New base special 16 june 2014

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NewBase 16 June 2014 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Future Nuclear Energy leaders ready for operations at U.A.E.'s
first nuclear energy plant – Emirates News Agency, WAM
The Emirates Nuclear Energy Corporation (ENEC) celebrated the graduation of its first group of
Local Operators this week, following the completion of a specialised training programme designed
to equip trainees with the expertise necessary to oversee safe operations at the U.A.E.. s first
nuclear energy plants.
Local Operators supervise
operations across a nuclear
energy facility, reporting on
systems, controlling equipment
and directly monitoring plant
equipment performance. The
group of ten Emirati graduates
is now the U.A.E.. s first fully
qualified Local Operators in the
country's emerging nuclear
energy sector, and will join
ENEC full time as part of the
team working towards the start
of commercial operations in 2017.
Delivered at leading educational and nuclear training facilities in the U.A.E.. and Korea, the 15-
month Local Operator training is part of ENEC s Energy Pioneers programme, which aims to
attract and develop the country s most talented science students, engineering graduates and
experienced professionals and provide them with an opportunity to become pioneers of the
U.A.E.. s nuclear energy industry.
Local Operators are trained to be the eyes and ears of a nuclear energy facility. They play an
integral role in safe operations, and are assigned throughout the plant to provide constant
monitoring and operation of plant equipment, reporting back to the Reactor Operators and Senior
Reactor Operators in the plant s Main Control Room.
The students who graduated include Huda Al Qassab, Aaref Al Shehhi, Faisal Al Shamsi,
Mohammed Al Shehhi, Rashid Salah, Saeed Ibrahim, Saud Abdulla, Sultan Al Memari, Tareq
AlBlooshi and Omar Al Shehhi.

"The U.A.E..'s peaceful nuclear energy programme is built on the most rigorous standards of
safety, quality and security, and world class training is fundamental to developing a talented
Emirati workforce with the skills and experience required to maintain this commitment," said
Mohamed Al Hammadi, hief Executive Officer of ENEC.
"It is with great pride that we see our first group of Local Operators graduate today. These are the
individuals who will supervise safe and efficient operations at our plants, and throughout their
training they have excelled to the highest standards, demonstrating the ability to carrying out work
with safety and quality top of mind at all times." ENEC s specialised training programme for Local
Operators was developed in conjunction with its Prime Contractor, the Korea Electric Power
Corporation (KEPCO).
The programme consists of various modules including classroom training on nuclear
fundamentals delivered at the Institute of Applied Technology in Abu Dhabi, nuclear systems and
on-the-job training at KEPCO s facilities in South Korea, followed by additional training at ENEC s
new state-of-the-art Simulator Training Centre at Barakah in the Western Region of Abu Dhabi -
the site of the U.A.E.. s nuclear energy plants.
For the final stage of the
programme, the trainees
complete a six month
hands-on plant
commissioning assignment
at the Barakah site, to
provide valuable plant
experience prior to the
start-up of Unit 1 in 2017.
In line with ENEC s
commitment to continued
learning and improvement,
Local Operators will also receive requalification training every six weeks.
ENEC's latest graduates are one of four groups of Local Operators, Reactor Operators and Senior
Reactor Operators currently at various stages of training as part of ENEC s Energy Pioneers
programme. ENEC is committed to developing the next generation of nuclear energy leaders, and
by 2020, will need around 2000 employees to operate its four nuclear energy plants and help
power the future growth of the nation. Talented Emirati nationals will play an important role in
achieving this goal, with ENEC s current Emiratisation rate at almost 67 per cent.
ENEC s first two units are now more than 45% complete, and are being constructed safely, on
time and within budget. Unit 1 is scheduled to enter commercial operations in 2017, and Unit 2 is
scheduled for operations in 2018, pending regulatory approvals. ENEC will apply for an Operating
License for Units 1 and 2 in 2015.
ENEC has recently been granted approval for additional civil works relating to Barakah Units 3 & 4
under its Limited Construction License. This approval will help to ensure that the Units remain on
schedule to enter commercial operations in 2019 and 2020 respectively.

