New base 02 feruary 2018 energy news issue 1135 by khaled al awadi

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NewBase Energy News 02 February 2018 - Issue No. 1135 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Adnoc in petchems, partnership talks with Chinese firms
The national + NewBase
The Abu Dhabi National Oil Company (Adnoc) has held a series of meetings with government and
corporate leaders in Beijing, focused on strengthening the strategic relationship between the UAE
and China and deepening the partnerships between Adnoc and China’s energy, chemical and
technology sector.
Dr Sultan Al Jaber, UAE Minister of State and Adnoc Group CEO, met with Wang Yi, Minister of
Foreign Affairs of the People’s Republic of China and with Ning Ji Zhe, and Vice Chairman of
China’s National Development and Reform Commission (NDRC), where business and economic
relations between the UAE and China were discussed, including growing cooperation between the
two countries in the technology, energy, chemical, investment and commercial sectors.
China is the UAE’s largest trading partner, with bilateral trade growing 800 fold in the three
decades since formal relations were established to top $50 billion per annum.
Dr Al Jaber highlighted the significant progress made in developing the close ties between the
UAE and China and expressed the keen interest of the UAE leadership to further enhance those
relationships.

Prior to his meeting with H.E. Wang YI, Dr Al Jaber met with senior officials from Huawei
Technologies, a leading global information and communications technology (ICT) solutions
provider, during a visit to the Zhongguancun technology hub, in the Haidan District of Beijing.
Dr Al Jaber said: “Adnoc’s focus on the application of advanced technology, in support of its 2030
growth strategy, is one area where China’s experience in developing Artificial Intelligence and
Predictive Data, through companies such as Huawei, could be deployed to create additional value
from its resources. Adnoc is keen to advance and lead the digitization of the oil and gas industry.”
As part of its transformation objectives, Adnoc is exploring how advanced technologies and
applications, such as machine learning, neural networks, predictive data and artificial intelligence,
could help enhance efficiency, productivity and profitability across the oil and gas value chain.
Adnoc launched its two digital command centres Panorama and Thamama in 2017, where data
from its subsurface and surface operations is captured, analysed and incorporated to decision
making.
“China represents a key strategic partner for the UAE and the growing ties between Chinese
companies and Adnoc is a testament to the depth and importance of the relationship,” said Dr Al
Jaber. “We are keen to explore how Adnoc can continue to serve the growing demand for energy,
and, in particular, for chemical and petrochemical products in China, as a key growth market.”
Meanwhile, Adnoc is focused on market expansion in China and Asia, where demand for
petrochemicals and plastics, including light-weight automotive components, essential utility piping
and cable insulation, is forecast to double by 2040. China is the largest export customer in Asia,
for Borouge, a petrochemicals joint venture between Adnoc and Borealis, accounting for 1.2
million tons per year of polyolefins, equal to one third of its sales worldwide. –

Chinese to Buy 1 Million 'New-Energy' Vehicles in 2018
Subsidy cut for plug-in hybrid, battery electric, and fuel cell vehicles won’t slow sales growth
Bloomberg - Iain Wilson
High-level Chinese government support for so called new energy vehicles, which include plug-in
hybrids, battery electric, and fuel cell vehicles, is set to drive an annual sales increase of almost
30 percent to 1 million units in 2018 and 2 million units by 2020.
The Minister of Science and Technology expects 5 million cumulative NEVs on its roads by 2020.
Even with a subsidy cut for new energy vehicles expected in the second quarter of this year,
robust demand will come from cities with purchase restrictions on internal combustion engine
vehicles, according to Bloomberg New Energy Finance.
The 2018 subsidy scheme is in line with the end goal of withdrawing subsidies and pushing
automakers to make better electric vehicles.
Firstly, vehicles with driving range below 150 km will not receive subsidies, vehicles with 300 km
of driving range will get the current electric vehicle subsidies, and ranges over 400 km have higher
subsidies. This is to encourage automakers to produce longer range vehicles.
Secondly, battery power/weight requirements have been increased, increased from 90 wh/kg to
105 wh/kg. They also only apply the full subsidy for vehicles with 140 wh/kg batteries, again
pushing for better electric vehicles.
Thirdly, power consumption requirements have been increased, pushing for more efficient
vehicles, which fit into the government policy to push the development of better electric vehicles
and the underlying technology.
In 2016, China outlined that its subsidies for new energy vehicles will end by 2020 and that they
will drop 20% each year until 2019, when they will decrease 40% based on 2016 levels, which will
then completely end the subsidies.

