New base 563 special 18 march 2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
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NewBase 18 March 2015 - Issue No. 563 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Saudi Arabia & GCC Needs More Oil to Feed Local
Refinery Expansion
Bloomberg + NewBase
Saudi Arabia’s plans to expand local refineries while maintaining its share of the global crude
market point to one thing: higher production.
The world’s largest oil exporter will probably increase output this year to feed new refineries,
deepening a global supply glut, according to analysts at Societe Generale SA and DNB ASA. The
kingdom may go as high as 10 million barrels a day by April, according to Torbjoern Kjus, an
analyst at DNB in Oslo. That would be the most in more than two years, according to data
compiled by Bloomberg.
“Saudi Arabia will do the same thing as other OPEC members have always been doing: They’ll
produce as much as they can,” Kjus said by phone March 11. Fellow OPEC members, the United
Arab Emirates and Kuwait, will probably do the same because “they don’t want to be holding back
on any potential exports.”
Crude’s rebound from the lowest in almost six years has faltered amid speculation that a global
supply surplus may worsen. U.S. production and stockpiles continue to rise from the highest level
in three decades, even after last year’s price slump of almost 50 percent. The Organization of
Petroleum Exporting Countries has pumped more than its daily production target of 30 million
barrels for nine months.
A February rally in the price of oil has been followed by two weeks of declines. West Texas
Intermediate, the U.S. benchmark, traded at $43.68 a barrel in electronic trading on the New York
Mercantile Exchange at 12:42 p.m. Singapore time. The contract fell to $42.85 Monday, the lowest
since March 2009.
SATORP, in its promising future, is one of the most
complex refineries in the world, with a processing
capacity of 400,000 barrels per day of Arabian Heavy

New Refineries
Saudi Arabia, Kuwait, the U.A.E., Qatar, Bahrain and Oman will raise their combined refining
capacity to 5.4 million barrels a day this year, an
increase of 17 percent from 2014, according to Vienna-
based JBC Energy GmbH. They will be able to process
6 million a day by 2020, the consultant estimates.
Saudi Arabia plans to start the main unit for making
gasoline at the new 400,000 barrel-a day refinery at
Yanbu on the Red Sea by the middle of the year.
Another plant with the same capacity is scheduled to
begin operation in 2017 at Jazan. The kingdom’s oil-product exports rose 44 percent last year
following the start of the Jubail refinery, according to the Riyadh-based Joint Organisations Data
Initiative.
In the U.A.E., the Abu Dhabi National Oil Co. is more than doubling the capacity of the 400,000
barrel-a-day Ruwais refinery. The International Petroleum Investment Company, a fund that
focuses on energy, is also considering opening a 200,000 barrel-a-day refinery in the emirate of
Fujairah.
Kuwait is planning the 4 billion-dinar ($13 billion) Al-Zour refinery that could open in 2020 with a
capacity of 615,000 barrels a day. Oman will award a contract next year to build a 230,000 barrel-
a-day plant to start production by the end of 2019.
Increase Exports
“Clearly the game plan is to increase product exports, to try to capture the extra margin,” Mike
Wittner, head of oil research at Societe Generale, said of Saudi Arabia’s plans by e-mail March
11. “If they want to increase crude exports, they would need to increase crude production even
further. Either way, those would be bearish headlines.”
Since 2010, Saudi Arabia, Kuwait and the U.A.E have increased their combined crude-oil output
by about 3 million barrels a day, according to OPEC data. The group estimates that it pumped

30.022 million barrels a day last month, 1.9 million more than the forecast for global demand for its
crude in the second quarter.
The effect on the global crude market of any additional production from these countries would be
limited if the oil is processed locally before being exported, according to BNP Paribas SA. It would
have a more pronounced impact on the prices of refined fuels and profits of European and Asian
refiners, the bank said.
Product Markets
“You’ll have an upward drift in production in countries like Saudi Arabia,” Harry Tchilinguirian,
BNP’s head of commodity-markets strategy, said by phone from London March 11. “But it doesn’t
necessarily mean more crude will be delivered to the international market.”
Saudi Arabia increased crude production to 9.85 million barrels a day last month, the highest
since September 2013, according to data compiled by Bloomberg. The country does not want to
cede its share of the market and will continue to supply enough to meet its customers’ demands,
Oil Minister Ali al-Naimi said in a speech in Berlin on March 4.
“There’s a genuine possibility of the Saudis keeping production high,” Miswin Mahesh, an analyst
at Barclays Plc in London, said by phone March 11. “They will definitely have a rethink in terms of
how much they’re keeping below the ground.”

