New base 651 special 21 july 2015

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NewBase 21 July 2015 - Issue No. 651 Senior Editor Eng. Khaled Al Awadi

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

Eni discovers up to 15bcm gas in Egypt; production to

start in 2 mos. Italy’s eni has discovered gas reserves of up to 15 billion cubic meters in Egypt’s Nile Delta region, with production set to start in two months, the Egyptian oil ministry said on Monday. The discovery was made in Western Abu Madi, 120 km northeast of Alexandria, where eni holds 75 percent of exploration rights through an Egyptian subsidiary, with Britain’s BP holding a 25 percent stake.

Preliminary estimates of the discovery account for a potential of 15 Bcm of gas in place with upside, plus associated condensates.




The discovery was made by the Nidoco NW2 Dir NFW well, which reached a total depth of 3,600 m and encountered a 60-m thick gas bearing sandstone interval of Messianian age with excellent petrophysical properties, further of other gas layers in the overlying Pliocene section.

The discovery will be put into production in two months’ time through a tie-in to the existing Abu Madi gas treatment plant. eni made the discovery at a depth of 3,600 meters and initial estimates point towards reserves of up to 15 billion cubic meters of natural gas and natural gas condensate, an Egyptian oil ministry statement quoted the company as saying. The oil ministry signed a $2 billion energy exploration deal with eni in June. Egypt raised the prices it pays eni and Edison for the natural gas they produce in the country in July. The agreements marked an attempt by Egyptian authorities to improve terms for foreign oil and gas businesses in the hope that more competitive pricing will encourage investment in the energy-hungry country. eni has started operating in Egypt since 1954 with the acquisition of shares of the company ieoc, which became fully owned in 1961. eni has operated in eni has reported a gas discovery in the Nooros exploration prospect, in the Abu Madi West license in the Nile Delta, 120 km northeast of Alexandria, Egypt. eni, through its subsidiary Ieoc Production BV, holds a 75% of working interest in the West Abu Madi development lease, with BP as a partner with 25%. Petrobel, equally owned by ieoc (50%) and EGPC (50%), is the operator of the concession. Egypt for more than 60 years through its Egyptian subsidiary ieoc and is one of the main energy producers in the country, with a daily output of around 180 thousand barrels of oil equivalent. — SG/Agencies. http://www.worldoil.com/news/2015/7/20/eni-reports-15-bcm-gas-discovery-in-egypt-s-nile-delta




Ghana: Tullow Oil announces Jubilee field production update Source: Tullow Oil

Tullow Oil has announced that gas export from the Jubilee field to the Ghana Gas plant at Atuabo has been

suspended since 3 July 2015 due to technical issues with gas compression systems on the FPSO Kwame

Nkrumah and is expected to resume by mid-August. Oil production is currently constrained to approx.

65,000 bopd and is under constant review but there is no effect on the field’s reservoir or resources. Tullow

has mobilised a team of experts to rectify the fault within the gas compression system and estimates that it

will take approx. a further 3 weeks

to reinstate gas export and full oil

production.

Tullow will review its 2015

production forecast for Jubilee and

provide an update on progress at its

half yearly results on 29th July.




Azerbaijan: Statoil to sell its 20% in TAP gas pipeline project, according to SOCAR Source: Reuters

Norway's Statoil is to sell its 20-percent stake in the Trans Adriatic Gas Pipeline (TAP) project that will carry gas from Azerbaijan to Europe, the president of Azeri state energy firm SOCAR said.

'Statoil has decided to leave the TAP project completely, and there is a company which is ready to buy its stake,' Rovnag Abdullayev told Azeri ANS TV late on Friday. 'Several companies have expressed an interest in buying Statoil's stake, and it would be better if several companies would buy it,' he added.

Statoil did not comment on the news. 'We generally do not comment on speculations on adjustments to our portfolio,' Statoil's spokesman told Reuters.

The TAP pipeline is a part of project that is designed to transport 16 billion cubic metres (bcm) of gas from Azerbaijan's Shah Deniz II field in the Caspian Sea, one of the world's largest gas fields, by the end of the decade. The 870 km (545 mile) pipeline will connect with the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before reaching southern Italy.

