Newbase 654 special 27 july 2015

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,
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NewBase 27 July 2015 - Issue No. 654 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE fuel deregulation to create savings elsewhere in
the Gulf
SG + Agencies + NewBase Deregulation of transport fuel in the UAE could create fiscal savings elsewhere
in the Gulf, according to an analysis by Fitch Ratings.
The removal of transport fuel subsidies, announced by the UAE ministry of energy last
Wednesday, may set a “positive fiscal precedent”, particularly for sovereigns whose public
finances are under pressure, the credit agency said on Sunday.
The UAE announced that gasoline and diesel will be deregulated from August 1 a new pricing
policy linked to global levels will be introduced.

At present, state subsidies keep gasoline and diesel in the UAE at some of the lowest prices in the
world. Motorists pay 47 US cents for a liter of gasoline, less than a third of levels in Western
Europe, Reuters reported last week.
Energy Minister Suhail bin Mohammed Al-Mazroui said: “Deregulating fuel prices will help
decrease fuel consumption and preserve natural resources for future generations.”
A fuel price committee, to include representatives from the energy and finance ministries and the
CEOs of ADNOC Distribution (part of Abu Dhabi National Oil Company) and Emirates National Oil
Company, will set prices monthly based on a review of average global prices and operating costs.
Fitch rates two UAE sovereigns - Abu Dhabi (AA/Stable) and Ras Al Khaimah (A/Stable). It said in
a statement this week that fuel subsidies form part of the UAE’s federal spending so the new
system will have no direct budgetary impact for these sovereigns. But it should result in some
indirect fiscal savings to Abu Dhabi, which is a large contributor to the federal budget.
It cited recent IMF forecasts showing that pre-tax energy subsidies in the UAE will amount to
12.64 billion, or 2.87 percent of GDP, in 2015. These figures, Fitch said, suggest that the impact of
cutting fuel subsidies could be larger in other sovereigns in the region.
For example, it noted, the IMF puts the pre-tax energy subsidies in 2015 at 4.62 percent of GDP
for Saudi Arabia and Bahrain. The figures for Kuwait and Qatar are 1.81 percent and 1.64 percent
respectively.
“We think governments in the region understand the benefits of subsidy reform, including both
fiscal cost savings, and more efficient resource allocation and energy consumption,” Fitch said.
“However, reforms so far have been uneven and incomplete. For example, Bahrain has focused
mainly on industrial consumers and Kuwait has partly reversed diesel and kerosene price
increases enacted early in 2015 in response to the negative reaction by consumers.
“The Kuwaiti experience shows that cutting or removing subsidies can be politically contentious.
However, we do not expect adverse political repercussions in Abu Dhabi, which enjoys very high
GDP per capita, and good growth prospects.
“Successful implementation in the UAE while oil prices are low could increase public acceptance
of subsidy reform elsewhere in the region, boosting the prospects for reform.”
The statement noted that although the global drop in oil prices has cut fuel subsidy costs, it has
also reduced government revenues among Gulf oil exporters. As a result, Fitch said it forecasts
budget deficits of 13 percent and 10.9 percent of GDP for Saudi Arabia and Bahrain respectively.

Lebanon: NEOS identifies frontier oil & gas province in
Lebanon - seeks co-investment partners/ Source: NEOS
NEOS has announced the promising findings from a regional oil & gas prospectivity
study that it completed in Lebanon. NEOS believes a frontier oil & gas province is now
emerging in the country.
The results came from the company’s neoBASIN™ study to evaluate the prospectivity of a 6,000
km2 area encompassing the onshore northern half of the country and the transition zone (TZ)
along the Mediterranean coastline. Insights from the neoBASIN interpretation revealed tell-tale
signs of a highly prospective hydrocarbon system:
• Evidence of hydrocarbon-generating source rock and oil seeps;
• Evidence of large structural traps, with several containing resistivity anomalies;
• Evidence of multiple ‘stacked’ play types throughout the project area.
His Excellency Mr.
Arthur Nazarian,
Lebanese Minister of
Energy & Water,
commented, 'This
neoBASIN project has
put the topic of onshore
oil and gas exploration
on the top of our
national agenda once
again. As an indication
of the importance in
which we hold this
project, the Ministry will
begin undertaking all of
the necessary
procedures to ensure
the development of a
vibrant onshore
exploration sector.'
NEOS CEO Hollis
concluded, 'We are
developing plans to
acquire additional
data, including seismic
over the most
promising structures,
to further de-risk the
opportunity and to
secure the capital
needed to drill the most promising locations. I look forward to our continued collaborations with
the Ministry, the LPA and Petroserv.' The interpretative products are now available for license to
interested E&P operators. To learn more about this neoBASIN project,
view:http://tinyurl.com/LebanonSlideshow.

