new base 558 special 11 march 2015

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Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 1 NewBase 11 March 2015 - Issue No. 558 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Saudi Arabia, Argentina form R&D joint venture on nuclear technology State-owned R&D companies from Argentina and Saudi Arabia have set up a joint venture company, Invania, to develop nuclear technology for Saudi Arabia's nuclear power program. The foundation of the joint venture company was announced by Argentina's federal planning ministry and Invap during a visit by the Saudi Arabian consultative assembly, the Shoura Council to Buenos Aires. Invania has been established under a nuclear cooperation agreement signed by the two countries in 2011. According to Invap, the joint venture aims to leverage Argentina's nuclear experience and capabilities to help Saudi Arabia implement its own nuclear power program. Argentina has a long history of nuclear technology R&D. Its atomic energy commission, the Comisión Nacional de Energía Atómica (CNEA), was set up in 1950. Today, the country generates about one-tenth of its electricity from its three pressurized heavy water reactors with plans for more. A prototype 27 MWe Argentinian-designed modular reactor, CAREM, is under construction. The country has its own uranium mining and milling, enrichment and fuel fabrication and heavy water production capabilities. It also produces medical radioisotopes including molybdenum-99 and cobalt-60. Saudi Arabia is looking to nuclear power to help it meet growing demand for both electricity and desalination, with plans for the construction of as many as 16 reactors over the next 20 years. Smaller reactors, such as CAREM, are envisaged for use in desalination. The country has signed nuclear cooperation agreements with France, South Korea and China as well as Argentina. Argentina’s Minister for Planning Julio De Vido receives the Saudi Arabian delegation

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Page 1: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 1

NewBase 11 March 2015 - Issue No. 558 Khaled Al Awadi

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

Saudi Arabia, Argentina form R&D joint venture on nuclear technology

State-owned R&D companies from Argentina and Saudi Arabia have set up a joint venture company, Invania, to develop nuclear technology for Saudi Arabia's nuclear power program. The foundation of the joint venture company was announced by Argentina's federal planning

ministry and Invap during a visit by the Saudi Arabian consultative assembly, the Shoura Council to Buenos Aires. Invania has been established under a nuclear cooperation agreement signed by the two countries in 2011. According to Invap, the joint venture aims to leverage Argentina's nuclear experience and capabilities to help Saudi Arabia implement its own nuclear power program. Argentina has a long

history of nuclear technology R&D. Its atomic energy commission, the Comisión Nacional de Energía Atómica (CNEA), was set up in 1950. Today, the country generates about one-tenth of its electricity from its three pressurized heavy water reactors with plans for more. A prototype 27 MWe Argentinian-designed modular reactor, CAREM, is under construction. The country has its own uranium mining and milling, enrichment and fuel fabrication and heavy water production capabilities. It also produces medical radioisotopes including molybdenum-99 and cobalt-60. Saudi Arabia is looking to nuclear power to help it meet growing demand for both electricity and desalination, with plans for the construction of as many as 16 reactors over the next 20 years. Smaller reactors, such as CAREM, are envisaged for use in desalination. The country has signed nuclear cooperation agreements with France, South Korea and China as well as Argentina.

Argentina’s Minister for Planning Julio De Vido receives the Saudi Arabian delegation

Page 2: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 2

Nuclear Power in Saudi Arabia (Updated 10 March 2015) Muhammad Garwan, K.A.CARE, Nov 2013, Sustainable Energy Mix for Saudi Arabia

• Saudi Arabia plans to construct 16 nuclear power reactors over the next 20 years at a cost of more than $80 billion, with the first reactor on line in 2022.

• It projects 17 GWe of nuclear capacity by 2040 to provide 15% of the power then, along with over 40 GWe of solar capacity.

In December 2006 the six member states of the Gulf Cooperation Council (GCC) – Kuwait, Saudi Arabia, Bahrain, the United Arab Emirates (UAE), Qatar and Oman – announced that the Council was commissioning a study on the peaceful use of nuclear energy. France agreed to work

with them on this, and Iran pledged assistance with nuclear technology.

Together they produce 520 billion kWh per year (2012), all from oil and gas and with 5-7% annual demand growth. They have total installed capacity of over 90 GWe, with a common grid apart from Saudi Arabia. There is also a large demand for desalination, currently fuelled by oil and gas.

In February 2007 the six states agreed with the IAEA to cooperate on a feasibility study for a regional nuclear power and desalination program. Saudi Arabia was leading the investigation and thought that a program might emerge about 2009.

