BP Oman awards $730m worth drilling contracts

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BP Oman awards $730m worth drilling contractsOman Observer + NewBase
BP Oman yesterday announced the award of two long-term drilling contracts for the Khazzan
project in Block 61. KCA Deutag has been awarded more than $400 million contracts for the
construction and operation of five new build land rigs for
Khazzan. The rigs are being assembled in Nizwa to help
maximise employment opportunities in Oman.
According to the second agreement, Oman’s Abraj Energy
Service has been awarded more than $330 million contracts
to supply three drilling rigs for the full field development of the
Khazzan Project “We are pleased to announce these
contracts which continue to progress our development of the
gas resources at Block 61. Abraj Energy Service and KCA
Deutag will play important roles in the massive drilling
programme ahead. The selection of Abraj Energy Services demonstrates once again BP’s
commitment to In Country Value,” said BP Oman General Manager Dave Campbell.
Khalid al Kindi, Deputy General Manager for BP Oman, stated, “Building local content into our
supply chain is a key focus area in BP’s procurement strategy. BP is committed to hiring and
developing talented Omanis. We are also implementing a significant multi-million dollar long-term
social investment strategy to support education and enterprise development in Oman. All these
are part of our commitment to deliver BP’s In-Country Value Plan (ICV)”
Since the approval of the Khazzan Project development, BP has been actively awarding contracts
to ensure that the project meets its deadlines. In addition to the announced contracts awarding,
several contracts with a value around $90 million have been awarded to local Omani companies
for civil works, including well pads and in-field roads. More recently, BP awarded contracts with a
value of around $16 million to several Omani companies to supply carbon steel pipes and to
manufacture, supply and install a water pipeline. The water pipeline will be manufactured in
Sohar.
Sanctioned in December 2013, the Khazzan Project represents the first phase in the development
of one of the Middle East region’s largest unconventional tight gas plays. Khazzan has the
potential to be a major new source of gas supply for Oman for many decades.
BP is the Operator of Block 61 and holds a 60 per cent interest. The Oman Oil Company for
Exploration and Production (OOCEP) holds a 40 per cent interest.
The full field development of the Khazzan Project will involve a drilling programme of around 300
wells over 15 years to deliver plateau production of one billion cubic feet (28.3 million cubic
metres) of gas per day. This volume is equivalent to an increase of around a third of Oman’s total
daily domestic gas supply.

Oil prices to recover ‘slightly’ in Q4 2014
Saudi Gazette + NewBase
Oil prices were forecast to recover slightly in the fourth quarter of 2014 on the back of an uptick in
demand during the winter seasons, the Riyadh-based Jadwa Investment said in its latest report on
oil. But ample supply from non-OPEC sources will see global oil surplus reaching 1.73 mbpd in
2014, therefore preventing prices from rising too far beyond the $100 per barrel mark, the report
noted.
Furthermore, there is likely to be no let-up in the strength of the US dollar, which will hold its
elevated value, and “we do not foresee any significant cuts in OPEC production taking place.
However, we see any deterioration in geopolitics of Iraq, Russia/Ukraine and Libya resulting in oil
prices recovering to above $105 per barrel.”
Global oil supply grew by
1.7 mbpd, year-on-year,
in Q3 2014, with non-
OPEC supplies growing
by 1.8 mbpd as a result
of increased US oil
production. In Q4 2014
there will be continued
output increases from
non-OPEC sources, led
by the US with some
increases also recorded
by OPEC as a partial
resumption of output
from Libya contributes to
year-on-year increases.
The shale oil revolution
in the US continues
apace with production
rising by 13 percent in Q3 2014, year-on-year. As economic recovery builds momentum, Jadwa
expects to see increased investment in both non-conventional and conventional oil resources
which will maintain output by 13 percent in Q4 2014. US production will average 8.46 mbpd in
2014 and 9.28 mbpd in 2015 and this will be accompanied by declining oil imports, which will
average 7 mbpd in 2014 and 6.2 mbpd in 2015. By 2015, imports of oil will represent 36 percent of
total US energy consumption, compared to 58 percent in 2010.
Total output from OPEC dropped by 5.1 percent in Q3 2014, year-on-year. OPEC continues to be
affected by sizable falls in Libyan output despite some improvement in output recently. Other
sizable drops in Q3 2014, year-on-year, were seen in Iran (-17.7 percent), Nigeria (-5.5 percent)
and Saudi Arabia (-3.1 percent).
Saudi Arabian crude production was down by 3.1 percent in Q3 2014, year-on-year, to 9.8 mbpd,
compared to 10.1 mbpd over the same period in 2013, due to softer global demand and rising
non-OPEC supplies, in specific, US shale oil. Jadwa forecast that Saudi production will fall to an
average of 9.5 mbpd in Q4 2014 as non-OPEC output continues to accelerate and global oil

