New base 557 special 10 march 2015

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NewBase 10 March 2015 - Issue No. 557 Khaled Al Awadi

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

Ras AlKhaimah:RAK Petroleum strikes oil off Ivory Coast http://www.rakpetroleum.ae/News/News-from-RAK-Petroleum/RAK-Petroleum-Reports-Cote-d-Ivoire-Discovery

RAK Petroleum plc, the Oslo-listed oil and gas investment company, announced today that the Marlin North-1 well drilled by Foxtrot International LDC offshore Côte d'Ivoire flowed gas and oil from the Turonian and Lower Senonian intervals, neither of which had previously tested hydrocarbons on Block CI-27.

A 22-meter perforated section of the gas bearing column in the Turonian flowed at a stabilized rate of 25 million cubic feet per day of gas and 150 barrels per day of condensates through a 46/64 inch choke. In the Lower Senonian, an 11-meter perforated section of the oil bearing column flowed at a stabilized rate of 1,525 barrels per day of 27° API oil and 0.6 million cubic feet per day of associated gas through a 28/64 inch choke.

The well, drilled in 65 meters of water, reached a vertical depth of 2,790 meters. A declaration of hydrocarbons discovery has been submitted to the Ministry of Petroleum and Energy and an evaluation and appraisal program will follow.

Through Mondoil Enterprises LLC, RAK Petroleum has a one-third ownership of Foxtrot International which in turn operates Block CI-27 with a 27.5 percent stake. Other partners on the block are the state oil company, Petroci, and SECI.

Elsewhere on the block, development of the previously discovered Marlin oil and gas field and the nearby Manta gas field is on track as part of a four-year, USD 1 billion expansion program involving installation of a second production platform on the block and drilling of development wells commencing in July. The first platform on the block has been in operation since 1999 and processes gas and liquids from the Foxtrot and Mahi fields.




During 2014, gas production from Block CI-27 averaged 142.6 million cubic feet per day or some 70 percent of the country's total. Gas is sold into the domestic market for power generation and other industrial and commercial uses under fixed price terms that last year averaged $5.87 per million btu. Average daily production and prices have increased marginally in 2015.

About RAK Petroleum plc

RAK Petroleum plc is an Oslo Stock Exchange listed oil and gas investment company established under the laws of England and Wales as a public limited company. Its principal holdings are 42.8 percent of DNO ASA and 33.33 percent of Foxtrot International LDC held through Mondoil Enterprises LLC. DNO ASA is a Norwegian oil and gas operator active in six countries in the Middle East and North Africa. Shares in the company have traded on the Oslo Stock Exchange since 1981. DNO ASA is headquartered in Oslo with more than 1,000 employees and contractors worldwide. Foxtrot International LDC is a

privately-held company active in West Africa whose principal asset is a 27.5 percent interest in and operatorship of Block CI-27 offshore Cote d'Ivoire. Block CI-27 contains the two largest producing gas fields in the country, meeting over 70 percent of Cote d'Ivoire's needs.

• RWe hold indirect interest in 22 blocks in various stages of exploration, development and

production across eight countries.

• Resource base of more than 245 million barrels of oil and gas on an oil equivalent basis net

to RAK Petroleum plc through our stake in the two investment entities

• Strong reserves growth with a compound annual growth rate of 59 percent since 2008

• History of placing winning bets on undervalued exploration and production assets and

operating companies

• The Oslo Børs listing came in the wake of RAK Petroleum PCL's fifth consecutive year of

profitability

• Our DNO ASA stake was acquired for an average price of NOK 8 per share with first

purchases at just over NOK 4 per share

• Our Foxtrot International LDC stake was acquired for $15 million

• RAK Petroleum plc’s Executive Chairman, Bijan Mossavar-Rahmani, co-founded Foxtrot

International LDC and has been its Chairman since inception and also serves as Executive

Chairman of DNO ASA

• "We're not just hands on, we're hands in"




Day two of the Solar Impulse – Oman to India http://www.solarimpulse.com./leg-2-from-Muscat-to-Ahmedabad Solar Impulse took off on the second flight from Muscat (Muscat International Airport, MCT/OOMS) in the Sultanate of Oman, to Ahmedabad (Sardar Vallabhbhai Patel International Airport, AMD/VAAH) in the Republic of India. Bertrand Piccard will fly the zero-fuel airplane across 1465km (791NM) for an estimated time of 16 hours. The historic port of Muscat is the ideal location to set Si2 up for its first sea crossing onwards to Ahmedabad.




Egypt: Aminex's South Malak-2 well declared a discovery Source: Aminex Aminex has noted the Ministry of Petroleum of Egypt announcement that the South Malak-2 well ('SM2') on the West Esh el Mellaha-2 concession in Egypt ('WEEM2') has been declared a discovery well. Tests showed production flow rates of approx. 430 barrels per day of 40 API crude. Based on the success of SM2 a full field development programme will be presented by the Operator to the Egyptian Authorities and the joint venture partners prior to commercial development.

