EOG Newspaper October 2008 Issue by Egypt Oil & Gas

October 2008

NEWS

Issue 22

24 pages

Debut of GE’s Power Crystal Technology in Egypt

Viva Shell Marketing! Tharwa and Elab to join the Stock Market page 14

For the second consecutive year, Shell Marketing was crowned winner of Egypt Oil and Gas’ Ramadan Petroleum Soccer Tournament 2008, where 16 teams competed for the title Continued on page 22

Seven blocks of EGAS on the scene page 15

Energy policy in the race between Obama and McCain page 18 What is Storage Virtualization? Part II ............................ page 10 Between a rock and a hard place ............................... page 19 Statistics ......................... page 20

LAST MONTH’S OIL PRICES

October 2008 - Issue 22

Managing Editor Yomna Bassiouni ybassiouni@egyptoil-gas.com Media & Statistics Monitoring Ayman Rady

Administrative Assistant Basma Naguib Senior Graphic Designer Ahmed El-Degwy Cartoonist / Designer Ramy Ameen

Reporter Ahmed Morsy

Production Advisor Mohamed Tantawy

Photographer Ahmed Hamad

Accountant Abdallh Elgohary

Contributors Mohamed El-Sayed Ashraf Said Business Development Officers Laila Solaiman Mustafa Ibrahim Vice President Laila Fayek lfayek@egyptoil-gas.com

Legal Advisor Mohamed Ibrahim Newspaper Technical Advisors Eng. El-Sayed Orabi -MAGAPETCO Geol.MagdyWedad - PICOEnergy Dr. Mohamed Ghareeb - Lufkin Eng. Said Zaki - Weatherford

This publication was founded by Omar Donia, Mohamed Sabbour and Mohamed Fouad Publisher Mohamed Fouad All rights to editorial matters in the newspaper are reserved by Egypt Oil and Gas and no article may be reproduced or transmitted in whole or in part by any means without prior written permission from the publisher. Contact Information: Tel: +202 25164776 +202 25192108 E-mail: info@egyptoil-gas.com

Fax: +202 25191487 www.egyptoil-gas.com

The privatization controversy Stock market, privatization and Initial Public Offer (IPO) have been introduced to the Egyptian society over the past few years. Yet, a status of ambiguity is still dominating the public opinion; the government loses control over major industries as companies’ shares are offered for IPO in the stock market, hence prices of major commodities increase and cause a heavy economic burden on citizens! That is more or less the common thought of many Egyptians. Therefore, when the petroleum sector joins the wave of stock market participants, various questions are raised; is this mean the Ministry of Petroleum will no longer control the distribution and allocation of such strategic commodities? Will petroleum companies be privatized and the private sector will become the upper hand? Is this move to result in a price increase of petroleum products and subsidies to be lifted...etc? Probably, the reason behind bringing back to lights the privatization issue lies in the recent announcement made by the Ministry of Finance concerning its intention to vend its assets in two petroleum companies, Tharwa Petroleum Co. and the Egyptian Petroleum Co. for Alkyl Benzene Production (Elab). Last month, the ministry, holding 40% shares of Tharwa, revealed its plan to sell only 20% of its assets whether through an IPO or to a main investor. Rumours spread claiming that this is the first step towards the privatization of petroleum companies and ringing the alarm bell to a possible threat over the country’s stability. It was said that the petroleum sector, which is considered as a strategic weapon, to be controlled by the private sector that would seek economic profit on the expenses of national security. Eng. Sameh Fahmy, Minister of Petroleum, made it clear that the public offering of petroleum companies’ shares aims at reviving the Egyptian stock exchange, triggering positive effects on the market, luring more investments and decreasing the government’s financial deficit. However, Fahmy declared that the offered shares will never exceed the 49% in order to assure the government’s sole control over such a tactical commodity. It is too early to determine or predict the consequences of public offerings in the petroleum sector, yet many financial experts believe that this sector is well capable to lift and revive the stock exchange and be an added value to this market.

October 2008 - Issue 22

Debut of GE’s Power Crystal Technology in Egypt CSL to deliver its 1st Egyptian subsea project CSL is delivering its first subsea operations support project in Egypt on Burullus Gas C o m p a n y ’s (Burullus) Simian field, 114km offshore Idku. CSL has been contracted by sister company, DOF Egypt, to provide procurement services, project management and engineering support to Burullus, a joint venture between Egyptian General Petroleum Corporation (50%), BG Group (25%) and Petronas (25%). The contract is worth £750,000. The project involves the replacement of two glycol filtration units (GFUs) which prevent blockages in the pipelines that serve the Simian field’s subsea developments. CSL will utilize an Egyptian workforce for the fabrication, assembly and test of the replacement GFUs and will provide onsite supervision of the work. As well as managing interfaces with the project contractors, CSL will provide engineering and construction representation throughout the offshore phase of the project which will be carried out in a water depth of 825 metres by ROV (Remotely Operated Vehicle) from Burullus’ subcontracted vessel, Saipem’s DP Reel. The offshore phase of the project commenced at the beginning of August 2008 with completion scheduled for early September. “Burullus awarded the contract to DOF Subsea because of its proven track record in providing subsea project management, engineering and procurement services. We’re looking forward to working closely with CSL in order to deliver the project safely, within schedule and budget,” said Dinesh Bissoon, Burullus Gas Company’s Senior Subsea Engineer. Mark Gillespie, CSL’s Managing Director commented on the deal, “The project marks another step in CSL’s international development and demonstrates that we have the skills and expertise to deliver a full suite of subsea services in any oil and gas region in the world.” (Oil Egypt)

GE Oil & Gas is launching its “Power Crystal” technology for an upgrade project that will increase the power output and performance of gas turbines at an LNG plant owned by the Egyptian Operating Company for Natural Gas Liquefaction Projects (Egyptian LNG). Under an agreement valued at more than $60 million, GE will supply parts to upgrade 12 GE MS5002D gas turbines plus four spare modules at the LNG plant, located in Idku, about 50 kilometers east of Alexandria. The GE Oil & Gas Power Crystal kits are based on a single crystal technology originally developed by GE for aircraft engines and later adapted for use on GE’s advanced, heavy duty gas turbines. The Egyptian LNG project marks the first use of the technology on power turbines for oil and gas applications. The use of single crystal advanced alloys for high performance turbine blades enables turbine firing temperatures to be raised at least 40° F, which leads to a four percent increase in turbine power output with no increase of NOx emissions. Power Crystal technology can enable longer mean time between maintenance inspections -- up to 72,000 hours between major inspections. Customers can gain up to 10 days of production over a full maintenance cycle. Alternatively, customers can elect to apply Power Crystal for enhanced production capacity, increasing the firing temperature. This feature allows keeping power output increase independent from ambient temperature. “This first application of our Power Crystal technology signals the beginning of a new era for advanced heavy duty turbine upgrades in the oil

and gas industry,” said Jeff Nagel, Vice President - Global Services for GE Oil & Gas. “Our Power Crystal kits can be installed during major inspections without increasing downtime and with limited impact on the entire plant process, while delivering significant improvements in gas turbine production or availability.” Nagel added, “The development of Power Crystal technology demonstrates the tremendous power of GE businesses working together. Thanks to those synergies, and to the strong cooperation and support of Egyptian LNG in this milestone project, the oil and gas business is now able to take advantage of the benefits previously available only in the aviation and power generation industries”. “Egyptian LNG has invested in GE’s gas turbines in both of its LNG trains in Idku. Being the first to embark on such a project, we are looking forward to the opportunities for improvement made possible with the use of this new technology,” said Adnan Abidin, CEO of Egyptian LNG. “This has been made possible as a result of the good business relationship that the two companies have developed over the years,” he added. Parts for phase I of the Egyptian LNG upgrade will be shipped in 2008, with shipments for phase II in 2010-2012. One of the world’s largest producers of LNG, Egyptian LNG is a joint venture of local shareholders including EGPC and EGAS, and foreign shareholders such as BG Group plc, PETRONAS and Gaz de France. Currently, two trains are running at the Idku plant, each with a capacity of 3.6 million tons per year. (GE Press Release)