demand is subdued due to a weaker than expected recovery in the global economy. “Overall, we
forecast Saudi production to average 9.7 mbpd for 2014, up from 9.6 mbpd in 2013.
Looking ahead into 2015, we see Saudi production declining slightly, but not dramatically. As the
global economy recovery builds momentum in 2015, especially in the H2 2015, global oil demand
should also pick up, supporting Saudi production levels at around 9.6 mbpd for the year.
We also expect Saudi Arabia to maintain its current share of total OPEC production, at around 32
percent, because, as pointed out earlier, we do not see Libyan supply returning to normal levels
for the short to medium term, whilst security and infrastructure issues in Iraq will prevent
production from rising beyond current levels for the remainder of the year and hamper efforts to
increase output in 2015,” Jadwa said in the report.
Latest OPEC data shows that Iraqi crude production rose by 0.5 percent, year-on-year, in Q3
2014, to 3.1 mbpd. Southern Iraqi oil fields and infrastructure have been unaffected by civil strife
in Iraq, resulting in exports increasing by 6 percent in Q3 2014, year-on-year.
The loss of control of oil fields and infrastructure in the north of the country is keeping overall
output broadly flat. Since an attack on the Kirkuk-Ceyhan oil pipeline in early March there have
been no exports out of the north, with production from northern fields dropping to around 160 tbpd
from highs of 620 tbpd in February.
Jadwa believes that the current civil strife in Iraq will not further impact oil output going forward but
the main threat is likely to come from small scale attacks that add to negative market perception
which, in turn, have a short term impact on oil prices. It forecast that Iraqi oil production will remain
around current levels for the foreseeable future.
In 2014, total Russian crude production will grow by just under 1 percent. Russian oil output
growth has been on a downward trend in recent years as many of the western Siberia oil fields,
which yield two-thirds of total production, are maturing and require more capital intensive
investment to maintain output levels. In addition, new US and EU sanctions, at the beginning of
September, are likely to further impact long term oil exploration and make financing for all the
major Russian energy companies more difficult.
At the same, even as political tensions remain high around Crimea, Jadwa sees the likelihood of
disruption on Russian oil exports, amounting to roughly 5 mbpd, as very low. Energy trade
between EU and Russia is too important for both sides and will only be affected if there is a
significant deterioration in the current geopolitical situation.

