Weekly Energy, Economic & Geopolitical Outlook Vol. 60. No. 15 14.April.2017.

CORPORATE Oil & Gas 2 Transportation 5 BP Poised For Strong Year In Mena Refining & 6 Petrochemicals In contrast to a mixed 2016, BP’s return to Abu Dhabi’s onshore as well a key startup set for the Power & Water 7 second half of the year will provide an immediate boost to the major’s output figures, paving the road OPEC for 2017 being a defining year for the company in terms of production gains. Page 11 8 Geopolitical Risk 10 Corporate 11 Economics & 13 Finance Selected Data 15

OIL & GAS oil & gas TRANSPORTATION REFINING & PETHCHEMS Israel: Plenty Morocco LNG Oman: Output Oman-Kuwait Of Gas, No Delays, Gas Rising, Revenue Ink New Market? Plans In Doubt Falling Refinery Deal

New field developments could Political deadlocks have While production and exports State firms from Oman and leave Israel facing a surplus hindered Morocco’s plans to of Omani LNG actually Kuwait have signed a multi- of gas. Absence of adequate progress with an LNG import rose, price falls still mean billion deal to build a joint domestic demand means terminal. After a two year the increase is not enough to refinery in Oman scheduled to substantial export deals will be delay, it now hopes to start prevent revenues dropping to a commence operations by 2020. required. Page 2 importing by 2023. Page 4 12 year low. Page 5 Page 6

POWER & WATER OPEC geopolitical risk economics & finance Saudi Targets US Oil Trade Libya Oil Saudi Shifts 9.5GW Of Hits Record In Output Starts Investment Renewables 2017 To Tumble Strategy

Riyad shortlisted 27 companies The US has seen a sharp rise in Political splits in Libya have Saudi Arabia’s Public for round one of a renewables crude exports in Q1 2017 while put the country once more Investment Fund has started program aimed at developing imports have not actually on a downward trajectory carving out its international solar and wind capacity fallen so far. This means that as progress is once again investment strategy. If through independent power the US had a full 17% of total hampered and export volumes successful, it will become the producer projects. Page 7 world oil trade in Q1. Page 8 are floundering. Page 10 world’s largest SWF. Page 13 2 I

©Middle East Petroleum and Economic Publications (Cyprus) Ltd srael 14.April.2017 www.mees.com Reproducing MEES Is Strictly Prohibited ††Oil & Gas it wouldneedtofindamark rael couldhave asurplusofgasthat Tanin not toolongafterwards, and possiblythesmaller gas discovery dueonlineinlate2019 16% andmethanol 3%(seechart). of themix,industry 15%,transport the power sectorwillaccountfor67% and 2.2bncfdby 2040, by whichtime 1.1bn cfdby 2020, 1.6bncfdby 2030 M in 2016 or830mncfd. for gassales justify suchdevelopment? the current1bncfd. Tamar, hasscopetoboost outputbeyond D Lots OfGasButWhere’s TheMarket? Israel: and Tanin willremainundeveloped. export market isfoundandthat development couldbedelayed until an This couldvery wellmean the possibleramp-upof than development couldyet stall. despite having reached a sizeableexportdealisnot signedthen country able exportdealsandthefactthat GAS O 93% ofthegasconsumed by fromTrinidad). (three cargoes Tamar and3.6% from coal last year, 46.3% from gas 49.6%generated ofitselectricity from the remaining10%fromcoal(see chart). fiv try’s electricityoutputwithinthenext natural gastomake up80%ofthecoun maining coalunitsatminimumcapacity. power plants, aswelloperatingthere are shutdown andreplacedby naturalgas coal unitsatthepower station at H coal withintheenergymixto10%by 2025. that gradual andtime-consumingprocess. filling thatv ing 17%)andby afurther5%thisyear, in 2016 (withactualcutbacksreach burning initselectricitysectorb sion in2015 tobeginphasingoutcoal Even withthegovernment’s deci inistry expectsgasdemandtoreach e s The minis Energy I e years with 10% from renewables and e yearswith10%fromrenewables and I W That’s not even takingintoaccount I srael’s state electriccompany ( sraeli gasdemandw f development does go ahead then aheadthen f development does go ays thiswillbeachieved oncefour I ith the2010 srael is looking to reduce the use of srael islookingtoreducetheuseof U ’s onlyproducingfield,10tcf STING COAL M tcf despite thelackofany size sanctioned in evelopment of oid with gas is a more oid withgasisamore inister Yuval ter says L eviathan field was eviathan field was L eviathan offshore eviathan offshore D I srael is targeting srael istargeting o the prospects o theprospects LN I srael’s Energy FID as 9.39bcm L K G imports G imports S eviathan. eviathan. F arish and L teinitz says I ebruary , srael’s 22 et for. eviathan eviathan I L EC came EC came evia I I n 2016 s K y 15% y 15% - H - I arish - adera adera EC) EC) - , ,

I f f - -

- RELIANT ONCOAL. SOURCE:IEC,MEES CALCULATIONS. GENERATION CAPACITY. SMALLERGENERATORS ARESOMEWHAT MORE WHILST OILBURNING ISENDED. ^IECACCOUNTS FOR 72% OFISRAELI 2017 FORECAST PRESUMES20%PLANNEDRISEINGAS USEISHIT N ISRAEL ELECTRICCO^F ered offshore will behopingthatisno domes 2022, whichisduetofall700mncfd to closeon10July ( blocks in it launchedabidroundfor24 offshore ies aremadeandbroughtonline. but thatimpliesnomoregasdiscover in 2030withdemandforgasincreasing I ISRAEL GAS DEMANDFORECAST BY SECTOR 1,000 1,500 2,000 2,500 3,000 3,500 8.9bn cfdwhile7%camefrom from Tamar, whichhitrecordoutputof the market while 72%oftheelectricityin itgenerates at srael isfacingasurplus, 1.14bn cfdin 500 EXPOR u I Almost 40tcfofgashasbeendiscov Fu 0 ral EC’s capacityis13.617 G D comes Ph L el iesel C e G v oal tic consumption ofgasin2016 was O ase iat as 2017 il T DEALS NEEDED N h 1A

100 online

2018 an 10 20 30 40 50 60 70 80 90 ovember last yearthatisdue 0

I 2019 2013 2014 2015 40.6 41.7 41.6 49.9 59.9 56.2 58.257.6 49.640.1 srael since2009. But,given . 0.1 2.6 0.6

2020 come K aris I PPs 25%. generate U M 2021

EL MIX h &T online EE

2022 2022: 1.14 t the case after t thecaseafter 0.7 0.1 anin S

, 17

( 2023 % W 2016* 2017F2022F

0.4 0.1 )

and and 2024 F LN bn ebruary). R C L

2025 e ene omes cfd G. I v srael srael iat

w 2026 ( h MN CFD ables O - an 80 10 10 nline

2027 - ç Ph 2028 ase )

2029 2 just 800mncfd,fullyexploitingsuchre surprising ( ary tosanction and pipeline toEuropeviaCyprus, Greece Turkey, Jordan, andmost fancifullya Continued on– p3 ing ( floating production and offload storage envisaged a16.5 bcm/year (1.6bncfd) ture (unspecified)exportmarket. will connecttheplatformtoafu while asecond12bcm/yearpipeline ity raisedby around9bcm/year, the platform’s gastreatmentcapac see afurtherfourwellsdrilledand a cost ofapproximately $3.5-4bn. 12 bcm/yeartreatmentfacilitiesat drilled todate,andtheins opment wells, includingthetwowells deals. Phase 1Acomprisesfourdevel dependent ontheprogressofexport Phase 1development intwostages, 45.34%, Ratio15%)aimtoimplement And despiteasheafof serves requiressubstantial exportdeals. political pressure( which hasyet tobefinalizedamid ( which wouldsee have slippedunderthepoliticalradar. deal, whichbeganinJanuary, appearto as exotic asitgets. with 1.9bcmofgasover 15years, isabout to supplyJordan’s ArabPotash Company, Jordan’s N N N 2030 2030: 700 oble Energy’s decisionin ot soasubstantially $10bndeal larger epco) with45bcmofgasover 15years The originaldev The secondscaledbackstage will The partners( S All ofwhichmadeoperatorU I o faradealsignedin F 2031 taly –nonehave beenfinalized. P

S 2032 mn O) v SOURCE: ISRAELENERGYMINISTRY, MEESCALCULATIONS. N

ational ElectricCompany 2033 cfd M essel.

EE 2034 L GA eviathan somewhat eviathan somewhat L

S 2035 REQ N S O , 2 eviathan gas supply eviathan gassupply S H M

oble 39.66%, elopment plan elopment plan upplies under this upplies underthis

2036 U U 4 o IRED EXPORTS EE TP wever the current wever thecurrent F L

2037 U ebruary). o S T I ( , 6J F s –toEgypt, MN CFD tallation of tallation of 2038 ebruary 20 F ebru

anuary). 2039 )

- 2040 D S

- E I T M firm firm nd ransport elek elek lectricity et - u h

- stry anol 14 - - COUNTRYCOIsraelUNTRY

Continued from – p2 stake in Tamar to 25% while Delek will be gas from both fields, neither have pro- forced to farm-out all of its stakes in the gressed further. And the aformentioned same field by 2020 (essentially ending the deal to supply Jordan with 45bcm of gas project is for a much pared back Phase 1A. partners’ monopoly of offshoreI srael) is still awaiting Amman’s green light. Which makes it somewhat surpris- � most observers expect the Energean That deal was seen as crucial for sanc- ing that Greek firm Energean has been plans to stay on the drawing board. But tioning Leviathan but the firms went www.mees.com bullish regarding the development of that also appeared to be the case for Le- ahead with FID on the field in the hope its Karish and Tanin fields, which hold viathan in the absence of a major export it would push the deal over the line. an estimated combined 3 tcf (see box). deal. Even with the pared back Phase

Energean in a conceptual development 1A, which at $3.75bn, is almost 50% less unrealistic plans ç s plan released in March says it has com- than the full original development plans, a pleted the engineering feasibility study it remains to be seen if the economics Israel has also recently talked up the and is targeting FID by the end of 2017. can be made to work without the Jordan possibility of constructing a pipeline “Base case is a gas FPSO with gas deal being finalized (and of course the to Turkey and also to Cyprus and then pipeline to shore and offshore liquids official expectation is that it will). further on to Europe but both are riddled Oil & G † offloading. Energean’s intent is to execute with financial and geopolitical hurdles. the project via an established deepwater EXPORTS PROVING TRICKY ç Israel believes that Cyprus cannot contractor alliance, minimizing pro- object to a pipeline constructed through † ject risk,” the firm says. This does not But where will this surplus of its exclusive economic zone from Levia- mean the project is risk-free, but simply gas go? Noble and Delek have found than to Ceyhan on Turkey’s Mediter- minimizes the Greek firm’s exposure. getting export deals over the fin- ranean coast. But Nicosia disagrees with The firm says all gas produced from ish line extremely difficult given those claims and even the UN’s Conven- the fields will be sent to the domestic Israel’s issues with its neighbors. tion of the Law of The Sea (UNCLOS) market in accordance with the 2016 gas Despite Jordan and Egypt suffer- does very little to clarify the matter. outline and on the 2013 Zemach Commit- ing from gas deficits, the Tamar and On the one hand it states “subject to tee recommendation, based on estimates Leviathan partners have found it its right to take reasonable measures for of total Israeli reserves, that 540 bcm understandably difficult to close any the exploration of the continental shelf, would be reserved for the domestic export deals with these two Arab na- the exploitation of its natural resources market, with the remainder available for tions. Jordan has a largely Palestinian and the prevention, reduction and export. Karish and Tanin’s export quota population while in Egypt former oil control of pollution from pipelines, the of 47 bcm was allocated to Leviathan. minister Sameh Fahmy was sentenced coastal State may not impede the laying or Whilst these competing export plans to 15 years in jail in 2012 for signing off maintenance of such cables or pipelines.” must be music to the ears of the Israeli on a deal to supply Israel with gas. But on the other hand “the delineation regulatory authorities � which came to a And although the partners signed of the course for the laying of such pipe- compromize with Noble and Delek last letters of intent to supply Egypt’s idle lines on the continental shelf is subject year that will see the US firm reduce its LNG plants at Damietta and Idku with to the consent of the coastal State.” ¶