U.A.E. looks to tap vast potential of wind power
The U.A.E. has been a driving force in funding wind power overseas, but the green energy source
has found itself in the doldrums closer to home. The country's obvious solar potential has also had
the effect of putting other renewables in the shade
That could be about to change as attention focuses on the wind potential offered by locations such
as the power-hungry Northern Emirates and islands such as Sir Bani Yas, while at the same time
technology to produce power from lower wind speeds improves.
Such technological developments are especially relevant for the U.A.E., which typically lacks the
gales that drive the largest of existing wind farms in Europe and North America. Masdar, Abu
Dhabi's eight-year-old renewable energy company, has taken a lead in investing in wind projects
overseas. After wind-mapping the country, it is also scouting possible locations for turbines at
home.
The Mubadala Development unit has more than US$1 billion invested in energy projects around
the world. It is also a key player in the emirate's attempt to achieve 7 per cent renewable energy
capacity by 2020. Dubai's renewable target is 5 per cent. Masdar is one of three major investors in
the Middle East's first utility-scale wind power project in Jordan.
The 117-megawatt Tafila Wind Farm is expected to increase the country's total power capacity by
3 per cent and is estimated to cost about US$290 million. The U.A.E. wind-mapping project is
about identifying the best locations for potential turbine sites. Among the places that look initially
favourable is Sir Bani Yas Island, where Masdar has already presented plans to the Government
for a 30MW project.
But finding the wind is only half of the problem. The cost of erecting the turbines and their gigantic
blades can be prohibitive without the right infrastructure. To that extent, identifying commercially
Sir Bani Yas Island is home to largest wind turbine in the GCC

viable locations for wind power in the U.A.E. is more challenging than doing the same for solar
projects, where there are fewer variables to consider.
"The commercial viability of a wind project depends on the wind project itself, the specifics of the
project and where it is located,” said Ahmed Al Awadi, the head of business support at Masdar's
clean energy unit. "The Northern Emirates are mountainous, and so in order to build your plant
you may have to build additional infrastructure to accommodate the vehicles that would take the
blades there.”
Modern blades made for the largest wind turbines are vast. The largest rotors made by Siemens
extend more than 150 metres, competing with the wing span of an Airbus A380 superjumbo. One
sweep of such a rotor covers more than 18,600 square metres, or two-and-a-half football fields.
Another factor is the relatively weak wind speeds available throughout the U.A.E.. However,
research and development into generating power at much lower velocities than was viable last
decade has yielded
positive results in
the past five years.
"At first sight the
country doesn't
look very windy,
but there are
locations where it
makes sense to
develop wind
powers,” said
Nicholas Fichaux,
the programme
officer for resource
assessment at the
Abu Dhabi-based
International
Renewable Energy
Agency.
But even in the absence of formal government-supported utility-scale wind farms, small private
turbines are already operating in the country where grid power is lacking. "You see quite a lot of
turbines already on the road to Liwa,” said Mr Fichaux. "You tend to see a small solar panel and a
wind turbine beside it. I was surprised because you may not think there is enough wind in the
desert, but there is.”
While weak wind speeds represent one of the biggest challenges for the industry locally, globally
the headwinds are economic in nature. The increasing availability of shale gas offers the potential
to build cheaper gas-fired power plants – even as the cost of producing wind power continues to
fall.
Siemens, one of the world's biggest players in wind energy, says the cost of producing wind power
in the United States has fallen 43 per cent since 2008, while the power generated per turbine has
jumped 30 per cent. It estimates that the total cost of providing wind power has fallen by 90 per
cent since 1980. – Source THE National

Oman Gas Company awards gas pipeline supply tender for Duqm
BYTIMES NEWS SERVICE
Oman Gas Company, the Sultanate's gas transportation company, has awarded the gas pipeline
supply tender for Duqm Economic Zone project with an estimated cost of OMR36 million.
Highlighting this vital project, Mansoor Al Abdali, acting general manager (Engineering) at the
Oman Gas Company, said that the 36-inch pipeline that will run for 230 kilometres will serve the
requirements of Duqm Economic Zone, and is considered to be one of the main infrastructure
projects currently on in the area Al Abdali pointed out that the tender for the construction works
will be announced soon. He said the entire project is expected to be ready in 2018 and will be
ready to feed the Duqm refinery, which will possibly be the first gas consumer at the zone
The company has also announced for the first time that the internal and external coating for the
pipes will be done locally. This will help stimulate the development of local industries and retain
valuable investments in the Sultanate
Oman Gas Company is the Sultanate's natural gas transportation company, wholly-owned by
Oman Oil Company and responsible for delivering natural gas to the vibrant economic sectors and

major consumers comprising domestic, power and desalination plants, fertiliser, methanol,
petrochemical, refineries, steel and cement plants. Since its inception in 2000, the company has
grown in stature and reputation into an integrated enterprise harnessing the power of Oman's
natural gas transportation.

