New base 731 special 18 november 2015

Copyright © 2015 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 18 November 2015 - Issue No. 731 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oman: Frontier gets extension for Block 38 EPSA
Written by Oman Observer
US-based international oil and gas exploration firm Frontier Resources says it has secured a two-
year extension of the initial term of the Exploration and Production Sharing Agreement (EPSA)
signed with Oman’s Ministry of Oil and Gas for Block 38 in the southwest of the Sultanate.
The company, which has a 100 per cent interest in the Block, said the extension comes with an
amended work programme which requires Frontier Resources to drill one exploration well
targeting the Nafun formation, as well as undertaking the acquisition, processing and
interpretation of 1,000 kilometres of 2D seismic. With the extension, the initial three-year phase of
the six-year EPSA has been extended to November 25, 2017, the company said.
Block 38, covering an area of 17,425 square kilometres, is located in Dhofar Governorate in the
southern part of the Rub al Khali Basin. The concession is considered as prospective for oil and
gas because of its proximity to Block 6, operated by Petroleum Development Oman (PDO), and
EXPLORATION: Block 38 covers an area of 17,425 square kilometres

which accounts for the lion’s share of Oman’s current oil and gas output. During the first half of
this year, Frontier Resources pressed on with interpretation of available legacy 2D seismic data.
This led to the identification of a number of leads, one of which has “sufficient seismic coverage”
to be suitable for drilling, the company said. Consequently, Frontier Resources received approval
to exchange the Phase 1 work commitment of a 3D seismic survey for an exploration well with a 2
D seismic survey.
“A proposed drilling location has subsequently been approved and the Company is preparing to
initiate the Environmental Impact Study of this location,” M J Keyes, Chief Executive Officer,
stated in the Chairman’s report of the unaudited interim results for the first six months of the year.
However, a long-standing effort to secure a farm-in partner has yet to yield results — a setback
attributed to the current downturn in the global oil and gas industry, the company noted. “Oman,
where we have excellent terms and a drill-ready large structure close to infrastructure we believe
should eventually attract a suitable and funded farm–in partner, but inevitably this is a process that
is taking longer than planned due to the present crisis within the industry,” Keyes commented.
The company has retained the services of Dallas-based Moyes & Co, a company specialising in
international oil and gas mergers and acquisitions, to assist and provide general transaction
advice on the ongoing farm-out process by the company for Block 38, Frontier Resources said.
Oman Block 38
Block 38, located in the Dhofar Region of southwest Oman, was awarded to
Frontier in October 2012. The block covers approximately 17,425 square
kilometers and is bounded to the west by the Republic of Yemen, to the north is
the Rub Al Khali Basin and the Kingdom of Saudia Arabia and to the east lies the
prolific South Oman Salt basin (SOSB). The Bock is separated from the highly
productive South Oman Salt Basin (SOSB by a north-east trending linear
basement feature known as the Ghudun-Khasfah High).
Based on data from previous exploration efforts and the results of an independent
evaluation by SLR Consulting Frontier believes that this Block contains an
untested salt basin with exploration potential analogous to the other proven salt
basins of Oman, particularly the SOSB that lies approximately 50 kilomteres to
the east.
Exploration targets include carbonate stringers embedded in the Ara Group salts
lying a depths of between 3000 and 5000 meters. Secondary targets are within
the shallower Haima Supergroup which had minor oil shows during previous
drilling and the deeper Buah Formation which has proven to be gas productive
elsewhere in Oman.

Saudia: Sepco wins gas booster deal for Aramco project
Reuters + NewBase Reuters + NewBase
China's Shandong Electric Power Construction Corp (Sepco) has signed a contract to build a gas
compressor station as part of the expansion of Saudi Arabia's main gas pipeline, according to
industry sources.
The world's top oil exporter is pressing ahead with gas-related projects to meet rising domestic
demand and conserve oil for export and refining.
Overseen by state oil company Saudi Aramco, the project, known as Master Gas System 2 (MGS
2), will raise the system's capacity to 12.5 billion cubic feet of gas a day (cfd) by 2018 from 8.4
billion cfd currently.
There was no clear value for the contract but sources have estimated it at around $700 million to
$800 million. Saudi Aramco did not respond to an e-mailed request for comment. Sepco was not
available for immediate comment.
Sepco is already executing the first phase of the expansion of the MGS, installing booster gas
compressor stations due to be complete by the end of 2016 that will help raise capacity to 9.6
billion cfd. The MGS was built in the mid-1970s to gather and process associated gas from oil
wells for use by domestic industries.

