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New base special 13 august 2014

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NewBase energy news - Khaled Al Awadi

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New base special 13 august 2014

  1. 1. 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 13 August 2014 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE SaudiArabia consumes 23% of oil production Zawya + NewBase Twenty-three percent of Saudi Arabia’s oil production is used for local consumption, said an economic report on Monday. During the first seven months of this year, the Kingdom exported 1.6 billion barrels of oil worth SR657 billion, the report added. “Local consumption of oil during the same period stood at 475 million barrels or 23 percent of the total production,” the report pointed out.The report came as the Organization of Petroleum Exporting Countries (OPEC) predicted a fall in demand for oil this year. However, OPEC increased its output in July despite the violence in Iraq and Libya. Fahd bin Juma, an economic consultant, said world demand for oil rose to 89.9 million barrels per day while supplies stood at 90.1 million bpd, bringing down prices to $102 per barrel. For details see attached OPEC AUGUST 2014 Report
  2. 2. 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 2 Oil Market Well Supplied Despite Conflicts – IEA ByReuters + NewBase Huge rises in oil production from North America are keeping oil markets increasingly well supplied, the West’s energy watchdog said on Tuesday, suggesting oil prices are unlikely to rise much soon despite conflicts near key oil producing areas. The International Energy Agency (IEA) said that although the situation in several key oil producing countries “remains more at risk than ever”, supplies were ample and the Atlantic Basin was even reported to be facing a glut. Output from the Organization of the Petroleum Exporting Countries rose to a five-month high in July, as rises in production from Saudi Arabia and Libya more than offset declines in Iraq, Iran and Nigeria. “Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin,” the International Energy Agency (IEA) said in its monthly report. “U.S. and EU sanctions on the Russian oil sector are not providing oil markets with much support either. The consensus in the industry seems to be that neither set of sanctions will have any tangible near term impact on supplies. Even for the medium term, their impact appears questionable,” the IEA said. The oil market has fallen over the last month but remains nervous about further supply shocks. Brent was trading just below $104 a barrel by 0750 GMT on Tuesday, down from a high above $115 in June. “While the situation across these key producer countries remains more at risk than ever, so far the market appears confident that OPEC can deliver the production increase needed from it to meet rising demand expected in the second half of the year,” said the IEA, which advises major consuming nations on energy policy.
  3. 3. 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 3 Duqm Refinery floats site preparation tender BYTIMES NEWS + NewBase Duqm Refinery and Petrochemical Industries Company has floated a tender for site preparation work for its upcoming refinery at the Special Economic Zone at Duqm. Site preparation work is expected to start in the first quarter of 2015 and complete during the first quarter of 2016, said a company release he site preparation works comprises the excavation and compaction of more than 14 cubic meters of soil, and will lay the groundwork to commence refinery construction on schedule in 2016. "Preparation work is the first activity on the refinery site, and is an exciting milestone for the project. It ensures that the site will be ready for major construction of the refinery and that the project remains on schedule. We are delighted that many Omani contractors expressed interest in tendering for the contract and that the works will directly benefit the local community at Duqm and the Al Wusta governorate," said Jacobus Nieuwenhuijze, project director of Duqm Refinery Duqm Refinery and Petrochemical Industries Company is a joint venture between Oman Oil Company and International Petroleum Investment Company (IPIC). The refinery is the first major industrial project to be developed at the new special economic zone at Duqm, and will have a capacity of 230,000 barrels per day. Duqm is located approximately 600 kilometer south of Muscat along the Arabian Sea coast of Oman. Significant investments have already been made in Duqm, including a new international airport, a new dry dock/quay, hotels and dual carriage roads, with further projects currently under execution, including residential and tourist projects and a fishery harbour. Duqm special zone extends bid deadline , Special Economic Zone Authority Duqm (Sezad) yesterday said that the last date for submitting tenders for a consultancy service for building roads, infrastructure and buildings close to the berth area at Duqm port has been extended to September 2 from August 5, according to Sezad website. The scope of work for the winning international consultant includes assistance in preparing contract, evaluate bids, examine detailed drawings and supervision of the work. The period stipulated for the construction work is thirty months. The Duqm authority has already prepared a master plan for the road and other infrastructure projects.