ISRAEL PUSHES FOR domestic GAS COMPETITION Seven years after discovery, the hold a combined 3 tcf. The fields could includes the leasing of a floating pro- partners in Israel’s 22 tcf Leviathan produce 3 bcm/y or 300mn cfd once duction, storage and offloading vessel. offshore gas field finally reached a online according to the Greek firm. And According to the firm’s CEO Mathios final investment decision inF ebru- if Leviathan, Tamar and the Greek firm’s Rigas, the estimated $1.3-1.5bn financ- ary this year (MEES, 24 February). two fields come online,I srael could see ing of the project will be covered by The field is due to come online in gas output of 3bn cfd by 2030 (see chart). both local and international banks. late 2019 and will add some 1.1bn cfd Noble and Delek were forced to sell Before the fields can be sanctioned to Israel’s gas output when Phase 1A their rights to the two fields inD ecember though, Energean must first secure begins running at full capacity (12bcm). last year for $148mn, plus payment of sales contracts which may prove tricky Tamar, currently the only producing royalties once the fields begin producing, despite the government’s keenness for field offshoreI srael (see main story), as part of an anti-trust deal that would the field to be developed. The Greek firm should face competition from Leviathan allow them to keep control of Tamar and says it needs to secure 3 bcm/y worth of 14.April.2017 within the local Israeli market but just Leviathan. As part of the deal Delek has gas sales deals before it can reach FID. how that competition will work is up until 2020 to sell off its stakes in Tamar. Leviathan development stalled as No- for debate with Tamar and Leviathan Energean says it hopes to reach FID ble and Delek struggled to find enough sharing the same key partners � US firm on Karish by the end of the year and customers for its gas, in the end signing Noble Energy and the local Delek Group. has submitted a conceptual develop- deals with firms for power stations that Israel’s government, in its attempt ment plan to Israeli authorities which have yet to be built (MEES, 6 January). to mitigate this monopoly announced on 2 April measures to help encour- ISRAEL’S POTENTIAL GAS OUTPUT (MN CFD) age the development of small and 3,500 medium fields. The plan envisages the 3,000 Karish & construction of a 10km subsea pipeline Tanin from Israel’s offshore to Hadera on the 2,500 Leviathan northwest coast and the investment of Phase-2 ILS10mn ($2.7mn) to provide grants 2,000 to companies that wish to purchase 1.500 Leviathan vehicles that are run on natural gas in Phase-1A order to create a market for more gas. 1,000

Specifically this is aimed at helping Tamar

500 Greek firm Energean develop theK arish 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 and Tanin fields which are believed to 0 Ltd and Economic Publications (Cyprus) ©Middle East Petroleum Strictly Prohibited MEES Is Reproducing 3 4

©Middle East Petroleum and Economic Publications (Cyprus) Ltd MOROCCO 14.April.2017 www.mees.com Reproducing MEES Is Strictly Prohibited ††Oil & Gas charge of transportation and equipment. oftransportationandequipment. charge his rolewithAzzizRebbah,whowas in mines Abdelkader Amarawillbeswapping nine women.ThePJ will consist of39ministers including putting thebrakes ontheeconomy. stalling parliamentaryfunctionsand a government withother rivalparties, tions inOctober2016, butfailedtoform ing advisorstorestart theprocess. revived hopesfor two yearslaterthaninitiallyplanned. start importingthecooledfuelin2023, isnow again, thekingdom hopingto from theirpositioninpast months. of theenergyministry wereremoved project hasbeenheldup, askey members and economicpolicy. Progressonthe put sometractionbehindwiderenergy nouch, aclosefriendoftheking. main rivalparty freedoms, now undertheremitof tegic ministry ofjustice andpublic ministries. S a newcabinet headedby Prime rocco, withstate utilityO D led by themain new coalitiongovernment on5April W during sixmonthsofpoliticaldeadlock. I project. The advisors inJanuary forthe$4.6bn law firmAshurst as legalandfinancial companies including initiated talkswithmajorsandenergy minal willbeanintegral part. gas-to-power scheme inwhichan on tendersforthe development of awider no while Ashurst willreceive $1.97mn.But and BP( petitive globalmarket. ture volumes inan increasinglycom- of of excitement, notably fromanumber import ambitionsin2014 spurredaflurry M Future GasSupply Strategy In Doubt Morocco Project LNG Delayed, ndependents (R aadeddine ElOthmani,fromthePJ A evelopment (PJ ith political progress possible once ith politicalprogresspossibleonce LN d LN The PJ I H K HS O s decisiontorevive M t ishopedthatthenewcabinet will v N ing o orocco’ G supplierskeen tolockinfu- isors G supplytalkshave madeprogress. wever, thePJ BC andAshurst willadviseO EE picked M M D EE ohammed V F wonparliamentaryelec- port, which became sidelined port, whichbecamesidelined for a5bcm/year orocco isstepping upplans terminal attheJorf

picked HS ormer minis S , 16October20 I BC contract is worth $7mn BC contractisworth$7mn N slamist Justice and NI HS D LN ational Rally of ational Rallyof ) party. Thishas D ) ledby AzizAkhan- D BC G importsto lost thestra- S willretain several hell, Gazprom hell, Gazprom I I appointed a appointeda n 2015, M ter of energy and ter ofenergyand N iddle East and EE appoint- LN I 15). 15). n addition n addition M M L G import G import LN asfar asfar inister orocco LN M LN N G G N o D EE EE G ter ow - LN G G ,

ç

G G - upstream explorer one day have beenrevived by U hopes tostrike domestic gasdiscoveries consideration. with an – the projectcouldbesubjecttochange committed tobecomingan grated projectwillin future infrastructure andpower plants. and attract thenecessary fundsforthe risks inherenttothegas-to-power scheme, to give investors greatervisibilityintothe commercial framework.Thisisneeded to shapeanappropriatecontractualand tive inexperienceinthegasbusiness, is of thechallenges, given close fortheterminalby theendof2019. still Theaimistoreachfinancial ongoing. the processofsecuring opers forthe for qualification(R ply of0.64 bcm/y( with Algeria’s the endofO initially slatedfor2021,coincidingwith become thekingdom’s propertyin2021. M S to 0.75 bcm/yofpayment inkindfrom to feedtwopower plants, inaddition M gasto ships Algerian M will bebuilttoconnecttheterminal proposed –slatedtocomeonlineby 2025. combined c 2.4G Regasified minal toplannedgas-firedpower plants. infrastructure neededtoconnectthe ter tion ofajetty, storage tanks, andassociated to in 2016, having alreadybeendelayed. ticipated thatthelaw wouldbepassed distribution operations. designed togovern transportationand has yet topassalong-awaited gaslaw to matchtheCCGTloadvariations. amount ofgassupplyflexibilityrequired p12), O from plannedrenewables projects(see ity tobackupintermittent generation expected toactasbaseloadcapac- onatrach inreturn fortransitrights. The D oroccan sectionoftheG orocco alreadyimportsgasfromAlg aghreb EuropeGasPipeline(G LN omestic wever, even if H I F But therecouldbefurtherdelays. One O The A 400kmhigh-pressuregaspipeline n addition, or ins W N o G regasificationfacilities, theinte- EE isexpectedtolauncharequest ofgas-firedcapacity–four600 N LN FS EE willneedtodetermine the tance, withfutureCCGTs RU solutionpotentially under LN G terminal’s start-up was ycle gas turbine plants are ycle gasturbineplantsare N

gas LN EE’s long-termcontract S G will be shipped to supply G willbeshippedtosupply I onatrach forthesup- M n particular, thekingdom’s G terminalin3Q17, while ? orocco’

M F S M ound Energy. Q EE volve theconstruc - S pain via ) fromprivatedevel- orocco remains LN M S I s parliament s parliament , 7April). t was an- orocco’ M G supplies is G suppliesis LN E pipeline will E pipelinewill M G importer, K orocco -based s rela- M

E) that E) that

MW eria eria

. . ç -

ness withsub- to the related political tensionwithAlgeria matic tieswithpotential allies, amid M sidered equallyunrealistic, reflecting distances.a newlinkacrosslarge ily duetothehighcosts ofdeveloping security risks, theschemefailedprimar S desertand landin cross theAlgerian to builda30bcm/ypipelinethatwould ( rian inthepast,with Algeria whenthe the exactroutehasyet tobeagreed. 4,000km alongtheAfricancoast, although M ment Authority and wealth funds Pipeline, was spearheadedby sovereign The project,namedtheTrans-African African nationsandonwards toEurope. rian gasto a gaspipelinethatwouldship 2016, more far-fetched option. country isalsoventuring intoanother, strategy subjecttopotential the change, solving the whom itseesasthe biggest obstacle to the AfricanUnion, against thatofAlgeria “Rabat istryingtoadvanceitsposition in Porter, fromriskconsultancy to emphasize in the supports andsheltersthePolisario rebels the comple to claimcommerciallyviableresources. Energy isstill alongway frombeingable in bigdiscoveries inpast years. onshore andoffshore,hasfailedtoresult search fordomestic gasresources, both to holdsome9-31 tcfofgas, M tures indentifiedinthe Tendrara and before announcingtheresultsofwell. will gatherfurtherwirelineloggingdata W sand sequencecommencingat2,643m. confirmed thepresenceofagas-prone of 3,120m. Thecompany said thatthewell border,Algerian reachingatarget depth the Tendrara onshorelicencenearthe I NN n pain. Butnotwithstanding politicaland N orocco’ orocco eridja licenseareasarelarg hile thecompany reportsgasshows, it M igeria The Trans-African Pipelineiscon- N W “ W I PC) and N arch, igeria proposed a similar project proposedasimilarproject igeria see this more as a diplomatic gesture seethismoreasadiplomaticgesture ith hile M M W ational Petroleum Corporation orocco and oroccan-occupied territory). es M . The pipeline would likely run . Thepipelinewouldlikely run s effortsto strengthen diplo- S

pipeline S tern M orocco’ ound Energysays thatstruc- tion of its third well, TE-8, at at tion ofitsthirdwell,TE-8, W ound Energy announced ound Energyannounced orocco aswelltoo S N es M onatrach agreed in 2009 onatrach agreedin2009 S S igeria igeria tern aharan Africa,” says Geoff orocco’ ahara dispute (Algiers ahara dispute(Algiers s future gas supply s futuregassupply N S I igeria agreed to build agreedtobuild igeria thmar Capital of thmar Capitalof S ahara issue.” overeign s interconnected- I n M D e enough e enough ecember ecember orocco’ N N S alcosa. - ige I ound ound nvest- ther ther N ¶ - ige s s - ç which falling nual Reporthighlightstheextent to to just $1.9bn.Oman consecutive slideinannualrevenues LN the number one purchaser of Omani the numberonepurchaserofOmani year its clientbase.As withlarg ate hassincesignificantly diversified took 99%ofOman’s recently as2013 Japan and nese takingsfallingdramatically. 20 tween numbertwobuyerJapan in mark. relatively steady aroundthe4mnt/y I supply glutforthenext fewyears. as Australia willextend thecurrent fresh suppliesfromcompetitors such S of 2017, islikely toberelatively modest. and therehasbeeninthefirst twomonths recent levels. Any continuedrecovery, $8.20/mn BTUarestill way down on second halfoftheyear, butataround fell from$20.2bn to$15.1bn year-on-year. year –andoverall hydrocarbon revenues those of falling oilrevenues. Oil revenues dwarf squeeze ongovernment cofferscaused by last yeartoitslowest level since2004. wonder thatrevenues fellnearly$700mn $10/mn BTUbelow 2014 levels. year tojust $7.38/mn BTU, morethan LN output mos ber onebuyer, takingaround50%ofits gloss offoftheoutputperformance. O falls meant it wasn’t enough to prevent LNG revenues falling to a 12 year low. the feedstock pressure on Oman LNG. Production and exports of LNG rose, but price Gas supply growth and a rare fall in demand from the power sector combined to ease But Revenue Falls Regardless RecordsOman LNG Rare OutputRise, of est statistics publishedby theGroup G OMAN low demandgrowth andtheonset of E I ncreasingly I 15, duetoJapa butthiswas largely NL xport S Prices recovered somewhatinthe The S W S G last year. tothelat According G to nternational , 51%ofthetotal purchased. outh outh outh hat isnotable isthatwhileas ) itreceived 4.11mn tonslast I t openedupawidegapbe LN S LN outh K K K D G revenue fall exacerbated the G revenue fallexacerbatedthe orea re orea isOman orean takingsha t years. ButpricesofOmani G -$12.9bnagainst $1.9bnlast estinations to athreeyearhighof8 enough to prevent a third enough toprevent athird tons in2016, butthiswasn’t man LN K orea fellsome3

LN G prices took the G pricestookthe Varied LN tained itscrown as G importers(G G production rose G productionrose LN LN G, the G’s 2016 An LN

er produc S ve been ve been G’s num outh S ultan 7% last L - ittle K - I .5mn .5mn orea ------√

squee production andimportsviathe gains arenotable. Gassupply, through thanks torisingdemandandsolast year’s too yet they roseacomparable amountin2015 year (seetable)whichclearlyhelped. But pipeline fromQatar, rosenearly1bcmlast join theclub( Bahrain ispushingaheadwithplansto 500mn cfd in adding totheexisting 960mncfd ( floating andregasificationunit storage The UAE last yearmooreda500mncfd Regional demandfor of buyerslast year, taking0.13mn tons. The UAE was alsoaddedtotheroster volume, butitwas thefirst suchinstance. sold toJordan may have beensmallin third largest buyerofOmani LN in whichOmansupplied for ourcompany.” 2016 was thethirdyear Jordan asrepresenting“newdepartures sale oftwospot to cargoes are having toseekoutnewbuyers. in whichtheyoperatemeans the increasinglycompetitive market ers, suchasworldnumberoneQatar, 0.71mn tonslast year. tons in2014, 0.45mn tonsin2015 and substantially eachtime;from0.06mn Oil/Gas Field Use Field Oil/Gas Generation Power Industry CONS GAS OMAN - Fuel Gas -Fuel SOURCE: NCSI, MEES. NCSI, SOURCE: Total - other -Flared - Reinjection FS E D fficiency Allied to the increased supply of gas Allied totheincreased supplyofgas Oman Oman M G, butthevolumes have increased RU) offshore Abu ubai. ore thanthat,the0 zed forfeedstock inrecentyears LN S LN LN G productionfell thatyear. harjah plans to receive a harjah planstoreceive a FS G has been increasingly G hasbeenincreasingly G’s annualreportlaudsthe G M RU in2018, whilenearby

