August Newsletter from StratoChem Services [Print Edition]

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August 2011

Happy Ramadan
from
StratoChem Services

Annual Iftar 4

StratoChem Services gathered to hold our annual Iftar celebration for Ramadan on August 18, 2011. Colleagues and friends gathered at sunset to share a meal and an evening of traditional Egyptian music.

Wishing you health, happiness, prosperity

and a Happy Eid.

Egypt: Beach Energy Announces Two Discoveries in its Abu Sennan Concession in the Western Desert

(www.energy-pedia.com - August 24, 2011)

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Beach Energy advises that exploration discoveries have been made at its first two exploration wells, GPZZ-4 and Al Ahmadi-1, in the Abu Sennan concession in the Western Desert.

Beach Energy has announced discoveries from its two wells in the Egyptian Abu Sennan concession, with production testing on both wells continuing to assess volumes and commerciality. It is expected that there will be an expeditious tie-in of the wells due to the location of the wells being within 10 kms of existing pipeline infrastructure. Details regarding the outcomes of the flow testing from the wells will be advised in due course.

GPZZ-4 was drilled as the first well of a six-well program in the Abu Sennan concession. During initial drilling, hydrocarbon shows were found in the lower and upper Bahariya Formations, and the Abu Roash 'G' Member. An extensive testing program of these formations is currently underway.

The second well, Al Ahmadi-1, has also encountered hydrocarbon shows within the Kharita Formation, the lower Bahariya Formation, the Abu Roash 'G' Member and the Abu Roash "E" Member. Hydrocarbon zones highlighted by the wireline logging and testing will be followed up with a significant cased hole testing program.

Beach Managing Director, Mr Reg Nelson said, 'This is a fantastic result for Beach's International operations and is a credit to the team that identified the potential of this permit in Egypt's Western Desert. We have mentioned on a number of occasions that in order to grow reserves and production, one has to look beyond its own shores, hence why we strategically identified and invested in countries such as Egypt. These discoveries at Abu Sennan justify this strategy and we firmly believe that there will be further success in the not too distant future.'

The Joint Venture equity interests in Abu Sennan are: Beach (via wholly owned subsidiary Beach Petroleum (Egypt)) - 22%; Kuwait Energy - 50% and Operator; Dover Petroleum - 28%.

Iran Discovers Another Gas Field Worth $133 Billion

(www.energy-pedia.com - August 8, 2011)

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Hydrocarbon-rich Iran has discovered another gas field with reserves of 495 billion cubic meters, valued at $133 billion, the oil ministry's SHANA news service quoted an oil official as saying Monday. 'The new gas field has in spot reserves of about 495 billion cubic meters (17.5 trillion cubic feet) valued at $133 billion and is located east of Assalouyeh,' National Iranian Oil Company (NIOC) managing director Ahmad Qalebani said.

Assalouyeh, in the southern province of Bushehr, is the base for developing Iran's offshore South Pars field which Tehran shares with Qatar. It holds an estimated 14 trillion cubic metres of gas (500 trillion cubic feet) or about eight percent of the world's total. The Islamic republic, which has divided South Pars into 28 phases, has proven gas reserves of 33 trillion cubic meters second largest in the world after Russia.

Iran consumes almost all of the 600 million cubic meters per day of gas it produces, but hopes to double production and export 250 million cubic meters a day to its neighbors and Europe from 2015 by developing the giant South Pars field.

Tehran also announced Monday an increase of 17 million cubic meters in phase 10 of South Pars, SHANA reported. 'Gas production in phase 10 of South Pars has increased by 17 million cubic meters,' said Moussa Souri, director of Pars Oil and Gas. But the South Pars development has been delayed amid a lack of investment in a country faced with severe gas needs of its own and because of difficulties in procuring the required technology.

Iran's vital energy sector is one of the key areas targeted by world powers in sanctions imposed against Tehran for pursuing its controversial nuclear programme. Most Western and European energy firms have withdrawn or put on hold their investments in the country's energy sector.

