New base 512 special 06 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
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NewBase 06 January 2015 - Issue No. 512 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Saudi SABIC & Molecular in JV to commercialize nanomaterials’ apps
Saudi Gazette + NewBase
SABIC and Molecular Rebar Design, LLC have signed a joint venture agreement to develop and
commercialize nanomaterials for select market segments and applications. The joint venture,
Black Diamond Structures, LLC will develop, manufacture, and commercialize products based on
Molecular Rebar Design’s unique and revolutionary carbon nanotube (CNT) technology, Molecular
Rebar.
CNTs when made commercially consist of large entangled bundles of nanotubes. These bundles
are far less useful than discreet or individual nanotubes. Molecular Rebar are discreet, open
ended, highly functionalized CNTs that are free from catalysts and waste matter and are
demonstrated to advance the science and applications for nanomaterials.
Black Diamond Structures, LLC will focus on applications in select market segments including
energy storage, energy generation, automotive & light truck, consumer electronics, and
construction. Commenting on the joint venture, Ernesto Occhiello, SABIC Executive Vice
President, Technology & Innovation, said Black Diamond Structures, LLC is aligned to SABIC’s
2025 strategy and part of the drive to develop higher value-added specialty businesses globally
and in Saudi Arabia.
“SABIC believes that nanotechnology is an important part of the future. We focus on making
nanointermediates more viable for industrial implementation via improved scale-up,
ease/effectiveness of use and partnership with customers.
We believe the new JV is well aligned with emerging market needs, and thus is poised for
accelerated deployment and development for both existing and new applications.” Kurt Swogger,
Chief Executive Officer of Molecular Rebar Design, said “we believe the synergistic combination of
Molecular Rebar Design’s advanced nanotechnologies with SABIC’s commercial and
manufacturing capabilities will lead to many exciting opportunities for innovative, new materials in
high growth market segments.”

Oman Fiber Optic Cable plant to be commissioned in November
Times of Oman + NewBase
Oman Fiber Optic on Monday said that its state-of-the-art plant to manufacture fibre optic cables
will be ready for commissioning by November this year
The pioneer fibre optic cable manufacturer is investing OMR13 million for two plants — one with
an installed capacity to produce 14,000-18,000 kilometres of cable and another for the
manufacture of 1.6 million fiber kilometres per annum — and other facilities, Mohammed Al
Barashdy, chief executive officer of Oman Fiber Optic, told journalists
The cable plant was commissioned in March 2014, while the fiber optic cable plant will be ready in
November, he added, while addressing the media to launch the company's new logo.
Oman Fiber Optic chie f noted that the company used to produce 350,000 fiber kilometres per
annum before a massive fire destroyed the entire plant. "After the fire, we have decided to build a
completely new plant. We have a technological tie-up with Sumitomo. It took ten months for the
company to build the cable plant.
Apart from fibre optic cable plant, the facilities coming up at Rusayl include a headquarters and
warehouse. Proceeds from insurance claim and additional capital injected by stakeholders helped
the company to generate the required fund for the massive expansion
Al Barashdy said the company will sell 35 per cent of its output in the domestic market, with the
remaining 65 per cent for export markets. The company's export markets include Gulf Cooperation
Council (GCC), Arab countries, Iran, central Asia and Eastern Europe
Oman Fiber Optic caters to the needs of various sectors, including telecommunication, oil and
gas, government utility and related projects. Oman Fiber Optic's sales revenue touched
OMR26.95 million in 2013, from OMR5.29 million in 2007. Apart from manufacturing fiber optic
cable, the company has other divisions like telecommunication solutions division to cater to the
specific needs of customers
Referring to Oman Broadband Company's initiative for providing fibre optic cable connection to
homes, he said the company is involved in the project over the last three years and have provided
over 40,000 home connections in several residential areas, including the Wave, Muscat Hills and
Shatti Al Qurum
The launch of the company's new commercial identity shows its new strategy and aspirations.
Al Barashdy said that the company's new logo consists of the initial letters of 'Oman Fiber Optic.'
The new logo also has red, green and blue colours. The overall Omanisation within the company
is around 47 per cent.

