new base 559 special 12 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,

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 .

NewBase 12 March 2015 - Issue No. 559 Khaled Al Awadi

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

Gulf countries push for diversification as oil prices drop GulfNews + NewBase The UAE economy is stronger than ever and will not be impacted due to drop in oil prices, a top official from the ministry of energy said.

“We are not worried at all due to decrease in oil prices. Our economy is strong,” said Ahmad Al Ka’abi, director of the petroleum economics department in the Ministry of Energy. He said drops in oil prices are not new and have happened before.

“Our economy was not affected when oil prices went down earlier. It will not affect now. Our economy is much stronger than before,” he said while speaking at a symposium on current oil market developments in Abu Dhabi on Wednesday.

Oil prices have dropped by about 60 per cent since June last year due to rising production and less demand from Europe and China. Brent, the international crude benchmark, was trading at less than $60 per barrel on Wednesday. Al Ka’abi said the UAE’s dependence on oil has fallen sharply over the years.

From left: Dr Michelle Foss, Chief Energy Economist and Program Manager, University of Texas, Dr Jean-Francois, Adjunct Professor, Georgetown University, USA, Musabbeh Al Ka’abi, CEO , Mubadala Petroleum, Panel Chair, and Timothy Gould, Head of Unit, Resources and Investment, Directorate of Global Energy Economics, International Energy Agency, France, at the symposium.




“The country is adopting a new strategy in the energy sector, which includes amalgamation of nuclear energy and creation of renewable sources to meet the energy demand. By 2020, we will have four nuclear stations and they will provide 25 per cent of the UAE’s energy needs. We are investing in diversification of our energy sources.”

He added that the growth of the US shale production was the most important factor that contributed to the decline in oil prices.

On the other hand, a senior official from Kuwait Petroleum Corporation said that none of their projects were stalled due to drop in oil prices. “All the major projects are going ahead. We have a strategy to reach 4 million barrels per day of oil production by 2020. We are trying to reach the target and take actions,” said Dr Mohammad Khuder Al Shatti, an oil analyst and manager of the CEO’s office at the Kuwait Petroleum Coporation.

He said the fall in oil prices has brought in new changes in the oil industry in the Gulf countries.

“It is not about cutting projects but thinking about diversification, which is very important. In the UAE, Saudi Arabia and Kuwait, there is a drive towards diversification and put emphasis on solar power and other sources of renewable energy. In Kuwait, 15 per cent of our energy will be renewable energy by 2030.”

“It is good for the countries. We are in a better position because of high financial reserves, which we accumulated over the years. The present situation is pushing for much more mature thinking in terms of expanding on renewables and studying and reviewing subsidies. There will be rationalisation of expenditure.”

Kuwait exports the fifth-largest volume of crude oil and condensates following Saudi Arabia, the UAE, Iraq, and Nigeria among Opec countries.




Dubai Airports to link solar project to Dewa

Dubai Airports has partnered with Dubai Electricity and Water Authority (Dewa) to erect a solar array at Al Maktoum International at Dubai World Central (DWC) which allows the power generated to be fed directly into the power grid.

This is the first solar project to be linked directly to the Dewa grid and is expected to be followed by several other similar projects across Dubai, a statement said. By tapping the sun’s energy, the 100-panel solar array aims to limit the power used by DWC’s employee gate facility. The array, which is located on the roof of the building, has a capacity of 30KW and generates about 48.8MWh of electricity per year, equal to about two-thirds of the power used by the building. Feeding power into the Dewa power grid allows both Dubai Airports and Dewa to further reduce their reliance on power generated using fossil fuel. “The solar array is just one of several projects across our airports aimed at adopting ways to limit our environmental impact while safeguarding the significant economic and social contributions the aviation sector provides Dubai. Initiatives such as these take us a step closer to achieving that ambition,” said Majed Al Joker, SVP of Operations DWC at Dubai Airports. The project also forms part of a broader environmental drive outlined in the Dubai Integrated Energy Strategy 2030, aimed at reducing the emirate’s reliance on fossil fuels. “We are pleased to implement the first smart initiative to connect solar power to buildings. This supports the Dubai Integrated Energy Strategy 2030 to diversify the energy mix and increase the share of renewable energy in Dubai’s total power output to 7 per cent by 2020 and 15 per cent by 2030, and achieve our strategy of supporting sustainable energy projects in Dubai,” said Waleed Salman, EVP of Strategy & Business Development at Dewa .




