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November 2011
Greetings from StratoChem Services!


We at StratoChem Services are excited about the increasing applications for our X-Ray Fluorescence (XRF) sample analyzer.  This new machine allows us to rapidly screen samples for estimated lithology.  This rapidity means we are able to analyze an entire well in one day, providing significantly faster results to our clients at a low cost.  Furthermore, in the future we plan to use XRF results to compare mineral compositions among wells to establish accurate correlations.  Because of the hand-held component of this instrument we also are able to bring the XRF analyzer into the field, where it can be used to screen the elemental data of outcrops.

For further information about the XRF sample analyzer and its related services please direct inquiries to:

Egypt: Petrobel Leads a Busy Drilling Schedule

 ( - November 14, 2011) 


Egyptian flag small 


     Balayim Petroleum Company (Petrobel) is heading further with its 2011/2012 plan by the drilling of two development wells and another exploratory one, in Sinai and the Mediterranean areas respectively.


     The two development wells 112-141 H and 112-140 H were drilled to total depths of 9243 feet and 10427 feet respectively in the area of Sinai. 

The drilling cost of the 112-141 H well totaled $2.504 million, while the 112-140 H drilling cost counted for $3.299 million.

     Moreover, the company finished the drilling of Salmon-1 exploratory well in the Mediterranean area, with $18.174 total cost. The oil producing well was drilled by the Scarabe-4 rig to a total depth of 5335 feet.  


  Petrobel is jointly owned by the Egyptian General Petroleum Corporation (EGPC) and Italian Eni.  In last September, the total production rate of Petrobel stood at 4.148 million barrels of oil.


Saudi Arabia Halts $100bn Oil Expansion Programme


( - November 24, 2011)


Saudi Arabian Flag 


   Saudi Arabia has halted the $100bn expansion of its oil production capacity after reaching a target of 12m barrels a day as the kingdom believes that new oil sources will meet raising demand.


      Khalid al-Falih, chief executive of state-owned Saudi Aramco, said on Monday that pressure on Riyadh to raise its output capacity had "substantially reduced", the clearest indication yet that the world's top oil producer is not pushing ahead with an assumed expansion plan to 15m b/d by the end of 2020.  


     The comments put a cap at least temporarily on a $100bn expansion program that started in the early 2000s when Saudi was able to produce about 8.5m b/d. The halt comes in spite of tightness in the oil market due to ongoing production disruptions in Libya, Syria and Yemen.


     Oil prices reached a two-year high of more than $125 a barrel this year after the civil war broke in Libya but since then the cost of Brent, the global benchmark, has fallen back to $105 a barrel due to the impact of the financial crisis.


     The oil market closely watchesSaudi Arabia's expansion programme because the country holds most of the global spare production capacity that acts as a cushion in case of a production disruption. Riyadh boosted its oil output to 10m b/d earlier this year, the highest in 30 years, to compensate for the loss of production in Libya.  


     "There was pressure on the kingdom and Saudi Aramco to raise production [capacity]. That pressure, I think, has been substantially reduced," Mr Al-Falih said, adding that the debate on energy policy had been "turned upside down" recently by growing oil and natural gas supplies.  


      The International Energy Agency has over the last decade steadily cut its projection for Saudi Arabia oil production. Earlier this month, the watchdog said on its flagship World Energy Outlook that the kingdom would need to produce 12.6m b/d by 2030, compared with an estimate for the same year of 18m b/d published in 2005.  


     The Paris-based IEA estimates that Iraq would be now the biggest contributor to global oil supply growth between 2010 and 2035, adding more than 5m b/d. Saudi Arabia would be still the second largest contributor, but closely followed by global biofuel production, and oil supplies from Brazil, Canada and Kazakhstan.  


      Mr Falih said that Saudi Aramco was shifting its spending priorities from oil production into natural gas, refining and the chemicals business. "The downstream [refining] is increasingly growing in scale to equal, and sometimes eclipse, the level of spending we are doing in upstream [oil production]," he said.  


      But Amrita Sen, an oil analyst at Barclays Capital in London, noted, however, that the decision not to expand further comes at a time of pressing budgetary needs. "The current focus of Saudi is on domestic social spending on the back of Arab Spring," she said.


      King Abdullah of Saudi Arabia announced earlier this year hand-outs and boost to public spending at a total cost of $129bn in an effort to buy social peace.



Egypt: Bapetco Deepens Operations in Sitra


(  - November 23,  2011)


Egyptian flag small


     Badr El-Din Petroleum Company (Bapetco) invested $2.172 million in a drilling activity in the Alam El-Shawish Concession, onshore the Western Desert.