Egypt: Eni signs update to the Head of Agreement signed with Egypt last March
Source: Eni
The Egyptian Minister of Petroleum and Mineral Resources, Sherif Ismail,
and Eni’sCEO, Claudio Descalzi, in the presence of the Prime Minister of Egypt,
Ibrahim Mahlab, and the Italian Prime Minister, Matteo Renzi, on Friday signed
an update to the Head of Agreement signed last March, following
the significant gas discovery made by Eni in the Nile Delta concession. The
update describes the commitment of the parties to jointly evaluate the development
opportunities of the discovery by renegotiating the terms and contract extension of
the concession.
Preliminary estimates of the discovery, located in the Abu Madi West license in
the Nile Delta offshore, account for a potential of 15 billion cubic meters of gas in
place with upside, plus associated condensates. Eni will be focused on a fast track
exploitation of this potential to fill up the processing capacity of Abu Madi Gas Plant.
Today’s update further reaffirms and strengthens the commitments undertaken with
the Head of Agreement signed last March during the Egyptian Economic
Development Conference in Sharm El Sheik, which, following the revision of the
contractual parameters and temporary extensions of some concessions, envisages
investments of an estimate 5 billion dollars. The investment will lead to the
realization of projects to be implemented in the next 4 years and directed to the
development of 200 million barrels of oil and 1.3 TCF of gas. These investments will
also contribute effectively to the increasing energy needs of local demand.
Eni has been present in Egypt since 1954, where it operates through its subsidiary
IEOC and is the market leader with an equity production of approx. 180 thousand
barrels of oil equivalent per day.

Philippines: Red Emperor Resources farm-in to Otto Energy's Block
SC55 receives approval Source: Red Emperor Resources
Red Emperor Resources has announced that it has received formal notification from
the Department of Energy of the Republic of the Philippines that approval for the assignment
of the Company’s 15% working interest in Block SC55has been granted. This was the final
condition precedent to be met with respect to Red Emperor’s farm-in agreement with Otto
Energy, as announced on 2nd March 2015. With all conditions now satisfied, the Company
confirms that the agreement has now been completed.
Red Emperor has also been advised by Otto that mobilisation of the Maersk Venturer drill ship to
the Hawkeye-1 well location remains on schedule to take place at the end of the month, with
drilling operations to commence soon after.
Greg Bandy, Red Emperor’s Managing Director, commented, 'The Company is delighted to have
received formal approval from the Philippines government and thanks them for their support. We
also wish to thank shareholders for their patience with respect to this approval and look forward
to updating them on the progress of this highly anticipated drilling campaign over the coming
weeks.'
SC55 is located in the southwest Palawan Basin and covers an area of 9,880km2. It is a deep-
water block in the middle of a proven regional oil and gas fairway that extends from the
productive offshore Borneo region in the southwest to the offshore Philippine production assets
northwest of Palawan. The Hawkeye prospect was identified on 2D seismic in 2007 and further
defined with a 600km2 3D seismic acquisition in late 2009. Hawkeye contains a 'Best Estimate'
STOIIP of ~480 MMbbls of oil and a 'Best Estimate' Gross Prospective Resource of 112 MMbbls
(RMP net 14.3 MMbbls) (refer to ASX announcement dated 2 March 2015).

