New base 770 special 21 january 2016

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NewBase 21 January 2016 - Issue No. 770 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
GCC: Countries Savings Put at $87 Billion With Renewable Energy
Bloomberg - Claudia Carpenter
Gulf countries stand to save as much as $87 billion from lower oil and natural gas consumption if
they achieve goals for renewables use by 2030, according to the International Renewable Energy
Agency.
Meeting Gulf Cooperation Council targets for solar and other renewable energy could also create
an average of 140,000 jobs a year, with 207,000 people employed in 2030, the Abu Dhabi-based
Irena said in a 96-page report released Wednesday. The goals may already be pushed back, with
Saudi Arabia, the largest of the GCC’s six member countries, delaying its target completion date
for renewables by eight years to 2040.

Oil prices dropped almost 70 percent the past three years, prompting some Gulf countries to plan
spending cuts or eliminate fuel subsidies. Renewable energy is taking on focus in the Gulf region
as some GCC states can’t meet their own needs from traditional fuels because of growing
demand, with the United Arab Emirates turning to natural-gas imports, according to the report.
The savings of $55 billion to $87 billion by 2030 is equal to 2.5 billion barrels of oil equivalent, the
Irena report showed. Carbon emissions could also be reduced by 1 gigaton by 2030, resulting in
an 8 percent cut in the region’s per capita carbon footprint, it said.
GCC countries Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates
comprise the world’s largest hydrocarbon-producing region, with about 30 percent of its proven
crude reserves and 22 percent of gas, according to the report. Solar would account for 85 percent
of renewables jobs in 2030, with waste-to-energy at 14 percent, Irena said.
Saudi Arabia’s program shows solar contributing 76 percent of its sustainable energy plans by
2040, with wind at 17 percent.
Water use could be cut by 16 percent in the power sector in the region, it said. In the U.A.E., fuel
consumption in water and power industries could be cut 50 percent if targets are met, according to
the report. Fuel use would drop 23 percent in Saudi Arabia and 21 percent in Kuwait, it said.
Sales of crude, petroleum products and natural gas generated almost 80 percent of total GCC
government revenue in 2013, and regional energy consumption grew an average 5 percent a year
since 2000, faster than India, China and Brazil, Irena said. Saudi Arabia is the world’s largest
crude exporter and Qatar the biggest shipper of liquefied natural gas.

UAE: Adma-Opco projects on track despite oil slump
Gulg News - Sarah Diaa
Abu Dhabi Marine Operating Company (Adma-Opco) is on-track with its drilling and oil production
projects despite the plunge in oil prices, which reached new lows below $28 (Dh103) a barrel on
Wednesday.
According to Ali Al Jarwan, the company’s chief executive officer, Adma-Opco has not changed or
slowed down its plans to develop oilfields as a result of lower oil prices. The company has seen a
16 per cent reduction in costs in 2015, however, and plans to cut costs by a further 15-20 per cent
in 2016.
“2015 was a good year for Adnoc (Abu Dhabi National Oil Company) generally. Reducing our
spending was the focus last year, and we managed to cut our spending by 16 per cent. We’re
working on a lot of projects in 2016 and have a large budget, but there’s also an opportunity to cut
costs because the market prices are lower,” Al Jarwan said.
New fields
Adma-Opco is mostly owned by Adnoc, which has a 60 per cent stake in Adma-Opco, with the
remaining 40 per cent stake being distributed among BP, Total, and Japan Oil Development Co.
This year, the company is working on developing new fields including Satah Al Razboot, which is
now 70 per cent complete; Umm Lulu, now 40 per cent complete; and Nasr, currently 30 per cent
complete. The three projects will come online in 2017, 2018, and 2019 respectively.
Al Jarwan was speaking to reporters
on Wednesday on the sidelines of
the Abu Dhabi Summit of Global
Marine and Maritime Leaders.
In November, the CEO said the
company would increase its oil
production levels to one million
barrels per day by 2020, up from the
current levels of 650,000 barrels a
day. Adma-Opco would add around
20,000 to 50,000 barrels
incrementally over the next few
years to reach its target.

