New base 559 special 12 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
in this publication. However, no warranty is given to the accuracy of its content . Page 1
NewBase 12 March 2015 - Issue No. 559 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Gulf countries push for diversification as oil prices drop
GulfNews + NewBase
The UAE economy is stronger than ever and will not be impacted due to drop in oil prices, a top
official from the ministry of energy said.
“We are not worried at all due to decrease in oil prices. Our economy is strong,” said Ahmad Al
Ka’abi, director of the petroleum economics department in the Ministry of Energy. He said drops in
oil prices are not new and have happened before.
“Our economy was not affected when oil prices went down earlier. It will not affect now. Our
economy is much stronger than before,” he said while speaking at a symposium on current oil
market developments in Abu Dhabi on Wednesday.
Oil prices have dropped by about 60 per cent since June last year due to rising production and
less demand from Europe and China. Brent, the international crude benchmark, was trading at
less than $60 per barrel on Wednesday. Al Ka’abi said the UAE’s dependence on oil has fallen
sharply over the years.
From left: Dr Michelle Foss, Chief Energy Economist and Program Manager, University of Texas, Dr
Jean-Francois, Adjunct Professor, Georgetown University, USA, Musabbeh Al Ka’abi, CEO , Mubadala
Petroleum, Panel Chair, and Timothy Gould, Head of Unit, Resources and Investment, Directorate of
Global Energy Economics, International Energy Agency, France, at the symposium.

“The country is adopting a new strategy in the energy sector, which includes amalgamation of
nuclear energy and creation of renewable sources to meet the energy demand. By 2020, we will
have four nuclear stations and they will provide 25 per cent of the UAE’s energy needs. We are
investing in diversification of our energy sources.”
He added that the growth of the US shale production was the most important factor that
contributed to the decline in oil prices.
On the other hand, a senior official from Kuwait Petroleum Corporation said that none of their
projects were stalled due to drop in oil prices. “All the major projects are going ahead. We have a
strategy to reach 4 million barrels per day of oil production by 2020. We are trying to reach the
target and take actions,” said Dr Mohammad Khuder Al Shatti, an oil analyst and manager of the
CEO’s office at the Kuwait Petroleum Coporation.
He said the fall in oil prices has brought in new changes in the oil industry in the Gulf countries.
“It is not about cutting projects but thinking about diversification, which is very important. In the
UAE, Saudi Arabia and Kuwait, there is a drive towards diversification and put emphasis on solar
power and other sources of renewable energy. In Kuwait, 15 per cent of our energy will be
renewable energy by 2030.”
“It is good for the countries. We are in a better position because of high financial reserves, which
we accumulated over the years. The present situation is pushing for much more mature thinking in
terms of expanding on renewables and studying and reviewing subsidies. There will be
rationalisation of expenditure.”
Kuwait exports the fifth-largest volume of crude oil and condensates following Saudi Arabia, the
UAE, Iraq, and Nigeria among Opec countries.

Dubai Airports to link solar project to Dewa
Dubai Airports has partnered with Dubai Electricity and Water Authority (Dewa) to erect a solar
array at Al Maktoum International at Dubai World Central (DWC) which allows the power
generated to be fed directly into the power grid.
This is the first solar project to be linked directly to the Dewa grid and is expected to be followed
by several other similar projects across Dubai, a statement said. By tapping the sun’s energy, the
100-panel solar array aims to limit the power used by DWC’s employee gate facility. The array,
which is located on the roof of the building, has a capacity of 30KW and generates about
48.8MWh of electricity per year, equal to about two-thirds of the power used by the building.
Feeding power into the Dewa power grid allows both Dubai Airports and Dewa to further reduce
their reliance on power generated using fossil fuel. “The solar array is just one of several projects
across our airports aimed at adopting ways to limit our environmental impact while safeguarding
the significant economic and social contributions the aviation sector provides Dubai. Initiatives
such as these take us a step closer to achieving that ambition,” said Majed Al Joker, SVP of
Operations DWC at Dubai Airports.
The project also forms part of a broader environmental drive outlined in the Dubai Integrated
Energy Strategy 2030, aimed at reducing the emirate’s reliance on fossil fuels. “We are pleased to
implement the first smart initiative to connect solar power to buildings. This supports the Dubai
Integrated Energy Strategy 2030 to diversify the energy mix and increase the share of renewable
energy in Dubai’s total power output to 7 per cent by 2020 and 15 per cent by 2030, and achieve
our strategy of supporting sustainable energy projects in Dubai,” said Waleed Salman, EVP of
Strategy & Business Development at Dewa .