Iraq: Gulf Keystone Petroleum Update Shaikan production
Source: Gulf Keystone Petroleum +NewBase
Gulf Keystone Petroleum has provided an update on the Company's operations at Shaikan, its
key producing asset in the Kurdistan Region of Iraq.
The Company is pleased to announce that the existing Shaikan production facilities ('PF-1' and
'PF-2') are now producing from seven wells with Shaikan-8 expected to come online in January
2015.
Total daily production has been gradually increasing since early December 2014, reaching the
Company's 40,000 gross barrels of oil per day target on 27 December. On 29 December, a
record number of 354 trucks were loaded at PF-1 and PF-2 with nearly 58,000 gross barrels of
Shaikan crude sent by truck to the Turkish coast for further export sale.
On 24 December, the Company spudded Shaikan-11, an additional producer, which will be tied
to PF-2 through the 11 km flowline, already in place.
John Gerstenlauer, Gulf Keystone's Chief Executive Officer commented:
'We are pleased to begin 2015 on the back of a positive end to last year, having achieved the
Company's record daily production and crude oil export sales rates from the Shaikan field. 2014
was not without its challenges for the Kurdistan Region and we are proud of what has been
achieved against this backdrop, in particular a nearly 300% increase in Shaikan production and
export sales since January 2014.
Our immediate focus is to ensure a stable daily production rate of 40,000 gross barrels of oil per
day, which is a base for future production growth, whilst maintaining a regular payment cycle for
Shaikan export oil sales by truck and to finalise a pipeline access solution for Shaikan.'
Original article link

Croatia awards 10 offshore licenses
Minister of the Economy
The Croatian Government has granted 10 licenses for exploration and exploitation of
hydrocarbons in the Adriatic.
The awards, announced Friday, January
2, were preceded by the first license round for
the exploration and exploitation of
hydrocarbons in the Adriatic, which was
concluded on November 3, 2014. The received
bids were evaluated by an Expert Committee
headed by Minister of the Economy, Ivan
Vrdoljak.
Bids were received from a total number of 6
companies for 15 exploration areas. The
Expert Committee has positively evaluated
bids for 10 exploration areas and finally
awarded 10 licenses. In accordance with the
decisions, Marathon Oil, OMV, ENI, MEDOILGAS and INA gained the right to explore and exploit
hydrocarbons in the first offshore license round.
A Consortium of bidders Marathon Oil and OMV was granted a licence for the exploration and
exploitation of hydrocarbons in seven exploration blocks. The assigned exploration blocks are
North Adriatic 8, Central Adriatic 10, Central Adriatic 11, Central Adriatic 22, Central Adriatic 23,
South Adriatic 27 and South Adriatic 28.
A Consortium of bidders ENI and MEDOILGAS was granted a licence for the exploration and
exploitation of hydrocarbons in one exploration block, Central Adriatic 9. INA – Industrija nafte d.d.
was granted a license for the exploration and exploitation of hydrocarbons in two exploration
blocks, South Adriatic 25 and South Adriatic 26.
The estimated value of investment plans in the exploration activities for which the companies were
competing amounts 4 billion HRK ($623.6 million). According to the Croatian Hydrocarbons
Agency, a 100 million HRK ($15.6 million) will be paid directly to the state budget after signing the
contracts.
“We are extremely pleased with the job done. These are serious companies with extensive
experience using the latest technology that meet the most demanding environmental
standards,” said Minister of the Economy, Ivan Vrdoljak.
“With today’s decisions of the Croatian Government, we can start negotiations on signing the
Production Sharing Agreement. Awarded companies were obliged to accept the provisions of the
draft Production Sharing Agreement already in their offers, since it was a part of the
documentation for tendering and to enclose all the provisions that they want to alter in the
negotiations.
The final deadline for signing the Agreement is 3 months from the issuance of licenses, namely
2nd April 2015,”said the President of the Management Board of the Croatian Hydrocarbon
Agency, Barbara Dorić.