  4. 4. 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 4 Talisman Energy: readying Iraqi Kurdistan assets for sale Reuters + NewBase on Tuesday it still plans to sell all or a portion of its exploration properties in Iraq's Kurdistan region despite conflict in the area. The company said it expects to begin a sale process in the next several weeks. Brent Anderson, a spokesman for Clgary- based Talisman, said an adviser has been selected to handle the marketing of the properties, though he declined to say who had been chosen to oversee the process. The company could sell all or part of its oilfields in the region depending on the amount of interest in the sale. "We had anticipated going to the marketplace in the third quarter and this process has just started," Anderson said. "We have an adviser selected and we plan to go into the market with that adviser over the next couple of months." The company is starting its sales process even as tens of thousands of people have been driven from their homes in the region and the United States carries out air strikes against the Sunni militants of the Islamic State, who have captured a third of the country. Talisman has an interest in two oil blocks in Iraq&apos, Kurdistan region: The Kurdamir block, which it shares with WesternZagros Resources Ltd , and its wholly controlled Topkhana property, where it has just completed the drilling of a promising well. It is now assessing the results of that drilling and has yet to release its findings. Anderson said the company's properties have not been affected by the conflict in the region; nonetheless Talisman last week removed most of its personnel from the area.Major companies such as Chevron Corp and Exxon Mobil Corp have evacuated staff from Kurdistan, while smaller Canadian operators have also suspended operations. ryx Petroleum Corporation Ltd suspended drilling operations and evacuated staff from oilfields
  5. 5. 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 5 in Iraq's Kurdish region last week. On Monday ShaMaran Petroleum Corp , an Iraqi Kurdistan-focused oil development and exploration company with an interest in the Atrush block, said it had suspended operations at Atrush and significantly reduced staffing levels. Talisman, which recently seen as a target of a potential takeover by Spain's Repsol SA , has long said it would like to sell all or part of its Kurdistan operations. However, the timing of the sale, coming during the fighting in the region, may deter some potential buyers. "It's probably not as nice of a market as they would have had six months ago," said Michael Dunn, an analyst with FirstEnergy Capital. "But from Talisman's perspective their plan always seemed to be to drill that Topkhana well first and see what they have there." Talisman shares were up 9 Canadian cents to C$11.56 by early afternoon on the Toronto Stock Exchange. The foothills after which WesternZagros is named run close to the Iranian border and take up most of the northern part of Iraq. The Zagros fold belt, as geologists know it, is estimated to contain 24 billion barrels of proven reserves as of year-end 2011, with an ultimate recoverable resource of 66 billion barrels, according to the International Energy Agency. Besides the sheer size of the resource, observers say, the majors have been drawn north by favorable terms offered by the Kurdistan Regional Government (KRG). Exxon last year announced it would pull out of a $50-billion project in Iraq’s West Qurna-1 oilfield. The departure followed several exploration deals the Irving, Texas-based giant signed with the KRG in 2011, raising the ire of Baghdad. “In terms of profitability, the Kurdish contracts are better than the technical contracts signed in the south,” says David Przybyla, who covers WesternZagros for FirstEnergy Capital Corp. from London. He estimates production sharing contracts offered by the KRG translate into extra profits of between $5 and $5.50 per barrel of production for oil companies. “It’s not fantastic compared to other countries, but it’s much more profitable,” Przybyla says. “And then you still have the size because we’re speaking about multibillion-barrel oilfields.”
