New base 730 special 17 november 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 17 November 2015 - Issue No. 730 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Saudi Aramco: Petrofac awarded Fadhili contract
Source: Petrofac
Petrofac has been awarded a contract by Saudi Aramco to undertake the engineering,
procurement and construction (EPC) of a sulphur recovery plant as part of their Fadhili gas
programme.
Fadhili is a greenfield development located 30 km west of the city of Jubail in the eastern province
of Saudi Arabia. When completed, the gas plant will have a capacity for around 2,500 MMSCFD
and will process sour gas from the Khursaniyah oil field and the Hasbah non-associated gas field.
Petrofac’s scope of work includes the construction of six sulphur recovery trains with associated
facilities for the sulphur and heavy duty oil handling, loading, unloading and storage; sour water
stripper, flare system and waste water treatment plant.
Marwan Chedid, Chief Executive of Petrofac’s Engineering, Construction, Operations &
Maintenance (ECOM) division, commented: 'This award builds on our portfolio of projects in the
Kingdom and we are delighted to have been selected by Saudi Aramco to be part of the
strategically important Fadhili gas programme.
Petrofac has a strong track record of delivering projects involving sour gas handling and sulphur
recovery and looks forward to bringing that experience to bear as we deliver the project.'

Oman: PDO inks contracts worth $650m
Written by Oman Observer
Petroleum Development Oman (PDO) yesterday boosted Omani job and training opportunities by
signing six contracts worth $650 million over the next 10 years. The deals for the supply,
installation and maintenance of 29 centrifugal compressors were signed with international
engineering companies Siemens LLC, General Electric International LLC and Omani firm OHI
Petroleum & Energy Services
LLC and its partners MAN Diesel
& Turbo Schweiz AG.
The contracts all contain In-
Country Value (ICV) provisions to
retain more of the oil and gas
industry’s wealth in the Sultanate
for the training of Omani
engineers and the local
manufacturing of components
such as vessels, coolers and
transformers.
The signings took place at the
third edition of the Business
Opportunities Forum at the Oman
International Exhibition Centre at Seeb under the auspices of His Highness Sayyid Haitham bin
Tareq al Said.
The event, organised by the Oman Chamber of Commerce and Industry (OCCI), aims to create a
platform for companies and institutions to expand business, build awareness and present
investment opportunities from large firms and promote the efforts and programmes of private
sector companies in the field of ICV.
PDO Managing Director Raoul Restucci said: “Despite the current difficult oil price environment,
these signings show that we are committed to staying the course and making significant
investments which will directly increase Omani jobs and training opportunities and build a robust
and sustainable local supply chain.
“Since 2011, our ICV strategy has so far created more than 15,000 National Objectives job and
training opportunities for Omani job-seekers and we are working all the time to develop and
support Omani service and manufacturing capabilities.”
The compressors are planned to be installed at 11 PDO projects, including the Yibal Khuff mega
project, Lekhwair, Mabrouk and the second phase of the Saih Nihayda and Kauther Depletion
Compression projects.
The suppliers have committed to maximising the local content in their submitted contract plans.
This should lead to the recruitment and training of a number of Omanis as engineers and
technicians and maximise the use of PDO’s in-house repair workshops.
PDO received one award at the OCCI event for the largest one-off contract with Siemens LLC
worth $210 million.

Egypt: SacOil commences drilling operations and steam
injection at its Lagia oil field, onshore . Source: SacOil Holdings
SacOil, through its subsidiary Mena International Petroleum Company, has commenced the
drilling of the Lagia 11 well on 13 November 2015, at its 100% owned Lagia oil field in Sinai,
onshore Egypt. This forms part of the Phase 2 field development operations.
As reported previously,
the Lagia 11 well is part
of a five well drilling
campaign aimed at
increasing and optimising
production. The Lagia
wells will be drilled using
the contracted Petro
PDSO land rig, Shams 1.
The five wells, Lagia 11,
12, 13, 14 and 15 will be
targeting the main
producing reservoir, the
Nukhul formation at
approx. 1500 feet below
mean sea level.
The Phase 2 field
development also
includes the successful
installation and
commissioning of steam
facilities for a thermal
recovery process on
the production wells.
The existing five
production wells were successfully steamed with the formation reacting positively by accepting the
injected steam as anticipated. The thermal recovery process yielded positive results with an
increase in production rates observed after the first steam and soak cycle using progressive cavity
pumps.
The five existing wells were steamed and allowed to soak for a number of days in order to heat up
the reservoir and reduce the oil viscosity before starting production. The final program includes the
steaming and thermal recovery of all the wells in order to achieve a targeted production rate of
1,000 bbl/day.
The company successfully procured and is in the process of installing ten new thermal well heads
and tubing sucker rod pumps, which have been customised specifically for the Lagia field
conditions and which will replace the progressive cavity pumps.
More details on the results of the drilling, as well as progress on the current operations, will be
announced in due course, as operations progress.