Rockhopper gets stake offshore Croatia
Rockhopper Exploration plc has been awarded a 40% interest in offshore Block 9 in Croatia in
partnership with Eni (60% interest and operator). As previously reported, the Croatian
Government has granted 10 licenses for exploration and exploitation of hydrocarbons in the
Adriatic.
The block is located in the relatively shallow
water of the prolific Northern Adriatic gas
province and contains the previously discovered
Ksenija accumulation along with the Klaudija
prospect.
Rockhopper says that the anticipated work
programme consists of seismic acquisition,
processing and re-processing during the first
exploration phase (3 years) with the drilling of a
well in the second exploration phase (if
Rockhopper elects to proceed to the second
phase).
According to the company, signature of a Production Sharing Contract with the Croatian
Hydrocarbon Authority must be completed by April 2, 2015. In addition, Rockhopper has also
applied for acreage in the first offshore licencing round in Montenegro. The outcome of such
application is expected in Q1 2015.
Sam Moody, Chief Executive of Rockhopper, commented:
“We are delighted to be partnering with the leading international producer in Croatia as we build
our position in our second core area of the greater Mediterranean region following the acquisition
of MOG. This represents an outstanding low cost opportunity to increase our acreage position in
an area with proven hydrocarbons.”

India: Russian shale beating US is ONGC’s last bet
Bloomberg + NewBase
Oil & Natural Gas Corp, India’s biggest energy explorer, is banking on the world’s largest shale oil
reserves to save its Russian acquisition. Stumbling blocks include oil prices at a five-year low and
US sanctions.
Imperial Energy Corp, which the Indian state-run explorer bought in 2009 for $2.1bn, will drill four
wells in Russia’s Bazhenov shale formation by July, seeking to find enough oil to start commercial
production, said Narendra Kumar Verma, managing director of ONGC’s overseas unit, which
owns Imperial. Failure would mean seeking options, including selling the unit, he said. “We’re
banking on that silver lining,” Verma, the chief of ONGC Videsh Ltd, said in an interview in his
office in New Delhi. “We have to think of alternative strategies. All options are open,” should
Bazhenov flop, he said.
ONGC plans to more than double its oil and gas production from overseas fields in four years
even as it seeks to reverse declining output from Imperial’s fields, revive assets in troubled Sudan
and Syria and boost output in Venezuela. It gives away 79 percent of its revenue from Imperial’s
fields as taxes to the Russian government, which is facing the prospect of defaulting on its debt
amid sanctions following the annexation of Crimea from Ukraine. At the moment, Bazhenov is the
promising thing,” Verma said. “We have to see how much it yields, as shale oil wells are costlier
due to horizontal drilling and hydro-fracking.”
Bazhenov may hold as much as 360 billion barrels of recoverable reserves, Bloomberg
Industries said in a December 2012 report, citing estimates by Russian subsoil agency Rosnedra.
Venezuela holds 298.35 billion barrels, the world’s biggest known oil reserves. Russia’s Bazhenov
has yet to yield oil. The formation has proved to be tougher to drill than areas in the US, prompting
Russian oil majors such as OAO Rosneft and OAO Gazprom Neft to seek partnerships with US
and European companies.
Imperial had given Denver-based Liberty Resources LLC a contract to drill in its shale-oil acreage
in the Bazhenov formation. Liberty ended the contract following US sanctions on Russia, Verma
said. Imperial is now drilling two wells on its own and plans to drill a total of four by July, he said.

