January 2012
Greetings from StratoChem Services!

 

Happy new year from StratoCHem Services!  We hope your start to 2012 has been as productive and enjoyable as ours has.  Here at SCS a new year means new opportunities: opportunities for innovation, growth, collaboration, and experimentation.  To that end, we are constantly trying to create new services, offer new courses, that help use to reach a greater number of people.  Whether it is new applications for our XRF analyzer or a new partnership within our field, we strive to be on the cutting edge of the industry.  We hope that you will continue to be in contact with us throughout what is sure to be an exciting year here at StratoChem Services.

 

 

For further information about our services please direct inquiries to: info@stratochemlabs.com


Egypt: Kuwait Energy Hits Oil in Gulf of Suez

 (www.petroleumafrica.com - January 24, 2012) 

 

Egyptian flag small 

   

     Kuwait Energy Co. made a new oil discovery in Egypt on its Area A concession in the Gulf of Suez with the drilling of the Ahmad-1X well. The Ahmad-1X discovery well was drilled to 2,110 meters depth. The initial test recorded a flow rate of 890 boepd from the Kareem formation level.

 

    This discovery brings the total number of oil, gas and condensate discoveries made by Kuwait Energy in Egypt, since 2008, to 14 discoveries, three of which were made in Area A.  Kuwait Energy is the operator of Area A and holds a 70% working interest. Omani independent Petrogas E&P holds the remaining 30% interest.

 

    Kuwait Energy deputy chairman and CEO, Sara Akbar, said: "The Ahmad-1X well is located in a potentially rich area and we look forward to continuing testing and development activities in the area to reach its maximum potential. This is a further contribution to the productive capacity of the Egyptian energy sector and we are glad to play a part in this success."

Unified EU Bans Iranian Oil Imports from July 1

 

(www.Rigzone.comJanuary 23, 2012)

 

Iranian Flag 

 

     European Union foreign ministers Monday approved an oil embargo on Iran, moving past an internal debate over the economic burden on some members and sending a strong rebuke to the Islamic Republic over its nuclear program.

 

       Citing "serious and deepening concerns," the EU agreed to impose a full embargo on Iranian oil, including existing contracts, by July 1. Other new sanctions targeted the Central Bank of Iran and Iranian petrochemical exports to the EU, according to a statement by the Council of the European Union.

 

    The embargo comes as the U.S. and the EU exert unprecedented efforts to starve Iran from key oil revenues, amid growing fears the alleged Iran nuclear buildout could inflame Middle East relations.

 

      While policy analysts have expressed skepticism at the utility of an oil embargo as a lever on Iran, few doubt the EU's move will cause major ripples in the oil market. Refiners in Spain and Italy have already begun to phase out some Iranian oil purchases in anticipation of the embargo and those efforts promise to increase as the July deadline approaches.

 

      Although the embargo was largely in line with expectations, oil prices rose slightly at news the EU had agreed the policy. 

 

   At 1428 GMT, the front-month March contract on the New York Mercantile Exchange was trading up 62 cents, or 0.6%, at $98.95 a barrel. The front-month March Brent contract on London's ICE futures exchange was up 64 cents, or 0.6%, at $110.50 a barrel.

 

     The Iranian rial tumbled to new record lows against the dollar Monday on the EU headlines, to around IRR20,500, Agence France-Presse reported.

 

   There was no immediate reaction Monday from Iran, but an official acknowledged the policy will hinder the country's largest revenue stream.

 

   "It will make things tougher at this end" by restricting the choice of crude buyers, an Iranian oil official said.

 

   In an interview with the Fars news agency Monday, Fatemeh Alia, a member of the National Security and Foreign Policy Commission, said Iran "hasn't changed [its] stance" regarding the possibility of closing the Strait of Hormuz, a vital shipping lane through which passes one-third of the world's seaborne oil.

 

    According to the International Energy Agency, the EU imports about 600,000 barrels of oil a day from Iran--close to a quarter of Tehran's exports of 2.6 million barrels a day. But those imports fall unevenly, with many of Europe's most stressed economies--Greece, Italy and Spain--among the biggest customers.