U ains M EE PTION BY BY PTION 40.85 23.69 2016 9.16 1.66 2.93 0.79 3.78 7.99 S , 16 LN D K habi atRuwais, uw D vs2015 .06mn tons G isgrowing. K U +0.98 +0.39 +1.04 ecember 2016). +0.07 +0.24 +0.17 K uw S ait was the ait was the -.09 -.33 E (BCM) uw LN ait with ait with ait and ait and D G in2016. 39.81 22.71 2015 FS olphin olphin 8.32 8.77 0.89 3.71 1.43 2.76 RU RU ç 20.39 11.73 2 4.51 0.39 0.89 1.50 4.14 1.73 H 16 But thefullimpactoffieldonOman’ sure onOman’s gassupplies(seep11). late-2017 willsignificantlyeasethepres BP-operated edged upto 7.07bcmedged in2016. tighten. Associated gasproduction ated gasthen suppliescould tailed atfieldsproducingassoci fields itwouldfreeupgassupplies. operators opt tocutbackoutputatthese has beenrisinginrecentyears tion ofgasforEORatmatureoil fields the first halfoftheyearmay bepositive for over 1mnb/d to970,000 b/d inthe with Opectocutoilproductionby just gas balancewon’t befeltuntil2018. up considerablyimproved efficiencies. The 2016 reportoughttobeableflag by 15.5% anddesalinated water by 17.5%. manag tion increasedjust 4.3%year-on-year it year said thatwhileitsgasconsump firm OP be paying off. in thepower sectorandtheyappearto measures Oman toimplementefficiency outstripping supplyhave prompted year tojust under8bcm(seetable). from 20 tor rose1.9bcmover thefive years actually fell.Gassuppliedtothesec ment �demandforpower generation however was amorenotable develop vs1H16 L +0.08 +0.28 +0.16 ate -.04 -.02 -.23 -.31 -.10 The plannedstart-up ofthe1bncfd Conversely, ifoutputiscur Concerns thatdemandgrowth was I S n the meantime, the agreement n themeantime,agreement ultanate’s gassupplies. Reinjec -2017 Su ed to increase electricity supplied ed toincreaseelectricitysupplied W 11-2015, butfell0.33bcm last vs2H15 +0.00 +0.06 +0.38 +0.20 +0.99 +1.56 +0.17 +0.14 P’s 2015 reportreleasedlast K S tate electricity and water tate electricityandwater hazzan tight gas field in hazzan tightgasfieldin pply 20.43 11.96 1 3.86 4.62 2.05 0.73 1.43 0.41 H 16 B oost 18.83 10.75 2 3.94 0.39 1.36 1.68 4.14 0.72 H 15 ¶ - , and if , andif 21.85 37.59 2014 - 8.00 0.83 2.88 2.54 1.59 7.84

- - - - 39.11 22.59 2013 9.05 2.86 2.39 1.53 2.27 ç 7.47 s s -

5 ©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 www.mees.com Reproducing MEES Is Strictly Prohibited „„transportation 6

©Middle East Petroleum and Economic Publications (Cyprus) Ltd OMAN/K 14.April.2017 www.mees.com Reproducing MEES Is Strictly Prohibited ‰‰refining & petrochemicals UW AIT products willbenaphtha,je Refinery andP on theArabian economic zonebeingdeveloped at a 230,000 b/d exportrefineryinaspecial that engineering,procurementandcon Company ( while k will ultimatelyleadto project withAbu previously beenplanningtodevelop the of of understanding forthejointdevelopment L tion (merox) treatingunits. andmercaptanhydrogen generation oxida coking units, alongwithsulfurrecovery, hydrocracking, hydrotreating anddelayed cals, mineral resourcesandfisheries.” processing industries basedonpetrochemi thority seesthe regionally aswellinternationally portant hubsforenergyrelatedindustries the parent company anticipated inthethirdquarterof2017. $6-7bn, withfinancialclosefortheproject of developing therefinery toamount output tobeexported. the endof2020, withmost oftheplant’s scheduled tocommenceoperationbefore tion andinvited bidsfortheEPCwork. neering designfor F will belaidattheendof2017. U that thefoundationstone fortheproject O intended mainly for export. Both countries will also provide crude feedstock. State firms from Oman and Kuwait have committed to building an Omani refinery DealMulti-Billion Refinery Oman, Kuwait Sign only tobuild,own and operatetherefinery equity in I will bea struction (EPC)contractsfortherefinery ration ( which itisbeingmerg turing ofstate investment vehicles under and as itime transportationandlogistics services, P ey componentsof“aregionalhubformar os PG. OOCand I D OOC chief executive D N M The OOC and C, but ter D uqm refineryin RP izar al-Adsani, chiefexecutive of uqm areaintooneofthemost im r Zedjalisays that D afe haven forinvestments inexport W K RP D I warded inthenext twomonthsand C says therefinerywillcompriseof heeler completed frontendengi PC), says that“thismegaproject D uqm I P I RP D C hascompleted prequalifica al ( ship agreementfortheir K man OilCompany (OOC)and I RP K C withdrewamidst arestruc uw I S P etrochemical K C, which was formednot K S pecial EconomicZoneAu I D I ea coast ofcentralOman. ait Petroleum P C) joint venture to build C) jointventure tobuild P K areboth taking50% D uqm refinery as one of the uqm refineryasoneofthe I I uw D habi investment house ) have signedapartner signed a memorandum signedamemorandum N uqm refineryrecently, ait Petroleum Corpo wards transforming wards transforming ed with ovember. OOChad H D I e expectsthecos sam al-Zedjali says uqm refinery is uqm refineryis t fuel, diesel and t fuel,dieseland I I ts primary ts primary ndustries M I K nternation ubadala. ’ s Amec s Amec D .” uqm uqm D K - uqm uqm - P - I t t - - - - ’s - - - - - for comple 81, equity andwillsupplyallthecrude. N crude toVietnam’s new200,000 b/d D earmarking volumes beyond2020for b/ 200,000ity withtheclosureofageing K 2.13mn b/d ofcrudein2016. Recently combined 160,000 b/d beyond2020. Oman’s crudeexportpotential by a – dueonstream thisyear–willreduce tion ofthe toOpec.Comple in linewithapledge before thesultanatetrimmedoutput 880,000 b/d ofcrudeandcondensate, will provide 65%oralmost 150,000 b/d. lent tojust over 80,000 b/d –while 35% ofthecrudeforrefinery–equiva ucts exportpotential. Omanistoprovide some ofitscrudeaswellonward prod an opportunitytosecureanearby outlet for to the according toTimesofOmannewspaper. ems projectat feasibility study foranintegratedpetch project directorYusuf al-Jadhami says a with therefineryatalaterdate. but alsotointegrateapetrochemicals plant refining andpe produce 1.1mntons/year ofpetrochemicals. and 24,000 b/d of Plastics complexat Orpic hasstarted buildingthe$6.5bn 74,000 b/d. Besides therefineryexpansion, around 17,000 b/d andgasoilalsodoubleto while jet kerosene capacitywilldoubleto gasoline productionby 35%to60,000 b/d, b/d and increaseupgradingcapacity. project, whichwilltake capacityto197,000 all unitsinstalled aspartofitsexpansion announced themechanicalcompletion of coast. Towards theendof northwest of 36,000 b/d oflightendsfrom M uw SO uqm, ghi uscat- d 000 b/d K Oman last yearexportedanaverage Abu Orpic is also building the 290km Orpic isalsobuilding the290km The expansionwillincrease S S H tate refiner Orpic is already creating a tate refinerOrpicisalreadycreating ait lost domestic refiningcapac uw huaiba refinery. S AR PROGRESS D on refinery, whereitholds35.1% K D uqm refinery, but ait, meanwhile, exportedarecord S P habi was tohave provided crude ohar ProductsPipeline ( I D tion “in the coming months”, tion “inthecomingmonths”, S will soon begin delivering willsoonbegindelivering ohar refinery expansion ohar refineryexpansion uqm refinery as well as the uqm refineryaswellthe M D tchems hubat uscat onOman’s northern uqm isunderway anddue N S G

ohar. Thiswillprocess H L s from o wever, besides F K ebruary Orpic uw S S F ait has seized ait hasseized ohar refinery ohar refinery ohar, 200km ahud fieldto S D ohar’s RP MS K - I uw - C C L PP) PP) iwa iwa - ait ait - Ç -

- Benzene - Operating: MICALS - Paraxylene Aromatics PETROC Total RefiningEnd-2020 Planned: Duqm (2020) U Operating Total Mina al-Fahal Sohar REFINING - Operating: OMAN DO SOURCE: ORPIC, DRPIC, OMPET. DRPIC, ORPIC, SOURCE: TerminalJifnain (2017) (2017) Pipeline Products Muscat-Sohar &STORAGE PIPELINE +Planned Current Petchems Total Terephthalate - Polyethylene Acid Terephthalic -Purified Planned: PTA/PET (2020+) Butane-1 - Ether Butyl Tertiary -Methyl - Polypropylene Polyethylene Density -High Polyethylene Density Low -Linear - Cracker U Total Current Polypropylene S paraxylene from Orpic’s aromaticsplantat L M refineries with a new storage terminal near refineries withanew terminalnear storage materials plantat ment (20%)plansan$850mnpackaging joint venture ofOOC(50%), This willlinkthe network atanexpectedcost of$320mn. Solvent Deasphalter Hydrocracker Vacuum Distillation Distillation Crude Main New Capacity CDU Expanded Current CDU Capacity Crude Processing: ORPIC’S SO Sohar Expansion (‘17) Expansion Sohar nder Construction: nder Construction: Liwa Plasticsnder Construction: (2020) ohar andimported ethylene glycol. G (30%)andOman’s Takamul uscat airport. H E U W nits: H NSTREAM PLANTS/PROJECTS AR REFINERY EXPANSION M S S ean ohar and ohar, whichwillprocess while, theOmpet M K ina al- orea’ I nvest SOURCE: SOURCE: 170,000m³ s s 93,000 b/d F ‘000 B/D ¶ ‘000 B/D ‘000 T/Y ahal - 1,366 4,066 1,100 1,100 1,600 1,016 MEES. 71.5 96.8 66.4 42.4 533 222 116 500 500 106 300 230 215 880 198 350 818 116 197 40 81 45

a 300 process, duetobecompleted inJuly. ders duringtherequest forproposals made available to pre-qualifiedbid- ment work. sites have fullpredevelop - undergone years forsolarand20wind.Thetwo power purchaseagreementsof25 and supportlong-termprosperity.” also catalyzeeconomicdevelopment not onlydiversify ourpower mixbut deployment in tained programofrenewable energy the starting pointofalongandsus- development contractsin F Tabuk region.Announcingthetenderin installed at Al-Jawf regionandthewindfarmwillbe will bebuiltat Riyadh inmid-April. project ThesolarPV bles programataninvestment forumin announce thenext phaseoftherenewa- says energyminister power producer( solar andwindcapacityinindependent als fromthecompaniestodevelop the ticipants ortofulfilboth roles(seetable). to bemanagingparticipants, technicalpar ruary. Thecompanieshave beenselected applications foratenderbeguninlate and 24 fora400 of capacityb renewables programtargeting 3.45G a qualified companiesforroundoneof a sense of urgency introducedto a senseofurgency potential andinvestment environment.” confidence inourvas ingly positive, demonstrating market the responsetotenderas“overwhelm T renewables program. solar and wind capacity. The tender brings impetus to a previously floundering Riyadh’s renewables unit has shortlisted companies to develop 700MW of Targeting 9.5GW By 2030 Saudi Renewables Program renew sents “thefirst step towards realizingour SA ebruary FIRST STEP The shortlisting also demonstrates Repdo has qualified 27 companies for Repdo hasqualified27companiesfor Repdo will back the projects with Repdo willbacktheprojectswith M hasinvited propos- The agency ays theshortlisting repre M U DI ARABIA r r MW able energyambitions.” F F alih s alih s , solar photovoltaic (PV) project project solarphotovoltaic (PV) M M of Energyhasshortlisted of D he Renewable EnergyProject S r y 2020and9.5G

ite assessments will be ite assessmentswillbe aid the tender “marks aid thetender“marks evelopment Office (Repdo) evelopment Office(Repdo) F idyan inthenorthwestern S S alih s S audi Arabia’s akaka in the northern akaka inthenorthern MW audi Arabia, that will audi Arabia,thatwill I PP) projects. Repdo aid theaimistoaward wind farm, out of 128 windfarm,outof128 t renewable energy t renewable energy K halid al- S eptember. W M H by 2030. F inistry e describes alih will S audi audi W - F

eb ç

- - -

Cro at theTuraifproductss national renewables agency national renewables agency I est of S fied forRepdo’s solarproject (seetable). tender was canceledin to bidfordevelopment projects, butthe panies andconsortiain appears tohave beenafalsestep. N 50 had alreadybeguntenderingfortwo scribed by utility recently completed by state electricity panelsandstorage batteries ing 12PV as a3 comprises small-scalesolarplants, such published by Abu according tothelatest annualstatistics its renewables capacitytoonly48 by theendof2016 renewables capacityby 2032. outlined anambitiousplanfor54G and Renewable Energy( had beenpromisedandlittle achieved. of the posed renewables projects but also of posed renewables projectsbutalso of for the a numberofthecompaniesthatqualified Al-Jawf regionandoneatRafhainthe solar capacity( ( and threeintegratedsolarcombinedcycle planned three50 farm proposedby intended asapilot fora50 nal innorthwestern to 2020andhis N renewables thinkingasaresultof sioning asingle2.75 General Electric(GE)arecommis S IS n 2013 audi AramcoandU EC itselfisuncertain. FALSE STEP ational TransformationProgram( orthern Bordersregion–inwhatnow MW CC) plants The windturbinew N The company hadqualified18com- Although thenewtenderisde- This yearstate petroleum firm Before theenergyministry tookcharge wn Prince ow thefatenot onlyof MW S S S audi Arabia’s with generators S projects–oneinthe solarPV audi renewables program, much audi renewables program,much EC atits K EC tenderhave alsobeenquali- ing Abdullah CityforAtomic rooftopinstallation compris- M r

