Fujairah as global energy hub

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NewBase 15 February 2015 - Issue No. 540 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Fujairah expanding into a global energy hub
Gulf News +NewBase
As global energy production and consumption centres are shifting, Fujairah is transforming into a
major platform for local, regional and international companies seeking to expand their footprint into
other parts of the world, according to a Gulf Intelligence special report on Fujairah.
“Over the past decade, Fujairah has experienced tremendous growth. Notably in 2012, the Abu
Dhabi Crude Oil Pipeline came on stream — providing Abu Dhabi with an export outlet for crude
from the Habshan field via Fujairah. In addition, Fujairah is currently planning refining,
petrochemical and LNG regasification facilities for the future,” said Shaikh Saleh Bin Mohammad
Bin Hamad Al Sharqi, Chairman of the Department of Industry and Economy, Fujairah and
Chairman of the Board of Port of Fujairah.
The importance of pipeline and storage in locations such as Fujairah has become increasingly
important in times of high geopolitical instability, the report stated. As a result, the Gulf will likely
see major additions of oil storage capacity in locations such as Fujairah, and Sohar, Ras Markaz
and Duqm in Oman.
According to a poll taken at the Gulf Intelligence 2014 Energy Markets Forum, 62 per cent of
senior energy executives believe that in the long term additional storage capacity will be needed
and that new storage facilities won’t create a surplus of capacity in the region.

Top military role for Sabic chief
Saudi Press + NewBase
The Saudi engineer who helped to turn Sabic into one of the world’s biggest industrial groups is
taking the helm of the
kingdom’s military
industries corporation.
New Saudi King
Salman appointed the
Sabic chief executive
Mohamed Al Mady to
the role, according to a
royal decree published
on the state news
agency SPA yesterday. The statement said he would become the
chairman of the General Organization for Military Industries with
immediate effect. It did not say if Mr Al Mady would be leaving his post at Saudi Basic Industries
Corporation.
Mr Al Mady made headlines in 2013, when he said that compulsory military service could help to
solve the Arab youth unemployment crisis. The move would help to change the mindset of young
people unwilling to consider certain jobs, he told a World Economic Forum meeting in Jordan in
2013.
“The problem is you have to tackle the cultural dimension of the labour force. People don’t accept
jobs. They want the jobs that will give them higher money and stability. That’s not going to
happen. “They have to accept certain job categories that fit their situation,” he told a session
about tackling joblessness in the Arab world.
Mr Al Mady joined Sabic in 1977, when there were only five other people working for it. Within
three decades it had grown to become the world’s biggest chemical maker. Today it has a market
capitalisation of US$76 billion and employs 40,000 people.
He was one of a handful of young Saudis hand-picked by the kingdom’s ministry of education to
learn chemical engineering in the US in the early 1970s at a time when Saudi Arabia did not have
a single major chemical plant.
They were to learn how to turn the vast oil reserves lying deep below the kingdom’s deserts into
valuable chemicals using the waste gases that at that time were burned off at the wellhead during
the oil drilling process, known in the industry as flaring.
The company was able to rapidly expand its operations in the kingdom and beyond, helped by its
ability to tap cheap natural gas to manufacture plastics while competitors in Europe and the US
struggled to compete and paying much more for the gas or oil feedstock needed to make ethylene
– the building block petrochemical.
But the recent growth of the shale gas industry has dramatically revived the fortunes of many of
Sabic’s competitors reducing the price advantage enjoyed by the Saudi company for decades.
Last month it reported a 29 per cent drop in fourth quarter profits.

Fitch Ratings affirms AA rating for Abu Dhabi
The National + NewBase
A top ratings agency has affirmed Abu Dhabi’s investment grade despite the impact of a weaker
oil price. Fitch Ratings followed Standard & Poor’s in affirming AA investment grade for Abu
Dhabi.
The ratings agency cited the emirate’s ability to withstand turbulence in energy prices with its
growing sovereign foreign assets, prudent cost-cutting measures, declining debt levels of
government-related-entities, and contributions from the non-oil economy.
Brent crude stabilised and rebounded in February after months of declines. The commodity traded
at US$61.52 per barrel on Friday after falling as low as $48 per barrel at the end of January from a
peak of $111 in June.
The decline in oil prices wiped more than 20 per cent off the value of Abu Dhabi and Dubai
equities from the beginning of October to the middle of December. Stocks have since rebounded,
with the Abu Dhabi Securities Exchange General Index up 18 per cent since December 16 and
the Dubai Financial Market General Index up 26 per cent in the same period.
Last week, Standard & Poor’s said that it kept Abu Dhabi’s AA rating, predicting the emirate’s
economy would remain resilient despite the lower oil prices. Saleem Khokhar, the head of
equities at National Bank of Abu Dhabi, said the vote of confidence places much in the way of a
needed catalyst for UAE equities to hold steady.
This is after the drastic declines when investors feared that the economy would slow down as a
result of lower oil prices, said Mr Khokhar.

