new base special 07 may 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

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NewBase 07 May 2014 Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE

Kuwait renews $3.7bn crude supply deal with India's Bharat By Reuters

Major oil producer Kuwait has renewed crude supply contracts with India's Bharat Petroleum Corporation Ltd (BPCL) worth up to $3.7 billion a year, the Gulf state's official news agency KUNA said on Tuesday.

State-owned Kuwait Petroleum Company (KPC) signed one contract with BPCL and another with its subsidiary Bharat Oman Refineries Ltd (BORL), KUNA said. The report did not specify any volumes.

OPEC member Kuwait produces about 3 million barrels per day (bpd) of oil, about two thirds of which is exported. BPCL operates a 240,000 bpd Mumbai refinery in western India and a 190,000 bpd Kochi refinery in the south of the country.

It also has majority stakes in the 60,000 bpd Numaligarh refinery in northeast India and the 120,000 bpd Bina refinery in central India. The Bina refinery is operated by Bharat Oman Refineries Ltd, in which state-ownedOman Oil Company has a minority stake.




Iraq awards Petrofac & China's CPECC Rumaila oilfield contracts Reuters - UK Focus –

Iraq's cabinet said on Tuesday it had approved two major energy contracts for its Rumaila oilfield project worth around $960.8 million.

It approved a $535.8 million contract with British oil service firm Petrofac to submit projects management services for the supergiant Rumaila, which pumps more than a third of Iraq's total output of over 3 million barrels per day (bpd).

China Petroleum Engineering & Construction Corporation (CPECC) has also won a $425 million service contract to handle engineering, procurement, construction and commissioning work for a power station at Rumaila.

Rumaila, the workhorse of Iraq's oil industry with 17 billion barrels in reserves, is being developed by British oil major BP and Chinese partner CNPC.

Baghdad has signed a series of contracts with foreign oil companies that target total oil production capacity of 9 million barrels per day by 2020 - up from over 3 million bpd .

NewBase Research ( About the Rumaila oil Field ):-- The Rumaila oil field is a super-giant oil

field located in southern Iraq, approximately 20 mi (32 km) from the Kuwaiti border. The dispute between

Iraq and Kuwait over alleged slant-drilling in the field was one of reasons for Iraq's invasion of Kuwait in

1990. This field was discovered by the Basrah Petroleum Company (BPC), an associate company of the Iraq

Petroleum Company (IPC), in 1953.Under Abd al-Karim Qasim, the oilfield was confiscated by the Iraqi

government by Public Law No. 80 of 11 December 1961. Since then, this massive oil field has remained

under Iraqi control. The assets and rights of IPC were nationalised by Saddam Hussein in 1972, and those of

BPC in 1975. Rumaila is considered the third largest field in the world. The field is estimated to contain 17

billion barrels, which accounts for 12% of Iraq's oil reserves estimated at 143.1 billion barrels.




Azerbaijan: Statoil’s farm down in Shah Deniz and South Caucasus Pipeline Source: Statoil

On 1 May 2014 Statoil completed the farm down of 10% of its interest of 25.5% in the Shah Deniz

Production Sharing Agreement and the South Caucasus Pipeline Company to BP (3.33%) and SOCAR (6.67%). The consideration for the sale and transfer of these assets is USD 1.45 billion.

The divestment that was announced in December 2013, is in line with Statoil’s strategy of portfolio optimisation based on rigid prioritisation of future investments, and capturing value created from a significant gas position.

Statoil portfolio in Azerbaijan consists of 15.5% in the Shah Deniz (SD) project and the South Caucasus Pipeline (SCP), 8.56% in Azeri-Chirag-Guneshli (ACG) and 8.71% in Baku-Tbilisi-Ceyhan (BTC) Pipeline. Statoil also holds 20% share in Trans Adriatic Pipeline (TAP) AG which is developing the pipeline for transport of the Shah Deniz gas to European markets.

• Licensees in Shah Deniz: BP 28.8%, SOCAR 16.7%, Statoil 15.5%, Lukoil 10%, NICO 10%, Total 10% and TPAO

9%

• Operator for Shah Deniz: BP

• Technical operator of the South Caucasus Pipeline (SCP): BP

• Commercial operator of SCP: Statoil




Egypt: Circle Oil updates Egypt operations Source: Circle Oil

AIM-listed Circle Oil has announced an update regarding the Al Amir SE Field ('AASE') and the Geyad

Field in Egypt. The Company reports success at the infill producer AASE-21 well, which will provide additional oil and gas production from the Al Amir SE field.