Kuwait's $508 Billion Oil Spending Plan Gets Attention of Banks
Bloomberg
Kuwait’s $508 billion energy spending plan and the prospect for juicy profits from financing it is
grabbing the attention of some of the nation’s banks.
With Brent crude near $70 a barrel, oil companies are looking to spend
to boost production and build refineries after cutting back since oil
began plunging in June 2014. Kuwait, OPEC’s fifth-biggest crude
producer, plans to invest $114 billion on capital projects over the next
five years and another $394 billion by 2040, Kuwait Petroleum Corp.
Chief Executive Officer Nizar Al-Adsani said this week.
The nation’s lenders are focused on financing those projects, Shaheen
Hamad Al Ghanem, CEO of Kuwait’s Warba Bank, said in an interview
with CNBC Arabia televised Thursday.
“The oil sector has for the first time announced its plans for the coming
years," he said. “This will be the focus and will, without a doubt, be a
strong catalyst for development of Kuwaiti banks."
More spending from the state oil giant will be a welcome change. Middle Eastern economies took
a hit as governments struggled to cope with falling crude oil prices and spending cuts.
Kuwait Finance House aims to be “a key partner" with national oil companies to fund projects in
the next five years, CEO Mazin Al Nahedh told CNBC Arabia earlier this week.

Egypt: Official opening of Zuhr 30 TCF gasfield, for self-sufficiency
Egyptian President Abdul Fattah Al Sissi on Wednesday launched the first production stage of a
giant natural gasfield, calling it a “dream coming true”.
The Zuhr field, discovered by Italian energy firm Eni in 2015, has estimated gas reserves of 30
billion cubic feet. The largest filed in the Mediterranean Sea, Zuhr began a test production of
around 350 million cubic feet per day (cfd) last month.
“This field will produce gas in figures that were previously a dream and are now a reality,” Al Sissi
said in televised remarks. He added that a recent demarcation of maritime border between Egypt
and Cyprus allowed for the Zuhr discovery.
“Completing the demarcation of borders with Cyprus was a motive for foreign companies to
cooperate with Egypt in exploring for this wealth,” he added, referring to Eni. Zuhr is seen as a
major stride in the country’s efforts to achieve self-sufficiency in the liquefied natural gas (LNG)
supply to meet growing local needs.
The field output will reach 2.7 billion cfd by the end of 2019 when Egypt plans to achieve LNG
self-sufficiency, according to Oil Minister Tareq Al Molla. “This will represent about 50 per cent of
Egypt’s gas production,” he told the ceremony.
The current production from the field will save Egypt’s public treasury some 720 million dollars in
annual gas imports, Al Molla added. The overall investment in the project amounts to 12 billion
dollars, the official said.
Egypt hopes that Zuhr, located 190 kilometres off the coastal city of Port Saeed, will turn the
country into a regional energy hub. In recent years, Egypt has suffered an acute energy shortage
due to a drop in local gas output and the turmoil that followed the 2011 uprising.