The Trans Adriatic Pipeline (TAP) will transport Caspian natural gas to Europe

Statoil has already sold its shares in Azerbaijan's Shah Deniz gas field as well as the South Caucasus Pipeline (SCP) to SOCAR, BP and Malaysia's Petronas.

Italian gas infrastructure company Snam said last month that it could take a stake of up to 20 percent in the TAP project that is designed to reduce Europe's reliance on Russian gas. CEO Carlo Malacarne said that as gas buyers are signing binding, long-term ship-or-pay contracts for the Azeri gas, the transmission revenue is guaranteed and this opened the way for regulated infrastructure players like Snam to enter the project.

Officials decline to comment on the price, but insiders say a 20 percent TAP stake could be valued at around 400 million euros ($433.72 million).

TAP's shareholders are BP (20 percent), SOCAR (20 percent), Statoil (20 percent), Belgium's Fluxys (19 percent), Spain's Enagas (16 percent) and Swiss company Axpo (5 percent).




China will soon surpass South Korea, Russia, and Japan in nuclear generating capacity. EIA, International Atomic Energy Agency, World Nuclear Association

Nuclear power currently makes up slightly more than 2% of China's total power generation. However, the Chinese government has a stated goal to provide at least 15% of overall energy consumption by 2020 (increasing to 20% by 2030) from non-fossil fuel sources, including nuclear, hydroelectricity and other renewable sources. To help achieve this target, China plans to increase nuclear capacity to 58 gigawatts (GW) and to have 30 GW of capacity under construction by 2020.

China has rapidly expanded its nuclear capacity in the past several years, which likely will increase nuclear generation in the next few years. China's net installed nuclear capacity is 23 GW, after the country added 10 reactors totaling more than 10 GW since the beginning of 2013.

By the end of 2015, China is expected to surpass South Korea and Russia in nuclear generating capacity, placing it behind only the United States, France, and Japan. China is also constructing an additional 23 GW of nuclear capacity that is slated to become operational by 2020. Operation of these units will make China the leading nuclear generator in Asia. Several more facilities are in various stages of planning.

All of China's nuclear plants are located along the east coast and southern parts of the country, near most of the country's power demand. Following Japan's coastal Fukushima nuclear disaster in 2011, China has increasingly considered construction of inland reactors.

China plans to take an ownership role throughout the entire nuclear supply chain. China intends to build strategic and commercial uranium stockpiles through overseas purchases and continue to develop domestic production in Inner Mongolia (north Central China) and Xinjiang (northwest China). China is developing nuclear fuel reprocessing facilities, which are expected to come online by 2017, according to the World Nuclear Association.

China currently imports all of its reactor technology, but the country is in the process of designing its own large pressurized water reactors, the CAP1400, through a technology transfer with U.S.-based Westinghouse. Also, as part of its nuclear expansion program, China signed agreements with several countries (Romania, Argentina, Turkey, and South Africa) in 2014 to finance the construction of nuclear reactors and export its own nuclear technology.




Japan demands China halt oil exploration in part of East China Sea REUTERS

Japan called on China on Tuesday to halt construction of oil-and-gas exploration platforms in the East China Sea close to waters claimed by both nations, concerned that Chinese drills could tap reservoirs that extend into Japanese territory.

Japan's Defense Ministry added the demand to its annual defense review after hawkish members of the ruling party complained that its original draft was too soft on China, a ministry official said.

China resumed exploration in the East China Sea two years ago, the report said. In 2012, Japan's government had angered Beijing and purchased a disputed island chain there. Before then, Beijing had curtailed activities under an agreement with Japan to jointly develop undersea resources in disputed areas.

"We have confirmed that China has started construction of new ocean (exploration) platforms and we repeat our opposition to unilateral development by China and call for a halt," the ministry said.

The platforms are being erected on the Chinese side of a median line delineating the exclusive economic zones of the two countries, the Japanese ministry official said.

