Newbase energy news covering the MENA by Energy expert Khaled Al Awadi

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NewBase 14 January 2014 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oman aims to keep oil output steady over two to three years
(Reuters.com) –
Oman aims to produce oil at current levels around 950,000 barrels per day (bpd) for the next two to
three years as the Gulf nation implements techniques to arrest an output decline, its oil and gas
minister said on Sunday.
Oman's oil and condensate production averaged 930,000 bpd in 2013, Mohammed bin Hamad Al Rumhy
said. "Improved oil recovery and enhanced oil recovery (techniques) we are doing to sustain production at
current levels. Our priority is to sustain the production," Rumhy told reporters at the Petrotech energy
conference in New Delhi on Sunday.
He also said he favoured ending subsidies on retail rfuel prices and hoped a decision would be taken soon
on a price increase. "There is a consensus that we need to increase the price as the current subsidy system is
not sustainable ... when can we do it I cannot predict, hopefully soon," he said. Energy prices are heavily
subsidised in the six member states of the Gulf Cooperation Council, giving little incentive for their fast-
growing populations to moderate use of big gas-guzzling cars or around-the-clock air conditioning.
Oman is under more immediate pressure to reform than its wealthy Gulf neighbours as its energy resources
are less ample. The International Monetary Fund has warned that Oman's state finances could slide into
deficit in coming years because of recent public spending rises. "The timing is an issue when you remove a
subsidy, it becomes more of a political issue than economic issue. I am talking from an economic angle,"
Rumhy said. In a rare reform, Oman announced plans in early 2013 to double its industrial gas price to $3
per million British thermal units, still cheap by international standards, by 2015. Bahrain recently said it will
reassess plans to gradually raise diesel prices from mid-January to cut subsidies after a protest by some
members of parliament.

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UAE sees keen interest for largest oilfields on revised terms
By Nidhi Verma NEW DELHI, Jan 13 (Reuters)
ADCO fields producing 1.6 mln bpd, aim to produce 1.8 mln in 2 years -minister
* Abu Dhabi mulling bringing in big Asian buyers into ADCO concession
* Ruwais refinery expansion to be completed by end-2014
Abu Dhabi has received strong interest from international firms for participating in its largest oilfields, the
UAE oil minister said, as it weighs continuing previous partnerships with Western oil giants or letting big
Asian buyers take stakes.
Abu Dhabi National Oil Company (ADNOC) took full control of the biggest oilfields in the United Arab
Emirates (UAE) when its decades-old venture with four of the world's largest oil companies ended on
January 11. Under the concession arrangement, ADNOC held a 60 percent controlling stake in the Abu
Dhabi Company for Onshore Oil Operations (ADCO) oilfields, while ExxonMobil, Royal Dutch Shell,
Total and BP, each held 9.5 percent stakes.
Several companies, including those whose participation in the concession have expired are interested in
joining the project with revised terms, UAE's oil minister Suhail bin Mohammed al-Mazroui told reporters.
"Most of the existing partners are involved and expressed keen interest to participate," he said.
"There was a criteria that ADNOC announced. This was based on technology because the challenges
moving forward are different than the challenges we had when we started," the minister, who is in New
Delhi to attend industry event Petrotech 2014, said.
Abu Dhabi is the capital of the UAE, which is a member of the Organization of Petroleum Exporting
Countries (OPEC). UAE's concession system allows oil and gas producers to acquire equity in hydrocarbon
resources. ADCO's output is about 1.6 million barrels per day (bpd).
The western oil majors have partnered Abu Dhabi since decades but several Asian energy companies are
keen to take stakes in fields that mostly supply oil to the Asian market. These would offer a chance for UAE
to strengthen political ties with its biggest oil buyers such as China, Korea and Japan.