Saudi electricity

Saudi Arabia’s population has grown from 4 million in 1960 to almost 30 million in 2014. It is is the main electricity producer and consumer in the Gulf States, with 272 billion kWh gross production in 2012 – 150 TWh from oil and 121 TWh from gas. Energy use for electricity and heat production including desalination in 2011 was 28,783 PJ, 57% of it from oil. It consumes over one-quarter of its oil production, and while energy demand is projected to increase substantially, oil production is not. Generating capacity is over 30 GWe. Demand is growing 8% per year and peak demand is expected to be 70 GWe by 2020 and 120 GWe by 2032. Saudi Arabia is unique in the region in having 60 Hz grid frequency, which severely limits the potential for grid interconnections – it has no electricity import or export. Its population is about 29 million, and per capita consumption about 8000 kWh/yr.

The Ministry of Water & Electricity (MOWE) is broadly responsible for power and desalination in the country.

It has plans to install 24 GWe of renewable capacity by 2020, and 50 GWe by 2032, and is looking at the prospects of exporting up to 10 GWe of this to Italy or Spain during winter when much generating capacity is under-utilised (cooling accounts for over half the capacity in summer). The 50 GWe in 2032 was to comprise 25 GWe CSP, 16 GWe solar PV, 4 GWe geothermal and waste (together supplying 150-190 TWh, 23-30% of power), complementing 18 GWe nuclear (supplying 131 TWh/yr, 20% of power), and supplemented by 60.5 GWe hydrocarbon capacity which would be little used (c10 GWe) for half the year. The nuclear target date has now been put back to 2040.

Page 3: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 3

The first of three phases of the King Abdullah Solar water initiative were expected to be operating by the end of 2013. Phase 1 involves construction of two solar plants which will generate 10 MW of power for a 30,000 m³/d reverse-osmosis (RO) desalination plant at Al Khafji, near the Kuwait border. Phase 2 will involve construction of a 300,000 m³/d desalination plant over three years. The third phase aims to implement the solar water initiative throughout Saudi Arabia, with the eventual target of seeing all the country's desalination plants powered by solar energy by 2020.

Meanwhile the country continues to install huge desalination capacity, much of it thermal MSF and MED, but a lot is reverse osmosis (RO), driven by electricity.

Saudi Nuclear power plans

In August 2009 the Saudi government announced that it was considering a nuclear power program on its own, and in April 2010 a royal decree said: "The development of atomic energy is essential to meet the Kingdom's growing requirements for energy to generate electricity, produce

desalinated water and reduce reliance on depleting hydrocarbon resources." The King Abdullah City for Atomic and Renewable Energy (KA-CARE) was set up in Riyadh to advance this agenda as an alternative to oil and to be the competent agency for treaties on nuclear energy signed by the kingdom. It is also responsible for supervising works related to nuclear energy and radioactive waste projects.

In June 2010 it appointed the Finland- and Swiss-based Poyry consultancy firm to help define "high-level strategy in the area of nuclear and renewable energy applications" with desalination. In November 2011 it appointed WorleyParsons to conduct site surveys and regional analysis to identify potential sites, to select candidate sites then compare and rank them, and to develop technical specifications for a planned tender for the next stage of the Saudi nuclear power project. Three sites were short-listed as of September 2013: Jubail on the Gulf; and Tabuk and Jizan on the Red Sea. The Nuclear Holding Company was being set up in 2013.

In June 2011 the coordinator of scientific collaboration at KA-CARE said that it plans to construct 16 nuclear power reactors over the next 20 years at a cost of more than 300 billion riyals ($80 billion). These would generate about 20% of Saudi Arabia's electricity. Smaller reactors such as Argentina’s CAREM are envisaged for desalination. An April 2013 timeline showed nuclear construction starting in 2016.

In April 2013 KA-CARE projected 17 GWe of nuclear capacity by 2032 of total 123 GWe, with 16 GWe solar PV, 25 GWe solar CSP (to provide for heat storage), and 4 GWe from geothermal, wind and waste. About half the capacity in 2032 would still be hydrocarbon, with one-third solar following investment in that of some $108 billion. In addition 9 GWe of wind capacity would be used for desalination. In January 2015 the nuclear target date was moved to 2040.

