new base special 25 july 2014

17
Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 1 NewBase 25 July 2014 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Taqa withdraws from purchase of $1.6 billion Indian power plants source TAQA + The National Abu Dhabi National Energy, known as Taqa, has abandoned a deal to buy two hydroelectric power plants in India for US$1.6 billion. Jaiprakash Power Ventures, the Indian company selling the plants, said the move was as a result of a change in strategy for Taqa. “They have been constrained to take the said decision as a result of a change in the business strategy and priorities of their group,” said Jaiprakash Power in a filing yesterday on the Bombay Stock Exchange. A spokesman for Taqa declined to comment. The majority Abu Dhabi government-owned company’s stock closed 4.5 per cent higher yesterday at Dh1.15 a share. The exit is the latest sign of a more cautious approach for the company after several years of far-flung international acquisitions. In November, it shelved a US$12 billion coal project in Turkey and said it was seeking to reduce its entire business by about two-thirds to cut costs. The downsizing involved the shedding of staff at Taqa’s headquarters in Abu Dhabi and in Canada. In March, Taqa said that it was leading a consortium to buy the Baspa Stage II and Karcham Wangtoo hydroelectric plants, located on the River Satluj Basin in the northern state of Himachal Pradesh, from the Jaypee Group, the parent company of Jaiprakash Power. Taqa was to hold a 51 per cent stake in the consortium, with an unnamed entity, reported to be Canada’s Public Sector Pension Investment Board, holding a 39 per cent share. IDFC Alternatives’ India Infrastructure Fund II, an Indian private equity fund, would hold a 10 per cent stake. Taqa’s withdrawal from the deal made it liable to the payment of a break fee, Jaiprakash Power said in the filing. Taqa posted its first annual loss last year following writedowns of US$884 million in Canada. Shortly after the announcement of the loss, the company’s chief executive Carl Sheldon, who had held the role since 2011, stepped down, with his duties passing to Edward LaFehr, who became

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Page 1: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 1

NewBase 25 July 2014 Khaled Al Awadi

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

Taqa withdraws from purchase of $1.6 billion Indian power plants

source TAQA + The National

Abu Dhabi National Energy, known as Taqa, has abandoned a deal to buy two hydroelectric power plants in India for US$1.6 billion. Jaiprakash Power Ventures, the Indian company selling the plants, said the move was as a result of a change in strategy for Taqa.

“They have been constrained to take the said decision as a result of a change in the business strategy and priorities of their group,” said Jaiprakash Power in a filing yesterday on the Bombay Stock Exchange.

A spokesman for Taqa declined to comment. The majority Abu Dhabi government-owned company’s stock closed 4.5 per cent higher yesterday at Dh1.15 a share.

The exit is the latest sign of a more cautious approach for the company after several years of

far-flung international acquisitions. In November, it shelved a US$12 billion coal project in Turkey and said it was seeking to reduce its entire business by about two-thirds to cut costs. The downsizing involved the shedding of staff at Taqa’s headquarters in Abu Dhabi and in Canada.

In March, Taqa said that it was leading a consortium to buy the Baspa Stage II and Karcham Wangtoo hydroelectric plants, located on the River Satluj Basin in the northern state of Himachal Pradesh, from the Jaypee Group, the parent company of Jaiprakash Power. Taqa was to hold a 51 per cent stake in the consortium, with an unnamed entity, reported to be Canada’s Public Sector Pension Investment Board, holding a 39 per cent share. IDFC Alternatives’ India Infrastructure Fund II, an Indian private equity fund, would hold a 10 per cent stake.

Taqa’s withdrawal from the deal made it liable to the payment of a break fee, Jaiprakash Power said in the filing.

Taqa posted its first annual loss last year following writedowns of US$884 million in Canada. Shortly after the announcement of the loss, the company’s chief executive Carl Sheldon, who had held the role since 2011, stepped down, with his duties passing to Edward LaFehr, who became

Page 2: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 2

chief operating officer. Mr LaFehr said in April that the loss would not curtail the company’s plans to make future investments or service its debt.

