New base special 08 october 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

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

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

NewBase 08 October Khaled Al Awadi

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

UAE non-oil economy buoyed by trade The National + NewBase

World oil prices may be hitting multi-year lows, but the UAE’s non-oil economy is chugging along at a good clip, the latest data show. September’s monthly survey of 400 purchasing managers in the UAE by HSBC, released yesterday, showed that “activity in the UAE’s non-oil producing private sector rose at the fastest pace since June … with companies commenting on increased order intakes,” the bank said in its report.

The upbeat indicator runs counter to the broader tone of economic slowdown set yesterday by the IMF, with the release of its latest World Economic Outlook in Washington. As expected, the IMF trimmed its forecast for next year’s global economic growth to 3.8 per cent from the 4 per cent it forecast in July. The IMF report supported other data showing a mixed picture for larger economies, with the US picking up but Germany and other European economies, as well as Japan, China, Russia and Brazil, all showing signs of slowing.

But the UAE is not alone among Middle East economies showing some resilience. Saudi Arabia and Egypt are also indicating expansion in their non-oil economies.

HSBC’s series of purchasing managers indexes (PMIs) are a broad survey-based gauge of economic activity and are tracked by a wide range of policymakers, including central banks. The




UAE September survey put its PMI at 57.6, which although easing slightly from the previous month’s record high 58.4, was above the long run average of 54. Any reading above 50 signals growth.

Commenting on the report, Razan Nasser, senior economist for Middle East and North Africa at HSBC said: “Numbers continue to indicate we are in a good stage in the economic cycle. Output continues to grow while price pressures remain under control.”

Others also see encouraging signs. Jason Turvey, Middle East economist at Capital Economics in London, said the UAE PMI numbers underpin a longer-term trend whereby some of the region’s economies – especially the UAE – are becoming less dependent on the oil and gas sectors. “In terms of the UAE non-oil sector, it is actually performing quite well. Dubai in particular is exposed to developments in the global economy, largely in its role as a logistics hub for trade between Asia, Europe and Africa,” Mr Turvey said.

The UAE economy has continued to make gains even though the important real estate sector has

slowed, with both private housing and commercial property markets softening in the latter half of this year. The fears of another bubble have subsided and the slowing does not seem to have had a dragging effect on the economy as a whole.

Meanwhile Saudi Arabia’s “whole economy” PMI, which also takes the pulse of the entire non-oil private sector, rose in September to 61.8 from 60.7 in August and was the survey’s highest reading in more than three years.

Egypt is also showing economic strength as it continues to recover from its post-Arab Spring turmoil. The country’s PMI rose to 52.4 in September from 51.6 in August, the second consecutive month that it has been above 50, indicating a quickening expansion.

Separately, the IMF’s outlook for the Middle East and North Africa was mixed. It pointed to the turmoil continuing in Syria and Iraq, potentially spreading farther afield. While noting that this had yet to have an effect on oil prices, the IMF chief economist Olivier Blanchard said: “Clearly this could change in the future, with major implications for the world economy.”

The IMF cut its growth forecast for the Middle East and North African region as a whole to 2.6 per cent for this year, down from a 3.2 per cent forecast in April. But the IMF said growth in the six-nation GCC countries will remain strong at an average 4.5 per cent in 2014 and 2015. It increased its economic growth projections for Qatar, Saudi Arabia and the UAE, but lowered those for Kuwait.




UAE: ADWEA, GDF Suez close $1.5bn financing deal for power project By Reuters + NewBase

Abu Dhabi Water & Electricity Authority (ADWEA) and GDF Suez on Tuesday said they signed a $1.5 billion financing package for the emirate's Mirfa independent water and power project (IWPP).

The Mirfa IWPP, the tenth such scheme in the emirate, was financed through a mix of bank debt and equity from the shareholders, a statement from ADWEA said.

No details on terms for the bank debt were given, nor the split between debt and equity. However, it did state that a consortium of 13 local and international financial institutions are funding the project, with nearly $500 million of debt committed by four Abu Dhabi banks.

ADWEA holds an 80 percent stake in the project, with GDF Suez the remaining 20 percent.

Expected to start commercial operations on a phased basis between 2016 and 2017, the Mirfa IWPP will have a total power capacity of 1600 megawatts and 52.5 million gallons per day of seawater desalination capacity.




Chevron Sells Stake In Canadian Shale Field To Kuwait Reuters + NewBase

Chevron Corp said on Monday it would sell a 30 per cent stake in its Canadian oil shale holdings to Kuwait’s state-owned oil company for $1.5 billion.