Madagascar: OMNIS transfers Afren's interest in Madagascar
Block 1101 to Oyster Oil & Gas . Source: Oyster Oil & Gas
Oyster Oil and Gas has noted the widely reported demise of the Afren group, and also the recent
release of its formerly held interests in Block 1101 in Madagascar. The Company has confirmed
that Oyster has been invited by the Government of Madagascar/OMNIS (Office des Mines
Nationales et des lndustries Stratégiques) to meet to agree the transfer of responsibilities for
Block 1101 to Oyster in accordance with the various con tract agr eements as well as
discussions for the forward work program for 2016-2017.
Michael Wood, CEO commented: 'The Oyster executive team have a long standing relationship
with Madagascar and OMNIS, which goes back to 2006 as or iginal signatories and operator of
the contract (with a previous company). We look forward to working closely together in the future
with OMNIS in developing the forward work program and oil prospectivity of Block 1101.'
Background
Block 1101 covers approx. 14,900 sq kms in the east of the Ambilobe Basin. It was originally
licensed in 2006 to Candax Madagascar and East Africa Exploration (EAX), with an effective
date of July 30 2007. Subsequently EAX, which was acquired by Afren, took over the operating of
the block with a 90% working interest. Oyster's interest in the block is historical, as three
members of Oyster's management team were involved with the exploration effort until 2011. In
October 2013, Oyster acquired Candax's 10% interest in the block. For further information on
Block 1101, click here.

UK coal plants must close by 2025, Energy Secretary to announce
Telegraph - Emily Gosden, Energy Editor
Britain will stop burning coal for electricity within a decade and build a new fleet of gas power
plants to keep the lights on, Energy Secretary Amber Rudd is expected to announce today.
Unveiling a new energy strategy, Ms Rudd will say it is “perverse”
that coal, the “dirtiest fossil fuel” is still such a major part of the UK’s
energy system – providing 29pc of the UK’s electricity last year.
It is understood she will announce that the country’s dozen
remaining coal-fired power stations must all close by 2025 at the
latest. “It cannot be satisfactory for an advanced economy like the
UK to be relying on polluting, carbon-intensive 50-year-old coal-
fired power stations. Let me be clear: this is not the future,” she will say.
Ms Rudd will say the ageing coal plants are
also becoming increasingly unreliable,
highlighting breakdowns which forced
National Grid to impose emergency
measures earlier this month. In their place,
she will say Britain must build a new
generation of power plants that burn gas –
which is significantly more environmentally-
friendly than coal.
“One of the greatest and most cost-effective
contributions we can make to emission
reductions in electricity is by replacing coal-
fired power stations with gas,” she will say.
“Gas is central to our energy secure future.
In the next 10 years, it’s imperative that we
get new gas-fired power stations built.”
She will also back more new nuclear plants, describing the technology as “central to our energy
secure future”.
A series of major coal-fired power plants have shut in recent years because of environmental
regulations to prevent acid rain, but the dozen that remain have a combined capacity of almost 19
gigawatts (GW), according to the Department of Energy and Climate Change (DECC).
Of these, three have announced they plan to close by the end of March, while a fourth will partially
close, together removing about 5.5 GW from the system. DECC already forecasts a declining role
for the remaining plants, estimating that coal could provide just 1pc of UK power in 2025 because
of a combination of tightening air quality ruled and carbon taxes.
However, until now there has been no fixed closure date and experts had suggested that coal may
in fact continue to play a much bigger role for much longer, especially in the absence of new gas
plants and if the Treasury fails to increase the UK’s carbon tax, which it has already frozen.

