New base special 16 october 2014

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NewBase 16 October 2014 Khaled Al Awadi

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Oman’s projects opportunities at $26bn by 2015 Saudi Gazette + NewBase

Oman’s projects market is set to receive a massive boost as the Sultanate ramps up its investment in turnkey projects over the next few years with 2015 witnessing an influx of up to $26 billion in capital expenditure and pipeline opportunities including the latest Duqm developments valued at $12.5 billion and fisheries harbors valued at $13.6 billion respectively.

As much as $145 billion worth of projects are currently under way or will be awarded in Oman, according to MEED projects, the region’s leading projects tracker. Among the projects at the forefront of Oman’s aggressive expansion program are $26 billion Khazzan & Makarem Fields projects, Oman’s Suwaiq IWPP and Haima Solar Thermal Hybrid Power Plan. Furthermore, $13 billion are to be invested in the Takamul downstream project and ORPIC’s Liwa Plastic Project Initiative with another $12 billion dedicated solely to the development of Duqm as the new energy, industrial, residential and tourism and leisure hub in Oman. As such, these and other project opportunities will be the focus of the upcoming MEED Oman Projects Forum 2014, which is held with the support of the Ministry of Commerce and Industry and puts an emphasis on In-Country Value initiatives and the associated requirements for those wishing to capture a share of what is quickly becoming a lucrative and astounding positive economic movement within the Sultanate of Oman. The Forum, to be held on Oct. 27-29, 2014 at the Al Bustan Palace Muscat, is designed to




provide attendees with exclusive and valuable insights on how to capture a share of Oman’s mega projects by adhering to in-country value requirements. Dr Ali Al Sunaidy, Minister of Commerce and Industry, Oman will deliver the keynote address highlighting the milestones of the country’s economic progress and identifying the priority sectors for investment in the next few years. In addition his address will outline the key initiatives to promote In-Country Value across Oman’s sectors as well as spending forecasted for 2015 and associated priority areas. Key government agencies will present a snapshot of opportunities across Oman’s high growth sectors as well as the strategic roadmaps for the development of each sector. The first day of the Forum will dedicate considerable focus during the morning to analyzing the macroeconomic trends and the drivers of the Omani economy as well as a thorough review of the expected outlook for Oman’s economy. Over 50 speakers including government representatives, project owners, engineering consultants, contractors, and financiers will give insight on the latest project opportunities across Oman’s infrastructure, transport, oil, gas, power, water and heavy industry sectors, and the critical procurement models to win these. “MEED’s Oman Projects Forum 2014 presents a detailed overview of the sultanate’s economy, the priority sectors and budget for the coming years. More importantly, it provides an insight into the Omani planned budget and a sector-by-sector analysis by value, stages and timelines. As such it is an important meeting for those interested in gaining a foothold in or winning a bigger share of Oman’s projects,” said Edmund O’ Sullivan, Chairman, MEED Events, organizers of the forum. Projects valued $500m andmore under execution or planned in Oman to 2022 ($m) Project Budget ($m) 1 Duqm new town 20,000

2 Oman national railway 15,600

3 Duqm refinery & petrochemical complex 15,000

4 Khazzan & Makarem fields 15,000

5 Muscat & Salalah international airport expansion 5,200

6 Gas-based steel plant 3,000

7 The Wave development 3,000

8 Batinah expressway 2,600

9 Sohar Aluminium smelter expansion 2,400

10 Sohar refinery expansion project 2,300

11 Duqm IWPP 2,000

12 Haima Solar thermal hybrid power plant 2,000

13 Oman convention and exhibition centre 1,800

14 Masirah island causeway 1,500

15Sur IPP 1,500

16 Sultan Qaboos medical city complex 1,480

17 Batinah coastal road project 1,312

18 Bidbid to Sur dual carriageway 1,156

19 Yibal Khuff sour development project 1,050

20 Development of Block 60 (Abu Butabul) 1,000

Source: MEED Projects, October 2013




UAE asks oilfield bidders for two-month offer extension Reuters + NewBase

The UAE has asked bidders for its biggest onshore oilfields to extend their offers by two months until December 31, sources familiar with the matter said, as the country considers bringing in Asian firms after decades-long partnerships with western majors.

Nine Asian and western firms have bid for stakes in the Abu Dhabi Company for Onshore Oil Operations (Adco) concession after a deal with western oil majors that dates back to the 1970s expired in January. State-run Abu Dhabi National Oil Company (Adnoc) has asked the nine bidding companies to extend offers that were due to expire around October 22 until December 21, three sources said. Industry observers say any changes in the concessions would be made at the highest decision-making body for the oil and gas industry, the Supreme Petroleum Council. They say there is a difference in opinion inside the SPC over whether to stick with western companies, or make room for newcomers from Asia, while some would like to see Adnoc operating the fields alone.




