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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 28 April 2014 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE The five steps to ruining a national oil company By: - Robin Mills – Energy Consultant + The National.ae There are five easy steps to ruining a national oil company. Should you be president of a petroleum-rich country, within a few years you can convert even the most capable guardian of the country’s hydrocarbon wealth into a bloated, inefficient and dangerous monopoly. The first stage is to make sure you subjugate the company firmly to political goals, not commercial ones. It may be effective to put an ally in charge, preferably one without an oil industry background, who can sack experienced technocrats from opposition parties. Of course, countries such as Norway may preach separation of powers – a ministry to set strategy and policy, a regulator to ensure the rules are followed, and a national oil company to operate fields. But things are different in Scandinavia. The second stage is to require the company to supply the domestic market with below-price fuel. Instead of spending money on health or education, why not encourage Muscovites to heat their homes in winter with the windows open? In Venezuela, you pay more to top up your tyres than the 6 bolivars (about Dh3.5) it costs to fill your tank. Maybe Venezuela should introduce subsidised air. You may end up having to import fuel at world market prices and sell it domestically at a loss. But if this helps to keep inflation down and a political party in power, the price seems worth paying. Brazil’s Petrobras has lost US$14 billion since the start of 2012 from government price controls, at the same time as it is trying to raise $237bn of investments in its new oilfields by 2017. Thirdly, if you are lucky enough to have large but geologically challenging oil and gas reserves, you should require the national oil company to control their development, regardless of its technical or financial capacity. Petrobras is one of the world leaders in deepwater oil production. So when you find some 50 billion barrels of oil in the deep offshore “pre-salt”, why not require it to lead every field development? Never mind that that burden would overstretch any oil company in the world. If you find the national oil company still needs partners, better to avoid technically capable corporations from your adversaries. So, like Venezuela, you can secure applause from “anti- imperialist” circles around the world by inviting Belarus, Vietnam and Iran to help you develop your extra-heavy crude resources in the Orinoco belt. Probably no one will notice that your hundreds of signed memoranda of understanding have led to very little in the way of tangible projects. You can also try to scare off potential investors by nationalising them, as Argentina did with Repsol’s YPF unit, then find another company willing to work with you on the country’s giant shale oil prospects.

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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 28 April 2014 Khaled Al Awadi

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

The five steps to ruining a national oil company By: - Robin Mills – Energy Consultant + The National.ae

There are five easy steps to ruining a national oil company. Should you be president of a petroleum-rich country, within a few years you can convert even the most capable guardian of the country’s hydrocarbon wealth into a bloated, inefficient and dangerous monopoly.

The first stage is to make sure you subjugate the company firmly to political goals, not commercial ones. It may be effective to put an ally in charge, preferably one without an oil industry background, who can sack experienced technocrats from opposition parties.

Of course, countries such as Norway may preach separation of powers – a ministry to set strategy and policy, a regulator to ensure the rules are followed, and a national oil company to operate fields. But things are different in Scandinavia.

The second stage is to require the company to supply the domestic market with below-price fuel. Instead of spending money on health or education, why not encourage Muscovites to heat their homes in winter with the windows open? In Venezuela, you pay more to top up your tyres than the 6 bolivars (about Dh3.5) it costs to fill your tank. Maybe Venezuela should introduce subsidised air.

You may end up having to import fuel at world market prices and sell it domestically at a loss. But if this helps to keep inflation down and a political party in power, the price seems worth paying. Brazil’s Petrobras has lost US$14 billion since the start of 2012 from government price controls, at the same time as it is trying to raise $237bn of investments in its new oilfields by 2017.

Thirdly, if you are lucky enough to have large but geologically challenging oil and gas reserves, you should require the national oil company to control their development, regardless of its technical or financial capacity.

Petrobras is one of the world leaders in deepwater oil production. So when you find some 50 billion barrels of oil in the deep offshore “pre-salt”, why not require it to lead every field development? Never mind that that burden would overstretch any oil company in the world.