Gulf stocks hit on oil woes
AFP + Oman Observer
Stock markets in the Gulf states plunged on Wednesday, following the massive rout in global
shares as oil resumed its decline. The fresh fall came a day after most Gulf bourses made a
strong rebound as oil and world stocks saw important gains. But all seven bourses in Gulf
countries, which pump around 18 million barrels of oil a day, dropped on Wednesday, led by
Saudi Arabia and Dubai.
The Saudi Tadawul All-Shares Index, the largest Arab bourse, dipped more than 4 per cent to fall
below the key 5,500-point mark at mid-session. The leading petrochemicals and banking sectors
fell 5.6 per cent and 3.7 per cent, respectively. The Dubai Financial Market Index finished the day
down 4.6 per cent to drop to 2,638.76 points, its lowest level for 30 months.
Leading shares Emaar properties and Arabtec construction plunged 5.2 per cent and 7.7 per cent.
The Abu Dhabi Securities Exchange shed 3.1 per cent to drop below the 3,800-point level, pulled
down by all sectors, especially the investment and financial services sector which plunged 9.3 per
cent.
The Qatar Exchange, the second biggest Arab bourse, dropped 3.3 per cent to below 8,700 points
and traded around levels seen in early 2013. The Kuwait Stock Exchange Index closed down 1.95
per cent to drop below the key 5,000-point mark, a level last seen more than 12 years ago.
The small Muscat Securities Exchange lost 1.83 per cent and the tiny Bahrain bourse dropped 0.6
per cent. All seven Gulf bourses remained well below last year’s close. Oil prices were also
trading at more than 12-year lows.

Equatorial Guinea:ONGC Videsh, Govt Sign MoU for Oil, Gas Cooperation
by Rigzone + NewBase
India's ONGC Videsh Ltd. and Equatorial Guinea signed a memorandum of understanding (MoU)
to cooperate in the latter's oil and gas industry, the West African country's Ministry of Mines,
Industry and Energy (MMIE) announced in a press release Wednesday.
"The MoU provides the basis for a
comprehensive cooperation in
multiple areas of the energy sector,
including offshore oil and gas
exploration in Equatorial Guinea plus
midstream and downstream projects.
The MoU is considered the
foundation for future discussions that
will take place in the coming weeks
between the both parties to reach
further agreements," MMIE revealed.
The agreement, which "calls for a
sweeping cooperation that could
encompass several areas of the oil
and gas industry", was signed by
Gabriel Mbaga Obiang Lima,
Equatorial Guinea's Minister of
Mines, Industry and Energy, and
ONGC Videsh's Managing Director
Narendra K. Verma, Managing
Director.
“We have received a clear mandate
from H.E. the President of Equatorial
Guinea to execute this cooperation
on both the economic and political
front. Going forward, we want to
share our very ambitious plans with
ONGC for developing upstream and
downstream sectors. We will be
happy to cooperate with ONGC to
fulfill all of them,” Gabriel Mbaga
Obiang Lima said.
ONGC Videsh, the overseas arm of state-owned Oil and Natural Gas Corp. Ltd. (ONGC) focused
on the upstream sector, has made investments in Africa a top priority of its 2016 agenda. The
Indian company intends to double its spending on Africa to $16 billion over the next few years as it
evaluates multiple exploration opportunities.
“We look forward to this occasion for boosting our ties, particularly in the hydrocarbons and
energy sector ... This will strengthen the relationship between our companies and governments.
Our Government and Prime Minister are very keen on this cooperation, following the mandate set
forth last October,” Verma said.

Equatorial Guinea:Heerema installs Marathon’s Alba B3 platform
Offshore Energy Today
Heerema Fabrication Group, the Netherlands-based manufacturer of large structures for the oil
and gas industry, has informed through social media that the Alba B3 topside and jacket have
been installed at the Alba field, offshore Equatorial Guinea.
The platform sailed away from the Netherlands towards its offshore location in December 2015.
Both the topside and the jacket were constructed by Heerema Fabrication Group at the
company’s Poland fabrication facility in Opole under a contract awarded by the Houston-based oil
and gas company Marathon Oil in April 2013.
The transportation and installation scope of work was conducted by the company’s sister
division Heerema Marine Contractors. The company used the Thialf crane vessel for final offshore
installation.
The platform was originally scheduled to be installed on the field by end-2015 with start-up
expected in mid-2016.
The 5,800-tonne topside was mated with the 91-meter tall jacket weighing 2.600 tonnes some 32
kilometers offshore Malabo, Equatorial Guinea. The topside is 40 meters long and 40 meters wide
with the height reaching 35 meters. The 33-meter-long, 4-legged jacket is 33 meters wide and 81
meters high.
The Alba 3 platform will compress gas from the existing Alba B2 platform through a 33-meter-long
bridge connection. With this new platform, Marathon is expecting to boost production from the gas
and condensate field.