 

      In recent weeks, Greece emerged as the most skeptical EU member of the embargo, arguing that a slower implementation was needed to ensure that its economy wouldn't be excessively burdened.

 

     Under Monday's agreement the EU said it will undertake a review of the policy's effects on member states by May 1, bowing to a condition sought by Greece. However, any move to reverse or delay the embargo would require a unanimous decision of the EU's 27 members, officials said, and Greece didn't win a special exemption giving it extra time beyond July 1 to implement the full embargo, a proposal it had made last week.

 

  Diplomats said EU foreign ministers would promise to take all necessary measures to ensure all member states would continue to have access to oil supplies.

 

    The sanctions represent the most-serious ratcheting up of EU pressure against Iran thus far over its nuclear program. France, which initially proposed the sanctions, is one of several member states that accuse Iran of seeking to develop nuclear weapons, a charge that Tehran denies.

 

    The EU is yet to get a response to an October letter from its foreign policy chief Catherine Ashton to Iran's chief nuclear negotiator Saeed Jalili, offering to resume talks.

 

    Monday, the EU pledged to continue with its "dual track" approach--sanctioning Iran on the one hand, while remaining open to negotiations on the other. The EU move comes as top U.S. officials also apply pressure to China, India and other Asian countries to trim Iranian imports. Despite those diplomatic efforts, China and other countries continue to say they will import from Iran.

 

    Joseph Nye, a Harvard University political scientist, said in a recent interview that the effectiveness of an oil embargo would be limited as long as Iran is still able to sell some oil on the international market. An additional risk is that an embargo could be trumped if Iran follows through on threats to close to the Strait of Hormuz, Nye said; that could cause oil prices to rise steeply and generate higher oil revenues for Iran.

 

    An embargo will have "some effect, but whether it will have the effect policy makers want is an open question," said Nye.

South Sudan Shuts Oil Output Amid Export Row with Sudan

 

(www.energy-pedia.com - January 30, 2012)

 

          

 

     South Sudan says it has shut off its vital oil production industry amid a row with Sudan over export fees. The newly independent country relies on Sudan's infrastructure to export its oil, but talks to agree the fees to do so have broken down. The two countries have also failed to reach agreement on borders and accuse each other of backing militia groups.

 

     UN Secretary General Ban Ki-moon warned the dispute had become a major threat to stability in the region. 'As long as these issues remain unresolved, tensions will only grow,' he said, calling on the international community to take immediate action.  

 

     Speaking in the capital, Juba, on Sunday, South Sudan's oil minister Stephen Dhieu Dau said all production had been halted and that no oil was now flowing through Sudan. 'Oil production will restart when we have a comprehensive agreement and all the deals are signed,' he told Reuters news agency.

 

    Juba had threatened to take the action on 20 January, after Sudan seized tankers carrying southern oil, saying it was confiscating the oil in lieu of unpaid transit fees. On Saturday, Khartoum said it would release the ships as a goodwill gesture to ease negotiations, but Juba said this did not go far enough.

 

    It has accused it northern neighbour of stealing oil worth $815m (518m) in total. 'If we want to continue negotiating with Khartoum then they must meet the minimum demands... The stolen crude must be paid back to South Sudan,' said Mr Dau.

 

     He said any deal now reached between the two countries must also address the disputed Abyei region, the undemarcated borders and require Sudan to 'stop sponsoring militias in South Sudan. This deal must be overseen by the international community. We will restart operations when we agree all these issues,' he said.

 

     Landlocked South Sudan seceded in July 2011 following a deal which ended decades of civil war. It took with it the lion's share of the region's oil, which now makes up 98% of its budget. But it relies almost entirely on Sudan's infrastructure to market the oil.

 

   Sudan's President Omar al-Bashir and his South Sudanese counterpart, Salva Kiir, held talks on the sidelines of an African Union summit in the Ethiopian capital Addis Ababa on Friday, but failed to reach agreement.