     The company completed the drilling of Sitra 8-14 development well to a total depth of 11565 feet through the EDC-72 rig.  


     This drilling operation serves the 2011/2012 plan of Bapetco, the joint venture between the Egyptian General Petroleum Corporation (EGPC) and Shell Egypt.  


      Bapetco is Involved in the oil and gas exploration and production in the Western Desert area, through its fields, such as Bed-1, Bed-2, Bed-3, Neag, Neag-1, Sheiba; Sitra, El-Hamra, Obayied and America.

Emir of Qatar Inaugurates Pearl GTL Project


( - November 22, 2011)                                                                          

 Qatar emblem


       His Highness Sheikh Hamad bin Khalifa Al-Thani, The Emir of Qatar, has officially inaugurated the Pearl Gas to Liquids (GTL) Project, the largest GTL plant in the world and the largest energy project in the state of Qatar. Visiting dignitaries including HRH Prince Andrew, The Duke of York, toured the facility and were briefed on the state-of-the-art technologies used to convert natural gas resources from Qatar's North Field into high quality liquid fuels and products that will be sold at premium all over the world.


  Pearl GTL has been jointly developed by Qatar Petroleum and Shell creating an additional route for Qatar to generate value from its enormous supply of gas. Using innovative technology and engineering, Pearl GTL turns natural gas into high quality liquid fuels and products, thereby realizing the full upside of accessing the oil markets.  


    CEO of Shell Peter Voser said: 'Pearl GTL is a tribute to the remarkable partnership between Qatar Petroleum and Shell. The inauguration of Pearl GTL represents an historic milestone for Shell, and for our industry as a whole. It marks the culmination of five years of project delivery, and over 35 years of Gas to Liquids technology development at Shell.


       'We are proud of what has been accomplished and privileged to have contributed to Pearl GTL's success with our innovation, technology and project delivery capabilities. Shell would like to extend its deepest appreciation to the people of Qatar for the enormous support we have received during the development and execution of the Pearl GTL project. We look forward to continuing our partnership through the operations phase, delivering high quality fuels and products right across the world for decades to come.'


      Pearl GTL is a fully integrated upstream/downstream, world-scale project located in Ras Laffan Industrial City, 80 km north of Doha. It captures the full value chain from offshore development through onshore gas processing to refining of finished products and the distribution of these products right across the world in one project. When fully operational, Pearl GTL will have the capacity to produce 140,000 barrels a day of high quality GTL products (gasoil, naphtha, kerosene, normal-paraffin and lubricants base oils), thereby help meet the increasing global demand for high quality hydrocarbon. It will also produce 120,000 barrels a day of Natural Gas Liquids (liquefied petroleum gas and condensate) and ethane.


      The project is being developed in two trains and major construction was completed at the end of 2010. The first train started up in Q1 2011 and the first commercial shipment of gasoil was exported in June 2011. The second train of the plant started up in November 2011 by bringing in sour gas from offshore wells. The gas processing plant has come quickly on line delivering on-spec gas, condensate, LPG and sulphur. The first of the four world scale Air Separation Units in Train 2 is also on-line producing on-spec oxygen.


      At peak 52,000 construction workers from 60 countries worked on the construction of Pearl GTL, a project which took 500 million hours to design and build. The project broke many industry records in terms of safety, achieving 77 million hours without a lost time injury in 2010.

Iraq: ExxonMobil Nettles Baghdad with Kurdish PSC


( - November 24,  2011) 


Iraq Flag


     ExxonMobil Corp. has signed a production-sharing contract with the Kurdistan Regional Authority for 6 blocks in the semiautonomous region in northern Iraq. "We have informed the central government of this contract," said KRG Minister of Natural Resources Ashti Hawrami. "It is a matter of law for us to do so," Hawrami told OGJ.


    "The KRG has for the last few months been in discussions with a number of major oil companies," said Michael Howard, an advisor to Hawrami. "This resulted in the agreement with ExxonMobil to explore in 6 blocks."


    Howard said KRG is "excited" to have ExxonMobil under contract, adding that it is a major step forward in plans developed by KRG over several years that are aimed at "getting the industry going."  


     Full details of the agreement between the KRG and ExxonMobil have yet to emerge, but officials are optimistic over its portent for the future. "We initially started working with small, dynamic independents, then moved to midsized firms, and now there's ExxonMobil-our first...supermajor," said Howard.