If you find the national oil company still needs partners, better to avoid technically capable corporations from your adversaries. So, like Venezuela, you can secure applause from “anti-imperialist” circles around the world by inviting Belarus, Vietnam and Iran to help you develop your extra-heavy crude resources in the Orinoco belt. Probably no one will notice that your hundreds of signed memoranda of understanding have led to very little in the way of tangible projects.

You can also try to scare off potential investors by nationalising them, as Argentina did with Repsol’s YPF unit, then find another company willing to work with you on the country’s giant shale oil prospects.

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

Fourthly, you can require that the national oil company enter a range of social investments and “economic diversification” projects quite outside its core competence: supplying food and running schools. Like Mexico’s Pemex, you can allow the company to become a state-within-a-state, beholden to labour unions and grossly overstaffed.

Murky governance will allow your political allies to skim off billions in corruption, as alleged at China National Petroleum Corporation. But hope that oil prices will remain high so that falling production does not undermine the government budget.

Fifthly, you can forget basic safety and environmental protection. If 41 people die in an explosion at your largest refinery, such as at Venezuela’s Amuay in 2012, you can blame it on sabotage rather than incompetence and ignoring warning signs.

Of course, you could do none of these things. You might end up with a successful, internationally competitive national oil company such as Norway’s Statoil, Malaysia’s Petronas or Saudi Arabia’s Aramco. But that might require you to give up short-term political advantage for long-term benefits.

Robin Mills is the head of consulting at Manaar Energy, and author of The Myth of the Oil Crisis .

A SESSION BY ROBIN MILLS ON ‘MIDDLE EAST

ENERGY OUTLOOK’.

On the 6th of May 2013, the Global MBA Students at S P Jain, Dubai organized an interactive session with Mr. Robin

Mills, one of the most respected experts on Middle East Energy Strategy and Economics. Mr. Robin Mills heads the

consulting wing at Manaar Energy and comes with a first-class degree in Geology from the University of Cambridge.

He also holds the distinction of authoring the books, The Myth of Oil Crisis and Capturing Carbon and is a renowned

columnist on energy and environmental issues at The National, and regularly comments on energy issues in media

such as the Financial Times, Foreign Policy, Atlantic, CNN, BBC, Bloomberg and Sky News.

During the session, Mr. Mils highlighted the role and importance of the Middle East and Northern Africa (MENA)

region in the oil and gas industry as the leading exporter of oil and gas to the rest of the world with the 48.1% of

the world’s proven oil reserves. Through his extensive research, he further underlined that as the world moves

towards 2030, the oil demand by the developed nations would fall, due to the development of more efficient

products and machines and increased sustainability efforts of these nations. Nevertheless, the global demand of oil

would still increase, due to the offsetting of this fall by the huge increase in demand of oil and gas by India and

China. Saudi Arabia and Iraq, as per Mr Mills, would be key players to look out for to meet this rise in demand.

Regarding latest developments, Mr. Mills said that shale oil and gas extraction process, that involves pumping oil

and gas from impermeable rock beds, is the technology that would revolutionize the oil and gas industry. The

knowledge of this technology opened up new horizons to the understanding of the oil and gas industry for the GMBA

students, as this technique was unknown to many. If shale oil and gas extraction becomes a success, it would

eventually decrease the dependence of the world, particularly of the U.S, on Middle Eastern oil and gas providers.

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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Since the U.S. is the biggest oil and gas trade partner of the Middle Eastern nations, the reduction of its

dependence on their oil and gas would have a significant impact on their economies. Mr. Mills also revealed that

shale gas is so abundantly available in the U.S. that it could become a potential exporting partner of gas to China.

During the session, Mr. Mills presented the students with facts about the oil and gas industry and the energy

industry of the U.A.E. The major share of oil reserves of the U.A.E. lies with Abu Dhabi. U.A.E. currently produces

2.8 million barrels of oil per day, which is planned to be increased to 3.5 million barrels per day by 2017 in order to

cater to the increasing demands of developing Asian economies. Also, the per capita energy consumption of the

U.A.E. is 11 tons of oil per person per year, one of the highest in the world, a majority of

which is used in maintaining hospitable temperatures in buildings and facilities.