The AASE-21 well was spud on 9 March 2014 and is located about 1,100 metres south-east of the AASE-4 well and 750 metres north-west of the AASE-1X well to appraise both the Shagar and Rahmi sands for production. The well encountered the Kareem sands with 19 feet of net oil pay in the Shagar and 4 feet of net oil pay in the Rahmi, both zones of good reservoir quality. The well has been completed as a Shagar producer and initial short term testing has yielded flow rates, on a 48/64" choke, of 3,005 bopd and 3.228 MMscf/d of gas (587 boepd) for a total of 3,592 boepd.

Current gross daily production rate over the last month from the AASE and Geyad fields continues at approx. 11,000 bopd and 11 MMscf/d. Total gross production from the NW Gemsa fields has now exceeded 15.3 MMbo of 42 degree API crude oil with a water injection total of 19.9 MMbw.

After drilling the AASE-21 well the rig was moved to drill AASE-22, planned as an infill support injector well, 500 metres north and up dip of the AASE-8 injector in the western central part of the field. Following completion of AASE-22 the rig will be released on sub contract for the rest of 2014.

A dynamic reservoir model to assess reservoir behaviour for the future is in construction to provide input for the effective and efficient management of the AASE field. This reservoir management study will also permit the planning for any future infill drilling both for producers and injectors to maximise reserve recovery for the medium and long term.

The Al Amir and Geyad Development Leases cover an area of 82 sq kms, and lie about 300 kms south-east of Cairo in a partially unexplored area of the Gulf of Suez Basin.

The concession agreement included the right of conversion to a production licence of 20 years, plus extensions, in the event of commercial discoveries. The NW Gemsa Concession partners include: Vegas Oil

and Gas (50% interest and operator); Circle Oil (40% interest); and Sea Dragon Energy (10% interest).




Ukraine: Cub Energy's M-17 well makes new gas pool discovery P. Release:- Cub Energy

Cub Energy, a Black Sea region-focused upstream oil and gas company, has announced that the

S7 zone in the Makeevskoye-17 ('M-17') well tested gas at a rate of over 0.9 million cubic feet

per day ('MMcf/d') through a seven millimetre choke. The M-17 well is operated by KUB-Gas, a

partially-owned subsidiary in which Cub has a 30% effective ownership interest through its 30%

shareholding of KUBGAS Holdings.

Makeevskoye-17 Well

In March 2014, Cub announced that wireline logs indicated 9 metres of net gas pay in the S6, 2.5

metres of net pay in the S5 carbonates, and resource potential in the R30c and S7 sands. The

Company has not produced the S7 sand previously and thus Cub has no reserves for the zone. It

was believed that the M-17 well’s 5.5 metres of net pay in the S7 would require stimulation to get

a commercial flow rate from the

zone. Cub plans to perform a dual

completion on the M-17 as a

producer in the S6 and S7 zones,

with the S7 producing unstimulated.

Currently, the Company’s snubbing

unit, required for dual completions,

is performing operations on its O-4

well. The M-17 well will be

suspended until the snubbing unit

arrives on location. Once the

subbing unit is on location, the

Company will set a bridge plug

above the S7, and will perforate

and test the S6 zone, which is 45

metres above the S7 and the primary target of the M-17 well. The S7 discovery is still being

considered for stimulation and remains in the Company’s fracture stimulation campaign scheduled

for October this year.

Gas samples taken during testing indicate that the gas has a carbon dioxide ('CO2') content of

8.8% and a heating value of 6,960 kilocalories per cubic metre ('kcal/m3'). While this is below the

sales gas pipeline specification of 7,600 kcal/m3 and 2% CO2, it can be blended with production

from the Makeevskoye and Olgovskoye fields and the resulting blend will meet or exceed all

pipeline requirements. The Company is confident that the gas composition will not pose any

material issues in development.

The M-17 well was drilled to a total depth of 3,475 metres to appraise the new pool gas discovery

made in the S6 sandstone by the Company’s Makeevskoye-16 ('M-16') well, which is currently

producing at a rate of 3.9 MMcf/d (1.2 MMcf/d net to Cub). The M-17 is located about one

kilometre to the northwest of the M-16 well and within the same structural closure.




