New base 564 special 19 march 2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

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NewBase 19 March 2015 - Issue No. 564 Khaled Al Awadi

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

SolarImpulse2 in flight 3/12 to Varanasi India www.solarimpulse.com

Solar Impulse 2, world's first solar-powered aircraft is on its journey around the world. It has made stopovers at Ahmedabad and Varanasi in India and is on its way to Mynamar's Mandalay. Here is all the important information you would want to know about it.

Solar Impulse 2, world's first solar-powered aircraft is on its journey around the world. It has made stopovers at Ahmedabad and Varanasi in India and is on its way to Mynamar's Mandalay. Here is all the important information you would want to know about it.

The first attempt to fly a plane round the world using only solar power. It’s not a non-stop flight, the plane stops in different countries. The aircraft is as wide as an Airbus A380. It weighs as light as a family car at 2,300kg.




It ranges between 50-160kmph, faster during days and slower at night to prevent batteries from draining quickly. Solar Impulse 2 flies at 27,800 feet during the day, 5,000 feet at night. Maximum time one pilot will spend in air at a stretch is five days. This is how long the plane will take to cross the Atlantic. Both pilots went through intensive training, including in yoga and self-hypnosis. Pilots — Bertrand Piccard and Andre Borschberg —

both Swiss, take turns. One pilot flies one leg, the other meets the flight at the next stop and takes over controls. They eat, sleep, drink and even go to the toilet in the cramped cockpit. Short naps are possible in reclining pilot’s chair. A flap in the seat opens, making the chair double as a toilet seat. Only short naps when the plane is stable. Goggles with flashing lights help pilots wake up when sleep time is over. In emergencies, seat starts vibrating. The cabin isn’t pressurized. Outside temperatures can reach -40°C, however, the insulated cabin can retain some warmth. It has an electronic co-pilot, which can help the aircraft hold course, but this isn't anything like an autopilot modern jets are equipped with. It can be used in short spells when a pilot is resting.

The mission control is located in Monaco where weathermen, air traffic controllers and engineers are stationed. 65 ground staff travel with the pilots. Roughly five months. It will fly over 3 continents and 2 oceans, Total distance to be covered: 35,000km. Flight across Atlantic will be difficult, and the conditions will have to be absolutely right . The pilot would bail out and use ocean survival gear to stay alive until rescue arrives. More than

17,000 built into wings that at 236ft are longer than on a Boeing 747 and approaching those of a Airbus A380. It is made of lightweight carbon fibre. It can stay aloft several days and nights. The propellerdriven craft has four 17.5-hp motors with rechargeable lithium batteries.




Saudi oil exports gush 11-month high in Jan. Saudi Gazette+NewBase Saudi Arabia’s crude oil exports rose 7.8 percent in January to the highest level in 11 months, according to the Joint Organizations Data Initiative (JODI). The world’s biggest oil exporter shipped 7.47 million barrels a day in the month compared with 6.93 million in December, data posted Wednesday on the initiative’s website showed. Shipments increased to the highest since

February 2014, the data showed. The Kingdom produced 9.68 million barrels a day of crude in January, up 0.5 percent or 50,000 barrels a day, from the previous month, according to JODI. Saudi Arabia is the largest producer in the Organization of Petroleum Exporting Countries. The growth in January exports coincided with a 7.6 percent slide in the Brent crude price that month, signaling that cheaper oil may be stimulating demand amid a global surplus. Consumption is rising gradually, and economic growth is more robust, Saudi Oil Minister Ali Al-Naimi said March 4 in Berlin. The International Energy Agency, an adviser to industrialized nations, increased its forecasts for global oil consumption in 2015 by 130,000 barrels a day because of “modestly escalating global economic growth,” it said in a March 13 report. Saudi Arabia reduced the amount of crude it burned as fuel in power plants in January to 276,000 barrels a day from 386,000 in December, according to JODI data. The country burned less crude in January than in any month since March 2011. OPEC’s second-biggest producer, Iraq, exported 14 percent less oil in January at 2.54 million barrels a day, while Iran’s shipments were little changed from December at 1.33 million, the data showed. Kuwait, the third-largest producer in OPEC, exported 2.03 million barrels a day, some 20,000 more than in December, according to JODI. US production and stockpiles continue to rise from the highest level in three decades, even after last year’s price decline of almost 50 percent. OPEC, which decided in November to keep output




