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  March 2014
Your Lab Is Where?!?

A lot of people we talk to are surprised to find out that a lab with the experience, training, expertise, and top-of-the-line instrumentation of StratoChem is located in Cairo. But the surprise is a pleasant one. Even in 2014, when almost anywhere in the world is just an internet connection or a few days' shipping away, there's something uniquely appropriate about an Egyptian company standing at the forefront of a scientific field. From the earliest Egyptians who invented such daily necessities as toothpaste, through the medieval alchemists who laid the groundwork for our current understanding of chemistry, Egypt has long been seen as a center of learning and discoveryWe're proud to be a part of a long tradition of scientific discovery in our homeland, and we thank all of you for letting us share it with the world.

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Egypt Flag Flat Egypt: New Field Discoveries & Development Lease Approvals by Apache
January 30th, 2014

Apache Corporation said that recent drilling results, approval of three new development leases and expanded natural gas processing facilities in the West Kalabsha area have set the stage for continued growth and investment in Egypt's Western Desert in 2014. Apache operates in Egypt in partnership with Sinopec International Petroleum Exploration and Production Corporation, which owns a one-third-minority interest in Apache's Egypt oil and gas business.

Successful wells included the deepest well drilled in the Western Desert and the first well in a horizontal drilling program targeting tight conventional and unconventional resources.

"We currently have 27 drilling rigs in operation - including four drilling horizontal wells - as well as 5 million exploration acres and 2 million development acres in the target-rich, stacked-pay environment of the Western Desert. Apache sees continued opportunity for profitable investment developing Egypt's oil and gas resources," said Thomas M. Maher, Apache's regional vice president and general manager in Egypt. "This progress is the result of hard work and collaboration involving the Apache team, the Khalda Petroleum and Qarun Petroleum joint ventures and our partners at the Egyptian General Petroleum Corp. (EGPC) and the Ministry of Petroleum."

New field discoveries drive development lease approvals
Based on new field discoveries in the North Tarek and Khalda Offset concessions, Apache has applied for two additional development leases expected to be approved in 2014. Three leases recently approved by EGPC and Petroleum Minister Sherif Ismail brought the number of applications approved during 2013 to 20. The leases approved in 2013 converted 66,000 acres of short-term exploration acreage into 20- to 25-year term development leases. Apache currently has 119 development leases that cover almost 2 million acres.

New field discoveries included:
The Apries-1X, located in the Khalda Offset Concession within the Shushan Basin, tested 4,389 barrels of oil and 14.2 million cubic feet (MMcf) of gas per day from Paleozoic Basur sand. The well encountered 87 feet of net pay in the Basur. The well cost approximately $5 million to drill and complete.
The NTRK-H-1X, located in the North Tarek Concession within the Matruh Basin, tested 20 MMcf of gas and 250 barrels of condensate per day from 60 feet of fracture-stimulated Jurassic Lower Safa pay. The well was a follow-up to the previously announced NTRK-G-1X Upper Safa discovery. This deep gas-condensate well was drilled to 15,710 feet and cost $7 million to drill and complete.

Successful Appraisal Drilling and Facilities Expansion Increase Production Capacity

Apache's Khalda Petroleum JV also completed drilling operations on the deepest well ever drilled in the Western Desert. In the North Ras Qattara Concession of the Alamein Basin, the NRQ-8X was drilled to 19,322 feet to appraise the previously announced NRQ 3151-1X new field discovery. The NRQ-8X encountered 98 feet of net pay in the Jurassic Upper and Lower Safa formations. The well is expected to be tested during the first quarter of 2014. Apache acquired an operating interest in the North Ras Qattara Concession in the Alamein Basin in 2010 and followed up with acreage in the Yidma-Alamein Concession in 2013.

In the Abu Gharadig Basin, Apache continues to develop the multi-pay Meghar Field discovered in 2012.

Three development wells were drilled in the second half of 2013, all logging net pay between 127 feet and 181 feet in the Lower Bahariya, Upper Bahariya, Abu Roash G and Abu Roash E sands. Wells with pending completions are expected to extend current record production from the area.