Pearl GTL signs QR1.2bn long-term service deals with 5 major
contractors . Press release
Pearl GTL, a joint venture of Qatar Petroleum and Shell, has signed long-term service agreements
worth nearly QR1.2bn with five major contractors to provide maintenance services to the gas-to-liquids
plant at Ras Laffan. Picture taken during the signing ceremony here recently.
Pearl GTL, a joint venture of Qatar Petroleum and Shell, has signed long-term service agreements
worth nearly QR1.2bn with five major contractors to provide maintenance services to the gas-to-
liquids plant at Ras Laffan.
Under the terms of the contracts signed here recently, mechanical maintenance services will be
provided by Madina and AMEC-Blackcat; electrical and instrument maintenance services will be
provided by Kentech; and scaffolding, painting and insulation services will be provided by Hertel
and Cape East.
Madina and Hertel have been existing contractors to Pearl GTL providing services since 2010. As
part of the contracts, Pearl GTL expects more than 1,000 full-time personnel from the contractor
companies to be dedicated to supporting the plant onsite.
On behalf of Pearl GTL, Wael Sawan, managing director and chairman of Qatar Shell Companies,
stated, “Through a careful tendering process that began last year, we believe we have partnered
with quality firms that will provide important capabilities to help us keep the Pearl GTL plant
running safely, successfully and efficiently. These companies stood out for their safety
performance, the quality of their personnel and their record of reliable delivery.”
The Pearl GTL plant, located in Ras Laffan, takes natural gas from the North Field and converts it
to cleaner burning fuels. Shell is operator of the Pearl GTL plant under a development and
production-sharing agreement with Qatar Petroleum. The major attraction of GTL products is that
they are derived from pure methane and are free of impurities such as aromatics, sulphur or
metals. As a result, they burn cleanly and with fewer emissions than products derived from
conventional crude oil, such as diesel and jet engine fuels. With its gas-to-liquids technology
proven, Pearl GTL is now in steady-state production supplying its five key products globally with
more than 300 cargoes shipped to date.

Total redefines strategy in Azerbaijan from Shah Deniz to Absheron
Press Release -
The French major Total and its partners, the State Oil Company of Azerbaijan Republic (SOCAR) and
the other French oil and gas company GDF-Suez, are finalizing the conceptual design to develop
the Absheron offshore gas field in the Azerbaijan Caspian Sea.
This decision on the design to be detailed and implemented appears as a key milestone in the
Absheron project development for all partners.
It comes in following
series of
Total announcements
about selling its working
interests in different
projects related to the
Shah Deniz Full field
Development.
In December 2013,
Total decided to pull out
from the joint venture to
build and operate the
Trans Anatolia Natural
Gas Pipeline (TANAP)
project to carry out Shah
Deniz gas from
Azerbaijan to Greece
through Turkey.
In May 2014,
Total published a press release to explain that it is selling its 10% stake in Shah Deniz and the
South Caucasus Pipeline to the Turkish national oil company (NOC) TPAO.
In June 2014, Total communicated its intention to withdraw from the last section of the pipeline
from Greece to Italy and known as Trans Adriatic Gas Pipeline (TAP) project.
Although Total is present in Azerbaijan since 1995, this cascade of publications could have
indicated a general withdraw from this country.
But Total had only a minority share in these giant projects while it discovered in 2011 the
Absheron liquid-rich offshore gas field in the central area of the Azerbaijan Caspian Sea.
In Absheron, Total and its partners are sharing the working interests as following:
- Total 40% is the operator
- SOCAR 40%
- GDF-Suez 20%

