Al HosnNews

Volume 01 – No. 003 – September 2012

A quarterly magazine issued by Abu Dhabi Gas Development Company Ltd.

Two new rigs arrive at Shah Gas Field

The 2012 CEO Football

Championship

Al Hosn Gas Launches its Website

Co-sponsoring Abu Dhabi Industry Award 2012

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EditorialSaif Ahmed Al Ghafli, CEO

At the outset, I would like to wish you, on behalf of the Al Hosn Gas family, a blessed Eid season. May the Almighty

shower his blessings upon all of us.

In this issue of Al Hosn Gas News magazine, I would like to highlight the significance of the Shah Gas Development Project and the considerable progress that the team of Al Hosn Gas has achieved to date.

In November 2008, the Abu Dhabi Government developed “The Abu Dhabi Economic Vision 2030,” which provides a road map to build a sustainable and diversified, high value-added economy. This vision document recognizes development of technically-challenging sour gas reservoirs as one of the engines of Abu Dhabi’s future economic growth. We, at Al Hosn Gas, perfectly realize our important role in

contributing to the realization of “The Abu Dhabi Economic Vision 2030.” The development of the Shah Gas Field is a landmark project that will fuel growth, industrial development and employment opportunities, and also create sustainable wealth far into the future.

In delivering towards this important objective, Al Hosn Gas mobilized state of the art equipment and materials with cutting-edge technology. This will go a long way in ensuring that we drill sufficient number of wells to supply gas in time to start-up our gas plant in 2014. Overall, our project is 55% complete, and although there are significant challenges ahead, we are confident that, with the blessing of the Almighty and your continued support, we will be able to fulfill the vision and mission of our company as one of the important engines for future economic growth.

Table of contents

Editorial

Cover StoryTwo New Rigs Arrive

at Shah Gas Field

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Volume 01 – No. 003 – September 2012

Al HosnA quarterly magazine issued by Abu Dhabi Gas Development Company Ltd. (Al Hosn Gas).

The magazine covers the company’s news, activities and events, seeks to document the company’s achievements, boost relationship between employees, and promote internal communication. It also aspires to enhance external communication with different stakeholders including shareholders and strategic partners, among others.

Prepared, revised and issued by

The Public Relations Department,

General Services Division

Al Hosn News magazine welcomes any contribution or suggestion by the readers. However, all contributions are subject to editing and revision before publication.

All correspondence to be sent to the Public Relations Department:

Phone : 00971-2-6542135 / 6542075

Fax: 00971-2-6542044

Po. Box: 44115 Abu Dhabi – United Arab Emirates

Email: alhosngasnews@alhosngas.com

The magazine has the right to keep original articles and pictures whether published or not. Published articles reflect the views of their writers only, so please refer to the source when quoting.

All rights and copyrights are reserved to Al Hosn Gas. No part of the magazine may be copied, stored or saved in any system or, otherwise, transmitted without the prior written approval of the Public Relations Department. This magazine is not for sale.

News

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Profile

Sheikh Mohammed bin Zayed, the man behind many initiatives that contributed to enhancing national security

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Interview

Rick Callahan, Senior Vice President for Development

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News

Al Hosn Gas co-sponsors Abu Dhabi Industry Award 2012Launch of Al Hosn Gas website

Umrah trip for the employees and their familiesThe 2012 CEO Football Championship

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Profile

Sheikh Mohammed bin Zayed, the Man behind Many Initiatives that Contributed to Enhancing National Security

He was appointed Commander of the Air Force and Air Defense, and Deputy Chief of Staff of the UAE Union Defense Forces before becoming its chief in 1993. A year later, he became Lieutenant General. After the death of his father, the late Sheikh Zayed bin Sultan Al Nahyan in 2004, and the election of his older brother His Highness Sheikh Khalifa bin Zayed Al Nahyan as President of the United Arab Emirates, Sheikh Mohammed was appointed Deputy Supreme Commander of the UAE Armed Forces in January 2005, and was also promoted to the rank of General. In addition to his military responsibilities, Sheikh Mohammed serves as a main advisor to the President of the UAE in security affairs. In November 2003, His Highness was Deputy Crown Prince of Abu Dhabi. A year later, he was appointed Deputy Chairman of Abu Dhabi Executive Council before becoming its Chairman in December 2004. His Highness is also an active member of the Supreme Petroleum Council.

Economic diversification is one of the key issues of concern to His Highness Sheikh Mohammed, within his efforts for a comprehensive development in the Emirate of Abu Dhabi. He is also head of the UAE Offsets Program Bureau, working on channeling defense-related investments into profitable projects across different sectors in order to help diversify the economy of the UAE. To reach this diversification, Mubadala Development Company was established in 2002 as the main investment vehicle for the government of Abu Dhabi. The company aims to achieve sustainable social and economic benefits for Abu Dhabi.

