New base 828 special 12 april 2016

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NewBase 12 April 2016 - Issue No. 828 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE targets zero contribution from oil to GDP, minister says
Gulf News - Siddesh Suresh ?Mayenkar Senior Reporter
The contribution of oil to the UAE’s GDP (gross domestic product), which has been falling and
currently pegged at 30 per cent, will fall to 20 per cent by 2021, and is likely to fall to zero per cent
in the next 50 years, the country’s economy minister told delegates at an industry event on
Monday.
Countries in the Gulf Cooperation Council (GCC) derives most of the revenues from oil, prices of
which have fallen more than 60 per cent, and these countries have been taking steps to spruce up
its public finances to maintain its social and infrastructure spending.
This was the main one of the topics of discussion at the sixth edition of Annual Investment
Meeting, which was inaugurated by His Highness Shaikh Mohammad Bin Rashid Al Maktoum,
Vice-President and Prime Minister of the UAE and Ruler of Dubai.

“Our strategy at present is focused on building a knowledge based economy powered by various
sectors such as industrial transport, space, renewable energy and information technology,” UAE
Economy Minister, Sultan Bin Saeed Al Mansouri, told delegates.
The UAE aims to increase its contribution of foreign direct investment (FDI) to 5 per cent of the
country’s GDP over the next five years. The country was the second largest recipient in the West
Asia region.
The increased FDI pushed the UAE to number one regionally and 22nd globally.
The country also maintained its dominance in attracting the highest FDI in the GCC region, the
minister said.
The economic openness in policies along with the implementation of the right strategic plans by
the government towards diversifying the economy contributed to the development of various
sectors and fostered the business environment attractiveness to record levels, Al Mansouri said.
The IMF recently praised the fiscal policies adopted by the country; that enhanced its
competitiveness and made bank assets, owned by the local banking sectors, the largest of its kind
in the region, making the UAE the second largest economy in the region and 17th globally,
according to the World Economic Forum (WEF) indicators.
This UAE’s achievement was despite the world economy witnessing modest growth amid falling
oil prices and falling demand, and lack of confidence of consumers.
According to the latest estimates of the International Monetary Fund, the world economy is
anticipated to grow at 3.4 per cent in 2016 with the pick-up in global activity remaining gradual
especially in emerging markets and developing economies.
Meanwhile global FDI flows increased 36 per cent in 2015 to an estimated $1.7 trillion — the
highest since 2007 and the growth was largely driven by growth in FDI flows in European Union
and the United States, according to United Nations body.
This increase was largely due to cross border mergers and acquisitions with a limited contribution
from Greenfield investment projects.

Saudi Arabia to supply Egypt with 700,000 tonnes of petroleum
products a month. Reuters
Saudi Arabia is to provide Egypt with 700,000 tonnes of petroleum products a month under
a $23 billion deal over five years between Saudi Aramco and the Egyptian General
Petroleum Corp , an EGPC official said on Monday.
"The Saudi Fund for Development will pay Aramco for the petroleum products directly, and receive
in return the amount from Egypt in installments," the source told Reuters .
The deal is part of financial support for Egypt announced during a visit this month by Saudi
Arabia's King Salman.
It also highlights a change in strategy by Saudi Arabia to focus more on financial support for Egypt
that will also provide Saudi Arabia with a return on its investment. Egypt will get financing for the
products but will have to repay the money.
Saudi Arabia, along with other Gulf oil producers, has pumped billions of dollars, including grants,
into Egypt's flagging economy since the toppling of President Mohamed Mursi of the Muslim
Brotherhood in 2013 after mass protests against his rule.
Low oil prices have contributed to Saudi Arabia's change of approach. Under the 700,000-tonne
monthly supply deal, Saudi Aramco will provide Egypt with 400,000 tonnes of gas oil, 200,000
tonnes of benzene and 100,000 tonnes of Mazut, the source said. The financing for the petroleum
and petroleum products will have an interest rate of 2 percent and will be repaid over 15 years, the
source said.