Sembcorp secures $425-million deal Singapore’s Sembcorp Marine is primed to build two jack-up rigs for Egyptian Offshore Drilling Company (EODC) in a deal worth $425 million. The pair of jack-ups will be built at Sembcorp offshoot PPL Shipyard, based on the proprietary Pacific Class 375 design. The first unit is scheduled for delivery at the end of the fourth quarter of 2010 while the second unit will be delivered by the end of the first quarter in 2011. Both rigs will be equipped to drill high pressure and high temperature wells to depths of 30,000 feet and will be capable of operating in up to 375 feet of water. The vessels will have berths for 120 people. “We envisage that EODC will increase their fleet in the near future in view of the demand for offshore drilling off Egypt,” PPL’s Senior General Manager Tam Kim Yung said in a statement. On delivery, both rigs will be contracted to EODC for their offshore operations in Egypt. (Upstream Online)

October 2008 - Issue 22

RWE Dea’s Egyptian South Sidi-Ghazy Well hits gas RWE Dea has made a new gas discovery in the Egyptian Nile Delta. In the onshore part of the Disouq concession, the South SidiGhazy 1x-well found the Messinian formation gas bearing for the second time. South Sidi-Ghazy 1x was spudded on July 20, 2008 and drilled to a total depth of 3188 m within the Late Miocene. The well encountered a gas bearing interval of 24 m column. Formation evaluation and the Modular Dynamics Tester Tool (MDT) confirmed the presence of gas in the intervals of 2,747 m to 2,771 m with porosities in the range of 27%. The prospect is based on a seismic anomaly within the Upper Messinian succession, which shows direct hydrocarbon indicators (DHI) conformable with a four way dip closure at the top of the Messinian succession in analogue to the North Sidi-Ghazy discovery, drilled by RWE Dea in 2008. The Disouq concession was awarded to RWE Dea in July 2004. The block covers an onshore area of 5,375 km2 within the densely populated farmland of the Nile Delta region of Egypt. The South Sidi Ghazy-1x well is the fifth well drilled by RWE Dea in the Disouq Concession. It is located 7.5 km south/south-west of the North Sidi Ghazy1x discovery. Following the two successful Messinian wells, a third exploration well (North West Khilala - 1x) will be drilled to test another potential Messinian structure. RWE Dea has already been engaged in Egypt since 1974 and has been producing oil as operator in the Gulf of Suez for 25 years now. In addition, the company is engaged as operator and partner in exploration and production of gas and oil in sites located in the Nile Delta and onshore in the Western Desert region. RWE Dea has a total of 15 onshore and offshore concessions in Egypt, across a total area of roughly 15,500 square kilometers. (RWE Dea Press Release)

TransGlobe raises interest in West Gharib TransGlobe Energy Corporation has completed the acquisition of an additional 25 percent in certain leases on its West Gharib properties from its partner, a private company registered in Cyprus, for consideration of US$18.0 million adjusted to June 1, 2008. This acquisition brings TransGlobe’s holdings to a 100 percent working interest on all nine West Gharib leases. The acquisition was funded from TransGlobe’s expanded credit facility and working capital. TransGlobe’s average daily production increases by approximately 400 barrels of oil per day (Bopd). The purchase price paid by TransGlobe translates into approximately US$16.20 per barrel of Proved Plus Probable reserves or approximately US$45,000 per flowing Bopd, in line with recent similar transactions in the area. Depending upon the size of future reserve additions in the East Hoshia and South Rahmi fields, TransGlobe has agreed to pay the partner a success fee up to $5.0 million and $2.0 million, respectively. Ross Clarkson, President and CEO of TransGlobe, commented, “The West Gharib acquisition established TransGlobe as a producing operator in the Middle East and we are very pleased to increase our interest. The early drilling successes have proved the value of the assets. We believe there are more production and reserve gains to come from the West Gharib lands.” (Rigzone)

First batch of biodiesel produced at Ross plant, Ireland The first batch of biodiesel has recently been produced at the Green Biofuels Ireland Ltd. (GBIL) plant at Marshmeadows. Green Biofuels Ireland Ltd. operates as Ireland’s first commercial scale biodiesel processing plant and so far has produced around 1,000 tons of biodiesel. GBIL was incorporated in 2004 to capitalize on the growing demand for biodiesel in Ireland by establishing a state-of-the-art production facility in New Ross. Employing twenty people, GBIL, is designed to produce 34 million liters of biodiesel per annum. Construction on the site at Marshmeadows began in March 2007 and the site was officially opened by the-then Minister for Communications, Marine and Natural Resources, Noel Dempsey. Wexford Farmers Co-Op and Green Gem Power are the main shareholders in this €21-million investment. It is the first commercial scale biodiesel manufacturing plant in Ireland and is set to play a major role in this country’s reduction in CO2 emissions. The output from GBIL will displace 140,000 tons of CO2, or the equivalent of removing almost 25,000 vehicles from the roads, per annum. Raw materials are used, such as used cooking oil from restaurants and cooking establishments from all over Ireland, which are waste materials. “We use various chemicals and put them through a chemical process and get biodiesel,” explained Joe Byrne, the Chief Operations Officer. ‘The big thing about our process is that our raw materials are very environmentally friendly. In terms of sustainability we are as good as you can get,” he added.

US wind turbine market to be worth $60.9 billion in 2013 According to a new technical market research report from BCC Research, the domestic market for wind turbine components and systems will be worth $60.9 billion in 2013. This represents an increase from the 2007 market value of $7.9 billion and the estimated 2008 market value of $11.2 billion. The compound annual growth rate (CAGR) between 2008 and 2013 is expected to be 40.0%. The market is analyzed by state and includes the top ten spenders on wind turbine technology; Texas, California, Iowa, Minnesota, Washington, Oregon, Colorado, New York, Kansas and Illinois. Texas has the largest statewide expenditure, exceeding $2.4 billion in 2007 and an estimated $3.0 billion in 2008. This should grow at a CAGR of 38.0% to reach $15.2 billion in 2013. In 2007, Colorado spent over $1.2 billion on wind turbines, second only to Texas. Colorado has not recorded any wind turbine installations for 2008. The projection is that Colorado will install approximately $3.7 billion worth of wind turbines in 2013. California has often been the testing grounds for new wind turbine developments and technologies, and is expected to surge ahead in the coming years. From anticipated spending of over $676.0 million on wind turbines in 2008, California is expected to spend as much as $17.1 billion in 2013, a CAGR of 91.0%. Iowa is expected to spend over $1.3 billion in 2008 and over $3.1 billion in 2013, a CAGR of 19.0%. The State of Washington had significant expenditures in 2006 and 2007, both above $500 million. They are expected to spend about half of that amount in 2008 and approximately $2.2 billion in 2013.