Adnoc could not be reached for comment and none of the nine companies would comment. One source said however that it was unlikely any company would refuse Adco's request. "Is any company going to say 'no our bids have expired'? The answer is no. No company is going to go through this effort and then say our offers are not valid anymore," the source said. ExxonMobil, Royal Dutch Shell, Total and BP – have each held 9.5 per cent equity stakes in the Adco concession since the 1970s. Portugal's Partex had a 2 per cent stake, and the rest was held by Adnoc. After the deal expired in January, Adnoc took 100 per cent of the concession. Shell, Total and BP have made their new bids, which are being evaluated by the government of Abu Dhabi, the capital of the UAE, while Exxon has decided against bidding, sources have told Reuters. US firm Occidental Petroleum, Italy's Eni, China National Petroleum Corp (CNPC), Norway's Statoil, Japan's Inpex and Korea National Oil Corp have also bid for the new deal. Each company submitted two proposals last year - one for a 5 per cent stake and another for a 10 per cent stake, with a one year validity, the first source said.

Oil production facilities – Bu Hasa , Total




Solo Oil Acquires Interest in Kiliwani Gas Field in Tanzania Solo Oil + NewBase

Solo Oil on Tuesday announced that it has signed an agreement to acquire an initial 6.5% interest in Kiliwani North Development License in Tanzania from Ndovu Resources, a wholly-owned

subsidiary of Aminex, for $3.5 million. The UK based company also has a 45 day option to increase its interest in the license by a further 6.5 percent to 13 percent. The license contains Kiliwani North 1 well which is expected to produce at an approximate rate of 20 million cubic feet per day (mmscfd) in first half 2015.

“This agreement, when closed, will represent a major landmark for Solo as it will give the company its first revenue from Tanzania,” Solo said. According to Solo, independently verified gross in-place unrisked mean gas resources of the well, computed by Isis Petroleum Consultants, are estimated as 45 billion cubic feet (bcf).

Construction of the 2 km long pipeline from KN1 to the new Songo Songo gas processing plant has now commenced and is expected to be completed in early 2015. The Songo Songo gas processing plant is connected with the newly constructed 36-inch gas pipeline from Mtwara in the south of Tanzania to Dar es Salaam, the national capital, in the north, and this provides an immediate route to monetise the Kiliwani North gas production.

Ndovu is in advanced negotiations for a gas sales agreement with the Tanzanian authorities and these negotiations are expected to be satisfactorily concluded in the near future, Solo stated.

Solo and Aminex are already partners in the Ruvuma Production Sharing Contract in southern Tanzania, with respectively 25 percent and 75 percent working interests.




Senegal to award two offshore oil licences by year-end Reuters + NewBase

Senegal will award exploration licences for two offshore oil blocks by the end of the year, the head of state-run hydrocarbons corporation Petrosen said on Wednesday.

The announcement comes days after Cairn Energy announced it had made an offshore oil discovery that Petrosen said was one of the biggest in Senegal's history. 'We already have proposals. We are evaluating the best for the state of Senegal,' Petrosen Director General Mamadou Faye said of the two new northern offshore blocks. Faye would not give the names of the firms who had shown interest in the new licences. He said Petrosen will look for funds to explore a third block for itself.

Firms have explored for oil offshore and onshore in Senegal for decades but none of the finds have been commercially viable. Last week, Petrosen signed a $400 million 'farm-in' agreement with Kosmos Energy for a 60 percent stake in the Cayar and St. Louis offshore blocks. See: Kosmos to buy into Senegal offshore blocks for $400 million




Cairn owns a 40 percent interest in three-block joint venture in which ConocoPhillips has 35 percent, FAR Ltd 15 percent and Petrosen 10 percent. Speaking of Cairn's announcement last week, Faye said. 'This is a real discovery. It is not fiction. It is one of the biggest oil finds ever in Senegal.' Cairn and Petrosen estimate the deep Sangomar offshore holds 250 million proven barrels and 2.5 billion probable barrels. 'Evaluations of the discovery are ongoing with the objective of etermining the extent of deposit and elaborating a development plan for production,' Faye said.

Senegal: stable & democratic Senegal is considered one of Africa’s most politically and economically stable countries and hosts some of the best transportation, telecommunications and communication infrastructure in West Africa. It has been a functioning democracy since independence from France in 1960 and enjoys free and fair elections. Contract terms for oil and gas exploration and production are among the best in the world.