Located approximately 100 kilometers southeast of Baku, Absheron is lying just beyond the
continental shelf by 500 meters of water depth and 7,000 meters of total depth.
Total-SOCAR-GDF-Suez to phase up Absheron project
From the current estimations resulting from three years of exploration, Total and its partners,
Absheron should hold 5 to 10 trillion cubic feet (tcf) of natural gas.
In addition to this non-associated gas reserves, Absheron appears to be rich of condensate still
under evaluations.
In this context,
Total made the
decision to re-allocate
its interests in
Azerbaijan and to
concentrate its
financial effort from
Shah Deniz to
Absheron where it
operates.
Because of its size,
Total and its partners
are planning to
develop Absheron in
phases in similar way
as Shah Deniz.
Even though Total withdrew from Shah Deniz project and all related infrastructures, it will
contribute directly to the optimization of these assets as Total is planning to export Absheron
gas and condensate through BP and SOCAR Sangachal Terminal and the Southern Corridor
Pipeline project.
For Absheron Phase-1, Total should spend $5 to $7 billion capital expenditure including:
- Subsea production system with four subsea wells
- Offshore platform
- Export pipeline system to the Sangachal Terminal
In order to save costs, the Absheron offshore platform should be located on the continental shelf
of the Caspian Sea by only 100 meters of water depth and should have a capacity of 500 million
cubic feet per day (cf/d) of natural gas.
From the actual design concept, Total and its partners, SOCAR and GDF-Suez are preparing to
move into the front end engineering and design (FEED) work of the Absheron Phase-1 project in
expecting the first production by 2021.

Kazakhstan: Kashagan group in talks with government over
oilfield's future . Source: Reuters
Members of the international consortium developing Kazakhstan's giant Kashagan oilfield and the
central Asian state's government will discuss changes to the contract that governs the project, which
has seen massive cost overruns and delays. The production sharing agreement (PSA) is due to
expire in 2041. Industry sources say that foreign shareholders in the $50 billion project are keen to
extend it to recoup higher-than-expected costs caused by repeated postponement of production deadlines.
Production at Kashagan, one of the world's biggest oil finds of recent times, was originally set for 2005, but
only started last September. However, output was almost immediately halted after the discovery of gas leaks
in the pipeline network and may not restart until 2016, according to Kazakh Oil & Gas Minister Uzakbai
Karabalin.
The North Caspian Operating Company (NCOC) on Friday said a memorandum of understanding was
signed this week agreeing to discuss 'the potential progression of future phases of development and
production of the Kashagan project.' The Financial Times business daily on Friday cited a source close to
the Kashagan project as saying that Kazakhstan had already agreed to extend the contract for the project.
'Discussions ... within the framework of this memorandum of understanding will continue in the months
ahead to advance development plans,' the NCOC statement said.
The members of the North Caspian Production Sharing Agreement are Agip Caspian Sea B.V., CNPC
Kazakhstan B.V., ExxonMobil Kazakhstan Inc., Inpex North Caspian Sea Ltd, KMG Kashagan B.V., Shell
Kazakhstan Development BV and Total E&P Kazakhstan.

Philippines: Gas2Grid discontinues rights issue - seeking farmout of
Malolos oil field appraisal and development. Source: Gas2Grid
Gas2Grid has announced that it will not proceed with the previously announced Rights Issue and will
consider alternative sources of funding for the appraisal and deveelopment of the Malolos oil field in
Service Contract 44, including a farmout of interests.
On 2 April 2014, Gas2Grid launched a 1 for 4 non-renounceable rights issue (Rights Issue) to raise approx.
$5,102,175 (before transaction costs). Under the Rights Issue, eligible shareholders with registered
addresses in Australia and New Zealand were able to apply for 1 new share for every 4 shares held at 7pm
(NST) on 11 April 2014. The issue price was to be $0.03 per new share. For every new share issued, the
applicant was to receive one new option for no additional consideration.
Since the launch of the Rights Issue the shares of Gas2Grid Limited have traded at or below the offer price
and there are a low number of acceptances received to date. In light of those circumstances, the Company
has decided that it will not proceed with the previously announced Rights Issue with immediate effect and
will return any application moneys received to date. Alternative sources of funding are being considered by
the Company including borrowings from Directors and others, farm out of interests in Service Contract 44
and equity issues at a later time in the next financial year.
Malolos Oil Field
The results and observations from the current production flow test at the Malolos Oil Field have been
positive. The Malolos-1 well has again demonstrated that it can produce approx. 200 barrels of oil per day.
But the oil flow during the test was impaired when the perforations within the wellbore at the sandstone