In September 2013 both GE Hitachi Nuclear Energy and Toshiba/ Westinghouse signed contracts with Exelon Nuclear Partners (ENP), a division of Exelon Generation, to pursue reactor

Page 4: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 4

construction deals with KA-CARE. GEH is proposing its ABWR and ESBWR, while Toshiba/ Westinghouse is proposing the AP1000 and its ABWR version. Areva and EdF have signed a number of agreements with Saudi companies and universities, and EdF signed an agreement with Saudi Arabia's Global Energy Holding Company (GEHC) for the creation of a joint venture whose first task will be to carry out feasibility studies for an EPR reactor in the country.

In March 2015 the Korea Atomic Energy Research Institute (KAERI) signed an agreement with KA-CARE to assess the potential for building South Korean SMART reactors in the country. SMART is designed for electricity generation (up to 100 MWe) as well as thermal applications, such as seawater desalination, with a 60-year design life and three-year refuelling cycle. The cost of building the first SMART unit in Saudi Arabia is estimated at $1 billion. The agreement is seen by South Korea as opening opportunities for major involvement in Saudi nuclear power plans, and it also calls for the commercialization and promotion of the SMART reactor to third countries. KAERI has designed an integrated desalination plant based on the SMART reactor to produce 40,000 m3/day of water and 90 MWe of power at less than the cost of gas turbine.

Also in March 2015, the state-owned INVAP (Investigacion Aplicada) from Argentina and state-owned technology innovation company Taqnia set up in March 2015 a joint venture company, Invania, to develop nuclear technology for Saudi Arabia's nuclear power program, apparently focusing on small reactors such as CAREM. Taqnia is the technology arm of the Public Investment Fund.

Page 5: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 5

China, India drive global energy needs: Al-Attiyah GulTimes

The global energy industry has seen huge demand from two fast-growing major economies —China and India — even as consumption dropped in Europe, said HE Abdullah bin Hamad al-Attiyah, president of the Administrative Control and Transparency Authority (ACTA). “These two countries have launched themselves to a high growth zone,” al-Attiyah told Gulf Times

yesterday. “For example, take the case of India. From a very classical agrarian-based economy with just textile exports to highlight, India has become a giant in industry, IT and many sectors. India has changed drastically over the last 20 years. This is not the India we have seen in the

60s and 70s,” al-Attiyah said on the sidelines of the 5th Gulf Intelligence Doha Energy Forum 2015 in Doha. He said China and India would need huge amounts of energy to achieve their growth targets. “I therefore believe a consumption drop in Europe will be made up by growing demand for energy in China and India,” al-Attiyah said. Earlier, at a one-on-one session, al-Attiyah said he did not think the relevance of Opec was fading. “Opec has always been and is still relevant.”Al-Attiyah, also a former president of the Organisation of Petroleum Exporting Countries, said he believed Opec would not change policy at its next meeting unless other producers cut first. “I don’t advise Opec to have an extraordinary meeting without having a concrete decision to change policy,” said al-Attiyah, who was associated with Opec at different capacities for about 40 years. Earlier in his welcome note, Alistair Routledge, president and general manager of ExxonMobil Qatar, said, “Forecasting long-term energy trends begins with a simple fact — people need energy. Over the next few decades, population and income growth — and an unprecedented expansion of the global middle class — are expected to create new demands for energy and thus we see global energy consumption rising by about 35% from 2010 to 2040.” Asia’s impact on world energy demand and global energy security in the 21st century was among the critical industry topics to be debated at the 5th Doha Energy Forum, which will include ConocoPhillips and Maersk Oil Qatar amongst the forum’s other industry partners, with Texas A&M University at Qatar engaging as the forum’s Academic Partner.

Page 6: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 6

Solar Impulse2 toward flight 3/12 (from India to Myanmar ) www.solarimpulse.com

Before taking off for its third flight from Ahmedabad (VAAH) in the Republic of India, to Varanasi (VIBN) in the Republic of India, the Solar Impulse team will prepare the aircraft and pilot. It will also be the opportunity to reach out to governments, NGOs, universities and schools to spread Bertrand Piccard's and André Borschberg's message about clean technologies.

Solar Impulse will take off for its fourth flight from Varanasi (Lal Bahadur Shastri Airport, VNS/VIBN) in the Republic of India, to Mandalay (Mandalay International Airport, MDL/VYMD) in the Republic of the Union of Myanmar. The pilot will fly the zero-fuel airplane on about 1408km (760NM) for an estimated time of 20 hours. South of the Himalayas, the meeting of the jet streams can cause difficult crosswind for Si2. The pit-stop is the opportunity for pilots Bertrand Piccard and Andre Borschberg to share the symbol of Solar Impulse with the people of Varanasi.