Somaliland: Jacka Resources signs second farmout with Sterling Energy for the Odewayne Block

Source: Jacka Resources

Jacka Resources has announced that its wholly owned subsidiary Jacka Resources Somaliland Limited

('JRSL') has signed a second Farmout Agreement with Sterling Energy (East Africa) Limited, a wholly owned subsidiary of Sterling Energy, for the Odewayne Block Production Sharing Contract, onshore Somaliland, East Africa. Sterling will acquire JRSL’s 15% participating interest in the PSC for a total cash consideration of US$12 million. Approval for the transaction has been received from the Government of Somaliland and the Company expects completion under the Second Sterling Agreement within the next week.

In November 2013 Jacka announced JRSL’s farmout of a 15% participating interest in the Odewayne block to Sterling (the 'Original Sterling Transaction'). That transaction closed in January 2014 after receiving government approval. Under the terms of the Second Sterling Agreement:

1. Sterling will acquire an additional 15% interest in the PSC from JRSL, effective on completion;

2. Sterling will pay JRSL US$2.4 million on signature of the Second Sterling Agreement and $9.6 million on

completion;

3. JRSL will cancel the US$12 million future conditional payments due under the Original Sterling Transaction;




Although this transaction results in JRSL’s departure from the PSC, Jacka retains an option to acquire a 5% participating interest arising from its original farm-in agreement with Petrosoma Limited (1). The option can be exercised on the earlier of the proposal of a second well in the PSC or the parties entering into the Fifth Period of the PSC.

The PSC is currently in the Third Period (expiring November 2014) with an outstanding minimum work obligation of 500 km of 2D seismic. The minimum work obligation during the Fourth Period of the PSC (expiring May 2016) is for 1,000 km of 2D seismic and one exploration well. Operations in Somaliland have been delayed by security concerns and Genel Energy, the operator on behalf of the joint venture partners, is working with the Ministry of Energy and Minerals to resume operations as soon as practicable. Jacka’s Managing Director, Mr Bob Cassie commented:

'Jacka’s challenging past nine months have been well documented elsewhere. As a result of these circumstances it has been imperative that the Company looks to its asset base to provide it with the necessary funding for working capital and to maintain progress on its other assets. With the funds from this transaction, the recent placement and the current fully underwritten entitlements issue to raise a combined $3.9 million, Jacka will emerge with a strong balance sheet and can now look forward to progressing the Aje Field (OML113 offshore Nigeria) through a final investment decision (expected in mid-2014) and into development; as well as further appraisal of the Hammamet West oilfield, offshore Tunisia; and exploration on OML113, in the Bargou permit surrounding the Hammamet West field, and the Ruhuhu licence, onshore Tanzania. 'Jacka remains enthusiastic about Somaliland and considers the option to acquire another 5% interest in the future as providing the Company and its shareholders with an opportunity to re-enter the project as work advances. Jacka would like to take this opportunity to thank the joint venture partners and the Somaliland government for their assistance over the years and in approving this key transaction for the Company. We wish them and the people of Somaliland success with the future exploration program.' The PSC participants are: Prior to farmout Post farmout Genel Energy Somaliland (Operator) 50 % 50% Jacka Resources Somaliland 15% 0% (1) Sterling Energy (East Africa) 25% 40% Petrosoma 10% 10% Note 1: Jacka retains an option to acquire a 5% participating interest through its initial farm-in agreement with Petrosoma. The option requires Jacka to carry Petrosoma through exploration activity up to a capped amount of total project expenditures. On the basis of current estimates of the project expenditures, the expenditure cap may be reached before Jacka exercises the option resulting in Jacka’s carry obligations being satisfied.

Background The Odewayne PSC covers Block SL6 and part of Blocks SL7 and SL10, onshore Somaliland, comprising an area of 22,840 sq kms. Jacka entered the Odewayne PSC in March 2012 through a farm-in to Petrosoma’s interest, initially acquiring 50% with the potential to ultimately increase to 85%. Jacka’s regional studies highlighted this as an area likely to contain a sedimentary basin analogous to the multi-billion barrel producing basins in Yemen. Initial reprocessing of gravity data by Jacka demonstrated the existence of a deep basin with potentially attractive structural trends and these were confirmed by an aeromagnetic and gravity survey acquired in early 2013.