reservoirs were blocked. Over the last couple of days the perforations have been subject to a cleaning
process by the use of high-pressure water jets. The well will now be tested for fluid influx by swabbing. If
the current remedial work does not result in improved productivity the Company will make a decision on
future operations, which might include suspension of test operations whilst various alternatives are
considered to exploit the proven oil reservoirs.
Dennis Morton (Managing Director) commented:
'The Company has proved that the two targeted sandstones are oil saturated with commercial potential but
affected by down-hole mechanical issues. These two oil sandstones have 21.4 million barrels of Best
Estimate (2C) Likely Contingent Resource of Oil in Place (Low Estimate 6.8 and High Estimate 68.1
million barrels)*. This is a resource well worth pursuing.
We are working in a well that was drilled and cased over 50 years ago and that in itself limits our current
options. We decided to test the well because it was the lower cost option, as opposed to deepening the
Nuevo Malolos-1 well, which still remains an option. We have now determined that sand and migration of
fines is an issue with the perforated casing completion and that going forward we will require an alternative
completion technology (screens or gravel pack) to manage the fines production. These are standard industry
completion techniques.
The forward plan will likely include application to the Philippine Department of Energy for the declaration
of Malolos as a commercial oil field and a production period to allow field appraisal and development. The
Company will also re-engage with potential farminees in order to fund the appraisal and development of the
Malolos Oil field.'

Little Upside for NatGas, Oil Prices as Global Markets Reach
'New Equilibrium,' Says Wood Mackenzie
Global energy markets are reaching a new equilibrium, offering little upside signals for oil or
natural gas prices as strong demand is countered by an equally strong supply, according to Wood
Mackenzie's forecast to 2030.
Energy demand may be shifting to the Asia-Pacific markets, driven by China, but the increases
are being matched, said the analyst's long-term view of global energy trends to 2030. The
"revolutionary" supply growth in North America now is redefining global energy markets, which are
"increasingly interconnected," while and supplier-consumer relationships are increasingly
dependent, as reflected by Russia's gas trade links with Europe.
"As demand shifts East it will expand to extraordinary proportions, but this era is also one of
robust energy supply," said Wood Mackenzie's Paul McConnell, principal analyst for the firm’s
global trends service. "As a result, we see few, if any, strong upside signals for oil, gas and coal
prices. Investors are wary, and shareholder pressure is pushing down spend and forcing an
emphasis on short-term cash flow.
"This shift from volume to value means a rebalancing toward a supply outlook more appropriate to
a world in which demand growth, while still remarkable in the context of history, is somewhat
softer than was expected only a few years ago."

While the industry settles into the new equilibrium, "cost pressures will remain at the forefront of
executive concerns. However, the expansion of developing markets, the impact of new techniques
and technology on the supply mix, and the increasingly interconnected character of global energy
trade, provides an endless spread of opportunities for growth over the long term."
China already is the world's largest energy consumer, and the entire region's thirst for energy is
getting larger, McConnell said.
"By 2030 China's energy consumption will be unrivaled and the center of gravity for global energy
demand will have decisively shifted East. India and the other developing economies of Asia
Pacific are also of huge importance. India and China will cement their positions as compelling
destinations for exporters of coal, oil and gas. And between 2014 and 2030, energy demand
growth in the region will outpace that of North America by five times. On average, the effect is to
add a new Brazil to global energy demand, every year between now and 2030."
Wood Mackenzie's forecast for growing gas demand mirrors some of the findings of the
International Energy Agency, which on Tuesday issued its 2014 Medium-Term Gas Market Report
(see Daily GPI, June 10). The U.S. gas surfeit is "beyond the golden age," with China coming on
strong.
Increasing global energy demand should be met partly by the emerging North American natural
gas -- and oil -- energy export market, said McConnell."The renaissance of North American gas
and oil production is the critical supply-side trend affecting global energy markets in the long
term," he said.