Asia-Pacific: Huge clean-up bill of old oil assets upto 100B$
Wood Mackinzi + NewBase + Bloomberg
The tens of thousands of oil and gas wells sprinkled across offshore Asia-Pacific left over from the
drilling boom of the 1970s and 1980s will soon need to be decommissioned, a task that could add
up to a $100 billion clean-up bill, according to energy consultant Wood Mackenzie Ltd. And the
region’s state-owned oil companies, and ultimately the tax payers, are on the hook for about half
of that, it said.
The region has about 35,000 offshore wells, more than 2,500 platforms and more than 55,000
kilometers (34,200 miles) of pipelines in countries including China, Thailand, Malaysia, Indonesia
and Australia. That totals up to about 7.5 million tons of steel that has been exposed to
petrochemical contaminants, Wood Mackenzie said in a report Thursday.
While decommissioning is common in the U.S. Gulf of Mexico and Europe’s North Sea, it’s
relatively new in Asia-Pacific. If done poorly, it can result in environmental damage in a region
where fisheries are an important source of livelihood, analysts Jean-Baptiste Berchoteau and
Prasanth Kakaraparthi said in an interview in Singapore.
“As this equipment moves past its expected working life, every day it isn’t decommissioned carries
the risk of potential failures or breakdowns,” Kakaraparthi said. “There’s going to be pressure on
companies and governments to sort it out quickly.”
Government Guidance
Most countries in the region, outside Australia and Thailand, don’t have strong regulations to
guide companies through decommissioning, according to Wood Mackenzie. Companies will need
to manage costs without making mistakes that could damage the environment and expose them
to liabilities. And the timing couldn’t be worse for energy companies tightening their belts trying to
return to profitability in the fourth year of sub-$100 oil.

In the best case scenario, when a country leases offshore resources, it will create escrow
accounts for the driller to set aside decommissioning funds, according to Wood Mackenzie. That
didn’t always happen in the 1970s and 1980s, Berchoteau said. And costs can spiral beyond
expectations even when companies do properly plan.
BP Plc ended up paying $200 million to plug and abandon its Nile well in the Gulf of Mexico,
compared with its initially planned $20 million, according to Wood Mackenzie.
Decommissioning could present a growth industry if countries and companies invest in the
infrastructure and workforce needed to do it, Kakaraparthi said.
“There’s strong industrial capacity in the region,” he said. Companies such as Singapore’s Keppel
Corp. and Sembcorp Marine Ltd. “built themselves up building these platforms. They could
develop a niche decommissioning them and use that capability in other parts of the world.”

India: Modi’s Energy Agenda Facing Its Toughest Test Yet
By Rajesh Kumar Singh
Indian Prime Minister Narendra Modi’s energy reforms may be facing their toughest test yet.
Soon after Modi came to power in May 2014, crude oil prices went into a tailspin. The resultant
bonanza helped buffer government finances and led to the decontrol of fuel prices. Now, as the
commodity that forms almost a fifth of the nation’s import bill reverses its direction and a
long election season looms, one of Modi’s key reforms may be in jeopardy.
That’s bad news for India’s state-run oil marketers. Pump prices in India for gasoline and diesel
are near record levels as the government raised taxes on the fuels. A public backlash may leave
little room for further increases.
“Crude’s rally may force the Indian government to choose between cutting excise duty on
petroleum products or reintroducing fuel-price caps to control inflation,” Kunal Agrawal and Kar
Wai Lee, analysts at Bloomberg Intelligence, said in a Jan. 29 note. “Reducing duty would impact
state finances, while price caps would dent state refiners’ revenue.”
Already, high fuel prices
have become a flash point
with the opposition. Modi’s
opponents have criticized
excise tax increases by the
government that have
deprived Indians of the
benefits of low crude prices.
Signs that all this is leading
to a pause in fuel pricing
are becoming evident. State
refiners and
marketers Indian Oil Corp.,
Bharat Petroleum Corp. and
Hindustan Petroleum Corp.
barely revised gasoline
prices between Nov. 1 and
Dec. 14, when elections in
Modi’s home state of
Gujarat and the Himalayan state of Himachal Pradesh took place. BJP won both. Diesel prices
rose by just about 1 percent during the period, while Brent prices gained 5 percent.
This year, elections are scheduled in eight Indian states, including in three where Modi’s Bharatiya
Janata Party is seeking re-election. This will be followed by federal elections in the first half of
2019.
“On the global front, crude prices are rising, but I don’t expect much increase in India’s retail
prices for gasoline and diesel,” said Vaibhav Chowdhry, an analyst at KR Choksey Shares &
Securities Pvt. in Mumbai. “There might be a price-cap again.” Brent, the global benchmark, has
gained about 31 percent in the last six months, touching its highest level in three years on Jan. 24.
The country has reversed its decision on fuel price decontrol before. In 2004, a coalition led by the
Congress party introduced partial price control, saying the deregulation introduced by the prior
regime didn’t work transparently.