The decision not to go ahead with the purchase of the power plants is the second investment U-turn by the company since it decided in November to stall a government-backed agreement to spearhead a $12bn coal mining and power production project in Turkey. Mr Sheldon said at the time the plans were “shelved”.

It is also a blow for the Jaypee Group, the builder of a variety of infrastructure in India, which is seeking to cut its multibillion dollar debts.

Taqa still holds interests in India. In January of last year, the company said it was purchasing an interest in Himachal Sorang Power, the developer of a 100 megawatts hydroelectric plant in the same state, Himachal Pradesh. The plant was scheduled to become operational this year. Taqa also operates a 250MW lignite power station in the Neyveli region of Tamil Nadu. The Baspa Stage II and Karcham Wangtoo plants have a combined power generation capacity of 1,391MW.

As part of a shake-up of its global operations, Taqa has reorganised its operations in Canada and offloaded other parts of its business that were less profitable. Mr Sheldon said in November that the move coincided with a refocus on opportunities closer to home, such as Iraq, where it is drilling in the Kurdish region, and Egypt, where along with Mubadala Petroleum and International Petroleum Investment Corporation, it is evaluating infrastructure investment.

Still, the company’s operations remain wide-ranging – besides the North American acreage it pumps oil in the North Sea, produces power in Ghana, and stores gas in an underground reservoir in the Netherlands

Page 3: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 3

No impact on upcoming power, water projects: OPWP by Oman Observer

Moves by Oman Power and Water Procurement Company (OPWP) to introduce an ‘electricity spot market’, as well as new procurement arrangements for future projects in the Sultanate, will not impact the ongoing procurement of a number of major power and water schemes, according to the state-owned procurer.

Earlier this year, OPWP — a subsidiary of The Electricity Holding Company SAOC — said it intended to implement new arrangements for the future procurement of power and water from independent power producers (IPPs) and independent power and water producers (IWPPs) in Oman. Envisaged as part of the new arrangements is the introduction of an ‘electricity spot market’ that will operate alongside and in conjunction with the existing system of power purchase agreements (PPAs) and power and water purchase agreements (PWPAs).

Also as part of the initiative, OPWP is espousing the implementation of a more flexible process for the awarding of new PPAs and PWPAs, aimed at increasing competition, including between new-build and existing plants.

These arrangements, which will initially focus on the Main Interconnected System (MIS) — the national electricity grid that covers much of the northern half of the Sultanate — will only be operational by 2017. Consequently, they will have no

immediate bearing on plans for the procurement of 2,650 megawatts of new power capacity — the single largest capacity procurement in the sector’s history — currently in the early stages of a competitive tender.

A number of international developers are preparing to register their interest in competing for a licence to design, finance, build, operate and maintenance of a pair of new Independent Power Projects (IPPs) of a combined electricity generation capacity of 2,650 MW. A green-field site in Ibri in Dhahirah Governorate and a plot within Sohar Port in North Al Batinah Governorate have been identified as possible locations for these IPPs. Offers in response to a Request for Qualifications (RfQ) are due in by August 3, 2014.

“The introduction of these new arrangements is not expected to affect the procurement of the (IPPs) or the commitment of OPWP to enter into the (Power Purchase Agreements) for the capacity and output of the (IPPs) but will require the Project Companies to commit to provide information following the expected date of introduction of this market to ensure that the spot market prices properly reflect the operation of the power generation market in Oman as a whole,” said the procurer in a briefing note to developers.

Other ongoing schemes, the procurement of which is not expected to be impacted by OPWP’s latest initiatives, include a 46 million imperial gallons per day capacity (MIGD) Independent Water Project (IWP) planned at Qurayat in Muscat Governorate. Importantly, the proposed new

Page 4: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 4

procurement arrangements, as well as the electricity spot market initiative, will open the power sector to greater competition, says OPWP.

“The proposed new arrangements are intended to build on and enhance the existing system, providing additional flexibility and facilitating greater competition whilst, importantly, providing a transparent framework for the continued operation of power (and water) plants coming to the end of their original PWPAs,” it noted.