 

      Speaking in Addis Ababa, Mr Ban accused the two leaders of lacking 'political will' and urged Mr Bashir in particular to 'fully co-operate with the United Nations'. He said there was 'great concern' that war could break out again and called on African leaders to 'play a more important role solving regional issues'.

 

      Observers say the oil row has created the greatest crisis between the two states since South Sudan became independent.

Kuwait's Crude Oil Exports to China Jump 58.9 Percent

 

(http://www.egyptoil-gas.com/ - January 24, 2012)                                                                          

 Kuwaiti Flag

     

        Kuwait's crude oil exports to China surged 58.9 percent in December 2011 from a year earlier to 853,000 tons, equivalent to around 202,000 barrels per day (bpd), for the first gain in two months, latest official data showed.

 

   Kuwait provided 3.9 percent of China's total crude oil imports, compared to a 2.6 percent share in the same month of 2010 and 3.2 percent in November, according to the Chinese General Administration of Customs. Kuwait's exports to China in the full year 2011 totaled 9.54 million tons (192,000 bpd).

 

     China's overall imports of crude oil in December grew 5.1 percent year-on-year to 5.19 million bpd. Saudi Arabia remained China's top supplier with its shipments rising 9.6 percent from a year earlier to 1.12 million bpd, followed by Angola with 673,000 bpd, up 7.0 percent. Iran became third, with imports from the country surging 40.8 percent to 575,000 bpd.

 

   Earlier this month, Kuwait Petroleum Corporation (KPC) Chief Executive Officer Farouk Al-Zanki visited Beijing to enhance corporation's relationship with major Chinese oil companies.

 

       It was Al-Zanki's first visit to China as CEO since assuming the post in 2010. Since the establishment of KPC Beijing Representative Office in 2005, Chinese refiners have significantly increased crude purchase from Kuwait.

 

       Sales of Kuwaiti crude oil and petroleum products were just USD 400 million in 2004, but currently amounts to more than USD 10 billion, driven by robust crude shipments.

 

     The Beijing office has also successfully developed new outlets for KPC products in the world's largest energy consuming market, including naphtha, gas and sulfur.

Iraq, Shell New Venture to Boost Gas Output in 2012

 

(www.rigzone.com - January 26, 2012) 

 

Iraq Flag

 

     A joint venture between Iraq, Royal Dutch Shell plc and Mitsubishi Corp. to capture and process huge volumes of gas flared from its giant southern oil fields is expected to start production this year, a senior Iraqi oil ministry official said here Thursday.

 

    "We are expecting to produce some 50 million cubic feet a day this year," Ali Hussein Khudhier, head of the South Gas Co., an affiliate of the Iraqi Oil Ministry, told Dow Jones Newswires in an interview in Zubair in the southern Basra governorate.

 

     The 17.2 billion joint venture--Basra Gas Co., or BGC--was signed in Baghdad in November following almost three years of negotiations between the Iraqi government and Shell.

 

     Khudhier also said a floating liquefied natural gas plant and terminal off Basra coast in the Arabian Gulf to be built by Shell and Mitsubishi is expected to cost around $3 billion, and "we are expecting the LNG to be operational either in 2017 or 2018." The project would handle the export of 600 million cubic feet a day of LNG.

 

     The venture would soon invite international companies in a tender to build the LNG facility near Iraq's main oil export terminal of Basra.

 

   Gas output from the venture is expected to increase gradually to process all currently flared gas from three oil fields in Basra, Rumaila, West Qurna Phase 1 and Zubair, estimated at 1.1 billion cubic feet a day.

 

     "We need probably more than two years to process all the gas which is being flared from the three fields," said Khudhier.

 

    Before signing the deal with Shell, Iraq was producing around 450 million cubic feet a day of gas from these three fields.

 

      According to the joint-venture agreement, Iraq has to supply the Basra Gas Co. with at least 2 billion cubic feet a day of raw gas even if it has to bring it from other fields other than the three mentioned.

 

    "We are, however, expecting gas output from these three fields to reach more than 2 billion cubic feet a day when they reach their production plateau as mentioned in the contracts signed with firms developing these fields," he said.