Tokyo worries that the platforms will tap into gas fields that overlap the median line and could also be used as radar stations or bases for drones or other aircraft to monitor air and sea activity near the disputed chain of islets, known as the Senkaku in Japan and Diaoyu in China.

China's defense and foreign ministries did not immediately respond to requests for comment on the Japanese report. The report didn't disclose details of the location or number of offshore platforms being erected by China.




The 500-page report, approved by Prime Minister Shinzo Abe's government, also commented on the disputed South China Sea where Japan and other countries have criticized Chinese land reclamation projects as a threat to regional security.

For the first time, the report included satellite images of Chinese man-made islands in the South China Sea. "China has rapidly moved ahead with land reclamation on seven reefs in the Spratly Islands and on some is building infrastructure including runways and harbors. Beginning with the U.S., this is a concern for the international community," it said.

China claims most of the 3.5 million sq km (1.35 million sq mile) South China Sea, with the Philippines, Vietnam, Malaysia, Brunei and Taiwan also staking claims. Japan has no claims in the area but fears Chinese military bases there would bolster Beijing's influence over a region through which $5 trillion in trade passes every year, much of it to and from Japan.

China has said its construction work in the South China Sea would be used for defense as well as to provide civilian services that would benefit other countries.

Japan and the Philippines have conducted two joint naval exercises in and around the South China Sea. In June, Abe and Philippine President Benigno Aquino said they would begin talks that could give Japan access to Philippine bases.

Japan has also said it may begin air patrols in the South China Sea. China said it would see that as interference.




US: Halliburton funds drilling in old shale wells & Refracking Source: Reuters via Yahoo! Finance

Halliburton said it had tapped BlackRock Inc for $500 million to help fund drilling in existing shale wells, the first such move by a major oilfield services provider at a time when oil producers are shying away from drilling new wells. The world's No.2 oilfield services provider, which is buying No.3 Baker Hughes to cope with a fall in demand, also reported a better-than-expected profit, helped by cost cuts.

Market leader Schlumberger and Baker Hughes have touted refracking, the practice of fracking existing wells, as means for oil producers to save money. Drilling normally accounts for about 40 percent of the cost of a new well. 'Though a relatively small market today, we see significant runway for refrac in the future,' Halliburton President Jeffrey Miller said on a post-earnings call on Monday.

Oil and gas companies have said refracking is still too unpredictable, but some such as Devon Energy and Chesapeake Energy are using the technology to revive output from existing wells. The funding could help Halliburton speed up adoption of refracking, Edward Jones analyst Rob Desai said. 'I think people are wondering why Halliburton themselves weren't providing some of that financing.'

Halliburton's shares rose 2.7 percent to $41.05 and Baker Hughes' rose 2.4 percent to $59.70, while the broader U.S. oil and gas index was down 1 percent. Halliburton also said it was 'fully committed' to buying Baker Hughes, days after the U.S. Department of Justice extended its review of the deal. The company has put up three drilling businesses for sale to alleviate regulatory concerns and said on Monday it was 'pleased with the prices and level of interest' it had received.

Desai said Halliburton tapped the capital market to help it conserve capital given the Baker Hughes deal and the effect of the oil price slump on its own business. Halliburton's revenue from North America slumped 38.5 percent in the second quarter ended June 30. Revenue from outside the region fell 12 percent. The company said it expects an 'uptick' in activity, including refracking, later this year and a 'meaningful recovery' only in 2016.

Halliburton's net profit slumped 93 percent to $53 million in the quarter. Total revenue fell 26.5 percent to $5.92 billion. According to Thomson Reuters I/B/E/S, the company earned 38 cents per share, higher than analysts' average estimate of 29 cents. Analysts were expecting revenue of $5.78 billion.




Oil Price Drop Special Coverage

Oil prices slip on stronger dollar, ample supply Reuters + NeweBase

Oil prices edged lower on Tuesday, dragged down by a firm dollar and ample supply of both crude and refined products. Expectations of more Iranian supply following a nuclear deal and concerns that economic worries in China and Europe will weigh on demand have put pressure on oil prices this month.