Education is one of the priorities of Sheikh Mohammed, be it public or private, from elementary to high school, or higher education. He is head of Abu Dhabi Education Council, which was established in 2005 to oversee and develop the education sector in the emirate. The council conducts studies, encourages the active participation of students and parents in the evaluation process, and communicates with international educational institutions to exchange creative initiatives in the aim of advancing the education sector. His

Highness is also President of the Emirates Center for Strategic Studies and Research, dedicated to the publication of academic analyses on topics relevant to the UAE and the region.

Sheikh Mohammed is known for his great interest in protecting falcons, as well as other species including the Oryx and the Houbara from Arabian Peninsula. Motivated by his interest in the preservation and protection both locally and internationally, His Highness set up the Mohammed bin Zayed Species Conservation Fund. His dedication to environmental protection led to adapting alternative energy projects in Abu Dhabi, primarily Masdar City.

His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces, and Chairman of Abu Dhabi Executive Council, was born in 1961. He played an effective role in developing the Emirate of Abu Dhabi for more than three decades that have witnessed an accelerated economic and social shift. Ever since he was appointed Crown Prince, Sheikh Mohammed was known to be the guiding force behind many initiatives that contributed to enhancing the security of the Emirate of Abu Dhabi and promoting the growth and diversification of its economic activity.

His Highness Sheikh Mohammed bin Zayed graduated from the Royal Military Academy Sandhurst in 1979.

• TheCrownPrinceofAbuDhabiadoptsstrategies to address economic diversificationissuesintheEmirateofAbu Dhabi.

• Advancingeducationandkeepingupwith the latest international practices are top priorities that received the attention of His Highness.

• “Ournationhasmadegreatachievements by taking leaps that went way beyond its chronological age and received the admiration and appreciation of the entire world.”

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Rick has over 28-year industry experience in engineering, drilling, operations and project management. His diverse experience includes assignments in multiple locations in the United States, Thailand, Indonesia, Netherlands and Libya with Unocal, Chevron, and Oxy.

Before joining Al Hosn Gas as Senior Vice President - Development, Rick was President and General Manager for Oxy Libya. He was seconded to his current role in April 2011, after the joint venture between Oxy and ADNOC.

Rick holds a bachelor of science in Petroleum Engineering from Texas A&M University and an MBA from Duke University in the United States.

About Rick Callahan

Mr. Rick Callahan, Senior Vice President - Development

In an interview with Al Hosn News magazine, Mr. Rick Callahan, Senior Vice President - Development, gave an overview of the Development division’s work, the main challenges faced during the development of the Shah Gas Field, the division’s key

achievements, the activities on this year’s calendar and the future plans.

“TheDevelopmentdivision uses cutting-edge technology and tools to gather and analyze data, perform subsurface modeling, design and drill wells that will ensure optimized development of the reservoir.”

The Development Division team of about 70 high technical experts is playing a key role in making the seemingly impossible Shah Gas Development project become a reality. The team consists of geologists, geophysicists, reservoir engineers, drilling engineers, drilling HSE and field implementation specialists. Mr. Rick Callahan, SVP - Development is leading the division that comprises the Drilling and Subsurface departments. The two departments work together to design the safest and most efficient ways to deliver sour gas from the reservoirs to the surface facilities.

The subsurface team does the modeling work and analyzes the subsurface with the aim of finding the best way to lift the gas to the surface. The role of the drilling team is to design and implement the well drilling in order to achieve this common goal.

Throughout the different phases of the project, the Development division uses cutting-edge technology and tools to gather and analyze data, perform subsurface modeling, design and drill wells that will ensure optimized development of the reservoir. Once the gas production starts, the interpretation of data coming from the initial wells will help the Development teams refine their models and future plans to ensure continued optimized exploitation of the gas reservoirs. The Development Division must ensure that the continuously updated reservoir development and drilling plans can maintain uninterrupted availability of the required gas volume at the wellheads during the project lifespan – 30 years.

Since its inception, the Development division has proceeded to build an organization that can fully operate the development drilling program. The teams

prepared the reservoir and drilling development plan to be able to produce one billion cubic feet (1 Bcfd) of gas per day. All services and materials required to drill the first 20 wells prior to plant start up were contracted and procured. The Development division has obtained two rental drilling rigs that started the drilling operations in July 2012, in addition to ADCO’s assistance in lending a rig and drilling the first four wells in 2011 and early 2012. Through these efforts and with the support of other divisions to obtain these services and materials, the Shah Gas Development Project is on track to meet the gas delivery schedule.