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The minister, however, said that western companies have agreed to continue working with ADNOC until
new contracts are finalised. "There is an arrangement between us and those companies to continue until we
finalise the contract. Now, ADNOC is responsible for sale of all of the crude," he said.
WELL-SUPPLIED MARKETS
The Gulf nation has the capacity to produce 3 million barrels per day (bpd) and is currently producing 2.8
million bpd. "Our production goes up and down depending on the market demand. Priority is market should
be well supplied of the OPEC crude and UAE is doing its role in that context," al-Mazroui said.
ADNOC aims to raise output from its largest onshore oilfields to 1.8 million barrels per day (bpd) in two
years as the country aims for a 3.5 million bpd export capacity by 2017, he said.
ADNOC has a term contract to supply 230,000 bpd to Indian refiners but actual purchases go up to as high
as 280,000 bpd as these companies also purchase from the spot market.
"As some members of OPEC like Libya and Iraq are experiencing difficulties, so we are producing as much
as we can to ensure that markets are well-supplied," he added.
The minister also said that the expansion of Ruwais refinery of Abu Dhabi Oil Refining Co (Takreer) will
be completed by end-2014. The expansion was earlier planned to be completed in the first quarter of 2014.
The minister did not specify the reasons for the delay. The Ruwais refinery has a capacity of 415,000 bpd
and expansion work is underway to more than double it. The new refinery would process Abu Dhabi's
Murban crude oil grade.

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Total deal speeds up UK shale gas raceBY KAROLIN SCHAPS -(REUTERS) -
Total has become the first major oil and gas company to strike a deal to explore for shale gas in Britain,
boosting a technology which has brought cheap energy to the United States but sparked protests by
environmentalists and local communities.
The French group said on Monday it had bought a 40 percent interest in two licences in the so-called
Gainsborough Trough area of northern England for up to $48 million. Total's involvement, which follows
shale gas deals by utilities Centrica and GDF Suez, puts Britain firmly on the map as one of Europe's
strongest prospects for the development of unconventional oil and gas resources.
The investment is tiny in industry terms, but experts say it paves the way for similar moves by other top oil
and gas firms. "We expect further international energy companies to follow the lead taken by Total (...) and
ramp up their plans for signing 'farm-in' agreements with UK firms that already have licences to explore UK
shale reserves," said Glynn Williams, partner at Epi-V, an investor in oil and gas services.
However, shale gas extraction or "fracking" - using chemicals, water and sand injected underground at high
pressure to fracture rock formations and release the gas - is bitterly opposed by environmentalists who fear
it could pollute water, blight landscapes and add to global warming. Last summer, Britain saw protests erupt
in the south of the country as local communities expressed opposition as well.
Britain's shale gas resources are estimated at more than 400 times the country's annual gas consumption and
the government has thrown its weight behind exploration at a time when rising energy prices have become a
hot political issue. In the United States, shale gas exploration has transformed the energy market, caused
prices to collapse and set the country on the path towards energy independence.
Tighter planning and environmental regulation, and denser population, mean Britain is unlikely to see a
shale gas boom of the kind experienced in the United States. Nonetheless, the British government supports
shale gas exploration as a way to reduce the country's growing dependence on gas imports and to increase
revenues.
It has allowed handsome tax breaks for companies involved in the nascent industry and promised financial
benefits to local communities affected by shale gas exploration. The government also announced on
Monday that local councils will be able to keep all of the business rates to be received from shale gas sites,
instead of 50 percent currently given, amounting up to 1.7 million pounds per site.

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"A key part of our long-term economic plan to secure Britain's future is to back businesses with better
infrastructure. That's why we're going all out for shale," Prime Minister David Cameron said, announcing
the new rates.
COMPENSATION
The British government's support for shale gas makes it one of Europe's most attractive markets for
unconventional oil and gas drilling as others, such as France and Germany, have imposed moratoriums on
the activity. "It's ironic that a French-owned company is seeking to drill the UK for shale gas when it's
banned from fracking in France due to environmental concerns," said Jane Thomas, senior campaigner at
environmental group Friends of the Earth.
France's constitutional court in October upheld a ban on hydraulic fracturing for shale oil and gas. Poland,
which also actively encourages shale gas exploration, has seen a raft of oil and gas companies withdrawing
from its programme due to poor drilling results and an uncertain legal landscape.
In contrast, Britain's first shale gas is planned to flow by the end of this decade and growing momentum
behind the shale gas race is expected to attract other big names to the UK market. Following last summer's
protests against shale gas, the government promised improved benefits for communities affected.
Communities are expected to receive 100,000 pounds ($164,800) in compensation as well as a separate fund
established by the developer equalling 1 percent of revenue per shale gas well drilled. The compensation
scheme starts when exploratory drilling begins. France's GDF Suez bought shale gas licence stakes in a
partnership with Dart Energy in October and Britain's Centrica entered the race in June.
Having Total as a partner will be a feather in the cap of industry minnows Dart Energy, Egdon Resources,
IGas and eCORP Oil & Gas UK Ltd, with which Total will partner on the two projects in northern England.
Britain's IGas will be the operator of the initial exploration programme and Total will take over ownership
of the projects as they reach the development phase, the firms said.
A shale gas drilling rig in Weeton, Lancashire. Photograph: FLPA/Alamy