South Africa's Zuma outlines ambitious oil exploration plans Source: Reuters+ NewBase

South African President Jacob Zuma outlined ambitious plans on Wednesday for oil and gas exploration in coastal waters that he said could contain as much as 9 billion barrels of crude and vast quantities of natural gas.

In a speech to senior South African and Malaysian officials in the port city of Durban, Zuma said the government wanted to drill 30 exploration wells over the next 10 years. 'Over the next 20 years, this could lead to the production of 300,000 barrels of oil and gas per day,' Zuma said. He

did however stress that there was 'significant uncertainty' about the extent of South Africa's hydrocarbon resources.

Although blessed with an abundance of minerals such as gold, platinum and coal, Africa's most advanced economy has always been a major oil importer. Zuma said 9 billion barrels of crude was equivalent to 40 years of South African oil consumption, while gas deposits could amount to as much as 11 billion barrels of oil equivalent, equal to 375 years of consumption.




Heerema to build Culzean jacket .Press Release

Maersk Oil North Sea UK Limited, operator of the Culzean development in the North Sea, has awarded a contract for the engineering, procurement and construction (EPC) of the project’s well head platform

(WHP) jacket to Heerema Hartlepool Limited.

Heerema will build the WHP jacket and piles, the well head access deck and access ways. It’s expected that

the well head access deck

and access ways will be

fabricated in Hartlepool,

with the WHP jacket being

built in Vlissingen in the

Netherlands. The contract

is expected to be ready for

‘sail away’ ahead of the

drilling startup on the

project in Q2 2016, subject

to a final investment

decision in 2015.

The award comes

as Hercules Offshore Inc,

the provider of the

newbuild jack-up rig for

the Culzean development, begins a recruitment drive in Aberdeen as it establishes a permanent UK presence

to support the Culzean project and pursue other market opportunities. This inward investment is expected to

create up to 100 offshore and 20 onshore jobs.

Project on track

Welcoming the WHP jacket award, Maersk Oil UK Managing Director, Martin Rune Pedersen said,“The

Culzean project continues to progress well. This award has been made on schedule and three weeks after

steel cutting began on the heavy duty jack-up rig which will commence drilling in Q2 2016, subject to final

approvals.”

Commenting on the announcement, Exchequer Secretary to the Treasury, Priti Patel MP said, “The

Culzean project has the potential to meet around 5% of UK gas demand in 2020/21, and would not be

possible without the Government’s ultra high pressure, high temperature cluster area allowance. The new

allowance builds on the existing work that the Government has done with industry through field allowances,

which has helped create new jobs through record levels of investment. Oil & Gas UK estimates the

Government’s allowances directly incentivised £7bn of investment last year.”

Key facts on Culzean:

– Culzean is a uHP/HT field. Maersk Oil UK (49.99%) is the operator, with JX Nippon (34.01%) and Britoil

(BP) (16%) its co-venturers.

– Forecast plateau production is in a range of 400-500 million standard cubic feet per day (this represents

Maersk Oil equity production of 30-45,000 boepd).

– The accommodation platform will have the capacity for over 100 people.

– The water depth is approximately 88 metres and the reservoir is located around 4300 metres below sea level.




Report: Benefits of Cygnus project felt accross UK

A new report published 15 October has revealed the full extent of the economic benefits being generated by

the Cygnus gas project – the UK’s largest Southern Gas field discovery in the past 25 years.

The report by leading economics consultancy Oxford Economics has highlighted how the project will add

£1.29 billion to the UK economy and support more than 4,820 skilled jobs during its five-year construction

period.

It comes as drilling begins at the Cygnus field, following a

successful installation campaign which has seen one

platform and the jackets for a further two platforms safely

in place.

Economic benefits will be felt across the UK, in particular

throughout Scotland and the North East of England, where

19,000 tonnes of offshore infrastructure is being built at

yards in Hartlepool, Fife and the Highlands.

Most cash spent in UK

The budget for the overall project is in the region of £1.4

billion. Of this, just over £250 million will be spent on contractors and suppliers based overseas, leaving

almost £1.15 billion to be spent within the UK.

According to the report, in Scotland, where one platform and the bases for all four platforms are being built,

£323 million will be generated in the economy, securing 1,450 jobs including 15 apprenticeships at yards in

Fife.

Across the North East coast, it will bring nearly £90 million to the local economy and secure over 400 jobs,

including in Hartlepool. Three platforms for Cygnus are being built in the town, making it the third

consecutive offshore project by Centrica Energy to involve major construction work in Hartlepool.

“The total contribution of the Cygnus project to UK GDP is expected to be £1.29 billion over a near-five-

year period, sufficient to support an average of 4,820 jobs over that time.”