Kuwait targets 3.2 MBD oil output at 43-year high
Bloomberg + Gulf News + NewBase
Kuwait Oil Company will soon offer contracts for offshore rigs and support services to drill its first
undersea wells as the Arabian Gulf nation tries to boost crude output to the highest level in more
than four decades.
Kuwait is targeting production of 3.165 million barrels a day later this year or in 2017, up from a
current 3 million barrels a day, Chief Executive Officer Jamal Jaafar said Monday at a conference
in Kuwait City.
He made his comments a day after fellow Organisation of Petroleum Exporting Countries member
Iraq reported a record level of production and less than a week before some of the biggest oil-
producing nations are to discuss freezing output to reduce a glut and shore up prices.

“We are trying to make use of the low cost of production in Kuwait,” said Jaafar, whose company
is the exploration and production arm of national energy group Kuwait Petroleum Corp.
Kuwait and Iraq are among members of the Opec that plan to meet with other major producers on
April 17 in Doha for talks about a freeze. Saudi Arabia, Russia, Venezuela and Qatar agreed in
February on a proposal to cap output at January levels, though Iran has refused to participate until
it restores production to pre-s anctions levels. Crude prices have tumbled more than 60 per cent
over the last two years.
Oil markets will be oversupplied throughout the first half of this year but will start to rebalance in
the third quarter, Jaafar said. Kuwait Oil is looking at six offshore areas to drill its first undersea
wells and plans soon to offer contracts for the work, he said, without specifying dates. Kuwait,
Opec’s fourth-largest member, hasn’t pumped an annual average of more than 3 million barrels a
day since 1973, data compiled by Bloomberg show.
Kuwait will also start a project this year with Royal Dutch Shell Plc to capture carbon dioxide at
oilfields and reinject it underground to produce more crude, he said. Kuwait Oil is tackling more
difficult crude formations to increase production capacity, and it’s testing the injection of chemicals
and polymers at fields in the northern part of the country to enhance recovery.
Crude output in Iraq, Opec’s second-biggest producer, reached a record 4.55 million barrels a day
last month from 4.46 million barrels in February, the country’s state-run Oil Marketing Co. said
Sunday in an emailed statement.
Production in southern Iraq, where most of the country’s biggest fields lie, will remain unchanged
this year amid cuts in investment, Ali Haddad Al Fares, head of the energy committee of the Basra
regional council, said Monday in an interview in Kuwait City. Iraq is targeting total output to reach
6 million barrels a day by 2020, with most of the increase to come from the Basra region, he said.

Iraq: Kuwait Energy signs export oil sales agreement for Block9
Source: Kuwait Energy
Kuwait Energy has announced the signing of the Iraq Block 9 Export Oil Sales Agreement.
The Export Oil Sales Agreement, signed between a consortium led by Kuwait Energy and
the State Oil Marketing Company (SOMO) – the Iraqi national company responsible for
marketing Iraq’s oil – puts in place the mechanism by which Kuwait Energy will be paid for
services in Block 9, Iraq.
The signing ceremony took place in SOMO’s Baghdad Head Quarters and was attended by
Majid Al-Hilfi representing SOMO, Sara Akbar, CEO, Kuwait Energy, Ibrahim Fathy, Assistant
Deputy CEO for Development and Reservoir Production Dept., Egyptian General Petroleum
Corporation and Asri Mousa, representing Dragon Oil Holdings from the partners side.