Some of the remaining coal plants could potentially evade the closure date by converting to burn
renewable biomass instead, as Drax has partially done. However, ministers have moved to curb
the subsidies available for biomass.
Another option could be to fit carbon capture and storage technology, but this is also expected to
require subsidies.
Despite political support for new gas plants, and subsidies on offer through a scheme called the
"capacity market", investment has ground to a halt and many existing plants have been
mothballed because they are losing money.
The only proposed new gas plant that was due to be built under the capacity market, Trafford, is in
doubt after developers failing to secure investment. It is hoped that announcing a coal closure
date will send a signal to investors that will spur investment in new gas power plants.
Environmental group Greenpeace said it would welcome a move away from coal, but criticised a
new “dash for gas” which it said would “lock in more dirty power than we actually need”, arguing
ministers should support renewables instead.
Ms Rudd has cut subsidies for onshore wind farms

EU: Record-low water levels on Rhine River are
disrupting fuel shipments
Source: U.S. EIA, based on Thomson Reuters
Low water levels on the Rhine River have resulted in transportation disruptions for shipments of
petroleum products by barge, which in turn have resulted in record supply disruptions in markets
upriver, such as Switzerland and southern Germany, and high stock levels downriver, in the
Netherlands and Belgium.
The Rhine River, which runs northwest from the Swiss Alps through Switzerland, Germany,
France, and the Netherlands, where it flows into the North Sea, is a major petroleum product
transportation corridor. The navigable portions of
the river connect the major refinery and
petroleum trading centers of Amsterdam and
Rotterdam in the Netherlands and Antwerp in
Belgium, collectively known as the ARA, to inland
markets.
Tanker barges carry petroleum products from the
ARA upriver to inland bulk distribution terminals
that provide petroleum products to nearby areas.
Water levels on the Rhine River fluctuate with the
seasonal rainfall, and both high and low water
levels can create problems for barges.
High water levels on the Rhine may put barges at
risk of potentially striking bridges over the river.
Low water levels mean barges risk getting stuck
and hitting the river bottom.
Within safety and operational constraints, barges
adjust the amount of cargo they carry to balance
bridge clearance and deep draft restrictions

based on the water level. Low water levels mean barges must carry less cargo, increasing the
freight rate per unit of cargo.
In recent months, water levels on the Rhine River measured at Kaub, Germany, near the Rhine's
midway point, have been at historic lows. The average water level at Kaub in October was 2.8
feet, compared to the five-year average levels of nearly twice that (five to seven feet).
Low water levels on the Rhine since
July have resulted in increased barge
freight rates, with the estimated rate for
a cargo of distillate fuel (heating oil or
diesel) from Rotterdam, Netherlands, to
Basel, Switzerland, increasing from
around $5 per barrel (b) in July to more
than $30/b in late October. Rates have
also increased for delivery to points
closer to the ARA, with delivery to
Frankfurt, Germany, now more than
$10/b, compared with $2/b in July.
The low water levels have resulted in
tight supplies in markets farther upriver,
such as Switzerland. On October 28, the
Swiss Federal Office for National Economic Supply permitted the release of emergency fuel
reserves following problems at the nation's only refinery and the continued disruption to Rhine
River shipments.
Alternatives to shipments on the Rhine River are costly, as Europe's petroleum product pipeline
infrastructure is not as extensive as in the United States, leaving relatively more expensive
transport by rail and long-distance trucking as the remaining alternatives.

These disruptions come at a time of year when markets upriver of the ARA begin to build stocks of
heating oil for the winter.
Normally, stocks of distillate fuel would be transported from refineries and terminals in the ARA
region upriver on the Rhine, but the low water levels and high transportation costs are causing
distillate stocks to remain in the ARA. After high refinery runs this summer, independently held
distillate stocks in the ARA in October averaged 10 million barrels above their five-year average
level.
Weather patterns will determine the duration and severity of the disruption. More precipitation in
the Alps will flow water in the tributaries of the Rhine River, raising the water level downstream.
Warmer-than-normal temperatures in the Rhine River valley could reduce heating oil demand.
Drier and/or colder weather could have the opposite effects.

US: Struggling US oil producers get credit lifeline amid downturn
Reuters +NewBase
An autumn credit crunch was expected to hit many independent US oil producers, starving the
industry of billions of dollars and further denting company budgets and drilling plans.
But banks that adjust their loans to energy companies every six months based on the oil price and
volumes of reserves were more lenient than many expected this time, leaving producers with
more cash for drilling and allowing them to supply more oil to a market already flush with excess
crude.
The biannual process, known in the industry as redetermination, shaved only 4% off bank loans to
oil and gas companies, according to a Reuters analysis of loan data, surprising experts who had
expected deeper cuts because of a protracted oil price rout.
It offers cash-starved energy firms a lifeline right when oil prices are back near six-year lows
around $40 per barrel because of global oversupply.
Of the 37 US oil and gas producers tracked by Reuters that hold credit lines backed by their
reserves, 15 had credit reduced, seven saw an increase and 12 saw no change. Two said they
expected to keep their credit unchanged and one said it expected a reduction.
In total, the producers retained access to $30.7bn in credit this fall, $1.4bn less than in the spring.