“It does show the agencies [S&P and Fitch] believe the Abu Dhabi economy, despite the oil price,
has the strength and ability to grow,” Mr Khokhar said. The report “helps the market hold steady
and doesn’t come lower, supporting current valuations. The real concern was that the economy
tails off and equities suffer”.
In a report released late on Friday, Fitch
said sovereign assets were expected to
have grown to 184 per cent of GDP by the
end of last year. There is more room for
“significant cutbacks in aid, net lending to
state owned enterprises and transfers to
the federal government”, the report said.
The debt of government- related and
state-owned enterprises declined to 34.5
per cent of GDP by the end of last year, “reflecting the authorities’ commitment to containing
indebtedness”, Fitch said in its report. “Explicit contingent liabilities are clearly delineated and
GREs and SOEs borrowing plans are scrutinised by the authorities,” the report added.
Non-oil economic growth, which stood at 7 per cent last year according to Fitch estimates, is
expected to slow to 4 per cent next year as a result of cutbacks on spending and a slowdown in
Dubai, the agency said.
Fitch, however, voiced concern that “economy policymaking tools, primarily at the federal level,
are weak, although steps to develop the policy framework continue”.
“A macro-fiscal unit has been
established at the Department
of Finance and the use of
macro-prudential tools has
increased. Nonetheless, Abu
Dhabi is primarily dependent
on its fiscal and external
buffers to absorb shocks,” the
report said.
The ratings agency also
pointed to “major gaps in the
transparency and availability
of data remain despite recent
improvements.
“In particular, a
comprehensive external
balance sheet is not published
and there is less information
on the sovereign balance
sheet than peers. Few high-
frequency indicators are
disseminated, although the
publication of quarterly
national accounts data has begun,”

Oman’s natural gas demand to grow at 6%/Y
Times of Oman + Newbase
Oman's natural gas demand is expected to grow at six per cent per annum for the next five years.
The major consumers of natural gas in the country include power producers, gas-based industries
and liquefied natural gas plant
Total gas consumption at the main power and desalination plants in 2013 was about 6.7 billion
cubic metres, according to a study on power sector conducted Shurooq Securities
The Oman Power and Water Procurement Company (OPWP) estimates gas consumption in the
electricity and water desalination sector to rise from the current annual volume of 6.7 billion cubic
metres to 10 billion cubic metres by 2020, an almost 50 per cent increase. While the national
demand for gas will rise sharply over the coming five years, the rate of increase is by no means
evenly distributed, with requirements set to spike in some regions
In fact, the Ministry of Oil and Gas is responsible for supplying gas to various consumers and the
obligations are set out in within the agreements. The Sultanate's natural gas production this year
is estimated at 120 million cubic metres per day, which is 10 million cubic metres higher than that
of last year
The report also noted that the water demand in the northern region (inter-connected zone and Sur
zone) is projected to grow by six per cent per year, from 238 cubic meters in 2013 to 349 million
cubic meters by 2020
The major developments include an expansion of 12.5 million imperial gallons per day of water at
Barka I, which will be completed by the third quarter of 2015. In Salalah, water demand is
projected to grow by eight per cent per annum and peak demand to increase from 75,000 cubic
metres per day in 2013 to 132,000 cubic metres per day in 2020
The principal developments in Sur zone include Oman Power and Water Procurement Company's
plans to procure an extension to Sur independent water project with a capacity of 50,000 cubic
meters per day, which is expected in late 2015

Indonisia:Pertamina Gas Sets Aside $400 mn for Gas Infrastructure
Globnews + NewBase
Pertamina Gas has set aside $400 million in capital expenditure this year to continue work on gas
transmission and distribution projects in Indonesia that were started in 2014, Jakarta
Globenewspaper said Thursday in a report.
Projects include pipelines from Porong to Grati, both in East Java, and Muara Karang to
Tegalgede in West Java, planned to be operational later this year. The company would also begin
work on the gas pipeline in Sumatra, by connecting the pipes in Arun and Belawan to the pipes in
Medan Industrial Area (KIM) and to the ones in Sei Mangkei Special Economic Zone (KEK),
Besides developing the gas pipelines, the company was constructing a $28 million LPG refinery in
Mundu, which is scheduled to be operating in March, and a $162 million LNG refinery in Bali,
which is targeted to be start in late 2015.