The Agreement with SOMO will enable allocation of crude cargoes to be sold in compensation
for the services the consortium is rendering in Block-9. Kuwait Energy is expected to be
allocated its first cargo of oil entitlement for Kuwait Energy’s working interest share from Faihaa-1
well covering the production of oil from October 2015 – March 2016.
'Today marks an important milestone in Kuwait Energy’s history and its Iraq operations in
particular, as this Agreement will facilitate receiving revenue from our Iraq operations after 5 years
of Kuwait Energy’s work and investment in Iraq,' said Sara Akbar.
'It wouldn’t have been possible if it wasn’t for the excellent relationship and cooperation between
the Consortium, Iraq’s Ministry of Oil and the South Oil Company, which maintained focus and
discipline allowing production startup from this important asset in one year from the discovery'.
In 2013, Kuwait Energy was awarded the Block 9 Exploration, Development & Production
Service Contract (EDPSC) in southern Iraq as operator and currently holds a 60% participating
interest.
First exploration well in Block 9 was spud in March 2014 which led to significant oil discoveries in
September and December of the same year. Oil production commenced from the Block in
October 2015, only a year after the first discovery was made.

Oman: PDO Awadrs India’s L&T contracts worth $370m
Oman Observer
L&T Hydrocarbon Engineering (LTHE), a wholly owned subsidiary of Indian engineering
conglomerate Larsen & Toubro Ltd (L&T), has bagged two orders valued approximately $370
million from Petroleum Development Oman LLC (PDO).
According to India media report, LTHE will be responsible for engineering, procurement &
construction (EPC) of the Saih Nihaydah Depletion Compression Phase 2 (SNDC2) and Kauther
Depletion Compression Phase 2 (KDC2) projects.
Petroleum Development Oman, the leading exploration and production company in Oman,
accounts for more than 70 per cent of the country’s crude-oil production and nearly all of its
natural-gas supply. PDO is owned by the Government of Oman (which has a 60 per cent interest),
Royal Dutch Shell (34 per cent), Total (4 per cent) and Partex (2 per cent).
Saih Nihaydah Field is located in the central Oman area. The field has been producing via the
Saih Nihaydah Gas Plant (SNGP) which was commissioned in 2005. Kauther Gas Plant (KGP) is
located approximately 120 km from Saih Rawl-CPP, Oman.
These projects are being implemented to overcome pressure depletion and maintain potential in
order to sustain production. LTHE has already executed three projects for PDO — the Lekhwair
Gas Field Development Project ($150 million); the Saih Rawl Depletion Compression Project ($
235 million), and the Yibal 3rd Stage Depletion Compression ($240 million).

Senegal: Cairn Energy announces positive well results offshore
Source: Cairn Energy
Cairn Energy has announced further exploration and appraisal success in its latest well in the
ongoing evaluation programme offshore Senegal. The BEL-1 well was targeting the Bellatrix
exploration prospect and appraising the northern extent of the SNE field discovered in 2014.
Based on the positive campaign results to date, the Joint Venture (JV) has agreed a fourth well
location, SNE-4, which will commence operations shortly.
BEL-1 Exploration Target:
• The main exploration objective zones are tight gas-bearing sandstones that are not of
productive reservoir quality
• Two good quality gas-bearing sand reservoirs (combined net thickness of 8 metres (m)) were
encountered between the Bellatrix main objective and deeper SNE appraisal objective
BEL-1 Appraisal Target:
• Confirms the extension of reservoirs in the northern area of the SNE field
• Good quality reservoir sands encountered within the Upper Reservoirs
• Good correlation and presence of the principal reservoir units between SNE-1, SNE-2, SNE-3
and BEL-1 over a distance of more than 9 kilometres (km)
• Gas-Oil and Oil-Water depths indicate an oil column of ~100m gross at BEL-1 similar to
SNE-1, SNE-1 and SNE-3
• 144m of continuous core taken across the entire oil reservoir interval with 100% recovery
• Multiple samples of gas, oil and water recovered to the surface
• Initial measurements show similar oil quality as seen in SNE-1, SNE-2 and SNE-3, with
higher oil density towards the base of the column
The BEL-1 well targeted a shallower ‘buried hill”
exploration play which is one of multiple
exploration play types that have been identified
across the block. The BEL-1 well exploration
results confirm the presence of shallower regionally
extensive reservoirs also encountered in the SNE-
3 well more than 9 km away. These well results,
along with the latest 3D seismic acquired in Q4
2015, will be incorporated into block wide
remapping to look at possible new plays and down-
dip oil potentially associated with the shallower
reservoirs.
In light of the success of the ongoing appraisal
programme, the JV has agreed that the Ocean Rig
Athena will now drill SNE-4, located 5km south-
east of the SNE-1 discovery well, to appraise the
eastern extent of the field and aiming to confirm the
nature of the upper reservoirs in the oil zone.