Algeria: PM urges EU to revive several energy projects APS + NewBase

Prime Minister Abdelmalek Sellal urged Tuesday the European Union (EU) to revive several energy projects like gas pipelines "TSGP" and "GALSI" and "DESERTEC" project relating to the solar energy production.

During a news conference jointly held with his Portuguese counterpart Pedro Passos Coelho following the 4th Algerian-Portuguese High-Level Meeting, Sellal said he has proposed to Portugal and the EU to revive energy projects with a view to meet Europe’s needs.

At the request of the European countries that have expressed the need for ‘securing and diversifying energy supplies to reduce

dependence on Russian gas’, Algeria proposed to Europe "the revival of the pipeline project" GALSI" to link Algeria to Italy via Sardinia and which works have not started yet."

Algeria has also recommended the relaunch of another "strategic project which is the Trans-Saharan gas pipeline (TSGP), in partnership with the African Union (AU) within the NEPAD. The gas pipeline is set to link Nigeria to Europe via Algeria.

Algeria is Europe’s second gas supplier after Russia through three pipelines: two via Spain and a pipeline supplying Italy.

The Premier has also said having discussed with his Portuguese counterpart about the possible relaunch of "DESERTEC" project, initially planned with Germany," adding that it is possible to "produce solar energy in Algeria and sell in Europe".




In this regard, Sellal said that "Algeria has also respected the conventions binding it with other countries.” "Algeria does not politicize economic agreements," he added. Furthermore, Sellal said that "new energy discoveries are recorded annually in Algeria and we cannot evaluate all our underground energy reserves."

Concerning shale gas, Sellal said the purpose of the exploration operations is to "know the potential of Algeria for the next 15 to 20 years." We are considering the means of exploiting these newly discovered conventional hydrocarbons, he said.

"Last year, we talked about reserves for 2025. Today, and with these new findings, we are speaking about reserves for the year 2033, notwithstanding the increase in domestic consumption," said Sellal.

"Today, Algeria turns its energy policy towards the diversification of its resources through what is commonly called ‘energy mix’," adding that Algeria "possesses new power plants using solar energy." Regarding the Algerian-Portuguese bilateral cooperation, Sellal said that is has progressed during the past two years.

"A significant number of joint-ventures are operating in Algeria, complying with the 49/51 rule," the prime minister said. He further emphasized the possibility of strengthening bilateral relations, especially after the recent opening of an air route between Lisbon and Algiers, making two flights a week.

About the political relations, the Prime Minister said that Algeria and Portugal shared "a common vision on regional issues, chiefly the situation in the Sahel, Libya and the Middle East, including the fight against terrorist groups, like the ISIS organization (EI).

"It is certain now that Algeria has a proven and

recognized experience. We are

strong supporters and advocates of peace. Any conflict, whatever its nature, must be resolved at the political level because the military solution would only worsen the situation," he noted.

Referring to the meeting that brought together the Libyan belligerents in Algiers, Sellal said the support of Algeria to the inter-Libyan dialogue answers "the principle of defense of the country’s unity," recalling that Algeria "in general, does not interfere in the internal affairs of the country."

He also stressed that "Algeria, which supports the principle of political pluralism, rejects any attempt to divide any territory." "After the good results we have achieved for Mali and Tunisia, we wish to find an acceptable solution to the crisis in Libya," Sellal concluded.




India: TAPI Pipeline Negotiations at the Final Stage Gas Asia + NewBase

Negotiation related to TAPI natural gas pipeline is at the final stage, India’s Petroleum Minister Dharmendra Pradhan said in Parliament on Monday. The TAPI pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years.

Last year, gas companies of Turkmenistan, Afghanistan, Pakistan, and India established a company that will build, own and operate the planned 1,800-kilometer TAPI natural gas pipeline. Pradhan said that once the pipeline is complete India would be free from bring dependant on Gulf countries on natural gas. The minister also stated that Indian government will also take a decision on a project to bring natural gas from Iran through a pipeline passing through Afghanistan and Pakistan.