By 2020, Wood Mackenzie thinks North America oil output will outpace the Middle East by "four
barrels to one," and by 2030, North America will have grown by 390 million metric tons of oil
equivalent (MMtoe) from 2009's levels of 650 MMtoe. That growth would rival an increase of
around 430 MMtoe in the Middle East, where oil production is seen increasing, mostly driven by
growth in Iraq. Meanwhile, the tight oil supply in Canada and the United States "plateaus post-
2020."
Natural gas output from North America also is expected to expand, doubling to 1,000 MMtoe in
2030 from 2005.
By 2018, "North America will become energy independent with energy exports exceeding
imports," predicted the analyst. By that time North America also will have overtaken the gas output
of Russia and the Caspian and will be the world's largest gas producing region by 2030.
"The growth in North American supply has introduced a new dynamic to global oil prices, with U.S.
tight oil providing a price floor for global oil prices," said head of macro oils research, Ann-Louise
Hittle. "Increasing U.S. tight oil supplies and Canada's growth in oilsands production are expected
to continue to add stability to the international oil market, rather than remove it."
As North America becomes energy independent, Europe is seen growing increasingly dependent
on imports. "A growing reliance on imported natural gas will prevail, with imports set to increase by
50% between 2014 and 2030, from 215 to 320 MMtoe," Wood Mackenzie analysts said.
"The ongoing crisis in the Ukraine has focused attention on Europe's reliance on Russian natural
gas," said Massimo Di-Odoardo, principal analyst for European gas and power. "Russian gas
remains competitive against other alternatives and will continue to be the cornerstone of European
gas supply. It also represents a major market for Russian gas, even in light of the recent signing of
a gas pipeline deal to export Russian gas to China. Therefore, our long-term view is that the
Europe-Russia gas relationship will continue out of necessity."

Brent rises above $113, holds near 9-month top as Iraq
violence intensifies . Reuters
Brent crude rose above $113 per barrel to near a nine-month high on Monday as Sunni
insurgents advanced in Iraq, intensifies concerns over a potential disruption to oil exports from the
second-largest OPEC producer.
The sudden eruption of
violence in Iraq led to a
sharp spike in prices last
week, with both Brent and
U.S. crude gaining over 4
percent - the most since
July and December
respectively. The rally
began losing steam from
Friday as the market
waited to see if the conflict
would threaten oil refineries
south of Baghdad.
"It's a bit calmer now because people realize (the militants are) not just going to just roll right into
Baghdad. But still it looks like the country is headed to civil war, which will mean a higher risk
premium build into oil prices," said Tony Nunan, oil risk manager at Mitsubishi in Tokyo.
"This may not mean a stop to Iraqi exports immediately, but it probably will affect the Iraq's ability
to increase their production rate," he said.
Brent crude for August delivery rose 61 cents to $113.07 a barrel by 0342 GMT. The July contract,
which expired on Friday, settled 39 cents higher at $113.41 per barrel, the highest since Sept. 9.
U.S. oil climbed 44 cents to $107.35 per barrel. On Friday, it rose as high as $107.68 before
settling up 38 cents at $106.91 per barrel, the highest level since Sept. 18.
Exports safe for now
Sunni insurgents on Sunday seized a mainly ethnic Turkmen city in northwestern Iraq on Sunday
after heavy fighting, solidifying their grip on the north.
Yet for the moment the immediate threat to Iraq's oil supplies - most of which is hundreds of miles
to the south of the fighting - remains limited, analysts and consultants say. Northern exports have
run at a trickle for months, and few had expected a rapid recovery.
Should the militants advance south of the capital, analysts expect them to encounter much greater
resistance, while Iraqi exports from the north are considered safe for the moment as the major
Kirkuk oil hub is held by Kurdish forces.
President Barack Obama said on Friday he needed several days to determine how the United
States would help Iraq deal with the Islamists' stunning advance. But he ruled out sending U.S.
troops back into combat in Iraq, which U.S. troops departed in 2011 after a bloody, costly war.