Algeria: PM urges EU to revive several energy projects
APS + NewBase
Prime Minister Abdelmalek Sellal urged Tuesday the European Union (EU) to revive several
energy projects like gas pipelines "TSGP" and "GALSI" and "DESERTEC" project relating
to the solar energy production.
During a news conference jointly held with his Portuguese
counterpart Pedro Passos Coelho following the 4th Algerian-
Portuguese High-Level Meeting, Sellal said he has proposed to
Portugal and the EU to revive energy projects with a view to
meet Europe’s needs.
At the request of the European countries that have expressed
the need for ‘securing and diversifying energy supplies to reduce
dependence on Russian gas’, Algeria proposed to Europe "the revival of the pipeline project"
GALSI" to link Algeria to Italy via Sardinia and which works have not started yet."
Algeria has also recommended the relaunch of
another "strategic project which is the Trans-
Saharan gas pipeline (TSGP), in partnership with
the African Union (AU) within the NEPAD. The gas
pipeline is set to link Nigeria to Europe via Algeria.
Algeria is Europe’s second gas supplier after Russia
through three pipelines: two via Spain and a pipeline
supplying Italy.
The Premier has also said having discussed with his
Portuguese counterpart about the possible relaunch
of "DESERTEC" project, initially planned with Germany," adding that it is possible to "produce
solar energy in Algeria and sell in Europe".

In this regard, Sellal said that "Algeria has also respected the conventions binding it with other
countries.” "Algeria does not politicize economic agreements," he added. Furthermore, Sellal said
that "new energy discoveries are recorded annually in Algeria and we cannot evaluate all our
underground energy reserves."
Concerning shale gas, Sellal said the purpose of the exploration operations is to "know the
potential of Algeria for the next 15 to 20 years." We are considering the means of exploiting these
newly discovered conventional hydrocarbons, he said.
"Last year, we talked about reserves for 2025. Today, and with these new findings, we are
speaking about reserves for the year 2033, notwithstanding the increase in domestic
consumption," said Sellal.
"Today, Algeria turns its energy policy towards the diversification of its resources through what is
commonly called ‘energy mix’," adding that Algeria "possesses new power plants using solar
energy." Regarding the Algerian-Portuguese bilateral cooperation, Sellal said that is has
progressed during the past two years.
"A significant number of joint-ventures are operating in Algeria, complying with the 49/51 rule," the
prime minister said. He further emphasized the possibility of strengthening bilateral relations,
especially after the recent opening of an air route between Lisbon and Algiers, making two flights
a week.
About the political
relations, the Prime
Minister said that
Algeria and
Portugal shared "a
common vision on
regional issues,
chiefly the situation
in the Sahel, Libya
and the Middle
East, including the
fight against
terrorist groups, like
the ISIS
organization (EI).
"It is certain now
that Algeria has a
proven and
recognized
experience. We are
strong supporters and advocates of peace. Any conflict, whatever its nature, must be resolved at
the political level because the military solution would only worsen the situation," he noted.
Referring to the meeting that brought together the Libyan belligerents in Algiers, Sellal said the
support of Algeria to the inter-Libyan dialogue answers "the principle of defense of the country’s
unity," recalling that Algeria "in general, does not interfere in the internal affairs of the country."
He also stressed that "Algeria, which supports the principle of political pluralism, rejects any
attempt to divide any territory." "After the good results we have achieved for Mali and Tunisia, we
wish to find an acceptable solution to the crisis in Libya," Sellal concluded.