ET Solar signs 50-MW deal with Wattner

ET Solar Group Corp., a Nanjing, China-based solar power solution provider and integrated manufacturer of photovoltaic products announced that it has entered into a master agreement for the turn-key construction of solar power plants for Wattner Group of Cologne, a German initiator of closed-end energy and infrastructure funds. Under the agreement, ET Solutions AG, the solar power solution arm of ET Solar, will deliver solar installations to Wattner worth €200 million [US $289.67]. The solar power plants will be built within the next five years, primarily in Southern Europe. The agreement covers the complete lifespan of the solar construction fund Wattner SunAsset 1. This publicly raised fund has now also made its first investment decision with the Solarpark Penig, an installation with approximately 12,000 solar panels. (Eco News)

October 2008 - Issue 22

Eni increases stakes in Algerian assets RWE Dea hits double in Sirte Basin Marking its sixth and seventh discovery in the Libyan territories, RWE Dea achieved two new oil discoveries in the Sirte Basin, in the concession NC 193. The first exploration well, E1-NC193 drilled by the Nabors F16 rig, tested oil at a rate of 704 bbls/ day, from the Dahra Formation at a depth of 4823 ft. The rig is being released. The second exploration well, F1-NC193 drilled by the rig Ensign#45, encountered oil in the Upper Dahra Formation at a depth of 4418 ft and tested at a rate of 439 bbls/ day. The rig is moving to drill the second appraisal well (A3-NC193) on RWE Dea’s first Libyan discovery made in late 2006. For the remainder of the year further appraisal wells are scheduled to delineate the cluster of now five discoveries in the concession NC193 with a view towards bringing them on stream as early as possible. Following three oil discoveries in the concession NC193 and two in the concession NC195 in the last years, the new two discoveries in NC193 further strengthen RWE Dea’s position in Libya. The country is one of the key regions of RWE Dea’s upstream business, where the company has been operating since June 2003. RWE Dea’s licence acreage in Libya covers a total of more than 40,000 square kilometres over seven concessions combined. The concession NC193 has been awarded to the company in 2003. (RWE Dea Press Release)

Eni S.p.A. has reached an agreement to acquire all the common shares of First Calgary Petroleums Ltd. First Calgary is a Calgary (Canada) based oil and gas company actively engaged in exploration and development in Algeria and is listed on the Toronto and London AIM Stock Exchanges. First Calgary has a 75% interest in the perimeter of Ledjmet (Block 405b), located in Algeria, which includes several fields, with total resources in excess of 1.3 billion boe, of which approximately half is gas. Eni estimates that the Acquisition will increase its reserves by approximately 190 mmboe (2P) within its Algerian asset portfolio. Production start-up is expected in 2011 with a plateau of Eni’s share of production of approximately 30,000 boepd by 2012. Through the transaction, Eni will also ensure access to skilled and experienced management, strengthening its presence in a core country in which it has been active since 1980. Under the terms of the agreement, First Calgary shareholders will receive C$3.60 per share in cash and convertible debenture holders will receive US$108,000 (plus accrued interest) in cash for each US$100,000 par value of bonds held. The Acquisition values the fully diluted share capital of First Calgary at approximately C$923 million. The Board of First Calgary has voted unanimously to recommend the Acquisition to its shareholders. The Acquisition, subject to required regulatory approvals, will be effected by way of a plan of arrangement and is conditional upon the approval of First Calgary shareholders and convertible debenture holders. The transaction is anticipated to close late in 2008. In connection with the Acquisition, certain shareholders, directors and officers of First Calgary have entered into agreements pursuant to which they have agreed to vote in favor of the plan of arrangement, representing in aggregate approximately 18.3% of the outstanding shares and options of First Calgary. Commenting on the Acquisition, Paolo Scaroni, Chief Executive Officer of Eni, said, “We are pleased to have reached an agreement with First Calgary to acquire the company. The transaction is in line with our strategy of increasing our presence in our core countries, acquiring high potential assets. We will utilize our well established expertise and

Gulfsands’ Khurbet production exceeds 11,500 bpd Gulfsands Petroleum plc, the oil and gas production, exploration and development company with activities in Syria, Iraq, and the U.S.A., is pleased to announce that stabilized oil production through the Khurbet East Early Production Facility (EPF) currently exceeds 11,500 barrels of 25.7 degree API oil per day (bopd), with production from three vertical and two horizontal wells. Total field production to date has been in excess of 260,000 barrels of oil with the oil being transported by truck approximately 33 kilometers from the EPF to a processing facility operated by the Syrian Petroleum Company (SPC). Sufficient trucking capacity had been pre-arranged in order to transport these daily volumes. “Khurbet East is the first new oilfield to go into commercial production in Syria in some time and we are therefore very pleased with the initial results so far. It is especially pleasing that the individual producing wells, production facility and trucking operations are producing at even better rates than we expected prior to our commencement

of first oil in mid July. With total field production to date now in excess of 260,000 barrels of oil, we have achieved another significant milestone for the Company and we look forward to the Khurbet East Field’s continued contribution to our production profile and cash flow,” said Andrew West, Chairman of Gulfsands. Under oil marketing arrangements reached with SPC and the Oil Marketing Bureau (OMB) of the Syrian Government, oil produced from the Khurbet East Field will be sold as “Syrian heavy crude oil” which has an API of approximately 24.1, into the OMB’s well established markets and exported through the Mediterranean port of Tartous using SPC’s oil handling infrastructure. Monthly invoices will be raised for oil produced from the field and these will generally be paid by the OMB within 21 days of the date of invoice based upon the initially assessed technical specification of the oil. (Gulfsands Press Release)

experience in Algeria. to leverage operational synergies. We are committed to the successful and rapid development of these gas fields and the consequent rapid start up of an important resource for the country.” Shane O’Leary, First Calgary’s President and CEO said, “We are very pleased to support this transaction which we believe delivers the highest value for FCP shareholders compared with other strategic options.” “We will work with Eni to ensure a smooth transition and avoid disruptions to the project. We believe the resources and expertise that Eni can bring to this project should accelerate the development.” (Eni Press Release)

Iraqi Ahdab field to lure $63 billion revenue Iraq is expected to earn around $63 billion from a contract it signed with a Chinese company to develop Al Ahdab oilfield in central Iraq, Oil Minister Hussein al-Shahristani told reporters in Baghdad. The Iraqi cabinet approved the $3 billion oil service contract with China National Petroleum Corp. to develop Al Ahdab oilfield in the central Shiite province. It is not known yet, however, if the contract needs the approval of the country’s parliament or not. Some Iraqi officials and lawmakers said that the parliament should approve such a big contract. The minister said that a Chinese delegation would be in Baghdad this month to sign the final contract. The signing makes China National Petroleum Corp. the first foreign oil firm to enter an agreement with the central Iraqi government to invest in the domestic oil industry since the 2003 U.S.-led invasion. CNPC originally had an agreement with the ousted regime of Saddam Hussein to develop the Al Ahdab field, giving it a 23-year stake in profits. However, CNPC could not implement the original contract at the time due to U.N. sanctions imposed on Saddam’s Iraq between 1990 and 2003, which barred direct dealings with the country’s oil industry. Iraq has changed the terms, amending the contract from a production-sharing agreement to a set-free service deal. (Rigzone)

October 2008 - Issue 22

Countdown to 2012 Games Fifth thrilling title

Federer won his first Grand Slam title since his victory in New York last year Roger Federer’s fifth straight US Open title was all the more special as it came after he had lost the number one ranking in a difficult year. The Swiss star beat Britain’s Andy Murray 6-2 7-5 6-2 to become the first man in the Open era to win five consecutive US Open crowns. Federer, 27, is the first man ever to win five straight titles at two different Grand Slam events, having matched his US feat at Wimbledon before losing to Rafael Nadal in this year’s final. On the other hand, Serena Williams saw off a valiant display from Serbia’s Jelena Jankovic to win her third US Open title and regain the world number one ranking. The American, 26, came through 6-4 7-5 in a fantastic match to secure her ninth Grand Slam title. Jankovic, 23, was playing in her first Grand Slam final but made the better start before Williams fought back with three breaks to win the opening set. And Williams sealed victory after saving four set points in the second. Williams has now won one French Open, two Wimbledon, three Australian Open and three US Open titles, adding to her victories of 1999 and 2002 in New York.

