NewBase 606 special 18 May 2015

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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NewBase 18 May 2015 - Issue No. 606 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oman: Oxy output totals 800 MMboe in 30 years of operations
© Oman Daily Observer + NewBase
Output from US-based international oil and gas firm Occidental Petroleum Corporation's
( Oxy ) hydrocarbon assets in the Sultanate has grossed over 800 million barrels of oil
equivalent (MMboe) over the three decades of its Oman operations, according to a high-
ranking executive. Robert Swain, Senior Vice President & General Manager, Occidental
Petroleum Corporation ( Oxy ) Oman, said that production from Oxyoperated fields has
tripled over the last decade to reach around 83 million barrels of oil equivalent (MMboe) in
2014, averaging 227,000 barrels of oil equivalent per day (boepd).
"Over the years we have identified hydrocarbon reserves in Oxy blocks of over 3 billion barrels of
oil equivalent based on a combination of successful exploration and reservoir characterisation
projects," said Swain.

"To date we have cumulatively produced more than 800 million barrels of oil equivalent," he added
in a recent presentation on the company's expanding operations in the Sultanate.Oxy Oman is
celebrating 30 years of successful operations in the Sultanate, having emerged as the country's
largest independent oil producer over this period.
The company has a substantial portfolio of hydrocarbon assets in the Sultanate: it is the operator
of Block 9 (65 per cent working interest), Block 27 (65 per cent working interest), Block 53 (45 per
cent working interest) and Block 62 (48 per cent working interest).
A significant proportion of Oxy 's production comes from the Mukhaizna heavy oilfield (Block 53)
which it operates under a 30-year Production Sharing Contract signed with the Omani government
in 2005.
The Mukhaizna oilfield, according to Swain, has over three billion barrels of oil in place in both
heavy oil sands and fractured carbonates. Since it assumed operatorship of the field in
2005, Oxy has drilled more than 2,400 new wells, while installing extensive facilities to support its
steam flood project.
We are now the largest heavy oil steam flood in the Middle East, and we recently commenced
exploration of both shallow and deeper zones in the block. We are testing the first wells as we
speak, and look forward to the results, the Senior VP and General Manager said.
Another key contributor to Oxy 's hydrocarbon production is Block 9, where output from the Safah
and Wadi Latham fields currently averages around 100,000 barrels of oil equivalent per day
(boepd), said Swain. Underpinning this output is a combination of over 1100 wells and continued
exploration success building out from the main Safah discovery into multiple smaller fields that are
connected to the existing production infrastructure, he added.
In adjoining Block 27, Oxy has drilled more than 67 wells to tap the hydrocarbon potential of the
Khamilah field. Discovered in 2005, the field has a reserves potential of around 200 million barrels
of oil equivalent in place, with output currently averaging 10,000 boepd.
In Block 62, Oxy has made headway in the development of two fields within the Discovered Non-
Associated Gas (DNAG) Area. The company is moving ahead with an Extended Production Test
facility targeting two key gas fields. We are drilling development wells right now while upgrading
and installing a gas plant to handle that production. We will have first gas production by the end of
2015, said Swain.
Also during the course of 2014, Oxy reported a total of eight new oil and gas discoveries that
added an estimated 19 million barrels of oil equivalent to hydrocarbon reserves. Of this number,
three oil finds were made in Block 9 and four in Block 27, while a gas and condensate discovery
was made in Block 62. 3D seismic acquisition was also completed in Blocks 9 and 27 as well.