India: TAPI Pipeline Negotiations at the Final Stage
Gas Asia + NewBase
Negotiation related to TAPI natural gas pipeline is at the final stage, India’s Petroleum Minister
Dharmendra Pradhan said in Parliament on Monday. 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.
Last year, gas companies of Turkmenistan, Afghanistan, Pakistan, and India established a
company that will build, own and operate the planned 1,800-kilometer TAPI natural gas pipeline.
Pradhan said that once the pipeline is complete India would be free from bring dependant on Gulf
countries on natural gas. The minister also stated that Indian government will also take a decision
on a project to bring natural gas from Iran through a pipeline passing through Afghanistan and
Pakistan.
The pipeline will be 1,750 millimetres (56 in) in diameter with a working pressure of 100 Bar
The initial capacity will be 27 billion cubic metres (950 billion cubic feet) of natural gas per year of
which 2 billion cubic metres (71 billion cubic feet) will be provided to Afghanistan and 12.5 billion
cubic metres (440 billion cubic feet) to each Pakistan and India. Later the capacity will increase to
33 billion cubic metres (1.2 trillion cubic feet). Six compressor stations would be constructed along
the pipeline. The pipeline was expected to be operational by 2014.]
The pipeline's cost is estimated at US$10.0 billion. The Asian Development Bank has played a
leading role in coordinating and facilitating the TAPI negotiation process. The four TAPI nations
must still attract commercial partners to build, finance and operate the pipeline.

UK: Total to sell stake in the Laggan-Tormore field in North Sea
Source: Reuters
French oil major Total is selling its stake in the North SeaLaggan-Tormore oil and gas field as
it seeks to shed assets after a steep fall in the oil price, banking sources said. Total is hoping to
get up to $1.5 billion for its 80 percent operating stake in the field, located approx. 125 km north-
west of the Shetland Islands in Britain's North Sea, the sources said. The company aims to
complete the deal in June, according to the banking sources.
A Total spokeswoman said: 'We
don't comment on market
rumours.' Many oil companies
are trying to sell assets in the
ageing and high-cost North Sea
oil province. However, the
Laggan-Tormore is considered a
high-quality asset as it is
planned to start production at
the end of this year. It is
expected to start production at
the end of 2015 after initial
delays, eventually reaching peak
production rates of 93,000
barrels of oil equivalent per day.
Total had sought to make the
Laggan-Tormore gas and
condensate field its third major
hub in British waters, after the
existing Alwyn North and Elgin-
Franklin provinces. As recently
as 2013, the company expected
Laggan-Tormore to turn it into
the top oil and gas producer in
British waters. But oil prices
roughly halved between last
June and January leading Total,
like most of its peers, to cut
spending and sell assets in
order to boost their balance sheets. Oil prices have since stabilised at around $60 per barrel, but
are still off peaks of more than $100 reached last year.
Total last month said it would cut 2015 investments by up to 13 percent to $23-24 billion and
would spend 30 percent less on exploration work following oil price decline. 'Total is reassigning
their portfolio and want higher returns elsewhere in the world,' one banking source said.
Denmark-based Dong Energy holds the remaining 20 percent stake in the field.
The sale of one of Total's key projects, meant to help the group reach its 2.8 million barrels of oil
equivalent per day by 2017, also could signal that after having embarked on one of the largest
asset-sale programmes in the industry in recent years, the group now has fewer non-core assets
to dispose of.

Glencore to take 49% stake in Russian Russneft
Reuters + NewBase
Glencore is to take a 49 percent stake in Russian oil producer Russneft as a result of a
restructuring, its owner said on Wednesday, despite fears that an escalating conflict between
Moscow and the West over Ukraine could lead to wider sanctions against the Kremlin.
Speaking in an interview on the Rossiya 24 TV channel, Mikhail Gutseriyev said the deal was
awaiting approval from the Russian competition regulator. The non-cash transaction will convert
shares Glencore has held for the past decade in Russneft's subsidiaries into a stake in the parent
company, said Gutseriyev. Russneft also owes Glencore $984 million, according to Glencore's
results for 2014. Glencore declined to comment.
The deal is being finalised as the United States and the European Union are considering
slapping new sanctions on Russian companies and individuals over Moscow's role in Ukraine's
crisis. Fitch Ratings said on Wednesday that sanctions and their impact on corporate funding
pose a greater threat to the Russian oil industry than the weak oil price.
'Glencore has long sought to venture into upstream just like some of its rivals,' Alexei Kokin, an
analyst with UralSib brokerage in Moscow, told Reuters. 'The fact is - there are no sanctions
against Russneft'.
Even though many large Russian companies have escaped EU and U.S. sanctions so far, the
implications have been huge - Western banks' lending to Russia has almost dried up since last
year and imports of Western technology and equipment has become very difficult. Last week
Russian billionaire Mikhail Fridman's deal to buy the UK North Sea oil and gas interests of
German utility RWE was challenged by the British government due to fears of potential future
sanctions.
Glencore has its roots in the oil trading industry and remains one of top three crude traders in the
world. Its merger with Xstrata in 2013 has also turned the trader into a mining giant but its
production assets in the oil industry have so far remained modest compared with the amount of
oil it trades.
'This deal (Russneft) highlights that oil is clearly something that Glencore is committed to in the
longer term,' said Bernstein Research analyst Paul Gait. 'It also shows they are prepared to take
greater political risk where others would be slightly more cautious. Whether it’s Russia, Bolivia or
the DRC, Glencore seems more comfortable than the others in these riskier areas,' he said.
The Russneft deal follows a turbulent decade for Glencore in Russia where the firm has exported
large volumes of crude from Russneft but also faced losing its investment there when Gutseriyev