The deal with Kuwait Foreign Petroleum Exploration Co helps Chevron reduce production risk and gives it more capital to increase drilling in Alberta’s Duvernay shale formation, one of North America’s largest shale deposits.

The deal, valued at about $15,000 per acre, boosts land valuations in the region and should help increase drilling, a step that will likely reduce production costs to about $12 million per well, down from about $15 million to $20 million currently, analysts at investment bank Tudor Pickering Holt said in a note to clients.

Chevron’s Canadian subsidiary has exploration leases for about 330,000 net acres (1,335 square km) in the Duvernay shale formation. The area is located about 124 miles (200 km) northwest of Edmonton, Alberta.

The deal also creates a partnership for appraisal and development of liquids-rich shale resources in the Kaybob area of the Duvernay, Chevron said. After the deal closes in November, Chevron Canada will remain the operator and will hold a 70 per cent interest in the project.

The deal price includes a portion of Chevron Canada’s share of future capital costs for the joint venture.

Allen Good, senior equity analyst at Morningstar, said the divestment was not a comment on the quality of Chevron’s Duvernay assets but rather a way to cut spending at a time when the company has a number of major projects underway. “I see this as a way to reduce capital spending but still retain exposure to a potentially lucrative play,” Good said, adding that Kuwait Foreign Petroleum Exploration Co did not offer any particular expertise.




“It’s simply a funding source that historically Chevron would not have looked at, but they are spending a lot on developing LNG and offshore so are looking at monetizing some of their assets sooner than they normally would.”

Duvernay is widely viewed as one of North America’s most promising shale fields. Chevron boosted its holdings in the field in August 2013, buying 67,900 net acres from Alta Energy Luxembourg SARL.

Chevron has drilled 16 wells since beginning its exploration program in the Duvernay in 2011, recording initial well production rates of up to 7.5 million cubic feet of natural gas and 1,300 barrels of condensate per day.

Penn West Petroleum Ltd, Royal Dutch Shell Plc and Athabasca Oil Corp are some of the other operators in the Duvernay shale formation.

Chevron also has shale assets in the Permian Basin in Texas and Pennsylvania’s Marcellus shale field. Chevron CEO John Watson told Reuters last month that the Duvernay, Permian and Marcellus would be the company’s primary North American shale projects for the foreseeable future.

Chevron’s shares rose as high as $119.05 in morning trading before slipping back to trade flat at $117.71. The stock has fallen about 10 per cent in the past three months.




Petronas says 15-yr delay of Canada LNG plant if no tax deal Reuters + NewBase

Malaysian state-owned energy company Petronas said on Monday it could delay its planned $11bn

liquefied natural gas plant on Canada’s Pacific Coast by up to 15 years unless it can reach a

favourable tax deal by month’s end.

Petronas said in a

statement that the

economics of the

plant are marginal

and without a

favourable tax

arrangement with

the province of

British Columbia

and Canada’s

federal

government, it

could shelve the

project for a

decade or more.

The company set a deadline of the end of October to reach a deal. “Missing this date will have the impact of having to defer our

investments until the next LNG marketing window, anticipated in 10-15 years,” it said.

With companies such as Petronas facing fierce competition from rapidly advancing LNG projects in the US and Australia, the threat should be taken seriously, said Peter Tertzakian, chief energy economist at ARC Financial Corp.

“There is a trend for large multinational oil and gas companies to walk away from mega projects that are marginal and uncertain, so I don’t view it as a bluff,” he said.

More than a dozen LNG projects have been proposed for British Columbia’s Pacific coast, with companies such as Petronas, Royal Dutch Shell and Chevron Corp leading the race to build Canada’s first LNG export facility.

Chevron’s project hit a bump earlier this year, after partner Apache Corp said it would sell its stake in the Kitimat LNG project to focus on domestic oil production.




WellDog And Shell Collaborate To Commercialize Novel Shale Gas Testing Service SOURCE WellDog

WellDog Pty Ltd ('WellDog') announced today that it has collaborated with Shell International Exploration & Production, Inc. ('Shell') over the past eighteen months to develop a new technical

service for locating natural gas and natural gas liquids in shale formations. This announcement follows a laboratory and field development program undertaken by the two companies, leveraging WellDog's patented downhole Raman spectroscopy technology and Shell's geochemical and petrophysical experience in shale gas evaluation.

The new service is directed at identifying the locations where natural gas and natural gas liquids occur in shale formations, allowing producers to focus development efforts, reduce drilling costs, optimize production, and reduce the number of hydraulic fracturing stages and associated water usage. Shell is now leading beta trials of the t echnical service that is being developed from the program.