Global oil market future uncertain
ENERGY OUTLOOK Syed Rasih Husain
Courtesy of the growing depth in global output, oil markets today are depicting a rare resilience -
despite significant outages. The growing specter of disturbances in major oil producing areas -
from Libya to Sudan and Nigeria to Venezuela and now Iraq - could easily have sent markets into
spin. Not this time -as yet!
This is in sharp contrast to February 22, 2011, when global energy ministers were meeting at the
fabulously impressive King Abdulaziz International Conference Center in Riyadh, formally to sign
the new IEF charter. Uprising against Gaddafi had begun and the consequent loss of roughly 1.6
million bpd light Libyan crude was weighing heavily on the minds of most men and indeed women
present there on the day.
Everyone from the then IEA Executive Director Nobuo Tanka to US Deputy Secretary of Energy
Daniel B. Poneman and Charles Hendry, the then British Minister of State for Energy and Climate
Change, were disturbed, deeply concerned and nervous, on oil market prospects and the market
volatility due to the outage.
At the end of the day Minister Naimi had to come forward, assure and reassure the world that the
Kingdom was ready and indeed capable to pump all the crude required by the markets. But still,
the quality of the crude to be made available and could that replace the light Libyan crude, kept
haunting the corridors of the Conference Center that afternoon.
Energy world has undergone a massive change since then. It is faced today with a crisis of an still
bigger magnitude, but the reaction is somewhat muted. The US Energy Information Administration
(EIA) is of the view that unplanned disruptions have removed around 2.5 million barrels per day
from the crude markets since the start of 2011. Libya is not back to normal - yet. Syria has been in
turmoil - for two years now. Nigeria and Venezuela are faced with their own problems. Sudan is no
exception.
And now Iraq, the emerging energy powerhouse the next door, is back in news - for rather
adverse reasons. With militants taking over Mosul and Tikrit, and apparently advancing towards
Baghdad, the country seems in the midst of a real chaos. Kurds have also reportedly taken control
of the oil-rich Kirkuk.
This is significant. In the words of Daniel Yergin, ‘the recovery of Iraq was kind of key to the future
of the world oil market.’ By April 2014, Iraq was producing an estimated 3.3 million barrels per day
- equal to about 4 percent of global supply. And the country was expected to keep ramping up
production. Although Baghdad was targeting an output of around 12 million barrels a day soon,
yet even the Paris-based IEA was of the view that Iraq definitely has the capacity and the potential
to take its output to around 6 million bpd.
Markets are not panicking. Oil prices did gain some two per cent after militants took over Iraq’s
Mosul and Tikrit. World’s major oil blends gained between one and two pe cent. Brent crude for
July delivery jumped 2.8 percent to $113 per bbl last Thursday, whereas, WTI gained $1.50 to
$105.90 in US a barrel, the highest level since September.
Indeed, the ongoing action right now is in the north, which has less implications for the energy
world. So far the only reported disruption is in the flow of oil through the 600,000 barrel Kirkuk-

Ceyhan pipeline, running from Kirkuk to Turkey. The Kirkuk fields produce about 400,000 to
500,000 barrels a day, while the major fields in the Basra area produce about 2.6 to 2.7 million
barrels a day, according to IHS.
But what if chaos spreads to the oil rich south of the country remains a major uncertainty? “If it
spreads to the south or threatens the south, I think the anxiety is going to be reflected in the oil
market. Absolutely,” says Yergin.
Markets have been able to absorb the lost supply because of the slackening demand growth and
the growing alternative supplies from North American shale and Saudi Arabia.
Boom in US shale oil has caused America’s oil output to rise by four million bpd over the last four
years. Since 2011 too, the US crude and condensates output has gone up by around 2 million
bpd. Saudi Arabia too has increased output by a similar amount over the same period, according
to the EIA.
In the meantime, global demand for gasoline and diesel has been stagnant or even falling, as
vehicles become more efficient and consumers use their cars much less than in the past. The
world is changing!
Consequently, global oil markets have been unusually steady since 2010. Dramatic changes in oil
production around the globe have offset each other instead of wreaking havoc. The current rise in
market prices is indeed not dramatic. “A $2 move is nothing in historical terms,” says BNP Paribas
oil analyst Gareth Lewes-Davis.
Indeed if the turmoil hits the south of the country - then it would be a different ball game. “That
could push oil prices to a much higher level - maybe 10,15 dollars higher from here,” says
Oppenheimer senior energy analyst Fadel Gheit.
Sentiments control energy markets, most agree. And they don’t take long to change too. Just a
few months ago, energy analysts were predicting OPEC powerhouses would need to cut output to
make room for others. Now it’s a different scenario altogether. The call on Saudi oil is again
growing. Saudi Arabia may need to pump a record 11 million barrels a day by December to cover
the other member nations, says Energy Aspects Ltd., a consulting firm.
“Now it’s not whether the Saudis will make room, but whether they’ll keep it going and maintain
enough spare capacity,” said Jamie Webster, of IHS Inc., an industry researcher.
Mid-May, the IEA too recommended a “significant rise in OPEC production” to meet demand of
30.7 million barrels a day in the second half of the year. Oil inventories in advanced nations were
at 2.62 billion barrels in April, the lowest for that month since 2008, the year Brent reached a
record $147.50 a barrel, IEA data show.
In the current scenario, what would be the ultimate call on Saudi crude? Estimates vary. IHS
projects about 10.3 million and while Societe Generale says between 10.2 million barrels and 10.5
million bpd in the third quarter. Energy Aspects says 11 million bpd could be needed from Saudi
Arabia.
Indeed it doesn’t take long for the oil markets to undergo transformation. And that makes the task
of analysts entrusted with the task to peep into future – professionally a hazardous venture. The
number of variables are indeed too many. And geopolitics continues to lead the bundle - despite
all the efforts, all around!