The pipeline will be 1,750 millimetres (56 in) in diameter with a working pressure of 100 Bar

The initial capacity will be 27 billion cubic metres (950 billion cubic feet) of natural gas per year of which 2 billion cubic metres (71 billion cubic feet) will be provided to Afghanistan and 12.5 billion cubic metres (440 billion cubic feet) to each Pakistan and India. Later the capacity will increase to 33 billion cubic metres (1.2 trillion cubic feet). Six compressor stations would be constructed along the pipeline. The pipeline was expected to be operational by 2014.]

The pipeline's cost is estimated at US$10.0 billion. The Asian Development Bank has played a leading role in coordinating and facilitating the TAPI negotiation process. The four TAPI nations must still attract commercial partners to build, finance and operate the pipeline.




UK: Total to sell stake in the Laggan-Tormore field in North Sea Source: Reuters

French oil major Total is selling its stake in the North SeaLaggan-Tormore oil and gas field as it seeks to shed assets after a steep fall in the oil price, banking sources said. Total is hoping to get up to $1.5 billion for its 80 percent operating stake in the field, located approx. 125 km north-west of the Shetland Islands in Britain's North Sea, the sources said. The company aims to complete the deal in June, according to the banking sources.

A Total spokeswoman said: 'We don't comment on market rumours.' Many oil companies are trying to sell assets in the ageing and high-cost North Sea oil province. However, the Laggan-Tormore is considered a high-quality asset as it is planned to start production at the end of this year. It is expected to start production at the end of 2015 after initial delays, eventually reaching peak production rates of 93,000 barrels of oil equivalent per day.

Total had sought to make the Laggan-Tormore gas and condensate field its third major hub in British waters, after the existing Alwyn North and Elgin-Franklin provinces. As recently as 2013, the company expected Laggan-Tormore to turn it into the top oil and gas producer in British waters. But oil prices roughly halved between last June and January leading Total, like most of its peers, to cut spending and sell assets in

order to boost their balance sheets. Oil prices have since stabilised at around $60 per barrel, but are still off peaks of more than $100 reached last year.

Total last month said it would cut 2015 investments by up to 13 percent to $23-24 billion and would spend 30 percent less on exploration work following oil price decline. 'Total is reassigning their portfolio and want higher returns elsewhere in the world,' one banking source said. Denmark-based Dong Energy holds the remaining 20 percent stake in the field.

The sale of one of Total's key projects, meant to help the group reach its 2.8 million barrels of oil equivalent per day by 2017, also could signal that after having embarked on one of the largest asset-sale programmes in the industry in recent years, the group now has fewer non-core assets to dispose of.




Glencore to take 49% stake in Russian Russneft Reuters + NewBase

Glencore is to take a 49 percent stake in Russian oil producer Russneft as a result of a restructuring, its owner said on Wednesday, despite fears that an escalating conflict between Moscow and the West over Ukraine could lead to wider sanctions against the Kremlin.

Speaking in an interview on the Rossiya 24 TV channel, Mikhail Gutseriyev said the deal was awaiting approval from the Russian competition regulator. The non-cash transaction will convert shares Glencore has held for the past decade in Russneft's subsidiaries into a stake in the parent company, said Gutseriyev. Russneft also owes Glencore $984 million, according to Glencore's results for 2014. Glencore declined to comment.

The deal is being finalised as the United States and the European Union are considering slapping new sanctions on Russian companies and individuals over Moscow's role in Ukraine's crisis. Fitch Ratings said on Wednesday that sanctions and their impact on corporate funding pose a greater threat to the Russian oil industry than the weak oil price.

'Glencore has long sought to venture into upstream just like some of its rivals,' Alexei Kokin, an analyst with UralSib brokerage in Moscow, told Reuters. 'The fact is - there are no sanctions against Russneft'.

Even though many large Russian companies have escaped EU and U.S. sanctions so far, the implications have been huge - Western banks' lending to Russia has almost dried up since last year and imports of Western technology and equipment has become very difficult. Last week Russian billionaire Mikhail Fridman's deal to buy the UK North Sea oil and gas interests of German utility RWE was challenged by the British government due to fears of potential future sanctions.