Brent September crude LCOc1 was 14 cents lower at $56.51 a barrel by 0326 GMT, after settling 45 cents lower on Monday. The contract has shed about $7 so far this month. U.S. August crude CLc1, set to expire on Tuesday, fell 19 cents to 49.96 a barrel. The front-month contract fell below $50 a barrel on Monday for the first time since April and is down some $9 a barrel for the month.

The consulting firm expects first incremental oil from Iran to come to market in the second quarter of next year, with production rising from around 3 million barrels per day (bpd) now to full capacity of 3.5 million bpd by the end of next year.

Prices have come under further pressure this week from a strengthening dollar, which is trading close to three-month highs .DXY on expectations of higher U.S. interest rates. A firm dollar makes crude more expensive for investors using other currencies, while higher interest rates is seen as drying up liquidity, possibly weighing on appetite for commodities.

U.S. commercial crude oil stocks likely fell about 2.1 million barrels in the week ended July 17, according to a preliminary Reuters survey. The Reuters poll was taken ahead of weekly inventory reports from the American Petroleum Institute (API) due at 2030 GMT and the U.S. Energy Information Administration (EIA) due Wednesday.

In China, diesel sales fell in June on slower economic growth and a rebound in oil prices, two state refining sources said, threatening to add to a global fuel glut as the country exports what it cannot absorb. Saudi Arabia's domestic crude oil inventories jumped to a record in May, although the rise likely reflected the operational demands of a major new refinery rather than another sign of a global supply glut.




Iran Seeks to Regain Share of Oil Market Regardless of Price by Golnar MotevalliHashem Kalantari - Bloomberg

Iran will emphasize regaining oil sales it lost due to sanctions over helping to prop up prices once curbs that choked off the nation’s crude exports are lifted.

The Persian Gulf producer plans to restore output to the level it achieved before the economic curbs crippled production and exports, Oil Minister Bijan Namdar Zanganeh said Monday in Tehran. Iran wants to pump almost 4 million barrels a day within seven months once sanctions are removed and 4.7 million as soon as possible after that, he said.

Such an increase may cause oil prices to fall, Zanganeh told reporters after meeting with Germany’s Vice Chancellor Sigmar Gabriel. “But that doesn’t mean we won’t enter our oil into the market.”

Iran had the second-biggest output in OPEC before the European Union banned purchases of its crude in July 2012. The country is now fourth-largest in the Organization of Petroleum Exporting Countries, with output in June averaging 2.85 million barrels a day compared with 3.6 million at the end of 2011, according to estimates compiled by Bloomberg.

Under the nuclear agreement Iran and six world powers reached in Vienna last week, the U.S. agreed to end efforts to limit Iran’s oil sales. The EU said it would end the bloc’s embargo on imports once Iran complies with obligations to scale back its nuclear program.

Adjustments Needed Brent crude, the global benchmark, fell about 50 percent last year amid surplus supply as the U.S., Russia and Saudi Arabia all boosted production. Oil lost 3 cents to $56.62 a barrel on the London-based ICE Futures Europe exchange at 12:51 p.m. Singapore time on Tuesday.

Countries that sold more oil and took market share from sanctions-bound Iran will have to adjust as the country restores its output and exports to historical levels, Zanganeh said, without identifying such nations. Production slid to 2.66 million a day by the end of 2012 after sanctions were tightened in July of that year, data compiled by Bloomberg show.

“Those who are responsible for protecting prices are those who have filled our share before and used it,” Zanganeh said. “Our only responsibility here is attaining our lost share of the market, not protecting prices.”

Iranian oil exports declined to 1.4 million barrels a day on average last year due to sanctions, the U.S. Energy Information Administration said June 24 on its website. Sales averaged about 2.6 million barrels daily in 2011, before the U.S. and European Union imposed restrictions, the EIA said. Iran looks forward to doing more business with German oil and petrochemical companies, Zanganeh said. Issues preventing banks and insurers from involvement with Iran must be resolved before deals between the two countries can go ahead, he said.




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Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010

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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.

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New base 651 special 21 july 2015