Sudan offers three oil and gas blocks to India's ONGC Videsh
Source: Reuters
Sudan has offered three oil and gas blocks for exploration and development to India's ONGC Videshas
part of efforts to increase the country's oil revenue, oil minister Mohamed Zayed Awad said on Wednesday.
The African nation lost three quarters of its oil revenue when South Sudan seceded in 2011 and currently
produces about 100,000 barrels per day (bpd).
Three areas have been offered to the Indian company, comprising Blocks 8, 15 and 24, the last
of which is in the development stage, Awad told Reuters after meeting his Indian counterpart
Dharmendra Pradhan ahead of a two-day India-Africa Hydrocarbon summit.
Awad also asked ONGC to consider buying a stake in Sudan's Block 17, which is producing
about 7,000 bpd oil. Block 17 is operated byStar Oil, in which Yemen's Ansan Wikfs owns a 66
percent stake and Sudan's Sudapet holds the remainder. Awad said the Yemen company wants
to sell its stake in the venture.
ONGC Videsh, the overseas investment arm of Oil and Natural Gas Corp, already has a 25
percent stake in onland Blocks 1, 2, and 4, which together produce about 50,000 bpd.

Norway’s Arctic ambitions just got a $7 billion boost from Statoil ASA.
Bloomberg
Norway’s largest oil company was able to halve its expected development costs to keep alive its
delayed Johan Castberg development in the Barents Sea. The decision comes as welcome news
for an industry that’s struggling with a deep plunge in oil prices and tens of thousands of job cuts.
Statoil’s plans will also benefit other companies that have made discoveries in the Barents Sea,
such as Lundin Petroleum AB with its Gohta and Alta finds, said the Swedish explorer’s local
manager, Kristin Faeroevik.
“It’s fantastic news,” she said Tuesday in an interview at a conference in Sandefjord, Norway. “I
have great confidence that our own discoveries will be developed.”
Statoil announced that the project will proceed after it managed to lower estimated investments to
50 billion kroner to 60 billion kroner ($7 billion) from an earlier estimate of 100 billion kroner. The
owners of the oil deposits, which include state-owned Petoro AS and Eni SpA, agreed on using a
floating production, storage and offloading facility, with a final investment decision planned for next
year and possible production start in 2022.
“This is a project that’s starting to get close to what I would call an attractive project,” Chief
Executive Officer Eldar Saetre said at the conference. Statoil will seek to make the project even
cheaper, he said.
The decision breaks a string of delays for the project that has suffered from high costs, a tax
increase and, most of all, a plunge in oil prices. It goes against a trend of cancellations of energy

projects worldwide, not least in the high-cost Arctic, where Statoil and others have abandoned
exploration plans from Alaska to Greenland.
Castberg, which holds as much as 650 million barrels of oil, was considered a breakthrough
venture to unlock oil resources in the Arctic after Norway’s crude production has dropped by half
since a 2000 peak. It’s also a welcome boost to the country’s supplier industry that’s being
squeezed as spending is due to fall for a third year.
Paradoxically, the 75 percent slump in crude prices over the past 18 months that was weighing on
the project’s profitability has also contributed to lower investments as suppliers are forced to cut
their rates. Saetre declined to provide details on Castberg’s profitability threshold.
Challenging Time
Petoro’s CEO Grethe Moen called the news “positive.” All lasting cost efficiencies will help
develop resources in the Barents Sea, a region with little infrastructure, she said.
Separately, Eni received approval from Norway’s Petroleum Safety Authority to start production
from the FPSO on the delayed Goliat field in the Barents Sea, the government body said in a
statement. Goliat will become the first oil field to start producing in Norway’s Barents Sea, where
only the Snohvit gas deposit is in operation.
Statoil will continue working on plans for a possible onshore oil terminal at Veidnes as a separate
project with operators on Castberg, and four other fields in the north, Alta, Gohta, Wisting and
Goliat, Saetre said. The terminal was part of an original development solution presented by Statoil
in 2013 but later scrapped.
Norwegian authorities had signaled a preference for a development of Castberg involving
pipelines and a terminal with capacity for future discoveries in the area, which would have
strengthened incentives to explore the Barents Sea.
“I’m satisfied that companies are working on developing projects in a challenging time,” Petroleum
and Energy Minister Tord Lien said to reporters in Sandefjord. Still, “it’s important that we find
ways to develop the resources on Norwegian shelf that create the most value in the long-term.
That means that we need robust solutions too.”