unchanged, has pumped more than its daily production target of 30 million barrels for nine months. Brent, a benchmark for more than half of the world’s oil, slid as much as 70 cents, or 1.3 percent, on Wednesday to $52.81 a barrel on the London-based ICE Futures Europe exchange. Meanwhile, Saudi Arabia is investing heavily in its downstream business and developing captive markets to enter global oil market domination and counter the threat of US tight oil. Saudi Arabia has been crafting the strategy for a few years, but it has come in sharp focus after the kingdom convinced other OPEC producers to maintain oil production at a meeting last November despite a collapse in crude prices. Oil prices have fallen 50% since June 2014, but Saudi officials have been unmoved as they see their strategy working. That suggests that the country has effectively handed over the role of swing producer to more expensive non-OPEC producers and made a real play to capture more market share. "The intention to grow market share and move away from its role as swing supplier increases the likelihood of Saudi Arabia ramping up its petroleum supplies going into H2 2015 by 0.5 to 1 mb/d and 2016, in our view," said Miswin Mahesh, analyst at Barclays Capital. "By building local refineries and increasing stakes in refineries globally (South Korea, China, US), Saudi Arabia has a growing captive market for its crude. It is uniquely positioned relative to other oil producers in a highly competitive market." Saudi Arabia is an equal partner with Royal Dutch Shell in Motiva refinery, the United States' largest refinery. The investment has helped Riyadh maintain its market share - in percentage terms - in the United States, even as other OPEC producers such as Algeria and Nigeria have seen their market share drop on the US Gulf Coast. The International Energy Agency predicts the Middle East will establish itself as a major downstream player, with Saudi Arabia leading the way. "Saudi Arabia is on track to join the club of major oil-product exporters following the completion of two grassroots refineries within the kingdom and the start of a new product trading company, Saudi Aramco Product Trading Company, in 2012," the IEA said in its latest medium-term outlook report.

Saudi crude exports up in January to 7.47m bpd




Oman: $259m contracts to local Omani firms in BP Khazzan project Written by Oman Observer

Energy major BP, which is developing the potentially prolific Khazzan tight-gas field in Block 61 in central Oman, says it has so far awarded contracts totaling over $259 million to local Omani firms since it won the government’s green-light to commercialise the block’s resources in October 2013. The company said in its 2014 Sustainability Report issued here yesterday that the contracts were in line with its longstanding commitment to supporting local businesses and developing strong local supply chains.

BP Oman, a partnership of BP and Oman Oil Company Exploration & Production (OOCEP) — a wholly owned subsidiary of Oman Oil Company, plans to invest billions of dollars in unlocking Khazzan’s prodigious tight gas potential. The development phase began early last year following the signing of a commercial agreement with the Omani government in December 2013.

“The Khazzan field development will involve a drilling programme of around 300 wells over a 15-year period, to deliver up to 28 million cubic metres of natural gas a day,” said BP in its Sustainability Report. “In this remote desert location, we are applying innovative technology to access gas locked in hot sandstone almost three miles below the earth’s surface. Several hundred wells will be drilled in the field with a combination of horizontal wells and hydraulic fracturing technologies to stimulate production,” it noted.

The energy giant said it was “working responsibly to develop and produce natural gas from unconventional resources” at its operations in a number of locations around the world, including tight-gas in Oman.