For example, the new arrangements, when implemented, will provide a framework for the continued operation of power (and water) plants coming to the end of their agreements with the procurer. “OPWP considers that it would be beneficial to establish some near-term certainty in respect of those long-term PWPAs that are due to expire within the next few years. This will provide both OPWP and the relevant producers with the certainty required for operational planning purposes in the near-term while preparing for the transition to the new arrangements,” the procurer said.

“OPWP envisages that the new arrangements will be capable of supporting the continued operation of plants coming to the end of their (agreements) from around 2021 onwards. Accordingly, as a transitional measure, OPWP intends to consider making short extensions to those long-term (power/water purchase agreements) that are due to expire before 2020, to extend their terms up to the end of 2020,” it further added.

Page 5: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 5

Japan To Count Saudi, UAE Crude Storage Toward Reserve Goals GulfBusiness

Japan will start treating as “quasi-strategic reserves” some of the crude stored by Saudi Arabia and the United Arab Emirates in the Asian nation, as a way to help meet Tokyo’s strategic reserve obligations, a trade ministry panel said on Wednesday.

Japan has been lending 10.7 million barrels (1.7 million kilolitres) of crude tank capacity to the two countries, in a deal that gives them a supply depot close to their largest customers in exchange for priority access to Japan in an emergency.

The volume of loaned tanks is set to grow to a total of 12.6 million barrels (two million kl) next fiscal year and possibly higher in the following years, in a move to

strengthen Japan’s ties with the two main suppliers of crude, the panel said.

The panel said it would seek to add half of the crude tank capacity used by the producers to the national strategic reserves to meet a storage target of 90 days’ worth of oil under International Energy Agency (IEA) obligations.

The panel also said Japan would delay by a year its plans to boost national stockpiles of liquefied petroleum gas (LPG) to 1.5 million tonnes until some time in the financial year starting April 2017, to account for the expected lower cost of imports from the United States from next year.

About 60 new large LPG vessels will be introduced in 2015 and 2016, and the start of a new shipping route, with the completion of the Panama Canal expansion, is projected to bring a significant saving in LPG costs from 2015, the panel said.

Japan boosted its national LPG stockpiling capacity by 850,000 tonnes to 1.5 million tonnes in March 2013 by completing the construction of two bases in its west, one in Namikata in Ehime prefecture, and the other in Kurashiki, in Okayama prefecture.

Japan’s two new facilities take to five the number of stockpiling bases it has. It now aims to raise national LPG stockpiles to full capacity by March 2018 so as to have 40 days’ worth of imports. Together with 50 days’ worth of stocks in commercial storage, Japan aims to have 90 days of stockpiles.

Page 6: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 6

Chevron starts Saudi Arabia – Kuwait Wafra Joint Operations Phase-1

The California-based international oil company (IOC) Chevron Corporation (Chevron) and its local partners, Saudi Aramco and Kuwait Oil Company (KOC) have validated the steamflooding technology to develop the Wafra heavy crude oil field in the onshore Partitioned Zone (PZ) between Saudi Arabia and Kuwait.

The Partitioned Zone is located at the north east of Saudi Arabia and South of Kuwait and was created to allow both countries to explorer and produce oil and gas resources in this region disputed by both countries.

Because of the politically sensitive aspect of this region, any development of project in the Partitioned Zone is suffering from additional constraints and time frame uncertainty to the usual challenges of conventional large scale project.

In addition Wafra is classified as heavy crude oil field, rated between 18° and 24° API Gravity, with all related issues to make it technically and commercially viable.

Discovered in 1954, Wafra Joint Operations (WJO) is operated by Kuwait Gulf Oil Company (KGOC), a KOC subsidiary dedicated to the exploration and production in the Partitioned Zone.

Wafra Joint Operations is a 50/50 joint venture between Saudi Aramco and KOC. On the Saudi side, the national oil company (NOC) Saudi Aramco signed an agreement in 1949 with Chevron to operate its working interests in the PZ.

In 2009, Saudi Aramco and Chevron renewed this agreement until 2039.