In late 2012 Jacka completed a transaction with Genel Energy, whereby Genel acquired a 50% interest in, and operatorship of, the Odewayne PSC. JRSL retained a 30% interest. Under the terms of that transaction, Genel will fund 100% of the exploration program in the Odewayne Block until the end of the Fourth Period. Subsequently, in November 2013, JRSL farmed out a 15% interest to Sterling in return for US$3 million in cash paid on execution of the farmout agreement and up to a total of US$12 million in additional payments as work program milestones were achieved. JRSL retained a 15% interest. The next planned stage of the work program includes acquisition of an extensive 2D seismic programme to define drillable targets, however, operations in Somaliland have been delayed by security concerns and the Operator, on behalf of the joint venture partners, is working with the Ministry of Energy and Minerals to resume operations as soon as practicable.




EIA: April oil production in U.S. highest since 1988 Source : EIA

U.S. Energy Information Administration (EIA) estimates U.S. total crude oil production

averaged 8.3 million barrels/day (bbl/d) in April 2014, which would be the highest monthly

average production since March 1988.

U.S. total crude oil production, which averaged 7.4 million bbl/d in 2013, is expected to increase to 8.5 million bbl/d in 2014 and 9.2 million bbl/d in 2015. The 2015 forecast represents the highest annual average level of production since 1972.

Most of the increased production flows from the tight oil formations in North Dakota and Texas. Oil production in the Gulf of Mexico is also expected to rise this year and again in 2015, marking the first increase in offshore oil output in five years, according to EIA.

According to EIA, Brent crude oil spot prices averaged $108/barrel (bbl) in April. This was the 10th consecutive month in which the average Brent crude oil spot prices fell within a relatively narrow range of $107/bbl to $112/bbl. New pipeline capacity from the Midwest into the Gulf Coast helped reduce inventories at the Cushing, Oklahoma storage hub to 25 million barrels by the end of April, the lowest level since October 2009.

The discount of WTI crude oil to Brent crude oil, which averaged more than $13/bbl from November through January, fell below $4/bbl in early April. Total U.S. commercial crude oil stocks at the end of April reached a record high of nearly 400 million barrels, which is expected to put downward pressure on crude oil prices. EIA projects Brent crude oil prices to average $106/bbl in 2014 and $102/bbl in 2015 and the WTI discount to Brent to average $10/bbl and $11/bbl in 2014 and 2015, respectively.




Ukraine crisis to benefit US Export LNG Terminals approval

The Ukraine crisis may benefit to the series of Export liquefied natural gas (LNG) terminal projects in the USA in beginning with Oregon LNG supported by Leucadia National Company (Leucadia) on the west coast of USA.

Even though the Oregon LNG project is located on the Pacific Coast with business perspectives in Asia, the risk of gas shortage in Europe because of the Ukraine crisis may impact all regional markets.

After the Sempra Cameron LNG project on the Gulf Coast in Louisiana and the Veresen Jordan Cove LNG project also on the west coast, Oregon LNG project stands in the next position for the US Federal Energy Regulatory Commission (FERC) approval.

As Jordan Cove LNG, Oregon LNG project is rather unique as one of the only two export LNG terminal projects in USA being located on the west coast.

Historically all these LNG projects were initiated as LNG import and regasification terminals, therefore they were concentrated on the Gulf Coast to download the LNG carriers from Middle-East and Africa.

The other particularity of these two projects on the Pacific coast relies on exporting Canadian natural gas, mainly from British Columbia and Alberta.

For these reasons the approval process for Jordan Cove LNG and Oregon LNG is even more complex as it requires the Canada National Energy Board (NEB) approval in addition to the US Department of Energy (DOE), the authorization for export to non-free trade agreement (non-FTA) countries, and the FERC.

For the Oregon LNG project, Leucadia selected the Skipanon Peninsula in the Warrenton City of the Clatsop county in the north of the Oregon, close to the boarder with Washington state.

CH-IV completed Leucadia Oregon LNG FEED work




Located on the estuary of the Columbia River in the Pacific Ocean, Warrenton provides Leucadia with the advantage to minimize the costs for the marine terminal and for the pipeline to supply the Oregon LNG trains in natural gas coming from Canada.