In the nearby Southwest Abu Gharadig Field, the SWAG-8 development well tested 756 barrels of oil and 15.3 MMcf of gas per day from 36 feet of pay in the Abu Roash G formation.

In the Siwa Concession in the far southern Faghur Basin, Apache's Khalda JV drilled the SIWA 2-L2, the first development well in the previously announced SIWA-L Field. The offset well test-flowed 3,047 barrels of oil per day on natural flow from Paleozoic Desouky sand. In aggregate, the two wells currently are producing more than 8,000 barrels of oil per day through early production facilities. Additional development drilling is planned in 2014.

Also in the Faghur Basin, the TAYIM-W3 well in the West Kalabsha Concession tested 2,412 barrels of oil and 5 MMcf of gas per day from 32 feet of aggregate pay in the Upper and Lower Safa formation.

To accommodate additional oil and gas production from the Faghur Basin, the Khalda JV recently completed expansion of existing facilities at West Kalabsha Concession. The expanded facilities are expected to increase oil production by 4,500 barrels of oil per day during the first quarter of 2014.

Early Horizontal Drilling Results Optimistic

Apache also reported that that the first well of a multi-well horizontal drilling program in the Western Desert, the AG-115H in the Abu Gharadig Field, was drilled, completed and is currently producing. During December, the Khalda JV well produced an average of 1,681 barrels of oil and 3 MMcf of gas per day from a 1,970-foot lateral of horizontal section within a 20 foot oil zone in the Abu Roash D limestone. Total cost to drill and complete the AG-115H was $6.5 million.

With contributions from the AG-115H and other wells, production from Abu Gharadig Basin properties averaged a record 55,214 barrels of oil equivalent per day (gross) in December, a 90-percent increase since the assets were acquired in 2010.

The AG-115H was one of eight wells initiated during 2013 to test horizontal drilling technology to increase recoveries in a variety of tight conventional and unconventional reservoirs. Additional horizontal drilling is planned in the Abu Gharadig and surrounding fields in 2014.

Testing is under way at a horizontal well targeting the Abu Roash G dolomite in the Main Razzak oil field. Drilling is under way on four horizontal wells, with one targeting the Abu Roash G sandstone in North El Diyur Field, one targeting Abu Roash G dolomite in the North Ras Qattara Field, and two targeting the Upper Bahariya Formation at Umbarka and Neama Fields.

Drilling activity drives momentum into 2014
In 2013, Apache operated an average of 26 drilling rigs and drilled more than 250 wells. Gross production averaged 346,530 barrels of oil equivalent per day during the third quarter.  
Libyan Flag Libya's Oil Production Falls to 230,000 BPD After Oilfield Closure
February 23rd, 2014

Libya's oil production has fallen to 230,000 barrels a day due to the closure of the El Sharara field following protests, state-owned National Oil Corp (NOC) said.

NOC closed the 340,000 bpd El Sharara field, located in the remote south, on Thursday due to protests and clashes in the area. It was been repeatedly shut down by protesters as a way to pressure the weak central government into political and financial demands.

"Production today is 230,000 bpd," NOC spokesman Mohammed El Harari said, without giving a breakdown of oilfields.

Restoring El Sharara to full production at the start of the year had been a victory for Prime Minister Ali Zeidan as he struggled to end another protest that blockaded three eastern oil terminals since August.

Three years after the revolt that toppled Muammar Gaddafi, Libya's oil infrastructure is often targeted by protests, shutdowns and strikes by brigades of former rebels who refuse to disarm or recognize the state's authority.

The shutdowns have hit the national budget hard as oil and gas are the only source of income and a major source for hard currency needed to fund essential food imports.

Production stood at around 1.4 million bpd until the middle of 2013 when the protests began to break out at the country's major ports in the east.

