new base energy news issue 923 dated 06 september 2016

Copyright © 2015 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 Energy News 06 September 2016 - Issue No. 923 Edited & Produced by: Khaled Al Awadi

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

Qatargas enters into new LNG pact with UK Centrica Gulf Times

Qatargas, the largest producer of liquefied natural gas (LNG) in the world with an annual production capacity of 42mn tonnes per annum (MTPA), has entered into a new sale and purchase agreement (SPA) with Centrica, the largest supplier of gas to households in the UK.

In accordance with the SPA, Qatargas will deliver up to 2MTPA of LNG to Centrica -- a leading international energy and services company, supplying approximately 28mn customer accounts mainly in the UK, Ireland and North America -- until 2023.

The LNG will be supplied from Qatargas 4, a joint venture between Qatar Petroleum (QP) (70%) and Shell (30%), with a production capacity of 7.8MTPA.

Qatargas-chartered Q-Flex and Q-Max LNG vessels will deliver the LNG to the Isle of Grain Terminal, in the UK.

“We are delighted to extend our strong relationship with Centrica and the UK. This agreement underscores Qatargas’ reputation as a safe and reliable supplier of LNG," Saad Sherida al-Kaabi, QP president and chief executive, and chairman of Qatargas, said.

Qatar's LNG ship at Isle of Grain. Inset, al-Kaabi




This agreement, according to him, has the potential to positively contribute to the UK’s energy security for years to come.

“Qatargas is pleased to lengthen our existing partnership with Centrica – a partnership which dates back to 2011. This new agreement reinforces Qatargas’ commitment to building a strong relationship with customers, and our position as the leading supplier of LNG to the UK," Khalid bin Khalifa al-Thani, chief executive, Qatargas, said.

Qatargas had initially entered into a three-year contract with Centrica to supply LNG from June 2011. The company then

inked a further four-and-a-half-year contract, with the latest five-year contract extending the agreement until December 2023.

“Centrica continues to grow its LNG portfolio, further developing its presence in the global LNG market. I am very pleased that our long-standing supply relationship with the world’s biggest LNG producer will continue,” according to Iain Conn, Centrica chief executive.




Somaliland: Sterling Energy granted 2 year extension to the Odewayne PSA, onshore ..Source: Sterling Energy

AIM-listed Sterling Energy has announced that the Government of the Republic of Somaliland has granted a further 2 year extension to the current period of the Odewayne Production Sharing Agreement ('PSA').

The expiry dates of the relevant exploration periods under the PSA shall now be:

• Third Period: 2 November 2018; • Fourth Period (optional): 2 May 2020; • Fifth Period (optional): 2 May 2021; and • Sixth Period (optional): 2 May 2022.

The minimum work obligations for the exploration periods remain unchanged: (i) the acquisition of 500km of 2D seismic during the Third Period; and (ii) the acquisition of 1,000km of 2D seismic and one exploration well during the Fourth Period.

Sterling holds a 40% interest in the PSA and will be carried by Genel (50% interest and Operator) for the costs of all exploration activities during the Third and Fourth Periods of the PSA. Eskil Jersing, the Company’s Chief Executive Officer said: 'We would like to thank the Government of the Republic of Somaliland and Genel for agreeing to the further 2 year extension. We look forward to the commencement of the seismic campaign.'