Iran is the second largest producer within Organisation of Petroleum Exporting Countries at 3.7 million barrels per day, and has oil reserves of around 155 billion barrels.

Egypt: Apache Reports Continued Exploration Success in Faghur Basin in Egypt's Western Desert

(www.energy-pedia.com - August 4, 2011)

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Apache Corp has reported two new oil discoveries - Faghur Deep-1X and Neilos-1X - in its Faghur Basin play of Egypt's Western Desert oil and gas province.

A test of the Jurassic Safa sand in the Faghur Deep-1X flowed at a rate of 6,671 barrels of oil and 2.76 million cubic feet (MMcf) of natural gas per day. The Neilos-1X discovery on the Neith Southdevelopment lease test-flowed at a rate of 4,179 barrels of oil and 4.2 MMcf of gas per day from the Jurassic Safa formation. The well also encountered two Alam El Bueib (AEB) Cretaceous pay sands that were not tested.

The latest discoveries were developed through evaluation of modern 3D seismic surveys acquired over the southwestern part of the Khalda Offset Concession and the southern part of the West Kalabsha Concession. In 2011, Apache has drilled and/or completed 11 exploration wells, resulting in nine new field discoveries in the Faghur Basin play. Drilling is continuing on two exploration wells, and seven additional exploration wells are slated to reach total depth in the area before the end of 2011.

"The Faghur Basin continues to be a successful focus area for Apache, with prolific oil and gas production from the AEB, Safa, and Paleozoic reservoirs that demonstrates the multiple-pay potential of this area of the Western Desert," said Tom Voytovich, vice president of Apache's Egypt Region.

Saudis Plan $100 Billion in Investments to Meet 8% Energy Demand Growth

(www.ordons.com - August 12, 2011)

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Saudi Arabia's massive urban building development program is one of the drivers behind the country's 8% annual energy demand growth. The architectural and consumer lighting sectors alone account for nearly 25% of Saudi Arabia's power consumption. To cope with this predicted rise in energy demand, the Kingdom plans to increase electricity production capacity by building a series of new plants, reports the Saudi Gazette.

Current peak levels of consumption stand at 44,000 megawatts (MW), but this is estimated to rise to 121,000 MW by 2032. The Middle East's largest economy could spend up to $100 billion in the power build program in the next decade. This investment will cover new power plants, expansion and upgrading of existing plants, and upgrading and developing the national distribution networks.

Heating, ventilation and air conditioning (HVAC) systems will use energy-efficient solutions for lighting, heating and cooling requirements in the domestic, industrial and public sectors. Power plants currently under construction include the 850-MW thermal project at Yanbu on the Red Sea, requiring an investment of $1.5 billion, and the $2.4 billion power and desalination project at Ras Al Khair in the east of the country, which will be the largest plant of this type in the world. The 2,800-MW plant will serve the needs of the Ras Al Zawr Mineral Industry City (RAZMIC), which is being built to serve miners and process plants exploiting local mineral deposits. The planned plants include an aluminum smelter. The project is scheduled for completion by the end of 2013.

For further information see July 25, 2011, article - Saudi Arabia Gas-Fired Capacity to Bridge Gap to Diversified Energy Mix. Ahmed Pauwels, the organizer of the upcoming Light Middle East 2011 event in Dubai, said, "Given the huge expenditure involved in setting up new energy infrastructure and the rising patterns of energy use among the increasingly prosperous societies in the region, the effective integration of energy-efficient lighting systems, along with infrastructural investments, can promote sustainable energy use in the future." He added that Saudi Arabia, which is the largest market in the region, is attracting huge attention from energy and lighting majors throughout the world.

Egypt's Crude, Condensates Output Reaches 695,000 Barrels a Day

(www.egyptoil-gas.com - August 7, 2011)

Egypt is producing 695,000 barrels a day of crude and condensates, Oil Minister Abdalla Ghorab said. Separately, the North African country is continuing negotiations over increasing the price of natural gas exported to countries such as Jordan and Israel to bring them in line with global prices, Ghorab said today in a telephone interview from Cairo.