U.S. biodiesel and renewable diesel imports increase 61% in 2015
Source: U.S. Energy Information Administration, Petroleum Supply Monthly
After reaching its highest level to date in 2013, U.S. imports of biomass-based diesel fuel (both
biodiesel and renewable diesel) fell in 2014 amid uncertainty surrounding future Renewable Fuel
Standard (RFS) targets and the elimination of the biodiesel blender's tax credit. As higher targets
for biomass-based diesel were finalized in 2015, U.S. imports of biodiesel and renewable diesel
increased by 61% in 2015 to reach 538 million gallons.
The strongest drivers of the increase in U.S. biomass-based diesel demand since 2012 have been
increasing RFS targets and the biodiesel tax credit, which has lapsed and been reinstated several
times.
Biodiesel and renewable diesel qualify for the two major renewable fuel programs in the United
States: the RFS applied at the national level, and the Low Carbon Fuel Standard (LCFS) in
California. Biomass-based diesel fuels have additional advantages over other renewable fuels
because of their relatively high energy content and low carbon intensity, which allow them to
qualify for higher credit values in both renewable fuel programs.
Biodiesel and renewable diesel fuels are produced by refining vegetable oils or animal fats.
Biodiesel is blended with petroleum diesel up to 5% or 20% by volume (referred to as B5 and B20,
respectively). Renewable diesel is a diesel-like fuel that meets specifications for use in existing
infrastructure and diesel engines, so it is not subject to any blending limitations.
Of the 334 million gallons of biodiesel imported into the United States in 2015, more than half (183
million gallons) were from Argentina. The U.S. Environmental Protection Agency's January 2015
approval of an RFS pathway for Argentine biodiesel volumes established a streamlined process
for Argentina's biodiesel producers to generate Renewable Identification Number (RIN) credits.
The remaining volumes of regular biodiesel imports were sourced primarily from Indonesia and
Canada, at 73 million gallons and 61 million gallons, respectively. U.S. renewable diesel imports
reached 204 million gallons in 2015, up 69% from the level in 2014. All U.S. renewable diesel
imports in 2015 were sourced from Singapore and entered the United States primarily through
West Coast ports, likely destined for California LCFS compliance.

NewBase 12 April 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices holding above $40 ahead of producer meeting
Reuters + NewBase
Oil prices is holding in early Asian trade on Tuesday, both U.S. and international crude futures
held above $40 per barrel ahead of a meeting of major producers to discuss freezing output levels
to rein in ballooning oversupply.
U.S. West Texas Intermediate (WTI) crude futures were trading at $40.27 per barrel at 0059 GMT,
down 9 cents from their last settlement.
International Brent crude futures were at $42.70 a barrel, 13 cents below their last close but only
36 cents off their 2016-high reached the previous day.
Major oil producers from the Middle East and Russia, but excluding the United States, plan to
meet in Qatar's capital Doha next Sunday. They will discuss measures to rein in ballooning
oversupply which sees as many as 2 million barrels of crude produced every day in excess of
demand, leaving storage tanks around the world filled to the rims with unsold and unwanted fuel.
Most analysts expect producers to freeze output around current output levels, which being beyond
consumption and close to record levels would do little to address the glut.
"The potential risk for prices is for the downside as freezing output at current levels would be more
of a symbolic act rather than a real market intervention. But you need to be open to surprises in
this market," said Ric Spooner, chief market analyst at CMC Markets in Sydney.
Oil price special
coverage