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UK offers local councils incentive to accept shale gas drilling
(Reuters.com) –
British local councils that allow shale gas developments will keep 100 percent of a levy they collect
from the sites under a government move to persuade communities to accept the fracking process used
to extract the gas.
The local tax, known as business rates, is levied by councils on commercial properties in England and
Wales. Councils use business rates to pay for local services. Britain's shale gas industry is still at the stage of
exploration, not commercial production, but energy companies see it as one of Europe's strongest prospects.
The government is pushing for further exploration despite fierce local and environmental opposition to the
hydraulic fracturing process. Prime Minister David Cameron's office said in a statement on Monday that the
full business rates take, up from 50 percent under previous rules, could be worth up to 1.7 million pounds
($2.8 million) a year to councils for a typical site.
Local councils have lost big chunks of the grants they receive from central government since 2010 as the
Conservative-Liberal Democrat coalition tries to reduce Britain's budget deficit. Hence any potential
increase in alternative sources of revenue could be an incentive for them.
The Local Government Association (LGA), which represents all but two of the 375 councils in England and
Wales, said the announcement on business rates was a step in the right direction but not enough to satisfy
communities affected by fracking. Environmental campaigners say fracking, which involves pumping water
and chemicals into the ground, can pollute water supplies and cause earthquakes.

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"Local areas will be keen to hear more details on how the community benefits package will be strengthened
to fairly renumerate those who will be most affected," the LGA said in a statement. "Given the significant
tax breaks being proposed to drive forward the development of shale gas and the impact drilling will have
on local communities, these areas should not be short-changed by fracking schemes."
The central government has already announced measures aimed at encouraging companies to invest in
British shale gas. Those include a cut in tax payable on any profits from shale gas - a separate tax from
business rates - to 30 percent from 62 percent, confirmed by Chancellor George Osborne in December.
Geological studies show Britain has large scale shale reserves that could reverse a rising dependency on
energy imports, but more drilling is needed to see whether the deposits are commercially viable. France's
Total is set to become the first major oil company to invest in the industry in Britain when it commits 30
million pounds to drilling for shale gas in Lincolnishire, central England, sources told Reuters on Saturday.
Shale gas, which has helped transform the U.S. energy market, is gas trapped in dense rock formations.
Three companies are leading the charge to develop Britain's shale gas resources: Australia's Dart Energy
which is partnered with GDF Suez, London-listed IGas Energy and Cuadrilla, a privately owned business
partnered with British utility Centrica. Britain will launch its latest licensing round to allow companies to
explore for shale gas in early summer.

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NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Your partner in Energy Service
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 experience in theof experience in theof experience in theof experience in the Oil &Oil &Oil &Oil & Gas sector.Gas sector.Gas sector.Gas sector.
Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ withCurrently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ withCurrently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ withCurrently 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 , Mostexternal voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Mostexternal voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Mostexternal voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most
of the experience were sof the experience were sof the experience were sof the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipelinepent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipelinepent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipelinepent 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 theNetwork Facility & gas compressor stations . Through the years , he has developed great experiences in theNetwork Facility & gas compressor stations . Through the years , he has developed great experiences in theNetwork Facility & gas compressor stations . Through the years , he has developed great experiences in the
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along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gasalong with many MOUs for the local authorities. He has become a reference for many of the Oil & Gasalong with many MOUs for the local authorities. He has become a reference for many of the Oil & Gasalong with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas ConferencesConferencesConferencesConferences
held in the UAE andheld in the UAE andheld in the UAE andheld in the UAE and Energy program broadcasted internationally , via GCC leading satelliteEnergy program broadcasted internationally , via GCC leading satelliteEnergy program broadcasted internationally , via GCC leading satelliteEnergy program broadcasted internationally , via GCC leading satellite ChannelsChannelsChannelsChannels ....

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