UAE: Emirates National Oil Company Moves to Acquire Dragon Oil
http://www.naturalgasasia.com/emirates-national-oil-company-moves-to-acquire-dragon-oil-15073
Dragon Oil on Tuesday said it has received an approach from Emirates National Oil Company
(ENOC) to buy its shares that ENOC did not already own. “Following the recent movement in its
share price, Dragon Oil confirms that it has received an approach from Emirates National Oil
Company (ENOC) regarding a possible offer for the entire issued and to be issued ordinary share
capital of
Dragon Oil that
it does not
already own.
There can be
no certainty
that any firm
offer for the
Company will
be made nor as
to the terms on
which any firm
offer might be made,” Dragon Oil said in a statement. ENOC is Dubai based Dragon Oil’s largest
shareholder and owns 53.95 percent in the company.
Dragon Oil is leading independent international oil and gas company with its principal asset being
the Cheleken Contract Area, in the eastern section of the Caspian Sea, offshore Turkmenistan. It
also has exploration assets in Tunisia, Iraq, Afghanistan, Egypt, Algeria and the Philippines.

UAE: The future is nuclear, says Hans Blix
The national + NewBase
New generations of nuclear power plants will not lead to disastrous accidents like the one in
Fukushima, Japan, the chairman of the UAE’s nuclear programme advisory board has said.
Dr Hans Blix, former head of the International Atomic Energy Agency, said on Tuesday that
smaller accidents might happen but that faith in the sustainable energy source was slowly being
restored around the world.
“The Fukushima plants were 40 years
old,” he said during the lecture
organised by the Khalifa University on
the importance of nuclear power to
states and the world, at the Emirates
Centre for Strategic Studies and
Research.
“They were not the new generation and
there were errors in the past, including a
lack of sufficient strength in the attitude
of the regulator vis-a-vis the operator,
and there were also weaknesses in the
technical side in the placement of these
generators.”
He said there were still concerns about nuclear power.
“Nuclear can offer huge amounts of power without emitting any carbon dioxide,” he said. “It’s the
only fuel that can offer energy in terawatt volumes without emitting [carbon dioxide]. Nuclear
power is a sustainable source of energy, it’s not a renewable source of energy, and we need
sustainable energy.”
The most common concern revolves around nuclear safety.
“There have been three major accidents in the world and they all involved core melts,” said Dr
Blix. “We cannot guarantee there won’t be more. The risk is never zero but it is very low, and I
think we can exclude the big accidents, not the smaller ones.”
He said many 40-year-old reactors, in France for instance, would soon be replaced. “In the third
generation of nuclear power plants coming on stream, we can be sure that even in serious
accidents, there will not be any spills of radiation in the environment,” he said.
“The fourth generation of plants, which is now on the drawing board and in the phase of design,
can also [rule out] the risk of any core melts. The most severe modern energy-related accidents
were connected with hydro-dams bursting.”
He said that although no generation of energy was without some dangers to the environment and
the population, hazardous radioactive contamination had been a particular negative consequence
of accidents such as Chernobyl and Fukushima. “And this is bad,” he said. “Yet we should note

that with the third and fourth generation of nuclear power plants, there should be no risk of
contamination from accidents.”
Dr Blix said consensus could not be reached on the use of nuclear power. “And this must not
stand in the way of the use of expanded nuclear power in countries where they accept it,” he said.
“For those countries, it is crucial to use this energy.”
In the Middle East, the support was strong, he said.
“The UAE, Saudi Arabia and Iran are determined to rely on it to generate much of the electricity
they need and perhaps to desalinate water,” he said. “The four nuclear power plants in the UAE
add 5.6 gigawatt of electricity to the country’s present fossil fuel base capacity of 19 gigawatt. So
far, work has been on schedule and on budget, and it’s an achievement.”
He called the UAE programme a well-prepared and ambitious project.
“It will result in a large energy capacity serving the UAE society and industry,” he said. “Women
also form a significant part of the workforce. The project has been set as the gold standard and
that has been well earned.”
The UAE aims to have four nuclear plants operational by 2020 to provide energy that is expected
to meet up to a quarter of electricity needs and save up to 12 million tonnes of greenhouse gas
emissions a year.