Jordan Aqaba to open LNG terminal on May 25
Jordan Times +NewBase
The Aqaba Special Economic Zone Authority has announced that the Kingdom will receive
the first shipment of the liquefied natural gas (LNG) via a new specialised terminal, which
its investment arm, Aqaba Development Corporation (ADC), has completed.
According to the corporation's Chief Executive Officer Ghassan Ghanem, the development of the
facility is part of a JD1 billion- port development master plan for the years 2005-2030, which is
now at its peak period.
ADC's top executive said the LNG terminal, created to import liquefied gas as one alternative to
the costly heavy oil used to generate electricity, is one of four energy ports, including the oil
terminal, which is in the hot operation status.
The third is the liquefied propane gas terminal, dedicated to receive shipments of gas used in
cylinder for cooking and heating purposes. The facility is also fully operational now, after upgrades
that reduced unloading time by 50 per cent.
Ghanem told The Jordan Times in a recent interview at his office in Aqaba that the highest
international technical and safety standards are applied in the operation of the terminal, where
environment considerations have been taken into account.
A state-of-the-art miscellaneous liquids terminal project is in the pipeline, with tender documents
expected to be ready in two months, according to the official, who said that the port will include 30
lines to carry the liquids to tanks farms for storage.
The industrial ports of Aqaba are cited as an exemplary partnership between the public and the
private sector. The Jordan Industrial Ports Company PSC (JIPC) has emerged as a joint venture
between Arab Potash Company (APC) and Jordan Phosphate Mines Company (JPMC).
JIPC has embarked on a multi-million-dinar project to refurbish an existing industrial jetty, which is
operational now, in conjunction with building a new industrial jetty. ADC chief noted that the cost
of the new terminal is JD170 million, adding that the progress was at 50 per cent.
A major component in the ports package, the container terminal has also received a facelift. The
facility has seen expansion and upgrading, with four berths fully operational, equipment upgraded
and storage areas increased, at a total cost of JD300 million.

Ghanem added that the staff members, mostly Jordanians, operating the terminal have been
targeted with rehabilitation and skill-upgrading plans.
New berths have been added to the passenger terminal, the CEO added, with 100 per cent
progress reported in this aspect of the development, while 25 per cent of plans concerning other
facilities has been completed.
The New Port is the highlight of ADC's master plan for ports. The plan entails the relocation of port
from the urban area to the southern tip of the region.
The original land was sold to the UAE-based Al Maabar property developer, which is building the
$10-billion Mrasa Zayed, a multi-use waterfront project, the largest in the history of Jordan.
Ghanem said that the land value was only one reason for the relocation. Another was the need for
separating the land use function, avoiding mixed use, in line with the vision for Aqaba.
The city's urban part (50 per cent) is planned to be exclusively dedicated to tourism and real
estate, while industrial (20 per cent) and the ports (30 per cent) components are located outside
the city.
The official explained that such a plan would protect the environment of Aqaba. The relocation of
the port is environmentally vital because it is used for grain, which attracts birds, a major
complaint by residents in the town, apart from the dust caused by unloading the commodity.
In addition to these factors and the fact that the virtual life of the old facility is expired, he said, the
regional developments have made it imperative to upgrade and expand the terminal.
In fact, the planned capacity of 100,000 tonnes of silo storage has been doubled, a goal that was
originally set to be achieved in 2025, Ghanem said, adding that 80 per cent of the project, which
The Jordan Times toured, has been achieved.
The Middle Port is also subject to a JD110 million makeover and ADC is currently tendering
consultancy services from specialised international firms to add new berths, taking advantage of
the naturally deep waters.‫ز‬

U.S.power sector CO2 emissions expected to increase through 2040
Source: U.S. Energy Information Administration, Annual Energy Outlook 2015
Although U.S. carbon dioxide (CO2) emissions associated with electricity generation have fallen
from the 2005 level, they are projected to increase in the coming decades, based on analysis in
EIA's Annual Energy Outlook 2015 (AEO2015) that reflects current laws and regulations, and
therefore does not include proposed rules such as the U.S. Environmental Protection Agency's
Clean Power Plan.
In 2013, CO2 emissions from electricity generation accounted for 38% of the total energy-related
CO2 emitted. Since 2005, the substitution of natural gas for coal as well as increases in
renewable and nuclear generation helped to reduce these emissions. Increased energy efficiency
in homes and business led to lower electricity demand growth, reducing the need to generate
electricity.
Power sector emissions in the United States are subject to federal regulation under the Clean Air
Act. In June 2014, the Environmental Protection Agency (EPA) proposed the Clean Power Plan
(CPP) to regulate CO2 emissions from existing power plants. The CPP specifies intensity rate
targets for existing fossil fuel-fired electric generating units operating or under construction as of
early 2014, with the stated aim of reducing carbon emissions in the power sector by 30% from
2005 levels by 2030.
While the AEO2015 does not include EPA's proposed rule (as AEO2015 only includes existing
rules and laws), it does include two regional programs in the Northeast and in California (the
Regional Greenhouse Gas Initiative and Assembly Bill 32, known as RGGI and AB32,
respectively) that aim to reduce greenhouse gases (GHG) from the power industry. Existing
federal environmental rules that have previously been finalized, including the Mercury and Air
Toxics Standard, are also included in AEO2015.