Page 7: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 7

Bahrain refinery expansion to cost some $5b, online by 2019 GulfNews + NewBase

An expansion of Bahrain’s Sitra crude oil refinery is expected to cost around $5 billion and the facility is likely to be commissioned by 2019, the energy minister said on Tuesday. “We have the refinery modernisation which will cost around $5 billion. Already front-end engineering and design (FEED) has been awarded — FEED should be ready by the end of the first quarter of 2016,” Abdul-Hussain Bin Ali Mirza told Reuters.

“The increase in capacity according to the current plan is from 260,000 barrels per day to 360,000 and it will be commissioned by 2019.” He added, “Financing will be through borrowing, we haven’t finalised this yet.”

Bahrain lacks the ample crude oil and financial resources of the big Gulf energy exporters, and its state finances are under heavy pressure from the plunge of oil prices since last year. But Bahraini officials have said they will press ahead with key projects that are needed to develop the economy.

Construction of a pipeline between Saudi Arabia and Bahrain, which will replace an ageing one and lift capacity to 350,000 bpd from 230,000, is expected to be finished by 2018, Mirza said. Previously, officials had estimated the pipeline would be completed by the third quarter of 2016. Mirza did not give a reason for the change.

He added that this year Bahrain would ask companies to bid to explore offshore blocks for oil and gas. He did not give a specific date or say which companies would participate as a roadshow for investors has not taken place yet.

The chief executive of Bahrain’s National Oil and Gas Holding Co, Mohamed al-Khalifa, told reporters on Monday that the launch of the bidding round “will depend on the situation of the market”.

Mirza said in a speech late on Sunday that his country had completed a pilot project to generate 5 megawatts of solar power and was close to launching another pilot plant to generate 3MW of solar power and 2MW of wind power.

Page 8: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 8

Egypt:Siemens helps to power up Egypt with gas turbines The National + NewBase Egypt is adding huge power generation capacity to its grid with a combination of conventional and renewable energy. Siemens will supply four gas turbines to the Attaka Power Plant, which will add 650 megawatts to the grid. The plant is located about 150 kilometres east of Cairo, and will provide electricity for more than half a million people.

Siemens did not provide a value for the deal, nor did it say when the project was expected to be commissioned. “This project is in progress, but on time to be executed according to the fast-track schedule,” said Karim Amin, the senior vice president for power generation at Siemens Middle East.

The German company also recently signed a contract with the East Delta Electricity Production Company to supply, install and commission electrical components at the 650MW Suez Thermal Power Plant.

The plant will be commissioned in 2016. In addition, Abu Dhabi-based Masdar this week inaugurated a 10MW solar power plant in Marsa Matrouh, enough to power about 10,000 homes.

“The plant will save five million litres of diesel fuel and also reduce Egypt’s carbon footprint by more than 14,000 tonnes of carbon dioxide per year,” Wam quoted Sultan Al Jaber, the UAE Minister of State, as saying during the inauguration.

Page 9: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 9

Masdar announced in November that it was looking to undertake 2,000MW of wind and solar projects in the North African country, increasing its original plan of only 200MW. Masdar is also working to provide solar power to 61,000 homes throughout Egypt.

As Egypt struggles to regain economic standing from pre-Arab Spring levels, power shortages have been a major obstacle. The country dropped 14 places to 121 out of 144 countries for electricity

supply in the World Economic Forum’s annual Global Competitiveness Index 2014-15.

Industries have suffered across the board from local business owners spending more money on diesel generators to continue operations. Egypt’s president Abdel Fattah El Sisi has made energy reform a major priority.

On his visit to the UAE in January, he said that the country would roll out an ambitious energy strategy to help meet rising demand. The strategy could be unveiled at the upcoming Egypt The Future investment conference hoping to attract investments from international companies.

Page 10: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 10

US: Get Ready for Oil Deals: Shale Is Going on Sale Bloomberg + NewBase

A decision by Whiting Petroleum Corp., the largest producer in North Dakota’s Bakken shale basin, to put itself up for sale looks to be the first tremor in a potential wave of consolidation as $50-a-barrel prices undercut companies with heavy debt and high costs.

For the first time since wildcatters such as Harold Hamm of Continental Resources Inc. began extracting significant amounts of oil from shale formations, acquisition prospects from Texas to the Great Plains are looking less expensive.