“Is anyone looking to ring the death knell for the energy industry?” asked Thomas Rinaldi,
institutional investor service director at global energy consultancy Wood Mackenzie. “I don’t think
so.”
The cuts were less steep than many had expected in part because banks were encouraged by
producers’ hedges that locked in higher prices, their ability to cut costs during a downturn and
increases in production.
Lenders at large were also more lenient than Wells Fargo, the nation’s fourth largest bank, which
said in October it had cut energy credit lines by 15% on average, priming some analysts to expect
similar lending cuts across the industry.
“If credit lines stay strong, companies will keep drilling and keep inventories higher and oil lower,”
said Chris Metcalfe, director of finance and investor relations at Gran Tierra Energy, a small
conventional oil producer which had its credit line increased by $50mn to $200mn in September.
“We wanted to push the banks as far as we could, in case we needed it in the future,” he said.
While the company has not drawn on the credit yet, Metcalfe said, it needed the extra funds to
think about possible expansion.
“We wanted it there in case we needed it for acquisitions,” he said.
Others expressed similar sentiment.
“You won’t see as much of a drawdown in capital expenditure as if there was a 15-20% drop in
borrowing bases,” said Nicholas Bobrowski, chief financial officer at EV Energy Partners, a US oil
and gas producer whose credit lines rose by $125mn to $625mn this fall.

EV Energy Partners’ ability to borrow increased in part because of an acquisition completed on
October 1 and the favorable ratio between the amount of oil it owns in the ground and how much it
produces, Bobrowski said. A slide in oil prices from over $100 a barrel last year has slashed
revenues, making loans an essential source of capital for many companies and the bi-annual
redeterminations a make-or-break event for their operations.
The ultimate impact of loans on US oil output this winter will largely depend on the price of oil,
which is determined by many factors beyond US producers’ control, such as exports from the
Middle East and the strength of the global economy.
Some analysts say independent US producers will have limited impact on overall US oil output or
prices. Factors such as expiring hedges which may make drilling uneconomical in some areas,
can work to offset the impact of any credit-fuelled additional supply.
Even drillers whose credit lines have increased this fall have not committed themselves to more
drilling while crude prices remained stuck near six-year lows.
Banks’ leniency this fall, however, does undermine one of few factors supporting oil markets: the
view that small companies, starved of cash, will go under in droves. “It makes for oil to stay at low
levels,” said Rinaldi. “The companies aren’t flush, but they aren’t starving. That speaks for the rig
count to stay low but not go much lower.”
The US oil rig count now stands at 574, one third of the 1,568 rigs operating a year ago.
Meanwhile, oil production, remains stubbornly high near record levels above 9mn barrels per day.
The production outlook also depends on the next set of redeterminations six months from now.
The potential impact is clear. Struggling energy producer Exco Resources, which had its credit
lines cut by over 37% on October 20, a week later announced that it halted drilling in the Eagle
Ford shale in South Texas.
“If commodity prices are still low it will be worse in the spring,” said Leo Mariani, oil and gas
analyst at RBC Capital Markets. “It could be more like a 10% drop.”

NewBase 18 November - 2015 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices edge up on reports of falling inventories, higher
refinery runs
Reuters + NewBase
Crude oil prices edged up in early trading on Wednesday following reports of falling stockpiles and
rising refinery activity, but analysts said the market would remain under pressure for the rest of the
year and into 2016.
Industry group American Petroleum Institute (API) said late on Tuesday that U.S. crude stockpiles
fell last week by 482,000 barrels due to lower imports and higher refinery runs. This helped push
front-month U.S. crude futures up 31 cents from their last settlement to $40.98 a barrel at 0120
GMT. The gain followed an over $1 fall during the previous session.
Official inventory data is due later on Wednesday from the U.S. government's Energy Information
Administration (EIA). Internationally traded Brent crude futures were up 33 cents at $43.90 per
barrel. Despite the slight gains on Wednesday, most analysts expect prices to remain at low
levels for the rest of the year and into 2016 as production continues to outpace demand.
"While the growth in U.S. unconventional production appears to be slowly abating, the upsurge in
Organization of the Petroleum Exporting Countries (OPEC) output, robust global stock levels, and
ongoing uncertainty around the strength of demand suggest that the oversupply and surpluses are
likely to continue well into next year, exerting continued downward pressure on prices," the Center
for Strategic and International Studies said in its 2016 outlook on Wednesday.
Analyst estimates for oversupply in 2015 range from 0.7 to 2.5 million barrels of oil being
produced per day in excess of demand.
Oil price special
coverage