After taking these existing environmental regulations into account, the projections for electricity
generation and its resulting emissions are primarily determined by the available capacity and
relative operating costs of the different technologies.
Power-sector CO2 emissions are influenced by a number of factors not directly affected by
environmental policies, such as macroeconomic growth levels and relative fuel prices. The
AEO2015 cases with the largest differences in cumulative emissions from the Reference case are
two cases that consider higher or lower macroeconomic growth.
In the High Economic Growth case, electricity demand, fossil-fired generation, and resulting CO2
emissions are all higher, while the reverse is true in the Low Economic Growth case. Projected
power-sector CO2 emissions increase even in the Low Economic case, and by 2040 they are 2%
higher than in 2013.
Cases with higher or lower world energy prices, represented by oil prices, have relatively little
direct impact on power-sector emissions, as petroleum provides a small fraction of U.S. electricity
generation. However, world oil and natural gas prices do affect natural gas trade and domestic
natural gas prices, which in turn affect the role of natural gas in the U.S. power sector.
A case that assumes significantly higher domestic oil and natural gas resource availability results
in lower natural gas prices, thus increasing natural gas's share of generation and lowering power-
sector CO2 emissions.

US:The Arctic Is Hot Again
Why is Shell steaming toward risk with oil at $65 /Bl?
Bloomberg + NewBase
Oil companies would go on to produce more than 10 billion barrels of oil from the North American
Arctic. And counting.
This week, with oil at $65, the Interior Department approved Royal Dutch Shell’s plan to to drill up
to six exploratory wells in the Chukchi Sea, just west of the Beaufort.
The industry's secret? Patience. And a strong stomach.
The world is awash in oil. The Arctic is prone to weather that can affect navigation, even in the
summer drilling season. Shell has already stumbled there; a botched 2012 effort, when a drilling
rig ran aground, spurred investigations by the Coast Guard and Interior, which turned up major
environmental and safety concerns. On Thursday, environmentalists in kayaks faced off against a
Shell rig in Seattle's harbor, just a taste of the activism and PR challenge to come. Opponents
warn that a spill in the ecologically sensitive region—often frozen yet unpredictable with climate
change and far from help—is as unimaginable as the Deepwater Horizon was in the Gulf of
Mexico in 2010.
Why do it?
The answer goes back to 1979. The development of enormous oil resources requires enormous
amounts of money, time, and risk. There could be roughly 11 billion barrels of undiscovered
economically recoverable oil in the entire Chukchi. Or maybe the answer goes back to the dawn of
the industry: What oil companies do is look for oil.
Even in an optimal scenario for Shell—lots of oil and no mistakes—the company is years away
from production. First they'll look for the oil. Then, if they find it, they'll evaluate it to determine
whether it's worth producing. If it's worth producing, they may want to cash out a bit. Shell owns
100 percent of its leases now. It might sell tracts to pay off its investment and to have partners in
the hard work. By that time, who knows what oil will fetch.
“The current oil price is actually somewhat irrelevant. The size of the resource is what's important,”
Marvin Odum, president of Shell Oil Company, told CNBC on Thursday.
The big oil companies have been thinking about the Arctic for a long time. Alaskan oil production
began in the 1960s. In 1989, Shell found hydrocarbons from exploratory wells in the Chukchi Sea,
the leases for which it had acquired a year earlier. After oil prices crashed, the recovery was slow,
and Shell ended up returning those early leases to the U.S.