fell out with the authorities. Eight years ago the billionaire fled to London following a tax evasion
probe and after his son died in mysterious circumstances. Now ranked 33rd in Forbes
magazine's latest list of the richest Russians, he returned to Russia in 2010 after the tax fraud
case was dropped and reasserted his control over Russneft.
Under a corporate restructuring Gutseriyev has become the sole shareholder at the holding
company level and last month he took over as chairman of the company's board while quitting
the post of company president.
After its consolidation the Russneft group will be producing 360,000 barrels of oil a day,
according to Gutseriyev, making it comparable in size with Russia's six-largest oil producer,
Bashneft, which is listed and has a market capitalisation of $6 billion. 'All the subsidiaries will be
folded into the main (holding) company. The deal is being signed, we have been finishing the
shareholders agreement. Glencore will own 49 percent in Russneft,' Gutseriyev said on
Wednesday.
About Russneft : RussNeft was established in September 2002.
RussNeft increased its oil production in Tomsk region in 2012 by 54% up to 1.045 million tons
(against 696.5 thousand tons in 2011). Another strategically important operation project for OAO
NK RussNeft is development of Shapshinskoe group of fields. The cumulative production at those
licenses in 2012 was 1.4 million tons. OAO NK RussNeft will increase the oil production in 2013 at
Shapshinskoe group of fields by 7% up to 1.5 million tons.
The production grew also due to successful implementation of the large-scale drilling programs.
The cumulative oil growth due to start-up of 138 new producing wells was 1172 thousand tons.
RussNeft has independent audit results of oil and gas reserves as of 01.01.2014. Oil and gas
reserves of all the companies in OAO NK RussNeft corporate structure as of 01.01.2014 , in
compliance with the audit performed by Miller and Lents (the USA), amount to:
Oil:
Proven – 1,034.689 mbbl;
Probable – 465.563 mbbl;
Possible – 639.379 mbbl.
Gas:
Proven – 987,607 mcf;
Probable – 272,419 mcf;
Possible – 245,351 mcf.
Estimates of the oil and gas reserves are compliant with the new requirements of
SPE/WPC/AAPG/SPEE valid from 28.03.2007.

Ghana: Azonto Petroleum relinquishes Offshore Accra Block
Source: Azonto Petroleum
Azonto Petroleum has announced that, as a result of a continued strategic review of its
operations and prolonged discussions with the government of Ghana and potential partners with
regard to ongoing participation in the offshore Accra Block, the Company has decided not to
continue with its deepwater
exploration acreage in
the Offshore Accra Block,
Ghana.
Following the exit from the
Block of other partners in
March 2014 Azonto's
subsidiaryAzonto
Petroleum (Ghana), in
which Vitol E&P has a 43%
interest, and the other
remaining partner Afex Oil
(Ghana), secured a 6-
month extension of the
Licence to 23 September
2014 for the purpose of
determining whether
suitable operating partners
could be found to proceed with into the next phase of Exploration under the Petroleum
Agreement. During the extension period the Company undertook extensive technical work,
including further detailed evaluation of the seismic data and remapping, and set up a detailed
Data Room which was visited by over ten companies.
However, as a result of the currently challenging market conditions, a farmout agreement could
not be finalised and the JV Partners have therefore elected not to seek a further extension to the
Initial Exploration Period, nor to apply to enter into the First Extension Period under the
Petroleum Agreement.
As a consequence, the JV Partners have formally advised the Ghana Ministry of Energy and
Petroleum that all of the Contract Area is relinquished and that Azonto Petroleum (Ghana) has
withdrawn as temporary Operator in respect of the Licence.
There were no outstanding commitments under the work programme, which was completed in
the period to 31 December 2013, and there is no cost to the Company associated with the
relinquishment.
Commenting on today's announcement Azonto's Managing Director, Mr Gregory Stoupnitzky, said:
'Today's announcement is another step in support of our strategy to focus on delivering value
from our core asset in Cote d'Ivoire and prudently managing our balance sheet. Relinquishing
the Offshore Accra Block will reduce Azonto's annual operating costs by up to USD 500k, which
is in line with our commitment to reduce G&A whilst focusing on the delivery of our development
project in Côte d'Ivoire. We look forward to working with our CI-202 partners towards delivering
and unlocking full value for shareholders.'
Full details of the Offshore Accra Block farmout campaign are available at energy-pedia
opportunities, our international oil and gas opportunities service, available via subscription.