NewBase Special Coverage
News Agencies News Release 18 Nov.. 2015
“No” is not an Energy Plan
There’s a question I get often when it comes to leadership. The question is this: “What makes a
great leader?”
It’s simple. Be willing to make decisions and accept the consequences. Take into account all the
information available, and make a call. That’s the most important quality in a good leader. Don’t
fall victim to what I call the “ready-aim-aim aim-aim” syndrome. You must be willing to fire. It helps
to be a good shot.
President Obama failed this leadership test in two ways with his handling of the Keystone
Pipeline. Blocking the pipeline weakened America’s energy security and damaged prospects for a
North American energy alliance while doing nothing to limit CO2 emissions (Let’s be clear: One
way or another the oil is going to be extracted and used by someone).
Rejection was always going to be the wrong call. But the President compounded his mistake by
dragging the decision out over seven years – time the oil and gas industry could have used to

adjust plans for oil from Canada to U.S. refineries. Now 800,000 barrels a day will be shipped to
China instead. Looking to his remarks attempting to justify his decision makes the rationale all the
more puzzling.
Take this line: “What has increased America’s energy security is our strategy… to reduce our
reliance on dirty fossil fuels from unstable parts of the world.” While I strongly support this goal, I
was not aware Canada was an unstable part of the world. Clearly this administration is not aiming
to strengthen American energy security, but to wage war on all fossil fuels despite public
comments to the contrary.
In his Keystone remarks, the President tried to imply the price of oil and gasoline have fallen
during his term of office because of the policies of his administration. In reality, oil and gasoline
prices have fallen in spite of having been a rhetorical piñata for the past seven years. Low oil
prices for consumers exist because of the ingenuity, the innovation, and the investment of the oil
and gas industry. Not because of the federal government.
The hydro-fracturing and horizontal drilling techniques that have made energy in America so
readily available have given Americans the lowest energy prices in the world. According to
economist Steven Moore, for every penny gasoline prices drop, Americans save $1 billion. Of
that, 78 percent gets put right back into the U.S. economy.
When the President proudly proclaimed that our dependence on OPEC oil is down dramatically
since he took office, he made it sound like it was his policies that did that, too.
It was not.
The more than 3 million members of the Pickens Plan Army having been calling attention to our
dependence on OPEC since 2008. They have worked hard to help their elected representatives --
at their state capitals and in Washington, DC -- understand how important it was to them. Then
state-by-state, they set about getting laws and regulations changed to help make domestic natural
gas an economically feasible alternative to imported diesel.
Like so much of America’s history, progress has come not from the top down, but from the bottom
up. The President has stopped – at least temporarily – the construction of the Keystone XL
pipeline. But, that won’t stop the relentless drive for Americans to create, to build, and to advance.
We will get to a day when hydrogen fuel cells or another zero-emissions energy source are the
dominant method of powering automobiles and trucks, but it isn’t going to be soon. While we work
toward that day we still need to move food, goods,
and people from points “A” to “B.”
We do need a comprehensive infrastructure plan as
the President suggested. But even before that we
need a comprehensive energy plan, because the
way we build out the 21st century infrastructure will
depend on what we want to drive on it, sail in it, and
fly over it.
We can have a spirited and profitably national debate
on what an energy plan should include, but I know this: “No” is not an energy plan and it is not
leadership.

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 18 November 2015 K. Al Awadi

New base 731 special 18 november 2015

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to New base 731 special 18 november 2015

Similar to New base 731 special 18 november 2015 (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (20)

Recently uploaded

Recently uploaded (20)

New base 731 special 18 november 2015