  6. 6. 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 6 Kurdistan Oil & Gas are vital to the world energy's & economy It is clear that Kurdistan has now become a major oil center. The Kurdish government estimates that the region is the world’s 9th largest oil producer. Oil companies from around the world operate in Kurdistan, including :- (major oil companies are indicated in bold, U.S. and French oil companies in italics): USA • Exxon Mobil • Chevron • Aspect Energy • Marathon Oil Corporation • Hillwood International Energy • Hunt Oil • Prime Oil • Murphy Oil • Hess Corporation • HKN Energy • Viking International France • Total Canada • Forbes and Manhattan • Western Zagros Resources • Talisman Energy Inc • NIKO Resources • Ground Star • Shamaran South Korea • Korea National Oil Company (KNOC) Turkey • Genel Energy • Petoil • Dogan Britain • Gulf Keystone Petroleum • Sterling Energy • Heritage Oil Anglo-French • Perenco
  7. 7. 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 7 UAE • TAQA • Dana Petroleum Austria • OMV China • China acquired a significant presence in Iraqi Kurdistan after Sinopec Group bought Addax Petroleum in 2009. Hungary • MOL India • Reliance Industries Papua New Guinea • Oil Search Russia • Norbest • Gazprom Neft Norway • DNO Iraq • Oil Search (Iraq) Limited • Kar Group • Qaiwan Group Spain • Repsol Independent • AFREN With Chevron, Exxon, Marathon, Hess and Total operating major facilities in Erbil, now it is believed that Iraqi oil is driving foreign policy, Any significant disruption of current Iraqi oil production or long-term diminution in its expected growth could have major repercussions for theworld economy. Kurdistan also possesses approximately 89% of all Iraqi natural gas reserves. And so the West & the East - including you – should & is eager to protect Kurdish hydrocarbons from falling .
  8. 8. 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 8 Heerema-AF JV get LoI for Murchison platform removal job Press Release. AF Decom Offshore U.K. Limited in a consortium with Heerema Marine Contractors Nederland SE, called Heerema-AF Consortium, has been awarded a Letter of Intent by CNR International (U.K) Limited, for the removal and disposal of the Murchison Platform in the North Sea. Murchison oil field straddles across the UK/Norway median line, whilst the platform itself is located on the United Kingdom Continental Shelf, east of the Shetland Islands. The Murchison platform, one of the largest steel jacket platforms in the North Sea, was installed in 1980 and finally ceased production in March 2014. The Letter of Intent covers a major contract for engineering, preparation, removal and disposal (EPRD) of both topsides and jacket structure, altogether a total weight of around 37,000 tons. The contract assumes start of the engineering work in 2014 immediately after contract award, the offshore work starting early 2016 with removal and final disposal work continuing through to 2020. About The Murchison Field is located in the East Shetland Basin, northern North Sea at approximate latitude 61° 23' N, longitude 1° 43.5' E, 120 miles northeast of the Shetland Islands (Fig. 1). The field straddles the UK-Norway international boundary with the greater portion in the UK Block 21 l/19a and the lesser portion in Norway Block 33/9. Water depth is -512 ft BMSL. In the context of the North Sea the field is of medium size with an areal closure of approximately 7 square miles and contains 790 million barrels of oil in place. The productive reservoir consists of coastal deltaic sandstones of the Middle Jurassic Brent Group which lie between the marine shales of the Lower Jurassic Dunlin Group and the marine, organic-rich shales of the Upper Jurassic Humber Group. The trap is structural comprising a single, northwesterly dipping rotated fault block which has been sourced and sealed by the overlying Upper Jurassic shales. The field is named after the Scottish geologist Sir Roderick Impey Murchison (1792-1871), who is best known for his contribution to Palaeozoic stratigraphy.