Indonesia: Cue Energy signs rig contract for Naga Selatan-2
Source: Cue Energy
Cue Energy Resources has advised that its wholly owned subsidiary Cue Kalimantan Pte Ltd,
the operator of the Mahakam Hilir PSC, has contracted a rig for the drilling of the forthcoming
Naga Selatan-2 well in Indonesia. Cue holds a 100% interest in the Mahakam Hilir PSC which is
located onshore in the Kutai Basin, Indonesia.
Naga Selatan-2 is a vertical exploration well to be drilled in the Mahakam Hilir PSC on the
Pelarang anticline situated approx. 2.6 kms southeast of Naga Selatan-1. The Pelarang anticline
lies approx. 10 kms west of the Sanga Sanga Anticline, which contains the prolific Mutiara,
Pamaguan and Louise (Sanga Sanga) fields.
The well is designed to test the updip potential of the Late Miocene Balikpapan and Early-Middle
Miocene Pulau Balang reservoirs which were penetrated by the Naga Selatan-1 well drilled by
SPC Mahakam Hilir in 2012. Cue participated in that well as a 40% joint venture partner.
Hydrocarbon shows were recorded in several sands throughout this interval. Recent detailed
surface mapping, in conjunction with new seismic interpretation, has been used to position the
Naga Selatan-2 well at or near the axial crest of the anticline in the vicinity of known oil seeps.
The Naga Selatan-2 Prospect has been estimated by Cue to contain a prospective mean
recoverable resource of 37.8 mmstb of oil. The technical chance of success for this prospect has
been estimated to be 35%. The well is planned to spud in early January 2016 and drill to a total
depth of 2240 feet (MD) in 15 days.
Forward plans include immediately applying for a 4 year extension to the exploration phase of the
permit upon completion of the Naga Selatan-2 well, as well as testing and appraisal of the
discovery in the success case.

Algeria to focus next year on mature oilfields
Reuters + NewBase
Algeria will focus next year on maximising output at its mature fields and seek out foreign
partners with the technology to explore offshore opportunities as part of its strategy to
increase output, a senior energy official said.
The North African OPEC producer has struggled to increase oil and gas production and attract
foreign oil investment in recent auctions. Last month, it postponed another energy bidding round
because the slump in oil prices.
Sonatrach state energy company Vice President Salah Mekmouche told local El Khabar
newspaper the company would focus next year on developing more from older fields like Hassi
Massoud, Hasi Berkine, and Illizi southwest and east.
"We will orientate around areas that are already well developed, those efforts will be on optimising
the mature fields," he told the newspaper on Monday.
He said national production of oil and gas was expected to close 2015 at around 190 million
tonnes of oil equivalent. Algeria's energy output peaked at 233 million tonnes of oil equivalent in
2007, before steadily declining to 187 million tonnes by 2012. But the government sees
hydrocarbon output reaching 224 million tonnes of oil equivalent by 2019.
Mekmouche said the third train at the In Amenas gas plant -- which produced 11 percent of
Algeria's gas before a 2013 attack by Islamists militants -- would be back in operation in the first
part of next year. That would bring its gas production from 16 million cubic meters a day to 20
million.
In a bid to counter declining earnings because of the oil price slump, Sonatrach will also take
steps to reduce production costs at oil and gas fields. He said the company was in talks with its
foreign partners to reduce service costs.
Sonatrach will next year resume exploration operations in Niger where it has halted activities in
2014 after the expiration of a production-sharing contract. He said Sonatrach is also ready to carry
out operations in countries such as Mozambique, Ghana, South Africa and Egypt.