TRAINING COURSE - BEST PRACTICES IN MULTI SHIFT OPERATIONS
9 - 11 November 2014, Jumeirah at Etihad Towers Hotel, Abu Dhabi
1 - 3 December 2014, The Diplomat Radisson Blu Hotel, Bahrain
Best Practices in Multi Shift Operations is a three-day training course designed for Plant and
Operations Managers, Supervisors, Senior Operators and Engineers with responsibility for
managing operations in a shift environment. The course will also be valuable to HR
managers and Training Managers who have responsibilities for shift personnel.
To download the Abu Dhabi Course Brochure, please click here
Visit the website by clicking here
To download the Bahrain Course Brochure, please click here
Visit the website by clicking here
TOP BENEFITS OF ATTENDING
• Learn to develop communication strategies that work in a shift environment
• Understand and manage fatigue and its consequences
• Develop supervisors for maximum effectiveness in shift teams
• Ensure continuity of performance and avoid incidents due to shift changeovers
YOUR TRAINER: ANDY GIBBINS
Andy is a specialist consultant focusing on the oil, gas, petrochemicals and process
industries. Andy previously worked as shift manager, operations manager and site
manager in a multishift environment. He has been involved in the management and
optimization of shift working organisations for many years.
If you would like to book a place on this course, or discuss running this course
in-house, please contact me and I will be pleased to assist you.
Joyce Ghorayeb
Training Manager
Euro Petroleum Consultants
T:+971 (0)4 421 4642
E: joyce@europetro-me.com
W: www.europetro.com

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 experience in theof experience in theof experience in theof experience 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 CoTechnical Affairs Specialist for Emirates General Petroleum CoTechnical Affairs Specialist for Emirates General Petroleum CoTechnical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation forrp. “Emarat“ with external voluntary Energy consultation forrp. “Emarat“ with external voluntary Energy consultation forrp. “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 Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe 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 FaciManager in Emarat , responsible for Emarat Gas Pipeline Network FaciManager in Emarat , responsible for Emarat Gas Pipeline Network FaciManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedlity & gas compressor stations . Through the years , he has developedlity & gas compressor stations . Through the years , he has developedlity & gas compressor stations . Through the years , he has developed
great experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supply
routes. Many years were spent drafting, & compilroutes. Many years were spent drafting, & compilroutes. Many years were spent drafting, & compilroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs foring gas transportation , operation & maintenance agreements along with many MOUs foring gas transportation , operation & maintenance agreements along with many MOUs foring 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 andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcastedEnergy program broadcastedEnergy program broadcastedEnergy program broadcasted
internationally , via GCC leadinginternationally , via GCC leadinginternationally , via GCC leadinginternationally , via GCC leading satellitesatellitesatellitesatellite ChannelsChannelsChannelsChannels ....
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 16 June 2014 K. Al Awadi

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