Glencore has its roots in the oil trading industry and remains one of top three crude traders in the world. Its merger with Xstrata in 2013 has also turned the trader into a mining giant but its production assets in the oil industry have so far remained modest compared with the amount of oil it trades.

'This deal (Russneft) highlights that oil is clearly something that Glencore is committed to in the longer term,' said Bernstein Research analyst Paul Gait. 'It also shows they are prepared to take greater political risk where others would be slightly more cautious. Whether it’s Russia, Bolivia or the DRC, Glencore seems more comfortable than the others in these riskier areas,' he said.

The Russneft deal follows a turbulent decade for Glencore in Russia where the firm has exported large volumes of crude from Russneft but also faced losing its investment there when Gutseriyev




fell out with the authorities. Eight years ago the billionaire fled to London following a tax evasion probe and after his son died in mysterious circumstances. Now ranked 33rd in Forbes magazine's latest list of the richest Russians, he returned to Russia in 2010 after the tax fraud case was dropped and reasserted his control over Russneft.

Under a corporate restructuring Gutseriyev has become the sole shareholder at the holding company level and last month he took over as chairman of the company's board while quitting the post of company president.

After its consolidation the Russneft group will be producing 360,000 barrels of oil a day, according to Gutseriyev, making it comparable in size with Russia's six-largest oil producer, Bashneft, which is listed and has a market capitalisation of $6 billion. 'All the subsidiaries will be folded into the main (holding) company. The deal is being signed, we have been finishing the shareholders agreement. Glencore will own 49 percent in Russneft,' Gutseriyev said on Wednesday.

About Russneft : RussNeft was established in September 2002. RussNeft increased its oil production in Tomsk region in 2012 by 54% up to 1.045 million tons (against 696.5 thousand tons in 2011). Another strategically important operation project for OAO NK RussNeft is development of Shapshinskoe group of fields. The cumulative production at those licenses in 2012 was 1.4 million tons. OAO NK RussNeft will increase the oil production in 2013 at Shapshinskoe group of fields by 7% up to 1.5 million tons.

The production grew also due to successful implementation of the large-scale drilling programs. The cumulative oil growth due to start-up of 138 new producing wells was 1172 thousand tons. RussNeft has independent audit results of oil and gas reserves as of 01.01.2014. Oil and gas reserves of all the companies in OAO NK RussNeft corporate structure as of 01.01.2014 , in compliance with the audit performed by Miller and Lents (the USA), amount to:

Oil:

Proven – 1,034.689 mbbl; Probable – 465.563 mbbl; Possible – 639.379 mbbl.

Gas:

Proven – 987,607 mcf; Probable – 272,419 mcf; Possible – 245,351 mcf.

Estimates of the oil and gas reserves are compliant with the new requirements of SPE/WPC/AAPG/SPEE valid from 28.03.2007.




Ghana: Azonto Petroleum relinquishes Offshore Accra Block Source: Azonto Petroleum

Azonto Petroleum has announced that, as a result of a continued strategic review of its operations and prolonged discussions with the government of Ghana and potential partners with regard to ongoing participation in the offshore Accra Block, the Company has decided not to

continue with its deepwater exploration acreage in the Offshore Accra Block, Ghana. Following the exit from the Block of other partners in March 2014 Azonto's

subsidiaryAzonto Petroleum (Ghana), in which Vitol E&P has a 43% interest, and the other remaining partner Afex Oil (Ghana), secured a 6-month extension of the Licence to 23 September 2014 for the purpose of determining whether suitable operating partners

could be found to proceed with into the next phase of Exploration under the Petroleum Agreement. During the extension period the Company undertook extensive technical work, including further detailed evaluation of the seismic data and remapping, and set up a detailed Data Room which was visited by over ten companies.

However, as a result of the currently challenging market conditions, a farmout agreement could not be finalised and the JV Partners have therefore elected not to seek a further extension to the Initial Exploration Period, nor to apply to enter into the First Extension Period under the Petroleum Agreement.

As a consequence, the JV Partners have formally advised the Ghana Ministry of Energy and Petroleum that all of the Contract Area is relinquished and that Azonto Petroleum (Ghana) has withdrawn as temporary Operator in respect of the Licence.