Renewable energy globally to account for 8% of total consumption by 2035
Saudi Gaszette + NewBase
Renewable energy will account for 8% of total energy consumption in 2035, compared to just 3%
today, said Mark Finley, BP General Manager, Global Energy Markets and US Economics,
revealing the importance of the renewable energy-focused research taking place at the Masdar
Institute of Science and Technology.
Finley was speaking at the Masdar Institute
campus in Abu Dhabi as part of the Distinguished
Lecture series hosted by the independent,
research-driven graduate-level university focused
on advanced energy and sustainable technologies.
Finley said " Outlook's projection of rising CO2
emissions will require additional significant steps
by policy makers beyond the steps already
assumed, and the Outlook provides comparative
information for possible options and their relative impacts on emissions. However, as no one
option is likely to be sufficient on its own, multiple options will need to be pursued. This underlines
the importance of policymaking taking steps that lead to a meaningful global price for carbon
which would provide incentives for everyone to play their role in meeting the world's increasing
energy needs in a sustainable manner."
The BP Energy Outlook 2035 highlights the relevance and importance of research-based
institutions such as Masdar Institute that operate in the sustainability arena. The forecast serves
as a strong motivating factor for the students and faculty to consistently pursue with their efforts in
bringing sustainable solutions to help tackle energy and climate-related challenges.
In his talk the BP official also highlighted the BP 'Energy Outlook 2035' finding that among non-
fossil fuels, renewables are expectedly to rapidly gain shares in the coming years, from around
3% today to 8% by 2035, overtaking nuclear in the early 2020s and hydro in the early 2030s. The
BP Outlook assesses the implications for global energy demand and supply of expected changes
in global economic growth, population growth, technological change, and policy support for
renewable energies, energy efficiency, and other sources of energy supply.
Finley said that the growth of renewable fuels in areas outside the Organization for Economic
Cooperation and Development (non-OECD) region will be roughly the same in volume as in the
OECD. But there will also be significant increases in non-OECD nuclear and hydropower.
Renewables will eventually account for 16% of the growth in power generation in the non-OECD areas.
He noted that among the exporting regions, the report states that the Middle East will remain the
largest net energy exporter, but its share will fall from 46% in 2013 to 36% in 2035. Russia will
remain the world's largest energy exporting country, while Asia's import dependency will rise from
23% in 2013 to 27%. Oil will account for 60% of that rise, with imports accounting for over 80% of
Asian oil consumption by 2035. Asia's oil imports in 2035 will be almost as large as OPEC's
current entire oil production, the report said.
Citing the BP Energy Outlook 2035, Finley pointed out that nuclear energy at the rate of 1.8% per
annum and hydro-electric power at 1.7% per annum will grow faster than the total energy sector.

However, among fossil fuels, natural gas will grow the fastest at 1.9% per annum with oil at 0.8%,
marginally ahead of coal, also 0.8%.
According to the report, over 70% of carbon emissions will be produced from non-OECD
countries, although per capita emissions in the non-OECD will still be less than half the OECD
level. Total carbon emissions however will increase by 25%, the report added.
It also predicted that by 2035, all the fossil fuel shares will be clustered around 26-28% with no
single dominant fuel - for the first time since the Industrial Revolution. Fossil fuels in aggregate will
lose share but will remain the dominant form of energy in 2035 with a share of 81%, down from
86% in 2013.
On the emissions front, the report says the profile for emissions will be well above that
recommended by the scientific community. Total carbon emissions from energy consumption are
expected to increase by 25% between 2013 and 2035 at the rate of 1% per annum, with the rate
of growth declining from 2.5% over the past decade to 0.7% in the final decade of the Outlook,
says the report.
The report also predicted that the US, Russia and Saudi Arabia will supply over a third of global
liquids fuel (crude oil) output by the year 2035, while the Organization of the Petroleum Exporting
Countries' (OPEC) share of the global liquids market by 2035 will be around 40% - the same as
over the past 20 years.
The lecture, which was attended by faculty, students, staff and other guests, covered global
market share of fuels, outlook for US tight oil and shale gas supply, the significance of US energy
renaissance for global markets, the likely changes for China and the implications for CO2
emissions. Earlier, Finley was received by Masdar Institute officials, who took him around the
campus on a tour of the research projects and the sustainable architectural elements.