France’s Total SA is reevaluating plans to explore for shale oil with Moscow-based OAO Lukoil in
Bazhenov. Royal Dutch Shell Plc and Norway’s Statoil ASA may also miss out on Russian shale,
Bloomberg Intelligence analyst Philipp Chladek wrote in a report.
Russia can develop its shale oil resources even without foreign partners, Interfax reported on
December 29, citing Lukoil President Vagit Alekperov. The development is not profitable at current
oil prices, Interfax reported in the interview.
Russia has potentially the biggest shale oil resources,
followed by the US, according to a January 2014 report
by the US Energy Information Administration. Shale
basins in the US have helped boost the country’s
production to the highest in more than three decades,
drawing it into a price war with Saudi Arabia as oil prices
slump to the lowest since 2009.
The Russian government will allow companies that
produce in the Bazhenov formation to retain about 40
percent of their revenue, compared with 21 percent that
Imperial gets now, Verma said. “If we are able to have
substantial production from Bazhenov, then our net
back may improve, bottomline may improve and we may
sail through,” he said. “I’m not saying we will make
profits, I’m saying the company may sail through.”
Current output at Imperial’s fields in western Siberia,
which holds part of the Bazhenov formation, has declined to about 7,000 barrels a day from
17,000 barrels in April 2010. Even in a scenario where oil is at $100 a barrel, Imperial is left with
$6 after spending as much as $15 on production, and paying oil extraction levies, Verma said. It
pays about $2 a barrel as income tax to the government and the remaining $4 has to fund
operating costs, capital expenditure and administrative costs, he said.
Plunging crude oil prices is making it worse for Imperial, Verma said. Brent crude, a benchmark
for more than half the world’s oil, declined 48 percent last year in London trading, the steepest
annual loss since 2008. Weak economic growth in China, a global oil glut and Opec’s refusal to
cut output have pushed crude into a bear market since June.
In Russia, ONGC Videsh owns 20 percent in the Sakhalin-1 project off the country’s far eastern
coast, which it acquired in 2001. The project produces both oil and gas and ONGC Videsh gets a
share of the output or equivalent revenue from the sale. The company is also in talks with Rosneft,
Russia’s biggest oil producer, to study the possibility of buying stakes in two other oil and gas
fields in Russia, ONGC Chairman Dinesh Kumar Sarraf said in November.
Imperial has always performed below expectations for ONGC. A plan to revive production from
Imperial’s fields was scrapped just months after ONGC completed the purchase in 2009 because
the fields didn’t meet expectations. India’s federal auditor in March 2011 said ONGC lost
Rs11.8bn in the 15 months ended March 31, 2010, after Imperial produced at half of the target
rate. ONGC announced the plan to buy Imperial in August 2008 and completed the purchase in
195 days. Brent crude, which slumped 62 percent in that period, reached $36.6 a barrel in
December that year as the global financial crisis deepened. ONGC then justified the acquisition
saying oil would rebound to $100 a barrel. Most negotiations for the Imperial acquisition
“happened in the peak price of oil, but before closing it slid,” Verma said. “We could not come out
of the deal.”

Otto Energy, Partners Complete Seismic Survey in Tanzania
Otto Eng + NewBase
Otto Energy Ltd and partner Swala Energy have successfully completed a 430 km 2D seismic
programme over the Kilombero Basin in
central Tanzania.
Otto Energy Tanzania Pty Ltd (a wholly
owned subsidiary of Otto) has a 50
percent participating interest in the Kilosa
Kilombero licence while Swala Energy’s
subsidiary Swala Oil and Gas (Tanzania)
Plc, as operator, has the remaining 50
percent stake.
The joint venture has already identified the
Kito Prospect as a potential drilling target
for 2015. The new seismic data are
currently being processed ahead of
detailed interpretation that aims to map
additional potential drilling targets for the
forthcoming drilling campaign. The joint
venture will carry out basin modelling and
seismic amplitude studies to help rank the
prospect portfolio ahead of these planned
drilling activities.
Matthew Allen, Otto’s CEO said: “The
work programme of the joint venture in the
Kilosa-Kilombero licence has been
executed in line with the work programme
commitments to TPDC, in an area that
had not previously seen any oil or gas
exploration activity. We look forward to the
results of the detailed mapping, basin modelling and seismic amplitude studies to support the final
drill candidate selection.”

