New base 539 special 12 february 2015

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NewBase 12 February 2015 - Issue No. 539 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Somali Petroleum Minister Sees Start of Oil, Gas Output by 2020
Bloomberg+NewBase
Somalia may start producing oil and gas by 2020 after exploration work showed the potential for
“huge” deposits of the resources in the Horn of Africa country, outgoing Petroleum Minister Da’ud
Mohamed Omar said.
“We expect that Somalia will produce oil and
gas in 2020 and the nation will reap
enormous benefits such as alleviating the
poverty and leading the country into
prosperity,” Omar told reporters Wednesday
in the capital, Mogadishu. He didn’t identify
which oil companies are carrying out
exploration work in the country.
Somalia is considering its first bidding round
for oil blocks since 2009 as increasing
stability begins to attract more foreign
investors. African Union-backed government
forces have regained control of about 70
percent of the country that had fallen under
the control of al-Shabaab, the al-Qaeda-
linked militant group seeking to create an
Islamic state in Somalia.
The government is in talks with companies
including Royal Dutch Shell Plc, Exxon Mobil
Corp., BP Plc and Chevron Corp. about
reactivating dormant contracts in the country,
according to J. Jay Park, managing director of Petroleum Regimes Advisory, who provides legal
advice to the government. Oil companies haven’t operated in the country since civil war erupted in
1991 and they were forced to declare force majeure.
Omar said in October that he expects the country to begin producing oil and gas within six years.
He is being replaced by Mahamed Mukhtar Ibrahim, who was appointed as minister in a new
cabinet announced by Prime Minister Omar Abdirashid Ali last week.
While Somalia has no proven oil reserves, drillers are betting the country has a geology similar to
that of Yemen, which lies across the Gulf of Aden and has 3 billion barrels of proven oil reserves,
according to the BP Statistical Review of World Energy.

Pakistan: China Gas Pipeline Bureau to Begin Laying Gas Pipeline
BusinessRecorder + NewBase
China Petroleum Pipeline Bureau (CPP) will soon begin laying 700 km Gwadar-Nawabshah gas
pipeline in Pakistan on government to government basis, reported Pakistani newspaper Business
Recorder On Tuesday .
Once complete, the pipeline will transport up to one billion cubic feet per day of regasified LNG.
CPP is expected to finish the pipeline in two years, the newspaper reported . Pakistan hopes that
the pipeline would also facilitate Iran-Pakistan pipeline project if international sanctions on Tehran go.
An official told Business Recorder that CPP would bring the required capital of $1.5 billion and will
also construct the LNG terminal in Gwadar, costing $800 million. The terminal, which is likely to be
offshore, will have a capacity of 500 mmcfd of LNG.
Cost of TAPI Gas Pipeline Could Rise to $10 bn
Delay in implementation could push up cost of Turkmenistan, Afghanistan, Pakistan and India
(TAPI) gas pipeline project to $10 billion, Asian Development Bank has warned. According to
Pakistan’s Express Tribune newspaper earlier estimates had put the cost at $7.5 billion, which will
now go up by $2.5 billion, which officials say would also include development cost of gas fields.

Officials from the four countries met in Islamabad on Wednesday during the TAPI steering
committee meeting. The committee will deliberate to finalise the award of a multi-billion-dollar
contract to French energy giant Total.
Officials added that Turkmenistan had agreed to award the contract to Total as the four nations
gathered to discuss the service contract agreement to be signed with the French company, which
would function as a consortium leader, Express Tribune added. Under the contract, Turkmenistan
will pay a service fee to Total for development of the fields and the French entity will bear the
costs associated with laying the pipeline.
Last year, gas companies of Turkmenistan, Afghanistan, Pakistan, and India established a
company that will build, own and operate the planned 1,800-kilometer natural gas pipeline.
Turkmengas, Afghan Gas Enterprise, Inter State Gas Systems, and GAIL (India) Limited own
equal shares of the company.
The TAPI pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan
to Afghanistan, Pakistan, and India over 30 years.