There were no outstanding commitments under the work programme, which was completed in the period to 31 December 2013, and there is no cost to the Company associated with the relinquishment. Commenting on today's announcement Azonto's Managing Director, Mr Gregory Stoupnitzky, said:

'Today's announcement is another step in support of our strategy to focus on delivering value from our core asset in Cote d'Ivoire and prudently managing our balance sheet. Relinquishing the Offshore Accra Block will reduce Azonto's annual operating costs by up to USD 500k, which is in line with our commitment to reduce G&A whilst focusing on the delivery of our development project in Côte d'Ivoire. We look forward to working with our CI-202 partners towards delivering and unlocking full value for shareholders.'

Full details of the Offshore Accra Block farmout campaign are available at energy-pedia opportunities, our international oil and gas opportunities service, available via subscription.




Kenya:Tullow Oil provides onshore Kenya exploration and appraisal update Source: Tullow Oil + NewBase

Tullow Oil has provided an update on exploration and appraisal activities in onshore Kenya Blocks 10BB, 13T and Block 10BA.

Engomo-1 exploration well

The Engomo-1 exploration well in Block 10BA was drilled to a total depth of 2,353 metres utilising the SMP-106 rig. The well encountered interbedded sandstones, siltstones and claystones but no significant oil or gas shows were encountered and the well has been plugged and abandoned.

Engomo-1 was the first well drilled in the large North Turkana Basin and is located west of Lake Turkana where numerous naturally occurring oil slicks and seeps have been observed. Analysis is being focused on high-grading the remaining prospectivity in the basin. The SMP-106 rig will now be demobilized.

South Lokichar Basin appraisal activity

Tullow is continuing its extensive exploration and appraisal programme in the South Lokichar Basin in Blocks 10BB and 13T, which has the joint objectives of proving reservoir quality and

defining the resource estimates to ultimately progress the development of the discovered resources.

The SMP-5 rig recently installed well completions in Amosing-1 and Amosing-2A in preparation for an Extended Well Test (“EWT”) of the field and the rig has now been released. The EWT involves test production and injection to provide dynamic flow characterisation of the Amosing stacked oil reservoirs. Both wells have been completed in five zones with hydraulically controlled selective completions that permit independent tests of selected intervals without well intervention. Initial rig-less clean-up testing has been concluded on both wells with excellent results. The Amosing-1 well flowed at a combined maximum rate of 5,600 bopd from five zones and the Amosing-2A well flowed at a combined maximum rate of 6,000 bopd from four zones, the fifth zone being in the aquifer. Both wells demonstrated high quality reservoir sands and flowed 31 to 38o API dry oil under natural flow. Pressure data during the initial




clean-up flows shows connectivity between the two completed wells in the upper three zones with further production testing required to test connectivity in the lower two zones. These findings support the static pressure data which indicated connectivity between the Amosing-1, 2, 2A and 3 wells in multiple zones. The Amosing EWT forward programme is to conduct longer-term oil flow and water injection tests, commencing mid-March with results expected in the second quarter of this year.

The PR Marriott 46 rig recently drilled the Ngamia-7 appraisal well to a final depth of 2,914 metres. The well was drilled to test the Ngamia oil field’s eastern flank and was located 1,800 metres north-east of Ngamia-1 and 1,300 metres east of Ngamia-3. The well encountered up to 132 metres of net oil pay and has expanded the proven extent of the field. The well has now been suspended for future use. Static pressure data from the Ngamia-1, 3, 5, 6 and 7 wells supports connectivity between the wells at multiple reservoir horizons which will be tested with the planned Ngamia EWT.

Planning is also under way to conduct an EWT of the Ngamia field. The PR Marriott 46 rig, which is currently drilling the

Amosing-4 well with a result expected in April, will mobilize back to the Ngamia field to drill and complete the Ngamia-8 well which will be the main producer for the EWT. Additionally, two of the existing suspended Ngamia wells will be complete as EWT wells. Initial flow testing of the Ngamia EWT wells is expected to commence around mid-year.

The Weatherford 804 rig is currently drilling the Ekales-2 appraisal well to test an eastern fault block on the structure and also test a deeper exploration objective within the Lokhone shale source rock that has tested oil elsewhere in the basin. The well is currently at a depth of 2,817 meters and has drilled through the primary objective and encountered 50 to 70 metres of potential net oil pay. Final results from the well should be available in April. Following completion of this well, the Weatherford 804 rig will be released.

