Bahrain Sits on Major Oil Wealth, Plans To Drill 900 Wells in 5 Years
Several countries are vying to sign oil contracts with Bahrain, and more deals will be announced in the near future
Bahrain announced its intention to drill 900 oil wells over the next five years, according to an official report issued by Tatweer Petroleum, the oil arm of Bahraini government investments.
Bahrain produced, according to official statistics from the National Oil and Gas Authority, 71.1 million barrels in 2020, and it exported 84 million barrels of oil derivatives from which Saudi Aramco produced more than 350,000 barrels for Bahrain.
In April 2018, Bahrain announced the discovery of a large field of shale oil, with an estimated oil reserve of 80 billion barrels, the second largest deposit of shale oil in the world.
During the past two weeks, Bahrain signed an agreement for cooperation in the areas of oil and gas with Morocco, in addition to the Republic of Cyprus. It has an agreement to purchase Russian gas at preferential prices, and has the right to re-export it.
Bahrain focuses on expensive oil products and derivatives that achieve a high added value, such as ultra-low sulfur diesel, which generates revenues of hundreds of millions of dollars annually.
A source who is well-informed about Bahraini oil told The Media Line that “Bahrain announced in December 2020 the offering of four oil areas for investment,” which are located in the Persian Gulf. “These areas surrounding Bahrain are definitely rich in oil,” he said.
The source, who requested anonymity, also noted that “there is a joint field near the Hawar Islands with Qatar, which contains huge quantities of oil and natural gas, but I do not know the amount yet.”
“Now Bahrain can export oil and gas, and if it was able to sell twice the quantities of oil it currently produces, it would witness an unprecedented recovery,” he added.
“Shale oil in Bahrain is low-cost; its extraction costs will not exceed $35 a barrel, and with prices rising above $50 a barrel, it will be worthwhile to export it,” he said.
Now Bahrain can export oil and gas, and if it was able to sell twice the quantities of oil it currently produces, it would witness an unprecedented recovery
He stressed that there are “huge quantities of oil in the field, some estimate it to be the second-highest quantities of shale oil in the world.” Extraction was supposed to begin at the beginning of the year, but the coronavirus pandemic caused a delay for the Italian company responsible for the field, he said.
“The economic explosion is coming in Bahrain. The 900 oil wells announced by Tatweer are only from the regular Bahrain field, which is located in the middle and south of the island, but shale oil will certainly be greater. The company was previously able to raise production from the field from 45,000 barrels per day to 55,000 barrels, which covers Bahrain’s internal needs only, but if production is increased, the surplus will be exported,” he said.
He says that there are several countries that seek to invest in Bahrain’s shale oil field and others that seek to invest in its three other oil fields and other areas known to have oil. And, he added, “more about Bahraini oil fields will soon be revealed.”
Turkish oil expert Anash Dermilar told The Media Line that “Turkish companies are seeking to invest in oil in Bahrain, and it is one of the first countries that offered Bahrain to start investing in these fields.”
“Bahrain sits on a huge amount of oil and gas that has not been fully announced yet, but the official authorities know this for sure. This small kingdom has large quantities of oil that will be announced gradually,” he explained.
“Although Bahrain does not export or import large quantities of gas, it has established a very large gas port, which confirms that the government [is prepared] to export gas in large quantities, times what is currently produced, and therefore there are certainly large quantities of gas,” he said, adding that the kingdom would be “announcing it later.”
He stressed that “there is intense competition between American, British, French, Italian, Turkish, Emirati and even Israeli companies to obtain oil contracts in Bahrain, and more deals will be revealed later.”
Everyone prefers Bahrain because it is easy to deal with, and because it is a stable country, far from political problems
Meanwhile, Moroccan oil and gas expert Mehdi Fakir told The Media Line: “Cooperation between Bahrain and Morocco will be very fruitful in the field of oil, and now Bahrain also has major agreements with Cyprus and with several other countries.”
He stressed that “Bahrain has open markets for the export of oil and gas, and there is a need in some Middle Eastern countries, and there are great agreements with Japan, with China and with ASEAN (Association of Southeast Asian Nations) countries; everyone prefers Bahrain because it is easy to deal with, and because it is a stable country, far from political problems.”
Regarding the shale oil field, he said, “I do not have much information about it, but shale oil will be the future with the beginning of the end of normal oil.”