NewBase 21 January 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices stabilize but market sentiment remains bearish
REUTERS + NEWBASE
Oil prices stabilized in early trading on Thursday after hitting fresh 2003 lows the session before,
but analysts said a persistent global glut would keep pressuring markets.
U.S. oil futures crashed below $27 dollars a barrel on Wednesday for the first time since 2003,
caught in a broad slump across world financial markets as traders worried that a huge oversupply
in crude was coinciding with an economic slowdown, especially in China.
On Thursday, oil prices stabilized, with front-month West Texas Intermediate (WTI) crude futures
CLc1 trading at $28.66 per barrel at 0155 GMT, up 31 cents from its previous close. International
benchmark Brent was up 37 cents at $28.25.
Yet broader market sentiment remained bearish as producers around the world pump 1-2 million
barrels of crude every day in excess of demand, creating a huge storage overhang. At the same
time, concerns are growing that China's economy could slow further, hitting demand.
"Lower commodity and oil prices reflect weakening demand," HSBC said on Thursday. ANZ bank
said prices were likely to come under more pressure after the release later in the day of the U.S.
Energy Information Administration's official storage data.
Oil price special
coverage

Oil Extends Drop From 12-Year Low as U.S Supplies Seen Rising
Bloomberg - Ben Sharples
Oil extended its decline from the lowest close in more than 12 years before weekly U.S.
government data forecast to show crude stockpiles expanded, exacerbating a global glut.
Futures lost as much as 3.4 percent in New York after falling 3.3 percent Tuesday to the lowest
since September 2003. Inventories probably increased by 2.75 million barrels last week,
according to a Bloomberg survey before a report from the Energy Information Administration
Thursday. Markets could “drown in oversupply,” sending prices even lower as demand growth
slows and Iran boosts exports, according to the International Energy Agency.
“The outlook for the oil market is pretty negative at the moment,” Angus Nicholson, an analyst at
IG Ltd. in Melbourne, said by phone. “Iran is adding to the concerns. Once the market does get a
gauge on Iran’s potential, there will probably be less uncertainty affecting the market.”
Crude is down 26 percent this year amid volatility in Chinese markets and speculation the removal
of restrictions that capped Iran’s oil sales will help to prolong a worldwide oversupply. Energy
producers led declines in Asia as the MSCI Asia Pacific Index lost 2.7 percent in Hong Kong,
heading for the lowest close since September 2012.
West Texas Intermediate for February delivery, which expires Wednesday, fell as much as 97
cents to $27.49 a barrel on the New York Mercantile Exchange and was at $27.55 at 2:29 p.m.
Hong Kong time. Monday’s transactions were booked with Tuesday’s because of the Martin
Luther King Jr. holiday. The more-active March future slid 77 cents to $28.80.

Oil Supplies
Brent for March settlement lost as much as 72 cents, or 2.5 percent, to $28.04 a barrel on the
London-based ICE Futures Europe exchange. The contract rose 21 cents to $28.76 Tuesday. The
European benchmark crude traded at a discount of 58 cents to WTI for March.
U.S. crude stockpiles were about 100 million barrels above the five-year seasonal average at the
end of 2015, according to EIA data. Supplies at Cushing, Oklahoma, the delivery point for WTI
and the biggest U.S. oil-storage hub, increased for a 10th week through Jan. 8 to a record 64
million barrels.
The IEA trimmed 2016 estimates for global oil demand as China’s economic expansion weakens
and raised forecasts for supplies outside of the Organization of Petroleum Exporting Countries.
While non-OPEC supply is set to drop 600,000 barrels a day in 2016, Iran’s comeback could fill
that gap by the middle of the year. As a result, world markets may be left with a surplus of 1.5
million barrels a day in the first half.
Output Trimmed
Cnooc Ltd., China’s largest offshore oil company, will trim outputfor the first time in more than a
decade, prompting speculation the nation’s producers are succumbing to the global price war.
Shares dropped as much as 6.6 percent to HK$6.55. PetroChina Co. and China Petroleum &
Chemical Corp. both fell more than 7 percent.
Oil prices are likely to stay at current levels of about $30 a barrel for some time as the energy
market weathers a “supply shock,” Glencore Plc Chairman Tony Hayward said in an interview at
the World Economic Forum in Davos, Switzerland.