Kenya: CAMAC Energy completes 2D seismic acquisition in Kenya
Source: CAMAC Energy
CAMAC Energy has announced the successful completion of its onshore 2D seismic acquisitions
on Blocks L-1B andL-16 in the Republic of Kenya. 'The preliminary results from data processing
in the field are encouraging'.
The 2D seismic program was conducted by BGP Kenya and covers approx. 700 line kms on L-
1B and 325 line kms on L-16. The objective of the acquisition is to identify potential exploration
targets in the Paleozoic, Jurassic, Cretaceous, and Middle to Lower Tertiary sections, which are
known to be oil-bearing in the East Africa region. The seismic survey, paired with the previously
completed airborne gravity and magnetic surveys, will be used to help identify potential drilling
targets on the block.
'The preliminary results from data processing in the field are encouraging', commented Segun
Omidele, Senior Vice President of Exploration and Production. 'These seismic surveys are
fundamental to advancing our onshore Kenya work program and our understanding of the
resource potential on these blocks and will help us determine potential locations to begin our
exploration drilling.'

Gabon:VAALCO Energy announces production from the Etame 10-H well
Source: VAALCO
VAALCO Energy has announced first production from Etame 10-H, the second development well
drilled from the newly installed Etame platform, offshore Gabon. The horizontal development
well was drilled to a Measured Depth (MD) of 3,144 meters while intersecting over 180m of high
quality reservoir within an oil-bearing portion of the Gamba Sand. Following completion
operations, the well was tested at the rate of approx. 3,200 BOPD on a gross basis with
negligible amounts of water and no hydrogen sulfide (H2S). The well is currently being produced
at approx. 3,000 BOPD.
'We are very pleased with the results from the Etame 10-H well and we are eager to continue our
current drilling program offshore Gabon,' said Steve Guidry, CEO of VAALCO. 'VAALCO has
produced over 85 million barrels of oil from the Etame Marin block and, with our two new
platforms, we are well positioned to continue to deliver a growing production profile through most
of 2015.'
The contracted jack up rig, the Transocean 'Constellation II', is now being mobilized to drill
additional development wells from the Southeast Etame/N. Tchibala ('SEENT') platform,
beginning with the Southeast Etame 2-H well in the Southeast Etame field, where the Company
and its partners drilled a successful exploration well in 2010.
Following the mobilization of the jack-up rig to the SEENT platform, VAALCO is planning to
conduct an extended well test of the Etame 8-H well, drilled in the fourth quarter of 2014, to
confirm and quantify the presence of H2S, which was detected during the initial 17 hour flow test.
The well test is expected to occur later in the first quarter of 2015.

Poland’s dream of shale gas riches begins to dim
AFP + NewBase
Poland’s dream of becoming a shale gas “El Dorado”, bringing untold riches and assuring energy
independence, is turning into a mirage as Western firms abandon prospecting efforts, citing poor
results.
“We can no longer talk of a new El Dorado,” said Grazyna Piotrowska-Oliwa, a former president of
Poland’s PGNiG
gas utility. “The
hopes and
promises were
excessive,” she
said, even though
the official results
of the explorations
have yet to be
published.
Optimistic
estimates
suggested Poland
could have up to
1.92 trillion cubic
metres (67.8
trillion cubic feet)
of exploitable
shale gas
deposits, fuelling
interest from top
energy giants
around the world.
But those
forecasts were “exaggerated”, and now “there’s disappointment” in Poland, according to analyst
Grzegorz Kus of the consultancy PwC. Leading Polish geology scholars also say that the
country’s shale deposits are structured so differently from those found in the United States that
extraction technologies developed there cannot be applied in Poland.
US energy major Chevron was the latest to pull the plug on shale gas prospecting in Poland.
ExxonMobil, Marathon Oil and Talisman Energy had led the exodus, followed by French oil giant
Total and Italy’s Eni last year.
“It’s not a surprise and it’s not the last withdrawal,” Kus said of Chevron. “It turns out that this
market is not as interesting as it was thought to be.” He attributed the retreat of global oil giants to
the disappointing results of exploration, the drop in global fuel prices, more interesting extraction
opportunities elsewhere in the world, Polish bureaucracy and planned tax hikes in Poland’s
energy sector.
Fifteen firms are still in the game, including US major ConocoPhillips, PGNiG and Polish oil group
PKN Orlen.