The investment in offshore operations, including transporting and installing the infrastructure for the

Cygnus field and bringing the field into production, will bring nearly £225 million for the UK economy and

support nearly 300 jobs.

Across the rest of the UK, the spending of people employed by the Cygnus partners and contractors will

support 1,540 jobs, adding £315.8 million to the nation’s economy.

At peak the Cygnus project, which was sanctioned in 2012, will produce enough gas to meet the demand of

1.5 million UK homes.

“The Cygnus North Sea project is already supporting valuable income and employment opportunities in the

North East, in Scotland and throughout the UK”

Adrian Cooper, CEO of Oxford Economics, said: “The Cygnus North Sea project is already supporting

valuable income and employment opportunities in the North East, in Scotland and throughout the UK, even




though the gas production process itself has yet to start. The benefits are being felt not just by those directly

involved in the design and build of the required infrastructure, but also by suppliers of goods and services

of all kinds to those contractors in turn.”

Colette Cohen, Senior Vice-President for the UK and the Netherlands at Centrica Energy, said: “This

report underlines how significant an impact the Cygnus project is having across the UK both in terms of

investment and jobs, as well as strengthening our security of gas supply. This is a great example of what can

be achieved when we invest in skilled people across the UK, creating thriving energy coasts and securing

gas for the UK.”

Read the full Oxford Economics – Economic Impact of Cygnus Project

http://library.the-group.net/centrica/client_upload/file/Oxford_Economics_report_Economic_Impact_of_Cygnus_Project.pdf

The Cygnus project is operated by GDF SUEZ E&P UK with a 38.75% interest, with partners Centrica

Energy (48.75%) and Bayerngas (12.5%).

The development was sanctioned in 2012

following the UK Government’s decision to

introduce a field allowance for new large gas

fields in shallow water, which provided GDF

and the project partners with the certainty

needed to go ahead. First gas at the field,

150km off the coast of Lincolnshire, is

targeted for the end of 2015.




Oil continue to fall, below $84 after hitting 4-year low Reuters+ NewBase

Brent crude hit a new four-year low on Wednesday before recovering to just under $84 a barrel, as faltering global growth curbed demand for fuel at a time of heavy oversupply.

Oil saw its biggest daily fall in more than three years on Tuesday after the West’s energy watchdog slashed its forecasts for world oil demand for this year and 2015.

Brent for November delivery touched a fresh post-2010 low of $83.37, down $1.67, before recovering to around $84.80 by 1330 GMT. Brent has now fallen more than 25 per cent from the year’s mid-June peak.

US crude fell 24 cents a barrel to $80.61 after hitting a new 27-month low of $80.01 on Wednesday. On Tuesday, the contract posted its largest fall in a single session in nearly two years.

Traders said prices had rebounded slightly after US crude held above $80 a barrel, a symbolically important level in a market that has crashed through most lines of major support.

But prices remain under pressure as core members of the Organisation of the Petroleum Exporting Countries appear to be focused on fighting for market share rather than on cutting production to shore up prices.

Weak European markets and slowing Chinese inflation added to concerns about global growth, which have helped extend the rout.

US shale oil production is set to grow by around 106,000 barrels per day in November from October, the US Energy Information Administration said.

On Tuesday, Iran said it could live with lower oil prices, joining the chorus of similar signals from core Opec members Saudi Arabia and Kuwait.

US commercial crude oil inventories were forecast to have increased in the week ended October 10, while refined products likely fell, according to a Reuters poll of analysts.

Industry group the American Petroleum Institute (API) will issue its report later on Wednesday, and the EIA will follow with its weekly data on Thursday. The reports have been delayed a day due to Monday’s Columbus Day holiday.




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 Tsector. Currently working as Tsector. Currently working as Tsector. Currently working as Technical Affairs Specialist for echnical Affairs Specialist for echnical Affairs Specialist for echnical Affairs Specialist for

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

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 experience were spent as the Gas Operations Manager experience were spent as the Gas Operations Manager experience were spent as the Gas Operations Manager in in in 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 compressor stations . Through the years , he has & gas compressor stations . Through the years , he has & gas compressor stations . Through the years , he has & gas compressor 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

engineeriengineeriengineeriengineering of supply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenance ng of supply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenance ng of supply routes. Many years were spent drafting, & compiling gas transportation , operation & maintenance ng 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 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 EEEEnergy program broadcasted internationally , via GCC leading satellite Channels . nergy program broadcasted internationally , via GCC leading satellite Channels . nergy program broadcasted internationally , via GCC leading satellite Channels . nergy 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 16 October 2014 K. Al Awadi

Economy & Finance

New base special 16 october 2014