Kenya:Tullow Oil provides onshore Kenya exploration and appraisal update
Source: Tullow Oil + NewBase
Tullow Oil has provided an update on exploration and appraisal activities in onshore Kenya
Blocks 10BB, 13T and Block 10BA.
Engomo-1 exploration well
The Engomo-1 exploration well in Block 10BA was drilled to a total depth of 2,353 metres
utilising the SMP-106 rig. The well encountered
interbedded sandstones, siltstones and
claystones but no significant oil or gas shows
were encountered and the well has been
plugged and abandoned.
Engomo-1 was the first well drilled in the large
North Turkana Basin and is located west of
Lake Turkana where numerous naturally
occurring oil slicks and seeps have been
observed. Analysis is being focused on high-
grading the remaining prospectivity in the basin.
The SMP-106 rig will now be demobilized.
South Lokichar Basin appraisal activity
Tullow is continuing its extensive exploration and appraisal programme in the South Lokichar
Basin in Blocks 10BB and 13T, which has the joint objectives of proving reservoir quality and
defining the resource estimates to ultimately
progress the development of the discovered
resources.
The SMP-5 rig recently installed well
completions in Amosing-1 and Amosing-2A in
preparation for an Extended Well Test (“EWT”)
of the field and the rig has now been released.
The EWT involves test production and injection
to provide dynamic flow characterisation of the
Amosing stacked oil reservoirs. Both wells have
been completed in five zones with hydraulically
controlled selective completions that permit
independent tests of selected intervals without
well intervention. Initial rig-less clean-up testing
has been concluded on both wells with excellent
results. The Amosing-1 well flowed at a
combined maximum rate of 5,600 bopd from five
zones and the Amosing-2A well flowed at a
combined maximum rate of 6,000 bopd from
four zones, the fifth zone being in the aquifer.
Both wells demonstrated high quality reservoir
sands and flowed 31 to 38o API dry oil under
natural flow. Pressure data during the initial

clean-up flows shows connectivity between the two completed wells in the upper three zones
with further production testing required to test connectivity in the lower two zones. These findings
support the static pressure data which indicated connectivity between the Amosing-1, 2, 2A and
3 wells in multiple zones. The Amosing EWT forward programme is to conduct longer-term oil
flow and water injection tests, commencing mid-March with results expected in the second
quarter of this year.
The PR Marriott 46 rig recently drilled the
Ngamia-7 appraisal well to a final depth of
2,914 metres. The well was drilled to test
the Ngamia oil field’s eastern flank and
was located 1,800 metres north-east of
Ngamia-1 and 1,300 metres east of
Ngamia-3. The well encountered up to 132
metres of net oil pay and has expanded
the proven extent of the field. The well has
now been suspended for future use. Static
pressure data from the Ngamia-1, 3, 5, 6
and 7 wells supports connectivity between
the wells at multiple reservoir horizons
which will be tested with the planned
Ngamia EWT.
Planning is also under way to conduct an
EWT of the Ngamia field. The PR Marriott
46 rig, which is currently drilling the
Amosing-4 well with a result expected in April, will mobilize back to the Ngamia field to drill and
complete the Ngamia-8 well which will be the main producer for the EWT. Additionally, two of the
existing suspended Ngamia wells will be complete as EWT wells. Initial flow testing of the
Ngamia EWT wells is expected to commence around mid-year.
The Weatherford 804 rig is currently drilling the Ekales-2 appraisal well to test an eastern fault
block on the structure and also test a deeper exploration objective within the Lokhone shale
source rock that has tested oil elsewhere in the basin. The well is currently at a depth of 2,817
meters and has drilled through the primary objective and encountered 50 to 70 metres of
potential net oil pay. Final results from the well should be available in April. Following completion
of this well, the Weatherford 804 rig will be released.
Finally, the 3D seismic survey data set over along the western basin bounding fault discoveries
has been processed and is being interpreted. These data already indicate significantly improved
structural and stratigraphic definition and additional prospectivity not evident on the 2D seismic.
Tullow Operates Blocks 10BB, 13T and 10BA with 50% equity and is partnered by Africa Oil
Corporation, also with 50%.