Page 7: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 7

Chevron to complete Wafra Phase-1 FEED work

Wafra Joint Operations project covers the development of five oil and gas fields:

- ARQ - Humma - South Fuwaris (SF) - South Umm Ghudair (SUG) - Wafra During decades, Kuwait Gulf Oil Company developed Wafra with conventional electrical submersible pumps (ESPs), sucker rod pumps (SRPs) and progressive cavity pumps (PCPs) assisted by water injection for reservoir pressure maintenance.

In 2009, Chevron decided to test the thermal enhanced oil recovery (EOR) techniques with steam injection through the Large-scale Steamflood Pilot (LSP) project.

Since then the results of the steam flooding process enabled Chevron and its partners Saudi Aramco and KOC to envisage the development of Wafra in phases. For the Wafra Phase-1 project, the operator KGOC is planning to invest $5 billion capital expenditure to produce 80,000 barrels per day (b/d).

In addition to the development of the heavy crude oil field, Wafra Phase-1 project is also targeting to gather all the flared gas of the Partitioned Zone. Chevron and its partner Saudi Aramco and KOC expect to complete Wafra Phase-1 front end engineering and design (FEED) by the end of 2014 in order to start the engineering, procurement and construction (EPC) work after final investment decision (FID) in 2015.

Page 8: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 8

Iraq: Russia's Gazprom Neft starts commercial production at

Iraq's Badra oilfield Source: Reuters + NewBase

Russia's Gazprom Neft, the oil arm of state-run Gazprom, has started initial commercial oil production from its Badra oilfield in Iraq, the oil ministry said on Wednesday. Production

from Badra started on Monday at an average of 15,000 barrels per day and is expected to reach 170,000 bpd of crude oil by 2017, the ministry said in a statement. 'Oil flow from Badra has started on Monday to fill the oilfield storages in preparing to feed the export,' said ministry spokesman Asim Jihad.

The oilfield is located in the Wasit Province in eastern Iraq with an estimated 3 billion barrels of oil in reserve.

The Russian company submitted a tender in December 2009 and signed a contract with the government in January 2010 to develop the field.

Gazprom Neft Badra B.V. is developing Badra oilfield, Wassit province, Iraq, under

respective contract with Iraqi Ministry of Oil

The Badra oil field is located in the Wassit Province in Eastern Iraq with an estimated 3 billion barrels of oil in place. The contract to develop the Badra oil field was signed

with the Iraqi Government in January 2010 following submission of a tender in December 2009. This tender

was awarded to an international consortium comprising Gazprom Neft, Kogas (Korea), Petronas (Malaysia) and ТРАО (Turkey). Gazprom Neft's share, as lead operator

on this project, is 30 per cent, Kogas' share is 22 per cent, Petronas' share is 15 per cent and ТРАО's share is

7.5 per cent. The Iraqi Government, represented by the Iraqi Oil Exploration Company (OEC) retains 25 per cent. The Badra development project is expected to

last for 20 years with a five-year extension option. The maximum oil production is expected to total about 170,000 barrels per day. The calculated investment is

expected to amount to $2 billion. Under the agreement, investors will be reimbursed for costs incurred and paid a bonus of $ 5.5 per barrel of oil equivalent produced. First production at the deposit is planned for 2013. By 2017 production is expected to

reach 170,000 barrels per day (about 8.5 million tons per year) and maintain at this level for 7 years. In total 17 operational and five injection wells will be drilled.

Page 9: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 9

Iraq: Oil Search reports encouraging results at the Taza-2 well in Kurdistan Source: Oil Search

Oil Search reports that the Taza-2 well in Kurdistan has reached a total depth of 4,200 metres in a 6-1/8” hole. During the week, having seen encouraging hydrocarbon shows towards the base of the previously drilled section, a further 102 metres was drilled to the final total depth of 4,200 metres. Wireline logs are currently being acquired over the new section of hole and preparations are underway for a comprehensive testing programme, likely to comprise drill stem tests over up to five intervals.

Taza 2 is located 10 kms north-west of Taza 1 and is designed to appraise the hydrocarbon-bearing intervals discovered by Taza 1 (Jeribe/Dhiban and Euphrates/Kirkuk Formations), as well as explore deeper Tertiary and Cretaceous targets including the Shiranish Formation.