If it finds riches and pursues them, the oil might find its way to market through a subsea pipeline.
That's if Shell finds the reserves it expects in the Chukchi. And if, by the time it's ready to pump
them up, they're fetching more than, what, $90 a barrel? No one can say what will make the
endeavor profitable so far in the future.
Spending money is the easy part. The hard part is what Shell is doing right now: moving ahead
with its latest Arctic-drilling plan, seven years and $6 billion in the making, and not knowing how it
will turn out.
Flotilla protests Shell’s Arctic drilling plans
Hundreds of activists in kayaks and small boats fanned out on a Seattle bay on Saturday to
protest plans by Royal Dutch Shell to resume oil exploration in the Arctic and keep two of its
drilling rigs stored in the city’s port.
Environmental groups have vowed to disrupt the Anglo-Dutch oil company’s efforts to use the
Seattle as a home base as it
outfits the rigs to return to the
Chukchi Sea off Alaska, saying
drilling in the remote Arctic
waters could lead to an
ecological catastrophe.
Demonstrators have planned
days of protests, both on land
and in Elliott Bay, home to the
Port of Seattle, where the first of
the two rigs docked on
Thursday. Kayakers on
Saturday paddled around the rig yelling “Shell No.” Others unfurled a large banner that read
“Climate Justice.”
Environmental groups contend harsh and shifting weather conditions make it impossible to drill in
the Arctic, a region with a fragile environment that helps regulate the global climate because of its
vast layers of sea ice.
Allison Warden, 42, said she travelled from Alaska to represent her native Inupiaq tribe, which
makes its home in the Arctic. She said whales central to the tribe’s culture are particularly
vulnerable to oil spills. “I don’t know what our culture would be without whaling. It’s at the center
of everything we do,” she said. “It’s a different relationship than just going to the grocery store.
The whale feeds the entire community,” she said.
Opponents of the rigs docking in Seattle, a city known for its environmental causes, include Mayor
Ed Murray and the City Council.
Shell was bringing in the rigs and moving ahead as planned despite the opposition and a ruling
earlier this week by the city’s planning department that the port’s agreement with the company
was in violation of its city permit. “The timeline now is just to make sure the rigs are ready to go,”
said Curtis Smith, a Shell spokesman.
The second rig is expected at the port in the coming days.

Oil Price Drop Special Coverage
Oil prices rise on Midl.East fighting; OPEC output in focus
Reuters+ NewBasse
Oil prices rose on Monday following fighting in Iraq and Yemen, but Iranian comments that OPEC
was unlikely to cut output as well as signs of strengthening U.S. production capped gains. Front-
month Brent futures were up 1 percent, or 65 cents, at $67.46 a barrel by 0654 GMT. U.S. crude
rose 79 cents to $60.48.
Prices were supported by concerns that conflict in Iraq and Yemen could disrupt supplies after
Islamic State militants said they had taken control of the Iraqi city of Ramadi in a big blow to the
government.
In Yemen, a Saudi-led coalition resumed air strikes against Houthi militia in Aden, a port-city on
the shores of key Middle East oil routes.
Despite these Middle East conflicts, analysts said oil markets remained oversupplied, and that the
glut could worsen if U.S.-production picked up and output by producer-club OPEC remained
strong.
Oil prices appear to have outpaced the improvement in underlying fundamentals, Barclays said
on Monday.

We expect selling interest in the $65.00/67.00 area to cap WTI crude oil ($70.00/$72.00 area for
Brent crude) and look for a move lower in range over the coming weeks. Our downside targets for
WTI and Brent are $54.24 and $63 respectively.
Iran's Deputy Oil Minister Rokneddin Javadi told Reuters on Monday that OPEC was unlikely to
cut output at its next meeting in June, and that Iran hoped its crude exports would return to pre-
sanctions levels of 2.5 million barrels per day (bpd) within three months once a deal to lift an oil
embargo is finalised.
A deal over Iran's disputed nuclear programme between Tehran and world powers could see
sanctions on Iran lifted if a more permanent pact is finalised in June. Because of the sanctions,
Iranian oil exports have fallen to about 1 million bpd since 2012, mainly to Asia.
In the United States, Goldman Sachs said that despite an expected dip in output in the second
half of this year, production would increase by 205,000 bpd in 2016.
Yet most producers require higher prices. Deutsche Bank said that of major exporters only the
United Arab Emirates, Qatar and Kuwait still have a balanced budget at current prices.
With forward markets suggesting that the drop in prices is more permanent than temporary, a
period of adjustment will therefore be necessary, it said.
Brent for delivery in May 2017 is only $4 per barrel costlier than spot prices, implying an
expectation that prices will not rise sharply soon.