Finally, the 3D seismic survey data set over along the western basin bounding fault discoveries has been processed and is being interpreted. These data already indicate significantly improved structural and stratigraphic definition and additional prospectivity not evident on the 2D seismic.

Tullow Operates Blocks 10BB, 13T and 10BA with 50% equity and is partnered by Africa Oil Corporation, also with 50%.




Oil Price Drop Special Coverage

Oil hits one-month low $56 Later rises to on dollar rally Reuters+ AFP+ NewBase

London: World oil prices edged higher yesterday as traders eagerly awaited the weekly update on commercial crude stockpiles in top consumer the United States. Gains were however limited by the strong dollar and persistent concerns about a global supply glut. In midday London deals, European benchmark Brent North Sea crude for April delivery rose 20

cents to $56.59 a barrel. US benchmark West Texas Intermediate for April added 18 cents to $48.47 a barrel. Crude futures had suffered heavy falls on Tuesday as the rebounding dollar pushed the market sharply lower. WTI tumbled $1.71 and Brent fell $2.14 as the greenback soared against major rivals. The rallying US unit makes dollar-priced oil more expensive for buyers using

weaker currencies. That tends to dent demand and weigh on price levels. The European single currency yesterday hit new multi-year dollar lows on expectations of a US interest rate hike. The euro slid to $1.0560 — the lowest level since March 2003. “The strong US dollar continues to dominate the oil market, limiting any upside potential in crude oil prices,” said Myrto Sokou, senior research analyst at brokerage Sucden Financial in London. She added: “Today, all eyes will be on the US inventories report.” The US government’s Department of Energy will unveil its update on American oil reserves for the week to March 6. US crude reserves likely rose 4.75 million barrels in the week ended on March 6, according to a survey by Bloomberg News. It added that total supplies likely soared to 444.4 million, the highest level since the DoE started compiling weekly inventory data in 1982. Crude prices lost some 60 per cent of their value to about $40 between June and late January




owing to an oversupply in world markets, a weak global economy and the strong dollar. Prices have since rebounded following a slowdown in US oil drilling activities, but analysts say volatility is likely to continue for some time. Separately, the DoE’s market outlook report released on Tuesday projected for this year “continuing large builds in US crude oil inventories, including at the Cushing, Oklahoma, storage hub.” Brent crude oil slipped to a one-month low below $56 a barrel on Wednesday before steadying as a rally in the US dollar and global oversupply weighed.

The US dollar hit a fresh 12-year high against the euro on Tuesday, trading at $1.0637 against the single currency. A stronger dollar makes commodities priced in the greenback more expensive for holders of other currencies.

“ Russia’s crude oil exports are also set to rise this year, Energy Minister Alexander Novak said, despite some expectations of a plunge in production due to lower prices following the crash last year.”

Russia’s crude oil exports are also set to rise this year, Energy Minister Alexander Novak said, despite some expectations of a plunge in production due to lower prices following the crash from above $100 a barrel last year.

“We expect more downward pressure today,” said Phillip Futures oil analyst Daniel Ang in Singapore, after Brent fell more than 3 per cent on Tuesday. Brent for April delivery hit a one-month low of $55.92 a barrel before recovering to trade up 3 cents at $56.42 a barrel by 0919 GMT. It dropped $2.14, or 3.66 per cent, in the previous session.

West Texas Intermediate for April delivery climbed 16 cents to $48.45 a barrel after falling $1.71, or 3.42 per cent, on Tuesday. Its discount to Brent was at $7.97 a barrel, close to its narrowest in a month.

The US crude benchmark took some support from a surprise drop in crude stocks in the world’s largest oil consumer last week, with the American Petroleum Institute reporting a 404,000-barrel fall late on Tuesday. Analysts had expected a 4.4-million-barrel build.

Despite the draw, crude stocks rose by 2.2 million barrels at the Cushing, Oklahoma delivery point of the WTI contract, the API said, keeping price gains in check. Traders are now waiting for official data from the US. Energy Information Administration at 1530 GMT on Wednesday to see whether it confirms the API numbers.