The participants in Taza 2 are: Oil Search (Iraq) Limited (1) 60%; Total E&P Kurdistan Region of Iraq (Taza) B.V. 20%; Kurdistan Regional Government (KRG) 20%. (1) Oil Search’s funding interest is 75%, with the KRG’s 20% interest carried by Oil Search and Total E&P Kurdistan Region of Iraq (Taza) B.V.

Page 10: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 10

Botswana: Tlou Energy provides update on Lesedi CBM project -

operations temporarily discontinued Source: Tlou Energy

As previously advised, the Selemo pilot pod had reached Critical (gas) Desorption Pressure (CDP) as a result of the careful dewatering process that had been undertaken. With ongoing pumping

operations following CDP, the gas pressure inside the casing continued to increase on a consistent upward trend. However, more recently the observed gas pressure has plateaued due to a casing integrity issue. Therefore pumping operations will be

temporarily discontinued on the Selemo pod to remediate the issue which is currently preventing the continued build-up of gas pressure.

Tlou acknowledges that the above remediation process will cause delays to the expected flow testing and flaring of gas at the Selemo pod however, Tlou remains very encouraged by the rate of gas pressure build up at the Selemo pod to date. Tlou will continue to provide regular updates to shareholders as the remediation work is undertaken.

Page 11: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 11

EU's planned sanctions against Russia to hit South Stream and Yamal LNG Source: Reuters +NewBase

The European Union's proposed sanctions against Russia, targeting sensitive technology, take aim at Gazprom's huge South Stream gas pipeline project to Europe and Novatek's Arctic Yamal liquefied

natural gas (LNG) facility.

A draft proposal outlines a package of targeted measures in the areas of access to capital markets, defence, dual use goods and sensitive technologies, EU diplomats said on condition of anonymity. It makes clear any measures should not affect current energy supplies and that sanctions should be reversible. But the list, if enforced, would delay major energy projects in the pipeline sector, which Russia dominates, and the fast-growing global liquefied natural gas (LNG) market, in which Russia is so far not a big participant.

The diplomats said the EU was considering restricting Russian access to piping used for building oil and natural gas pipelines, drilling pipes to extract oil and gas, floating or submersible drilling platforms, as well as floating cranes and dredging equipment. That would likely halt or delay development of Gazprom's South Stream pipeline, planned to pump 63 billion cubic metres (bcm) of natural gas a year, equivalent to 15 percent of European demand, via the Black Sea into the EU later this decade, cementing Russia's position as the region's dominant gas supplier.

Gazprom's main partners in South Stream are Italy's Eni, France's EDF, Austria's OMV and Germany's Wintershall, which is a subsidiary of German chemical giant BASF. Already, the European Commission, the EU executive, has suspended negotiations on making South Stream conform with EU legislation. South Stream relies heavily on European know-how to be built, such as through a contract with Italy's Saipem to work on one of four parallel South Stream pipelines due to cross the Black Sea.

The proposed sanctions would also likely hit Novatek's Yamal LNG export project. Novatek's main partners in the project are France's Total , a specialist in deep-sea drilling, and China's CNPC. French oil services company Technip, which won the engineering, procurement and construction contract for Yamal LNG last May warned earlier on Thursday about the risk that sanctions against Russia could interrupt income flows from the Siberian project, sending its shares down more than 8 percent.

EU diplomats were meeting on Thursday to debate tighter sanctions, but were expected to meet again next week before taking any final decision. Energy Commissioner Guenther Oettinger said on Wednesday that the EU should not give Russia technical help to develop Arctic oil and gas fields if Moscow failed to help to defuse the Ukraine crisis.

Novatek, which has seen one of its shareholders hit by U.S. sanctions, is the main developer of the Arctic Yamal peninsula LNG export project, which plans to export 16.5 million tonnes of LNG a year. The project's gas is so far in the Arctic North that it requires the use of specialised technology, often provided by Western partners.