NewBase Special Coverage
News Agencies News Release 21 January 2016
Rich Nations Sovereign Wealth Funds latest on oil
Bloomberg - Javier Blas
In the days of the commodity boom a few years ago, oil-rich nations and their petrodollar wealth
were the darlings of the World Economic Forum.A panel that included Kuwaiti, Saudi and Russian
sovereign-wealth fund officials was one the hottest tickets at Davos in January 2008, just before
oil prices surged to $150 a barrel.
It was a time when crude producers were accumulating billions of dollars in debt and equities, plus
real estate, sports teams and other trophy assets. So influential were the fund managers that a
group of bank chiefs told them behind closed doors at the Swiss resort to become more
transparent, or risk antagonizing American legislators.

Now, with oil below $30 a barrel, the situation has reversed. Instead of buying U.S. Treasuries,
British department stores and French soccer teams, producing countries are selling, helping
depress already-spooked markets. Only a handful of wealth-fund heads are scheduled to appear
at the 2016 annual forum of the rich and powerful. And not one panel is devoted to the topic.
"They are selling, they are selling a lot," said Paolo Scaroni, deputy chairman at Rothschild &
Sons and a former head of Italy’s largest oil company, ENI SpA. "The selloff will continue in 2016
because oil-rich countries need to finance" their spending.
Across the Middle East, central Asia, Africa and Latin America, governments are tapping the
reserves accumulated during the good times. Petrodollars are pouring out of a myriad of vehicles:
sovereign wealth funds, stabilization funds, development funds and the foreign-exchange
reserves sitting in central banks.
To be sure, petrodollar-stocked government funds are still a influential force in global finance,
accounting for about 5 percent to 10 percent of global assets. Nor is the selling unexpected:
Stabilization funds, for instance, are designed to grow during the boom years and help
governments keep up spending during the lean times.
Yet the magnitude of the declines has surprised many who help commodity countries manage
their wealth. Saudi Arabia, Qatar and Kuwait "are all withdrawing money," said Alberto Gallo, head
of macro credit research at Royal Bank of Scotland Plc. "Petrodollars are becoming
petropennies."
Gallo has a point: the gross flow of petrodollars into the global economy last year fell to as little as
$200 billion, down from nearly $800 billion in 2012, according to the bank.
Market Sentiment
While wealth fund assets aren’t big enough to move markets alone, they can have an impact on
market sentiment. Royal Bank of Scotland said in a note to clients this month that the selloff is
potentially reducing "the demand for fixed-income assets, which was a significant portion of major
oil exporting sovereign wealth funds’ growing investments over the past decade."
Producers are exacerbating the global market rout, according to David Zervos, chief market
strategist at New York-based Jefferies LLC. At the current crude price, commodities countries
have "entered the phase where the excess savings glut is being replaced with an excess selling
glut," he said in a note to clients this week.
In Chile, the state-owned stabilization fund has seen its assets fall to $14 billion at the end of last
year, from a peak of $15.5 billion in 2014. The foreign-exchange reserves of Azerbaijan have
fallen to $7.3 billion, less than half the $16.5 billion of mid-2014. Nigeria hasn’t tapped its small
sovereign wealth fund -- but the country has burned through the reserves controlled by the central
bank. They’ve fallen to $28.7 billion, down from a peak of $48 billion in mid-2013.
Losing Money
The funds’ chiefs are under pressure. The head of the sovereign wealth fund of Kazakhstan was
fired earlier this month after he told The Wall Street Journal the vehicle will run out of money in
seven years as oil prices cut its revenue. Algeria, one of the world’s top natural-gas exporters,
has over the last year burned through the reserves it took nearly four years to accumulate,
according to data compiled by Bloomberg.

