New base energy news issue 907 dated 15 august 2016

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NewBase Energy News 15 August 2016 - Issue No. 907 Edited & Produced by: Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Iraq starts natural gas processing plant in southeast region
Reuters
Iraq started operating a new natural gas processing plant for oil fields in the southeastern region
on Sunday as part of a plan to use gas that was previously flared to generate electricity, the oil
ministry said in a statement.
The plant located in Misan province, on the border with Iran, will process gas associated with
crude pumped at the Fakka and Bazargan fields, it said. All Misan fields to be brought on stream
in the future will be connected to the plant.
OPEC's second largest oil producer after Saudi Arabia, Iraq flares about 70 percent of its gas
output, according to the Basrah Gas Company which the nation set up in partnership with Shell
and Mitsubishi.
Basrah Gas this year also started exporting cargoes of gas condensates and liquefied petroleum
gas processed from fields in the Basrah region. Thirteen years after the U.S.-led invasion that
toppled Saddam Hussein, the country still suffers from an acute electricity shortage as it lacks
power stations and gas supply .

SEC fuels wind, solar projects in line with Vision 2030
Saudi Gazette
In line with the Kingdom’s Vision 2030, the Saudi Electricity Company (SEC) have begun technical
studies to take advantage of renewable energy and in line with that has identified sites that could
produce solar energy in the various regions of the Kingdom.
SEC CEO Ziad Al-Shiha told Al-Watan Arabic newspaper, “This trend began when the company
entered the field of renewable energy by implementing the Farasan Project with 500 kilowatts to
be the first, which works quite efficiently.”
He noted that the Board of Trustees of SEC approved renewable energy initiatives to build
different stations for solar and wind power with a total capacity of 300 megawatts, which provides
the equivalent of 25.5 million barrels of fuel over the estimated productive lives of 25 years.
Al-Shiha confirmed that, since the announcement of the Kingdom’s Vision 2030, the company has
worked with the Ministry of Energy and Mineral Resources to develop its plans and its initiative to
implement renewable energy projects capacity of 9.5 GW in the towns of Al-Jouf and Rafha in
order to create two working solar energy technologies. Al-Shiha explained that the company is
working on the implementation of Harimale Project to produce 2,750 kilowatts of wind power in
addition to preparing the necessary studies to implement projects for wind power on the west
coast of the Kingdom with capacity of 50 megawatts.
He explained that he has signed two separate contracts that are considered the largest power
plants in the world’s electric power integrated with solar thermal energy (ISCC). The CEO stated
that he is currently implementing the solar power plant in the city of Aflaj with a total capacity of up
to 50 megawatts, which is one of the first renewable energy plants initiated by the company in
collaboration with the King Abdulaziz City for Science and Technology.

Pakistan:Russia Seeks $1.25 per unit to Transport LNG Through
Pakistan's North-South Gas Pipeline … The Express tribune
Russia has sought a tolling fee of $1.25 per unit for transmitting the imported LNG through the
North-South gas pipeline, reported The Express Tribune, a Pakistani newspaper.
PT Global Resources, a subsidiary of Rostec, has commenced discussions with Pakistani side
regarding commercial aspects of the North-South gas pipeline construction project in the South
Asian nation.
In October 2015 in
Islamabad, an
intergovernmental
agreement was
signed between
the governments
of Russia and
Pakistan on the
construction of the
North-South gas
pipeline from
Karachi to Lahore.
The pipeline will
have a length of
1,100 km and a
capacity of up to
12.3 bcm a year. It
will connect LNG
terminals in the
ports of Karachi
and Gwadar in
southern Pakistan with power plants and industrial gas consumers in Lahore in the north of the
country.
The fee was proposed during negotiations between the two countries in Islamabad, officials have
told the newspaper.
Pakistan’s Economic Coordination Committee (ECC) has agreed the creation of an SPV (Special
Purpose Vehicle) in Pakistan, the responsibilities of which will include responsibility for
implementing the project, that meets the parameters of the intergovernmental agreement.
The ECC has taken a decision to implement the project on BOOT (Build, Own, Operate, Transfer)
contract terms, under which the constructed gas pipeline after its commissioning will be owned
and operated by the project company for 25 years and then transferred over to the Pakistani side.
Officials said the SPV will also be listed on the Pakistan stock market by floating its shares in
order to generate funds for the project.
( Gas flow 1000,000 MMBTU/Day x 1.25 U$D/MMBTU , thus revenues = U$D 1,250,000 )