Winning bronze in judo, Hisham Mesbah becomes Egypt’s only medalist at the Beijing Olympics Mesbah was nobody’s center of attention at the Beijing Olympic Games; not even the Egyptians. In fact, he was nowhere near being one of Egypt’s favorites to win a medal. It is almost as though he came out of the blue to surprise Egyptian officials in Beijing, just as wrestler Karam Gaber had in the Athens Games four years ago. Snatching the bronze medal in the 90kg weight category, and after the sudden defeat and elimination of Gaber in his first match, Mesbah has become Egypt’s new Olympic prodigy. The countdown to 2012 has started, and the British, the organizers, know they have a great deal to live up to with China hosting one of the best organized Games in history and staging some of the most memorable opening and closing ceremonies ever seen. The Beijing Olympic Games, played out against a background of political intrigue and featuring 16 days of compelling and controversial action, ended just as they had began inside Beijing’s Bird’s Nest Stadium, with a glittering extravaganza as China made full use of one final opportunity to showcase itself to a world audience. The Games saw China depose the United States as the new sports superpower. At the end of the 16 days of competition and 302 events, China had 51 gold medals, 15 more than the United States on 36, with Russia winning 23, Great Britain 19, and Aus-

tralia finished with 14 gold medals. Although China have yet to truly breakthrough in track and field they have emerged as a gold medal power in a range of sports where they were once also-rans such as rowing, sailing and weightlifting. Not just one but two athletes gave arguably the greatest performances in Olympic history -- Michael Phelps with his eight gold medals in swimming, and Jamaica’s effervescent Usain Bolt with three golds and three world records in the sprints. Led by Phelps and Bolt, athletes broke 43 world records and 132 Olympic records during the games. Yet Rogge, who visited every venue, said the most touching moment for him came after the 10-metre air pistol event, when gold medalist Nino Salukvadze of Georgia embraced runner-up Natalia Paderina of Russia even as their two countries’ armies fought back in Georgia.

Almost there…

Woods rules out of Ryder Cup

Egypt top Group 12 and move towards reaching the final phase of the 2010 World Cup qualifiers

World number one Tiger Woods will not attend Ryder Cup but has pledged his support to the U.S team

African champions Egypt snatched the lead of Group 12 with 12 points after pulling off a precious 1-0 victory over DR Congo in Kinshasa last month in the World Cup qualifiers’ first phase. Egypt needs a single point from their last qualifier at home to Djibouti this month to advance to the final phase of the African qualifiers for the 2010 finals in South Africa. After their fourth win in Group 12, Egypt is in charge of the group with 12 points, three clear of DR Congo and Malawi with one match to go. Meanwhile, Malawi kept their hopes alive thanks to their 3- 0 win over Djibouti. The victory at the Gouled Stadium in Djibouti City took the Flames level on nine points with DR Congo. Djibouti is already out of contention for a place in the second phase of the qualifiers as they have no points after five matches. They have so far conceded 26 goals and found the net only two times.

Captain Paul Azinger saidsnatched he planned keepofinGroup touch African champions Egypt thetolead with Woods during his side’s campaign. But Woods, who 12 with 12 points after pulling off a precious 1-0 victory would miss the tournament because of a knee injury, said, “I over DR Congo in Kinshasa last month in the World Cup plan to watch, but won’t attend”. qualifiers’ first phase. “Azinger Egypt needshas a my cell phone number and he or any U.S player can call me any time - I doubt I can do much, I have no feel for how the course is playing.” In July, Woods turned down an invite from Azinger to act as a Vice-Captain for the match against Europe. In all, Woods has won 10, lost 13 and halved two of his 25 Ryder Cup matches and the 14-time major champion says he will be available to offer support should Azinger require it. “If I can offer any assistance, I’m happy to. I wish the American team well and hope they can bring back the Cup.” Woods, whose wife Elin is expecting their second child, admits he is still some way from returning to competitive action. He required surgery after his left knee suffered a double stress fracture. “I just cannot rotate on my leg and I still do not know what my first event will be in 2009,” he said. “I miss the competition and I miss the preparation, but if I tried to play now, you would see some of the worst shots you have ever seen. My rehabilitation is going well.” “Although I will not be able to swing a club until early next year, my left knee is getting stronger and the doctors are pleased with my progress.”

Azinger has described Woods’s absence from the team as a “tremendous blow”, despite the fact that the 14time major winner has not been a strong influence for the US in the Ryder Cup - winning 11 points from 25 matches. And Azinger has denied that he would prefer Woods to stay away from the course to prevent him becoming a distraction. European Ryder Cup hero Paul McGinley, who sank the winning putt at The Belfry in 2002, says the absence of Tiger Woods could actually make the American team a stronger unit. “I think it is going to pull them together and put everyone in their team on a level playing pitch,” said McGinley. “Not to have Tiger, it will be just the team and I don’t think it’s going to hurt them at all.”

October 2008 - Issue 22

What is Storage Virtualization? Storage Virtualization Definition

Simply, it is the ability to have a single point of management for all storage devices. At its core, the storage virtualization layer pools physical storage from multiple, heterogeneous network devices and presents a set of volumes for hosts to use (regardless of the storage brand). In addition to creating storage pools composed of physical disks from different arrays, storage virtualization provides a wide range of services, delivered in a consistent way, that include: • Basic volume management (including LUN masking, concatenation, volume grouping and striping across multi vendor storage arrays) • Support for tiered storage • Non-disruptive data migration • Data protection and disaster recovery functionality, such as Snapshots and Asynchronous, Semi-synchronous, or Synchronous mirroring Storage virtualization addresses and solves the five challenges, discussed previously in the first part of this article hindering the management of a large enterprise-class storage environment.