 

     The 25-year joint venture is made up of state South Gas Co. which holds 51%, Shell holds 44% and Mitsubishi has 5%.

 

     The terms of the venture call for BGC to buy raw gas from the oil ministry and sell the dry gas, LPG and liquids it processes back to the ministry at international prices.

 

      Iraq has signed some 11 deals with international oil companies with the aim of reaching an output of at least 8 million barrels a day by the end of this decade.

 

    The gas project with Shell is crucial to Baghdad's ambitious oil expansion that will also boost much-needed power generation in Iraq.

 

     Iraq, holder of the world's 10th gas reserves, is producing 1 billion cubic feet a day of gas from southern oil fields, but some 70% of them are being flared because of lack of infrastructure.

Egypt's Citadel Capital Plans to Construct Refinery This Year

  

(http://www.egyptoil-gas.com/  - January 27, 2012)

 

  Egyptian flag small  

  

     Citadel Capital SAE, the Egyptian private equity firm that has raised $3.7 billion to build an oil refinery, plans to start construction in the second quarter.  The refinery will have a capacity of 4.2 million tons of refined products a year and construction will take four years, Chairman Ahmed Heikal said in an interview in Davos, Switzerland, where he is attending the World Economic Forum.

 

     Citadel has more than $9 billion in investments through companies investing in 15 countries including Uganda, Sudan and South Africa in industries such as food, transport, cement and energy. The Cairo-based company raised 1.05 billion Egyptian pounds ($173.9 million) in a capital increase last year. It also raised $234 million in equity and debt for its railway investments in Kenya and Uganda, as well as $150 million from the U.S. Overseas Private Investment Co.

 

    "We have agreed with our investors, our shareholders, that the best risk-reward ratio that we have today is to put capital at work within our existing portfolio," Heikel said.

 

     Part of the company's plans this year is to pay "a lot of attention to a number of our portfolios that are underperforming," he said, listing Rally Energy Corp., a Cairo- based upstream oil and gas exploration company. Citadel will also sell some of its "non-core investments" and "recycle" the cash to other assets, Heikal said.

 

    Citadel's shares gained 11 percent this month. Egypt's benchmark EGX 30 Index climbed 22 percent after the Arab country inaugurated its first parliament following the uprising that ousted President Hosni Mubarak last year and the government requested a $3.2 billion loan from the International Monetary Fund to contain record borrowing costs.

 

     Heikal said rising public debt and widening budget deficits in Egypt and around the world will create opportunities for private companies to invest more in services that governments used to provide.

 

     "Governments cannot invest in infrastructure, cannot invest to provide some of the services they used to provide," he said. "If the governments can't provide those services, the private sector will."

Kenya/South Sudan Sign Pipeline Agreement 

 

(www.petroleumafrica.com - January 27, 2012)



      South Sudan and Kenya have signed an agreement to build the much talked about pipeline to connect its oil fields with the Kenyan Port of Lamu, the Kenyan government said in a statement.

 

     "The pipeline will be developed through Kenyan territory and will be built and owned by South Sudan," the statement released late January 25 said. There was no timeframe given for the project, however South Sudan's deputy petroleum and mining minister Elizabeth James Bol said that the project would take 11 months to complete.

 

      The idea of the pipeline to Kenya became increasingly bandied about around the time South Sudan seceded from the north, but at the time South Sudan's president Salva Kiir said that the project would put an undue strain on the newly formed country's budget. The row between the north and south over transit fees for the crude shipped to the north for export appears to have tipped the scales toward the pipeline. The two sides have been negotiating but no luck in reaching an equitable solution for both sides has been reached.

 

    The situation between the two has come to a head with Khartoum confiscating oil exports from the south and South Sudan in turn deciding to shut-in its production rather than let Khartoum "steal" its production. Currently South Sudan is closing in on half of its production shut-in and looks to have the remaining shut-in over the next week or so.

Iraq: ExxonMobil Laying Groundwork in Kurdistan

 

(www.egyptoil-gas.com/ - January 26, 2012)


Iraq Flag 

     ExxonMobil, the first supermajor to move into Iraqi Kurdistan, is quietly mobilising in Arbil despite strenuous objections from the central government, according to a report.