     KRG officials expect the new contract to accelerate the process of signing on other international oil companies, with the names of several leading IOC's mentioned. But KRG's main aim is to spur production.


    "We have reserves estimated at 45-50 billion bbl of oil, and we have invited a large number of international oil companies to develop our oil and gas," said KRG Prime Minister Barham Salih. "At the moment we are producing about 175,000 b/d, but we will reach 1 million b/d by 2015," Salih told delegates at the Atlantic Council's Black Sea Energy and Economic Conference in Istanbul.


   In signing the agreement with KRG, ExxonMobil has risked the displeasure of Iraq's central government, which has long sought to dissuade IOC's from working with KRG.


    Indeed, Iraq's Deputy Prime Minister for Energy Hussein Al-Shahristani has said that ExxonMobil will be dealt with in the same way as other companies investing in Kurdistan without federal government approval.


      "The Iraqi government will deal with any company that breaks its laws in the same way that it has dealt with similar companies in the past," said al-Shahristani.


     Previously, Baghdad has blacklisted IOCs that signed contracts with KRG, so that they cannot work in the rest of the country or purchase crude oil.


     That treatment was spelled out to the US firm in the form of three letters that warned of "dire consequences" should it proceed to sign up for acreage with KRG.


      "All three letters were clear...the signing of any contract with the KRG without the approval and the knowledge of the Iraqi central government and the oil ministry will be considered illegal," said an oil ministry spokesman.  "ExxonMobil could face disqualification and the termination of its contract," the spokesman said.


      In January 2010, ExxonMobil's Iraq unit signed a service contract with Iraq's ministry of oil to redevelop and expand the West Qurna-1 field in southern Iraq. ExxonMobil is the lead contractor with 60%, Iraq's state-owned Oil Exploration Co. holds 25%, and Royal Dutch Shell PLC has 15%.


      ExxonMobil is also leading a consortium of IOCs active in the south in the development of a $4 billion water injection facility for use on the West Qurna-1, West Qurna-2, Zubair, and Rumaila fields.


      ExxonMobil "appears to be gambling its West Qurna-1 project against the upstream potential in Kurdistan," one observer told OGJ, adding that the US firm "could gain access to reserves under [PSCs] in contrast to its tight technical service contract in the south."


    Tony Hayward, the former chief executive of BP PLC, who recently emerged at the helm of Genel Energy, a Kurdistan-focused player, told OGJ that the ExxonMobil agreement would "ultimately...hasten progress towards compromise" between Baghdad and KRG.


     That may be, but other IOCs will probably adopt a wait-and-see attitude before running any risks with Baghdad-especially if they have much to lose.


     "ExxonMobil has little to lose with its service contract in the south and much to gain with its PSC in the north," said another industry observer, adding that, "Things are different for Shell, which just signed a $17 billion gas deal with Baghdad."


     Still, there can be little doubt that all eyes will be on Baghdad in the days and weeks to come.

Yemen Boots Nexen, Forms New E&P Co


(  - November 23, 2011)


  Yemen flag  


     The Cabinet approved Tuesday a draft decision to establish the Masila Company for Petroleum Exploration and Production (PetroMasila) at block 14 in Masila area, Hadramout province.


     In its weekly meeting chaired by Premier Ali Mujawar, the cabinet assigned Oil and Minerals Minister to issue all the executive decisions to execute the draft decision presented by the Supreme Economic Council and the issuance of the company's statute, financial and accounting systems in coordination with Finance and Legal Affairs Ministers.


    Under the decision, PetroMasila company is a subsidiary of the National Petroleum Company (under formation) and runs and operates the block 14 according to the global petroleum industry standards after taking over the Masila oilfield replacing the Canadian Nexen company, whose production sharing contract expires on December 17th, 2011.


       The state-run company acquires all the rights and privileges enjoyed by the former operator Nexen as well as all duties and obligations according to the valid contracts at the delivery field date of the oilfield.  


       It also stipulates that the PetroMasila company, as received the block, to conduct further exploration and development operations by itself or via contracting with local and foreign specialists.  


     The Supreme Economic Council discussed a report of the Oil and Minerals Ministry on the future of the block 14 in Masila area and the available alternatives to run and operate the block.  


     Moreover, the council discussed a report on the local market and electricity sector's needs of oil derivatives. It affirmed the importance of providing all needed derivatives to meet the requirements and enhanced the necessary measures to crack down the black market that impacts the stability of local market.  


     The revenue of the oilfield entire production will transfer to the government, in addition to the block's assets and property which would by considered - after assessment - as a capital of the company.  