, which incorporate some , whichincorporatesome F M M alih asafirs S uhammad bin D audi Vision2030. MW EE D S S ammam complex. EC. Thecompany also habi-based inter audi Arabia has raised audi Arabiahasraised MW S S S , 10 audi Arabia. audi Arabia. solar PV projects projects solarPV conglomerate conglomerate as originally as originally torage termi torage M S N wind turbine windturbine K EC, the larg- F arch. ovember 2016 MW acare) had ebruary). t step, S I EC’s pro- rena. This rena. This H wind wind S H o alman’s o wever, S D MW - wever, EC EC W eputy eputy - N -

of of TP) TP) ,

ç First Solar, US* US* Solar, First EDF, France* Germany Belectric, Saudi* Power, Acwa Spain* Acciona, 300M Technical Managing & RENE Q COMPANIES GAMESA. SOURCE: SAUDI MINISTRY OF ENERGY. OF MINISTRY SAUDI SOURCE: GAMESA. SIEMENS SPAIN-BASED FORM TO PROJECTS.^MERGING PV SOLAR RAFHA AND AL-JAWF FOR TENDER SEC CANCELED IN *QUALIFIERS Japan Tsusho, Toyota Japan &Co, Mitsui Japan Marubeni, US GE, Spain^ Gamesa, Engie, France Enel, Italy EDF, France Spain Cobra, Spain Acciona, Project: Farm nd UAE Masdar, 400M Total, France* Japan* &Co, Mitsui Japan* Marubeni, Engie, France* Italy* Enel, nounced aplantoprivatize65G near term( some 8G 47 plantsofferingmorethan57G comprise name of years.” Although capacity“inthenext generating couple sealed last October, when years beenintendedforprivatization. capacity asofend-2015, hasformany The company’s fatewas effectively W W W

Solar P Solar W S A EC, the65G BLES TENDER i W S under development in the underdevelopment inthe EC’s existing capacityplus M V U Project: A EE LIFYING FOR REPDO'S SA REPDO'S FOR LIFYING Kepco, Korea Kepco, Qatar Nebras, Japan JGC, Spain Cobra, UAE* Masdar, participant Managing Japan Sojitz, Canada SNC-Lavalin, Qatar Nebras, Korea Kepco, Japan JGC, Saudi Arabia Acwa Power, Malaysia Tenaga, Japan Sojitz, Canada SNC-Lavalin, S , 1 W M 4 October2016). appears likely to appearslikely to r F alih didno M r Korea Korea QCells, Hanwha China Energy, New GCL Spain Fotowatio, Germany Enerparc, Canada Canadian Solar, participant Technical Denmark Vestas, France Voltalia, Siemens, Germany^ Spain Iberdrola, China Goldwind, Germany Enercon, Spain Elecnor, Spain* TSK, Trini Solar, China Jinko Solar, China Spain Iberdrola, F alih an W W of of t t of of U ¶ D - I

7 ©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 www.mees.com Reproducing MEES Is Strictly Prohibited ††power & water RECORD US OIL TRADE BELIES PROTECTIONIST RHETORIC OPEC

he first three months of a captures increased cash flow as pro- levels in Q1, at 8.14mn b/d (see chart 1 and presidency that promised to duction increases,” The EIA says. table p9 for full data). But early indications Tput ‘America first’ and poten- This sharp rise in exports must mean lower are that they are due to fall as cuts since the tially impose trade barriers imports, right? Not so far. Q1 gross US oil start of the year begin to bite whilst Gulf on friend and foe alike, has seen previous imports, at 10.30mn b/d were only just below producers focus on their core Asian markets records of oil trade blown out of the water. the four-year high of 10.34mn b/d set in Q3 (and of course imports at the end of 2016 and Record volumes of crude exports – some last year. All this means that gross US oil trade beginning of 2017 were boosted by Opec’s 928,000 b/d in February and 802,000 b/d for – imports plus exports – hit a massive record ‘pre-deal’ output surge; a surge that is still Q1 as a whole – have grabbed the headlines. But of 16.24mn b/d. The equivalent a full 17% of making itself felt in US crude stocks that exports of refined products (3.02mn b/d),N GLs the world’s oil output in the first three months remain at/near record levels (see chart). (1.40mn b/d) and biofuels (530,000 b/d) were of 2017 was either imported to or exported Saudi volumes did dip in late March with all at or near record quarterly levels. All told from the US, in the form of crude or products. ship trackers estimating a further fall to come. the US exported 5.75mn b/d in Q1, up 400,000 But then this needs to be put in perspective: b/d on the previous record set in Q2 last year asian takers ç March volumes were only low compared to (see chart 1 and MEES, 23 December 2016). January’s three-year-high levels; Q1 as a whole Record US exports come as the country’s Both China and Japan had already im- saw the highest volumes since early 2014. output has rebounded rapidly from 8.57mn ported a VLCC of US crude each in the first Other Opec countries have staged an b/d in September last year to 9.08mn b/d in two months of 2017. And arrivals are set to leap unlikely comeback. US imports from Alge- March, the highest in 12 months. The latest after a flurry of buying ofF ebruary and March- ria, having dwindled to next to zero in 2014 Short Term Energy Outlook of the US gov- loading cargoes. Other recent buyers include and 2015, hit a four-year high of 156,000 ernment’s Energy Information Administra- Thailand, which is set to import an Eagle Ford b/d in October and have not fallen below tion has revised up its 2018 forecast for US condensate cargo in May, Reuters reports 100,000 b/d since (see chart 3). ¶ output by some 200,000 b/d to 9.90mn b/d. At least as far as crude imports are con- “The higher forecast reflects im- cerned volumes will almost certainly dip in Continued on – p9 provements to the rig methodology that Q2. Volumes from the gulf were at record

1: US OIL TRADE HITS 16.24 MN B/D IN Q1: EXPORTS AT RECORD LEVELS WHILST IMPORTS REMAIN FIRM (MN B/D) 1q17: record 16.24mn b/d

16

Gross oil trade 14 2005: record net oil imports 12.55mn b/d

12 Q1 total imports 10.30mn b/d 10 1.3 2005: record crude imports 10.13mn b/d 0.2 8 0.7 Net crude imports 6

4 Net oil imports 8.1

2 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 0 imports -0.8 Crude Products -2 -3.0

-4 exports -1.4 NGLs -0.5 Blendstock, -6 Biofuels* record exports 5.75mn b/d

2: SPOT THE TREND: US CRUDE IMPORTS FROM THE GULF (‘000 B/D) SOURCE: EIA. 3: BACK FROM THE DEAD: US IMPORTS FROM ALGERIA (‘000 B/D) 2,500 500

443

105 2,000 303 400 170 326 233 362 171 191 622 other 309 169 250 328 195 476 209 212 312 Kuwait 180 411 1,500 341 206 523 300 459 536 281 364 206 431 Iraq 415 417 443 449 287 505 229 228 215 1,000 200 178

132 980 1,082 1,186 1,361 1,325 1,162 1,050 1,097 1,109 1,132 1,134 1,012 1,274 1,344 1,337 1,141 120 S Arabia 116 500 100

29 6 3 19 21 30

17 17 17 17 ar eb an an 2009 2010 2011 2012 2013 2014 2015 2016 1Q16 2Q16 3Q16 4Q16 1Q17 J F M 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 J

©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 8 Reproducing MEES Is Strictly Prohibited US: KEY OIL DATA (‘000 B/D): CRUDE OUTPUT CONTINUES TO RISE WITH EXPORTS HITTING RECORD IN 1Q17 OPEC

1Q17 vs 4Q16 % 4Q16 3Q16 2Q16 1Q16 *Mar17 vs Feb17 vs Mar16 *Feb17 Jan17 Dec16 2016 2015 2014

PROD UCTION: CRUDE OIL 8,965 +157 +1.8 8,808 8,672 8,847 9,172 9,076 +93 -98 8,984 8,835 8,775 8,875 9,416 8,760

Lower 48 Onshore 6,725 +94 +1.4 6,638 6,652 6,779 7,053 6,841 +78 -185 6,764 6,640 6,536 6,781 7,419 6,867

Gulf of Mexico 1,740 +72 +4.3 1,667 1,570 1,580 1,607 1,741 +10 +104 1,731 1,691 1,728 1,606 1,514 1,397

NGLs 3,475 -20 -0.6 3,494 3,464 3,571 3,380 3,606 +152 +97 3,455 3,363 3,344 3,478 3,272 3,015

Total Petroleum Output (mn b/d) 12,440 +138 +1.1 12,302 12,136 12,418 12,552 12,683 +244 -1 12,438 12,198 12,119 12,352 12,688 11,775

Renewables & oxygenates 1,151 -24 -2.0 1,175 1,163 1,126 1,118 1,144 -3 +6 1,147 1,163 1,198 1,145 1,089 1,055

Total Oil Output^ 13,591 +114 +0.8 13,477 13,300 13,544 13,670 13,827 +242 +6 13,585 13,361 13,317 13,498 13,777 12,830

y-o-y change -79 +264 -77.0 -343 -522 -302 +49 +6 +13 -15 -7 -236 -409 -280 +952 +1,782

Rig count^^^: Oil 600 75 +14.2 525 425 341 372 631 +29 +259 602 566 525 525 536 1,499

Gas 151 19 +14.4 132 96 89 92 157 +6 +65 151 145 132 132 162 340

Domestic Demand 19,327 -425 -2.2 19,752 19,905 19,424 19,450 19,614 +483 -2 19,131 19,234 19,979 19,633 19,531 19,104

Crude stocks (mn bl, end period)^^ 520.1 +36 +7.4 484.3 469.1 498.0 501.5 535.5 +15 +34 520.2 504.5 484.3 484.3 449.2 360.9

CR UDE OIL IMPORTS 8,137 +297 +3.8 7,840 8,061 7,731 7,876 7,966 -44 -76 8,010 8,435 7,860 7,877 7,348 7,343

% of US demand 42.0 +2.3 +5.9 39.7 40.5 39.8 40.5 40.5 -1.2 -0.5 41.7 43.9 39.3 40.1 37.6 38.4 from Opec 3,261 +45 +1.4 3,216 3,311 3,174 3,016 3,158 +113 -113 3,045 3,579 3,295 3,179 2,680 3,037

% of crude imports 40.0 -1.0 -2.4 41.0 41.1 41.0 38.3 39.6 +1.6 -1.0 38.0 42.4 41.9 40.3 36.5 41.4

% of US demand 16.8 +0.6 +3.5 16.3 16.6 16.4 15.5 16.1 +0.2 -0.6 15.9 18.6 16.5 16.2 13.7 15.9

Gulf Opec 2,504 +762 +43.7 1,743 1,832 1,764 1,602 2,458 -526 +705 2,984 2,071 1,875 1,735 1,487 1,848

Key Opec Suppliers: Angola 58 -70 -54.7 128 189 169 148 31 -8 -129 39 104 102 159 124 136

Ecuador 233 +5 +2.1 228 231 208 281 304 +157 +40 147 247 236 237 225 210

Iraq 523 +18 +3.6 505 431 443 287 536 +126 +171 411 622 593 417 229 364

Kuwait 170 -42 -20.0 212 250 169 206 171 -62 +48 233 105 254 209 206 309

Nigeria 290 +78 +36.8 212 192 231 206 291 +27 +22 264 315 220 210 56 59

Saudi Arabia 1,274 +262 +25.9 1,012 1,134 1,132 1,109 1,141 -196 -124 1,337 1,344 1,014 1,097 1,050 1,162

% of crude imports 15.7 +2.7 +21.1 12.9 14.1 14.6 14.1 14.3 -2.4 -1.4 16.7 15.9 12.9 13.9 14.3 15.8

Venezuela 667 -79 -10.6 746 781 722 716 683 +69 -90 614 704 718 742 779 734

By region: MENA** 2,013 +99 +5.2 1,914 1,938 1,879 1,621 1,849 -132 +77 1,981 2,208 2,032 1,838 1,495 1,860

AMERICAS** 5,207 -75 -1.4 5,282 5,229 5,135 5,665 5,216 +235 -363 4,981 5,424 5,276 5,328 5,456 5,094

Americas % 64.0 -3.4 -5.0 67.3 64.9 66.4 72.0 65.5 +3.3 -3.9 62.2 64.3 67.1 67.7 74.3 69.4