  9. 9. 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 9 KrisEnergy, Eni resolve Vietnam dispute with Neon Press Release Italy’s Eni and Singapore’s KrisEnergy have reached an agreement with Neon Energy to resolve a dispute regarding the settlement of the financial liabilities of Neon, subsequent to the Vietnamese drilling program conducted in late 2013 in Block 105-110/04 and Block 120. Block 105-110/04 covers an area of 7,192 sq km in the central Song Hong Basin offshore Vietnam where water depths range from 20 metres to 80 metres. In consideration for a full release from all liabilities Neon has agreed to pay US$5.75 million to Eni Vietnam and KrisEnergy, assign its working interest in the blocks, and remit the net proceeds from the Cua Lo-1 insurance claim (if and when that claim is settled). Upon completing the transaction Neon Energy’s cash balance will stand at approximately US$20.5 million. More precisely, Neon Energy’s 25% working interests in Block 105 and Block 120 offshore Vietnam will be transferred to Eni Vietnam and KrisEnergy, proportionately. The completion of such transfers is pending government approval. Upon completion, Block 105 will be held by Eni Vietnam (66.67%) and KrisEnergy 105 (33.33%) and Block 120 will be held by Eni Vietnam (66.67%) and KrisEnergy 120 (33.33%). Neon Energy Managing Director, Ken Charsinsky, commented “We are pleased to have reached a settlement with Eni Vietnam and KrisEnergy, which allows the Company to now focus on a new growth strategy without constraint.” Block 120 covers 8,574 sq km offshore central Vietnam, overlying the Quang Ngai Graben in the north and central section of the contact area and passing into the Phu Khanh Basin in the southern portion of the block. Water depths in the contract area range from 50 metres to 1,100 metres. Block 105-110/04 covers an area of 7,192 sq km in the central Song Hong Basin offshore Vietnam where water depths range from 20 metres to 80 metres.
  10. 10. 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 10 Jordan :BAM starts marine construction at Aqaba LNG Press Release, August 13, 2014; Image: MAG E& Together with its sister company BAM Contractors from Ireland and its Jordanian joint-venture partner MAG Engineering & Contracting Co. BAM International was awarded the Engineering, Procurement and Construction (EPC) of the LNG jetty in November 2013. BAM Infraconsult is involved in the designing of the civil works. The project is proceeding as scheduled and the hand- over to Aqaba Development Corporation (ADC) is expected in April 2015. The scope of work for the new LNG jetty includes a 100 metres trestle on steel piles, a concrete off-loading platform of 20 x 20 metres, four mooring dolphins and two breasting dolphins. The project further comprises a 700 metres long gas pipeline to the shore tie-in point, as well as associated control equipment and instrumentation. The development of the terminal area including roads and two buildings also belongs to the contract. The substructure works for the terminal building are nearing completion. The substructure works for the administration building have commenced. This is the third project for BAM in Aqaba. The joint venture has already successfully completed the New Port in Aqaba for the same client earlier this year and the extension of the Container Terminal for APMT and ADC in 2013.
  11. 11. 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 11 China to raise natural gas prices for industries Press Release China will pass on some of the higher costs of natural gas to consumers, but again excluded residential users in its first price increase in more than a year. The move comes as the country aims to eliminate overcapacity in industries that rely heavily on cheap natural gas and as Beijing slowly loosens its grip on energy prices to accelerate the development of unconventional resources such as shale and coal-bed methane gas. China’s Natural Development and Reform Commission, its top economic- planning agency, said yesterday that it would raise the government-set wholesale price of natural gas by as much as 0.4 yuan (6 US cents) per cubic metre from September 1. China divides natural gas sold to non- residential users into two categories. The first, known as existing reserves, is based on the volume of natural gas consumed in 2012. The second, known as incremental reserves, is the volume of gas consumed above that level. Last year, the NDRC said existing reserves were 112bn cubic metres, and it estimated incremental reserves of 11bn cubic metres. China’s total natural gas consumption was 170bn cubic metres in 2013, after factoring in imports. Consumption is expected to reach 420bn cubic metres by 2020. The price increase announced yesterday, which will vary by region, affects only existing reserves, the NDRC said in a statement on its website. The increase is aimed at promoting the development of natural gas resources and accelerating the reform of industries with backward capacity that rely on natural gas as a feedstock, it said. Tian Miao, an energy analyst at research firm NSBO, said in a note that PetroChina Co, the country’s largest gas supplier, will be the largest beneficiary of the price increase because it controls most of the pipelines and wholesale distribution in China. The increases should eventually trickle down to benefit gas distributors such as Kunlun Energy Co, ENN Energy Holdings and China Gas Holdings, she said. “Those with higher exposures to direct distribution, commercial and industrial customers – rather than residential users – will see the greatest upside as industrial prices are usually raised faster than residential prices,” she said. The NDRC said China’s natural gas consumption has been growing at an average rate of 15% a year and that domestic production isn’t enough to meet demand. As a result, natural gas imports – which are more expensive – have risen each year, adding to pressure to accelerate domestic pricing reform, it said. China imported 53bn cubic metres of natural gas in 2013, or about 30% of its total needs, according to the NDRC. Concerned about the impact of inflation on its population, China has used price controls to blunt the effects of rising natural gas prices. In March, however, the NDRC said it would introduce a three-tiered pricing structure for residential natural gas users by the end of 2015. The tiers will be similar to recent pricing reforms for residential water and electricity prices, which charge more based on higher consumption.