To conclude, Mr. Mills mentioned the challenges the energy industry in U.A.E. and the

Middle East in general, faces with respect to pricing, transportation and the discovery of

shale gas.

Overall, the session brought a fresh perspective pertaining to the potential changes that one

might experience in the oil and gas sector and their possible impacts on U.A.E. and MENA.

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

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Qatargas wins Shell’s ‘Goal Zero’ safety award QatarTimes Qatargas was recently awarded the Shell “Goal Zero” award in recognition for working “10mn man hours without serious leaks or incidents.”

“Our incident and injury-free culture is woven into everything we do. Our Qatargas Management System (QGMS) ensures our operations and safety of the work environment of our employees and contractors. We accept no compromises in this area,” said Qatargas chief executive officer Sheikh Khalid bin Khalifa al-Thani.

Sheikh Khalid, who received the award from Qatar Shell Companies managing director and chairman Wael Sawan, added that “The dedication and expertise of our people combined with the support of our shareholder partners has made this achievement possible.”

Qatargas chief safety, environment and quality officer Randy Lee Stadler said, “At Qatargas, safety is a core business value that governs everything we do from planning and facility

construction, to shutdowns and maintenance activities, as well as our daily operation protocols.”

He added: “By instilling the importance of working safely in our employees and contractors from the first day that they start working, we strive to create a working environment in which safe behaviours are consistently reinforced and rewarded. We thank Shell for recognising our efforts and achievements.” Sawan said Shell’s “Goal Zero” award recognises Qatargas’ outstanding safety performance.

“I would like to congratulate all Qatargas management and staff as well as its partners and contractors on this very significant milestone. We look forward to our continued partnership with Qatargas that maintains safety as a deeply held value,” Sawan said.

Qatargas has implemented a tailor-made safety programme called “Incident and Injury Free” across all its operations. This programme focuses on taking all necessary precautions to prevent accidents and injuries “and to help ensure that everyone goes home safely every day.”

Last year, Qatargas launched the “10 Life Saving Rules,” which is related to mandatory safety requirements for every person in Qatargas. Earlier, the company achieved 12 consecutive years without a lost time incident (LTI) across its offshore operations. Also this year, the Qatargas Jetty Boil-off Gas Recovery Project (JBOG) achieved 20mn man-hours without an LTI.

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Essar investors, fighting buyout, appeal to India, UK Reuters

Minority investors in Essar Energy have appealed to the Indian and British governments to intervene to head off a forced takeover by its majority owner at a price they say undervalues the company.

Essar Energy is listed in London but remains 78 per cent-owned by Essar Group, an Indian conglomerate controlled by the Ruia family, which has offered 70 pence per share for the 22 per cent of Essar Energy it does not own. Other Essar Energy shareholders and independent directors say the figure is too low – but because the majority owner controls more than 75 per cent of the shares it is in a position to push through the delisting regardless.

Robert Hingley, director of investment affairs at the Association of British Insurers, wrote to India’s High Commissioner in London and British business minister Vince Cable about the matter on April 23. Copies of Hingley’s letters were released to the media yesterday. Hingley said the forced delisting of Essar Energy would cause “real damage to the integrity of the UK market and to the reputation of Indian companies more generally.”

The minority shareholders have also hired US law firm Skadden Arps to advise them. Essar Energy and its majority owner have so far declined to comment on the moves taken by investors unhappy with the delisting plan. Essar Energy owns power and oil assets in India and operates Britain’s second-biggest oil refinery, Stanlow, in northwest England.

Since it listed in London nearly four years ago, the company has faced a string of problems, including slow growth in its Indian operations, delays in getting coal licences, a tough tax regime in

Oil and Gas : Vadinar refinery in India, the Stanlow refinery in the United Kingdom and a 50% interest in the Kenya Petroleum Refinery Limited. , network of c.1,400 operational retail fuel outlets, 15 blocks and fields of exploration and production of oil and gas in India, Indonesia, Madagascar, Nigeria and Vietnam. Total reserves = 2,034 mmboe.