NewBase February 02 - 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices extend gains on compliance with output cuts
Reuters + Bloomberg + NewBase
Oil rose for a third day on Friday after a survey showed strong compliance with output cuts by
OPEC and others including Russia, offsetting concerns about surging U.S. production.
Brent futures, the global benchmark, were up 24 cents, or 0.3 percent, at $69.89 a barrel by 0635
GMT. U.S. West Texas Intermediate (WTI) crude was up 33 cents, or 0.5 percent, at $66.13 a
barrel.
Oil price special
coverage

Production by the Organization of the Petroleum Exporting Countries (OPEC) rose in January
from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in
Venezuela and strong compliance with a supply reduction pact, a Reuters survey showed.
OPEC pumped 32.4 million barrels per day (bpd) in January, the survey found, up 100,000 bpd
from December. Last month’s total was revised down by 110,000 bpd to the lowest since April
2017.
Even so, adherence by producers included in the deal to curb supply rose to 138 percent from 137
percent in December, the survey found, suggesting commitment is not wavering even as oil prices
hit their highest level since 2014.
“It underscores the commitment of the cartel, and their Russian partners, to keep a floor under the
oil price,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader. U.S. crude
output surpassed 10 million bpd in November for the first time since 1970, the Energy Information
Administration said this week.
Oil Finds Haven Against U.S. Supply Threat in Rosy Goldman View
The specter of expanding U.S. supply haunting the oil market is being beaten back by Wall Street
banks’ faith in a price rally.
U.S. futures are on course to end the week little changed, after they were whipsawed by concern
about rising American production and optimism over rosy outlooks painted by forecasters
including Goldman Sachs Group Inc. West Texas Intermediate crude in New York has rebounded
2.5 percent, recouping almost all of its losses over Monday and Tuesday.

Crude has remained above $60 a barrel since late December, boosted by shrinking U.S.
stockpiles and a weaker dollar, extending an advance from June amid OPEC-led output cuts to
clear a glut. Goldman hiked its price forecast, saying the market is now likely balanced, joining
other Wall Street banks including Morgan Stanley and JPMorgan Chase & Co. in raising its
outlook. Still, the rally’s an incentive for American drillers to pump more.
“There’s a tendency at the moment that the market wants to continue this bull run,” Will Yun, a
Seoul-based commodities analyst at Hyundai Futures Corp., said by phone. “Fundamentally
speaking, there’s a high chance that the U.S. will boost production and conflicts could also
increase among OPEC nations if prices continue to surge.”
WTI for March delivery added as much as 50 cents to $66.30 a barrel on the New York Mercantile
Exchange and traded at $66.10 at at 8:33 a.m. in London. The contract rose 1.7 percent to $65.80
a barrel on Thursday. Total volume traded was about 40 percent above the 100-day average.
Front-month futures are down about 0.1 percent this week.
Brent for April settlement was at $69.87 a barrel on the London-based ICE Futures Europe
exchange, up 22 cents. The contract rose 76 cents to $69.65 a barrel on Thursday. The global
benchmark crude traded at a premium of $4.05 to April WTI.
Goldman sees Brent crude reaching $75 a barrel over the next three months and will climb to
$82.50 within six months. Its previous estimate for both time periods was $62 a barrel. The bank’s
bullish outlook is driven by its revised demand forecasts, reflecting stronger economic growth in
emerging markets.
U.S. output surged above 10 million barrels a day for the first time in more than four decades in
November, the Energy Information Administration reported Wednesday. Nationwide crude
inventories climbed 6.78 million to 418.4 million barrels last week, the first increase in 11 weeks,
according to the EIA. Meanwhile, production from the Organization of Petroleum Exporting
Countries in January added just 20,000 barrels a day.
Gasoline futures on the Nymex added 0.5 percent to $1.9003 a gallon. Front-month prices are
down 1.9 percent this week, the first loss in about a month.
Big Banks Accept OPEC Was Right as They Embrace Oil Near $80
Wall Street’s biggest banks have changed sides and are embracing a surge in oil prices.
Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. have all issued a flurry
of bullish forecasts in the past fortnight. They’ve abandoned their skepticism and are accepting
that OPEC’s output cuts are finally succeeding in clearing a global glut.
This faith is a recent phenomenon. At almost every stage of OPEC’s quest to end the industry’s
worst downturn in decades, there were a few prominentanalysts ready to cast doubt on the effort.
Now, the “New Oil Order” that Goldman declared in 2014 -- effectively saying the Organization of
Petroleum Exporting Countries was obsolete -- is officially “on hiatus.”
Here are some of the ways the biggest banks have been proven wrong:
OPEC Won’t Reach a Deal
Goldman and others had predicted in 2014 that any effort by OPEC to curb supply would hardly
amount to much -- the U.S. shale industry can raise production at such pace and volumes that it
would fill the gap.