Algeria's energy exports rise 8 percent in August Reuters - Louafi Larbi

Algeria's energy exports increased by 8 percent last month to 71.5 million tonnes of oil equivalent (TOE) versus 65.4 million TOE in August 2015, a statement from state energy firm Sonatrach showed. Over the last year, Algeria has started to reverse a trend of declining production by targeting better output from more-mature oilfields and planning to bring more gas fields online in its deep southern Sahara. Algeria increased gas exports via its three pipelines by 43 percent in August, the statement quoted by official APS news agency said. "This confirms the good re-positioning targeted by Sonatrach in the European market," Sonatrach said. But oil exports decreased by 8 percent as this volume was used to refine gasoline and diesel, Sonatrach said. "We have reduced our imports (gasoline, diesel) by 43 percent and saved $750 million," the statement said. The North African OPEC state had struggled until last year with stagnating energy production after it failed to draw major foreign investment in its last bidding rounds auctioning oil and gas fields. Some foreign companies see Algeria's contract terms as unattractive or have not been drawn by the fields on offer. Earlier this year, Algeria said Sonatrach would start bilateral deals directly with companies to speed up and ease bureaucracy. At a May summit, European Union officials and energy firms urged Algeria to adapt to more competitive markets so as to attract the investment needed to pump more gas north. Algeria is seen as a natural partner for the European Union as it looks to diversify energy supplies after the Ukraine conflict again exposed the risks of relying on the bloc's top gas supplier, Russia. Algeria is the EU's third-biggest gas supplier behind Russia and Norway, yet its export capacity through three pipelines and LNG shipments across the Mediterranean has been underused in recent years.




Norway: OMV awards Wisting development study to Sevan Marine Source: Sevan Marine

Sevan Marine has been awarded a study to evaluate its cylindrical hull design for application on the Wisting field development. The study has been awarded by OMV Norge which is screening various floating alternatives for developing the Wisting discovery. The study completion is by year end 2016.

The Wisting discovery is located 310 kms from shore in the northern part of the Barents Sea at the Norwegian Continental Shelf. OMV Norge is the operator of Wisting (PL 537) with 25% share.

Sevan 1000 FPSO which is being used to develop the Goliat field in the Barents Sea

About ;-

OMV said that the Wisting Central II well is the shallowest horizontal offshore well drilled from a floating drilling facility and has a depth of 402m. "OMV carried out a well test, with flow rates reaching above 5,000boe/d." The well has a total length of 2,354m and its horizontal section measures 1,402m.

In addition to drilling, the company conducted advanced data collection and geo-steering through the entire horizontal phase. The well was spudded using the semisubmersible rig Transocean Spitsbergen and will now be permanently plugged and abandoned. OMV executive board member responsible for upstream Johann Pleininger said: "OMV is very satisfied with the well test results, which are promising. "This well is an important milestone towards a future field development on Wisting." OMV (Norge) operates the PL537 licence with a 25% interest. Other joint venture partners are Petoro (20%), Idemitsu (20%), Tullow (20%) and Statoil (15%).




Bangladesh: KrisEnergy begins Bangora drilling onshore Source: KrisEnergy

KrisEnergy has announced that the Bapex Bijoy 10 rig has commenced drilling of the Bangora-6 development well in theBlock 9 production sharing contract, onshore Bangladesh. Bangora-6 is being drilled from the Golpanagar site in the northern section of Block 9 and is planned to reach total depth at 3,786 metres (12,421 feet) measured depth, or 3,053 metres (10,016 feet) total vertical depth subsea.

Block 9 covers 1,770 sq. km and is located approx. 50 km east of Dhaka. In 2015, gross production from the Bangora field averaged 106 million cubic feet of gas per day and 291 barrels of condensate per day from four development wells.

KrisEnergy is the operator for Block 9 with a 30% working interest. Other partners in Block 9 are Niko Exploration (Block 9) Ltd with a 60% working interest and Bangladesh Petroleum Exploration and Production Company Limited with 10%.