Buyers are ultimately after reserves, the amount of oil a company has in the ground based on its drilling acreage. The value of about 75 shale-focused U.S. producers based on their reserves fell

by a median of 25 percent by the end of 2014 compared to 2013, according to data compiled by Bloomberg. That’s opening up new opportunities for bigger companies with a better handle on their debt, said William Arnold, a former executive at Royal Dutch Shell Plc.

“In this market, there are whales and there are fishes, and the whales are well armed,” said Arnold, who also worked as an energy-industry banker and now teaches at Rice University in Houston. “There are some very vulnerable little fishes out there trying to survive any way they can.”

Smaller producers with significant debt that depend on higher prices to make money are the most likely early targets for buyers such as Exxon Mobil Corp. or Chevron Corp., companies that have bided their time

Page 11: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 11

for years as the value of some shale fields soared to $38,000 an acre from $450 just a few years earlier.

‘Consolidation Game’

The market crash is creating “a consolidation game,” Concho Resources Inc. Chief Executive Officer Timothy Leach said in a Feb. 26 call with investors. “It’s harder to be a small company today than it has been in the past.”

In the pre-plunge days, acquisitions were dominated by foreign buyers overpaying to get a seat at the shale boom table. That buying frenzy was followed by an explosion in asset sales as companies pieced together their ideal drilling portfolios. Joint ventures were a popular way of funding what seemed like an unstoppable drilling machine.

Now, an expected surge of deals is more likely to feature fire sales by companies unable to pay expenses, falling asset prices and a widening division between the haves and have-nots.

Heavy Debt

Sellers will be companies like Whiting, handicapped by heavy debt and lacking the cash reserves or hedging contracts that would have provided some insulation from the market crash. Among the three biggest producers in North Dakota -- Whiting, Continental and Oasis Petroleum Inc. -- the value per-barrel of reserves has fallen by about half since June, the data show, meaning those reserves would cost a buyer half what they were worth eight months ago.

Exxon is the only major oil company with a AAA credit rating, which gives it unparalleled borrowing power for financing deals. More importantly, the company has $226 billion of its own shares stashed away from buybacks that it could use to buy other companies. That was how Exxon paid for Mobil in 1999 and XTO Energy Inc. in 2010.

Chevron holds $43 billion of its own shares in its treasury alongside $13 billion in cash, and the company has ample ability to borrow.

An analysis by Wolfe Research LLC analyst Paul Sankey found the likeliest takeover candidates among major U.S. and Canadian producers included Continental, Apache Corp., Devon Energy Corp. and Anadarko Petroleum Corp. Those companies are big enough to help a buyer such as Exxon gain oil reserves at a cheaper price compared to peers, Sankey wrote Feb. 2.

Page 12: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 12

In the headiest days of the shale-buying spree, executives including Occidental Petroleum Corp.’s Stephen I. Chazen swore off deal-making, saying it would be more profitable to focus on developing the assets they’d already acquired. Now they’re singing a different tune.

Eyes Open

For the first time in years, EOG Resources Inc. Chairman and CEO William R. Thomas said Feb. 25 the company was weighing larger deals to scoop up acreage at a bargain, departing from its usual preference for more incremental purchases. Exxon Chairman and CEO Rex Tillerson suggested last week at an investor presentation in New York that the global oil giant is keeping its eye open for opportunities in the downturn.

Whiting has reached out to potential buyers including Statoil ASA about a sale, people familiar with the matter said this week.

The company took on $2.2 billion in additional debt for its $6 billion acquisition last year of fellow shale producer Kodiak Oil & Gas Corp., just as crude prices had begun a decline from more than $100 a barrel to less than $50 at the start of the year.

Scaling Up

The Denver-based company would be an attractive target for Exxon, Chevron or Hess Corp., all of which have operations in North Dakota and would benefit from scaling up, according to a Bank of America Corp. note to investors Monday.

Spokesmen for Exxon, Statoil, Chevron and Hess declined to comment on their potential interest in buying shale companies. Spokesmen for Anadarko, Apache and Devon declined to comment about their interest in selling.

Buyers will probably have to use their stock to purchase smaller operators, which don’t want to take cash at the bottom of the market, said Mike Bock, co-founder of energy investment bank Petrie Partners LLC of Denver. Bock spoke generally about potential energy mergers and declined to comment specifically on Whiting, as his firm has done business with the company in the past.

‘Stock for Stock’

“Now is the time to do a stock-for-stock deal,” Bock said. “For the most part, it’s going to be unconventional players combining.”

Since oil company shares have fallen alongside the market crash, an equity deal allows both buyer and seller to reap the upside when shares gain in a recovery, said Tim Balombin, an energy investment banker with Wells Fargo & Co.