Where Virtualization Lives

Storage virtualization services, like volume management, snapshots and replication, can reside at the host, network, or storage device level. Traditionally, storage intelligence has lived at either the host-level with a software volume manager, like Veritas Volume Manager, or in the RAID controller or a storage device. However, with the advent of network-based storage virtualization, this intelligence is being pushed into the network layer. IBM System Storage SAN Volume Controller (SVC) is the crown jewel in IBM’s storage strategy and portfolio, launched in July 2003. IBM boasts a fourth generation product with over 14,000 SVC systems implemented and five years of market acceptance. SVC is widely viewed as the most successful storage virtualization in the market today. These statistics speak to the maturity of the product and the value of a high touch consulting approach. SVC is 4Gbps End-to-End system that virtualizes 4Gbps storage arrays as well as auto negotiating down to

2Gbps speed, if necessary. SVC support up to 1024 attached hosts (servers) running any operating system where system capacity can grow up to 8 Peta Bytes. The SVC is based on a clustered, redundant, highly scalable architecture. It is only deployed in clustered pairs of nodes (each with 8GB of cache) running SVC software. A pair of SVC nodes is known as I/O group. In order to ensure redundancy, single node configuration isn’t supported. Adding another I/O group (that is, two SVC nodes) increases cluster performance and bandwidth. Therefore customers can start small and scale as their storage needs and I/O throughput profile changes over time. SVC comes with the full breadth of features most users expect from a storage virtualization product, including snapshots in the form of FlashCopy, thin provisioning by way of Space Efficient Virtual Disks (SEVs) and synchronous or asynchronous replication via Metro Mirror or Global Mirror. These features are in addition to the fundamental storage capabilities of storage pooling, provisioning, volume mirroring, and volume copying/migration.

Part II

By: Mohamed El Mofty Storage Networking Solutions Expert IBM Systems and Technology Group

feature set and capabilities provide the following crucial benefits to end-users that differentiate SVC from the other virtualization players: • Central Storage Virtualization across heterogeneous storage pools with the ability to stripe data across different systems to have higher performance • Central control point for multivendor storage arrays • Seamless Tiered Storage solution taking off the headache from administrators managing data across different tears • Always On-Line Storage Infrastructure by providing Non-Disruptive data Migration • Thin provisioning across multiple storage systems to make full use of storage resources. • Data protection and Disaster Recovery solution using different vendors’ storage arrays

SVC Architecture

SVC is known as an In-Band virtualization appliance that has proven superiority in performance over other techniques implemented in other systems. It has shown that InBand approach with a large amount of mirrored cache can indeed scale to handle the most stringent enterprise IOPS and availability requirements. For example, SVC boasts the highest IOPS rate (272,500 IOPS SPC-1 Benchmark) as measured by the Storage Performance Council SPC-1 Benchmark. The SPC-1 benchmark simulates read-write random I/O workloads, like Online Transaction Processing (OLTP) database and email and in an accurate approximation o a typical enterprise I/O pattern. SVC has also laid claim to the top spot (7.08 GB/s SPC-2 Benchmark) SPC-2 is a benchmark that simulates large, sequential I/O processing. Moreover, IBM’s SVC team has a big focus on availability, and their efforts were touched by customers. To date, field data across all deployed SVCs demonstrates availability comparable to or better than enterprise-class disk systems. IBM, through its focus on performance, scalability, and availability approaches has shown that an In-Band approach to virtualization can, in fact, scale and meet the availability demands of the large and small enterprises. SVC’s highly scalable In-Band architecture, and robust

Conclusion

Of the most storage vendors, IBM has been the most aggressive in terms of insisting on the benefits of storage virtualization and helping to drive awareness and adoption of the technology delivering SVC to market while it was protected by IBM support engineers. IBM SVC is a fourth generation product that has prospected where other storage virtualization products have struggled. It is a truly enterprise-tested product as evidenced by the more than 14,000 deployed systems with customers. In short, storage virtualization is coming of age and SVC is well positioned to capitalize on the trend. IBM is already the dominant supplier of storage virtualization today and has the most mature, robust, widely supported offering in the marketplace. But, this success has not gone unnoticed by other vendors, who have accelerated their product introductions and development now that IBM has blazed the trail to success.

October 2008 - Issue 22

Tharwa and Elab to join the Stock Market For a long time, the activity of petroleum companies in the Egyptian Stock Market was considerably limited; only two petroleum companies have been listed in the stock exchange. However, this will no longer be the case as more petroleum corporations are to join the stock world. Coping with the current plans to expand the petroleum participation rate, the Ministry of Finance revealed its intention to vend its shares in Tharwa Petroleum Co. and the Egyptian Petroleum Co. for Alkyl Benzene Production (Elab) According to a top official of Tharwa, the Ministry of Finance, holding 40% shares, plans to sell only 20% of its assets whether through an Initial Public Offer (IPO) or to a main investor in association with H.C Co. for the financial and technical evaluation. Hussein Shukry, CEO of H.C said that the evaluation phase would take up to six months before publicizing the conditions of this assets sale. Shukry highlighted that negotiations took place between his company and the Ministry of Finance to agree on the methodology and the points to be covered in the evaluation report. Contract to be signed between the two parties within the coming few days, added Shukry. “There was a severe competition; representing major companies and investment banks to win this deal,” highlighted Shukry. The competitors’ list included Hermes, CI Capital, Ahly Capital and H.C, which (the latter) was chosen by the ministry. Asked about the scheduled time for this public offering, the top official clarified that no schedule has been determined yet. The stability and conditions of the local and national markets should be studied first to determine the best timing for the asset sale. Tharwa is jointly owned by the Egyptian General Petroleum Corporation (EGPC), the Egyptian Holding Co. for Natural Gas (EGAS), Ganoub EL-Wadi Holding Co. (Ganope), the Ministry of Finance and the National Bank of Investment. The company is listed under the free zones category. The head count of Tharwa when first registered counted for $800 million. Currently, the company’s exporting capital is worth $400 million and contributes in three different entities,

which are: 1. Tharwa-Prida: specialized in the maintenance, manufacturing and assembling of drilling rigs 2. Sino Tharwa: a service company formulated with a reputable Chinese partner SINOPEC, which is one of the leading Chinese companies in the field of drilling. It is a Limited Liability Company between Tharwa and SINOPEC based in Egypt for handling drilling operations in Egypt 3. The Egyptian Company for Rigs Manufacture For two years, the idea of a public offering of petroleum companies’ shares to strategic or stock investors has been suspend, till the announcement made by the government earlier this year disclosing the intention to sell 65% of Alexandria Minerals Oil Co. (Amoc) and Sidi Krir Petroleum Companies to a strategic investor and a partial public offerings of the Middle East Oil Refining Co.’s (Midor) shares in the stock exchange. However, no updates were published since then. As for the Elab partial sale, Al-Naiem Co. for Financial Counselling conducted the required studies of the financial and technical evaluation and represented a report to the ministry incorporating the suitable plans for a public offering. Elab, located in the Free Zones of Alexandria, is specialized in the production of alkyl benzene, which is the raw material to produce industrial cleansings. Hesham Tawfik, a Board Member of Al-Naeim emphasized that the group finalized the evaluation stage and a primary price has been determined to start with. However, an investment advisor for Elab is indispensably needed in order to legally activate this public offering and proceed with the IPO stage.

Asked about the evaluation methodology and pricing range, Tawfik refused to reveal any further details concerning Elab’s deal. Elab’s production capacity is approximately 100 thousand tons a year; out of which 40 thousand tons are locally distributed to satisfy the increasing local demand, while the remaining 60 thousand are directed for exportation. The company generates 600 direct job opportunities The $450-million investment factor is jointly shared by the petroleum sector, the Ministry of Finance, the National Investment Bank and Royal Co. for Egyptian Chemicals. According to an official in the Ministry, the factory received various high demands from the national and local markets, although it has started the experimental production last August. Elab is classified as one of the major projects supervised by the Egyptian Petrochemical Holding Co. (Echem) in the context of the currently implemented national petrochemical plan to execute eight projects worth $6 billion. Elab is expected to lure $120 million profit to the country’s treasury, especially that the factory is characterized by its latest production techniques, provided by VOP. Being established near the petroleum exportation harbour, the factory will be able to fulfil its target to export 75% of its production; count for $500 million. Amr Al-Iraqi, a financial expert believes that such moves are to revive the stock exchange and will undoubtedly have indirect positive effects; increasing the public offerings will consequently lead to raise the shares’ price.

