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Simulation of new oil find encouraging: Bahrain minister

MANAMA, November 29, 2017

By K S Sreekumar
Reservoir simulation studies at the Khaleej Al Bahrain basin, where the kingdom discovered some 80 billion barrels of tight oil, have been encouraging and by the end of next year there could be an international company engaged in the first development of this resource, revealed Bahrain’s Oil Minister Shaikh Mohammed bin Khalifa Al Khalifa.
 
“To invite international oil companies, we need more information. We also need to let the oil flow for about six months from the two test wells being drilled and our target is to have sufficient information to attract IOCs to this resource,” said Shaikh Mohammed at a one-to-one interview at the World Islamic Banking Conference.  
 
Referring to the potential of the resource, he said in the oil and gas industry the quality of the source rock is as good as the reservoir. “Here we have some of the best reservoirs in the world and this is the source rock that gave the giant oilfields of Arabia,” he said.
 
The kingdom is currently talking to companies who have expertise in recovering unconventional resources. Unconventional exploration is very much a North American phenomenon, the minister explained adding that China too comes to the picture as a Chinese national oil company has a good footprint in Canada. The kingdom is setting up a data room in Houston to have effective sharing of information with consultants.
 
“We will load up data and hopefully we will have something finalised this time next year,” he said.
Taking advantage of the deep gas discoveries could happen quicker and the kingdom is talking to international companies on the matter, he said. The minister pointed out that Eni, which has been voluntarily conducting studies offshore, are encouraged by the results and might be willing to explore for oil.
 
To a question on the kingdom’s efforts to tap the bond market, Shaikh Mohammed said Bahrain has been quietly executing a number of mega-projects. The debt market was tapped for projects that are already under way. “All our projects are mature projects,” he asserted.
 
The Banagas Central Gas Plant Three (CGP-III) has been commissioned, which will produce 11,000 barrels of LPG for export. The AB-4 pipeline between Bahrain and Saudi Arabia has been inaugurated.
The kingdom’s LNG Terminal is more than 95 per cent complete. The Bapco Modernisation Programme (BMP) is nine months into its EPC stage of construction. 
 
The $6-billion BMP, which will be completed with help from export credit agencies from Italy, South Korea, Spain and UK, is a very profitable venture, he explained.
 
Once completed, the refinery will have an EBITDA of $1 billion. “As a holding company, once our projects are completed the EBITDA will more than double, which is a big jump,” he said.
 
To a question on the pressure on Opec to cut output at its December 6 meeting, he said “Opec is not a price cartel. Rather than fixating at a particular oil price, Opec is concerned about making sure that the oil price is right for investments to take place in the oil and gas sector.” 
 
Since the oil slump in 2014, the oil and gas industry saw $1 trillion decline in investments. This has resulted in a 5 million barrels per daily cut in production. In effect, the world faces a shortfall of about 5 million barrels per day (mbpd) assuming that the total world production is 100 mbpd, he said.  – TradeArabia News Service



Tags: Bahrain | Oil | minister |

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