DNO launches offer to acquire Gulf Keystone
Source: DNO
DNO, the Norwegian oil and gas operator, on July 29 unveiled a proposal to acquire for USD 300
million all of the enlarged share capital in Gulf Keystone Petroleum following the latter's
contemplated financial restructuring announced earlier this month.
The terms of the DNO proposal, which would comprise cash and shares, reflect a 20 percent
premium to the share price of USD 0.0109 at which, on 14 July 2016, Gulf Keystone issued
shares representing 5.6 percent of its share capital, and also reflect a 20 percent premium to the
price at which Gulf Keystone intends to issue further shares in its restructuring.
In addition, for the Gulf Keystone guaranteed note holders the DNO terms reflect 111 percent of
par value compared to 99 percent under the contemplated restructuring, and for the convertible
bondholders the DNO terms reflect 18 percent of par value compared to 15 percent under the
contemplated restructuring.
By offering USD 120 million in cash (approx. 40 percent of the consideration), DNO would provide
an early exit for those noteholders and bondholders who may be unable or unwilling to hold equity
for an extended period.
The additional offer of 170 million DNO shares (approx. 13.6 percent of the post transaction DNO
share capital) would provide Gulf Keystone investors with continued exposure to the Shaikan field
in addition to DNO's wider portfolio of assets, significantly larger market capitalization, more robust
cash flow, stronger balance sheet and proven operating and management capabilities.
DNO has been active in the Kurdistan region of Iraq since 2004 and ranks number one among the
international oil companies in oil production (50 percent), oil exports (60 percent) and proven oil
reserves (50 percent).
DNO holds a 55 percent stake in and operates the Tawke oil field at a current production level of
around 120,000 barrels of oil per day (bopd) of 27 degree API crude. Gulf Keystone holds a 58

percent stake in and operates the Shaikan oil field at a current level of around 40,000 bopd of 17
degree API crude.
Production from Shaikan is transported daily by road tanker to DNO's unloading and storage hub
at Fish Khabur for onward pipeline transport to export markets.
'Combining these two companies will create further scale and unlock operational synergies that
will reinforce DNO's already formidable presence in Kurdistan,' said Bijan Mossavar-Rahmani,
DNO's Executive Chairman.
'We understand Shaikan's challenges and opportunities and we are well positioned to focus
financial, technical, commercial and logistical support to maintain and then grow production at this
field to the benefit of both Kurdistan and our investors,' he added.
Gulf Keystone, a Bermuda incorporated and London listed company, has called a special general
meeting for 5 August 2016 to consider its contemplated financial restructuring. DNO has written to
the board of directors of Gulf Keystone to present its proposal and to facilitate immediate
engagement with Gulf Keystone's investors ahead of the meeting to ensure sufficient time for
these investors to carefully consider the enhanced terms proposed by DNO.
Shaikan
Significant operational progress has been made on the Shaikan block since
the Shaikan-1 world-class discovery in 2009 to the ramp up of production and
crude oil export sales levels of today.
The Shaikan block is situated about 85 km to the north-
west of Erbil covering an area of 283 km². The
Production Sharing Contract (“PSC”) for the Shaikan
block was awarded in November 2007 to Gulf Keystone
Petroleum International (Operator with the working
interest of 75%), Kalegran Ltd. (100% subsidiary of MOL
Hungarian Oil and Gas Plc. with 20%) and Texas
Keystone Inc. (5%).