China, India seen driving Qatar chemicals growth
By Pratap John -Chief Business Reporter
Qatar’s chemical industry expansion plans are based on the assumption that demand will continue
to increase in many emerging markets such as China and India, a new report has shown. Qatar
has announced plans to scale up petrochemical production from 10mn tonnes per year (tpy) to
23mn tpy, said Dun & Bradstreet in its “Qatar Economy Insight”.
The focus of growth in Qatar has shifted to the
non-hydrocarbon sector and one of the key
industries that are benefiting from Qatar’s
need to diversify away from “upstream”
hydrocarbon sector is chemicals, the report
said. Future plans involve expansion in
ethylene capacity and its derivatives through
improving capacity in existing plants as well as
building new ones with partnerships.
In addition, Qapco’s third low-density
polyethylene plant has been officially opened,
allowing Qatar to boost its output to 700,000
tpy. One of the key drivers of the
petrochemicals industry in Qatar is the
availability of cheap gas, Dun & Bradstreet said. Additionally, the state-owned Economic Zones
Company has adopted the development of three economic zones within Doha and its suburbs
with an authorised capital of $1.35bn.
The new economic zones are set to target value added manufacturing including downstream
petrochemicals, the report said. The manufacturing sector, including the refining and chemicals
sector represented 9.9% of Qatar’s nominal GDP in 2012. The value added contribution of the
manufacturing sector to economy in 2012 is estimated at $18.2bn, out of which the chemicals
sector represented 35.5% or $6.7bn, the report
said.
The establishment of new producers and
capacity expansions by the existing producers
have led to an average increase in capacity
growth of 17.5% a year from 2008 to 2012, the
report said. Qatar is the second largest
fertiliser producer in the GCC (Gulf Co-
operation Council) region. With annual
production capacity of 10.7mn tonnes in 2012,
Qatar accounted for 35% of the GCC capacity.
Qatar’s fertiliser production is concentrated
around nitrogen fertilisers. The country is also
the largest urea and the second largest
ammonia producer in the region. With two
major expansions commencing production in
Qatar over the past years, the country’s current

fertiliser plant is the largest single urea and ammonia facility in the world.
Qatar’s polymer production is focused on polyethylene and accounted for 8% of the GCC’s total
polymers capacity in 2012. While capacity expansion in Qatar has continued over the past five
years at an average rate of 10.6%, it was slower than other GCC countries. Qatar is the second
largest exporter of chemicals in the GCC representing 17% of the GCC’s chemicals exports.
With capacity
expansions taking
place over the past
decade, Qatar’s
chemicals exports
have grown at an
average rate of 13.7%
a year since 2002.
Fertilisers and
petrochemicals
account for the
majority of Qatar’s
chemicals exports.
Qatar imported 1.8mn
tonnes of chemicals in
2012, the majority of
which are inorganic
chemicals and
specialties, particularly industrial additives and paints and inks. The chemicals import growth rate
in Qatar is one of the highest in the region – over the past decade it has grown at an average
19.8% a year. The chemicals sector in Qatar, according to Dun & Bradstreet, employed more than
9,600 employees in 2012, accounting for 7% of the region’s total workforce in the sector

BP starts drilling Atoll-1 offshore well in Egypt
Source : BP + NewBase
BP Egypt has started drilling the Atoll-1 well offshore, which is the second exploration well in the
North Demietta Offshore concession discovered by the firm last year.
The deepwater exploration well will be drilled using the sixth generation rig ‘Maersk Discoverer’ at
water depth of 923 metres and reaching a total depth of around 7400 metres targeting Oligecene
Channels, said a statement.
The well spudded on September 12 and the drilling is expected to last into next summer, it said.
Hesham Mekawi, BP North Africa regional president, said: “The significant investment in Atoll-1 is
another great example that demonstrates our commitment to meeting Egypt’s energy needs by
exploring the deep offshore potential of the Nile Delta, which we believe to be a world class gas
basin that requires substantial investments to unlock its potentials.
“We look forward to continuing to play a key role in the development of Egypt’s energy sector and
maximising the use of our existing resources to help meet the country's growing energy demands
for years to come.”
Atoll-1 is a high pressure/high temperature (HP/HT) well located north of Damietta city, said the
statement. BP has 100 per cent working interest in this well. Atoll - 1 well is named after a coral
reef, sometimes called a coral atoll, which is a ring-shaped coral reef, it added. -