     The cabinet formed a committee to coordinate the procedures for taking over and operating the block 14 and to identify the following tasks and procedures.  


      On the other hand, the cabinet confirmed the Supreme Economic Council's decision on providing all oil derivatives to meet the local market and electricity sector's needs and enhancing the necessary measures to crack down the black market that impacts the stability of local market.


Baird Defends Suncor Gas Project in Syria 


( - November 24, 2011)

Syrian Flag

    Canada defended the right of Alberta oil giant Suncor to continue operations in Syria even though Ottawa has imposed economic sanctions on a regime that has killed 3,000 protesters in their Arab Spring uprising.


       For the first time Tuesday, the Harper government directly addressed an apparent contradiction in its tough stance against the regime of Syrian President Bashar Assad - the fact that Suncor continues a $1.2-billion natural-gas project.


      "The natural gas that is extracted is used exclusively, to the best of my information, for civilian electricity generation," Foreign Affairs Minister John Baird explained from Kuwait, where he was wrapping up a two-country tour of the Persian Gulf.  "Cutting off families from the electricity grid would have a significant detrimental consequence on the popular support for reform, and at this time we've decided it would be negative, not positive to cut hospitals, places of work, families' homes from electricity."  


      Baird said the rationale is similar to how the tactical bombing of Libya was carried out by NATO: the alliance's fighter jets studiously avoided targets that would affect access to electricity or clean drinking water.  "If there is a time when I feel and the government feels there is a benefit to taking that action, we will immediately take it, without hesitation," the minister added.


    As for shutting down Suncor operations in Libya through sanctions, Baird said: "In Libya, their oil production was for exports and we didn't have any inhibition whatsoever for having the sanctions fully apply to them in that circumstance."


   Baird's explanation came a day after his parliamentary secretary obfuscated attempts by the NDP to get an answer to the question in the House of Commons.


      "Will the government make sure that the new sanctions against Syria will stop their friends from doing business . . . while thousands of civilians are being killed?" asked NDP foreign affairs critic Helene Laverdiere.


    Bob Dechert, Baird's parliamentary secretary, brushed off the question.  "Canada has taken decisive action by imposing sanctions that directly target members of the current Syrian regime and those who provide it with support," he said. "We will be bringing forth further stronger economic sanctions."


        However Baird bemoaned the fact that the current round of sanctions against Iran and Syria can't be toughened because of opposition from China and Russia. Both countries have vetoes on the United Nations Security Council.

Foreign Oil Companies Say Tough Terms Could Deter Libya Oil Investment


( - November 21, 2011)

Libyan flag NEW 

     Foreign oil companies operating in Libya warned that current contracts could deter new investment, even though the fall of Col. Moammar Gadhafi has been sometimes perceived as paving the way for a new oil rush in the country holding Africa's largest oil reserves.


     Libya's deputy oil minister says the country would show flexibility once new contracts are tendered but existing agreements won't be changed. Contractual terms 'determine what investment you are going to get,' said Martin Bachmann, an exploration and production executive director at Germany's Wintershall. 'That's for the new leadership to consider.'


   But in an interview with Dow Jones Newswires, Omar Shakmak, a deputy to interim oil and gas minister Ali Tarhouni, ruled out any change to current deals. 'We will honor our contracts,' he said. But 'it is not our intention to make any changes to existing contracts.'


     However, Shakmak didn't rule out new terms for future licenses, which won't be proposed before elections, due within eight months. 'For a new contract, it could be revised' from what was practiced under the previous regime, he said. 'There could be more flexibility to protect the rights of both parties,' referring to foreign oil companies and the government.


     The remarks are part of an emerging debate in the Libyan oil industry as attention slowly turns from resuming production to attracting fresh cash after decades of underinvestment. 'There will arrive a point where there is a new phase of development' for each given acreage, Wintershall's Bachmann told Dow Jones Newswires on the sidelines of the Oil Council conference.


     The contractual terms 'are horrible' said Sara Akbar, chief executive of Kuwait Energy Co., who is considering bidding for Libyan acreage when new licenses are tendered.


      Back in 2009, most foreign oil companies, including Wintershall, were forced to revise existing deals and cut stakes from 50% to as low as 12%. The renegotiation was designed to align old contracts with the terms of new oil and gas rights granted in 2005. But a string of awardees from these recent licenses, such as Chevron, exited after finding the combination of harsh contracts and disappointing exploration results wasn't worth staying.