While Spooner said that a production freeze would do little to address the immediate glut, he
added that keeping key Middle East and Russian output around current levels might in the longer
term lead to a more balanced market.
"There is demand growth, and production in the U.S. is falling, so if against that background there
was a freeze, markets could get tighter at some stage," he said.
Analysts at Bernstein said that they expected global oil demand to grow at a mean annual rate of
1.4 percent between 2016 and 2020, versus annual growth of 1.1 percent over the past decade,
adding that global demand would reach 101.1 million barrels per day (bpd) by 2020 from 94.6
million bpd now.
Looking further into the future, Bernstein said that world oil demand would likely peak in the
2030s. "The world will reach 'peak demand' before 'peak supply'. Global oil demand is likely to
peak around 2030-35 at 108 million bpd."
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A Fake Freeze on Oil Is Good Enough
Bloomberg - By Leonid Bershidsky
In less than a week, major oil-producing nations will meet in Qatar to discuss capping their output.
Yet even if they decide to do that, the purpose of the meeting probably has little to do
with balancing global supplies.
Crude market fundamentals are set for many months to come; the oil producers are more
interested in finding a way to manage financial markets' expectations, which have a greater effect
on prices.
A freeze "at recent production levels would not accelerate the rebalancing of the oil market,"
Goldman Sachs analysts wrote in a report that argued the meeting would be more likely to lead to
a price drop than a hike.
And indeed, output levels are close to all-time records for the Organization of Petroleum Exporting
Countries (above 33 million barrels a day) and near the historic high for Russia, a participant in
the Doha meeting (above 11.2 million barrels a day).
Besides, some OPEC members are increasing output ahead of the meeting. Iraq, for example, hit
its production record -- 4.55 million barrels a day -- in March.
U.S. producers are heading in the opposite direction. Their output is down to late 2014 levels:
Is the Boom Over?
Following the production decline, bloated U.S. oil inventories appear to be starting to slide, too.
Though they're still near all-time records, on April 6 the U.S. government reported an almost 5
million barrel drop.

The Glut Isn't Forever
The surprising resilience of U.S. oil production is by now a market meme. Yet there is nothing
miraculous about the oil industry. Producers can rely on crutches like price hedges or
technological advances, but at the end of the day, it's all about how much smelly dark liquid they
can extract from the ground at the right cost.
U.S. frackers may have been better than anyone else at using these crutches, but now their
impact is exhausted or receding. In the relatively free U.S. market, profit potential drives
investment and output. And on both these fronts U.S. producers are feeling the strain.
On the other hand, Persian Gulf states and Russia need to pump oil at any price because that's
how they fund their budgets, so when the price is low, they need to pump more. This is how it's
going to be at least for the next few years: The traditional producers are going to win back some
lost market share.
The biggest problem they face has nothing to do with the physical demand-supply balance of oil.
They need to keep prices as high as possible, but low enough to prevent U.S. investment and
output from rising again.
The only way to do that is to manage expectations. Domenico Favoino and Georg Zachmann of
the Brussels think tank Bruegel recently estimated that 73 percent of the oil price decrease in the
last three years could be attributed to expectations about the physical demand-supply balance,
not the balance itself. According to the researchers, the role expectations play in price setting has
increased dramatically since 2008.
This is a world in which you have to convince traders that the balance is going to move this way or
that, not to actually change it. That explains, at least in part, the mini-rally since the largely
meaningless February agreement between two of the world's biggest producers, Russia and
Saudi Arabia, as well as Qatar and Venezuela, to freeze production at January levels. The price of
Brent crude is up about $10 per barrel.