About WellDog WellDog (trade name of Gas Sensing Technology Corp and its subsidiary WellDog Pty Ltd) is a privately held energy-focused technical services company that developed its own patented, proven Reservoir Raman chemical sensing systems to provide commercial reservoir analysis services for coal, gas, alternative and conventional resources. Building on the strength of those services and the company's world-wide customer focus, WellDog now provides several technical services to the shale gas and oil, coal bed methane, coal mining, and conventional oil and gas industries including gas testing, permeability testing, downhole pump and reservoir monitoring systems, production optimization and environmental monitoring services. The company has offices in Laramie, Wyoming, USA and in Brisbane and Roma, Queensland, Australia. More information is available at www.welldog.com.




Occidental seeks buyer for $3 billion Bakken oil assets BYBLOOMBERG NEWS + NEWBASE

Occidental Petroleum, the United States' oil producer that is restructuring to focus on its mostprofitable operations, is seeking to sell oil assets in North Dakota for as much as $3 billion, peoplewith knowledge of the matter said

Occidental is working with investment bank Tudor Pickering Holt to sell about 335,000 net drillingacres in the Williston Basin, said the people, who asked not to be identified because they werediscussing private information. The holdings include a part of North Dakota's Bakken formation, anarea that has been less successful for Occidental because of higher costs, though it's one of thefastest-growing oil-producing regions in the US

A representative for Tudor Pickering Holt didn't immediately respond to a request for comment.Melissa Schoeb, an Occidental spokeswoman, said the Houston-based company announcedplans last year to 'pursue strategic alternatives' for some assets, including in the Williston Basin. Global energy producers are facing investor demands to cut spending and focus on their bestdrilling opportunities in the US, where oil output reached the highest level in almost 30 years.Companies including Apache have relied on asset sales and spinoffs to fund share buybacks andboost returns

An index of companies that focus exclusively on finding and producing oil and natural gas hasdeclined 14 per cent since July as crude prices weakened, falling last week to the lowest level innearly 18 months




Restructuring plan

Occidental chief executive officer Stephen I. Chazen has embraced a restructuring plan thatincludes selling part of Occidental's Middle East business and spinning off the company'sCalifornia operations. Chazen told investors in July that he might accelerate plans to sell assets inwhat the company calls its 'midcontinent' operations in the Piceance and Williston basins. Occidental produced the equivalent of 92,000 barrels of oil and gas a day in its midcontinentbusiness in the second quarter. Natural gas made up about 55 per cent of that output, which atthe end of 2013 came from states including Kansas, Oklahoma, Colorado, North Dakota andTexas. The company plans to spin off its California operations next month. It's also trying to sell a stake ofas much as 40 per cent of its operations in the Middle East and North Africa, a stake that could beworth as much as $8 billion

Occidental has fallen 1 percent since 2011 as energy companies on the Standard & Poor's 500Index have risen 28 per cent, according to data. Shares have declined more than 5 per cent sincethe start of July.




Wintershall’s Maria field work goes to FMC Technologies Press Release

Wintershall, Germany’s oil and gas producer, has announced the award of its first significant subsea contract for its Norwegian activities.

Worth approximately NOK 1.8 billion ($280 million), the contract for Wintershall’s Maria development goes to FMC Technologies’ Norwegian subsidiary FMC Kongsberg Subsea AS. The company said it has been assigned after a thorough selection process and in alignment with the other license partners. Wintershall says that the award positions Wintershall as a growth operator in the subsea arena,

and puts the company in a position to move forward with existing and new developments on the Norwegian Continental Shelf.

“Maria is our first subsea development in Norway and we are consequently building our expertise in this field. Wintershall sees future potential for more developments of this kind on the Norwegian Continental Shelf and Norway is becoming a center of excellence for this kind of work,” says Bernd Schrimpf, Managing Director of Wintershall Norge.

“I am proud that this is our first major subsea contract. It shows how committed Wintershall is to Norway and further establishes our position as one of the country’s leading oil and gas producers.”

Similar systems for future subsea fields are under consideration for Wintershall’s Skarfjell development in the North Sea. A new extension north of the producing field Brage is also being investigated. Under the proposed development solution the Maria field would be linked to the already existing infrastructure nearby via a subsea tie-back. Based on this plan, the Maria field would be connected with the producing platform Kristin, Åsgard and Heidrun via two subsea templates.

The frame agreement with FMC Technologies will first be used to source and build a comprehensive subsea production system for Wintershall’s Maria development in the Norwegian Sea. “We see a lot of potential in this partnership with FMC Technologies,” adds Bernd Schrimpf.