PTT to build third LNG receiving terminal in Myanmar
Third LNG terminal in Myanmar is strongly in plans of Thailand’s PTT as a gateway to further security to
the country’s energy supply.
LNG is used to produce 70% of
Thailand’s power generation with 25%
of it being imported from Myanmar.
According to Nuttachat Charuchinda,
chief operating officer for PTT’s
upstream business, the company is
looking to build an LNG receiving
terminal with a capacity of 5 million
tonnes per year reports Reuters.
PTT already owns a 5 million ton per
year, Map Ta Phut LNG terminal with
a second one of the same capacity
scheduled for completion in 2017.
Philippines energy mix plans might open door for new LNG imports
The Philippines said it will turn to natural gas in its energy mix to increase the share to a third over the next
16 years which would open doors for LNG imports. This new market would be welcomed by the major
LNG producers such as Chevron and Total
who face uncertainty over long-term
demand from Japan and South Korea.
Because of the country’s commitment to
low carbon emissions, natural gas will
increase to more than 30 percent of the
mix, according to Energy Undersecretary
Zenaida Monsada, reports Reuters.
The country is set to start using imported
gas to fuel energy producers in 2015 once
the LNG hub in Pagbilao province opens.

N. Sea Siri oil now flows to subsea tank, not tanker
Press Release
The oil from DONG Energy’s oil fields in the North Sea: Siri, Nini, Nini East, Cecilie and Stine-1,
is now sent directly to the oil tank below the Siri platform. This takes place after completion of
extensive repair work lasting several years.
Flemming Horn Nielsen, Country Responsible for DONG Energy’s Danish oil and gas activities, said:
“It’s a milestone that we’ve resumed producing to the oil tank. The Siri repair work has been a huge project
for the organisation. We were faced with a complex offshore project where we had to optimise the design
and construction solutions on a regular basis. Throughout the period, our employees have delivered a
fantastic job.”
The Danish Energy Agency’s final approval of the repair solution is still pending.
The background for the repair work is that DONG Energy during a routine inspection in August 2009
discovered cracks in the nose of the subsea oil tank of the Siri platform. No pollution happened but the
production was shut down for five months as a safety measure and re-started January 2010 after a temporary
solution had been installed.
In May 2011, the concept of a permanent repair solution was selected. Production was shut down again in
July 2013, because a crack was discovered in a critical area. In January 2014, as a temporary solution, the
satellite fields connected to Siri, ie Nini, Nini East and Cecilie, started producing via Siri’s processing
facilities directly to a tanker.
In July 2014, Stine Segment-1 and some of the Siri wells started producing again. In September 2014, the
final pipework was performed so that the oil can run into the subsea tank.

Norway: Det norske drills dry well near the Visund field in the N.Sea -
34/7-36 S . Source: NPD
Det norske oljeselskap, operator of production licence PL 553, has concluded the drilling of
wildcat well 34/7-36 S. The well was drilled about 10 kms west of the Visund field in the North
Sea. The primary and secondary exploration targets for the well were to prove petroleum in
Upper Jurassic reservoir
rocks (Intra Draupne
and Intra Heather
formation sandstones,
respectively).
Well 34/7-36 S did not
encounter any reservoir
in the Draupne
formation, while thin
reservoir sands of poor
quality were
encountered in the
Heather formation.
There are also traces of
petroleum in
sandstones in the Lista
formation from the
Palaeocene Age. The
well is dry. Data
acquisition and
sampling have been
carried out.
This is the first
exploration well in
production licence 553,
which was awarded
in APA 2009. The well
was bored to a vertical
depth of 3639 metres
below the sea surface
and was terminated in
the Etive formation from
the Middle Jurassic
Age. Water depth is 304
metres. The well has
been permanently
plugged and
abandoned.
Well 34/7-36 S was drilled by the Borgland Dolphin, which has now returned to land for its five-
year classification.