Mr. Callahan explained that the main design technical challenges result from the gas and reservoir characteristics. The gas is extremely sour, as 23% of its content is hydrogen sulphide, and 10% is carbon dioxide. The underground temperature and pressure are equally daunting. The temperature is about 150 degrees Celsius and the pressure is as high as 5,500 pounds per square inch. These characteristics, in combination with the high gas flow rates required, are at the leading edge of well component and drilling equipment designs currently utilized in the oil and gas industry.

The Development division has a busy schedule this year with many activities on its calendar. The division has taken over full operatorship of the drilling program from ADCO in April, and finalized contracting of required services and materials for the drilling program. Two new rental drilling rigs have arrived in Abu Dhabi between June and July, and recently commenced drilling operations. The Development team will conduct the first well production test on 5,000’ lateral sections in the Arab C and D reservoirs in the Shah Field later this year. The subsurface group has continued to build and improve reservoir models based on the latest well data obtained to further optimize the ongoing

drilling program. A seismic data re-processing pilot was successfully concluded and will move on to full field implementation later this year, thus providing further technical insight for optimum well placement in the reservoir.

Commenting on future plans, Mr. Callahan said that, next year, his division will start the procurement of materials and services required for all remaining wells in phase one after plant start up. Well clean-up operations are planned on three pads, making the wells ready to deliver gas into the plant. The Development division will also continue with the seismic re-processing project, in order to deliver better understanding of the reservoir through the seismic analysis.

Mr. Callahan reiterated the importance of improving the drilling performance and refining the well plans and design based on new data obtained from well test and additional pilot wells. An advanced reservoir simulation model will be built to incorporate new data and improve the development forecasting. Long-term planning beyond the 32 well Phase 1 development drilling program will also continue, as required, to ensure the 1 Bcfd gas rate is maintained continuously in the future.

“Themaintechnicaldesign challenges result from the gas and reservoir characteristics.”

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First Meeting of Public Relations Managers in National Oil and Gas Companies in the GCC

Under the sponsorship of Abu Dhabi National Oil Company (ADNOC) and its Group of

Companies, the first meeting of public relations managers in the GCC national oil and gas

companies was held on May 30 in Abu Dhabi. Al Hosn Gas Co-sponsors Abu Dhabi Industry Award 2012

Al Hosn Gas co-sponsored Abu Dhabi Industry Award to encourage academic excellence of national students. H.H.

Sheikh Nahyan Bin Mubarak Al Nahyan, Minister of Higher Education and Scientific Research, honored on June 18 the outstanding graduates of the Higher Colleges of Technology who won the award. The ceremony was attended by Mr. Sami Al Zaabi, Senior Vice President – Human Capital, and Mr. Omar Al Meheiri, Travel and Documentation Manager, from Al Hosn Gas. Present were also Dr. Tayeb Kamali, Vice Chancellor of the Higher

Colleges of Technology, faculty and staff members and representatives of the award’s sponsors.

Al Hosn Gas sponsored Abu Dhabi Industry Award to enhance the vision of H.H. Sheikh Khalif Bin Zayed Al Nahyan, President of the UAE, in developing human capital. Al Hosn Gas aims to continuously support any development program or initiative that encourages national students in their pursuit of distinction, and helps building a society characterized by innovation and excellence.

Qubaisi, Director of Human Resources at ADNOC, highlighted that the pivotal role of national oil and gas companies in development in the Gulf countries requires public relations managers to enhance communication with government institutions and the public. This will achieve common benefits and allow a deep understanding of general national issues in the GCC countries, in addition to highlighting the policies and position of the GCC countries toward energy-related issues.

The aim of the meeting was to enhance communication and share experiences in public relations between oil and gas companies in the Gulf, and boost cooperation between them at many levels, mainly the sponsorship of national events in the Gulf, crisis management and corporate social responsibility. The managers stressed the need for coordination and agreement on setting a common strategy and vision about the issue related to the oil and gas sector, in addition to developing a mechanism to share experiences for the benefit of all parties. Mr. Mohammed Shleiweh Al

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Mr. Saif Ahmed Al Ghafli, CEO of Al Hosn Gas, visited the Shah site on July 24 to celebrate the arrival of the first rental rig from H&P Company through the National Drilling Company to start up the drilling operations. The rig, H&P 484, officially spudded its first well on the MP-4 pad on July 25.