OPEC shared this view, but then surprised the market in September 2016 by announcing their
intention to cut supply.
Skepticism persisted. Most analysts surveyed by Bloomberg in November that year expected
member countries to fail to reach an agreement. BP Plc said the mood in the market was
“pessimistic.”
Yet on Nov. 30, the pact was finalized. The bigger surprise came 11 days later as a number of
countries outside the group joined the deal, including former rival Russia. It had once been
thought unfeasible this could ever happen.
OPEC Will Fail to Deliver
OPEC has a track record of backsliding on supply promises as the temptation to boost revenues
leads members to cheat.
The latest initiative would go the same way, banks said. Morgan Stanleysaw only a “small chance”
the targets would be implemented, expecting the agreement to unravel in six months. JPMorgan
predicted it would “collapse” by the end of 2017 and Commerzbank AG said OPEC would “over-
promise and under-deliver.”
Yet the group implemented 95 percent of the cuts it promised last year, and its allies delivered 82
percent. OPEC’s compliance improved through the year and reached 129 percent in December.
Admittedly, unplanned losses in Venezuela and elsewhere helped, but the compliance rate is
unheard of in OPEC’s history.
Cuts Won’t Clear the Glut
Analysts earlier warned of a new surplus in 2018, and the need for OPEC to persevere with its
alliance. They are now rethinking their pessimism.
Citigroup and Goldman have changed tack to say the inventory excess has disappeared. Others,
including UBS Group AG and Societe Generale SA, said last month that OPEC and Russia should
wind down the strategy earlier than scheduled, phasing out the cuts from the middle of the year.
Shale Will Keep a Lid on Prices
It wasn’t just the banks which saw U.S. shale as a mortal threat to OPEC’s plans. Even
the International Energy Agency, which remains neutral on market policy, cautioned that the cuts
would only backfire as $60 oil triggers a flood of American supply.
Sure enough, the boost to prices from OPEC’s strategy has invigorated U.S. output, which surged
to a 47-year high of 10 million barrels a day in November. Nonetheless, forecasters are predicting
prices will return to levels considered unthinkable during the downturn, despite the U.S. supply.
Goldman boosted its six-month price target by a third on Thursday, to $82.50 a barrel.
JPMorgan’s estimate of $70 a barrel for average Brent prices in 2018 is almost 50 percent higher
than in early October.
OPEC, Russia Supply Steady
Crude production by OPEC and its main ally Russia held steady last month as increases in Saudi
Arabia and Iran offset the ongoing deterioration of Venezuela’s oil industry.