October 2008 - Issue 22

Seven blocks of EGAS on the scene The Egyptian Natural Gas Holding Company (EGAS) invites Petroleum Exploration Companies for EGAS International Bid Round 2008 to explore/exploit for Gas and Crude Oil in seven blocks situated in the Mediterranean Sea basin of Egypt Earlier last month, EGAS has opened its doors for interested companies to review and/ or purchase data (2D seismic or 3D seismic or E-logs) in the blocks of its international bid round, till the closing date, set before 12:00 o’clock at noon Cairo local time, on Monday, 9th of February, 2009. This Bid Round includes seven exploration blocks in the Mediterranean Sea basin of Egypt as shown. Bidders have to submit their offers by the closing date in two separate sealed envelopes as follows:

Sealed Envelope (1) titled “Qualifications” This first envelope has to contain 1. A preliminary bond in the amount of $50 thousand to be submitted to EGAS with irrevocable bank letter of Guarantee or a payable check confirmed by an Egyptian bank, which has to be valid for not less than six months from the bid round closing date. This bond is to be collected from EGAS premises by the unsuccessful bidders upon EGAS’ notification. Within 15 days from receiving EGAS’ awarding notification to the successful bidder, the above mentioned guarantee will be increased up to an amount equal to 2% of the financial obligation of the initial exploration phase as

specified in the offer. EGAS shall liquidate without any legal procedure the guarantee amount; in the following cases: i- The $50 thousand bond will be liquidated by EGAS, if a. The bidder withdrew before the announcement of the bid results b. The successful bidder failed to increase the guarantee amount of $50 thousand up to the amount of 2% of the financial obligation of the initial exploration phase as specified in the offer ii- The 2% bond will be liquidated by EGAS, if the successful bidder withdrew or failed to deliver to EGAS the necessary documents required before the final signature date which will be determined by EGAS The above mentioned bonds will be collected from EGAS premises by the successful bidder a week after the signing of the Concession Agreement, and after submitting the letter of Guarantee with the minimum financial com-

mitment of the initial exploration phase. 2. Previous experience in petroleum exploration and production and activities of the company all over the world including development projects, reserves and latest used technology supplemented by the company’s Annual Report. 3. Article of incorporation of the company, the company’s commercial registration and copies of all documents that proves its legal existence as well as shareholders and their nationalities. 4. Recent annual report and/or official financial reports proving the financial strength of the bidder’s company.

October 2008 - Issue 22

Sealed Envelope (2) titled “Commercial” The second envelope has to contain proposed terms and conditions according to the Main Contract Terms and Conditions and the provisions of the Model Agreement. These two sealed envelopes shall be submitted and hand delivered separately but at the same time, where the first envelope shall be marked by qualifications, the second shall be marked commercial. On the other hand, the contract shall be a Production Sharing Model. Contractor undertakes all risks to explore and develop both gas and crude oil. The parties to the contract shall be the Egyptian Government, the Egyptian Natural Gas Holding Company (EGAS) and the contractor. EGAS shall bear and pay out of its share, on behalf of the Contractor’s royalty and the applicable Egyptian Income Tax. The exploration period duration shall be specified in the offer and subdivided into two phases. Total exploration period should not exceed six years, except for Blocks No. 6 and 7, the limit is eight years. The duration of any development lease shall be twenty years from the date of commercial oil discovery (in case of oil development lease) or from first delivery of gas (in case of gas development lease). A “Five Years Extension” can be provided upon contractor’s request and submission of a complementary development or production plan to EGAS; however, this is subject to the Egyptian government’s approval. If gas is discovered in commercial quantities and contractor failed to put such gas on

production in accordance to the submitted development plan or within six years period from the date on which the contractor notifies EGAS of the existence of a commercial gas discovery, (whichever is earlier); contractor shall surrender such gas reserves and relevant development lease to EGAS. The exceptions are Blocks No.

6 and 7, the production should start in accordance to the submitted development plan or within eight years period from the date on which the contractor notifies EGAS of the existence of a commercial gas discovery, (whichever is earlier); Contractor shall surrender such gas reserves and the relevant development lease to EGAS.

October 2008 - Issue 22

Energy policy in the race between Obama and McCain The U.S presidential race has grown as a thrilling one. Of all the speeches given by the two candidates, Barack Obama and John McCain, perhaps those concerned with energy policies remain all-important for By Mohamed El-Sayed American citizens The energy issue gained momentum especially after the recent unreasonable hikes in oil prices which saw the price of a barrel hitting the $147 at some point a few weeks ago. And despite the fact that oil prices plummeted below the $100 mark of late, people in the States are still anxious about the vicissitude of black gold. Sifting through the energy policies of the two candidates reveal that Obama aims at cutting carbon dioxide emissions to 80 percent below 1990 levels by 2050, reduce emissions to 1990 levels by 2020 and require fuel suppliers to cut carbon content by 10 percent by 2020. On the other side, McCain favors a cap-and-trade CO2 approach. To achieve this approach, he sponsored legislation in 2007 to cut emissions by 30 percent by 2050. As for gasoline prices, Obama would probe energy industry activities and stop filling the emergency oil reserve. However, McCain seeks to suspend the federal gasoline tax during the peak summer driving season and suspend filling

of the Strategic Petroleum Reserve, a stockpile designed to ensure the U.S has a cushion of crude oil to cope with any supply disruptions. Oil use is also topping the agenda of both candidates. While Obama would reduce overall U.S. oil consumption by at least 35 percent, or 10 million barrels per day, by 2030 to significantly reduce imports from OPEC nations, his adversary McCain has set no specific targets in this regard. However, he said that he would unveil a strategy to reduce dependence on foreign oil sources. Obama would double fuel economy standards in 18 years, give automakers tax credits to retool plants and invest in advanced lightweight materials and new engines. McCain, on the other hand, has not specified Corporate Average Fuel Economy (CAFE) targets. In fact, he voted against energy amendments in 2003 that would have boosted CAFE to 40 mpg by 2015. When it comes to bio-fuels, the Democratic candidate Obama is for the idea of boosting renewable fuel standard to at least 60 billion gallons of advanced bio-fuels like cellulosic ethanol by 2030, build the ethanol distribution infrastructure, mandate that all new vehicles be “flex fuel” by the end of 2012 and seek production of 2 billion gallons of cellulosic ethanol from non-corn sources like switch-grass by 2013. Nevertheless, the Republican candidate McCain supports offering ethanol incentives after opposing them in the past. He generally opposes subsidies and tariffs that, from his point of view, distort the market. Each presidential candidate is trying to win hearts and minds by promising a different, efficient energy policy. Many a time Obama and McCain criticized each other over

energy. McCain, for example, likened Obama to former U.S president Jimmy Carter for proposing an oil-profits tax. On the other side, Obama blasted McCain as an “oil baron”. “He [Obama] supports new taxes on oil producers,” said McCain during a speech in Houston, where many companies are based. “He wants a windfall-profits tax on oil, to go along with the new taxes he also plans for coal and natural gas,” he added. McCain went on arguing that “if the plan sounds familiar, it is because that was President Jimmy Carter’s big-idea tool - and a lot of good it did us.” He pointed out that “I’m all for recycling, but it is better applied to paper and plastic than to the failed policies of the 1970s.” While Obama dubbed McCain as an “oil baron”, the latter in response tried to show he is an environmentally friendly Republican, unveiling a TV campaign ad that boasts he “stood up” to President Bush five years ago by pushing for legislation to address climate change. McCain’s positions of opposing drilling in the Alaska National Wildlife Arctic Reserve – and at the same time supporting more offshore drilling to give a boost to domestic production and reduce reliance on foreign, especially Middle Eastern oil - drew criticism from liberal critics who argued that he’s contradicting himself. Meanwhile, Obama opposes offshore drilling and defended his proposed tax, saying he believes in a windfall profits tax in an attempt to ease the burden of higher energy costs on working families. “Instead of giving oil executives another way to boost their record profits, I believe we should put in place a windfall-profits tax that will . . . ease the burden of higher energy costs on working families,” Obama said in one of his speeches.