    Experts concur Libya's oil and gas framework makes for a tough environment. Henry Smith, an analyst at consultancy Control Risks, says that in the last years of Gadhafi's regime, 'the screw was tightened for some oil companies.'


     But Control Risks' Smith warned the government may have little room to maneuver in sweetening the terms of licenses. After toppling Gadhafi, 'they would look like they are handing out the country's resources,' he said. 'That would go down badly on the street.'


    So in the new Libya, oil investors appear headed for a showdown. 'Unless Libya changes its contracts,' its oil potential won't be fulfilled, said Jon Ferrier, a business development vice president at Maersk Oil and Gas. The Danish company is studying the possibility of entering the country. But Ferrier said that in such a global market companies are always able to invest elsewhere, citing a current boom in Iraqi Kurdistan.

BGP Scores Seismic Survey in Oman


( - November 14, 2011)


  Oman Flag        


     BGP announced that it has been awarded a 3D seismic survey contract by PDO in Oman which will last for 3+1+1 years.  This is the third contract that PDO has awarded BGP since 2004.


     This contract further confirms the leadership of BGP in delivering superior land survey services in the seismic industry.  


       The program will utilize the extra-heavy vibrators from INOVA with a target to commence in the first half-year of 2012.


        In addition to the successful collaboration between BGP and PDO on the current multi-year land acquisition program, BGP has enhanced its capability to fully meet the requirements of the client in the new project.

Shell Pen Poised for Iraq Gas Deal 


( - November 25, 2011)  


Iraq Flag    


     Shell is reportedly poised to sign on Sunday a prestigious $17 billion deal with Iraq to capture flared gas from three giant oilfields - despite a looming legal challenge from local officials - with production set to start in 2013.


     Shell will lead a joint venture, Basra Gas Company, with Mitsubishi and state-owned South Gas Company that aims to harness more than 700 million cubic feet per day of gas currently flared off at the southern fields - Rumaila, Zubair and West Qurna phase one - under the 25-year deal.


    The project was approved by the Iraqi Cabinet last week and the contract, which was scheduled to be signed on 24 November, will now be sealed at the weekend.


     "There were some legal issues but these have been resolved," South Gas director general Ali Khudhier told Reuters on the sidelines of an oil and gas conference in Basra. "It is the final contract, there were no changes," he added. Khudier also was reported as saying that the production from the project would start in 2013 and would be able to utilize all the gas currently being flared off by 2017.


     However, some members of the Basra Provincial Council say they plan to present a lawsuit because the council was not included in talks on the agreement.  "We are getting ready to present a legal case against the Oil Ministry," said council member Farid Khalid. He said the council members were not opposing the Shell deal itself, but wanted to have a larger participation in decisions on the agreement. 


     Iraq is currently producing about 1 billion cubic feet per day of gas from southern oilfields, but about 700 million cubic feet per day of this is being flared because of lack of infrastructure.


      The Shell deal is one of the largest agreements signed with a foreign energy company by Iraq as the Opec member works to rebuild its oil industry after years of sanctions and war following the 2003 invasion that ousted Saddam Hussein. 


Issue: 11 - 2011

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Currently at SCS we are preparing a new course for students from the American University in Cairo (AUC).  The one-week course will be held twice during the month of January for petroleum engineering seniors.  Our hope is to get the students excited about careers in the oil industry while providing them with real-life experience and exposure to geology and geochemistry.  As we have five laboratories at our facilities we will be dedicating one day to each lab.  Students will learn about the geology and geochemistry that is used, as well as some of the history of our methods.  They will then have the opportunity to run real tests in our labs, analyzing the results afterwards.  We look forward to this chance to work with and provide educational opportunities to those who represent the future of the industry.



In This Issue
Egypt: Petrobel Leads a Busy Drilling Schedule
Saudi Arabia Halts $100bn Oil Expansion Programme
Egypt: Bapetco Deepens Operations in Sitra
Emir of Qatar Inaugurates Pearl GTL Project
Iraq: ExxonMobil Nettles Baghdad with Kurdish PSC
Yemen Boots Nexen, Forms New E&P Co
Baird Defends Suncor Gas Project in Syria
Foreign Oil Companies Say Tough Terms Could Deter Libya Oil Investment
BGP Scores Seismic Survey in Oman

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  • Queensland International Gas Symposium: Brisbane, Australia - starting 7 December 2011 

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  • SEG/EAGE DISC Course: Muscat, Oman - 11 December 2011 

  • Intelligent Completions and Well Design for Improved Oil Recovery: Dubai, UAE - starting 12 December 2011 

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