Saudi Arabia, the world’s largest oil producer, is a prime example of the swiftness and magnitude
of the reversal: its foreign-exchange reserves have fallen more than $100 billion since mid-2015,
to $635 billion, according to data from the Saudi Arabian Monetary Agency. The drop is larger
than in 2008-2009, during the global financial crisis.
Riyadh managed most of these petrodollars as foreign exchange reserves under the control of the
central bank. The kingdom has in the past suggested it may create a sovereign wealth fund similar
to those in neighboring Kuwait and Qatar to manage a portion of the money. Reuters reported last
week that the nation is seeking proposals from investment banks and consultants.
Saudi reserves and oil prices follow the same path
The retrenchment is uneven. The wealth funds of other oil countries such as Kuwait, United Arab
Emirates and Qatar show little sign of shrinking, with their funds still buying assets. The sovereign
wealth fund of Norway has stopped growing, but hasn’t seen a drop in assets. The fund, the
world’s largest, had about 7.02 trillion kroner ($800 billion) at the end of September 2015, little
changed from the beginning of the year.
Governments and managers of eight commodities-rich countries and their funds either declined to
comment or didn’t reply to questions.
Few industries are more affected than asset management, whose bosses are heavily represented
at Davos. A turnaround isn’t in view any time soon, said Martin Gilbert, chief executive of
Aberdeen Asset Management Plc.
"What we do know though is, if the oil price remains low, we’re going to see more redemptions, I
would say, from government institutions," Gilbert told investors in November. That month,
Aberdeen reported $19.1 billion in net outflows in its fiscal fourth quarter as crude-exporting
countries, among other investors,pulled out.

Some Bankrupt Oil and Gas Drillers Can't Give Their Assets Away
Dawn McCarty
In mid-2014, when the crude price topped $100 a barrel, Clark made an offer to buy properties
from Dune Energy Inc., a small driller with money trouble. Dune turned him down. A year later, as
oil plunged to $60 a barrel, Dune filed for bankruptcy and Clark’s White Marlin Oil & Gas Co.
picked up the assets at auction at a deep discount.
“What we offered versus what we got it for, it’s a great price,” Clark said. “We’re going to continue
to play these bankruptcies. We’re participating in two more right now.”
Winners and losers are emerging from the energy bust. What’s a meal for Clark is indigestion for
banks that financed the boom using oil and gas properties as collateral. The four biggest U.S.
banks -- Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. --
have set aside at least $2.5 billion combined to cover souring energy loans and have said they’ll
add to that if prices stay low.
There’s plenty to keep Clark bargain-hunting. Last year, 42 U.S. energy companies went
bankrupt, owing more than $17 billion, according to a report from law firm Haynes & Boone.
Dune went belly up owing $144.2 million. Its assets sold for $20 million. In May, American Eagle
Energy Corp. filed for bankruptcy with debts of $215 million. Its properties sold for $45 million in
October. BPZ Resources Inc. owed $275.2 million. Its assets fetched about $9 million. Endeavour
International Corp. went into bankruptcy owing $1.63 billion. The company sold some assets for
$9.65 million and handed over the rest to lenders. ERG Resources LLC opened an auction with a
minimum bid of $250 million. Response? No takers.
“A lot of people got into this business and didn’t really understand the ups and downs of price
cycles,” said Becky Roof, a managing director for turnaround and restructuring with the consulting
firm AlixPartners. “They’re getting a very bad dose of reality right now.”
Eternal Energy
More pain will come, according to Roof’s firm. Crude prices, down more than 70 percent since
June 2014 and sinking below $30 a barrel, could head down further, according to an AlixPartners
report.
With its optimistic ticker AMZG -- earlier incarnations were named Golden Hope Energy and
Eternal Energy -- American Eagle is classic shale. The last few years, the company took
advantage of low interest rates and high oil prices, outspending its income and relying on debt to
keep drilling. Now the company is part of the bust, selling off acreage for less than it owed its
bondholders. Bradley Colby, American Eagle’s chief executive officer, didn’t respond to an e-mail
seeking comment.
Samson Resources Corp. filed for bankruptcy in September, listing $4.2 billion in debt. Its initial
plan was to let lenders with claims on its assets take over, but unsecured creditors opposed the
idea since, they contend, nothing would be left over for them. The company is still negotiating with
its lenders. Brian Maddox, a spokesman for Tulsa, Oklahoma-based Samson, declined to
comment.
“The reality is setting in as prices remain lower for longer,” said Buddy Clark, a partner with
Haynes & Boone in Houston, which represented Dune Energy in bankruptcy.

