract, March, was at its narrowest discount in a week to the second month, April, as strong gains in oil for prompt delivery reduced some of "contango" that made it profitable to store crude for future delivery.

Both WTI and Brent have gained nearly 20 percent since a Jan. 29 rebound inspired by better confidence in the supply outlook for crude following a seven-month-long selloff that took prices down by more than 50 percent.

"The harder you fall, the stronger you often rebound, from a statistical point of view," said Phil Flynn, analyst at the Price Futures Group in Chicago.

"But I think there is still a lot of denial that the market has hit bottom, and you'll continue seeing people standing in front of the rally for a selling opportunity." While Monday's sentiment in oil was predominantly bullish, some traders sounded caution over rising tensions surrounding Greek debt




negotiations, and how that could affect the broader European macroeconomic picture and demand for energy.

Demand forecast

Opec, or the Organization of the Petroleum Exporting Countries, forecast demand for the cartel's oil will average 29.21 million barrels per day (bpd) in 2015, up 430,000 bpd from its previous forecast.

In its monthly report, the group also slashed its outlook for crude supply growth in non-OPEC countries, citing a slowdown in the U.S. shale boom and lower capital investment by energy firms. Meanwhile, data from U.S. oil services firm Baker Hughes on Friday showed that the number of rigs drilling for oil in the United States fell to 1,140 last week, the lowest since December 2011.

Malaysia, Indonesia most exposed to low oil prices in East Asia Gulf Times Correspondent + NewBase

Net oil exporter Malaysia and commodity-rich Indonesia are the two nations to suffer most from low oil prices, while Japan will likely have the greatest benefit from it, a recent study conducted by

Thailand-based Economic Intelligence Center (EIC), a unit of Siam Commercial Bank, found. Malaysia, already plagued by soaring household debt and probably a candidate for a sovereign rating downgrade in the near future, relies heavily on energy and fuel as oil and natural gas exports account for around 8% of the country’s GDP. Thus, low oil prices have a negative impact on Malaysia’s current account balance and currency, the EIC said. The Malaysian government’s budget is also highly dependent on regular dividends and royalties from state-owned oil giant Petronas, which account for 30% of government revenue. Falling oil prices naturally reduce these payouts, raising fears of major budget cuts. Indonesia suffers indirectly. Being a net oil importer, lower prices are favourable, but the country is heavily reliant on the export of




other commodities like coal, palm oil and rubber which make up 60% of the country’s GDP, according to the EIC study. Prices for these commodities have been pushed down in tandem with the oil price and by increasing supply amidst a weakening global economy. On the upside, losses in commodity exports are partly compensated by lower fuel-related operating and transport costs for Indonesia’s commodity industry. “The priority for these commodity-dependent countries must be to continue to diversify their export and production base over time by increasing their overall competitiveness,” says Axel van Trotsenburg, the World Bank’s vice president for East Asia-Pacific. “Particular emphasis is required on reforms such as strengthening regulatory and legal institutions, enhancing skills and improving the business climate,” he adds. However, for most other countries in East Asia the oil price decline is highly beneficial because they are oil importers, with Japan expected to enjoy the biggest economic boost. Japan’s import of oil and oil-related products was valued at $210bn in 2014, around 4% of the country’s GDP, and the decline in oil prices of more than 50% means huge financial relief for the state budget. The entire manufacturing sector is set to experience a significant boost from lower raw material and electricity costs, especially the power-hungry steel, tire, glass, paper and automotive industries. The World Bank expects that Japan’s growth will recover to about 1.2% in 2015 and 1.6% in 2016 after a weak performance last year, with low oil prices boosting consumer purchasing power to compensate for weak wage growth and rising import costs of non-oil goods.

For similar reasons, other big net oil-importers such as China and South Korea will benefit from lower oil prices. For Thailand, another net oil importer, the benefit of lower prices could mean a boost in economic growth in 2016 of almost half a percentage point. Thailand’s net oil imports stood at $32bn in 2014, and with lower prices industries such as wholesale and retail, food and beverage, as well as electronics should benefit from increased consumption, while the logistics sector can gain from lower fuel prices. But the EIC warns that Thailand’s sizeable petroleum exploration and production sector will suffer from lower revenues, the tourism industry will face lower income from fewer Russian guests and the auto industry will see decreased demand from the important Middle Eastern target markets.




Six countries are expected to battle double-digit inflation in 2015 Bloomberg + NewBase

Thanks to an epic collapse in the ruble, price growth has hit crisis levels in Russia: Inflation reached 15 percent in January. Even worse, there's little respite in sight. Inflation will average 13 percent in 2015, according to the median forecast of economists surveyed by Bloomberg.

Food prices rose 21 percent in January from last year, with sugar jumping 68 percent. Grains and legumes saw a 45 percent spike, while fruit and vegetable prices climbed 41 percent. Luckily, alcohol inflation has tracked at a relatively tamer 14 percent.

The surge in cost of living has come at an especially painful time for Russian consumers, who are already battling a double-whammy to the economy: tumbling oil prices and the sanctions imposed over the Ukraine conflict (these are the two factors that have been driving the currency's collapse -- which in turn has been spurring inflation -- too).

The unfavorable mix means the Russian economy will probably shrink 4 percent this year, according to the median projection in a separate Bloomberg poll.

Russia is in good company, with five peers in double-digit inflation territory. Argentina probably will have about 22.5 percent inflation this year, and Ukraine is headed for 17.5 percent price growth. Egypt and Ghana also sit in the two-digit club, with 10.6 percent and 13.2 percent estimates, respectively. All are dwarfed by Venezuela's 72.3 percent projected price growth in 2015.




Rapid price increases are often one factor in a toxic mix for these economies. The drop in oil prices and revenues means Venezuela has little cash to pay for all the consumer goods it imports. That leads to even deeper shortages of everything from diapers to sugar, which drive up costs further. Venezuelans have become accustomed to waiting in lines that stretch around city blocks in the hopes of buying basic goods.

Argentina isn't far behind. A run on tampons in Buenos Aires last month had Argentine women paying premium prices for the monthly necessity. The nation is grappling with dollar shortages and likely fell into a recession in the fourth quarter.

The situation on the ground has changed since then. Venezuela’s economy is estimated to have shrunk by 4% in 2014, with inflation hitting 64%. The price of oil, which accounts for more than 95% of Venezuela’s hard-currency income, continues to fall. According to the latest opinion poll, Maduro enjoys the support of just 22% of the population, and he has come under fire on social media and editorial pages for spending nearly two weeks outside the country – with his extended family in tow – while the crisis deepens.

In Beijing, Maduro announced that China had agreed to invest more than $20bn (£13.2bn) in Venezuela, but it remains unclear whether the sum represented a fresh arrangement or was part of pre-existing oil-for-loans deals. Even if the investments are new, it is far from certain that this is money that the Venezuelan government can use for imports or debt repayments.




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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 01 February 2015 K. Al Awadi




New base 537 special 10 february 2015

Economy & Finance

shell spokesperson

revised concession bids

new concession

cent stakes

abu dhabi company

royal dutch shell

khaled al awadi newbase

cent equity stakes