Two Rigs Arrive at Shah Gas Field

After a long sea journey originating from Houston port in the US, the first rig had arrived to Zayed Port on June 8. The second rig arrived on July 5, and has been fully moved to site. The two rigs are contracted to Al Hosn Gas through the National Drilling Company for a 3-year period to facilitate the drilling and completion of all 32 wells in Phase 1 of the Shah Gas Development project.

During the CEO visit, the unique high technology features of the rig, designed to improve safety and drilling performance, were demonstrated. Key features of the fast moving rig design to provide quick moves between wells sites were also reviewed. The CEO provided the new rig crews with an overview of the planned Shah drilling program and the importance of drilling the wells safely and on schedule to meet the required gas delivery plans for the project.

The website information helps visitors learn about the company’s activities and the work progress in the Shah Gas Development Project, a project that is the first of its kind in exploring, producing and processing sour gas resources in Abu Dhabi.

Al Hosn Gas’s website is user-friendly and offers information about the company’s history, establishment, core business and e-services. The

Al Hosn Gas website: www.alhosngas.com

website also reflects the company’s commitment to social responsibility and its high-level practices in health, safety and environment. Visitors can explore the company’s news, activities and different publications. In addition, the website is a tool that enables job seekers to take a look at available vacancies at Al Hosn Gas and apply online.

Al Hosn Gas Launches its Website

Al Hosn Gas launched its website on September 4, 2012 to provide an overview of the company and shed light on its approach in doing business. This step is part of Al Hosn Gas’s strive to create effective communication channels with its partners and stakeholders, from contractors to consultants and employees, using cutting-edge technology.

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ADNOC’s Assistant General Managers – Administration Meeting

Mr. Al Ghafli stressed the importance of the efforts made to achieve Emiratization, as a result of the continuous coordination between the Group’s companies. He expressed his appreciation to the support that ADNOC is extending to Al Hosn Gas, which was reflected mainly in the number of competent employees who have joined Al Hosn Gas family, coming from different OPCOs.

The tremendous efforts of the Nationals Recruitment department were commended, as total number of UAE nationals recruited since 1999 exceeded

13,000, an average of 900 national employees per year.

The meeting highlighted the importance of ADNOC’s future initiatives that will meet the increasing demand for national employees. These initiatives include increasing the number of national students at the Petroleum Institute and ADNOC Technical Institute, providing more national and international scholarships, in addition to building and developing the capacities of new employees through training courses.

On June 6, ADNOC held its 27th Assistant General Managers – Administration meeting. Present were Mr. Saif Ahmed Al Ghafli, CEO of Al Hosn Gas, and Mr. Ali Al Murar, Senior Vice President – Administration.

The purpose of the trip was to help employees fulfill this sacred duty by facilitating their travel and accommodation, and providing all amenities that made their trip more comfortable, peaceful and serene. The Umrah rituals included Ihram in Miqat, recitation of Talbiyah, circumambulation of Kaaba (Tawaf), prayer behind the Station of Ibrahim (Maqam Ibrahim), Tarawih prayer at the Holy Sanctuary (Al Masjid Al Haram), shuttling between the two hills of Safa and Marwa (Sa’y) and head shaving for men.

The program also included a visit to Medina and the tomb of Prophet Mohamed, peace be upon him, in addition to performing prayers and reciting supplications at the Prophet’s Mosque, visiting the tombs of the Prophet’s Companions in Al Baqui’, visiting Mount Uhud, martyrs’ cemetery and praying at the Kaba’ Mosque.

Al Hosn Gas Organizes Umrah Trip for its Employees and their FamiliesAs part of its social activities that aim to enrich the social life of employees, Al Hosn Gas organized Umrah trip with the participation of 18 employees from different divisions and their families.

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Family Iftar for Employees

In the occasion of the Holy Month of Ramadan, Al Hosn Gas organized on August 7 a family Iftar for its employees, gathering more than 450 employees from all divisions and their families in a social, serene atmosphere. Present were members of the Extended Leadership Team.

The Iftar gathering is an acquaintance event that allows employees to communicate and meet their colleagues from other divisions and departments. In this year’s Iftar, there was an entertainment zone for kids offering many games. The audience enjoyed Ramadan atmosphere and took memorable pictures.

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Keen to provide a healthy work environment that meets the needs of employees and enhance their performance, the Social and Sports Committee at Al Hosn Gas organized the first CEO Football Championship between June 3 to 19, 2012. The administration team won the championship after four matches against the competitive teams, of which it won three and drew one.

Mr. Saif Ahmed Al Ghafli, CEO, rewarded the winning team by handing the championship cup to Mr. Ali Murshid Al Murar, captain of the team and Senior Vice President – Administration, and the medals to the team members. The five teams who participated in the championship were the Corporate Affairs, Development, Administration, Operations and Projects teams.