Platts: April spot LNG prices to Asia keep dropping
Platts + NewBase
Prices of spot liquefied natural gas for April delivery to northeast Asia continued their
downward slide, falling 59.8% year over year to average $7.279 per million British thermal
units, according to the latest Platts Japan/Korea Marker data for month-ahead delivery.
The figure reflects the daily JKM assessed between February 16 and March 13 expressed as a
monthly average.
The year-over-year drop was largely attributed to weaker-than-expected demand from buyers in
northeast Asia, where both electricity generation and utility gas usage are down on fairly mild
temperatures over the winter season, and slowing economic growth. The fall followed the record
year-over-year plunge of 61.7% seen the previous trading month.
Month over month, the April JKM dipped a more marginal 2.1%, suggesting that the downward
spiral in prices was beginning to lose momentum.
The JKM had opened the trading month at $6.725/MMBtu on assessment date February 16
before beginning a steady uptick that saw the marker gain 97.5 cents over the period to close at
$7.70/MMBtu on assessment date March 13.
This was the first sustained period of increases for the JKM since the beginning of 2015, although
the market remained in backwardation, as demand is expected to slow further with the advent of
northern hemisphere spring and warmer temperatures.
The U.K. National Balancing Point onshore gas market was seen to be providing some support to
Asian spot prices, as NBP had been trading at a premium to JKM for the first half of the trading
month.
“This afforded suppliers and traders the opportunity to deliver Atlantic-loading cargoes into the
premium European onshore gas markets, while backfilling requirements in the Asian Pacific basin
with cheaper spot cargoes,” said Stephanie Wilson, managing editor of Asia LNG at Platts. “This