Oil Price Drop Special Coverage
Oil hits one-month low $56 Later rises to on dollar rally
Reuters+ AFP+ NewBase
London: World oil prices edged higher yesterday as traders eagerly awaited the weekly update on
commercial crude stockpiles in top consumer the United States. Gains were however limited by
the strong dollar and persistent concerns about a global supply glut.
In midday London deals, European benchmark Brent North Sea crude for April delivery rose 20
cents to $56.59 a barrel. US
benchmark West Texas
Intermediate for April added 18
cents to $48.47 a barrel.
Crude futures had suffered
heavy falls on Tuesday as the
rebounding dollar pushed the
market sharply lower.
WTI tumbled $1.71 and Brent
fell $2.14 as the greenback
soared against major rivals.
The rallying US unit makes
dollar-priced oil more
expensive for buyers using
weaker currencies. That tends to dent demand and weigh on price levels.
The European single currency yesterday hit new multi-year dollar lows on expectations of a US
interest rate hike. The euro slid to $1.0560 — the lowest level since March 2003. “The strong US
dollar continues to dominate the oil market, limiting any upside potential in crude oil prices,” said
Myrto Sokou, senior research analyst at brokerage Sucden Financial in London. She added:
“Today, all eyes will be on the US inventories report.”
The US government’s Department of Energy will unveil its update on American oil reserves for the
week to March 6. US crude reserves likely rose 4.75 million barrels in the week ended on March
6, according to a survey by Bloomberg News. It added that total supplies likely soared to 444.4
million, the highest level since the DoE started compiling weekly inventory data in 1982.
Crude prices lost some 60 per cent of their value to about $40 between June and late January

owing to an oversupply in world markets, a weak global economy and the strong dollar.
Prices have since rebounded following a slowdown in US oil drilling activities, but analysts say
volatility is likely to continue for some time. Separately, the DoE’s market outlook report released
on Tuesday projected for this year “continuing large builds in US crude oil inventories, including at
the Cushing, Oklahoma, storage hub.”
Brent crude oil slipped to a one-month low below $56 a barrel on Wednesday before steadying as
a rally in the US dollar and global oversupply weighed.
The US dollar hit a fresh 12-year high against the euro on Tuesday, trading at $1.0637 against the
single currency. A stronger dollar makes commodities priced in the greenback more expensive for
holders of other currencies.
“ Russia’s crude oil exports are also set to rise this year, Energy Minister Alexander Novak
said, despite some expectations of a plunge in production due to lower prices following the
crash last year.”
Russia’s crude oil exports are also set to rise this year, Energy Minister Alexander Novak said,
despite some expectations of a plunge in production due to lower prices following the crash from
above $100 a barrel last year.
“We expect more downward pressure today,” said Phillip Futures oil analyst Daniel Ang in
Singapore, after Brent fell more than 3 per cent on Tuesday. Brent for April delivery hit a one-
month low of $55.92 a barrel before recovering to trade up 3 cents at $56.42 a barrel by 0919
GMT. It dropped $2.14, or 3.66 per cent, in the previous session.
West Texas Intermediate for April delivery climbed 16 cents to $48.45 a barrel after falling $1.71,
or 3.42 per cent, on Tuesday. Its discount to Brent was at $7.97 a barrel, close to its narrowest in
a month.
The US crude benchmark took some support from a surprise drop in crude stocks in the world’s
largest oil consumer last week, with the American Petroleum Institute reporting a 404,000-barrel
fall late on Tuesday. Analysts had expected a 4.4-million-barrel build.
Despite the draw, crude stocks rose by 2.2
million barrels at the Cushing, Oklahoma
delivery point of the WTI contract, the API said,
keeping price gains in check. Traders are now
waiting for official data from the US. Energy
Information Administration at 1530 GMT on
Wednesday to see whether it confirms the API
numbers.
Prices took some support from stronger US
economic figures. Job openings in the United
States in January rose to the highest in 14
years, figures from the Labor Department
showed on Tuesday, even as US sales
recorded their biggest decline since 2009.
Traders were also watching supply risks in
Libya, where two eastern oilfields have been
shut following an attack by Islamist militants, an oil official said.