Page 12: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 12

Morocco: Maxim Resources receives Reconnaissance

Concession for Hassi Berkane Block Source: Maxim Resources

Maxim Resources has received the Reconnaissance Concession Authorization in conjunction with the Hassi

Berkane Block in the Kingdom of Morocco. Maxim and the National Office of Hydrocarbons and Mines, ('ONHYM'), made application to the Ministry of Energy, Mines, Water and Environment of Morocco, ('MEMWE'), for a Reconnaissance Concession Authorization in order to conduct the research needed to meet the requirements of the Reconnaissance Contract with ONHYM as previously announced on June 23, 2014.

The Reconnaissance Concession Authorization is required in order to conduct exploration and review works. The work contemplated includes geological, geochemical and geophysical surveys and geotechnical review of already existing data. This work will be completed within approx. 4 months at which point Maxim will assess the results and chose its next steps in conjunction with ONHYM.

The Reconnaissance Concession Authorization provided by MEMWE is granted for a one year period and is exclusive and may be extended for several periods of one year if needed. The results of the exploration and reconnaissance works are released to MEMWE and ONHYM for review. With a successful review of the data Maxim, in conjunction with ONHYM, will have the right to obtain an Exploration Permit from MEMWE for all (or some) of the Hassi Berkane Concession.

Art Brown, CEO and President of Maxim stated; 'Maxim is pleased to now be able to move forward with Stage 1 of our reconnaissance works on Hassi Berkane. While trying to complete this works at the earliest, we are continuing to review further projects and opportunities as well.'

Page 13: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 13

Malaysia: Octanex secures project finance for Ophir

development offshore Malaysia. Source: Octanex + Newbase

ASX-listed Octanex has announced that limited recourse project finance has been secured for the

development of the Ophir field, offshore Malaysia. Octanex is a 50% shareholder in Ophir

Production Sdn Bhd ('OPSB') which was awarded the Ophir Risk Service Contract in June

2014. Octanex’s joint venturers in OPSB are Scomi Energy Services, a Malaysian downstream

oil and gas services company listed on the Main Board of Bursa Malaysia with a 30% interest, and

Vestigo Petroleum, a wholly owned subsidiary of PETRONAS, incorporated in 2013 with a focus

on the development of small, marginal and mature fields, holding a 20% interest.

The Ophir oil field will be developed by OPSB via a simple stand-alone development with first oil

expected in

December

2015. This

involves the

drilling of

three

production

wells from a

single

wellhead

platform

producing into

a leased

tanker for

storage and

offloading of

crude. The

capital cost of

the

development

is estimated

at US$135

million.

OPSB has accepted a Letter of Offer for syndicated term loan facilities of up to US$118.76 million for 75% of the planned capital expenditure for the development of the Ophir field, 75% of the first three quarters of operating expenditure and a bank guarantee facility of USD13.5 million. The finance is to be provided by a syndicate comprised of Malayan Banking Berhad (Maybank), RHB Bank (L) Ltd and United Overseas Bank Limited. The tenure of the term loan facilities is up to four years. Octanex has provided a proportionate corporate guarantee and undertaking in respect of the facilities.

Octanex Chairman, Geoff Albers, comment: 'Securing project financing is an important milestone for the development of the Ophir oil field'.

Page 14: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 14

UK: BG Group considers $1.7 billion North Sea operations sale

Souce Reuters + NewBase

Britain's BG Group is considering selling its largest operations in the North Sea for about 1 billion pounds ($1.70 billion), The Times reported on Thursday. BG Group appointed Rothschild to advise on a restructuring in a move that could result in the sale of its Armada, Everest and Lomond platforms, according to the newspaper, which cited unnamed sources.

One of the market sources told The Times that the FTSE-100 company is in 'disposal mode in the North Sea' as it tries to improve the performance of its portfolio. BG Group announced a portfolio review to beef up its finances last year.

'We do not respond to rumour and speculation. BG Group has been clear that we plan to take a more active approach to managing our assets,' BG Group spokesman told the Times. 'No asset is sacrosanct,' she added. BG Group and Rothschild could not be reached for a comment outside of normal business hours.

Last month, the group sold a majority stake in one of Europe's biggest gas pipelines to Antin Infrastructure Partners for nearly $1 billion.