Prices took some support from stronger US economic figures. Job openings in the United States in January rose to the highest in 14 years, figures from the Labor Department showed on Tuesday, even as US sales recorded their biggest decline since 2009. Traders were also watching supply risks in Libya, where two eastern oilfields have been

shut following an attack by Islamist militants, an oil official said.




Low price unlikely to spur oil demand BY SACHIN KUMAR - The Peninsula

Global demand for oil is unlikely to get boost despite lower oil prices. Strengthening of US dollar coupled with weakness in global economy will keep the demand for oil subdued in the short to medium term, according to a senior official of International Energy Agency (IEA). “Current lower oil price are partly coming from slower demand growth than expected in the past several months. In such kind of weak economic growth backdrop, we expect that in spite of lower oil prices, the demand growth will be kind of slower compared with past cycles of oil prices. The current lower oil prices will not boost the global demand growth,” Keisuke Sadamori (pictured), Director- Energy Markets and Security at IEA told The Peninsula. According to Sadamori, the global oil demand is likely to be around 0.9 million barrels per day in 2015. Oil industry watchers were expecting that the sharp fall might prompt oil consuming countries to buy more oil but weaker economic growth in European countries, Japan and China has led to lower demand of oil from these countries. Now appreciating US dollar has also emerged as a major drag in the oil demand. In the past one year dollar has risen significantly against many currencies due to recovery in US economy. A depreciating currency affects imports of a country adversely as imports become costlier which means that these countries will not be able to reap the benefit of falling oil prices fully. “Even though oil prices are going down in US dollar terms the dollar is appreciating against many currencies. So for the countries with weaker currencies, actually the oil prices are not as low for them, as in dollar denominated terms. For these countries, at the end consumer level, the oil products prices may not be going down much,” said Sadamori. “And there are some countries who are using this opportunity to reduce their fossil fuel subsidies like Indonesia, Thailand, Malaysia and India,” he added. Brent crude prices had plunged below $50 a barrel in January this year from highs of above $110 in June last year. Prices have recovered to some extent as Brent Crude hovered around $60 a barrel in February. Crude prices have declined on the back of new supplies hitting markets, in particular from shale oil production in the United States, and slower global economic growth, including in Asia. Now crude oil prices are trading around $55-$60 per barrel range. He added that the additional demand for oil will be coming from China India and Asean countries. “Emerging Asia will the leader in the demand growth, also there will be additional demand from Africa, the Middle East and Latin America. Even though Africa will see fairly solid growth, but the starting point is lower than the Asian countries,” he said.




Chevron to sell more assets amid drop in oil prices Source: AFP via Yahoo! Finance + NewBase

US oil giant Chevron Tuesday said it plans $15 billion in asset sales through 2017 as it seeks to maintain a strong dividend for shareholders amid lower oil prices. The divestment program expands by 50 percent a previous target to sell $10 billion in assets through 2016, according to a presentation by Chevron chief executive John Watson. In 2014, Chevron divested $6 billion in assets, including the $1.3 billion sale of a stake in a Chad oil project to the Republic of Chad. The deal also comprised

Chevron's interest in a pipeline system that transports oil from Chad to Cameroon.

Watson said the company was on track to increase production from 2.57 million barrels of oil equivalent per day in 2014 to 3.1 million in 2017. Major projects ramping up include Texas shale ventures and natural gas developments in Australia and Angola. 'We are well-positioned to manage through the recent drop in commodity prices and are taking several responsive actions, including curtailing capital spending and lowering costs,' Watson said.

Shares in Dow member Chevron plummeted 3.1 percent to $48.46 in late-afternoon trade.

The move follows Chevron's January announcement of a 2015 capital budget of $35 billion, down 13 percent from last year. The company also halted its share buyback program, citing the big drop in oil prices. In recent months, Chevron has also withdrawn from exploration ventures in Poland, Romania, Lithuania and Ukraine.

Other large oil companies, including ExxonMobil and Royal Dutch Shell, have also trimmed spending in response to about a 50 percent drop in oil prices since June. Leading oil services companies, including Halliburton and Schlumberger, have announced deep job cuts.




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 [email protected] [email protected]

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 12 March 2015 K. Al Awadi

new base 559 special 12 march 2015

Economy & Finance

oil prices

energy sources

energy demand

ministry of energy

energy sector

international energy

amalgamation of nuclear

uaes energy needs