Low price unlikely to spur oil demand
BY SACHIN KUMAR - The Peninsula
Global demand for oil is unlikely to get boost despite lower oil prices. Strengthening of US dollar
coupled with weakness in global economy will keep the demand for oil subdued in the short to
medium term, according to a senior official of International Energy Agency (IEA).
“Current lower oil price are partly coming from slower demand growth than expected in the past
several months. In such kind of weak economic growth backdrop, we expect that in spite of lower
oil prices, the demand growth will be kind of slower compared with past cycles of oil prices. The
current lower oil prices will not boost the global demand growth,” Keisuke Sadamori (pictured),
Director- Energy Markets and Security at IEA told The Peninsula.
According to Sadamori, the global oil demand is likely to be around
0.9 million barrels per day in 2015.
Oil industry watchers were expecting that the sharp fall might prompt
oil consuming countries to buy more oil but weaker economic growth
in European countries, Japan and China has led to lower demand of
oil from these countries.
Now appreciating US dollar has also emerged as a major drag in the
oil demand. In the past one year dollar has risen significantly against many currencies due to
recovery in US economy.
A depreciating currency affects imports of a country adversely as imports become costlier which
means that these countries will not be able to reap the benefit of falling oil prices fully.
“Even though oil prices are going down in US dollar terms the dollar is appreciating against many
currencies. So for the countries with weaker currencies, actually the oil prices are not as low for
them, as in dollar denominated terms. For these countries, at the end consumer level, the oil
products prices may not be going down much,” said Sadamori. “And there are some countries
who are using this opportunity to reduce their fossil fuel subsidies like Indonesia, Thailand,
Malaysia and India,” he added.
Brent crude prices had plunged below $50 a barrel in January this year from highs of above $110
in June last year. Prices have recovered to some extent as Brent Crude hovered around $60 a
barrel in February.
Crude prices have declined on the back of new supplies hitting markets, in particular from shale oil
production in the United States, and slower global economic growth, including in Asia. Now crude
oil prices are trading around $55-$60 per barrel range.
He added that the additional demand for oil will be coming from China India and Asean countries.
“Emerging Asia will the leader in the demand growth, also there will be additional demand from
Africa, the Middle East and Latin America. Even though Africa will see fairly solid growth, but the
starting point is lower than the Asian countries,” he said.

Chevron to sell more assets amid drop in oil prices
Source: AFP via Yahoo! Finance + NewBase
US oil giant Chevron Tuesday said it plans $15 billion in asset sales through 2017 as it seeks to
maintain a strong dividend for shareholders amid lower oil prices. The divestment
program expands by 50 percent a previous target to sell $10 billion in assets
through 2016, according to a presentation by Chevron chief executive John Watson.
In 2014, Chevron divested $6 billion in assets, including the $1.3 billion sale of a
stake in a Chad oil project to the Republic of Chad. The deal also comprised
Chevron's interest in a pipeline system that transports oil from Chad to Cameroon.
Watson said the company was on track to increase production from 2.57 million barrels of oil
equivalent per day in 2014 to 3.1 million in 2017. Major projects ramping up include Texas shale
ventures and natural gas developments in Australia and Angola. 'We are well-positioned to
manage through the recent drop in commodity prices and are taking several responsive actions,
including curtailing capital spending and lowering costs,' Watson said.
Shares in Dow member Chevron plummeted 3.1 percent to $48.46 in late-afternoon trade.
The move follows Chevron's January announcement of a 2015 capital budget of $35 billion,
down 13 percent from last year. The company also halted its share buyback program, citing the
big drop in oil prices. In recent months, Chevron has also withdrawn from exploration ventures in
Poland, Romania, Lithuania and Ukraine.
Other large oil companies, including ExxonMobil and Royal Dutch Shell, have also trimmed
spending in response to about a 50 percent drop in oil prices since June. Leading oil services
companies, including Halliburton and Schlumberger, have announced deep job cuts.

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
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
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 March 2015 K. Al Awadi

New base 559 special 12 march 2015

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (20)

Similar to New base 559 special 12 march 2015

Similar to New base 559 special 12 march 2015 (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (20)

Recently uploaded

Recently uploaded (20)

New base 559 special 12 march 2015