Power : Seven operational power plants in India and one in Algoma, Canada, with a total installed capacity of 3,910 MW. Essar

Energy also has access to approximately 500 mt of coal resources across seven coal blocks in India and overseas.

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

Xcite Bentley to inspire Statoil Bressay project in UK North Sea By:- 2b1stconsulting

The Norwegian State-owned company Statoil and its partner, the Royal Dutch Shell (Shell), are considering all options in order to reduce costs for the development of the heavy crude oil offshore project, Bressay, in the UK North Sea.

In November 2013, while Statoil and Shell were expected to make the final investment decision, they in fact stepped back from that phase in the light of the first experiences acquired by the junior company Xcite Energy Resources Limited (Xcite or XER) from the similar field Bentley only eight kilometers away from Bressay.

Located 160 kilometers from the Shetland Islands, these heavy crude oil fields are concentrated together with Statoil Mariner and Enquest Kraken in the middle of the North Sea along the boarder with the Norwegian territorial waters.

In Bressay, Statoil and Shell are sharing the working interests in such a way:

- Statoil 81.625% is the operator

- Shell 18.375%

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Discovered in 1976 for Bressay and in 1977 for Bentley, these fields were left undeveloped because of the challenging conditions of these 10 to 12 degree API heavy crude oil fields and associated sour gas.

Among these heavy crude oil projects of this area of the North Sea, Bressay is recognized as one of the most challenging for which Statoil and Shell mobilized all the lost advanced technologies.

As a result, when Statoil and Shell decided to stop Bressay development on its first concept, the project was estimated to cost between $6 and $7 billion capital expenditure.

Statoil and Shell to phase up Bressay development

With Mariner and Bressay, Statoil would have originated the largest projects in the UK North Sea.But the first solutions tested by Xcite on the neighboring Bentley fields motivated Statoil and Shell to rethink their concept for Bressay.

With 257 millions barrels of recoverable crude oil (2P), Bentley is very similar to Bressay estimated to hold between 200 and 300 million barrels of recoverable reserves of crude oil.

Because of the nature of heavy crude oil in these fields, the production process developed by the companies is rather complex in order to optimize the recovery rate of these fields.

Typically these projects will require:

- Chemicals and diluents injection - Risers and flowlines heating - Oil and gas separation - Water treatment

- Demulsifier

The accumulation of all these processes have a direct impact on the weight of the topsides and the definition of the

structure to support them.

In Bressay, Statoil was considering a single large platform, similar to Mariner, while in Bentley Xcite is combining a Sevan-type floating storage and offloading (FSO) vessel together with an Arup steel frame platform for production.

These differences in the concept are mostly related to the different methods of extracting the crude oil at the down hole.

In addition, the designed selected by Xcite provides all the flexibility to develop the field in phases, whereas the FSO remains all along the full development while the production unit can be adapted or even replaced at any time to the production goals and constraints.

With this new concept and costs revised downward, Statoil and Shell are expecting to sanction the Bressay phase-1 project in UK North Sea by 2016.

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

Egdon Resources ups its UK shale gas estimates ten-fold (Reuters) –

Explorer Egdon Resources said an independent report had estimated that its UK shale gas licences hold around 18 trillion cubic feet of gas, enough to supply Britain for more than 6 years and 10 times more than its previous estimate. Egdon shares were up 13.7 percent at 0716 GMT.

Britain is counting on the extraction of huge shale gas reserves to help make up for a decline in North Sea gas production, and the government has promised tax and local community incentives to help kick off a shale gas programme.

The company, which sold parts of its shale gas licences to French oil major Total earlier this year, also said it was continuing to look for acquisition and consolidation opportunities in the sector.

"Given the high level of interest and recent transactions, we expect our UK shale-gas assets to be an increasing near-term value driver for the business," Egdon Resources Chairman Philip Stephens said in a statement.