The Oregon pipeline will be a major package of the Oregon LNG project with a 138 kilometers connection in Woodland, Washington, with the existing Williams Northwest Pipeline.

The engineering company CH-IV International (CH-IV) completed the front end engineering and design (FEED) work and supported Leucadia in the submission of all the applications for regulatory approval.

Based on CH-IV FEED recommendations, the Oregon LNG project should include:

- 138 kilometers inlet Oregon pipeline - Two full-containment 160,000 cubic meter LNG storage tanks - Two LNG trains - Marine uploading terminal - LNG Carriers berthing facilities

With the capability to operate as export and still as import terminal, Leucadia and CH-IV designed Oregon LNG with:

- 9.6 million tonnes per year (t/y) of LNG export capacity

- 500 million cubic feet per day (cf/d) of natural gas import capacity.

In this configuration the Oregon LNG project should require $5.8 billion capital expenditure for the Warrenton facilities plus $487 million for the Oregon pipeline project.

Assuming that the export-import Oregon LNG Terminal project should be granted of all the necessary approvals in 2014, Leucadia may expect to load the first LNG carriers by 2018.




Energy Conferences in United Arab Emirates

Abu Dhabi International Downstream Conference and Exhibition Date: 11-May-14 to 13-May-14 Location: Abu Dhabi / United Arab Emirates

Co hosted by Abu Dhabi Oil Refining Company Takreer, Adid brings together global & regional

petrochemical producers, refiners &

technology providers to discuss key

issues affecting the industry. Taking place

at the Fairmont Bab Al Bahr from the 11-

13 May, and welcoming key executives

from four continents and over ten

countries including China, Iraq, the USA

and the GCC, Adidownstream will deliver three days dedicated exclusively to all the critical issues

facing the Middle Eastern downstream industry at the moment - from global and regional market

outlooks, the impact of the US shale gas revolution and feedstock challenges to Coal-to-Methane

& Methane-to-Olefins technology, joint ventures, and integrated plants.

4th Annual Global Pipeline Integrity Summit Date: 19-May-14 to 21-May-14

Location: Abu Dhabi / United Arab Emirates

Safety and integrity of pipelines is imperative for efficient and secure transportation of oil, gas and

energy resources. Industries have to stick to regulations and simultaneously maintain cost

effective operations. 4th Annual Global Pipeline Integrity Summit will gather members of the

pipeline industry over three days to overcome these challenges and adopt best practices. The

conference will attribute a comprehensive programme covering the key topics of asset integrity,

pipeline commissioning, maintenance and ensuring longevity of subsea assets. For more details

mail us on: [email protected]




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

[email protected] [email protected]

Khaled Al Awadi is a UAE National with a total of Khaled Al Awadi is a UAE National with a total of Khaled Al Awadi is a UAE National with a total of Khaled Al Awadi is a UAE National with a total of 24 years24 years24 years24 years of experience in theof experience in theof experience in theof experience in the Oil & Gas sector. Currently working as Oil & Gas sector. Currently working as Oil & Gas sector. Currently working as Oil & Gas sector. Currently working as

Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for 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 the GCC area via Hawk Energy Service as a UAE operations the GCC area via Hawk Energy Service as a UAE operations the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations base , Most of the experience were spent as the Gas Operations base , Most of the experience were spent as the Gas 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 , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed has developed has developed 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 supply of gas pipelines, gas metering & regulating stations and in the engineering of supply of gas pipelines, gas metering & regulating stations and in the engineering of supply 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 Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for OUs for OUs for OUs for

the local authorities. He has becomethe local authorities. He has becomethe local authorities. He has becomethe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE anda reference for many of the Oil & Gas Conferences held in the UAE anda reference for many of the Oil & Gas Conferences held in the UAE anda reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted Energy program broadcasted Energy program broadcasted Energy program broadcasted

internationally , via GCC leading satelliteinternationally , via GCC leading satelliteinternationally , via GCC leading satelliteinternationally , via GCC leading satellite ChannelsChannelsChannelsChannels . . . .

NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE

NewBase 067 May 2014 K. Al Awadi

new base special 07 may 2014

Economy & Finance

rumaila oil field

day bpd of oil

bpd bina refinery

foreign oil companies

bpd numaligarh refinery

bpd kochi refinery

bpd mumbai refinery

british oil major bp