US Natural gas storage injections continue beyond the end of October
Source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report
In natural gas markets, analysts refer to the storage injection season as running from April 1 through
October 31 of each year, but these dates are not strict cutoff points. In each of the past 11 years, going back
to the first full year of EIA's weekly gas storage surveys, there have been net injections during one or more
weeks in November. In 6 of those years, there have been multiple weeks of net injections. There have also
been multiple weeks within the injection season when the weekly change resulted in a net withdrawal.
In two of the past five years, 2009 and 2011, inventories on the last day of November have been greater than
the tallies for October. In 2012, there was a week with net injections as late as December. Similarly, the
nominal beginning of the injection season is April 1 each year, but for 6 of the past 11 years, there have
been net injections in March.
In the past 12 years, May, June, and September have been the only months that did not have any weeks with
net withdrawals. In 2006, there were weekly net withdrawals in July and August, as natural gas was used in
the electric power sector to meet high levels of summer air-conditioning demand.
The U.S. Energy Information Administration (EIA) has been surveying and reporting weekly gas storage
data since March 15, 2002. Before that, going back to 1994, weekly storage was surveyed by the American
Gas Association between 1994 and early 2002. The weekly survey covers 80 companies, which account for
about 90% of gas storage volumes.
The Weekly Natural Gas Storage Report (WNGSR) is one of the U.S. government's Principal Federal
Economic Indicators (PFEI). Most of these indicators, which include metrics like employment, international
trade, housing construction, and crop production, are released on a quarterly or monthly basis. The WNGSR
is one of only three PFEIs published on a weekly basis.

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Your partner in Energy Services
Khaled Malallah Al Awadi,
Energy Consultant
MSc. & BSc. Mechanical Engineering (HON), USA
ASME member since 1995
Emarat member since 1990
Mobile : +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a totalKhaled Al Awadi is a UAE National with a totalKhaled Al Awadi is a UAE National with a totalKhaled Al Awadi is a UAE National with a total
of 24 yearsof 24 yearsof 24 yearsof 24 years of experience in theof experience in theof experience in theof experience in the Oil & GasOil & GasOil & GasOil & Gas
sector. Currently working as Technicsector. Currently working as Technicsector. Currently working as Technicsector. Currently working as Technical Affairs Specialist foral Affairs Specialist foral Affairs Specialist foral Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with externalEmirates General Petroleum Corp. “Emarat“ with externalEmirates General Petroleum Corp. “Emarat“ with externalEmirates General Petroleum Corp. “Emarat“ with external
voluntary Energy consultation for the GCC area via Hawkvoluntary Energy consultation for the GCC area via Hawkvoluntary Energy consultation for the GCC area via Hawkvoluntary Energy consultation for the GCC area via Hawk
Energy Service as a UAE operations base , Most of theEnergy Service as a UAE operations base , Most of theEnergy Service as a UAE operations base , Most of theEnergy Service as a UAE operations base , Most of the
experience were spent as the Gas Operations Manager inexperience were spent as the Gas Operations Manager inexperience were spent as the Gas Operations Manager inexperience were spent as the Gas Operations Manager in
EmaEmaEmaEmarat , responsible for Emarat Gas Pipeline Network Facilityrat , responsible for Emarat Gas Pipeline Network Facilityrat , responsible for Emarat Gas Pipeline Network Facilityrat , responsible for Emarat Gas Pipeline Network Facility
& gas compressor stations . Through the years , he has& gas compressor stations . Through the years , he has& gas compressor stations . Through the years , he has& gas compressor stations . Through the years , he has
developed great experiences in the designing & constructingdeveloped great experiences in the designing & constructingdeveloped great experiences in the designing & constructingdeveloped great experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in theof gas pipelines, gas metering & regulating stations and in theof gas pipelines, gas metering & regulating stations and in theof gas pipelines, gas metering & regulating stations and in the
engineering ofengineering ofengineering ofengineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenancesupply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenancesupply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenancesupply 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 & Gasagreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gasagreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gasagreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas
Conferences held in the UAE andConferences held in the UAE andConferences held in the UAE andConferences held in the UAE and EnergyEnergyEnergyEnergy program broadcasted internationally , via GCC leading satellite Channels .program broadcasted internationally , via GCC leading satellite Channels .program broadcasted internationally , via GCC leading satellite Channels .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 02 October 2014 K. Al Awadi

BP Oman awards $730m worth drilling contracts

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