British utility Centrica and French peer GDF Suez have also entered the UK shale gas scene over the past year, paving the way for further interest by major oil and gas companies.

Egdon Resources, listed on Britain's Alternative Investment Market (AIM), warned however that it had not assessed the risks of extracting the gas, which meant there was no certainty extraction would be commercially viable.

Typically only 10-15 percent of resources in place are able to be extracted. The company also said it planned to participate in Britain's next onshore licensing round, which is expected later this year.

Egdon Resources also on Friday reported a 830,000 pound profit for the six months ended Jan. 31, recovering from a 230,000 pound loss over the same period a year ago. The explorer slightly undershot its full-year production target of 200 barrels of oil equivalent per day.

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Netherlands to become net gas importer in 10 years – IEA

Europe’s second largest gas producer, the Netherlands, could shift from exporter to importer within a decade, says the International Energy Agency (IEA). The study suggests seeking alternative energy sources in nuclear, unconventional fuels or renewables.

Declining production at the large Groningen gas field will turn the Netherlands into a net importer of natural gas, the IEA report says. The IEA sees opportunities for developing indigenous resources, is will is re-assessing is energy security and looking at different cost-effective paths.

Since 2005 the Netherland’s consumption of renewable energy has increased from 2.3 percent to 4.5 percent in 2013 and is expected to reach 14 percent by 2020 and 16

percent by 2023, the IEA says.

“Promoting lower-carbon energy use, especially in industry and transport, makes economic sense and can improve both sustainability and competitiveness,” said Maria Van der Hoeven, IEA Executive Director. She says the Netherlands can benefit from cooperating with is neighbors in competitive

electricity markets, particularly for combining reserves to meet demand peaks at the regional level. “Integrating the electricity systems across borders with new interconnections ensures resource efficiency. Europe’s energy markets need to be efficient and make renewable energy an integral part,” Van der Hoeven said.

Meanwhile the Netherlands remains one of the most fossil-fuel-intensive economies among IEA members. The share of fossil fuels in the Netherlands energy mix is above 90 percent.

The IEA says the country needs to develop a longer term energy policy up to 2030, which would involve huge investment into, and the promotion of, green projects like energy efficient buildings.

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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China wants more Latin American oil - president to visit in July Source: Reuters

China might be slowing economically but it still wants to buy more oil from Latin America and

invest in infrastructure in the region, with a presidential visit planned for July, Chinese and

Brazilians officials said on

Friday.As host of the 2014 soccer

World Cup, Brazil is hoping

Chinese President Xi Jinping, who

is known to be a fan of the sport,

will attend the final game on July

13 in Rio de Janeiro's legendary

Maracaná stadium. Brazilian

President Dilma Rousseff recently

said Brazil's partners in the BRICS

group of leading emerging nations

asked for the summit that she will

host be rescheduled for two days

after the World Cup so their

leaders could attend.

Chinese Foreign Minister Wang Yi, on a one-day visit to Brasilia on a Latin American swing, did

not confirm Xi would accept Brazil's invitation to attend the World Cup final. Wang reinforced

China's interest in setting up a fund to increase investment in infrastructure that is lacking in Latin

America, where China gets much of its raw materials, such as iron ore, oil and soy beans. 'There

is great potential for further oil cooperation with Latin America. We will like to set up long-term

partnerships, especially with Venezuela and Brazil,' Wang said at a news conference.

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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Brazil's Foreign Minister Luiz Alberto Figueiredo said the BRICS nations expect to announce the capitalization of a BRICS development bank at the leaders' summit to be held in the northern Brazilian city of Fortaleza in mid-July.

BRICS nations are moving to create their own bank and fund to challenge the influence of other groups under the control of developed nations, such as the International Monetary Fund. Both China and Brazil want to see the U.S. Congress approve reforms that other nations agreed to in 2010 that would increase the IMF's lending capability and increase the influence of China and Brazil and other growing economies at the IMF.

About Brazilian Oil&Gas :

• Brazil is the 8th largest total energy consumer and 10th largest producer in the world.