  12. 12. 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 12 Abu Dhabi leads by example in global energy production ADIPEC 2014 Boosts Abu Dhabi's Role as International Hub for Guiding Best Practices Abu Dhabi - Emerging markets are looking to Abu Dhabi for guiding best practices on how to enhance their domestic refining industries and will use the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) 2014, one of the world's top three energy events, as a knowledge-sharing platform. The ability of oil companies in emerging markets to effectively and efficiently use their resources is of critical importance, with recent studies showing that most energy demand will come from these economies. According to a recent BP report, 95 per cent of global energy consumption growth is expected to come from emerging economies, with nearly all net demand oil growth coming from China, India, and the Middle East. By 2035, energy use in these economies is expected to be nearly 70 per cent higher than in 2012. Growth in oil and gas supply is expected to come primarily from the Middle East and the Americas. The UAE is among the world's top 10 oil producers and exporters, and with more than 95 per cent of the country's crude oil and gas produced in Abu Dhabi, the capital's leading role in meeting the world's energy needs is receiving international recognition. ADIPEC 2014is witnessing increased global interest with more than 400 leading speakers, 1,800 exhibitors, and 60,000 thousand industry professionals from more than 200countries expected to participate in this year's event. These include both regional energy producers, such as the Kingdom of Saudi Arabia, and emerging hubs, such as China, India and Turkey. The numbers show a continuous and significant growth from the 300 speakers, 1,362 exhibitors and 51,000 visitors last year, warranting an expansion of exhibition space from 35,000 to over 40,000 square meters at the Abu Dhabi National Exhibition Centre. The UAE is the world's second-largest exporter of petroleum by value, according to OPEC, thanks primarily to the Abu Dhabi National Oil Company (ADNOC). Celebrating its 30thanniversary, ADIPEC 2014 will be held from 10-13 November 2014 under the theme of "Challenges and Opportunities for the Next 30 Years". ADIPEC 2014 is held under the patronage of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, and supported by the Ministry of Energy, Abu Dhabi National Oil Company (ADNOC), and the Abu Dhabi Chamber.
  13. 13. 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 13 US: Ohio's Utica Region now included in EIA's monthly Drilling Productivity Report Source: U.S. Energy Information Administration, The Utica Region in eastern Ohio, one of the fastest growing natural gas production areas in the United States, has been added to the Drilling Productivity Report (DPR). Total natural gas production in the Utica Region, which includes production from the Utica and Point Pleasant formations as well as legacy production from conventional reservoirs, has increased from 155 million cubic feet per day (MMcf/d) in January 2012 to an estimated 1.3 billion cubic feet per day (Bcf/d) in September 2014. Utica formation drilling activity has been primarily focused in eastern Ohio since mid-2012, although the geologic formation extends into Maryland, New York, Pennsylvania, and West Virginia. Some producers are successfully targeting the Utica formation in northern West Virginia, but these wells fall within the existing DPR Marcellus Region. The DPR analyzes all drilling and production within geographic areas in order to capture total production volumes supplied to the market and is not limited to the formation name used for the region. Source: U.S. Energy Information Administration, Drilling Productivity Report
  14. 14. 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 14 Production growth in the Utica Region is a function of both increased drilling productivity (measured as production per rig) and increased drilling activity (measured as number of rigs). Drilling productivity, or the average monthly production from new wells per drilling rig, has increased from 0.3 MMcf/d in January 2012 to an estimated 5.0 MMcf/d in August 2014. This increase has outpaced the growth rate seen in both the Haynesville Region from 2009 to 2011 and the Marcellus Region from 2010 to 2012, although current levels of drilling productivity in those areas still exceed that of the Utica Region. Compared to these changes in productivity, increases in drilling activity have been relatively modest: while there were fewer than 10 rigs drilling in the Utica Region prior to 2012, drilling activity has stabilized at between 20 and 25 rigs since early 2013. Source: U.S. Energy