effectively tightened availability of cargoes in the Asian spot market as traders and sellers bought
spot cargoes from various liquefaction projects, driving prices higher.”
At the beginning of the trading month, the NBP had been trading 40 cents above the JKM, but the
spread narrowed as NBP prices slipped on warmer temperatures, while JKM trended higher as
supply in the Asia Pacific basin tightened. The April JKM ended the trading month 80 cents higher
than the NBP.
The effects of the higher NBP price were also felt in India, where importers looking to secure
deliveries into the west of the country were forced to bid above other Asian buyers in order to
attract cargoes from the Atlantic and Middle East.
Meanwhile, the price of possible competing fuel thermal coal decreased 11.5% year over year,
while fuel oil was down 42.4% year over year.
Key points
• 2015 will see a ramp-up in Australian volumes as the new projects currently under construction start coming
online. In addition we may see the first cargo exported from the US Gulf of Mexico around the end of the year.
• Markets will continue to grow and diversify. We could see up to six new markets emerge in 2015 – while
continued growth in Asian imports is expected.
• We expect the LNG market to become more volatile over the next few years as it responds to 'lumpy' supply
and market additions and exogenous supply and demand factors.
Overview
After four years of supply hiatus the industry has now entered a period of supply growth with the start-up of QCLNG
the first project in an Australian 'supply wave'. With 12 trains and 1 FLNG unit, across 7 projects currently under
construction in Australia this is expected to add a total of 58 mtpa of supply capacity by 2019. Worldwide, including
Australia, 26 trains and 4 FLNG units are currently under significant construction, across 16 projects for a total of 122
mtpa of new supply capacity by 2020.
It is possible that we will also see the first cargoes
exported from the US Gulf of Mexico around the end
of the year, marking the start of the next supply
wave after Australia. With two projects making Final
Investment Decisions (FIDs) in 2014, a total of 41 mt
are now under significant construction in the US,
with Cove Point undertaking initial construction
works despite not having formally announced FID.
We are expecting five new trains and one FLNG with
a total capacity of 21 mtpa to start-up in 2015,
mostly in the second half of the year. As a result, we
are expecting trade3
to grow 3% to 250 mtpa in 2015
with an incremental 7 mtpa delivered. On the
demand side we are expecting 12 new regasification
terminals and one expansion to start-up, including
six new markets; Egypt, Jordan, Pakistan,
Philippines, Poland, Uruguay.
Uncertainties on the demand side include the rate of return of Japanese nuclear power-plants, some of which are
expected back on-line in 2015, plus the health of the Chinese economy and how this plays through to energy demand.
How the LNG market responds to the growing volumes will be a key factor to watch in late-2015 and in 2016. We
expect the LNG market to become more volatile over the next few years as it responds to 'lumpy' supply and market-
side additions plus exogenous supply and demand factors.
There may be periods in the next couple of years where the balance of supply and demand results in some cargoes
flowing 'back' into European markets – but it seems unlikely Europe will see the annual levels of LNG imports it saw at
its peak in 2011 until much later in the decade – assuming Asia continues to grow as expected.
At current oil price levels the range between crude oil prices and the European market price, between which LNG in
Asia has historically priced, will be much narrower in 2015 than in recent years.
In each of the past four years over 20 million tonnes of supply capacity has been sanctioned. The extent to which the
industry sustains the current supply growth momentum will depend upon how it responds to the current reduction in
commodity prices. A key indicator to watch will be the number of FIDs taken in 2015.

Saudi Arabia Wooing Fired U.S. Shale Workers to ‘Join Our Team’
Bloomberg + NewBase
Workers fired from U.S. shale fields after the collapse in oil prices could soon have a new boss:
the nation some blame for driving that decline.
The state-owned Saudi Arabian Oil Co., also known as Saudi Aramco, is posting new job ads
online aiming to snap up experts in extracting oil from shale as the country seeks to become a
leader in that rapidly expanding effort. Tens of thousands of U.S. workers have been fired since
November as oil prices plunged because of oversupplies, driven in part by an OPEC decision
supported by Saudi Arabia.
That’s now giving Saudi Aramco a better chance to lure experienced workers to its own shale
formations. Difficult living conditions had previously made the country a hard sell, said Tobias
Read, chief executive officer of Swift Worldwide Resources, a recruiting firm.
“We’ve seen people who have historically been reticent to look at Saudi Arabia who are now more
accepting of a job there,” Read said in an interview. For decades, the Saudis have recruited
workers from the U.S. for its conventional drilling programs, offering hefty salaries and benefits as
lures. Even so, “it’s been hard for us to put people there,” Read said. “The conditions are just quite
difficult.”
Previously, Saudi Aramco didn’t need expertise in shale oil and natural gas exploration because it
has large conventional oil reserves that don’t require expensive extra steps to develop, such as
the hydraulic fracturing or horizontal drilling used in shale rock.
‘Unconventional’ Oil
As those highly productive fields age, however, development of shale resources, along with other
hard-to-reach oil categorized as “unconventional,” may help Saudi Aramco maintain its dominance
in the oil market, according to John Kingston, president of the McGraw Hill Financial Institute.
“With the layoffs, it’s a great time to do it,” he said about the recruitment effort.
Nigel O’Connor, a spokesman for Saudi Aramco didn’t answer questions on the specifics of the
company’s campaign, or its timing. “To support the implementation of our strategy and continued
growth, Saudi Aramco continues to hire expertise in a number of technical areas across the
unconventional gas resource value-chain,” he said by e-mail.
In November, the Saudis led a decision by the Organization of Petroleum Exporting Countries to
maintain production levels of its 12 member countries despite falling prices. The hiring campaign