An attorney for BPZ Resources declined to comment. Representatives of Endeavour International
didn’t respond to requests for comment.
Cat Canyon
ERG Resources owns almost 19,000 acres in a century-old field about an hour’s drive northeast
of Santa Barbara, California. Called Cat Canyon, it was discovered in 1908 and has produced 300
million barrels of crude since then. ERG planned to squeeze more oil from the aging field. That
was before prices declined. ERG declared bankruptcy in April owing about $400 million, most of it
to Beal Bank USA, a private lender based in Las Vegas. The company found no qualified buyers
willing to pay its minimum bid of $250 million.
Any money the business generates will be used to repay Beal before other creditors, said Roof,
who was ERG’s chief restructuring officer.
Bankruptcies are accelerating. Magnum Hunter Resources Corp., Swift Energy Co. and New Gulf
Resources filed in December. With more liquidations hitting the market, bargain hunters may not
be willing to pay top dollar when there are so many deals to be found.
The next test will be the auction of Quicksilver Resources Inc.’s properties, scheduled for
Wednesday. The shale driller declared bankruptcy in March with more than $2 billion in debt.
“So much of the frenzy in shale in the past few years was a result of the money pouring out of
Wall Street,” said Clark of White Marlin. “It was as much a Wall Street play as it was an oil-and-
gas play. It was putting money to work. Companies took on all that risk and now we see the
result.”

Chevron's Costly LNG Project to Start in Shadow of Oil Crash
Bloomberg|James Paton
After years of delays, cost overruns and labor unrest, Chevron Corp.’s Gorgon project, one of the
world’s most expensive liquefied natural gas ventures, faces another challenge: the weakest
energy prices in more than a decade.
As Chevron prepares to start exports from the development off northwest Australia, oil prices --
which traditionally determine the value of LNG shipments -- are languishing near 12- year lows.
The project will add to a wave of new supply, including the first deliveries from the U.S., amid
weakening demand.
Gorgon highlights the challenge of investing in major energy projects amid unpredictable and
volatile prices. Brent crude has more than halved since Chevron decided to go ahead with the
development in 2009, and its cost has ballooned to $54 billion from $37 billion. While the company
says it’s focused on returns over four decades, current market conditions will reduce near-term
cash flows.

“Falling oil and LNG prices will greatly affect the economics of all new projects coming online
now,” James Taverner, a Tokyo-based analyst at industry consulting firm IHS Inc., wrote in an e-
mail. “Gorgon is one of the most expensive LNG projects in the world. Low LNG prices will hurt its
margins.”
China Contract
Chevron, which signed a preliminary supply agreement earlier this week to sell Gorgon gas to a
buyer in China, is concentrating on the long term. The San Ramon, California-based company has
agreements in place with buyers covering more than 80 percent of its LNG from the Gorgon and
Wheatstone ventures in Australia, it said in an e-mail.
“Legacy assets such as Gorgon will drive long-term growth and create significant shareholder
value for decades to come,” Chevron said. “Gorgon will generate substantial earnings over its
expected economic life of 40+ years.”
The Project
LNG Sales and Marketing :- The Gorgon Joint Venture Participants have signed a number of
sales agreements to market LNG in key customer countries and have adopted a flexible and
innovative marketing approach where each participant secures markets for its share of gas.
Domestic Gas Sales In November 2011, long term contracts were announced with Western
Australia’s largest energy retailer, Synergy and the State’s leading energy generator, Verve
Energy for a combined 125 terajoules per day for 20 years commencing in 2015.
Local Benefits : The Gorgon Project will be an important pillar of the Australian economy for
decades to come. The Project has:-
• Spent more than $31 billion on local goods and services.
• Generated more than 10,000 jobs in Australia, this includes more than 8,000 people working on
and around Barrow Island.
The Chevron-operated Gorgon Project is one of the world’s largest natural gas projects and the
largest single resource development in Australia’s history. The Project is under construction on
Barrow Island, around 60 kilometres off the northwest coast of Western Australia.
It includes a three-train, 15.6 million tonnes per annum (MTPA) liquefied natural gas (LNG)
facility and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to
Western Australia. The first LNG cargo is expected to be loaded in early 2016. This will be
followed by the commencement of domestic gas supply to the maket.

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
khdmohd@hawkenergy.net
khdmohd@hotmail.com
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 21 January 2016 K. Al Awadi

New base 770 special 21 january 2016

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