Output from the 14 members of the Organization of Petroleum Exporting Countries rose just
20,000 barrels a day to 32.4 million a day in January, according to a Bloomberg News survey of
analysts, oil companies and ship-tracking data. Russia’s production was little changed compared
to December and totaled 10.95 million barrels a day, according to data emailed Friday by the
Energy Ministry’s CDU-TEK statistical unit.
Tight Pack
Russia, OPEC held oil production steady in January sticking to output agreement
Source: Bloomberg, Russian Energy Ministry
The cartel continues to restrict output even more than it pledged in an accord with Russia and
other producers aimed at clearing a global glut. Russia kept its pledge even after its biggest
producers said late last year that they were not changing their investment plans for this year.
Goldman Sachs Group Inc. said Thursday the deal between OPEC and its allies has already
accomplished their goal of returning swollen inventories to normal levels. Overall compliance
among OPEC’s 12 members bound by the accord was 127 percent in January, the survey
showed. Russia’s compliance was close to 100 percent.
Goldman Says Oil to Surpass $80 With Market Likely Balanced
Goldman Sachs Group Inc. hiked its short-term crude oil price forecast by as much as 33 percent,
saying the market is now likely balanced.
The bank now estimates Brent will reach $75 a barrel over the next three months and will climb to
$82.50 within six months, analysts including Damien Courvalin wrote in an emailed report. Their
previous estimate for both time periods was $62 a barrel.

“The rebalancing of the oil market has likely been achieved, six months sooner than we had
expected,” Goldman’s analysts wrote. “The decline in excess inventories was fast-forwarded in
late 2017 by stellar demand growth, high OPEC compliance, heavy maintenance as well as
collapsing Venezuela production.”
Goldman joins other Wall Street banks including Morgan Stanley and JPMorgan Chase & Co. in
ratcheting up its outlook, as economic growth and output cuts led by the Organization of
Petroleum Exporting Countries have helped to boost prices. Morgan Stanley recently said Brent
will reach $75 a barrel this year, while JPMorgan said it could rise to near $78 as oil markets
tighten more rapidly than expected.
Brent for April delivery traded up 52 cents at $69.41 a barrel at 11:45 a.m. in London after earlier
rising to $69.67. The global benchmark last touched $75 in late 2014.
Goldman’s bullish outlook is driven by its revised demand forecasts, reflecting stronger economic
growth in emerging markets. The bank also said rising U.S. shale supply will be needed to keep
the market steady in the near-term, since any ramp-up in OPEC production will lag the
rebalancing.
Record bullish bets in the oil market are “actually not that elevated when viewed in the context of
broader portfolio allocation,” according to the Goldman report. It forecast that oil will return 24
percent to investors over the next six months.
Goldman said its view was cyclical, noting that U.S. shale production, the eventual end of OPEC’s
oil cuts and higher non-OPEC production will eventually pull down Brent prices to $60 a barrel by
2020. Its “New Oil Order” outlook -- where shale production transforms global supply -- is on
hiatus, but not finished, the bank said.

NewBase Special Coverage
News Agencies News Release February 02-2018
OPEC's Year-One Report Card in Five Charts
Last year was the first year of OPEC's latest push to raise oil prices via supply cuts. Now that the
data are all in, and with Brent crude having risen by about $10 a barrel across 2017, we can see
OPEC was successful -- up to a point. Below are five charts assessing year one of the cuts and
the important details beneath the headline figures.
When OPEC announced supply cuts in November 2016, it set
a reference level based on the most recently reported set of
production according to secondary sources (rather than the
figures reported by members themselves; all the data used
here reflect the secondary sources series). Each country was
then assigned a cut to that level, apart from Iran -- assigned a
small increase due to its recent sanctions-related supply
constraints -- and Libya and Nigeria, which were too strife-torn
to participate.
Overall, the 11 OPEC members excluding Libya and Nigeria complied with the target for output
and undercut it noticeably toward the end of 2017:
Following The Rules
By and large, OPEC's 11 stuck with the targeted cuts overall and went significantly below them
toward the end of 2017
Source: OPEC
Note: Actual production reflects secondary sources as published in OPEC's monthly reports.