The Company’s effective 10% interest in WEEM-2 is held via a shareholding in a limited company known as Aminex Petroleum Egypt Ltd. (‘APEL’), in which Aminex has a 12.5% interest. APEL holds an 80% interest in the WEEM-2 concession. Once the full development plan has been presented and in view of its carried interest which will generate income only after the funding partners have recovered their cumulative investment, Aminex will assess the economic benefit of this discovery to the Company and act accordingly. The Company continues to receive information only when the operator provides it to the Company.

Aminex is free-carried through to commercial production with a beneficial interest of

10%, through a shareholding in Aminex Petroleum Egypt Ltd

• The West Esh el Mellaha-2 PSA (‘WEEM-2’) covers 996 km2 in the onshore Gulf of Suez

region

• WEEM-2 block is adjacent to Lukoil's WEEM-1 producing oil field

• Main prospects are covered by 3D seismic




Egypt sets price for shale gas at $5.45/mmbtu – official Source: Reuters + NewBase

Egypt has set the price of shale gas expected to be extracted from a recent concession to foreign firms at $5.45 per million British thermal units (mmBtu), an official at the oil ministry said on Monday.

Egypt signed its first contract to extract gas by hydraulic fracturing, or fracking, in a deal with Apache and Shell Egypt in December that includes investments of $30-$40 million, the oil ministry said at the time. 'The shale gas agreement signed with Shell Egypt and Apache Corp provides for a price of $5.45 per mmBtu of gas extracted,' the official, who declined to be identified, told Reuters.

Under the contract, three horizontal wells as deep as 14,000 feet in Western Sahara fields will be drilled. 'The shale gas agreement is at an experimental stage for a year while we make sure the search for shale gas is feasible,' the source said. Egypt aims to boost domestic production and foreign imports of oil and gas to help address persistent energy shortages.




Vietnam: KrisEnergy becomes operator of Vietnam Block 105 Source: KrisEnergy

KrisEnergy has announced that it is increasing its working interest inBlock 105-110/04 ('Block 105') and taking over operatorship of the production sharing contract following the execution of a deed of assignment on 9 March 2015 between Eni Vietnam and KrisEnergy (Song Hong 105).

Pursuant to the Deed, which is effective 31 December 2014, Eni Vietnam’s 66.67% working interest in and operatorship of Block 105 will transfer to KrisEnergy 105, subject to the approval of the Ministry of Industry and Trade of Vietnam ('MoIT'). Prior to the Deed, KrisEnergy 105 held 33.33% working interest in Block 105. In January 2015, MoIT granted a 12-month extension to the Phase 1 Exploration Period, to 2 February 2016. Chris Gibson-Robinson, KrisEnergy’s Director Exploration & Production, commented: 'Following a 12-month extension of the exploration period at the beginning of 2015, we are still keen to investigate the prospectivity of several play types in Block 105 particularly the faulted Tertiary plays on the western margin of the contract area. We are also in discussions with other parties who have expressed an interest in joining us in Block 105.' Block 105 covers 7,192 sq. km in the Gulf of Tonkin, overlying the central Song Hong Basin where water depths range from 20 metres to 80 metres. A single exploration well,Cua Lo-1, was drilled in the contract area in 2013, which confirmed the existence of a petroleum system within the block.




Nigeria: Oando Energy commences production at the Qua Iboe field Source: Oando Energy Resources

Oando Energy Resources, a company focused on oil and gas exploration and production in Nigeria, has announced the completion of all civil and pipeline works associated with the Qua Iboe field, and associated crude delivery and sales infrastructure, with commercial production at 2,150 boepd gross.

Oando Energy Resources holds a 40% working interest in the field. In its capacity as technical services provider, OER, together with the operator and 60% owner, Network Exploration and Production Nigeria Limited (NEPN), brought the field from conceptualization, through development, to first oil delivery. The commercial oil production from the field's reservoirs has now commenced at an initial rate of 2,150boepd gross to the partners. The crude processing facility was commissioned in the fourth quarter of 2014 but commercial production was delayed until the completion of the associated cluster crude delivery and sales infrastructure into the Qua Iboe Terminal.

'We will now be focusing our attention on maturing the potential of this field through seismic acquisition and interpretation, and a possible multi-well drilling program. We hope the Qua Iboe field will follow in the footsteps of our successful Ebendo field, where production has increased from 900bopd (gross) at inception to over 7,500bopd (gross) through the identification and drilling of new reservoirs in the field.'