Everyone, including traders, understands that such deals are iffy, that the parties won't necessarily
stick to them, and that freezing production at record levels may just signify an inability to pump
much more oil in the near future. Yet it's still something to trade on. If the talks in Doha on April 17
end in an agreement, even a symbolic one, that will send the market a signal to drive up the price.
That signal, however, will not be credible or lasting enough to spur an increase in U.S. oil
investment. Investors and creditors are more cautious than traders. The former are scared off by
high volatility; the latter are energized by it.
In February, the implied volatility of the Brent crude price was the highest since 2009, at 70
percent; now it's down to about 50 percent -- still a scary level for people looking at energy
industry business plans.
The Saudis and the Russians, however, don't care about the volatility all that much: They're still
going to keep production as high as they can, because their populations' standards of living and
their regimes' stability depend on it.
So if they can send prices higher without signaling a real change of trend, that's the best they can
do until they solidify their market share gains. Holding a meeting where production caps and cuts
are discussed is one way of achieving that. News of the meeting can combine with shrinking U.S.
output to produce temporary price rises.
It's important to produce such news regularly. It's less important to be bound by any output-limiting
agreements, as OPEC has proven time and again by not sticking to its output targets.

NewBase Special Coverage
News Agencies News Release 12 April 2016
The 30-year-old Saudi who could scuttle oil deal
CNBC - Patti Domm
Saudi Arabia's 30-year-old deputy crown prince may have already tanked any hope of an oil deal.
Oil-producing countries from inside and outside of OPEC hope to strike a deal this weekend to
freeze production in order to stabilize the
price of crude. Since Saudi Arabia, Russia
and others first agreed to a meeting in
February, oil prices have been supported
at somewhat higher levels.
Other than Russian President Vladimir
Putin, there's no single individual seen as
having more sway over the world oil
market, and Deputy Crown Prince
Mohammad bin Salman is critical to the
success or failure of this weekend's
meeting in Doha, Qatar.
While there still could be a deal, some analysts see the chances of a meaningful agreement as
slim. The reason is that bin Salman stated the kingdom's position and is unlikely to change his
mind, barring a dramatic about-face in behavior from Iran.
"This could be the mother of all buy-the-rumor, sell-the-news," said John Kilduff, partner at Again
Capital.
In a five-hour interview with Bloomberg, bin Salman recently laid out his position on a freeze deal,
saying Saudi Arabia would participate only if major producers, including Iran, also participate.
"Actually I think nothing is going to happen there. I think the likelihood is that the Saudis will
continue to say the conditions are not right for a freeze in production," said Edward Morse, global
head of commodities research at Citigroup. "It's a combination of factors. They have the excuse
that Iran is not part of it, but I think overall Saudi strategy has been a function of recognition that
there's oversupply in the market, and if they don't take the market share, someone else will."
Iran has said it would participate in the Doha meeting this weekend, but it will not freeze
production. Iran is working to return oil to market, now that it is no longer under sanctions for its
nuclear program, and its goal is to bring back 1 million barrels in a year.
"If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers freeze
production, we will be among them," bin Salman told Bloomberg. He also said that Saudi Arabia
was not threatened by the drop in oil prices. Analysts say that comment signaled a willingness to
persevere with low prices as long as it takes to end the supply glut.