Indonesia Approves RH Petrogas' Development Plan for North Klalin Gas Field
Source: RH Petrogas
Indonesia has approved RH Petrogas’ development plan for North Klalin gas and condensate field
in the Kepala Burung PSC, West Papua. The plan of development was submitted following the
discovery made by the North Klalin- 1 well in 2011 and the successful appraisal by the North
Klalin- 2 and 3 wells in subsequent years, the company said Thursday in a statement. North
Klalin-1, 2 and 3 wells have since been put on production.
The development program involves the drilling of four new development wells and the construction
of flowlines tying back to existing production facilities within the block. The additional gas
production from the North Klalin field will be used to supplement internal fuel requirement for
operation as well as to meet additional demand for gas in the local markets and to support the
economic development around the Sorong area in West Papua.
RH Petrogas holds 60 percent stake in the PSC while PetroChina has 30 percent stake
andPertamina Hulu Energi owns 10 percent.

BP Loses Bid for $750 Million Transocean Spill Insurance
Bloomberg + NewBase
BP Plc isn’t covered under Transocean Ltd.’s insurance policies for the undersea well blowout that
caused the 2010 Gulf of Mexico disaster, the Texas Supreme Court said, blocking the oil
company’s access to $750 million for spill costs.
The decision conflicts with an earlier ruling by a U.S. appeals court that Transocean’s carriers
couldn’t deny coverage for pollution-related liabilities for a spill that has already cost BP more than
$28 billion. The appeals court later withdrew the opinion and asked the Texas justices to rule on
contract interpretation.
The Texas Supreme Court said Transocean’s insurance policy had to be read in context with the
company’s drilling contract with BP, as the two documents “are inextricably intertwined.” BP can’t
claim status as “an additional insured” because of limits in the drilling contract, the Texas court
said.
“BP is not entitled to coverage under the Transocean insurance policies for damages arising from
subsurface pollution because BP, not Transocean, assumed liability for such claims,” the Texas
court said on Friday.
Transocean owned the Deepwater Horizon drilling rig, which was hired by BP to drill the Macondo
well off the Louisiana coast. The blowout and the explosion that followed killed 11 workers and set
off the worst offshore oil spill in U.S. history. The accident and spill led to thousands of lawsuits
against BP and its partners and contractors. Cases over economic losses and personal injuries
have been combined before U.S. District Judge Carl Barbier in New Orleans.
Liability Assumed
Pam Easton, Transocean’s spokeswoman, called the decision “welcome news” for the company.
Transocean agrees that BP wasn’t entitled to coverage because BP had assumed liability for
damages arising from “subsurface pollution,” she said in an e-mailed statement..
“We are disappointed and are considering our options,” Geoff Morrell, BP’s spokesman, said in an
e-mailed statement.

BP filed claims with Transocean’s carriers in 2010, seeking to tap a $50 million primary policy
issued by Ranger Insurance and $700 million in excess coverage from Lloyd’s of London and
other underwriters. The carriers asked the court overseeing the spill litigation to rule that BP
wasn’t entitled to unlimited access to Transocean’s insurance.
Court Reversal
BP lost its battle for coverage at a lower court, won reversal on appeal, then saw that victory
erased when the U.S. Court of Appeals in New Orleans withdrew its original opinion. The
appellate panel asked the Texas Supreme Court to determine whether the reversal conflicted with
state law.
The company has set aside $43.5 billion to cover all costs of the spill, BP said in a Feb. 3
regulatory filing. The ultimate amount is “subject to significant uncertainty,” BP said.
The case is In Re Deepwater Horizon, 13-0670, Supreme Court of Texas (Austin). The appeal is
In Re Deepwater Horizon, 12-30230, U.S. Court of Appeals for the Fifth Circuit (New Orleans).
The lower-court case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on
April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).
Apple Said to Be Working on Electric Car to Challenge Tesla
Bloomberg + NewBase
Apple Inc. is working on an electric vehicle, according to people familiar with the matter, showing
the consumer-electronics giant is open to stepping outside its lucrative focus on mobile devices.
Apple has put a few hundred employees
to work on the secretive project, said one
of the people, who asked not to be
identified because the information is
private. Steve Zadesky, vice president of
iPhone product design, is leading the
effort, the person said. Apple often tests
ideas that don’t get released, and the
effort work may not lead to the company
introducing an automobile, the person
added.
The project is code-named Titan and the
vehicle design resembles a minivan, the
Wall Street Journal reported earlier
Friday. Some Apple executives have
flown to Austria to meet with contract manufacturers of high-end cars, the report said, citing
people familiar with the matter.
Apple already has technology that may lend itself to an electric car and expertise managing a vast
supply chain. The company has long researched battery technology for use in its iPhones, iPads
and Macs. The mapping system it debuted in 2012 can be used for navigation. Last year, Apple