October 2008 - Issue 22

Between a rock and a hard place At a time, when Egypt tries to put a brake on energy subsidies, a report issued last month by the Ministers Council’s Information and Decision-Support Centre showed that Egypt’s oil production has been on the decrease in 2007. The report said that Egypt is among the top countries that subsidize petroleum, making the prices of its products lower than international prices. This fact comes at a time when Egypt’s oil production is on the decline. “Egypt’s crude oil production has decreased by 6.3% in 2007 to hit 710,000 barrels a day,” the report said. Egypt’s oil production in 2001 was 758,000 barrels a day. The downturn began in 2005, according to the report. The report added that local consumption of oil in 2007 increased by 18.8% to hit 651,000 barrels a day, up from 548,000 barrels a day in 2001. The report reveals a number of facts regarding subsidies on oil products. “Egypt is in the 9th place of the list of countries that offer the highest subsidies on oil products. It subsidized oil products by 33 cents (LE1.9) per one liter in 2006,” the report added. Turkmenistan, Venezuela and Iran topped the list consecutively. Subsidies on oil, in fact, take the lion share of subsidies in general; around 72%. Out of LE83.7 billion worth of subsidies provided by the government on foodstuffs and other items, subsidies on oil was LE60.3 billion. Of all oil products, gasoline tops the list of products most subsidized with 38.4%. It is followed by natural gas which takes 22.7% of subsidies on oil products (57 cents per liter which equals LE2.2). The report shows the sectors that most consume oil prod-

ucts. Transportation, of course, came on top of these sectors which consumed 27.1% of oil products in 2006/2007. The industrial sector comes second with 20.7%, followed by the oil sector whose consumption stood at 20.2%. As per natural

gas, the power plants sector consumed around 58.2% of total production of Egypt during 2006-2007. The industrial sector comes second with 29%, while the transportation sector consumed 1% of natural gas production.

Although there are great efforts exerted by global energy companies to find alternatives to oil in the coming few years – given the sudden hikes in oil prices in the past year – the report predicts that oil will remain the main source of energy in Egypt up till 2020. “Crude oil prices are expected to hit the $225 mark per barrel in 2012,” the report said. “However, the share of oil as an energy source will decrease by 32% to 35.2% in average in the period between 2010 and 2020,” the report added. Given these facts, the government will undoubtedly be between the devil and deep blue sea. Raising the prices of oil products, especially gasoline, would incur public anger and increase an already high level of inflation. And keeping oil products’ prices at their current level would put more pressures on the state’s budget in light of expected increase in local consumption. Only the coming days will tell how the government will deal with such a critical issue. The prospect of allocating more funds for subsidies on oil products ruffles the feathers of the government officials, especially the ministers of finance and petroleum. Minister of Finance Youssef Botros Ghali once said that it is impossible to continue subsidizing gasoline for an ever increasing number of vehicles – which increase by more than 250,000 annually. On the other hand, the minister of petroleum once said that growing local oil consumption makes Egypt looses millions of dollars that could have been earned if these products were exported. This conundrum, as a matter of fact, makes the government caught between a rock and a hard place.

October 2008 - Issue 22

Table 1

World Oil Supply1 (Thousand Barrels per Day)

Table 2

Egypt Rig Count per Area -August 2008 RIG COUNT

Area Gulf of Suez Offshore Land Mediterranean sea Offshore Land

14%

53%

Persian Gulf3

OAPEC4

OPEC5

World

2007 November

8,578

23,227

24,435

35,860

85,114

December

8,659

23,876

25,087

36,602

85,487

2007 Average

8,457

23,109

24,277

35,421

84,439

Offshore Land Eastern Desert Offshore Land Delta Offshore Land

11%

16 8

Total

140

Rigs perArea August 2008 6% 8% Delta Sinai 8% Med. Sea. 11% E.D. 14% G.O.S.

United States2

Sinai

Table 1

Percentage of Total Area

20 20

Western Desert Offshore Land

Total

100%

Rigs per Specification 2% Semi-Sub 2% Standby/Stacking 3% Platform 14% Jack-up

53% W.D.

29% Work-Over

2008 January

8,624

24,990

25,129

36,505

85,253

February

8,625

24,219

25,359

36,667

85,372

March

8,664

24,230

25,372

36,895

85,529

April

8,717

24,143

25,294

36,612

85,215

May

8,879

24,611

25,739

36,990

86,241

June

8,665

24,687

25,850

37,201

85,895

2008 6-Month Average

8,696

24,313

25,457

36,812

85,587

1ÂŤOil SupplyÂť is defined as the production of crude oil (including lease condensate), natural gas plant liquids, and other liquids, and refinery processing gain (loss). 2 U.S. geographic coverage is the 50 States and the District of Columbia. Beginning in 1993, includes fuel ethanol blended into finished motor gasoline and oxygenate production from merchant MTBE plants. For definitions of fuel ethanol, oxygenates, and merchant MTBE plants 3 The Persian Gulf countries are Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. Production from the Kuwait-Saudi Arabia Neutral Zone is included in Persian Gulf production. 4 OAPEC: Organization of Arab Petroleum Exporting Countries: Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, and the United Arab Emirates. 5 OPEC: Organization of the Petroleum Exporting Countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. E=Estimated data. RE=Revised estimated data. PE=Preliminary estimated data. Revised data are in bold italic font.

50% Land-Drilling

World Crude Oil Production (Including Lease Condensate) (Thousand Barrels per Day)

Egypt

Libya

Sudan

Other

World

OPEC1

Persian Gulf2

Table 4

North Sea3 France

2007 November

609

December

609

1,740

520

2,526

73,914

33,339

21,434

4,064

2007 Average

637

1,702

464

2,505

73,050

32,174

20,672

4,114

1,740

520

2,517

2,524

73,434

73,980

32,648

33,220

20,833

21,538

OECD1 Countries and World Petroleum (Oil) Demand (Thousand Barrels per Day)

German

United OECD South United Other Italy Kingdom Europe2 Canada Japan Korea States3 OECD4