Oil Price Drop Special Coverage
Revamped US oil hedges may test Opec's patience
Reuters + NewBase
As a war of nerves between US shale producers and Gulf powerhouses intensifies, Opec's
biggest members are counting down the months until their upstart rivals lose the one thing
shielding them from crashing oil prices -
hedges.
They may need much more patience than
they reckon, however, because those hedges
are a moving target. Rather than wait for their
price insurance to run out, many companies
are racing to revamp their policies, cashing in
well-placed hedges to increase the number of
future barrels hedged, according to industry
consultants, bankers and analysts familiar
with the deals.
Opec officials hope that once US oil
companies get fully exposed to the impact of an over 50 per cent slide in crude prices since last
June, they will have to drill fewer new wells, causing US production growth to stall and putting a
floor under oil prices now testing $50 a barrel.
"There are companies which are hedged until the beginning of the year or until the end of the
year, so we need to wait at least until the first quarter to see what is going to happen," UAE
Energy Minister Suhail Bin Mohammed Al-Mazroui told Reuters and one other news agency last
month.
Yet that hope is based largely on quarterly company reports from several months ago, when
drillers last made their hedging portfolios public. In the meantime, with the price rout showing no
sign of reversing, at least some firms have put on new hedges that will help prevent their revenues
from falling further - and allow them to drill far longer this year than earlier expected.
"Opec should not expect to see any impact on US shale growth in the first half of the year and the
impact in the second half is being attenuated significantly by producer hedging," says Ed Morse,
global head of commodities research at Citigroup, one of the biggest US banks involved hedging.
CAPTURING THE UPSIDE
For the moment, it is unclear which companies are involved in the effort. New hedging strategies
are only likely to get disclosed in quarterly earnings reports in late January.
"It's a hot topic of discussion that everyone is thinking about and looking at," said Craig Breslau,
who heads the energy derivatives marketing desk at Societe Generale in Houston, which has
been involved in some restructuring transactions.

While the proportion of oil companies actually executing those deals is not that high, the deals
thus far have been large in terms of volume and dollars, he said.
According to their last filings, oil companies such as EOG Resources, Anadarko Petroleum Corp,
Devon Energy Corp and Noble Energy had hedged some of their 2015 production at prices of $90
a barrel or more.
The net short position of oil producers and other non-financial companies in US crude oil futures
and options markets -- used as a rough gauge of hedging activity -- has grown from 15 million
barrels in August to more than 77 million barrels last week.
For many companies that set up "in the money" hedges prior to the slump, the downturn offers a
chance to cash in or extend their protection.
For example, a company that had sold swap contracts to hedge a part of its 2015 production at
$90 a barrel - essentially shorting forward oil prices to guard against a drop - could buy them now
back at around $57 for a profit of about $33 a barrel.
Instead of just pocketing the cash, some companies are using the funds to shield themselves
against a further market slide by buying swaps and options pegged closer to current prices.
With the December 2015 put option for $60 a barrel now trading at around $9 a barrel, swaps
cashed in now could buy a producer nearly four times more protection at that price.
PROFITS OR SURVIVAL
Most of the half-dozen companies contacted by Reuters - those with sizeable hedges in place -
declined to comment or did not reply to requests for comment.
A spokeswoman for EOG said that it was not selling off its hedges. Devon Energy declined to say
whether the company was restructuring is large hedge book, but said it had not 'monetized' any of
its position.
So far only two companies have publicly confirmed winding down their profitable hedge books.
Bakken shale oil pioneer Continental Resources pocketed $433 million by liquidating its hedges in
September - a move that left the firm exposed to a further $20 slump, though it is not clear
whether it has set up new hedges since.
On Tuesday, tiny firm American Eagle Energy announced that it sold off its 414,000 barrels of oil
hedged at $89.59 a barrel through last December for a profit of $13 million to improve its liquidity -
even as the firm said it would have to stop drilling until prices improved.