Oman: Orpic’s plastics complex to offer $1.5b in business
By A E JAMES/businesseditor@timesofoman.com
As part of a major initiative to strengthen in-country value (ICV) while building mega projects,
contractors handling $6.5 billion worth of Liwa Plastics Industries Complex project have agreed to
purchasing a minimum of 25 per cent from local vendors, as well as meeting a minimum
Omanisation level of 30 per cent, and providing training for Omani
youths in excess of 15 per cent of those employed.
The prestigious Liwa Plastics Industries Complex is being built by
state-owned Oman Refineries and Petroleum Industries Company
(Orpic).
The estimated minimum value for ICV is approximately $1.5 billion,
Dr. Hilal Al Hinai, general manager – Corporate Support Services –
Orpic, told Times of Oman, prior to an in-country value roadshow in
Sohar.
Local small and medium enterprises are expected to significantly benefit from the business
opportunities, which include sub-contracting work, purchase orders, and support services,to be
purchased by major contracting firms.
Orpic has already awarded four major packages to multinational contracting firms for building Liwa
Plastics Industries. Among the four packages, a joint venture of CB&I and CTCI Company was
awarded a contract for a steam cracker and utilities, Italy's Tecnimont won a contract for building a
plastics units, a consortium of South Korea's GS Engineering and Construction and Japan's Mitsui
& Co won a contract for constructing a natural gas liquids extraction facility, and India's Punj Lloyd
was awardeda contract to build a pipeline between Fahud and Sohar.
“Orpic is leading five business opportunities across oil and sector, which has been identified in the
Blue Print Strategy Book. Orpic actively supports SME development-related engineering design
for the manufacturing industry, detailed engineering design, development of an engineering
services hub, tank maintenance and cleaning and purchasing of commodity chemicals. These
opportunities are progressing at different stages, starting with preparation or under strategy
phase,” said Al Hinai.
Al Hinai also noted that Orpic’s ICV agenda corresponds with that of the oil and gas industry and,
as such, the company fully supports the national ICV programme and the ICV committee, which
was formed by the Ministry of Oil and Gas. The company has embedded ICV into its own
business model, with particular reference to its major projects over the next four years.

“The ICV mechanism is in place to perform site visits to audit and monitor each ICV component
provided by the contractors to ensure the desired ICV outcome is generated, and meetings are
held with contractors to communicate and understand the challenges faced,” added Al Hinai.
Orpic’s ICV strategy is to support business development, human capability development, and
stimulate productivity in the Omani economy through the retention of maximum in-country value.
To achieve this, the ICV department aims at reaching the authentication (made in Oman) of
materials procured by Orpic, and development of human capital in all Orpic projects by ensuring at
least 30 per centof Omanisation across all categories and levels, sustainable development of
Omani Small and Medium Enterprises (SMEs) through the support of those directly linked to
Orpic’s business and communication of ICV achievements through dashboards to all key
stakeholders.
The ICV and procurement teams have started a new practice to ring-fence a number of tenders,
which are suitable to SMEs, in terms of their capabilities, in order to ensure 10 per cent allocation
to local businesses. “We have allocated a certain scope for either SME’s or local suppliers for
those scopes, which are currently being undertaken by international suppliers.”
The ICV team works with all agencies and departments to study tenders, to identify any ICV
opportunities through Omanisation or local sourcing, in an effort to include them in the tender
document.
Liwa Plastics Industries Complex is one of the strategic growth projects being undertaken by Orpic
as part of its transformational journey. The $6.5 billion project, which is scheduled for
commissioning in 2020, will transform Orpic’s product mix and business model, double company
profits, create new business opportunities, generate significant employment opportunities and
support the development of a downstream plastics industry in Oman.
Upon completion, plastics production will have increased by 1 million tonnes, allowing Orpic to
produce 1.4 million tonnes of polyethylene and polypropylene by 2020.

NewBase 15 August 2016 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices edge up on potential producer action to prop up market
Reuters + NewBase
Oil prices edged up early on Monday and have risen more than 10 percent since the start of the
month as speculation intensifies about potential producer action to support prices in an
oversupplied market.
International Brent crude oil futures were trading at $47.10
per barrel at 0018 GMT, up 13 cents from their last
settlement, and over 10 percent above the last close in
July. U.S. West Texas Intermediate (WTI) crude futures
were at $44.65 a barrel, up 16 cents from their last close.
"Oil posted another ... gain as speculation of potential
production freezes by OPEC picked up pace. Saudi
Arabia signaled that it is prepared to discuss stabilizing
the markets at informal OPEC discussions next month," ANZ bank said on Monday.
"This was despite another strong rise in drilling activity in the U.S. ...Baker Hughes data showed
the number of rigs operating in the U.S. rose by 15 last week to 396," it added.
After falling sharply from over 1,600 in 2014, before the price rout started, to a low of just 316 in
late May, the U.S. oil rig count has steadily risen since then as U.S. producers have adjusted to
lower prices.
Oil price special
coverage