Information Administration, Drilling Productivity Report Note: Production growth indexed from January of the year production began increasing rapidly in the region. The pace of drilling productivity growth can be attributed to both the geological properties of the Utica formation—it contains significant volumes of oil and natural gas—as well as the considerable horizontal drilling and hydraulic fracturing expertise producers are bringing to the play after nearly 10 years of drilling shale and tight formations. Because of the relatively low number of rigs drilling in the Utica Region, total natural gas production has grown about on pace with production growth in Texas's Eagle Ford Region from 2010 to 2012. The chart above indexes production growth from January of the year natural gas production in the region started increasing rapidly, in order to compare the pace of production growth across various regions.
  15. 15. 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 15 Source: U.S. Energy Information Administration, from Energy Velocity Utica Region natural gas production growth was constrained before July 2013 because of limited natural gas processing capacity in the area. As a number of processing plants have been built and brought into service over the past year, more natural gas is being gathered from wells and processed to meet pipeline specifications, allowing the gas to flow on interstate pipelines. In late June, the Rockies Express Pipeline (REX) began transporting Utica Region natural gas westbound from eastern Ohio. The REX system started transporting natural gas in late 2009 from Colorado and Wyoming to the Midwest, but significant production growth in Ohio and Pennsylvania has prompted the addition of capability for some westbound flows on portions of Zone 3. These additions allow pipeline operators bidirectional capability (with capacity for westbound as well as eastbound flows), in order to take advantage of low-cost supplies from the Utica Region at the eastern end of the system. By mid-July, Zone 3 had reached its initial capacity of receiving 0.25 Bcf/d from eastern Ohio; the company has plans to expand the bidirectional flow to 1.80 Bcf/d by mid-2015, and potentially up to 2.35 Bcf/d by the end of 2016.
  16. 16. 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 16 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, MSc. & BSc. Mechanical Engineering (HON), USA ASME member since 1995 Emarat member since 1990 Energy Services & Consultants Mobile : +97150-4822502 khalid_malallah@emarat.ae khdmohd@hotmail.com Khaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 years of eof eof eof experience in thexperience in thexperience in thexperience in the Oil & Gas sector. Currently working asOil & Gas sector. Currently working asOil & Gas sector. Currently working asOil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation forTechnical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation forTechnical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation forTechnical 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 othe GCC area via Hawk Energy Service as a UAE operations base , Most othe GCC area via Hawk Energy Service as a UAE operations base , Most othe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsf the experience were spent as the Gas Operationsf the experience were spent as the Gas Operationsf the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedhas developedhas developedhas developed great experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructing of gas pipelinof gas pipelinof gas pipelinof gas pipelines, gas metering & regulating stations and in the engineering of supplyes, gas metering & regulating stations and in the engineering of supplyes, gas metering & regulating stations and in the engineering of supplyes, 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 Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs forOUs forOUs forOUs for the local authorities. He has become a reference fthe local authorities. He has become a reference fthe local authorities. He has become a reference fthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andor many of the Oil & Gas Conferences held in the UAE andor many of the Oil & Gas Conferences held in the UAE andor many of the Oil & Gas Conferences held in the UAE and Energy program broadcastedEnergy program broadcastedEnergy program broadcastedEnergy program broadcasted internationally , via GCC leading satellite Channels .internationally , via GCC leading satellite Channels .internationally , via GCC leading satellite Channels .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 13 August 2014 K. Al Awadi

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