Egypt Flag FlatEgypt Signs New Oil & Gas Exploration Deals 
February 13th, 2014

Egypt has signed gas and oil exploration deals with the United Arab Emirate's Dana Gas, Ireland's Petroceltic International, and Italy's Edison, the oil ministry said. The deals will bring in investment of at least $265 million for eight new wells in Northern Sinai and the Mediterranean Sea, the statement said.
News from StratoChem
We want to make our 25th year one in which we reconnect with as many of our friends across the globe as we can.  In January and February, representatives of StratoChem attended the NAPE Exhibitions in Denver and Houston, respectively.  In April, we'll be exhibiting at the yearly AAPG Convention in Houston with our partners at Sirius Exploration Geochemistry, and then in late August, we'll be setting up our booth again at URTeC in Denver. Mark your calendars!
Iraq Approves Major Oil Contracts for ENI 
February 25th, 2014
Iraq has approved major contract items for Eni's giant oilfield project in its south, just hours after the Italian company threatened to pull out if red tape was not cut.

Rising violence has not hit operations at the southern fields driving Iraq's oil expansion, but Western companies at work there say deteriorating security and the distraction of elections at the end of April may be slowing the contract approval process.

Italy's Eni, on the other hand, was seeking swift approval for contracts to push the Zubair oilfield, now pumping about 320,000 barrels per day (bpd), towards a target of 850,000 bpd.

"We respect Eni and take their opinions seriously. We want them to stay in Iraq," the Iraqi official said. "We're doing our best to approve high-cost contracts as quickly as we can. If they are delayed, it affects productivity and profitability."

Two such contracts for de-gassing stations at Zubair, worth about $1 billion in total, received cabinet approval within minutes, he said. A third contract requires minor follow-up with Eni.

High-value contract items of $500 million or more require the blessing of Iraq's cabinet.

Big Oil has been tapping the prized fields of Zubair, Rumaila - led by BP and West Qurna-1 - run by Exxon Mobil - since 2010 when companies signed a series of service contracts with Baghdad.

Red tape and poor infrastructure as well as increasing security concerns have frustrated their efforts ever since they started to drill.

The Iraqi official said Baghdad had inherited an elaborate process for approving contracts that needed to be shortened. But he said hold-ups had also occurred because, in some cases, the cost of the contracts appeared to be inflated.

Middle East Oil Supply in February 2014
February 26th, 2014

Middle East's oil supply is estimated to decrease by 0.11 mb/d in 2013 from one year earlier to average 1.39 mb/d, unchanged from the previous MOMR. On a quarterly basis, this region could produce an average of 1.48 mb/d, 1.35 mb/d, 1.36 mb/d and 1.35 mb/d, respectively.

Oman's supply is estimated to increase by 20 tb/d in 2013 to average 0.94 mb/d, remaining unchanged compared with the previous estimation. Oman's output is also expected to increase by 30 tb/d to average 0.97 mb/d in 2014.

Syria's production is expected to drop by 0.12 mb/d in 2013 to average 90 tb/d. This downward movement is due to the country's current political situation, which is associated with a high level of risk. For the same reason, Syrian oil production is expected to drop by another 50 tb/d in 2014.

Yemen's production is expected to average 0.14 mb/d in 2013, a decrease of 40 tb/d from one year earlier, but its output is expected to increase by 20 tb/d to average 0.16 mb/d in 2014. Yemen is ramping up oil production to full capacity, following repairs on its main export pipelines, both of which were hit by separate bombing attacks late last month. The Marib pipeline and the Masila pipeline started working again in the first week of February. The two pipelines handle Yemen's total production of around 0.18 mb/d, occasionally reaching as high as 0.2 mb/d. All of the 100 tb/d produced from Masila is exported, but around half of the 100 tb/d sent through the Marib pipeline is consumed domestically, with the remainder being exported. However, continued attacks on infrastructure place the supply forecast at a high risk.

The Middle East supply forecast is generally associated with a very high level of risk - mainly due to political factors - which could dramatically change the outlook in either direction. Middle East oil output is forecast to remain unchanged in 2014 compared with the previous year, and no changes have been seen since the previous MOMR. On a quarterly basis, the Middle East's supply in 2014 is seen to average 1.38 mb/d, 1.38 mb/d, 1.39 mb/d and 1.39 mb/d, respectively.

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