also introduced CarPlay, a software system that integrates iTunes, mapping, messaging and other
applications for use by automakers.
Apple has batted around the idea of developing a car for years. Phil Schiller, Apple’s senior vice
president of marketing, said in 2012 court testimony that executives discussed building a car even
before it released the iPhone in 2007. Mickey Drexler, an Apple board member and head of J
Crew Group Inc., also said in 2012 that Apple co-founder Steve Jobs had wanted to build a car.
A representative of Apple, based in Cupertino, California, declined to comment. The Financial
Times reported earlier Friday that Apple is hiring auto experts to work at a new research lab.
Tesla Connection
Other Silicon Valley companies are also creating cars. Google Inc. is working on a self-driving
vehicle. Tesla Motors Inc. makes electric cars and has hired at least 150 former Apple employees,
more than from any other company, even carmakers.
“From a design philosophy, [Apple] is relatively closely aligned,” Elon Musk, Tesla’s co-founder
and chief executive officer, recently told Bloomberg Businessweek in an interview.
Musk also said Apple has been trying to poach employees from his Palo Alto, California-based
company, offering $250,000 signing bonuses and 60 percent salary increases.
“Apple tries very hard to recruit from Tesla,” he said. “But so far they’ve actually recruited very few
people.”
Auto Experience
Apple has hired from the auto industry over the years. Zadesky joined Apple 16 years ago from
Ford Motor Co., where he was an engineer for three years. Apple’s chief financial officer, Luca
Maestri, has worked at General Motors Co.
Over the past two years, Apple hired Haran Arasaratnam from Ford to work as a battery engineer,
according to Arasaratnam’s LinkedIn profile. Apple also brought on Robert Gough in January to
work on special projects. He’d spent the past four years at auto supplier Autoliv working on
projects including the company’s radar division and developing active safety sensor technology,
according to his LinkedIn profile.

Japan plans to restart some nuclear plants in 2015 after
Fukushima shutdown. Source: U.S. Energy Information Administration,
Previously one of the world's largest producers of nuclear-generated electricity, Japan has relied
heavily on fossil fuels following the meltdown at Fukushima Dai-ichi and subsequent shutdown of
the country's nuclear fleet. In 2013, when almost all of Japan's nuclear fleet was shut down, more
than 86% of Japan's generation mix was composed of fossil fuels. In 2014, Japan's nuclear
generation was zero. The Japanese government anticipates bringing online a few nuclear facilities
in 2015.
Nuclear reactor restarts could begin as soon as May 2015, as Kyushu Electric's Sendai Units 1
and 2 in southwestern Japan received approval to restart from the Japan's Nuclear Regulatory
Agency (NRA) and local authorities in November 2014. The NRA also approved Kansai Electric's
Takahama Units 3 and 4 at the end of 2014, although these units are still awaiting authorization
from the local government. The timelines for restarting these units and other reactors that
currently have applications pending before the NRA are uncertain in the face of more stringent
regulations and, in some provinces, political opposition.
Japan's nuclear industry has been disrupted for nearly four years, ever since the 9.0-magnitude
Tohoku earthquake and ensuing tsunami that occurred off the northeast coast of Japan in March
2011. That event led to the disaster at Fukushima Dai-ichi and the removal from service of the
country's entire nuclear capacity. Nuclear power plants that were not immediately damaged were
gradually shut down as routine maintenance was scheduled to occur. Two nuclear reactors,
Kansai Electric's Ohi Units 3 and 4, were restarted in July 2012 and ran until September 2013,
when they were shut down again.
Prior to the Fukushima accident and the gradual displacement of all of Japan's nuclear generation,
nuclear generation represented 27% of Japan's net generation in 2010. At that time, Japan ranked
as the third-largest nuclear power generator in the world behind the United States and France.