• Brazil was the largest producer of liquid fuels in South America in 2012.

• More than 90% of Brazil's oil production is offshore in very deep water and consists of mostly heavy

grades.

• The United States imported 187,000 bbl/d of Brazilian crude oil in 2012 and has been Brazil's largest

crude oil export destination for the past decade.

• In an effort to address the country's dependence on oil imports and surplus of sugar cane, the

government implemented policies to encourage ethanol production and consumption beginning in

the 1970s.

• The world's largest oil discoveries in recent years have come from Brazil's offshore, pre-salt basins.

• In contrast to the earlier concession-based framework, Petrobras will be the sole operator of each

production sharing agreement and will hold a minimum 30% stake in all pre-salt projects.

• Natural gas constitutes only a small portion of Brazil's total energy consumption.

• Along with the potential to significantly increase oil production in the country, the pre-salt areas are

estimated to contain sizable natural gas reserves as well.

• Brazil imported 470 Bcf of dry natural gas in 2012, a 27% increase from 2011. Bolivia accounted for

over 75% of Brazilian gas imports.

• Brazil has the third-largest electricity sector in the Americas, behind the United States and Canada.

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African Petroleum applies for listing on Oslo Stock Exchange Source: African Petroleum

African Petroleum Corp, the West Africa focused oil and gas exploration company, applied for listing on 25

April 2014 on Oslo Axess, a regulated market being part of the Oslo Stock Exchange. The announcement

follows the statement made on 24 February 2014, regarding the Company’s intention to seek a potential

listing on a European stock exchange.

A potential listing in Oslo is one of several strategic options available to the Company and will be

contingent on a number of factors, including suitably favorable market conditions. The Company will

provide further updates on the listing process in due course. The application for listing is pending the

approval from the Board of directors at the Oslo Stock Exchange. The Company is subject to disclosure

obligations as well as the insider regime applicable to an Oslo Axess listed company from the date of

submitting the application for listing. Stock exchange notices will be made public on Oslo Stock Exchange's

www.newsweb.no under the ticker code 'APCL'.

Commenting on today’s announcement, Charles Matthews, African Petroleum’s Chairman, said:

'This is a new era for African Petroleum Corporation and a listing in Oslo would be a significant statement

of the Company’s growth ambitions. The Oslo Stock Exchange has a strong heritage in oil & gas and,

subject to the Company proceeding, we believe that it would be an excellent home base for African

Petroleum Corporation as we look to continue our high impact exploration programme targeting over 5

billion barrels of oil in our licences offshore West Africa.'

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Stuart Lake Chief Executive Officer and Executive Director continued:

'We are coming to Norway and Oslo with a clear ambition to be exposed to a sophisticated market that

offers both the appropriate trading liquidity and understands high impact exploration stories such as ours.

We have a strong commitment to earn the trust of this very knowledgeable investor community as we move

the Company forward with a changed leadership and governance, an updated strategy and a clear plan for

being judged on delivery through our actions. African Petroleum Corporation has already attracted a wide

range of reputable international investors through our listing at the National Stock Exchange in Australia.

The Company now seeks to continue its expansion by trading on the Oslo Axess. Oslo Stock Exchange is

one of the world’s leading oil and gas focused financial markets. With this listing we are taking the next big

step in our transformation to become a leading E&P company on the West Coast of Africa.'

Company Background

African Petroleum Corp is a dynamic, independent oil and gas exploration company operating eight licences in four

countries offshore West Africa. The Company’s assets are located in fast-emerging hydrocarbon basins, principally

the West African Transform Margin, where several discoveries have been made in recent years, including African

Petroleum’s Narina-1 discovery in February 2012, which successfully proved a working hydrocarbon system in the

Liberian basin. With a combined net acreage position of 28,295km2 through its licences in Côte d’Ivoire, Liberia,

Senegal and Sierra Leone, the Company has matured its portfolio rapidly, acquiring more than 15,000km2 of 3D

seismic data and successfully drilling three wells, one of which was the first hydrocarbons discovery offshore

Liberian deep-water basin.