NewBase 17 November - 2015 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices give up early gains as market glut persists
Reuters + NewBase
Oil prices turned away from slight gains on Tuesday as the risk premium following the Paris
attacks and the French airstrikes in Syria faded and traders began to focus on the global
oversupply in petroleum products again.
Analysts said that despite the Paris attacks and resulting French airstrikes in Syria, prices would
remain low for the rest of the year and into 2016 as oil markets stay oversupplied, with most
estimates for 2015 ranging from production outpacing demand by 0.7-2.5 million barrels per day.
Front-month U.S. crude futures initially rose towards $42 per barrel in early trading but then
dipped back to $41.75 a barrel by 0320 GMT, almost flat with its last settlement. Internationally
traded Brent crude futures rose towards $44.80 before dipping back to $44.62 a barrel.
"The well supplied crude market, record high inventories in OECD and lack of a material threat to
the oil facilities in the Middle East from the military escalation against IS in Syria are going to
prevent geopolitical premiums building in oil prices in the aftermath of the Paris terrorist attacks,"
BMI Research said.
Oil price special
coverage

On the supply side, ANZ bank said that U.S. shale oil production, which many analysts said would
fall sharply as a result of lower oil prices, would only dip. "We estimate crude oil production from
U.S. shale fields will fall just 2.5 percent (in Q4)," the bank said, adding that this was a result of
falling shale production costs and healthy refined oil product sales.
Money managers cut their net long U.S. crude futures and options positions to the lowest in three
months during the week to Nov. 10, the U.S. Commodity Futures Trading Commission (CFTC)
said on Monday.
The speculator group cut its combined futures and options position in New York and London by
27,456 contracts to 127,351 during the period. The cut in bets on higher prices has come in
parallel to soaring amounts of contracts actively betting on a further fall in oil.
U.S. crude oil prices have now been lower than $50 per barrel for longer than they were during the
height of the global credit crunch in late 2008/early 2009, when they were under that level for 74
straight days and another 14 intermittent days before and after.
This year, U.S. crude has been below $50 a barrel for 84 days since July as well as another 44
days earlier in the year.
Oil Approaching $40 Deepens Investor Pessimism on Recovery
Bloomberg - Mark Shenk
Hedge funds have turned more pessimistic on oil as prices flirted with $40 a barrel for the first time
since August.
"The speculators keep trying to pick the bottom and keep getting burned," Michael Lynch,
president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by
phone.
Money managers’ short bets in West Texas Intermediate crude surged 21 percent in the week
ended Nov. 10, according to data from the Commodity Futures Trading Commission. The net-long
position dropped 16 percent. The release of the figures was delayed because of Veterans Day on
Nov. 11.
Oil inventories in developed countries have expanded to a record of almost 3 billion barrels
because of massive supplies from both OPEC and non-OPEC producers, the International Energy
Agency said in a report on Nov. 13. WTI slipped to the lowest level since August before the CFTC
release Monday.
Thirty-nine oil tankers are waiting near Galveston, Texas, up from 30 in May, according to vessel-
tracking data compiled by Bloomberg. "There’s been concern about excess supply in the market
for a while now and that’s been strengthened by the IEA report," Lynch said.
WTI fell 7.7 percent in the report week on the New York Mercantile Exchange. Futures were down
0.1 percent at $41.68 a barrel at 11:48 a.m. in Singapore. Prices touched $40.06 on Monday, the
least since Aug. 27, before rebounding to close 2.5 percent higher.