“Some stakeholders have raised concerns about the potential environmental and community impacts of hydraulic fracturing. BP seeks to apply responsible well design and construction, surface operation and fluid handling practices to mitigate these risks,” it stressed. With regard to measures it is taking to safeguard the welfare of its workforce — projected to

number over 10,000 people at the peak of construction next year — the company said it was closely monitoring the overall well-being of its field staff.

“In Oman, we have developed minimum workforce welfare standards for our Khazzan gas project




that set requirements for contractors with respect to working and living conditions. We have discussed these with our contractors and have established a series of forums that will meet regularly to monitor worker welfare and employee relations activities, and act as a channel for escalating and addressing grievances raised,” the report said. Dave Campbell, Chief Operating Officer and Vice President Operations, BP Oman, was quoted as further stating: “At peak development in 2016, our Khazzan project in Oman will involve more than 10,000 people working in the remote desert.

In preparation for this, we have developed workforce welfare requirements on aspects such as living accommodation, food provision and recreation facilities and are proactively addressing workforce concerns.

We have held workshops with our key contractors to discuss our requirements and develop a shared understanding of the importance of delivering a standard of workforce welfare that respects our workers and adheres to our human rights policy.”

With a view to ensuring sustainability of water use at its Khazzan operations, BP said it was currently assessing the full project water cycle and water system requirements to maximise the use of each barrel of water, with the aim of reducing its impact to the environment.

Billed as one of the largest unconventional tight gas developments in the Middle East, the Khazzan project involves investment of $16 billion over a period spanning more than 30 years to unlock around 7 trillion cubic feet of gas and deliver a volume equivalent to around a third of Oman’s current total daily domestic gas supply. The Block has the potential to be a major new source of gas supply for Oman over several decades.




Morocco: Mubadala Petroleum to explore big offshore area Reuters+ NewBase

Mubadala Petroleum has signed an agreement with Morocco’s Office National des Hydrocarbures et des Mines (ONHYM) to carry out an evaluation of the hydrocarbon potential of a large area

offshore Morocco’s Mediterranean coast.

In the presence of H.H. General Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the agreement was signed on behalf of Mubadala Petroleum by Mubadala’s Energy CEO, H.E. Dr. Sultan Al Jaber and Amina Benkhadra, General Director, ONHYM at a ceremony held in Casablanca.

Commenting on the agreement, Musabbeh Al Kaabi, Chief Executive Officer, Mubadala Petroleum, said, “We are pleased to be able to build on the strong relationship between the

U.A.E. and Morocco in this tangible way. We very much hope this agreement will pave the way for further co-operation with ONHYM both on the more detailed exploration of the Mediterranee Ouest area and in other projects.”

The agreement provides Mubadala Petroleum with an exclusive reconnaissance license to carry out detailed geological evaluation of the hydrocarbon potential of an area designated as Mediterranee Ouest. This is an area comprising 3,433 square kilometers offshore Morocco.

Mubadala Petroleum will provide ONHYM with the results of its evaluation on completion.




Indonesia: Statoil Awarded exploration Acreage Offshore Source: Statoil

Statoil on Wednesday said it has been awarded new exploration acreage through the Aru Trough I licence offshore Indonesia.

The licence covers an area of approximately 8,300 square kilometres, adjacent to Statoil’s existing exploration acreage in the Aru and West Papua IV licences. Statoil will operate the licence with a 100% working interest.

“This is a low-cost access into a frontier area with considerable potential where Statoil is already present. This position strengthens the optionality in Statoil’s long-term portfolio and secures potential upsides from our existing exploration acreage,” says Erling Vågnes, Statoil’s senior vice president for exploration in the Eastern hemisphere. Statoil will initially collect seismic data during the first three years of the exploration period.




India: Signals Rout Cuts Odds of Gas Rise for BP & Reliance Bloomberg + Newbase India’s oil minister signaled Reliance Industries Ltd. and BP Plc may need to wait longer for higher domestic natural gas prices as plunging global energy costs make imports cheaper.