African Petroleum Corporation has estimated net unrisked mean prospective oil resources in excess of 5.2 billion

barrels* in highly attractive acreage. Recently, majors such as Chevron, Exxon and Shell have entered the West

African Transform Margin showing testament to the exploration potential in the area.

On 3 February 2014 the Company announced the appointment of Dr. Stuart Lake as Chief Executive Officer. Dr. Lake

is a highly experienced industry executive and proven explorer with over 27 years of experience at Hess, Apache and

Shell. Following the appointment of new Chairman, Charles Matthews and Finance Director, Stephen West in

October 2013, the Company has a revitalised Board and senior management team in place to deliver on the

Company’s assets going forward.

African Petroleum Corporation has recently completed a

successful A$20M share placement which, along with

the support of existing shareholders, gives Africa

Petroleum Corporation financial flexibility to continue its

initiatives to further develop its portfolio and attract

farm-in partners for its licences.

Mr. Frank Timis, the founder and major shareholder in

the Company has as previously announced retired from

the board and his position as Non-Executive Chairman

on 10 October 2013. His tireless work and investment

was integral to building the Company to a position

where it is today. Due to historical events related to

other listed companies where he has been involved, Mr.

Timis will not be employed by the Company nor hold Board positions nor play any governance role going forward.

An updated Corporate Presentation can be downloaded from the Company’s website at:

http://www.africanpetroleum.com.au/investors/investment-proposition/corporate-presentation

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Growth in Angola’s oil industry picks up pace Source: BusinessDay Online

With the recent launch of the ultra-deep offshore Kaombo project, the upcoming start-up of CLOV project by June, three exploration wells planned in the Kwanza basin this year and the planned bid round to award 10 new oil blocks in May, Angola’s oil and gas industry is set for a significant growth.

Angola, Africa’s biggest oil producer after Nigeria, is making spirited efforts to ramp up exploration and production in the country as it seeks to increase production to 2 million barrels per day (bpd) next year and then maintain that level for five years.

The development of CLOV, which started in 2010, resulting in the installation of a fourth floating production, storage and offloading (FPSO), with a production capacity of 160,000 barrels of oil equivalent per day, is scheduled to start up in mid-2014.

The $10 billion CLOV project, which stands for the fields Cravo, Lirio, Orquidea, and Violetal, is estimated to hold 505 million barrels of crude.

Last week, Total and its joint venture partners made the final investment decision to develop the ultra-deep offshore Kaombo project in Angola. With a production capacity of 230,000 bpd, Kaombo will develop estimated reserves of 650 million barrels. Following an intensive optimization exercise, the project’s capital expenditure to reach full capacity was reduced by 4 billion dollars to 16 billion dollars, with an expected start-up in 2017.

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Located approximately 260 km The largest risk faced by Nigeria will come in the form of delayed offshore projects and investments as a result of the uncertainty surrounding the adoption and content of the PIB.

offshore Luanda in water depths ranging from 1,400 to 1,900 meters, the Kaombo project will develop six of the 12 discoveries already made on Block 32.

Angola, which extracts nearly all its crude from offshore fields, is seeking to develop its onshore potential, with a tender process for onshore oil exploration at 10 new blocks in the Congo Basin and Kwanza Basin starting on May 30. According to its state oil firm Sonangol, the 10 blocks may hold, on average, reserves of 700,000 barrels of oil each.

Isn’t Angola stealing the show?

Coming at a time when international oil companies are cutting their capital expenditure and deep water costs are rising globally, analysts say that Total’s decision to continue with its Angola project shows how investors view Angola’s longer-term offshore prospects.

Angola produced 1.73 million barrels of oil per day on average last year, with major international firms such as France’s Total, Britain’s BP and Chevron of the United States among the leading operators. Last year, Chevron Corporation’s $10 billion Angola LNG plant came on line with the first cargo shipped in June. In Nigeria, Chevron-operated Escravos Gas to Liquids (EGTL) project scheduled to start up last year has yet to come on stream as at the time of filing this report. The project, which has been severally delayed, is a 33,000-bpd gas-to-liquids plant designed to process 325 million cubic feet per day of natural gas from the Escravos Gas Plant expansion.