Canada 3,383 -27 -0.8 3,410 3,166 3017 3435 3,342 +59 +42 3,283 3,525 3,438 3,257 3,170 2,883

Mexico 579 +15 +2.6 564 570 629 565 543 -17 -32 560 635 515 582 688 781

AFRICA** 482 +93 +24.0 389 442 497 446 482 353 444 273 280

E UROPE/ASIA** 117 +40 +51.9 77 259 154 144 117 50 158 116 338

PROD UCTS/NGL*** IMPORTS 2,262 +152 +7.2 2,110 2,275 2,298 2,043 2,262 1,954 2,182 2,051 1,882

Canada 757 +256 +51.0 501 518 521 630 757 624 543 585 503

Opec 214 -35 -14.1 249 288 258 264 214 203 265 221 229

of which: Algeria 115 -19 -14.2 134 141 120 130 115 90 131 106 104

Venezuela 45 -0 -0.7 45 63 53 58 45 71 55 51 56

TOTAL OIL IMPORTS 10,541 +591 +5.9 9,950 10,337 10,030 9,919 10,384 10,697 9,814 10,059 9,399 9,223

% of US oil demand 54.9 +4.5 +8.9 50.4 51.9 51.6 51.0 54.1 55.6 49.1 51.2 48.1 48.3 of which Opec 3,793 +328 +9.5 3,465 3,599 3,432 3,280 3,793 3,498 3,444 2,899 3,266

Opec % 35.5 +0.6 +1.8 34.8 34.8 34.2 33.1 35.5 35.6 34.2 30.9 35.4

U S OIL EXPORTS 5,700 +436 +8.3 5,265 5,191 5,351 4,943 5,692 -26 +690 5,718 5,691 5,460 5,187 4,751 4,175

Crude 802 +292 +57.2 510 608 545 415 731 -198 +223 928 746 442 520 458 345

Products/NGLs/other*** 4,946 +192 +4.0 4,754 4,583 4,805 4,527 4,946 5,018 4,668 4,293 3,830

NET OIL IMPORTS 4,905 +220 +4.7 4,685 5,146 4,678 4,976 4,905 4,354 4,871 4,648 5,048

% of oil demand 25.5 +1.8 +7.5 23.7 25.9 24.1 25.6 25.5 21.8 24.8 23.8 26.4

Crude 7,335 +5 +0.1 7,330 7,454 7,186 7,460 7,235 +154 -299 7,082 7,689 7,418 7,358 6,890 6,998

Products/NGLs/other*** -3,131 -486 +18.4 -2,645 -2,308 -2,508 -2,484 -3,843 +510 -1,308 -4,353 -2,784 -3,064 -2,486 -2,242 -1,946 from Opec 3,581 +374 +11.7 3,207 3,387 3,251 3,062 3,581 3,299 3,227 2,652 2,978

Saudi Arabia 1,343 +339 +33.7 1,004 1,133 1,141 1,122 1,343 1,005 1,100 1,054 1,165

*PRELIMINARY **INCLUDES REGIONAL OPEC MEMBERS ***INCLUDES BLENDSTOCK, BIOFUELS. ^EXCLUDES REFINERY PROCESSING GAINS. ^^COMMERCIAL STOCKS ONLY.^^^ACTIVE DRILLING RIGS END PERIOD. SOURCE: EIA, MEES CALCULATIONS, BAKER HUGHES.

©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 9 Reproducing MEES Is Strictly Prohibited 10

©Middle East Petroleum and Economic Publications (Cyprus) Ltd LIBYA 14.April.2017 www.mees.com Reproducing MEES Is Strictly Prohibited ¨¨Geopolitical risk the Eni-operated majeure. Gasandcondensate output from Corporation ( early AprilbeforeTripoli’s in thecountry, cameonstream brieflyin S N export terminal was blocked by protes pipeline connecting themtotheZawiya previously shutin on27 on 6April.Outputfromthefields was two days later, andtoabout215,000 b/d and reboundedtoabout200,000 b/d from thefieldshadrestarted on2April by anunidentifiedgroup. Production April duetoadeliberatepipeline blockage sources intheoasesand[ S The grouphasgrandlynameditselfthe in eastern demands canbemet. Anoppositiongroup D without anofficial government since PC toliftalogjamthathasleftthecountry pre-conditions forittoentertalkswiththe sentatives ( based parliament,the east ofthecountry. Thecountry’s Tobruk- of Tripoli’s of theoilsector.manage Arenegadebranch are squabblingover whohastherightto (PC), theexecutive branchofgovernment, ernment. re-emerging acrossallinstitutions ofgov threatened by politicaldivisions, whichare A recent progress and hamper crude production increases. Political splits that have re-emerged in Libya in recent weeks threaten to derail Drops Below 500,000 b/d Libya OilOutput major exportterminalsinthe ened toprevent oil reachingthecountry’s 1.1mn b/d b/d ofliquidsproduction,let alonethe about 490,000 b/d thefollowing day. b/d on9Aprilbeforedroppingto 693,000 b/d on6Apriland703,000 is increasinglyremote. Outputreached upreme Councilforoil,gasandwater re- harara oilfields, thebiggest producers Sh D ecember 2015. C-186) wereforcedtoshut down C-186) on10 N i The Oil productioncontinuestobe T v OC in Benghazi is challenging the right OC in Benghazi is challengingthe right arara he prospectofmaintaining700,000 isions S harara fields(Blocks N N L N H

OC and the Presidency Council Council OC andthePresidency ibya hasmeanwhile threat- s a downward trajectory. The appear oncemoretobeon the year, earlyin fter abriefsurge OC istargeting forAugust, OC tomarket oilfromthe OR), haspublishedalist of hu N OC) again declared force OC) againdeclaredforce t I t is unlikely that all the t isunlikely thatallthe

W in afa fieldisalsoshutin. L H ibya’s fortunes ouse ofRepre M arch when the arch whenthe N S ational Oil ational Oil S irte] basin. N irte basin. irte basin. C-115 and and C-115 - - ç ç -

s W the Alg ties ofoilandgas”would“migrateto field wouldmean“immensequanti basin, soacomplete shutdown ofthe both ofwhichareintheGhadames field islinked to the AlrarfieldinAlgeria, to astatement by an estimated $9.8mn aday, according has crudecapacity ofabout85,000-b/d. which hasnot produced fortwoyears, year thatitisclose toarestart. Thefield, repeated announcementssincelate last southwest, whichremainsshutindespite (Elephant) oilfield( and Repsol, Austria’s O consortium, whichgroups rara blocksareoperatedby theAkakus by theendofmonth.The overall nationaloutputto800,000 b/d (with gainstargeted from from N tors atAl-Riyaniya( SOURCE: SNAM-RETEGAS, MEES. *ALL EXPORTS ARETO ITALY VIATHEENI-OPERATED GREENSTREAM PIPELINE.SUPPLIESCOMEFROMENI’S WAFA ANDBAHR ESSALAMFIELDS. libyan age facilitiesarefull,saidage and willceasecompletely oncestor 4,000 b/d fromcapacityof10,400 b/d into storage, butoutputhasfallenby around 221,000 b/d beforetheoutage. 1,000 till suffering the outage oftheEl till sufferingtheoutage 100 200 300 400 500 600 700 800 900 … OC had planned to increase output OC hadplannedtoincreaseoutput afa field( L Crude production is currently going Crude productioniscurrentlygoing The fieldshadbeenproducing as 0 N osses from an ongoing outage at the atthe outage osses fromanongoing 909 S

orway’s

gas is harara to270,000 b/d inApril erian side,” accordingto 2008 850

Wafa

2009 exports 874 N

C-169A) arecostingC-169A) 2010 215 S

tatoil alongside 2011 596

N (

2012 mn M 528 OC on 10 April. The OC on10April.The M N V,

2013 cfd 630 C-174) inthe EE F 2014 688 rance’ ) N S *: N , 31 S 2015 OC. Eniis 464 Vol C-186) and and C-186) pain’s

S 2016 M ha s Total u N N mes arch). arch). - OC. L OC. F ibya eel - -

contin J

an ç 2017 u e

to W M W power station. Operatedby pipeline between thefieldandRuwais & Gas, the Gas andcondensate outputfromthe 110mn cfdforthe28-30 (see chart).Thiswas anincreaseon a similarlevel intheearlydays of April from Rete reportedreceipt of183mncfd pipeline, alsooperatedby Eni. the 8bcm/year-capacity Greenstream power supplyandexportsto atthefieldhashitbothoutage domestic gas and18,000 b/d ofcondensate. The gas-condensate discoveries onarea b/d. Eniannouncedtwo important and condensate outputofabout25,000 gas productioncapacityof950mn cfd of crudeinlate N the Bourifield,both ofwhicharealsoon of theBahrEssalam fieldandsouthof spudded thewell.Area announced on4January thatEnihad operated by disco ment ofanewoffshoregas/condensate for EniinAprilwithan more than800mncfdinmid-January. in 20 400-500mn cfdinpreviousweeksand riod, butcomparespoorlytoreceipts of

flo C-41. Bouriwas producing41,000C-41. b/d afa hascapacityofabout460mncfd afa fieldhasbeenshutinsince26 arch whenprotestors blocked agas I There was at least some good news There was atleast news somegood talian gasgridoperator u 15 ( very oncontract area nder L ibya on31 feb M

in L EE

ibya subsidiaryof

M april S ellitah Oil&Gas , 1 M 4 August 2015). M arch; BahrEssalam has arch, continuing at arch, continuingat D N M is 5km north is5kmnorth OC announce mar arch pe D M S ( I nam- taly via taly via ellitah Oil N I . taly’s Eni, C-41), C-41), N ¶ OC OC -

D apr

-

*EXCLUDES BP SHARE OF ROSNEFT OUTPUT. SOURCE: BP, MEES. SOURCE: OUTPUT. ROSNEFT OF SHARE BP *EXCLUDES Total Algeria Egypt CFD) (mn Gas Total Algeria Egypt Iraq Dhabi Abu B/D) (‘000 Oil BP NETPROD D company andoneinwhichthe 2017 isset tobeadefiningyearforthe set tostart-up inthecomingmonths. gains frompre-existing projectsthatare to BP’s outputfigures, supplementing Abu eye-catching ofthesewas BP’s return to deals BPsignedinlate2016. Themost as highlightedby atriumvirate ofmajor to loosenthepursestrings somewhat, still beingcautious, theyarebeginning of low oilprices. Andwhile be centraltoBPs productiongains. R 2017 is set to be a major year. startups set for the second half of the year and BP’s return to Abu Dhabi’s onshore, decline rates at its Egyptian gas assets saw overall gas output fall. But with key BP had a mixed 2016 in Mena with liquids output edging up while high natural For Strong Year In Mena BP Poised year (see chart) thanks to it finalizing year (seechart)thankstoitfinalizing ought togrow around165,000 b/d this whichdeclined9,000and Algeria) b/d. contrast toits output grew16,000 b/d to197,000 b/d, in in theGulf( majority ofthiscamefromitsoperations to 20.4% ofthefirm’s globalshare.The b/d in2016 to246,000 b/d, boosting it dle East and REGIONAL I ecember ( mmediate Mena % Mena % Adco will provide animmediateboost Adco I BP’s n the core Gulf region, BP output n thecoreGulfregion,BPoutput D habi’s concessionin onshoreAdco M ena liquidsedg U M I down toweatherthestorm I cost-cutting forBPandother ecent yearshave allbeenabout 1,208 CTION* N 5,796 raq andAbu OCs astheyhave bunkered A 2016 20.4 EE 208 101 305 N orth Africa( dco 8.9 10 96 39 orth Africanassets (Egypt S , 23 O vs 2015 vs il D -155 B -1.0 -97 0.3 ecember 2016). 14 11 21 -6 -3 oost ed up7,000 5 D M habi) where habi) where I OCs are OCs are ena) will 1,194 5,951 M 2015 20.0 187 402 9.9 id 13 96 85 45 -