That appears to be the effect that Opec is looking for, although thus far it is the exception rather
than the rule. "The companies' situation is strong," said an Opec delegate from a Gulf producer.
"All this will delay the impact of the lower oil prices."
Oilfield services companies feel the heat as prices plunge
+ NewBase
Oilfield service companies operating in the United Arab Emirates are feeling the pressure as
prices continue to plunge due to oil oversupply and weak demand. They are expecting profit to
reduce and demand to go down for their services.
Oil price has fallen by more than 50 per cent since June last year. From a peak of $115, Brent
crude came down to $55 on Monday. Analysts forecast the price to slide further and touch $50 in
the coming days.
A Dubai based company said the profit will decrease by 30 per cent.
“Many development projects are already on hold or getting slow based on the directive from oil
companies. This will enable oil and gas engineering companies like us to compete in a tough
market and the work needs to be executed at a very less or no profit scenario,” said Ashik
Subahani, Managing Director of Great Waters Maritime, an oilfield services firm that deals with the
global offshore, oil and gas maritime industry.

He said less oil price will reduce job opportunities and will result in many employees losing their
jobs. “It will adversely affect more in Europe compared to Middle East due to the higher oil
production cost of Europe,” he said.
“Reduction in oil price will put on hold many of the ongoing alternative energy projects specially in
Europe as buying oil at a lesser price becomes cheaper than going for alternative energy.”
The United Arab Emirates has said the country will continue to invest in oil and gas sector and
increase the production to 3.5 million barrels per day by 2017.
Talking about the fall in oil prices and how it would impact the industry, an energy expert based in
Abu Dhabi said uncertainty is not good for business.
“It will have an impact on projects and their profits. I expect the economics of all new projects will
be rerun at more conservative worst case oil price scenarios and those of marginal returns will
likely be put on hold,” said Adrian Nizzola, a partner in Simmons & Simmons, an international law
firm specialising in energy.
“There will be a real pressure on the cost base of oil service companies, as national and
international oil companies will look for cheaper exploration and production solutions. If these
companies are unable to adjust to a lower oil price environment, they will struggle,”
He expects reorganisation and restructuring of the job pool as oil prices continue to tumble.
“Companies will look to lessen their labour cost. Western expatriate workers could be affected as
companies look to reassign and reorganise their work force e.g. they might be put on other
projects or other ventures. Individual contractors may see the durations of their contracts
shortened or suspended.
Ongoing oil and gas projects will be continued, but companies will be closely watching new
projects, he said. “They will revisit the economy of new projects.”
Meanwhile, Emirates NBD in a monthly report quoting Bloomberg estimates said the total oil
production by Organisation of the Petroleum Exporting Countries (Opec) members declined by
122,000 barrels per day in December with the biggest cuts coming from Saudi Arabia and the
UAE, which reduced output by a combined 250,000 barrels per day. However, this was offset by
increased output from Iraq, 150,000 bpd and Nigeria by 110,000.
Oil plumbs new depths below $55 a barrel
Reuters + NewBase
Oil prices have continued their descent in the new year, with US$50 a barrel the next milestone
coming into view on the way down.
In Dubai on Monday, crude oil futures for February delivery lost another $1.97 a barrel to finish at
$52.04. In London, North Sea Brent crude futures were down $1.82 at 5pm UAE time to $54.60,
bringing the cumulative loss since last summer’s high to more than 52 per cent.
The dip below $55 was the first since May 2009.