Thailand: Mubadala spuds Manora appraisal/development well Tap Oil

JV partner Tap Oil has provided an update on the Mubadala-operated Manora Oil Development in the Northern Gulf of Thailand (TAP 30% interest). The Joint Venture has identified an opportunity to add further near facility production at the Manora Oil Development in 2016 through additional development drilling, and to potentially add

further contingent resources via an appraisal well. Mubadala Petroleum, Operator of the G1/48 concession, has advised that at 03:00 hrs WST on 3 September 2016 the Atwood Orca jackup drilling unit commenced drilling the MNA-17 well at the Manora Oil Development. The MNA-17 well will be drilled from the Manora platform and has both an appraisal and development

component. The MNA-17 (AP) well path is planned an as appraisal/pilot well, appraising the 500 series sands and assessing a separate untested fault block, the Manora West Structure, which has the potential to de-risk the Greater Manora West prospective resources. The MNA-17 (AJ) well will utilise the upper pilot section before being deviated into the Central Fault Block as a new production well. MNA-17 (AJ) is expected to increase Manora production performance. The MNA-17 (AP) well will be drilled to a total depth of 1,859.3 metres total vertical depth subsea (TVDSS) and drilling is expected to take 5 days on a trouble free basis. The deviation to MNA-17 (AJ) is expected to take 5 days with a total depth of 1,981.2 metres TVDSS. The well cost is expected to be US$2.5 million (net to Tap). Tap has 2P reserves of 4 mmbbls (13.2 mmbbls gross) as at 31 December 2015 booked for Manora (ASX release 26 February 2016). Tap will review these reserves and contingent resources following development drilling and production performance. Tap’s next expected announcement is at the completion of the drilling. Manora Oil Development partners are: Mubadala Petroleum (MP G1 (Thailand) Limited) 60% - Operator; Northern Gulf Petroleum Pte Ltd 10%; Tap Energy (Thailand) Pty Ltd 30%.




Russia's Rosatom says ready to build 16 Saudi nuclear power stations Arabian Busuness

Russia's Rosatom State Nuclear Energy Cooperation has announced that it is ready to build 16 nuclear power units in Saudi Arabia in a $100 billion deal.

Yury Ushakov, aide to the President of the Russian Federation outlined the company's plans for the Gulf kingdom to journalists at a briefing, a statement said. The announcement comes a year after Russia and Saudi Arabia signed an agreement to work together on “peaceful” nuclear energy projects.

Ushakov said: "There are prospects for cooperation in the field of nuclear energy. The intergovernmental agreement on cooperation between Rosatom and Science City of King Abdullah of Saudi Arabia, which was signed in June of 2015, is under implementation.

"Our company, which has the most advanced technologies, is ready to join the project on construction of 16 nuclear power reactors in the kingdom of Saudi Arabia. The project is provided until 2030, its cost is $100 billion," he said.

In May, the First deputy CEO of Rosatom, Kirill Komarov, said that the nuclear programme of Saudi Arabia is very ambitious and envisages the construction of 16 nuclear power units in the country.

Rosatom brings together over 360 nuclear companies and research and development institutions that operate in the civilian and defence sectors and the world's only nuclear icebreaker fleet.

The company currently holds projects for the

construction of 30 nuclear power plants, from which 21 are abroad in such countries as India, China, Turkey, Vietnam, Finland and Hungary.




NewBase 06 September 2016 Khaled Al Awadi

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

Brent steady after rise on Russia-Saudi pact Reuters + NewBase

Brent crude prices were steady on Tuesday, holding most of their gains from the previous session when top producers Russia and Saudi Arabia agreed to cooperate on stabilizing the oil market.

London Brent crude for November delivery was down 15 cents at $47.48 a barrel by 0022 GMT, after settling up 80 cents at $47.63 on Monday. The global benchmark on Monday hit a near one-week high of $49.40 after the Russia-Saudi news.

NYMEX crude for October delivery did not settle on Monday due to U.S. Labor Day holiday. It was trading little changed from late Monday, up 64 cents at $45.08 a barrel. It rose as far as $46.53 on Monday, the highest since Aug. 30.

Russian Energy Minister Alexander Novak said Russia and Saudi Arabia were moving towards a strategic energy partnership and that a high level of trust would allow them to address global challenges.

Saudi energy minister Khalid al-Falih told a UAE-based television channel he was optimistic about cooperation with other producers ahead of a meeting this month in Algiers, adding that freezing production was not the only solution to a supply glut.

The Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russia will hold informal talks in Algeria later in September.

Several OPEC producers have called for an output freeze to rein in the glut, which arose as supplies from high-cost producers such as the United States soared.

Oil price special

coverage




Brent rallied to above $50 a barrel in late August, helped by growing talk of a coordinated production freeze, but prices have since fallen as few believe OPEC will act.

Russia's Novak said he was open to ideas on what cut-off period to use if producer countries decided to freeze output. Novak said outright oil production cuts may also be discussed in Algeria.

Saudi-Russia Output Talk Disappoints Oil-Market Bulls: Chart

Share on Faceboo kShare on Twitter

Brent crude prices surged as much as 5.5 percent as news broke that Saudi Arabia and Russia would make a joint-statement on the oil market at the G20 summit in China earlier today. But what began with the promise of a “significant” announcement disappointed the bulls. As the two nations stopped short of taking any concrete steps to limit output, prices fell back to near $48 a barrel, a more sedate 2 percent increase on the day.




NewBase Special Coverage

News Agencies News Release 06 September 2016

Oil and gas production to rise as huge new projects come online Reuters

Despite the drop in crude prices, huge spending cuts and thousands of job losses – the world’s top oil and gas companies are set to produce more than for some time.

While top oil companies struggle with slumping revenues following a more than halving of prices since mid-2014 after years of spectacular growth, their production has persistently grown as projects sanctioned earlier in the decade come on line.

Overall production at the world’s seven biggest oil and gas companies is set to rise by about 9 per cent between 2015 and 2018, according to analysts’ estimates.

With an expected recovery in prices, the increased production should boost cash flow and secure generous dividend payouts, which had forced companies to double borrowing throughout the downturn.

"There are a lot of projects coming on stream over the next three years that will support cash flow and ultimately dividend," said the Barclays analyst Lydia Rainforth.

And despite a drop in new project approvals, companies have throughout the downturn cleared a number of mammoth undertakings such as Statoil’s Johan Sverdrup oilfield off Norway and Eni’s Zohr gas development off the Egyptian coast.

Others opted to acquire new production, such as Royal Dutch Shell, which bought its smaller rival BG Group for US$54 billion this year, and ExxonMobil through investments in Papua New Guinea and Mozambique.

Shell is expected to see the strongest growth among its peers over the next two years at 8 per cent, according to BMO Capital Markets.

Production is unlikely to drop after 2020, and could post modest growth as companies continue to bring projects onstream, albeit at a slower pace, said the BMO analyst Brendan Warn.




The French oil major Total, for example, plans to clear three major projects by 2018 – the Libra offshore oilfield in Brazil, the Uganda onshore project and the Papua LNG project – that will begin production after 2020.

"We won’t see 5 to 10 per cent growth that we’ve seen from companies in recent years. It will be closer to 1 or 2 per cent," Mr Warn said.

Capital spending, or capex, for the sector is set to drop from a record $220bn in 2013 to around $140bn in 2017 before modestly recovering, according to Barclays.

But companies have learnt to do more with the money after slashing expenditure and tens of thousands of jobs, while the cost of services such as rig hiring dropped sharply throughout the downturn.

"2017 is the sweet spot for integrated companies. It took two to three years to adjust to the drop in oil prices, and a lot of the efficiencies introduced in recent years will roll into 2017, when projects kick in and free cash flow will improve," Mr Rainforth said.

The resilience is mostly due to new gas projects coming on stream as companies shift towards the less polluting hydrocarbon that is expected increasingly to displace oil demand in coming decades.

The slower pace of project development after a decade of rapid growth that was accompanied by soaring costs will help companies, Mr Warn said.

"That is much more sustainable for a major that will reduce the number of large capex projects."




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 26 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 06 September 2016 K. Al Awadi

new base energy news issue 923 dated 06 september 2016

Business