 

     Since the bold play came to light in November, the company has kept silent - fuelling speculation that it froze the deal and bowed to Baghdad, which has long held that all foreign oil deals signed with the Kurdistan Regional Government (KRG) are illegal.

 

  But Kurdish officials insist that investment is going ahead and movement on the ground supports their claims, Reuters reported.

 

   "They (ExxonMobil) are definitely here and they are definitely assessing living and working accommodation," a Western industry source told the news wire in Arbil, at the heart of Iraq's northern Kurdish region.

 

      "There are around 10 individuals here at any one time looking at what it takes to fully mobilise here - office space, housing space, these types of things. No oil company comes in in a day."

 

    ExxonMobil executives met the region's Natural Resources Minister Ashti Hawrami last week, sources in Arbil told Reuters, and are preparing to issue a tender for seismic work for some, if not all, of the six exploration blocks acquired in October.

 

     The move north sparked fury in Baghdad, which is threatening to take action against ExxonMobil, which is in charge of developing the supergiant West Qurna-1 oil field in southern Iraq. ExxonMobil has been summoned to the oil ministry for final talks.

 

      It is unclear whether the discussions would take place before the US supermajor's fourth quarter results on 31 January, when it is also expected to go public with its Kurdistan investment.

 

      In the meantime, however, it is business as usual - production at West Qurna-1 has risen to about 390,000 barrels per day and ExxonMobil continues to lead a multi-billion dollar water-injection project that is crucial to boosting output in the south.

 

      Before signing the deal with Kurdistan, ExxonMobil was sure to have weighed any possible legal challenges.

 

     "I'm sure Exxon has more lawyers than probably there are Ministry of Oil officials in Baghdad," the industry source told Reuters.

 

     Such calculations are likely to influence other oil majors who may be considering moving into Kurdistan, and the lack of concrete action from Baghdad as yet is sure to reinforce the belief that it could prove a sound investment.

 

      The KRG's Hawrami told Reuters this month the KRG was in talks with other oil majors and he expected further agreements to be signed in the next few months.

 

     Lack of security, political instability, bureaucracy and the relatively unattractive oil deals in the rest of Iraq are driving international oil majors towards following ExxonMobil's lead and signing exploration and production contracts with Kurdistan.

 

      After ExxonMobil snapped up the last unclaimed Kurdish territory, new arrivals will be looking to farm into existing blocks. France's Total is keen to move into the north, sources said, and a link up with Anglo-French explorer Perenco in the Sindi-Amedi block along the Turkish border is one scenario.

 

      Total also has a minority stake in the Halfaya oil field in southern Iraq.

Other names frequently mentioned are Eni and Lukoil - that are also involved in the south of Iraq. Chevron and ConocoPhillips, which have nothing at stake, may also be interested, said the Western industry source.

 

     A Lukoil spokesman dismissed the possibility of the Russian company heading north. "Lukoil does not want to work in Kurdistan," he said.

 

    "Ashti Hawrami was very clever in the way he set up the oil industry here, starting with small companies to get things off the ground," said a Western oil executive who declined to be named. "It was almost designed to lure in the oil majors, and that is what we are seeing now."

 

Iran May Cut Oil Sales to EU Before July

 

(www.energy-pedia.com  - January 26,  2012)

  

Iranian Flag

   

     The European Union rather than Iran will lose out under new EU sanctions banning Iranian oil, President Mahmoud Ahmadinejad said on Thursday as lawmakers said they might cut supplies to EU countries ahead of a July 1 deadline.

 

        'It is the West that needs Iran and the Iranian nation will not lose from the sanctions,' Ahmadinejad said in his first public comments on the issue since the EU's 27 member states agreed the ban on Monday. 'There was a time when 90 percent of our trade was with the Europeans. It has now dropped to 10 percent. We didn't call for this. Cut it (trade) and let's see who will incur the loss,' he said in excerpts of a speech broadcast on state radio. 