There are two elements to the contract:

Maria Subsea Production System (SPS)

FMC Technologies will deliver a comprehensive SPS System for the Maria development. This includes engineering, procurement and construction (EPC). The Maria SPS consists of two integrated template manifolds with their respective trees and auxiliary equipment. It also includes




the dynamic and the static umbilical, the production riser base and the subsea umbilical termination unit and the subsea control system. The contract for Maria is worth approximately NOK 1.8 billion ($280 million).

Subsea Production System (SPS) Frame Agreement

This includes a standardized SPS supply which forms the basis for future contracts for other developments.

Maria field

Approximately 200 kilometers from the Trondheim coastline, Maria is situated on the Halten Terrace in the Norwegian Sea. The field is located 20 kilometers east of the Kristin field and 45 kilometers south of the Heidrun field in the blocks 6407/1 and 6406/3. The discovery is expected to produce around 130 million barrels of oil and just over 2 billion standard cubic meters (Sm3) of gas.

Wintershall Norge is the operator, with a 50 % share. The other licensees are Petoro with 30 % and Centrica with 20 %.




As oil prices tank, new era of abundance seen dawning Reuters + NewBase

- As oil production swells, demand falters and prices slide, the global oil market appears on the verge of a pivotal shift from an era of scarcity to one of abundance. Oil prices have fallen as much as 20 percent since June, despite a host of rising supply risks, leading more investors and traders to consider whether 2015 is the year in which the U.S. shale

oil boom finally tips the world into surplus.

While the plunge has rekindled speculation that the Organization of the Petroleum Exporting Countries (OPEC) may need to cut output for the first time in six years when it meets next month, some analysts are looking much further ahead.

They say a long-anticipated fundamental shift in the market

may now be under way, ending a four-year stretch when $100-plus prices were the norm, and opening a new era in which OPEC restraint once again becomes paramount. The signs are everywhere: U.S. oil imports are shrinking much faster than expected while oil production climbs to a thirty-year high. Chinese economic growth, and therefore oil demand growth, is slowing. Even output in trouble spots like Libya and Iraq is rising after years of insurrection-led losses.

What is happening in oil markets "finally represent the rebalancing and the impact of this tremendous surge in U.S. oil production," says Daniel Yergin, Vice Chairman of IHS and one of the world's foremost oil historians. The fact that oil prices are falling despite continued turmoil in much of the Middle East and sanctions on Russia"is a milestone, a marker of change."

Some analysts say it is too early to tell if the latest fall in prices is any different from previous declines, such as in 2012 and 2013, when events such as civil war in Libya and sanctions on Iran spurred sharp rebounds. A spurt in economic growth in Europe or another supply disruption could again push prices higher in the short term, but risks appear increasingly skewed lower.

Last week analysts at Credit Suisse cut their 2016 Brent oil price forecast to $93 a barrel, the second-lowest among analysts polled by Reuters . The consensus for that year was over $101 a barrel. The bank pegged 2017 at $88 a barrel as North American output growth "overwhelms" global demand. Some oil traders agree. Long-dated futures for 2017 and beyond, which had for months held firm despite the slump in immediate prices, finally fell last week. Global benchmark Brent crude for November fell 5 percent last week, hitting its lowest in over two years.

The implications of such a shift extend well beyond OPEC. It would likely accelerate shifts in the global balance of power, with consumer nations such as the United States becoming less dependent on producers like Russia or Iran.




END OF AN ERA

For most of the past decade, the oil market has been defined by shortage. Prior to 2008, years of underinvestment, roaring demand from Asia and fears of a looming "Peak Oil" fueled the price rally, and OPEC members have struggled to keep up with demand. Oil soared to nearly $150 a barrel by mid-2008.

Then, the financial crisis sent prices into a tailspin, forcing OPEC to make two sharp cuts - as it turns out, its last formal measures for at least six years. With demand stunted and U.S. shale breakthrough, the "Peak Oil" theme faded giving way to hope for abundance.

Yet oil prices held resolutely above $100 a barrel, with each potential downturn eventually thwarted.

In 2011, it was the breakdown in OPEC member Libya that fueled gains, cutting supplies by as much as 1.5 million barrels per day (bpd); later that year and in 2012, it was U.S. and European sanctions on Iran that choked off some of supply. Last summer it was Libya again as violence flared anew.

TEST FOR OPEC...AND SHALE PRODUCERS

The same could happen again next year. Growing tensions with Russia are putting supplies from the world's No. 2 producer at risk. Talks with Iran over a nuclear deal could sour, prompting calls to ratchet up sanctions. Yet the odds for another rebound are growing longer.