The cost of overseas liquefied natural gas for India has dropped to about $9 per million British thermal units, curbing the government’s scope to increase rates for local producers, Dharmendra Pradhan said. Domestic prices, due for review April 1, were boosted by one-third to $5.6 per million Btu on Nov. 1.

“If imported LNG is available at that price, how can we meet the demand from domestic gas producers for higher prices?” Pradhan said in an interview at his office in New Delhi on Tuesday. “That may not be possible now.”

While Prime Minister Narendra Modi has made boosting energy supplies a priority to curb blackouts, explorers such as Reliance Industries argue higher domestic gas prices are needed to spur investment and raise output. BP last year wrote off $770 million from an undersea Indian gas block, while Canada’s Niko Resources Ltd. is seeking to sell its stake in the project because of uncertainty about the long-term pricing outlook in India.

The price of LNG is about $7 per million Btu and it costs about $2 per unit more to transport it to India, Pradhan said. The difference between the price of LNG -- gas chilled to a liquid for ease of transport by ships -- and local prices is too small, he said. Mumbai-based Reliance Industries, controlled by billionaire Mukesh Ambani, has declined 3.2 percent this year compared with the 4.4 percent gain in the benchmark S&P BSE Sensex. BP has increased 3.6 percent in London. ‘At Risk’ Reliance owns 60 percent of the KG-D6 gas field off India’s east coast and Niko has 10 percent. BP bought 30 percent, as well as a stake in 20 other blocks, for $7.2 billion in 2010. India’s offshore oil and gas industry is “at risk” in the absence of higher prices, BP Chief Executive Officer Robert Dudley said in June.

Output from KG-D6 slid from 2010 as the reserves proved more geologically difficult to extract than anticipated, Reliance said in January. Tushar Pania, a spokesman for Reliance Industries, didn’t immediately respond to an e-mail seeking comment.

Lower gas prices will also affect state-run Oil & Natural Gas Corp., India’s biggest gas producer. Each dollar increase in gas prices raises the explorer’s annual profit by 23.5 billion rupees ($375 million), Chairman D.K. Sarraf said in October.

The price of Brent crude, a benchmark for more than half the world’s oil, almost halved last year and is down 6.7 percent this year as supply outstrips demand. The May contract slid as much as 0.9 percent to $53.01 a barrel on the London-based ICE Futures Europe exchange today. LNG prices are typically linked to oil.




Norway: Statoil announces gas discovery at Snefrid Nord in the Norwegian Sea . Source: Statoil

Operator Statoil has together with PL218 partners made a gas discoveryin the Snefrid Nord prospect in the Norwegian Sea. The discovery is an important contribution to the Aasta Hansteen field development projectand Polarled pipeline utilisation.

'The Snefrid Nord discovery increases the resource base for the Aasta Hansteen field development project by around 15%,' says Irene Rummelhoff, senior vice president exploration Norway in Statoil.

The Snefrid Nord discovery is located in the deep-water Vøring area in the immediate proximity of the three gas discoveries comprising the Aasta Hansteen field development: Luva,

Haklang and Snefrid South.

The discovery well 6706/12-2, drilled by Transocean Spitsbergen, proved a 105-metre gas column in the Nise Formation. Statoil estimates the volumes in Snefrid Nord to be in the range of 31-57 million barrels of recoverable oil equivalent (o.e.). Statoil is drilling two exploration wells in the vicinity of Aasta Hansteen in 2015, with the aim of proving upside potential in the area. After completing Snefrid Nord, Transocean Spitsbergen will move to the neighbouring licence PL602 and drill an exploration well in the Roald Rygg prospect.

'Near-field exploration is the main focus of our Norwegian continental shelf exploration programme in 2015. By proving additional timely resources, we extend the production life of our fields and create significant value,' explains Rummelhoff.

Aasta Hansteen will be the largest SPAR platform in the world and is the biggest ongoing field development project in the Norwegian Sea. It is one of the main projects in Statoil’s portfolio. The plan for development and operations (PDO) was approved by the Norwegian Ministry of Petroleum and Energy in 2013. Production start-up is expected in 2017.