1,096 6,016 2014 ç 17.7 107 406 8.5 10 97 46 41 year, butits as thesecondlargest Gulfproducerthis BP supplant terms onitsreturn toAdco. Thiswillsee output las ate’s offshore.Allofthe101,000 b/d crude must decidewhether toremainintheemir the GulfisonceagaininAbu they won’t boost outputsignificantly. liquids gainsintheformofcondensate, BP’sAlgeria, mainfocusisongasoutput. off thetablein2017. major liquidsgainslooktobelargely Total andExxon year, butitlooksset toremainbehindboth Gulf outputwillriseconsiderablythis output hadbeen123,000 b/d. Thefirm’s the previoussystem, BP’s shareof2015 b/d to96,000 b/d last year. Butunder b/d Rumailafieldin price movements onliftingimbalances.” revised down “toexclude theimpactofoil producer intheGulf( up morethan$2bntorejoinAdco, this butafterstumping to remainatAdma, license. BPhasconsistently stated itsdesire will have toopt whether toremainatthe expires in2018 andBPother partners has a14.66% stake. concession TheAdma Adma concessionwhereBP the offshore W M ^MEES PROJECTION*KUWAIT/SAUDI NEUTRALZONE SOURCE: COMPANY REPORTS, MEESCALCULATIONS. BP G 100 200 300 400 500 600 0 EE hile this holds the prospect of marginal hile thisholdstheprospectofmarginal Beyond 2017 thekey issuefacingBPin BP’s shareofoutputfromthe1.45mn 2010 2011 2012 2013 2014 2015 2016 U 190 308 334 478 LF LIQ S 94 had expected BP to challenge Total hadexpectedBPtochallenge t yearinAbu U IDS PROD I S raq outputfigureshave since hell as the third largest oil hell asthethirdlargest oil 240 317 344 567 88 M obil. U I I CTION SETTO SOAR IN2017 raq grewfrom85,000 n both Egypt and M D I EE n habi came from habi camefrom N 255 311 356 548 86 S orth Africa, orth Africa, , 2 D 4 habi, as it habi, asit ( 78,000 B/DFOR 2014 M arch). arch). 270 324 386 545 84 - ) ( ISCHEVRON’S ONLY PRODUCINGMENAASSET. 000’ B/DNET output (A bined entitywillhave around1.4mn b/d to befinalizedlatethisyear. Thecom key offshoreconcessionZadcoisslated withtheother ofAdma planned merger is likely toprove similarlyexpensive. Continued on–p12 Qatar’s vast gasreserves ( Qatar. Exxon almost 600mncfdofwhichcamefrom 795mn cfdinthe still seeitbehindTotal which produced BP’s currentglobalproduction.Thiswill push outputuptowards 700mncfd,10%of be producingforthefullyearandcould nounced in2018 whentheseprojectswill output. Buttheimpactwillbemorepro by volume andasashareofBP’s global this yearoughttopushoutputupboth noticeable fallfrom9.9% in2015. 8.9% itwas a remainsinthisrange output inrecentyears, andwhile2016’s has provided 9-10% ofBP’s globalgas gas developments. The focus thisyearisset tobeongreenfield ment forBP, butthefirm’s primary 143 192 264 381 78 W The issue is further complicated as the The issueisfurthercomplicatedasthe As for2017, anumberofmajorstart-ups The return to Adco isabigdevelopThe return toAdco a v e O ) f dma isaround790,000 b/d). G 181 270 351 398 27 as M S obil’ t M art ena regionlas s sizeable exposure to s sizeableexposureto

u 197 384 274 353 M ps 0 M ena region

EE S ,7 April) 2017^ t year, 363 280 400 370 5 M Ch

BP T E Sh ena - - e o xxon v tal ell

- ron

ç

* 11 ©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 www.mees.com Reproducing MEES Is Strictly Prohibited ππcorporate 12

©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 COREGIONAL

Reproducing MEES Is Strictly Prohibited corporate www.mees.com U

ππ NTRY OCCO MO r Oman OilCompany (OOC)has40%. a 60%operatingstake, whilestate-firm statements aboutthefieldwhereit has cline ratesmeanthefirmneedstorunjust ( las tive yearsanddeclinedastaggering 24% country hasfallenforthelast fourconsecu needed. BP’s net gasproductioninthe tobeinEgypt, are going andtheyaremuch slight uptick inBP’s liquidsproduction. b/d grosscondensatea output,affording Phase 1isalsoslatedtoprovide 25,000 field willbeproducingforthefullyear. primary boost willbefeltin2018 asthe BP’s gasoutputfiguresthisyear, butthe K 2020. ThelicenseareaofBlock61inwhich boost gasproductionto1.5bncfdaround to gainfinalapproval, butisexpected to ( commissioning asecondphaselast year towards thepartnersmoving towards expected andthisdoubtless contributed been moreproductive thanBPinitially I F BP’s AnnualReport,released6April. complete on31 the endofyear. Phase1was 92.5% K tion last yearcomingfromtheemirate. its rivalswithallof3.17bn cfdproduc means itiscomfortablyoutinfrontof Continued from–p11 ber asapreludetoPhase2approval. to bringthe1bncfdfirs ing upthisyearinEgypt, BPisplanning M M the s N Pallonji ( firms with China’s ChintGroup and ence in alongside theCOP22climateconfer projects.offered forincreasinglylarger tariffs: thelowest cost electricityisbeing project of scaleareabigfactorinPV and countryspecificfactors.” Economies such asthetermsofcontractandlocation “taking intoaccountequalizingfactors the most competitive awarded worldwide oune anda20 will alsoincludean80 part of M S M the edg power plantatOuarzazate voltaic (PV) nitial gasratesfromwellsatthefieldhave ull 1bncfdoutputisexpectedin20 hazzan tightgasfieldonlinetowards hazzan lieswas extended in tarted buildingthe audi private developer Acwa Poweraudi privatedeveloper Acwa has oor PV1 –expectedtocost oor PV1 $220mn t yearfrom402mncfdtojust 305mncfd oroccan orocco EE EE K BP hasbeenconsistently bullishin But thebiggest gasoutputgainsin2017 Along withmajorgasprojectss Acwa was awarded the Acwa says the Acwa M hazzan will give a slight increase to hazzan willgive aslightincreaseto S S S oroccan-occupied , 7April).Ex , 19 terling & M e ofthe M . The70 M orocco’ orocco las F EE ebruary 20 MW S S D S , 25 ahara desert in southern ahara desertinsouthern olar W ecember according to ecember accordingto s N MW N plant at Boujdour in plantatBoujdourin oor PV1 tariff is one of tariffisoneof oor PV1 ilson and tremely highnaturalde N oor PV1 project, which project,which oor PV1 t year, inpartnership N ovember 2016). capacity project is capacityprojectis oor-4 solarphoto t phaseofOman’s MW 16). Phase2hasyet Sh

W N plantat es ines oor PV1 project project oor PV1 S tern N hapoorji hapoorji I ovem ndian ndian A S tart s ahara. ahara. L 18. - - C aay - osts - - - - - Tu EGYPT D M projects arenow beginningtocomeonline. to s ing fields. Given thehigh naturaldecline continued development ofalready-produc to offset naturaldeclinerates–alongside 2017, theyshouldbemorethansufficient won’t berealizeduntilthesecondhalfof 2.7bn cfdfrom2019 ( Egypt’s gasrenaissance. Zohrisset for development, theother key elementof rising to15%)inEni’s key 24 tcfZohr output laterthisyear( June, rampingupto600mncfdgross output and200mncfdisplannedfor (BP 82.75%, $12bn, 5tcf are still inthepipeline.TheBP-operated according toBP’s report.Butthebiggains 2017, lessthan18monthsafterstartup gas and7,000 b/d condensate inJanuary Output herehitplateaulevels of875mncfd 25%) intheshallow offshore SOURCE: JODI,EGPC,BP, ENI,GIIGNL,MEESESTIMATES &CALCULATIONS. **CURRENTLY CONTRACTED CARGOESONLY, FURTHER VOLUMES LIKELY TO BESECUREDFOR 2017AND2018.^BASED ONCOMPANY FORECASTS. *ACTUAL OUTPUTTO 2016,ESTIMATE FROM2017. INCLUDESINCREMENTAL GAINSAT CURRENTLY-OPERATING PROJECTS BUTEXCLUDES ZOHR, WND. 0 1 2 3 4 5 6 7 tariff of of Acwa’s levelized electricity pledged of April2018 –was securedonthebasis to buildandbecompleted by theend Japan’s for solarelectricityiscurrentlyheldby offer ofU D cord holderforthe800 asre dar thentemporarilyreplacedAcwa park last year. 200 partnership with for atime,having bidU world-beating low electricitycost. world recordsizedprojecttosecurea had originallytenderedfora350 be builtforAbu S project, butw (U mble ecember 2017 startup, rampingupto olar, whichoffered adi ubai’s solarparkwithanelectricity tariff H Acwa has recently won a number of hasrecentlywonanumberof Acwa didholdthelow cost record Acwa PV S F Although many ofthesegasoutputgains BP hasalsobought10%(possibly tand still, butluckilyforBPanumber of 2011 201220132014201520162017201820192020 5.93 5.885.454.734.314.063.603.192.822.50 ¢2.42/k MW irst upwas the o ’S GAS BALANCE W wever, theworldrecordlow cost es M MD secondphaseof S t block split (with Eni 75%, BP t blocksplit(withEni75%,BP arubeni andChina’s Jinko ¢2.99/k W W 0.46/k D es as persuaded to go for a fora as persuadedtogo ea 17.25%) hasbeguntest h) fora1.18G H t D o N wever, Abu S habi’s Adwea Adwea. W W ile pain’s T N ( BN CFD D h (U h ( M oroos fieldonthe Abu D M h0.089/k EE S M MW elta gas project elta gasproject EE ¢5.85/k S D EE S ¢4.797/k ) SK W ubai’s solar : , 3 S third phase of thirdphaseof bp N , 31 S D PV plant to plantto PV to win the towinthe , 3 M ile

a habi’s W

arch). arch). M W major M MW D h h arch). arch). h in h in arch). elta. elta. W 0.41 0.791.08 - M h).

contrib as - - - u tor rates I S rian outputoughttobehigherstill. second halfoftheyear, 2017’s net Alge with many ofthesegainscominginthe 21mn cfdtohit208mnlast year, and (BP 45.89%) projects. Outputgrew 2018 (seechartand country’s 2017-18 financialyearin June production to5.85bn cfdby theendof to Egypt asitplanstoboost Egyptian gas BP’S NETMENAGAS O E 100 200 300 400 500 600 potential ( PV,offers forregionalsolar the they dorepresentatrend. expected costs may prove tobehigher, bids may not materializeandsomeofthe says that“whilesomeoftherecentlow win the60.3 Jordanian recordofU low tarifffor Jordan ofJ Amman inJordan, having bidarecord 61.3 aggressive pricing. projectsthrough smaller regionalPV financing limitthe and difficultiesinsecuringaffordable barriers, weakgridinfrastructure be built80kmnorthwest ofAmman. (U average pricesforelectricityfromPV.” these low costs cannot beconsideredas M M gypt n onatrach and 0 edium- arket Reportfor2016 says market D I S S I

EA renewables chief Paulo to alah (BP33.15%) and ¢5.90/k D 6.02 0.20 MW n Algeria, BP is partnered with BPispartneredwith n Algeria, espite theserecentrecordlow price A , these projects are of vital importance , theseprojectsareofvitalimportance emand 2012 2013201420152016 470 444 406 402 305

120 gas lgeria Rishaplant360kmeast of Term Renewable Energy

o M u W 0.75 1.732.70 6.27 0.08 0.80 MW tp EE h). Thisbeatitsown 117 u N S t orway’s

, 4 M reco U M I afraq PV project, to project,to afraq PV M TP N 0.06 6.52 t is building the t isbuildingthe 1.20 ena region’ ovember 2016). U EE v 107 S T (MNCFD) ery ¢6.14/k D S S I 0.042/k tatoil at the tatoil atthe , 10 H n Amenas n Amenas 0.03 6.78 o 1.20 wever, F 187 F W ebruary). I rankl s solar s solar EA’s SOURCE: BP, MEES. h to h to W I LNG P Z mports W o rod ND h ¶ h h r ^ ^ u

- 208 ction ** * figures fromthe ferred totheP share listing ofAramcowillbetrans process, garneredconsiderablecachet. on theinternationalstage, andinthe to carve outitsown investment strategy in late-2018. Butithasalreadystarted the plannedexecution ofAramco’s due tothecentralroleitisset toplay in fund hasbeenthrust intothelimelight kingdom. Qatar I ment Authority ($792bn), the SWF considerably smallerthanother Gulf currently stand at$183bn. I 13th largest fundintheworld by the double thisover just fouryears. the government planstomorethan were worth istry estimate thatnon-oilrevenues lion ($266bn)by 2030( S it isseekingtoboost non-oilrevenue to and onethatlooksunfeasible. kingdom’s dependence onoilby 2020. 2016 withthestated ofendingthe goal 2030’, thiswas unveiled on25April transformation plan,known as‘Vision strategy iscentralto P revenue forthestate.to generate econom ing internallytobuildupthenon-oil serve both adevelopmental role,invest from itscurrent5%to50%by 2020. s key stakes today arein proportion ofitsforeigninvestments chart) �thefundplanstoincrease S ity ofP is domestic-heavy –thevast major ing tothe the world’s largest at$922bn accord Government Pension more thantwicethesizeof will make P I trillion) by 2030( of raising itscapitalfromcurrentlevel T Saudi Arabia’s PIF’s ChangingStrategy Shifting Sands: nvestment Authority ($592bn) andthe nstitute whichestimates itstotal assets f –anditisabigifthisachieved, it SA R530bn ($141bn) by 2020andto audi majoritystate-owned firms(see IF S T The revenue generated from the 5% fromthe5% The revenue generated The P This isanextremely ambitioustask Going forward, P I W U R686bn ($183bn)to andtheoverhaul ofitsinvestment ndeed, therestructuring ofthe o putthisinperspective, thelatest DI ARABIA s suchastheA hile theP I IF nvestment Authority ($335bn). y, whilealsoinvesting globally IF ’ SWF S ince then,thesovereign wealth is currently ranked as the iscurrentlyranked asthe IF Arabia’ barely recognized outside the barely recognizedoutsidethe F his timeoneyearago S R199bn ($53bn), and R199bn ($53bn),and und (P theworld’s largest IF