comes after some U.S. oil chiefs, including Continental Resources Inc. CEO Harold Hamm,
blamed the Saudis for causing the North American cutbacks.
New Ads
In February, Saudi Aramco posted several new ads on websites including Rigzone and LinkedIn
that focused on shale expertise. One recent LinkedIn listing for a petroleum engineer with shale
experience drew 160 applicants in a month, according to data from the professional networking
website.
“Consider the opportunity to join our team and help shape the future of key global unconventional
resource development,” the ads say, referring to shale-rock exploration that’s led to a renaissance
in U.S. oil and natural gas production.
Additionally, since the start of the year, Saudi Aramco has added an “unconventionals” category to
its recruiting website, where 35 job listings require specific experience in shale. A recruiting
company, Whitney Human Resources, has also written directly to prospective employees on
Saudi Aramco’s behalf.
A February letter from Whitney obtained by Bloomberg News said there are three areas of the
country where Saudi Aramco has an “active exploration program” for unconventional gas
resources.
‘Exciting Development’
“Senior managers from the company will be in North America in the forthcoming months to meet
professionals with your background who are interested in joining this exciting development,” the
letter said. A recruiting professional at Whitney declined to answer questions about its work with
Saudi Aramco.
The nation is interested in developing natural gas in its shale formations to help replace the
equivalent of 900,000 barrels a day of domestic crude and fuel oil used to generate local electricity
supplies, according to a March 10 research note by a team of Barclays Plc analysts including
David Anderson in New York.
On a recent trip to the region, the analysts learned that Saudi Arabia fears damaging its oil- and-
gas-rich formations with shale drilling, which could hurt future production, Barclays said in the
note. To date, only eight shale gas wells have been drilled in the country with plans to drill 135
wells over the next 3 years.
Recruiting Efforts
“Soon, Saudi Aramco will be known not just for conventional oil and gas production, but as a
leader in full life-cycle unconventional gas development,” the company said in a recent ad. Saudi
Aramco’s shale recruiting efforts are akin to a Chinese factory running a U.S. factory out of
business, then trying to hire the unemployed workers to improve operations in China, said Michael
Webber, an associate professor at the University of Texas and deputy director of the Energy
Institute.
After watching the U.S. shale revolution collapse on low prices, Saudi Aramco is seizing the
opportunity to bolster its own expertise in shale. “They don’t want to start from scratch,” Webber
said. “They have no experience with shale and they have to hire outside workers. It’s a way to
leapfrog.”

US: Removing US oil export ban would create jobs beyond drilling
Source: Reuters via Yahoo! Finance
Lifting a 40-year-old U.S. ban on crude exports would create a wide range of jobs in the oil drilling
supply chain and broader economy even in states that produce little or no oil, according to a report
released on Tuesday. Some 394,000 to 859,000 U.S. jobs could be created annually from 2016 to
2030 by lifting the ban, according to the IHS report, titled: 'Unleashing the Supply Chain:
Assessing the Economic Impact of a U.S. crude oil free trade policy.'
Only 10 percent of the jobs would be created in actual oil production, while 30 percent would
come from the supply chain, and 60 percent would come from the broader economy, the report
said. The supply chain jobs would be created in industries that support drilling, such as oil field
trucks, construction, information technology and rail. Many of the jobs would be created in
Florida, Washington, New York, Massachusetts, and other states that are not known as oil producers.
'The jobs story extends across the supply chain, right across the United States,' said Daniel
Yergin, a vice chairman at IHS and an oil historian. 'It's not just an oil patch story, it's a U.S. story.'
Record spare U.S. crude oil supplies caused by the drilling boom of the last five years have put
pressure on the Obama administration and Congress to lift the country's ban on oil exports.
Congress put the ban in place after the 1970s Arab oil embargo led to fears of energy shortages,
and only a few lawmakers including Republicans Senator Lisa Murkowski and U.S.
Representative Joe Barton support lifting the restriction. Many other lawmakers have been
hesitant to support relaxing the ban, fearing they could be blamed for any unrelated rise in gas prices.
In New York, a state that maintains a ban on hydraulic fracturing, or fracking, for natural gas, jobs
for the drilling business have been created in big data analytics and database management. The
number of those jobs would rise if the ban was lifted, said the report. In Illinois, jobs would be
created in durable manufacturing of engines and machine tools and mining for fracking sand.
The report, sponsored by energy companies including ConocoPhillips, Exxon Mobil and
Pioneer Natural Resources, assumed there would be no slowdown in drilling due to campaigns
by environmental or other groups.