EIA tracking tool shows light-sweet crude oil imports to Gulf Coast virtually eliminated
Source: U.S. Energy Information Administration,
The increase in U.S. shale and tight crude oil production has resulted in a decrease of crude oil
imports to the U.S. Gulf Coast area, particularly for light-sweet and light-sour crude oils. These
trends are visualized in EIA's crude import tracking tool, which allows for time-series analysis of
crude oil imported to the United States.
Historically, Gulf Coast refineries have imported as much as 1.3 million barrels per day (bbl/d) of
light-sweet crude oil, more than any other region of the country. Beginning in 2010, improvements
to the crude distribution system and sustained increases in production in the region (in
the Permian and Eagle Ford basins) have significantly reduced light crude imports.
Since September 2012, imports of light-sweet crude oil to the Gulf Coast have regularly been less
than 200,000 bbl/d. Similarly, Gulf Coast imports of light crude with higher sulfur content
(described as light-sour) have declined and have been less than 200,000 bbl/d since July 2013.

EIA's crude oil import tool can be used to examine crude oil imports by country of origin. In the
Gulf Coast (defined as the Petroleum Administration for Defense District 3, or PADD 3), crude oil
is imported from several countries, mainly in the Americas (Mexico, Venezuela, Colombia, and
Canada) and in the Middle East (Saudi Arabia, Kuwait, and Iraq).
Imports from other countries to PADD 3 have declined significantly in recent years, from an
average of 1.7 million bbl/d in 2009 to just 0.26 million bbl/d in 2014, through October. Imports
from Africa in particular have declined, as those were primarily light-sweet in quality.
Because the Midwest region (PADD 2) is landlocked, imports show a much less diverse range of
countries of origin.
In 2014, almost all imports of crude oil to the Midwest came from Canada. Comparing Canadian
imports to the Midwest, which now surpass 2 million bbl/d, imports from other countries had been
historically low (125,000 bbl/d in 2009) and are now even lower (34,000 bbl/d in 2014 through
October).

Oil Price Drop Special Coverage
Halliburton axes 6400 jobsd due to fall in oil prices
Low oil prices have forced major oil companies to reduce capital expenditure, consequently
hurting the oilfield services sector, including companies such as Halliburton, Schlumberger and
Baker Hughes.
“We value every employee we have, but unfortunately we are faced with the difficult reality that
reductions are necessary to work through this challenging market environment,” BBC has quoted
Halliburton as saying.
Halliburton has a workforce of more that 80,000 employees, representing 140 nationalities in over
80 countries.
The company has said that the overall number of 6400 jobs includes the previously announced
plan to reduce its international workforce by a 1000.
Halliburton, headquartered in Houston, Texas, is not the only oilfield services major forced to lay
off workers due to the challenging market conditions. Schlumberger, world’s largest provider of
services to the oil and gas sector, last month said it would lay off 9000 workers.
Also, Baker Hughes, soon to be taken over by Halliburton, in January said it expected to
undertake a workforce reduction of 7000, most of which to take place in the first quarter of the
year.
Halliburton, world’s second biggest oilfield services provider, said that the latest layoffs are not
related to the takeover agreement with Baker Hughes.
6400
700

OPEC producers cut prices to Asia in battle for market
Agencies + NewBase
Iraq, Kuwait and Iran joined Saudi Arabia in cutting their March crude prices for Asia, signaling the
battle for a share of OPEC’s largest market is intensifying. Iraq’s Basrah Light crude will sell at
$4.10 a barrel below Middle East benchmarks, the deepest discount since at least August 2003,
the Oil Marketing Co. said Tuesday.
National Iranian Oil Co. said its official selling price for March Light crude sales will be a discount
of $2.10 a barrel, the widest since at least March 2000, according to a company official who asked
not to be identified because of corporate policy. Kuwait Petroleum Corp. said Wednesday its
discount will be $4.10, the biggest since August 2008.
The cuts come after Saudi Arabia, the largest crude exporter, reduced pricing to Asia last week to
the lowest in at least 14 years. The Organization of Petroleum Exporting Countries left its
members’ output targets unchanged at a November meeting, choosing to compete for market
share against US shale producers rather than support prices. Iraq is the second-biggest producer
in OPEC, Kuwait is third and Iran fourth.
“This is an effort by some producers to protect market share,” Sarah Emerson, managing principal
of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts, said by phone Tuesday.
“It’s really straightforward; cutting prices is how you keep your foot in the door.”
Middle Eastern producers are increasingly competing with cargoes from Latin America, Africa and
Russia for buyers in Asia. Oil prices have dropped about 45 percent in the past six months as
production from the US and OPEC surged.
The International Energy Agency said Tuesday that the US will contribute most to global growth in
oil supplies through 2020 as OPEC’s attempts to defend its market share will hurt other suppliers
including Russia more.
“If they go out and sell at a higher price, they won’t sell much,” John Sfakianakis, Middle East
director at Ashmore Group Plc, a London-based investment manager, said in an interview in