IF I nstitute ( S , withthes ’ s current portfolio s currentportfolio audi M s Public bu EE IF IF S F audi’s economic D ) was a name ) was aname F is planned to isplannedto S und, currently M habi inance S , 8April20 R7trillion ($2 R7trillion ($2 SWFI EE I tated goal of of tated goal N I t isthereby nvestment I S orway’s nvest , 29April). K I n so doing, n sodoing, M ). ). uw SWF S in S - audi audi ait ait 16). 16). I - R1 tril - - PO PO - SWF ,

-

- focus ofthetripw lis seek broadcooperationincross- will bethemajorityin ing investing intheAramco awul, the est growing importersof countries thatareamongtheworld’s fast M and month-long tourofAsiain sector andcurbunemployment. These wouldhelpdev ture isacriticalplankoftheVision2030. expand thekingdom’s digitalinfrastruc and jobsforyoung technology thatcanprovide training improving thekingdom’s techsector. F Valley andinitialedsomedealswith bin D Qatar isalsointalkstoinvest inthefund. negotiations toinvest $15bnaswell and years. Abu $45bnoverhaving pledged the next five $25bn from intheU managed S the next decadeaccordingto investor over inthetechnologysector” a $100bnfundthatwillbe“thebigg national telecomsconglomerate,tocreate a dealwith will joinUber’s board.( managing directorYasir al-Rumayyan approximately 5%ofUberandthefund’s made inaprivatecompany. P marking thelargest singleinvestment ever was investing $3.5bn inthetaxiappUber, D I energy company –the $814bn China with China.China’s with $65bnof S companies and signed between bigJapanese private sizeable technologyin ment strategy andhasalreadymade time inexecuting abullishnewinvest H including theupcomingAramco Japan Exchange GroupandtheTad ing investment opportunitiesin nvestment Corp. –isalsoconsider on, audi Japan Vision2030forum,along acebook and eputy Crown Prince uring the o alaysia, ting and product development. ting andproductdevelopment. wever, theP Creating newindustries rooted in The architectofVision2030, Then inOctober2016, theP Around 20 agreements were also Around 20agreementswerealso A This S I S n June 2016, theP M audi’s S alman, hasalsovisited M oftBank’s founderandchairman. arch this year in which he visited arch thisyearinwhichhevisited oU w S oftBank Vision S I K audi stock exchange, to D ndonesia, Japan andChina- S S S ing as inked between the oftBank, theJapanese multi habi’s audi delegation to China, audi delegationto China, oftBank, while M M IF S S oUs thatweresigned icrosoft aimed at icrosoft aimedat audi firms at the audi firmsatthe alman undertook a alman undertooka K haswasted little as aimedatpromot SWF S and seeded with andseededwith SWF audis and help to audis andhelpto elop the private elop theprivate vestor inthefund, vestments. IF M M

M uhammad uhammad announced it announcedit F S and largest andlargest EE audi oil. A large audi oil.Alarge und willbe ubadala is in ubadala isin F S I ebruary S S PO. M ilicon ilicon IF , 20 audi’s P IF asayoshi willown S I signed signed audi, audi, M PO. - est - ay).

-

IF - -

- - to China. higher demand,andfallingdomestic pro imports. Economicgrowth hasspurred China isgrowing morereliantoncrude spot inthefirst twomonthsof2017. to 1.02mn b/d), buthasregainedtop 1.05mnRussia edgingitout(by b/d was knocked offitsperchin2016, with and by somemargininrecentyears. number onesupplierofoiltoChina, S 340 Chinese mark tions. Aramcohasa25%stake in Aramco have strong operationalconnec SOURCE: BLOOMBERG, SWFI, FT, MEES. *AS OF12APRIL.UBERISPRIVATELY OWNED, VALUE ISESTIMATED. SA ing suppliesof cooperation inthefieldofenergy, includ expressing theirdesiretofurtherboost and Beijingissuedajointstatement Continued on– p14 M up over wranglingbetween geopolitical be asupplier. Thepipelinehasbeenheld M a pipelinelinkingitto The refinerywillreceive crudethrough in China’s southwestern Yunnan province. C in negotiations withChinesestate firm growth, butfarbelow 2015’s 740,000 b/d. Aramco onthe has 37.5% intwodownstream JVs with F ports. The duction hasexacerbatedtheneedforim opec wouldinvest inthe that hehopedChineserefiner Aramco’s CEOAmin 2 no published on27 nies accordingtoaBloombergreport ot A amba linma 40,000 b/d refineryinthesoutheastern ujian pro Sh N h yanmar andChina,buttheparties yanmar and U w ongoing betweenw ongoing thetwocompa R er S As theworld’s biggest energyuser, At theendofvisittoChina,Riyadh Aramco is also at an advanced stage Aramco isalsoatanadvancedstage PC forequityina260,000 b/d refinery DI ARABIA’S PIF:KEYSTAKES ipping ,000 b/d in2017, inlinewithlast year’s iyad audi Arabiaiskeen toboost oilsales N

F ( B implied ational inancial ank B

ank ( 0.9 I 74.0

( vince. t has traditionally been the t hastraditionallybeenthe I 0.6 )

EA projectsdemandtogrow )

( 1.9 )

( 2.6 et ( ) S PIF Assets S S ) audi Arabia is angling to audi Arabiaisanglingto audi oilforthegrowing M audi Red Uber 3.5 S $183Bn M Total inopec, meanwhile, arch. EE S *

a S N 9.26.5 u abic S S asser told officials asser toldofficials di ittwe portin , 2 S NCB A I inopec and inopec and PO. Talks are rabian S 4 25.8 ea coast. ( M $BN 58.5 arch). M ) ining S T S inopec’s elecom a S u in I

di - t t

- - - - - 13 ©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 www.mees.com Reproducing MEES Is Strictly Prohibited ^^economics & finance 14

©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 COSA U Reproducing MEES Is Strictly Prohibited economics & finance www.mees.com U DI ARABIA ^^ NTRY crease “ sides expressedtheiragreementonthe des to le its dev countries tor its dossierof50possible U 2017, theTrumpadministration published man ing createjobsinalocalindustry. Today, contracts shouldbeprocuredlocally, help forward, 50%ofdefense that,going goal hope toreduceimportsinsuchsectors.” oping a might alsobeakey development. sector. Otherentertainmentandservices develop in in ment fundswants tomake longterm develop adomestic defenseindustry. is alsolookingtotheU spending onrecreationto6%by 2020. industry andaimstodoublehousehold is relaxingtherulesonitsentertainment its first attractions inthekingdom. buying astake inU. in change coincides withtheundergoing dent TrumpisleadingintheU. thatPresi importance ofthegreatchange ties toenterthe American companieswiththeopportuni to exceptionally providing andlargely United included huge two countrieshave beendiscussed. They ing withU gave thefollowing statement onthemeet has muchstronger tiestoU Crown Prince with theU the youngprincetoboost hisprofile This was apricelessopportunityfor numerous ited theU technology transferandco-investment.” year. “TheP and RoubiniGlobalEconomicslast betweenthe backofmerger 4CA at 4CA Ziemba, ones like Japan, announced itsopeningon10April. Continued from–p13 projects, totaling $137.5bn, with50%of to supportlocalprocurement. ofthecontractvaluehas that apercentage M S vestments insectorsthattheymight S trengt “ The Vision2030hasset anambitious “Amusement parkscould beonesuch “The P As partofitsVision2030plan,Riyadh A senioradvisertoPrince The P I any oftheeconomicfilesbetween the tination for S audi Arabia through ‘Vision 2030.’”audi Arabiathrough‘Vision n I t theTexas-based company open y defensecontractsalreadystipulate ix wouldanticipatetheP M elopment plan - this is part of the elopment plan-thisispartofthe S S F S S T-RGE, theentityformedon arch, Prince audi Arabia’s closetieswithAsian lags afterstarting negotiations M tates of America, in addition tates ofAmerica,inaddition audi defenseindustry ispartof IF , especially big oil importing , especiallybigoilimporting S IF S S S M anaging h –alongfavored investment is currently considering iscurrentlyconsidering President administration. audi Arabia,” says IF ening like other sovereign develop oUs werealsosigned. M willalsohave interest in S S audi investments inthe S K uhammad bin audi Arabia - where audi Arabia-where audi market. Thetwo orea andChina, E S D . themeparkopera astern M irector of Research irector ofResearch D S uhammad vis

to help it further tohelpitfurther onald Trump: onald Trump: S S infrastructure IF H T officials. M M ies is rival, is rival, willin I S N n uhammad , which s Ziemba. s Ziemba. ayif, ayif, F D ” Rachel ” Rachel

ebruary evel S - - T T I -

- ç t t - - - - -

are lik in thefirs g interes uity tosomestrategic shares. Theyare move fromU Arabia’s holdingsofU private partnerships,” says opportunities includingsomepublic in theU are boundtopro ment. Thesearen’t yet officialpolicy, but the projectstobefundedby private invest has a greater geographical diversification, diversification, has agreatergeographical P enue.” ExpandinginJordan ispartofthe will bechosento“ensurelong-term rev mayyan said theJordanian investments will have aninitialcapitalof$10m. banks. Thecompany operating thefund remaining 10%heldby 15Jordanian P energy, tourismandinfrastructure. investment ofupto$3bninrealestate, K the sidelinesofastate visittoAmmanby S and on28 vestment and show mutualinterest in es arevyingfortheAramco is another indicationthatmajorexchang support fortheVision2030plan. drawn upplanswithRiyadhtoboost D science, educationandinfrastructure. investment intheU the directorofP component oftheAramcoflotation. L minister, inaclearattempt tosecurea F Xavier Rolet. Theymet with L brok intheinterim ably findingadvantage other leadingglobalpowers areprob and support theVision2030agenda, slow tofind ways tocollaborateand the Obamaadministration, hasbeen D tute in S ye tors. Thatplanisnot cleartothepublic greater understanding andsoon.” resa it wouldfindinteres tion hadaclearinfrastructure plan, overnments thataresavvy enoughto audi-Jordanian cholar attheArabGulf alih, Aramco’ IF IF ondon listing aspartoftheinternational ondon l ing owning epartment, underTrumpand t,” ondon I “ “ P The fundenvisages long-term “The recentvisitofP They alsomet withYasir al-Rumayyan, “ “ The P ’ willown 90%ofthefundwith Also problematicisthatthe ndeed, theU I I I s strategy to“develop aportfoliothat M IF ering tradeandinvestment deals.” K t willalsolooktodiversify expectthattheP thinkiftheTrumpadministra S ely toberewarded,” says alman ( aren Y ay madeatwo-day visittoRiyadh W managingdirectorYasir al-Ru ted inboosting returns, gaining S S IF ashington tells inmoredirectinvestment t week of April, along with the t weekofApril,alongwiththe S tock Exchange chiefexecutive

M listing treet announcedthatithad is also looking closer to home isalsolookingclosertohome arch, itestablished thenew oung, S FDI M Treasury’s publiceq s CEOand EE ve attractive totheP K I nvestment opportunitiesin Prime ? S S K

IF ted enior Resident enior Resident , 31 with a focus on withafocuson SD , todiscussin IF S M M S S M assets �ie willinvest audi inves S audi outward in M tates

arch 2017). arch 2017). audi’s energy EE M M I inister The K PO and those PO andthose ay to Riyadh ay toRiyadh s Ziemba. s Ziemba. F S halid al- und on . I M S nsti S audi audi s Young. tate tate S audi audi - - ward ward S - - - audi audi IF -

- . - ç

- - - N contract tohelpset upandoperatethe fies sourcesofincome,” hetoldReuters. trying tocleanupthebooksinorder Gulf Aramco ag tion, intendedtosupportgovernment might beparked indifferent vehicles. projects suchasschoolsandhospitalsthat from adiverse portfolioofnon-energy its coreoiloperationsbeingseparated untangled fromthegovernment’s, and stake inthecompany inthefuture.” if thegovernment decidestosellalarger increase inthevalueoffirm,especially tax ratewillnot resultinaproportionate stream ofcashflows. by applyingahigherdiscountratetothe reduce theshares’valuationaccordingly unsustainability ofalow taxregime,will which noted: “ the firm’s valuationsignificantly. have suggested thiswillnot infactboost cut from85%to50%,someanalysts to make surethey’re presentable.” ency. tors willlikely demandmoretranspar Aramco willbealisted entity, inves parent atfirst,” investors, theywon’t needtobeastrans capital locked upwithenoughcornerstone the lis ate enoughdemandthentheycanpushup I and sizethattheP bearingonthefutureshape huge from local,state entities,” says sparking internalinvestment andgrowth is differentfromitstraditionalroleas investments forthegovernment. This revenue fromoutward and generating mission, fordiversification, jobcreation funds like theChina holdings orAY practice. aspartofimprovingtransparency best investors andmay choose toincrease one ofthegroupsforeignsovereign holdings tional reportingrequirementson foreign andfollowincrease transparency interna strategy andmodusoperandion15 be hos ability. Cognisant ofthis, Riyadhwill levels of its newrole–key questions persist about concerns abouthow theP structure projects. S is risk-adjusted acrosssectorsanddiversi dent ofthe tion, aswelllocal PO tofoster demand,becauseifthey cre tudies publishedareportin ational Project encies indelivering complexinfra “The P “But o Ongoing preparations for the preparationsforthe Ongoing Aramco’s financesarecurrentlybeing The Oxford Regarding Aramco’s taxratebeing “ “Going forward, theP I n I SWF think Aramco is going to encourage toencourage thinkAramcoisgoing S F ting price.Andalsoiftheyhave this ting anevent tooutline theP o ebruary I I S ,” says S PO willobviously have a thinkthenext step willbe ver time,andgiven that audi transparency andaccount audi transparency investors toparticipateinthe IF till, it is unlikely to report its till, itisunlikely toreportits SWF now hasanimportant I M , theU M I nvestors, recognizingthe M nstitute forEnergy