Panoro spuds Aje-5 well offshore Nigeria
Panoro Energy ASA, the independent E&P company with assets in Nigeria and Gabon, has
announced that drilling has started on the Aje-5 production well on the OML 113 license, offshore
Nigeria.
The well is being drilled with the Saipem Scarabeo 3 semi -submersible drilling rig. Panoro
entered into a rig contract with Saipem in June 2015. Aje is an offshore field located in the western
part of Nigeria in the Dahomey Basin close to the border with Benin. The field is situated in water
depths ranging from 100 to 1,000 metres about 24 km from the coast.
Panoro Energy holds a 6.502% participating interest in OML 113 (with a 12.1913% revenue
interest and 16.255% paying interest in the Aje Field). According to Panoro, the Aje Field contains
hydrocarbon resources in sandstone reservoirs in three main levels – a Turonian gas condensate
reservoir, a Cenomanian oil reservoir and an Albian gas condensate reservoir.
Panoro said that the Aje-5 well is being drilled from a seabed location close to Aje-4 in 300 metres
water depth. The well will be drilled as a deviated well targeting a location close to the Aje-2
subsurface location where that well encountered and tested high quality oil-bearing Cenomanian
reservoir.
Following drilling, the Aje-5 well will be completed as a subsea oil production well. The drilling and
completion for Aje-5 is expected to take approximately 70 days. Following this the rig will be used
to re-enter the existing Aje-4 well to complete it as a second Cenomanian subsea oil production
well. The company noted that installation of the production manifold, flowlines, umbilicals and
risers will take place in Q4 2015 after which the FPSO vessel the ‘Front Puffin’ will be installed
and commissioned.
Production is expected to start by year end 2015 at an initial anticipated production flow rate of
approximately 1,100 bopd, net to Panoro from these two wells, in accordance with the first phase
of the approved Field Development Plan. Yinka Folawiyo Petroleum is the operator of the OML
113 licence and other partners are New Age, FHN (Afren Subsidiary), Energy Equity Resources,
and Jacka Resources.

Indonesia to expand its port network to boost economy
AFP/Jakarta
Container ships dot the horizon off the coast of Jakarta, as cranes and labourers work on an
ambitious, economy-boosting project to expand the port network in the world’s largest archipelago
nation.
New Priok will be Indonesia’s biggest port once completed, and is one of 24 ports planned to
overhaul maritime connections in Southeast Asia’s top economy, which comprises more than
17,000 islands.
Container ships dock at the Tanjung Priok port, north of Jakarta. New Priok will be Indonesia’s biggest port once completed, and is one of 24 ports
planned to overhaul maritime connections in Southeast Asia’s top economy, which comprises more than 17,000 islands.
President Joko Widodo is leading efforts to improve dilapidated maritime infrastructure in a
country where ships face lengthy delays before berthing and goods can get stuck for days as they
run a gauntlet of government agency checks.
“This is no longer a wish, but a necessity,” Widodo recently said of improving ports after
Indonesian growth hit a six-year low of 4.7% in the first quarter, a blow for a leader who won
power on a pledge to revive the economy.
The port plan is part of a broader scheme to improve infrastructure, from potholed roads to
creaking train lines, as the country seeks to lure foreign investors and pull out of a long slowdown
driven by falling prices of its key commodity exports.
Action is urgently needed—Indonesia’s infrastructure is so woeful that it is cheaper to transport
goods from China to the country’s most populous island of Java than to bring them from the
Indonesian part of Borneo, which is far closer, according to the World Bank.
Improving ports is particularly critical for a nation that straddles the Indian and Pacific Oceans and
is home to important shipping routes. As well as attracting new investment, the scheme could