'The Snefrid Nord discovery makes the Aasta Hansteen development project more robust and prolongs the Aasta Hansteen production plateau. It will utilise both the Aasta Hansteen and the Polarled gas pipeline capacity,' says Torolf Christensen, Statoil vice president for the Aasta Hansteen project. 'The discovery will now be further evaluated for future tie-in to the Aasta Hansteen infrastructure.' Exploration well 6706/12-2 is situated in PL218 in the Norwegian Sea. Statoil is operator with an interest of 51%. The partners are Wintershall Norge (24%), OMV (Norge) (15%) and ConocoPhillips Skandinavia (10%).




Norway: BG Group produces first oil from the Knarr field Source: BG Group

BG Group, a world leader in exploration and LNG,

has announced the Petrojarl Knarr floating

production, storage and offloading (FPSO)

vessel has started production from the Knarr oil

field in the North Sea, offshore Norway.

The FPSO has been leased from Teekay Corporation and is moored approx.

120 kms off the Norwegian coast. It has a production capacity of 63,000

barrels of oil equivalent per day and a storage capacity of 800,000 barrels.

The Knarr field, discovered in 2008, has estimated gross recoverable reserves

of around 80 million barrels of oil equivalent with a production life of at least

ten years. In 2011 the Knarr field was merged with the Knarr West field into an integrated development. New exploration drilling in the licence area is

ongoing, in order to help extend the production life further.

BG Group is the operator of the field with a 45% working interest. Partners includeIdemitsu Petroleum Norge (25%), Wintershall Norge (20%)

and DEA Norge(10%).




Oil Price Drop Special Coverage

NO Comments …… it’s a long saga




US shale oil firms brace for more pain as crude prices resume plunge Reuters + NewBase

With the prospect of another plunge in crude prices looming after two months of stability, US shale oil producers may face another round of spending cuts to conserve cash and survive the downturn. A deeper retrenchment would have far-reaching effects.

Additional cutbacks would further gut the already-hemorrhaging oilfield services industry and may heighten expectations for a steeper drop in US crude output later this year. They would also reinforce the US’ emerging role as the world’s “swing producer,” with dozens of independent companies that can quickly ramp up production in good times and dial it back in a downturn. “If I were an oil company today, I would talk about one thing: how far can you cut costs,” said Fadel Gheit, an oil analyst at Oppenheimer in New York. “They cannot control anything else.” Gheit said he expected a new wave of capital budget cuts starting in May, when much of the energy industry reports quarterly results. US oil companies have slashed spending 20 to 60% since the price of oil fell by half from June to January, and oilfield services firms shed more than 30,000 jobs, according to Reuters compilations of public disclosures. Debt rating agency Moody’s estimates that about a fifth of the North American exploration and production companies it follows will slash budgets by more than 60% this year while more than half will cut spending by at least 40%.