NewBase Special Coverage
News Agencies News Release 15 August 2016
Five oil producers that fly under the radar, and what you should
know about them CNBC
Just about everyone knows about major oil producers like Saudi Arabia, Iran, Libya and
Venezuela. Yet how much is known about some of the smaller nations that play a role in
lubricating the machinery that keeps the world supplied with oil?
With all the scrutiny on OPEC countries and noncartel giants, places like Nigeria, Angola, Gabon
and Trinidad — which some people may not realize is the largest oil and natural gas producer in
the Caribbean — are often overlooked. Like their larger cohorts in the global oil market, they have
also found themselves under severe pressure from falling oil prices. Still, the dynamics in these
individual countries are worth taking a look at, especially because crude markets remain as
volatile as ever.
CNBC surveyed the landscape, and highlighted some of the smaller oil producers that fly under
the radar, but arguably deserve more attention as developments in the world economy shape their
domestic economies.
Angola: A mess with opportunity

The bear market in commodities has put considerable pressure on Angola, which is highly
dependent on oil and has one of the least diversified economies in the world. About 80 percent of
government revenue comes from crude, which has sent public finances crashing.
Recently, the ruling party instituted austerity measures that sliced the government budget by 50
percent, but analysts at Standard & Poor's were unimpressed: On Friday, the agency cut the
country's outlook to negative because of slumping growth prospects.
"The risks of the low oil price are rising inflation, currency devaluation, and social and economic
difficulties," Claire Lawrie, Africa energy lead at Ernst & Young, told CNBC recently. She added
there are still opportunities in the country's gas sector.
Colombia: Outlasting its neighbors
The Andean nation has not been completely immune to the slump in oil prices that has
undermined other commodity-dependent economies. At the same time, Colombia has managed to
coast in an economy that's hammering places like Venezuela, its geographic neighbor in the
throes of an economic collapse.
Colombia ranks behind Venezuela and Brazil as one of South America's largest oil exporters, the
U.S. Energy Information Administration notes, producing about 1 million barrels per day. The
country is also pouring money into a $70 billion multiyear infrastructure spending project.
"Given the intensity of the oil price shock, it is our view that Colombia's recent growth performance
has been quite strong," Michael Heydt, lead Colombia analyst and a vice president at DBRS, told
CNBC recently. "Colombia's medium-term prospects are also good compared to regional peers,"
he said.

Gabon 'stable' despite oil slump
The West African nation only recently rejoined OPEC. The move may help to deepen commercial
and financial relationships with other cartel members. Gabon produces about 240,000 barrels of
oil per day, making it the smallest of OPEC's oil producers. Gabon remains a small country by
population, but one with relatively high per capita growth.
"Oil production is stable, which is supportive for the country's creditworthiness. It is also making
some progress on economic diversification, which is important," said Morgan Harting, senior
portfolio manager at AB Global, who oversees the firm's emerging market multi-asset portfolio.
Nigeria: A 'borderline failed state'

Once one of the crown economic jewels of West Africa, Nigeria has been hammered by the oil
slump. The country is not in as bad a shape as Venezuela, but comes awfully close: The
government has been forced to battle terrorist elements, double-digit inflation and widespread
energy shortages. A few months ago, short seller James Chanos said Nigeria was "caught in a
macro hurricane," and was a "borderline failed state."
Trinidad and Tobago: Still resilient
Trinidad is about more than colorful carnivals and Soca music, arguably the country's most
recognizable cultural exports. The Caribbean's wealthiest nation has a history in oil and gas
production that goes back more than 100 years, but churns out only 70,000 barrels per day.
Trinidad is also the world's largest ammonia exporter and a methanol powerhouse, according to
IHS Global Insight data.
Oil's tumble has dealt the economy a stiff blow, but International Monetary Fund officials said in
March that Trinidad "still has enormous strengths, including a well-educated workforce and a
stable political system."
›

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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 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 15 August 2016 K. Al Awadi

New base energy news issue 907 dated 15 august 2016

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New base energy news issue 907 dated 15 august 2016