Global Output
Oil inventories surged because of increased global production, the Organization of Petroleum
Exporting Countries said on Nov. 12. U.S. crude supplies rose to 487 million barrels as of Nov.
6, the highest for this time of year since 1930, the Energy Information Administration reported on
Nov. 12.
"We think the next few months will be very weak," Sarah Emerson, managing director of ESAI
Energy Inc., a consulting company in Wakefield, Massachusetts, said by phone. "The market is
focused on inventories. Prices shouldn’t rally in the coming year unless we have a disruption."
Speculators’ net-long position in WTI dropped by 27,198 contracts to 144,854 futures and options,
the biggest decline since the week ended July 21, CFTC data show. Shorts climbed by 23,766
contracts while longs decreased by 3,432.
Brent Positions
Traders increased their bullish stance in Brent crude to the highest level in a month during the
period. Speculators raised Brent net-longs to 187,479 contracts, according to data from ICE
Futures Europe.
In other markets, net bearish wagers on U.S. ultra low sulfur diesel decreased 5.2 percent to
30,818 contracts. Diesel futures slipped 5.1 percent in the period to $1.4865 a gallon. Net bullish
bets on Nymex gasoline fell 14 percent to 15,434. Futures dropped 5.8 percent in the period
covered by the CFTC report to $1.3618 a gallon.
Oil rose Monday after failing to drop below $40 as French fighter planes dropped bombs on Syria,
heightening tensions in Europe and the Middle East in the wake of deadly terrorist attacks in Paris
on Nov. 13. French President Francois Hollande vowed to boost security spending, limit
constitutional protections and win a war against Islamic terrorism.
"It doesn’t look like this will have any impact on oil supply," Tim Evans, an energy analyst at Citi
Futures Perspective in New York, said by phone. "It’s hard to distinguish between the unstable
mess we had in the Middle East on Thursday and what we are looking at today. The overriding
concern in the market right now is excess supply."

NewBase Special Coverage
News Agencies News Release 17 Nov.. 2015
GCC countries must restructure, broaden revenue sources
Saudi Gazette
While lower oil prices are expected to slow down the GCC economies, it should be seen as an
opportunity for countries to restructure and broaden revenue sources. According to speakers at a
panel discussion organized by ICAEW’s Corporate Finance Faculty in the UAE, there is a
pressing need to raise taxes in GCC countries in order to diversify revenues and strengthen their
fiscal positions.
ICAEW members and guests gathered at The Oberoi in Dubai recently to discuss how fiscal
reform will affect businesses in the GCC countries. Panellists included Jeanine Daou, partner and
head of indirect taxes at PwC; Gary Dugan, managing director – Global Wealth, CIO and head of
investment strategy at NBAD; Trevor McFarlane, Chief Executive Officer of Emerging Markets
Intelligence and Research; and Ashok Hariharan, partner and regional head of tax MESA at

KPMG. The discussion was moderated by David Staples, managing director corporate finance
EMEA at Moody’s.
Following an introduction by Sanjay Vig, managing director at Alpen Capital and Chair of ICAEW’s
Corporate Finance Faculty network in the Middle East, panellists and invited guests debated what
fiscal reform would mean for business in the region.
Panellists agreed that the lower oil price is not a problem for GCC counties as they have more
than $2.5 trillion in reserves and very low percentages of debt. However, for long-term economic
sustainability, GCC countries must continue, and accelerate diversifying their revenues.
Panellists agreed that imposing tax is the best solution for GCC countries to broaden revenues as
other approaches, such as cutting subsidies or spending, will be difficult to implement at this
stage.
Michael Armstrong, FCA and ICAEW regional director for the Middle East, Africa and South Asia
(MEASA), said: “There is growing international focus on taxation. Countries are looking for more
information on multinational companies who are shifting their profits to countries with lower tax
rates. Now is therefore a perfect time for GCC countries to start levying taxes. This will be in step
with international trends and will also help to diversify revenues.”
Speakers said that GCC countries have been discussing a common tax framework for the past 10
years, which is now reaching its final stages. Based on the core principles of the framework, each
country will have the choice to implement its own tax legislation and system.
Panellists explained that value added tax (VAT) is a viable option — and some form is expected to
be introduced in the near future. This could be at a 3-5% rate initially, but there are likely to be
some exceptions to the levy. If introduced, VAT could generate up to 4-5% of GDP. Speakers also
noted that countries most likely to impose VAT are the UAE and Oman. Other GCC countries are
likely to follow, although Qatar is unlikely to introduce taxes at this stage.
However, speakers agreed that the GCC countries are not ready to start imposing taxes right now
as they are currently at different stages of preparation. The biggest challenge they are facing is
resources, both in terms of infrastructure and expertise. Finally, panellists warned that if the tax
systems were not well designed there would be the potential for aggressive tax avoidance as has
been seen in some countries in the West.

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 17 November 2015 K. Al Awadi

New base 730 special 17 november 2015

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