Natural gas and coal were the primary fossil fuels used in Japan, making up about 30% and 24%
of Japan's electricity mix, respectively, in 2010. Oil, one of the most expensive and least-clean
fuels to burn, accounted for just 7% of power generation in 2010. Renewable energy made up
about 11%, mostly from hydroelectric generators.
Following the Fukushima accident, nuclear's share of electricity generation declined, and energy
conservation measures were enforced for larger businesses and highly encouraged for smaller
consumers. Japan's utilities initially substituted the lost nuclear generation with natural gas, heavy
fuel oil, crude oil, and coal, but oil-fired generation began declining in 2013, as Japan relied more
on natural gas and coal. Meanwhile, almost 4 gigawatts (GW) of additional coal capacity came
online in 2013, increasing the share of coal-fired generation. Japanese utilities have proposed
building several additional natural gas- and coal-fired power plants to replace aging generators
and to serve the country's high electricity demand.
Japan imports virtually all its fossil fuels. As a result of greater fossil fuel use and higher
international oil prices during the past few years, Japan spent 60% more for fossil fuel imports in
2013 compared to 2010, an increase of $270 billion over three years. This reversed Japan's trade
surplus and created a widening trade deficit. Utilities have passed on some of the high cost for
power production to consumers, and electricity prices have risen at least 20%.
The current Japanese government believes that the use of nuclear energy is necessary to help
reduce current energy supply strains and alleviate high electricity prices. Japan's new energy
policy, issued in 2014, emphasizes energy security, economic efficiency, and greenhouse gas
emissions reduction, although the plan has yet to provide details of the country's future power
generation fuel mix.

Oil Price Drop Special Coverage
Projects worth $200b cancelled due to low oil prices
Projects worth around $200 billion (Dh734.47 billion) were cancelled globally in the last three
months due to falling oil prices, an oil and gas expert told Gulf News. Christophe de Mahieu, a
partner in Dubai-based Bain and Company said a lot of companies are either cancelling projects
or temporarily stopping work due to the slide in oil prices.
“Drilling activity in the US is dropping like a stone. The contracts are interrupted and drilling
companies have stopped drilling because of the cash flow situation. “National oil companies in the
region, for example Qatar Petroleum and Shell, have cancelled a major petrochemical project.
Aramco has also put on hold or cancelled a number of projects to cut their capital expenditure
programme.”
De Mahieu who has more than 25 years of experience in the industry has been long-term adviser
to many leading institutions and corporations in the Middle East for more than 10 years. He
worked extensively in key sectors including oil and gas, mining, metals, chemicals and private
equity and was a manager of Exxon Corporation.

He said it is difficult to predict where the oil prices are heading in the next six months but said the
trend will lead to spending cuts and greater discipline. “It will put a lot of pressure on oil service
companies to get their prices down. They will look at potential mergers, specially midsize and
small companies.”
Due to fall in prices,
companies are resorting to
reducing operating expenses
by 10 to 15 per cent by
laying off people. “This is
happening right now in
oilfield services companies
and also in drilling
companies around the
world.”
Oil prices have been
plunging since the middle of
last year. From $115 in
June, they have gone down
to around $50 last month.
Weak demand and a
production glut from non-
Opec (Organisation of
Petroleum Exporting
Countries) members have
been cited as the main
reasons for the slide in oil
prices.
Opec countries led by Saudi
Arabia have refused to cut
output to halt the price slide
despite pressure from
member countries like Iran
and Venezuela.
“We can the understand the logic of what Opec is trying to do, to protect and maintain market
share and to restate that Opec and GCC [Gulf Cooperation Council] is the natural owner of the oil
industry in terms of leading it.”
“I think Opec policy, all the ministers have been saying is that for the time being, they don’t see
any reason to meet. They will leave the market to balance itself on supply-demand point of view.
They will not give away on market share.”
On Abu Dhabi oil concessions, he said Adnoc (Abu Dhabi National Oil Company) is looking at
different options between keeping the existing players like Total, BP and potentially opening the
concessions to new players especially from Asia as a lot of oil produced is consumed in Asia. “I
think it’s a very well run professional and logical process that comes to a conclusion pretty soon.”
Adnoc awarded 10 per cent stake to French energy company Total to develop 15 onshore oilfields
two weeks ago. It is yet to take a decision in awarding other contracts.
A number of companies are in the fray including Royal Dutch Shell, BP, Occidental Petroleum
from the US, Statoil from Norway, China National Petroleum Corporation (CNPC), Japan’s Inpex,
South Korea’s Korea National Oil Corporation and Italy’s ENI.