Whiting has fallen 54 percent since June, about the same as oil prices in that time. An index of producers on the Standard & Poor’s 500 Index has fallen by about 32 percent, according to data compiled by Bloomberg.

“The companies that have good currency in their stock are willing to deploy it aggressively,” Balombin said in a telephone interview. “The best companies that come out of these downturns come out of it bigger and stronger.”

Page 13: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 13

Oil Price Drop Special Coverage

Saudi oil exports keep rising Agencies + NewBase

Average exports from Saudi Arabia for February totaled just under 7 million bpd, 66,000 bpd higher than the January average, according to the Oil Research & Forecasts team at Thomson Reuters. Total seaborne exports (excluding pipeline flows) averaged 6.76 million bpd for February. This compares favorably to preliminary forecasts for February of 6.70 million bpd. Weekly vessel departure tracking indicates that Saudi exports peaked at around 8.6 million bpd during the month, comprising of around 44 vessel loadings. Further analysis suggests that average Saudi exports have increased steadily since November’s decision to continue OPEC production at 30 million bpd, with Saudi Arabia leading the drive to keep up pressure on market supply. Just over 195.8 million barrels were exported, with customers in Asia retaining a 58% share of exports. Although China consumption has overtaken Japan in recent months, Chinese buying appears to have moderated as strategic reserves fill up. Shakil Begg, Lead Oil Analyst at Thomson Reuters, said “Saudi oil production has been robust so far this year in spite of the sharp drop in oil prices, and our calculations reinforce OPEC statements that production will not be reduced. Estimates further indicate that exports will remain robust.” Meanwhile, the Organization of Petroleum Exporting Countries won’t change policy at its next meeting unless other producers cut first, Qatar’s former energy minister said. OPEC is scheduled to next meet in Vienna in June, seven months after deciding to maintain output levels and protect market share. Production by non-OPEC members such as Mexico rose in February from the month before, US output is forecast to be the highest in three decades and Russian supply climbed to a post-Soviet high in January.

Page 14: New base 558 special 11 march  2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 14

“I don’t advise OPEC to have an extraordinary meeting without having a concrete decision” to change policy, Abdullah bin Hamad Al-Attiyah, who was Qatar’s energy minister from 1992 to 2011, told the Doha Energy Forum on Tuesday. OPEC won’t change policy at its next meeting in June unless non-OPEC producers join in a collective cut, he said. Brent crude, a benchmark for more than half of the world’s oil, has dropped 26 percent since OPEC’s decision on Nov. 27. Futures fell 1.3 percent to $57.75 a barrel by 11:19 a.m. on the ICE Futures Europe exchange in London. OPEC’s next regular meeting is scheduled for June 5. The Energy Information Administration forecast that US output will increase to 9.3 million barrels a day this year, the most since 1972. Russia produced 10.71 million barrels a day in January and Petroleos Mexicanos, Mexico’s state-controlled oil company, boosted output to 2.33 million barrels a day in February from 2.25 million barrels in January.

Brent oil expected to trade at $60-70 by 2015 end GulfTimes + NEwBase

Brent crude oil prices are expected to trade in the $60-70-a-barrel price range by end-2015 and international oil companies (IOCs) are likely to maintain their production targets despite crude prices have fallen around 50% from last summer’s highs, an industry survey conducted at The Gulf Intelligence Doha Energy Forum has found.

According to the survey, conducted yesterday among more than 160 Qatari and international leaders from government, academia and the energy industry, 42% of the respondents expressed the view that Brent crude was expected to trade in the $60s-a-barrel range at the end of the year, while 38% thought prices were more likely to be at $70s at that

point. Only 6% predicted Brent would trade above $80 a barrel by year-end. Brent crude prices slumped below $50 a barrel in January, having fallen off the cliff from highs above $110 in June before recovering to levels around $60 a barrel in February. Brent was trading below $58 a barrel yesterday. Crude prices have declined on the back of new supplies hitting markets, in particular from shale oil production in the US, and slower global economic growth, including in Asia. The survey also found that 33% of respondents expected IOCs to maintain production targets through greater operational efficiency, even with lower capital expenditure, despite oil prices trading in the current price range and the resulting volatility on the development of new energy capacity over the short to mid-term. As many as 29% of those surveyed thought that prices and volatility would cause US shale oil producers to stop new capacity additions and lead to a decline in existing shale oil capacity.

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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.

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Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 17