Oil Price Drop Special Coverage
Brent crude oil prices Ups & Downs as supplies increase
Brent crude oil prices lost ground on Tuesday, trading at their lowest level since early February, as
concerns over a growing supply glut mounted.
Analysts said that rising US crude oil
stocks, an increase in Libyan oil
production and the chance of an
agreement between Iran and the West
that could ease sanctions on the oil
producer and boost its exports are all
pulling prices lower.
“The focus is on the bearish side,” said
Bjarne Schieldrop, chief commodities
analyst with SEB in Oslow. “When
people look at the market now, they are
looking at the possibility of an Iran
resolution,” Brent, which rose to a
session high of $54.38 (Dh199.73), was trading at $53.11, down 33 cents, by 1016 GMT. The
April contract that expired in the previous session closed down $1.23 after hitting $52.50 earlier on
Monday, its lowest since February 2.
US crude, or West Texas Intermediate (WTI), was at $43.11 a barrel, down 77 cents and slightly
above 6-year lows of $42.85 marked on Monday. Though fighting between rival governments has
complicated Libya’s oil production, an industry source said it has now risen to 489,000 barrels per
day after the restart of the Al Feel and Wafa oilfields.
Further weekly data on US crude inventories was due later on Tuesday from industry group the
American Petroleum Institute (API), and some traders expect the gap between Brent and WTI to
widen further.
While the US rig count dropped to 1,125 last week from 1,809 rigs a year ago, past cycles have
shown there is “often a lag between when drilling stops and when oil supply stops growing”,
Morgan Stanley said in a note.
“We expect WTI to remain under pressure as inventories swell further as the seasonal
maintenance period begins. We expect this to remain the case in the short term,” ANZ bank said.
A Reuters poll showed a likely build in US crude inventories for a tenth week to a new record high.
Some see the possibility for markets to stabilise or even rise, with Vitol chief executive Ian Taylor
telling a conference on Tuesday that oil markets would “come into balance” by the second half of
the year.
However the potential of a nuclear deal that could end sanctions against Iran, allowing Tehran to
send more of its oil into the market, also dragged on oil markets.
“If sanctions were to be lifted, up to 1 million barrels per day of additional oil could reach the
market from Iran in the second half of the year, making it more difficult for prices to recover,”
Commerzbank said in a note on Tuesday.

OPEC Comes Cleaner On How Much Oil Its Members Pump
By Reuters + NewBase
OPEC members’ own versions of their oil output were for years greeted with such scepticism
that the group resorted to publishing what others thought they were producing. That gave rise
to a mini-industry of OPEC watchers, tapping secretive sources to track every barrel. Output
was hotly contested when the group squabbled over member quotas, which have since been
abandoned.
But on Monday, OPEC issued a set of production figures as reported to its Vienna Secretariat
by member-countries, without any countries missing from the total for the first time in months.
{OPEC/M]
These also showed the difference between OPEC output based on member-countries’ own
submissions, and that provided by OPEC’s list of secondary sources, which include
consultants and industry media, to be narrowing.
“I can see some countries trying to address these problems and publish better data,” said an
oil market expert working for a European government. “But there are a few countries that I
doubt have made much progress.”