Dubai Tuesday. “For the Saudis, it’s market share at any cost. Saudi (Arabia) is the leader in this
and the others have to follow the leader.”
Iran’s output rose to 2.78 million barrels a day in January from 2.77 million a month earlier as Iraq
boosted supply to 3.9 million from 3.7 million, according to a Bloomberg survey of oil companies,
producers and analysts.
Saudi Arabia won’t balance global crude markets by itself even as prices fall “too low for
everybody,” Khalid Al-Falih, the chief executive officer of Saudi Arabian Oil Co., said at a
conference in Riyadh on Jan. 27. The Kingdom’s Oil Minister Ali Al-Naimi has said producers
outside of the group should trim their output first.
“This is a global market that’s oversupplied,” Emerson said. “Late March and early April are in
normal times a period of weak demand, so you have to be rather aggressive now if you want to
sell your oil.”
Crude demand is improving amid signs prices are stabilizing, the state-run Saudi Press Agency
reported, citing Saudi Arabia’s Oil Minister Ali Al-Naimi.
Al-Naimi discussed a “relative improvement in the market” with Algeria’s Minister of Justice Al-
Tayeb Louh at a meeting in Riyadh on Wednesday, the Saudi Press Agency reported. Increased
demand, stability of prices and the importance of cooperation among oil producers were
mentioned, according to the report. Algeria and Saudi Arabia are members of the Organization of
Petroleum Exporting Countries.
Al-Naimi discussed cooperation among oil producers from OPEC and from outside the group with
Gazprom Chairman and presidential envoy Viktor Zubkov, according to the Saudi Press Agency.
Al-Naimi has said producers outside of OPEC should trim their output first.
Global economic growth will boost demand, Al-Naimi said at a conference in Abu Dhabi in
December. Economic growth will accelerate to 3.5 percent this year from 3.3 percent last year, the
International Monetary Fund on Jan. 19.
Iraq, Kuwait and Iran joined Saudi Arabia this month in lowering their crude prices for Asia,
signaling OPEC is seeking to defend market share rather than support prices. Brent crude, the
benchmark for pricing more than half of the world’s oil, climbed the past two weeks on signs US
drillers were cutting.
Oil demand growth will accelerate to 1 percent this year from 0.7 percent last year, partly on faster
economic growth, the Paris-based International Energy Agency said on Tuesday. Brent crude
slumped 48 percent last year as increased production from the U.S. to Russia and stagnating
economic growth helped global output to exceed demand.
Oil fell toward $55 a barrel on Wednesday, under pressure from expectations of persisting

oversupply in world markets and an industry report saying US crude stocks rose further from a
record high.
The American Petroleum Institute said on Tuesday crude stocks increased by 1.6 million barrels
last week. The US government’s Energy Information Administration (EIA), which issues its latest
report on Wednesday, already shows stocks at a record high. Crude had come under pressure on
Tuesday from International Energy Agency (IEA) forecasts of continued supply growth in the
United States to 2020 despite lower prices, and of a possible further rise in stocks this year.
“The supply growth in 2015 is likely to continue unabated, albeit at a somewhat lower rate,”
Fereidun Fesharaki at Facts Global Energy said in a market note. “This all means a weak market
in 2015 and even lower oil prices. Demand rebound will not save the oil market.”
Brent crude futures LCOc1 were down $1.37 cents at $55.06 by 1415 GMT (09:15 a.m. EST). US
crude CLc1 traded at $49.22, down 80 cents, having reached a high of $51.14 earlier in the
session.
After more than halving since June, oil prices have rallied by over 20 percent in the last four
weeks. Kuwaiti Oil Minister Ali Al-Omair said on Wednesday crude prices could rise to $60 a
barrel by the end of the year.
But analysts agreed with IEA predictions that following the crash, oil prices would stabilize well
below the highs of more than $100 a barrel seen in the last three years. Jefferies Bache analysts
said Brent and US crude, known as West Texas Intermediate (WTI), would fall in the short term.
“We still expect fresh WTI lows and an ultimate decline towards the $40 area,” they said in a note
to traders. “Assuming our $40 WTI target is achieved, a nearby Brent price in the $48 area would
be implied.” “All in all, we are maintaining a bearish stance.”
Adding further pressure on prices, the EIA kept its 2015 and 2016 domestic oil output forecasts
virtually unchanged from the previous month. The EIA expects US oil production in 2015 to be 9.3
million barrels per day, slightly lower than the 9.31 million bpd forecast in last month’s short-term
energy outlook.
Cheaper oil won’t fuel economic growth: Moody’s
SG/Agencies + NewBase
A fall in world oil prices over the next two years won’t support global economic growth, as
economic and political tension in the Eurozone, China, Russia and Japan constrain activity,
Moody’s international rating agency said in a report.
“Lower oil prices should, in principle, give a significant boost to global growth,” said Marie Diron, a
Moody’s Senior Vice President and author of the report. “However, a range of factors will offset
the windfall income gains from cheaper energy.”
While in theory lower oil bills should spur economic growth in Europe, however a number of
economic issues, like high unemployment and deflation are outweighing most of the benefits of
cheaper crude. The agency predicts that GDP growth of the euro zone will reach 1 percent this
year despite low oil prices and 1.3 percent in 2016.