After a pause brought a sense of relief, the price slide has resumed. US benchmark West Texas Intermediate (WTI) has fallen 12% in a week to $42 on concerns about lingering global oversupply. Citibank and Goldman Sachs have said oil could tumble to $30 or even $20. One Houston banker said acquisition chatter has picked up in the past two weeks but that no company wanted to be the first to seek buyers given potential investors and sellers remain wide apart on valuations. Companies have made clear they will not hesitate to trim more to avoid credit rating downgrades and further stock sell offs. “We don’t see value in chasing growth in this environment,” Al Walker, chief executive of Anadarko Petroleum Corp, a top shale company, said this month. Oil firms slashed tens of billions of dollars from their capital budgets between November and February. Many have cut costs already twice and could do it again after first-quarter earnings in May, though ConocoPhillips has already announced cuts yesterday. Conoco said it expected to spend about $11.5bn per year over the next three years, down from a prior forecast of $16bn. Oil producers can save money by shrinking their rig fleets and delaying so-called completions, which include fracking, of wells to bring them online, which accounts for 60 to 70% of a well’s total cost. Anadarko expects to end this year with 420 to 440 uncompleted wells, while EOG Resources Inc, often considered the strongest US shale oil company, expects to have 285, with postponed completions saving it about $500mn. The US land rig count has already fallen some 43% from its 2014 high of 1,876 in November to 1,069 last week, according to Baker Hughes. More declines are likely. That trend, along with deferred completions, has some executives predicting national crude output will drop earlier than official forecasts. The Energy Information Administration (EIA) latest forecast from March 10 sees US output peaking in May at 9.46mn barrels per day (bpd) and then dipping to 9.41mn in June. But in a sign the drop could come sooner, the agency now expects output in two of the biggest US fields, the Eagle Ford shale in Texas and the Bakken in North Dakota, to fall in April, for the first time since it began tracking drilling in those oilfields in 2013.




Cnooc’s Nexen Makes 13 Percent Job Cut as Oil Rout Weighs Bloomberg + NewBase

Nexen Energy, the Canadian unit of Chinese oil and natural gas producer Cnooc Ltd., is cutting 13 percent of its workforce as it grapples with crude prices at a six-year low.

Nexen, which Cnooc purchased for $15.1 billion in a deal announced in 2012, will cut 340 workers from its North American division and 60 from its U.K. unit, the Calgary-based company said in a statement on Tuesday. Nexen’s total headcount is about 3,000, said Diane Kossman, a company spokeswoman.

Energy companies are reducing staff to cut costs as they scale back capital spending by around 37 percent on average this year after U.S. crude prices slid about 60 percent from June’s peak, according to data compiled by Bloomberg.

Cnooc plans to cut capital spending by as much as 35 percent to 70 billion ($11 billion) to 80 billion yuan to cope with the low crude environment, Chief Financial Officer Zhong Hua said in Hong Kong in February.

“It’s a positive step in the current environment as industry focus is on improving returns and lowering lifting costs,” said Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein. “Headcount reduction is happening across the industry and companies which are proactive in cutting costs will be rewarded.”

Cnooc shares gained 1.8 percent to HK$10.40 as of 10:05 a.m. The stock has dropped 10 percent in the past year, compared with a 12 percent gain in the city’s benchmark Hang Seng Index. Cutting Jobs Cnooc, China’s largest offshore oil and gas producer, is cutting jobs at Nexen despite its pledge to the Canadian government to try to retain the company’s employees. “In response to the recent industry downturn that has affected all companies in the energy sector, a decision was made to conduct a thorough review of our organization to ensure our long-term viability and sustainability,”




Fang Zhi, chief executive officer of Nexen, said in the statement. “While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program.”

Canada approved the takeover of Nexen in December 2012 after Cnooc made commitments including employee retention, continued investment and that the company would list its shares in Toronto. Prime Minister Stephen Harper said at the time that Canada wouldn’t approve additional acquisitions by state-owned companies of oil-sands projects, barring “exceptional circumstances.” Investment Commitments

“Our thoughts are with the employees and families who received this difficult news today,” Jake Enwright, press secretary for Canadian Industry Minister James Moore, said by e-mail. “Industry Canada is reviewing the announcement and will ensure compliance with the Investment Canada Act.”

Kossman said in an e-mail that the company is complying with the commitments made by Cnooc to the Canadian government. Cnooc last year replaced Kevin Reinhart, Nexen’s Canadian CEO, with Fang.




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Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010

Mobile : +97150-4822502 [email protected] [email protected]

Khaled Al Awadi is a UAE National with a total of 25 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed great

experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally , via GCC leading satellite Channels.

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

NewBase 19 March 2015 K. Al Awadi




11 March 2015 K. Al Awadi

New base 564 special 19 march 2015

Economy & Finance

Transcript of New base 564 special 19 march 2015