Oil prices have declined every week since mid-November when the decline that began last June
gathered pace as it became clear that Opec, and Saudi Arabia in particular, would rather see
prices fall than cede market share by cutting production.
Brent was last below $50 a barrel briefly at the end of 2008, when oil prices crashed in the wake
of the global financial crisis. But it has not been below that level for a sustained period since 2005.
Citibank this week added its voice to the chorus of those cutting their forecasts for Brent crude this
year, with a bearish new prediction that Brent will average $63 a barrel in 2015.
Ed Morse, the head of commodities research at Citigroup and one of the more authoritative
analysts after accurately bucking the consensus view in the recent past, laid out a very bearish
case for the oil market in his latest report.
Mr Morse reiterated the story that the oil market has become swamped by output from North
America, from both Canada’s vast Alberta tar sands fields as well as those opened up by new
drilling technologies in places such as North Dakota and the Permian Basin in Texas.
He sees these conditions gathering pace in the early part of this year.
“Lying ahead in [the first half of 2015] is a step-up in oversupply, more volatility and turmoil, with a
surge of more than 200,000 barrels a day in Canadian sour crude delivered to the US [Gulf
Coast], along with potential Saudi efforts to regain US market share followed by weaker [second
quarter 2015] demand and what looks to be weaker refinery margins.”
Like others, Mr Morse is also worried about the wider implications of the sudden and sharp drop in
oil prices.
“Most worrisome are unintended consequences and geopolitical fallout,” he warns. “Opec’s
expected revenues of $445 billion this year, down more than 50 per cent from 2012, increases
domestic pressures in Opec and other producers, especially those facing sanctions and internal
dissent such as Russia and Iran, where geopolitical tensions could strain further if prices are seen
as being manipulated against them.”
Recent predictions for oil prices from banks and other forecasters have varied wildly.
HSBC, for example, is still forecasting a Brent average price of $95 a barrel for this year,
expecting that the sharp decline in prices will cut off investment for the more expensive projects.
Morgan Stanley, on the other hand, is among the more downbeat, seeing Brent going as low as
$43 a barrel, though more likely to average out at $70 a barrel.
In such volatile conditions, predictions are even more flexible than normal. Even Citigroup
reaffirmed a forecast for this year of $97.50 a barrel for Brent as recently as October.
One of the difficulties is assessing the impact of lower prices on producers. Russia and other
former Soviet Union producers were pumping at a record rate in November and December. But
while exports from that region likely will continue to surge this month, they may be hit by a number
of factors as the year progresses.

“Output [from Russia] this year could decline year-on-year by over 100,000 barrels a day, given
the impact of sanctions, low oil prices and no large projects expected to come online,” according
to Amrita Sen, the head of oil analysis at Energy Aspects.
Several of the large international oil companies also have announced lower capital expenditures in
the coming year, including ConocoPhillips, which last month said it would cut overall investment
by 20 per cent, a significant portion of which would be in unconventional plays in the Permian
Basin, Niobrara in Colorado and the Montney and Duvernay tar sands projects in Canada.
The question for the oil markets is how long it will take for cutbacks such as these to take effect
and allow oil demand in a sluggish world economy to catch up with supply.
Mr Morse reckoned the market will find a new equilibrium but not quickly.
“There are likely to be lots of head fakes, starting with reports of declining production in North
Dakota,” he said. “But this is going to reflect far less the accumulating reductions in upstream
capital spending than normal seasonality and the difficulties of drilling in the heart of winter in
snowy and icy North Dakota. Even so, the market should eventually sort itself out, from a
combination of supply and demand responses.

Your Guide to Energy events in your area

Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk Energy
Khaled Malallah Al Awadi,
Energy Consultant
MSc. & BSc. Mechanical Engineering (HON), USA
ASME member since 1995
Emarat member since 1990
Mobile : +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
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 06 January 2015 K. Al Awadi

New base 512 special 06 january 2014

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