Lower energy prices will not stop the continued slowdown of the Chinese economy, as higher
energy taxes and state control of prices in various sectors will weaken the effect of cheap oil.
Moody’s expects China’s GDP growth will be below 7 percent in 2015 and 6.5 percent in 2016,
Moody’s says.
Brazil, which imports and exports roughly the same volumes of oil, is expected to have its slowest
growth period since the early-1990s between 2014 and 2016 with the country’s GDP growth
around zero in that period.
The recession in Russia will be deeper and longer than in 1998 and 2009 and last until 2017,
according to the report. The country’s GDP will lose more than 8 percent in 2015-2016, while the
drop in domestic demand will be sharper than the decline in GDP as a whole.
At the same time government spending in Saudi Arabia will support economic growth and
compensate for the negative effects of lower oil prices. Moody’s expects the price of North Sea
Brent blend to be at $55 per barrel by the end of 2015 and up to $65 per barrel in 2016. The
agency explains it is not expecting any changes in supply and demand in the near future.
However, despite a large number of downside risks, there won’t be any serious threat to the world
economy, Moody’s analysts say. Moody’s said it will leave the forecast unchanged for the G20
countries. “For the G20 economies, we expect GDP growth of just under 3 percent each year in
2015 and 2016,” the report said.
The current oil prices will have a positive impact on the economies of India and the US, with its
GDP expected to increase by 3.2 percent in 2015 and 2.8 percent in 2016. “The US is one of the
main beneficiaries of cheaper oil,” Diron said. “The favorable economic environment in the US will
encourage consumers and companies to spend part of the gains in real income that come from
lower energy costs.”

Algeria increases initiatives to address drop in oil prices
APS + NewBase
ALGIERS- Algeria’s initiatives to find a consensual platform likely to stop the drop in oil
prices are increasing towards oil producing countries, including those which are not
members of the Organization of the Petroleum Exporting Countries (OPEC).
In the face of the persistent rejection of some OPEC’s members to hold an urgent meeting
devoted to the recovery in oil prices, Algeria started an initiative aimed at organizing consultations
with the OPEC and non-OPEC members to reach a consensus for the control of oil prices.
It is in this regard that President of the Republic Abdelaziz Bouteflika tasked Prime Minister
Abdelmalek Sellal to hand over letters to heads of State of the member countries of the African
Petroleum Producers Association (APPA) to consult each other following the drop in oil prices.
The concerned countries are Nigeria, Gabon, Angola, Congo and Equatorial Guinea. Azerbaijan,
which is a major regional oil power of the Caucasus, also received a message from President of
the Republic.
Minister of Energy Youcef Yousfi was received Wednesday in Baku by Azerbaijani President
Ilham Aliyev, to whom he handed over a message from President Abdelaziz Bouteflika, about
particularly the situation of the global oil market.
President Bouteflika’s message is also about the “need to hold consultations” between the
producing countries OPEC and non-OPEC members.

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
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For additional free subscription emails please contact Hawk Energy
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
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 12 February 2015 K. Al Awadi

New base 539 special 12 february 2015

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