Page 15: New base special  25 july 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,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 15

Biofuels are included in latest U.S. Navy fuel procurement Source: U.S. Navy, used with permission

Recently the Department of Defense (DoD) released its annual procurement for bulk fuels to be delivered to its

facilities in the eastern and inland United States and Gulf Coast. For the first time, this procurement requests

military-specification diesel fuel and jet fuel that are blended with biofuels. The biofuels components, however, are

optional and will only be accepted if certain cost and performance requirements are met. A similar procurement for

the Rocky Mountain and West Coast regions is expected to be released later this year.

The U.S. Navy's interest in biofuels is part of its goal to generate 50% of its energy from alternative sources by 2020: nuclear energy, electricity from renewable sources, and biofuels. The Navy currently sources about 17% of its energy supplies from renewable and nuclear sources of electricity. No biofuels are currently included in that percentage.

The Navy's interest in biofuels is limited to those fuels that can be used as direct replacements for petroleum-based gasoline and distillate fuels, also known as drop-in biofuels. These fuels require no modification or operational changes to distribution infrastructure, aircraft, or ships. Although biodiesel blends readily with diesel fuel or jet fuel, and is compatible with most diesel engines, it is not a drop-in fuel. Certain properties limit biodiesel blends from being used in some applications: potential fuel system clogging and poor performance at low temperatures prevent its use in jet fuel for civilian or military use, and water separation problems prevent its use as a marine diesel fuel. Drop-in biofuels are available today on a limited commercial basis, and operable U.S. production capacity is about 210 million gallons per year.

Drop-in biofuels tend to be more expensive than petroleum fuels. The 2014 National Defense Authorization Act prohibits DoD from paying prices for alternative fuels that are higher than it would pay for traditional fuels. To address these economic issues, the Navy and the U.S. Department of Agriculture (USDA) announced the Farm-to-Fleet program in December 2013. The program intends to increase the production of drop-in biofuels in the short term to allow producers to improve yields and lower feedstock costs through experience, and to achieve economic competitiveness by 2020.

Firms wishing to offer drop-in biofuels under the current solicitation can apply to the USDA Commodity Credit Corporation for grants to offset the cost of feedstocks used to produce the biofuels. Some drop-in biofuels may also qualify for Renewable Identification Numbers (RINs), which can be used to comply with the Renewable Fuels Standard (RFS) or sold to other parties. The RFS has encouraged the production and import of drop-in diesel that can meet DoD's requirements. It remains to be seen whether the combination of the USDA grants and RIN value is enough to bring drop-in jet fuel to market at a price comparable to traditional jet fuel.

For this year's fuel procurements, there are two acceptable sources of drop-in biofuels: hydroprocessed esters and fatty acids (HEFA), and Fischer-Tropsch (FT) liquids. HEFA biofuels are produced through the reaction of vegetable oil or animal fat with hydrogen to yield hydrocarbons that are nearly identical to those found in petroleum-based diesel fuel or jet fuel. FT liquids are hydrocarbons produced from coal-, natural gas-, or biomass-based synthesis gas and are suitable for blending into diesel fuel and jet fuel.

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redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 17

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 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 OiOiOiOil & Gas sector. Currently working as l & Gas sector. Currently working as l & Gas sector. Currently working as l & 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 base , Most of the experience werethe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience werethe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience werethe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations spent as the Gas Operations spent as the Gas Operations 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 & reof gas pipelines, gas metering & reof gas pipelines, gas metering & reof gas pipelines, gas metering & regulating stations and in the engineering of supply gulating stations and in the engineering of supply gulating stations and in the engineering of supply gulating 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 become a reference for many of the Oil & the local authorities. He has become a reference for many of the Oil & the local authorities. He has become a reference for many of the Oil & the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andGas Conferences held in the UAE andGas Conferences held in the UAE andGas Conferences held in the UAE and Energy program broadcasted Energy program broadcasted Energy program broadcasted Energy program broadcasted

internationally , via GCC leading satellite Channels . internationally , via GCC leading satellite Channels . internationally , via GCC leading satellite Channels . 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 25 July 2014 K. Al Awadi