OECD1

World

4,082 2007 November

2,076

2,536 1,748 1,778 15,872 2,460 5,237 2,357 20,535 3,591 50,051

December

1,837

2,417 1,717 1,663 14,905 2,341 5,692 2,369 20,719 3,622 49,647

2007 Average

1,950

2,456 1,702 1,763 15,304 2,376 5,007 2,214 20,680 3,564 49,145 85,747

2008 January

2,060

2,504 1,626 1,695 15,394 2,356 5,369 2,372 20,114 3,484 49,090

February

1,992

2,494 1,671 1,804 15,364 2,431 5,883 2,348 19,782 3,566 49,373

March

1,882

2,399 1,569 1,674 14,744 2,313 5,097 2,266 19,732 3,422 47,573

2008 January

609

4,004

February

609

1,740

520

2,541

74,161

33,375

21,763

3,980

March

609

1,740

520

2,508

74,269

33,595

21,768

3,975

April

609

1,718

520

2,504

73,857

33,314

21,682

3,924

April

2,005

2,500 1,621 1,821 15,390 2,246 5,062 2,098 19,768 3,693 48,258

May

609

1,700

520

2,528

74,412

33,688

22,148

4,051

May

1,851

2,310 1,609 1,620 14,430 2,292 4,516 2,181 19,729 3,601 46,749

June

609

1,740

520

2,565

74,372

33,866

22,214

3,686

2008 4-Month Average

1,957

2,441 1,618 1,721 15,059 2,327 5,177 2,253 19,826 3,552 48,193

2008 6-Month Average

609

1,730

520

2,528

74,176

33,510

21,852

3,938

1 OECD: Organization for Economic Cooperation and Development. 2 OECD Europe consists of Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. 3 U.S. geographic coverage is the 50 States and the District of Columbia. 4 Other OECD consists of Australia, Mexico, New Zealand, and the U.S. Territories. NA=Not available. Revised data are in bold italic font. Notes: The term Demand is used interchangeably with Consumption and Products Supplied.

1 OPEC: Organization of the Petroleum Exporting Countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. 2 The Persian Gulf countries are Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. Production from the Kuwait-Saudi Arabia Neutral Zone is included in Persian Gulf production. 3 North Sea includes the United Kingdom Offshore, Norway, Denmark, Netherlands Offshore, and Germany Offshore. Revised data are in bold italic font.

US Dollars per Barrel

October 2008 - Issue 22

Table 5

Table 6

World Natural Gas Liquids Production (Thousand Barrels per Day)

Algeria Canada

Mexico

Soudi Arabia Russia

Former U.S.S.R

United States1

Persian Gulf2

OAPEC3

OPEC4

World

International Stock

International Stock Prices Mid-August 2008 - Mid-September 2008 High

Low

2007 November

347

694

364

1,440

424

1,886

2,268

2,725

3,058

8,040

Schlumberger [SLB] NYSE [US Dollars]

December

349

752

379

1,440

423

1,828

2,316

2,776

3,109

8,069

Halliburton [HAL] NYSE [US Dollars]

45.68

34.34

2007 Average

342

728

396

1,440

426

1,783

2,313

2,769

3,096

7,959

Exxon Mobil [XOM] NYSE [US Dollars]

80.47

73.25

2008 January

350

729

366

1,440

421

1,783

2,325

2,790

3,131

8,017

Atwood Oceanics [ATW] NYSE [US Dollars]

41.66

35.26

February

352

688

368

1,440

421

1,830

2,330

2,796

3,138

8,022

Weatherford [WFT] NYSE [US Dollars]

39.15

28.38

March

353

700

367

1,440

420

1,847

2,332

2,800

3,142

8,042

70.01

60.14

1,880

2,333

2,802

3,142

8,060

Shell [RDS.A] NYSE [US Dollars] Apache [APA] NYSE [US Dollars]

117.24

100.55

98.52

80.90

April

355

709

370

1,440

418

May

356

699

371

1,440

419

1,908

2,335

2,805

3,147

8,129

June

358

686

372

1,440

423

1,810

2,345

2,837

3,180

8,791

Baker Hughes [BHI] NYSE [US Dollars]

81.91

60.93

2008 6-Month Average

354

702

369

1,440

420

1,843

2,333

2,805

3,147

8,011

BJ [BJS] NYSE [US Dollars]

28.02

20.86

Lufkin [LUFK] NYSE [US Dollars]

94.00

72.94

Transocean [RIG] NYSE [US Dollars]

130.47

114.72

Transglobe [TGA] NYSE [US Dollars]

3.89

3.06

BP [BP.] LSE Pence Sterling

528.75

476.00

BP [BP.] LSE Pence Sterling

1219.00

1029.00

Dana Gas [Dana] ADSM US Dollars

1.77

1.3

Caltex [CTX] ASX Australian Dollars

12.73

11.00

RWE DWA [RWE AG ST] Deutsche-Borse Euros

73.63

64.86

Lukoil [LKOH] RTS [US Dollars]

78.10

58.00

1 U.S. geographic coverage is the 50 states and the District of Columbia. Excludes fuel ethanol blended into finished motor gasoline. 2 The Persian Gulf countries are Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. 3 OAPEC: Organization of Arab Petroleum Exporting Countries: Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, and the United Arab Emirates. 4 OPEC: Organization of the Petroleum Exporting Countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. - - = Not applicable. E=Estimated data. PE=Preliminary Estimated data. Revised data are in bold italic font. Notes: Monthly data are often preliminary and also may not average to the annual totals due to rounding.

Average Currency Exchange Rate against the Egyptian Pound (August / September 2008)

US Dollar 5.362

Company Alexandria Mineral Oils [AMOC.CA] Sidi Kerir Petrochamicals [SKPC.CA]

Euro 7.794

Sterling 9.742

Stock Market Prices (August / September 2008) High

Yen (100) 4.920

Low

78.00

67.35

17.57

15.58

October 2008 - Issue 22

st 1 place goes to Shell Marketing! For the second consecutive year, Egypt Oil and Gas organized its Ramadan Petroleum Soccer Tournament 2008

Following last year’s overwhelming success, the Ramadan Petroleum Soccer Tournament enjoys now popularity amongst Football fans in the Oil and Gas field in Egypt. The tournament took place in the open-air Arena of the Cairo International Stadium, and expanded than last year to host 16 teams of the leading companies in the Petroleum sector. The Official Tournament Sponsor was PICO Energy Petroleum Integrated Services and Ieoc was the Tournament Co-Sponsor, while National Petroleum Company (NPC) was the Outfits Sponsor. Title holders, Shell Marketing crowned again in the second edition of Ramadan Soccer Tournament 2008, and snatched the golden medals from Halliburton in a hard-fought final encounter after winning 2-1. The third spot was reserved for Ieoc after beating Pico Energy Petroleum Integrated Services 3-1. During the 11-day tournament, 16 teams participated enthusiastically in order to reach the final stages. Each company registered for

10 players, of which 6 played including the assigned goalkeeper. The teams were: Shell Marketing, Shell Egypt, PICO Energy Petroleum Integrated Services, Smith, Hess, Ieoc, Halliburton, NPC, Gaz de France, Apache, Centurion, Dana Petroleum, Qarun, PICO International, Baker Hughes and Egypt Oil & Gas. In the final ceremony, Eng. Hady Fahmy, EGPC Executive Vice President, and Eng. Mo- the medals and the awards to the players. hamed Fouad, the organizer and the President of Egypt Oil & Gas company, shared the players’ joy and honored the winning teams and handled

Best Audience Award

Through a new tradition, a new award was added to the tournament’s prizes, but this time for the audience. Four major companies’ audience vigorously competed for this title; Apache, Baker Hughes, Gaz de France and PICO Energy.

With its exceptional ideas, costumes and performance, Apache deserved the title of Best Audience. As demonstrated in the pictures, the company’s spectators were very innovative in the way hey supported their team, which contributed to make this year’s tournament a very exciting

October 2008 - Issue 22