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French oil major Total had last year announced that first oil from its Egina deepwater oil field in Nigeria was expected in 2017, but the company and the FPSO contractor have been dragged to court over local content issues.

The company awarded a $3.1-billion FPSO vessel contract for the Egina deepwater oil field to South Korea’s Samsung Heavy Industries (SHI), with Lagos Deep Offshore Logistics (LADOL) as local content partner. The award however generated controversies between Samsung and a sister Korean firm, Hyundai Heavy Industries (HHI), regarding the local content value of the contract. The case is still in court, raising concerns that the project may be stalled or be delivered far behind schedule if the litigation lingers.

For Total, Angola remains a priority country, with a commitment to develop the Angolan oil indus-try. It is already the top operator in Angola, with equity production of 186,000bpd, mainly due to its Girassol, Dalia and Pazflor deepwater fields in the huge Block 17. The blocks it operates produce a total of 600,000 bpd, over a third of the country’s output.

“Angola could potentially regain the top oil producer spot by the end of 2014 with oil production expected to start from Total’s CLOV field project. The field is expected to achieve a peak production level of 200,000 bpd and could increase Angola’s oil production to 2 million bpd,” said Ecobank Research in its April 9, 2014 Energy, Oil and Gas update.

In 2009, Angola displaced Nigeria as the top African crude oil producer after years of militancy significantly reduced capacity. But the Southern Africa country’s grip on the title was short-lived as Nigeria regained it in 2010 as production hit 2.4million bpd.

What does this mean for Nigeria?

Nigeria’s hydrocarbon sector has continued to struggle amid a worsening political and business environment, echoed Business Monitor International (BMI), in its 2014-second quarter Nigeria Oil and Gas Report.

The African top oil producer currently produces between 1.9million and 2million bpd of crude oil, with rising security problems related to oil theft, pipeline sabotage and piracy in the Gulf of Guinea affecting production and curtailing oil exploration projects. Last year, the country did not come near its production target of 2.53 million bpd. Reserves base has declined from 37 billion barrels to 35 billion barrels.

The long-delayed Petroleum Industry Bill (PIB), which is expected to overhaul the industry and expand investment, is still stuck in the legislative pipeline. According to BMI, the largest risk faced by Nigeria will come in the form of delayed offshore projects and investments as a result of the

uncertainty surrounding the adoption and content of the PIB.

Should the current situation in the Nigerian oil industry endure, project investments and cancellations could see Nigerian production stagnate in the longer term, the agency said, adding that “A substantial increase in production is unlikely until the PIB is passed.”

“Adoption of the Petroleum Industry Bill (PIB), which we do not expect before the Nigerian 2015 election, would be a strong signal for investors that Nigeria’s hydrocar-

bons sector, is ready to move forward. Without the adoption of the PIB, further offshore project delays could occur, resulting in a stagnation of Nigerian production,” said BMI.

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Khaled Al Awadi is a UAE National withKhaled Al Awadi is a UAE National withKhaled Al Awadi is a UAE National withKhaled Al Awadi is a UAE National with a total of 24 yearsa total of 24 yearsa total of 24 yearsa total of 24 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 UAEthe GCC area via Hawk Energy Service as a UAEthe GCC area via Hawk Energy Service as a UAEthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations operations base , Most of the experience were spent as the Gas Operations operations base , Most of the experience were spent as the Gas Operations 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 & cogreat experiences in the designing & cogreat experiences in the designing & cogreat experiences in the designing & constructingnstructingnstructingnstructing 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. Hthe local authorities. Hthe local authorities. Hthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE ande has become a reference for many of the Oil & Gas Conferences held in the UAE ande has become a reference for many of the Oil & Gas Conferences held in the UAE ande has become a 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 . . . .

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