Egypt holds Africa's sixth-largest crude oil reserves, with 4.5 billion barrels, and the continent's third-biggest gas reserves, with 78 trillion cubic feet (2.2 trillion cubic meters), according to data from BP Plc. The country produced 736,000 barrels a day of oil and 61.3 billion cubic meters of gas last year, the data show. BP, BG Group Plc, Royal Dutch Shell Plc, Eni SpA and Apache Corp. are among the companies operating in Egypt.

Iraq: Independent Report Puts Gulf Keystone's Sheikh Adi Resources at 1-3 Billion Barrels

(www.energy-pedia.com - August 11, 2011)

Gulf Keystone Petroleum has announced results of an independent preliminary evaluation of the Sheikh Adi resources by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants. The DGA report, based on Sheikh Adi-1 wireline logging data, core samples, 2D and 3D seismic and regional data, has indicated a significant range of between 1 billion barrels and 3 billion barrels of gross oil-in-place volumes calculated on the P90 to P10 basis, with a P50 estimate of 1.9 billion barrels.

Gulf Keystone has completed drilling of Sheikh Adi-1, the first exploration well to be drilled on the Sheikh Adi structure, to a TD (total depth) of 3,780 meters in the Triassic zone. A series of flow tests will now be performed on a number of Jurassic zones in the Sheikh Adi-1 well. Testing in the Triassic zone will not be possible due to issues relating to casing integrity at these depths.

The Sheikh Adi block is located immediately to the west of the Company's Shaikan block, where a major discovery was made in 2009. Gulf Keystone is the Operator of the Sheikh Adi block with an 80 percent working interest and is carrying the Kurdistan Regional Government's 20 percent working interest in the block.

DGA's previous assessments of assets on behalf of Gulf Keystone included independent evaluation of the Shaikan discovery, including a major revision of the gross oil-in-place volumes (4.9 billion barrels to 10.8 billion barrels calculated on the P90 to P10 basis) announced in April 2011.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented: 'This independent report demonstrates the potential of the Sheikh Adi block with between 1 and 3 billion barrels of gross oil-in-place. This report reinforces our belief in having encountered yet another potential world class oil source. We plan to further evaluate the Sheikh Adi structure and define and assess this complicated geological structure. The Sheikh Adi oil-in-place numbers are all the more significant due to our 80 percent interest in the block.

'These numbers are in addition to 7.5 billion barrels of P50 oil-in-place at Shaikan, 2.4 billion barrels of P50 oil-in-place at Akri-Bijeel and 1.9 billion barrels of estimated petroleum-initially-in-place at Ber Bahr. This report further demonstrates the world class nature of Gulf Keystone's assets in the Kurdistan Region of Iraq'.

Libyan Oil Could Hit Market in Coming Weeks

(www.petroleumafrica.com - August 22, 2011)

The oil market could potentially be seeing an addition of 250,000 bpd in the next few weeks if the momentum of opposition troops in Libya continues. While 250,000 bpd is not a significant amount in the wider scheme of things it could give the market the confidence that the crisis in Libya is drawing to a close and additional Libyan crude could be on the way.

"Our fields are under maintenance and we're still waiting for security," Abdeljalil Mayouf, information manager at Libya's Arabian Gulf Oil Company (AGOCO), which is operating the Sarir and Mesla fields, told Reuters. "When the security is OK we will start. Perhaps two or three weeks after the improvement in security. In three weeks maybe," he said.

TransGlobe Sees Record Production in Q2

(www.petroleumafrica.com - August 10, 2011)

TransGlobe Energy Corp. saw its production increase over Q2, rising to a record 11,826 bpd. TransGlobe's record was achieved during a difficult period of political transition in both Egypt and Yemen.