Qatar Petroleum to restructure following oil price fall
By Reuters + NewBase
State-owned Qatar Petroleum will announce a restructuring plan in the coming months to
adapt to the drop in oil prices, the head of its wholly owned international subsidiary said.
“The restructure comes at the right time, with low oil prices a great motivation for the
institution to be more capable of facing challenges in the upcoming years by getting rid of all
burdens that accumulated during the previous period,” Qatar
Petroleum International (QPI) Chief Executive Officer Nasser
Khalil Al-Jaidah told state news agency QNA.
Earlier this year, QP said it would absorb QPI into its
structure, a move suggesting authorities want to consolidate
the industry after the price drop. Al-Jaidah said demand for
OPEC oil is likely to improve, as prices below $100 will hinder the growth of shale oil.
“The coming period will witness an improvement in prices but they will not reach $100,” he
said. On Friday, U.S. crude settled down 19 cents at $59.69 a barrel, after falling more than
$1 during the session. Brent, the more important oil benchmark, settled up 11 cents at
$66.81, down from more than $115 in June last year.
Al-Jaidah said QPI’s international projects were currently being evaluated in terms of
geopolitics, prices and “current challenges”, giving no further details.
QPI was formed in 2007 as the foreign investment arm of the firm. Over the last few years, it
has created 10 joint ventures in the United States, Britain, Italy, Singapore, Egypt and
elsewhere, though it has not disclosed a figure for its total assets.

Qatar Petroleum Sees Rising OPEC Demand as Price Drop Hits Shale
Bloomberg + NewBase
Demand for OPEC’s crude will rise as the drop in oil prices below $100 a barrel continues to
hinder shale production, Qatar Petroleum International’s Chief Executive Officer Nasser
Khalil Al-Jaidah said.
“The coming period will witness an improvement in prices but they will not
reach $100,” he said in an interview published Saturday by the official
Qatar News Agency. Current prices will hinder the expansion in shale oil,
“which signals an improvement in demand for OPEC’s oil.”
The Organization of Petroleum Exporting Countries decided in November
not to cut its output target amid a price slump, which resulted from a global
supply glut driven by sluggish demand and rising U.S. shale production.
The decision roiled markets, contributing to a decline in prices of almost 50
percent last year.
Brent crude closed at $66.81 on Friday, up 43 percent from its lowest settlement for the year on
Jan. 13. Oil prices have stabilized since December because of higher demand from Europe and
emerging markets, and lower U.S. output, Al-Jaidah said.
OPEC will “stick with” its earlier decision to maintain the output ceiling when it meets next month
because of the recovery in prices this year, Abdulmajeed Al-Shatti, a member of Kuwait’s
Supreme Petroleum Council, said in an interview on Tuesday.
Qatar Petroleum, the world’s biggest producer of liquefied natural gas, will benefit from lower oil
prices as it restructures the company by “shedding added costs that have accumulated in the
past,” Al-Jaidah said. Qatar Petroleum International, QP’s foreign investment arm, will be taken
over by its parent, which will focus more on foreign operations and investments as most domestic
production projects have been completed, he added.

OMV hit by low oil price, security woes in Libya, Yemen
Reuters + NewBase
Austrian energy group OMV's first-quarter underlying operating profit fell by half to 333 million
euros ($380.3 million) as oil prices dropped, beating market expectations.
The average estimate in a Reuters poll of analysts for OMV's clean current cost of supplies
earnings before interest and tax (clean CCS EBIT) -- which strips out special items and inventory
holding gains or losses -- was 322 million euros.
OMV added on Monday that its refining margins, which had benefited from low oil prices, are
expected to come down due to overcapacity in European markets.
Low oil prices , which slumped to about $45 per barrel at the start of the quarter, forced OMV to
lower its investment plans last year and to give up on its aim of reaching output of 400,000 barrels
of oil equivalent per day by 2016. It expects 2015 brent crude oil prices to average between $50
and $60 per barrel.
OMV, which wants to stay cash flow neutral after dividends, said it had entered into oil price
hedges between July 2015 and June 2016 for a volume of 50,000 barrels per day. OMV's first-
quarter output fell to 303,000 boe/d from 318,000 in the previous quarter.
OMV is expecting its output to suffer from the difficult situation in Libya and Yemen, where armed
conflict has hit output. It had declared force majeure on all its blocks in Yemen last month, it said.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
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For additional free subscription emails please contact Hawk Energy
Khaled Malallah Al Awadi,
Energy Consultant
MS BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 25 years of experience in
the Oil Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility
gas compressor stations . Through the years, he has developed great
experiences in the designing constructing of gas pipelines, gas metering regulating stations
and in the engineering of supply routes. Many years were spent drafting, compiling gas
transportation, operation maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 03 May 2015 K. Al Awadi

NewBase 606 special 18 May 2015

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NewBase 606 special 18 May 2015