reduce the price of consumer goods through lower transport costs and help develop more remote
parts of the archipelago.
Widodo, a former furniture exporter who knows well the problems of the country’s ports, is taking a
personal interest in the project but it faces formidable challenges. There are growing doubts his
administration, which has been criticised over its failure to kickstart major infrastructure projects,
will be able to push through the plans due to a lack of organisation and a dysfunctional
bureaucracy.
On a recent visit to Tanjung Priok port in Jakarta—which handles much of Indonesia’s
international trade—Widodo’s frustration at slow progress was clear when he delivered an angry
tirade over the failure to substantially cut the time it takes goods to move through the facility.
The target date to complete all the ports is 2019. But even if the target is met, which seems
doubtful given many infrastructure projects in Indonesia suffer delays, experts say this alone will
not solve the problem of red tape and graft that slows down processing of goods.
“Building hardware is a critical element in the wider scheme of things,” said Jayendu Krishna, a
Singapore-based analyst with industry consultancy firm Drewry Maritime Services.
“An equally important element for success will be tackling bureaucracy and corruption, otherwise it
might turn out to be much ado about nothing.”
Nevertheless, industry players sense renewed momentum under the new president.
“I am very optimistic, we’ve got very strong support from the top,” Richard Lino, president director
of state-owned port operator Pelindo II, which is developing the New Priok port, told AFP.
“There is no reason not to be successful.” The Jakarta project is one of five planned deep-sea
ports, which can receive large cargo ships and will be dotted across the archipelago from western
Sumatra island to underdeveloped eastern Papua.
Tanjung Priok, currently Indonesia’s biggest port, handles 6.5mn containers a year.
To its east, the first stage of New Priok is taking shape, with labourers working on a container
terminal, a wide stretch of concrete jutting out into the sea.
Construction of the new port, which consists of two phases, began in 2013 but people involved in
the project say it has sped up in recent months. Trial operations are due to begin on the first
stage later this year but the entire project is not expected to be completed for some years.
The new port, which will share services with Tanjung Priok and whose first phase alone is
expected to cost around $4.5bn, will have capacity to handle 12.5mn containers of international
freight a year.
Work has already started this year on ports in Kuala Tanjung on Sumatra and in Makassar on
central Sulawesi island. Despite the optimism, Indonesia faces a long road to catch up with other
Asian countries, such as more affluent Malaysia, which has more modern port facilities. “We are
still behind our neighbours, that is for sure,” said Pelindo II’s Lino. “It is a very big challenge.”

Oil Price Drop Special Coverage
Oil prices fall on oversupply worries; investors await Fed meeting
Oil prices fell on Monday after closing the previous session at their lowest levels since March on
renewed oversupply concerns from the United States and Iraq, although a weaker dollar helped to
limit deeper losses.
Investors are looking to the U.S. Federal Reserve for direction this week. The central bank starts a
two-day policy meeting on Tuesday that could result in a September interest rate hike that would
strengthen the greenback.
"The markets are looking for price guidance from Janet & Co," said Ben Le Brun, market analyst
at Sydney's OptionsXpress, referring to Fed Chair Janet Yellen and the bank.
"There is scope for the dollar bulls to be disappointed this week (which) might be a driver for oil
prices and the commodities complex overall," Le Brun said.
A weaker dollar makes dollar-denominated commodities, including oil, cheaper for consumers
using other currencies.
Brent crude for September LCOc1 was down 2 cents at $54.60 a barrel as of 0655 GMT after
dropping 65 cents in the previous session to $54.62, its lowest close since March 19.
U.S. crude for September CLc1 was down 12 cents at $48.02, after falling 31 cents in the previous
session to $48.14, its lowest settlement since March 31. It hit an intra-day low of $47.72 on Friday,
the lowest intraday price since April 1.
Sparking new worries about a global glut, U.S. oil producers added 21 drilling rigs last week, the
biggest rise since April 2014, according to Baker Hughes (BHI.N).

The increase in drilling activity came despite a 21 percent collapse in U.S. crude prices from about
$61 a barrel in mid-June. A 20 percent downturn is considered by many traders to constitute a
bear market.
In Iraq, exports from its southern oilfields are on course for a monthly record, having topped 3
million barrels per day so far this month, according to loading data and an industry source.
The expectation of continued abundant oil supplies, including an output increase from Saudi
Arabia and other members of the Organization of the Petroleum Exporting Countries, led the
National Australia Bank on Monday to revise its oil price forecasts in a monthly report.
"We now expect oil prices to stay below $70 a barrel for the rest of 2015 and 2016," the bank said.
Speculators cut long bets on U.S. crude futures and options to the lowest level in five years last
week, the U.S. Commodity Futures Trading Commission said on Friday.

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

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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 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 01 July 2015 K. Al Awadi

Newbase 654 special 27 july 2015

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