The targets implied that, relative to the reference level, the OPEC 11 would produce 425 million
fewer barrels in 2017 than they otherwise would have. That is in line with the build-up in
commercial OECD oil inventories OPEC had observed since the oil crash began when it
announced its cuts. As it turned out, the OPEC 11 produced 438 million barrels fewer last year --
103 percent compliance.
But not everyone deserves a gold star.
The Vienna agreement targeted a cut of about 4.6 percent for each OPEC member signing up
(Iran got a 2.4 percent increase). But actual compliance varied widely.
No Gold Star For Gabon
While the OPEC-11 met their supply cuts objective overall in 2017, some did way more than
others
Source: OPEC
Note: Calculated using secondary-sources data as published in OPEC's monthly reports.
Those percentages don't fully capture what counts, though: absolute barrels kept off the market. In
that regard, Qatar's over-compliance was no doubt welcome, but it meant just an extra 4 million
barrels being denied to buyers. This chart shows what was required and what was actually
delivered in 2017:
Inequality
In terms of absolute barrels kept off the market, Saudi Arabia, Venezuela and Angola did the
heaviest lifting, while Iraq and the UAE kept pumping

Source: OPEC
Note: Calculated using secondary-sources figures published in OPEC's monthly reports.
Overall, Saudi Arabia committed to keep 177 million barrels of the market in 2017, but kept an
extra 40 million off, too. That excess roughly offset the extra barrels produced by Iraq and Iran.
That burden also shifted through the course of 2017. Meanwhile, Angola's extra contribution of
about 12 million barrels almost offset the UAE's excess, and Venezuela's additional cuts of 17
million mopped up the rest.
The burden has also shifted over time. This chart shows monthly actual production relative to the
cuts agreed in 2016 for Saudi Arabia, Venezuela, Angola and the rest of the OPEC 11:
Fall And Winter
Saudi Arabia and Angola undeproduced through most of 2017, but Venezuela's contribution
accelerated into year-end
Source: OPEC
Note: Monthly absolute production above or below target levels. Calculated using secondary-
sources figures publisjed in OPEC's monthly reports.

What's quite clear there is that a combination of much better compliance by most of the group,
combined with a sharp drop in Venezuelan output, coincided with the late rally in oil prices last
year; Brent only broke sustainably above $55 a barrel in late September.
What's missing, of course, are those two other members: Libya and Nigeria. They didn't have
targets but spent most of 2017 staging a recovery in their production and offsetting a large amount
of the efforts being made by a handful of their fellow members.
Out Of Africa
Libya's and Nigeria's recovery offset more than one-in-four of the barrels kept off the market by
other OPEC members in 2017
Source: OPEC
Note: Cumulative reduction in oil supply in 2017 versus reference levels. October 2016 supply
used as reference level for Libya and Nigeria. Calculated using secondary-sources figures
published in OPEC's monthly reports.
That chart shows the importance of that sudden outbreak of relative discipline among other OPEC
members in the second half of the year.
Above all, what success OPEC had in 2017 was due largely to Saudi Arabia once again assuming
more of the burden of supply constraints than agreed, as well as Venezuela's and, to a lesser
extent, Angola's difficulties. Having the other non-OPEC countries such as Russia playing a part
was also crucial.
So top marks for effort for some -- even if they didn't do it by choice -- and a decent grade for
trying overall. Still, 2017's performance also shows why, having taken this path, OPEC must try
to keep it up in 2018 and beyond.
This column does not necessarily reflect the opinion of NewBase and its owners

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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Khaled Malallah Al Awadi,
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Khaled Al Awadi is a UAE National with a total of 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years, he has developed great
experiences in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of supply routes. Many years were spent drafting, &
compiling gas transportation, operation & maintenance agreements along with many MOUs for the
local authorities. He has become a reference for many of the Oil & Gas Conferences held in the
UAE and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
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New base 02 feruary 2018 energy news issue 1135 by khaled al awadi