The Administration Team Wins the 2012 CEO Football Championship

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Al Hosn Gas held a farewell party for Mr. Ian Ross, Vice President for Health, Safety and Environment (HSE), as his services came to an end. Mr. Saif Ahmed Al Ghafli, CEO of Al Hosn Gas, commended the work of Mr. Ross and said that his service witnessed the winning of ADNOC 2011 HSE Award for Innovation, for company standard on hazard study for escape, evacuation and rescue (HAZEER).

Mr. Ross, in turn, thanked Al Hosn Gas management and employees, especially the HSE team, and expressed his appreciation for the support he has received during his service.

Mr. Patricio Rivera succeeded Mr. Ross as Vice President for HSE.

Hydrogen SulphideHydrogen Sulphide is a chemical compound with the formula H2S. It is a colorless, very poisonous, flammable gas with the characteristic foul odor of rotten eggs. This gas is heavier than air and collects in low-lying and enclosed areas. Hydrogen Sulphide is separated by heat, treated and condensed for easy transfer, then exported. It is used in manufacturing some medicines.

Farewell Party for the HSE Vice President

Properties of H2S• The gas is highly toxic, rank second in toxicity after

hydrogen cyanide, and is 5-6 times more poisonous than carbon monoxide.

• Colorless• Has a characteristic rotten egg odor when identified in

relatively low concentrations• Heavier than air. Its relative density is 1,189 and may

travel along the ground.• It collects in a low-laying and enclosed spaces.• Flammable and explosive• Self-ignition temperature: 260 ºC /500 ºF)

• Explosive limits: 46% - 4.3 LFL/LEL• Highly corrosive to some metals• Burns with a blue flame to form sulfur dioxide (SO2),

a gas that causes irritation to the eyes, lungs and throat, and may cause lung inflammation (pneumonia) few hours after exposure

• Dissolve fast in water and hydrocarbon liquids• 10 ppm is the concentration humans are allowed to get

exposed to for eight hours for five days without using breathing apparatus

• Boiling point: 79 ºF• Melting point: 117 ºF

Places where H2S can be foundHydrogen Sulphide can be found in large quantities in the oil and natural gas industry when drilling in sour gas zones, and during storage, refining and transportation. It results from the bacterial breakdown of organic matter containing sulfur as well. The gas is also formed during the refining, hydrocracking and hydrogen purification processes for some oil products.

DangerousnessThe dangerousness of hydrogen sulphide lies in the fact that it deadens the sense of smell very quickly, so people may be unaware of its presence. Some people can smell it even at low concentration levels. Exposure to high concentration levels of hydrogen suphide causes eye, nose and throat irritation. At these high levels (50-100 ppm), people should not rely on their sense of smell to determine the presence of H2S in the air, and must use a measurement tool instead. The increase of hydrogen sulphide levels causes allergy, eyes irritation, dizziness, itching and headaches. At levels higher than 25 ppm, the gas affects the person’s ability to breathe. Exposure to levels higher than 600 ppm can kill instantly. Death happens when people enter poorly ventilated spaces like deep wells and subsurface fluids tanks. Since hydrogen sulphide is heavier than air, the gas concentration is higher at the bottom of these spaces.

First AidDue to the instant, dangerous effect of hydrogen sulphide on individuals who inhale it, there might not be a chance to save a person by simply moving him to the closest clinic. He should receive first aid immediately at the worksite before moving him to the clinic or calling the doctor. Therefore, breathing apparatus should be available at the operation sites that have high concentration levels of hydrogen sulphide in preparation for any emergency. All people working in these sites must be trained on how to use the breathing apparatus and provide first aid in case of injury.

When a person inhale the hydrogen suphide gas, the following steps must be taken immediately:

• Move the injured person instantly away from the gas source to a fresh air area

• If the injured person is not breathing, an artificial respiration should be provided on the spot, with no delay or interruption, until he can breathe normally again or until the doctor arrives. In these cases, it is preferable to use oxygen apparatus to save the life of the injured.

• Heating the injured person until he is moved to the nearest clinic or hospital.

Safety Requirements• Clear warning signs and a “yellow flag” to

identify the work site• Maintain a safety distance from danger zones,

unless there is a necessity• Audio-visual alarm apparatus• Ensure that detectors, personal protective

equipment and breathing apparatus are in good conditions

• Store protective equipment in accessible places• Respiratory devices• Availability of detectors and calibration

maintenance

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The plant at Shah Gas Field as of September 20, 2012 المصنع في حقل شاه للغاز حتى تاريخ 20 سبتمبر 2012