As OPEC accounts for the bulk of the world’s oil exports, its production level is vital
information for traders, consumers and governments. The trouble is that finding that number
is no easy task due to a dearth of timely official information.
Due to that challenge, the Organization of the Petroleum Exporting Countries since 2012 in its
monthly report has published two sets of numbers – one from member-countries themselves,
and one from the secondary sources.
The two often show wide differences. But the gap between their OPEC output total has now
narrowed to about 230,000 barrels per day (bpd) in the February 2015 estimates published on
Monday, from almost 1 million bpd in the first data set given in 2012.
The change could reflect efforts by OPEC and other government agencies to improve the
transparency of oil markets through programmes such as the Joint Organisations Data
Initiative (JODI), and comes at a time when OPEC is defending market share from rival
suppliers. There is little disagreement over the output rate of top producer Saudi Arabia,
which told OPEC it pumped 9.64 million bpd in February while the secondary sources
estimated 9.68 million bpd.
“We are at a serious moment with OPEC defending market share,” said the oil market expert.
“It makes sense to be transparent.” The figures still show some long-standing output claims
by OPEC members to be pumping at different levels than estimated by the secondary
sources.
For example, Venezuela told OPEC it pumped 2.74 million bpd in February, while the
secondary sources estimated production at 2.34 million bpd. And large differences persist.
The secondary sources put Iraq’s February production 540,000 bpd higher than Iraq itself.
Lukoil Overseas announces record oil production
Gulf News + Newbase
Lukoil Overseas, the Dubai based international upstream division of the Russian Lukoil
Group said that none of its projects were affected due to the recent drop in oil prices and
has announced a record oil production for the year 2014.
In a statement, the company said its total oil production in 2014 reached 9.6 million tonnes, 2.4
times the level of 2013 due to the start of the West Qurna-2 field in Iraq. The gas production was
6.8 billion cubic meters (bcm).
“This boosted the share of Lukoil Overseas in Lukoil’s total oil production from 4.4 per cent in
2013 to 10 per cent in 2014, and its share in total hydrocarbon production from 9.5 per cent to
13.3 per cent,” the company said.

A spokesperson for the company said that the recent slide in oil prices has not affected their
projects. “We didn’t abandon any projects due to fall in oil prices,” said Fedor Klimkin, press and
communication officer of Lukoil Overseas speaking to Gulf News.
He however said that they received a letter from Iraqi authorities to find ways to reduce the cost of
West Qurna-2 field without influencing the time schedule and implementation of the project.
“The letter is under consideration at the moment and everything is on schedule,” he said. Klimkin
said the precarious security situation in Iraq has not impacted their operations as most of their
projects are located in the Southern part of Iraq.
West Qurna-2, one of the largest oilfields in the world is located in Southern Iraq, 65 kilometres
from the town of Basra. The field has 13 billion barrels of recoverable oil reserves in two main
formations — Mishrif and Yamama. The company has invested more than $4 billion (Dh14.7
billion) in the oilfield.
The development and production service contract for the West Qurna-2 field was signed on
January 31, 2010. The stakeholders are the South Oil company of the Ministry of Oil of Iraq and
consortium of contractors including Lukoil and Iraqi North Oil Company.
Oil prices have been falling due to record US shale production and weak demand. Prices fell
about 60 per cent since last June. Organisation of the Petroleum Exporting Countries (Opec) kept
the oil production unchanged at a crucial meeting in Vienna last year.
Opec countries led by Saudi Arabia are pressing non-Opec countries mainly Russia to cut
production to prop up the prices. Another meeting of Opec is scheduled to be held in June. On
the other hand, the implementation of major gas projects in Uzbekistan by Lukoil is on track, the
company said.
A booster compressor statıon was started in November at the Khauzak-Shady field, allowing for a
20 per cent increase in production, according to the company. The Early Gas Kandym large
capital project entered an active phase; work was underway on design documentation
development, equipment fabrication and delivery, as well as early construction under the Gissar
Full Development project.
The annual production at the fields in Uzbekistan totalled 4 bcm of gas and over 100,000 tonnes
of liquid hydrocarbons. Lukoil Overseas shifted its base to Dubai from Moscow in late 2013
because the city is near to their upstream projects located in the Middle East and Central Asia.
About 800 people work in Dubai office located in Dubai Media city and the company is
implementing around 30 upstream projects in more than a dozen countries worldwide. On
Tuesday, Lukoil announced it had closed a deal to develop the Etinde offshore block in the Gulf of
Guinea off Cameroon.

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscription emails please contact Hawk Energy
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
khdmohd@hawkenergy.net
khdmohd@hotmail.com
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 11 March 2015 K. Al Awadi

New base 563 special 18 march 2015

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