"I think he's the biggest wild card factor," said Helima Croft, chief commodities strategist at RBC
Capital Markets.
Croft said she expects the producers will still try to get a deal, as they all are feeling the pain of
lower prices. They face budget shortfalls and possible debt downgrades.
In order to get a deal, Iran would need to come to the table with some sort of production
agreement that would be viewed as acceptable to Saudi Arabia, but that could prove difficult, she
said.
"It's going to require creativity this week. I think the effort will be made ... you have the Kuwaitis
out there, saying 'We're going to get a deal.' You have these other GCC (Gulf Cooperation
Council) countries still holding out hope. I think they're invested in trying to get this thing done,"
said Croft. "I think what they're looking to do is close their fiscal gap ... they are all concerned
about increased borrowing costs."
Francisco Blanch, Bank of America Merrill Lynch's head of global commodities and derivatives
research, said he sees a slight chance Iran could agree to something, possibly a production cap
just slightly above its current 3.2 million barrels a day output.
"The downside risk is the Doha meeting ends up being another big disappointment, like the
previous OPEC meetings have been. There is risk of that. We know there's a proposal on the
table. We know the market has bounced somewhat on that proposal. It's also somewhat on the
back of other seasonal factors that are driving prices higher. I still think even if we get some kind
of freeze agreement and OPEC stops talking the market down, that leaves us where we are," said
Blanch.
However, if there is no deal, oil could trade lower immediately. West Texas Intermediate crude
futures settled just above $40 per barrel Monday, and Brent was just under $43. Blanch expects
Brent to trade at around $47 per barrel this summer and above $50 at year-end.
The final decision on Saudi participation is up to bin Salman and the kingdom is the key to the
deal. "This prince is a son of the king, who looks like he's the heir apparent to the king and he
seems to be calling the shots," said Morse. The son of King Salman, bin Salman is deputy to his
cousin, Crown Prince Mohammad bin Nayef, but is seen as more of a rival.
Bin Salman has the support of young Saudis and dresses in traditional attire. "There are a lot of
people worried about him in that he appears to be a radical who wants to transform the country
and he's gained a lot of power," said Morse. "If you reform a country that's very conservative,
you're going to provoke a lot of people who are interested in a slower approach to reform than he
appears to be taking, from that interview."
The young prince heads both the energy sector and the military, while his cousin rose up the
ranks as an intelligence official. Bin Salman is also set on diversifying the Saudi economy, and
has plans to build a giant sovereign fund, starting with the sale of a stake in Saudi Aramco.
"He's the first person of that stature who takes seriously the move to diversify the economy, not as
a long-term goal but something that requires action in the short term," said Morse.
Croft said the message from Saudi Arabia has changed, with more conciliatory comments
previously from Saudi Oil Minister Ali al-Naimi, now overshadowed by bin Salman's remarks. But

Morse said Naimi left the door open to disagree when he said the Saudis would supply any
customers who are looking for oil.
"This is a clear and present danger, if they don't get oil prices higher. Maybe Mohammed bin
Salman doesn't care, but these other GCC countries care," said Croft.
She said Russia is also looking for a deal. "I think the Russians, they're incentivized to get this
done from the standpoint of a fiscal position," she said. "Russia's been pretty adamant about
getting this done."
If Saudi Arabia does not agree to a freeze, the prince could find himself at odds with Putin. Russia
has said it would support a freeze, and it is reported to be interested in brokering a deal between
Saudi Arabia and Iran, but Morse said a deal could have come over Syria but that could prove
elusive since the Russians have pulled out of Syria.
Bin Salman may also have more leverage to endure the oil downturn. "He has about $600 billion
and the Russians have about $60 billion, and he smells weakness," said Morse. He said the Saudi
sovereign wealth fund has about $580 billion.
Bin Salman, in a five-hour interview with Bloomberg, also discussed his vision for the kingdom's
Public Investment Fund and the sale of a public stake in the Saudi oil giant Saudi Aramco. The
proceeds of the stock offering, expected next year or later, would help fund the PIF which
ultimately could control $2 trillion and help diversify Saudi Arabia away from oil, according to the
report.
"transferring its shares to PIF will technically make investments the source of Saudi government
revenue, not oil," said the prince. He said that after diversifying investments, Saudi Arabia, within
20 years, would become an economy that does not depend mainly on oil.
Bin Salman said Saudi Arabia is working on spending more efficiently, noting the government
used to spend up to 50 percent more than allocated in its budget but that was cut to 12 percent
last year. For that reason, he said he does not believe Saudi Arabia has a problem with low oil
prices.
Educated in Saudi Arabia, bin Salman is unlike many members of the royal family that have been
educated in the West. He is seen in traditional dress, and Croft said he's not known to hit the
nightclubs.
Patti DommCNBC Executive News Editor

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NewBase 12 April 2016 K. Al Awadi

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New base 828 special 12 april 2016