Bahrain Announces Largest Oil Discovery Since 1932
When it comes to oil producing countries in the Middle East and Gulf state, for most people Saudi Arabia and Qatar come to mind, not Bahrain. That is until Bahrain shocked the world by announcing the most significant oil discovery since 1932.
In initial reports, the Gulf nation did not give the exact size of the oil discovery, but the government stated that the new oil field is “understood to dwarf to dwarf Bahrain’s current reserves” as reported by the Bahrain News Agency (BNA). The new oil reserve was spotted off the west coast of the island in the Khaleej Al Bahrain Basin. BNA reported the reserve contains highly significant quantities of “tight oil and deep gas.”
Tight oil is a type of oil in airtight shale and limestone rock deposits, also known as shale oil. This type of oil is processed into diesel, gasoline, and jet fuels, but is extricated using hydraulic fracturing, more commonly known as “fracking.”
At a press conference last Wednesday, Bahrain’s Oil Minister Sheikh Mohammed bin Khalifa Al-Khalifa added that the new oil field in the country’s western basin is estimated to contain over 80 billion barrels of oil. Before this discovery, Bahrain’s reserves were estimated to contain 125 million barrels of crude oil.
What do energy experts say about the discovery?
Tom Quinn, a senior analyst for the Middle East upstream at Wood Mackenzie, said to Forbes, “While the scale of discovery is significant, more information is needed to find out how much of the resources can be recovered commercially.” He added that the exploration could be costly as the tight reservoir means low recovery, and only a small amount of the 80 billion barrel could be recoverable.
According to Yahya Al Ansari, Chief Exploration Geologist at the Bahrain Petroleum Company (Bapco), Bahrain’s discovery is “a layer with moderate conventional reservoir properties on top of an organic-rich source rock.” Such a geological composition may prove tricky to extract. Bahrain has yet to mention how much of the resource can be extracted.
Bahrain’s National Communication Center stated that the new resource is expected to be in production within five years. Bahrain’s oil minister announced, “An agreement has been reached with Halliburton to commence drilling on two further appraisal wells in 2018, to further evaluate reservoir potential, optimize completions, and initiate long-term production.”
Depending on how much oil can be extracted, the new reserves could provide a significant boost to Bahrain’s economy. Bahrain’s National Communication Center added that the new oil reserves “is expected to provide significant and long-term positive benefits to the kingdom’s economy – both directly and indirectly through downstream activities in related industries.”