Oil price may not recover significantly in 2015: QNB
Oil prices are not expected to recover significantly in 2015, averaging around $56
per barrel for the full year, QNB has said in a report. Falling investment spending by
oil companies should begin to have an impact on production by 2016-17, adding
some upward pressure on prices as the supply glut is cleared, the bank said in a
report yesterday.
“We therefore expect prices to
recover to $64/b in 2016 and $69/b
in 2017. These forecasts are
broadly in line with the oil futures
market. However, it is predicated
on a recovery of the world
economy and oil demand,
something that remains a risk
going forward,” QNB said.
The Brent crude oil price fell 57%
between June 2014 and January
2015 to a low of $45/b. Over the
last three weeks, however the oil
price has rebounded by 31% to a
peak of $59/b. This poses the
question whether a further rebound
is in the making, given cutbacks in
investment spending by oil
companies and falling US drilling
rig counts.
The evidence suggests that these fundamental changes are likely to affect prices
only over the medium term, while technical factors in financial markets explain the
recent rebound. These technical factors are likely to be temporary.
QNB therefore does not expect a significant further recovery in 2015. The
fundamental supply adjustments currently taking place will, however, result in a
gradual recovery in oil prices in 2016 and 2017.
The technical factors that drove the rebound in oil prices may be connected to the
shape of the futures oil price relative to the spot price. As spot prices fell below
$70/b in January 2015, expectations that supply and demand would adjust led to
futures prices higher than the spot price (the so-called contango shape of the
futures curve).
The lower spot prices became, the greater the expected increase in future prices,

resulting in the futures curve steepening. The futures curve was steepest when spot
prices bottomed out in January—oil for delivery in December 2017 was over $20/b
above the spot price.
This may have pushed oil traders to profit from buying oil on the spot market and
storing it, while selling it at higher prices on futures markets. It also encouraged the
hoarding and stockpiling of oil.
Reports have emerged that major oil traders and Chinese oil companies have
booked super tankers to stockpile oil as oil prices plunged and US inventories have
reached all-time highs.
Furthermore, as oil prices dropped, net short positions on futures markets also
declined. This unwinding and reversal of speculative positions may have played a
significant role in the recent oil price recovery, but this is unrelated to fundamental
shifts in oil supply.
“We do not expect this recovery in prices to continue during the remainder of 2015.
The futures curve has flattened with the recovery in prices, making it harder to profit
from buying oil on spot markets and selling it in the future. Most speculative short

positions have also been unwound, resulting in less speculative downward or
upward pressures on oil prices,” QNB said.
That said, supply and demand adjustments are unlikely to have an impact on prices
until 2016-17. A number of major oil companies have announced cutbacks in
investment, but many of them still expect an increase in production in 2015,
particularly US shale oil producers.
For example, Continental Resources cut investment spending by 41% to $2.7bn,
but still expects production to increase by 20% this year. The International Energy
Agency (IEA) stated in a report last week that it expects the pullback in shale oil
production to be “limited in scope”.
Investment cutbacks are leading to lower numbers of operational drilling rigs in the
US, but this is likely to impact production only in 2016-17. The number of
operational US drilling rigs has fallen by 21% to 1,456 so far in 2015.
However, historical data on US rig counts appear to have minimal relationship with
US crude oil production. A falling rig count during 2012 had no visible impact on US
oil production, which continued rising steadily.
Once a well is drilled, it can take some time for it to be developed and become
operational. Oil companies tend to have a stock of oil wells that are drilled but are
waiting to come into full operation.
Furthermore, the average productivity of oil wells has been rising in recent years
and is expected to continue increasing. As a result, the decline in operational drilling
rigs is only likely to impact oil prices from 2016-17, QNB said.

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 15 February 2015 K. Al Awadi

Fujairah as global energy hub

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