The Company identified the asset in 2012 and an agreement was reached with NEPN for OER to technically lead and fund certain aspects of NEPN's costs until first oil. Consequently, post recovery of all loan repayments, OER is entitled to 90% of NEPN's sales proceeds from its 60% share of crude oil production until NEPN's obligation is paid in full, with OER earning an additional 10% fee on the funded amount.

Qua Iboe is located at the mouth of the Qua Iboe River in the eastern Niger Delta, in OML 13, and covers an area of 14 km² (3,459 acres). The field is immediately adjacent to the ExxonMobil Qua Iboe Terminal.




U.S. Shale Oil Growth Slows as Price Crash Idles Drill Rigs Bloomberg

The biggest slowdown in oil drilling on record is showing signs of reining in the U.S. shale boom.

U.S. shale oil output is expected to post the slowest growth in more than four years in April, the Energy Information Administration said today. That follows a 41 percent plunge since December in the number of drilling rigs seeking oil.

A slowdown in U.S. output would come at the same time that refineries are expected to return from seasonal maintenance and bring relief to an oil market that has seen prices decline more than 50 percent since June. Companies had 444.4 million barrels of oil in storage in the U.S. as of Feb. 27, the most in weekly records dating back to 1982.

“You have refineries coming back out of maintenance, and production getting cut

back,” said Carl Larry, head of oil and gas for Frost & Sullivan LP in Houston. “Everything could come together where, all of a sudden, everyone thought there was plenty of supply and there’s not.”

Oil production from six major U.S. shale plays will be 5.6 million barrels a day in April, an increase of 298 over March, according to the EIA’s estimate. It’s the smallest projected increase since February 2011.

West Texas Intermediate crude for April delivery added 23 cents to $50.23 a barrel in electronic trading on the New York Mercantile Exchange at 12 p.m. Singapore time.

Permian Rising

Output from the Eagle Ford in Texas, the second-largest oil field in the U.S., is expected to drop by 10,000 barrels a day. Production in the Bakken region in North Dakota is expected to decline by 8,000. It’s the first month both regions are forecast to have shrinking production since January 2009.

Production in the Permian Basin in West Texas and New Mexico, the largest U.S. oil field, will rise by 21,000 barrels a day to 1.98 million. Refineries processed 15.1 million barrels of crude a day the week of Feb. 27. Last year, crude demand rose from 15 million barrels a day in the middle of March to 16.6 million in July. Refineries typically shut units for planned maintenance in the late winter and early spring to be able to run at full capacity during the summer driving season.

The EIA’s oil-production estimates are based on the number of drilling rigs in different plays and calculations of how productive each piece of equipment is. The number of rigs drilling for oil fell to 922 on Friday, according to oilfield service company Baker Hughes Inc. Oil rigs in the U.S. peaked in October at 1,609.




Oil Price Drop Special Coverage

Traders cash out on tanker-stored oil as prices rise Reuters + NewBase

Traders who have been storing oil since the start of the year are selling some supplies back into the market, completing a trade-play that made oil storage profitable, and re-injecting fuel into an already oversupplied market.

The selling signals a winding down of a strategy that has seen at least 50 million barrels of oil stored in tankers, equivalent to about one month's consumption in Britain, although traders said it was not clear how much oil has been sold.

A steep fall in the price of crude from last June to January enabled traders to potentially make money by storing oil for delivery at a later date, as the market moved into an unusually large contango, with prices in future months well above the spot price.

Profitting on storage

Traders such as Trafigura, Vitol and Gunvor, as well as energy majors like BP and Shell stored oil on land and in tankers to capitalise on the price movement. Under the strategy, a trader buys oil and sells it forward, locking in a profit as long as the price difference is higher than the cost of storage. As oil prices have recovered the contango has narrowed, making it less profitable to store oil, and prompting some selling.




"They've already locked in the contango and financing is not expensive," said a trader with a western bank in Singapore. "If they unwind now, they can make 30 cents on paper, plus the premium on the crude," he said, referring to firmer Asian demand that has boosted some selling prices.

Brent crude has stabilised around $60 a barrel, up from six-year lows of $45 in mid-January, cutting the contango between the first and second month to about 46 cents from more than $1.30.

For Dubai crude, which is traded over the counter, the difference between the first two months has also narrowed to 70 cents from about $1 in early January. Stored oil being re-injected into the market could add to increased supply from seasonal factors, putting prices under pressure as oversupply builds.

"A supply overhang of about 1.5 million barrels/day should build as seasonal demand eases," ANZ bank said this week, adding that "a lack of production cuts will send prices lower."

Floating stocks sold

While onshore storage tanks, such as in South Korea and in the United Arab Emirates, are still filling with surplus oil from the Middle East, Europe and Russia, grades like Abu Dhabi's Murban and Iraqi Basra Light, stored on more expensive

supertankers, have been sold, traders said.