Looking forward the company said that its focus for the 2011/2012 drilling program continues to be developing the Arta/East Arta pools in the West Gharib project in Egypt. There are two drilling rigs assigned to this project and a third rig commenced drilling in May. The West Gharib project area is now the primary producing asset in the company's portfolio and continues to be the growth engine for the future.

TransGlobe's pending acquisition of 4,000 bpd in the West Bakr Concession (100% WI) announced March 25 will add a new project area adjacent to the West Gharib properties. The company said that the acreage contains numerous development opportunities and operational synergies expected to be seen from the acquisition. The company completed its due diligence and submitted the deed of assignment for government approval. Closing is planned to occur shortly after receiving all approvals.

In the Western Desert, the East Ghazalat Safwa development was approved in July. The commencement of first production (approximately 800 to 1,200 bpd to TransGlobe) is expected in December. The company also entered into an agreement to acquire a 50% interest in its first operated project in the Western Desert of Egypt in the South Alamein concession. The acquisition includes a Cretaceous light oil discovery at Boraq 2X which will be appraised and developed in the near term. The acquisition is subject to the normal government approvals of the acquisition, and approval of the Boraq development plan. The South Alamein concession is a large 558,000 acre exploration license which has a number of prospects identified on 3D seismic.

With the addition of West Bakr and the commencement of production at East Ghazalat, total company production could reach 20,000 bpd by year end.

Egypt's Maridive Posts H1 Profit of $36 Million

(www.egyptoil-gas.com- August 17, 2011)

Egypt's Maridive and Oil Services posted a 37 percent increase in first-half profit and analysts said it had secured more construction contracts than in the same period of 2010. The biggest oil services firm by fleet size in the Middle East said earnings before minority interests were $36.2 million, up from $26.4 million a year earlier. Revenue for the first half soared 45 percent to $204.8 million, up from $141 million a year earlier.

However, quarter-on-quarter earnings declined by 12 percent as operations at Maridive's Indian ONGC project stopped in mid-May during the monsoon rainy season. The firm said operations there would resume in October.

"The results are of no surprise and make us confident it will near our year-end estimates, especially in that Maridive's operations are offshore and not impacted by events happening in Egypt," said Ahmed Khalil, an analyst at Beltone Financial. "Maridive's second quarter for 2011 had contracts so it was able to offset a terrible second-quarter last year when margins were suppressed with no construction projects," he said.

Maridive said it was able to win contracts for two marine units for Tunisia and Nigeria while a third unit from India would be used this month in Saudi Arabia. The firm said in a statement it had finished a large section of its Saudi Arabian Aramco project and expected it to finish by the fourth-quarter of 2011.

"In the second quarter, Maridive usually focuses on Gulf market projects to make up for monsoon season in India in the summer when construction work comes to a halt," Khalil said.

Maridive, which serves BP Plc , Kuwait Oil Company, Royal Dutch Shell Plc (RDSa.L: Quote), Saudi Aramco, Qatargas, Total and other oil companies, owns over 60 marine units and has contracted to receive about six vessels and one barge by 2012. Shares in Maridive closed 1.4 percent lower before the results were announced, while Egypt's benchmark share index added 0.4 percent on Monday.

Syria Announces Discovery of New Gas Field Near Homs

(www.energy-pedia.com - August 17, 2011)

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Syria announced Tuesday it has found a promising gas field in the central governorate of Homs, as Human Rights Watch urged the European Union to freeze the assets of Syria's state oil and gas companies. 'The first wells were drilled at Qara in Homs governorate and the flow rate is 400,000 cubic meters per day.' Oil Minister Sufian Allawi was quoted as saying by state news agency SANA.

'This discovery opens new perspectives in the region of Qalamun and the Syrian company will continue its drilling,' said Allawi, adding that the field was located in the Basin of Dau. He said Syria's natural gas production has reached 30. 29 million cubic meters per day, up by 3 million cubic meters since last year. Oil production in Syria is about 380,000 barrels per day, Allawi added.