Bahrain announces largest oil discovery since 1932
Huge quantities of shale oil, deep gas found in Bahrain Basin
Bahrain yesterday announced the discovery of a shale oil and a deep gas resource in Khaleej Al Bahrain Basin, located off the west coast of the kingdom.
The find represents the largest discovery of oil in the Kingdom since 1932, when extraction started on Bahrain’s first oil well within the Bahrain Oil Field.
The new resource is forecast to contain highly significant quantities of tight oil, also known as shale, and deeply located gas, understood to dwarf Bahrain’s current reserves.
The announcement was made by Bahrain’s Higher Committee for Natural Resources and Economic Security, chaired by Crown Prince Salman Bin Hamad Al Khalifa.
“Following the initial discovery of the resource, detailed analysis of the find’s content, size and extraction viability has been undertaken alongside internationally- renowned petroleum industry consultants, DeGolyer and MacNaughton [ Demac],” Minister of Oil Shaikh Mohammad Bin Khalifa Al Khalifa said.
“Today we announce that initial analysis demonstrates the find is at substantial levels, capable of supporting the long- term extraction of tight oil and deep gas.”
The government confirmed
Today we announce that initial analysis demonstrates the find is at substantial levels, capable of supporting the long- term extraction of tight oil and deep gas.” Shaikh Mohammad Bin Khalifa Al Khalifa | Bahrain’s Minister of Oil
that modelling and analytical studies are ongoing, led by Bahrain’s National Oil and Gas Authority ( NOGA) working alongside private sector partners, aimed at detailing the ultimate quantity and market value of the find.
A DeGolyer and MacNaughton spokesperson said that “Demac evaluated the reservoir and test data, evaluated volumetric and recovery potential, and provided reports documenting both Prospective and Contingent Resources.”
Long- term activities
The discovery, expected to support extensive, long- term downstream activities, follows a recent uplift in oil and gas exploration projects undertaken in response to directives from King Hamad to the Higher Committee for Natural Resources and Economic Security to increase exploration activities.
The US could become the world’s largest oil producer by the end of 2018 or next year due to rise in shale oil production, according to analysts.
Shale oil production from the US has been going up in the last few months as oil prices rise due to production cut agreement between Opec and nonOpec member countries and geopolitical tensions in the Middle East and elsewhere.
“It is entirely within the realm of possibility that the US could become the world’s largest oil producer in 2018 or 19 if current trends continue. The rebound in oil prices resurrected the US oil sector with production increasing after the downturn of the past few years,” said Justin Dargin, a global energy expert at the University of Oxford told Gulf News.
He also added that the production is likely to exceed 10 million barrels per day for the rest of 2018 and could touch 11.4 million barrels per day in 2019 which is a record for the US
The previous record for US oil production was in 1970 when oil production reached 9.63 million barrels per day.
Giving a short term outlook on oil prices, he said Brent crude, a global benchmark, could average $ 70 ( Dh257) to $ 75 per barrel during the summer months as Opec supply restrictions remain firm. Brent was trading at $ 69.34 per barrel, up by 0.84 per cent and US crude West Texas Intermediate at $ 64.94 per barrel, up by 0.87 per cent when markets closed on Friday.
Seasonal factor
“We are going through a particularly volatile phase in oil prices at the moment,” he said.
“In general, there was always a seasonal factor to oil price volatility that would see oil prices increase around spring due to the anticipation of the summer driving season in North America. However, there is an increase in shale oil production in North America that could act as a brake on the rising oil price.”
Opec and producers outside the group are cutting production by about 1.8 million barrels per day in order to prop up prices under a deal that is to expire at the end of 2018. Opec is restraining production by about 1.2 million barrels per day and the rest is shared by Russia and other countries.