Glencore's head of oil, Alex Beard, said this week that the current pricing structure allowed for land-based storage but made more costly tanker storage unattractive. Asian traders are also profiting from price hikes for Middle East Gulf grades, which will add a profit of $1.20 a barrel for a cargo of Basra Light loaded in January and sold in April.

After deducting storage and financing costs of about 70 cents a barrel, traders could bag an estimated profit of $3 million for a 2-million-barrel shipment over four months, from an outlay of around $90 million.

Traders who bought Murban crude in December and sold in February could make 85 cents a barrel just on the rise in its monthly official selling price and spot premiums. However, some traders may opt to hold the oil longer if they have chartered ships for a year. Similarly, there is little pressure to sell oil from the less expensive onshore tanks which often have longer storage times.




Oil, Gas Industry May Cancel $1trn Projects On Price Fall –Aramco Reuters + NewBase

The steep fall in energy prices will hit investment in oil and gas projects worldwide and the industry may cancel about $1 trillion of planned projects globally in the next couple of years, a senior Saudi Aramco executive said on Monday.

“Challenges during down cycles are more complicated today than before…At this moment the global industry is poised to potentially cancel about $1 trillion in capital funding,” Amin Nasser, senior vice president for upstream operations at the Saudi oil giant, told a

conference in Bahrain.

Speaking to reporters later, Nasser said the $1 trillion figure included projects that might merely be delayed, not just those that could be cancelled outright.

“What we’ve heard from the industry is that there is $1 trillion of planned projects that will be dropped or deferred over the next couple of years because of what’s happening,” he said, without elaborating on the source

of that estimate.

Since last June, the Brent oil price has collapsed from $115 a barrel to around $60 because of a supply glut fuelled by a sharp rise in U.S. shale oil production, as well as weaker global demand.

The decline has left some smaller oil producing countries reeling and forced a number of oil companies to slash investment budgets.

Aramco itself has put on hold its deepwater oil and gas exploration and drilling activities in the Red Sea and suspended plans to build a $2 billion clean fuels plant at its largest oil refinery in Ras Tanura, industry sources told Reuters.

The company’s chief executive Khalid al-Falih said in January that Aramco would renegotiate some contracts and postpone some projects because of cheap oil.




Goldman Says $40 Oil Call May Be Too Low as Demand Surprises Bloomberg + NewBase

Goldman Sachs Group Inc. said it didn’t expect oil demand to recover so quickly and its forecast

for crude at $40 a barrel may be too low.

While the bank projects that oil will still reverse its recent advance, the failure of global inventories to increase amid weather-related disruptions and stronger-than-expected demand means there’s a risk prices will miss its target for the next two quarters, according to a report dated March 8. Morgan Stanley also said the oil market was “surprisingly healthy.”

Global benchmark crude prices rose in February for the first time in eight months, rebounding from an almost 50 percent loss in 2014 as U.S. production surged to a 30-year high. Sandstorms disrupted Iraqi exports while cold weather in the U.S. and a drought in Brazil bolstered consumption, according to Goldman Sachs.

“The lack of a meaningful build in the past few months leaves risk to our forecast for oil prices remaining at $40 a barrel for two quarters skewed to the upside,” Goldman analysts including Damien Courvalin in New York wrote in the report. “Weather has played a great part in keeping crude off the market.”

Price Rebound

West Texas Intermediate crude, the U.S. benchmark, rose as high as $54 a barrel last month on speculation a recovery in demand was helping shrink a global glut amid a slowdown in U.S. drilling. The April contract settled at $50 a barrel on the New York Mercantile Exchange. Brent crude closed at $58.53 in London after touching $63 a barrel in February.

Goldman forecast in a Jan. 11 note that WTI would drop as low as $40.50 a barrel in the second quarter before rebounding to $65 in 2016. The bank projected that Brent will slide as low as $42 and average $70 next year.

Weather, violence or sanction-related supply disruptions in Iraq, Libya and Iran removed 885,000 barrels a day from the global market in January and February relative to December, according to the bank. Winter consumption also led to stronger-than-expected demand from the Middle East to the U.S., it said, predicting global consumption growth of 1.35 million barrels a day in 2015.

Weather Changes

These bullish conditions may not last as Libyan disruptions peak while a return to normal weather in Iraq may spur a recovery in exports, according to Goldman. At the same time, Russia, Brazil, Saudi Arabia and the U.S. may continue to boost output. The end of winter may lead to a deceleration in demand growth, it said.

“While we reiterate our out-of-consensus view that demand growth will be strong in 2015, on the back of better economic growth and low oil prices, we did not expect demand to be so strong this soon,” the analysts said. As leading economic indicators signal activity may weaken “our expectation going forward is therefore for the global crude inventory build to resume,” according to the report.




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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

Mobile : +97150-4822502 [email protected] [email protected]

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 10 March 2015 K. Al Awadi







Economy & Finance

New base 557 special 10 march 2015