"The fire drill may be real this time," says Daniel Sternoff at Medley Global Advisors.

Now, either OPEC agrees to put a floor under prices in the short-term, or a prolonged period of lower prices starts to curb long-term investment or revive demand growth, he says.

The price downturn is not only testing OPEC's resolve but also the durability of the U.S. shale revolution, which has added 1 million bpd to U.S. output in each of the past 3 years.

It is far from clear when, or whether, OPEC will intervene. Sharp cuts in Saudi Arabia's oil sale price to Asian customers on Wednesday suggested that the world's largest oil producer will accept

lower prices to maintain market share.

Bob McNally, a White House adviser to former President George W. Bush and now president of the Rapidan Group energy consultancy, said after a recent trip to Saudi Arabia that OPEC producers might wait for U.S. output cuts rather than cut production themselves. While some in OPEC are starting to call for cuts, core Gulf members are betting winter demand will revive the market.

That may change if oil prices slide another $10 or so. Not only will that squeeze budgets from Caracas to Moscow, but U.S. drillers would probably curb activity in the event of a "sustained pullback" below $80 a barrel, analysts at Baird Energy wrote in a report on Monday.

"US shale oil after all is not just the newest and biggest source of supply, but also high cost and most responsive to oil prices," said McNally. "North Dakota and Texas have effectively joined OPEC, though they may not have realized it yet."




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

Your partner in Energy Services

Khaled Malallah Al Awadi, Energy Consultant MSc. & BSc. Mechanical Engineering (HON), USA ASME member since 1995 Emarat member since 1990 Mobile : +97150-4822502

[email protected] [email protected]

Khaled Al Awadi is a UAE National with a total Khaled Al Awadi is a UAE National with a total Khaled Al Awadi is a UAE National with a total Khaled Al Awadi is a UAE National with a total

of 24 yearsof 24 yearsof 24 yearsof 24 years of experience in theof experience in theof experience in theof experience in the Oil & Gas Oil & Gas Oil & Gas Oil & Gas

sector. Currently working as Technical Affairs Specialist for sector. Currently working as Technical Affairs Specialist for sector. Currently working as Technical Affairs Specialist for sector. Currently working as Technical Affairs Specialist for

Emirates General Petroleum Corp. “Emarat“ with eEmirates General Petroleum Corp. “Emarat“ with eEmirates General Petroleum Corp. “Emarat“ with eEmirates General Petroleum Corp. “Emarat“ with external xternal xternal xternal

voluntary Energy consultation for the GCC area via Hawk voluntary Energy consultation for the GCC area via Hawk voluntary Energy consultation for the GCC area via Hawk voluntary Energy consultation for the GCC area via Hawk

Energy Service as a UAE operations base , Most of the Energy Service as a UAE operations base , Most of the Energy Service as a UAE operations base , Most of the Energy Service as a UAE operations base , Most of the

experience were spent as the Gas Operations Manager in experience were spent as the Gas Operations Manager in experience were spent as the Gas Operations Manager in experience were spent as the Gas Operations Manager in

Emarat , responsible for Emarat Gas Pipeline Network Facility Emarat , responsible for Emarat Gas Pipeline Network Facility Emarat , responsible for Emarat Gas Pipeline Network Facility Emarat , responsible for Emarat Gas Pipeline Network Facility

& gas compress& gas compress& gas compress& gas compressor stations . Through the years , he has or stations . Through the years , he has or stations . Through the years , he has or stations . Through the years , he has

developed great experiences in the designing & constructingdeveloped great experiences in the designing & constructingdeveloped great experiences in the designing & constructingdeveloped great experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the of gas pipelines, gas metering & regulating stations and in the of gas pipelines, gas metering & regulating stations and in the of gas pipelines, gas metering & regulating stations and in the

engineering of supply routes. Many years were spent drafting, & compiling gas transportatiengineering of supply routes. Many years were spent drafting, & compiling gas transportatiengineering of supply routes. Many years were spent drafting, & compiling gas transportatiengineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenance on , operation & maintenance on , operation & maintenance on , operation & maintenance

agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas 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 andConferences held in the UAE andConferences held in the UAE andConferences held in the UAE and Energy program broadcasted internationally , via GCC leading satellite Channels Energy program broadcasted internationally , via GCC leading satellite Channels Energy program broadcasted internationally , via GCC leading satellite Channels 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 08 October 2014 K. Al Awadi

Economy & Finance

New base special 08 october 2014