I like M s Ziemba.“ nstitute, tells ichael IF H anagement Organisaanagement S I will take. willtake. o H audi investors and S nvestment Corpora S wever, thereare A ’ Bechtelwona ence, lo M M IF IF aduell, Presi A hasdone.” is likely to islikely to will manage willmanage I M t may join t may join wering the wering the M M arch arch s Young. EE - IF M

- S ay. ’

- . s s - ¶ ------CRUDE OFFICIAL SELLING PRICES ($/B) SAUDI CUTS MAY LIGHT CRUDE PRICES TO ASIA selected data

Apr16 May16 Jun16 Jul16 Aug16 Sep16 Oct16 Nov16 Dec16 Jan17 Feb17 Mar17 Apr17 May17 Jun17

SA UDI ARABIA: to Asia (FOB Ras Tanura, vs Oman/Dubai average)

Arab Super Light (>40°) +2.30 +2.55 +2.95 +3.95 +4.05 +3.35 +2.55 +3.45 +3.40 +4.55 +3.05 +3.45 +4.45 +3.95 +3.75

Arab Extra Light (36-40°) +1.30 +1.65 +1.80 +2.60 +2.60 +1.70 +0.10 +1.00 +0.95 +1.85 +0.65 +1.10 +1.70 +0.95 +0.60

Arab Light (32-36°) -1.00 -0.75 -0.85 +0.25 +0.60 +0.20 -1.10 -0.20 -0.45 +0.45 -0.75 -0.15 +0.15 -0.15 -0.45

Arab Medium (29-32°) -2.40 -2.40 -2.40 -1.30 -1.00 -1.20 -2.20 -1.25 -1.35 -0.40 -1.40 -0.90 -0.55 -0.85 -0.85

Arab Heavy (<29°) -3.05 -3.30 -3.65 -2.75 -2.65 -2.80 -3.50 -2.80 -3.30 -2.70 -3.30 -2.80 -2.60 -2.60 -2.60

to US (FOB Ras Tanura, vs ASCI)

Arab Extra Light (36-40°) +2.15 +1.85 +2.60 +2.40 +2.10 +1.70 +1.30 +1.60 +1.80 +1.80 +1.90 +2.10 +2.40 +2.10 +2.70

Arab Light (32-36°) +0.15 -0.05 +0.35 +0.35 +0.55 +0.45 +0.25 +0.45 +0.35 +0.35 +0.05 +0.25 +0.40 +0.20 +0.50

Arab Medium (29-32°) -1.25 -1.45 -1.05 -1.25 -1.05 -1.15 -1.15 -0.95 -1.05 -1.05 -1.15 -1.15 -0.90 -1.00 -0.70

Arab Heavy (<29°) -1.75 -1.95 -1.55 -1.75 -1.55 -1.65 -1.65 -1.45 -1.85 -2.25 -2.35 -2.35 -2.20 -2.30 -2.00

delivered US Gulf (vs ASCI)

Arab Light (32-36°) +1.50 +1.30 +1.70 +1.70 +1.90 +1.80 +1.60 +1.80 +1.70 +1.70 +1.40 +1.60 +1.75 +1.55 +1.85

Arab Medium (29-32°) +0.10 -0.10 +0.30 +0.10 +0.30 +0.20 +0.20 +0.40 +0.30 +0.30 +0.20 +0.20 +0.45 +0.35 +0.65

Arab Heavy (<29°) -0.40 -0.60 -0.20 -0.40 -0.20 -0.30 -0.30 -0.10 -0.50 -0.90 -1.00 -1.00 -0.85 -0.95 -0.65

IRAN: to Asia (FOB Kharg Island, vs Oman/Dubai average) *SEPARATE PRICE FOR NOROOZ NOT PUBLISHED FROM JUNE 2016. BLENDED WITH SOROUSH.

Iranian Light (33-34°) -0.50 -0.60 +0.50 +0.85 +0.45 -0.85 +0.00 -0.25 +0.65 -0.55 +0.05 +0.35 +0.10 -0.20

vs Saudi Arab Light +0.25 +0.25 +0.25 +0.25 +0.25 +0.25 +0.20 +0.20 +0.20 +0.20 +0.20 +0.20 +0.25 +0.25

Iranian Heavy (30-31°) -2.60 -2.60 -1.60 -1.25 -1.45 -2.45 -1.50 -1.60 -0.65 -1.69 -1.19 -0.84 -1.10 -1.10

vs Saudi Arab Medium -0.20 -0.20 -0.30 -0.25 -0.25 -0.25 -0.25 -0.25 -0.25 -0.29 -0.29 -0.29 -0.25 -0.25

Foroozan (31°) -2.43 -2.43 -1.40 -1.05 -1.25 -2.25 -1.30 -1.40 -0.45 -1.49 -0.99 -0.64 -0.90 -0.90

Soroosh (18.6°) (vs Iranian Heavy) -5.65 -5.65 -5.60 -5.55 -5.45 -5.45 -5.45 -5.35 -5.60 -5.56 -5.56 -5.91 -5.50 -5.50

Norooz (20.6°) (vs Iranian Heavy)* -5.65 -5.65 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

to Northwest Europe/South Africa (FOB Kharg Island, vs BWAVE)

Iranian Light (33-34°) -4.65 -4.60 -4.40 -4.75 -4.55 -4.30 -4.75 -5.20 -4.60 -4.30 -4.75 -3.50 -3.90 -4.30

Iranian Heavy (30.7°) -6.20 -6.45 -6.40 -6.85 -6.40 -5.80 -6.40 -6.70 -6.50 -6.00 -6.55 -5.40 -5.80 -6.15

Foroozan (31°) -6.00 -6.25 -6.20 -6.65 -6.20 -5.60 -6.20 -6.50 -6.30 -5.80 -6.35 -5.20 -5.60 -5.95

to Mediterranean (FOB Kharg Island, vs BWAVE)

Iranian Light (33-34°) -5.00 -5.05 -4.75 -4.85 -5.30 -4.70 -5.45 -5.55 -5.60 -5.10 -5.55 -4.55 -4.60 -5.25

Iranian Heavy (30-31°) -6.50 -6.85 -6.75 -7.05 -7.20 -6.25 -7.15 -7.15 -7.40 -6.90 -7.35 -6.40 -6.35 -7.00

Foroozan (31°) -6.30 -6.65 -6.55 -6.85 -7.00 -6.05 -6.95 -6.95 -7.20 -6.70 -7.12 -6.20 -6.15 -6.80

Soroosh (18.6°) -10.35 -10.95 -10.75 -11.20 -11.05 -9.65 -10.95 -11.15 -11.10 -10.70 -10.90 -9.90 -9.75 -10.25

Norooz (20.6°)* -10.35 -10.95 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

IRAQ: to Asia (vs Oman/Dubai average)

Basra Light (FOB) -2.60 -2.50 -1.40 -1.10 -1.30 -2.30 -1.40 -1.45 -0.45 -1.40 -0.90 -0.50 -0.75 -0.75

vs Saudi Arab Medium -0.20 -0.10 -0.10 -0.10 -0.10 -0.10 -0.15 -0.10 -0.05 +0.00 +0.00 +0.05 +0.10 +0.10

Basra Heavy (FOB) -6.55 -6.60 -5.70 -5.60 -5.75 -6.40 -5.70 -6.15 -5.45 -6.05 -5.50 -5.45 -5.45 -5.45

to Europe (vs Dated Brent)

Basra Light (FOB) -4.85 -5.00 -4.65 -4.85 -4.70 -3.95 -4.70 -4.90 -4.50 -4.05 -4.50 -3.70 -3.80 -4.20

Basra Heavy (FOB) -9.60 -9.75 -9.30 -9.45 -8.95 -7.95 -8.75 -9.15 -8.70 -8.00 -8.30 -7.55 -7.55 -7.95

Kirkuk (FOB Ceyhan) -4.55 -4.55 -4.45 -4.40 -4.30 -4.05 -4.85 -4.85 -4.80 -4.60 -4.85 -4.15 -4.20 -4.45

to US (vs ASCI)

Basra Light (FOB) -0.55 -0.35 -0.50 -0.50 -0.60 -0.60 -0.60 -0.60 -0.50 -0.60 -0.75 -0.40 -0.50 -0.30

Basra Heavy (FOB) -5.65 -5.60 -5.55 -5.45 -5.30 -5.00 -5.00 -4.90 -4.80 -4.70 -4.80 -4.45 -4.20 -4.00

Kirkuk (FOB Ceyhan) +0.90 +0.80 +0.80 +0.50 +0.50 +0.80 +0.50 +0.35 +0.35 +0.25 +0.25 +0.50 +0.40 +0.70

KWU AIT

Kuwait Export Blend (31º)

to Asia (FOB, vs Oman/Dubai) -2.85 -2.90 -1.80 -1.50 -1.70 -2.65 -1.75 -1.90 -1.00 -1.95 -1.40 -1.10 -1.35 -1.45

vs Saudi Arab Medium -0.45 -0.50 -0.50 -0.50 -0.50 -0.45 -0.50 -0.55 -0.60 -0.55 -0.50 -0.55 -0.50 -0.60

to Mediterranean (FOB, vs Dated Brent) -5.75 -5.75 -5.40 -5.70 -5.40 -5.10 -5.50 -5.60 -5.45 -4.85 -5.25 -4.90 -4.90 -5.30

to North West Europe (FOB, vs Dated Brent) -6.05 -6.10 -5.80 -6.15 -5.70 -5.15 -5.65 -6.00 -5.50 -4.95 -5.50 -5.00 -5.30 -5.60

FOB Sidi Kerir (vs Dated Brent) -5.40 -5.40 -5.15 -5.25 -5.75 -4.90 -5.30 -5.45 -5.45 -4.80 -5.20 -4.85 -4.80 -5.15

to US (FOB, vs Saudi Arab Medium) -0.45 -0.40 -0.40 -0.35 -0.30 -0.35 -0.35 -1.10

delivered US Gulf (vs Saudi AM delivered US Gulf) -0.45 -0.40 -0.40 -0.35 -0.30 -0.35 -0.35 +0.25

©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 15 Reproducing MEES Is Strictly Prohibited selected data benchmark crude prices ($/b)

12Apr 3-7Apr 27-31Mar Mar17 Feb17 Q1 2017 Q4 2016 Q3 2016 2017 (>12Apr) 2016 2015 2014

WTI 53.11 51.27 49.31 49.70 53.48 51.85 49.32 45.03 51.85 43.43 48.83 92.92

ICE Brent 55.86 54.36 52.06 52.54 56.00 54.57 51.06 47.20 54.62 45.13 53.59 99.44

DME Oman 54.65 52.85 51.05 51.46 54.95 53.30 48.68 44.23 53.33 42.00 51.20 96.95

ICE Dubai 54.55 53.13 50.96 51.44 55.12 53.41 48.73 44.20 53.44 42.09 51.37 96.97

OPEC Basket 53.67 51.59 49.45 50.32 53.37 51.95 47.52 43.00 51.99 40.76 49.51 96.30

JCC na na na na 55.25 na 47.05 46.22 na 41.86 55.03 105.17

AVERAGE SETTLEMENT PRICES FOR PERIOD IN QUESTION.

ICE Brent WTI DME Oman OPEC Basket 60

50

40

30 aug16 sep16 OCT16 NOV16 dec16 JAN17 feb17 mar17 apr17

ASIAN LNG PRICES ($/MN BTU): JAPAN SPOT PRICES FALL FROM 2-YEAR HIGH WITH END OF WINTER BUYING 18 Japan 2014 2015 2016 2017 16 S Korea

14 Janap (spot*)

12

10 China

8 8.80 7.99 6.98 7.35 6

4

2

0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr *PRICES FOR CARGOES ARRIVING IN THE GIVEN MONTH EXCEPT ‘apr17’ WHICH IS THE AVERAGE PRICE FOR CARGOES CONTRACTED IN February & march. SOURCE: JAPAN CUSTOMS, METI, KOREA CUSTOMS, CHINA CUSTOME. MEES CALCULATIONS.

MEES EDITORIAL STAFF

Publisher: D. r Saleh S Jallad [email protected] Editors: Melissa Hancock [email protected]

Managing Director: Fadi Aboualfa [email protected] Jamie Ingram [email protected]

Managing Editor: James Cockayne [email protected] D avid Knott [email protected]

Consultant: Walid Khadduri [email protected] Richard Nield [email protected]

Production: L edha Socratous [email protected] Fatima Sadouki [email protected]

Irene Stylianou [email protected] Peter Stevenson [email protected]

Advisor: Basim Itayim [email protected]

©Middle East Petroleum and Economic Publications (Cyprus) Ltd 14.April.2017 16 Reproducing MEES Is Strictly Prohibited