 

     Tehran has said the EU's six-month phase-in for the ban indicates its difficulties in cutting Iranian oil supplied as it faces unprecedented economic uncertainties due to a debt crisis. The EU is Iran's second biggest oil customer after China.

 

   Parliament will debate on Sunday a bill that would oblige the government to halt oil exports ahead of the July 1 deadline the EU set in order to soften the blow to the ailing economies of Greece, Italy and others to whom Iran is a major supplier.  'All European countries that made Iran the target of their sanctions will not be able to buy even one drop of oil from Iran and oil taps will be turned off to them so that they will not play with fire again,' lawmaker Nasser Soudani told the semi-official Mehr news agency.

 

     The EU move and new U.S. measures aimed at making it harder for countries around the world to buy oil from Iran, OPEC's second biggest exporter, constitute the toughest sanctions yet aimed at pressuring Tehran to curb its nuclear programme. They come as Ahmadinejad is struggling to control rising inflation and a currency crisis which itself was partly caused by the psychological impact of the new sanctions.

 

     Central Bank Governor Mahmoud Bahmani told state television that in addition to higher bank interest rates announced on Wednesday, Tehran would enforce a single exchange rate from Saturday, an attempt to stamp out a black market where dollars have soared due to fears over the sanctions.

Libya Sees 1.3 Million BPD 

  

(www.petroleumafrica.com - January 27, 2012)  

     

Libyan flag NEW    

       

       Libya's crude production is on the rise, closing in on pre-conflict totals according to a statement from NOC. The state-run company said that the country's current output has climbed to 1.3 million bpd.

 

     "The National Oil Corporation announced...that the production of crude oil has reached 1.3 million barrels per day," said a statement on its website. The industry should expect to see about 12.7 million barrels exported between January 26 and February 1.

 

    Pre-conflict output from the North African country was around 1.6 million bpd.

Issue: 1 - 2012

StratoChem employees enjoying themselves at our new year party.
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StratoChem Services is pleased to report that our course for students from the American University in Cairo (AUC) was a great success!  The one-week course was held twice during the month of January for petroleum engineering seniors.  Our goal was 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 petroleum engineering students, many had exposure to the drilling side of the industry, but few knew about the types of services that SCS provides.  Since we have five laboratories at our facilities we dedicated one day to each lab.  Students learned about the geology and geochemistry that is used, as well as some of the history of our methods.  They also had the opportunity to enter our labs, learning about the tests that we run, then analyzing the results of these tests afterwards.  Based on student feedback the course was a huge success.  Many students said they appreciated the opportunity to learn about the science behind petroleum.  Of particular interest was our ability to analyze source rock and the importance of this work.  Overall, it was a great opportunity for us to interact with those who represent the future of the industry.

 

edited differently

Above: AUC students from the first week of our course.

Below: AUC students from the second week of our course.

In This Issue
Egypt: Kuwait Energy Hits Oil in Gulf of Suez
Unified EU Bans Iranian Oil Imports from July 1
South Sudan Shuts Oil Output Amid Export Row with Sudan
Kuwait's Crude Oil Exports to China Jump 58.9 Percent
Iraq, Shell New Venture to Boost Gas Output in 2012
Egypt's Citadel Capital Plans to Construct Refinery This Year
Kenya/South Sudan Sign Pipeline Agreement
Iraq: ExxonMobil Laying Groundwork in Kurdistan
Iran May Cut Oil Sales to EU Before July
Libya Sees 1.3 Million BPD

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There are no abstract deadlines occurring in February 2012.  
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The following conferences occur in February 2012:
    
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  • Optimising Oil and Gas Logistics 2012: Abu Dhabi, UAE - starting 13 February 2012 

  • 2nd Middle East Technology Forum: Dubai, UAE - starting 14 February 2012 

  • International Petroleum Week: London, UK - starting 20 February 2012 

  • Nigeria Oil and Gas 2012: Abuja, Nigeria - starting 20 February 2012 

  • SPE Geopressure Assessment and Its Impact on Wellbore Construction: Phuket, Thailand - starting 20 February 2012
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StratoChem employee Maha helping AUC students analyze oil data during week one of our course.
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